Energy supplier SSE PLC (LSE:SSE) and Equinor, formerly Statoil, agreed to buy gas power plant operator Triton Power for £341 million, according to a regulatory statement.
The deal is the latest move by a UK energy supplier to shore up gas supplies following sanctions on Russian oil and gas and rising wholesale prices.
Last year, wholesale gas prices rose six-fold between February and December, according to the national auditor.
The Consumer Council warned this month that SSE is due to put up its gas prices by 42.7% from 1 July due to the impact of volatile global market dynamics.
"Flexible energy will be absolutely essential as renewable energy scales up over the coming years, providing vital back-up while protecting security of supply. But the real prize will be how we decarbonise that flexible energy over the longer term,” Catherine Raw, Managing Director of SSE Thermal, said.
The deal includes the acquisition of three power plants including the 1.2 GW Saltend Power Station, a combined cycle gas plant that provides heat and power north of the Humber Estuary in East Yorkshire.
The plant is a prime target to be an off-taker for Equinor’s Saltend hydrogen power project, a carbon capture and storage facility that will produce hydrogen from natural gas for local chemical plants and maritime refuelling. Steps are already underway to blend the plant’s output with up to 30% of low-carbon hydrogen by 2027, as the plant winds down carbon emissions by 2035.
SSE said the deal will provide opportunities for further hydrogen blending in its portfolio.
Triton’s portfolio also includes an open cycle gas turbine in Cornwall, a decommissioned combined cycle gas turbine in north Wales, a hydrogen storage project in Yorkshire, the Keadby 3 carbon capture power station, and the Keadby hydrogen plant, which could become one of the world’s first hydrogen-fuelling stations.
Triton employs 82 workers, who will continue to work for the company, as the buyers said they are “committed” to transitioning the assets towards net zero “in consultation with the local workforce and representatives”.
SSE Thermal and Equinor will jointly own and run Triton following the deal, which is expected to close in September after seeking national security and merger approvals.