Wind power to whip up storm of Scottish opportunities

The Sunday Times
February 8, 2009
John Penman

Wind power, which last year overtook hydro as the largest generator of renewable energy in Scotland, is still likely to provide the best opportunities for future deals, says a report.
A study by consultants Price Waterhouse Coopers (PwC) into mergers and acquisition (M&A) activity across Europe claims that while opportunities will still exist for some hydro projects, wind is likely to see more activity.
Across the whole of Europe, wind and solar are adding to renewable energy deal momentum according to Renewables Deals, the first edition of an annual review by PwC. In Europe, solar overtook hydro as the second largest category after wind, accounting for 30% of renewables deals and 20% of the total value of deals. Wind power captured 60% of the deal total.
In Scotland, onshore wind narrowly became the largest renewable generation last year although hydro continues to play a significant role. Figures from Scottish Renewables show that wind now generates 1400 megawatts (MW) of power compared to 1380MW in hydro.
With the Scottish government setting ambitious targets to secure at least 50% of the country’s demand for electricity from renewable sources, the view is that there are still real growth opportunities in wind power and even wave and tidal schemes. John Cowan, at PwC, said: “While falling energy prices may cast some doubt over the viability of some renewable schemes, the opportunity is ripe for governments to set a more certain framework for the industry.
“Last week’s announcement by Scottish government that it will focus efforts on energy generation, production and expertise is a positive move in this direction and at a time when a number of industries are reducing staff the predicted 16,000 jobs that will be created will be especially welcome.”
Over the next few years, the firm believes there will be a substantial reduction in hydro schemes. However, this will be offset by significant opportunities for growth in windfarms.
There is also a growing appetite for wave and tidal schemes and other initiatives. While these don’t feature in the report, PwC say they provide examples of progress in a Scottish context and of where deal activity may emerge.
PwC said: “The deal market in Scotland is not immune to the downturn but there are some hot sectors, like renewables, where there is still considerable appetite to do deals.”
The report shows that renewable energy now accounts for one tenth of M&A value in the wider power sector.