ScottishPower has sold Knapton power station, a 42MW open cycle gas turbine plant in the UK, to RGS Energy, a subsidiary of US Energy Systems, for GBP15.5 million in cash.
In addition, ScottishPower has entered into long-term power purchase and gas supply agreements with RGS.
Under the power and gas supply agreements, ScottishPower has an obligation to take all of the electricity generated by the plant and all of the natural gas produced from the surrounding reserves up to 100 bcf, in each case at a discount to market.
John Campbell, director of energy wholesale at ScottishPower, said: Securing this sale and these long term contracts allows us to recycle the value from this non-core asset into other investment opportunities and provides access to future gas reserves at an attractive price. The excellent sale price and the value of the long term contracts maximizes shareholder value.