Pennon Group buys three renewable energy projects for £85m

Pennon Group has bought another three renewable energy generation projects in an £85million deal, as part of its strategy to achieve net zero emissions by 2030.

The water company told investors Tuesday the three sites in Buckinghamshire, Aberdeenshire and Cumbria are expected to generate over 95 gigawatt hours of electricity per year from solar panels.

The group, which owns South West Water and Bristol Water, expects the acquisition and building costs of around £85million, with the sites to become operational sometime in 2025.

The latest deal adds to the recently acquired 40 GWh solar panel Dunfermline project in Fife, Scotland.

Together these projects should allow Pennon to self-generate 40 per cent of its total electricity usage, bringing it closer to its 50 target.

The group told shareholders: ‘The acquisition of these projects will provide attractive commercial returns, whilst also benefitting the group by increasing energy security and resilience through reducing exposure to future volatility in wholesale power markets.’

Last year, Pennon allocated £160million for investment in renewable energy generation.

It swung to an £8.5million pre-tax loss in the year to the end of March, as it was hammered by extreme weather and higher costs.

But it still hiked its dividend for the year by 10 per cent to £111.7million and paid a £1.5billion special dividend. 

That’s despite South West Water being fined £2.15million in April for illegally dumping sewage in rivers and the sea around Devon and Cornwall. 

Water companies have been under the scrutiny of political and regulatory forces over the last year along with public anger over the condition of infrastructure and the dumping of raw sewage.

Pennon shares were down 0.7 per cent to 684p in afternoon trading on Tuesday. They have lost around a quarter of their value since the start of the year.