Scottish Power Sells Tidal Energy Business to Atlantis

Scottish Power Renewables has sold its tidal power business to Atlantis Resources in exchange for a six percent stake in Tidal Power Scotland Limited, the country's largest tidal power developer.

The deal builds on Atlantis' leading position in Britain's tidal energy sector following its purchase of one of its rivals, Marine Current Turbine Limited, from Siemens in April.

Tidal power converts energy harnessed from tidal movements into electricity via turbines. Scottish Power's tidal business includes two projects worth $9.8 million, meaning TPSL, which now owns the projects, is valued at $163 million.

"It brings another highly credible industrial shareholder with deep skill sets, as well as positioning the company strongly for bringing in new investors into its projects," analysts at Peel Hunt said of Atlantis. Peel Hunt raised its target price by 10% on Atlantis on the back of the announcement and recommends buying the stock.

TPSL, in which Atlantis retains a 94% holding, will now have a tidal power project portfolio of nearly 650 MW, making it Britain's largest tidal power player.

The deal comes on the same day as the British government announced cuts to small-scale renewable energy subsidies in a bid to rein in costs for green energy projects.