Swedish utility Vattenfall’s subsidiary Nuon Energy has agreed to sell its thermal power assets in the Netherlands to Dutch energy firm Eneco.

Under the agreement, Eneco will acquire Nuon’s heat network and the Lage Weide and Merwedekanaal combined-cycle gas-fired power plant (pictured) in Utrecht, Vattenfall said. The plant consists of two units situated on either side of the Amsterdam-Rijncanal and supplies 50,000 households and 1200 businesses with power and heat through Utrecht’s district heating network.

The sale is expected to be completed in January 2015. Financial details were not disclosed, nor was the reason for the sale.

The move comes as Vattenfall’s new CEO, Magnus Hall, said in an interview with Danish newspaper Borsen that his company is set to work to reduce its offshore wind costs by up to 40 per cent by 2020.

Vattenfall aims to match competitor Dong Energy’s stated goal, announced in 2013. “If we cannot provide the same or better, we will not win projects,” Hall said. “So we have a lot of pressure to get prices lowered as much as possible.”

The two companies are competitors in Denmark’s tender for construction of the 400 MW Horns Rev 3 offshore wind power plant.

In September Sweden’s new government advised Vattenfall to focus on its renewables business going forward.