SSE has begun talks with the Competition and Markets Authority (CMA) over the planned merger of its supply business with Innogy’s Npower, the firm has revealed in a third quarter trading update.
The company continued to lose customers over the period, with its customer accounts totalling 7.68 million at the end of December – down 40,000 over the previous three months and 400,000 year-on-year.
According to the update, SSE and Innogy have entered pre-notification discussions with the CMA ahead of the first phase of its investigation into the merger.
It says the companies will “continue to work constructively with the CMA and other interested parties during this process and remain confident that the creation of a new independent energy supply and services business in GB will serve the needs of customers, employees and other stakeholders in the long term.”
The merger “remains on course to be completed by the last quarter of 2018 or the first quarter of 2019”, it adds.
SSE expects to deliver adjusted earnings per share of between 116p and 120p for 2017/18 – a slight fall on the previous year’s figure of 125.7p.
Renewable output since the beginning of the financial year rose by a quarter when compared to the same period in 2016/17. This partly reflected an increase in wind capacity but was mainly the result of wetter and windier weather.
SSE said it is still on track to invest around £6 billion over the four years to March 2020, with about £5 billion already committed to spending on electricity networks and renewable energy projects.
The company has lowered its projection for investment in 2017/18 from £1.7 billion to £1.6 billion. Of this, it has so far spent £1.1 billion.
The figure includes £355 million invested in wind generation. SSE has commissioned a total of 516MW of new capacity since the beginning of April and has a further 481MW under construction.
The firm said substantial progress has been made on the construction of the Beatrice offshore wind farm, where the first turbine is expected to be installed in July 2018. The 588MW project, in which it owns a 40 per cent stake, is scheduled to be completed in 2019.
SSE’s total renewable capacity is projected to rise to 4.3GW by March 2020, enabling the company to generate around 12TWh of low-carbon electricity in a typical year.
The company has also invested around £558 million in its electricity distribution and transmission networks since the start of the financial year, including in the Caithness-Moray transmission link which is on course for completion in late 2018.
It has additionally spent £140 million on the smart meter rollout. As of the end of December, SSE had fitted more than 725,000 smart meters, compared to more than 400,000 a year before.
SSE chief executive Alistair Phillips-Davies, said: “The energy sector continues to present a number of complex challenges to manage but, throughout this financial year, we have kept our focus on delivering the best possible service for our networks and retail customers and on delivering our programme of investment in the energy infrastructure on which all customers depend. All of this represents an encouraging year so far for SSE.
“The SSE group will evolve significantly between now and the end of the next financial year. There will be a greater focus on creating value from owning, operating and developing assets and infrastructure; and we will contribute to the creation of a new energy supply market model that combines the resources and experience of two established players with the focus and agility of an independent supplier.”