SSE is considering selling shares in its networks businesses, including its remaining 33 per cent stake in gas distribution network SGN, to help fund billions of pounds of new investment.

As part of its financial results, the group said it plans to dispose of £2 billion of non-core assets in instances “where it is not the principal operator or where they don’t align with the transition to net zero”.

Speaking in a call with reporters this morning, SSE chief executive Alistair Phillips-Davies said this could extend to selling stakes in its electricity transmission and distribution business Scottish and Southern Electricity Networks (SSEN), particularly if there is an increase in investment as part of a green recovery from the coronavirus pandemic.

“That will provide more challenges for us on funding,” he explained.

Other potential candidates include SSE’s 25 per cent interest in the Walney offshore windfarm and some or all of its 50 per cent stake in a portfolio of energy-from-waste projects, of which 68MW is operational and 50MW is still under development.

SSEN currently plans to invest £2.4 billion in the transmission network over the RIIO2 price controls beginning next year.

However, Phillips-Davies said they have identified up to £6.8 billion of total investment that could be made over the five-year period, including £600 million on a new transmission link to Shetland.

Ofgem gave preliminary approval to the project in April but said its final decision would be dependent on SSE giving its go-ahead the Viking windfarm on the islands, which it did earlier today (17 June).

Phillips-Davies said large investments could also be made in transmission links to other remote Scottish islands: “There’s £200-300 million in there for connecting Orkney. There’s £500-600 million in there for connecting the Western Isles.

He continued: “There’s also a very large project as well for running an eastern bootstrap from Peterhead down to the Drax area. That’s something like a £2 billion project that would be shared between ourselves and National Grid. There’s an awful lot of projects that could still come forward and significantly increase the £2.4 billion.

“We’ll be looking for flexibility mechanisms with Ofgem so that as and when you can prove the need for those things, we can then move forward with them. If we, the government and the regulator all agree, then more and more of those projects can get done.”

He also confirmed that SSE plans to sell at least 10 per cent of the colossal 3.6GW Dogger Bank offshore wind project in which it owns a 50 per cent stake: “Currently the intention is for ourselves and Equinor our partner to both sell at least 10 per cent and we might sell slightly more. That’s not included in the £2 billion of disposal we talked about.”

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