SSE has announced its intention to sell 25% stakes in its electricity transmission and distribution networks to help fund a new commitment to invest £12.5 billion in critical low-carbon infrastructure by 2026.
It said the figure represents an increase of £1 billion per year – or 65% – over its previously announced plans.
SSE said the investment programme will allow it to deliver over a quarter of the UK’s target to install 40GW of offshore wind generation by 2030. By 2026, the company said it will double its net installed renewable generation capacity to 8GW and build up a sustainable development pipeline of 15GW.
Chief executive Alistair Philips-Davies said: “After all the commitments made at COP26, now is the time to deliver. Our Net Zero Acceleration Programme represents the next phase of SSE’s growth and involves a substantial ramping up of investment – equivalent to nearly £7 million each day in low-carbon infrastructure – backed up by clear delivery and funding plans.
“Today’s announcement will maximise our long-term potential and capture critical growth opportunities during a critical time for the energy sector, creating jobs, delivering on government ambitions, and creating value for society and shareholders.”
SSE chair John Manzoni said: “Over the past six months the board of directors has carefully considered a range of strategic alternatives for the next phase of SSE’s growth and development.
“Having reviewed all options and taken independent advice, this resulting strategic update significantly accelerates growth in our core businesses, whilst providing efficient and competitive sources of financing and ensuring SSE continues as a reliable and resilient operator of critical infrastructure.
“The board believes these plans represent the optimal pathway for SSE, positioning it as the UK’s clean energy champion with the scale to enable the delivery of over 25% of the UK’s 40GW offshore wind target and over 20% of upcoming UK electricity networks investment, deploy flexibility solutions to keep the lights on, whilst exporting its renewables capabilities overseas.”
SSE made the announcement alongside its financial results for the six months to the end of September. Its adjusted operating profit rose by 15% when compared to the same period last year to almost £377 million, but more than doubled to £1.9 billion when excluding adjustments. Its statutory pre-tax profit also more than doubled to nearly £1.69 billion.
Operating profit from Scottish and Southern Electricity Networks (SSEN) grew by 58% for transmission to around £182 million and by 34% for distribution to roughly £153 million. However, these increases were offset by an 82% reduction in adjusted operating profit from SSE Renewables to £25.4 million due to exceptionally low wind and hydro output.