SSE says it expects to exceed its target for trebling its renewable output by 2030, and confirmed it would have a run rate of at least 1GW of new assets a year during the second half of this decade.
Posting its results for the year to 31 March, the company saw operating profit in its renewables business increased by 29% to £731.8M, despite adverse weather conditions that reduced output by 10%. The reduction was partially offset by higher plant availability and higher achieved power prices. The company also recorded £226M from the disposal of a 51% stake in Seagreen and a 10% stake in Dogger Bank A and B, along with disposal of the group’s financial interest in the Walney offshore wind farm of £188.8M.
Meanwhile the company’s thermal plant business saw operating profit rise by 5% to £160.5M, partly due to higher utilisation in periods of low generation or high demand during the pandemic. The company also registered a £20.4M developer profit on the disposal of a 50% sale in Slough Multifuel.
SSE expects the sale of its 33% stake in SGN to be its “next material disposal”, with a disposal process starting during mid-summer 2021 and the intention of having an agreed sale by the end of the calendar year. It has already disposed of its gas production business.
It said this sale and other ‘non core’ disposals “has helped sharpen our focus on our low-carbon electricity core in renewables and networks”, and realised £1.5B. The sale of SGN would mean it exceeded its £2B disposals target.
In the networks business, transmission had “significant growth potential in transmission over and above the T2 base case”, notably in connecting renewables via Scottish islands. SSE said that adding the Shetland HVDC link to SSEN Transmission’s totex for RIIO-T2 (set to be around £2.8bn) would take its RAV over £5B for the first time, but “Subject to a range of factors including generator commitment, planning and Ofgem approval additional potential SSEN Transmission projects could grow RAV to over £6B by March 2026.”
In addition, “The pace of the energy transition will only increase the importance of Distribution’s role in delivering the required system transformation locally”.