SSE sets out ‘Net Zero Acceleration Programme’ with major investment in networks and renewables

SSE has announced a £12.5 billion five-year strategic capital investment plan that includes delivery of over 25% of UK’s 2030 40GW offshore wind target – a 65% step-up in annual investment on its previous plan.
It also plans to invest more in UK electricity networks, whilst deploying flexibility solutions and exporting renewables capabilities overseas.
It responded to speculation about a breakup by saying there was more value in maintaining the group and launching a ‘Net Zero Acceleration Programme’, which will see ‘enhanced investment in a balanced mix of low-carbon infrastructure,’ Overall 40% of the investment will be in networks, 40% in renewables and 20% in other net-zero-aligned business.
It will be funded through operating cashflows, debt funding and further partnering, including peviosuly announced plans to sell a 25% stake in both SSEN Transmission and SSEN Distribution.
SSE has already disposed of its Energy Services business, which with other recent disposals is expected to raise in excess of £2.8 billion.
Over the 10 years to 2031 SSE plans to :
• Maintain a sustained renewables pipeline in excess of 15GW.
• Treble its owned renewables capacity to over 13GW (net) from 4GW today.
• Increase renewables output fivefold to 50TWh in 2031.
• Increase electricity networks RAV after disposal of a 25% stake to £11-13bn (net), from £7.4bn (gross) at FY21
• Maintain dividend growth.
Following the announcement, rating agency Moody’s changed the outlook on SSE and its subsidiaries, from negative to stable. Moody’s said the new plan’s £1 billion additional investment “is significant in absolute terms and relative to SSE’s earnings. It also carries some execution risks. Nevertheless, Moody’s
believes that the group will pace its capital spending and seek to balance growth with credit-supportive measures.” it expected that SSE “will be able to restore its financial profile to the level commensurate with a Baa1 rating owing to earnings growth coupled with balance sheet protective measures, including a reduction in dividends and asset disposals”.

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