SSE has spun out its renewables activities into an entirely new unit, SSE Renewables, as it bids to lead on low carbon energy.
The energy giant confirmed the establishment of SSE Renewables this morning, stating that the new business model would allow it to consolidate the development, operation and ownership of renewable assets under a single entity.
All of SSE’s existing operational assets, which are expected to comprise more than 4GW of wind, hydro and pumped storage by next April, will fall under the new division’s ownership.
And there are plans to expand on this portfolio. SSE has said that the UK and Ireland will remain the business’ core focus, but it is also seeking to “extend its core competencies” in renewables into geographical markets elsewhere, with SSE having already commenced the process of assessing alternative opportunities.
SSE this morning outlined five key opportunities that the creation of the renewables-dedicated outfit will help realise, perhaps most interestingly enhancing the company’s ability to raise finance for new renewables projects.
SSE is already the largest issuer of green bonds in the UK corporate sector and could realistically look to substantially build on this status moving forward.
The firm has also teased that the renewables unit would have a much greater scope to enter into strategic and financial partnerships and joint ventures with other firms that held a “shared commitment to decarbonisation of the electricity system”, and suggested that other technologies could too be embraced.
SSE Renewables is to be led by SSE’s cutting managing director of generation Jim Smith, who has been appointed as MD designate for SSE Renewables. He’ll report into wholesale director Martin Pibworth and lead on preparations for the new entity to come into force, expected by the end of the current financial year.
Alistair Phillips-Davies, chief executive at SEE, said the creation of SSE Renewables formed the “latest step” in the firm’s strategic goal to give “greater focus to renewable energy”.
“Success will mean maximising SSE’s contribution to the ongoing decarbonisation of the electricity system and creating value for shareholders and society in a sustainable way, with a clear focus on maximising future growth opportunities.
“SSE has a unique portfolio of renewable energy assets and a valuable pipeline of future opportunities. The creation of SSE Renewables will build on SSE’s established skills in asset management and large capital project development and put the business in a strong position to evolve and succeed in a rapidly-changing electricity sector,” he said.
In a trading update also published this morning for the six months ended 30 September, SSE also confirmed that its headline results were ahead of expectations set out in September. But adjusted profit before tax for SSE, excluding its energy services division, remained 41% down year-on-year at £246.4 million.