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SSE on 'strong strategic footing' despite COVID-19 impact of around £200m

Image: SSE.

Image: SSE.

SSE is continuing to expect the impact of COVID-19 to sit between £150 million and £250 million.

This matches estimates in its full year results, with the company reiterating in today’s results – for Q3 2020/21 – that its adjusted earnings per share for 2020/21 will be in the 85p-90p range.

This is based on the above COVID-19 impact as well as the assumption that for the nine months to 31 December 2020, renewables output was 402GWh - or just over 5% - below its plan.

Onshore wind’s generation output for the nine months to 31 December 2020 – including constrained off output – was 3,149GWh, down from 3,334GWh in 2019. Offshore wind was 1,326GWh, also down, although just from 1,487GWh in 2019.

Conventional hydro, conversely, was up on the year before, coming in at 2,571GWh compared to 2,294GWh. This brought the total renewables output – excluding pumped storage – to 7,046GWh compared to 7,115GWh in 2019.

On the distribution side, 26TWh was transported through SSEN Distribution, a drop of 2TWh from the same period the year before.

The energy firm said that good progress is being made on its five-year, £7.5bn investment and capital expenditure plan, with financial close reached on Dogger Bank A and B in November and construction continuing at its Viking onshore and Seagreen offshore wind farms.

SSE also highlighted how it continues to participate in seabed auction processes so as to deliver on its plans to treble renewables output by 2030 and achieve a run rate of at least 1GW (net) of new assets a year during the second half of the decade.

It is also on track to realise in excess of £2 billion from a disposals programme designed to further its strategic focus on net zero, it said. It outlined how the completion of the sale of its Multifuel assets for £995 million and the sale of its gas exploration and production assets in December supported its ESG focus, whilst also taking expected proceeds from agreed or completed disposals to over £1.5 billion.

Gregor Alexander, finance director, said that SSE is “well positioned” as it moves towards the end of its financial year as a result of its “solid” operational performance and “strong strategic execution”.

"With a number of uncertainties lifting and an increasingly supportive policy environment which further underpins our clear strategic focus on the transition to net zero, SSE is on a strong strategic footing for the rest of 2020/21 and beyond."

SSE also pointed to how it has welcomed the “positive change in totex” in Ofgem's Final Determinations for the RIIO-T2 price control period, although it continued to say how it was disappointed that the financial parameters did not reflect the evidence put before Ofgem.

Ofgem upped the funding available in the RIIO-T2 price controls in its Final Determinations, bringing the total to £40 billion. This followed network companies heavily criticising its proposals, with SSEN describing the cuts initially outlined as being "unjustified".

SSE said it is to continue to "engage constructively with the regulator to secure an ambitious, fair and balanced price control settlement that is acceptable to all stakeholders".

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