SSE is to invest £12.5 billion by 2026 to accelerate progress towards net zero, announcing this alongside its half year financial results.
The new programme – which represents a 65% uplift on the company’s previous plans – will see SSE deliver over a quarter of the UK’s 40GW offshore wind target by 2030 and over 20% of the upcoming electricity networks investment in the UK, the company said.
It will also double the company’s existing renewables net installed capacity to 8GW, and amass a sustainable renewables development pipeline in excess of 15GW. The programme will also see a growth in electricity networks, increasing Regulated Asset Value to £9 billion.
It will be supported by further partnering in renewables and up to 25% minority stake sales in SSEN Transmission and SSEN Distribution, with the company stating it sees significant growth potential in these businesses due to electricity demand being expected to more than double in the transition to net zero.
As such, the selling of minority stakes will enable SSE to unlock growth to the fullest while maintaining an attractive balance of capital allocation across the group.
In August, the company agreed to sell its 33.3% stake in gas distribution operator Scotia Gas Networks for £1,225 million as part of a £2 billion plus disposals programme.
The company has also set targets for the next decade, with this including delivering a fivefold increase in renewables output, increasing renewable and other low carbon generation capacity to over 16GW and including new technologies such as batteries, hydrogen and carbon capture and storage.
SSE is currently partnering with Siemens Gamesa Renewable Energy to co-locate hydrogen production facilities at two onshore wind farms in Scotland and Ireland.
The announcement of the £12.5 billion funding comes alongside the company publishing its financial results for the six months to September 2021.
SSE recorded an adjusted EBITDA from continuing operations of £700.2 million, and an adjusted operating profit of £376.8 million, with this up 15%.
The company said this reflects the post-COVID-19 recovery across a number of its affected businesses, and has been achieved despite the impact of unfavourable weather conditions on renewables output during the period.
SSE Renewables saw its adjusted operating profit fall by 82% to £25.4 million, compared with £141.6 million for the same period the year prior, reflecting the lower output. This was around 25%, or 1.1TWh, below the comparative period and around 30%, or 1.2TWh, below the current year plan.
The unfavourable weather conditions were largely over the summer, which was one of the least windy across most of the UK and Ireland and one of the driest in SSE’s Hydro catchment areas in the last seventy years.
However, adjusted and reported operating profit grew for SSEN Transmission by 58% to £181.7 million, compared with £115.2 million. This was mainly due to phasing of allowed revenue as the business enters the first year of the RIIO-T2 price control, with this partially offset by increases in operating costs and depreciation charges as capital investment progresses.