Energy giant SSE has outlined plans to invest more than £12 billion in the coming years to accelerate progress to net zero.
The company, which currently boats a substantial offshore wind pipeline, will increase its capital investment by two thirds – £1bn more annually – to support global decarbonisation.
Launched just days after the curtain came down on COP26 in Glasgow, SSE’s programme will enable it to deliver over a quarter of the UK’s 40 gigawatt (GW) offshore wind target by 2030.
Moreover, more than 20% of the necessary upcoming electricity networks investment in the UK will come from the Perth-headquartered company.
Alistair Phillips-Davies, SSE chief executive, said: “After all the commitments made at COP26, now is the time to deliver. Our Net Zero Acceleration Programme represents the next phase of SSE’s growth and involves a substantial ramping up of investment – equivalent to nearly £7m each day in low-carbon infrastructure – backed up by clear delivery and funding plans.
“Today’s announcement will maximise our long-term potential and capture growth opportunities during a critical time for the energy sector, creating jobs, delivering on government ambitions, and creating value for society and shareholders.”
Net Zero Acceleration Programme
On top of the increase to capital investment, SSE’s Net Zero Acceleration Programme will enable, by 2026, a doubling of existing renewables net installed capacity to 8GW, as well as a sustainable development pipeline in excess of 15GW.
Over 2.5 times more capital will be allocated to renewables growth, with cash also earmarked to expand electricity networks.
It’s hoped the move will increase the regulated asset value (RAV) of the networks to £9bn.
SSEN Transmission and SSEN Distribution
In order to support the programme, SSE is planning to sell up to 25% minority stakes in SSEN Transmission and SSEN Distribution.
By doing so, it hopes to unlock the benefits of the forecast growth in electricity demand whilst maintaining an attractive balance of capital allocation across the group.
© SSELooking further ahead, SSE has set out a series of ambitious targets for the next decade to 2031.
These include delivering a fivefold increase in renewables output and increasing renewable and other low-carbon generation capacity to more than 16GW.
It will also develop other flexible technologies, such as carbon capture and storage, hydrogen and batteries.
Sir John Manzoni, SSE chairman, said: “Over the past six months the Board of Directors has carefully considered a range of strategic alternatives for the next phase of SSE’s growth and development. Having reviewed all options and taken independent advice this resulting strategic update significantly accelerates growth in our core businesses, whilst providing efficient and competitive sources of financing and ensuring SSE continues as a reliable and resilient operator of critical infrastructure.
“The Board believes these plans represent the optimal pathway for SSE, positioning it as the UK’s clean energy champion with the scale to enable the delivery of over 25% of the UK’s 40GW offshore wind target and over 20% of upcoming UK electricity networks investment, deploy flexibility solutions to keep the lights on, whilst exporting its renewables capabilities overseas. SSE is creating long-term value for all of our stakeholders.”
The new investment programme was announced alongside SSE’s financial results for the six months to September 2021, in which the Company expressed its confidence in delivering solid financial performance for the full year.
The first six months of its financial year saw adjusted operating profit up 15%
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