SSE has said its investment in Scotland’s electricity infrastructure system could total in excess of £15bn this decade.
The Perth-headquartered company, whose operations stretch from renewables to regulated electricity networks, plans to invest in key technologies including new offshore wind, critical network upgrades, carbon capture and storage (CCS), batteries and hydro-electric power.
Assuming a continued supportive policy environment, the group’s current investment plans will see it investing significantly more than it makes in profits over the next few years in order to realise its growth opportunities and accelerate the transition to net zero; with Scotland making up the largest proportion of that.
The investment update came as part of SSE’s full-year financial results for 2021/22, which revealed adjusted operating profit of £1.5bn - up 15% year-on-year. Pre-tax profits were £3.48bn, up from £2.42bn a year earlier.
Lower renewables output, due to unfavourable weather, was partially offset by stronger performance from the company’s flexible generation assets, including hydro and gas-fired power stations.
This enabled adjusted earnings per share of 95.4p, within its 92p to 97p pre-close guidance range.
SSE invested a record £2bn in capital expenditure for the year, as the business set out to deliver its £12.5bn Net Zero Acceleration Programme (NZAP), announced in November.
The goals will see the company cut carbon intensity by 80%, increase renewable energy output fivefold and enable low-carbon generation and demand.
Today's update set out investment in the UK which could total more than £24bn by the end of the decade. Its fully-funded plans to 2026 remain unchanged.
SSE also confirmed it expects to deliver earnings per share in 2023 of at least 120 pence and upgraded its guidance on earnings for the five-year period to March 2026.
As previously announced, SSE intends to sell a minority stake in both its transmission and distribution businesses to help fund its growth opportunities and rebalance capital allocation across the group.
It recently started a sales process for a 25% share of the SSEN Transmission business, primarily due to the fact that its growth is clearer given that its price control runs ahead of SSEN Distribution’s.
A decision on the timing of a similar stake sale in SSEN Distribution will be made in due course.
Among the renewable projects, SSE is developing Scotland’s largest and the world’s deepest tethered offshore wind farm, Seagreen - off the coast of Angus - alongside what will be one of Europe’s most productive onshore wind farms, Viking, on Shetland.
Earlier this year it was confirmed the business had secured rights to develop a new giant floating offshore wind farm off the coast of Angus.
The transmission business is currently constructing the electricity cable which will connect Shetland to the UK mainland for the first time in history. It is also developing the multibillion-pound Eastern Link “superhighway”, which run 270 miles under the North Sea from - Peterhead and Torness - to transport renewable energy to millions across the UK.
The company is also developing pumped storage at Coire Glas in the Highlands, alongside Carbon Capture and Storage (CCS) projects at places like Peterhead.
SSE previously announced its projects will deliver 1,000 direct jobs a year to 2025 across the UK.
Alistair Phillips-Davies, chief executive of SSE, said: “Against the backdrop of a global gas crisis, we are investing far more than we are making in profit to deliver clean homegrown energy that will bolster security, cut emissions and make energy more affordable over the long term.
“These results demonstrate the strength of our strategy and highly complementary business mix, the passion and commitment of our people, and our ability to deliver for all our stakeholders as we create thousands of jobs and contribute billions to Scottish GDP.”
Phillips-Davies also told BBC Radio 4’s Today programme: “I don’t think this government is going to impose a windfall tax on successful sectors that are delivering for the UK and creating jobs and making sure that we avoid these crises in the future by bringing in lower-cost energy from indigenous sources.”
Net Zero and Energy Secretary Michael Matheson added: “Our abundant natural resources, expertise and proven track record in decarbonisation make Scotland perfectly placed to become a global powerhouse of renewable energy – as clearly evidenced by the significant investment plan from SSE.
“The coming decade will be truly transformative for our energy sector - delivering further good, green jobs and benefits for communities, and I welcome SSE’s firm commitment to playing an important role in our just transition to net zero.”
Independent analysis by PwC found the business contributed £2bn to Scottish GDP, supporting more than 11,000 jobs.
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