SSE to extend clear power funding by £2.5bn after earnings rise

SSE plans to develop its funding in clear power by 14% to £20.5bn for its present finances after reporting higher than anticipated earnings for the primary half of the monetary yr.

The FTSE 100 utility advised buyers it can add an additional £2.5bn to its spending plan for the 5 years to the 2023-2024 monetary yr, most of which can be used to put money into renewable power and upgrading the UK’s power grids.

SSE’s chief government, Alistair Phillips-Davies, stated the corporate was ready to speed up its inexperienced ambitions as a result of it had elevated confidence in its future earnings.

The corporate, which relies in Perth, Scotland, reported pre-tax earnings of £565.2m for the primary half of the yr, up by 1% from the identical months final yr. SSE set out plans earlier this yr to speculate £40bn in clear power over the subsequent 10 years after virtually doubling its full-year annual earnings in contrast with the yr earlier than.

Phillips-Davies stated the corporate’s earnings had been more likely to continue to grow due to the “enduring broad political consensus behind the necessity to construct the electrical energy infrastructure required for internet zero”.

He added: “There stays sturdy underlying political consensus on the large drivers of power safety and decarbonisation – accelerating renewables, community funding and versatile energy technology – and these are the expansion engines powering SSE.”

SSE’s renewable power portfolio earned adjusted earnings of virtually £87m for the primary half of the yr, up from £15m in the identical months final yr, whilst milder climate led to decrease output from its windfarms.

Aarin Chiekrie, an fairness analyst at Hargreaves Lansdown, stated SSE had been hoping for a return to “extra regular climate within the second quarter, after a sluggish begin to the yr” for its renewable power tasks.

“However that didn’t materialise as unfavourable climate situations have left renewables’ output 19% decrease than deliberate. Which means different elements of the enterprise are having to choose up the slack, leaving little room for additional slippage if full-year steering is to be hit,” Chiekrie stated.

The corporate’s fleet of gas-fired energy crops, that are used to cowl peaks in demand for electrical energy, reported adjusted earnings of simply over £226m for the primary six months of the yr, down barely from £248.2m within the first half of final yr.

SSE earned adjusted working revenue of £215.6m from working its high-voltage transmission cables within the first half of the yr, up 3% from the yr earlier than. Its native energy grids enterprise, which has regulated earnings, reported a 31% drop in adjusted earnings to £120.1m for the primary half after rising prices in its provide chain.