SSE commits to green power investment and net zero as earnings charge up

Energy giant SSE has topped its expectations for the past quarter as it pushes ahead with billions of pounds of investment in green power schemes.

Releasing a trading update, the Perth-headquartered group said that its first-quarter trading performance had “slightly exceeded” internal expectations, leading it to reaffirm its full-year guidance for adjusted earnings per share of at least 120p.

The firm told investors that progress had been made across various capital expenditure projects “at pace”.

First power from the Seagreen offshore wind farm is expected by the end of this month and construction on the Viking onshore wind farm and Dogger Bank A, B and C offshore wind farms is said to be “progressing well”.

Progress continues to be made on the disposal of the group’s 25 per cent minority stake in SSEN Transmission with the formal process now under way. SSE has targeted an agreed sale by the end of the calendar year, with completion following receipt of regulatory approvals.

The group was releasing the update to investors ahead of its annual shareholder meeting.

Finance director Gregor Alexander said: “We continue to make excellent progress on our net zero acceleration programme, investing at pace in the vital electricity infrastructure that will help build a more secure, affordable and sustainable energy system.

“The strength of SSE’s integrated and balanced business model, combined with our commitment to positive engagement with key stakeholders, is serving us well through a period of market, political and regulatory complexity.

Perth-headquartered SSE is now one the world's largest investors in on and offshore wind energy.

“We remain confident in our financial outlook for strong earnings growth this year and look forward to updating the market on performance in our interim results statement on November 16.”

Stuart Lamont, investment manager at financial services group Brewin Dolphin, said: “SSE was expected to deliver a robust update against the backdrop of high power prices and the company appears to have delivered, with performance exceeding management’s expectations.

“The business continues to make progress on its strategy which, over the long term, is designed to support spending on major projects and an attractive dividend. At the same time, SSE should benefit from the transition to net zero and the current macroeconomic backdrop, but political risks remain elevated.”

In May, SSE outlined plans to invest some £15 billion in Scottish “clean electricity” infrastructure this decade as it unveiled a double-digit hike in profits.

The group plans to invest in key technologies including new offshore wind, critical network upgrades, carbon capture and storage (CCS), batteries and hydroelectric power.

SSE said that assuming a “continued supportive policy environment”, its 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.

The firm set out its investment plans for the period up to the end of the decade as it published its full-year financial results for 2021/22.

Adjusted operating profit jumped 15 per cent year-on-year to just over £1.5bn, while profit before tax was up 23 per cent at almost £1.2bn.