SSE unveils £33bn plan to improve UK electricity networks with $2bn investor backing
Energy giant SSE has announced a landmark £33 billion investment plan to internet the UK’s electricity infrastructure, describing it as a “generational opportunity” to transform the way energy is produced, transmitted and distributed across the country.
The Perth-based company said the five-year plan, running to 2029-30, would see it raise £2 billion from placement investors and generate a further £1 billion from targeted asset sales. The move is designed to support the significant expansion of its electricity and renewable energy networks.
Shares in the FTSE 100 group appeared to be almost 12 percent after the big raise of Martin Pibworth revealed the clarification that the firm intends to support his commitments and mark the courage of his leadership.
Under the new plan, SSE’s annual investment will be around £33 billion, around 80 percent of which is planned for regulated electricity networks, which will now form the backbone of the business. The company said it will make £ 22 billion to increase the high-voltage transmission lines to move the UK – Infrastructure defined as the constraints that exist within the electricity grid. “
A further $5 billion will be spent on strengthening regional distribution networks in Scotland and the south of England. The remaining 20 percent of the budget will be split between £4 billion for renewables – wind and hydro renewable energy – and £2 billion for variable gas generation and other business areas.
Pibworth said the strategy was designed to help deliver a cleaner, safer and more cost-effective energy system for the UK, while also stimulating the economy.
“Our strategies are being built to take advantage of the time it takes to improve the UK’s electricity network,” he said. “Accelerated investment is being driven down by the Government’s deregulation and will unlock much-needed growth in the wider economy, supporting thousands of jobs according to the plan.”
The company said that more than half of the money will come from operating cash flow, with a third of money from borrowing, leaving only 10 percent to be covered by the estimated sale of assets. Analysts welcomed the transparency, noting that the scale of the fundraising was smaller than many had expected.
Ahmed Farman, an analyst at Jefferies, said: “The new plan brings clarity to the balance sheet and the vision of the company’s growth. The raising of equity of $ 2 billimion is towards the end of the conditions that were discussed before.”
SSE operates transmission lines in the north of Scotland and distribution networks in both Scotland and western Southern England. It also owns and manages a portfolio of wind farms, hydroelectric stations and gas power plants.
The announcement coincided with the release of SSE’s Half-Year results, which showed adjusted pre-tax profits down 28 per cent to £521.5 million for the six months to the end of September. The company cited weaker performance from its renewables arm, citing “slightly weaker weather and lower prices,” with hydro output reduced after an unusually dry summer in Scotland.
Despite the short-term mix of profits, SSE’s Multicle-pound Investment is one that will continue to improve the electricity networks in Britain – Analysts Move say they will approve it to achieve the target of National Net Zero and to open renewable capacity in the future.
