SSE's renewables output hit by lack of wind but profits remain on track: reaction

SSE, the Perth-headquartered power generating giant, has seen its renewables output hit by a lack of wind though its annual profits remain on track.

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

“Dry and still weather patterns” led to a shortfall of around 5 per cent from the group’s renewable facilities during the first quarter of its financial year but the first few weeks of the second quarter have seen a return to more normal conditions. Meanwhile, electricity output from SSE’s gas-fired generation plant for the three months to the end of June was down on the same period last year, reflecting “more planned outages”.

Despite those setbacks, the group reiterated its annual outlook for adjusted earnings per share of more than 150 pence for the full financial year. In a trading update to coincide with its annual shareholder meeting in Perth, SSE also said it was making good progress with the delivery of its £18 billion net zero acceleration programme. Among key project milestones hailed by the group were the installation of the 114th and final Vestas turbine at the Seagreen offshore wind farm and first power from Dogger Bank A offshore wind farm, which is expected in the coming weeks.

Finance director Gregor Alexander told investors: “SSE is a long-term business with a clear strategy, and we remain focused on delivering the ambitious [net zero acceleration programme plus] growth plan that we announced in May. We are making good progress on the critical national infrastructure projects that underpin our growth plans out to 2027, and we continue to develop options that could see us invest up to £40bn over the next decade. We are seizing the long-term opportunities presented by net zero while in the near term, subject to normal weather and plant availability, our outlook for the full-year remains unchanged.”

Tom Gilbey, equity research analyst at investment firm Quilter Cheviot, said: “SSE seems to be on track with its major projects, with the 114th and final Vestas turbine installed at Seagreen offshore wind farm in June, and around 90 of the turbines are now commissioned. And, positively, first power is expected from its Dogger Bank A offshore wind farm in the coming weeks and SSE continues to develop options that could see it invest up to £40bn over the next decade. While we like the fundamental drivers of SSE which offers exposure to the networks and renewables, we prefer National Grid due to its more defensive characteristics.”

In May, SSE outlined plans to invest up to £40bn over the next decade, creating more than 1,000 green jobs a year, saying the record sum would mark one of the largest clean energy investment programmes the UK and Scotland have ever seen. The move includes plans to inject more than £21bn into Scotland alone, and will see the group ramp up its deployment of renewable energy. It unveiled the major plans alongside its full-year results for 2022/23, including an adjusted profit before tax of just over £2.18bn, up by 89 per cent on the year before. Earnings per share rose 75 per cent to 166p.

First giant turbine powered up at Scotland’s biggest offshore wind farm