SSE on course despite slight lag in renewables

Energy giant SSE marked its first quarter out of the household energy sector by saying that it is on course to deliver on its earnings target for the year.

The announcement comes despite the firm’s renewable output slipping five per cent behind expectations in the first nine months of the year.

Read more: Ovo completes purchase of SSE’s retail business

The former Big Six member said that earnings per share would be between 83p and 88p for the year, although it cautioned that this would depend on weather conditions.

The firm also used its results to announce it was adding 11 turbines to the 70 megawatt Gordonbush onshore wind farm in the north of Scotland.

The additional capacity of the new turbines will be 47 megawatts. The project will be built without government subsidies, making it one of the first new developments to be built since 2015.

Despite the new development, managing director Jim Smith warned that as private investment is only possible for a limited number of the most attractive projects, onshore wind won’t be deployed at the rate needed to reach Scotland and the UK’s net zero targets without intervention from government.

The Committee on Climate Change has advised governments that onshore wind capacity needs to expand by at least one gigawatt a year to achieve net zero emissions targets, reaching 35 gigawatts by 2035.

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Backing up its renewables credentials, SSE will end production at its last coal-fired power plant in Warrington in March.

SSE’s finance director Gregor Alexander said: “Since reporting our interim results we have continued to deliver on our priorities, focusing the SSE group on businesses that are well placed to play a leading role in delivery of a low-carbon strategy that supports the transition to net zero emissions.”

John Moore, senior investment manager at Brewin Dolphin said: “While the recent trading environment for utility companies has been difficult, SSE seems to be in relatively good shape with management committed to its dividend plan and earnings per share expected to be within target range.

“The share price has been increasing steadily since late May last year and sat nearly 50 per cent higher at close of business yesterday – a sign perhaps that many investors believe better times are ahead for SSE as it continues to find its way through a significant period of transition.”

Read more: Watchdog gives green light for Ovo Energy’s £500m SSE deal

Earlier this month SSE completed the sale of its household energy supply business to challenger brand Ovo Energy for £505m.

The deal means that Ovo will take over SSE’s 3.5m customers, making it one of the UK’s largest energy companies.