SSE to Invest Bumper Profits in Green Opportunities

Energy giant SSE has revealed ambitious plans to pour £40bn into renewable energy over the next decade, following a nearly twofold rise in its annual profits, significantly boosted by its fossil fuel power plants. A merger between Scottish Hydro-Electric and Southern Electric – Scottish and Souther  

The FTSE 100 firm, headquartered in Perth, intends to execute its unprecedented green energy scheme by investing substantially beyond its earnings. The company's adjusted pre-tax profit skyrocketed to £2.18bn in the 12 months leading up to the end of March, a substantial increase from the £1.16bn reported the previous year. 

This drastic profit escalation was driven largely by earnings from SSE's gas-fired power stations, which saw a fourfold increase to £1.24bn for the last fiscal year, up from £331.1m the previous year. 

Despite the heightened profits associated with fossil fuels following Russia's invasion of Ukraine and the resultant surge in global energy market prices, SSE maintains a commitment to renewable energy. It managed to avoid elevated taxes on its gas-powered station profits as the government's energy generator levy primarily targeted renewable power. 

SSE CEO, Alistair Phillips-Davies, defended the company's tax position, attributing the UK's energy crisis primarily to gas, and stated that SSE's investments aim to reduce the UK's dependence on this resource. 

Emphasizing the company's focus on "profits with a purpose," Phillips-Davies outlined how these profits will speed up SSE's renewable energy investments and bolster the UK's electricity grid, thereby driving the country's climate objectives. 

While the company considers international investments as part of its ten-year, £40bn plan, Phillips-Davies expects Europe to continue as SSE's central market. He argued that tangible action, rather than mere ambition, is essential for tackling climate change, energy affordability, and security issues. 

SSE, which operates gas-fired power stations, hydroelectric plants, wind farms, and an electricity transmission business, had initially planned to accelerate the UK's net zero targets by 2021 through a £12.5bn investment. This plan has been extended until 2027, with a 40% increase in spending to £18bn. 

SSE's updated plan involves a 50% increase in capital expenditure for regulated electricity networks, a 40% rise for renewable electricity generation, and a 10% increment for low-carbon thermal generation and other enterprises. 

Phillips-Davies asserted, “Through the implementation of our society-aligned strategy, we are fast-tracking renewables development, fortifying the networks essential for decarbonisation, providing crucial flexible generation, and diligently ensuring no one is left behind in the transition to net zero.”