© Supplied by SSE 
Perth-based SSE has shaved £3 billion from its plans to invest in its energy production and networks businesses due to a “changing macro environment” and delays to consent to phase in networks.
The adjustment came as the firm reported a £2.1bn profit for the year ending 31 March, which union leaders branded “obscene”.
Chief executive Alistair Phillips-Davies, who noted this will be his last time overseeing results for the firm before retiring, used the occasion to address electricity market reform.
He said proposals to introduce zonal pricing – a mechanism linking pricing to regional supply and demand – would be a “huge mistake”.
In a statement, he said: “The government is considering ‘zonal pricing’ – a fundamental change to the UK electricity market which is one of the remaining options on the table following a market review kicked off by the previous government.
“We’ve been clear, as has anyone with a serious interest in building, making or investing in anything in this country: this would be a huge mistake. It risks creating a postcode lottery, where some households would pay £200–£300 more simply because of where they live.
“It would inject more than five years of uncertainty, raise the risks and costs of investments, and ultimately leave us more exposed to gas prices for longer. Ruling it out would generate an immediate boost to investment.”
SSE, which is the UK distribution network operator (DNO) responsible for the electricity grid network across central southern England and the north of Scotland through its SSEN Transmission business, said it would instead invest around £17.5bn in the next five years in what it described as an “evolving investment programme delivering in complex operating environment”.
SSE recently announced there were 300 jobs at risk in its renewables business in the UK and Ireland.
Chief executive Alistair Phillips-Davies said: “SSE continues to prove the benefits of a portfolio that is built to withstand risk and uncertainty and a strategy that is focused on creating sustainable value.
“We have met our financial goals for the year and evolved our investment plans to reflect the changing world around us – leaning into the opportunities presented in networks and redoubling our capital discipline across our energy businesses.
“We are particularly well placed to contribute to future energy systems in our home markets built on renewables, networks and flexibility. This opportunity, alongside our balance sheet strength and the increased proportion of index-linked revenue we anticipate, gives us every confidence in our FY27 target of 175-200p earnings per share and sustainable growth to 2030 and beyond.”
© Supplied by SSEN TransmissionSSEN Transmission, which is 25% owned by Ontario Teachers Pension Plan, also announced it was dropping a plan for a substation for its Beauly-Peterhead 400kV project.
It said it has discovered “unanticipated challenges” at the site of the proposed Coachford substation to the south of Keith.
The substation was one of four along the route of the project, part of a £20 billion upgrade to the transmission network across the north of Scotland.
SSEN said it would look for “alternative options” for another substation which will still be required by 2033 to meet future network demands and reduce infrastructure impact.
SSEN development portfolio manager Nick Brown said: “We will now actively explore alternative options to deliver the network capabilities originally planned at Coachford.
“That work will involve identifying potential new sites in line with ongoing and future network development needs. The company will build on the significant insight already gathered from the Coachford planning and consultation process, ensuring that lessons learned inform future site selection and design.”
