View
0
Download
0
Category
Preview:
Citation preview
FINANCIAL RESULTS FOR THE YEAR TO 31 MARCH 2020
17 JUNE 2020
PROVIDING ENERGY TODAYBUILDING VALUE FOR TOMORROW
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies2
PROVIDING ENERGY TODAY, BUILDING VALUE FOR TOMORROW2019/20 Results Presentation
Part One
• 2019/20 – a year of progress
Part Two
• Responding to coronavirus –positioning the business well for the long term
Part Three
• Contributing to green recovery, creating value through transition to net zero
Alistair Phillips-DaviesChief Executive
Gregor AlexanderFinance Director
Martin PibworthEnergy Director
SSE’s vision is to be a leading energy company in a net zero world
Clear objectives
• Sustaining dividend payments on which pensioners and savers depend
• Promoting long term success of company for benefit of all stakeholders
Focus on regulated electricity networks and renewables
• Achieving excellence
• Contributing to green economic recovery
• Delivering growth
• Creating value through transition to net zero
SUSTAINING DIVIDENDS AND PROMOTING LONG-TERM SUCCESS
3SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
Supporting electricity supplies
• Maintaining reliability of electricity networks
• Ensuring availability of power generation
Being a responsible employer
• Working closely with trade unions
• No employees furloughed
Committing to C-19 Business Pledge
• Focus on customers, communities, suppliers and employees
FULFILLING OUR CORE PURPOSE
4
Responding to coronavirus
New photo?
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
A YEAR OF PROGRESS
Part One
5
RESULTS TO 31 MARCH 2020
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
6
Increases in adjusted operating profit, adjusted profit before tax and adjusted earnings per share
A solid recovery from the previous year
SOLID FINANCIAL RESULTS
RESULTS TO 31 MARCH 2020A year of progress
Success in CfD auctions and quality RIIO T2 business plan
Completed Energy Services sale to focus on the core
STRATEGIC EXECUTION
Total recordable injuries down to 71 in 2019/20 from 86 in 2018/19
Best ever year for safety performance, wellbeing and environmental care
OPERATIONAL DELIVERY
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
RESULTS TO 31 MARCH 2020Coronavirus and related impacts
7
2019/20 Income Statement £m
Adjusted EBIT impact (18.2)
Exceptional charge (33.7)
Total estimated impact (51.9)
• Demand impacts
• Increased provision
within customer
businesses for bad
debts
Main components
2019/20 Adjusted EPS Pence
March 27 forecast (pre-coronavirus impact) 83-88
Adjusted EPS 83.6
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
RESULTS TO 31 MARCH 2020Overview
Income statement – continuing operations* FY20 FY19
Adjusted Operating Profit - £m 1,488.4 1,088.7
Adjusted Profit Before Tax - £m 1,023.4 685.1
Reported Profit Before Tax - £m 587.6 1,300.3
Adjusted EPS - pence 83.6 61.8
8
Key movements
• Restoration of GB Capacity Market payments
• Reduction in EPM-related loss
• Strong performance in SSE Renewables
* 2019/20 discontinued operations: SSE Energy Services adjusted operating profit £32.7m; Gas Production Assets
adjusted operating profit £25.8m
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
IFRS9 Movements
RESULTS TO 31 MARCH 2020Exceptional items
FY20 Exceptional items (£m)Cont.
Operations
Discont.
OperationsTotal
Reshaping the SSE Group (176.0) (237.7) (413.7)
Market conditions (291.3) (291.3)
Coronavirus impact (33.7) (33.7)
Total exceptional items (209.7) (529.0) (738.7)
9SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Main components
• Loss on disposal of Energy
Services is £231m lower then
reported at HY due to novation of
out-the-money derivatives
• Loss on closure of final coal plant
• Telecoms and onshore wind
gains
• Gas Production impairment
For a full description of exceptional charges see note 7 of the summary financial statements
RESULTS TO 31 MARCH 2020Regulated networks businesses
10
Adjusted EBIT (£m) FY20 FY19
Electricity Transmission 218.1 252.1
Electricity Distribution* 356.3 401.3
Investment in SGN 202.3 176.8
Total Networks 776.7 830.2
RAV
• Combined RAV £9.1bn at 31 March 2020
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
*September 2019 forecast was £375m; variance due to lower than expected volumes in 2H20
Year on year movement
• Phasing of allowed revenue
• Increased depreciation
Net increase in costs including
• Increased depreciation
• Higher costs associated with
supplying Shetland
• Increased Totex outperformance
• Additional commercial income
11
RESULTS TO 31 MARCH 2020SSE Renewables
Adjusted EBIT (£m) FY20 FY19
Hydro (inc. pumped storage) 191.1 178.7
Onshore wind 201.4 188.3
Offshore wind 174.8 88.9
Total SSE Renewables 567.3 455.9
Year on year movement
• Net increase in wind energy capacity, mainly Beatrice
• Total renewable output 11.4 TWh including 0.7TWh constrained off wind
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
12
RESULTS TO 31 MARCH 2020Core Businesses
SSE Renewables and regulated networks (SSEN and SGN) contributed around 90% of Group EBIT and 85% of Group EBITDA in FY20
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Adjusted EBITDA (£m) FY20 FY19
SSE Renewables 803.3 694.0
SSEN Electricity Networks 798.9 850.9
Total Core Businesses 1,602.2 1,544.9
Investment in SGN 259.1 234.3
Total Renewables and Networks 1,861.3 1,779.2
Adjusted EBIT (£m) FY20 FY19
SSE Renewables 567.3 455.9
SSEN Electricity Networks 574.4 653.4
Total Core Businesses 1,141.7 1,109.3
Investment in SGN 202.3 176.8
Total Renewables and Networks 1,344.0 1,286.1
RESULTS TO 31 MARCH 2020Energy Businesses
13
Adjusted EBIT (£m) FY20 FY19
Total Renewables and Networks 1,344.0 1,286.1
Thermal Generation 152.7 (22.3)
Gas Storage 3.7 (5.7)
Gas Production contracts 77.1 n/a
EPM (137.4) (284.9)
Total Energy Businesses 96.1 (312.9)
Total Customer Businesses 66.1 122.0
Corporate unallocated (17.8) (6.5)
SSE Group 1,488.4 1,088.7
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Year on year movement
• Capacity market reinstatement
• Increased multifuel profits
• Benefitting from merchant
operation in volatile markets
• Reflecting split of assets and
contracts pursuant to sale
Variance to guidance
• OVO transaction impact
• Weaker Sterling
RESULTS TO 31 MARCH 2020Customer Businesses
14
Adjusted EBIT (£m) FY20 FY19
Total Renewables and Networks 1,344.0 1,286.1
Total Energy Businesses 96.1 (312.9)
Business Energy 9.2 51.6
Airtricity 48.8 38.6
Enterprise 8.1 31.8
Total Customer Businesses 66.1 122.0
Corporate unallocated (17.8) (6.5)
SSE Group 1,488.4 1,088.7
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Year on year movement
• Higher bad debts and other
indirect costs
• Non-commodity costs
• Slightly improved margins
• Reflects reduced earnings due to
50% disposal of Telecoms
RESULTS TO 31 MARCH 2020Pension schemes
Contributing to employees’ pension schemes FY20 FY19
Net pension scheme asset - £m 341.7 287.1
15
• Net accounting surplus across SSE’s two pension schemes
• SHEP conversion of swap covering £800m of liabilities to ‘buy-in’
• Significantly reducing exposure to fluctuations in valuation of scheme obligations
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
16
RESULTS TO 31 MARCH 2020Investment and Capital Expenditure
FY20 Summary
Transmission
• Total £329.0m
• New substations
Distribution
• Total £364.9m
• Subsea reinforcement
Renewables
• Total £342.7m
• Seagreen contribution
Thermal
• Total £177.0m
• Keadby 2 and multifuel
Capital Recycling
• 19MW Sleive Divena II at £2,700/kW
0
200
400
600
800
1000
1200
1400
1600
FY20 FY19 FY18
Investment and CapEx
Networks Renewables Other
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
£m
RESULTS TO 31 MARCH 2020Managing net debt
FY20 HY20 FY19
Adjusted net debt and hybrid capital - £m 10,466 10,339 9,437
Average cost of debt at period end, incl. hybrid capital 3.51% 3.60% 3.70%
Adjusted net finance costs - £m 465.0 403.6
17SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Adjusted net finance cost movement
• Higher net debt
• Higher JV interest costs
• Lower capitalised interest
• Impact of IFRS 16
RESULTS TO 31 MARCH 2020Dividend
18
• Dividends provide vital income for pensions and savings
• 2019/20 was a year of progress
• Quality and nature of core businesses
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
* recommended
56p*
FULL YEAR DIVIDEND 2019/20FINAL DIVIDEND 2019/20Payment 18 September
80p
Part Two
19
2020/21 AND BEYOND
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
SUSTAIN DIVIDENDS
20
2020/21 AND BEYONDOverview
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
• Quality and nature of SSE’s businesses and assets and their potential for sustainable value creation transcends the financial impact of coronavirus in 2020/21
• Coronavirus impact on the wider economy is expected to have short term adverse effects on SSE’s business; substantial in context of one year, largely temporary in duration
KEY OBJECTIVES
PROMOTE LONG TERM SUCCESS
Sustain SSE’s ability to pay dividends on which pensioners and savers depend for income
Contribute to green economic recovery and create value through the transition to net zero
21
Main expected adverse effects resulting from economic impact of coronavirus
2020/21 AND BEYONDPotential impact of coronavirus
1. Reduced demand for electricity affecting DUoS
2. Reduced demand from customers for electricity and related services
3. Excess electricity hedges with negative mark-to-market valuations
4. Higher level of customers bad debt
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
EPS guidance to be provided later in the year
Coronavirus impact modelling
2020/21 Estimated impact
Electricity Distribution EBIT* £50m - £90m
Customer Solutions EBIT £60m - £110m
Enterprise EBIT £30m - £35m
SGN EBIT £10m - £15m
Total £150m - £250m
*at least 80% of which expected to be recoverable under the price control
Expect Transmission, Renewables and Thermal to see no net material impact
22
2020/21 AND BEYONDA comprehensive plan
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
KEY OBJECTIVES
SUSTAIN DIVIDENDS
PROMOTE LONG TERM SUCCESS
Sustain SSE’s ability to pay dividends on which pensioners and savers depend for income
Contribute to green economic recovery and create value through the transition to net zero
EFFECTIVE FINANCIAL MANAGEMENT
MANAGING CASH OUTFLOW
SECURING VALUE FROM DISPOSALS
COMPREHENSIVE PLAN
23
2020/21 AND BEYONDFinancial management and liquidity
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Good liquidity position
• Moved quickly to issue new debt in April 2020
• Average debt maturity 6.5 years
• Cash and committed facilities of over £2bn, after planned redemption of €600m Eurobond today
Refinancing requirements
• Only financing requirement over the next two years relates to around £1.2bn hybrid bond, assuming £2bn disposals
24
2020/21 AND BEYONDManaging cash outflow
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Reducing 2020/21 cash outflow by c£250m
• Prioritising and deferring capital expenditure (90%)
• Execution of options to extend renewables internationally deferred
• Reducing and deferring operational expenditure plans (10%)
Strategic investment projects unaffected
• Designed to earn sustainable returns to support earnings
No new share buy-back programmes in 2020/21
• No buy-back of shares irrespective of scrip uptake
25
2020/21 AND BEYONDSecuring value of over £2bn
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Targeting proceeds of over £2bn by the autumn of 2021
• Sustains dividends
• Sharpens focus on core business
• Supports financial management
• Underpins future investment
Timing subject to market conditions, but confident of significant interest in assets and securing over £2bn
SUSTAIN DIVIDENDS
KEY OBJECTIVES
PROMOTE LONG TERM SUCCESS
Sustain SSE’s ability to pay dividends on which pensioners and savers depend for income
Contribute to green economic recovery and create value through the transition to net zero
26
2020/21 AND BEYONDSecuring value from sales
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
Disposal of non-core assets
• SSE not main operator
• Less aligned with transition to net zero
• Slough Multifuel sold April 2020
IN PROGRESS TO BE INITIATED
• Gas Production Assets
• Contracting
• Walney Offshore Wind Farm
• Multifuel
27
2020/21 AND BEYONDSecuring value from partnering
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
RENEWABLES SGN
• Further SSER project partnering
• Option to sell remaining stake
SSEN
• Consider sale of minority stakes*
*enabling SSE to retain the lead role in relation to governance and operational control
28
2020/21 AND BEYONDCapital and investment spend
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
• Capital and investment to focus on core strategic
projects:
• Making greatest early contribution to transition
to net zero
• Contributing to wider green economic recovery
• Helping achieve our 2030 goals on renewable
energy and electrification
• Earning sustainable returns in the years ahead
2020/21 Capex (net of project finance refunds)
expected to be around £1bn*
Forecast CAPEX to FY2025
Transmission
Distribution
Renewables
Thermal Energy
Other
£7.5bn
* Before mitigation
29
2020/21 AND BEYONDA sustainable financial framework
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
EFFECTIVE FINANCIAL
MANAGEMENT
MANAGING CASH OUTFLOW
SECURING VALUE FROM
DISPOSALS
FINANCIAL FRAMEWORK
NE
T D
EB
T/E
BIT
DA
RA
NG
EC
RE
DIT
RA
TIN
G
NET DEBT/EBITDA RANGE
• Maintain net debt/EBITDA ratio at the lower end of a 4.5 to 5 times rangefrom 2021-2025
CREDIT RATING
• Maintain credit ratios comfortably above those required for an investment grade credit rating
30
2020/21 AND BEYONDDividend
SSE Financial Results for the Year to 31 March 2020
Presenter: Gregor Alexander
*assuming 1.5% RPI for 2020/21
EFFECTIVE FINANCIAL
MANAGEMENT
MANAGING CASH OUTFLOW
SECURING VALUE FROM
DISPOSALS
FINANCIAL FRAMEWORK
NE
T D
EB
T/E
BIT
DA
RA
NG
EC
RE
DIT
RA
TIN
G
Full year dividend of 80p for
2019/20
Target full year dividend of 80p
+ RPI for 2020/21
KEY OBJECTIVES
SUSTAIN DIVIDENDS
PROMOTE LONG TERM SUCCESS
Sustain SSE’s ability to
pay dividends on
which pensioners and
savers depend for
income
Contribute to green
economic recovery
and create value
through the transition
to net zero
Expected interim dividend of
24.4p* for 2020/21
Confident SSE can deliver
2018-23 dividend plan
31
2020/21 AND BEYONDDividend
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
EFFECTIVE FINANCIAL
MANAGEMENT
MANAGING CASH OUTFLOW
SECURING VALUE FROM
DISPOSALS
FINANCIAL FRAMEWORK
NE
T D
EB
T/E
BIT
DA
RA
NG
EC
RE
DIT
RA
TIN
G
KEY OBJECTIVES
SUSTAIN DIVIDENDS
PROMOTE LONG TERM SUCCESS
Sustain SSE’s ability to
pay dividends on
which pensioners and
savers depend for
income
Contribute to green
economic recovery
and create value
through the transition
to net zero
Plan to invest £7.5bn net in five
years to 2025
Full year dividend of 80p for
2019/20
Target full year dividend of 80p
+ RPI for 2020/21
Expected interim dividend of
24.4p* for 2020/21
Confident SSE can deliver
2018-23 dividend plan
Part Three
32
CREATING VALUE THROUGH NET ZERO
SSE Financial Results for the Year to 31 March 2020Presenter: Alistair Phillips-Davies
33
CREATING VALUE THROUGH NET ZEROStrategy and capability
SSE Financial Results for the Year to 31 March 2020Presenter: Alistair Phillips-Davies
• Urgent need to secure green economic recovery
• SSE ‘Greenprint’ for a cleaner, more resilient economy
• Strategic focus on networks and renewables
• Ambitious goals for 2030
• Commitment to having right credentials for ESG investors
34
CREATING VALUE THROUGH NET ZEROStrategy and capability
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
Alignment of strategy demonstrated by:
• Ambitious goals for 2030 relating to decarbonisation and electrification
• Options for new opportunities, using capital discipline in selecting investments
• Skills in development, build and operation of electricity infrastructure
35
CREATING VALUE THROUGH NET ZEROSSE Renewables – Offshore wind – Seagreen
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
• Seagreen to be Scotland’s largest offshore wind farm
• 51% stake sold to Total
• SSE Renewables gross equity contribution around £850m
• £320m investment to date repaid through equity divestment and project finance
• Capacity of 1,075MW; typical annual output around 5TWh
• c40% under CfD; c30% under contract with SSE Group
SEAGREEN EXPECTED TIMELINE
• FID reached June 2020
• Targeting first export Dec 2021; completion Dec 2022
NEW MAPS IN DEVELOPMENT.
TO BE SUPPLIED BY CALLUM TOSH. 15/06/20
36
CREATING VALUE THROUGH NET ZEROSSE Renewables – Offshore wind – Dogger Bank
• Dogger Bank to be world’s largest wind farm
• Using world’s largest turbine GE Haliade-X 12+MW
• 50:50 JV with Equinor, three 1,200MW sites each expected to generate around 5.5TWh annually
• Each project has secured a CfD, with prices ranging from £39.65/MWh to £41.61/MWh at 2012 prices
NEW MAPS IN DEVELOPMENT.
TO BE SUPPLIED BY CALLUM TOSH. 15/06/20
DOGGER BANK EXPECTED TIMELINE
• Dogger Bank A & B FID Q4 2020, targeting first export Q3 2023
• Dogger Bank C progressing to FID Q3 2021
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
37
CREATING VALUE THROUGH NET ZEROSSE Renewables – Onshore wind – Viking
• Decision to invest around £580m in Viking wind farm, subject to final outcome of Ofgem consultation
• 443MW project with estimated load factor of 48%
• Largest onshore wind farm in the UK in output terms
VIKING WIND FARM EXPECTED TIMELINE
• FID reached subject to Ofgem consultation
• First export expected Q2 2024
NEW MAPS IN DEVELOPMENT.
TO BE SUPPLIED BY CALLUM TOSH. 15/06/20
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
38
CREATING VALUE THROUGH NET ZEROSSE Renewables – Growth
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
0
1
2
3
4
5
6
7
Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26
Renewables Growth from Core Projects (before any sell-downs)
Hydro Onshore Offshore
GW
5
1
1. Dogger Bank A/B FID
2. Gordonbush ext completion
3. Dogger Bank C FID
7. Dogger Bank A Completion
8. Dogger Bank B first power
9. Viking Completion
4. Seagreen first power
5. Seagreen Completion
6. Dogger Bank A first power
4 6
3
811
10. Dogger Bank B Completion
11. Dogger Bank C first power
12. Dogger Bank C Completion
12108, 9
2
7
39
CREATING VALUE THROUGH NET ZEROSSE Renewables – Future wind development
SSE Financial Results for the Year to 31 March 2020
Presenter: Martin Pibworth
ON
SH
OR
EO
FF
SH
OR
E
MW
GB Onshore 1,247
NI Onshore 122
ROI Onshore 567
Total 1,936
SSE has a further 1.6GW of offshore options being explored in Ireland
OPERATIONAL DUE FID OR IN CONSTRUCTION CONSENTED REQUIRING CONSENT
MW
Greater Gabbard 252
Beatrice 235
Walney 92
Total 579
MW
Viking 443
Gordonbush Ext. 38
Total 481
MW
Dogger Bank A 600
Dogger Bank B 600
Dogger Bank C 600
Seagreen 1 (42% CfD) 526
Total 2,326
MW
Yellow River 105
Tangy 57
Lenalea 15
Galway Wind Park 14
Total 192
MW
Arklow Bank 2 520
Total 520
MW
Strathy South 208
Cloiche 155
Doraville 138
Other circa. 300
Total 801
MW
Seagreen 2 & 3 3,200
Gabbard Extension 250
Total 3,450
TOTAL: 2.5GW TOTAL: 2.8GW TOTAL: 0.7GW TOTAL: 4.3GW
• Largest electricity storage capacity in the UK
• 400MW of ‘run-of-river’
• 750MW flexible hydro
• 300MW pumped storage
• Uniquely placed to deliver large-scale flexible zero-
carbon power
• Total hydro output of 3,870GWh in 2019/20 vs
3,543GWh in 2018/19 (including pumped storage)
• Increasing in value as the electricity system adjusts
• Total EBITDA £223m for FY20 (vs £220m in FY19)
40
CREATING VALUE THROUGH NET ZEROSSE Renewables – Hydro
SSE Financial Results for the Year to 31 March 2020
Presenter: Martin Pibworth
• High levels of availability, operating efficiently with low levels of operational spend
• Proactive long term capital investment programme
• Consent for new pumped storage at Coire Glas
• Continuing to explore business case
41
CREATING VALUE THROUGH NET ZEROSSE Renewables – Hydro
SSE Financial Results for the Year to 31 March 2020
Presenter: Martin Pibworth
Hydro profitability FY20 FY19
Conventional hydro EBITDA - £m 207.8 195.6
Foyers EBITDA - £m 15.1 24.4
Total EBITDA - £m 222.9 220.0
Conventional hydro EBIT - £m 177.9 157.0
Foyers EBIT - £m 13.2 21.7
Total EBIT - £m 191.1 178.7
Conventional hydro volumes - GWh 3,743 3,318
Foyers gross volumes - GWh 127 168
• Older high-carbon stations at end of useful lives
• Keadby 2 to be Europe’s cleanest and most efficient CCGT
• Expected to achieve 63% gross efficiency
• On target for commissioning 2021
• 15 year capacity contract expected to be worth £17.29/kW by 2024
• Low carbon pathway
SSE Thermal Energy participating in the world’s first ‘zero-carbon cluster’ by 2040
42
CREATING VALUE THROUGH NET ZEROLow carbon thermal
SSE Financial Results for the Year to 31 March 2020
Presenter: Martin Pibworth
• SSE’s vision is to be a leading energy company in a net zero world
• Delivered 50% reduction in carbon intensity between 2006 and 2018
• In 2018 set a new target to achieve another 50% reduction by 2030
New science based target
• Targeting a 60% reduction in carbon intensity of electricity generated by 2030, compared with 2018 levels
• Strategic commitment to creating value through transition to net zero
43
CREATING VALUE THROUGH NET ZERONew emissions targets
SSE Financial Results for the Year to 31 March 2020
Presenter: Martin Pibworth
• Vital role in the transition to net zero
• Electrification of heat and transport create long term growth opportunity
• Heavily focused on delivering change and modernising operations, infrastructure and work practices
• Aiming for strong finish to RIIO-ED1
• Working with stakeholders to prepare for RIIO-ED2
44
CREATING VALUE THROUGH NET ZEROSSEN Distribution
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
45
CREATING VALUE THROUGH NET ZEROSSEN Transmission
SSE Financial Results for the Year to 31 March 2020Presenter: Alistair Phillips-Davies
• Strong record in enabling decarbonisation
• Renewable capacity connected to the grid
• Increased to 6.3GW in 2019/20
• Forecast to reach 10GW by 2025/26
• RIIO-T2 minimum Totex of close to £2.4bn over the five years to 2025/26
• Net zero points to £3.5bn Totex
• Potentially taking Transmission RAV to over £5bn
46
CREATING VALUE THROUGH NET ZEROSSEN Transmission
SSE Financial Results for the Year to 31 March 2020Presenter: Alistair Phillips-Davies
• £2.4bn Totex excludes any island links
• 600MW HVDC Shetland link required by Viking
• Approximate cost £600m
• Subject to final approval from Ofgem, work could begin in late summer
• Longer term strategic opportunities
• E.g. Peterhead to Drax HVDC
0
2
4
6
8
10
12
14
FY20 FY21 FY22 FY23 FY24 FY25 FY26
Networks RAV forecast
Transmission Distribution SGN
47
CREATING VALUE THROUGH NET ZEROSSE Regulated Networks Growth
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
£bn
1. RIIO T2
2. RIIO GD2
3. RIIO ED2
4. Combined Networks RAV could reach £12bn
1, 2 3 4
£2.4bn Transmission Totex (excl. Island links)
48
CREATING VALUE THROUGH NET ZEROSummary
SSE Financial Results for the Year to 31 March 2020
Presenter: Alistair Phillips-Davies
SSE’s vision is to be a leading energy company in a net zero world
Clear objectives
• Sustaining dividend payments on which pensioners and savers depend
• Promoting long term success of the company for the benefit of all stakeholders
Focus on regulated electricity networks and renewables
• Achieving excellence
• Contributing to a green economic recovery
• Delivering growth
• Creating value through the transition to net zero
THANK YOU Questions
Recommended