Perth-based renewable power and networks giant SSE has announced that output from its SSE Renewables’ assets in during the April 1 to September 22 period this year was around 32% below plan, which represents an 11% shortfall on SSE’s forecast total output for the full year.
“This shortfall was driven by unfavourable weather conditions over the summer, which was one of the least windy across most of the UK and Ireland and one of the driest in SSE’s Hydro catchment areas in the last seventy years,” said SSE.
“Performance was also affected by the requirement to buy back hedges in volatile markets.
“Both scheduled and unscheduled outages have had an impact on availability of SSE’s Thermal plant, but market volatility has improved performance at SSE’s Gas Storage operations in recent months.”
SSE finance director Gregor Alexander said the group will soon update the market “with an ambitious new investment plan that will optimise the SSE group’s options and opportunities …”
SSE has been under pressure from US activist hedge fund Elliott Advisors, which has been pushing for a breakup of the group into two separate companies after buying up a small stake in the Scottish firm.
Elliott has been putting pressure on SSE management to split its renewables and networks businesses into two separate companies, but SSE has said there has been no decision made to break up the group, which is one of Scotland’s largest listed companies and biggest employers.
In its financial outlook, SSE said it remains confident about delivery of a solid financial performance for the full year.
“In light of the factors outlined above, SSE expects to report adjusted earnings per share in the range of 7.5p to 10p for the half-year,” said the Perth firm.
“Also, and in line with its dividend plan to 2023, SSE expects to recommend a full-year dividend of 80 pence plus RPI inflation.
“Based on RPI of 3.75%, an interim dividend for 2021/22 of 25.3 pence is expected to be paid in March 2022.”
SSE Renewables announced separately on Wednesday it has signed an agreement with Pacifico Energy, one of Japan’s largest developers of renewable energy, to create a joint ownership company that will pursue offshore wind energy development projects in Japan.
SSE finance director Gregor Alexander said: “SSE’s very deliberate mix of economically regulated and market-based businesses provides resilience against seasonal variability.
“The operational issues we’ve faced in the first half are, by their nature, time-limited and the key months of our financial year are still to come.
“The successful reshaping of the group through our disposals programme has sharpened the focus on our core renewables and electricity networks businesses, and those businesses that are truly complementary to them.
“We are creating significant growth opportunities, most recently with our Japanese announcement today.
“We look forward to updating the market with an ambitious new investment plan that will optimise the SSE group’s options and opportunities in the transition to net zero, and to partnering with the UK Government as Principal Partner of COP26 in Glasgow.”