SSE reports first-quarter performance in line with forecasts

18th Jul 2024 07:18

(Sharecast News) - SSE reported a strong operational performance in its first quarter on Thursday, aligning with expectations, with significant growth in its renewables sector.

The FTSE 100 company said its renewable energy output increased by 60% year-on-year, driven by normalised weather conditions and capacity expansions.

It reaffirmed the financial outlook stated in its preliminary full-year results in May, adding that it continued to foresee steady performance across its business units, contingent on factors such as weather, market conditions, and plant availability during the upcoming winter months.

SSE said it was committed to expanding its asset base through its £20.5bn 'Net Zero Acceleration Programme Plus' (NZAP Plus).

Key developments included the generation of first power at the Viking onshore wind farm in Shetland, with full energisation anticipated soon, and the installation of the final turbine at the Yellow River onshore wind farm, targeting early 2025 for commercial operations.

Additionally, construction on the Dogger Bank A offshore wind farm progressed, with 27 turbines installed and full operations expected in the first half of 2025.

Further advancing its infrastructure projects, SSE said it had made strides on the Eastern Green Link 2 between Peterhead and Drax, securing HVDC cable supply contracts with NKT for projects in Aberdeenshire and the Western Isles.

Beyond the current investment plan, SSE said it was committed to developing the 2GW Alpha offshore wind tender site in the Netherlands, aiming for commissioning by the decade's end, pending a final investment decision.

In terms of operational performance, SSE Renewables reported significant increases across various segments for the quarter ended 30 June.

Onshore wind generation rose to 1,069 GWh from 715 GWh, offshore wind to 874 GWh from 496 GWh, conventional hydro to 565 GWh from 341 GWh, and pumped storage generation to 88 GWh from 73 GWh, culminating in a total renewable output of 2,596 GWh compared to 1,625 GWh in the same period last year.

Conversely, SSE Thermal's gas-fired generation output saw a decline, totaling 3,338 GWh for the first quarter, down from 3,714 GWh in the same period in 2023.

The reduction was seen both in Great Britain, with 3,072 GWh from 3,218 GWh, and the Republic of Ireland, with 266 GWh from 496 GWh.

Additionally, oil-fired generation was marginally lower at 27 GWh compared to 29 GWh in the same period last year.

"We have made a solid start to the financial year as we convert our premium project pipeline into high-quality sustainable earnings," said chief financial officer Barry O'Regan.

"We remain on track to meet our 2027 growth targets that are underpinned by world-class assets and balance sheet strength, with two-thirds of revenue either regulated or already backed by existing government policy.

"The outlook is supported by the enhanced clean power target of the new UK government which recognises the essential need for investment in renewables, flexible power and electricity networks - areas where SSE has unrivalled capability and significant growth potential."

Reporting by Josh White for Sharecast.com.