SSE has outlined how what it described as its balanced portfolio of electricity assets, infrastructure and integrated business mix have helped it post a “strong performance” during market volatility.
The company’s adjusted EBITDA of continuing operations for the financial year ended 31 March 2022 is £2,257.2 million, compared to £1,996.3 million for the year prior.
Its reported adjusted operating profit, meanwhile, is £1.5 billion, up 15% year-on-year, with lower renewables output from unfavourable weather offset by a stronger performance from its flexible generation assets – which includes hydro and gas-fired power station.
It comes as SSE states that its investment in Great Britain’s electricity infrastructure system could total over £24 billion this decade.
Its investment plans – assuming a continued supportive policy environment – include radically increasing renewables capacity, with a fivefold increase in output by 2031, as well as upgrading electricity networks to support increased demand and investing in low-carbon flexible generation such as pumped hydro storage and carbon capture and storage (CCS).
Indeed, the company is already developing pumped storage at Coire Glas in the Highlands and CCS projects at Peterhead and Keadby, as well as battery and hydrogen technologies at multiple sites.
More policy support for long-duration energy storage (LDES) such as pumped hydro is still needed, SSE has previously said, stating that a policy and market framework that appropriately values LDES technologies will be critical to the deployment of such systems at the levels needed for net zero.
This new investment figure follows the company detailing a £12.5 billion by 2026 investment plan in November 2021.
Meanwhile, independent analysis by PwC found SSE contributed £5.8 billion to UK GDP in 2021/22.
The adjusted operating profit of SSE Renewables during the financial year was £568.1 million, a drop on the previous year’s £731.8 million. This was mainly due to developer profits of £64 million from a 10% stake disposal in the Dogger Bank C wind farm in February 2022 were lower than the £226 million of developer profits of the prior year.
Excluding developer profits, operating profit was broadly flat as exceptionally still and dry weather in the summer months led to a decrease in output of 7% (0.7TWh) compared to the previous year, with this offset by the strong financial performance of hydro and pumped storage in the volatile markets.
The company said that during periods where wind volume output was significantly lower than expected, excess sale contracts had to be “bought back” in the market at higher prices, further reducing its trading result.
SSE Networks (SSEN) Transmission’s adjusted and reported operating profit increased by 72% to £380.5 million. This was mainly due to higher allowed revenues in financial year 2022 – being the first year of the RIIO-T2 price control period.
This higher revenue was partially offset by increases in operating costs and depreciation charges, however, as the business continues to expand its operational capability and asset base.
SSEN Distribution’s adjusted and reported operating profit increased by 28% to £351.8 million compared to £275.8 million last year, which was lower than expected due to a c.£40 million impact of COVID-19 in financial year 2021.
SSE intends to sell a minority stake in both its Transmission and Distribution businesses to help fund its growth opportunities and rebalance capital allocation across the group, having recently started a sales process for a 25% share of the SSEN Transmission business.
“These results demonstrate the strength of our strategy and highly complementary business mix, the passion and commitment of our people, and our ability to deliver for all our stakeholders as we create thousands of jobs and contribute billions to GDP,” Alistair Phillips-Davies, chief executive of SSE, said.