10th Dec 2024 14:04
(Alliance News) - SSE PLC on Tuesday said its 75%-owned subsidiary, SSEN Transmission PLC, plans to invest at least GBP22 billion in new grid infrastructure.
The Perth-based energy company is the majority-owner of SSEN Transmission, an electricity network operator based in Reading, England, which is responsible for networks in the north of Scotland.
In a business plan submitted for regulatory approval, SSEN Transmission said investment will be critical to meeting net zero and energy targets, including the UK government's aim of "achieving clean power" by 2030.
SSEN Transmission's forecast, which was reviewed by independent consultancy BiGGAR Economics, said the plan could support up to 37,000 UK jobs and add GBP15 billion of value to the UK economy. This includes 17,500 jobs and GBP7 billion of value in Scotland.
The plan will be reviewed by the Office of Gas & Electricity Markets, the UK's industry regulator. It covers the regulator's RIIO-T3 price control period from April 1 2026 to March 31 2031, with RIIO referring to Ofgem's "Revenue = Incentives + Innovation + Outputs" framework.
SSEN Transmission wants to eliminate interruptions to energy supply, meet 20% of electricity demand with clean power and encourage investment in the energy transition.
The company said it will require around GBP22.3 billion expenditure to deliver its objectives. Of this, baseline total expenditure is predicted around GBP6 billion, with around GBP16 billion in strategic investments already committed and approved by Ofgem.
SSEN Transmission also noted potential for an additional GBP9.4 billion of future uncertainty mechanism expenditure, bringing total expenditure to around GBP31.7 billion.
The company expects the investment to "deliver well in excess of £100m in community benefit funding" and support development of 1,000 new homes in the north of Scotland.
"Delivery of this plan, the associated government targets it will enable and the significant economic benefits it will unlock will require unprecedented and accelerated levels of strategic investment in the north of Scotland's electricity network infrastructure", SSEN Transmission said.
"It is crucial that Ofgem's regulatory framework reflects this urgency and the wider economic context against which this investment must be secured".
The company's Chief Executive Alistair Phillips Davies said that the price control period came "at a critical juncture" in the electricity sector.
"We're setting out today the extent of our ambition and commitment," Davies added.
"It is now crucial that Ofgem backs that ambition with an investable and financeable framework, setting an appropriate cost of equity that recognises the unprecedented levels of investment required to decarbonise the economy and deliver a clean power system."
SSE shares were down 1.2% at 1,678.26 pence each on Tuesday afternoon in London.
By Holly Munks, Alliance News reporter
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