Generation

The operation of, and investment in, SSE's generation portfolio is founded on a series of principles:

• compliance: with all safety standards and environmental requirements;
• capacity: to meet the electricity needs of domestic and small business customers;
• diversity: to avoid over-dependency on particular fuels or technologies;
• availability: to respond to customer demand and market conditions;
• flexibility: to ensure that changes in demand for electricity can be addressed; and
• sustainability: to deliver a 50% cut in the carbon dioxide content of electricity produced2.

A diverse generation portfolio

In line with the Generation principles of diversity and sustainability, we are maintaining and investing in a balanced portfolio of fossil fuel-fired generation capacity and in energy sourced from renewable sources. The practical application of this balance means that SSE’s Generation portfolio comprised, at 30 September 2011: 

• 4,467MW of gas-and oil-fired capacity; 
• 4,370MW of coal-fired capacity (with biomass co-firing capability); and
• 2,538MW of renewable (hydro, wind and dedicated biomass) capacity.

In the six months to 30 September 2011 we:

•  completed the construction of Clyde South onshore wind farm with all 56 turbines (130MW) beginning to export power to the national grid; and
• added 46MW to its Generation capacity with the completion of phase 1 of Walney offshore wind farm, adding to the existing 5MW from Beatrice offshore wind farm.

These developments, together with its wider Generation strategy, means SSE has the greatest diversity in fuels for generating electricity among UK generators including options in onshore and offshore wind, pumped storage, solid fuel, and Combined Cycle Gas Turbines (CCGTs). Consequently, it:

•  avoids dependency on a single technology or commodity;
•  has significant optionality in the management of its power stations; and
•  can manage effectively the risks inevitably associated with primary fuel procurement.

Its breadth of opportunities allows SSE to take forward only the best investments and achieve the strongest possible returns to support dividend growth.
It is for this reason that SSE has decided to sell its interest in NuGeneration Ltd (NuGen) to its partners GDF Suez and Iberdrola. SSE will instead focus its financial and other resources in the deployment of its wide range of non-nuclear generation options