As the UK and Ireland’s clean energy champion, we have unveiled an ambitious £12.5bn (net) capital investment plan to accelerate progress towards net zero.
We are currently building more offshore wind than anyone in the world, including the world’s largest offshore wind farm at Dogger Bank, and own and operate three of Britain’s electricity networks. To support the global push to decarbonise, we are increasing our capital investment by two thirds – £1bn more annually.
The Net Zero Acceleration Programme will provide tangible solutions to help deliver on the COP26 summit commitments and the UK Prime Minister’s Ten Point Plan.
"After all the commitments made at COP26, now is the time to deliver. In recent years we have made great progress in focusing the SSE Group on the delivery of the electricity infrastructure needed in the transition to net zero. We are constructing more offshore wind than anyone else in the world right now and expanding overseas, delivering the electricity networks needed for net zero and pioneering carbon capture, hydrogen and battery technologies to deliver system flexibility.
"Our Net Zero Acceleration Programme represents the next phase of SSE's growth and involves a substantial ramping up of investment - equivalent to nearly £7m each day in net zero infrastructure - backed up by clear delivery and funding plans. It builds on our existing strong platform for growth and highly desirable pipeline to create significant value for shareholders and wider society while further enhancing the long-term potential of the business.
"Today's announcement means SSE will maximise its long-term potential and capture growth opportunities during a critical time for the energy sector, strengthening and growing its core businesses, creating jobs, delivering for wider society and offering attractive shareholder returns."
Alistair Phillips-Davies, Chief Executive Officer, SSE plc
"The Board of Directors carefully considered a range of strategic alternatives for the next phase of SSE’s growth and development. Having reviewed all options and taken independent advice this resulting strategic update significantly accelerates growth in our core businesses, whilst providing efficient and competitive sources of financing and ensuring SSE continues as a reliable and resilient operator of critical infrastructure."
Sir John Manzoni, Chair, SSE plc
The UK and Ireland's national clean energy champion
As the UK and Ireland’s national clean energy champion, we're investing £12.5bn by 2026 – 65% uplift on previous plan. This equates to around £7m a day to be spent on critical low-carbon infrastructure needed in net zero transition.
Our Net Zero Acceleration Programme will deliver, by 2026:
- £1bn additional capital investment per year versus previous plans
- A doubling of existing renewables net installed capacity to 8GW
- A sustainable renewables development pipeline in excess of 15GW
- Over 2.5 times more capital allocated to renewables growth
- Growth in electricity networks, increasing Regulated Asset Value (RAV) to £9bn
The new programme will enable delivery of over a quarter of the UK’s 40GW offshore wind target by 2030 and over 20% of the necessary upcoming electricity networks investment in the UK, as well as continuing its international expansion.
The programme will be supported by further partnering in renewables and up to 25% minority stake sales in SSEN Transmission and SSEN Distribution. With electricity demand set to more than double in the transition to net zero, we see significant growth potential in these core networks businesses and selling minority stakes will enable it to unlock this growth to the fullest whilst maintaining an attractive balance of capital allocation across the Group.
We has also set out a new, growth-enabling dividend plan from 2023/24, paying at least £3.50 per share across the five years. Correspondingly, after fulfilment of existing commitments to 2023, we will rebase our dividend to 60 pence in 23/24, before targeting at least 5% dividend increases in 24/25 and 25/26.
Capital investment plans to 2026
In 2021, we identified significant further attractive growth opportunities for additional investment across the Group. These include opportunities above and beyond our already approved capital expenditure plans under RIIO-T2; in projects from our highly attractive renewables pipeline; in medium- to long-term growth options in flexible technologies critical to net zero in the form of pumped storage hydro, carbon capture and storage, hydrogen and batteries; and in selective partnerships focusing on international expansion in renewables.
With these opportunities in mind, we have now set out a new five-year capex plan that aligns capital allocation with our greenhouse gas emission targets and our changing energy mix.
In doing so, we seek to maximise total shareholder returns from both earnings and asset value growth from its wealth of net zero-orientated opportunities, while remunerating shareholders with a rebased dividend with attractive growth. The plan represents a floor target, not a ceiling, and we will be well positioned to take other opportunities as they emerge.
Accelerating decarbonisation with our new 2030 goals
Looking further ahead, we have set out a series of ambitious targets for the next decade to 2030, focusing on four core business goals, aligned to the UN’s Sustainable Development Goals (SDGs), to drive faster decarbonisation across the next decade.
Supporting Scottish and UK net zero targets it will also enable the connection of at least 20GW of renewable electricity generation to its north of Scotland electricity Transmission network and enable around two million electric vehicles and one million heat pumps on its electricity distribution networks in the north of Scotland and southern central England by 2030.
The 2030 Goals are already linked to executive remuneration but it is also proposing to increase the emphasis on sustainability overall as well as focusing it more to the longer term.
The Goals increase the company’s climate ambitions and are part of its drive for net zero which saw the business unveil a £12.5 billion Net Zero Acceleration Programme in November.
The last 18 months have also seen us become a leader on the just transition to net zero, with our ranking at the top of the World Benchmarking Alliance’s just transition assessment of 180 global companies. Our fourth 2030 Goal will continue this leadership and champion a fair and just energy transition, by guaranteeing fair work, committing to paying fair tax and sharing economic value.
After breaking new ground when we first announced our SDG-aligned 2030 Goals in 2019, this update makes the targets more stretching after strong delivery over the last three years.
SSE’s new 2030 Goals are to:
- Cut carbon intensity by 80%
Reduce Scope 1 carbon intensity by 80% by 2030, compared to 2017/18 levels, to 61gCO2e/kWh.
- Increase renewable energy output fivefold
Build a renewable energy portfolio that generates at least 50TWh of renewable electricity a year by 2030.
- Enable low-carbon generation and demand
Enable at least 20GW of renewable generation and facilitate around 2 million EVs and 1 million heat pumps on SSEN’s electricity networks by 2030.
- Champion a fair and just energy transition
Be a global leader for the just transition to net zero, with a guarantee of fair work and commitment to paying fair tax and sharing economic value.
Chief Sustainability Officer, Rachel McEwen said:
"Going harder in cutting carbon intensity – from a 50% reduction to 80% – is what I call ‘net zero acceleration in action’ and is exactly what everyone was calling for at COP26.
"Achieving net zero requires a relentless focus, huge swathes of investment and the strategic foresight to go about it in a way that creates a cleaner, greener, and fairer world for the future.
"Our Net Zero Acceleration Programme, has ramped up the pace and scale of our ambitions with £12.5bn of investment in developing and building the low-carbon infrastructure needed to decarbonise.
"Our 2030 Goals ensure SSE’s might is focused on the areas that can simultaneously create value for shareholders and for society for the long term."
An ambitious plan for the future
Our Net Zero Acceleration Programme has at its core a capex plan that is fully fundable and deliverable. It enables 1.5 degree aligned science-based targets as well as providing a platform for ambitious growth into the 2030s and beyond, creating lasting value for shareholders and society during what promises to be a pivotal period in the fight against climate change.
Net Zero Acceleration Programme News
Yellow River secures contract in Ireland’s second RESS auction
SSE Renewables has been successful in Ireland’s latest competitive auction for onshore wind and solar energy and has provisionally won a contract for low-carbon power for the proposed 104.4MW Yellow River onshore wind farm project in Rhode, Co. Offaly.
Peterhead Carbon Capture project to contribute £660 million to Scottish economy
A planned new low-carbon power station at SSE Thermal’s Peterhead site in Aberdeenshire could generate significant benefits to the Scottish and UK economies over its lifetime, according to a new report.