27 Jun 2012

SSE is hosting an event for analysts and investors today (Wednesday 27 June) and tomorrow in Glasgow and at Clyde wind farm to present its approach to managing its large capital projects. SSE will set out the way it works to ensure that such projects are governed, developed, approved and executed in an effective manner.

SSE expects its capital and investment expenditure to total just over £1.6bn in 2012/13 and to be between £1.5bn and £1.7bn in 2013/14 and in 2014/15. Since the start of this financial year on 1 April 2012:

• SSE has entered into an agreement to acquire electricity generation assets in Ireland which are in operation (1,068MW), under construction (460MW) or in development for a total cash consideration of €320m (£256m) plus an estimated €43m (£34m) for working capital and €125m (£100m) to complete the construction of the Great Island CCGT;
• the pre-construction enabling works at the 68MW multi-fuel facility being developed at SSE's Ferrybridge power station by the joint venture Multifuel Energy Ltd, in which SSE has a 50% stake, have got under way;
• SSE's onshore wind farm capacity in operation has increased by 34MW to 1,337MW, reflecting progress at the Clyde development; 
• its commissioned offshore wind farm capacity (net) has increased by 69MW to 256MW as a result of the completion of Walney and of continuing construction progress at Greater Gabbard; 
• the progress on- and offshore means SSE is the largest generator of electricity from wind across Great Britain and Ireland; and 
• SSE's transmission business, Scottish Hydro Electric Transmission Ltd, has virtually completed the new £25m 275kV substation at Beauly and remains on course to invest over £350m in total in 2012/13, taking its Regulated Asset Value to over £1bn for the first time.
• In addition, the reservoir at SSE's 100MW Glendoe hydro electric scheme is now being filled and, subject to adequate rainfall occurring in the catchment area, electricity generation should resume later this summer.

The presentation slides will be available at http://www.sse.com/Investors/Results/Presentations/ from 1100 BST today (Wednesday 27 June). No new information or comment on current trading is being provided at the presentation.

Gregor Alexander, Finance Director of SSE, said:

"SSE's investment in large capital projects is delivering a significantly expanding asset base which is supporting secure and lower carbon energy supplies in Great Britain and Ireland. It is also earning the returns that are necessary to sustain future investment and to meet SSE's target of annual above-inflation increases in the dividend payable to shareholders, including an increase of at least 2% real in respect of 2012/13.

"We expect that capital and investment expenditure will continue to be significant for the next few years, which means maintaining ongoing rigour in how projects are managed is vital. Our capital markets day will show that the SSE team has the experience, skill and commitment necessary to continue to make sure that investments are successful in operational, financial and strategic terms."