TIDMSSE
RNS Number : 1709U
SSE PLC
01 December 2021
SSEN DISTRIBUTION PUBLISHES BUSINESS PLAN TO POWER COMMUNITIES
TO NET ZERO
1 December 2021
Scottish and Southern Electricity Networks (SSEN) Distribution,
a wholly owned subsidiary of SSE Plc, has today published its final
business plan for RIIO-ED2. The plan includes proposals to invest
around GBP4 billion, creating over 850 jobs over the price control
period (2023-28).
SSEN Distribution plans to increase its investment by around a
third in the north of Scotland and central southern England over
the RIIO-ED2 period (2023-2028) to accelerate the transition to
smart, flexible networks and meet the net zero challenge.
The proposed increase in investment to GBP3,994m will be
delivered with no planned rise in distribution costs on customer
energy bills, supporting a just and fair transition to net
zero.[1]
Titled 'Powering communities to net zero', SSEN's business plan
has been shaped by over 25,000 customer and stakeholder voices and
sets out six clear goals that SSEN will deliver for customers and
communities by 2028, namely to:
-- Create a foundation for net zero by investing GBP1bn in
strategic resilience across its networks
-- Reduce the frequency and duration of power interruptions by 20%
-- Achieve a customer satisfaction score of at least 92% in every contact area
-- Support 200,000 customers in fuel poverty with targeted
support and energy efficiency measures
-- Facilitate the connection of 1.3m electric vehicles and 800,000 heat pumps on its network
-- Cut its business carbon footprint by 35% aligned to a 1.5degC
science-based target, accredited by the Science Based Targets
initiative
This baseline investment could see the Regulated Asset Value
(RAV) of SSEN Distribution grow to over GBP6.0bn by 2028. In
addition, SSEN has proposed over GBP1bn of regulatory uncertainty
mechanisms to help provide flexibility to meet customer needs,
providing opportunity for future RAV growth.
The final business plan includes a reduction in baseline
investment of GBP146m from the GBP4,140m initially proposed in SSEN
Distribution's draft plan published in the summer, on the basis of
increased efficiencies and innovation as well as through
recalibration of the amount of funding to be agreed through the
Uncertainty Mechanism.
SSEN's final RIIO-ED2 plan will now be assessed by Ofgem, with
determinations published in 2022, ahead of the new price control
commencing in April 2023 and running to March 2028.
SSEN Distribution's Business Plan was included within its parent
company SSE Plc's recently announced, 'Net Zero Acceleration
Programme'. The group-wide plans included an enhanced, fully funded
GBP12.5bn strategic capital investment plan to 2026 alongside
ambitious 2031 targets, aligned with net zero and a 1.5 degree
science based target pathway. The plans included minority stake
sales in both SSEN Transmission and SSEN Distribution (modelling
assumption of early FY24) to unlock value and optimise
investment.
Chris Burchell, Managing Director of SSEN Distribution,
said:
"Networks will unlock the electrification of the economy with
billions of pounds in investment to create modernised local
electricity grids fit for a net zero future. Our RIIO-ED2 business
plan will improve reliability, support the most vulnerable, cut
carbon, get EVs on the roads and enable cleaner heating into homes
as well as create hundreds of well-paid and secure green jobs in
our regions.
"As energy policy and targets accelerate at pace, it's critical
we invest at the right level now to meet this ambition and avoid a
higher cost future. We now need Ofgem to support this aim by
providing an agile price control framework which gives the
certainty and flexibility required to meet evolving policy and
customer needs."
Alistair Phillips-Davies, Chief Executive of SSE plc, said:
"Submitting our business plan today comes as we ramp up the
execution of the SSE group's Net Zero Acceleration Programme.
Collectively, SSE is investing nearly GBP7m each day, enabling over
20% of the upcoming UK electricity networks investment, the
delivery of over 25% of the UK's 40GW offshore wind target and so
much more to help the UK and other governments decarbonise.
"We are proud to be the UK's clean energy champion, powering
change and tackling climate change through our specialism in
electricity infrastructure. With the UK committing to an
accelerated net zero timeline ahead of COP26, this is where the
rubber hits the road and we see huge growth in our Distribution
business as it brings net zero to the front door."
For more information, visit ssenfuture.co.uk .
Notes to editors:
-- GBP3,994m investment includes GBP2,577m for SEPD licence area
and GBP1,417 for SHEPD licence area. A further breakdown of costs
is detailed in business plan finance chapter and associated
annexes.
-- More information on SSE Plc's Net Zero Infrastructure Programme is available here .
Contact:
Institutional investors and analysts ir@sse.com + 44 (0)345 0760
530
Media media@sse.com + 44 (0)345 0760 530
MHP Communications oliver.hughes@mhpc.com + 44 (0)7885 224 532
simon.hockridge@mhpc.com + 44 (0)7709 496 125
[1] Calculated using industry standard 8-year RIIO-ED1 average
and 5-year RIIO-ED2 average; achieved through efficiency savings
and innovation, coupled with lower financing costs
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