SSE boss calls for more investment

The boss of renewables-focused energy firm SSE has urged the Scottish supply chain to invest more if it wants to secure a bigger share of wind farm work.

Alistair Phillips-Davies, chief executive, said the Perth-based company was duty- bound to “get the cheapest providers” in order to deliver the best value for energy customers.

But he added the firm was doing all it could, including funding support and a platform to highlight bidding opportunities to help more Scottish businesses benefit from projects like the £3 billion Seagreen Offshore wind farm near Angus, the £580 million Viking onshore wind farm in Shetland and a £630m subsea power cable between Shetland and the Scottish mainland.

Mr Phillips-Davies also underlined an ambition, as part of the joint UK Government-industry

Offshore Wind Sector Deal, launched last year, to increase the target for the amount of UK content in homegrown offshore wind projects to 60%.

But many potential contractors need to invest in innovation and capacity to win work, he said.

And spelling out the scale of the challenge facing UK supply chain firms hoping to muscle in on work instead of foreign rivals, he highlighted SSE’s giant Dogger Bank development off the east coast of England, which has required a jack- up installation vessel – the world’s largest – with a crane taller than the Eiffel Tower.

Both SSE and the Scottish Government have been criticised for allowing much of the Seagreen work to go overseas.

Mr Phillips-Davies was speaking after SSE posted results showing a £115m first half hit from Covid-19.

The FT SE 100- listed company also announced plans to treble its renewable energy output by 2030, by adding one gigawatt a year of new capacity by the second half of the decade.

Underlying pre-tax profits for the six months to September 30 came in at £193.9m, down from £263.4 ma year earlier.

The renewable power generator and network operator said the estimated C ovid -19 impact was slightly lower than expected, but put the group on course for a full-year earnings blow from the virus in the middle of the £150m-£250m range previously announced.

Energy firms have taken a knock from the pandemic as lockdowns and restrictions to control the virus have impacted demand and new supply connections.

Donald Brown, senior investment manager at wealth manager Brewin Dolphin, said: “The £115m profit hit from Covid-19 aside, SSE has made significant progress in reshaping its business.

“The sale of SSE Energy Services as well as the more recent disposals of stakes in Ferrybridge and Skelton Grange underline its direction of travel.

“A ‘green recovery’ from the economic impact of Covid-19 and a focus on transitioning the UK economy towards net-zero should play to SSE’ s strengths and position it well for the future – indeed, a commitment to retail price index-linked increases to the dividend will also provide a degree of comfort to income investors for the next couple of years.

“However, the shares remain around 20% below their price at the start of the year and debt is stubbornly high, which investors will be watching with interest in future statements.”

Shares in SSE rose more than 4% to £14.07.

DUTY: SSE chief executive Alistair Phillips-Davies said investment would secure a bigger share of wind farm work.