EU court ruling blows hole in SSE profits

A EUROPEAN court ruling has blown a hole in the profits of energy giant SSE after it ordered an immediate halt to a £1bn scheme designed to keep Britain’s lights on.

The FTSE 100 energy giant said the ruling will wipe out £60m from its earnings this year by abruptly ending payments from the Government’s cornerstone energy security scheme.

The court ruling, which came in November, means SSE’S adjusted earnings per share for the year to December will be about 6p lower than forecast, at between 64p and 69p a share, it said.

SSE’S shares plummeted in the wake of the court ruling, and fell a further 1.6pc following yesterday’s profit warning to hit lows of £11.50 a share.

The so-called “capacity market” scheme pays the owners of Britain’s gas, coal and nuclear plants a fee to guarantee that they are ready to power up the grid when demand for electricity is high. However, a standstill period now means Government cannot hold any capacity auctions or make any payments to power generators which have already won contracts until it can be approved again.

SSE added that the Government “continues to believe that the capacity market is the right mechanism for delivering security of supply at the lowest cost to consumers”. It was also quick to reassure investors that the return of the expected income from the scheme is a “matter of timings only”.

The company also affirmed its intention to dispose of its retail energy arm, either through a demerger and listing on the stock exchange or a sale.