Sse Share Discussion Threads

[skinny] 04/12/2020 07:33

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SSE has entered into an agreement to sell a 10% stake in the first two phases of Dogger Bank Wind Farm to Eni for an equity consideration of GBP202.5m, subject to adjustments for interest on closing. SSE intends to use the proceeds to enable delivery of its low carbon growth plans. Divesting this stake in Dogger Bank Wind Farm is in line with SSE's stated intention to partner to capitalise on its significant growth opportunities related to net zero.

Eni has also entered into an agreement to purchase a 10% stake in Dogger Bank A & B from project partner Equinor. Once the transaction is complete, the new overall shareholding in Dogger Bank A (1,200MW) and Dogger Bank B (1,200MW) will be - SSE (40%), Equinor (40%) and Eni (20%).

The transaction is expected to complete in early 2021, subject to regulatory and lender approvals. There is no change to the ownership of the third phase, Dogger Bank C (1,200MW), in which SSE and Equinor each have a 50% stake. SSE Renewables will continue to lead on the development and construction of Dogger Bank Wind Farm, and Equinor will operate the asset on completion.

Gain on sale and financial outlook 2020/21

At its half year results in November 2020, SSE stated that it expected adjusted earnings per share for 2020/21 to be in the range of 75 pence to 85 pence including the gain on disposal of an equity stake in Dogger Bank Wind Farm. Following the successful conclusion of the Dogger Bank A & B equity stake disposal, SSE now expects adjusted earnings per share for 2020/21 to be in the range of 85 pence to 90 pence, including an EPS impact from the gain on sale of around 19 pence after transaction costs. Consistent with the range provided in November, this assumes normal weather conditions for the remainder of the year and an impact from coronavirus towards the middle of the GBP150m to GBP250m range set out in June 2020.

Gregor Alexander, SSE's Finance Director, said: " The sale of a stake in Dogger Bank Wind Farm to Eni is another successful example of SSE's approach to partnering to create and secure value for shareholders. This transaction will enable us to fund further low carbon growth opportunities, helping to deliver governments' net zero ambitions and our own target to treble our renewable output by 2030."

Claudio Descalzi, Chief Executive Officer of Eni, said: "For Eni, entering the offshore wind market in Northern Europe is a great opportunity to gain further skills in the sector thanks to the collaboration with two of the industry's leading companies, and to make a substantial contribution to the 2025 target of 5GW of installed capacity from renewables, an intermediate step towards the more ambitious target of zero net direct and indirect greenhouse gas emissions in Europe by 2050".

Additional Information

On 26 November 2020, SSE and Equinor announced they had reached financial close on the first two phases of Dogger Bank Wind Farm, a ground-breaking project off the north east coast of England. Once all three phases are complete in March 2026, it will be the largest offshore wind farm in the world. In total it will generate around 18,000GWh, enough renewable electricity to supply 5% of the UK's demand, equivalent to powering six million UK homes.

SSE's approach to selling down stakes to retain typically 30-40% equity in a project and working with equity partners during construction and/or operation brings a number of benefits. Partners can be introduced at a variety of stages of the project lifecycle, depending on their risk appetites. It ensures SSE focuses its investment where it can secure developer premiums and realise value at the earliest opportunity. It also reduces overall risk and financial exposure on large-scale projects and avoids a large increase in net debt that is not earning.

Dogger Bank Wind Farm is the largest of SSE Renewables' projects currently in construction. SSE Renewables is currently also leading the construction of the Seagreen offshore wind farm (1,075MW, SSE share 49%), which will be Scotland's largest on completion, and the wholly-owned Viking wind farm (443MW), the UK's most productive onshore wind farm. Together these flagship renewable energy projects are driving SSE Renewables' significant growth to 2025 and demonstrate the quality and value of its development portfolio.

Notes

SSE was advised by Rothschild & Co and Linklaters LLP on this transaction.

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END

[skinny] 26/11/2020 07:02

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SSE Renewables, together with its 50:50 joint venture partner, Equinor, has reached financial close on the first two phases of what will be the world's biggest offshore wind farm.

The two companies are proceeding with the first two phases of Dogger Bank Wind Farm, a ground-breaking project off the north east coast of England which, once all three phases are complete in March 2026, will be the largest in the world.

Each phase has a capacity of 1,200MW and will generate around 6,000GWh. In total, Dogger Bank will produce enough clean, renewable electricity to supply 5% of the UK's demand, equivalent to powering six million UK homes.

The funding of the development of Dogger Bank A and B represents the largest ever offshore wind project financing anywhere in the world and SSE's expected equity investment forms part of its GBP7.5 billion investment programme to March 2025, the renewables element of which will double its renewables output by 2025.

Total investment in the first two phases of the project will be around GBP6 billion and has already created hundreds of UK jobs, with more to come as project construction ramps up.

Dogger Bank Wind Farm is the largest of SSE Renewables' projects currently in construction. SSE Renewables is currently also leading the construction of the Seagreen offshore wind farm (1,075MW, SSE Renewables share 49%), which will be Scotland's largest on completion, and the wholly-owned Viking wind farm (443MW), the UK's most productive onshore wind farm. Together these flagship renewable energy projects are driving SSE Renewables' significant growth to 2025 and demonstrate the quality and value of its development portfolio.

Alistair Philips-Davies, SSE Chief Executive , said: "We are proud to be leading on the construction and development of Dogger Bank Wind Farm, which has been 10 years in the making. We are putting our money where our mouth is on delivering net zero and reinforcing the UK's position as a world leader. This investment will help drive a green recovery from coronavirus through the project's construction over the next five years, creating jobs and boosting the local economy.

"Achieving financial close for the first two phases of the world's largest wind farm is a huge accomplishment and, alongside reaching Seagreen 1 financial close earlier this year, represents significant progress towards achieving our goal of trebling our renewable output by 2030."

Pål Eitrheim, Equinor EVP of New Energy Solutions , said: "Reaching financial close on the two first phases of Dogger Bank is a major milestone, demonstrating our commitment to profitable growth within offshore wind. The extensive interest from lenders, underpins the attractiveness of UK offshore wind assets and confidence in SSE and Equinor. As the wind farm's future operator, we are proud to take this big step forward in delivering what will be the backbone of a growing wind hub in the North Sea. Through the sheer scale of the project we have delivered record-low contract prices for the UK market, and as operator of the wind farm we will continue to deliver value to the UK for years to come."




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[bountyhunter] 24/11/2020 09:31

Doesn't time fly! SSE has changed significantly in that time.

[wad collector] 23/11/2020 13:56

Impressed that you have been updating this site for 16 yrs!

[bountyhunter] 19/11/2020 17:48

Header updated, a bit rough and ready as updated on my phone.

[bountyhunter] 19/11/2020 17:01

Agreed re the regulatory review but I think they will stick to the 5 year dividend plan as with the interim divi just declared of 24.4p - one would hope that SSE's green credentials and low carbon vision would improve the likelihood of a favourable regulatory review, but nothing is guaranteed in this crazy world in which we now find ourselves.

"SSE's vision is to be a leading energy provider in a low-carbon world.

To achieve this, its strategy is to create value for shareholders and society from developing, owning and operating energy and related infrastructure and services in a sustainable way.

We have set four fundamental goals for 2030 which put sustainability at heart of SSE’s business strategy. These goals aren’t just important to SSE, they matter to everyone – that’s why they are directly linked to the United Nations Sustainable Development Goals."

[williamcooper104] 19/11/2020 17:00

It has - the big cloud is the regulatory review and divi sustainability in short term Personally would rather they cut aggressively, used the cashflow to reposition and then rebuild divi From memory they've form for paying dividends greater than free cash flow and even earnings Torn here - have a small position - will add when we see where we are in December with the regulated return position

[bountyhunter] 19/11/2020 16:58

Yes and SSE appears to be unique in this respect in terms of the extent of its green credentials amongst the larger utilities having almost reinvented itself since shedding the consumer business.

[williamcooper104] 18/11/2020 22:59

It is - I've invested for a few years in NEE (US listed) - NEE reinvented itself as a green utility, and is up c3x in last 5 years and is now nose bleed expensive (c35 pe and 1.8 yield)

[bountyhunter] 18/11/2020 21:16

The green credentials here should protect SSE amongst the utilities in the event of a Starmer win in the next election. A good long term investment in my view.

[leading] 18/11/2020 20:55

I do like the way this company has positioned itself.

It’s a utility with a stonking dividend yield but also with a nice line in early stage wind farm investment/development which it then spins out to infrastructure investors and repeats.

£7.5bn capex over coming 5 years is no small beer either.

Attractive strategy.

[wad collector] 18/11/2020 08:59

Not really many surprises . Included are

" -- Interim dividend of 24.4p per share.
-- Intention to recommend full-year dividend of 80p per share plus RPI inflation and continue to target RPI increases in the two subsequent years as set out in the 2023 dividend plan.

Financial outlook for 2020/21 and beyond

-- Adjusted earnings per share, including below impact of coronavirus and assuming normal weather conditions, estimated to be in the range of 75p to 85p including gains on disposal of stakes in Seagreen and Dogger Bank offshore wind farms.

-- Full-year coronavirus impact on operating profit expected to be towards the middle of the GBP150m to GBP250m range set out in June.

[wad collector] 11/11/2020 12:47

Interims out in a week , suspect there won't be many surprises.

[williamcooper104] 05/11/2020 09:08

It's a shame SSE aren't following the US model of setting of managed YieldCos - eg sell mature assets into funds - get carry and management fees

[wad collector] 05/11/2020 08:30

It looks like the market is finally acknowledging that this is a secure investment, relatively covid immune and paying a good yield.

[coxsmn] 13/10/2020 11:35

Yes, as long as its not too windy, or there's not enough wind.

[skinny] 13/10/2020 07:02

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SSE agrees sale of its 50% share in Ferrybridge and Skelton Grange multifuel assets

SSE plc has entered into an agreement to sell its 50% share in energy-from-waste ventures Multifuel Energy Limited (MEL1) and Multifuel Energy 2 Limited (MEL2) to European Diversified Infrastructure Fund III, an infrastructure fund managed by First Sentier Investors, for a total cash consideration of GBP995m. The transaction is expected to complete by late 2020 subject to antitrust approval by the European Commission.

MEL1 and MEL2 are 50-50 joint ventures between SSE and Wheelabrator Technologies Inc., consisting of the operational Ferrybridge Multifuel 1 and Ferrybridge Multifuel 2 facilities (MEL1), as well as the Skelton Grange Multifuel development project (MEL2), all in West Yorkshire.

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[skinny] 08/10/2020 12:08

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A consortium including Equinor, SSE, Uniper, Centrica, National Grid, Mitsubishi and British Steel has applied for a UK government grant of up to £20m ($25.8m) to progress work on a major carbon capture and storage (CCS) project that would include Europe’s first commercial-scale blue-hydrogen plant.

[wad collector] 08/10/2020 11:30

It seems to me unlikely that Boris will be PM in 2030 to be held to that promise!
But I like the sentiment.

[alphorn] 06/10/2020 13:26

Most unlikely in project timescales. More like hot air than wind to me.

[bountyhunter] 06/10/2020 13:14

Boris: "and in 10 years time offshore wind will be powering every home in the country!"

A big increase from the current 10% of the country's power requirements.

[bountyhunter] 06/10/2020 07:42

Offshore wind industry to be in the news today.

Rishi Sunac has just said on BBC news that Boris will be talking about the Offshore Wind industry today and creating tens of thousands of new jobs in this industry.