SSE sells 25 per cent stake in transmission business in £1.5bn deal
Image credit: SSE
UK power firm SSE has reached agreement to sell a 25 per cent minority stake in its electricity transmission network business to a pension fund.
The Ontario Teachers’ Pension Plan Board is spending £1.5bn in the transaction that will help “unlock significant growth in both the transmission business and across the wider SSE Group”.
SSE said the deal reflects the “significant growth potential” of its transmission business as it is one of Europe’s fastest growing. It added that the network has a central role in helping the UK meet net zero targets and shore up energy security.
It is currently used to access renewable resources in the north of Scotland and transport that low-carbon power to areas with higher demand further south.
SSE also expects the business to experience further growth following the publication of Ofgem’s Accelerated Strategic Transmission Investment framework.
This was a consultation launched by the regulator on the electricity transmission network upgrades that will be needed to meet the government's 2030 renewable electricity generation ambitions.
It includes proposals to streamline the current regulatory approval process for large electricity transmission projects as well as measures to protect consumers against additional risks that changing the process brings.
SSE said it will use the proceeds from the sale to support growth of the business, which could see it deliver around 20 per cent of the offshore wind generation and electricity networks needed in the UK by 2030.
It forecasts investments exceeding £24bn in Great Britain by the end of the decade.
Gregor Alexander, finance director with SSE, said: “We are delighted to agree a transaction that will help unlock the full potential of our growing electricity transmission business, which remains core to our strategic direction as a clean energy champion specialising in electricity infrastructure.”
“As we set out in our Net Zero Acceleration Programme last year, due to the scale of potential growth and the associated investment required across SSE’s businesses, including in electricity networks, bringing in minority partners will balance capital allocation and support further growth, creating greater long-term value for all our stakeholders.”
Rob McDonald, managing director of SSEN Transmission, said: “With the north of Scotland home to the UK’s greatest resources of renewable electricity we have a critical role to play in helping deliver the UK and Scottish Governments net zero commitments.
“Our investments will also be key to securing the UK’s future energy independence through enabling the deployment of homegrown, affordable, low carbon power.”
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