SSE reported a near double of its annual profit as its gas-fired plants and gas storage facilities cashed in during the energy crisis on volatile and high prices.
The FTSE100 energy group denied it had made windfall profits, and tried to avoid criticism by claiming that it invested “far more” than its earnings. The group announced plans to invest up to £40billion over the next decade. This included PS18billion by 2027. More than 80 percent of this investment would be made in Britain.
SSE operates electricity networks, hydro-electric plants, gas-fired plants, and gas storage facilities.
The adjusted pre-tax profit of the company rose by 89 percent to nearly £2.2 billion in the year ending March, while adjusted operating profit grew 65 percent to over £2.5 billion.
Gas power plants and storage operations drove the jump, with adjusted operating profit almost quadrupling to £1.2 billion compared to £331 millions a year ago.
The gas industry, which has benefited from the high and volatile energy price, is exempted from windfall tax that affects gas producers and low carbon power plants.
Alistair Phillips Davies, the chief executive officer of SSE said: “I do not think there are windfall profits here.”
He said that the company had previously invested in its gas business for a very long time without making “particularly high returns”. These assets were “critical” to keep the lights on, and to ensure people could power their homes during the past year. He said that while the company had “made money” from them, it was profits that were “clearly intended” to fund investments. He said, “We have to remember that the UK crisis was a gas problem.” “We’re investing more money than we make to ensure that we can get out of this gas crisis.”
SSE entered the energy crisis by operating five large gas-fired plants in Britain. In September, it acquired jointly with Equinor a sixth station, Triton Power (owner of the Saltend Power Plant in East Yorkshire). Mid-March, it began operations at Keadby 2 (North Lincolnshire), a seventh large plant.
SSE reported that the Triton purchase has increased profits by £220million, while Keadby2 added £37million.
The company stated that the gas-fired plants it operates have experienced “extreme volatility on the forward power market”, which they acknowledged some of was “directly attributed to the war in Ukraine, and the ensuing crisis in gas”. The company said that it had benefitted from increased power generation at its existing gas plants, “along with higher prices for power and a good performance on the balancing markets”.
SSE has increased its investment plan to £18 billion for the five-year period 2026-2027 from £12.5 billion that was planned in 2025-26.
Phillips-Davies stated that the government’s policies would determine how quickly its plans for investment will be implemented. He said, “We have a lot of shovel-ready project.” “We’re encouraging policymakers and governments to get into the delivery mode now. Let’s move these shovel-ready project forward. We need to make sure we are dealing with the issues of planning, consenting and moving forward. We are ready to invest.
“We want to see an acceleration in pace and make sure the UK can compete with places like the US and their [Inflation Reduction Act] and that European legislation is coming. It’s all about speed. “Let’s ensure that the UK is either the easiest or best place to invest in the entire world.”