SSE has shown that it’s first quarter performance is well ahead of expectations, with th eenrfy group boosted ahead by the production of it’s renewable plants.
Energy prices have sky rocketed over the past year, peaking at incredible levels after Russia invaded Ukraine due to concerns of Russian suppliers to the continent, and the constrains they may have.
SSE saw stronger output from it’s wind farms and much higher production from gas generation than the same period last year. The groups electric output from green sources across the UK and Ireland alone stood at 93 GWH, a whole 5% above expectation due to good weather conditions.
SSE added to this noting that the thermal generation played a key part in the UK and irish energy market and it’s transition to NZC (net zero carbon). Net Zero carbon is tipped to be in place by 2050 across the world, where no form of energy is produced by burning oil as a fuel source and is all sourced renewably.
The group did reiterate that the full year forecast and expectations would total over £2.5B.
SSE has personal plans to invest £24B into the UK energy infrastructure this decade alone, and added that it had begun a formal sale process to sell a ¼ stake in a subsidiary business.
The financial director said that they remain confident in their financial outlook, they expect strong earnings and growth this year and look forward to updating the market with their interim results statements in November 2022. SSE is expected to deliver a robust update against high power pricing and the company has delivered with performance astonishingly exceeding expectation.
The business continues to make progess on it’s strategy, which in the long term will support the larger scale spending on major projects and a very attractive dividend. In the same sentence it is noted that SSE should greatly benefit from the transition to net zero, and keep well safe from the current macroeconomic issues in the world.
The Current Market
In 2020, the wholesale energy price per kwh was 3.86p. In the same month in 2021, the average unit price elevated to 7.64p. Coming up to winter 2021 though, prices increased rapidly peaking at 42.09p per kwh, and prices have fluctuated rapidly since with an average of around 25p.
The current average price for wholesale energy is 26.69p, and the current average tariff sits at 28.05p, but with more uncertainty coming with the Russian energy cut offs wholesale prices have began to steadily rise again.
With many energy markets aiming to be 100% renewable and green, the current economic stance has quickly increased investment into more local sourced energy, such as wind and solar. SSE alone are looking to invest 25B into renewables, with all UK DNO’s, and over 100 suppliers also looking at their renewable options.
With this being the case, and the current economic struggles, it looks like the net zero target will be hit much earlier and stronger than planned, and within that – the cost of fuel and energy will drop significantly.