SSE has appointed banks to review options for divestment of all or part of its stake in gas distribution network SGN and will decide on an approach and timings before the end of this financial year, it said in a trading statement. Gas distribution networks will decide this month whether to accept Ofgem’s ‘final determination’ of their business plans for the five years from 1 April, which allow for returns sharply lower than in the last period, or appeal to the Competition and Markets Authority.

SSE acquired a 50% equity stake in SGN in 2005 for £505M. It reduced that to 33.3% in 2016 when it sold the balance to Abu Dhabi Investment Authority for £621M.

SSE has said it will consider network divestments along with non-core assets to build a war chest for further renewable energy investment. It wants to treble renewables output by 2030 and achieve a run rate of at least 1GW of new assets a year during the second half of the decade. That includes a move into international markets and in January it  pre-qualified as part of a consortium for the Danish Thor offshore wind tender.

The £2 B disposals programme has so far reached £1.5B and included completion of the sale of its Multifuel assets for £995M and gas exploration and production assets in December.

Electricity output from renewables (excluding pumped storage) was down by 5% in the nine months to end-December to 402 GWh, mainly due to wind resource.

 

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