REG - SSE Plc - SSEN TRANSMISSION PUBLISHES RIIO-T3 BUSINESS PLAN

SSEAnnouncement

10/12/2024 08:30

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RNS Number : 4817P  SSE PLC  10 December 2024

SSEN Transmission sets out plans to invest £22bn+ in mission-critical grid
infrastructure

·    Business Plan for RIIO-T3 published, setting out an ambitious yet
deliverable blueprint for investment

·    Investment key to delivering UK and Scottish net zero and energy
security targets, including the UK Government's Clean Power by 2030 ambition

·    Will drive economic growth, supporting up to 37,000 UK jobs, 17,500
in Scotland; adding up to £15bn of value to the UK economy, £7bn in Scotland

SSEN Transmission, the 75%-owned subsidiary of SSE plc, will today submit to
the energy regulator, Ofgem, its plans to deliver at least £22bn in
mission-critical grid infrastructure through its Business Plan for the RIIO-T3
price control, covering the period from 1 April 2026 to 31 March 2031.

'Delivering a Network for Net Zero: A Pathway to 2030'

The Business Plan is underpinned by three ambitious goals for the RIIO-T3
period:

·    Reliable Energy, with an ambition for zero interruptions in
electricity supply to homes and businesses due to the north of Scotland
transmission network.

·    Clean Power, with the north of Scotland transmission network having
the capability to meet 20% of GB demand for clean power.

·    Our Legacy, to drive investments in the energy transition that
delivers transformative lasting benefits for local communities, the economy
and nature.

It sets out a clear and evidence-based need for an expected known total
expenditure of around £22.3bn over the RIIO-T3 period.  This compromises:

·    a baseline total expenditure of around £6bn; and

·    around £16bn of committed strategic investments that have already
received approval of need from Ofgem through its ASTI framework and LOTI
Uncertainty Mechanisms.

SSEN Transmission has also set out the potential for an additional £9.4bn of
future Uncertainty Mechanism expenditure, which could bring the total
expenditure over the RIIO-T3 period to around £31.7bn.

The timing, progression and scale of this additional potential expenditure
remains subject to a range of external factors.  These include regulatory and
planning approvals, the outcome of Government policy decision and ongoing
industry reform, securing supply chain, and, critically, an investible
financial framework.

Enabling Government targets and driving economic growth

These investments are critical enablers of UK and Scottish Government climate
change and energy security targets, delivering a pathway to net zero emissions
and helping underpin the UK Government's Clean Power by 2030 ambition.

It represents one of the largest ever private investment programmes in
Scotland and will act as a major driver of jobs and economic growth across the
country.

Economic analysis, which has been independently peer reviewed by leading
consultancy, BiGGAR Economics, forecast that, if delivered in full, the
potential £31.7bn total investment could support up to 37,000 jobs across the
UK, 17,500 of which in Scotland, including 8,400 in the north of Scotland.
 It would also add £15bn in value to the UK economy, £7bn of which in
Scotland, including £3bn in the north of Scotland.

These investments will also provide significant local benefits, including
community benefit funding, which, based on draft UK Government guidance, is
expected to deliver well in excess of £100m in community benefit funding for
projects being taken forward across the RIIO-T3 period.

It will also support the development of at least 1,000 new homes across the
north of Scotland, creating a legacy in the communities that will host
construction workers by delivering housing that will support local need once
projects are completed.

An investible financial framework

Delivery of this plan, the associated Government targets it will enable and
the significant economic benefits it will unlock will require unprecedented
and accelerated levels of strategic investment in the north of Scotland's
electricity network infrastructure.  It is crucial that Ofgem's regulatory
framework reflects this urgency and the wider economic context against which
this investment must be secured.

The successful delivery of this plan therefore requires a financial framework
commensurate with the scale of the task and capable of attracting the
unprecedented levels of investment needed to deliver the clean energy
transition and protect future energy consumers.

Rob McDonald, Managing Director of SSEN Transmission, said:

"Our RIIO-T3 Business Plan sets out an ambitious, deliverable blueprint, to
unlock the unprecedented levels of investment required to deliver UK and
Scottish net zero and energy security targets, including the Clean Power by
2030 mission.

"In what is one of the largest investment programmes of all time in Scotland,
this plan will also support tens thousands of jobs across the country,
turbo-charging the economy and delivering a transformational and lasting
legacy for communities, the economy and nature.

"We now look forward to working constructively with Ofgem, Government and
wider stakeholders to ensure the future regulatory framework secures the
investment required to support the nation's ambitious goals and delivers the
vast economic opportunities the clean transition presents."

Alistair Phillips Davies, Chief Executive of SSE plc, said:

"The RIIO-3 price control comes at a critical juncture in the effort to
deliver a cleaner, more secure and affordable electricity system for current
and future generations.

"With a new national mission to deliver clean power by 2030 in order to boost
energy security and protect future consumers, unlocking the right level of
investment during the next price control will be key.

"We're setting out today the extent of our ambition and commitment; it is now
crucial that Ofgem backs that ambition with an investable and financeable
framework, setting an appropriate cost of equity that recognises the
unprecedented levels of investment required to decarbonise the economy and
deliver a clean power system."

Next steps

Ofgem is expected to launch a Call for Evidence from 18 December 2024 to 10
February 2025 followed by the publication of its Draft Determinations in June
2025 and Final Determinations in December 2025.

For more detail, please visit SSEN Transmission's dedicated Business Plan
website:

www.ssen-transmission.co.uk/RIIO-T3
(http://www.ssen-transmission.co.uk/RIIO-T3)

Notes

All prices in 2023/24 base.

About SSEN Transmission

·      SSEN Transmission is responsible for the electricity transmission
network in the north of Scotland, investing in and maintaining the high
voltage 132kV, 220kV, 275kV, 400kV and HVDC electricity transmission network.

·      SSEN Transmission's strategic objective is to enable the
transition to a low carbon economy.  It does this by building the electricity
transmission network infrastructure required to connect and transport
renewable electricity from the north of Scotland to areas of demand, as it
delivers a network for net zero emissions.

·      SSEN Transmission is owned 75% by SSE plc and 25% by Ontario
Teachers' Pension Plan Board (Ontario Teachers').

·      Learn more about SSEN Transmission by
visiting www.ssen-transmission.co.uk (http://www.ssen-transmission.co.uk/) ,
twitter at @ssetransmission (https://twitter.com/SSETransmission) , LinkedIn
(https://www.linkedin.com/company/ssen-transmission/)  or Instagram
(https://www.instagram.com/ssentransmission/) .

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