SSE (SSE)

[idpickering]

UK offshore wind auction set to flop.

An upcoming auction for seven UK offshore wind projects is set to flop, according to industry sources.

The results are due to be announced on Friday, but the number of bids will be close to zero, or none at all, the sources said.

Offshore wind developers have been saying the price set by the government for the electricity they will generate is too low to make projects viable.

The government said it was committed to increasing the use of renewable energy.

Energy firm SSE and Swedish firm Vattenfall have already ruled themselves out of the bidding, saying that the government had failed to allow for sharp rises in the cost of steel and labour when setting the electricity price.

Industry sources have told the BBC that if big, experienced and well-financed firms cannot make the sums work, it is unlikely that others will be able to.

Under its wind power auctions, the government sets an electricity price which bidders compete to come in at or below.

This arrangement is called a Contract for Difference (CFD). If electricity prices in the future rise above that level, the companies pay the excess back to the Treasury, if they fall below it the Treasury pays the company the difference.

The £44 per megawatt hour price floor set for this auction fails to take account of development costs, according to industry insiders. They have been warning for some time that steel prices and wage rises had pushed their costs up by between 20% and 40% since the last auction was held at a similar price target.

Electricity generators were also hit with a windfall tax on profits from older projects that pre-dated the Contract for Difference regime. SSE warned at the time that the tax would cause it to review future investment plans.

https://www.bbc.co.uk/news/business-66740920

Ian (Who no longer holds SSE as of two weeks ago due to the dividend situation).

[Dod101]

UK offshore wind auction set to flop.

An upcoming auction for seven UK offshore wind projects is set to flop, according to industry sources.

The results are due to be announced on Friday, but the number of bids will be close to zero, or none at all, the sources said.

Offshore wind developers have been saying the price set by the government for the electricity they will generate is too low to make projects viable.

The government said it was committed to increasing the use of renewable energy.

Energy firm SSE and Swedish firm Vattenfall have already ruled themselves out of the bidding, saying that the government had failed to allow for sharp rises in the cost of steel and labour when setting the electricity price.

Industry sources have told the BBC that if big, experienced and well-financed firms cannot make the sums work, it is unlikely that others will be able to.

Under its wind power auctions, the government sets an electricity price which bidders compete to come in at or below.

This arrangement is called a Contract for Difference (CFD). If electricity prices in the future rise above that level, the companies pay the excess back to the Treasury, if they fall below it the Treasury pays the company the difference.

The £44 per megawatt hour price floor set for this auction fails to take account of development costs, according to industry insiders. They have been warning for some time that steel prices and wage rises had pushed their costs up by between 20% and 40% since the last auction was held at a similar price target.

Electricity generators were also hit with a windfall tax on profits from older projects that pre-dated the Contract for Difference regime. SSE warned at the time that the tax would cause it to review future investment plans.

https://www.bbc.co.uk/news/business-66740920

Ian (Who no longer holds SSE as of two weeks ago due to the dividend situation).

Thanks for that Ian. Serve the Government right as well. Market forces at work. That may help account for the fall off in the share price for SSE.

Dod

[BullDog]

UK offshore wind auction set to flop.

An upcoming auction for seven UK offshore wind projects is set to flop, according to industry sources.

The results are due to be announced on Friday, but the number of bids will be close to zero, or none at all, the sources said.

Offshore wind developers have been saying the price set by the government for the electricity they will generate is too low to make projects viable.

The government said it was committed to increasing the use of renewable energy.

Energy firm SSE and Swedish firm Vattenfall have already ruled themselves out of the bidding, saying that the government had failed to allow for sharp rises in the cost of steel and labour when setting the electricity price.

Industry sources have told the BBC that if big, experienced and well-financed firms cannot make the sums work, it is unlikely that others will be able to.

Under its wind power auctions, the government sets an electricity price which bidders compete to come in at or below.

This arrangement is called a Contract for Difference (CFD). If electricity prices in the future rise above that level, the companies pay the excess back to the Treasury, if they fall below it the Treasury pays the company the difference.

The £44 per megawatt hour price floor set for this auction fails to take account of development costs, according to industry insiders. They have been warning for some time that steel prices and wage rises had pushed their costs up by between 20% and 40% since the last auction was held at a similar price target.

Electricity generators were also hit with a windfall tax on profits from older projects that pre-dated the Contract for Difference regime. SSE warned at the time that the tax would cause it to review future investment plans.

https://www.bbc.co.uk/news/business-66740920

Ian (Who no longer holds SSE as of two weeks ago due to the dividend situation).

You sold SSE? Interesting to hear that. I said a while ago why I had exited SSE. The share price has since fallen but the yield isn't high enough to tempt me back.

[daveh]

UK offshore wind auction set to flop.



https://www.bbc.co.uk/news/business-66740920

Ian (Who no longer holds SSE as of two weeks ago due to the dividend situation).

Thanks for that Ian. Serve the Government right as well. Market forces at work. That may help account for the fall off in the share price for SSE.

Dod

Yet SSE just announced:
https://www.investegate.co.uk/announcem ... -5/7744053

UK CfD Allocation Round 5

 

SSE plc



UK Contracts for Difference Allocation Round 5



8 September 2023

 

SSE Renewables has today, 8 September 2023, been informed that Aberarder Wind Farm, Bhlaraidh Wind Farm Extension, Strathy South Wind Farm, and Viking Energy Wind Farm have been successful in the UK's fifth Contracts for Difference (CfD) Allocation Round and are set to be awarded low-carbon power contracts for a total of 605MW.



The successful projects will receive the guaranteed strike price of £52.29/MWh, based on 2012 prices but annually indexed since then for CPI inflation, for the contracted low carbon electricity they will generate for a 15-year period from the 2027/28 delivery year.



The projects' success in securing contracts follows the UK Government's Allocation Round 5 process in which the projects competed in 'Pot 1' alongside various technologies including offshore wind, hydro, energy from waste with CHP, and solar photovoltaic (PV).

So not a total flop, though all of these are onshore projects and the total at 605MW is small beer. It will be interesting to see what happens with some of the big offshore projects with consent, but no CfD yet. Will they go ahead or will they be postponed until the government make a better offer.

[Dod101]

The share price drop has been happening over the last couple of months or so but I have seen no discussion about it. I am just an observer I am sorry to say and have no answers but it is good to see that SSE are pressing on with windfarm development, although I prefer it to be off shore.

Dod

[idpickering]

You sold SSE? Interesting to hear that. I said a while ago why I had exited SSE. The share price has since fallen but the yield isn't high enough to tempt me back.

Thanks for your input. As a HYPer, I tend to buy and hold shares offering a high yield. Going forward SSE don't fit the bill imho. I can earn higher yields elsewhere.

Ian.

[BullDog]

You sold SSE? Interesting to hear that. I said a while ago why I had exited SSE. The share price has since fallen but the yield isn't high enough to tempt me back.

Thanks for your input. As a HYPer, I tend to buy and hold shares offering a high yield. Going forward SSE don't fit the bill imho. I can earn higher yields elsewhere.

Ian.

I agree with you about the yield presently at SSE. I'll look again in the future, but at the moment, it's not for me.

[Dod101]

Thanks for your input. As a HYPer, I tend to buy and hold shares offering a high yield. Going forward SSE don't fit the bill imho. I can earn higher yields elsewhere.

Ian.

I agree with you about the yield presently at SSE. I'll look again in the future, but at the moment, it's not for me.

Presumably you are looking at the forward yield. If anything the yield is likely to reduce as the share price recovers but it is a well run company and it is building up its renewables side . Future looking I'd say which is why I will continue to hold it. I live off my investment income but I am happy to hold SSE.

Dod

[BullDog]

I agree with you about the yield presently at SSE. I'll look again in the future, but at the moment, it's not for me.

Presumably you are looking at the forward yield. If anything the yield is likely to reduce as the share price recovers but it is a well run company and it is building up its renewables side . Future looking I'd say which is why I will continue to hold it. I live off my investment income but I am happy to hold SSE.

Dod

I agree, SSE is a terrific company.

However as I have said before, I'm not giving them my dividend money to spend on off shore wind farms.

Share price has, quite predictably, dropped since I sold and took my profit with me.

I've reinvested the proceeds elsewhere in the renewable energy industry at a better yield and I'm fairly confident of decent capital growth too medium term. Though nothing is guaranteed if course.

I can imagine buying SSE again one day. But not now.

[idpickering]

Notification of Closed Period.

Ahead of the publication on 15 November 2023 of results for the six months to 30 September 2023, SSE plc is today updating the market on its performance and outlook, including:

· Expecting to report half-year adjusted earnings per share of at least 30 pence

· Balanced, diversified business model continuing to underpin expected full-year adjusted earnings per share of more than 150 pence

· Continuing focus on disciplined execution of growth strategy, with progress made on key projects

HALF-YEAR FINANCIAL OUTLOOK

SSE expects to report interim adjusted earnings per share of at least 30 pence, largely reflecting the normal seasonal nature of operations that deliver the majority of annual earnings in the second half of SSE's financial year.

This guidance takes into account renewables performance which remains below expectations, with output around 19% behind plan for the six months to 30 September, mainly due to adverse weather conditions. This represents around a 7% shortfall relative to the full year's planned output. It also reflects a more stable market environment which is expected to drive a seasonal half-year loss for gas storage, before reverting back to a profit for the full year when gas is withdrawn. Finally, flexible thermal assets have continued to demonstrate their value to the energy system during the period.

Following the successful issuance of a €750m eight-year Green Bond in September 2023 at a fixed coupon of 4.0%, adjusted net debt is expected to be around £9bn at 30 September 2023, with over 90% of financing still held at fixed rates.

https://www.investegate.co.uk/announcem ... d-/7794909

Ian (No holding).

[Dod101]

Presumably you are looking at the forward yield. If anything the yield is likely to reduce as the share price recovers but it is a well run company and it is building up its renewables side . Future looking I'd say which is why I will continue to hold it. I live off my investment income but I am happy to hold SSE.

Dod

I agree, SSE is a terrific company.

However as I have said before, I'm not giving them my dividend money to spend on off shore wind farms.

Share price has, quite predictably, dropped since I sold and took my profit with me.

I've reinvested the proceeds elsewhere in the renewable energy industry at a better yield and I'm fairly confident of decent capital growth too medium term. Though nothing is guaranteed if course.

I can imagine buying SSE again one day. But not now.

The share price has dropped even further now. When I sell, the share price usually rises, but if you are blessed with the power of prediction as you seem to be, please let us know when you next plan to sell something.

Dod

[monabri]

I agree, SSE is a terrific company.

However as I have said before, I'm not giving them my dividend money to spend on off shore wind farms.

Share price has, quite predictably, dropped since I sold and took my profit with me.

I've reinvested the proceeds elsewhere in the renewable energy industry at a better yield and I'm fairly confident of decent capital growth too medium term. Though nothing is guaranteed if course.

I can imagine buying SSE again one day. But not now.

The share price has dropped even further now. When I sell, the share price usually rises, but if you are blessed with the power of prediction as you seem to be, please let us know when you next plan to sell something.

Dod

I see the CEO, FD and CCO have been selling. They've been in post 10, 21and 7 years respectively...I wonder if they have one eye on retirement?

Source : Simply Wall Street

[idpickering]

I see the CEO, FD and CCO have been selling. They've been in post 10, 21and 7 years respectively...I wonder if they have one eye on retirement?

Source : Simply Wall Street

Thanks for your input. When even the bosses in a company are selling their holdings, that speaks volumes to me (I'm sure they know more about what's going on with the inner workings of SSE than I do), and gives me confidence in my decision to sell my SSE shares too. A shame though as I like the outfit and what they're doing.

Ian.

[AJC5001]

I see the CEO, FD and CCO have been selling. They've been in post 10, 21and 7 years respectively...I wonder if they have one eye on retirement?

Source : Simply Wall Street

Thanks for your input. When even the bosses in a company are selling their holdings, that speaks volumes to me (I'm sure they know more about what's going on with the inner workings of SSE than I do), and gives me confidence in my decision to sell my SSE shares too. A shame though as I like the outfit and what they're doing.

Ian.

Looking back at the RNS's for SSE shows this one from 7th June 2023
https://www.investegate.co.uk/announcement/rns/sse--sse/director-pdmr-shareholding/7564788

This shows that the individuals mentioned were awarded shares as part of various incentive schemes and that the sales were to meet income tax and National Insurance liabilities. So the taxman benefitted from those sales, not the directors.

Adrian

[idpickering]

SSE PLC: INTERIM RESULTS FOR THE SIX MONTHS ENDED 30 SEPTEMBER 2023.

CREATING VALUE BY DELIVERING ON CRITICAL INFRASTRUCTURE

· Major progress on flagship projects including first power at Dogger Bank and full power at Seagreen offshore wind farms, and planning and supply chain secured for Eastern Green Link 2 subsea transmission cable.

· Reporting adjusted earnings per share of 37.0p, ahead of pre-close guidance and reflecting the normal seasonal nature of operations that deliver the majority of annual earnings in the second half of SSE's financial year.

· Maintaining balance sheet strength with 91% of adjusted debt paying a fixed rate and less than £1.5bn long-term debt refinancing required over the next 24 months.

· Focus on safety remains the number one priority for the group, with initiatives put in place as increased construction activity contributes to a Total Recordable Injury Rate of 0.24, an increase from 0.15.

· Reaffirming guidance for full year 2023/24 of more than 150p adjusted earnings per share.

And later;

An interim dividend of 20.0p per ordinary share (2022: 29.0p) has been proposed and is due to be paid on 8 March 2024 to those shareholders on the SSE plc share register on 12 January 2024. The proposed interim dividend has not been included as a liability in these financial statements. A scrip dividend will be offered as an alternative.

https://www.investegate.co.uk/announcem ... rt/7881736

Ian (No holding).

[Dod101]

These seem very good results. Just what I would expect from this company. As they said, the dividend has been rebased but I M on all very happy with this investment and so should the market.
Dod

[idpickering]

As they said, the dividend has been rebased but I M on all very happy with this investment and so should the market.
Dod

Thanks for your input Dod. Your later point seems spot on, with the SSE share price being up over 2% as I type ( in a rising overall market thus far today ). The SSE rise could be for other reasons though of course.

Ian.

[Dod101]

Yes. It sounds like a morning of good news for once. Inflation down more than expected and SSE results better than expected. I am very happy with my holding in SSE and am likely to keep it as a core holding. As an investment it has a lot going for it.

Dod

[idpickering]

Change of Registrar.

SSE plc announces it has changed its share registrar from Link Group to Computershare Investor Services PLC ("Computershare") with effect from 18 December 2023.

A notification letter will be sent to shareholders advising of this change as well as an invitation to register for online access to their shareholdings.

https://www.investegate.co.uk/announcem ... ar/7947383

Ian.

[idpickering]

SCRIP DIVIDEND SCHEME

The Board of SSE plc ('the Company') confirms that the Scrip reference price for the fully paid ordinary shares to be issued to shareholders electing to receive the Scrip dividend alternative for the interim dividend for the year ending 31 March 2024, payable on 8 March 2024, will be 1,779 pence per share.

The Scrip reference price has been calculated by taking the average mid-market closing price of the Company's shares over the five business days commencing on the ex-dividend date. In respect of the interim dividend for the year ending 31 March 2024, this was the period 11 to 17 January 2024.

Ex dividend 11 Jan 24, paid 08 Mar 24.

https://www.investegate.co.uk/announcem ... ve/7996219

Ian.