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SSE is seeking to raise £2bn in fresh equity to help fund a new £33bn investment plan aimed mainly at upgrading and expanding electricity networks in Britain by the end of the decade.
The FTSE 100 energy company plans to invest about £22bn in the high-voltage electricity networks in Scotland and about £5bn in lower-voltage networks in Scotland and southern England.
The remaining £6bn will go towards projects such as the giant Dogger Bank offshore wind farm that SSE is building off the north-east coast of England.
The plan, unveiled on Wednesday, represents a significant increase on SSE’s previous strategy to invest £17.5bn by 2027.
Shares climbed more than 10 per cent in morning trading on Wednesday to £21.83, bringing the rise this year to 34 per cent.
As well as the £2bn equity raise, the plan will be funded by about £21bn of cash flow from its existing power stations and electricity networks. SSE also anticipates a roughly £14bn increase in adjusted net debt and hybrid capital, and to raise £2bn through asset sales.
The proposals are in line with the UK government’s plan to decarbonise the power sector by 2030, which will require massive investment in electricity networks to move power from wind farms in remote parts of Scotland.
Fellow UK electricity network owner National Grid raised £7bn in a rights issue in 2024 also to help fund upgrades, its largest equity raise.
However, the massive investment needed has also triggered concern about the impact on consumer electricity bills at a time when the government has pledged to bring bills down by 2030.
Executives at companies including Octopus Energy last month warned that retail electricity prices would rise over the next few years even if wholesale prices fell, due to costs including network upgrades.
Martin Pibworth, who took over as SSE chief executive in July, has pushed back against the suggestion that the scale of network investment should be reviewed. He argued in a LinkedIn post last month that upgrading the grid now was “more affordable than it will be in five or ten years”.
Announcing the investment plans, Pibworth said they were “built on a once-in-a-generation opportunity to upgrade the UK electricity network” and would unlock wider economic growth.
SSE is one of the UK’s largest energy groups, owning and developing electricity networks in Scotland and England as well as wind farms and gas-fired power stations. It also supplies energy in Northern Ireland and Ireland through its subsidiary SSE Airtricity.
In half-year results for the six months to September 30, announced on Wednesday, SSE reported a 31 per cent fall in reported pre-tax profit of £586.3mn compared with the same period last year.
That was partly because of lower profits at its renewable energy division following factors such as lower rainfall denting output at its hydropower stations and lower wind speeds offsetting an increase in its wind farm capacity.