British electricity company SSE has reached an agreement to sell a 25% minority stake in its electricity transmission grid business to a pension fund.
The Ontario Teachers’ Pension Plan Board is spending £1.5 billion on the transaction which will help “unlock significant growth both in the broadcasting sector and across the wider SSE group”.
SSE said the deal reflects the “significant growth potential” of its broadcasting business as it is one of the fastest growing businesses in Europe. He added that the grid plays a central role in helping the UK achieve net zero goals and enhance energy security.
It is currently used to access renewable resources in the north of Scotland and transport that low carbon energy to higher demand areas further south.
SSE also expects the firm to experience further growth following the release of Ofgem’s Accelerated Strategic Investment Framework for Transmission.
It is a consultation launched by the regulator on electricity transmission network upgrades that will be necessary to meet the government’s renewable electricity generation ambitions by 2030.
It includes proposals to streamline the current regulatory approval process for large electricity transmission projects, as well as measures to protect consumers from the additional risks that the process change poses.
SSE said it would use the proceeds from the sale to support the growth of the business, which could see it supply around 20% of the UK’s needed offshore wind generation and electricity grids by 2030.
He expects investments in excess of £24bn in Britain by the end of the decade.
Gregor Alexander, Chief Financial Officer of SSE, said: “We are pleased to agree to a transaction that will help unlock the full potential of our growing electricity transmission business, which remains critical to our strategic direction as a clean energy champion specializing in infrastructure. electric”.
“As we established in our Net Zero accelerator program last year, due to the scale of potential growth and associated investments required across all SSE businesses, including power grids, engaging minority partners will balance the capital allocation and will support further growth, creating greater long-term value for all of our stakeholders.”
Rob McDonald, Chief Executive Officer of SSEN Transmission, said: “With the north of Scotland hosting the UK’s largest renewable electricity resources, we have a vital role to play in helping meet the UK and Scottish Government’s net zero commitments. .
“Our investments will also be instrumental in ensuring the UK’s future energy independence by enabling the deployment of local, affordable and low-carbon energy.”
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