UK utility SSE to review opex, capex in light of coronavirus

London — UK energy utility SSE is to review operational expenditure plans "and also its capital expenditure plans for projects which have not yet reached financial close" in light of the coronavirus pandemic, it said Friday in a trading statement.

Final investment decisions are pending on the three Dogger Bank offshore wind farms, which SSE is developing with Norway's Equinor. At 1.2 GW each, the projects constitute the world's largest offshore wind cluster.

"Dogger Bank Wind Farm continues to progress toward Final Investment Decisions for each of Dogger Bank A, B and C projects," an SSE spokesman told S&P Global Platts. The FIDs were due later this year and into 2021, he confirmed.

"Onshore works have begun for Dogger Bank A and B," he added.

It was "much too early" to forecast the impact of the crisis on the UK and Irish economies and therefore on SSE's businesses, but if the economic impact resulted in significant adverse effects the board would consider the timing of dividend payments, the utility said.

Earnings for the year to end-March would be at the lower end of the expected range indicated in January 2020, SSE said, this before any coronavirus impacts were taken into consideration.

"SSE has a robust business model, but like other companies is operating in an unprecedented situation and is continuing to plan for a range of scenarios in the coming months," it said.

SSE's total renewable generation for 2019-20 was expected to be close to 11.4 TWh (9.8 TWh for 2018-2019), including over 600 GWh of constrained-off output.

The utility expected a year-on-year increase of around 25% for SSE Renewables' adjusted operating profit, mainly due to a first full year of output from the 588-MW Beatrice offshore wind farm.

High single-digit percentage year-on-year decreases in operating profit, meanwhile, were expected for transmission and distribution businesses primarily due to lower-than-expected Distribution Use of System electricity volumes and a greater number of network faults.

"Our long-term focus continues to be on supporting the transition to a net zero economy and this is reflected in the substantive progress made in recent months by our core, low-carbon networks and renewables businesses," Finance Director Gregor Alexander said.