Pre-close period note and maj

RNS Number : 4727T

Scottish & Southern Energy PLC

29 September 2010

 



NOTIFICATION OF PRE-CLOSE PERIOD

AND MAJOR PROJECTS UPDATE

SSE (Scottish and Southern Energy plc) will enter its close period on 1 October 2010, prior to the publication on 10 November 2010 of its financial report for the six months to 30 September 2010.

SSE remains on course to achieve its principal financial objective for 2010/11 - an increase of at least 2% more than RPI inflation in the dividend payable to shareholders - while maintaining a dividend cover consistent with its established range.

SSE is now mid-way through its five-year capital investment for the period to March 2013.  The status of the major projects within the programme is as follows:

·     Clyde onshore wind farm (350MW development):  the most advanced of the wind farm's three sections is the South (130MW), where the first turbines have now been delivered to site.  Work on turbine installation is due to start this autumn. As part of the process for resolving the outstanding radar-related issues associated with the consent granted for the development,  SSE has proposed NATS (En-Route) plc to act as sponsor for a temporary airspace change to impose, through public consultation, a Transponder Mandatory Zone over Clyde wind farm, in advance of the development of a new primary radar facility which will provide the necessary level of coverage for the wind farm.  This process may delay the start of electricity generation at Clyde but it is still expected to take place in the early part of the new financial year.  The South section should still be completed by the end of 2011; and the entire wind farm should still be completed in 2012.

·     Griffin onshore wind farm (156MW development): the main construction works are now under way, in advance of turbines being delivered to the site in early 2011. Turbine installation is expected to begin thereafter, with the wind farm due to be commissioned in 2012.

·     Greater Gabbard offshore wind farm (500MW development; SSE stake 50%): the installation of all the 140 turbine foundations is now complete and over 40 turbines are now in place.  The first export of electricity is expected to take place in the next few weeks and the wind farm remains scheduled to be completed in 2012.

·     Walney offshore wind farm (367MW development; SSE stake 25.1%): the installation of all of the 51 turbine foundations and transition pieces required for the first phase of the wind farm (183.6MW) is now complete and 14 turbines have now been installed.  The first export of electricity is expected to take place in early 2011.  The first phase is expected to be fully commissioned in the first half of 2011 and the second phase in the first half of 2012.

·     Beauly-Denny replacement electricity transmission line: regulatory construction cost allowances are in place to allow investment in preliminary construction works of over £50m in this financial year.  Substantive progress is being made in satisfying those conditions associated with Scottish Ministers' consent to replace the line which apply to the SSE section (Beauly to Wharry Burn) and, if this is maintained, preliminary construction works should take place in the current financial year.

·     Aldbrough gas storage capacity (up to 370mcm development; SSE stake 66.6%): the development already provided capacity in four caverns at the end of the last financial year and further capacity is expected to become available by the end of this financial year, when there will be six caverns storing a total of around 175mcm of gas.  The development as a whole, which will comprise nine caverns in total, remains on schedule to be completed in 2012.

In addition, SSE has commissioned 90MW of new onshore wind farm capacity since the start of the current financial year.

A cumulative total of around £1.3bn has been invested by SSE in assets which are still largely under construction at 29 September 2010 and therefore have yet to make any substantive contribution to earnings. This includes 1,000MW of on- and offshore wind farm capacity currently under construction.

Work on the construction of the new tunnels required to allow electricity generation to resume at the Glendoe hydro electric scheme is now fully under way.  SSE can, therefore, now forecast a return to electricity production on the basis of progress so far, and it expects this to take place in the first half of 2012.

Ian Marchant, Chief Executive of SSE, said:

"Our programme of investment is designed to deliver assets in renewable energy, electricity networks and gas storage which will contribute to secure and lower-carbon supplies of energy and support SSE's long-term commitment to above-inflation dividend growth.  We have made solid progress in recent months, but discipline in project assessment, development and execution remains paramount for the rest of this financial year and beyond."

 

END

 

 

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