ENERGY giant SSE has announced plans to ramp up investment in electricity networks and renewables over the next five years after earnings came in ahead of forecasts for the first half.

The Perth-based company has upgraded its investment programme to £20.5 billion through its 2027 financial year, £2.5bn higher than previously targeted. The decision came amid what SSE said was “increased visibility and certainty” over future earnings.

One analyst declared the firm, which reaffirmed its guidance for the rest of the year, had positioned itself in a “sweet spot” in the UK’s transition to net zero, having achieved a number of landmarks in the first half.

SSE, which lifted adjusted profits before tax for the half year by 1% to £565.2 million, said capital expenditures of £1.1bn had delivered a range of “nationally significant” clean energy projects in the first half.

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First power was achieved from the giant Dogger Bank wind farm, located around 130km off the north-east coast of England, while operational delivery was completed at Seagreen, Scotland’s largest offshore wind farm which is based around 27km off the coast of Angus in the North Sea. And the final turbines have also been installed at the Viking onshore wind farm in Shetland.

SSE said profitability increased at its renewables division in the first half despite adverse weather conditions leading to a shortfall against planned output, with the company citing higher hedged prices combined with a lower requirement for hedge buybacks.

It reported a strong performance by its thermal business, which benefited from the addition of Keadby 2 and Triton power stations, alongside improved availability of its other assets.

In electricity networks, SSE’s transmission business, which owns the high-voltage electricity transmission network across the north of Scotland, saw operating profits rise by 3%. However, operating profits at its distribution business, which powers homes across the north of Scotland and central southern England, fell by 31% mainly because of inflationary costs, which are expected to be recouped it future years, and storm costs.

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The group reiterated its earnings per share forecast for the full 2023/24 year of more than 150p adjusted earnings per share. It expects to deliver 13% to 16% average earnings growth per year over the five years to 2026/27 as it continues to build “world-class electricity infrastructure”.

The company added that, between its existing operational asset base and the capital expenditure committed to date, it now has increased visibility on around 95% of its targeted earnings estimate of 175p to 200p per share for 2026-27.

John Moore, senior investment manager at RBC Brewin Dolphin, said: “SSE has delivered yet another robust set of results. Its earnings per share are ahead of expectations and the renewables group has reaffirmed its guidance for the rest of the year.

“SSE is in a sweet spot in terms of the UK’s transition to net zero, with plenty of investment opportunities in front of it – but the company has been discerning about where to allocate capital when it needs to be. With an attractive rebased dividend – set to increase by between 5% and 10% annually – good prospects ahead, and debt under control, SSE is in a very good position, with the kicker from investments made starting to come through in 2025’s numbers.”

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Alistair Phillips-Davies, chief executive of SSE, said: “Our first half performance reflects both the financial strength of our business and our ability to deliver world-class projects that are at the heart of the clean energy transition.

“There remains strong underlying political consensus on the big drivers of energy security and decarbonisation – accelerating renewables, network investment and flexible power generation – and these are the growth engines powering SSE.

“That we are investing more than £20bn over the five years to 2027 and could invest more than £40bn over the decade to 2032, speaks to the range and quality of opportunities we have, underpinned by an energy transition that is gathering pace, and our continued commitment to creating value for society and shareholders in a disciplined way.”

Shares in SSE closed up 2.31% or 39.5p, at 1,751p.