Although offshore wind currently represents just a fraction – 12.6% - of SSE’s renewable generation capacity, the energy company plans to restructure it business to allow it to attract additional investment to fund future, much larger offshore assets.
SSE will "reorganise" by creating a new holding company to control all operational offshore assets, those under construction, and those in development. The new holding company will be "wholly-owned by SSE for the foreseeable future", however, the new structure will give SSE "the flexibility to introduce other sources of funding".
Additional investment from others may be needed as SSE moves ahead with development of the 4.8GW in offshore rights it has been awarded under the Crown Estate’s Round 3 tender.
Incorporation of SSE’s new offshore wind holding company should take place "shortly", according to its 2011/12 annual report, published on 14 June.
The group’s renewable energy output jumped 73% during the year ending 31 March 2012, to reach 7.6TWh.
Its offshore assets, which include Walney and Greater Gabbard, contributed 428GWh, representing 5.6% of total renewable output. This figure excludes output from turbines at Greater Gabbard that are mounted on foundations subject to an ongoing legal dispute.
Meanwhile, SSE’s renewable generating capacity increased by almost a quarter (23.3%) in 2011/12 to reach 3.0GW, of which offshore wind represents 12.6% or 187MW. This compares to 1.3GW in onshore capacity.
The significance of renewable energy in SSE’s overall electricity generating portfolio has become substantial:
- renewable 3.0GW
- gas & oil 4.5GW
- coal 4.4GW.
In ten years’ time, SSE's offshore wind capacity could be head-to-head with other sources, both renewable and conventional. Of SSE’s four investment priorities, one is the "commissioning of new renewable energy assets".
However, substantial increases in investment will clearly be necessary. Last year, the group invested £982m in electricity generation and energy portfolio management, with almost all of this going to renewable sources - £852.3m or almost 87%.