Britain’s SSE to consolidate renewables business

British energy supplier SSE Plc plans to create a new company that will include its renewable energy assets in the UK and Ireland, it said on Wednesday.

It reported a 40.9 per cent drop in adjusted pre-tax profit.

The new company, to be known as SSE Renewables, will comprise around four gigawatts of SSE’s existing renewable assets such as hydropower, onshore wind and several stakes in offshore wind projects.

SSE said the creation of the new entity will provide greater visibility of assets and future earnings for investors and improve its ability to raise finance for projects.

Adjusted pretax profits at the company, which includes energy supply and networks as well as generation, slumped almost 41 per cent to 246.4 million pounds (320 million dollars) for the six months to Sept. 30.

The company warned in September that profits would be hit as calm weather cut renewable output and a summer heatwave curbed demand.

SSE plans to merge its UK retail division with Innogy’s power.

The two companies said earlier this month the tie-up would be delayed beyond the first quarter of 2019 due to market developments such as the looming implementation of a price cap.

“There is now some uncertainty as to whether this transaction can be completed as originally contemplated,” SSE said on Wednesday.

“The Board believes that the best future for SSE Energy Services… will continue to lie outside the SSE group,” it said.

British energy regulator Ofgem from January 1 will cap average annual household electricity and gas bills at 1,137 pounds, a level well below the most-used tariffs set by the country’s big six suppliers.

Ofgem has said the move should save British households around one billion pounds a year.