SSE Q1 trading statement: networks investment jumps 83% as earnings guidance holds

SSE keeps its earnings outlook unchanged

SSE's first-quarter update is mainly a delivery story. The energy group has reiterated adjusted earnings per share guidance of between 168p and 193p for 2026/27, alongside its longer-term range of between 225p and 250p for 2029/30.

Adjusted earnings per share, or EPS, measures profit attributable to each share after excluding certain items management considers unrepresentative of underlying performance.

Keeping both ranges unchanged suggests the first three months have developed in line with SSE's expectations. However, management stressed that the outlook remains subject to weather, market conditions and plant availability. The key winter months are also still to come, so this is not yet the point in the year for investors to declare the job done.

The standout figures were an 83% year-on-year increase in regulated networks investment and a 31% rise in renewable generation output.

Key figures from SSE's first quarter

Metric	Q1 FY27	Q1 FY26	Change highlighted by SSE
SSEN Transmission adjusted investment	£666 million	£311 million	Not disclosed
SSEN Distribution adjusted investment	£222 million	£173 million	Not disclosed
Total networks adjusted investment	£888 million	£484 million	83%
Total renewable output	3,264 GWh	2,499 GWh	31%
Total flexible thermal output	3,514 GWh	3,186 GWh	Not disclosed

SSE's adjusted networks investment is net of the 25% minority interest in SSEN Transmission. In simple terms, the reported number reflects SSE's economic share rather than the full amount invested by that business.

Networks spending is accelerating

SSE invested £888 million across its regulated networks businesses during the quarter, up from £484 million a year earlier.

SSEN Transmission accounted for £666 million of that total, compared with £311 million in the prior-year period. Construction is progressing across major ASTI and LOTI projects. These are frameworks intended to support investment in electricity transmission infrastructure.

Distribution investment also increased from £173 million to £222 million. SSE said this came ahead of the submission of its ED3 business plan in December. ED3 will be the next regulatory period for electricity distribution networks.

The scale-up matters because regulated networks sit at the heart of SSE's five-year, £33 billion investment plan. The company remains on track to invest a record £5 billion during the current financial year.

There is also potential for the pipeline to grow. The National Energy System Operator's Beyond 2030 Update Report identified more than £12 billion of additional potential investment for SSEN Transmission. That takes newly identified Future Uncertainty Mechanism spending to more than £17 billion.

This is potential rather than committed expenditure. It remains subject to regulatory and planning approvals, but it gives investors a clearer view of the possible long-term opportunity within transmission.

Renewable output benefits from weather and added capacity

SSE Renewables generated 3,264 GWh during the quarter, up from 2,499 GWh a year earlier. The company attributed the 31% increase to more favourable weather and continued capacity additions.

The improvement was spread across the portfolio:

Renewable technology	Q1 FY27 output	Q1 FY26 output
Onshore wind	1,460 GWh	1,233 GWh
Offshore wind	982 GWh	863 GWh
Hydro, pumped storage and battery	822 GWh	403 GWh
Total renewable output	3,264 GWh	2,499 GWh

Hydro, pumped storage and battery output showed the largest absolute increase, rising from 403 GWh to 822 GWh.

Renewable output is reported on an equity-share basis and includes compensated constrained-off generation. This includes electricity that could have been produced but was restricted by the network, with compensation received under the relevant arrangements.

Flexible thermal generation also increased, reaching 3,514 GWh compared with 3,186 GWh. Thermal output is generally reported according to SSE's equity share, except for Marchwood, where 100% of volumes are included because of the contractual arrangement.

Major projects continue to move forward

SSE reported progress across several large infrastructure and generation projects.

Construction has started on the Netherton Hub near Peterhead. The development will include 400kV and 132kV substations, together with high-voltage direct current converter stations supporting the Spittal to Peterhead, Eastern Green Link 3 and Eastern Green Link 5 subsea projects.

Early preparatory work has also begun on the Western Isles high-voltage direct current link, with main construction expected to start later this year.

At Dogger Bank B, 30 turbines have been installed. SSE said the installation run-rate is significantly ahead of that achieved during the first phase. Commissioning at Dogger Bank A continues in line with expectations.

In Ireland, construction has commenced on the 180MW Platin power station. The open-cycle gas turbine will be capable of running on natural gas or sustainable biofuels. It is due to become operational in 2028 and is supported by 10-year Capacity Market agreements.

Coire Glas was included in Ofgem's minded-to list for long-duration electricity storage support under a cap-and-floor model. This mechanism can provide projects with a minimum revenue level while limiting excess returns. SSE cautioned that a significant number of details still need to be resolved before the project can progress, while reiterating its focus on capital discipline and return thresholds.

Funding progress supports the investment plan

A £33 billion investment programme requires substantial financing, making the quarter's debt issuance an important part of the update.

SSE raised £1.1 billion of hybrid debt at an average cost of 4.6% and an average tenor, or time to maturity, of 6.6 years. It also raised £1.3 billion of senior debt at an average cost of 5.1% and an average tenor of 8.7 years.

Hybrid debt combines characteristics of debt and equity, while senior debt ranks ahead of subordinated borrowing if a company runs into financial difficulty.

Diversifying funding sources is positive for programme delivery. The counterpoint is that the cost and scale of financing remain important considerations as SSE increases annual investment.

What should SSE investors take from the update?

The positives are straightforward. Networks investment is accelerating, renewable output has increased significantly and management has maintained both near-term and 2029/30 EPS guidance. Progress on transmission infrastructure, Dogger Bank and new funding also supports confidence in the wider plan.

The main risks are equally clear. SSE's outlook remains exposed to weather, market conditions and plant availability, with the crucial winter period still ahead. Several longer-term opportunities also require regulatory or planning approval, while major infrastructure projects demand disciplined execution and funding.

Overall, this quarter provides evidence that SSE's £33 billion strategy is moving from plans into physical investment. For investors, the next test is whether that accelerating delivery translates into earnings within the stated guidance ranges while maintaining the company's return thresholds.