SSEN Distribution sets out ambitious £4bn plan to power communities to net zero

Scottish and Southern Electricity Networks (SSEN) Distribution today published plans to invest £4 billion and create over 850 jobs, with many more in the supply chain, as it submits its final RIIO-ED2 business plan designed to power communities to net zero.

The UK and Scottish Governments have set clear and binding targets to address the climate emergency, including an accelerated 2035 timeline for decarbonisation of the UK’s electricity system. With electricity demand set to double in the same time period as the adoption of electric vehicles, heating systems and industrial processes accelerates, local electricity networks will be a key enabler of this change.

SSEN Distribution plans to increase its investment by around a third in the north of Scotland and central southern England over the RIIO-ED2 period (2023-2028) to accelerate the transition to smart, flexible networks and help deliver net zero.

From connecting more electric vehicles and supporting the decarbonisation of heat across homes and businesses to reducing power interruptions, the network operator is set to play a key role in delivering the UK’s net zero ambitions.

Chris Burchell, Managing Director of SSEN Distribution, said:

“Networks will unlock the electrification of the economy with billions of pounds in investment to create modernised local electricity grids fit for a net zero future. Our RIIO-ED2 business plan represents an important and critical step in this journey.

“As energy policy and targets accelerate at pace, it’s critical we invest at the right level now to meet this ambition and avoid a higher cost future. We now need Ofgem to support this aim by providing an agile price control framework which gives the certainty and flexibility required to meet evolving policy and customer needs.

“Our purpose is to power communities to thrive today and create a net zero tomorrow. Aligned with that, our plan has been co-created with the customers and communities we serve.  It will improve reliability, support the most vulnerable, cut carbon, get EVs on the roads and enable cleaner heating in homes as well as create hundreds of well-paid and secure green jobs in our regions.

“Our proposals are ambitious, including a sector-leading commitment to a 1.5°C science-based target pathway; balanced, delivering the investment required to enable the energy transition; and affordable, with no planned increase to network charges on customer bills, something we recognise is important in the wider context of overall energy costs.”

SSEN’s business plan has been shaped by over 25,000 customer and stakeholder voices, turning ambition into action.

Titled ‘Powering communities to net zero’, it sets out six, clear goals that SSEN will deliver for customers and communities by 2028:

  • Create a foundation for net zero by investing £1bn in strategic resilience across its networks
  • Reduce the frequency and duration of power interruptions by 20%
  • Achieve a customer satisfaction score of at least 92% in every contact area
  • Support 200,000 customers in fuel poverty with targeted support and energy efficiency measures
  • Facilitate the connection of 1.3m electric vehicles and 800,000 heat pumps on its network
  • Cut its business carbon footprint by 35% aligned to a 1.5°C science-based target, accredited by the Science Based Targets initiative

This significant increase in investment will be delivered with no planned rise in distribution costs on customer energy bills, supporting a just and fair transition to net zero.[1]

Of its proposed £3.99[2] billion investment, £360m will be allocated to digitalising systems and improving customer service; £2.2bn will be invested to deliver a safe, resilient and responsive network, with half of this targeted investment in network resilience to create a foundation for net zero demands; and over £1bn to help accelerate net zero for communities, including proactive and flexible solutions to support 3.7GW of new network capacity by 2028.

Recognising the unique role SSEN plays, it plans to go above and beyond in its support for communities, vulnerable customers and the environment, with innovative projects including using its subsea cables to support broadband rollout to remote islands, setting up a dedicated team to directly support local authorities and community groups with their net zero plans and assisting vulnerable customers with energy efficiency and personal resilience support. These additional proposals are forecast to deliver over £50 million of net consumer benefit.

The final ED2 plan will now be assessed by Ofgem, with determinations published in 2022, ahead of the new price control commencing in April 2023 and running to March 2028. 

SSEN Distribution’s Business Plan was included within its parent company SSE Plc’s ‘Net Zero Acceleration Programme' announced on 17 November to accelerate clean growth, lead the energy transition and maximise value for all stakeholders. The Programme includes an enhanced, fully funded £12.5bn strategic capital investment plan to 2026 alongside ambitious 2031 targets, aligned with net zero and 1.5 degrees. Given the timeframes covered, a proportion of the ED2 proposals set out today are included in the £12.5bn group-wide plan to 2026.

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[1] Calculated using industry standard 8-year RIIO-ED1 average and 5-year RIIO-ED2 average. This will be achieved through efficiency savings and innovation, coupled with lower financing costs.

[2] £3,994m investment includes £2,577m for SEPD licence area and £1,417mfor SHEPD licence area. A further breakdown of costs is detailed in business plan finance chapter and associated annexes.