Creating energy, generating investment
Keeping the lights on is a huge responsibility that requires significant investment.
SSE currently invests £1.5 billion a year and employs 20,000 people in order to develop and maintain the UK’s energy infrastructure. That investment comes from SSE’s shareholders who provide the capital for the business to achieve its goals.
Earning a profit enables SSE to do six things:
- Provide the energy people need;
- Deliver better services;
- Upgrade Britain’s energy system;
- Protect jobs;
- Pay tax; and
- Pay back investors.
Running a profitable business is an essential part of the cycle illustrated below.
Investors are rewarded through dividends which give them a significant return over the long term. Dividend targets also provide a transparent means to hold management to account.
Since 2008, SSE has invested over £8bn in things like modern power stations and new electricity networks. To fund this, it has borrowed money and its net debt has gone up from £3.7bn in 2008 to £7.8bn now.
Shareholders, as the owners of SSE, have effectively taken on this debt and pay interest to debt investors; and in return for this SSE pays them dividends. SSE’s shareholders support our signficant investment in the energy infrastructure of the UK.
Without it, SSE could not finance the large capital projects that are helping to modernise the UK’s energy system.
The table above shows the journey through energy creation to generating investment, and how one could not exist without the other.