SSE profits hit by falling wholesale gas prices and lower household energy demand

3rd May 2016 | Commercial Energy

Operating profits at SSE’s wholesale gas division fell 94% to just £2.2m as a result of the fall in gas prices. And SSE lost about 300,000 energy customers during the year, leaving it with 8.2m customers, both households and businesses. And costs relating to its coal-fired power stations rose to £287m during the year.

Despite all these significant factors, SSE Chief Executive Alistair Phillips-Davies says “there are grounds for some cautious optimism for the next couple of years”. He cites mist around the legislative, political and regulatory environment and SSE’s continued financial discipline and commitment to its long-term strategic framework as the basis for this optimism.

In March, SSE closed its Ferrybridge coal-fired power station in Yorkshire and it also announced on Wednesday that it would be selling a significant portion of its stake in gas distribution business SGN to raise cash for shareholders or to reinvest. The company also said it would invest up to £6bn over the next four years into the UK’s electricity and gas infrastructure, including new transmission lines and wind farms.

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