SCOTTISH Hydroelectric owner SSE has reiterated plans to invest £7.5 billion in support of its focus on renewable energy and to make big dividend payouts in spite of the challenges posed by the coronavirus and the weather.

The Perth-based energy giant said yesterday that it expects the fallout from coronavirus to cost it up to £250 million in the current year before mitigation. The virus has triggered a drop in demand for power and a rise in bad debts.

In an update on trading, SSE revealed the electricity it generated from renewable sources was 15 per cent below plan in the quarter to June 30 “mainly due to weather conditions”.

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The relatively sunny and dry conditions that prevailed during the lockdown did not help SSE.

The shortfall highlights how the performance of the windfarms and hydroelectric plants in SSE’s portfolio can be impacted by the weather.

However, SSE’s directors appear to be convinced the company was right to decide to focus investment on renewables and associated networks.

The company completed its exit from the British household supply business in January, through the sale of its retail arm to Ovo for £500m.

Chief executive Alistair Phillips-Davies said yesterday the company had continued to support the national coronavirus response in the first quarter by supporting the safe and reliable supply of electricity.

He noted: “While the wider economic implication of coronavirus continues to impact on the business, we’ve been investing in the green economic recovery and progressing our £7.5bn capex plan of low-carbon investments, primarily in renewables and electricity networks.”

The capital expenditure programme will include investment in huge windfarms, in Scotland and offshore.

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In June, SSE underlined its confidence in the prospects for the UK market by approving a plan to build the giant Viking windfarm on Shetland. This will involve £580m investment by the firm.

Earlier that month SSE approved plans to build the Seagreen windfarm off the Angus coast after Total bought in to the project. Seagreen will involve around £3bn total investment.

SSE and Norway’s Equinor are developing plans to build the massive Dogger Bank windfarm off Yorkshire. SSE reckons this will be the biggest in the world.

The company said it has been progressing the processes to secure project finance and sell an equity stake in Dogger Bank.

It recently secured around £1bn funding at relatively low interest rates through an issue of bonds, which was oversubscribed.

SSE renewed its criticism of the price controls the regulator Ofgem last week proposed should apply to firms that operate transmission networks.The company said: “The draft settlement risks failing to deliver on net zero, inadequately reflecting stakeholder and customer needs, and falling short in attracting the significant investment required.”

However, Mr Phillips Davies said the steps SSE is taking leave it well placed to achieve success over the long term and to deliver its five-year dividend plan.

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Corporations have faced pressure to curb payouts amid the coronavirus crisis.

SSE said its dividend provides income for people’s pensions and savings and is “particularly vital given the economic consequences of the coronavirus pandemic”.

The company expects total dividend payments to increase in line with retail price index (RPI) inflation this year, from 80p last time. It intends to declare a 24.4p interim dividend in November 2020 for payment in March 2021, based on an estimated RPI of 1.5 per cent.

The company said it will hold the general meeting scheduled for August 12 with the minimum number of shareholders required for a quorum in attendance after careful consideration of the ongoing pandemic and associated social distancing measures.

Shares in SSE closed up 33.5p at 1397p.

SSE said it expects the impact of coronavirus on the wider economy to have adverse, albeit temporary, effects on several of its businesses during 2020/21. The greater impacts are likely to be experienced in the first six months of the year.

The company said: “Coronavirus impacts on operating profit for the first three months of trading are in line with our expectations, with the total for 2020/21 still anticipated to be in the range of £150m to £250m before mitigation.”

Reduced demand for power will impact on SSE’s distribution business and its remaining supply businesses.

The division that sells energy to firms is expected to suffer increased bad debts. SSE’s Airtricity operation supplies power to households and business on the island of Ireland.