Earnings Transcript for SSE.L - Q2 Fiscal Year 2021

Alistair Phillips-Davies: Good morning everyone. Once again, we're bringing our results to you remotely due to Coronavirus. Despite that difficult backdrop, Gregor, Martin, and I are pleased to be able to report strong delivery and good strategic progress during the first half of the financial year. We'll be taking the questions later, but in the meantime, we will cover firstly a summary of recent progress in delivering our clear and focused strategy. Secondly, our financial and operational performance; and finally, the significant opportunities we see ahead of us to create sustainable value for both shareholders and society through the transition to net zero. Throughout the coronavirus crisis, we've been guided by our core purpose, which is to provide energy needed today while building a better world of energy for tomorrow. Doing so requires us to ensure the safety and well-being of our employees and total recordable injuries in the first six months of the year approximately 27 compared with 35 in the same period last year. In these unique ties, delivering energy needed today would not have been possible without the commitment and flexibility of our employees, particularly those in operational roles. And I'd like to pay tribute to them. Thanks to their hard work, operational performance has been strong. We're continuing to establish ourselves as a preeminent green energy company in the U.K. and Ireland. We've made significant progress on the £7.5 billion investment plan, especially in renewables. Construction workers started and key contracts have been awarded Seagreen and Vikings, and we expect to reach financial flows on the first two phases of the world's largest offshore wind farm Dogger Bank over the coming days. These projects alone are trading more than 1,000 jobs. And we enhance to plan in June to generate over £2 billion from disposals we've already delivered £1.4 billion in combined proceeds from Walney, Maple, Multifuel Energy. Gains on sales expected to total over £900 million, helping to recycle capital into our core green businesses. We've also undertaken prudent activity in financial markets to lead the group well financed, and we've announced an interest dividend of £24.4 per share and reiterated our commitment to delivering our 2023 dividend plan. More broadly, we've led the industry in making the case for an ambitious green economic recovery from the pandemic. And this week building on our science-based carbon targets announced in June, we've joined the UN Global Compact race to zero, committing for the first time to achieving net zero emissions across all scopes by 2050 at the latest. We are asked to be a principle partner for cop 26. We're committed to supporting the U.K. Presidency attempts during the next 12 months to reach a more ambitious global climate agreement in Glasgow next year. And today we become one of the first companies to publish address transition strategy available on our website outlining the social implications of net zero and our role in supporting fairness for employees, customers and communities. This all adds to the significant progress we've made in recent years to reshape and refocus the group on our core electricity businesses. Our networks and renewables businesses formed the foundational core of SSE. The central to transition to net zero, and are where we will be investing 90% of our ambitious CapEx program. Importantly, these businesses share attributes that leverage our core competencies. They are low carbon asset rich businesses requiring world-class skills in developing, building, procuring, operating and owning large scale complex electricity infrastructure that they played to our strengths and asset management, large capital projects, energy policy and regulation risk and efficient financing. But many of our European peers we see a strong logic to holding renewables and networks in the same group. We have a long-term strategy of capital recycling for growth across these core green businesses. And our ongoing disposals program will mean we will only retain those businesses where they're highly complementary to that core by their contribution to the transition to net zero. For example, thermal provides firm Flexible Capacity to balance the variability renewables, business offer has a key role to play in delivering net zero, the opportunity to develop both carbon capture and storage and hydrogen, which will help pave the way for decarbonisation of heat, transport and industry. Our energy customer businesses provide a valuable route to market for our generation in both GB and Ireland. In Ireland's vertical integration to mitigate risk, one GB we believe our energy customers will become increasingly important as a route to market, the demand for green corporate PPAs increases. Enterprise gives us a platform for growth in the growing distributed energy market for our trading and asset management capabilities will be important. And through EPM, we can deliver commercial synergies and manage risk across all our market based businesses. In our renewables business, there are a wealth of opportunities, we have projects already in development that will double our renewables output by 2025. We have an enviable pipeline with longer term prospects, all of which we believe will be required to meet binding government targets, and it could travel all renewables output by 2030. SSE is leading the development of more offshore wind than any other developer with further auctions still to come. Furthermore, we continue to see potential to export our end to end expertise across the renewables value chain to new geographies, in order to extend our portfolio further. Delivering on these opportunities will support sustainable long-term growth and create shareholder value, underpinning our ongoing commitment to remunerating shareholders with dividends. Doing so will maintain our strong operational and financial performance. I'll now hand over to Gregor, who will take us through our results during the first six months.

Gregor Alexander: Thanks Alistair. I would echo your thank to our colleagues who have helped us to maintain the safe and reliable supply of electricity during the pandemic. I'm pleased to say that financial performance in renewables transmission and thermal has not been adversely impacted by coronavirus. However as forecasts in June, we have seen adverse impacts elsewhere in the group with an impact and operating profit for the first six months of around £115 million. This is a slightly lower than the guidance we've provided in September, and none of it has been treated as exceptional. Despite recent increases in the infection rate, our view and the lately feel your impact is unchanged. And based on our latest assessment, we expected to be towards the middle of the £150 million to £250 million range. In summary, compared with many other listed companies, we have been relatively resilient in the face of coronavirus. And we continue to take steps to minimize the impact. Coronavirus notwithstanding, we've delivered a very solid set of results for the first six months. It's really in the businesses currently held for sale. We have delivered adjusted operating profit of £418.3 million, adjusted profit before tax of £193.9 million and adjusted earnings per share of £11.9 within the expected range set out in September. Reported metrics also include the £260.8 million exceptional gains on sale, recognized during the period on disposal of Walney and MapleCo. With further exceptional gain in excess of £650 million to be recognized on Multifuel Energy in the second half of the year. Given seasonal impacts on our businesses, our focus is always on results for the full year. However, for the first six months in our core businesses, we have seen in transmission adjusted operating profit increased by 5%, mainly due to phasing of a load revenue, partially offset by increased depreciation charges relating to ongoing capital expenditure and operating costs. In Distribution lower demand and reduction in new connections activity due to coronavirus were the main contributors to 27% reduction in adjusted operating profit, although, £25 million pounds of this is expected to be recoverable in future years. Renewables saw reduction of 6% with adverse weather conditions being almost entirely offset by higher achieved power prices. The result was also adversely impacted by lower renewable obligation certificate prices and non-recurring GB capacity market income in the prior period. Over higher GB balancing activity, and then non-exceptional gain on sale of a 51% stake and Seagreen minimized the net impact. Finally, our investment in SGN delivered a lower operating profit this year, replacing almost other things, the impact of coronavirus, which led to higher unproductive costs. Elsewhere, several demonstrate value in complimenting our renewables fleet with strong performance in the balancing market for six months and exceptionally high availability across the period. Despite the prior period, including £51 million of non-recurring GB capacity market income adjusted operating profit only fell by 14%, reflecting the strong operating performance combined with again, sale of a 50% stake in Slough Multifuel. Business energy has already been facing challenging market conditions and coronavirus further reduced customers demand for Electricity and related services. That drop in demand led to £24 million loss from early settlement of excess commodity hedges with negative mark-to-market valuations. Airtricity performed relatively well with adjusted operating profit aligned with the prior period, despite the impact of coronavirus, although the full year contribution from the business will be heavily influenced by the winter months ahead. In Contracting business, which we're in the process of selling has also felt acutely the impacts of coronavirus and this has weighed heavily on results for SSE Enterprise. Finally, there was a significant reduction in the Europe operating loss for ETM, reflecting SSEs new approach to hedging. It is still expected to make small operating profit in future years. Adjusted metrics continue to be important in giving a view of the underlying operational performance of the Group. However, given that the disposals program constitutes key part of our strategy for creating long-term value, it is important to call out its impact in terms of real gains and real cash proceeds. As Alistair said, we've already delivered more than £1.4 billion and are now targeting well in excess of £2 billion in disposal. We sold a 25% non-operating stake in Walney to Greencoat UK Wind for £350 million. We've now completed the sale of our 33% stake in the asset provider MapleCo to Equitix for £95 million. And last month, we announced the sale for 50% share of Multifuel Energy to First Sentier Investors for £995 million. Again in this disposal will form part of the reported results at the year end. These transactions remain to more than £900 million in gains on disposals showing the value SSE can create. For clarity, we set out on this slide the clearly significant impact of exceptional items on reported profit. In addition to the £260.8 million exceptional gains recognized in the first six months from our disposals program. Further non-cash exceptional gains totaling £66.2 million have been recognized, including fair value uplifts on sale of stakes in Seagreen and Slough Multifuel and at least have excess coronavirus provisions following continued recovery of customer data. Our operating derivatives, there was a favorable £343.9 million IFRS 9 remeasurement recognized in the period, mainly from an unwinding of previously out of the money commodity trades. Capital and investment expenditure before project financing refunds during the first six months was £680.5 million with their own £570 million or 85% of that in our core electricity networks and renewables businesses. This capital investment includes developing with Equinor, the world's largest offshore wind farm at Dogger Bank, where we hope to reach financial cores on the first two phases in the coming days. Developing with Total will be Scotland's largest offshore wind farm at Seagreen, commencing construction of Viking, which will be one of the most disruptive onshore wind farms in Europe and getting work underway, when it was originally to Scotland following final approval by Ofgem earlier this year. At the full year, we expect capital investment expenditure net to project financing refunds to be around £1 billion. This lower run rate is expected to reverse in '21, '22 and '22, '23, when Spain is expected to be around £1.8 billion in each year. Probably £7.5 million net of project finance DevEx refunds, we will invest to 2025, almost 90%, which will be in our core businesses. Within this equity investment, we're totaling around £1.5 million in the period to March 25 in Seagreen and Dogger Bank alone. These projects will contribute significantly to the UK is net zero ambitious, as well as a green economic recovery. SSE has a strong balance sheet and the financial discipline needed to fund our spending plans and take opportunities when they present themselves. I thought in September of adjusted net debt and hybrid capital stood at £10.6 billion. This follows successful refinancing during the first six months of this year, through which we raised hybrid capital securities and conventional Eurobonds totaling over £2 billion. This means we have no significant refinancing or funding requirements for the next two years. We have good liquidity with £1.5 billion of undrawn committed facilities. And we will continue to be agile with investments, sales on core assets and acquisitions. Adjusted net debt is expected to be around £9.5 billion at March 2021. We can increase our ability to capitalize on the significant development opportunities related to net zero through financial partner, particularly in renewable. SSE is well placed to manage development with the selling then state to retain typically 30% to 40% of a project and working with equity partners for construction and or operations brings a number of benefits. It allows us to secure developer premiums and realize value at the earliest opportunity. It reduces our overall risk and financial exposure on large scale projects. It avoids a large increase in net debt there's no earnings. And it appeals to the different risk appetites of different partners at different stages of the project cycle. This approach optimizes value creation from our CapEx and gives us further optionality as we seek to make the most of our enviable development pipeline. And to that end, we hope to announce the father farms own have a stake in Dogger Bank by the end of the calendar year. In June, we said we would also consider in time extending a partnership approach potentially through sales and minority stakes and of course transmission and distribution businesses. Our position remains that we are open in the medium term to bringing in minority equity partners in networks, should we consider the release of capital to facilitate the realization of greater growth opportunities across the four businesses. In June, we also set a financial framework which incorporated requirements for funding over investment plans to ensure the message is clear. I would like to reiterate the key points today whether disposals program to secure well in excess of £2 billion. We believe our plan to invest £7.5 billion pounds over the five years to March 25th is fully financeable without any requirement to change capital structure. This would also be consistent with our targets improve our net debt to EBITDA ratio to be at the lower end of 4.5 to 5 times range between '21, '22 and '24, '25. Our S&P credit rating remains at BBB plus stable outlook, and our Moody's rating remains a Baa1albeit on negative outlooks. These compare favorably to peer companies while downgrade would be disappointing, we believe it will be entirely manageable on current plans. In summary, we are comfortable with the balance sheet and the target net debt to EBITDA ratio for today, and how they are forecast to fall with our disposal investment plans to 2025. This will allow us to capitalize on the opportunities to invest in further value creating projects on the journey to net zero and to increase EBITDA for the long-term. Over and above the disposals we've already outlined, sales processes are continuing for our contracting and real businesses, with a sale expected to be completed by the end of the financial year, and our E&P business where completing a sale has proved challenging, not least due to the prevailing economic circumstances. We are updating this at the appropriate time, but we remain committed to disposing of the business as it is neither core and nor entirely focus on delivery of net zero. We have what to do, in June we signaled we're exploring divestment or interest in SGN, while no final decision has been made, with appointed times to view options for the sale of all a part of our holding. Ultimately, our approach to disposals and navels capital recycling and concentrates our efforts on growing core businesses. While disposals of non-core assets will clearly have a short-term impact on earnings, which we estimate to average around 7pence over the next five years, delivering our ambitious CapEx program is ultimately what will underpin sustainable EPS growth. For our main renewables projects alone, we forecast this will either in 10pence by 26, 27. And this is EPS growth driven by high quality long-term assets, the form part of our renewables and net loss core. SSE’s first financial objective has always been to generate shareholders through dividends. Overall, financial performance in the year-to-date remains in line with the boards expectations, and on that basis, we're declaring an interim dividend for 2021 of 24.4pence. Looking further ahead, we expect to recommend a full year dividend of 80 pence was RPI inflation and continue to target IPI increases in the following two years, I set out in a 2023 dividend plan. This retains the total dividends paid to shareholders over 14 pence per share since 1998 and underlines SSE’s ongoing commitment to ruminating shareholders for their investment. Although uncertainties remain over the impact of Coronavirus on the wider economy in the second half of the year, this remains in line with SSE’s current forecast and weather conditions are normal for the remainder of the year. Then adjusted earnings per share for the full year is basically in the range of 75 to 85 pence things, including again and disposal for Dogger Bank. Reported EPS will reflect gains and disposals for Multifuel Energy, Walney and Liverpool and it is basic to be well in excess around in 50 pence, excluding any movement and re-measurements under IFRS9. So, in summary, notwithstanding the impact of Coronavirus, with a good six months with solid operational performance and good strategic process. Looking ahead, we're in a strong position to create lasting value for shareholders and to remunerate them with dividends going forward. Our ESP extensions or strengthening with growth options that are second to none, a strong balance sheet, we believe as a fully financial plan to build the infrastructure that is so badly needed to deliver net zero. And I'll hand you back to Alistair to look in detail at our future opportunities.

Alistair Phillips-Davies: Thank you, Gregor. For just six weeks left in the Brexit transition period. Clearly there is a degree of uncertainty. We've carried out comprehensive planning for a range of Brexit scenarios. While we continue to monitor developments closely we are confident that resilience shown by business models through the pandemic will enable us to maintain the operational standards expected by all our shareholders. Any Brexit or Coronavirus headwinds are however far outweighed by the opportunities presented to SSE by the transition to net zero. Whether you believe the committee on climate change projections, or those national grids future energy scenarios, a number of things as universally accepted. First, the significantly more renewables will be required with the traveling of U.K. capacity expected by 2050. But currently in the process of developing more offshore wind than anyone else in the U.K., and see significant opportunities to build out our pipelines and grow our portfolio to the end of the decade and beyond. Second, the electrification of heat, transport and other sectors could double our electricity demand by 2050. With production of green hydrogen on top of this, it could triple. This will require significant long-term investments in both transmissions as we look to connect up the surge in renewables, and in distribution, where we need to modernize our networks to accommodate up to 5 million EVs, and a significant increase in heat pumps. Third, the new technologies like carbon capture and storage, hydrogen and floating offshore wind, all of which align to our core capabilities, but have increasingly important roles to play. The opportunities for SSE with our clear strategic focus on electricity and net zero our sustainable business model our presence across the value chain are immense. Across the Irish Sea, the story is similar, albeit on a smaller scale, and with other countries pursuing a similar path. There are strong and clear opportunities for SSE to play a role internationally. I'll now hand over to Martin, the reason he stepped up into a broader role as Energy and Commercial Director with a specific mandate to drive growth across the group. Growth in mind provides more detail on how our market based businesses are capitalizing on the opportunities associated with net zero.

Martin Pibworth: Thank you, Alistair. We are undoubtedly a first class operator of renewable assets, which provides a strong platform for the group. Our hydro portfolio boasts uniquely long-term assets we have 78 hydro stations that outperform us are often underrated despite yielding close to 4 terawatt hours of production over the last 12-months and providing vital flexible backup to our portfolio under market. Our pumped storage and trust for years, and our flexible hydro stations including Sloy, Glendo and Affric have provided significant support to the system via balancing and ancillary services already this year. The importance of flexibility will only increase in renewables led energy system. And at Foyers, we can produce electricity in less than 30 seconds. And in Wind, we operate 224 offshore wind turbines and 1,191 onshore wind turbines. In short, we have hugely talented people operating first class assets. And we're building more of these assets. We have an enviable pipeline of wind projects. And this slide shows both our current ownership stake and an indicative future ownership percentage following any potential sell downs. This highlights the potential future value creation from these projects. And we have used assumed SSE ownership stakes in the right hand column as the basis for the following slides on our plan future outputs and capacity growth. For those huge successes in last year's allocation round three options, our flagship renewable projects are all progressing well. Right now, there is no other company in the world, leading the construction of as much offshore wind capacity. Seagreen will be the largest offshore wind farm in Scotland, and the deepest in the world. At 1,075 megawatts and with turbines with a rotor diameter 30 metres above the London Eye, it will have low factors are 54% and as expected to produce around 5 kilowatt year. With our partners at Total, we will be investing £3 billion, making it the largest privately funded project in Scotland. It currently has a 454 megawatt CfD, and we're progressing the build with a target commissioning date of December 2020. Meanwhile, a Dogger bank, we're constructing the biggest offshore projects the world has ever seen. With the longest offshore wind grid connection and the biggest turbines ever installed offshore at 3.6 gigawatts it will have a load factor of 57% and product around -- sorry about that. Meanwhile, a Dogger Bank we're constructing the biggest offshore projects the world has ever seen, with the longest offshore wind grid connection and the biggest turbines ever installed offshore. At 3.6 gigawatts, it will have a load factor for 57% and produce around 18 tarawatt hours per annum. GE turbines will have a 220 meter ROSA covering a sweat area of 38,000 square meters. That's nearly three times bigger than the London Eye. They will be installed by a vessel taller than the Eiffel tower. And onshore Viking of 443 megawatts with a load factor to 48%. It will be among the highest yielding onshore wind farms in Europe, producing almost two powerhouses of energy each year. At peak construction there will be 400 people on site, and we've reached a final investment decision on the basis of building it These projects from those are creating more than 1,000 skilled green jobs at a time when are solely needed. The great potential in renewables was considerable even before the Prime Minister's recent commitment to increasing ambition for offshore wind to 40 gigawatts by 2030. Critically, SSE by strong developments options even beyond the projects we had discussed, giving SSE renewables a continuous development pipeline over the decade ahead and beyond. Seegreen 18 at 360 megawatts could be built in the middle of the decade, and it is perfectly possible for Auckland bank at 520 megawatts to be built in Ireland at a similar time. We expect both to have opportunities to secure contracts in the next financial year. Our view of the potential capacity across the Seagreen projects has increased by around 1 gigawatt since June with Dogger Bank and Dogger Bank formally Seagreen 2 and 3 now its 4.15 gigawatts. Alone with no falls, adjacent to SSE JV, these are options for future CfD option rounds and it is feasible to all of these could be built by 2030 to support delivery of the Prime Minister's ambitious plan. Further field SSE is exploring beyond Ireland and we're in active participants in both the Scotland and the next Crown Estate leasing round. This is an enviable offshore pipeline, and it is complemented by a 700 megawatts on-shore pipeline and 1.5 gigawatts of newly consented pumped storage capacity at Cory Glass. We are also generating options overseas by establishing relationships with potential partners and building local knowledge in different jurisdictions. Clearly there are a number of potential pathways for our renewables fleets, depending on our successes in CfD and crow estate options, and as Alistair has indicated the pace with which we can expand internationally. This slide illustrates how our portfolio could develop, based solely on our existing pipeline. We set ourselves a target of contribution, renewable output, especially talent out to you by 2030 and with a strong pipeline and further upcoming opportunities to build on it, we have a clear line of sight to achieving that goal, targeting a trebling of our renewable outputs by the end of this decade, which we would expect to can triple our wind output. Delivering our current pipeline on average, over 500 megawatts of renewable capacity each year to 2030, and with upcoming to see better options and the work we are doing to identify opportunities to expand our portfolio internationally. We have clear aspirations to reach a run rate of at least 1 gigawatt of new assets a year during the second half of this decade. Low carbon thermal will be vital to the transition to a net-zero world providing firm flexible capacity, that balances the variability of renewables and underpins decarburization of industry heats and transports. Our development of a new CCGT at Keadby 2 is progressing well backed by a 15-year capacity market contracts at the highest price since 2017. It will be the most efficient CCGT station in Europe. However, this won't be the last unabated thermal station rebuild. The longer term future of thermal is in carbon capture, storage and hydrogen. We have credible opportunities to be at the Vanguard of CCS, and over a slightly longer timescale at Keadby, Peterhead and Medway. Keadby 3 in particular, progressing through the planning process, and as part of the zero carbon Humber consortium to secure early government funding, and it's well placed for future funding rounds. Through our strong spikes and involvement with partners in low carbon clusters, we are well placed to seize further opportunities and future opportunities in this space over the decades ahead. I'll now hand back to Alistair, who will cover our regulated networks businesses.

Alistair Phillips-Davies: Thank you, Martin. Much of the renewables potential described by Martin ties in the, lies in North Scotland and transmission, which now has an internationally accredited science based carbon reduction targets and holds the key to unlocking it. Following regulatory approval for the 630 million Shetland HVDC link in July, construction began in the summer and the project remains on track for completion in Spring 2024. This link will tap into Shetland's renewables potential, including the Viking wind farm to help ensure security supply on the island. We'll support future earnings and regulated asset value not previously covered in growth forecasts for this investment not forming part of our RIIO T2 baseline investment case. Turning to Q2 itself, we were extremely disappointed when we saw Ofgem draft determination this summer. We have had constructive discussions, while we remain concerned are hopeful that often we'll consider the additional evidence and stakeholder support provided, including the provisional findings, the CMA appeal by a number of participants in the water sector, when it publishes its final determination in December. SSEN settlement will enable us to attract investments and create jobs from delayed progress on net-zero with a drawn out CMA process. Delaying investment is not a lower cost option for consumers in the long run. And we continue to engage constructively with Ofgem with a view to security the right settlement for all stakeholders. Our network for net-zero business plan sets as well justify £2.4 billion of investment during Q2 and since submitting it our expectations for the amount of investment required has only increased. We now see a clear path to earlier traveling of connected generation capacity from 8 gigawatts today to 22 gigawatts by 2030. This is because a significant portion of the growth anticipated in offshore wind is expected in Scottish waters, particularly on the East Coast as demonstrated by the launch of the Scotland leasing round in the summer. In collaboration with National Grid Electricity Transmission and Scottish Power Energy Networks with submit to Ofgem an initial need case for the East Coast HVDC link that will connect the north of Scotland to demand SSEN in the south for subsea cable. The latest network options assessment from National Grid recommends construction of this so-called bootstrap proceeds in 2029. The focus is now turning to the likely requirement for second HVDC link shortly afterwards. So in summary when considering the known transmission investments in the coming years, and the vast opportunities to transition to net zero presents, we expect on all reasonable outcomes, the transmission ramp will reach over 5 billion by the end of RIIO T2 price control in 2026, with potential for significant future growth in the years beyond. And while transmission networks will enable the expected renewables boom at local level, it will be for DNOs, eventually VSOs to deliver the decarbonisation of our streets and homes. The direction travel and electrification is clear to see and we have commissioned research that indicates a significant spike in EV ownership in our distribution operating areas from around 44,000 vehicles today to 5 million by 2050. We also expect a significant increase in heat pump installation over the same period. So this in mind, we need the right level of investment in the upcoming ED2 price control to provide the platform needed to make communities net zero ready. RIIO T2 business plan will like our approach to RIIO T2 be stakeholder led will engage with all parties for outcomes that create lasting value and meet societal expectations on net zero. Under the new leadership of this virtual is succeeding Colin Nicol is retiring, the business will be focused on performing well for the closeout of ED1 while seeking an ED2 framework that strikes a balance between efficiency and security the innovation and investment needed for decarbonisation of the system, network reliability and improvements in customer service. So we'll take questions in a moment, but before we do I'll recap what we set out today. During the first six months we've delivered strong operational performance and demonstrated the resilience and underlying quality of our business. Coronavirus impacts, EPS and dividend tracking in line with board expectations. We've also made encouraging strategic progress on our CapEx program, our disposable program and I'm further refocusing the group around our foundational core of renewables and networks. We are at the forefront of efforts to build back greener and we're working hard together settlements to T2 delivers both for net zero and for customers. We have a clear pipeline projects, treble our renewables output and quadruple our wind output by 2030. And financial disciplines are supported. We building more offshore wind than any other company in the world right now and with upcoming UK auctions and opportunities in other geographies, we have clear aspirations to reach a run rate of at least 1 gigawatt of new assets a year during the second half of this decade. We have optionality, first class capabilities and we are committed to creating shareholder value through the significant investment in the net zero transition. By aligning our business objectives to UN Sustainable Development Goals, committing to the race to zero pledge promoting principles of fair tax and playing our part in addressed just transition will reinforce our position as a leading ESG star and trusted partner to governments. Ultimately, we are delivering our clear company purpose securing the long-term sustainability of our business activities while operating simultaneously value for both shareholders and society. Thank you and we'll now open for questions.

Operator: Thank you, ladies and gentlemen. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Alex Leng from UBS. Your line is now open, Alex. Please go ahead.

Alex Leng: Hi, Good morning. Alex Leng from UBS. A few questions for me, please. First from the remainder of the disposal plan, approximately 70% through, can you spoke today about delivering well in excess of the 2 billion? Is that balance just reflecting gas production and the contract in your mail business like today? With that also factoring SGN, no other options? Can I just confirm that? And on this, is it possible to get an update on your thinking for SGN while you found some starting to explore the sale option in the summer seemed like the need may not be so much immediately balance sheet driven anymore. So then the sale is a slightly or you potentially seeing opportunities to secure value provide more headroom to capitalize on some of the renewable opportunities you highlighted today? And the second on the longer-term renewables pipeline and upcoming sea base leak options. You mentioned clear international opportunities. Do you have any more details on what you may be targeting and on the sea bases? I think historically, the timeline from the third consenting financial framework construction to actual operation can be a 10 year process. The timelines you've shared in the presentations are quite tight. Do you see this process potentially becoming foster going forwards original 2030 explorations likely to require some of this international gross in the middle? Thank you.

Alistair Phillips-Davies: Okay, plenty of questions there. Look, I think Gregor go through the detail the SGN process, but it's very clear, we would need to get SGN in order to get well in excess of the 2 billion. The other two disposals are smaller. They're important to us to clean up the business, but much much smaller. Gregor, maybe you want to go on SGN and Martin will cover the renewables piece.

Gregor Alexander: Yes, thanks, Alistair. We announced, we've appointed banks will look at the options. Clearly, before we do anything, we need to wait for the final proposals to come out in December. Assess that, and then look at how we move forward to the process. And we will consider that in the first quarter of the next calendar year. I would expect to get over the 2 billion. We certainly need to sell a stake in SGN. And we'll take that forward and advice the market probably in a first quarter.

Alistair Phillips-Davies: Okay, great. On renewables, I'll just International, which I know we mentioned a couple of times. I'll just deal with that. And then Martin for the rest of it onto the seabed leases and timeframes and things like that because his teams are working hard on delivering that plan at 2030. But internationally, we've historically looked in a number of places. And currently, our focus has been on opportunities in offshore West Europe, outside of the U.K. and Ireland. Obviously, we've been clear about what we're doing there. We're looking at Japan, and also we're looking at the important market -- onshore market in North America as well. So, I think we see several clear opportunities for us to be able to expand. Martin maybe just [Multiple Speakers].

Martin Pibworth: Yes. So it's just obviously on the international stuff for me. I think there 59 gigawatts of windmills last year globally. So, obviously, we got to find that. On the news and stuff and clearly you have the seabed auctions especially taking place next year for Crown Estate and indeed for ScotWind, and obviously, we are working in those processes. But of course we also are currently in Ireland, so 520 megawatts offshore wind possibility and clearly stated ambition by the states to have offshore wind generating by the middle of this decade. And we think that remains to lead the project. And clearly the longer term pipeline will be will be faced as face option processes mature, but clearly government policy is very much pointing to a requirement to very large offshore wind build out over the next 10-years. And clearly, we believe we have a pipeline that can play into that and help deliver government sectors.

Operator: The next question comes from the line of Mark Freshney. Your line is open, Mark. Please go ahead.

Mark Freshney: Can I please ask about the next CfD allocation round? I mean, you alluded to opportunities overseas, but the next CfD allocation round looks like, there won't actually be that much offshore wind that can fit into it and I think there's only one project that that you have. How does the onshore and solar potential within your post within your portfolio? How does that look going into the CfD round? So, I guess, what do you think of the CfD round? And your offshore where onshore wind should I say? How likely is it that you can fit that in?

Alistair Phillips-Davies: Okay, I'll just mention policy and then Martin will comment on some of the other more specific thoughts you've got. I think we've obviously seen another number of announcements from this government and particularly the Prime Minister, and we obviously saw a very positive and ambitious set of announcements this morning on the 10 point plan. I think we shouldn't imagine that the next CfD round is going to be identical to the last one. I think with the increasing ambition, there are clearly opportunities to change the rules a little bit and tweak the rules typically getting. Somebody, somebody's making a lot of noise on the line. So, I think we need to tighten or whatever. Or maybe you need to move Mark if you're typing furiously. So, I think we'll see potentially changes, changes to how these things are run to make sure that we can deliver the 40-gigawatts target. And that will obviously provide a number of companies with opportunities in order to in order to get that target. But Martin, maybe you want to talk more about what possibilities we have?

Martin Pibworth: Yes, so I mean, I mean, obviously, Alistair was mentioned, like the CfDs building consortium. So you don't fully know that. I mean, clearly, we've mapped out a pipeline of onshore in development that we think can be bought forward over the next few years. So, we're probably slightly mindful of that. And of course, we also have the possibility for Seagreen 1A in particular to go into that next CfD round as well. So, I mean, I think kind of looking at the overall pipeline that we have, I think we feel pretty replete with options and we're pretty optimistic about placing those under what we expect to be a number of government rounds from here to achieve their ambitious targets.

Alistair Phillips-Davies: But I think there's no doubt that the government is going to have to be a little more flexible in the next couple of rounds. And we're going to have to accelerate them if they're going to get all the if they're going to get the kind of volumes bidding in that they that they obviously saw in the last round when we were obviously very successful. And there were some other people who I would expect to redevelop those sites for the next rounds. There definitely going to be a need to try and shorten timelines, which I think was what Alex mentioned as well. If we're going to deliver all that because timelines today have been slightly longer than you'd probably indicate from that. But I presume if the ambition's there, we can get that done and we certainly stand ready to do that.

Operator: Should we proceed to next question, sir?

Alistair Phillips-Davies: Well, there's a little bit on solar and onshore. So, I think we've got numbers in there for, actually for a fairly significant onshore build in the UK, and then solar something that we're starting looking at food distributed energy business. So, that's going to be smaller than moment unless we start to take advantage of opportunities overseas. But yes, if we can go to the next question please.

Operator: Thanks. Your next question comes from of Jenny Ping from Citibank. Please go ahead.

Jenny Ping: Hi, good morning. A couple of questions please. Firstly, can you tell us what the book value for Dogger Bank is as we stand at first half? And then secondly, you talked about Japan in terms of interest there. Is this fair to say that you could be bidding into the 2021 auction? Is it really assumed as that? Third, very quick question, 9.5 billion net debt, I'm assuming that includes all of the disposal announced plus Dogger by year end. And the last question is around Multifuel. I understand that you have signed an off-take power contract with the buyer of Multifuel. Can you tell us a little bit about that contract? What the duration is and if you can confirm that is done at market prices please? Thank you.

Alistair Phillips-Davies: Okay, fine. Just on Japan, it's a market of interest for us, other than specific what we say at this time, but we'll obviously update you on any international moves we make as and when we make them, but just people in the past have expressed an interesting way where we're looking in those areas. But book value and net debt Gregor, that sounds quite accounting to me.

Gregor Alexander: Yes. Thanks Alistair. That does include all of disposals which would expect including Dogger and the book value, we're not disclosing that at the moment. We're in the process, we've said we'll hope to have that process completed by the end of the calendar year. So, you're just, unfortunately Jenny just have to wait so that comes out and then we'll give you all the details on the project. This is a joint venture with Equinor and we're limited in what we can say on some of those numbers.

Alistair Phillips-Davies: Okay. And then finally you asked on Multifuel. I'm not aware that Jenny that's unusual or odd contexts, but Martin.

Gregor Alexander: So Jenny, certainly that provided market access to Multifuel business by the power market and clearly Multifuel, majority of Multifuel remuneration is true. The waste that they obviously recycled, but we do provide -- we have provided market services for the power markets.

Alistair Phillips-Davies: So therefore there's no significant contract with any particular in and out and the money issues around it. It's just accessing the market for a small feed basically to make sure they can trade their power.

Operator: Thank you. Next question comes from the line of Martin Young from Investec. Please go ahead, Martin. Your line is open.

Martin Young - Investec: Yes. Good morning to everybody just step a couple of questions, please. The first is on networks. Yesterday, the CMA announced that final determination in the water and appeals process has been pushed back to mid-February. Given everything that Ofgem has been saying about looking to take the findings of the CMA into a tank, I just wondered what your thoughts are as to whether that has somewhat muddied the waters? And the second part of the question on networks is in relation to the offshore wind network opportunities, if we do move to some kind of mesh network structure offshore, would you be expecting to participate in that and under what regulatory framework? And then my second question was sort of me picking up on what you were saying at banks and the retail presence that you still retain, giving you a hedge for some of your generation outputs. And given the expansion in renewables that you've outlined, do you have a sufficient route to market through your business retail endeavors to provide some elements of protection going forward? Thanks.

Alistair Phillips-Davies: Yes, we obviously know what the CMA has been saying. If they make an announcement in mid-February, it still allows us an often time. I would expect to take full account within the detailed licensed drafting, which I don't expect to complete until early March. And therefore, we can make a decision about any appeals that we make and obviously option can make any adjustments that they need to make to their detail license. It does, perhaps muddy the waters, as you rightly put it, in respect of how they will treat what they say in early to mid-December, on final determination. But one will be hopeful that we can navigate our way through to the final agreement that to see the CMA important decisions today fully reflected in the returns that we would hope to get over the next five years. I think on the mesh networks, going forward and regulation, I think, we're at a very early stage that we're going to be careful from a purely practical point of view in building offshore grids not to pick winners in terms of particular advantages, particularly to sea bed or wind farms, I think there is a need to have a more coordinated approach. So we avoid 20 or 30 different applications to land cables and get to the transformer stations at 30 kilometers inland into places like the Norfolk Coast where there's been a lot of issues there, I think, in particular constituencies and amongst MPs. So I think there is a role for the transmission companies to play and trying to provide a level playing field for access for all various wind farm developments that will go on offshore, the exact regulatory framework for that. I think we're unsure. But there's a clear regulatory framework at the moment for each of those transmission companies. I think something along those lines, a simple ramp base model that provides key points of access, that give certainty to renewable generators, that seem a sensible approach, but I think we're at early stages of discussing those things, but they will be important in terms of trying to reach that 2030 target. There's obviously a lot more offshore wind needs to be connected up on the East Coast of the UK and it needs to be done in some sort of sensible organized fashion and a retail presence.

Gregor Alexander: Yes. I mean clearly short-term power market liquidity has held up, but longer term market liquidity has not been in a very good state for a bit of time now, and therefore, cost the Company's business after the importance move to market for most renewables exposure, actually, all assets exposure, also, not just in UK, but also in Ireland. So in Ireland, I mean, it is of a purely vertically integrated market. So clearly, the customer presence area is very important to the hedging of those assets. But it also in the UK, I mean, directly your question about whether there's enough volume, I mean, business energy account for roughly somewhere between 9% and 10% of the time to get full power, and placing kind of renewable exposures won't, into that sector won't erode all of that volume. So there is there is plenty of volume to go out. And final point is that not only does the customer's business provide liquidity, they'll see also provides shot front capability for somehow greening opportunities and we have seen increased customer demand for that over the last 6 to 12 months.

Operator: Next question comes from the line of John Musk from RBC. Please go ahead, John. Your line is now open.

John Musk: It's John. Two questions from me, firstly, on COVID and just how that is playing through the numbers. Obviously, the guidance is perhaps a little better then you gave us previously. Can you give some color on where that is? I know it's in particular, you reverse and bad debt charges in Ireland? So is that something similar in the UK as well, always in bad debt? Perhaps a little better than you originally anticipated? And then secondly, not sure if this is repeating Jenny's question, but the earnings guidance for the full year of 75 to 85, you say includes the gains on Seagreen and Dogger? I think Seagreen is around about 2P within that. What should it be a similar number for Dogger that we can think of within that 75 to 85?

Alistair Phillips-Davies: Okay, great, thanks. I'll let Gregor on to that.

Gregor Alexander: I mean, I think clearly, we've given you some guidance for the first time and everyone's trying to work out where all the numbers but there's a lot of moving parts John. COVID and hope you have allocated COVID and some of the businesses, we haven't gone through segment analysis with any of them. So that are kind of things that overtime, that will be clear, and we're just going to have to wait till Dogger Bank disposal happens and you'll get a lot more clarity. Then we just felt that the range of earnings from analysts was between £66 and £92, that's quite a wide range. And therefore we felt it was sensible as point to give you at least central guidance. That is say we can be above or below it and is just to give you a better guidance. In terms of COVID impacts, I mean broadly speaking of that 115 million, but 50 million of that is coming through the customer business, and mainly business energy, I mean, bad debts have been a bit better than we expected. So that's good, but a fair bit of that is the hedge that we're on power that we had to sell out because demand was down. There's about 35 million coming through the network businesses. And a lot of that demand on just unproductive time and the balance is coming through the enterprise business, which for contracts and businesses impacted in the first half of the year. I think, moving forward, we've obviously gone into the second phase, we'll see how that moves forward. We are seeing demand coming down, but is still tracking, broadly speaking, on our projections. And I think the risk will be that bad debts maybe could be more challenging in the following year, which we'll have to go through as monitor. But Martin you want to say a quick think on debt?

Martin Pibworth: Yes, I mean, as Greg has said and slightly best [indiscernible] demand has clearly been pretty volatile. I mean, at the start of this COVID crisis, we see demand collapsed 20% to 25%. And if you like that now and actually through September and October, demand nearly got back to normal. So, we're keeping a close eye on that. But obviously, those patterns have been pretty volatile. And in terms of macroeconomic outlook for customers, and clearly, we're keeping a watchful eye on that as well. And we're trying to also make sure that we are doing the right things in terms of assessing customers' requirements during this period.

Gregor Alexander: And the fact that is COVID is clearly demand over the winter period, particularly network businesses is more skewed to that period. That's why you've still got some COVID impact coming through in the second half of year to be in the middle of the range between 150 and 250 million range.

Operator: Next question comes from the line of James Brand of Deutsche Bank. Please go ahead, James. Your line is now open.

James Brand: Hi, good morning. Thanks for the presentation and taking the questions. I have three questions on different topics. The first one is just one and we have two and you mentioned you've been having constructive discussions with adoption, but remains concerned a huge concern because you feel like your messages are not necessarily getting across to them, or just because the prudent thing to do is to be concerned when there's uncertainty around the process, just wondering whether there's any feedback and say, What do you think your arguments are getting through to them on March? Our second question is on the EPS, with clearly six weeks away from the end of the transition period, unless huge amounts of certainty across different parts of the economy. And the agreement we will have but I just wondering whether you felt like you knew what was happening with the EPS or potentially even had a central expectation this, what was going to happen with the EPS in six weeks time? And then certainly, on electricity distribution, you're obviously any faults if your review process there and haven't published business plans and things like that yet. But there's some expectations that could be as you alluded to, in your presentation, a lot more investments related to electrification and you've got some kind of credible sources out there like the CCE saying that we might have to schedule a program of signal through horizons and transcend all of the cables, because majority of the cables do, I was hoping you could just try some sold somebody you've sold for a significant investment site that might come in the next repertory period, whether you would have to start just strengthen all the cables. Thanks.

Alistair Phillips-Davies: Okay, I'll take the networks once and Gregor [indiscernible] as well. But look on RIIO T2, I think we're concerned because we're a long way apart, when you look to look at the draft determination of Jim, we were an awful long way apart, there was there was kind of 800 million of a tax cuts in there, or more resort with a very well laid out stakeholder led plan. So, I think engagement has been good. But obviously we've got a lot of work at the moment, they're dealing with dealing with the gas transmission, and obviously, the gas distribution networks at the same time. I think transmission is a little bit unique because of net zero. I think SSE transmission business is very unique because of because of the enormous growth potential that we have in it, it's obviously grown, usually, I've not checked, but it must be the most rapidly growing sizable transmission network anywhere in the world with positive reception outside of China, it is more difficult to see what's going on there. So, our concerns were around how far often have to move on that. And also, I think there is a there appears to be a clear disagreement or spat between, between essentially, government regulators. And that is the water regulator in the CMA where, you see the water regulators saying quite extraordinary things about what the CMA said, and the need for clarity on cost of capital, particularly given the risks associated with going to Nigeria and the enormous construction programs. So, the things that give us cause for concern, but we continue to talk to them. Our understanding is that their board meeting is will probably be late next week. We've got engagements within between now. And then we know it's incumbent upon us, regulators and government to try and deliver the revised settlement for all stakeholders. And on ED, yes, there may be stretches and networks, I think what we need to do is make best use of all the cables that we've got, we need to look at where we've got constraints, and use smart technology. And we're running a big trial in all of Oxfordshire about how we do that, so getting transparent, innovative platforms to provide flexibility for parts of the network, to make sure that we as an operator can run auctions to provide the flexibility that people need. Everybody needs firm connections at the maximum demand or export capacity at any one time. And we've shown previously on Shetland, under systems that you can run on are active at work. So, changing the distribution networks to be more actively managed is important. Getting flexibility and using technology and smart technology to enable these grids to become smart grids is important. But then us with the take off in electric vehicles, and electrification of heat, it will obviously be important as well to have reinforcement of some particular parts of the network. But the key thing is to manage that reinforcement well around where it's really needed, and not do some willy-nilly program. And that's why the DNS currently have got the best local information and the best placed to drive that. But that'll be a key part of our business plan going forward, how we can demonstrate that we can be innovative, that we can make most use of existing assets, and we can then clearly target the spend that we've got going forward, which I think could be very significant. As you said, on strengthening the networks as and when it needs to be strengthened, but I think the key parts of that will be in the next price control. By the time you get to 2030, you will need significant upgrades to the networks. But obviously those discussions will happen once we published our business by next July and then in the ensuing periods, drop gem, examine that, and we have the full stakeholder engagement and on energy trading scheme in Europe and the UK.

Gregor Alexander: The short answer is no. We're not -- we haven't got big guarantee clearly, and there is a trade deal we expect in UK and in U.S. So there is no trade deal we expect to obviously affect the carbon emissions in UK we obviously we saw the carbon toxicity, most likely interim solution, and we'd also expect that to be pretty closely linked to EUA prices. But there's no real clarity on how a price will be set in a standalone UK ETS, and down the track. It's probably cheap points day-to-day. So, the portfolio point would be acid business is well hedged in line with the hedge policy through the next 12 to 24 months. And the second point would just be the kind of big political point that, regardless of where we end up I think it's a positive thing that the government seems to be committed to carbon pricing, because we stayed that is incredibly important to the delivery of -- ambition and therefore, despite some of the kind of uncertainty around it, the fact that the government does need to be committed to carbon pricing has got to be a good thing for business aiming to invest in this space.

Operator: Yes. Our next question comes from the line of Ajay Patel from Goldman Sachs. Please go ahead. Your line is now open.

Ajay Patel: Good morning. Thanks for taking my questions. So I've got two. Firstly, Gregor could you split out the 7 tons of dilution that you expect from the disposals. How much, what is the foundation of the assets as well? And then I got a broader question. I kind of look at your dividend policy set out to 2023. We had a CapEx program at the 2026, but now we're talking aspiration beyond that. And all of it points to more capital in the business and it's a great thing because it means you have a wealth of opportunity ahead of you. But how do you balance that because I think earlier in the presentation, you mentioned the potential maybe to sell a minority stake on the networks and I'm thinking in my head, well, that was near a 10 dilution in exchange for right taking that money for further growth. So, how does that balance with generating enough cash flow to cover the dividend or how does the dividend fits in there that would be really helpful to get an answer. And then finally just on expansion and the reason you identified thank you very much for that, but I guess also wanted to understand, is there any sort of rough size that you can give us so that we can sort of put frame in our minds, the lens of which you're considering expansion or it is just too early at the moment. Thanks.

Alistair Phillips-Davies: Okay. Look, I'll give a little bit on dividend and then Gregor can talk about dilution and whatever. We've got a clear plan as to 2023 that we're committed to. This is a management team that is committed to dividends in the long-term to remunerate shareholders. As you know, we've got substantial growth opportunities. We've provided a lot of clarity with how we see plans going forward. We obviously see potential for more investment, both in networks that we've discussion during some of these questions and in renewables, part of what you've been on international, a year or 18 months from now, well in advance of time, we'll obviously be giving clarity on what we think the right dividend policy is post 23. Right now, we're very focused on getting together all of our operational businesses so that they can one deliver huge work program we've got. And then secondly, also deliver the substantial pipeline that we think, we can develop as well going out 2030 and beyond. And I think, well make sure that we have a dividend policy consistent and consistent with where we've been historically, but also recognizing what the opportunities are going forward. And today, which is very clear about the amount of build that we can do, and the fact that we can fund that from our own resources currently, and we can still paid sensible dividends. But we'll give people guidance, well in advance of time, but clearly, we don't need to at this point. Gregor, if you want to deal with everything else you want to say on dividend.

Gregor Alexander: I mean, I think obviously in dividend. As you see, if you look over the last 15 years, we've recycled capital consistently. So it's nothing new and I actually, the network is slow money to sort of speak is in the CapEx plan and something you've looked at your portfolio, and you look to move money into kind of more kind of fast earning money, so or assets. So that's what I see there. And in terms of EPS impact Multifuel, Walney, MapleCo around a bit up on EPS for average over the next five years per year. And it's not massive, and you can see, just even just on the Multifuel, the 20 times EBITDA kind of deal, how beneficial that has been to SSE. So relatively low in terms of impact and if you're asking the other components of that will be E&P contracting, and SGN making up the closer to 70.

Alistair Phillips-Davies: And then just coming back to renewables, I think the best way to think about that is we, the number that we talked about with getting an excess of a gig of renewables in the second half of the decade. Given the generally we're assuming, we're selling down half, that means that we need to be grossing out to at least 2 gigs a delivery year in terms of on the teams and then netting that down to one plus. There is the kind of ambition that we're looking at, and will clearly need to add something, I think from other geographies unless the UK is extraordinarily successful for us in UK and Ireland, both of them, we get a lot more than our fair share of those markets. So I think that's probably the best way to look at it at the moment, Ajay, but we'll obviously update you as and when we find those opportunities that we decide to take advantage of.

Operator: Next question comes from the line of Deepa Venkateswaran from Bernstein. Please go ahead, Deepa. Your line is now open.

Deepa Venkateswaran: Deepa Venkateswaran from Bernstein. So a lot of great questions have already been asked. So I'm going to be asking a couple more. So, one is on the renewable targets, so by my calculations, given this 1 gigawatt net in the second half, that would take you to around 11 gigawatts to 12 gigawatts by 2030. Could you just confirm the match here? Second question on onshore wind particularly on the UK. We've already seen that in the Nordics et cetera. There are a lot of onshore wind developments that are coming up on the back of PPAs. Can you comment on why that mean, what has happened in the UK? And do you see that changing and therefore, maybe not needing to depend on the CfD option for onshore? And my last point is just wondering whether Gregor or Alis, do you had any reaction to Boris Johnson's 10 point program. Were there anything in that particularly struck you as maybe slightly game changing or maybe not for RIIO T2 both ED and T?

Alistair Phillips-Davies: Sure. Okay. Well, Martin and I'll deal with renewable, and Gregor now have with the Boris Johnson's 10 point plan. Or comment passage about the template planet that should say on how to go in there just answering the question. So renewables, yes, I think 12 plus gigawatts could definitely be what we'd be aiming for in terms of our net share after sell downs and things like that. So, I think your master ever deeper is that sounds pretty accurate to me and then market just genuine renewables onshore and PPA.

Gregor Alexander: Yes, so you're right I mean I've been corporate PPAs in particular, probably haven't come through quite as quickly as maybe I was hoping even six months ago. There is still a lot of token considerations out there. And there does seem to be a demand that hasn't quite triggered quite quickly, maybe. Having said that though, we are seeing from the customers' business plan more interest in green people's consumption, and whether that's through kind of traceable, wind and hydro contracts, we go back to contracts or even in kind of green gas, and by me saying sophisticated consumption. We've definitely seen more interest from customers that end. So I will still maintain what else was in that that evolves into bigger and deeper kind of corporate PPAs down the line, which actually goes to your point about additionality and opinions from offshore wind go forward.

Ajay Patel: Okay, great. On the 10 point plan, I think many of the items in there would be talking to government about across the summer. Obviously, the recommitment to the 40 gigawatts by 2030, I think of offshore is important. And as I've already said, I think that will create opportunity for transmission companies to do more investment, you're going to have to spend more money to do that. If you're then looking at homes, public buildings, and things of that nature, and transport with particularly EV which are called out in there, again, in answer to one of the previous questions, I would see that offering a significant impetus for us and other stakeholders to work hard on that EV 2 business plan that we'll be publishing in the middle of next year. And for it to offer, you know, reasonably significant and probably more ambitious than we would have expected 6 to 12 months ago, plans for investment within the distribution networks. And then, finally, there's obviously carbon capture and hydrogen in there, which are discussed, as well. Gregor you may want to give some?

Gregor Alexander: I think, visibility and hydrogen, particularly, yes, we've been saying for a long time that you can use to have a focused strategy. I think that hydrogen coming through and how it ties in with renewables will be really important for our business and also for the attractiveness of SGN as well. Going out and extending the life of the assets cost 2015, which I think is important.

Operator: The next question comes from the line of Fraser McLaren. Your line is now open. Please ask your question.

Fraser McLaren: Good morning everyone. Hope you're well. Three questions for me please. First of all, on Scottish independence have 40C as a key challenges in the event of an independent Scotland, would you be implications for existing renewable support or your new growth targets? And how do you heard from the SNP on any of those issues? And number two, just on RIIO T2 and to be clear about your remarks on the CMA does the delete to the final CMA decision make it much harder for you to make the call on whether to appeal the FDE? Which presumably you'll have to do before we hear from the CMA? And are you saying that there could still be a wheat appeal after that point, if you see anything materially new? And then finally, in light of your expanded long-term renewables ambitions, any further thoughts about the advantages of actually splitting off the renewables division? Thanks.

Alistair Phillips-Davies: Okay, they're still living up here on Foyer, so presumed absolute arriving. Excellent, right. I didn't either we all in this room. So, Gregor, I'll pass onto you.

Gregor Alexander: Back in 2014, we give a good kind of view of how we would take things forward. I think, there's a lot of activity, politically test to go down the line before we get to that position as you know, but I'm pretty convinced that the Scottish Government would see the importance of renewable Scotland as being a key part of that discussion. And therefore, the discussions over time with the Scottish Government were very good. I would expect appropriate solution to be achieved. However, as we've seen with Brexit, we can't assume anything. But Scottish renewables are pretty important for the U.K. meeting as net zero requirements. And Scotland's net zero requirements are actually tougher and tighter than the rest of the U.K. So I think that would be positive as well. First thing I say is, I think it's not for us to comment on the politics and the timing. But I still think that is an issue that is more remote than current that we will have to say.

Alistair Phillips-Davies: Okay. Back to T2, the most [indiscernible] or it's unfortunate that we don't have a firm view from the CMA app at the moment. But my understanding of the timing, given also what was said on the call earlier, is that the drafting of the license conditions will not be complete until early March, is the actual license conditions that matter. My understanding is that we have 20 days after the publication of those licenses in February and then will appeal by -- we have 20 days from the publication of those detail license positions. The key is whether auction can you just write in for -- can you just see what's in the CMA when they publish the lighting conditions, and you'll build sufficient flexibility in that to take account of whatever the CMA says, if indeed, that they're minded to do so. And then we obviously will hopefully get the chance to decide based on what lighting conditions say, and then to whatever the CMA of hopefully finally concluded. So I think that's our view of the choreography, but it may put Ofgem in a difficult position, or they may need to build some flexibility and license around whatever the CMA says, if they're so inclined to do so. So, I know the third point that I thought you forgot was that. No, we don't value that, in that in the moment. I think we see, a strong link and complementarity between the businesses, as we noted earlier in the presentation. And I think even down to obviously, we did HVDC, in a transmission business up in Scotland is successfully completed that more than a year ago now, and that's been running well, we've got HVDC as part of Dogger bank, there are real complimentary skills in terms of procurement, the types of companies. We're dealing with major capital project management, between some of those businesses, and they're all really have a very, very strong core founded in Nigeria and green recovery in this country. So, at the moment, for us, it's all about dealing with how we get growth out of those businesses based on that zero, rather than being distracted by some sort of separation, or other sort of major corporate moves. I think would really detract from what we're trying to do in terms of generate growth opportunities from our core businesses.

Operator: Next question comes from the liner for [indiscernible] from Morgan Stanley. Please go ahead. Your line is now open.

Unidentified Analyst: Just one question for me. Gregor, if we could go back to the question or the guidance, maybe offset a slightly different way. In terms of the current consensus, which instead of around 70pence to 73pence compared to the new guidance range, and I don't think the current consensus. Are you broadly comfortable with that level for the underlying business excluding Dogger? I know that there are a lot of moving parts for you. Or are you slightly less comfortable today compared to where you last sort of updated us on how to [indiscernible] for sentiment around guidance then how you're feeling about?

Alistair Phillips-Davies: So, the questions are polling questions. I just want to answer that, Greg. So, the answer is getting feedback. So, there are a lot of moving parts. We haven't gone through segment-by-segment with the analysts and COVID is getting picked up probably slightly different, but some analysts, some consistent some not. Your races, majority of analysts haven't included Dogger Bank for some half. And so that's the sort of thing it's a bit. And there are things like the corporate unallocated element of segments where a lot of analysts aren't picking that up for the full year. And the fact that we've absorbed some of our overhead costs for retail that we then recharged as part of the DSAs. So, this is first time we've given guidance in terms of the year and because of all these moving parts over the next few months, I'm sure we'll get a bit more concerned consensus in terms of where the numbers are. So that's a long-winded answer to say that, it's difficult to comment on, where the underlying position to the analysts is because there's quite a range when you're talking about 66 to 92, there's a big range there, and that's why we decided to give a better guidance so that we can narrow that range.

Unidentified Analyst: And Greg, I hope you answer that a short follow-up. In terms of the Dogger Bank expectations, for which, given you just provided this concept that there would be a number or range in that, do you think there's both upside risk and downside risk to that internal estimate that fuel running? And so we might see this bend move up or down depending on how that process concludes.

Gregor Alexander: Yes. That production balance I would expect to see more on the upside. At SSE we're pretty prudent. I'll remind people that, we've gotten this analysis for guidance, 200 million of COVID impact if I add back EPS and actually the top end would over a 100 in EPS, if we didn't have COVID. So, I wouldn't say this is kind of static in the guidance. There's a lot of moving parts and hopeful that we'd be closer to the top end of our range and maybe even a bit higher. But at the moment, we can't say that because we haven't gone through the Dogger Bank process.

Alistair Phillips-Davies: Okay, great. Look, I appreciate everybody's patience. We began for an hour and a half now. So we're going to have to call that to a close. I really appreciate all the questions that we've got from people. If there are further questions by all means, get in touch with the IR team, Rory, Sally, Marlin, and we'll try and set something up to go through, where we've got investor road shows coming up over the next couple of weeks or virtual investor road shows coming up over the next couple of weeks. I didn't get to finish up on that point. At the end of the day, we want to make clear to people it's been a robust performance for the year. We look on target to almost cover, if not fully cover on some dividends from adjusted. We'll obviously, probably like double cover the dividend from the reported numbers given all the positives that we've brought in there, and really a lot of this pending what comes out of T2 and we're hopeful of getting something sensible out of that. We really wanted to focus on the long-term pipeline that we have in renewables, and how strong and exciting that is, and we've hopefully provided that today. But know that we'll have more conversations over the coming weeks and indeed between now and the year end, we look forward to making more considerable process and strategically on long-term goals and the promises announcements today can only help with that I think. So, thank you all very much for your time, and we look forward to engaging with some of you over the coming weeks for any more clarification that you need. Thank you.