PROVIDING ENERGY TODAYBUILDING VALUE FOR TOMORROW

SSE’S INVESTMENT CASE • UK-listed energy group focused on regulated electricity networks and renewables sources of electricity

• Strategy to create value in the transition to net zero through developing, operating and owning green infrastructure

• Commitment to remunerate shareholders' investment through dividends, with annual DPS targets set to 2023

• Strategy underpinned by strong environmental, social and governance focus

SSE.LNJuly 2020

STRATEGIC FOCUS ON REGULATED NETWORKS AND RENEWABLES

Regulated networksRenewablesOther

£1.5bn

FY20 Adj. EBIT

£9.1bnNetworks RAV

c. 4GWRenewable Capacity

EXECUTING OUR STRATEGY

• Developing, operating, owning, applying world-class skills and experience to the low-carbon infrastructure needed now and in the future

• Creating value for shareholders and society, earning profit from successful development, operation and responsible ownership of low-carbon assets; while delivering inclusive services, contributing to inclusive economic growth and sustainable jobs

• Delivering in a sustainable way, being purpose-led, adopting four fundamental business goals aligned to the UN’s SDGs

OPPORTUNITIES THROUGH THE LOW CARBON TRANSITION

UK legislation for ‘net zero’ emissions by 2050UK is the first major economy to legislate for ‘net zero’ emissions

• Electrification of transport and heat

• Maximising renewable energy sources key to achieving target

• Central enabling role for electricity networks

Irish Climate Action PlanIrish Government supports adoption of a net zero target by 2050

• Aim for >70% of Irelands electricity from renewables by 2030

• Commitment to carbon pricing as a core policy measure to

reduce greenhouse gasses

£7.5bn

Investment Programme£7.5bn capex plan across the five years

to 2025*

*Net of project finance devex refunds

Electricity NetworksRenewablesOther

Electricity NetworksTransmission

• Business Plan includes £2.4bn Totex

across the RIIO-T2 price control (FY21

– FY26)*

• Could take RAV from £3.5bn to £5bn

by 2025/26, excluding island links

Distribution

• Leadership position in innovation

• Aiming for strong finish to RIIO-ED1

(to FY23)*subject to Ofgem final determinations

RenewablesOffshore

• 1,075MW Seagreen Wind Farm

(SSE share 49%)

• 3,600MW Dogger Bank Wind Farm

(SSE share 50%)

£1.5bn equity investment net of project

finance refunds across both projects

Onshore

• 443MW Viking Wind Farm

• 100% owned, £580m investment

SIGNIFICANT INVESTMENT OPPORTUNITIES IN THE FIVE YEARS TO FY25

FINANCIAL STRENGTH

£2bn Disposals ProgrammeSharpening focus on core business

In progress

• Gas Production Assets

• Contracting

To be initiated

• Walney Offshore Wind Farm

• Multifuel

Further options

Partnering in Networks and Renewables

Sustainable financial frameworkNet debt/EBITDA range

• Maintain net debt/EBITDA ratio at the

lower end of a 4.5 to 5 times range

from 2021-2025

Credit rating

• Maintain credit ratios comfortably

above those required for investment

grade

Good liquidity position• New debt issued in April & June 2020

• Average debt maturity 6.5 years

• £1.5bn cash and committed facilities

Refinancing requirements

• No new financing requirement within

the next two years, assuming £2bn

disposals

SUSTAIN DIVIDENDS

Sustain SSE’s ability to pay

dividends on which pensioners

and savers depend for income

PROMOTE LONG TERM SUCCESS

Contribute to green economic

recovery and create value

through the transition to net zero

KEY OBJECTIVES

2020/21 AND BEYOND

Plan to invest £7.5bn net in five years to 2025

Target full year dividend of 80p + RPI for 2020/21

Expected interim dividend of 24.4p* for 2020/21

Confident SSE can deliver 2018-23 dividend plan

*Assuming RPI inflation of 1.5%

£7.5bn

REGULATED NETWORKSEARNING FAIR RETURNS

SSE’S REGULATED NETWORKS BUSINESSES

• Combined Regulated Asset Value (RAV) of £9.1bn at 31 March 2020

• Expected to reach £10bn by 2023; net zero trajectory means it could reach £12bn by 2026 (excl. island links)

• Economically regulated by Ofgem

• Diversified across Electricity Transmission, Electricity Distribution and Gas Distribution

ElectriticyTransmission

ElectricityDistribution

Gas Distribution

RAV

£9.1bn

SSE.LNJuly 2020

SSEN DISTRIBUTION

• Vital role in the transition to net zero

• Electrification of heat and transport create long term growth opportunity

• Heavily focused on delivering change and modernising operations, infrastructure and work practices

• Aiming for strong finish to RIIO-ED1

• Working with stakeholders to prepare for RIIO-ED2

SSEN TRANSMISSION

• Strong record in enabling decarbonisation

• Renewable capacity connected to the grid increased to 6.3GW in FY20

• Forecast to reach 10GW by FY26

• SSE’s RIIO-T2 Business Plan includes Totex of close to £2.4bn over the five years to FY26 – subject to Ofgem’s Final Determination

• Potentially taking Transmission RAV to over £5bn

• A Net Zero trajectory would point to at least £3.5bn Totex over the course of RIIO-T2

1. RIIO T2

2. RIIO GD2

3. RIIO ED2

4. Combined Networks RAV could reach £12bn

0

2

4

6

8

10

12

14

FY20 FY21 FY22 FY23 FY24 FY25 FY26

NETWORKS RAV FORECAST ASSUMING £2.4BN TRANSMISSION TOTEX

Transmission Distribution SGN

£bn

1, 2 3

£2.4bn Transmission Totex (excl. Island links) subject to Ofgem Final Determination

4

GAS DISTRIBUTION

• RAV £3.5bn

• 100% owned

• Capex intensive

• Growth opportunity

• RAV £1.9bn

• 33% owned

• Regulatory frontier

• Option to sell

ELECTRICITY DISTRIBUTION

• RAV £3.7bn

• 100% owned

• Predictable returns

• DSO opportunity

ELECTRICITY TRANSMISSION

• RAV £3.5bn

• 100% owned

• Capex intensive

• Growth opportunity

2

REGULATED NETWORKSEARNING FAIR RETURNS SSE.LN

July 2020

SSEN DISTRIBUTIONSSE’s electricity distribution networks in the north of Scotland and central southern England use Overhead

lines and Underground cables to deliver electricity to around 3.8 million homes and workplaces. They are

economically regulated by Ofgem. The RIIO-ED1 Price Control runs until March 2023 and the RIIO-ED2

Price Control will run from April 2023 to March 2028.

KEY SOURCES OF VALUE

• Stable earnings stream supporting the dividend

• ED1 Price Control runs to March 2023

• Targeting improvements in incentives performance

• Preparing the ground for Distribution System Operator (DSO) role

40

50

60

70

80

90

2010 2015 2020 2025 2030 2035 2040 2045 2050

GW

History Community Renewables

Two Degrees Steady Progression

Consumer Evolution

NATIONAL GRID DEMAND FORECAST SCENARIOS

Electric Vehicles

Batteries

Demand Side

Response

OPPORTUNITIES IN ELECTRIFYING

TRANSPORT AND HEAT

SSEN TRANSMISSION

SSE’s electricity transmission network in the north of Scotland uses high voltage overhead lines and

underground and subsea cables to carry electricity from the mainly renewable generating plant to the

distribution network. It is economically regulated by Ofgem. The RIIO-T1 Price Control runs until March

2021, and the RIIO-T2 Price Control will run from April 2021 to March 2026.

KEY SOURCES OF VALUE

• RAV expected to grow to around £3.6bn by FY21

• Based on SSEN’s formal plan submission, powerful case for investment

which could grow RAV to over £5bn by FY26

RIIO-T2A NETWORK FOR NET-ZERO

Ofgem is in the process of setting the next price control for

Transmission, RIIO-T2, which will run April 2021 to March 2026. As

part of this process, in December 2019 SSE published its Business

Plan entitled ‘A Network for net Zero’. It sets out SSE’s analysis that a

minimum total expenditure (totex) of £2.4bn is required over the five

year period to maintain and grow the north of Scotland transmission

network to meet the certain needs of current and future electricity

generators and customers.

The £2.4bn totex includes £1.1bn of growth-driven investment

including East Coast upgrades; Argyll refurbishment and upgrade;

Tummel SVC; projects started in RIIO-T1 and pre-construction works.

The remainder covers projects investing in assets, including c£50m in

Beauly-Kintore; along with resilience, IT and data investment.

Five clear goals

3

SSE RENEWABLESLEADING IN RENEWABLE ENERGY SSE.LN

July 2020

ON

SH

OR

EO

FF

SH

OR

E

MW

GB Onshore 1,247

NI Onshore 122

ROI Onshore 567

Total 1,936

OPERATIONAL

MW

Greater Gabbard 252

Beatrice 235

Walney 92

Total 579

MW

Viking 443

Gordonbush Ext. 38

Total 481

MW

Dogger Bank A 600

Dogger Bank B 600

Dogger Bank C 600

Seagreen 1 (42% CfD) 526

Total 2,326

MW

Yellow River 105

Tangy 57

Lenalea 15

Galway Wind Park 14

Total 192

MW

Arklow Bank 2 520

Total 520

MW

Strathy South 208

Cloiche 155

Doraville 138

Other circa. 300

Total 801

MW

Seagreen 2 & 3 3,200

Gabbard Extension 250

Total 3,450

TOTAL: 2.5GW TOTAL: 2.8GW TOTAL: 0.7GW TOTAL: 4.3GW

0

1

2

3

4

5

6

7

Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26

Renewables growth from core projects (before any sell-downs)

Hydro Onshore Offshore

10

1. Dogger Bank A/B FID

2. Gordonbush ext completion

3. Dogger Bank C FID

7. Dogger Bank A Completion

8. Dogger Bank B first power

9. Viking Completion

4. Seagreen first power

5. Seagreen Completion

6. Dogger Bank A first power

10. Dogger Bank B Completion

11. Dogger Bank C first power

12. Dogger Bank C Completion

GW

2

1 3

4

5

6

7

8, 9

11

12

SSE Renewables brings together the development and operation of all of SSE’s renewable energy assets under a

single management team, creating the leading renewable energy company across the UK and Ireland, with ambitions

beyond those two countries. It has a sector-leading management team with the focus, specialisation and innovation

needed in a distinct part of the energy sector, in which SSE has a large pipeline of opportunities.

KEY SOURCES OF VALUE• Biggest renewable energy portfolio across UK & Ireland

• Technology diversity (flexible hydro, run-of-river hydro,

pumped storage, onshore wind, offshore wind)

• Semi regulated income

• Operational excellence

• Development and construction expertise

CAPACITY (MW) REMUNERATION SCHEME

2,216 ROC £/MWh

235 CfD £/MWh

2,021 CfD £/MWh for offshore in construction

375 REFIT €/MWh

850 Capacity Mechanism £/MW

SSE RENEWABLES - FUTURE WIND DEVELOPMENT

SSE RENEWABLES – GROWTH OUTLOOK

4

DUE FID OR IN CONSTRUCTION CONSENTED REQUIRING CONSENT

SSE RENEWABLESFOCUS ON KEY PROJECTS SSE.LN

July 2020

SEAGREEN OFFSHORE WIND FARM

DOGGER BANK OFFSHORE WIND FARM

VIKING ONSHORE WIND FARM

5

SSE RENEWABLES1.5GW HYDRO CAPACITY SSE.LN

July 2020

750MW

FLEXIBLE HYDRO409MW

RUN OF RIVER

300MW

PUMPED STORAGE

Additional revenue streams

from flexible hydro

High levels of availability

Pro-active long-term capital investment programme

Option for new 600MW pumped storage at Coire

Glas

BUSINESS ENERGY• Supplies energy to over 0.5m GB

business and public sector

customers

• Important route to market for

renewable electricity generation

ENTERPRISE• Provides energy infrastructure and

services for business and public

sector customers

• SSE’s option for fast growing

distributed energy markets

EPM• Executes commodity trades for

each asset class on behalf of

SSE’s Business units

AIRTRICITY• Supplies energy to over 0.7m

household, business and public

sector customers across Ireland

GAS STORAGE• Provides and operates gas storage

facilities

GAS PRODUCTION*

• Investment in production and

processing of gas and oil from

UKCS*SSE is in a process to sell Gas Production assets

SSE THERMAL ENERGYPROVIDING FLEXIBILITY THROUGH LOW CARBON TRANSITION

FLEXIBLE GAS-FIRED

GENERATION• SSE owns and operates 5.3GW of gas-

fired generation, including five of the

most flexible and efficient gas-fired power

stations in the UK and Ireland

WASTE-TO-ENERGY• SSE currently owns 69MW of waste-to-

energy projects at Ferrybridge, and planning

for 44MW (100%) at Skelton Grange (Both

50/50JVs with Wheelabrator Technologies )

• 50MW Slough Multi-fuel in development

(SSE 50% stake with CIP)

HYDROGEN & CARBON CAPTURE• Actively looking at developing generation

assets with low carbon pathways

• Member of Humber Cluster, participating in

UK Government Industrial Strategy

Challenge Fund competition

KEADBY 2• Investing £350m to construct the new

840MW Keadby 2 project in

Lincolnshire

• Set to be cleanest and one of the

most efficient CCGTs in the world

OTHER BUSINESSESCONTRIBUTING TO THE SSE GROUP

6

Nature’s Batteries

SSE.LNJuly 2020

ENGAGING WITH ESG PLATFORMSLAST TWO YEARS’ PERFORMANCE

7

SSE’s strategic goal is to create value for shareholders and

society. SSE recognises that a sustainable company is

purpose-led; and that a purpose-led company is one that

offers profitable solutions to the world’s problems. The UN’s

Sustainable Development Goals (SDGs) are the blueprint for

addressing global challenges, including climate change, and

therefore SSE’s four 2030 business goals are aligned to the

UN’s SFGs more material to its business.

SSE.LNJuly 2020

SSE.LNJuly 2020

FY19/20 RESULTSFINANCIAL FRAMEWORK AND DIVIDEND

Disposal of non-core assets

• SSE not main operator

• Less aligned with net zero

Securing value from partnering

TARGETING PROCEEDS OF OVER £2BN BY AUTUMN 2021

MANAGING CASH OUTFLOW

Reducing 2020/21 cash outflow by c£250m

• Prioritising and deferring capital expenditure (90%)

• Reducing and deferring operational expenditure plans

(10%)

Strategic investment projects unaffected

Designed to earn sustainable returns to support earnings

No new share buy-back programmes in 2020/21

No buy-back of shares irrespective of scrip uptake

FINANCIAL MANAGEMENT AND LIQUIDITY

Good liquidity position

• Moved quickly to issue new debt in April 2020

• Average debt maturity 6.5 years

• Cash and committed facilities of over £2bn, after

redemption of €600m Eurobond

Refinancing requirements

• No refinancing requirements over the next two

years assuming £2bn disposals

8

DisclaimerThis financial report contains forward-looking statements about financial and operational matters. Because they relate to future events and are subject to future circumstances, these forward-looking

statements are subject to risks, uncertainties and other factors. As a result, actual financial results, operational performance and other future developments could differ materially from those

envisaged by the forward-looking statements.

SSE plc gives no express or implied warranty as to the impartiality, accuracy, completeness or correctness of the information, opinions or statements expressed herein. Neither SSE plc nor its

affiliates assume liability of any kind for any damage or loss arising from any use of this document or its contents.

This document does not constitute an offer or invitation to underwrite, subscribe for, or otherwise acquire or dispose of any SSE shares or other securities and the information contained herein

cannot be relied upon as a guide to future performance.

The SSE Team

Sally FairbairnCompany Secretary & Director Investor Relations

+44 (0)1738 456491sally.fairbairn@sse.com

Wendy Pringle-MacIntyreInvestor Relations Manager

+44 (0)1738 512907wendy.pringle-macintyre@sse.com

Rory NewtonInvestor Relations Senior Analyst

+44 (0)1738 516916rory.newton@sse.com

Marlon HallInvestor Relations Analyst

+44 (0)1738 457407marlon.hall@sse.com