RENEWABLES OVERVIEW

30 September 2020 SSE RENEWABLES Onshore operational Leading in Offshore operational Hydro operational

Offshore Awarded SSE Renewables brings together the development and operation of all of SSE’s CfD Contracts Sept renewable energy assets under a single management team, creating a leading 2019 renewable energy company across the UK and , 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

Page 2 RENEWABLE ENERGY Generating Returns

KEY FACTS • Owned capacity in operation of around 4GW in UK and Ireland • Operate a further 1.2GW of onshore and offshore wind on behalf of partners • Awarded over 2.2 GW of CfD contracts in recent AR3 auction (SSE share now 2GW reflecting Seagreen sell down) • Aligned to geo-political low carbon transition

CAPACITY REMUNERATION Status (MW) SCHEME • Capacity • Capacity • Capacity 1,459MW 1,955MW 487MW* 2,021 CfD £/MWh Awarded in AR3 • FY20 Adj. EBIT • FY20 Adj. EBIT • FY20 Adj. EBIT £191m £201m £175m 1,870 * ROC £/MWh Operational • • Optimisation 1GW+ pipeline • 7GW+ pipeline 235 CfD £/MWh Operational investment opportunities 433 REFIT €/MWh Operational Capacity Mechanism

950** Operational

HYDRO ONSHORE WIND OFFSHORE WIND OFFSHORE £/MW *Post 92MW Walney sale *252MW of ROC volume also earns double ROCs at Greater Gabbard **De-rated under capacity mechanism equates to c 873MW

Page 3 RESULTS TO 31 MARCH 2020 SSE Renewables

FY20 FY19 EBIT Production EBIT Production £’m GWh £’m GWh Hydro (inc. pumped storage) 191.1 3,870 178.7 3,543

Onshore wind 201.4 4,580 188.3 4,729

Offshore wind 174.8 2,244 88.9 1,439

Total SSE Renewables 567.3 10,694 455.9 9,711

Year on year movement • Net increase in wind energy capacity, mainly Beatrice • Excludes constrained off generation of 0.7TWh in both FY19 and FY20

4 CREATING VALUE THROUGH NET ZERO SSE Renewables – Offshore wind – Seagreen

• Seagreen to be Scotland’s largest offshore • 51% stake sold to Total • SSE Renewables gross equity contribution around £850m • £320m investment to date repaid through equity divestment and project finance NEW MAPS IN DEVELOPMENT. • Capacity of 1,075MW; typical annual output around 5TWh TO BE SUPPLIED BY CALLUM TOSH. • c40% under CfD; c30% under contract with SSE Group 15/06/20

SEAGREEN EXPECTED TIMELINE

• FID reached June 2020 • Targeting first export Dec 2021; completion Dec 2022

5 CREATING VALUE THROUGH NET ZERO SSE Renewables – Offshore wind – Dogger Bank

• Dogger Bank to be one of the world’s largest wind farms • First deployment of GE Haliade-X 13MW turbine • 50:50 JV with , three 1,200MW sites each expected to generate around 6TWh annually • Each project has secured a CfD, with prices ranging from £39.65/MWh to £41.61/MWh in 2012 prices NEW MAPS IN DEVELOPMENT. TO BE SUPPLIED BY CALLUM TOSH. 15/06/20

DOGGER BANK EXPECTED TIMELINE

• Dogger Bank A & B FID Q4 2020, targeting first export Q3 2023 • Dogger Bank C progressing to FID Q3 2021

6 CREATING VALUE THROUGH NET ZERO SSE Renewables – Onshore wind – Viking

• Decision to invest around £580m in , • Ofgem approved transmission link • 443MW project with estimated load factor of 48% • Largest onshore wind farm in the UK in output terms

NEW MAPS IN DEVELOPMENT. VIKING WIND FARM EXPECTED TIMELINE TO BE SUPPLIED BY CALLUM TOSH. 15/06/20 • FID reached June 2020 • First export expected Q2 2024

7 CREATING VALUE THROUGH NET ZERO SSE Renewables – Growth

Renewables Growth from Core Projects (before any sell-downs) GW 7 5 7 8, 9 10 12 6 8 5 2 4 6 11

4

3 1 3 2

1

0 Mar-20 Mar-21 Mar-22 Mar-23 Mar-24 Mar-25 Mar-26 Hydro Onshore Offshore 1. Dogger Bank A/B FID 4. Seagreen first power 7. Dogger Bank A Completion 10. Dogger Bank B Completion 2. Gordonbush ext completion 5. Seagreen Completion 8. Dogger Bank B first power 11. Dogger Bank C first power 3. Dogger Bank C FID 6. Dogger Bank A first power 9. Viking Completion 12. Dogger Bank C Completion

SSE Investor Presentation – September 2020 8 STRATEGIC DISPOSALS Creating value for future investments

Slieve Divena 2 Wind Farm Seagreen Offshore Wind Farm Walney Offshore Wind Farm

• 100% disposal • 51% disposal • 25.1% disposal • Net proceeds £50m • Proceeds £70m • Proceeds £350m • 18.8MW • 548MW • 92MW (SSE stake 25.1%) • March 2020 (FY19/20) • May 2020 (FY20/21) • September 2020 (FY20/21) • Acquired by Greencoat • Acquired by Total • Acquired by Greencoat • Only site with different turbines to • Strategic partner to share in the • SSE Renewables had no operational role remainder of the fleet construction and funding and was a financial investor in the project

SSE Financial Results for the Year to 31 March 2020 9 CREATING VALUE THROUGH NET ZERO SSE Renewables – Future wind development

OPERATIONAL DUE FID OR IN CONSTRUCTION CONSENTED REQUIRING CONSENT

MW MW MW MW GB Onshore 1,247 Viking 443 Yellow River 105 Strathy South 208 NI Onshore 122 Gordonbush Ext. 38 Tangy 57 Cloiche 155 Lenalea 16 Doraville 138

ONSHORE ROI Onshore 567 Other circa. 300

Total 178 Total 801 Total 1,936 Total 481

MW MW MW MW

Greater Gabbard 252 Dogger Bank A 600 Arklow Bank 2 520 Berwick Bank & Marr 3,200 Bank (Seagreen 2&3) Beatrice 235 Dogger Bank B 600 Seagreen 1A 176 North Falls (Gabbard 252 Dogger Bank C 600 Extension) Seagreen 1 (42% CfD) 527

OFFSHORE Total 487* Total 2,327 Total 696 Total 3,452** TOTAL: 2.4GW TOTAL: 2.8GW TOTAL: 0.7GW TOTAL: 4.3GW

* As at 30 Sept 2020 Post 92MW Walney disposal **SSE has a further 1.6GW of offshore options being explored in Ireland

10 CREATING VALUE THROUGH NET ZERO SSE Renewables – Hydro

• Largest electricity storage capacity in the UK • 400MW of ‘run-of-river’ • 759MW flexible hydro • 300MW pumped storage • Uniquely placed to deliver large-scale flexible zero- carbon power • Total hydro output of 3,870GWh in 2019/20 vs 3,543GWh in 2018/19 (including pumped storage) • Increasing in value as the electricity system adjusts • Total EBITDA £223m for FY20 (vs £208m in FY19)

11 LOAD FACTORS SSE Renewables

TECHNOLOGY HYDRO ONSHORE OFFSHORE 25% -33% Load 35% Pre 2015 Factor Based on 8 year 40% to 50% average 40 – 45% Post 2015

Capacity* 1,159 MW 1,955 MW 487 MW Exc. pumped storage

• Based on typical year • Wind is gross of constrained off volumes which can be in the range of 1-3%

12 MAJORITY OF ROCS IMPACT NOT UNTIL 2032

SSE ROCS EXPIRY PROFILE - MW

2500 • Hydro ROCs expire from March 2027 2000 • Double ROCs on offshore wind mean impact delayed to 2032 1500 • Newer onshore wind receives 0.9 ROCs out to March 2037 1000

500 POST ROCS: • Significant repowering potential 0 • Replace with larger turbines • Existing ground works reduce costs • Supply chain efficiencies hydro onshore wind offshore wind offshore double roc

ROCs year April to March Page 13 ONSHORE DEVELOPER CREDENTIALS

ONSHORE BUILD COST POST 2015 £1.4m/MW Average cost of SSE onshore build

Project Cost £m Completion Capacity Build Cost Date MW £/MW

Strathy North 119.2 Nov 2015 67.6 1.8 Tievenameenta 52.3 Mar 2017 34.5 1.5 Slieve Divena II 28.0 May 2017 18.8 1.5 West Galway 94.4 May 2017 66.0 1.4 Dunmaglass 210.0 July 2017 94.1 2.2* Bhlaraidh 134.1 Oct 2017 108.0 1.2 Leanamore 33.0 Feb 2018 20.7 1.6 Stronelairg 343.8 Dec 2018 227.6 1.5

*Dumnaglass includes acquisition costs

Page 14 STRONELAIRG ONSHORE WIND FARM Case Study DEVELOP & BUILD STAKE SALE OWN & OPERATE

Developer - SSE Renewables Ownership 66 Vestas turbines 227.7MW £450.4m 50.1% 31.6 KM2 site ROC accredited Price for 49.9% stake sold in March 2019 Retained ownership stake, will benefit from Planning consented in June 2014 earnings and dividends form the windfarm Build time 18 months to Dec 2018 Contractor – RJ McLeod Operated under MSA Cost - £343.8m 3.96 £/MW Delivery ahead of time and underbudget Highest ever multiple for onshore windfarm disposal in Europe Currently operates 2.6GW of onshore wind for wholly owned, 3rd party and partner assets

PPA agreement with

Market rate PPA with SSE

Page 15 BEATRICE OFFSHORE WINDFARM Case Study

HIGHLIGHTS • SSE Renewables lead developer • 40% owned • Financed off balance sheet • 88 Siemens turbines • 588MW • Underpinned by 15 year Cfd - £151/MW in 2016 prices • Build time 36 months to May 2019 • Cost - £2.5bn • Delivery ahead of time and £100m underbudget SUCCESSFUL REFINANCING PARTNERS • Refinanced in May 2019 • 15 year term • Gearing increased post construction allowing equity release via dividends • 29 banks subscribed 24 hedging banks • Commercial banks and institutional investors

Page 16 NEW SEABED LEASING TIMETABLE The Crown Estate – bidding process Key characteristics: Agreement for Lease Year -2+ -1 0 1 2 3-10 • Option fee auction based (likely to be higher than in Scotland) • Initial deposit of 1 years’ lease payment is at risk Payment 1x annual £0.5m + next x2 while Habitats Regulation Assessment (HRA) is payment AfL annual payment Milestones/Option undertaken (min 3yr to break at Yr 3 commitment) Outcome determined by: • Price bid into auction Habitats Regulation Assessment (HRA)* • Full detailed technical analysis *Environmental consultation undertaken after sites awarded • Potential breach of lease if milestones not met As a result, the deposit of 1 year’s lease payment is at risk HRA may extend beyond 12 months Crown Estate Scotland – bidding process Option agreement year -2+ -1 0 1 2 3-10 Key characteristics • Auction process with bids capped • Paid in full at the outset of the lease • Financial risk owing to environmental 2 Payment Fee/km for the considerations is limited to the application fee <=10 year period Various (£20k) milestones Outcome determined by: Habitats Regulation • Qualitative characteristics Assessment* • Health & Safety • Environmental • Project delivery *Environmental consultation undertaken in parallel to the bidding process • Technical experience Risk of bidding for site which is not included in the adopted plan (but negligible financial risk) • Quality assurance

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