SSE Goes Green - SGN Experimenting With Hydrogen

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SSE Goes Green - SGN Experimenting With Hydrogen

Wed, 08/04/2021 - 09:45
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Flag of Scotland (copyright by Shutterstock/Dmytro Balkhovitin)
Flag of Scotland (copyright by Shutterstock/Dmytro Balkhovitin)

In a complicated transaction with many elements, a vital part of Scotland's infrastructure -- its gas supply pipeline network -- has been wholly bought over by a Canadian consortium. SSE, the energy firm based in Perth, announced it has sold its one-third stake for £1225m, to focus on renewable electricity. The future owners, with 37.5% each, will be Brookfield, a global investor whose business consists of a diverse real estate, infrastructure, and private equity portfolio across key cities, and the Ontario Teachers Pension Fund.

Southern Gas Networks (SGN), the piece in Scotland being sold, includes the gas pipelines supplying homes and businesses in Scotland and in the south-east of England, including Oxfordshire and parts of London.

Gregor Alexander, finance director of SSE, said: "SGN has been a hugely successful investment for SSE during the past 16 years.  It is a strong business delivering consistently for customers and will have a key role to play in the future development of the hydrogen economy. [But] for SSE, it has become purely a financial investment as we have sharpened our focus on our low-carbon electricity core, and it is therefore the right time for SGN to continue to thrive under new ownership.

Waseem Hanif, spokesman for SGN, commented: "We look forward to working with all our shareholders (new and existing) in helping the UK on its journey towards net-zero, through the development and deployment of safe, modern decarbonised gas networks, using hydrogen and other energy vectors."

BBC cautioned that the investment in gas pipelines is not risk-free:  The pressure of public policy towards net zero carbon puts a question mark over the future use of gas in heating homes and businesses.

This is why SGN is already engaged in pilot projects to feed hydrogen through its pipelines, and to invest in district heating schemes, transferring excess heat from industry into other uses. But that technology is commercially unclear and the future is uncertain. Hence the push to focus much more strictly on renewable electricity.

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