London, April 25, 2026, 19:03 BST
Deutsche Bank bumped its price target on SSE PLC to 2,900 pence from 2,850 pence, sticking with a “buy” call as the UK utility draws attention again after Britain’s latest overhaul to power-market returns. The broker pointed out that the government’s proposed wholesale Contracts for Difference could make one of SSE’s more volatile earnings streams less risky. Proactiveinvestors UK
Timing is key here. Britain has just unveiled plans: older low-carbon generators could take up voluntary fixed-price power contracts, and the Electricity Generator Levy—currently at 45%—will jump to 55%. The policy also involves Contracts for Difference, or CfDs, which lock in a set price for a generator’s output, shielding them from the full swings of market rates.
SSE sits right at the center of the argument, with a chunk of its wind power still tied to market-based pricing. Deutsche’s James Brand ran the numbers: what if 8 terawatt hours of that market-linked wind output shifted into wholesale CfDs, locking in real prices between 40 and 50 pounds per megawatt hour?
“This could lead to near-term earnings downside of 5-8%,” Brand noted, pointing to early adoption in 2027/28. But on Deutsche Bank’s side, steadier contracts may help curb future policy risk and simplify valuation for a big, exposed chunk of SSE’s operations. Proactiveinvestors UK
Shares in SSE stood at 2,630.50 pence on Friday, according to the company’s investor page—still under Deutsche Bank’s revised target. Preliminary results for the year ended March 31, 2026, are scheduled for May 28.
Rivals are dealing with policy shifts too, though the impact isn’t uniform. According to Morningstar analyst Tancrede Fulop, SSE booked around 6.5 TWh of ROC-eligible output—these are legacy renewable projects still benefiting from the Renewables Obligation scheme. Orsted saw about 4 TWh, RWE hit 6 TWh. Centrica, on the other hand, had little ROC exposure but still got hit with the levy via its nuclear generation.
SSE’s new trading update hands investors another angle. For 2025/26, the group is targeting adjusted EPS between 147 and 152 pence, roughly 14.5 TWh in renewables output, and capital investment pegged near 3.5 billion pounds. Adjusted net debt plus hybrid capital lands just over 10 billion pounds.
The main focus is still on the regulated network expansion. SSE has mapped out over 29 billion pounds for transmission projects across northern Scotland—11 large onshore and offshore builds are part of that, aiming to channel more renewable electricity from far-flung sources to where it’s actually needed.
Still, there’s risk in the reform cutting the other way. Officials haven’t nailed down a fixed price yet, and since joining up is optional, an unattractive price—too low—could keep generators on the sidelines. If it lands too high, consumers could end up stuck with expensive contracts. Marc Hedin, who leads research on Western Europe and Africa at Aurora Energy Research, told Carbon Brief the headlines point to a sharp shift away from gas-linked pricing. In practice, though, “the reality is more incremental.” Carbon Brief
Friday brought a quieter update from SSE: the company reported almost 1.8 million pounds invested in Angus communities via the Seagreen Offshore Wind Farm Community Benefit Fund. SSE operates Seagreen and holds a 49% stake, with TotalEnergies and PTTEP each controlling 25.5%.
Now comes the question: can SSE stick to its earnings guidance as investors adjust for a market that’s less prone to gas price jolts—yet also less likely to deliver surprise gains. Deutsche Bank, at least for the moment, is making the case that reduced volatility outweighs the cost of giving up those windfall opportunities.
