SSE continues to lose customers as it warns of "complex challenges" in 2017

 
Courtney Goldsmith
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SSE argues the UK market is "highly competitive" (Source: Getty)

SSE continued to lose customers in the first quarter as it warned of "complex challenges" in the year ahead, but it remained on track to meet financial expectations.

Total energy customer accounts in Britain and Ireland were down by 230,000, around three per cent, to 7.77m, SSE said in a trading update for the first quarter to 30 June.

This continues a trend seen in both SSE and its rival British Gas over the last year when customers were urged by consumer groups to leave the Big Six firms. SSE lost 210,000 customers in the previous financial year while British Gas lost 409,000.

Gas-fired output continued to increase, up to 5.4 terawatt hours (TWh) from 4.4TWh last year, while wind output grew to 1.1TWh from 0.9TWh due to higher than average wind speed.

SSE also noted Ofgem's plans to create an energy price cap for vulnerable customers called a "safeguard tariff" along with plans to make it easier for customers to switch their energy supplier.

The regulator has been working to come up with a way to keep customers from overpaying for gas and electricity since a report by the Competition and Markets Authority last year revealed customers were paying £1.4bn more than they would in a fully competitive market.

SSE today argued the British domestic energy market is "highly competitive". "SSE believes that competition should be at the heart of the retail energy market and in line with that promotes a range of tariffs, products and services."

The firm has previously warned of "potential unintended consequences" of any proposed intervention into the energy market.

Alistair Phillips-Davies, chief executive of SSE, said:

As expected, 2017/18 is presenting a number of complex challenges to manage, but SSE is a focused, resilient and adaptable business with efficient operations and disciplined investment at its core.

There continues to be significant change across the energy sector, but also opportunities for responsibly-minded businesses to contribute positively to its direction in the interests of customers and investors alike.

SSE also confirmed it is maintaining its target of increasing the full-year dividend by at least the rate of inflation, but weak recent cashflow and tough new regulation could pose a threat.

"SSE has several new wind farms coming online in the next year or so, but unless these can deliver a noticeable improvement in cash flows, its policy of raising the dividend by at least the rate of RPI inflation is going to look like an ever more weighty burden," said George Salmon, equity analyst at Hargreaves Lansdown.

Read more: SSE boss: Hinkley will likely be the UK's only new nuclear plant

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