SSE is to give more focus to its renewables business following an agreement to sell its retail arm to OVO Energy.
The SSE Energy Services sale, which has an enterprise value of £500m, is expected to be completed later this year or in early 2020 and is subject to necessary regulatory approvals.
SSE chief executive Alistair Phillips-Davies said: “Following the transaction, SSE will be able to give an even greater focus to delivering the low carbon infrastructure needed to help the UK reach net zero emissions.
“We have a clear strategy around developing, operating and owning renewable energy and electricity network assets, along with growing businesses complementary to this core.
“With a large and growing renewable energy pipeline and a leading position in the electricity networks needed to deliver low-carbon energy reliably to homes and businesses in an increasingly electrified economy, we are well placed to create value from the low-carbon transition.”
He added that SSE has “long believed that a dedicated, focused and independent retailer will ultimately best serve customers, employees and other stakeholders – and this is an excellent opportunity to make that happen”.
The enterprise value comprises £400m cash and a £100m in loan notes, SSE said.
The company said it submitted Renewable Obligation Certificates in August 2019 in satisfaction of SSE Energy Services’ Renewables Obligation for the period ended 31 March 2019, the last full financial year of SSE ownership.
OVO will be liable for all Renewable Obligations accruing thereafter, it added.
On completion of the deal all SSE Energy Services’ around 8000 staff will transfer to OVO.
OVO chief executive and founder Stephen Fitzpatrick said: “This transaction marks a significant moment for the energy industry.
“Advances in technology, the falling cost of renewable energy and battery storage, the explosion of data and the urgent need to decarbonise are completely transforming the global energy system.
“For the past three years OVO has been investing heavily in scalable operating platforms, smart data capabilities and connected home services, ensuring we’re well positioned to grow and take advantage of new opportunities in a changing market.
“SSE and OVO are a great fit. They share our values on sustainability and serving customers. They’ve built an excellent team that I’m really looking forward to working with.”