Capex acceleration for the net zero goal without breaking up company SSE''s strategy update relies on a major (net) Capex increase to GBP12.5bn in 2021-26 (vs GBP7.5bn in the previous plan). Capex will be devoted to Renewables (40%), Networks (40%) and Thermal and Other (20%). SSE aims to double its renewable capacity to 8GW while maintaining a stable 15GW pipeline by FY25. The intention is also to increase its RAV by 10% CAGR. SSE management announced its decision not to break up the company since the current structure (vertically integrated utility) is seen as optimal to pursue growth, execution and value creation. How to fund such an ambitious plan The ambitious cash requirement (GBP12.5bn capex, GBP3bn dividend and GBP3bn Interest and Tax) is expected to be largely funded with c. GBP12bn operating CF, GBP4.5bn divestments (SGN, 25% stake sales in Networks and other non-core) while the net gearing should stay at 4.5x ND/EBITDA. We note the updated dividend policy reiterates the existing DPS commitment until 2023 but DPS will be rebased to 60p in FY23 (5% yearly growth to FY26). Returns and growth broadly in line with expectations SSE returns are expected to be at 10% RoE on JV offshore projects, 7-9% RoE in Networks, 100-400bps spread to WACC on unlevered renewable projects and 300-50bps spread to WACC in new technologies. SSE''s growth is expected at 5-7% Adj. EPS CAGR, supported by Renewables (CAGR2021-26e EBITDA 11-12%) and Networks (GBP 7.4bn in FY21 to c. GBP12bn gross by FY26). SSE - An attractive option to play the UK Energy transition We admit the limited visibility and challenges of the new plan, while we continue to see SSE as well positioned to benefit from the UK''s renewable ambitions. The decision not to break up SSE reduces its take-over candidate appeal but SSE (and its shareholders) will continue to benefit from the market appetite for infrastructure and renewables through farm-downs and minority stake sales that will be...