UK on cusp of going up the risk-reward ranks for utilities investors The next month could be very important for the attractiveness of UK energy utilities. On the one hand the trade relationship with the EU could provide some visibility and OFGEM''s final determination for RIIO-T2 could determine whether we have seen the trough in regulatory returns. Green Industrial Revolution not waiting In recent research UTILITIES: Capex supercycle we analysed the investments needed across Europe and the UK to deliver on net zero carbon targets by 2050. We also underscored the importance of governments and regulators in providing the visibility needed for these investments to go ahead. We believe the UK government''s 10-point plan for a so called Green Industrial Revolution is a strong step in that direction as is next year''s 4th round renewables auction. Still additional support might be needed from the government and/or consumers for some younger technologies such as floating offshore, hydrogen and biomass carbon capture to be delivered. SSE - a pure play into the UK''s energy transition We nudge our SOTP to 1725p. We believe the market is undervaluing the company''s renewables pipeline and is attaching too much risk on the electricity networks regulation. Our analysis suggests that SSE has the balance sheet capacity to deliver on the trebling of its renewables output by 2030 (with more growth potential thereafter) while growing DPS by inflation, assuming some improvement in the OFGEM final determination vs the draft (4.5% ROE vs 3.95%). Drax - more confidence in post 2027 optionality The government''s inclusion of Bioenergy with Carbon Capture and Storage in its 10-point plan as well the favourable treatment of biomass in the EC''s draft delegated act for the EU Taxonomy has given us more confidence to start pricing in value beyond 2027; the year that support for biomass generation expires in the UK. Our power price assumptions do not support merchant...