Scottish and Southern Energy will demonstrate its independent strengths on Thursday as market operators speculate on a further round of industry consolidation to follow the current auction for control of British Energy.The Perth group’s shares soared in heavy turnover last week on rumours that the German RWE or another of its Continental rivals could be tempted to swoop as part of a global rationalisation drive that has also seen the American NRG Energy group post a multi-billion dollar bid for Calpine Corporation.But SSE’s chief executive Ian Marchant is determined to show that his group is already a clear winner from current turbulent energy markets, with news of a lift in earnings before interest and tax from £1.18 billion to about £1.3bn, and could reward shareholders with another double-digit rise in dividend payments. He will also stress that the group’s decision to let others make the first move before imposing 15% price increases in the spring helped the Scottish hydro giant to boost its customer numbers to a record 8.5 million, up about 10% over the past year.

Brokers point out that SSE is still able to hold back longer than its rivals because it makes much of its money from selling surplus capacity to other distribution groups and also gains as a result of higher wholesale electricity prices for hydro-electricity and other output not connected with soaring oil and gas costs. Even so, most analysts believe that directors will follow British Gas group Centrica in warning of further tariff increases in the pipeline because of the jump in wholesale prices caused by the surge in oil to more than $130 a barrel and another leap in coal costs as a result of Chinese stockpiling after the earthquake cut the country’s hydro-electric production. Some believe that profit margins on the group’s distribution operations may have dropped to as little as 4% in recent weeks, down from more than 7.5% a year ago. Fraser McLaren at Merrill Lynch says that further tariff increases of 15% to 20% are “not inconceivable” later this year if the group decides to protect these retail margins. “But there is a question of whether the companies will be able to pass on the higher costs or deem it prudent to absorb some cost pain rather than risk further punitive action by the government or regulator,” he says. The issue of power prices was brought into sharp focus last week when Energywatch chief executive Allan Asher alleged that Scottish and Southern Energy and the other five big suppliers operated a policy of “tacit collusion”. An Ofgem investigation into the industry is due to report in September, and SSE has moved to win brownie points ahead of the findings with new plans designed to help 100,000 fuel poverty customers through cheaper tariffs. It has also won favour with the government because of its huge commitment to renewable energy at a time when the UK is falling well short in its drive to get 20% of production from green sources by 2020.

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