Fresh from its recent acquisition of wind energy specialist Airtricity, Scottish and Southern Energy yesterday sought to further bolster its green credentials, updating its carbon emissions reduction target and launching a new division dedicated to provide householders with energy performance certificates (EPC).

The energy giant announced that it has now set itself the target of reducing by 50 per cent the amount of carbon dioxide it emits per kilowatt hour of electricity from all power stations that it has an ownership or contractual interest in.

The company said that, if achieved, the target - which replaces an earlier goal of cutting CO2 per kilowatt hour levels by 20 per cent by 2016 and takes account of the recent acquisition of wind farm operator Airtricity - would result in around 12m fewer tonnes of carbon being emitted in 2019/20 compared to 2005/06.

The company expects to meet the target by rapidly expanding its renewable energy capacity and has committed to investing £2.5bn in alternative energy in the UK and Ireland and a further £500m in overseas renewable energy projects over the next five years.

SSE chief executive Ian Marchant said that there was an economic imperative driving the company's investment in the sector. "It has been clear for some time that the industry is going to have to produce less carbon dioxide per unit of electricity generated, but this has been a year in which the headline 'Oil hits new record price' has become commonplace," he said. "It has become ever more apparent that the supply of fossil fuels is going to struggle to keep up with the demand."

He added that in such a climate investment in renewable energy provided numerous opportunities, "including reduced exposure to volatile prices for fossil fuels, and the legally-binding EU targets for renewable energy mean this investment will be actively encouraged by governments across Europe".

The announcement came as SSE also launched a new service designed to address the growing market for energy certificates. The UK government is introducing legislation that will require all house sales and commercial properties to hold an EPC detailing the energy efficiency of the building.

SSE said it is currently recruiting accredited Domestic Energy Assessors to visit properties, collect the required data and create the certificates. They will initially provide the service in south-west England and south Wales, before expanding the service to offer it nationwide during 2009.

"At a time of higher prices, near-universal concerns about climate change and the long-term security of supplies, energy performance and efficiency is set to become a key business opportunity and it is one that we want to play a full part in," said Marchant.