By Scott Wright
THE boss of energy giant SSE has warned that plans to nationalise UK energy assets would cause disruption, uncertainty and risk the country’s leadership position in offshore wind.
Alistair Phillips-Davies also said private companies are best placed to help the UK achieve its net-zero carbon target by 2050. His remarks came when asked to comment on Labour’s plan to nationalise energy infrastructure if it wins power in the December 12 election.
The SSE chief executive was speaking to journalists after the utility reported a 15 per cent rise in adjusted profit before tax to £263.4 million for the six months ended September 30. Its results were boosted by £110m of Capacity Market payments from the UK Government, which were restored following an investigation by the European Commission under state-aid rules. This included £60.4m which was not recognised in respect of the prior year.
READ MORE: Scots energy giants hit renewables obstacles
Asked to comment on Labour’s plans to nationalise the UK’s energy utilities, Mr Phillips-Davies told reporters that the current policy regime had helped to unlock investment in renewable capacity in the UK, despite the continuing political “turmoil and uncertainty” caused largely by Brexit.
He cited SSE’s plans to invest in two major offshore windfarms in the North Sea as a result of successful bids under the Government’s contacts for difference (Cfd) regime, following the completion of the £2.6 billion Beatrice project.
Doggerbank will be the “world’s biggest” windfarm when complete, Mr Phillips-Davies said, while Seagreen will be Scotland’s largest wind farm when work finishes, with the two projects representing investment of around £10bn between them.
READ MORE: New employer for 2,700 SSE staff after bumper deal
However, while investment is continuing to “flow” he warned nationalisation would bring yet more uncertainty.
Mr Phillips-Davies said: “Regarding state control, we all want the same thing. We want to deal with the climate emergency, we want to deal with net zero. Any issues around state control, or interference of ownership of assets, I think it will take a long time for that to happen.
“It will be very disruptive, it will to a lead to a lot of uncertainty, it will risk things like the UK’s leadership position in offshore wind globally. We will also see all sorts of issues coming out of that.”
Mr Phillips-Davies, who called in a separate statement for the current moratorium on onshore wind projects to be lifted, added: “The best people to achieve net zero are going to be private companies currently delivering and performing well.”
The half-year results for SSE excluded its energy supply business, which it has agreed to sell to Ovo in a £500m deal, and the gas production assets it has put up for sale. The competition watchdog is currently investigating the Ovo deal, but Mr Phillips-Davies said he was confident it would be cleared early “no later than December 18”.
Elsewhere, Mr Phillips-Davies said the firm was “definitely still making progress” with its plans to develop two electricity transmission links connecting Shetland and the Western Isles with the Scottish mainland. The company was last month asked by Ofgem to rethink its plans, after the industry regulator concluded that planned wind farms for the islands’ would not generate sufficient power to justify the huge investment in the links.
Mr Phillips-Davies said SEE hopes to lodge a “needs case” with Ofgem for Shetland by the end of the year, early next year, on the back of the Viking offshore windfarm it is developing under a joint venture around the islands. On the Western Isles, he said SSE is “looking for more signals” from windfarm developers which were not successful in recent CfD bids as to whether they wish to feed into a planned transmission link.
“We need to get to a total of about 370 megawatts that is going to be built or intended to be built, and then we can go forward with our needs case,” he said. “While progress may not be as rapid as people want, I think we have ways through in both of them. It does require some work from Ofgem and some work for developers, particularly on the Western Isles.”
Ofgem approved the firm’s hopes to develop a transmission link with Orkney in September.
SSE said the generally wet and windy weather since September meant its renewables output was ahead of plan, with operating profit of £149.9m, compared to £78.4m last year.
Shares rose 2.5%, or 32p, to 1,322p.
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