by PERRY GOURLEY

POWER giant SSE yesterday warned that UK government policy was delaying
vital investment and did not provide enough incentives for investors to
fill a looming gap in generation capacity.

In strongly-worded comments accompanying a trading update, the firm said
the risk of “imminent shortages” was not being addressed.

The Perth-based utility, one of the UK’s biggest investors in energy
infrastructure, pointed to concerns raised by regulator Ofgem last month
that there could be shortages in the middle of this decade as the UK has
failed to build sufficient power stations to replace old fossil fuel plants.

SSE argued that it was vital the right balance is struck between keeping
open existing generation plant and making the market economic for new plant.

It believes the government’s plans for capacity market auctions as part of
the electricity market reforms (EMR) can ensure the lights stay on but
attacked moves to delay their introduction until 2018-19.

The comments came as SSE updated on trading since April at its AGM in
Perth. The number of electricity and gas customer accounts in markets in UK
and Ireland dipped slightly to 9.46 million from 9.47 million.

Average electricity consumption by household customers was estimated to be
920kWh, compared with 940kWh with average consumption of gas unchanged on
last year.

Chief executive Alistair Phillips-Davies – who replaced long-standing boss
Ian Marchant – said the year had got off to an “encouraging start”.


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