By Scott Wright Deputy Business Editor
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
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
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.
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
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.