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SSE to Boris: Back renewables for net zero and dismiss nationalisation

Image: SSE.

Image: SSE.

SSE’s chief executive has written to the country’s new Prime Minister Boris Johnson, stressing the need for him to ramp up the UK’s renewables ambition.

In a letter addressed to the PM, who placed Andrea Leadsom at the helm of UK energy policy earlier this week, SSE chief Alistair Philips-Davies urged Johnson to get serious on renewables in a bid to unite the country behind its net zero target.

The letter lists three immediate priorities, arguing that acting on those three priorities would show the country is serious about achieving that goal.

Top of SSE’s priority list is for the government to “lift the cap” on renewable energy, arguing that the government will need to increase the target for offshore wind capacity to be contracted via the Contracts for Difference mechanism by one-third to 40GW.

SSE writes that the government could send an early message to industry by increasing the 6GW cap for offshore wind within this year’s CfD allocation, the auction for which is ongoing.

In addition, the utility has implored the government to revisit onshore wind - effectively cast aside by the Conservative Party since 2015 - and take the opportunity to investigate how a subsidy-free route to market could be introduced for new farms and the repowering of existing ones.

It has also stressed the need for electricity system diversity and flexible technologies to support and complement further renewable deployment, name-checking nuclear, carbon capture and storage, energy storage and hydrogen in particular.

But Philips-Davies has argued that these technologies cannot be the centre of any model, before referencing the need to decarbonise at the lowest possible cost.

“Whilst I am supportive that government is exploring a financing framework for nuclear power and other complementary technologies we must not build at any cost. A renewables-led approach will mean that we don’t have to,” he said.

Carbon pricing and networks

Next on SSE’s wish-list is a continuing commitment to a strong carbon price, backed by both the EU Emissions Trading Scheme and the UK’s own carbon price floor, stating that these mechanisms have made a “vital contribution” to the decarbonisation of the power sector to date.

Philips-Davies has stressed that while a robust carbon price will need to be retained throughout forthcoming budgets and the country’s Brexit process, a long-term commitment to a strong carbon price which extends beyond 2021 will be necessary for net zero.

Lastly, SSE has stressed the pivotal role that the “often… overlooked” electricity network infrastructure will play in delivering net zero, especially in connecting low carbon generation to homes and businesses while allowing for new technologies like electric vehicles to be adopted en masse.

Philips-Davies has used the progress of electricity networks to rally against a possible nationalisation, claiming that it would be “disruptive and costly” and holds the potential to cause a “multi year hiatus” in decarbonisation efforts.

Earlier this year Jeremy Corbyn’s Labour Party unveiled proposals to renationalise the country’s distribution and transmission networks as part of a radical overhaul of the energy market it would enact in the event it won any general election.

While the government has remained tight-lipped on those plans, the energy sector was forthright in its condemnation of them, arguing they could pose a “huge setback” and beset the clean energy transition.

Philips-Davies signs off the letter with a call for further collaboration between government and industry.

“I hope that this letter is useful in identifying some of the priority areas we will look to engage with various government departments on in the coming months, as we await the publication of an energy policy white paper later this year. In SSE you have a UK-listed company which is committed to playing a leading role in net zero and will support the bold steps necessary to get us there by 2050 in a fair transition which maximises benefits for society,” he writes.

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