To mark the arrival of Alistair Phillips-Davies as the new Chief Executive of SSE, we invited a number of organisations and individuals to ask a question they’d like him to answer.
With important plenary votes on the EU ETS backloading proposal today, he answers questions on renewables from colleagues in Brussels.
Johannes Meier, CEO at European Climate Foundation:
SSE has made significant investments in renewables with a view to transitioning its business towards low-carbon generation. What timeframe do you see as realistic for the transition of SSE's business and what are the key pillars of the policy and regulatory framework at EU and Member States level that would be required to facilitate this? What role do you think that SSE as a business voice should play in making the case for this framework?
Alistair:
You’re right. We believe in renewable energy as part of a balanced generation mix. SSE is the UK's largest generator of renewable electricity so I’d say our transition is well underway.
I see renewable technologies continuing to play a big role in the future – for us as a company, for GB, Ireland and the rest of Europe. But this needs a good solid investment climate, with stable support mechanisms and a proper planning system that works for all parties. All those pieces are not in place at the moment, particularly in the UK.
Commitment right across the now EU-28 towards renewable and low carbon energy is very important. We are supportive of targets as a way of getting the supply chain mobilised and therefore costs down. But EU targets are only effective if all member states are committed to them – if one or two countries falter on the 2020 targets then the other countries come under pressure back home for “taking the first steps alone”. This commitment from the EU will be tested in the Parliament in the forthcoming EU ETS vote, where I hope we get some progress for the EU ETS which then paves the way for necessary structural reform.
As a large low-carbon investor, we are lucky in that we have a voice in the debate and when it comes to the investment climate we see it as our duty to be constructive but tell it like it is. We want to continue investing a large part of our £4 million a day in renewables and associated infrastructure, but that’s difficult to do without long-term certainty over policy. No-one wants to commit to major investments only to find that the goalposts have moved. That’s why we have been more vocal back home than most while the UK has been developing its market reforms.
The next 10 to 20 years are very important for the low-carbon transition, and we’ll keep pushing for the right policies to be put in place to make this transition possible while keeping energy affordable.
Thomas Becker, CEO of European Wind Energy Association (EWEA):
SSE has been a strong advocate for a 2030 European Union Renewable Energy Target, making it a key ally and member of EWEA in this crucial debate. Will SSE continue to put the case in Brussels on this issue? How can SSE engage with the UK government to build support for this target?
Alistair:
Thomas, we both want a progressive 2030 policy framework in Europe. That’s why SSE has been pushing for a stronger EU ETS, a 2030 renewables target and 2030 energy efficiency targets. We think that will help map out how we’re going to meet our binding targets for emissions by 2050.
It’s simple – if companies know the future direction of policies, they can invest in long-term supply chains. That brings the innovation and understanding that will help get costs down and make low-carbon energy more affordable.
Unfortunately the UK Government doesn’t currently support our position. I think that they need to hear more about how targets can help bring down costs. They are concerned that there may be cheaper ways to decarbonise and supporters of renewable targets need to redouble efforts to prove otherwise.
Within this wider debate it is vital that affordability is a key consideration, because, as you know, in energy the consumer pays for policy choices. As we look at future frameworks we also need to keep an open mind to emerging technology and shifts. That means emerging technologies like wave and tidal, and CCS, and it also means having regard for other developments like shale. We all know the environmental issues with shale but if we see continued development in the US and parts of the EU then we have to work out if and how that plays into the low carbon energy system we all want in Europe.
See you in Brussels when I am next there. A lot going on over the next few months. With the EU ETS where we need to pave the way for the necessary long term reforms and with the need to restate the positive case for renewables, I think we will all be pretty busy.