Marking 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.
Today, Alistair answers questions about how we run our business, and potential threats to the industry in the coming months and years.
Robert Canepa-Anson at Newton Investment Management Ltd
What is the biggest threat to your traditional utility businesses of generation, supply and networks?
Alistair:
I would say it is probably regulation and policy. As an industry we have to be better at explaining ourselves to the consumer. Energy is complicated and complication breeds confusion and this can lead to political and media pressure, which can then lead to knee-jerk reaction and poor policies.
Take retail. Retail margins are low, and we target around 5%, but that does not stop some people thinking that we are making huge retail profits. At one point people were calling for windfall taxes when we were making losses. The media don’t always help, but we can’t blame anyone, we have to get better at communicating.
In getting better at informing the public about energy we have to become more transparent. If you get most people in a room and show them the numbers, talk them through the policy and explain energy, they leave with a greater understanding of the realities. But not everyone has the time, so we have to be better at providing this understandable information. If we fail to communicate with the public, these issues will not go away and the threat of interventions continues. I know we play it straight but we have to show people. Only then can trust be earned and the risk of misplaced interventions be alleviated.
Ultimately, a significant part of SSE’s growth potential is founded upon a proper and stable policy framework. Without it our business becomes inherently more risky and investments in growing the economy and ensuring there is enough flexible capacity to provide security of supply are difficult to make. Because we have a management team with a lot of experience and because we are broad-based we can see the whole energy picture which helps us to provide Government and Ofgem with a more balanced perspective on how the policy framework is impacting on investments. Hopefully that, better communication and a collaborative approach with policy-makers will lead to this threat reducing over time.
Jim Moohan, Senior Organiser, GMB Scotland
What are the aims which gained you the position above other applicants? Job security, capital investment and working relationships come to mind as important to the employees and hopefully you. What other long-term plans do you have in mind?
Alistair:
I’m probably not the best person to explain why I got the job! What I can say is that I'm really proud to be heading up one of the UK’s and Ireland’s most successful companies – one that has doubled the number of people it employs in the course of the last decade. I've worked here for 16 years and served on the Board for 11, and I want SSE to continue to be the type of company that provides essential services that customers need at affordable prices. I also want to build on the great working culture we have here so that apprentices see us as a great place to learn, develop and have a career. Energy is about long term investments in the regional economy, so I want SSE to provide good long term jobs right across the UK and Ireland, attracting and producing high quality individuals, whether they are engineers, customer service staff or meter readers.
Job security comes from successful companies. That’s why we’ll still pursue a balanced business model, focused on operations and investment. We’ll work hard to give customers better standards of service every year. And ultimately we’ll keep striving for sustained real growth in the dividend. In doing that, we’ll maintain and create jobs, pay taxes and invest billions in the UK and Ireland along the way. In doing all of this, the safety of everyone who works for, or comes into contact with, SSE will be the first priority.
As well as the focus on safety we’ll need the support and hard work of SSE’s talented employees to help us meet the many challenges ahead. I’ll work hard to make sure we can retain and attract the very best people. Our good working relationship with the Unions and our annual Great Place to Work survey are just two of the many ways we can make sure all of my 20,000 colleagues feel good about coming to work each day.
Danny McCoy, Director General, Irish Business and Employers Confederation.
SSE has achieved remarkable growth in the Irish energy market over the past five years. Do you see further potential for the organisation as this market links more closely with the British one?
Alistair:
Yes, absolutely. Ireland is now very much a core market for SSE and a natural extension to SSE's presence in Scotland, England and Wales. We now have a real base on the island with over 850,000 customers, half a GW of renewables and at an advance stage in the construction of Ireland’s newest most efficient 460MW CCGT at Great Island in the south east.
EU policy is focussing on further integrating markets and we support greater links between Britain and Ireland. For us it is about extending our base on the island and delivering low carbon, secure and affordable energy to our growing customer base.
We have all the foundations in Ireland: great assets, a strong leadership team, first class staff and culturally it has been a perfect fit.