The UK energy market needs a ‘continuing stable regulatory environment’ in order to facilitate the investment – estimated today at more than £300 billion by the National Audit Office – in electricity infrastructure and new power plants.
That was one of the key messages delivered by Scottish Power – one of the Big Six utilities – at the Energy UK annual conference. This – and other key issues – were spelt out in advance of the Energy UK conference by Keith Anderson, Chief Corporate Officer, Scottish Power, who said:
“ScottishPower, and its parent company Iberdrola, is fully committed to a continuous, sensible dialogue on all aspects of the UK energy market. We will always fully engage with all political parties on these matters
“We fully recognise the critical importance of the issue of public trust in both successfully delivering for consumers and building support for the vital investment in future clean energy capacity.
“As an international energy company, we carefully analyse all of the major markets in the world. Maintaining principles of sound regulation and avoiding regulatory uncertainty are critical to securing this global investment in the UK.
“We have investment plans for up to £15bn in the UK. This includes our proposals to Ofgem outlining a £5.2bn investment programme in our distribution network. This will play a major role in connecting renewable energy, as well as delivering significant reliability and service improvements and cost reductions for customers.
“However, we are at a critical juncture in terms of future investment in the UK as global economic prospects begin to improve and as the Government’s plans for Electricity Market Reform (‘EMR’) are due to be implemented next year.
“This is key to building the confidence so essential to attracting the investment that the country needs. Moreover, maintaining this political consensus is crucial to winning the necessary public backing for this programme. Division in this area will simply make it harder for any government to deliver the necessary investment in the energy system.”
Referring to the recent proposal for a freeze on retail energy prices, Anderson added: “Energy policy is very difficult. Any move to freeze all domestic bills will not alter the fact that the investment Britain needs still has to be paid for. To the extent such a freeze would cause investors to doubt that they will receive an adequate return or to fear future similar interventions, those doubts and fears would be reflected in the appetite to invest.”