UK Energy Department decision casts doubt over SSE’s flagship Caithness wind farms plan

Scottish and Southern EnergyScottish and Southern Energy (SSE) plc is to carry out a ‘wide-ranging’ review of its offshore wind farm plans following the decision by the UK Government to exclude two of its proposed flagship projects from government funding.

The decision casts a cloud over the Offshore Wind Europe conference being held this week in Aberdeen (See full programme and further details at EVENTS online at the Scottish Energy News) and comes amid a generally upbeat ‘new jobs, industry expands’ economic narrative for Scotland’s renewables energy sectors.

In its interim management statement this month Scottish & Southern said: “We are disappointed that neither the Galloper (SSE stake 50%) project off Suffolk nor the Beatrice (SSE stake 75%) offshore wind farm off Caithness have been included in the ‘provisionally affordable’ list of projects under the Final Investment Decision Enabling for Renewables announced by the UK government just before Christmas last year.

“We will complete a wide ranging review of our offshore wind development portfolio by the end of this financial year and will report on our conclusions then. “

Lindsay Leask, senior policy manager at the Scottish Renewables industry umbrella group, commented: “Despite having all the right ingredients to build a world-class offshore wind sector, there is now growing unease from developers because they feel they are being held back from delivering projects.”

Alistair Phillips-Davies, Chief Executive of SSE, said: “SSE believes it has, and wishes to maintain and invest in, a diverse generation portfolio that helps to keep the lights on for people, businesses and organisations by being available, reliable and flexible. 

“However, the prospects for investment in generation assets in Great Britain are, however, not encouraging.”

The Government’s Final Investment Decision Enabling programme is designed to enable developers of low carbon electricity projects to take final investment decisions ahead of the Contract for Difference regime being put in place as part of Electricity Market Reform.

DECC launched Final Investment Decision (FID) Enabling for Renewables in March 2013. Applications for participation in FID Enabling for Renewables closed on 1 July 2013.

On 4 December 2013, DECC published a summary of the applications that applied and qualified through Phase 2 of the programme, including details of the FID Enabling for Renewables affordability envelope and an indicative timetable for the contract award process.

All applicants that met the Phase 2 minimum threshold evaluation criteria were sent draft investment contracts on 19 December 2013, (based on the draft CfD standard terms and conditions and were invited to submit binding applications, confirming that they wish to apply for an investment contract, by March 2014.

Caithness, Sutherland and Ross MSP Rob Gibson commented: “This is yet another example of the UK Government’s dithering attitude to Scotland’s offshore renewables industry, which is putting jobs and investment at risk.

“Over 11,000 people in Scotland are employed in renewables, which only highlights the extent of the risk to Scotland’s economy from Westminster’s attitude.

“The fact that the UK Government continues to direct its support at nuclear power is bewildering. Energy generated from Scottish renewables will continue to represent the most cost-effective way for the rest of the UK to meet its renewables ambitions and will be crucial in keeping the lights on across the UK in the years ahead.”

  • Meanwhile, SSE is to replace its Management Board with a smaller executive committee responsible for implementing agreed strategy and policy and for the operational management of all of SSE’s businesses. The executive committee members are: Alistair Phillips-Davies (Chief Executive); Gregor Alexander (Finance Director); Jim McPhillimy (Managing Director, Enterprise); Mark Mathieson (Managing Director, Networks); Will Morris (Managing Director, Retail) and Martin Pibworth (Managing Director, Wholesale).

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