Utility Week

UTILITY WEEK | 30TH NOVEMBER - 6TH DECEMBER 2018 | 13 Policy & Regulation Renewables is key to our low-carbon vision "The IPCC's recent global warming report came with a stark warning – we must accelerate the global response to climate change." Chief executive's view Alistair Phillips-Davies, SSE T he world's leading climate scientists spelled out that temperature rises must be kept under 1.5C if we are to try and thwart the damaging effects of climate change. And it's clear that working towards a low-carbon economy is a necessity, not an ambition. SSE has been a leading developer and operator of clean energy technology for over a decade now. Our announcement in November that we will create SSE Renewables – bringing together the development, operation and ownership of all SSE's onshore wind, offshore wind and hydro assets in the UK and Ireland – is an important step forward in playing our part in decarbonising the electricity system. Creating SSE Renewables is also a vote of confidence in the long-term prospects of the green energy sector. SSE Renewables will start in a strong position, hav- ing the largest installed capacity for generating energy from renewable sources of any generator across the UK and Ireland. But we want to build on that, and this new, single entity will help us to do that in three clear ways. First, it conveys a keenness to invest. Creating SSE Renewables is explicitly designed to enhance our ability to raise finance from diverse sources, building on SSE's position as the largest issuer of green bonds from the UK corporate sector. We want to invest more in renewable energy, and the new company will help us do that. Second, it signals an appetite to compete. The costs of technologies like solar and wind have already fallen rapidly over recent years, approaching the cost of conventional generating technologies. SSE Renewables will have an unerring focus on efficiency and innovation, ensuring that renewable energy represents value for money for the cus- tomers who ultimately pay for it. Third, it shows a commit- ment to skills and quality jobs. SSE Renewables will be led by an experienced man- agement team with a strong track record in developing highly skilled jobs in some of the most rural parts of the UK and Ireland. It will have the enterprise and entre- preneurial flair to build on this in the future. It's always people who make the difference. Over the past decade, the UK and Ireland have been very positive places to invest in renewable energy, and both countries can be pleased with the progress they have made towards decarbonisation. To build on this, policymakers should have three main priorities. They need to take an end-to-end look at the planning system – onshore and marine – to make sure the cumu- lative impact of every rule, regulation and guideline is to facilitate responsible renewable energy development, not stall it. An effective planning system that safeguards all stakeholders' interests is key – but so is one that can be navigated in a clear, transparent and timely way. The second is to regard the offshore wind sector as of strategic significance to the economies of the UK and Ire- land and to regard recent successes in terms of installed capacity and lower costs as just the start. Confidence across the sector is good and the potential is enormous. But it needs to be nurtured with a sustained, long-term, practical commitment to a policy framework – regular contracts for difference (CfD) auctions in the case of the UK. Last week's CfD budget announcement was an important milestone for the industry. The third is to look again at onshore wind. Inap- propriate development of wind farms does nobody any good, but nor does creating barriers to an indigenous source of large amounts of clean, cheap energy. I have no doubt that the interests of customers, communities and companies can be reconciled in a way that makes future onshore wind farm development feasible. So SSE Renewables is an important step forward in a sector that's brimming with potential in countries that have done so much, and can do so much more, to bring renewables into the energy mainstream. It's good news for SSE, and it's good news for the fight against climate change too. Creating SSE Renewables is a vote of confidence in the long-term prospects of the green energy sector.

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