Utility Week

UTILITY Week 26th June 2015

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UTILITY WEEK | 26TH JUNE - 2ND JULY 2015 | 7 Interview I t's just 24 hours since the newly instated Conservative government delivered a body blow to the renewables industry, but Keith Anderson, boss of Scottish Power Renewables, is managing to keep his cool. "There will still be some collateral damage," he finally relents, but stops short of slamming the govern- ment's decision to lock onshore wind out of its Renewa- bles Obligation (RO) subsidy scheme from April 2016, with a possible block on the newer contracts for differ- ence (CfD) regime too. Anderson is Scottish Power's chief corporate officer and runs parent company Iberdrola's UK interests. He's speaking today with his other hat on, as chief executive of Scottish Power Renewables. But as the man responsi- ble for leading the group's £15 billion renewables invest- ment plan to 2020, you could forgive Anderson for a more vitriolic reaction to the policy U-turn that seems more based on Tory nimbyism than economics. He is still clear that the onshore wind sector has a role to play in the delivery of a decarbonised energy system and in reducing the costs of this process through innovation and competition. He is also clear that the RO cut could damage investor confidence. But Anderson is already looking forward, focused almost entirely on a conciliatory path towards real solu- tions that both government and industry can get behind. His tone is matter-of-fact, his rhetoric level-headed. But it's still a far cry from the laid-back confidence he exuded when Utility Week first met Anderson in Scottish Power's Glasgow office just over a month ago. It was a meeting in very different circumstances. Then, the UK was still a week away from the general elec- tion and the outcome seemed far from certain. Although the Conservative manifesto pledge threatened a "halt" to the spread of onshore wind, Anderson was unfazed. "We'll cross that bridge if we come to it," he smiled, clearly more interested in discussing the company's most recent financial success. Anderson has held the reigns of Scottish Power's renewables business as chief execu- tive since July last year and held his group role since July 2011. In that time, onshore wind, and now offshore projects, have helped the company lead the way in UK renewables. Iberdrola is investing £1.3 billion in the UK this year and another £1.3 billion next year, much of which will be in renewable energy. And for good reason. Iberdrola had just reported that Q1 earnings in the UK business rose 61 per cent – to €149.1 million – compared with the first quarter of last year. The key to this success was its increased renewable energy output, which grew by 15 per cent to 1.25GWh in large part due to the "standout performance" of its West of Duddon Sands offshore wind project. Anderson pointed out that the offshore windfarm exceeded its expected output, generating electricity at 55.8 per cent of its theoretical maximum. The load factor of the onshore wind portfolio is typically 32.8 per cent. "This shows the potential of offshore wind now that we are able to use larger turbines and better technology," Anderson said. Offshore wind output is just one of a string of suc- cesses Anderson was happy to discuss. Cost reduction was another key theme: the company's 714MW East Anglia One offshore wind project has already cut costs from £140-150/MWh just last year to agree a support price of £119/MWh. It's a cost trajectory that is familiar to those in the onshore wind industry. The technology could reach grid parity by the end of the decade. Support for onshore wind was one of four key items on the big six company's pre-election wishlist. But unsurprisingly the ongoing Competition and Markets Authority (CMA) investigation featured too. Anderson

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