British power generator and network operator SSE Plc on Wednesday set out plans to invest up to 40 billion pounds ($50.48 billion) this decade on clean energy projects and called on the government to ensure the country remains competitive.
Britain is aiming to ramp up its renewable power capacity as it seeks to meet a goal of net zero emissions by 2050 and to become more independent of imported energy following the supply disruption caused by Russia’s invasion of Ukraine.
“What we want to see is an acceleration of pace and to make sure the UK can compete with places like the US with their IRA act,” Alistair Phillips-Davies, SSE Chief Executive, said in a call with journalists.
U.S. President Joe Biden's administration last year signed into law the Inflation Reduction Act, which delivers a support package for clean technology worth $370 billion.
Phillips-Davies said he did not rule out SSE investing in the United States in the future but said he expects Europe to remain the core market. Britain has a contracts-for-difference (CfD) scheme to help spur investment in new renewable projects, offering a guaranteed minimum price for the electricity they produce.
Prices under the system have fallen significantly over the past few years, particularly for offshore wind projects, but Phillips-Davies said policy makers will need to get used to an end to continually record low prices. “Policy makers, I think, need to be resetting where (prices) are particularly given all the supply chain inflation,” he said.
Britain’s latest CfD auction round has set an auction price of 45 pounds per megawatt hour for offshore wind which many developers have said could be too low to bring forward projects. SSE’s investment plans came as the company posted adjusted pre-tax profit of 2.18 billion pounds ($2.75 billion) for the year ended March 31, up from 1.16 billion pounds reported a year earlier on the back of high energy prices and strong renewable power generation.
SSE said it had also allocated 43 million pounds for the final quarter of the financial year for Britain’s Energy Generator’s Levy, a windfall tax placed on power companies from January in the wake of record high energy prices last year.
($1 = 0.7923 pounds)
(Reuters - Reporting by Susanna Twidale in London, additional reporting by Aby Jose Koilparambil in Bengaluru; editing by Louise Heavens, Jason Neely and Kim Coghill)