SSE warns investment policy risks UK energy shortages

POWER giant SSE yesterday warned that UK government policy was delaying vital investment and did not provide enough incentives for investors to fill a looming gap in generation capacity.

In strongly-worded comments accompanying a trading update, the firm said the risk of “imminent shortages” was not being addressed.

The Perth-based utility, one of the UK’s biggest investors in energy infrastructure, pointed to concerns raised by regulator Ofgem last month that there could be shortages in the middle of this decade as the UK has failed to build sufficient power stations to replace old fossil fuel plants.

SSE argued that it was vital the right balance is struck between keeping open existing generation plant and making the market economic for new plant.

It believes the government’s plans for capacity market auctions as part of the electricity market reforms (EMR) can ensure the lights stay on but attacked moves to delay their introduction until 2018-19.

The comments came as SSE updated on trading since April at its AGM in Perth. The number of electricity and gas customer accounts in markets in UK and Ireland dipped slightly to 9.46 million from 9.47 million.

Average electricity consumption by household customers was estimated to be 920kWh, compared with 940kWh with average consumption of gas unchanged on last year.

Chief executive Alistair Phillips-Davies – who replaced long-standing boss Ian Marchant – said the year had got off to an “encouraging start”.