Swapping ROs for CfDs is ‘massive risk’, says Anderson

Straitjacketing the myriad renewables generators into a single contractual cost is a “mission impossible” that is “doomed to failure”, Keith Anderson has warned.

Speaking at a fringe event at the Labour party conference, the Scottish Power chief executive said transferring older and more expensive Renewables Obligation (RO) projects onto Contracts for Difference (CfD) was a potential “short term fix” for the wholesale market.

However, these projects spanned a very wide and “phenomenally complicated” range in terms of the size and length of time some RO contracts are due to run, he said: “Trying to fix one price that covers all of that is mission impossible and is doomed to failure. I just wouldn’t do it. I think it’s a massive, massive risk. “

Anderson told the meeting, which was organised by the Social Market Foundation thinktank, that going down this route would open up politicians and the industry “fairly easily” to accusations of mistakes that result in consumers overpaying.

He also said that while supporting the government’s recent bail out for billpayers in principle, there is a case for encouraging wealthier customers to save energy by exposing them to higher costs.

“There is a group of people in society who can afford to pay the true cost of energy and it is important people understand the true cost of energy.”

Scottish Power had seen an uptick in inquiries for measures like solar panels, batteries and energy efficiency during the run up to the announcement of the government’s bills support package earlier this month, Anderson said: “The better off in society will tackle the issue themselves without any help or encouragement because they see the commercial sense of doing so.”

He also expressed disappointment that energy efficiency has fallen down the agenda again over the past year.

“It has almost fallen off the agenda and we need to get it back at the top of the agenda.”

At the same meeting, WWF UK chief executive Tanya Steele expressed concern about a series of “backward steps” on climate change policy since last year’s COP 26 global summit in Glasgow.

“This isn’t the time for backward steps. We’ve seen a series of them recently and it feels like a world away from many of the commitments being made at COP26.”