UK capacity auctions should remain central to security, says SSE

SSE has urged the new UK government to maintain its capacity auction regime, saying it should remain a “principal mechanism” in securing long-term energy supply at an affordable cost to consumers.

The company’s chief executive Alistair Phillips-Davies outlined his key priorities for the new government saying they should include a focus on unlocking investment in electricity generating capacity, keeping bills as low as possible and the implications of an EU referendum on the integration of European energy markets.

“I would argue that the manifesto commitment of a ‘long-term plan’ should focus on maintaining capacity auctions as the principal mechanism to ensure the UK government fulfils its responsibility to ensure secure energy supplies at an affordable cost to consumers.

“Any changes to this mechanism must be fully considered as they will have notable implications for the future of existing and new plant,” he said.

Through the most recent capacity auction SSE secured agreements to provide almost 4.5GW of de-rated electricity generation capacity from October 2018 to September 2019 at a price of £19.40/kW.

Phillips-Davies said the auctions provide the best chance of keeping costs to consumers as low as possible, but added that government should also shift its focus to policies which contribute to rising bills as well as energy efficiency policies which should be “ambitious and targeted at vulnerable households”.

Finally Phillips-Davies says the upcoming EU referendum will also impact efforts to provide stability and certainty of investment in UK energy, adding that he has “no view” yet.

“However I am clear that the progressive integration of the GB energy market with other countries in Europe is in the best interests of efforts to deliver clean, affordable and secure supplies of energy,” he said.

Phillips-Davies said SSE looks forward to working with the new team at the Department of Energy and Climate Change.