Weekend press round-up: Drive to lead world in renewables has been breath of fresh air

In our latest review of sector coverage across the national newspapers, there are interviews with Alistair-Phillips Davies and Hayden Wood, chief executives of SSE and Bulb respectively, as well as with former National Grid boss Steve Holliday. Meanwhile, the government is considering how to designate more rivers as bathing waters.

Drive to lead the world in renewable energy has been breath of fresh air

SSE’s first big foray into offshore wind came at the expense of the Phillips-Davies family Christmas. It was 2007 and Alistair Phillips-Davies, then an executive director of the energy group, was in Canada and by coincidence staying at the same resort as his colleague Gregor Alexander. “We both spent the entire Christmas and new year on a family ski holiday trying to buy Airtricity, because we knew that was a pivotal point: we weren’t as big in renewables as we needed to be,” Phillips-Davies says. “We spent about eight days locked in a room, from five-thirty, six o’clock in the morning till about two, three o’clock in the afternoon.”

The sacrifice paid off: SSE clinched the deal to buy the Irish renewables company and with it the rights to build its first offshore wind farm at Greater Gabbard, off Suffolk, then due to be the world’s largest.

Fast forward 13 years and renewables are at the heart of the FTSE 100 group, which also owns power networks and gas plants. Phillips-Davies, SSE chief executive, and Alexander, now its finance director, are once more building what will be the world’s largest offshore wind farm but on an altogether different scale. Greater Gabbard used 3.6 megawatt turbines, each standing 130m tall, about 12 miles offshore. SSE’s latest project at Dogger Bank, more than 80 miles off the Yorkshire coast, will use 13 and 14 megawatt turbines up to 260m tall, so powerful that a single turbine spin can power a home for two days. The project should generate enough electricity for six million homes.

“We’re the UK’s pre-eminent green company,” Phillips-Davies says. “We’re competing on a world stage. Who would have thought a UK company was building more offshore wind than anybody on the planet at the moment?”

SSE’s ambitions do not stop there. It aims to treble its renewable output by 2030 and is considering expansion beyond the UK and Ireland with moves into offshore wind in Denmark, Spain and Portugal. Such plans would have been unimaginable when Phillips-Davies, 53, joined the company almost a quarter of a century ago after a stint in banking: “Renewables in 1997 was a twinkle in people’s eyes.” By the time he became chief executive in 2013, SSE had wide-ranging interests that included being one of the “Big Six” household suppliers as well as operating North Sea gas fields and coal plants.

One of his boldest moves has been selling the household supply arm, extricating SSE from “the trials and tribulations of the retail market” and the accompanying political and media circus that he never appeared to enjoy. A planned spin-off and merger with its rival Npower collapsed in 2018 and SSE eventually sold the division last year to Ovo, run by the entrepreneur Stephen Fitzpatrick, although with Ovo operating the business under SSE’s name, Phillips-Davies is not entirely free of it just yet. “I look forward to when Mr Fitzpatrick rebrands the business but he’s got the right to use the name for three years,” he says. “In the meantime, my Saturday morning breakfast is normally interrupted by five or six emails from customers who’ve got some issue or other.”

The sale was part of a streamlining to focus on SSE’s core businesses of electricity networks and renewables. Of the £7.5 billion it is investing in the five years to 2025, about 90 per cent will be in those divisions.

The rest of the interview (subscription required) can be read here

The Times

Bulb Energy tops FT 1000 ranking with focus on renewables

While working as a management consultant at Bain, Hayden Wood was sent to one of Britain’s top six energy suppliers. What he witnessed was “quite a shock”.

“I would come back from a day at work and we would be chatting in the pub and I’d say: ‘You wouldn’t believe what I am seeing . . . some of these software packages are from the early 90s’,” recalls Wood. “I just thought the energy companies could be investing in innovation and new technology and creating better experiences for their customers.”

So he co-founded Bulb Energy, a UK energy supplier, in 2015. It now tops the latest FT-Statista ranking of Europe’s 1,000 fastest-growing companies, with 2019 revenues of £1.7bn and a 2016-19 compound annual growth rate of 1,159 per cent (Statista calculates revenues according to calendar year; Bulb’s year end is March 31).

Competition in energy supply soared in the decade following reforms that made it easier to enter the market: the number of suppliers boomed from just 12 in 2010 to peak at 70 in 2018. A cap on energy bills for 11m households, introduced in 2019 to keep a lid on what the government saw as “runaway” prices, then heaped pressure on the market.

Bulb has been able to use its lower overheads to undercut incumbents, luring customers with claims of simpler pricing structures and 100 per cent renewable electricity. Last year, it expanded internationally, into France, Spain and Texas.

Since its foundation it has expanded to around 1.7m customers. That makes Bulb the sixth-biggest supplier in Britain, with nearly 6 per cent market share, according to data from the energy regulator Ofgem.

But such rapid growth has raised eyebrows in a sector where doubts over competitors’ low prices and the sustainability of their business models are common. Many new entrants and some legacy suppliers are lossmaking, Bulb included.

In addition, the UK government has said it will review how 100 per cent-renewable electricity deals are marketed following concerns from some consumer groups and suppliers about transparency.

Elchin Mammadov, senior utilities analyst at Bloomberg Intelligence, says many of the new, fast-growing energy companies are “are akin to ride-hailing and food delivery companies . . . they are OK with making losses as long as they keep rapidly growing their market share.”

But he adds: “Once the phase of rapid growth ends, many suppliers will have to shift focus to delivering profits. Many could struggle to do so.”

The rest of the article (subscription required) can be viewed here

The Financial Times

Rivers for bathing will monitored year round as winter wild swimming has become so popular

Rivers, lakes and the sea will be monitored year-round because of a boom in cold-water winter swimming, Environment Minister Rebecca Pow has announced.

At the moment, just one river, the Wharfe in Ilkley, Yorkshire, has been designated as an official bathing water. However, the government plans to expand this across the country in coming years.

Wild swimmers have long complained about the quality of water in Britain’s polluted rivers, as water companies are currently allowed to pump sewage into them, and there are additional problems with litter and agricultural run-off.

There was also widespread outcry from swimmers and environmentalists when it was revealed last year that no river in England is safe from chemical pollution.

The report also found that England’s water quality has plateaued, with just 14 per cent of our rivers marked as ecologically ‘Good’.

As part of a set of commitments announced on World Water Day, the minister vowed that Britain’s waters will be made safer for swimming.

Ms Pow told The Telegraph: “In this country we are lucky to take safe drinking water for granted, but climate change and a growing population mean our water environment is under increasing pressure. I am personally committed to driving up the quality of our lakes, chalk streams, rivers and seas for the public to enjoy.

“Those who live in or visit Ilkley in Yorkshire to swim in its beautiful river will now benefit from its new bathing water status which means that the same regular regime of monitoring of the water quality will operate as is carried out for bathing areas on the coast.

“And in a new move our designated  bathing waters will be monitored year round as opposed to only in a window over the summer.”

The successful designation of the Wharfe in December has lead ministers to consider designating more rivers, especially those which are popular with local swimmers.

Designation means there will be regular monitoring to check for bacteria levels, helping to inform swimmers of the water quality. The Wharfe becoming a bathing water also prompted local water company Yorkshire Water to confirm a new partnership with local farmers, the local authority and others to help drive up water quality standards.

Daily Telegraph

Britain down to its last coal power station

Britain will have only one power station still burning coal by the end of next year under plans by EDF to close its West Burton A plant.

The French energy giant is expected to confirm this week that it will shut the Nottinghamshire power station by September 2022 at the latest after more than half a century of operations.

Unions have been informed before a formal announcement to the plant’s 170 staff whose jobs will now be at risk.

The decision will leave Uniper’s Ratcliffe-on-Soar plant, also in Nottinghamshire, as the only power station still burning the polluting fuel before a government deadline to phase out unabated coal usage by October 2024.

The phasing out of coal power has been one of Britain’s success stories in decarbonisation that ministers are keen to trumpet as they push for global commitments at this year’s COP26 climate conference in Glasgow to cease building coal plants.

The Times

The former oilman who sees Extinction Rebellion as a force for good

Extinction Rebellion has found itself an unlikely sympathetic ear in the form of an ex-oilman. Steve Holliday, the former boss of National Grid and now chairman of Cityfibre, has spent the better part of his career grappling with an issue Extinction Rebellion wants to put front and centre of politics: how to cut out carbon while keeping the lights on.

“I was on stage at a conference with someone from Extinction Rebellion,” he says. “My final remark was: I think we agree on about 80pc of everything we talked about.

“They’ve done a lot of good. Some of their methods I would not applaud, but if you look at some of the fundamental things they want to change, I concur with an awful lot of it.”

It seems like an unusual position from a man who spent more than 20 years in the oil and gas industry, and 15 in utilities.

It is roughly five years since Holliday stepped back from the top job at FTSE 100 stalwart National Grid. In 2019, he took up the role of non-executive chairman at Cityfibre, the broadband infrastructure challenger to Openreach.

The son of a Royal Navy engineer, Holliday originally studied mining. On graduating, he started work at oil major Exxon, ultimately running its refinery in Fawley by the age of 30. He then went on to join British Borneo, the oil and gas exploration company.

On joining National Grid, the former state monopoly, in 2001, his friends in the world of oil exploration bemoaned the “boring move”. “My goodness, it wasn’t,” says Devon-born Holliday. “I honestly never had a dull day in my years at National Grid.”

Holliday led the utilities firm through a transformational patch that saw it aggressively expand into the US while preparing for renewable energy as warnings around climate change grew in their urgency.

National Grid had to lay the groundwork for a shift to renewable energy. “At first, I can still recall we concluded in a very big report that once we got to 20pc renewables we were doomed and stability would be gone,” he says. “But here we are today, we have up to 60pc some days.”

When Holliday took up the top job at National Grid, just 5.5pc of electricity was generated by renewables. Last year, the UK set a record of nearly 60pc in August.

The rest of the interview (subscription required) can be read here 

Daily Telegraph

Lib Dems call for creation of ‘green sovereign wealth fund’ from renewables windfall

The billions of pounds being raised by green energy auctions should be used to set up a sovereign wealth fund and invested across the UK, Ed Davey will say on Monday.

In his speech to the Liberal Democrat spring conference the party leader will attempt to reignite his party’s fortunes with a series of eye-catching policy ideas.

Pointing to the £9bn raised from a recent seabed licence auction last month, Sir Ed will argue the money should be ploughed into green projects to get Britain ready for net zero greenhouse gas emissions.

He says the plans would be used to create manufacturing jobs and fund a ten-year programme to insulate every home, cutting energy bills and usage.

“Just last month, an auction for the right to build windfarms off the coast of England and Wales attracted bids far, far higher than anyone expected – raising £9bn, with more to come,” he will tell his party at the gathering, which is being held online this year because of Covid-19.

“This green wealth doesn’t belong to Rishi Sunak, or the Tories. It belongs to the British people. So I say: let’s invest it in a sovereign green wealth fund.

“Let’s invest the windfall from wind power into more climate action. To build new infrastructure and attract more private investment. To grow our green wealth even further, and create thousands of manufacturing jobs here in the UK.

“By investing in the green technologies and industries of the future – tidal power, hydrogen, green flight – Britain can not only recover but become the world’s first green powerhouse.

“And with our new green wealth fund, we can also invest in an emergency ten-year programme to insulate every single home.

“Lower heating bills for everyone – and an end to fuel poverty. Warmer homes for everyone – and green jobs in every village, town and city across the UK.”

Sir Ed will accuse the Tories of instead slipping “the cash quietly into the chancellor wallet”, emulating Margaret Thatcher’s approach to North Sea oil.

The Independent

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.