Latest news with #BerwickBank
Yahoo
22-05-2025
- Business
- Yahoo
SSE cuts spending on energy businesses
UK utility SSE will reduce its planned investment in new renewables projects due to the changing macroeconomic environment and wider delays to planning processes. The company noted that it would be unlikely to meet its own renewable energy generation goal of 50 terawatt hours by 2030 after reducing its five-year investment expectations by £3bn to £17.5bn. The investment cuts will include investing £1.5bn less on the development of renewable energy initiatives, a £1bn reduction on thermal and other projects and a further £0.5bn cut from its transmission projects. 90% of this investment plan is currently committed, but the remainder is subject to delay or potentially even cancellation if the right investment conditions are not met. Projects that face delays include Berwick Bank on Scotland's east coast, the Coire Glas pumped hydro storage project, also in Scotland, and the Arklow Bank wind farm in Ireland. SSE chief executive Alistair Phillips-Davies stated: 'Our plans have evolved over time, using the optionality we have across a business mix that allows us to react to external factors and pivot to where we see value. As transmission investment opportunities emerged, we steadily upweighted our capital allocation in that area. 'Now, in response to the impact on growth rates from factors like a changing macro environment and delays to policy and planning, we are reducing spending on our energy businesses and evolving our internal structures to sharpen our focus on controllable costs and efficiencies.' SSE's decision follows Danish energy provider Ørsted's discontinuation of the 2.4GW Hornsea offshore wind farm, citing cost pressures. In early May 2025, energy company Drax announced that it would hold a major expansion of its Scottish hydro-power plant over increased project costs. In the same month, Scottish and Southern Electricity Networks (SSEN) announced a £200m ($258m) investment to upgrade the electricity distribution network in Oxfordshire, UK. "SSE cuts spending on energy businesses" was originally created and published by Power Technology, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site. Sign in to access your portfolio
Yahoo
21-05-2025
- Business
- Yahoo
Green energy giant slashes investment by £3bn in blow to Miliband
Energy giant SSE has slashed its green energy spending plans by £3bn and warned it will not hit its 2030 net zero goals. The power company told shareholders it was 'unlikely' to meet targets for renewable output amid the 'changing macroeconomic environment and wider delays to planning processes'. SSE, one of the operators of Britain's high-voltage power grid, said it would reduce spending on renewables by £3bn over the next five years, blaming planning and policy delays by the UK and Scottish governments. Alistair Phillips-Davies, the SSE chief executive, said the company would cut its investment expectations to around £17.5bn 'reflecting financial discipline ... and consent phasing in networks'. 'Consent phasing' is where separate planning permissions must be granted for each stage of construction. It follows last month's announcement that it would cut 300 jobs from its renewables business. The bulk of the remaining investment cash – about 60pc – will be invested in SSE's transmission and distribution networks with only about 30pc going to new renewables such as offshore wind. Mr Phillips-Davies said SSE's portfolio had to be built to 'withstand risk and uncertainty'. He said: 'What we see on planning is that historically, policies haven't been conducive to getting many planning consents approved. 'Our Berwick Bank offshore wind project has been on [Scottish] ministers' desks for about three years now. In transmission our Argyll-Skye link project is well over two and a half years.' He said SSE was continuing work on its massive Dogger Bank wind farm 80 miles off England's north-east coast, with the first phase due to become operational this year, eventually powering 6m homes on a windy day. However, Berwick Bank, which is potentially even larger, has been awaiting Scottish ministerial approval for so long that it missed out on the opportunity to take part in last year's government funding round. Mr Phillips-Davies suggested that Ed Miliband will need to also raise subsidy rates for future offshore wind projects or risk energy companies abandoning vital projects. That warning came as the Energy Secretary aims to commission thousands more offshore wind turbines in another funding round this autumn. The subsidy system, funded by levies on consumer bills, offers developers a guaranteed minimum price for the power they produce and has been getting steadily more expensive. It follows last month's announcement by Danish developer Orsted that it had abandoned plans to develop Hornsea 4, another giant wind farm, even though it had been guaranteed a minimum price of £85 per megawatt hour – among the highest rates ever offered. Mr Phillips-Davies said Orsted's decision suggested that Mr Miliband might have to offer even more to future developments. He said: 'This might tell you that companies in a similar position [to Orsted] might seek a higher price.' SSE reported £2.4bn in adjusted operating profit in the year to the end of March. Profit after tax was £1.8bn. Its distribution and transmission divisions are among the most profitable, generating £1bn in adjusted profits – up from £691m last year. The distribution division runs the networks linking homes and businesses to the national grid across central southern England and the north of Scotland. Its transmission division runs the high voltage grid in northern Scotland. The profits for SSE Renewables division also surged by 25pc to £1bn, up from £833m last year. Mr Phillips-Davies said he hoped planning processes would accelerate. 'What's been encouraging is that the administration in Scotland has committed to 52-week turnarounds on planning, and indeed, the new Labour Government are putting in place a new Planning Bill and new planning regime, which we would hope will significantly accelerate applications.' He warned that a move to zonal pricing with prices set by local supply and demand, would risk introducing confusion and a new set of delays at an already-turbulent time for UK energy. 'Zonal pricing just represents a dislocation in the market, significantly increasing costs and jeopardizing 2030 delivery. It's a really bad idea.'
Telegraph
21-05-2025
- Business
- Telegraph
Green energy giant slashes investment by £3bn in blow to Miliband
Energy giant SSE has slashed its green energy spending plans by £3bn and warned it will not hit its 2030 net zero goals. The power company told shareholders it was 'unlikely' to meet targets for renewable output amid the 'changing macroeconomic environment and wider delays to planning processes'. SSE, one of the operators of Britain's high-voltage power grid, said it would reduce spending on renewables by £3bn over the next five years, blaming planning and policy delays by the UK and Scottish governments. Alistair Phillips-Davies, the SSE chief executive, said the company would cut its investment expectations to around £17.5bn 'reflecting financial discipline ... and consent phasing in networks'. 'Consent phasing' is where separate planning permissions must be granted for each stage of construction. It follows last month's announcement that it would cut 300 jobs from its renewables business. The bulk of the remaining investment cash – about 60pc – will be invested in SSE's transmission and distribution networks with only about 30pc going to new renewables such as offshore wind. Mr Phillips-Davies said SSE's portfolio had to be built to 'withstand risk and uncertainty'. He said: 'What we see on planning is that historically, policies haven't been conducive to getting many planning consents approved. 'Our Berwick Bank offshore wind project has been on [Scottish] ministers' desks for about three years now. In transmission our Argyll-Skye link project is well over two and a half years.' He said SSE was continuing work on its massive Dogger Bank wind farm 80 miles off England's north-east coast, with the first phase due to become operational this year, eventually powering 6m homes on a windy day. However, Berwick Bank, which is potentially even larger, has been awaiting Scottish ministerial approval for so long that it missed out on the opportunity to take part in last year's government funding round. Mr Phillips-Davies suggested that Ed Miliband will need to also raise subsidy rates for future offshore wind projects or risk energy companies abandoning vital projects. That warning came as the Energy Secretary aims to commission thousands more offshore wind turbines in another funding round this autumn. The subsidy system, funded by levies on consumer bills, offers developers a guaranteed minimum price for the power they produce and has been getting steadily more expensive. It follows last month's announcement by Danish developer Orsted that it had abandoned plans to develop Hornsea 4, another giant wind farm, even though it had been guaranteed a minimum price of £85 per megawatt hour – among the highest rates ever offered. Mr Phillips-Davies said Orsted's decision suggested that Mr Miliband might have to offer even more to future developments. He said: 'This might tell you that companies in a similar position [to Orsted] might seek a higher price.' SSE reported £2.4bn in adjusted operating profit in the year to the end of March. Profit after tax was £1.8bn. Its distribution and transmission divisions are among the most profitable, generating £1bn in adjusted profits – up from £691m last year. The distribution division runs the networks linking homes and businesses to the national grid across central southern England and the north of Scotland. Its transmission division runs the high voltage grid in northern Scotland. The profits for SSE Renewables division also surged by 25pc to £1bn, up from £833m last year. Mr Phillips-Davies said he hoped planning processes would accelerate. 'What's been encouraging is that the administration in Scotland has committed to 52-week turnarounds on planning, and indeed, the new Labour Government are putting in place a new Planning Bill and new planning regime, which we would hope will significantly accelerate applications.' He warned that a move to zonal pricing with prices set by local supply and demand, would risk introducing confusion and a new set of delays at an already-turbulent time for UK energy. 'Zonal pricing just represents a dislocation in the market, significantly increasing costs and jeopardizing 2030 delivery. It's a really bad idea.'
The Guardian
21-05-2025
- Business
- The Guardian
Blow to UK's 2030 clean energy targets as SSE cuts spending on renewables
One of the UK's biggest energy developers will cut its planned spending on new renewables projects in a blow to the government's 2030 clean power targets. SSE warned that it would be unlikely to meet its own renewable energy goals for the end of the decade after shrinking its five-year spending plans by £3bn to £17.5bn. The spending cuts will include investing £1.5bn less on developing renewable energy initiatives, including offshore windfarms and a hydropower project, with another £1.5bn cut from its planned spending on other energy and transmission projects. SSE's outgoing chief executive, Alistair Phillips-Davies, blamed 'delays to policy and planning' and 'a changing macro environment' for the spending cuts, which have cast fresh doubt on the government's clean power goals. Phillips-Davies said the company had faced delays to two Scottish renewable energy projects – the Coire Glas hydropower project in the Highlands, and the giant Berwick Bank offshore windfarm development, which was submitted to the Scottish government for approval in late 2022. Together these renewable energy projects would power the equivalent of approximately 9m households in the UK once operating. SSE has also faced delays to the second phase of its Arklow Bank offshore windfarm off the Irish coast. The government had aimed to double the UK's onshore wind power, triple its solar power, and quadruple the country's offshore wind capacity by 2030 as part of a plan to create a power system 95% free of fossil fuels. SSE had expected to help the government meet these goals by growing its renewable energy generation fivefold to 50 terrawatt hours (TWh) by 2030. Its renewable energy generation output climbed by 18% last year to reach 13.3TWh in March of this year. SSE's step back from renewable energy investment will enable the FTSE 100 energy group to focus on investing in high-voltage power cables and local electricity distribution grids, which deliver predictable, regulated returns. The company's overall adjusted profits slipped by 3% to £2.14bn for the year. Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Phillips-Davies used his final statement before he steps down from the role later this year to underline the company's commitment to developing new offshore windfarms in UK waters. He said the company would continue its pace of investment, which stands at £8m a day, and called for stable market conditions and low risk to support its ambitions. This includes scrapping proposals to replace Great Britain's electricity market with a series of zonal markets with prices set by local supply and demand, according to Phillips-Davies. 'While the market needs reform, it does not need zonal [pricing],' he said. 'We've seen a whole swathe of the industry – all the main developers – come out firmly against zonal. It adds a whole lot of uncertainty and tens of billions of pounds to the cost of getting to net zero by 2030. It also introduces – tragically – a potential postcode lottery on people's bills,' he said.
The Courier
06-05-2025
- Business
- The Courier
SSE redundancies the 'cliff edge' energy sector has warned about
Delays to projects like an offshore wind farm off the Fife coast are exposing a 'cliff-edge' in the country's energy industry as 150 SSE Renewables workers face losing their jobs. The Perth-based energy giant confirmed it has entered redundancy consultations with staff. And The Courier understands up to 150 jobs in renewables could be at risk, out of a total 300 thought to be under threat. Among the jobs reportedly at risk are critical support staff for control rooms and those working in maintenance. Meanwhile, Berwick Bank — a multi-billion pound off shore wind project planned off the Fife coast — has been in 'limbo' now for more than two years. Because of these delays, they missed out on the opportunity to take part in last year's government funding round in the contracts for difference as a result. Energy industry 'cliff edge' One industry expert warned the 'cliff edge' facing the sector is now 'appearing before our eyes'. True North advocates for the energy and off shore industries and is based in Aberdeen. Managing partner Fergus Mutch told The Courier there is a bottleneck in the supply chain, which is not helped by continued delays to projects like Berwick Bank. Berwick Bank has the potential to deliver up to 4.1 gigawatts capacity — enough to power up to six million homes. A graphic detailing where the Berwick Bank wind farm is planned. It would be four times the size of the UK's current biggest offshore energy site Seagreen, located 30km off the coast of Arbroath. Fergus said: 'Broadly speaking, the energy sector is in a challenging place, with both energy security and confidence. 'There's a bottleneck in the supply chain, especially in renewables. 'The cliff edge which the industry has been warning about is happening before our eyes. 'It is now 30 months since Berwick Bank plans were given to the Scottish Government, and we should not have projects of that scale sitting on a civil servant's desk for that length of time. 'And I've spoken with three or four supply chain companies who have just been in a holding pattern with the Berwick Bank development.' Unions try to halt compulsory redundancies Trade union Unison said it is in talks with SSE to avoid compulsory redundancies. Regional organiser John Mooney said: 'SSE made £2.5 billion in profits last year, in large part because of the hard-working staff. 'Unison is asking SSE managers how we got into the situation where redundancies are required. 'We will do everything we can to support staff and their families in this very stressful time. 'We are working with managers to try and prevent compulsory redundancies and ensure that remaining staff do not receive increased workloads as a result of these cuts.' A spokesperson for SSE said: 'After a period of sustained growth, we're undertaking an efficiency review to ensure we continue to operate in the most efficient and effective way possible into the future. 'We have informed colleagues that this will unfortunately lead to reduced headcount in some parts of our business. 'We understand this process will be difficult for our teams, and we'll be consulting trade unions and keeping colleagues informed throughout.' The Scottish Government told The Courier previously it could not comment on a live application and that 'more complex applications may take longer.'
