U.K. Labour Price Cap Risks Offshore Wind Investment, SSE Says
A U.K. opposition Labour Party plan to cap energy bills if it wins the 2015 election risks delaying investments in offshore wind before the vote, SSE Plc (SSE) said.
“Although we are continuing to develop offshore wind projects, it’s now also becoming increasingly hard to see how a final decision on investment in new offshore wind capacity could be made before the 2015 election,” spokesman Justyn Smith said.
A Labour government would cap British gas and electricity prices until the start of 2017 should it triumph in the 2015 poll, party leader Ed Miliband said on Sept. 24. SSE, which yesterday raised its consumer tariffs, already said in March it wouldn’t decide whether to build new gas plants until at least 2015 because of “ongoing uncertainty” over energy policy.
The Conservative-led government says a freeze jeopardizes investment, risking power cuts. Caroline Flint, Labour’s energy spokeswoman, said today investors needed long-term certainty on policy rather than short-term returns based on “overcharging.”
The U.K. is seeking to lure about 110 billion pounds ($175 billion) of investment, funded with levies on consumer bills, to replace power plants that are retiring and reduce greenhouse gas emissions. SSE has stakes in three operating offshore wind farms and is involved in developing five more of the projects.
The Perth, Scotland-based company yesterday said it would raise household energy prices an average 8.2 percent, prompting a backlash from consumer groups such as the uSwitch comparison service who say costs are forcing customers to cut heating.
The government’s green energy levies were responsible for a third of the increase and pressing ahead with such policies will lead to more price gains, SSE Chief Executive Officer Alistair Phillips-Davies told the Telegraph newspaper in an interview.
“We need to think about what people really want to pay for,” Phillips-Davies told the London-based newspaper. “Maybe it’s time to retreat from decarbonization and focus more on the cost of living. I think we have to have a debate about it.”
Environmental campaigners argue that reducing reliance on fossil fuels with volatile prices will mean cost cuts in future.
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