The race to decarbonise is on - but to reach the finish line in good time, Britain's private and public sectors must run together. A significant ramp-up in investment needs to be unlocked if the government is to achieve its 2030 clean power target.
We all still painfully remember the energy crisis and the inflation caused, by the UK's reliance on imported fuels. To avoid repeating this, we must transform our energy system, shifting to homegrown, renewable energy sources that also help address the climate crisis.
As we all need to take steps to tackle the climate emergency, SSE is taking forward an ambitious investment plan that will see at least £20 billion invested in energy infrastructure this decade.
This includes the recently completed 103-turbine Viking Energy onshore wind farm in Shetland - set to be the UK's most productive and capable of powering 500,000 homes - which began transmitting electricity to mainland Britain via a new 260km high-voltage subsea cable in August. The £1 billion investment in both projects attests to the UK's clean energy ambitions and its abundant wind resources.
In the UK's recent annual renewables auction, the Government awarded 4.9GW of offshore wind contracts. A big improvement on 2023's zero-bid auction, but half of the new capacity needed to decarbonise electricity generation by 2035, as the Government intends.
Meeting this target will be a staggering undertaking, involving £280-£400 billion of investment in clean generation alongside wholesale changes to how the grid works. The UK's winds generally blow hardest in remote places, meaning the transmission network will need upgrading to ensure it can transport the much-needed energy from where it is generated, to where it is needed.
Flexible backup power solutions
As wind and sunshine are intermittent, we also need flexible power - such as hydrogen, hydroelectric storage and natural gas plants with carbon capture and storage (CCS).
SSE has the capital and appetite to build the infrastructure needed, but cannot do it alone. Decarbonisation requires a partnership between the public and private sectors, with the Government playing a leading role.
Energy supply chain and ensuring further investment
Certainty will make it more attractive for investors.
This means a national strategic plan that gives clarity about what technologies will be used and in which locations. It also means ensuring healthy enough returns to attract capital through support mechanisms like Contracts for Difference, where the state protects projects from volatile energy prices.
When the government provides businesses with certainty, it speeds up not only direct investment but also the development of the supply chains needed for a long-term transition. For example, Japanese firm Sumitomo's £350 million subsea cable factory at the Port of Nigg is being built to connect renewable energy projects to the electricity transmission grid. The factory will benefit the UK for years to come, but part of that was giving them a clear line of sight on the market.
A network for net zero - electricity transmission highways
So far, the state's record has been mixed, affecting where companies like SSE allocate their capital. Over the past 12 months, SSE has committed to investing more in transmission networks where the government had a target and the regulator turned that into clear plans. The government offered money upfront to do design work, allowed SSE to spend up to 20 per cent of the final cost putting in orders to secure the supply chain, and gave SSE visibility about their spending plans over six or seven years. SSEN Transmission, as part of SSE, is investing over £20bn to upgrade the network infrastructure across the north of Scotland between now and 2030 as the region plays a leading role in the clean energy transition.
Planning and consenting for renewable energy needs reform
Targets and plans have been less clear around renewables and flexible energy, comparatively slowing the pace of SSE's investments in those areas. SSE have the ambition and funds to progress with infrastructure development to help decarbonise the UK, but it's important to show discipline and move in lockstep with the government and regulators.
The UK urgently needs to reform planning and consenting. The average gestation period of an offshore wind farm - from feasibility scoping to going live - is 12 years. The government's target is to quadruple installed capacity by 2030. That's in just over five years. If it takes 12 years to build a wind farm, that's not going to happen.
Berwick Bank, potentially the world's largest offshore wind farm, is an example of the delay in planning and consenting, where the planning consent application has been awaiting a decision for nearly two years. Fixed timetables for planning and consenting could help speed up this process.
Homegrown energy, jobs, and a Just Transition
The National Energy Systems Operator is developing a Clean Power Plan for 2030, which SSE hopes will embody pro-investment policies and a spirit of partnership between the public and private sectors. Cheap, reliable, clean power would supercharge British industry - with Scotland having huge potential to leverage its abundant renewable resources and its legacy in offshore technologies - while a coastal renewables supply chain could support domestic and foreign decarbonisation for decades to come.
There are huge benefits from the UK taking control of our energy, exporting the skills we have and bringing industries here that need that energy.
As well as having a positive impact on the economy, the UK will also benefit from an increase in the number of jobs created. Over the past two and a half years, SSE alone increased its workforce from 11,000 to 14,500, and each job it creates generates four more in its supply chain. There's an opportunity to create thousands of well-paid jobs, often in places that can sometimes get forgotten.
This is a once-in-a-generation opportunity to generate good sustainable growth across the UK and show the world just what can be achieved with drive and determination.
This article was first published in The Times and Sunday Times in partnership with SSE.
