ScottishPower chief says lack of clarity threatens UK’s energy supply

The Chief Corporate Officer of Iberdrola-owned ScottishPower, Keith Anderson, has warned that the UK government is overcomplicating energy policy and that it is threatening the electricity margin.

He said that suppliers want to build new gas power plants but are being forced to wait due to a lack of clarity.

Keith Anderson of ScottishPower
Speaking at Marketforce’s ‘The Future of Utilities’ event in London on Tuesday, Mr Anderson said the country’s electricity margin could be reduced to as much as 3 per cent if the government continued to fail to clarify policy for potential energy investors.

“This is a real issue for our energy supply. Strip out the complexity- the volatility you want to avoid you will create, if you make it too complex.

Make it clear and transparent and secure or it will slow down investment. If we delay capacity mechanism by six months the lights go out ” that should be the focus.”

The ScottishPower chief told the audience at the event in central London that the government approach was what he saw as “buckaroo politics”, due to the coalition’s tendency to pile policies on top of each other, but which could “go pop at any moment.”

He added that his company had begun dismantling its coal power plant fleet, including Cokenzie Power Station, closed last week, and said, “they are not being mothballed; they won’t be back.”

He emphasised that there was an obsession with nuclear power, and warned that by the time such plants are operational, the situation would be critical unless the government made policy and made it as simple as possible.

We’ve got three consented sites for three new gas plants in the UK and we’re not doing anything with them. There is absolutely no economic signal or incentive to invest in the future of those sites at this time.”

“We’re going to sit and wait and what happens if we do that? That’s the problem the UK has got. The plants shut, the generation margin gets squeezed. It will happen; it’s happening today. The de-rated capacity margin could be below 3 per cent by 2015.”

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