SSE 'reviewing' offshore wind plans

SSE is undertaking a “wide-ranging” review of its offshore wind portfolio, after its Galloper and Beatrice projects were excluded by government from a recent list of projects likely to receive early Contracts for Difference (CfD).

In a trading statement published today, SSE says it was “disappointed” that neither Galloper nor Beatrice was included in the list of “provisionally affordable” projects revealed by the Department of Energy and Climate Change last month.

SSE – which also owns a stake in the Round 3 Dogger Bank project – aims to conclude its offshore wind review by March.

Having previously nominated seven offshore wind projects as likely candidates for an early CfD – including SSE and Repsol’s 1GW Beatrice – the government in December shrank that list to just four, three of them owned by Dong.

Even before that, SSE had warned that that the political contentiousness of the UK energy debate would make it difficult to take a final investment decision at any of its offshore wind projects before the next general election, in 2015.

The likely exclusion of Galloper and Beatrice from an early CfD represents just “one example of why there is greater uncertainty about the shape and extent of SSE’s capital and investment programme in the five years from 2015”, the utility warned today.

SSE, which like all UK utilities has taken heavy political fire in recent months due to rising power prices across Britain, says it is likely to invest less in UK energy infrastructure on an annual basis from 2015 than it has done since 2010 – an ominous signal to the offshore wind sector.

The utility noted that, taken as a whole, “the prospects for investment in generation assets in Great Britain are … not encouraging”.

While acknowledging that some key decisions related to the Electricity Market Reform have been taken, including a suite of announcements last month, SSE also pointed out that many critical details have yet to be confirmed.