This week’s big renewables story focuses on Scottish & Southern Energy and it’s announcement about a refocusing of its business.
The press have picked up on the message that domestic gas and electricity prices are to be frozen at current levels until 2016. However, what else is underlying that?
The SSE press release speaks of “streamlining and simplifying its business”. This includes “a strategic review of its offshore wind development portfolio” the outcome of which is a significant narrowing of operations. This narrowing does still involve spending billions of pounds on the Beatrice project.
However, when set alongside other news of retrenchment in other technologies – biomass, wave and tidal – it shows a major shift in emphasis as regards renewables.
Is this a sign of wider things to come?
It may well be. In many of other sectors operators operate and leave developers to develop. In the pre-renewables world there wasn’t much of a role for developers. Utility companies went through the consenting process, developed the schemes and then operated them. There wasn’t much of a role for other players.
However, the advent of renewables as a viable and mainstream energy source has seen the democratisation of energy development. Coupled with the terrible economic climate for other forms of property development through the recent recession, it has resulted in money, developers and advisers flooding into the sector. Much of that has been opportunistic. But the application of skills and experiences from other forms of development has produced some significant successes.
At one time the utilities – SSE among them – were rather sniffy and dismissive of these upstart developers. Indeed, I recall hearing one utility CEO start a presentation by telling the so-called developers to go home and leave it to the big boys.
I wonder whether the announcements by SSE today reflect a changed attitude; an attitude which acknowledges that utility companies need to focus on serving customers and that development – particularly of marginal technologies – is best left to others.
As always, comments, compliments or criticisms are welcome on twitter or linked-in!