An energy company leader today reiterated his opposition to regional pricing, warning that it could deter investment.
Keith Anderson, chief executive of ScottishPower, told a conference in Glasgow that there are dangers in making a fundamental change to the UK’s electricity system at a time when investors want clarity to back huge projects in areas such as grid upgrades, cabling and renewables.
He has previously warned of the risks in zonal pricing, which would potentially see different wholesale charges for electricity around the UK in an attempt to cut bills in some places.
Energy Secretary Ed Miliband is said to be considering the change which has support in Scotland where wind turbines provide most of the UK’s electricity but customers face some of the highest bills. Greg Jackson, the chief executive of Octopus Energy, is among those backing the idea.
Mr Anderson has warned that it could lead to swings in pricing and some customers paying much higher bills.
He told the All-Energy trade show in Glasgow that investors want clarity to back huge projects in areas such as grid upgrades, cabling and renewables. The focus, he said, should be on the benefits that will derive from the overhaul of the electricity transmission network.
His parent company Iberdrola recently benefited from a £1.35 billion package of support from a consortium of banks and the National Wealth Fund to upgrade the connections between Scotland and England.
Additional storage and connectivity will also mean turbines do not have to be switched off when there is an over-supply.
UK Energy minister Michael Shanks and Kate Forbes, the Scottish Deputy First minister and Economy Secretary, are among other speakers at the event.
Ms Forbes told the conference that her government wants to work “in close partnership” with Westminster on “big decisions to be made about energy prices and grid connections” to make sure that “any reforms respect devolved powers but also deliver certainty”.
“We are at a crossroads and the decisions we take, and the opportunities they unlock, are not just notable for what they can deliver in the coming years within our lifetimes, but what they can deliver when we are gone and our children and grandchildren are enjoying the benefits.”
Juergen Maier, chair of the investment vehicle GB Energy and Claire Mack, chief executive of Scottish Renewables, are also among those who addresseddelegates.
Ms Mack called on the UK government to double down on its support for the renewables sector amid growing net zero jitters and wider economic headwinds.
While there has been an uplift in investment and intentions to reform the system, Ms Mack said that high uncertainty on major policy decisions about market design and a lack of sustained project activity is damaging confidence.
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