Though the Government is pushing through electricity market reforms to address an acute shortage of generation capacity expected as polluting and ageing power stations shut down, SSE said the changes provide insufficient incentives to tackle imminent capacity shortages.
“(Reforms) will not, therefore, enable investment decisions for new plant to be made,” SSE, one of Britain’s big six energy suppliers, said in its interim management statement.
The Scotland-based utility, which owns Ferrybridge power station in West Yorkshire, said that its 2013/14 investment expenditure of £1.5bn will focus on networks and its wholesale business.
Over the first three months of the financial year, the utility added 32 megawatts to its wind farm portfolio.
Since April its only work on large-scale power generation capacity was in southeast Ireland, where it is building a 460 megawatt combined-cycle gas turbine (CCGT) plant that is expected to start operating in the second half of 2014.
In response to public outrage at rising energy bills, regulator Ofgem has forced Britain’s energy suppliers to limit the number of tariffs on offer to four and put all customers on the best deal available.
SSE said yesterday that it welcomed fairer bills, but that it was concerned that the changes will in practice add to costs and complexity. “I am ... confident that we will achieve our key financial goal for this year, and the years ahead, of an above-inflation increase in the dividend,” said CEO Alistair Phillips-Davies.