Ill wind for renewable energy in US to boost UK projects

A likely push towards more oil and gas drilling under President Trump could help ease supply chain shortages that have hampered a faster rollout of renewables on the UK system, but weaken the availability of parts for gas-fired plants, the boss of electricity supplier SSE has said.
Donald Trump’s election win is expected to boost the American oil and gas industries and diminish the buildout of renewables, which had been accelerated by President Biden’s $369 billion stimulus package for clean power and transport.
“Though we in Europe, and particularly the UK, may benefit from him doing less renewables and having more access to [the] renewable supply chain, I think we’ll struggle to get access to a gas-fired supply chain,” Alistair Phillips-Davies, SSE’s chief executive, said.
More gas turbines, which convert natural gas to energy, were likely to go to America as the new president accelerates fracking, he said.
The government has said that a strategic reserve of gas power will be required even as it works towards decarbonising the system by the end of the decade. The operator responsible for keeping the lights on in Britain has said that unabated gas should provide less than 5 per cent of the country’s power each year in normal weather conditions in a 2030 clean energy system.
Achieving the government’s ambition would “be a big challenge, there’s no doubt about it”, Phillips-Davies said. Labour is seeking to quadruple the amount of offshore wind generation on the system by the end of the decade, alongside doubling onshore wind and tripling solar power supply.
“We have a good chance of, at the very least, getting close to what the government’s ambition is in 2030,” he said.
However, the offshore wind industry has been hit by supply chain shortages and rising costs, which have made projects less profitable.
The company has been “disappointed” by the progress made by GE Vernova on the turbine installation at Dogger Bank A, he said, which has been delayed until the second half of next year. The wind farm — which together with its two sister wind farms off the East Yorkshire coast will have a combined installed capacity of 3.6 gigawatts — was due for completion during the six months to the end of September.
Phillips-Davies, 57, has said he will retire next year after 11 years leading the FTSE 100 energy group. He will remain in the role until a successor is found to “ensure a smooth and orderly transition”.
SSE, which is one of the UK’s largest clean energy companies, was boosted by an increase in renewable energy generation during the six months to the end of September, which helped lift adjusted operating profits by 24 per cent to £860 million. Pre-tax profits rose 38 per cent to £846 million, from £615 million a year earlier.
Its thermal generation and gas storage business recorded a loss of £43.8 million and SSE now expects full-year profits to come in at about £200 million, rather than “more than” that figure. Higher renewable output has diminished the demand for its gas-fired plants to switch on and plug the gaps in supply.
European gas prices have risen to their highest in almost a year on the back of higher demand for gas from Asia, a fall in gas storage levels in Europe and ongoing supply concerns arising from geopolitical tensions.
SSE shares fell 9½p, or 0.5 per cent, to £16.91 at close in London.