Scottish energy giant SSE is to review its offshore wind energy portfolio – warning that the prospects for investment in Great Britain are “not encouraging”.
The firm yesterday added that uncertainty over government support for offshore wind would lead to reduced capital investment in coming years.
The energy firm said it was disappointed that neither the proposed Galloper or Beatrice offshore windfarm developments had been included in a UK Government list of 10 “provisionally affordable schemes” announced in December last year.
As a result, the utility giant says it will complete a “wide-ranging review of its offshore wind development portfolio” by the end of the financial year.
“This is 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, and it is likely to be lower than the £1.5billion to £1.7billion range invested in each of the years since 2010,” SSE said yesterday.
“SSE believes it has, and wishes to maintain and invest in, a diverse generation portfolio that helps to keep the lights on for people, business and organisations by being available, reliable and flexible. The prospects for investment in generation assets in Great Britain are, however, not encouraging.”
Yesterday, SSE risked controversy by announcing it would increase payouts to shareholders on the back of an expected 8.8% boost in full-year profits to £1.5billion.
The announcement is likely to spark fresh anger following Labour calls for a cap on household gas and electricity bills as incomes continue to be squeezed.
SSE, which trades as Southern Electric, Swalec and Scottish Hydro, raised tariffs by an average of 8.2% from November, blaming government green levies as well as rising network costs and wholesale energy prices.
But the company confirmed it would extend cuts due to come into force in March until the spring of 2015.
Bills will be cut by 3.5% for all of the group’s 9million residential customers after the group passed on savings from a green levy shake-up.
In a trading update, SSE said its full-year dividend would be up by 3% and its adjusted profit before tax for the year ending on March 31 was likely to rise in line with market expectations to £1.5billion.
Offshore wind development was dealt several blows last year.
In December, Scots energy firm Scottish Power shelved plans for a massive 1.8GW windfarm off the coast of Tiree, the £5billion Argyll Array. This announcement came weeks after another major offshore wind scheme, the £3billion Atlantic Array in the Bristol Channel, was axed by developer RWE.