Why Paris must deliver more than hot air

With the UNFCCC’s Climate Change conference (COP21) well underway in Paris all eyes will be on those attending to see if they can secure a global agreement on tougher action. It’s an opportune moment for an energy company like SSE to take stock of its own role in all this.  

Obviously an energy company has a big role to play in terms of helping the UK and Ireland move towards a less carbon-intensive energy system. Removing carbon from electricity generation in an affordable way is essential to mitigate the worst affects of climate change. SSE has been progressively removing carbon from its generation mix – as most clearly evidenced by our long-term support for renewable generation.

We feel SSE has acted in a responsible and practical manner to these challenges. Since 2007 SSE has invested nearly £4bn in renewable generation and is currently the leading operator of renewable assets in the UK and Ireland. Such assets currently provide around 30% of SSE’s generation output; and will help us meet our commitment to reduce the carbon intensity of our overall electricity generation by 50% (compared to 2006) by 2020.

As a result of  a combination of factors associated with government policy and low energy prices;  SSE is moving away from a generation mix that was once weighted towards coal and gas towards one that is now weighted towards gas and renewables. Last year (2014/15) SSE produced more renewable electricity than any other company in the UK and Ireland (8,466MWh) from the most diverse range of sources.

Earlier in the year we announced the closure of our Ferrybridge coal plant in March 2016. The site has reliably supplied electricity for well in excess of four decades and the decision to close was a difficult one for everyone involved. However, the decision reflects the reality of a national transition to cleaner forms of generation. In addition we have already announced plans to re-open our gas-fired power station at Keadby. We’re beginning to see the impact of this shift in emphasis of our generation mix, with SSE’s carbon emissions down by 34% in 2014/15.

But we recognise that we are only partway through the transition to a lower carbon generation mix. And that’s why SSE committed to four bold climate change initiatives as it joined the CDP and We Mean Business ‘Commit to Action’ campaign in the run up to Paris.

These include: setting a science–based emissions reduction target; putting an internal price on the cost of carbon to use as part of our £1.5bn-a-year investment decision making; a public commitment to responsible engagement on climate policy making; and a commitment to transparent reporting of climate change related information.

In all of this, a meaningful carbon price is critical. The commitments we hope to get from Paris will only be a reality with strong frameworks beneath them. A strong and stable carbon price across the EU can deliver low carbon investment at the lowest cost – with the market deciding the lowest cost carbon emission reductions. We have seen some positive signs with reform of the EU Emissions Trading Scheme (EU ETS) but more needs to be done more to strengthen it after Paris.

The UK itself can do more here also by making sure its Carbon Price Floor is stable - it cannot be susceptible to change at each Budget as it is today if long term investments are to be underpinned by it.

Importantly, Europe can and should do more. The EU exceeded its 2020 greenhouse gas emission target of a 20% reduction on 1990 levels, achieving a 23% reduction by 2014. That’s three percentage points more, six years early. Potential action to increase the EU’s ambition is a point we’ll be raising with the UK and Irish Governments as well as the European institutions after Paris to ensure that the 2 degree target can be kept in sight. I’ll be sharing my thoughts on how to do this after Paris.

The road up to and beyond Paris is a long-term one for SSE and one that we are genuinely committed to. It’s incumbent on all of us to play a full part in helping to bring about meaningful change in a responsible manner.

About the author

Martin Pibworth Wholesale Director

Martin joined SSE in 1998 as an energy trader and undertook a series of commercial roles in the Company, becoming Managing Director, Energy Portfolio Management, and a member of SSE's then Management Board, in 2012. In 2014, he was appointed Managing Director, Wholesale, and a member of SSE's Group Executive Committee, taking on responsibility for SSE's electricity generation portfolio and associated capital investment programme. During this time, Martin has overseen the development of SSE's diverse and flexible generation portfolio including its growing renewable fleet. In 2017, he was appointed to the Board as Wholesale Director, where he also has responsibility for the supply of energy and related services to industrial and commercial customers and SSE's businesses in Ireland. Martin brings significant knowledge of energy markets and experience of commercial, technical and operational matters to the Board, and his innovative approach to strategy, in seeking opportunities to create future value, is also important to his role. Prior to 1998 Martin worked for Eastern Power and Energy Trading, and Total Gas Marketing.

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