SSE boss says ‘nobody has thought through the details’ of ESO separation

Alistair Phillips-Davies has expressed concern that uncertainty over the transition of the National Grid Electricity System Operator (ESO) into a standalone body will weaken the organisation.

Speaking on a panel at consultancy Aurora’s Spring Forum yesterday, the SSE chief executive said there is “a big period of uncertainty coming up for the ESO” following the government’s confirmation that it wants to see the organisation split from National Grid.

Setting out their vision for an independent system operator in July the Department for Business, Energy & Industrial Strategy (BEIS) said it was considering two possible ownership models – private or a “highly independent corporate body model”, classified within the public sector but with operational independence from government.

Phillips-Davies told the forum, which had been postponed due to the lockdown earlier this year, that 30 per cent of the staff at SSE’s own transmission business have joined since the beginning of the Covid-19 pandemic.

“We’re sat there saying how much staff we should take from the ESO because we know it will weaken their ability to deliver the transmission system and model all those Future Energy Scenarios.

“We’ve got real concern about how we deal with that transition. We’re not entirely clear what National Grid want to keep and that BEIS really understand what they are walking into,” Phillips-Davies said, adding that “nobody has thought through the details” about the transition, such as whether existing staff want to work in the public sector.

“It’s going to be really big issue over the next two to three years and will probably come home to roost in this Parliament.”

He also told the forum that the role of carbon capture and storage (CCS) in meeting net zero emissions is “over-rated”, describing it as a “transitional technology” like Apple Music, which “arrived and died fairly quickly”.

“It (CCS) is really important as a transitional technology for generation but there shouldn’t be much if any around in a lot of Western Europe by 2050.”

However, Phillips-Davies said that it may help with difficult to decarbonise processes.

Responding to a question about the future of gas-fired power station development, he said: “I don’t think we would get away with unabated thermal plant in the UK unless there was a depressingly urgent and pressing need to put in peakers to see UK and Ireland through winter, which regrettably is not beyond the realms of possibility because there are clear issues across the UK and Ireland systems at the moment.”

And the SSE chief admitted that securing consent for SSE’s Coire Glas 1500 MW hydro pumped storage project is proving “quite hard work” and questioned why what he likened to an “internal interconnector” should not be built, given the “current state of the market that will probably only get worse.”