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 Fueling the Renewable Shift: The Power of Policy and Partnerships

Perspectives | 26.03.2024 | 5 min read

Hitachi Energy CEO Claudio Facchin recently spoke with SSE CEO Alistair Phillips Davies in London. The pair discussed topics on investment, grid infrastructure, and policy. Claudio and Alistair shed light on the paramount need for speed and scale in adopting renewable energy sources.

Their exchange, rich with insights on financing, regulatory frameworks, and supply chain challenges, underscores the types of collaboration required to mitigate climate change impacts. As the discussion reveals, the two CEOs see technology, policy, and partnership as the key levers in achieving a sustainable energy future.

Claudio: Alistair, great to meet you again here in London. Recently, I was coming out of the IEA ministerial in Paris, and I saw more and more awareness of why this clean energy transition needs more speed and scale in terms of investments and grid infrastructure. I would like to hear your perspective on that.  

Alistair: We've just seen consistently in recent COPs that disturbing news about the planet potentially going up to one and a half degrees for a 12-month period. That's what everybody's very, very committed to avoiding. 

We've just seen consistently in recent COPs that disturbing news about the planet potentially going up to one and a half degrees for a 12-month period. That's what everybody's very, very committed to avoiding.

Alistair Phillips Davies

The energy transition is hugely important for us as a company. Our part in that, we announced recently we would be spending 20 billion pounds over five years and hopefully north of 40 billion pounds over a decade on a variety of infrastructure.

We've got renewables, we've got flexible generation and looking at carbon capture and storage, but actually networks, which is a huge part of our business as well, are massively important. How do we connect all this generation up and actually bring it into people's homes and businesses so we can power the future in a green way?

Claudio: The point we keep making in these forums and with all the stakeholders is that technology is not the bottleneck. And then, many stakeholders ask, what about financing? And what about the regulatory framework?

On the financing side and on the regulatory side, what is your perspective? Not just for the grids, but for the broader spectrum. 

Alistair: Without being too complimentary to the people we’ve got. We’ve got some great partners – Hitachi is one of them. They’ve got a lot of great technology. I think the issue’s financing, clearly interest rates have gone up and people are adjusting to a different world where you don’t kind of have free money anymore.

But I still think the financing is there for good projects. What you need is the right policies. You know, in the UK we've seen strong engagement from the regulators, particularly on the network side, enabling tens of billions of pounds worth of investment to be signed off right through until 2030s and into the early 2030s, which has been great.

But policy is a key thing and policy can unlock financing as well. So, I think all those things are there, and the technology is there too.

Alistair Phillips Davies

But policy is a key thing and policy can unlock financing as well. So, I think all those things are there, and the technology is there too. There's then going to be a capacity issue.

How can developers like us give companies like yourself enough confidence to build all the factories we need to build to produce all the goods that we want? And then planning is one of the key things that I think underpins all that. So, you know, funnily enough, regulation and finance I think are okay. They're not trivial, but they're okay. But planning policy and how we give certainty all the way up and down the value chain and really get building.

Claudio: We were discussing the supply chain and how we ensure with longer term visibility that we can plan not only for our own capacity that we will need but also for our suppliers. And your team has been a great contributor and supporter to innovate in that sense.

SSE announced 20 billion pounds

will be spent over five years and hopefully north of 40 billion pounds over a decade on a variety of infra-structure

Our distribution business is talking about a 15-year plan of how to get to more like 2040. We're certainly working on some projects into the 2030s.


We've got that North star, the energy transition, which is getting to Net Zero. It's great when you've got that to aim at.

Alistair Phillips Davies

Alistair: What we've had is really constructive discussions with major technology providers and with their supply chain about how we do that. Where we've landed is policy certainty. How can we get three, five, seven-year programs of work? How can we then come back to you? You've looked at ways in which you want to contract so you can make the investments.

We've looked at ways to guarantee that we get the equipment we want over time to build out multiple projects, you know, if we've got four or five big HVDCs. I think we've just been open-minded, and certainly, Hitachi's done a great job with us in terms of how we construct new models to create the right framework to deliver on an energy transition, which is a very, very changed world from even where we were five, six years ago.

Claudio: And very important are the repeatability, the harmonization of standards, and so on, which help us build at scale. Just to close, Alistair, your perspective on, of course, there is a lot of planning done and a lot of commitments between now and 2030. So, I think that the roadmap is quite clear. How do you see that journey after 2030?

Alistair: I think we're starting on that in the transmission businesses and the network businesses. Those models that I talked about and those plans, now that we've got some capacity locked in for the rest of this balance of this decade, we're almost looking at next decade for when we can build it.

If I think about our distribution business, which is lower voltage, they're talking about a 15-year plan of how they get to more like 2040. We're certainly working on some projects into the 2030s now with the regulator here in this country and looking at what the capacity is in the supply chain to deliver that. So as you say, repeatability, the overall plans for the groups are spatial plans as people call them. We're talking about that in this country on the back of the Winser report.

And then, how that can feed into ensuring that developers, technology providers, balancer plan providers, everybody can link up. We've got that north star, the energy transition, which is getting to Net Zero. It's great when you've got that to aim at. And I think we're all working a lot better together because of it.

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Claudio Facchin
Senior Vice President and Executive Officer, Hitachi, Ltd. | CEO, Hitachi Energy

Claudio Facchin has been a Senior Vice President and Executive Officer of Hitachi, Ltd. since April 2021. 

Claudio is also the CEO of Hitachi Energy. He took up his present role in July 2020, after leading the Power Grids business between 2016 and 2020 and the Power Systems Division of ABB from 2013 to 2015. Prior to this, he was the Chairman and President of ABB China and was responsible for the company’s North Asia region from 2010 to 2013. Claudio has a degree in Industrial Engineering from Politecnico di Milano, Milan, Italy.

Alistair Phillips-Davies
CEO, SSE

Alistair joined SSE in 1997 and possesses extensive knowledge of the Group, having held senior roles across multiple business areas. Prior to joining the Board in 2002 as Energy Supply Director, Alistair was Director of Corporate Finance and Business Development. In 2010, he became Generation and Supply Director, before his appointment as Deputy Chief Executive in 2012 then Chief Executive in 2013. Alistair is a fellow of the Energy Institute and a Chartered Accountant.

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