Human talent: a renewable resource

How do you evolve a business from being a carbon emitter to a hero of net zero while keeping the nation’s lights on and remaining profitable?

That is the challenge that Alistair Phillips-Davies has been tackling for the past decade as chief executive (and, prior to that, deputy chief executive) at the FTSE 100 energy company SSE.

It has been a dramatic transformation so far. SSE is in the middle of investing £7.5bn in low-carbon energy and electricity infrastructure over the next five years. This includes a trio of wind energy projects: the world’s largest offshore wind farm at Dogger Bank; Seagreen, Scotland’s largest and deepest offshore wind farm; and Viking Wind Farm on Shetland, set to be Europe’s most productive onshore wind farm as it seeks to treble its renewable output.

It is also building the flexible electricity transmission system needed to transport renewable power around the country, working with others to develop a multi-billion-pound underwater electricity super-highway that will be instrumental in bringing power from the wet and windy north of Scotland down to the UK’s centres of population.

A pivotal aspect of this future grid will also be its ability to store energy at scale and for ever longer durations. “We need those big, long-term storage assets, lasting for 24 hours or more, assets like pumped storage hydro that can help keep the lights on when the wind doesn’t blow and the sun doesn’t shine,” says Phillips-Davies.

Furthermore, the company must make smart bets on the technologies needed to decarbonise big industry with breakthroughs in carbon capture and storage (CCS) and hydrogen. It must also work to understand how the electrification of heat and transport will change the way local electricity distribution networks are managed.

In it for the long haul

The energy sector is investing in assets that will last decades, and net zero is a long-term goal. “We are on a long journey here, and it will get tougher as we get close to decarbonising completely. The job is nowhere near half done,” Phillips-Davies says.

While there are great uncertainties, the progress made so far is proof of what is possible. Offshore wind innovation over the past decade has seen the industry drop generation prices from well above £100/MWh to around £40/MWh in recent years.

Managing the current set of risks involved in investing at scale in emerging and, in many cases, unproven technologies is still tricky. SSE is in the process of building its knowledge and capabilities in tethered wind, battery storage and CCS, all of them at various stages of maturity. “You need options, you need to be patient and figure out where policy and where the public mood is going, as you will need to align with those,” says Phillips-Davies.
Being prepared to play the long game has been one important strength for SSE. Viking Wind Farm, currently under construction on the remote Shetland Islands, is a good example. “We’ve had people working on that since 2005,” he says. “These projects take a long time to come to fruition.

The right partners are vital for any business that plans to operate sustainably over the long term, adds Phillips-Davies. In the case of moving electricity around offshore and across oceans, it involves working on cutting-edge, high-voltage direct current power lines with partners including engineering group ABB. “You need good partners you can work with on projects that work with current government policy and technology.”

Nurturing talent

Training is an important part of the transition strategy, too. How do you re-skill a workforce steeped in the technologies of the fossil-fuel age for the era of wind, solar, hydrogen and CCS? “Creating good quality, long-term jobs for people who perhaps were in oil and gas, or coal is a challenge but a good one to have; we’re one of the first companies to set out a Just Transition strategy to support the move from a high-carbon economy to a low-carbon future. How that impacts on jobs, communities and wider society is important to plan for now,” says Phillips-Davies.

He is proud of SSE’s retention record in a sector competing for scarce engineering and technological talent. He ascribes this to the company’s clarity of purpose and sense of mission. The big bets it took long ago on renewable energy have helped attract and keep talent. “We have a fantastic staff who have a belief that they are doing the right things and caring about the communities around them. We have good alignment around that."

A willingness to foster a diversity of thought in the organisation has also been important for bringing in the right talent with the right skills, he adds. “Rachel McEwen, our chief sustainability officer, has done a lot of good work here to bring into the organisation people who are interested in sustainability and have a different view.”

There is a tension, however, between fostering fruitful internal debate and executing a plan once it has been set in place. Pursuing a goal to the point of success or failing at it faster is better than energy-sapping dither and procrastination, Phillips-Davies believes. “You want challenge, and you want people who are sceptical, as it ensures robust debate – but when you make a decision, you then have to get everyone behind it and do it.”

He is encouraged, in particular, by the resonance of SSE's mission with younger people. “If you spend time with apprentices or graduates, a lot of what they feed back on is the purpose of the company.” A surprisingly important part of his job has been fostering such two-way communication between leadership and employees, he says. “Talking to people, you get an enormous amount back from that. Every minute you spend out with staff in depots and planning rooms is hugely beneficial in terms of alignment. We also get ideas from employees. It pays to trust the people at the edges of organisation to tell you how things are.”

Broadcasting the big goals and the progress on them by digital means has its place, but the personal touch matters much more. “People want to hear it from the people who are leading the company. They want to know they can rely on the fact that what the company says it will do, it is following through on.”