Tim Sharp
City Editor
A SURGE in renewable and hydroelectric energy production by ScottishPower
thanks to a wet and windy winter was not enough to offset the impact of
closing Cockenzie power station, leading to a fall in generation in the
first quarter of 2014.
The Glasgow-based company reported a 2% year-on-year reduction in
production in the UK to 5,701 gigawatt hours (GWh) in the first three
months of the year.
Nevertheless, profit from its generation and supply activities rose nearly 8%.
There was a 55.4% increase in output to 281 GWh from ScottishPower’s three
hydroelectric plants at Cruachan in Argyll and Bute, Galloway and Lanark
due to rainy conditions compared to a dry winter last year.
There was also a 17.3% increase in output to 1,600 GWh from
ScottishPower’s three gas-fired generation plants at Shoreham in Sussex,
Damhead Creek in Kent and Rye House, Hertfordshire.
Renewable energy production in the UK, the bulk of which is from Scottish
wind farms, soared 38.7% to 1,100 GWh thanks to much windier conditions
than in the still winter of 2013.
The group said this led to a 32% rise in profits from the division.
However, coal-fired electricity production was down 22.2% to 2,688 GWh
after the closure of Cockenzie power station in East Lothian in March of
last year after a total of 45 years of operation.
ScottishPower also faced a fall in demand due to the relatively mild winter
weather.
It said that demand for electricity dropped by 7.6%, while demand for gas
decreased by 17.1%.
Despite the drop in production and cost rises including introduction of the
carbon price floor, ScottishPower’s Spanish parent Iberdrola said its UK
generation and supply arm had recorded a 7.7% rise in earnings before
interest, taxation, depreciation and amortisation to €197.7 million (£162.5m).
It was assisted by a rise in sterling of 2.5% against the euro.
In contrast, while Iberdrola’s Spanish hydroelectric and renewable output
grew, earnings in its home market were hit by additional regulatory costs.
ScottishPower put its prices up by an average 8.6% in December 2013 citing
increased energy delivery charges and costs to support compulsory social
and environmental schemes.
The increase was partially reversed in January
As of March 31, 2014, ScottishPower had 3.4 million electricity customers
and 2.2 million gas customers, representing an increase of 100,000 on the
same date last year.
ScottishPower’s networks business produced a “solid performance”,
Iberdrola said with a 14.9% rise in EBITDA as a result of increased
revenues from an expanded asset base following investment
Net profit for the group as a whole was up 8.4% at €952.6m (£782.9m),
although excluding the sale of stakes in Portugese and Brazilian
businesses, net profit was 4.6% down at €848m (£696.9m).
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