SCOTTISH Power has suffered a near 30 per cent fall in profits at its key
renewables arm after changes in weather conditions posed challenges.
The Glasgow-based giant said Scottish Power Renewables made £156.9m
underlying profits in the first nine months of 2016, down £62.8m, 28.6 per
cent, from £219.7m in the same period last year.
Scottish Power, which is owned by Spain’s Iberdrola, said the fall in
profits was largely driven by the 26 per cent reduction in total first half
output from assets such as windfarms.
The division regained some ground in the latest three months, when output
increased by 5.9 per cent annually.
The update underlines how big an impact variations in weather conditions
can have on wind power businesses.
Scottish Power highlighted that fact the full-year 2015 was a record year
for wind power output in the UK.
Last month Perth-based SSE said first half profits would be hit by the
significantly lower output of electricity from renewable sources than in
the same period in 2015.
Scottish Power seems confident renewable energy assets will generate
attractive returns over the long term. It is building eight new onshore
wind projects across Scotland, with investment of more than £650 million.
Chief corporate officer Keith Anderson noted Scottish Power has awarded
£340 million contracts for contractors to install smart meters across the UK.
While the company increased the profits it made from conventional power
generating activity by £22m in the first nine months, it said this
reflected the fall in costs linked to the closure of the Longannet power
station in Fife in March.
The retail arm, which sells gas and electricity to around 5.3 million
consumers, suffered a £17m fall in profits partly due to milder weather.
Scottish Power was fined £18m by Ofgem in April after the regulator found
it had let its customers down during the implementation of a new IT system.
Earnings at the networks infrastructure division fell to £580.9m, from
£597.4m. The company said the returns for the networks arm are largely
driven by the phasing of investments under the plan to upgrade the UK’s
power networks that utilities agreed with Ofgem last year.
Total earnings before interest, tax, depreciation and amortisation fell to
£924.9m in the first nine months from £999.4m.