Scottish Power announced a 39% drop in underlying profits for its division which supplies gas and electricity to households as it was hit by soaring wholesale energy prices and low volumes of energy. ‘wind power.
Keith Anderson, Managing Director of Scottish Power, said the energy crisis was “a stark reminder of why we need to decarbonize our energy sector quickly and efficiently”.
The company, one of Britain’s largest energy suppliers, owned by Spanish company Iberdrola, made earnings before interest, taxes, depreciation and amortization (EBITDA) – a measure of underlying profit – £ 83million in its UK retail business in the first nine months of the year, down £ 54million from the previous year.
The number of retail customers at the end of September was stable from the previous year at 4.5 million, and it delivered 8% more gas and 10% more electricity than a year earlier. Overall, including its renewables and grid divisions, Scottish Power’s EBITDA totaled £ 1.1bn, down 9.3% from the same period last year.
The renewable energy business contributed to underlying profits of £ 370million, down 16.5%, while SP energy networks, which owns and operates the electricity transmission and distribution network in the central and southern Scotland, Merseyside and Cheshire, said Ebitda of £ 656million, up 1.3%.
Like other energy providers, Scottish Power has been affected by the surge in natural gas prices to record highs in the financial markets. High gas prices have crippled small suppliers and 16 have gone bankrupt so far this year, meaning millions of customers have shifted to the remaining larger suppliers.
Wholesale gas prices have climbed in part due to low storage levels after a particularly cold winter in Europe last year, as well as increased energy demand from Asia, while low speeds of the wind have reduced the production of renewable energy. This year has been one of the least windy summers in the UK since 1961.
Anderson noted that the Cop26 summit begins in the company’s hometown of Glasgow in three days, and claimed Scottish Power has transformed its business model in the six years since the historic Paris climate agreement . “We have closed our coal-fired power plants and are proud to have played our part in coal-free Scotland since 2016.”
He said Scottish Power has invested £ 10bn in renewable energy projects and smart digital grid networks. “All this during the current energy crisis and the likelihood of a difficult winter. Soaring energy prices are a gas problem and a stark reminder of why we need to decarbonize our energy sector quickly and efficiently. “