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A reduction renewable output due to low winds has driven a sharp fall in Scottish Power’s profits in the first three quarters of 2016.
Earnings before interest, taxation, amortization and depreciation (EBITDA) dropped by 7.5 per cent when compared the same period last year to £924.9 million.
EBITDA for Scottish Power Renewables fell by 28.6 per cent to £156.9 million, as the division saw a 26 per cent reduction in output over the first half of the year, following record output in 2015. Output was actually up by 5.9 per cent year-on-year in the third quarter of 2016.
The networks division – SP Energy Networks – saw its EBITDA decline by 2.8 per cent to £580.9 million, “largely driven by the phasing of investments following the implementation of the RIIO-ED1 distribution investment programme from April 2015”.
EBITDA rose by 4.8 per cent to £187.1 million at Scottish Power’s generation and supply arm. Operating costs were lowered by the closure of the Longannet coal-fired plant, although earnings from the retail business were down by £17 million due to “milder weather and increases in non-energy costs”. Over the past year the number of electricity customers has fallen from 3.3 million to 3.2 million and the number gas customers has dropped from 2.2 million to 2.1 million.
Scottish Power revealed the signing of contracts for smart meter installations worth £341 million since the beginning of the year. LowriBeck, Amey, Providor and Actavo will all assist Scottish Power as it rolls out the meters to five million homes across the UK by 2020.
The company has so far installed around 100,000 smart meters, mainly in the homes of customers who have been with the supplier for more than two years. It soon expects be installing up to 2,000 meters every day.
ScottishPower chief corporate officer Keith Anderson said: “Scottish Power is well on course to invest over £1.8 billion this year, and digital innovation is a key part of our long-term business objectives.”
He continued: “This contract award is a significant moment for Scottish Power in the delivery of smart meters for millions of people across the UK. There is a significant challenge to support climate change targets and we are determined to offer all our customers a smart meter by the end of 2020, meeting the UK government’s deadline.
“It is crucial however that the significant investment we are making is supported by the government-appointed Data Communications Company (DCC), which has been tasked with delivering the necessary infrastructure for the new meters on time and to scope, enabling them to operate effectively across the energy market.”
There was another delay to the full smart meter rollout last month, after DCC revealed it had missed its go-live deadline of 30 September. It was originally expected to go-live in December 2015.
Iberdrola, the Spanish energy giant which owns Scottish Power, posted revenues of €21.5 billion in the nine months to end of September – a 9.1 per cent decrease on the same period last year. EBITDA increased by 4.2 per cent to €5.7 billion and investments rose by 45 per cent to roughly €3 billion.
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