Scottish Power has reported a sharp downturn in profits across the first nine months of 2021, with its energy retail business clobbered by surging wholesale prices and renewables division battered by low wind speeds.
The firm, owned by Spanish firm Iberdrola, has a hold in every part of Britain’s energy system, generating power with one of country’s largest wind portfolios, operating energy networks, and supplying electricity and gas to households and businesses.
Scottish Power’s retail business struggled most this year, buffeted by the surging wholesale gas prices that have felled 19 suppliers since August. Underlying profits in the year to September were down 39% to £83 million. Customer numbers were flat at 4.5 million compared to 2020, but Scottish Power supplied them with 10% more electricity and 8% more case than in the previous year, a result of lockdowns easing and the economic reopening.
Chief executive Keith Anderson last month described the grave impact surging gas prices have had on energy suppliers, saying he expected at least 20 more to crash out of the market, including some that are well run. “We are in danger of just sleepwalking into an absolute massacre,” he said, calling on the government and Ofgem to scrap the price cap that limits how much of these costs suppliers can pass on to households.
He now said the current crisis is “a stark reminder of why we have to decarbonise our energy sector quickly and efficiently.”
Scottish Power’s renewables business also saw profits dip, down 16.5% to £370 million. While the division got an £89 million boost from the new East Anglia One offshore wind farm, this was offset by lower wind generation across the portfolio as a result of low wind speeds.
This year has been one of the UK’s least windy since 1961, and wind speeds were low across the continent. Other major European wind players, including SSE, RWE and Orsted, have reported similarly low output from their portfolios.
Scottish Power’s energy network division which owns and operates the electricity transmission and distribution network in central and southern Scotland, Merseyside and Cheshire, reported modest gains, with profits up 1.3% to £656 million.
