Energy firm warns prices to fluctuate

Published on Thursday 21 May 2009 09:58

RAPIDLY fluctuating energy prices like those experienced throughout 2008 are likely to become the norm in the future, a leading British energy company warned today.

Scottish and Southern Energy said last year was a "foretaste of what is likely to happen as the supply of finite resources like oil and gas begins to struggle to keep pace with the demand".

The warning comes as the Perth-based company, which owns Scottish Hydro Electric, announced a two per cent rise in profits before exceptional items to 1.25 billion in the year to the end of March.

Chairman Lord Smith of Kelvin said the company continued to deliver a profit by running the business in "its usual no-frills way".

He added: "At a time of financial, economic and energy market turmoil, a company's ability to deliver profit and dividend growth has never been more important. These results mean that SSE has achieved ten successive years of increasing profits and dividend."

However, bottom-line profits declined to 53.3 million, compared to 1.1bn last year, following sharp adjustments in the value of derivatives.

Today's statement also noted that the availability of the firm's gas-fired power stations dropped by 19 per cent, and are now operating at three-quarters capacity, while coal-fired stations fared moderately better with a two per cent drop. Coal power stations are now operating at 89 per cent capacity.

SSE intends to ride the storm of economic slowdown by producing more sustainable energy.