ScottishPower is to go ahead with plans to build one of the world’s biggest offshore wind farms as part of a £6.3 billion investment programme in the UK over the next five years.
The news came as the Glasgow-based utility reported a 65 per cent jump in earnings before tax and other costs from its UK renewables business to €438 million (£347m) in 2015 aided by unusually windy conditions.
But factors including the imminent closure of Longannet power station saw earnings from its generation and retail arm fall 8 per cent to €421m although its energy networks arm saw an 11 per cent rise to €1.14bn. Full figures for ScottishPower will not be published until the spring but chief corporate officer Keith Anderson said they would show an overall slight increase after what he described as a “solid performance” from the business.
He also used the results announcement to stress his belief that the UK “benefits from being part of a greater European market”. He said the announcement that Spanish parent company Iberdrola had given the go-ahead to the East Anglia One offshore windfarm off the coast of Sussex will bring significant opportunities for the supply chain in the UK, including many firms in Scotland.
At least 50 per cent of content for the £2.5bn project, which will start construction in 2017, will be sourced from the UK. Companies including Aberdeen-based Wood Group have already secured contracts on preparation work for the site.
The project will also be a significant boost for the company’s Glasgow-based offshore wind team which works on offshore projects for Iberdrola in France and Germany as well as in the UK.
Overall, Iberdrola increased Ebitda by 4.9 per cent to €7.3bn in 2015. Growth of 18.6 per cent was recorded in global renewables, driven by increased production in UK. The UK will see some 35 per cent of the group’s total investment for 2016-20.
The figures came as a report from law firm Bircham Dyson Bell today warned of a growing shortfall between UK electricity generation and demand as ageing power stations close. Although ScottishPower said it did not envisage a “lights out” scenario, it believes next winter could be “very challenging” with the closure of older stations such as Longannet.