London — SSE's conventional thermal power generation business fell to a loss in the year to March 31, while its renewables business was hit by lower prices, the UK utility said Wednesday.
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The end of power purchase agreements, losses at SSE's remaining coal-fired capacity at Fiddler's Ferry and an outage at the Great Island CCGT plant in Ireland saw thermal generation deliver an operating loss of GBP22.3 million ($28 million), from a profit of GBP107.8 million for 2017/18.
Renewables generation saw operating profit dip 4% to GBP455.9 million, mainly due to renewable output in 2018/19 being sold at a lower achieved price than in the previous year, SSE said.
Assuming normal conditions and renewable capacity of 4 GW (including the just-completed 588 MW Beatrice offshore wind farm), the company expected renewable electricity output of around 11.5 TWh in 2019/20, delivering an adjusted operating profit of around GBP525 million.
SSE has hedged over 4 TWh/year of wind volumes at GBP39/MWh (2020) and GBP46/MWh (2021), data showed.
SSE's Energy Portfolio Management trading arm, meanwhile, reported an adjusted operating loss of GBP285 million and was expected to make a loss of around GBP115 million in 2019/20.
"Losses in both years are primarily due to the negative impact of persistently high gas prices on SSE's energy position," it said.
In March, SSE announced closure of Unit 1 (495 MW) at its Fiddler's Ferry coal plant (now 1,510 MW). The remaining three coal units have capacity obligations until September and continue to operate as normal, the company said.
"The UK government has committed to phasing out coal-fired power stations by 2025. SSE continues to review all commercial options for the station with no decision yet made," SSE said.
Completion of Ferrybridge Multifuel 2 (69 MW -- SSE share 50%) was on track for the end of the year, while SSE was looking at a potential new multifuel plant of up to 50 MW at Slough, southern England.
Meanwhile, construction of SSE's GBP350 million, 840 MW CCGT at Keadby 2 in Lincolnshire was under way and expected to be delivered by early 2022. It does not yet have a capacity market contract. The market has been suspended while the European Commission carries out an in-depth investigation into its design.
SSE said there was "considerable value in the optionality" of existing sites at Ferrybridge and Fiddler's Ferry if markets warranted further investment in gas-fired generation. It also remained "very interested in the long-term potential of Carbon Capture and Storage".
In renewables, SSE had 2,850 MW of offshore wind capacity expected to be eligible to bid in May 29's UK Contracts for Difference Allocation Round 3: the 1,050 MW Seagreen Phase 1, consisting of the Alpha and Bravo projects; and Dogger Bank (up to 3.6 GW in all), a 50:50 joint venture with Equinor to develop three projects (Creyke Beck A, Creyke Beck B and Teesside A ?- SSE's share 3 x 600 MW).
The utility was also lining up the 229 MW Viking onshore wind project on Shetland to bid into the auction.
Finally, SSE's Irish offshore wind prospect, Arklow Bank Wind Park, has a lease but was awaiting state aid approval from Ireland's Renewable Electricity Support Scheme.
"SSE believes offshore wind has real opportunities from the second RESS auction, indicatively scheduled for 2020, with further auctions signaled for 2021, 2023, and 2025," it said.
-- Henry Edwardes-Evans, firstname.lastname@example.org
-- Edited by Dan Lalor, email@example.com