Business

Lights out for power stations' profits

Profits at Northern Ireland's power stations, including Ballylumford, pictured, are either in decline or non-existent

THE fortunes of Northern Ireland's three main power stations plummeted last year due to low energy prices, falling demand and costly upgrades.

The combined turnover at the Kilroot and Ballylumford (both owned by AES) and ESB-owned Coolkeeragh fell 9 per cent to just under £367.5 million.

Kilroot recorded a £14.8m loss for 2015 while operating profits more than halved at Ballylumford to £6.3m.

Only Coolkeeragh reported a rise in revenue - 9 per cent to £142.3m - while profits doubled to £20.6m (although this was wiped out do to a £32.7m impairment charge).

In the case of Ballylumford - the north's largest power station - directors explained the drop in turnover was due to reduced availability of some of its facilities.

The station at Islandmagee provides work for around 158 people.

An upgrade of its 'B' station (which has a 540MW capacity) started in April last year in order to comply with new EU emissions directives.

The result meant that one of the chimneys at the station was retired with the remaining two "operating at nominal output of at least 250MW" until at least 2018.

A general reduction in electricity prices - from £49.70/MWh in 2014 to £38.10/MWh - was also blamed.

Directors at Kilroot, based near Carrickfergus, said the performance was "primarily attributable to lower energy prices on the spot electricity market, which is reflected in lower operating profit in the year".

Added to this: "Unfavourable gas/coal spread, milk weather and more outages resulted in lower turnover", while the company also invested £7m in upgrade technology to comply with the EU.

The plant, which is the north's only remaining coal-fired power station, increased its payroll slightly over the year to 119 on average.

And directors are positive for the future, expecting "the level of operating and financial activity of the various generating units in 2016 will be improved for the foreseeable future".

Meanwhile, the Coolkeeragh gas plant in Maydown reported a loss due to an impairment charge brought because of its reduced running in the single electricity market (SEM).

The 400MW power plant generates power using gas brought in from Scotland.

Directors said the reduction was due to "other technologies being more economic at energy generation and there are also a number of gas plant in the SEM, similar to Coolkeeragh, competing for running".

Profits at the north's power stations have been slashed in recent years due to the ending of lucrative contracts for electricity generation which dated back more than 20 years.

As recently as 2010, the three generators posted profits in excess of £100m combined.

The Utility Regulator forced the cancellation of the contracts which had been signed with Northern Ireland Electricity at the time of its privatisation in 1992.

The legacy contracts were widely recognised as particularly generous towards the north's power generators and were consistently cited as one of the main factors behind the region's historically high electricity prices.

Under the terms of the deals they could not be cancelled until 2010 at the earliest.

Enjoy reading the Irish News?

Subscribe now to get full access

Business