Massive swing from loss to profit at ESB's Derry power station

ESB's Coolkeeragh power station at the mouth of the River Foyle in Derry. Image: Google
ESB's Coolkeeragh power station at the mouth of the River Foyle in Derry. Image: Google

A POWER station in Derry owned by the Irish state recorded a massive swing from loss to profit last year due to a significant fall in gas costs, according to accounts filed with Companies House.

The gas-fired Coolkeeragh power station was built in 2005 by ESB International, a subsidiary of the power giant which is 95 per cent owned by the Irish Government.

It supplies energy all over the island of Ireland.

ESB also has also controlled NIE Networks since 2010.

The company registered by ESB to operate its north-west power station, Coolkeeragh ESB Ltd, last year recorded a pre-tax profit of £25.4 million.

It followed a 12-month period in 2018 when it registered a pre-tax loss of £13m.

Revenues rose from £129.8m to £137.4m for the year ending December 31 2019. But there was a dramatic reduction in costs from £130m to £97m.

The company said the massive swing was mainly down to the “the significant decrease in gas costs year on year.”

In a review of the business accompanying the financial results, the energy group also said: “In addition to this, the day-ahead-market (DAM) price fell at a significantly slower rate in comparison to the commodity price which resulted in strong spark spreads for most of the year.

“Coolkeeragh ESB Ltd also saw much higher market scheduled quantity running year on year.”

The increased profitability left the company with a tax bill of £1.04m.

The report also acknowledges the impact of Covid-19 on the economy in recent months.

“Given the nature of the company’s business, the directors do not believe that Covid-19 will have a material impact on the company.

“However, given the inherent uncertainties, there is a risk that this could change as the financial impact of Covid-19 on the company’s future financial performance becomes clearer.”

In February 2020, ESB entered into a €1.4 billion (£1.26bn) five year revolving credit facility with a syndicate of 14 banks. Under the facility, Coolkeeragh ESB Ltd is a co-borrower on the sustainability linked loan.

As of March 2020, €100m (£90.2m) had been drawn down.