An EU ruling on the energy market that prevents the UK from paying to keep power plants open has blown a hole in the profits of energy giant SSE. The “Big Six” supplier said it expected adjusted earnings-per-share for the year to December would be around 6p lower than forecast, at between 64p and 69p a share. In November the EU ordered an immediate halt on the UK’s ‘capacity market’ scheme, suggesting it constituted illegal state aid. The £1bn scheme paid the owners of Britain’s gas, coal and nuclear plants a fee to guarantee that they are ready to power up the grid when demand for electricity is high in winter. The scheme is now in a ‘standstill period’ until it can be approved again, preventing the Government from holding any capacity auctions or making any payments to power generators that have already won contracts. As a result SSE said it may not receive the £60m income from the scheme it expected this year. SSE added that the Government “continues to believe that the capacity market is the right mechanism for delivering security of supply at the lowest cost to consumers”. It was also quick to reassure investors that the return of the expected income from the scheme is a “matter of timings only”. The company also affirmed its intention to dispose of its retail energy arm, either through a demerger and listing on the stock exchange or a sale. A merger of the division with Npower fell apart last year.
Telegraph 8th Feb 2019 read more »
Herald 8th Feb 2019 read more »