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Finance & Investment This week SSE profits surge with renewable output Firm reports operating profit of £701.9 million, up from £529.8 million, in its first-half results SSE reported a dramatic increase in operating profit for the first half of this financial year as its supply business recovered from the losses seen in 2014, and the weather boosted renewable energy output. SSE's H1 results exceeded investor expectations, reporting an operating profit of £701.9 mil- lion, up from £529.8 million, with the bulk of the gains coming from its supply and wholesale energy businesses. SSE's wholesale business saw operating profit increase from £11.8 million to £141.8 million, as a result of a 38 per cent increase in renewable output. Higher rainfall and windier conditions over the six months may have helped SSE's wind and hydro power activities, but market conditions remain challenging for thermal generation, the company said. Also contributing to the profit increase is SSE's retail business, which last year reported an H1 loss of £16.9 mil- lion but now shows an operating profit of £73.8 million. SSE attributes the significant gains to a better perfor- mance in the industrial and commercial sector, lower than average temperatures, and lower operating costs. However, for domestic supply, SSE expects to report a decline in profit in its full-year results due to lower cus- tomer numbers. In July this year, SSE said its customer base had shrunk to 8.49 million compared with 8.58 million on 31 March this year, a decrease of 90,000 in the first quarter of its financial year. "The road ahead is becoming clearer," said SSE chairman Richard Gillingwater. JA ELECTRICITY EDF to take on Dorenell project EDF Energy Renewables has announced it will take on the construction and development of the planned 177MW Dorenell onshore windfarm alongside renewables developer Infinergy. The Scottish project received consent in 2011 but is in the pro- cess of applying to use a new tur- bine design that could increase its capacity to 200MW, making it one of the largest onshore developments in Scotland. EDF Energy Renewables' wind power portfolio already includes 700MW of capacity in operation or under construc- tion. EDF Energy chief executive Vincent de Rivaz said: "Today's announcement, just weeks before the international confer- ence on climate change in Paris, confirms EDF Energy's commit- ment to lead in UK investment in low-carbon electricity." ELECTRICITY DSR saves UKPN £43m of upgrades UK Power Networks (UKPN) has saved £43 million of asset invest- ment for the next eight years as a result of demand-side response (DSR) trials. The network has been able to delay the investment it would otherwise have made over the next eight years to reinforce the grid, aer DSR trials carried out as part of its Low Carbon Lon- don project revealed a good level of response from businesses when called on to reduce energy consumption. Thirty-seven participants vol- untarily reduced their electricity consumption sufficiently to serve 18,000 homes at peak time. UKPN will use DSR to manage sites that are occasionally close to their capacity limits, but where upgrading the network would have delivered more capacity than is needed generally. ELECTRICITY £26bn benefits for DNO smart grid Northern Powergrid estimates that the lessons from its Cus- tomer-Led Network Revolution (CLNR) project could lead to up to £26 billion-worth of benefits by 2050. The network said the net benefits to the UK would be between £5 billion and £26 billion from 2020-50, as all the domestic interventions trialled were successfully demonstrated and could form part of the future smart grid. Howevever, the distribution network operator also warned that the domestic interventions trialled would be cost effective in the next decade only if they delivered benefits to energy suppliers as well as avoiding network reinforcement. Windier conditions helped SSE's activities UTILITY WEEK | 20TH - 26TH NOVEMBER 2015 | 15 Stock watch 10.0 9.5 9.0 8.5 EON SHARE PRICE, 17 OCTOBER - 17 NOVEMBER 20 Oct 27 Oct 3 Nov 10 Nov 12 11 10 9 8 7 EON SHARE PRICE, 17 SEPTEMBER - 17 NOVEMBER Sep 2015 0ct 2015 Nov 2015 The share price of Eon UK's German parent company fell to five-week lows this week aer the energy giant reported record losses for the first nine months of the year on 11 November. By 17 November its share price stood at €8.75, the lowest price since early October and 11 per cent below highs seen at the end of last month. Just three months ago its share price was north of €11.50. 17 Nov