Utility Week

Finance & Investment This week Scottish Power profits curbed by low winds Renewables division suffers 26% drop in output in first half of year as wind farms are becalmed A reduction in renewable output as a result of low winds has driven a sharp fall in Scottish Power's profits for the first three quarters of 2016. Earnings before interest, taxa- tion, amortisation and deprecia- tion (Ebitda) dropped by 7.5 per cent to £924.9 million compared with the same period last year. Ebitda for Scottish Power Renewables fell by 28.6 per cent to £156.9 million, the result of a 26 per cent reduc- tion in output over the first half of the year, following record output in 2015. By contrast, output was up by 5.9 per cent year-on-year in the third quarter of 2016. In the networks division – SP Energy Networks – Ebitda declined by 2.8 per cent to £580.9 million, "largely driven by the phasing of investments following the implementation of the RIIO-ED1 distribution invest- ment programme from April 2015". Ebitda rose by 4.8 per cent to £187.1 million at Scot- tish Power's generation and supply arm. Operating costs were lowered by the closure of the Longannet coal-fired plant, although earnings from the retail business were down by £17 million because of "milder weather and increases in non-energy costs". Over the past year the number of electricity customers has fallen from 3.3 mil- lion to 3.2 million and the number of gas customers has dropped from 2.2 million to 2.1 million. Scottish Power also revealed that it has signed contracts for smart meter installations worth a total of £341 million with LowriBeck, Amey, Providor and Actavo since the beginning of the year. TG WateR Market leavers move customers to JV Water2business – a joint billing venture between Bristol Water and Wessex Water – will acquire the business customers of the two companies when they exit the non-household retail market. The firms have applied to the environment secretary for per- mission to exit. With approval, they will separate their whole- sale business and transfer all of their non-household customers to Water2business, a retailer regulated by Ofwat, on 3 April next year. Since 2001, all Bristol Water and Wessex Water customers have been jointly billed for their water and wastewater services. Water2business was born out of this venture. Bristol Water and Wessex Water will continue to deliver wholesale water and wastewater services to business custom- ers, and there is no change for domestic customers. electRicity More ecobonds from Ecotricity Ecotricity has launched another series of corporate ecobonds that enable the public to invest directly and share in its financial benefits. The green independent's fourth series of ecobonds will offer investors a return of 5 per cent a year for Ecotricity custom- ers, or 4.5 per cent for the wider public. It follows three previous mini-bond issues since 2010. The first two ecobonds were oversubscribed and raised £10 million each, the third in Autumn 2015 raised just under £18 million. The supplier has already received over £1 million- worth of applications for the latest bonds in just 24 hours. Applications for the latest bond offer close on 30 November. eneRgy Co-op Energy bears £1.8m penalty Ofgem has ordered Co-operative Energy to pay £1.8 million for customer service failings. The supplier was referred by Citizens Advice in June 2015 aŸer a steep increase in complaints caused by the introduction of a new IT system in March last year. The new system resulted in billing delays, problems logging into online accounts and direct debit updates stopped. New cus- tomers also experienced delays transferring to the supplier. The firm has already paid £1.6 million and the remainder will be paid shortly to custom- ers not yet compensated. Money that cannot be returned to customers will go to the charity Step Change to help energy consumers who are in financial difficulties. Scottish Power enjoyed a record output in 2015 Utility WeeK | 4th - 10th novembeR 2016 | 15 Stock watch 215 210 205 200 195 Tesla moTors share price, 26 - 31 ocTober 27 Oct 26 Oct 28 Oct 31 Oct Tesla's share price surged more than 5 per cent from $202.24 to $212.99 in aer-hours trading as the company posted financial results well above market expectations. Founder Elon Musk said car deliveries had rocketed 70 per cent in the past year, resulting in a revenue increase of 145 per cent to $2.3 billion in the third quarter – the first quarterly profit for the company in three years. Shares were back down to $197.73 as UW went to press.

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