Saltend power station profits tumble as renewable energy hits new high
A rise in renewable energy was partly blamed for the drop in profits
By Hull Daily Mail | Posted: 14 May 2019
A rise in the amount of electricity generated from renewable energy has been blamed for a profit drop at a Saltend gas power plant.
The Saltend Cogeneration Company – which runs a gas turbine power station at the site – saw its operating profits fall by more than £10m in 2018.
The business, which supplies electricity to both Saltend Chemicals Park and the wider grid, said less demand for gas power was partly to blame for the drop.
In accounts filed last week, directors said: “The deterioration in financial performance was due in part to reduced electricity margins from reduced demands for gas, as renewable sources increased…
“The short-term outlook predicts continued reductions in electricity demand as a result of continual improvements in energy efficiency, however the medium term suggests it will then increase following an increase in demands for electric vehicles and electric heat pumps.
“The UK committee for climate change currently predicts demand of around 365TWH by 2030, reflecting an eight per cent increase from today’s levels.”
Saltend Cogeneration Company was formed back in 2000.
It is one of the largest natural gas-fired electric power generating facilities in the country.
Last year, the company announced it had “reaped the benefits” in 2017 from the decline of coal power across the country.
However, 12 months later, the rise in renewable energy has changed the picture significantly.
Despite the drop in operating profits however, sales at the company actually rose from £342.1m in 2017 to £392.7m last year.
Directors said: “Gas fired generation accounted for 39 per cent of all generation, which was a small decline from 2017, but is expected to follow this path as renewable deployment increases through the 2020s.
“Generation from renewable sources increased by 13 per cent to a record high, driven by increases of both wind and solar.
“2018 saw further reductions in coal-fired generation, with record low levels driven by further site closures as the UK moves towards its target of all coal plants being phased out by 2025.”
The plant said it had experienced no major incidents during 2018.
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It said flexibility would be “of great importance” moving forwards, as renewable energy continues to rise in capacity.
Brexit was also touched upon in the report.
The company admitted the UK’s power sector would “likely be affected by the final outcome of Brexit.”
It said while it was currently too early to assess the potential impact of Brexit on the business, Saltend Cogeneration Company “remained confident there will be no disruption regardless of the outcome of negotiations.”