Airtricity and Michael Murnane venture clips liability to creditors

A green electricity joint venture between Airtricity owner SSE and businessman Michael Murnane owed creditors more than €70 million at the end of its last financial year, accounts just filed show.

Green Energy Company Ltd, which operates a large wind farm in Rylane, Co Cork, reduced losses by two-thirds to €170,350 in the 12 months ended March 31st, 2018, from €527,200 the previous year.

The company’s latest returns show it owed creditors €70.8 million on March 31st, the end of its last financial year, a near 7 per cent reduction on the €76 million liability it recorded 12 months earlier.

Green Energy Company is a joint venture between SSE Renewables, part of Scottish utility and Airtricity owner, SSE plc, and Michael Murnane, a well-known figure in the energy industry.

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The wind farm it owns in Rylane has the capacity to generate 57 mega watts of electricity, roughly enough to power about 60,000 homes, according to some industry calculations.

The accounts show that the wind farm earned €12.5 million from selling the power it generated during its 2018 financial year, 2.4 per cent more than the €12.2 million it sold in the previous 12 months.

Operating profit was flat at €4 million, but a €4.1 million interest bill and taxes left it with a €170,000 loss.

The balance sheet shows that it owed €51.5 million in longer-term bank loans and overdrafts. Close to €10 million of its shorter-term debt of more than €19 million was due to group undertakings.

In their directors' report, Mr Murnane and Airtricity chief executive Stephen Wheeler state that more favourable wind speeds boosted the company's sales during the year.

Wind power and national demand

However, they also note that costs rose, giving rise to the company’s loss for 2018.

Wind farms cannot generate and sell electricity if wind speeds are too low or too high. During these periods, the country relies on natural gas and other fossil fuel burning plants for power.

Wind speeds last summer, in the months that followed the end of Green Energy Company’s 2018 financial year, were particularly low.

The Government guarantees the price paid to wind farms for the electricity they produce. Householders and businesses support this through a levy on their energy bills called the public service obligation.

This year they will pay €209 million to support renewable energy businesses, including wind farms.

Regulators and the Government intend introducing a new system of renewable energy supports that will require less of a contribution from businesses and families.