The Irish electricity generation arm of London listed energy company SSE has posted a loss of €11.1 million stemming from a revaluation of oil-burning stations and a significant interest payment to group companies.
Recently filed accounts for SSE Generation Ireland Limited show the company turned its pretax profit of €4.1 million in the year ended March 31st, 2016 to a loss of €11.1 million the following year.
The significant loss came despite a 17 per cent increase in turnover to €187.9 million, the majority of which came from the single electricity market (SEM), the wholesale electricity market for the island of Ireland. While the cost of sales also increased, exceptional costs of €21.6 million led the group to a gross loss-making position. The exceptional costs included the revaluation of the company’s oil burning stations at Rhode, Co Offaly, and Tawnaghmore, Co Mayo. Those stations were “impaired due to their age and future competitive prospects”, leading to a total impairment of €21.6 million.
The review of that portfolio came as the company readies itself for changes coming in the form of the Integrated Single Electricity Market (I-SEM). The I-SEM comes into force in May this year and replaces the SEM. The new market arrangements are designed to integrate the Irish electricity market with European electricity markets.
Aside from the Rhode and Tawnaghmore plants, SSE operates in two further locations, Tarbert, Co Kerry, and Great Island in Co Wexford. Additionally, it owns sites in Lanesboro in Longford and Shannonbridge in Offaly.
Electricity exported by the Great Island plant increased 40 per cent on the previous year on the back of “increased power demand and prevailing market conditions”.
The other three plants operated as "peaking plants", meaning that they ran when requested if system demand required it. However, Tawnaghmore was out of operation for four months from the beginning of December 2016 due to works undertaken by ESB.
In addition to booking an impairment, SSE paid group companies interest of €8.46 million, further increasing its losses.
SSE employed 94 power station staff in the period, down four on the previous year. Meanwhile, wage and salary costs increased by 3.5 per cent to €8.03 million.
The company’s ultimate parent company is SSE plc, registered in the UK.