Tynagh Energy profit soars 60% to €40m after shutdown
Growth in profit partly due to three-month shutdown of generation plant in 2012
at Tynagh Energy, the multinational-backed power generator that is receiving a €66 million subsidy from electricity consumers, soared to €40 million in 2013, according to its most recent figures.
Tynagh is the single biggest beneficiary from the public service obligation (PSO) levied on all electricity users and will receive €66.4 million from the €335.4 million total that the charge will generate over the 12 months to next October.
Accounts recently filed by Tynagh show that its pretax profit grew 60 per cent to €40 million in 2013 from €25 million the previous year. Turnover rose by about 2.5 per cent to €120 million.
The company said the growth in profit was partly due to a three-month shutdown of its generating plant in 2012 for scheduled maintenance.
Galway-based Tynagh Energy’s owners include US giant General Electric and Turkish construction and utility group Gama. At the end of last year, shareholders’ funds stood at €71.3 million, almost twice the €37.6 million recorded on December 31st, 2012.
The company owed €147.5 million to its banks at the end of the year, €128 million of which was long-term debt. It has a facility with a syndicate of banks led by Royal Bank of Scotland.
The Commission for Energy Regulation reviews the PSO every October and this year decided to increase it by €125 million, with the result that all households are paying €5.36 more a month on their electricity bills.
Small businesses are paying €
18.47 a month, while large energy users, which include most of the Republic’s biggest employers, will shoulder a €166.8 million burden between them up to next October.
The PSO is charged on all electricity bills in the State and the proceeds are used to support renewable generators such as wind farms, turf-burning plants and two private operators, Tynagh and Aughinish Alumina, which agreed 10-year security of supply contracts with the government in 2006.
As a result of government policy, all those groups receive guaranteed prices for the power they supply.
The public service charge bridges the gap between the market price of power and the guaranteed tariff.
Tynagh began operations in 2006 and was built at a cost of €
320 million following a competitive tendering process run by the then government, which feared electricity consumption would outstrip supply.
Tynagh’s contract, under which it receives a guaranteed price for its electricity, is due to run out in January 2016. A similar deal with Aughinish, which is receiving €8 million, ends at the same time.
As a result of the increase in the PSO, the renewable sector, made up mainly of wind farms, will receive €92 million. The National Competitive Council recently called for this subsidy to be scrapped and said that renewable generation should be subject to market forces to the greatest extent possible.
The ESB-owned turf burning plants Lough Ree and West Offaly will get €81.6 million between them as a result of the PSO increase.