Reduced output from renewable energy sources and higher gas prices have led to an £80 million hit on operating profits at SSE during the first quarter of this financial year.
The Big Six firm has stated that its operating profits, for the three months to the end of June, have been “negatively impacted” by approximately £80 million compared to initial plans. Depending on a variety of factors, such as wholesale prices, this could have a negative influence on its full year results.
SSE said poorer levels of wind resulted in output from its onshore and offshore wind farms to be 15% lower than expected. Furthermore, higher temperatures meant 10% of gas demand was cut from the market, reducing the firm’s profits even further.
In a trading update, SSE chief executive Alistair Phillips-Davies, said: “This new financial year has so far been characterised by lower than expected output of renewable energy and persistently high gas prices, but looking ahead, we are very focused on fulfilling our obligations to energy customers and delivering on our key priorities.”
The company that has plans to merge its energy supply unit with Npower, has been force to increase its consumer energy bills this year as the UK Government’s plan to introduce a price cap on standard variable tariffs (SVTs). This will impact SSE’s 2.28 million electricity accounts and 1.53 million gas accounts that are on the most expensive household energy tariff.