- A resilient business model to navigate the current complex environment: Net profit of €1.84 billion for the half year (+12.2%), despite a 13.6% decline in the second quarter as a result of COVID-19 related lockdowns. The performance in the first half was underpinned by; the steady flow of investment activity over the past twelve months, with €8.23 billion committed and 4,900 new megawatts (MW) in operation; the group’s geographical and business diversification; and improved efficiency
- COVID-19 adverse impact over the first half of the year: The results for the first half were impacted by the COVID-19 pandemic. The main direct impacts of the pandemic on the group’s business were declines in demand and late payments. Both factors had a combined impact of EUR 228 million on group EBIT.
- Operating profit: The group’s gross operating profit (Ebitda) amounted to €4.91 billion, 1.4% below that of the first six months of the previous year, posting growth in renewables (+5.3%) and generation and supply (+14.3%) but a lower contribution from the networks business (-10.6%).
- Currently building 7,500 new megawatts: Investments for the period amount to €3.58 billion (+2.3%), in line with the objective of investing €10 billion by the end of 2020. Iberdrola continues to deliver its expansion plan which covers a renewable project pipeline of 58,000 000 MW and this was bolstered by a new agreement in Sweden and acquisitions in France.
- Guidance for 2020: Despite the uncertain environment related to the COVID-19 pandemic, the group maintains its guidance for net profit growth at levels ranging from ‘mid’ to ‘high single digit’, and its shareholder remuneration policy remains unchanged
Ignacio Galán, Iberdrola CEO and Chairman, said: “We are making steady progress in our commitment to invest €10 billion in our business during 2020, demonstrating that the only way to a rapid and sustained recovery is through the green economy.”
ScottishPower Half-Year Results 2020
Highlights
- Completion of the 102-turbine East Anglia One offshore windfarm, with construction continuing safely during the COVID crisis, adding 714MW of clean energy to SP’s portfolio
- SP Renewables output up by over 50 per cent year-on-year through increased capacity and stronger wind conditions
- On track to spend c.£1.3bn this year across renewables, networks and retail businesses, with up to two thirds of this with UK suppliers
- Support for tens of thousands of customers and communities throughout the COVID crisis
- 100% Green leadership position reinforced with ‘Unlocking Net Zero’ 10-point plan for accelerating investment in renewable generation and network infrastructure
Investment in renewable energy continued at pace throughout the second quarter – despite the COVID-19 pandemic – and a major milestone was achieved with the completion and full commissioning of the East Anglia ONE offshore windfarm. All 102 turbines are now fully operational, with the capacity to produce 714MW of clean energy – enough to power the equivalent of more than 630,000 homes. To date, 1.1TWhs of power has been generated by the windfarm.
In East Anglia, much of the work on the turbine installation and commissioning was completed during lockdown, with ScottishPower Renewables and its partners transforming how they worked to get the job done. The impact of the newly-completed windfarm goes well beyond the renewable energy it will produce, with jobs and UK supply chain targets both exceeded, making a difference to the local and national economies. This ambition will continue beyond completion, with recruitment currently underway for ScottishPower Renewables’ first-ever apprentices. This is testament to the role of offshore wind in supporting not just the journey to net zero, but in delivering a green economic recovery.
In addition to announcing £150m+ plans for a new cluster of onshore windfarms in South Lanarkshire that will deliver 165MW of electricity capacity– enough to power 100,000 homes –ScottishPower is also pressing ahead with innovative storage projects across the UK and Ireland. This year we expect to complete battery projects at Whitelee windfarm near Glasgow, as well as in Cornwall and the Republic of Ireland. he 50MW super-battery project at Whitelee, will be the biggest in Scotland and will support the operations of the 539MW windfarm on the site.
In the first half of the year, ScottishPower has played a crucial role in supporting customers through lockdown, particularly the most vulnerable. The company has advanced credit for 26,000 domestic customers with prepayment meters and facilitated more than 100,000 direct debit reductions or payment holidays for other domestic and business customers. Direct Debit increases for over 250,000 customers have also been delayed during the pandemic.
ScottishPower key workers in SP Energy Networks have ensured that supplies to customers and emergency services such as hospitals and care homes have been robustly protected. Funding for a number of SPEN’s existing Green Economy Fund projects has also been used to support vulnerable customers in relation to the COVID crisis, including the announcement in April of £450,000 funding for the Food Train charity for 9 new electric vehicles, meaning the charity can expand its services to new regions across Scotland to help older vulnerable people with weekly food and grocery supplies.
Keith Anderson, ScottishPower CEO, said: “Safely completing the final installation of East Anglia One windfarm during the Covid lockdown has been a monumental feat of engineering know-how, innovation, and sheer determination. It’s a big milestone on the UK’s journey to decarbonise and a clear example of the potential of the Green Recovery.
“We know that building more renewable energy and storage projects, and investing in transforming the energy networks to allow for the mass electrification of transport and heating, are crucial to meeting the UK’s ambitious Net Zero targets.
“The completion of East Anglia One, along with our strong renewables pipeline, shows what we can do as a key delivery partner on Net Zero. We’ve set out the practical steps the UK can make to speed up investment in Net Zero infrastructure, creating economic opportunities across the country at this critical time.”
ScottishPower Half-Year Results 2020 (First Six Months Cumulative)
ScottishPower Renewables
EBITDA £329.0m (+£116m, +54%)
First six months’ increases YOY is largely attributable to the East Anglia One contribution following commencement of operations late in 2019. ROC sites EBITDA has also improved 17% due to higher volumes and improved wind conditions.
SP Energy Networks
EBITDA £431.0m (+£14m, +3.3%)
Whilst there has been a Distribution revenue reduction as a result of COVID19 impact on demand (-8%), the returns for SP Energy Networks are on-target as the business delivers the RIIO-ED1 distribution investment programme, which runs until 2023, and the RIIO T1 Transmission investment programme until 2021.
Liberalised (Including Retail Business)
EBITDA £112.2m (+£63m; +130%)
The Liberalised business EBITDA increased in comparison to H1 2019 which was adversely impacted by Ofgem retrospectively changing the indexation period of the Price Cap. ScottishPower retail customer numbers have remained flat through 2020 at 4.7million. Total volumes versus prior year: Electricity -11% and Gas -8%. Business power volumes have been adversely impacted by COVID19 and are 19% lower than the previous year.
East Anglia One Local Economic Impact
- ScottishPower has exceeded the target of 50% UK content in the supply chain
- Created more than the estimated 3000 jobs (estimated almost 3500 at peak construction)
- 100 long term skilled jobs based in Lowestoft for the life of the windfarm.
- Implemented an ambitious skills strategy to engage with over 4000 pupils across the educational spectrum including sponsoring 10 engineering Masters students and developing an apprenticeship programme.
ScottishPower for customers during the Pandemic
- ScottishPower has advanced credit for 26,000 domestic customers with prepayment meters and facilitating more than 100,000 direct debit reductions or payment holidays for other domestic and business customers.
- ScottishPower is continuing to support customers who are struggling to pay for their energy and is helping customers to catch-up with their energy payments.
- ScottishPower has resumed installing smart meters in England and is prepared for the lockdown easing in Scotland and Wales to start installing immediately. This helps to safeguard the jobs of the engineers and the wider supply chain, as part of the UK’s Green Recovery.
