The return to action of Whitegate power plant in Cork boosted Bord Gáis Energy’s profits to almost €40 million in the first half of this year, according to results from its British owner, Centrica.
Whitegate began generating electricity again last December following a year-long shut down for repairs, which contributed to an energy squeeze in the Republic.
Centrica said on Thursday that Bord Gáis operating profits grew 74 per cent in the first half of this year to £33 million (€39.4 million) from £19 million over the same period in 2021.
Whitegate’s shutdown depressed the Irish company’s profits last year. Centrica’s figures show that in the first half of 2020, when the power plant was generating and selling electricity, Bord Gáis’s operations earned £30 million.
Centrica noted that “reduced retail margins in a challenging environment” hit the Irish operation’s profits in the first half of this year.
Whitegate burns gas to generate electricity while Bord Gáis supplies the fuel to homes and businesses, along with electricity. Gas prices rose to record highs last year on surging global demand while Russia’s invasion of Ukraine increased volatility.
Two increases
Bord Gáis increased its prices twice since last September. Calculations from price comparison website Bonkers.ie show its domestic customers pay an average of €1,797 a year for electricity, €706 more than in 2021, and €1,378 for gas, €573 more than last year.
Centrica noted that “bad debt provision” offset some of Bord Gáis’s gains, indicating that some customers were behind with paying their bills.
The Irish company recruited 4,000 more customers in the first half, bringing its total to 513,000, according to Centrica.
Bord Gáis proposes spending €250 million on building two standby gas-fired electricity plants in Dublin and Athlone to meet growing demand for power. Centrica said it expected to make a final investment decision on this in the second half of the year.
Surging profits
Centrica, Britain biggest gas supplier, said group operating profit for the first six months of 2022 rose to £1.34 billion (€16 billion), up from £262 million (€312.7) million a year earlier.
It said it made £6 per customer profit after tax in the first half of the year. The rise in profits comes as wholesale gas prices have hit record highs across Europe this year, following Russia’s invasion of Ukraine in February, in turn pushing up energy prices for consumers.
Operating profits at Centrica’s British Gas arm, meanwhile, fell 43 per cent to £98 million (€110 million) during the period as it needed to buy more energy in the wholesale market than expected to cover customer demand.
A British price cap on the most widely used domestic energy contracts is expected to rise by at least 64 per cent in October, having already increased 54 per cent in April, contributing to rising inflation and a cost-of-living squeeze.
As expected, Centrica restored dividends after halting them in 2020, pledging an interim payout of 1p a share.
Centrica in May completed the sale of its 69 per cent stake in Spirit Energy’s Norwegian oil and gas assets to Norwegian private equity firm SVAL Energi for about £560 million.
