THE consumer-facing business of ScottishPower has made a profit of more than half a billion pounds after recovering outstanding cash from Ofgem, the energy market regulator.
The energy giant, which is owned by Iberdrola of Spain, reported earnings before interest and tax (EBIT) of £567 million for its retail division in the first half of the year.
It comes after the company said it had retrieved outstanding monies due to energy suppliers from Ofgem, which arose as the industry awaited for the energy price cap to be increased last year.
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ScottishPower said the upheaval in the energy market which followed Russia’s invasion of Ukraine last year, which contributed to a steep rise in UK household energy bills, meant suppliers were forced to absorb higher prices while the regulator adjusted the price cap in response.
However, after the price cap was eventually raised, suppliers were able to retrieve outstanding monies. Alongside improved margins, this helped the ScottishPower retail business return to profit following a loss of £662m in the first half of last year.
A spokeswoman noted the payments were “fronted-loaded” into the first half of the financial year and will not be repeated.
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ScottishPower said: “Throughout 2022, extreme market volatility forced all UK energy suppliers to buy energy at peak prices and then sell it to customers at a loss, until Ofgem could amend the price cap to reflect the costs borne. Last year, ScottishPower’s retail business made a loss of £271m because of this and today’s figures reflect Ofgem’s move to return those costs to all suppliers this year.
“In 2023, ScottishPower is delivering a record level of green investment in the UK, doubling the money spent on renewable generation and grid infrastructure to help decarbonise and deliver energy security.”
Scottish Power reported overall first-half EBIT of £1.158bn, up 58% from £677m. Its networks business reported a 12% rise in EBIT to £336m, but renewables profits dipped by 11% to £239m.
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