150 new trainee jobs to be created through £200m Scottish Power grid contracts, but cut in subsidies takes wind out of its renewable energy sales

Keith Anderson
Keith Anderson

Scottish Power has today (21 Oct) awarded 13 new contracts with a total value of £196 million over  four years for maintenance and upgrade works on its overhead power line networks in Central and Southern Scotland, Merseyside and North Wales.

The contracts will support 400 jobs, creating 150 new trainee posts, through Scottish Power’s partnerships with Dumfries College, Forth Valley College and Coleg Menai.

Over 3.5 million homes and businesses are connected to SP Energy Networks distribution network, which consists of 30,000 substations, 40,000km of overhead lines and 65,000km of underground cables.

The contracts will cover refurbishment and rebuild works, fault and storm response activities and will support new connections on to the network. In the coming years the company will refurbish or replace around 11,000km of its overhead line network.

Keith Anderson, Scottish Power Chief Corporate Officer, said: “These new contracts will support our ambitious programme to deliver some of the most significant upgrades to our network in more than 50 years.

“Between now and 2023 we are investing more than £4 billion in total, further improving reliability for our customers and making our network more resilient to extreme winter weather.

“We also need to encourage a new generation of technicians and engineers in to our industry, so it is great to see 150 new trainees coming in to our industry as part of these contracts.”

The contracts were announced along with the latest quarterly results figures from Iberdrola, the Spanish conglomerate which owns Scottish Power.

Iberdrola EBITDA for the first 9 months of the year was up 5.8% to €5,431 million, against €5,132 million in the same period last year, while net profits rose 7.8% to €1,920 million.

Its UK renewables business delivered EBITDA for the first nine months of €301 million, which is twice the €150 million achieved in the same period in 2014, reflecting increased production as well as appreciation of the £ against the €.

The load factor (% output delivered vs theoretical maximum) for onshore wind was up 1.6% to 22.8% and the company’s first offshore wind farm at West of Duddon Sands reached a load factor of 44.4%. Total renewables production is up 30.3% over the nine months since the same period last year.

Scottish Power’s networks business delivered EBITDA in the first 9 months of the year of €821 million, up from €727 million as the benefits of the multi-billion pound investment programme in networks upgrades begin to be realised, helped also by the appreciation of Sterling against the Euro.

The supply and generation business saw EBITDA fall to €250 million down 17.8% on the equivalent 9 month period in 2014. This is principally because of the significant impact on gross margin of the carbon tax, increased cost of Renewable Obligations Certificates and feed in tariff costs, with generation from coal also down 20.8%.

Investment by Iberdrola in Scottish Power remains scheduled to be a record £1.3 billion in 2015, with most going into multi-billion pound upgrades of power transmission and distribution networks (detailed above)

SP Energy Networks has benefitted from 55% of Iberdrola’s global investment in networks and Scottish Power Renewables has benefitted from 68% of Iberdrola’ s global investment in renewables.

Anderson added: “These results show that onshore and offshore wind can be significant contributors to the UK’s generation mix.

“But with coal power generation now uneconomic given the impact of government obligations, the priority should be for a government framework that enables investment to steadily realise a new generation of gas power stations to provide base load. “

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