ESB makes record profits of €900m – but not on the back of our sky-high bills
...CEO also insists millions is being invested in infrastructure
ESB MADE record profits of almost €900million last year – but it insists they were not made on the back of customers paying recordhigh electricity bills.
Chief executive Paddy Hayes admitted yesterday the skyhigh profits ‘must be difficult for customers’ to hear of ‘when energy prices are still high’.
But he defended the bumper income, which he said was not earned from its domestic power business but much of it from its power generation and trading business in Britain.
Domestic electricity prices have nearly doubled since 2016 and the Russian invasion of Ukraine in 2022 sparked a massive surge in gas prices, which are up 70%. Gas is used to produce just over half of Ireland’s electricity.
The company will also hand over a dividend of €220million to the Government, and €76million was paid to the State under the Government’s scheme to cap the revenue of certain electricity generators.
ESB also said it contributed €2.7billion to the economy through wages, taxes, dividends and money spent with Irish companies and suppliers.
Mr Hayes, who joined the company two years ago, admitted yesterday : ‘I know that it must be difficult for customers to be listening to an energy company making profits at a time when energy prices are still high.
‘But the first thing to say is that none of those profits came from our Electric Ireland residential customer book.
‘Where our profits came from, ESB is a big, diversified electricity company. So our networks businesses in Ireland and Northern Ireland were profitable.
‘And 60% of our profits came from our generation and trading business which operates in the wholesale markets in Ireland and GB.’
Almost a quarter of its profits were made from its business in Britain where it is a big player in power generation.
Mr Hayes added: ‘Just to put our profits in context, we also invested €1.77billion last year. So for every euro we earned in profit we actually invested two euros in clean energy infrastructures.’
Utility prices expert Daragh Cassidy, of price comparison site Bonkers.ie, said: ‘Profits like these will be tough for many consumers to stomach especially given how high residential energy prices remain. But we need to remember that we own ESB. So almost all the profit gets reinvested back into our national grid or paid out to the Government in the form of dividends.
‘And huge investment is needed in the grid over the coming decade to help us move towards net zero and cope with a rapidly growing population. What’s more, almost a quarter of the ESB’s profit now comes from its activities in Great Britain and has nothing to do with Ireland.
‘Over the past two years the Government has paid a cumulative energy credit of €1,250 to every household in the country. And many received further social welfare support worth hundreds. So you could argue that all the ESB profit has pretty much been paid back out.
‘I’d also argue that it’s nice to be talking about a State agency making a profit for once as opposed to needing a taxpayer bailout like the health service or RTÉ often does.
‘If it’s any comfort, the ESB/ Electric Ireland and all the other energy suppliers are almost guaranteed to cut prices again by another 10% to 20% before the end of the year, barring any major economic shock,’ he added.
The company said there was a drop in greenhouse gas emissions from electricity generation of almost 30% on 2022 levels, with carbon intensity reducing by more than 11%.
ESB chief financial officer Paul Stapleton said: ‘While the extraordinary volatility experienced in global energy markets in 2022 eased in 2023, wholesale prices were still unpredictable and significantly higher than the levels seen prior to the energy crisis.’
He added: ‘The funding of our capital expenditure programme – forecasted at over €11billion over the next five years – will require continued strong financial performance and further profit growth.’