AES Kilroot Power
AES Kilroot Power is the large electricity generating plant close to Carrickfergus. It is a subsidiary of the American-owned parent company AES (NI) which also now owns the AES Ballylumford business which has another group of electricity generating plants in Islandmagee.
The generating plant at Kilroot was originally designed to burn oil or coal to generate electricity. Later it was converted to also use, according to market conditions, natural gas. In recent years, but subject to emissions limits, there have been periods when lower international coal prices have seen large imports of coal thought to be of south American origin.
The long-term future of the Kilroot plant is uncertain since the agreed Eu-wide agreement to observe tighter emissions controls would constrain the profitability of operations within a few years.
The accounts for Kilroot Power reflect a series of factors affecting its profitability. Total revenue in 2016 fell by 1% because of lower wholesale electricity prices which emerged in the all-island Single Electricity Market (SEM).
A feature of the operating profit in each recent year has been the recording as ‘other operating income’ of a significant gain from the various hedging strategies affecting different variables, including fuel prices. In 2016, operating profits were increased by £7.2m from this source, compared to £10.2m the previous year.
A major decision in 2015 affected the operating profit in that year. In August 2015, the SEM Committee decided to reduce the payments made to generators which make capacity available by about 10%. This change, along with foreign exchange and commodity price movements, had a serious impact on revenue. This was assessed to represent an indicator of the impairment of the assets of the business.
The accounts, therefore, for 2015 showed an impairment loss of £24m which resulted in what might have been an operating profit of over £10m translating into an annual operating loss of £14.8m.
The shareholding parent company has received no dividend payment in the past two years after a dividend of over £36m in 2014.