AES Kilroot Power Ltd
At the end of its last trading year of 2017, AES Kilroot Power had two large electricity generating units with a capacity of 560mw, from burning either coal or oil, as well as 142mw of capacity from four open cycle gas turbines.
The latest accounts were prepared with the knowledge that the large coal/oil units had failed to be awarded contracts to generate electricity as part of the new I-SEM system, which started on October 1.
The accounts reflect both the results of commercial trading in 2017 as well as the financial consequences of the major proposed contract change. As this report was written, no firm decisions were publicly available on talks to alleviate the dramatic impact of I-SEM on the Kilroot plant.
The critical feature of the most recent accounts is the inclusion of impairment charges, affecting the value of the plant, if the large generating units cease to supply electricity as expected in the I-SEM.
Impairment charges of £118.6m are shown in the operating accounts, leading to an overall trading loss of £110.4m. These impairment charges are also material to the pre-tax profit, which becomes a loss of £92.0m. The Kilroot plant is a subsidiary of the American-owned parent company AES (NI). The long-term future of the Kilroot plant has been uncertain since the acceptance of agreed Eu-wide rules to observe tighter emissions controls.
However, the I-SEM, now introduced, has brought forward the possible earlier demise of the coal/oil units. Employment at Kilroot has been stable in recent years and averaged 121 people in 2017. The share- holding parent company has received no dividend payment in the past three years after a dividend of over £36m in 2014. As this review is written, there has been no confirmation from SONI or the regulator that, to reduce risk to electricity supplies in the near future, special contracts will be agreed with AES to better manage the generating capacity at Kilroot and Ballylumford. The company report for AES Kilroot Power is reprinted following errors in last week’s table. We apologise for failing to indicate that operating profits and pre-tax profits in 2015 and 2017 were losses.