Profits storm ahead at Sheringham Shoal despite low wind speeds

One of the substations at the Sheringham Shoal Offshore Wind Farm. Picture: Ian Burt

One of the substations at the Sheringham Shoal Offshore Wind Farm. Picture: Ian Burt - Credit: IAN BURT

A windfarm off the north Norfolk coast which is aimed to power 220,000 homes more than doubled its profits last year despite lower-than-average wind speeds.

Scira Offshore Energy, which operates the 88-turbine Sheringham Shoal windfarm, made £21.9m in pre-tax profit for the year ending December 31 2015. Revenues jumped 10pc to £140m for the same period, up from £126m the year before.

It underscores the potential of the region to lead the way in offshore wind, with work on the Galloper Windfarm project near Lowestoft beginning this week.

In its latest accounts, posted by Companies House, Scira Offshore Energy said: 'During this period, while prevailing wind speeds have been lower than the long term average, the effect of this has been mitigated by maintaining production availability at a level higher than target.'

However, it said the removal of a key exemption to the climate change levy would affect future revenue.

The abolition of the Levy Exemp-tion Certificate, which made up 5-6pc of income, meant from August 1 last year renewables firms were required to pay the Climate Change Levy.

Renewable producers had been exempt from the charge since its introduction in 2001 to support renewable investment.

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The exemption was worth about £4 per megawatt hour to clean energy producers, providing a source of extra revenue for renewable projects dealing with low margins. Despite this, the firm said it expected to build on the performance of 2015, and be 'cash generative' for the remainder of the life of the project.

'It is anticipated that aside from expected variations in wind speed and minor variations resulting from the wake effect of other wind farms in the area, production and cost performance will be in line with that achieved in 2015,' it said.

The windfarm capacity factor - the actual energy produced compared to its potential level – was 42pc, up from 39pc in 2014.

The company is 40pc owned by Statkraft UK, 40pc by Statoil Patroleum AS and 20pc owned by UK GIB Sheringham Shoal Investment.

Is your firm investing in renewable energy? Call Sabah Meddings on 01603 772879 or email sabah.meddings@archant.co.uk

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