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Czech billionaire investor Daniel Křetínský’s gas-fired power stations in England enjoyed a second year of surging profits from the market disruption in the wake of Russia’s war in Ukraine.
His flagship gas-fired power plant in Stallingborough, north-east England, reported pre-tax profits of £141mn in 2023, according to accounts filed this month at Companies House.
It follows profits of £143mn in 2022 as electricity and gas prices soared in the run-up to and after Russia’s attack on Ukraine in February that year, compared with a loss of £26mn in 2021.
Russia’s invasion and the connected energy crisis has put profits of power generators in the spotlight as household energy bills jumped. They are set to rise by 1.2 per cent in January after a 10 per cent increase in October.
In its published accounts, directors for the South Humber Bank station, which is capable of supplying power to more than a million homes, said profits last year were boosted by “exceptionally high” prices in 2022 as they sold electricity in this period.
It also paid a dividend of £160mn to its parent company, Křetínský’s EP UK Investments, in 2023, the accounts show. A sister power plant in Devon reported pre-tax profits of £130mn in 2023, with directors highlighting the effect of high prices in 2022.
Gas-fired power stations were exempted from the UK’s windfall tax imposed on electricity producers to help households struggling with rising bills. This was because they needed to buy gas as prices for fuel rose.
However, many have gone on to report strong profits due to the high electricity prices, which were worsened by outages on France’s fleet of nuclear power stations in 2022. The French fleet exports to Britain and other neighbouring countries.
Trading group Vitol’s UK power station company reported adjusted annual pre-tax profits of £639.8mn in 2023, up from £177mn in 2021. Its 2023 results were also boosted by selling power in advance when prices were high in 2022.
The strong profits at Křetínský’s gas-fired power stations come as his £5.3bn takeover of Royal Mail nears completion, pending approval from regulators and the government. He wants to modernise Royal Mail and capitalise on the growth of ecommerce.
The 49-year-old’s business empire ranges from power stations in Britain and Europe to stakes in electronics retailer Fnac Darty and a 27 per cent stake in English Premier League club West Ham United.
The two gas-fired power stations in England are among several in the UK and Ireland owned by EP UK Investments.
This includes other gas-fired power stations in Northern Ireland and the Republic of Ireland — a single electricity market separate from Britain’s — and a biomass-fuelled power station in Lynemouth, Northumberland.
Overall, EP UK Investments reported a £99mn pre-tax profit in 2023 compared with £313mn in 2022 and a £226mn loss in 2021.
At the end of December last year, the South Humber Bank power station was fined £23.6mn by the energy regulator Ofgem for asking for “excessive” prices to lower its output when needed to balance demand and supply.
In a statement at the time, Ofgem said the power station had “breached its generation licence in a way that unfairly raised customers’ bills”.
In June 2023, the regulator introduced new rules restricting the ability of generators to make excess profits.
EP UK Investments declined to comment.
