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Guernsey Electricity posts multi-million losses

Guernsey Electricity posts multi-million losses

Wednesday 13 November 2019

Guernsey Electricity posts multi-million losses


Having to use the generators at the power station following the underwater cable failure set Guernsey Electricity back millions, leading them to lose £7.8m for the 2018/19 financial year.

Guernsey Electricity has recently completed the installation of the new undersea electricity cable (GJ1), linking the Island to France via Jersey. It ensures Guernsey is once again importing more than 90% of its energy from low carbon and renewable sources.

However, that has been far from the case in the last year, with the failure of the current link in October 2018 creating significant operational, financial and environmental challenges for the States-owned utility. 

Following an initial repair and subsequent analysis, CEO Alan Bates said a decision was taken to replace the undersea section of GJ1. 

"Without reliable importation, security of supply to the Island would continue to be adversely affected," he said. "The inability to operate the cable above 25% of capacity resulted in the remainder of our electricity demand being generated at the power station. The additional cost of this was over £11m for the year and produced an associated 216,000 tonnes of carbon dioxide.

Alan bates power station

Pictured: Alan Bates said reliance on the diesel generators had been financially and environmentally costly. 

"Our view was that this was a totally unacceptable environmental and financial position and therefore, an opportunity was taken to replace, rather than continue to keep repairing the cable.”

The company reported an operating loss of £7.8m for the year, before pension settlement gains, compared with £1.2m in 2017/18. The loss includes £3.4m of non-cash impairments of assets associated with the importation of electricity. Over the period £11.4m of cash was re-invested back into business activities, which represents an increase of £3m from the previous year.

“The costs of initially repairing and then replacing GJ1 and utilising the power station for 12 months, along with the impact of Brexit on our foreign exchange dealings, has affected us significantly," said Mr Bates. "We have however, overall, achieved a commendable underlying result which has seen bold decisions taken for the long-term benefit of the company and Guernsey.”

Pictured top: The new cable being laid in Havelet Bay. 

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