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(Alliance News) - Good Energy Group PLC said on Wednesday it finds itself amid a "national crisis" as it is faced with low wind levels and unprecedented price rises in power and gas.
Shares in the Chippenham-based renewable energy company were down 8.0% at 230.10 pence on Wednesday in London.
Good Energy said low wind levels had persisted into December and were expected to continue until Christmas. Wind levels in November were 18% below seasonal norms while December wind levels stood at 33% of the seasonal norm.
Despite this, Good Energy said its financial performance for November was in line with expectations. The company said its first domestic standard variable tariff rise, which became effective at the start of November, helped the stability.
In December, Good Energy said it had seen sharp increases in power and gas prices. The company cited tensions between Russia and Ukraine - the gateway of European gas imports - paired with colder and calmer weather forecasts for the rise. A French nuclear plant being taken offline was also offered as a factor.
For December, Good Energy said power on a day ahead basis compared to November had been 36% more expensive on average at GBP256 per megawatt hour. Gas prices had been 35% more expensive at GBP2.71 per therm on average.
Baseload power and gas prices for the first quarter of 2022 stood at GBP489 per megawatt hour and GBP4.39 per therm. This represents a more than double increase and 89% increase, respectively, the company explained.
Good Energy said these increases in nearer term power and gas prices were all feeding strongly into the company's 2022-23 seasonal contracts. As a consequence, Good Energy said it expects to take a GBP3 million hit to 2021 profits.
Chief Executive Nigel Pocklington said: "This is a national crisis. Wholesale gas and power prices have increased to unprecedented levels over the last three weeks, creating an extremely difficult operating environment for every business in the industry.
"While we have a very strong track record in forecasting and hedging, these unparalleled price hikes, together with the very low levels of churn within our customer base, means that we require far greater working capital to trade similar volumes at these stratospheric price levels."
The company said it was actively engaged with its financing partners to help ensure it can meet these short term working capital requirements.
Pocklington also urged the UK government to support the industry in navigating these short-term challenges to protect bill-payers.
By Heather Rydings; heatherrydings@alliancenews.com
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