LONDON (Reuters) - The recession has triggered an “unprecedented” fall in demand for electricity with Britain’s industrial and commercial customers showing the least appetite, power station operator Drax said on Tuesday.
Chief Executive Dorothy Thompson told reporters that typically demand followed swings in gross domestic product but that on this occasion the fall off in power requirements had been much sharper than contraction in the broader economy.
“For our sector it’s a very unusual movement ... in fact unprecedented in my experience,” Thompson, whose company runs the nation’s largest coal-fired power plant, said during a conference call.
Thompson said electricity demand was currently about 6 percent lower than a year ago with households, where consumption is down about 2 percent, proving more robust than industrial and commercial customers.
Her comments came after Drax posted a sharp fall in first half earnings due to lower power prices but said profit should rise sharply in 2010 thanks to more favourable hedging contracts.
The company said it had already sold approximately 80 percent of its output for 2010 at higher average spreads than for 2009.
“This will underpin next year’s gross profit at a level, under current market conditions, that is comfortably in excess of the underlying level this year,” the company said in a statement.
Drax said pretax profit fell to 33.8 million pounds in the first six months of the year from 149.5 million in the same period last year after revenues came in 12 percent lower at 706.9 million pounds.
It said the group’s full-year expectations for core profits, which fell 27 percent to 150 million pounds in the first half, were unchanged.
Shares in the company, which have lost about half their value since September last year, were up 2.6 percent at 421.8 pence by 8:12 a.m. British time.
Reporting by Paul Hoskins, editing by Victoria Bryan