Due to extremely dry and low-wind circumstances, SSE’s renewable assets generated 32 percent less power than projected between April 1 and September 22. This is 11% of the company’s full-year output target. In a statement, the Perth, Scotland-based company said unfavorable weather settings over the summer caused the shortfall, which was one of the least windy in most of the United Kingdom and Ireland and is one of the driest in SSE’s Hydro catchment fields in the last seventy years.
This summer, low wind generation contributed to Europe’s energy crisis, which has pushed power prices to new highs in recent days. Other variables include last year’s colder-than-expected winter, production cuts during the epidemic, low supplies from Russia, high carbon pricing, and rising demand for liquefied natural gas in Asia.
SSE isn’t the only renewable energy company to warn about the financial consequences of low wind speeds this summer. RWE, a German utility, forecast “significantly lower” wind volumes for the first half of 2021 throughout its Central and Northern Europe portfolio in August.
Orsted, a Danish energy company, made similar remarks, adding that “earnings from our operational offshore and onshore wind facilities were DKK 0.3 billion lower than the same period last year.”
In August, the firm noted that “the additional generation capacity from additional wind farms in service was more than compensated by substantially lower wind speeds throughout our portfolio,” while reiterating that it expects to fulfill its full-year financial projections. Wind speeds reached 7.8 meters per second during the second quarter, Orsted added, which was “much lower” than usual levels of 8.6 meters per second.
Nonetheless, SSE management stressed that these operational concerns are “temporary.” Hedging obligations in unpredictable markets have also hurt profitability in recent months, according to management.
Despite the summer slump, SSE said it is “confident” in meeting its financial targets for the entire year. In addition, the company declared plans to enter the Japanese offshore wind industry.
The previous North of Scotland Hydro-Electric Board was established in 1943 to design, construct, and manage hydroelectricity initiatives in the Highlands of Scotland. The corporation arose from the merger of two public-sector electricity distribution companies. When the electricity industry in the United Kingdom was nationalized in 1948, it took over additional generation and distribution responsibilities.
In 1948, the former Southern Power Board was established to distribute electricity throughout Southern England. The Northern of Scotland Hydro-Electric Board was a larger spectrum organization with its generating capabilities. In contrast, the Southern Electricity Board was a distribution-only entity with no electricity generation capacity.