Severn Trent’s investment in renewable energy is paying off, with earnings at the water firm’s renewables business up 16% year on year, according to its full year results.
The company said it was on track to generate half the energy it uses from renewable sources within three years, which is significant, given water companies are intensive energy consumers.
Its energy comes from anaerobic digestion (AD) plants, which turn waste food into gas. One, at Coleshill, uses the gas to generate electricity. Another, at Roundhill, is about to start generating biomethane, which can be injected into the gas grid, which is more efficient and in some cases can be more profitable. Severn Trent is due to open a second gas-to-grid AD plant in Derby next year.
“Our renewables business has delivered a 16% growth in EBITDA (earnings before interest, taxes, deductions and amortisation), showing that investment in renewable energy is right for both the environment and our bottom line,” stated chief executive Liv Garfield.
The company posted profit before interest and taxes for its renewable energy business of £19.4m from turnover of £54m.
Elsewhere, the company said it was “encouraged” by early wins in the business to business water retail market through its joint venture with United Utilities, Water Plus.
The group reported overall profit before interest and taxes of £544 million, up £39 million (7.8%).