THE START of gas-fired power generation at Killingholme on Humberside helped PowerGen to maintain its market share at around 26 per cent in the first half of the year, writes Mary Fagan. But Ed Wallis, the electricity company's chief executive, said that would fall to 22 per cent in the next few years because of the success of nuclear power and new, independent power producers, including North Sea companies. PowerGen increased pre-tax profits by 10 per cent to pounds 108m in the six months to 3 October from pounds 98m a year earlier. Sales of electricity fell by 3 per cent to pounds 1.26bn but cost-cutting enabled the company to increase earnings per share by 13 per cent to 9.71p. The interim dividend is increased by 18 per cent to 3.95p.
Mr Wallis said that PowerGen's prices to the regional electricity companies had fallen by 19 per cent in real terms since 1990, while those for most industrial customers supplied directly by the company had fallen by 16 per cent. However, he said that prices for industrial customers would have fallen by up to 35 per cent had it not been for high transmission and distribution charges and the levy on electricity bills that subsidises nuclear power.
PowerGen has cut about 1,000 jobs over the past year, leaving a workforce of 4,794.