The Channel Islands based company reported the loss for its financial year from March 2012 to March 2013 in comparison with a £4.7m profit in the previous 12 months.
During the period Guernsey Electricity said that it had “an issue with the oldest cable on the Channel Islands’ grid between Jersey and France” that was concluded to be “economically unviable for repair” that meant that the company had to continue to generate more of the island’s energy at its power station.
In a statement the company said: “Following the failure of the island’s cable links to France, 72% of the island’s electricity was generated at the power station; dramatically increasing the cost to the company of supplying islanders with power.”
However, it said that the failure of the Guernsey to Jersey link in April was repaired within five months, which is better than the industry standard, and there was good news “in that the £8m cost of repair was substantially covered by insurance”.
In its annual report, the company also said that it had imported 28 per cent of the island’s electricity through the cable network, compared to 82 per cent the previous year. This meant that 289GWh was generated at the power station, compared to only 68GWh the year before.
This resulted in the carbon emissions for the business increasing dramatically for the year to 209,748 tonnes of carbon dioxide from 60,965 tonnes in the previous year.
Other challenges Guernsey Electricity faced this year include the delivery and installation of a new medium speed diesel generator, the single largest piece of machinery ever unloaded in Guernsey, and in March the heaviest snowfall the island has seen in decades.
Alan Bates, managing director at Guernsey Electricity, said: “The increase in costs incurred by Guernsey Electricity was solely due to on-island generation being more expensive than importing electricity through the cable network, the impact of this reliance on on-island generation has resulted in an operating loss of £3.4m for the year ending March 2013.”