United Utilities (UU) has put its renewable energy business up for sale, with the process expected to commence in June.
The water company said the disposal of its renewable energy assets – valued at £65.5 million – will support the acceleration of its carbon initiatives, allowing it continue to benefitting from their output while reinvesting the proceeds in other low carbon projects.
In its financial results for the 12 months to the end of March – the first year of AMP7 – UU reported meeting or exceeding more than 80 per cent of its performance commitments, which are set to deliver net outperformance rewards of £21 million.
Despite challenging conditions, the company achieved its lowest level of leakage ever and halved interruptions to water supplies when compared to the previous year.
In line with group expectations, revenue and underlying profits were down but the organisation maintained a strong balance sheet and a stable A3 credit rating.
Chief executive Steve Mogford told Utility Week the organisation was very pleased with its performance in 2020/21, which he attributed to achieving fast-track status on its PR19 business plan that allowed the company to amply prepare for first year of AMP7.
“It starts with preparation and planning with a clear view and clear communication of that plan,” Mogford said and added that high levels of employee engagement and communication during the pandemic have been crucial to performance.
The group is on track for a 4* environmental performance for 2020 after reporting no serious pollution incidents and a one third overall reduction in events.
UU received its biggest penalty against its internal flooding outcome delivery incentive and plans to invest around £100 million in a dynamic network management system of sensors and predictive machine learning to take a proactive instead of reactive approach to managing wastewater networks.
Changes to demand patterns in the non-household sector were largely offset by increased consumption by domestic customers during lockdown.
The group has provided financial support for households with a new social tariff that helped 200,000 billpayers as part of its commitment to provide £71 million in financial support during AMP7 to assist struggling customers.
UU ranked 5th on Ofwat’s C-Mex ratings and is currently top rated by developers on the D-Mex chart for quantitative performance and anticipates an overall position of 4th place in the ratings. It achieved a £2.1 million reward for C-Mex performance.