Economic Results

A sustainable business must also be economically successful, generating profit for future investment and growth and creating value for its shareholders.

Although the IBERDROLA group is not listed on the London Stock Exchange, many leading UK pension and investment funds hold our shares, so many thousands of British people benefit directly from our strong financial performance through their pensions and investments.

Highlights from 2009 included IBERDROLA Chairman Ignacio Galán's visit to Longannet Power Station (seen pictured with John Campbell, Director, Energy Wholesale) and to No. 10 Downing Street for a meeting with the Prime Minister.

We also support the regional and national economies through the direct and indirect employment of thousands of people, contributing tax revenues to the UK Treasury and through our significant procurement of goods and services.

Energy suppliers in the UK were criticised by consumer organisations during 2009 for the prices they charge customers for electricity and gas. However, pricing is complex.

Energy bills reflect not only the price of fuel – they include the costs of producing and transporting energy and mandatory government programmes designed to reduce carbon, improve the energy efficiency of customers’ homes and provide help for vulnerable customers.

In its Project Discovery report, the energy regulator Ofgem warns that investment of around £200 billion will be needed in the UK energy industry over the next 10 years to secure energy supplies and meet climate change targets.

Ofgem also expressed concern about the effect of this unprecedented level of investment on consumer bills, which may mean that more customers are tipped into fuel poverty.

At ScottishPower we are well aware of the difficult balance we have to strike between generating profit for investment and maintaining affordability for customers.

We are investing significantly in developing our networks and adapting them to support low carbon generation and we are leading one of the UK’s most advanced carbon capture and storage projects at our Longannet Power Station in Fife.

At the same time, we are investing in the roll-out of Smart Meters, which will help customers to reduce their energy bills, through managing their energy consumption in the most efficient way possible. We are also working to alleviate fuel poverty, through our social spend and energy efficiency programmes, which totalled £91 million during 2009.