Wigton gets the wind in its sales

BY CAMILO THAME Business Co-ordinator Thamec@jamaicaobserver.com

Wednesday, September 14, 2011

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WIGTON Wind Farm stands to net $58 million more in profit than was originally projected.

According to a mid-year revision of estimates of revenue and expenditure, the power provider showed that it expected net profit of $240.6 million for the year ending March 3, 2012 — up from $182.3 million.

The financial performance of the company reflects the first full year of operations after the commissioning of an additional 18 megawatts (MW) of generating capacity — bringing total capacity to 38.7 MW — and a doubling of the rates Jamaica Public Service Company (JPS) pays for the electricity Wigton sells to the grid.

Last December, the additional turbines were brought on stream while the Office of the Utilities Regulator approved a new rate of US$0.1021 (J$8.68) per kilowatt-hour (kWh), which was an increase from approximately US$0.05 per kWh.

Up to March 31, 2010, the wind power provider was incurring losses and actually racked up accumulated deficit of $272.4 million since commencing operations in April 2004.

The turnaround in performance occurred during the last fiscal year, which ended March 31, 2011 and when the company posted $279.9-million net profit compared to a $13.4 million loss the prior year.

Last year, sales nearly doubled from $324.7 million to $600 million, and now estimates places revenue outturn at $1.04 billion. General and administrative expenses are expected to increase from $284.4 million during the last fiscal year to $628 million, but Wigton is also expected to earn other income totalling $119.6 million this year compared to none the year prior.

The other income likely reflects carbon credit earnings which are derived from selling credits made from reducing carbon dioxide emissions to countries that are producing higher amounts.

In March, Wigton Wind Farm project manager, Michelle Chin Lenn said the Wigton I (the original 20.7 MW) and Wigton II were expected to output 54.4 gigawatt-hours (GWh) a year and 47.3 GWh a year, respectively, which would offset just under 60,000 barrels of oil and 85,000 tonnes of carbon dioxide a year.

The potential carbon credits revenue was estimated at US$590,000, minimum.

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