Northland Power operating income and adjusted earnings from offshore wind jumped 55% and 63%, respectively, in the first three months of 2020, compared with last year, boosted by output from the Deutsche Bucht project and higher sales.
Operating income in the first quarter of 2020 was $321m, an increase of $113m on last year, while adjusted EBITDA was $304m rising $117m on Q1 2019.
Offshore wind sales increased by 43% or $135m to $445m, driven by higher electricity production which rose 54% or 558 gigawatt-hours (GWh) compared with the first three months of 2019.
The increase was primarily due to pre-completion production from Deutsche Bucht (pictured) and higher wind resources in the North Sea.
This was partially offset by more periods of unpaid curtailment due to negative pricing at Nordsee One and Deutsche Bucht.
Northland said its share of the loss on sales from the average wholesale market price falling was €7m ($10m) or 7%.
The loss on sales from unpaid curtailments was €5m or 7% of Northland’s share of revenues of Nordsee One and €5m or 8% of its revenues from Deutsche Bucht.
At Northland’s onshore renewable assets electricity production decreased 13% or 57GWh compared with the same quarter of 2019.
The fall was primarily the result of lower solar and wind resource across the facilities, the company said.
Onshore sales were $53m, a 9% decrease or $5m lower than 2019.
Northland said production variances at the solar facilities have a larger effect on sales than the wind facilities since solar projects receive a higher contracted price per MW.
Operating income and adjusted EBITDA of $24m and $34m, respectively, decreased 11% or $3m and 10% or $4m primarily due to lower production.
Overall, the company’s operating income stood at almost $395m in the first quarter, up from about $288m last year.
Adjusted EBITDA rose to nearly $421m in the first three months of the year, 59% up on the $264m posted in the same period of 2019.
Northland said its operating facilities are deemed to be essential infrastructure and, as such, operations have continued uninterrupted to date because of Covid-19.
However, the company said the impact of Covid-19 will have material effects across global economies and sectors, including reduced power demand within the renewable energy sector.
“While the vast majority of Northland’s revenues are contracted under long-term agreements with creditworthy counterparties, there is some, yet limited, exposure to the wholesale market price of electricity at the offshore wind facilities,” it said.
If low wholesale market prices persist for an extended period, Northland’s revenues may be negatively affected, the company added.
Northland president and chief executive Mike Crawley said: “Our financial and operating performance during the first quarter was solid, however, our highest priority to date has been to ensure the health and safety of our employees, contractors and communities across our global operations amid the Covid-19 pandemic.
“As outlined in our 30 March update, Northland provides an essential service, and our efforts are focused on ensuring our facilities continue to operate at high levels of availability.
“The strength of our balance sheet and stable cash flow profile, which are underpinned by long-term revenue contracts, position the company well to weather the current environment.”