The latest figures show that in the 18-month period up to September last year, there was a 7.1% drop in overall local electricity use.
Adjusting for the weather and the shutdown of businesses during the pandemic, the downward trend in usage is expected to continue.
However, there was a growth in demand in two areas – the de-carbonisation of transport and electric heating.
The number of customers has stayed static – at the end of September last year the trading entity had nearly 31,000 consumers.
The statistics are revealed in the latest annual report and accounts.
A change has been made to its fiscal year, with the most recent accounting period lasting 18 months, which makes it difficult to compare with the previous 12 months.
In chief executive officer Alan Bates’s report, he states that the current electricity market model is broken.
‘Decades of regulatory dysfunction has resulted in an under-recovery of costs and misleading tariff structures not aligned to the delivery of the energy transition.
‘This means future generations will be picking up the costs of past electricity consumers and today’s customers will potentially be making misinformed investment decisions based on the consequence of offsetting their fair share of fixed cost recovery.
‘We must fix this for the benefit of islanders and the environment.’
Under the existing tariff structure approximately 10% of revenues are generated through fixed charges and 90% through variable charges. But the cost base is split roughly 50:50 between fixed and variable charges.
Guernsey Electricity wants to increase the fixed charge to pay for future investments in infrastructure.
Regulation which is ‘not fit for purpose’ is another issue highlighted in Mr Bates’s report.
‘In our opinion, the current regulation of the electricity sector adds little value and imposes additional unacceptable cost and time burden on a company 100% owned by the States of Guernsey.
‘The board has also conveyed its continued concerns at the length of time the dysfunctional regulatory environment has been allowed to be in place.’
On paper the trading entity’s reported operating loss before pension settlement gains was £9m.
A complete cable failure, foreign exchange headwinds and Covid-19 were blamed for the deficit.
However, underlying business performance was rated as profitable and Guernsey Electricity aims to be at the forefront of the switch to renewable energy sources.
A direct cable to France remains its recommended solution to provide security and reliability of supply, while also getting rid of the current top-up role of the Vale power station.
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