United Utilities Group Plc, the U.K.’s largest publicly traded water company, plans to invest at least 100 million pounds ($156 million) in low-carbon power generation over five years to cut its electricity bill.
Investing in solar and wind generation as well as processing waste to produce biogas will allow the Warrington, England-based utility to supply 35 percent of its electricity needs, almost double the current level, Chief Executive Officer Steve Mogford said by phone Thursday.
“We use a lot of electricity so we put a lot of effort into reducing our power costs,” Mogford said. “We recognize that what we have got is a lot of sludge produced by the business, which is ‘black gold’ that can be used in energy creation.’’
The advanced digestion plant that opened last year at United Utilities’ Davyhulme facility is a sludge recycling center that runs on enough human waste to power 25,000 homes. It handles the sewage of 1.2 million people in Manchester, exporting surplus power to the U.K. grid using waste formerly dumped in the Irish Sea to generate renewable power.
Revenue in the year through March, meanwhile, increased 1.9 percent to 1.7 billion pounds, United Utilities reported. Full-year operating profit rose 4.6 percent to 664.3 million pounds as the company reduced power, labor and chemical costs, the CEO said.
The utility, which supplies 7 million people and 200,000 businesses, invested 869 million pounds in its networks last year, including works to reduce sewer flooding and leaks.
The company plans to invest 3.5 billion pounds through 2020, partly to adapt to weather patterns that will likely result from climate change. It spent 3.8 billion pounds the previous five-year period.
“A lot of our works have land around them so we’re also looking at ground-mounted solar arrays,” the chief executive said.
Underlying pretax profit climbed 15 percent to 447.4 million pounds for the year through March from 388.1 million pounds a year earlier, United Utilities reported.
The water company is targeting dividend growth that will at least match retail price inflation over the next five years after it proposed increasing its total payout for the past year by 4.6 percent to 37.7 pence.
The utility, whose shares have risen 18 percent in the last year, continued its expansion in Scotland and now has more than 200 customers generating annual revenue of about 15 million pounds, it said.
Severn Trent Plc, the U.K.’s second-biggest publicly traded water company, reports earnings on Friday.