Kretinsky profits soar from gas power plants amidst energy crisis

The Czech Republic-based entrepreneur Daniel Kretinsky, known for his significant investments across Europe, has reported substantial profits from his gas-fired power stations in England during the 2022 energy crisis. His power plants, particularly the South Humber Bank power station near Hull, generated approximately £141 million in pre-tax profit, a stark increase from a previous loss in 2021. The recent surge in profits can be largely attributed to soaring energy prices exacerbated by geopolitical tensions following Russia's invasion of Ukraine. This conflict led to 'exceptionally high' commodity prices, which enabled power stations like Kretinsky's to benefit financially from increased energy costs. Kretinsky's energy portfolio includes several power stations capable of serving about 1.2 million homes at full capacity, reflecting the scale of his operations in the UK. His conglomerate, EP UK Investments, not only operates the Hull site, but also owns other facilities across the UK, including those in Devon and Northern Ireland. These assets generated impressive revenues, with the South Humber Bank power station reporting a profit turnaround to £143 million in 2022 from a loss of £26 million in 2021. This underscores a broader trend in the energy sector, where many power generators are under scrutiny for their large profits amid rising energy bills for consumers. Despite the imposition of a windfall tax in 2022 aimed at alleviating household energy costs, gas-fired power stations were exempt, allowing Kretinsky’s operations to escape direct taxation on their windfall gains. The exemption was due to their pre-existing gas purchase contracts at lower rates prior to the conflict, illustrating how regulatory frameworks can affect business outcomes. Even with rising energy prices stabilizing somewhat since early 2023, household bills remain significantly higher than they were before the crisis, highlighting the uneasy balance between corporate profitability within the energy sector and consumer affordability. In addition to his energy investments, Kretinsky is known for moves in the postal service sector, with a deal to acquire Royal Mail reportedly nearing completion. However, this acquisition is currently under review by the British Government, indicating that Kretinsky remains a notable figure in both energy and logistics industries across Europe. The ongoing scrutiny of margins and profits in the energy sector, coupled with the increased cost of living for households, casts a larger narrative on corporate accountability and economic resilience in the face of external shocks like geopolitical conflicts.