Npower parent to tumble £155m into the red

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The owner of energy provider npower has revealed it will slump into the red after taking a 2.1 billion euro (£1.6bn) hit on its UK and German power stations.

German parent RWE said a series of writedowns on its power stations and lower energy prices would lead the group to post an annual loss of around 200 million euro (£155m) when it reports its results next month. Analysts had expected a 2015 net profit of 1.2 billion euro.

Npower, which has 4.9 million accounts, has major plants in the UK including Pembroke and Aberthaw in Wales and Staythorpe in Nottinghamshire.

RWE said: “The continued collapse of wholesale electricity prices came to bear, leading to an erosion of power plant mar- gins.”

Oil and gas prices have tumbled over the last 18 months as global growth slows. Brent crude is some 70 per cent lower than its peak in the summer of 2014.

But many consumer groups complain steep falls in commodity prices have not been passed on to customers.

The group also said it would not pay its full-year dividend of 13 cents (10p) a share due to “the current economic prospects of conventional power generation”.

Earlier this month, npower announced a 5.2 per cent price cut to its standard domestic gas tariff that would affect 1.2 million customers.