Npower has been written down by €480m (£428m) by its German owners following the UK government’s crackdown on the energy sector, it was announced this morning.
Spun-off from German giant RWE in 2016, Innogy said the pressure on margins in Britain “is very high”.
As part of the annual impairment test, a goodwill impairment of €480m for the UK retail business was recognised. This impairment reflects the deterioration in commercial assumptions and tougher regulatory conditions.
Today’s announcement follows last week’s confirmation that Npower and rival SSE would join forces in the UK to create Britain’s largest energy firm.
“The planned merger of the retail activities of Innogy and SSE in Great Britain did not lead to a different assessment of the impairment,” the firm said.
The government has sought to crack down on energy firms in the UK, in particular with reference to costly standard variable rates. Analysts have warned that energy price controls may be counter-productive and lead to consolidation in the market.