ENERGY giant ScottishPower has reported a big drop in earnings amid a squeeze on the sector caused by a spike in gas prices.

The supplier said its retail business had seen earnings before interest, tax, depreciation and amortisation (Ebitda) drop by 39% to £83 million in the last quarter. It marks a sharp contrast to the first and second quarters of the year when the division notched up strong growth.

At their peak earlier this month, UK gas prices had spiked around fivefold since January. Although they have given back some of this rise, prices remain high. It has led to the collapse of 13 energy suppliers since the start of September.

Although ScottishPower’s earnings have been squeezed, it is unlikely to go the way of its rivals. Alongside its supply side, the company also generates huge amounts of electricity from its wind farms.

Chief executive Keith Anderson said: “The energy price spike is a gas issue and a stark reminder of why we have to decarbonise our energy sector quickly and efficiently.”

His comments came as the Spanish-owned but Glasgow-based company prepares for world leaders to descend on the city for the UN climate change summit COP26.

Anderson added: “COP26 starts in our home city of Glasgow in three days. At ScottishPower, in the six years since the Paris Climate Agreement we’ve transformed our business model.

“We closed our coal plants and are proud to have played our part in Scotland being coal-free since 2016.

“We’ve done this through our highest ever level of sustained investment delivering a record £10 billion in the UK, in five years on renewable energy projects and smart digital grid networks.

“And we’re not stopping. Last week we committed a further £6bn to the East Anglia Offshore Hub, subject to planning approval, our largest ever investment in a single development.

“This is the acceleration in green energy investment we need if we’re to meet the ambitions of the COP26 summit and reach net zero.

“All of this during the ongoing energy crisis and the likelihood of a difficult winter.”