Renewables provide positives as Equinor learns to live without bumper earnings
New onshore assets in Brazil and Poland boost Equinor's renewables output by 48%
Renewables provided several highlights as Equinor posted a net quarterly profit of $2.6bn today (Thursday), considerably less than the Norwegian oil major was reaping one year ago.
“Equinor delivered solid financial results driven by strong operational performance across the business," said Equinor CEO Anders Opedal, who acknowledged that higher oil and gas production on the Norwegian continental shelf, and growing international production, provided the bedrock of this.
Prices for European pipeline gas may have subsided from former sky-high levels, but Equinor also drew positives from renewable production that surged to 774GWh in the quarter, up 48% from the same period last year.
Growth came primarily from onshore wind and solar plants in Brazil, to which Rio Energy was the key contributor, but also from Poland. Equinor's onshore renewables contributed 271GWh in the quarter.
Offshore wind contributed 468GWh, mostly coming from Dudgeon, Sheringham Shoal and Arkona wind farms, the company said.
Opedal added: “We maintain a value-driven approach to renewables growth. In the quarter, we achieved significantly better terms for our Empire Wind 1 project in the US and started the commercial production from the Mendubim solar plants in Brazil.”
Equinor has not disclosed the offtake rates for the Empire Wind contracts involved, but has revealed that the average for the two, taken together, as 150.5/MWh, compared with 118/MWh previously.
"This was a significant step up, and significant changed the economics," CFO Torgrim Reitan told analysts taking part in an earnings call.
"All contracts are settled for practical purposes. There is very little exposure to inflation left in the procurement, Reitan said, stressing also that orders for 15MW wind turbine generators from Vestas are for what he called a proven technology. "So we feel confident for the delivery of that," he added.
Equinor said an increase in renewables output in the quarter was roughly offset by lower prices but the company managed a net profit of $30m for this segment – compared to a $7m loss in the same quarter of 2023 - aided by lower project development costs.
Overall, Equinor's net income of $2.6bn was down 47% from the same quarter last year due to a steep fall in its realised prices for natural gas delivered by pipeline into Europe.
Equinor also announced in April the start-up of electrification of the Sleipner and Gudrun oil and gas installations on the Norwegian continental shelf, using a power-from-shore system aimed at reducing emissions from the operations.