Statkraft says Trump-era geopolitics require 'prudent' investment strategy

Statkraft has warned that global geopolitical turbulence may force it to tighten up its capital expenditure plans following a record year of investments for the Norwegian utility.

Statkraft, which lays claim to the title of Europe’s largest green power producer due to its extensive hydro assets, added another 2GW of generation capacity to its portfolio last year, a 10% increase on 2023.

The increase was mainly through wind and solar projects in Brazil, Spain and Chile – 1.5GW of which came with the acquisition of Spain-based Enerfin – but the boost also includes new capacity in India, Ireland and elsewhere.

Statkraft's record investments of NKr34.4bn ($3.1bn) in 2024 were mainly in renewables generation capacity but included some battery storage projects in Germany and the UK and grid stabilisers in Ireland.

This investment was almost 20% higher than 2023, which was also a record, and compares to an average of about Nkr11bn per year for 2020-21.

Last year the company also announced a NKr44-67bn investment plan for Norwegian hydro and wind power, but did so as part of a broader strategy aimed at sharpening its focus on the Nordics, Europe and South America.

In its earnings statement for 2024, Statkraft signalled a possible retrenchment in these investment levels.

Taking stock of recent political events since President Donald Trump took office again in the US, the company referred to “external factors affecting its 2025 investment capacity” and said it would respond to “increased market and geopolitical uncertainty” with stricter prioritisation of investments and projects.

CEO Birgitte Ringstad Vartdal said Statkraft is closely monitoring the geopolitical uncertainties including “potential trade wars and tariffs that could impact European competitiveness and an uncertain future role for Russian gas in the continent as well as declining power prices".

She said such uncertainties require a more prudent approach to investments, and indicated that this will mean a further sharpening of strategy.

Statkraft noted that some of its own divestment processes were ongoing under increased market uncertainty.

Ringstad Vartdal said the company still expects these transactions to close normally "in 2025 or in early 2026."

In 2024, Statkraft divested several wind and solar power projects, for a total of NKr4.5bn.

'Solid' financials

Stakraft’s net annual profit of Nkr7bn in 2024 was significantly lower than the “exceptional” Nkr27bn posted in 2023, due to lower power prices in Norway and Germany as well as higher hydro capacity and other factors.

However, the company said its underlying earnings before interest and taxes of NKr26,5bn, while 36% lower than 2023, were still “among the best” in its history.

“Statkraft delivered one of our strongest annual results, only outperformed by results driven by the exceptionally high prices during the energy crisis," said Ringstad Vartdal.

“We are investing heavily in maintaining and upgrading our Norwegian hydropower assets, while developing and optimising a portfolio of renewable energy projects to build scale and profitability in high-potential markets."

She also noted that the acquisition of Enerfin put the company among the top 10 wind power operators in both Spain and Brazil.

Global investment in renewables is growing exponentially," she added. "Statkraft is well positioned for continued profitable growth and value creation.

"We have a flexible asset base with relatively low cost and a track record for strong value creation. Our project portfolio and investment programme offer flexibility. This flexibility is more valuable than ever as greater geopolitical uncertainty is rapidly changing the energy markets," she noted.