Statkraft drops out of Utsira North and new offshore wind projects
Measure is part of cost and job-cutting strategy to concentrate on core portfolio; Vargronn seems to stay in race for Utsira
Norwegian renewables giant Statkraft, as part of a new cost and job-cutting strategy, will drop out of the upcoming floating wind tender in its home country for the Utsira North (Nord) area, as well as stop further activities in new offshore wind projects.
The company – Europe’s largest operator of green power, thanks to its vast hydro assets – in May already announced it will stop new green hydrogen developments.
“At this time, Statkraft will prioritise our financial capacity on near-term profitable technologies, such as solar, wind and batteries in fewer markets,” CEO Birgitte Ringstad Vartdal said.
“We have been successful in developing an attractive portfolio in several European markets. As we need to prioritise, parts of the portfolio will benefit from getting new owners.
“Offshore wind will play an important role in the power mix in Europe, but the pace of development of the industry has been slower than previously forecasted, and this has impacted the ability to drive down costs in the short term.”
Fellow Norwegian group Vargronn, meanwhile indicated that it may continue in the race for Utsira North.
“Norway has a supply, issue. It's actually a demand crunch that's coming up there. If you continue with the electrification of industry, transport, and oil and gas, Norway will not have enough power.
“And the supply chain is potentially phenomenal, with some of the world's best offshore (oil and gas) companies. It would be a crime not to use that for renewables.”
Equinor said it continues to work with Vargronn on a possible joint bid in the Utsira North tender, but at this point, neither confirms nor denies that it will actually take part.
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The cost-cutting measures come in addition to previously announced and ongoing divestment processes, such as that of district heating and biofuels activities in the Nordics, the development business in Croatia and the Netherlands, and business activities in India.
By focusing on fewer technologies and countries, Statkraft aims to cut payroll and other operating expenses by around NKr2.9bn ($292m) per year by 2027, or 15% when compared to the estimated cost for this year.
Statkraft said it will identify the exact cost efficiency measures, including job redundancies, through its annual business planning process that takes place in the second half of the year.
“Statkraft needs to adapt to the changing market and increased geopolitical uncertainty. Unfortunately, this also impacts our most important asset: Our people. We will do what we can to limit uncertainty and mitigate negative effects on employees,” Vartdal said.
“By concentrating on our core competitive advantages and prioritising investments in near term profitable opportunities, we will be able to continue our growth and value creation, while contributing significantly to the energy security and energy transition.”
The company still plans to invest NKr16 to 20bn annually in the coming years, including large hydropower capacity upgrades in Norway, and maintenance of the large operational asset fleet and onshore wind power developments in Sweden and Norway.