System price drops in the UK and across Europe drove down Nordic energy giant Statkraft’s earnings in Q1 2020.
This saw the company post a nearly £141 million loss in comparison to last year. Across its operations, its underlying EBIT fell to £324 million (NOK 4.1 billion), a drop of £213 million (NOK 2.7 billion) compared to the same period in 2019.
Similarly its net operating revenue fell by £158 million (NOK 2 billion), falling from £767 million (NOK 9.7 billion) to £601 million (NOK 7.6 billion).
This was driven by a significant drop in power demand and electricity prices across the Nordic region, the company cited.
“Our market activities continue to deliver strong results,” said CEO Christian Rynning-Tønnesen. “Overall, we are satisfied with the underlying EBIT considering the low Nordic power prices.”
Several of the company’s operation in the UK and other markets continued to grow however, with revenue from international power growing from £61 million (NOK 783 million) in 2019 to £66 million (NOK 841 million) in Q1 2020.
Therefore, while Statkrat’s return on average equity in the UK was effected by lower power prices, it only decreased by 0.9%.
The company has continued to invest in the UK, in particular with the construction of the 43ME Windy Rig wind farm. Additionally the company has continued to invest in its operations in Ireland with the construction of the 23MW Kilathmoy wind farm. Both projects have currently been put on hold due to the COVID-19 pandemic.
Over the last year, the company has made a number of advances in both the UK and Irish markets.
In January Statkraft completed an 11MW battery in the Ireland, which is set to participate in the DS3 flexibility market for example.
In the UK, it continued to expand in the EV sector, after acquiring Vattenfall’s charging network in March.
While towards the end of 2019, the company further solidified its role in the UK’s wind sector by working with supply platform Squeaky Clean Energy and not-for-profit public buying organisation The Energy Consortium to provide twenty universities with wind power. They became the first to sign aggregated corporate power purchase agreements to help them transition to cleaner power sources.