Statkraft’s wind and solar unit reported an operating loss of Nkr867m (€85m) in the second quarter of 2022, compared with a loss of Nkr263m in the same quarter in 2021.
The decrease in underlying earnings before interest and tax (EBIT) was mainly driven by “significant unrealised” hedging losses and higher operating expenses following increased business development activities, Statkraft stated.
This was partly offset by higher generation revenues, primarily following the acquisition of German and French wind farms in the fourth quarter of 2021.
Investments were mainly related to development and construction of wind and solar projects within the DS/DBS business model, primarily in Ireland.
In the second quarter Statkraft divested the Twentyshilling wind farm in the UK and secured route to market for six solar parks and four wind farms in Ireland with a total capacity of 810MW.
The projects are currently under development or construction with expected completion during 2023-2025.
In the group’s overall second quarter results, Statkraft reported a net loss of Nkr1.2bn, Nkr3.6bn lower compared to the first quarter in 2021.
The company said the results were due to negative currency effects under financial items and a high tax expense due to solid revenues from Norwegian hydropower generation subject to resource rent tax.
“The European energy crisis has accelerated due to a shortage of gas supplies from Russia, leading to high power prices and a large increase in Statkraft’s gross revenues.
“However, the significant increase in forward power prices has led to unrealised negative hedging effects. Underlying EBIT in the quarter was NOK 3.8 billion”, said chief executive officer Christian Rynning-Tønnesen (pictured).
He added: “The combination of dry weather and higher risk of gas rationing for the coming winter in Europe, particularly in Germany, has increased Statkraft’s water values.
“The importance of saving water for the coming winter is increasing and has resulted in lower Norwegian hydropower generation in the quarter.”