Statkraft still exploring UK onshore market despite ‘challenges’
Norway’s Statkraft will continue to seek opportunities in the UK onshore wind market despite the current policy challenges there.
Statkraft, which presented its full-year 2016 results today, said its revised strategy will shift its investment portfolio to include more onshore wind and solar, while simultaneously pulling out of the offshore sector.
While the focus will remain on developing business in Norway, Christian Rynning-Tønnesen said the company will explore business opportunities in the UK in the year ahead, amid "positive results" over the past 12 months.
Thomas Geiran, senior vice president of investor relations at Statkraft, told Recharge. "The focus going forward is to ensure cost efficient operation and maintenance of wind parks in the UK in addition to explore incremental business development opportunities."
Geiran added: "The current situation in the UK is however challenging for new onshore wind projects," referring to the apparent freezing out of onshore from the UK’s future contract-for-difference (CfD) support rounds.
"There is a strong need for new energy and good wind resources available, but limited development of new projects is expected as the previous support scheme has been terminated. Statkraft will nevertheless carefully explore new opportunities for onshore wind projects, taking among other things the regulatory development into consideration before entering into any financial commitments."
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Under the company’s current strategy, Statkraft has already started divesting its interests in Scira, which operates the 317MW Sheringham Shoal wind farm, and 402MW Dudgeon, off the UK.
"The up-to-900MW Triton Knoll project will be developed until [CfD] auction, but Statkraft will not invest in this project. The timing for divestments will be carefully considered in order to optimise the value," Geiran said.
Statkraft is pushing ahead on schedule with the giant 1GW Fosen Vind onshore wind project in Norway.
"The 1GW Fosen project is progressing according to plan. Access roads to the first wind park at Roan is well under way and some construction works related to buildings has started," according to Geiran.
The €1.1bn Fosen Vind, which will be built around a fleet of 3.6MW Vestas turbines, was revived and put back into action a year ago, after originally being scrapped due to "unviable market conditions".
First delivery of turbines is still scheduled for 2018.
The company saw its revenues increase last year to NKr53.8bn ($6.5bn) compared to NKr51.2bn in the previous year. Statkraft also narrowed its losses to NKr179m last year, compared to a loss of NKr2.3bn a year earlier.
The growth was mainly driven by both higher Nordic power prices and production, said the company.
Production reached a record high 66TWh compared to 56.3TWh in 2015.
Looking ahead, Statkraft is aiming to cut back on its cost and improve efficiency. The majority of NKr800m in savings are planned to be realised in 2017 and the remainder in 2018.
"Cost reduction, so far, have been achieved mainly through reduction in personnel, consultancy and IT costs and reduced activity in offshore wind," it said.