Statkraft profits surge nearly 360% in 2021 on high Nordic power prices

Norwegian state-owned hydropower giant Statkraft AS cashed in on surging power prices during the second half of 2021, changing the fortunes of one of Europe's largest renewables producers after years of low prices in the Nordic region.

The average Nordic system electricity price was €62.2/MWh in 2021, compared to just €10.9/MWh in the previous year, the company said in its Feb. 17 full-year results presentation.

Statkraft's annual power generation increased 7% compared to 2020, reaching 69.9 TWh. This catapulted underlying EBIT to 26.79 billion kroner, compared with 6.67 billion kroner in 2020. Net profit was 16.08 billion kroner, up 356% from 3.53 billion kroner in 2020.

The fourth quarter of 2021 boosted earnings in particular, with power prices in the Nordics surging 600% year over year to an average of €96.1/MWh, compared with €13.7/MWh in the fourth quarter of 2020.

The company stood to benefit from the energy crunch, thanks in part to its low hedges. Only about one-third of power volumes is hedged for the next three years, Statkraft said. The company also gained a new way to export its hydropower during the last quarter of 2021 as Britain's National Grid PLC powered up the 1.4-GW North Sea Link interconnector between Norway and the U.K. in October 2021.

Reflecting on a "very difficult situation for households and for businesses" caused by the international energy crunch, CEO Christian Rynning-Tønnesen said Statkraft is able to leverage its vast hydro assets to help meet demand.

"The fleet has a long life expectancy, high degree of flexibility and close to no CO2 emissions," the CEO said during the presentation. "This enables optimization of power generation based on market needs."

As of Feb. 16, US$1 was equivalent to 8.88 Norwegian kroner.