Vattenfall’s Focus on Fossil-Free Power Generation Pays Off

Vattenfall’s Focus on Fossil-Free Power Generation Pays Off

(IN BRIEF) Swedish energy company Vattenfall has reported stable financial development for the first quarter of 2023. The company’s focus on investing in fossil-free power generation and upgrading the electricity grid has paid off, as falling electricity prices and a calmer energy market have allowed for increased profitability. Vattenfall’s profit for the period increased by SEK 5.8 billion to SEK 11.8 billion, with a stable underlying operating profit of SEK 9.5 billion. The company’s heat and distribution businesses contributed positively to the result, while wind power saw a lower result due to lower electricity prices on the continent. The number of customers increased by 120,000 during the first quarter, but lower gas consumption contributed to a lower result in the Netherlands and Germany. Nuclear power availability was also lower due to delayed restarts.

(PRESS RELEASE) STOCKHOLM, 28-Apr-2023 — /EuropaWire/ —Vattenfall’s President and CEO Anna Borg comments on the interim report for January-March 2023:

The trend of falling electricity prices at the end of last year continued into early 2023. On the continent, gas stocks were well filled, which, in combination with a mild winter and the increased availability of French nuclear power, pushed down both fuel and electricity prices. Reduced price area differences in combination with a lower hedge ratio contributed to the fact that Vattenfall’s achieved price for electricity in the Nordics doubled compared to the first quarter of 2022.

Stable underlying result

Profit for the period increased by SEK 5.8 billion to SEK 11.8 billion, mainly thanks to an improved finance net, which was affected by a higher return from the Swedish Nuclear Waste Fund. The underlying operating profit was stable at SEK 9.5 billion.

The heat business contributed positively to the result, as increased fuel prices last year were reflected in our customer contracts now in retrospect. We have a higher result from the distribution business and higher realised earnings from the trading operations. Wind power reports a lower result due to lower electricity prices on the continent. This was partially offset by newly installed capacity where, for example, the Hollandse Kust Zuid wind farm made a positive contribution. The customer business is performing well, and the number of customers increased by 120,000 during the first quarter. However, the number of gas customers in the Netherlands and Germany was lower, which in combination with lower average consumption contributed to a lower result.

Nuclear power had lower availability due to the delayed restart of Ringhals 4. The complicated repair work has been carried out in a careful and safe manner and the restarted reactor now continues to supply fossil-free electricity in southern Sweden.

Investments that drive the energy transition forward

Thanks to a strong financial position, Vattenfall can maintain a high pace in investments throughout the value chain for fossil-free electricity and heat. During the quarter, we made the decision to invest in the onshore wind farm Bruzaholm, which will add much-needed capacity in southern Sweden. We invest in district heating with a low climate impact, for example, through the development of the district heating network in Bristol, in the UK. To meet the increased need for capacity in the electricity grid, we are also carrying out a comprehensive upgrade of the regional grid. In the new energy landscape, all types of fossil-free electricity generation will be needed, as will an expanded and robust electricity grid.

First quarter of 2023

Financial update (Webcast)
Read more about the result for the first quarter 2023 (PDF)

Business highlights, January–March 2023

• Lower electricity prices and reduced price area differences
  Repair of Ringhals 4 finalised
• Completed divestment of the gas-fired power plant Magnum in the Netherlands
• Important steps in the feasibility study for building small modular reactors at Ringhals
• Final investment decision made for the Bruzaholm onshore wind farm
• Completed acquisition of district heating network in the UK
• Partnership entered into with the Stromma Group to electrify the company’s boat fleet
• Continued upgrading of the regional network to meet increasing capacity needs

Financial highlights, January–March 2023

• Net sales increased by 62% (53% excluding currency effects) to SEK 96,788 million (59,579)
• Underlying operating profit of SEK 9,545 million (9,504)
• Operating profit of SEK 16,332 million (12,783)
• Profit for the period of SEK 11,818 million (6,064)

About Vattenfall

Vattenfall is a European energy company with approximately 20,000 employees. For more than 100 years we have electrified industries, supplied energy to people’s homes and modernised our way of living through innovation and cooperation. We now want to make fossil-free living possible within one generation.

Media Contact:

Markus Friberg
Head of Media Relations, Vattenfall Group
markus.friberg@vattenfall.com

SOURCE: Vattenfall AB