Swedish power company Vattenfall A.B. plans to pursue more renewable energy projects in the future after the German parliament’s decision to phase-out nuclear drove the utility into huge second-quarter losses.
State-owned Vattenfall, Europe’s fifth-largest electricity producer, posted an operating loss of 3.2 billion Swedish Kroner ($0.5 billion) for the April to June period. This is a 12.2 billion SKr decrease from an 8.9 billion Swedish kronor profit year-on-year.
Of its total operating loss,10.2 billion Swedish kronor came from impairment charges from closing two of its nuclear plants in Germany and the costs of dismantling and handling their fuel. It also said it could not repeat the high production and sales volumes it had during the corresponding quarter a year ago.
The Brunsbüttel and Krümmel nuclear plants will no longer operate after the German government decided in June to shut down all of its 17 nuclear plants by 2022 at the latest starting last month.
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Vatenfall was also hit by 8.9 percent decrease in total power-production in the second quarter a to 37.7 terawatt hours from 41.4 TWh in the same period last year. As expected from the write-downs, nuclear power generation decreased by 17.1 percent to 10.2 TWh from 12.3 TWh.
Improvements in renewables
As profits tumbled, Vatenfall’s renewable energy business remained afloat. Operating profit for renewables improved to 68 million Swedish kronor from 305 million Swedish kronor in the second quarter of 2010.
Oystein Loseth, president of Vattenfall, believes that investing in more renewable energy in the industry could help the utility bounce back in the upcoming quarters.
“The phase-out of nuclear power in Germany will result in an acceleration of the transition to renewable energy generation in Germany,” he said.
“Vattenfall sees business opportunities in this transition and intends to continue actively participating in the development of new projects,” he added.
Vattenfall’s best bet could be in wind energy after it managed to step up its wind power generating capacity to 0.7 TWh from 0.4 TWh last year, possibly from commissioning its 300-MW Thanet offshore wind farm in Britain, the world’s largest offshore wind farm to date, and the 78-MW Stor-Rotliden onshore wind farm in Sweden last year.
This compares with its hydropower generation that decreased by 10.1 percent in the second quarter of 2011 to 7.1 TWh from 7.9 TWh during the same period last year. Electricity generation based on biomass and waste also followed suit, sliding to 0.2 TWh from 0.4 TWh.
According to the utility’s website, Vattenfall is currently building nine wind farms in six countries, including the 150-MW Ormonde offshore wind farm in Britain and the DanTysk offshore wind farm in Germany which is estimated to have an annual generation capacity of around 1,320 gigawatt hours.
The projects are expected to be operational before year end and 2013 at the latest, respectively.
Aside from wind energy, Vattenfall said in June it is planning to invest up to 1 billion euros ($1.46 billion) in French hydropower projects as the country prepares to renew its offered licenses later this year. The utility aims to obtain 1 gigawatt’s worth of concessions out of French hydropower tenders.
