Vattenfall has had a solid start to 2024 with a good result development despite lower electricity prices. During the quarter, we completed the sale of three wind power projects off the coast of Norfolk in the UK, which contributed to strengthening our financial position. We continue to invest in projects and technologies that drive the energy transition forward.
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Vattenfall’s President and CEO Anna Borg comments on the interim report for January–March 2024:
Electricity prices have continued to decline, especially in southern Sweden, where the price areas are heavily affected by the price development on the continent. Continental prices are falling due to mild weather, well-filled gas stocks and good availability in French nuclear. Despite this, Vattenfall had higher achieved prices in the Nordics in the first quarter of 2024 due to price hedges, which had a positive impact on the result. However, the continental price hedges had an offsetting effect as these have not been as effective as in the Nordics.
Improved underlying profit
The underlying operating profit increased sharply during the quarter, amounting to SEK 13.9 billion (9.5). This is mainly due to higher achieved prices in the Nordics and higher volumes from nuclear power, wind power and hydropower. Profit for the period increased by SEK 5.1 billion to SEK 16.9 com
pared to the first quarter of 2023, mainly due to higher operating profit. A capital gain of SEK 4.6 billion from the sale of the Norfolk projects in the UK compensated for less positive changes in fair values.
Continued steps for fossil-free electricity generation and new partnerships
To succeed with the transition to a fossil-free society and meet future energy needs, we are continuing the expansion of existing fossil-free electricity generation while also planning for new production facilities. Our work on new nuclear is an example of this. During the quarter, we presented the main findings from the feasibility study on new nuclear. This showed that there are favourable conditions for building new nuclear power on the Värö Peninsula adjacent to Ringhals. Work on property acquisitions, assessment of impact on nearby nature reserves and continued dialogue with authorities and other stakeholders are ongoing. One important conclusion of the feasibility study is also that a risk-sharing model is needed to enable commercial companies to invest in new reactors. We welcome the fact that the government is now investigating the conditions for new nuclear power.
In addition to developing fossil-free electricity generation, it is important to cooperate with the industry to assist in reducing their climate impact. During the quarter, we have entered into several strategic partnerships, such as a hydro power purchase agreement with Borealis and two solar purchase power agreements with Evonik and Wieland Group. At the end of April, we also announced that we have signed a purchase agreement for 49% of Germany’s Nordlicht offshore wind farms with BASF.
A changing world, but the direction for the energy transition remains
We live in a changing world, with continued geopolitical and financial uncertainty and we have an important year ahead of us. However, it is clear to us that the direction of the energy transition remains, and that many attractive business opportunities come with it. We are continuing to build on our integrated and diversified business model by investing in profitable projects within areas such as fossil-free electricity generation and electricity grids.
First quarter of 2024
Business highlights, January–March 2024
- Vattenfall completed the sale of the Norfolk Offshore Wind Zone in the UK and reports a capital gain of SEK 4.6 billion
- Completion of the offshore wind farm Vesterhav Nord in Denmark
- Vattenfall and Borealis have signed a 10-year hydropower purchase agreement contributing to reduced CO2 emissions
- The feasibility study on new nuclear has been completed and shows favourable conditions for new construction at Ringhals
- New long-term Power Purchase Agreements for solar projects in Germany
- Vattenfall has initiated the work to connect SSAB's electric arc furnace in Oxelösund to the electricity grid
Events after the balance sheet date
- Vattenfall has signed a purchase agreement with BASF for 49% of Nordlicht 1 and 2 offshore wind farms in the German North sea
Financial highlights, January–March 2024
- Net sales decreased by 21% (21% excluding currency effects) to SEK 76,499 million (96,788)
- Underlying operating profit1 increased by 45% to SEK 13,884 million (9,545)
- Operating profit increased by 27% to SEK 20,755 million (16,332)
- Profit for the period increased by 43% to SEK 16,879 million (11,818)
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