Norwegian state-owned utility Statkraft, Europe biggest renewable energy producer, has today posted a net loss for the second quarter, citing asset impairments in part linked to climate change and reduced power prices.
The group's net result sank to a loss of 1 billion Norwegian crowns ($91.24 million) from a year-ago profit of 5.5 billion crowns, Statkraft said.
It booked impairments in Albania, Germany, India and Turkey.
They included 3.1 billion crowns in hydropower assets in Albania and Turkey because of expectations climate change and agricultural activity would curb output.
It also booked impairments of 841 million in German wind power assets, due to lower future power prices, and 348 million in hydropower in India.
Statkraft in June announced it was scaling back its growth plans, but it is still expanding.
After years of strong growth and plummeting development costs, renewable energy has hit obstacles in the form of higher interest rates, inflation and a lower long-term price outlook.
"We still believe in significant growth within renewable power production," CEO Birgitte Ringstad Vartdal told reporters today.
She said wind and solar were expected to be the predominant energy sources in the future, supported by increased battery storage capacity.
Underlying profit before interest and taxes (EBIT) for April to June fell to 4.9 billion Norwegian crowns from 7.4 billion crowns a year ago, the company said in its quarterly report.
Lower underlying earnings were driven by a decline in power prices as well as hedging effects from forward sales of power in the Nordics and Europe, it added.
The benchmark Nordic system power price averaged 35.30 euros per megawatt hour (MWh) in the second quarter, down 37% from 56 euros/MWh a year earlier, the report showed.
However, the company achieved a 10.5% higher price for its Norwegian generation compared with the average price for Norway on power exchange Nord Pool, Anna Nord Bjercke, chief financial officer at Statkraft, told reporters.
Statkraft's second-quarter power generation increased to 14.4 terawatt hours (TWh) from 13.1 TWh a year ago.
Earlier this year, the company announced plans to roll out 3 gigawatts of renewable energy projects in Ireland by 2030, which will include its 500MW North Irish Sea Array (NISA) offshore wind project.
