Norway’s Statkraft Halts New Green Hydrogen Developments on Cost, Market Concerns
(Reuters) — Norway's biggest utility, state-owned Statkraft on May 8 said it has stopped developing new green hydrogen projects citing higher costs and uncertain demand, while reporting a drop in first quarter earnings amid lower power prices.
Green hydrogen, made through electrolysis using renewable electricity, is seen as central to decarbonization efforts to limit global warming. Traditionally produced using natural gas, it is a feedstock in the chemical industry and for fertilizer production, and can also be used in heat and power generation.
Statkraft scaled back its hydrogen ambition last year, but since then uncertainty in the market has increased even more, while costs have risen, CEO Birgitte Ringstad Vartdal told reporters.
In addition, there was also a lack of regulatory clarity and uncertain customer demand, she added.
"Therefore, we have chosen to stop the activity in order to prioritize existing activity in mature renewable technologies and our market activity," the CEO said.
The company is predominantly active in hydropower, operates wind and solar power projects and invests into solar battery systems.
Statkraft presently has 13 green hydrogen projects across six markets at different stages of development and while some will be stopped, others may still move forward to a more mature stage to get other investors on board, Vartdal said.
In April, Statkraft cancelled an order for an electrolyzer, with Norwegian supplier NEL NEL.OL for a project in northern Norway citing the lack of commercial viability.
Earlier on Thursday, Statkraft reported a drop in underlying earnings before interest and tax fell to 9.0 billion crowns ($869 million) from 13.5 billion a year earlier on lower power prices.
The Nordic system price for power, the region's benchmark, averaged 46.0 euros per megawatt hour (MWh) during the first three months this year, down from 58.3 euros/MWh a year ago, Statkraft said.
The lower prices were partially offset by a 2.3-terawatt hours (TWh) rise in power generation to a record 21.7 TWh.
($1 = 10.3525 Norwegian crowns)
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