4 November 2021

Ørsted and Vestas: Challenging times ahead for wind energy

Ørsted and Vestas have warned of challenging conditions in renewable energy, in their financial reports for 3Q21. Ørsted reported an EBITDA of circa DKK 3 billion in 3Q21, a decrease of DKK 400 million compared to 3Q20, a drop that Ørsted ascribe to low wind speeds in Europe. Vestas reported an adjusted full-year guidance on EBIT-margin to 4% (previously 5-7%) following a decrease of its EBIT in 3Q21 (EUR 87 million) compared to 3Q20 (EUR 325 million). Additionally, its free cash flow amounted to EUR 300 million compared to EUR 547 million in 3Q20. Vestas ascribes the financial result to the supply chain instability and cost inflation caused by the pandemic. The assessment of the challenging conditions only comes a day after clean energy technologies were cited as critical to meeting climate goals in the COP26 summit (FT).

Eight new members join Dansk Energi’s Power-to-X partnership

Eight new members have joined Dansk Energi’s Power-to-X partnership, a partnership aiming to kick-start the PtX industry in Denmark and provide recommendations to the coming national strategy.

• A2X delivers turnkey solutions within PtX – including establishing electrolysis systems.
• Dansk Standard is Denmark’s official standardisation organisation that facilitates the development of international standards and works for an increased Danish influence on PtX standards.
• Evida looks for alternatives in a hydrogen infrastructure.
• HOFOR delivers CO2 and renewable energy.
• OK & Aabenraa Hamn provides required infrastructure for maritime- and land 
• Rambøll provides analyses and advice to PtX actors.
• H2energy is establishing a large-scale electrolyser Esbjerg, Denmark (Press release).  

Alfa Laval and Azelio join new ‘Long Duration Energy Storage’ council

Alfa Laval and Azelio announced their participation in the Long Duration Energy Storage (LDES) council, launched during the ongoing COP26 summit. Formed by technology companies, investors and users, the council aims to achieve carbon neutral targets by 2040 by supporting governments, grid operators and major electricity users in implementing the most cost-efficient energy storage solutions as an alternative to fossil fuels. Energy storage is imperative for decarbonising the power sector, which stands for a third of global emissions, by providing the sector with energy on demand, sourced from intermittent renewables such as wind and solar power. The LDES council considers it possible to store 10% of all energy in long duration energy technologies – equivalent to the annual electricity production of approximately 14,000 wind turbines (Press release, Energinyheter).

Statkraft 3Q21 earnings soar amid spikes in energy prices

Statkraft reported an increase in earnings before interest and taxes (EBIT) in 3Q21 – NOK 4.6 billion compared to NOK 3.5 billion in 3Q20. This marks the highest EBIT that Statkraft has reported in a third quarter and is accredited to a combination of significant spikes in Nordic power prices and high Norwegian hydropower generation, according to Christian Rynning-Tønnesen, CEO at Statkraft. The revenue for 3Q21, after taxes, was NOK 5 billion, an improvement by NOK 3.7 billion compared to 3Q20. Additionally, Statkraft reported a cash flow of NOK 9.9 billion (E24).    

Norwegian state-owned fund invests NOK 392 million in South African wind power

Norfund, the Norwegian state-owned fund, invested NOK 392 million for building four wind parks in South Africa to make its energy mix cleaner. The wind parks will have a total installed capacity of 587 MW – double the capacity of Norway’s largest wind park, Storheia in Trøndelag (288 MW). South Africa’s ability to deliver stable electricity is imperative for creating jobs, reducing poverty and for vital infrastructure, according to Tellef Thorleifsson, CEO of Norfund. However, Thorleifsson continues that the investment is expected to be a long-term and profitable investment, as it is not carried out as an assistance. The fund will invest together with several partners and own circa 20% of the wind parks, which will be sold and reinvested upon commissioning of the wind turbines. Anne Beathe Tvinnereim (Sp), Minister of International Development, is positive to the investment project in South Africa, alluding to Norway’s ability to achieve its climate targets and providing energy across the world (Nrk).

Second AP-fonden invests SEK 500 million in fund for sustainable infrastructure

Andra AP-fonden (AP2) invests circa SEK 500 million (€50 million) in the Climate Finance Partnership (CFP), fund managed by BlackRock, for the development of sustainable infrastructure in developing countries. This investment follows AP2’s new strategic direction decided upon in 2019, focusing on sustainable infrastructure and assets that contribute to sustainable development, aligned with the Paris Agreements. CFP will invest in developing countries with a focus on renewable energy and the associated infrastructure, such as electric grids and battery storage (Press release).  

Sun4Energy Group receives conditional approval for listing on NGM Nordic SME

Sun4Energy Group, a solar installer, has received its approval to be listed on the Nordic Growth Market (NGM). The first day of trading on the exchange is expected on the 26 November 2021.

SAS, Vattenfall, Shell and LanzaTech to investigate production of SAF

SAS, Vattenfall and Shell will investigate the opportunity to start the world’s first large-scale production of Sustainable Aviation Fuel (SAF), using LanzaJet’s patented “Alcohol to Jet '' technology. The production facility will use fossil-free electricity and captured carbon dioxide from district heating for producing the SAF. Assuming that a future investment decision is confirmed, the facility is expected to produce 50,000 tonnes annually of synthetic SAF, also labelled e-fuel. The partners have signed a letter of intent (LoI) to initiate e-fuel production in Sweden and decided upon the division of work among the partners.

• Vattenfall is to examine the supply of fossil-free electricity, hydrogen production and carbon capture needed for the e-fuel production.
• Shell will look into fuel production, logistics and be the purchaser of the produced e-fuel.
• LanzaTech provides the required expertise within gas fermentation, which regards the ability to produce ethanol from incoming waste gas streams. Additionally, the “Alcohol to Jet” technology will be licenced to convert the ethanol into e-fuel.
• SAS participates as a potential purchaser of the produced e-fuel.

The ambition is to commission the production facility sometime between 2026 and 2027 and is expected to be constructed in proximity to Vattenfall’s Forsmark nuclear power plant (Press release).

TotalEnergies and Iberdrola eye Norwegian wind power: Join forces with Norsk Havvind

TotalEnergies and Iberdrola have recently joined forces with Norsk Havvind to apply for tenders for the development of floating and bottom-fixed wind projects at two offshore sites in Norway – Nordsjön II (bottom-fixed wind) and Utsira Nord (offshore wind). Norway has offered tenders amounting to 4.5 GW already attracting several applicants well-established in wind power, such as Equinor, Ørsted, BP and RWE (Theworldnews).

Per Bolund (MP): COP26 will not be described as a success

Per Bolund (MP), Sweden’s Minister of the Environment and Climate, will travel to the COP26 summit in Glasgow next week. According to Bolund, the COP26 summit in Glasgow will not be described as a success – even if the hard-to-solve issues to speed up the Paris Agreement are resolved during the summit. It is an important step forward, but the COP26 summit is not deemed a success until a mutual plan to reduce CO2 emissions is established, Bolund continues. This is the first negotiating delegation in such a large climate context, claiming that it would be “extremely negative” if the countries were unsuccessful in solving the issue of regulating emissions trading – something that would jeopardize the confidence in the Paris Agreement. Furthermore, in an interview with Sveriges Radio, Bolund highlights the importance of Climate Financing, a pledge by wealthy countries to contribute to developing countries’ green transition by financing them with $100 billion annually (Omni). 

What we’re reading

• COP26: 190 nations and organisations pledge to quit coal (BBC)
• Energy groups call for $3tn long duration storage push (Financial Times)

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