Price hedging

Vattenfall continuously hedges its future electricity generation through sales in the forward and futures markets. 

With the current portfolio structure, the dominant risk exposure is coupled to Nordic nuclear and hydro power baseload generation. Vattenfall’s price hedging strategy is therefore focused on the Nordic generation assets.

While Vattenfall has some price exposure between electricity and used fuel/emissions on the Continent (Germany, the Netherlands and the UK), Vattenfall’s operations in the region generate a substantial share of regulated revenue from distribution, heat and tendered wind power, which reduces the total risk exposure and has a lower risk profile than the outright power exposure in the Nordic countries.

The market price risk of Vattenfall’s production assets and hedges for electricity, fuel prices and emissions as well as the ancillary trading market price risks are monitored daily.

Indicative Nordic1 hedge prices and hedge ratio as per 31 March 2022

  2022 2023 2024
EUR/MWh 28 30 30
Hedge ratio (%) 72 53 29

1) Sweden, Denmark, Finland

Vattenfall's estimated Nordic financial hedge ratio (%) as per 31 March 2022

2022 72
2023 53
2024 29

Sensitivity analysis – Continental portfolio (DE, NL, UK)2

  +/- 10% price impact on future profit before tax, MSEK3
Market quoted 2022 2023 2024 Observed yearly volatiliy
Electricity +/- 1,715 +/- 1,839 +/- 558 31% - 53%
Coal -/+ 111 -/+  168   -/+  83 51% - 80%
Gas -/+  298 -/+  1,754 -/+  1,212   35% - 64%
CO2 -/+  115 -/+  407 -/+  375  43% - 53%

2) Vattenfall’s continental portfolio is mainly exposed to clean spark spreads. Vattenfall hedges these production margins, which in turn affects reported sensitivity figures for electricity, gas and CO2 emission allowances.

3)The denotation +/- entails that a higher price affects operating profit favourably, and -/+ vice versa.

Related content

An aerial view of Kentish flats wind farm

Make comparisons and analyses with our financial analysis tool.

The offshore wind farm Krigers Flak

Learn about our operating segments and get the latest quarterly updates.

Installation of a wind turbine at sea

The majority of Vattenfall's growth investments are being made in renewable energy.

See also

A group of children on a hill

Vattenfall's strategy originates from our purpose to Power Climate Smarter Living.

A girl in a green sweater looking into the camera

We have decided to make the biggest leap yet to reduce the impact of climate change.

Read our latest annual and sustainability report, interim reports and other presentations.