First six months 2024: Positive development during the first half year

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Vattenfall’s President and CEO Anna Borg comments on the interim report for January-June 2024:

Electricity prices have continued to fall on Vattenfall’s markets. Lower fuel prices and increased availability from wind and solar power explain the price drop on the continent and in southern Sweden, as these are closely interlinked. In northern Sweden, electricity prices have fallen due to warmer weather and lower demand. The low electricity price impacted the contribution from wind power, hydro power and nuclear power, but was counteracted by our Nordic price hedges.

A satisfactory result

The underlying operating profit for the first half year increased by SEK 3.3 billion to SEK 17.9 billion. Price hedging allowed us to achieve higher prices in the Nordics despite a falling market trend. This compensated for a more difficult situation for the Dutch heat operation, with lower margins for gas-fired power generation. The comparison is also influenced by a higher profit for the heat operation in Berlin, which is consolidated until the beginning of May this year.

Profit for the period increased by SEK 19.3 billion to SEK 26.2 billion. Besides the improved operating profit, the increase is explained by non-recurring effects mainly related to the sale of 49% of Nordlicht I & II in Q2 2024 and sale of the Norfolk projects in Q1 2024.

Joint efforts needed to secure the future

While we are positive about our improved profit and key targets, the market trends show that joint efforts will be needed to safeguard profitability. That is why we are actively working on streamlining initiatives in all parts of our operations. This includes to review common processes and how we can secure more synergies between operations. This will continue to strengthen Vattenfall's role in the energy transition by enabling more profitable investments, for example in fossil-free electricity generation and heat, as well as increased capacity and flexibility in our networks.

Innovative wind power project and further steps in nuclear power

During the quarter, Vattenfall and Copenhagen Infrastructure Partners (CIP) were awarded a permit to build the wind farm IJmuiden Ver Beta off the Dutch coast. The project is expected to account for approximately 7 per cent of the electricity supply in the Netherlands. With this project, we are breaking new ground by combining wind, solar and hydrogen, thereby contributing to reduce carbon dioxide emissions in society.

Together with the other co-owners of the nuclear power plants Forsmark and Ringhals, we have made a strategic decision to prolong operation of our five reactors from 60 to 80 years. Work on new nuclear power continues and we are currently evaluating three suppliers of large-scale reactors. Among six evaluated suppliers of small modular reactors (SMRs), we have also made a decision to proceed with Rolls Royce SMR in the UK and GE Hitachi Nuclear Energy in the US.

Collaborations throughout the value chain

Commercial partnerships with the industry are key if we are to succeed with the energy transition. During the quarter, we deepened our collaboration with the chemical company BASF, which has purchased 49% of Nordlicht I and II projects. These are expected to generate electricity equivalent to the consumption of 1.6 million German households. In addition to reduced emissions from the industry, partnerships reduce project risk for Vattenfall by sharing both costs and responsibilities. Together with BASF we have also entered into a partnership with Vestas for the supply and service of wind turbines for the Nordlicht projects. Parts of these wind turbines will be manufactured using low-emission steel, which will reduce the carbon footprint by 66 per cent.

Vattenfall and Cemvision have signed a letter of intent regarding the development and supply of a cement that can reduce carbon dioxide emissions by 95 per cent compared to traditional cement. With this demand we are, as a customer, contributing to develop a market for near-zero emission cement.

Energy and industrial development go hand in hand

The energy transition is not the only solution to the climate issue, but it is a very important piece of the puzzle. Vattenfall plays a key role; as a supplier, partner, and customer. Access to fossil-free energy is essential for a competitive Europe. Vattenfall continues on its path by investing in profitable projects and entering into attractive partnerships. We are taking action right here and now to enable the fossil freedom that drives society forward.