Statnett SF Annual Financial Report 2021 (9692F)
March 24 2022 - 12:04PM
UK Regulatory
TIDM93RX
RNS Number : 9692F
Statnett SF
24 March 2022
(24 .03.2022 )
Statnett SF - Annual Report 2021
On 24 March 2022, the Board of Directors of Statnett approved
the Group's Annual Report for 2021. The Annual Report is enclosed
and available on www.statnett.no .
The Statnett Group's underlying profit after tax amounted to NOK
1 474 million in 2021 (NOK 2 079 million in 2020). The reduction in
the underlying profit is mainly due to increased system operating
expenses as a result of higher power prices. The increased cost for
system services in 2021 will contribute to increased permitted
revenue in 2023.
The underlying result is based on the regulated permitted
revenue, whereas the recorded result will depend on stipulated
tariffs and congestion revenue. The difference, referred to as
higher or lower revenue, will level out over time through
adjustment of tariffs, ensuring that Statnett's revenue corresponds
with the regulated permitted revenue. The recorded profit after tax
for the Group was NOK 3 307 million in 2021 (NOK 2 697
million). The increase in profit is mainly due to higher operating revenues.
The Group's operating revenues for 2021 amounted to NOK 14 412
million, compared to NOK 10 761 million in 2020. The increase is
mainly due to significantly higher congestion revenues (NOK 5 658
million in 2021 versus 2 408 in 2020). The increase is due to large
price differences relative to Sweden and Europe, as well as within
Norway. The trial operation of the North Sea Link from the third
quarter of 2021 has also contributed to increased congestion
revenues.
The Group's operating costs totaled NOK 9 566 million in 2021
(NOK 6 893 million). The increase is mainly due to higher costs for
system services and transmission losses. Costs for system services
increased by NOK 905 million compared with last year. Transmission
losses increased by NOK 1,493 million compared with the year
before, due to substantially higher electricity prices.
The Group invested NOK 6 121 million in 2021, compared to NOK 7
299 million in 2020. The investments included both completed and
ongoing grid infrastructure projects, interconnectors, purchase of
grid assets and digital development. Investments in new grid
capacity have been reduced from NOK 6,754 million to NOK 4,355
million as a result of the planned completion of major grid
investments such as Balsfjord-Skaidi, the Western Corridor and NSL.
Investments related to digital development, especially within the
systems and market area but also facilities management, show an
increase of approximately NOK 250 million to NOK 960 million
compared with 2020. Commissioned facilities amounted to NOK 9,534
million in 2021 (NOK 8,670 million), of which the largest is NSL,
which was put into trial operation in October. At the end of 2021,
the value of facilities under construction was NOK 6,197 million
(NOK 10,103 million).
Statnett's higher/lower revenue
Statnett's operating revenues mainly derive from grid operations
regulated by the Norwegian Energy Regulatory Authority (RME), which
stipulates a cap (permitted revenue) for Statnett's revenues.
Permitted revenue increased from NOK 9 285 million in 2020 to NOK
11 275 million in 2021. In 2021 revenue from grid operations were
higher than the permitted revenue, resulting in a higher revenue of
NOK 2 350 million (lower revenue of NOK 792 million) for the
period. This was caused by record breaking congestion revenues. At
the end of 2021, the accumulated higher revenue, including
interest, amounted to NOK 2 410 million.
Adjusted tariff
Statnett emphasizes the need for even and predictable tariffs
over time. In 2021 Statnett reduced tariffs to help grid customers
during the Covid-19 pandemic. However, extraordinarily high
revenues from congestion charges in 2021 and further into 2022 has
led to regulated income exceeding permitted income. As a result,
Statnett will be setting the transmission component of the
consumption tariff to zero from 1 April 2022 until the end of the
year.
Outlook
The war in Ukraine has put Europe in a new and challenging
security situation. This is causing uncertainty about the energy
supply situation in Europe, which is affecting gas and electricity
prices. This in turn affects the power market and the energy
situation in Norway. We assume that Europe's need to transition to
renewable energy will be affected by this, and with the current
focus on reducing dependence on Russian gas, we will see even
stronger emphasis on increasing investments in renewable energy.
Statnett is closely monitoring the situation.
Norway is now experiencing a significant shift in the
electrification of society and the transition is moving ever faster
on the road to the zero-emission society. In December, Statnett
published Short-Term Market Analysis 2021-2026. With the
consumption growth we are currently observing, we expect that
already around the middle of this decade, the Norwegian power
surplus will be fully utilized. To meet this future outlook, a
large number of measures are needed such as increased consumption
flexibility, energy efficiency, routing of consumption to places in
the power system that have good capacity, etc. However, the primary
measure must be a broad-based and significant increase in new power
production. The government has decided to give Statnett the
responsibility for the Planning role also at sea. Statnett will
facilitate a comprehensive and long-term development where the
connection of offshore wind, consumption and grid needs are seen in
context.
The power system is already closely interconnected across
countries and regions. Following the commissioning of NSL, Norway
is directly connected to seven other countries. This contributes
significantly to Norwegian security of supply and value creation.
Norway is therefore dependent on close international cooperation.
The green transition further reinforces this need in terms of
physical infrastructure, market solutions and the legal and
political framework.
In the years to come, power prices will fluctuate significantly
more in the short term than we are used to. Increased variation in
trading volume, power production and consumption reinforces the
need for automated and digitized operations. Automated system
operations will be essential for maintaining security of supply in
a power system characterized by higher fluctuations and finer time
resolution. Digital solutions and increased data exchange will also
facilitate quicker processing of connection requests and open the
way for new markets and new business models.
Contact :
Knut Hundhammer
Chief Financial Officer
Mobile: +47 901 65 299
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