Statkraft to Cut Costs by 15% Amid Uncertainty

Norwegian state-owned utility Statkraft has announced plans to reduce its annual costs by approximately 15%, equivalent to 2.9 billion crowns ($292 million) by 2027. The decision comes in response to increased global uncertainty, rising expenses, and lower power prices affecting the energy market.

In May, Statkraft revealed that it had halted the development of new green hydrogen projects due to escalating costs and uncertain demand. This move followed a reduction in its hydrogen ambitions last year.

CEO Birgitte Ringstad Vartdal emphasized the need for Statkraft to adapt to evolving market conditions and geopolitical uncertainties. Specific cost-cutting measures, including potential staff reductions, will be determined in the latter half of 2025.

Focus on Profitable Technologies

Statkraft intends to prioritize profitable technologies in the near term, such as solar, wind, and batteries, across fewer markets. The company cited the sluggish progress of the offshore wind industry as a factor influencing its strategic decisions.

Vartdal stated, “While offshore wind remains crucial for Europe’s energy mix, the industry’s development has been slower than anticipated, impacting cost reduction efforts in the short term.”

As part of its cost-cutting strategy, Statkraft will discontinue new project activities, including participation in Norway’s upcoming Utsira Nord allocation round and development projects in Portugal. The company will evaluate its investments in solar, wind, and batteries in Poland but will proceed with the North Irish Sea Array project. Statkraft plans to maintain its market presence in Portugal and Poland.

The company’s cost-cutting initiative reflects its commitment to navigating the challenges posed by the dynamic energy landscape and ensuring financial sustainability in the long run.

($1 = 9.9445 Norwegian crowns)

Sources: Reuters