Annual Financial Report

Statnett SF

21 March 2024

 

(21.03.2024)

Statnett SF - Annual and Sustainability Report 2023 

Increases investments in grid and digitalisation

Statnett is facilitating the green transition and is well underway building the grid we plan to have in place 20 years from now. Statnett's total investments were above NOK 6 billion in 2023 and will increase sharply in the years to come.

- Statnett plays a central role in Norway's transition to a low-emission society. Climate, energy and security policies are all pulling in the direction of increased consumption of electricity. We will expand the grid more rapidly and are focused on doing this in an efficient and sustainable way, says Cathrine Lund Larsen, Executive Vice President and CFO of Statnett.

•       The Statnett Group's underlying profit after tax increased by NOK 993 million to NOK 1,585 million in 2023.

•       Permitted revenue increased by NOK 1,150 million to NOK 16,675 million in 2023.

•       The Group's operating costs were reduced by NOK 1,413 million.

•       Statnett's total investments were NOK 6,078 million in 2023. Of this, around NOK one billion was invested in digitalisation. 

•       The Statnett Group's recorded profit after tax was a loss of NOK 2,617 million in 2023, which is NOK 8,566 million lower than in 2022.

•       Recorded operating revenue was NOK 11,600 million in 2023, which is NOK 11,393 million lower than in 2022.

The underlying profit gives the best reflection of Statnett's financial results. The Norwegian Energy Regulatory Authority (RME) stipulates a cap (permitted revenue) for Statnett's operating revenues. The underlying profit is based on the regulated permitted revenue.

The increase in underlying profit in 2023 is mainly due to increased permitted revenue. Operating costs decreased significantly in 2023, but were offset by higher financial costs.

The recorded profit will depend on stipulated tariffs and congestion revenue. The difference between the recorded profit and underlying profit, referred to as higher or lower revenue, will level out over time through adjustment of tariffs, ensuring that Statnett's revenue corresponds to the regulated permitted revenue. The recorded profit after tax ended with a loss due to reduced tariffs, a decrease in congestion revenues and reimbursement of higher revenue. Following record high congestion revenues in 2022, it was decided in both 2022 and 2023 to reimburse part of the accumulated higher revenue directly to grid owners in the underlying grid.

- Statnett delivers solid underlying results in 2023. At the same time, we have succeeded in returning much of the extraordinary high congestion revenues in 2022. This helps to balance out the high recorded revenue from 2022, as planned, says Cathrine Lund Larsen.

Normalization of a demanding energy market

The war in Ukraine contributed to 2022 being an extreme year for the European energy market, with severely elevated prices. 2023 was a more normal year for the power sector than 2022 according to figures and analyses from Statnett.

The situation has gradually normalized, with falling power prices throughout the year and good reservoir levels at the start of winter 2023/2024. Nevertheless, the situation in the power market has been more demanding than normal in 2023.

Despite storms and bad weather during the year, security of supply has been satisfactory, with few disruptions related to Statnett's facilities. In cases where interruptions have resulted in supply outages, supply has been quickly restored.

Strengthening efforts for nature and coexistence

The world is facing an environmental crisis due to human activity and degradation of nature. For Statnett it is crucial to reduce the impact we have and to safeguard nature. Statnett has also strengthened its efforts to ensure good coexistence with the reindeer husbandry sector, based on learning and dialogue.

During 2023, Statnett has prepared new and comprehensive area statistics on vulnerable and valuable nature.

- The new statistics provide a better overview of our impact on important nature areas. We must plan and build as gently as possible for both nature and people who are affected by our business, emphasizes Lund Larsen.

Outlook: Digitalisation and faster expansion of the grid

Norway and Europe aim to become low-emission societies in 2050. The need for secure access to energy is increasing, and digital and physical security and emergency preparedness is high on the agenda.

Faster grid development and increased investments in digitalisation and innovation result in significant higher investment levels. Over the past ten years, Statnett has invested NOK 70 billion in the Norwegian power grid and digitalisation. In the ten-year period to come, Statnett will invest up to NOK 150 billion in onshore grid and digitalisation.

 - Statnett has ambitious plans to strengthen and expand the current grid, and we are stepping up activity significantly. We are facilitating a considerable increase in Norwegian electricity consumption. The electricity supply of the future will also be automated to a far greater extent than today. We are therefore increasing investments in digitalisation, research and development, says Lund Larsen.

(Amounts in NOK million)	2023	2022
Underlying profit	1 585	592
Total permitted revenue grid operations	16 675	15 525
Total operating expenses	13 147	14 560
Recorded profit for the period	-2 617	5 949
Recorded total operating revenue	11 600	22 993
Congestion revenue	9 943	22 662
Higher (+)- and lower (-) revenue	-5 387	6 868
Accumulated higher revenue at the end of period	3 891	9 278
Investments	6 078	4 985

On 21 March 2024, the Board of Directors of Statnett approved the Group's Annual and Sustainability Report for 2023. The Annual Report is enclosed and available on www.statnett.no

http://www.rns-pdf.londonstockexchange.com/rns/8545H_1-2024-3-21.pdf

Contact:

Cathrine Lund Larsen
Chief Financial Officer
Mobile: [phone]

Petter Erevik

Director of Finance

Mobile: [phone]

Anbjørg Bakken
Senior Communication Advisor
Mobile: [phone]

www.statnett.no

 

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