Green energy benefiting from oil's woes, says Norway's Statkraft

Reuters News
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Posted: Oct 30, 2015 5:41 AM

By Nerijus Adomaitis

OSLO (Reuters) - Green energy is benefiting from the downturn in the oil sector, with more cash available for investments and more skilled manpower at hand, the chief executive of Europe's largest producer of renewable power told Reuters.

Norway's Statkraft [STATK.UL] is Europe's biggest generator of hydropower, and also has wind farms and gas-fired power plants. The company, which has power plants in countries including Germany, Britain, Turkey and Brazil, had turnover of $6.1 billion last year.

"It is easier to get the financing, because there is less money going into the oil sector," its Chief Executive Christian Rynning-Toennesen said in an interview.

"Until one-and-a-half years ago, we had serious problems filling critical positions with skilled people. Now we have no problems. The oil industry has many skilled people, so we get more applicants. More than we need, actually."

One project that could benefit from this is a major wind farm in Norway that could generate 1,000 megawatts of electricity, enough to power more than 400,000 households.

Statkraft had put on hold such plans in June, citing low profitability.

But Rynning-Toennesen said the company was now looking to move forward with the project, in which it will have a 51-percent stake. But he cautioned: "Still, there are many uncertainties."

Statkraft plans to take the final investment decision in the first quarter of 2016.

More broadly, Statkraft sees growth opportunities in South America, where it recently opened a hydropower plant in Peru and increased its stake in Brazilian power company Desenvix, said Rynning-Toennesen.

Statkraft opened its second hydropower plant in Turkey, Europe's fastest-growing power market, earlier this year, and has started building a third one, but further investments would depend on the security situation there, he added.

The company is a major power producer for the Nordics, where average power prices in the region hit a 15-year low in the third quarter due to late snow melt in the mountains and wet weather boosting water reserves.

Rynning-Toennesen declined to speculate on whether Nordic power prices had bottomed out, but said he saw a number of factors pointing to higher prices in the future.

He said the Nordic market would become tighter as Sweden shut down four nuclear reactors by 2020, earlier than previously planned, and new cables from Norway to Britain and Germany were put in place, allowing additional exports.

(Editing by Gwladys Fouche and Pravin Char)