Anna Borg, the CEO of Swedish utility Vattenfall, emphasised the urgent need for Europe to bolster its energy security by expanding its electricity transmission capacity and ramping up fossil-free power generation.
These remarks came in the wake of Vattenfall’s announcement of a significant decline in its fourth-quarter earnings.
Fall in earnings
Vattenfall, a state-owned company, reported a significant decrease in underlying earnings before interest and tax.
The current figure stands at 531 million Swedish crowns ($48.66 million), compared to 4.5 billion crowns during the same period last year, according to a Reuters report.
The company’s net profit decreased to 5.1 billion crowns from 5.7 billion crowns compared to the same period last year.
Borg told Reuters that the drop was due to a 46% year-on-year decrease in spot power prices in the Nordics, as well as higher provisions for the back end of nuclear operations, such as dismantling and handling spent fuel.
Simultaneously, Borg told Reuters that by selling production in advance at higher prices, the company has been able to neutralise some of the price increases during the quarter.
Investment plans
Vattenfall intends to invest 170 billion crowns over the next five years, primarily in wind power and grid projects, with additional plans for new nuclear generation, according to the report.
Additionally, Borg stated that Europe requires increased transmission capacity to facilitate power flow between market areas and optimise prices, as well as increased fossil-free electricity production.
Borg’s statement underscores the critical role of a robust and interconnected electricity grid in ensuring a stable and secure energy supply across Europe.
By enhancing transmission capacity, the continent can facilitate the efficient flow of electricity from regions with surplus generation to areas with high demand.
This increased flexibility is particularly crucial as Europe transitions towards renewable energy sources, which can be intermittent and geographically dispersed.
Reducing reliance on fossil fuels
Moreover, Borg’s call for greater fossil-free power generation highlighted the importance of decarbonising the energy sector to mitigate climate change and reduce dependence on fossil fuels.
Expanding renewable energy sources such as wind and solar power, coupled with investments in energy storage technologies, can provide a sustainable and reliable alternative to fossil fuels.
She told Reuters:
Both from a sort of independence perspective and the security perspective, because also in the geopolitical context, there is a need to be more self-sufficient in Europe in general.
The CEO’s comments serve as a reminder that Europe’s energy transition requires a multi-faceted approach encompassing infrastructure development, technological innovation, and policy support.
By prioritising investments in transmission capacity and fossil-free power generation, Europe can enhance its energy security, promote sustainability, and ensure a resilient and affordable energy future for its citizens.
Furthermore, Vattenfall noted that the demand outlook is problematic due to some companies delaying investments because of market and political uncertainty.
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