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Statkraft scraps plans for 1GW of wind projects in Norway

CTBR Staff Writer Published 05 June 2015

Statkraft has canceled plans to develop around 1GW of onshore wind capacity at the Fosen and Snillfjord projects in central Norway due to low power prices.

Wind turbine

The company noted that the increasing power surplus and continued moderate demand for electricity have cut long-term price estimates in the Nordic power market.

Statkraft's analysis found that the projects, which were estimated to cost about NOK11bn ($1.4bn) would not be profitable.

Agder Energi, TronderEnergi and Nord-Trondelag Elektrisitetsverk also have stakes in the projects, which were estimated to generate 3.25TWh of energy per year.

Statkraft president and CEO Christian Rynning-Tønnesen said: "Statkraft finds it regrettable that the projects cannot be realised. The authorities have contributed by facilitating wind power development, for example through improving the depreciation rules.

"Unfortunately, the market development is such that it is still not commercially responsible to invest in these projects."

Statkraft said it will continue to invest in Norwegian hydropower sector, but anticipates wind to become competitive in the Nordic region in the longer term.

The Norwegian Government has demanded an explanation from Statkraft on scrapping its plans of wind projects. Vestas was appointed as preferred turbine supplier for the developments.

Commenting on Statkraft's decision, Norway Energy Minister Tord Lien told Reuters: "It seems pretty clear now that many more of the wind power projects that have obtained permission will not be built. They are simply not profitable enough."

Image: Vestas was appointed as preferred turbine supplier for the Fosen and Snillfjord projects in central Norway. Photo: courtesy of pakorn/FreeDigitalPhotos.net.