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Statkraft expects to run German gas plants more as prices come down

·2-min read

By Nora Buli

OSLO (Reuters) - Statkraft's German gas power plants are likely to run for more hours going forward as gas prices come down from the current highs, the Norwegian utility's top executive told Reuters.

Statkraft said on Thursday it had reversed 1.02 billion Norwegian crowns ($118.74 million) of impairments on its gas fleet, helping to boost third-quarter earnings.

"In the future we see a good utilisation and good margins despite the fact that it's been few running hours this quarter," Chief Executive Christian Rynning-Toennesen told Reuters after the earnings presentation.

"That was forced by the very high gas prices. We don't expect that to continue," he added.

Statkraft is one of Europe's biggest renewable power producers but also operates two gas-fired power plants in Germany, with three others currently mothballed.

Benchmark natural gas prices in Europe have surged some 250% this year, driven by a demand recovery, lower-than-expected renewable energy production and a lack of additional supply from Russia.

This reduces the "clean spark" spread - which measures the value of operating gas-fired plants after accounting for carbon emissions, instead favouring coal-fired units.

Statkraft's gas plants produced only 0.5 terawatt hours (TWh) of electricity in the third quarter, down from 2.4 TWh in the same period 2020, its quarterly report showed.

The turbulent energy markets also hit Statkraft's trading unit, which posted a 4 billion crown loss.

"Some of the losses were real losses from our trading activities, due to the very high volatility and steep increases of the prices," Rynning-Toennesen said.

"Another part was unrealised and it remains to be seen how prices develop over the next quarter. I'm slightly optimistic but it's too early to say," he added.

($1 = 8.5901 Norwegian crowns)

(Reporting by Nora Buli Editing by Victoria Klesty and Mark Potter)

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