Vattenfall’s renewables division's profitability was undermined during the first half of 2012, in part due to a technical fault with the cabling serving the 300MW Thanet wind farm, off England’s south east coast.
The total cost to Vattenfall for the fault was about SEK50m (€5.6m), Vattenfall chief executive, Øystein Løseth, told Windpower Offshore. The problem was resolved on 13 April.
The impact of the cable failure was discussed as Vattenfall released financial results for both the second quarter (Q2) and first half (H1). These revealed a 7.2% decline in H1 revenue, to SEK85.7bn (€10.2bn) and a 6.6% fall in underlying operating profit, which totalled SEK16.5bn (€2.0bn).
Renewable profits fall
It was a different story for Vattenfall’s renewable division, which recorded a 64.2% increase in net revenue, rising to SEK1.7bn (€204m). However, this sharp increase did not deliver a similar jump in profit. In fact, the division’s underlying operating profit slumped by 64.8%, to SEK80m (€9.5m).
Factors behind weakened renewables profitability included lower average electricity prices, poorer wind conditions in the UK, and the cable issue at Thanet. More positively, the division benefited from "favourable wind conditions" in Denmark and Sweden.
Despite difficulties in the UK, Vattenfall recorded an increase in its total renewable electricity generation, all of which derived from wind farms. Combined, Vattenfall’s wind energy assets generated 1.8TWh during H1 compared to 1.6TWh during the same period last year.
The division also saw its staff numbers increase, from 321 full-time equivalents in H1 2011 to 416. This growth in headcount may reflect Vattenfall’s investments in several offshore wind projects in the UK and Germany. It is developing the Ormonde, Dan Tysk and East Anglia projects.
Vattenfall also announced today that it has submitted an application to Sweden’s radiation authority for permission to develop plans for new nuclear power stations. Chief executive Løseth emphasised that the company has not made any binding decisions to pursue new nuclear. "We are just investigating building new nuclear in the Nordic market," he said, adding that there are other options for replacing lost capacity when Sweden’s existing nuclear power stations are decommissioned. These options include additional renewables capacity.