Statkraft CEO sees risk of prolonged higher power prices

• Nordic power for Q4 was trading at €86 per MWh while German power traded at €140.75/MWh in wholesale markets
• Norway's hydropower reservoirs face a hydrological deficit after low winter snowfall, particularly in southern Norway which connects to continental Europe via subsea cables
• Gas prices have returned to levels seen at the start of U.S.-Iran tensions, increasing uncertainty in global energy markets

Statkraft CEO Warns of Prolonged Elevated European Power Prices

Norwegian state-owned utility Statkraft, one of Europe's largest renewable energy producers, cautioned that European electricity prices may remain elevated due to multiple converging factors, CEO Birgitte Ringstad Vartdal said Tuesday while presenting stronger earnings results.

Key Risk Factors:

The combination of Middle East conflict and depleted energy reserves poses significant upside risk to power prices. Gulf tensions have pushed gas prices back to levels seen at the start of the U.S.-Iran war, increasing uncertainty in global energy markets. Both natural gas storage and Nordic hydropower reservoirs are currently at low levels.

Current Market Prices:

Nordic power for Q4 is trading at €86 per megawatt hour (MWh), while German power stands at €140.75/MWh, according to LSEG data.

Regional Concerns:

Norway faces a hydrological deficit due to low winter snowfall, particularly affecting southern regions that supply continental Europe via subsea cables. Hydroelectric power is the cornerstone of Norwegian electricity generation. While Vartdal expressed cautious optimism about autumn rainfall replenishing reserves, she emphasized the need for close monitoring.

Market Implications:

The CEO declined to provide specific price forecasts but warned that sustained higher power prices could damage European industry's long-term competitiveness. Statkraft reported improved earnings driven by higher power prices in both Nordic and German markets.

The utility remains watchful but not overly concerned about current reservoir levels, contingent on adequate rainfall through autumn to restore hydropower capacity.