Statnett SF Annual Financial Report (0618U)

TIDM93RX

RNS Number : 0618U

Statnett SF

23 March 2023

(23 .03.2023 )

Statnett SF - Annual and Sustainability Report 2022

On 23 March 2023, the Board of Directors of Statnett approved the Group's Annual and Sustainability Report for 2022. The Annual Report is enclosed and available on www.statnett.no .

The Statnett Group's underlying profit after tax amounted to NOK 592 million in 2022 (NOK 1 474 million in 2021). The reduction in the underlying profit is mainly due to increased system operating expenses. The increased cost for system services in 2022 will contribute to increased permitted revenue in 2024. High congestion revenues (NOK 22,662 million) contributed to a recorded result significantly above the underlying result. This higher revenue will benefit Norwegian grid customers, and Statnett has repaid a total of NOK 11.3 billion to grid customers in 2022 through reduced tariffs and extraordinary repayments.

The underlying result is based on the regulated permitted revenue, whereas the recorded result will depend on stipulated tariffs and congestion revenue. The difference, referred to as higher or lower revenue, will level out over time through adjustment of tariffs, ensuring that Statnett's revenue corresponds to the regulated permitted revenue. The recorded profit after tax for the Group was NOK 5 949 million in 2022 (NOK 3 307 million).

The Group's operating revenues for 2022 amounted to NOK 22 993 million, compared to NOK 14 412 million in 2021. The increase is mainly due to significantly higher congestion revenues due to large price differences relative to Europe, as well as within Norway. Revenues from tariffs decreased as a result of the fixed component being set to zero. As a result of extraordinarily high revenues in 2022, Statnett decided to set the fixed component of the tariff to zero from April, and the energy component of the tariff was set to zero in September and October. In November, RME established a maximum price for the energy component of 35 øre /kWh. Tariff revenues from the fixed component decreased by NOK 3 059 million compared to 2021, while tariff revenues from the energy component increased by NOK 179 million.

The Group's operating costs totaled NOK 14 560 million in 2022 (NOK 9 566 million). The increase is mainly due to higher costs for system services and transmission losses. Costs for system services increased by NOK 2 283 million compared to last year. Transmission losses increased by NOK 2 174 million compared to the year before, due to substantially higher electricity prices.

The Group invested NOK 4 985 million in 2022, compared to NOK 6 121 million in 2021. The investments included both completed and ongoing grid infrastructure projects, purchase of grid assets and digital development.

Statnett's higher/lower revenue

Statnett's operating revenues mainly derive from grid operations regulated by the Norwegian Energy Regulatory Authority (RME), which stipulates a cap (permitted revenue) for Statnett's revenues. Permitted revenue increased from NOK 11 275 million in 2021 to NOK 15 154 million in 2022. The increase is attributable to an increase in tangible assets following the completion of multiple projects, higher interest rates and power prices.

In 2022 revenues from grid operations were higher than the permitted revenue, resulting in a higher revenue of NOK 6 868 million (higher revenue of NOK 2 350 million) for the period. This was caused by record breaking congestion revenues. At the end of 2022, the accumulated higher revenue, including interest, amounted to NOK 9 278 million.

Outlook

The war in Ukraine has put the European energy system to a test at a time when the transition to a zero-emission society is gathering pace. Europe has set ambitious goals aimed at solving energy challenges by developing large volumes of new renewable power. The transition is also gaining momentum in Norway, where Statnett is being contacted by numerous players who want to connect new green businesses to the grid or to electrify or expand their existing operations. This will require Statnett to adapt to deliver greater capacity in a shorter time. In the past decade, Statnett has invested more than NOK 70 billion in the grid and plans to invest up to NOK 100 billion by 2030.

Statnett is central to the development of the Norwegian and Nordic power system. In addition to sufficient grids, it is important to continue the development of systems, market solutions and digitalisation in order to accommodate a future with increasing dependence on electricity. These areas will remain important moving forward, both for Statnett alone and in collaboration with the other Nordic TSOs.

Statnett exercises an important social responsibility in operating and developing the transmission grid in a socioeconomically rational way, so that we meet the expectations of the owner and our sectoral policy objectives. Given the major changes and pressing need for grids, this places major demands on Statnett in terms of tempo, efficiency and our ability to execute, adapt and innovate. Statnett is well prepared to meet these requirements in close cooperation with the authorities and other players.

http://www.rns-pdf.londonstockexchange.com/rns/0618U_1-2023-3-23.pdf

Contact :

Cathrine Lund Larsen

CFO

Mobil: +47 979 75 867

www.statnett.no

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