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ENERGY

Danish energy firm posts profits as electricity and gas prices rocket

Danish company Ørsted said on Wednesday its energy sales increased by 54 percent in 2021’s third quarter, citing hikes in gas and electricity prices as the driving factor.

Danish energy company Ørsted posted large profits in 2021's Q3 due to high gas and electricity prices. The company wants to ramp up sustainable production by 2030.
Danish energy company Ørsted posted large profits in 2021's Q3 due to high gas and electricity prices. The company wants to ramp up sustainable production by 2030. Photo: Mads Claus Rasmussen/Ritzau Scanpix

The commercial division of Ørsted, Bioenergy & Other, reported a 6.6 billion kroner profit in the third quarter of this year, a 54 percent increase.

Operating profits meanwhile rose to 1.2 billion kroner in Q3, according to the results.

Gas prices are six times the normal rate and electricity three time more expensive than normal, the company said.

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“(The large profits) are due to extraordinarily good results from our power stations and high revenues from our gas businesses,” Ørsted writes in the results.

Although increasing gas and energy prices have given Ørsted strong results, the company, which has invested in wind and solar power, has not grown overall.

For the entire Ørsted company, operating profits in the third quarter dropped by just under 400 million kroner to 3.4 billion kroner.

That is because a relatively low amount of wind reduced the amount of energy produced by Ørsted’s wind farms.

Earlier this year, the Danish company published a plan to quadruple its position on sustainable energy by 2030.

That includes building wind and solar power farms to produce 50 gigawatts of power.

Contracts signed by the company so far can ensure 18 gigawatts of sustainable production, Ørsted said in its published results.

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ENERGY

Could the Norwegian government introduce a cap on energy prices? 

Due to soaring prices, the Norwegian government is mulling over several solutions, including a potential price cap for electricity and limiting energy exports abroad. 

Could the Norwegian government introduce a cap on energy prices? 

High energy exports in the last 12 months, low filling levels in Norwegian reservoirs and an uncertain energy situation around Europe have led to soaring electricity prices in southern Norway. 

Last year the government introduced a scheme whereby it covers 80 percent of consumers’ energy bills where the price rose above 70 øre/kWh. The portion of the bill under 70 øre is paid in full by households. The portion the government covers will increase to 90 percent in October. 

Critics have argued that the current scheme still leaves households struggling with their bills. As a result, Norway’s government has said it is mulling its options to curb energy bills.

Norway primarily depends on hydroelectric dams to help it meet its energy needs. Still, reservoirs in southern Norway have been at the lowest level for ten years, public broadcaster NRK reports. 

Low reservoir filling over the past year has conceded with record exports with higher prices on the continent, making sending power abroad an enticing proposition.

Recently, exports have fallen significantly, and the government is considering introducing a limit to reduce the possibility of energy rationing being introduced this winter. 

“Restrictions on the export of electricity to Europe may be one of the measures that is needed,” Elisabeth Sæther, state secretary at the Ministry of Oil and Energy, told NRK. 

Earlier this week, Prime Minister Jonas Gahr Støre ruled out completely shutting off exports to the continent. 

“It is a dangerous thought and will not serve us well. It could give us more expensive power and lack of power in given situations. We will hardly be able to import power when we need it without contributing to other countries when they need it. There is a reciprocity in this,” he told the newspaper Aftenposten earlier in the week. 

Sæther also told NRK that the government was weighing up putting a maximum price on energy but warned that it could have unforeseen consequences. 

“We are afraid that a maximum price means that more water is drawn into the reservoirs, which we need for the winter. It is a serious situation. We must prevent ourselves from getting into a situation where we lack enough power this winter,” she told the broadcaster. 

At the end of May, the state-owned Statnett announced that the supply situation in Norway might be under strain – in some scenarios – all the way up to and through the winter, especially if Southern Norway experiences drier than usual weather in the second part of the year. 

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