A word from the CEO

2022 was an eventful and challenging year. The war in Ukraine has, first and foremost, caused great suffering for the people of Ukraine, however it has also resulted in serious negative repercussions for the rest of the global community. Gas shortages in Europe have led to extremely high gas prices and European power prices. Dry weather conditions in Southern Norway and low reservoir levels, combined with European prices, contributed to very high power prices in Southern Norway throughout the year.

This has had a heavy impact on Norwegian power consumers, and resulted in a critical spotlight being shone on the Norwegian power system. At Hafslund, we support the measures initiated by the government authorities involving support schemes and the facilitation of fixed-price contracts for the business sector. At the same time, our greatest focus is on contributing to long-term solutions to energy challenges, primarily by developing more renewable energy, but also by finding solutions for saving energy. 2022 was a year when we got a lot started and we are fortunately able to see a wide range of solutions for the future. We have continued to develop and improve our hydropower, and we have acquired and started many new companies that can accelerate the growth of renewable energy.

Many new colleagues were added to our ranks in 2022 and increased our expertise and capacity through acquisitions. Operations have been good, and we had the lowest injury figures for many years. We are dedicated to our HSE work to ensure that this positive development continues.

The largest transaction of the year was the acquisition of what is now called Hafslund Oslo Celsio, Norway’s largest supplier of district heating. With the acquisition of Celsio, we have become an even larger group, with an extensive portfolio of companies that all contribute renewable energy or solutions for a renewable society. The Group’s nearly 700 employees all work towards the vision: “For a world in balance, with renewables.”

The Group has developed this new vision and underlying strategy in parallel with strong growth and structural changes. I am pleased that we are constantly increasing our sustainability and growth ambitions with initiatives that include the entire renewable value chain. It has become more apparent to us that a “green shift” requires multifaceted expertise and work across sectors, and Hafslund is well-positioned to make important contributions towards this shift.

We will grow within hydropower, solar power, wind power, district heating, district cooling and smart energy solutions, and we will make a large and challenging carbon capture plant a reality. We will achieve this with skilled employees and a large number of partners who we have together with us on the ownership side in many of the businesses that we operate. The parent company is owned by the City of Oslo and it is important for us that our business activities make a positive contribution for the citizens of Oslo. We want to contribute to an emission-free national capital and to create better energy solutions for citizens in Oslo and in the rest of Norway. Not least, we want to build more renewable energy that will give us an energy surplus that can contribute to achieving lower energy prices and a green transition.

However, in order to succeed with this we also need framework conditions that will make Norway a competitive country for renewable energy. New tax increases on power production that are specific to Norway are challenging for both the renewables industry and power consumers who are reliant on competitive and stable power prices. At Hafslund we understand that historically high power prices will result in calls for higher taxation and that Norway has a strong need to finance the national budget. However, we believe there are several clear disadvantages associated with how the new taxes have been arranged, and that this will have implications for the price level of long-term contracts, investments in renewable power and for financial hedging and risk management. At Hafslund, we are working to contribute to the establishment of framework conditions that better facilitate investments in new renewable energy and the emergence of greener businesses in Norway, and we will continue to highlight the importance of good framework conditions in 2023.

We have challenging and exciting years ahead of us. I am confident that with our accomplished and committed employees we will continue to make a contribution towards “a world in balance, with renewables”.

Finn Bjørn Ruyter