A word from the CEO
2023 was yet another eventful and challenging year. We are witnessing a world around us that is constantly changing, and the previous year was significantly impacted by war, geopolitical unrest and economic uncertainty. These are developments that played a major role in security and energy policy being merged together, and energy preparedness is higher on the political agenda than ever before.
Hafslund has delivered its highest ever profit. Despite strong results for the Group as a whole, we face challenges with the profitability of district heating. These challenges are primarily due to major changes in framework conditions that have adversely impacted the profitability of the district heating industry in different ways. This is happening at the same time as Statnett and Elvia announced that the transmission grid is at full capacity and that there will be no further scope for significant new consumption in the region until 2030 at the earliest. District heating is one of the most important measures for improving the grid and power situation in the short term, and we will continue to work in a targeted manner to contribute to alleviating the capacity situation in Eastern Norway through measures such as better profitability for district heating.
The extreme weather event “Hans” provided us with first-hand experience of climate change in 2023. The incident at Braskereidfoss made it clear that climate change requires adaptations to be made to the operation and management of our power plants. The extreme weather event also demonstrated how important regulated hydropower is for emergency preparedness and flood mitigation. In the Hallingdal watercourse, we succeeded in reducing the flood from being a 1,000-year flood to a 200-year flood.
For Hafslund, 2023 was a year marked by further internal improvements. The Group has undergone dramatic change in recent years, and over the course of last year we established a clearer structure in the Group. The business activities are now divided into three major business areas:
- Hydropower, which consists of Hafslund’s ownership in several power generation companies, as well as the power trading business.
- District Heating and Cooling, which consists of Hafslund Oslo Celsio, a company in which Hafslund owns 60 per cent of the shares.
- Growth and investments, which is a business area made up of growth activities and ownership in Eidsiva and other ownership interests outside of the other two business areas.
District Heating and Cooling and Growth and investments had their first full operating year in 2023, and the year was devoted to clarifying and further developing these three business areas. The Group functions were also strengthened in order to equip the Group for new growth and further quality control of existing activities. This is especially the case in areas such as risk management, compliance, sustainability, framework conditions and organisational development.
To achieve our goals, we require even more capacity and expertise across the Group. We took major steps towards this in 2023 through recruitment and organisational development. This will also continue into the future and I am proud of the improvements our employees are constantly achieving.
At the same time, the Group experienced an unacceptably high number of injuries in 2023. Safety work at all levels will have the highest priority going forward. The number of injuries needs to be reduced, and we will strengthen emergency preparedness work and preventive measures throughout the entire Group.
We have many growth opportunities and plans at Hafslund, and over the course of last year we worked on growth in hydropower, district heating, onshore wind, offshore wind, solar power, charging and urban solutions. Examples of transactions are the purchase of seven solar park projects in Sweden and investment in fast charging for heavy transport in Southern Norway. The Group as a whole has achieved strong results and this makes it possible to continue to focus on growth within the entire Group. We have ambitious goals for growth, sustainability and value creation throughout all of Hafslund. In addition to focusing on growth in renewable energy, improving profitability for the district heating business, and making a successful investment decision in the carbon capture project, during 2024 we will continue to do what we can to contribute towards achieving society’s climate and natural goals.
We have significant and important tasks ahead of us to support our vision: “For a world in balance, with renewables”. I look forward to yet another exciting year with my talented, committed, ambitious and inspiring colleagues.
Finn Bjørn Ruyter
