The largest European renewable energy producer reduces plans for wind and solar power plants

Norwegian Statkraft, the leading European company in renewable energy production, has announced a reduction in its ambitious plans for building new wind and solar power plants due to lower electricity prices and rising costs. Birgitte Vartdal, who took over as CEO in April, has committed to a ‘sharper’ strategy to cope with this ‘difficult environment’.

– The transition from fossil fuels to renewable energy is happening at an increasing pace in Europe and the rest of the world. However, market conditions for the entire renewable energy industry are becoming increasingly challenging – Vartdal stated.

Although Statkraft is not publicly traded, public markets indicate a decline in demand for renewable energy. The S&P Global Clean Energy Index, which includes manufacturers of wind turbines and solar panels, has fallen 25 percent since July last year, while ESG equity funds have suffered $38 billion in outflows this year by the end of May.

Statkraft, which is owned by the Norwegian state and primarily generates energy from its vast fleet of hydropower plants, has announced plans to slow capacity growth. It now aims to install 2-2.5 GW of onshore wind, solar, and battery storage annually from 2026 onwards — potentially enough to supply electricity to about 2.5 million households. This is compared to a previous target of 2.5-3 GW annually from 2025 and 4 GW annually from 2030.

For offshore wind, it now aims to develop a total of 6-8 GW by 2040, a decrease from the previous target of 10 GW.

We still strongly believe in offshore wind and would like to stay there, but we are somewhat reducing our ambitions – Vartdal said.

Additionally, Statkraft acquired the Spanish renewable energy company Enerfin for €1.8 billion last year. However, despite this, it has found itself among a handful of European companies that have decided to slow down ambitious green plans.

Danish Ørsted, the world’s largest offshore wind developer, has cut its 2030 targets by more than 10 GW after encountering difficulties with U.S. projects. Meanwhile, Portuguese EDP also cut its annual targets in May, blaming ‘lower electricity prices and a higher interest rate environment that will last longer,’ said CEO Miguel Stilwell d’Andrade at the time.

These moves come despite increasing political pressure for renewable energy, as countries agreed at the COP28 climate summit last November to try to triple global renewable energy capacity by 2030. However, it seems that political pressure is no longer sufficient.

– Projects have become much more challenging and relative returns simply do not exist. This is not good for the energy transition as its speed is called into question – said Vegard Wiik Vollset, vice president and head of renewable energy and power at Rystad Energy, a consulting firm.

Regarding hydrogen, Statkraft has reduced its target from 2 GW by 2030 to 1-2 GW by 2035.

Many governments consider this fuel key to decarbonization goals, but it requires government support to kickstart supply chains and demand and massive investments. Engie, the French state-owned company, has abandoned its goal to develop hydrogen projects of 4 GW from 2030 to 2035, claiming that ‘market development and structuring are slower than anticipated a year ago.