“uåX˜äŠÊ˜·³Ç

Speaking to “uåX˜äŠÊ˜·³Ç, Gunnar Groebler, head of Vattenfall's wind power division, believes the restructure will help change Vattenfall's fortunes.

According to “uåX˜äŠÊ˜·³Ç's data division, “uåX˜äŠÊ˜·³Ç Intelligence, Vattenfall has around 820MW in offshore projects. It also has has around 9GW of pipeline projects stacked up, including Horns Rev 3 in Denmark and the controversial 100MW EOWDC project in Scotland made famous as the focus of anti-wind protests by entrepreneur Donald Trump. In onshore terms it has around 1.5GW, all in northern Europe.

Vattenfall CEO Magnus Hall took over at the state-owned utility at the start of October 2014. Since then he has been shifting the group's focus towards renewables and, in particular, wind. Its 2014 financial results show Vattenfall's biggest expenditure was SEK 6.5 billion (€700 million) in wind developments – up by SEK 2.4 billion from 2013.

But this covers up other areas, where the company is struggling with overall profits that were lower in 2014 than the previous year. Groebler thinks wind will be the sector to turn the poor financial results around: "I think for the wind business, it is a big step forward and a big advantage. [It shows] very clearly that Vattenfall is focusing its efforts on growing in that sector."

He added: "When it comes to growth in generation assets, there is an outspoken focus on wind."

However, in May last year Vattenfall announced plans to cut its offshore research and development spending, instead focusing on maintainence and servicing its existent portfolio as projects get older. Speaking at the time of the cuts, head of research and development Nordic, Karl Bergman, told “uåX˜äŠÊ˜·³Ç: "We are really looking to take care of what we have."

Strong start

The start of 2015 has been strong for Vattenfall's offshore business; construction is progressing on its 288MW DanTysk project off the coast of Germany, due online later this year; in partnership with Iberdrola, it was offered a contract for difference (CfD) subsidy by the UK government for its 714MW East Anglia One project in the North Sea; and it was awarded the license by the Danish government to develop the 400MW Horns Rev 3 project.

Vattenfall beat competition from Dong Energy, Statoil and E.on for the Horns Rev 3 licence and won with a low bid of €103.1/MWh. The low price got many in the industry excited at the prospect of reaching the goal of €100/MWh by 2020 earlier than expected.

But a combination of factors may have contributed to an anomaly in project costs. Groebler said the transparency of the process and site conditions were key to offering a low price.

The CfDs averaged at €160/MWh, which, although lower than the maximum price set by the UK government was far from Vattenfall's Horns Rev 3 offer. "Everybody should be very cautious in comparing those numbers with any other numbers that you see in other European jurisdictions," Groebler warned. "In the Danish tender, the grid connection is provided by the transmission system operator (TSO) and so is the substation, which is different in the UK. So it is really not comparable."

At the same time as the CfD announcement in the UK, it was also revealed that Vattenfall was selling its 50% stake in the East Anglia One project to Iberdrola. What made the company pull out of one fully consented project, the same week it committed to developing another?

"For me, mainly, it is really about focusing on what we have at hand right now and where we want to move at our own pace and timeline," Groebler explained.