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Monday, July 22, 2024

Nuclear ban good news for Statoil

Germany’s decision to phase out its nuclear power plants was greeted warmly by Norwegian state oil company Statoil, which sees potential for more gas sales and higher prices. Norwegian consumers will likely face higher energy prices, though, as well.

Statoil can benefit from the closure of Germany's nuclear power plants. PHOTO: Harald Pettersen/Statoil

“This is very positive for Statoil,” Rune Bjørnson, director of natural gas for Statoil, told newspaper Dagens Næringsliv  (DN). Statoil currently sells 22 percent of all the gas consumed in Germany. With no energy coming from the nuclear plants, Statoil is eyeing the prospects of gaining an even bigger market share.

“Everything indicates we can sell more gas to Germany,” Bjørnson said. “Our infrastructure is in place and we have more gas to sell.”

Statoil has been selling natural gas to Germany for 30 years, with exports going through three pipelines that can handle more capacity. Statoil is in the midst of a major promotional campaign on the continent, with an eye to boosting exports as well.

Russia and Algeria are Norway’s biggest competitors in gas sales to Germany, but Bjørnson says “we’re closest, and we’re seen as a stable supplier.”

The German government announced Monday it would close all of the country’s nuclear power plants by 2022, because of concerns over their safety. The closure will eliminate 26 percent of Germany’s sources of electricity production. That will need to be replaced by other energy sources, either renewable or fossil fuels.

Shares in Norwegian solar firm REC were among other Norwegian energy shares that jumped on the news of the nuclear phase-out. REC rose 4 percent even though the German government also said it was evaluating cuts in solar subsidies next year.

While REC’s rise may have been purely market-driven, the nuclear phase-out in Germany is seen as likely to put more attention on the renewable energy sector. Consumers both in Europe and Norway, though, should brace for higher energy costs.

Germany is linked to the Nordic energy market “so this can influence prices, they can go up,” Stina Johansen of NordPool told DN. Lower supplies resulting from the lack of nuclear power could especially lead to higher prices in the winter.

Views and News from Norway/Nina Berglund
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