Group – Proportionate financials
2021 proportionate revenues were NOK 4,615 million, up from NOK 2,844 million in 2020. The increase reflects the acquisition of SN Power in January 2021 and new solar plants in Ukraine and Argentina which started operation during the year.
With a larger portfolio of power plants in operation, both revenues and EBITDA increased in Power Production, while decreasing in the Development & Construction segment. This change in segment mix resulted in a higher EBITDA margin for the Group compared with the previous year.
Global new installation of renewable energy capacity reached 315 GW in 2021 according to Bloomberg New Energy Finance (BNEF).
Although global cost inflation is impacting the renewables industry the cost impact on other energy sources is even stronger. Consequently, the relative competitiveness of the fuel independent electricity form solar, wind and hydropower has strengthened over the last few quarters.
Bloomberg New Energy Finance (BNEF) expects global solar new build to accelerate and see new installations of around 228 GW in 2022, up from an estimated 183 GW in 2021. For wind, new installations reached an estimated 93 GW in 2021 and is expected to grow by 9% each year up to 2030, cumulative capacity surpassing 1,000 GW already in 2023. The global energy storage market grows at unprecedented rates, with an estimated 11 GW of new capacity installed in 2021 and 345 GW to be added up to 2030.
Global hydropower new build reached an estimated 28 GW in 2021, according to the International Energy Agency (IEA). In a recent report, IEA highlights that around half of the economically viable potential of hydropower globally is yet untapped. The potential is particularly high in emerging and developing economies. To reach IEA’s net-zero emission by 2050, significant investments are required to build an estimated additional 477 GW of hydropower capacity globally by 2030.
Long term, BNEF expects all renewables to see massive growth and to supply 85% of energy in 2050 in a green scenario. In its latest New Energy Outlook 2021 report, BNEF highlights that the following milestones would need to be achieved every year on average through 2030 to be on track to reach net zero by 2050:
New wind power of 505 GW
Solar PV of 455 GW
Batteries of 245 GW
To achieve the goal of net zero emissions by 2050, 85 per cent of the world’s energy production will have to come from renewable energy, according to Bloomberg NEF, which will require total investments of USD 150 trillion in total. Green hydrogen and green ammonia are set to play a major role in decarbonisation of hard-to-abate sectors globally in the coming years, driven by volatile gas prices, cheap renewables, ambitious net zero targets and an increasing number of national hydrogen strategies being adopted. IRENA’s 1.5°C scenario envisages that clean hydrogen could meet up to 12% of final energy consumption by 2050.
In March 2021, Scatec announced a new target to reach 15 GW by the end of 2025 and a NOK 100 billion investment plan to fund the growth target. The business plan is supported by Scatec’s track record of strong growth and the solid project pipeline across solar, wind, hydro and storage in high-growth markets globally.
The 15 GW target implies 12 GW of new capacity, with NOK 15-20 billion of a total NOK 100 billion in investments to be funded by Scatec equity. Solid long term cash flows from operating power plants and margins from development and construction of new facilities are expected to fund a large part of Scatec’s equity investments.