Major Profitability Problems for Wind Power

Northvolt’s fall was the culmination of the increasingly difficult challenges of maintaining the facade of the so-called green transition. Previously, the alleged grandeur of wind power has also suffered several significant setbacks, something that is being reactivated in connection with Skellefteå Kraft writing down the value of its wind turbines by several hundred million kronor.

In 2018, Skellefteå Kraft invested around 100 million kronor in Northvolt, which gave them a minority stake in the company. Before the bankruptcy, Skellefteå Kraft wrote down the value of its shares in the company by 95 million kronor, and now comes the next green blow.

Three times before, Skellefteå Kraft has written down the value of its wind turbines, and now it’s time for the fourth time. For 2024, the write-down amounts to 226 million kronor, reports Affärsvärlden. This means that the total write-down since 2016 will be more than one billion kronor.

In the 2024 annual report, it is stated that they have made ‘renewed assessments and assumptions regarding impairment tests, which have resulted in write-downs of the group’s wind farms.’ The main reasons given are low electricity prices and an increasing number of hours with negative electricity prices.

Skellefteå Kraft is one of the country’s largest wind power owners with 117 turbines spread across four facilities in Norrbotten and Västerbotten. The wind power plant at Blaiken has been profitable for several years, although it has been small – ten million – in relation to the investment of 3.3 billion.

330 years

Excluding the exceptional year 2023, the average annual profit during the period 2017-2022 is around ten million kronor. With such profitability, it will take 330 years to recoup the investment of 3.3 billion.

‘Skellefteå Kraft seems to have a little difficulty in making the profitability calculations for its green investments. This applies not only to Northvolt but also to wind power,’ states economic researcher Christian Sandström.

Forecasted Northvolt’s Crash

In September 2024, sources told Dagens Industri that Northvolt’s financial situation had deteriorated significantly in recent times and that the money would soon run out. At the same time, Northvolt’s chances of new financing were assessed as slim.

At the same time, Christian Sandström said that he would not be surprised if they go bankrupt within six months. Sandström almost exactly predicted the bankruptcy – it was six months and three days later that the announcement came.

Sandström has been one of the foremost critics of state involvement in the so-called green industrial initiatives and has written the book Green Bubbles. He believes that Northvolt’s expansion plans have been based on where they have received the best subsidies.