English summary – fiscal year 2024

Salten Kraftsamband AS (SKS) is a private limited company, at year end 2024 owned by Bodø Kommune, NTE Energi AS, Jämtkraft AB, Nordlandskraft AS, Fauske Kommune, Bodø Energi AS, and Bodø Pensjonskasse.  

SKS mission is to run power-related business based on natural resources in the region of Northern Norway. SKS is the largest power producer with corporate headquarter located in the region of Northern Norway. The main office is located at Fauske, and its hydroelectric power production stations in the municipalities of Fauske, Gildeskål, Beiarn, Bodø, Rødøy, Hattfjelldal, and Hemnes.

SKS aims to be an active contributor to the development of a sustainable society. By using new technology and knowledge, and by strengthening our competence within hydropower, SKS will be an attractive partner in the energy market development. Through internal efficiency and reinvestment in the organization SKS wish to create further activity and build long term values for the region, the society, and our stakeholders. 

SKS holds the wholly owned subsidiaries SKS Produksjon AS and SKS Handel AS. SKS partly owns the subsidiary Rødøy-Lurøy Kraftverk AS (73.28 %). SKS provides the subsidiaries with financial and administrative services such as management, accounting, IT, HR, communication, ESG, strategic planning, and business development.

SKS PRODUKSJON AS

SKS Produksjon AS is the largest energy production company in Northern Norway, owning 20 hydroelectric power stations. The annual production is about 2 100 GWh.

SKS Produksjon AS holds 50 percent of the shares in Smisto Kraft AS and SISO Energi AS, both energy production companies. It also holds 72 percent of shares in Krutåga Kraft AS and 92 percent of the shares in Hattfjelldal Kraft AS. These companies both aim to build and operate new power plants. In 2023 Hattfjelldal started building Mølnhusbekken Kraftverk with a planned production of 19 GWh. SKS Produksjon AS holds 50 percent of the shares in Vakinn AS; an operation center for power production.

SKS Produksjon AS experiences risk exposure through fluctuations in electricity prices and volume. To hedge against such exposure the company engages in forward- and future contracts, and contracts for difference according to a defined risk strategy.

SKS HANDEL AS

SKS Handel AS engages in the power market, offering a wide range of products and services, including energy trading of both physical and financial contracts, portfolio management, and settlement services.

Well-built systems and employees with years of experience make the company able to efficiently manage, and increase the value of, energy resources owned by partners and municipalities.

The department of Portfolio Management is managing energy portfolios for external customers, creating significant value for its clients. It has also become a player in the renewable energy certificate market, providing certificates to buyers both domestically and internationally.

RØDØY-LURØY KRAFTVERK AS
Rødøy-Lurøy Kraftverk AS (RLK) is a power production company with an annual production of about 75 GWh.

FISCAL YEAR 2024

The year 2024 was characterized by large regional differences. Energy prices in Southern Norway are affected by what happens in Europe and by high electricity exports through several cables to other countries.

Northern Norway has significantly lower prices characterized by a strong surplus situation. Increasing wind and solar power production in the Nordic countries and Europe resulted in an increased number of hours with very low or negative power prices.

The energy flow in SKS’ price area NO4 is strongly influenced by the area’s relative isolation from the rest of the Norwegian power market, due to limited transmission lines. This affects prices in the area.

Hydropower accounts for most of the electricity production in NO4 and ensures stable production throughout the year. Another important source of power production in NO4 is wind power, which has had increasing importance in recent years.

Price area NO4 was characterized by large variations in the supply of water in 2024. Water reservoirs were low at the beginning of 2024. Low precipitation throughout the first quarter contributed to a weakened hydrological balance in the north. At the end of the quarter, the hydrological deficit was 5.5 TWh in Northern Norway, due to 3.2 TWh less water in the reservoirs and 2.3 TWh less snow than normal. Low precipitation and a weaker hydrological balance in Northern Norway may explain why the energy price in the first quarter was 473 NOK/MWh

The energy price for the second quarter in NO4 was among the lowest in the Nordic region, at 320 NOK/MWh. High wind power production in Northern Sweden led to net imports of power to price-area NO4.

With normal rainfall and low hydropower production in the third quarter, reservoir filling increased in Northern Norway. The price in the quarter fell further to 184 NOK/MWh.

Total precipitation in our production area was well below normal level in 2024. Half of the total annual precipitation for Northern Norway came in the fourth quarter. High inflow to the reservoirs, combined with low hydropower production, contributed to the reservoirs filling. NO4 had the lowest power price in the entire Nordic region at 104 NOK/MWh.

The capacity in the power grid also resulted in limitations between the north and south in 2024 and contributed to the price difference between the Norwegian price areas persisting. In NO4, where SKS has its power production, the annual price ended at 270 NOK/MWh, which was 72 NOK/MWh lower than in 2023. Power producers in Southern Norway had an average price of 591 NOK/MWh in 2024. This represents a significant income difference between power producers in Northern- and in Southern Norway.

The water inflow in our area corresponded to a production of 2,171 GWh. Total hydropower production in 2024 amounted to 1786 GWh, while the corresponding figure for 2023 was 1,906 GWh. The 2024 production is 15 percent lower than normal production of 2,100 GWh. Hydrologic conditions at the beginning of the year and low prices at the end affected volume produced. The filling of water reservoirs was 66 percent as we entered 2024 and 91 percent at year end. Normal reservoir level by year-end is 68 percent. Snow reservoirs were calculated to 513 GWh by year end, about 56 percent more than normal level.

SKS Produksjon AS had a power production of 1,711 GWh, compared to 1,830 GWh in 2023. Due to increased prices operating profit increased to 392 MNOK in 2024, compared to 420 MNOK in 2023. Net income after taxes was 222 MNOK in 2024, compared to 172 MNOK in 2023.

Rødøy-Lurøy Kraftverk AS had a power production of 75 GWh. Operating profit were 12 MNOK, compared to 18 MNOK in 2023. Net profit was 10 MNOK, compared to 14 MNOK in 2023.

SKS does not include power production from Smisto Kraft AS (210 GWh) and SISO Energi AS (1,100 GWh) when compilating company group power production.

SKS Handel AS’ operation profit in 2024 was 32 MNOK, compared to 27 MNOK in 2023. Netprofit was 35 MNOK, compared to 37 MNOK in 2023.

The parent company reports its result according to NRS (Norwegian reporting standards) and had a Net Profit of 154 MNOK, compared to 100 MNOK in 2023.

NET PROFIT OF THE YEAR 2024

The Annual Statement for SKS is compiled according to IFRS.

Gross Operating Income of SKS company group was 804 MNOK, in 2023 it was 820; 820 MNOK. Operating Profit was 406 MNOK and Result Before Taxes 460 MNOK. Taxes was 172 MNOK, compared to 243 MNOK in 2023. Net Profit was 288 MNOK, increased from 212 MNOK in 2023.

Unrealized change in value of energy- and interest derivates is recognized at real value according to IFRS, where changes in value are to be recognized in other comprehensive income. The changes in value contributed to the Net Profit by negative 24 MNOK. The company group’s Total Comprehensive Income for 2024 was positive 266 MNOK compared to 242 MNOK in 2023.

Total equity by year-end was 4,622 MNOK, compared to 4,465 MNOK in 2023, including a share capital of 134 MNOK.