Undeterred by Brexit, Vattenfall eyes growth in Britain

[FRANKFURT] Britain's decision to withdraw from the European Union is no reason for Swedish utility Vattenfall to shrink its local presence, its finance chief said, adding the group was there to stay and even planning to expand its business.

Britain's Brexit decision does not include plans for the country to turn away from two of its core energy goals - reducing greenhouse gases emissions and cutting dependency on foreign suppliers, Stefan Dohler told Reuters in an interview.

"We have great faith in the overall situation in UK energy," said Mr Dohler.

"Britain has a capacity problem and aims to curb its energy dependency on imports, that'll be favourable for renewable energy," he added.

At 703 megawatt (MW), Britain accounts for 28 per cent of Vattenfall's wind power capacity, including the onshore projects Pen y Cymoedd (PYC) in Wales (230 MW) and Ray (50 MW) in northern England. It is also developing the 100 MW Aberdeen offshore park.

In addition, Vattenfall co-owns the NorthConnect power cable project which aims to bring Norwegian hydro and power to the UK.

Future business in Britain, where Vattenfall plans to invest 4 billion Swedish crowns (S$637.454 million) this year and next, could include distribution and services, said Mr Dohler, who took over as finance chief at Vattenfall in December.

"We feel at home there. We don't see any threats to our business."

Britain faces an energy supply crunch by the early 2020s as coal-fired power stations close and its oil and gas production declines.

That is why it has put in place capacity auctions, under which it pays plant owners to ready back-up power to head off shortages, a scheme that suffering European power generators would love to see emulated elsewhere.

Asked about currency risks, Mr Dohler said Vattenfall would seek to hedge its positions with the aim of softening the blow from falling revenues in pound sterling.

"That is not unusual. We would always guard ourselves against currency risks when taking investment decisions," he said.

REUTERS