Dear friends and partners of Scatec,
This year has been an exciting one, both personally and for Scatec. I have taken the reins as the new CEO, and as a company, we have made decisive moves to sharpen our strategy. We have also started significant construction activities (of 1.2 GW) on three projects during the year and this will continue to keep us busy through 2023.
Renewables growth was remarkable in 2022, and even faster than anticipated according to the International Energy Agency (IEA). Environmental, economic, and geopolitical factors are driving the growing demand for renewables. Never have renewables been as cost-competitive compared to fossil fuels, and it’s especially encouraging to see that 82% of emerging markets have set a net zero target.
The IEA estimates in their current “stated policy” scenario that we will have a 2.5°C rise in global average temperatures by 2100es. This implies that we are not on track to reach the 1.5° C target set in the Paris agreement. Much more must be done, and much faster – and accelerated deployment of renewables is key to reach the target.
Focus on Ukraine
The case for renewable energy has been escalated even further due to the severe energy crisis resulting from the war in Ukraine. It has underscored the need for greater energy independence and the eradication of our reliance on fossil fuels.
For our dear colleagues in Ukraine, it has been a very difficult year. They are committed to keep our power plants running and provide much-needed electricity during a time of severe hardship. Their courage and strength in such a horrible situation inspire us all, and Scatec will always have their backs and do what we can to support them and their country.
Sharpened strategy
Scatec has a track record of profitable growth in emerging markets. Our sharpened strategy focus is on keep growing renewables, be an early mover in green hydrogen, and optimise our portfolio.
We will build scale, improve predictability and secure competitiveness in selected focus markets. Our focus markets are defined as having large and growing power demand, a clear energy transition agenda, predictable regulatory frameworks, and strong conditions for renewables.
Our strategy also gives us direction into new areas for Scatec. Over the next five years, green hydrogen demand will be driven by strong policy support in the EU, US, and Japan, and we will build on Scatec’s strengths as a renewables frontrunner to be an early mover. Access to low-cost renewables is essential for the economics of green hydrogen, which makes us well-positioned in strategic locations to unlock its potential.
To ensure focus and targeted growth, we will consolidate and simplify our portfolio to gain scale benefits. We are confident this sharpened strategy will ensure we reach our ambitious targets.
None of this is possible without our people. Our employees are our most important asset, their passion, drive, and competencies are the basis for our success. We will continue to develop and strengthen our organisation to support our growth.
Improving our future
As we near the end of 2022, it is important to reflect on why we are in this business. Our vision to improve our future remains steadfast. We believe that our mission to deliver more renewable power in emerging markets is crucial to reduce global carbon emissions and provide clean energy to the world, all while contributing to socio-economic development.
A short while ago, I was at the United Nation’s World Leader’s Summit at COP27, where we successfully launched the first phase of a green hydrogen plant in Ain Sokhna, Egypt. I also attended several roundtables with world leaders and other captains of industry during the conference. Although the outcome of the world’s climate negotiations at COP27 were disappointing in aligning on global steps to accelerate emission reductions, I left with a sense of hope and inspiration. I see that businesses are stepping up and renewables growth is certain.
Finally, I want to thank our employees and partners for the incredible contributions and collaboration throughout 2022. I look forward to continuing this incredible journey with you in 2023. In the meantime, I wish you a joyful, relaxing holiday and a happy new year.
Terje Pilskog,
CEO