Nordic giant makes battery advances as wind disappoints again

Vattenfall’s wind power segment faced a challenging first half of 2025, with lower wind speeds and one-off effects contributing to a 29% drop in underlying operating profit compared to the same period last year.

Despite this, the Swedish utility reported progress across its offshore and onshore wind portfolios, as well as in battery storage development, according to its Q2 results that came out Friday morning.

The company’s wind power generation fell by 12% year-on-year to 7.8TWh in the first half, down from 8.9TWh in H1 2024. This decline was attributed to reduced wind volumes both offshore and onshore.

Net sales in the wind segment decreased by 3% to SKr10.3bn ($1.1bn), while underlying Ebit fell from SKr3.3bn to SKr2.3bn.

The poorer results was not only contributed to lower production volumes, but also the absence of a one-time gain recorded last year related to the sale of the Norfolk offshore wind projects in the UK.

Additionally, depreciation costs rose due to the commissioning of Hollandse Kust Zuid off the Netherlands, which added 20MW of capacity over the past 12 months, bringing the total to 1,520MW.

Despite the financial headwinds, Vattenfall made progress on several wind projects. The Muir Mhòr floating offshore wind farm off the east coast of Scotland received consent for its onshore infrastructure, including land cables and a transformer station.

The project, a joint venture with Fred. Olsen Seawind, is expected to deliver up to 1GW of capacity. Subject to a final investment decision, the floating wind farm could begin generating electricity in the early 2030s. According to Vattenfall, Muir Mhòr is the first fully floating offshore wind farm from the ScotWind leasing process to achieve onshore planning consent.

In Sweden, all major permits have now been secured for the Kattegat Syd offshore wind farm off the coast of Falkenberg. The project is expected to generate approximately 5TWh of electricity annually, although no final investment decision has yet been made.

Vattenfall’s installed wind capacity stood at 6,432MW at the end of June 2025, comprising 4,454MW offshore and 1,978MW onshore. The company also reported impairments of SKr640m related to onshore wind assets in Sweden, driven by a deteriorating outlook for electricity prices.

New storage projects

Battery storage is becoming an increasingly important part of Vattenfall’s strategy to support renewable integration and grid flexibility. The company entered two new partnerships in the Netherlands and Germany aimed at optimising battery storage.

In the Netherlands, Vattenfall and Return agreed to collaborate on a 50MW battery park set to begin operations in 2026. In Germany, Vattenfall partnered with Terralayr to lease 55MW of battery capacity, which it will optimise and market from late 2025.

The company’s total investments in renewables reached SKr3.2bn in the first six months, representing 24% of its total capital expenditure.

Slower electrification

Vattenfall’s CEO, Anna Borg, made a note of the overall challenges in her written notes as the Q2 report was presented.

"The pace of electrification is currently slower than expected, but the direction ahead is clear. We are well positioned to expand the electricity system while industry seeks to transition. By staying committed to climate targets, predictability is created for the necessary investments. It is about meeting uncertainty with action“, Borg wrote.

While the wind segment’s profitability was down, Vattenfall’s broader power generation business saw a 114% increase in underlying operating profit, driven by improved results from continental and Nordic hedges and stronger trading performance. This helped offset the wind segment’s decline and contributed to a group-wide underlying EBIT of SKr15.3bn up from SKr14.8bn in the same period last year.