Deregulated power markets
Deregulation of power markets, internationalisation, global climate change, investment in clean and renewable energy - these are some of the key words as Statkraft enters the exciting decade leading up to the millennium.
Power generation and transmission were consolidated into one public utility for many years – from the state's first purchase of a waterfall in 1895, to the formation of the Norwegian Water Resources and Energy Directorate in 1921, and then Statkraftverkene in 1986. In 1992 this was divided into two state-owned enterprises: Statkraft was given responsibility for production and sale, while Statnett took over distribution. Within the liberalised power markets, Norway became a pioneer, with state-owned Statkraft taking a leading role.
After the division in 1992, the Storting (Parliament) decided that Statkraft should be run as an independent commercial company, but still wholly owned by the state. A new level of autonomy allowed the company to buy up regional power plants in Norway. At the same time, it began looking beyond Norway's borders, initially to hydropower projects in Laos and Nepal.
In 1994, a 250-kilometre-long power cable was laid across the bottom of the Baltic Sea between Sweden and Germany. The cable integrated the German and Swedish power markets. As a partner in Baltic Cable AB, Statkraft got a foothold in the European power market. The first foreign acquisition, however, took place in Sweden in 1996, where Statkraft became a co-owner of Sydkraft. Deregulation also came to the Swedish power market, and Sweden and Norway became a common energy market with extensive trading through Nord Pool, the world's first international power exchange. Power trading changed character from long-term, bilateral agreements to exchange trading including spot price, futures contracts and other financial instruments. In 1998 Statkraft opened its first office for power trading in Continental Europe, in Amsterdam, the Netherlands. The year after it opened a similar trading office in Düsseldorf, Germany.
Internationally, there was an increased focus on climate change and global warming. Increased use of pure energy from water, wind and sun can help to reduce emissions of greenhouse gases from fossil fuels, and political initiatives began taking shape in the EU and other parts of the western world to support a shift towards these renewable energy sources. This offered new business opportunities for a company like Statkraft.