The tariff threats could reduce electricity demand in Europe as investors could be more hesitant to invest in new factory capacity amid the ongoing trade wars, the top executive of Swedish utility giant Vattenfall told Reuters on Tuesday.
“I think we see a bit of hesitation when it comes to investments and the next steps, and that could possibly delay the increased (power) demand somewhat,” Anna Borg, chief executive officer at Vattenfall, told Reuters.
Europe’s industry has been at a disadvantage compared to U.S. and Chinese firms because of the high energy costs in Europe since the 2022 energy crisis. The uncertainty about the tariffs and the impact of said tariffs are creating additional hesitancy for European companies to invest in new factories and production capacity.
Vattenfall has just made the final investment decision on the Nordlicht 1 and 2 offshore wind farms in Germany. German chemicals giant BASF secured access to long-term supply of renewable electricity from the future offshore wind farms.
“By accelerating Germany’s energy transition and supporting industrial decarbonisation, it will provide clean, reliable energy while driving innovation and sustainability in the sector. We look forward to realising this important project in close collaboration with our supply chain partners,” Helene Biström, Head of Business Area Wind at Vattenfall, said last month.
Vattenfall on Tuesday reported lower net sales and profit for the first quarter of 2025, as it sold its heating operations in Berlin and the Norfolk projects in the UK in the first quarter of 2024.
“The first quarter of 2025 was characterised by increased geopolitical and economic uncertainty, which has further complicated the investment environment related to the energy transition,” Vattenfall’s Borg said in a statement.
Vattenfall noted it is making progress in new nuclear power. In March, the Swedish government presented a bill on state risk sharing. The government having a clear role in financing is a prerequisite to enable new nuclear power, said Vattenfall, which is now preparing to apply for financing according to the new model.
By Tsvetana Paraskova for Oilprice.com
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