Norwegian state-owned utility Statkraft announced plans on Wednesday to slash annual costs by 2.9 billion NOK ($292 million) by 2027, warning that staff layoffs may follow in the second half of the year. The move comes amid mounting cost pressures across Europe’s power sector and reflects deeper financial strain among major renewable-focused utilities.
Europe’s largest producer of renewable energy, Statkraft said the cuts aim to “safeguard long-term value creation” as inflation, higher financing costs, and uncertain power prices weigh on project pipelines. The company expects to clarify the scope of reductions—including potential job losses—by year-end.
The announcement underscores a growing retrenchment trend among utilities adjusting to post-pandemic cost spikes and policy volatility. In the UK, SSE Renewables recently proposed eliminating about 10% of its workforce, or 148 roles, while pausing several wind and hydro projects. The firm cited “challenging market conditions” and the need to “prioritize value over volume”.
Similarly, Harbour Energy, which operates both upstream and power generation assets, cut 25% of its UK staff earlier this year following new windfall tax impacts and shrinking North Sea investment.
Analysts view these moves as early signals of a broader reset among utilities navigating ambitious decarbonization targets amid a tougher investment climate. Statkraft’s plan, while still in early stages, could mark the utility’s most significant restructuring effort in over a decade, following suit from belt-tightening from peers who have been dangerously exposed to the capital-intensive nature of renewable development.
More announcements are expected in Q3 as European utilities finalize 2026–27 capital planning under tightened market conditions.
By Michael Kern for Oilprice.com
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