Good morning, everybody, and welcome to the first quarter presentation for Bonheur. My name is Anette Olsen. I am CEO of Bonheur and Fred. Olsen & Co. With me today, I have Richard Olav Ore, our CFO, and he will do the first part of the presentation as usual, and then the CEOs for the different segments will come and present, and we will take the questions and answers at the end. Richard, over to you.
Yes, thank you, Anette, and also a hearty welcome from me to this first quarter presentation. We have a mixed quarter. On one hand, we have an improvement in our operating result with NOK 132 million, which of course is positive. On the other hand, we have had some wind farms that have not operated as capacity due to technical issues, and we have had a canceled cruise for Balmoral due to the geopolitical situation in the Red Sea. Obviously, without these issues, the operating results could have been better. It is a mixed report this time. I will quickly go through the main events in each segment as they will be thoroughly covered by my good colleagues. Starting with renewable energy, where we have a small year-on-year improvement on the EBITDA, but we have to remember that first quarter 2024 was a very low wind speed quarter.
On the very positive side, we have seen higher power prices in the U.K., more than compensating the very low power prices in northern Sweden, where there are severe issues with trapped power in northern Sweden due to lack of transmission capacity from north to south, which Sophie will come back to. Like I said, generation is low this quarter. It is 21% lower than the P50 estimate, which is the kind of midpoint estimate for wind given historical wind resources in the various countries. The observed viewer of this presentation will note that we now report this including compensated curtailment to have a more clean number compared to the technical issues where we also then include on generation what we actually get compensated for. This is a trend we see that governments will compensate for curtailment due to the big impact of renewables in the grid.
We think this is a better way to present the figures going forward. The 21% deviation is then really related to low wind in the quarter, in particular in Scotland and Norway, but also due to technical issues that we will also come back to. Very good. Midhill, which was out for half of last year, commenced operation back on the 25th of January. Also very good in the quarter is that the two big projects that FORAS has undertaken, Crystal Rig IV and Windy Standard III, which are CapEx programs of close to NOK 3 billion, are progressing on time and on budget. Moving on to wind service, despite only 57% utilization for Bold Tern and Blue Tern, we have a strong improvement on EBITDA from NOK 174 million to NOK 280 million.
Also, the two yard stays for Bold Tern and Blue Tern went well, which Håkon Magne Ore will also come back to in his presentation. Also, in the segment, we agreed in the quarter in March to sell our 50% stake in United Wind Logistics to our partner, and that was closed on the 30th of April. Moving on to cruise, we do not have a separate slide on cruise in this deck because the main things on cruise are actually covered in these bullet points here. Its results are clearly lower than where they should have been and also lower than we expected. The main reason for the lower result is that we had to cancel one cruise for Balmoral, a long cruise to Asia that was going through the Red Sea area, and due to the geopolitical situation, we deemed it unsafe to conduct that cruise.
That is the main reason why the occupancy is only 63%, as Bolette and Borealis have operated as expected in the quarter. It is really one main event in this quarter, and that is the impact of this canceled cruise for Balmoral that we were not able to replace with high-paying guests on replacement cruises. Booking numbers are up 11% compared to last year, and that also includes the weak first quarter. These are the full year for 2025 and 2026, and we also started to selling some world cruises into 2027, so that is 11% up. We have utilized the market turmoil the last months to hedge 75% of the estimated bunker consumption, and we have hedged that in GBP. On the other investment, we see an improvement of NOK 35 million.
The main driver for that is NHST, which continued to perform much better than in the past and had an EBITDA of positive NOK 38 million in the quarter compared to a negative NOK 3 million first quarter last year. There are also some interesting trends around Fred. Olsen 1848 that Per will cover more in his presentation, but we see now on floating that the technology we have developed, Brunel, finally we see that the market starts to appreciate the big benefits of that technology, and we see that also on the floating solar side that it’s really picking up in Southeast Asia. Yeah.
Despite having a few issues in this quarter, like I said, it’s a quarter with improvement compared to the first quarter last year with NOK 132 million, and it really supports this long-term trend that we present now in each quarter where we came out of COVID and the recovery in energy prices, but also the strong performance in the wind service segment where we’ve been able to lift our 12-month rolling EBITDA between NOK 3 billion and NOK 4 billion. We see this quarter actually add to that trend with a small tick up in this quarter due to that you’re replacing the fourth quarter last year with an improved NOK 132 million. It is supportive of this trend we have seen, and the 12-month rolling EBITDA now stands between NOK 3.5 billion and NOK 4 billion, as you see here, which is more than a doubling of the level pre-COVID.
On the numbers, we have covered several of these, but it’s maybe important to note a few things on the revenues and the margins. On the revenue side, we are more or less in line with the revenue last quarter with a drop of NOK 77 million, and it’s really in the wind service where the revenue drop is the biggest of NOK 109 million. While on the other hand, the EBITDA in the wind service improved by NOK 106 million. That is related to the Shimizu contract that has a much lower margin than we have on the vessels that we own, Blue Tern and Brave Tern and Bold Tern. It’s purely a mix effect on that score. The lower revenue on cruise is really only related to the issues on Balmoral. The variances on the EBITDA we already have covered.
On the consolidated figures, we’ve been through the revenues and the EBITDA, an improvement of NOK 132 million. Depreciation is higher. That is related to the fact that we’re now starting to depreciate both cranes or upgrades on the Tern vessels, so we see higher depreciation. Net finance this quarter is at a very normal level when it comes to net interest, but we have some unrealized currency effects related to internal loans. They will fluctuate up and down each quarter. In the first quarter last year, we had some very positive unrealized effects. I wouldn’t pay too much attention to those unrealized effects, but rather the slide will show later on the cash and debt in the group on an external level. Tax cost is lower as we are not in Taiwan this quarter where we paid tax on the operation.
Final slide from my end is the group capitalization per first quarter 2025. As you remember from the fourth quarter presentation, we presented then the capital allocation framework, which is closely linked to our financial policy. I'll not repeat the financial policy and the capital allocation framework in this presentation, but rather spend time on the figures. On the figures, there are no material changes from last quarter, but it just confirms the policy. If we look at the 100% owned entities on the top, we have at the end of first quarter a cash position of close to NOK 5.2 billion and an external debt of close to NOK 3.5 billion, so a net cash of slightly more than NOK 1.6 billion. As you see, the subsidiaries controlled 100% by Bonheur are all net cash positive, and cash and external debt in Bonheur is matching around NOK 3 billion.
Where we have significant debt is in renewable energy, and that is related to the two joint ventures in Scotland, where we have optimized the capital structure according to the financial policy and the capital allocation framework by taking in very competitive short-term, long-term project debt, and also competitively priced equity by partners. There we have a net debt position of close to NOK 4.4 million on the two joint ventures. On the wind service, where we do not control 100%, which is UWL, Global Wind Service, and Blue Tern, cash and debt is fairly matching. We have presented in this report a note 8, where you can see the effect of UWL going out of the balance sheet. Here it is included, and it is also included in the numbers in this quarter. It will go out in the second quarter.
From note 8, you can see what will go out on the asset and the liability sides from UWL going forward. My final remark on this slide is very important to link this to the policy and that we walk as we talk when it comes to the numbers related to the policy. By that, back to you, Anette. Very good. First company to present is Fred. Olsen Renewables with CEO Sophie Olsen-Jepsen. Thank you. The highlights for this quarter for Fred. Olsen Renewables is that production is unfortunately below estimates due to low winds and technical issues. We’ve also seen the construction of our two ongoing wind farm projects is progressing well and that the prior power prices have reached a two-year high, but might be weakening in the short term. You’ve seen this slide before. It shows all of our projects and the pipeline.
No highlights there this quarter. However, I could mention that the development pipeline is progressing well. Over to the market. On the right-hand side is an overview of the power prices in the markets that we are in. We have seen that the average prices reached a two-year high in February, and as mentioned, there is a possibility for a weakening in the short term. I think in general, we see that when exiting a winter season, there is a lower demand, and the demand that is, or the residual demand, would then increasingly be covered by cheaper renewables. The prices will then, more or to a greater extent, be affected by resources like mostly solar and hydro going forward. We do also see that there is a potential impact on prices by the tariffs introduced.
Also, industrial activity, especially in Germany—which is a motor in Europe—and by potential increased geopolitical uncertainty. Over to production, and to give you some more details there. Degeneration was below estimates, mostly due to low winds in Scotland and Norway, curtailment, and downtime. We have seen significantly reduced turbine availability on our wind farm, Crystal Rig 1, close to Edinburgh. I think we are, together with our service provider, working very hard to restore production levels and establish a reliable timeline for full recovery. The Midhill Wind Farm, which I talked a bit about last quarter, was back in operation on the 25th of January after an external transformer failure, and we have seen negative prices in Sweden in periods. Hence, Fäboliden and Högaliden have been stopped. Just to give you an update on the construction projects that we are progressing, Windy Standard 3 is progressing well.
We're building out 88 megawatts of wind power here, and the tree felling is progressing together with an establishment of a construction compound. Moving over then to Crystal Rig 4, which is a bit more progressed in the construction. Here, all the anchor cages are installed. This is the base for the foundation, the gravity-based foundation, and we have done most of the concrete pouring of the foundation. We've added a picture of a toad on this slide because I'm quite amazed traveling to all of our wind farms of the continuous environmental measures that we are doing, both on construction projects, but also on the operational wind farms. In this example, there is a toad migration ongoing
The power prices have reached a two-year high, and we see that the construction of Crystal Rig 4 and Windy Standard 3 is progressing well. Thank you, Sophie. Next, Lars Bender, presenting Fred. Olsen Seawind. Thank you, Anette. Yes, and worth highlighting for Fred. Olsen Seawind in this quarter is that we, for our Amiable project, have now more clarity on the grid situation, which I’ll come a bit back to later. Also worth highlighting is that we see continued support both in the U.K. and Ireland for offshore wind. Especially in Ireland, we’ve seen a new government come into place in Q1, which I’ll also touch a bit on later in my presentation. If we start in Scotland and Midvar, as I’ve alluded to before, we have submitted our consent application last year in Q4. We’re naturally following this very close.
We have an expectation of an onshore consent award this year and offshore next year. A project like Midvar in the U.K. needs two conditions to be fulfilled in order to bid into a CFD auction. One of them is to have a final consent, and the other is to have a grid connection. Therefore, also positively, we’ve seen this quarter that our grid position is now clear with a regular connection to shore. On the back of that, we are fully engaged in the U.K. connections reform in order to get prioritization for our project. Positively, the U.K. government is now working with really getting grid to the projects as they progress, and with a project like Midvar, that is one of the front runners, we are naturally positioning ourselves to be in that queue.
Overall, we’ve seen that progression of grid, progression of the CFD regime in the U.K. is progressing well. It gives us faith in the market. It gives us faith in Midvar being a good project to develop for floating offshore wind, and we remain focused to be one of the first movers in floating offshore wind with our project in Scotland. If we then move to Ireland, we have also on Codling submitted a consent application last year. We are following that close and are naturally in close dialogue with both stakeholders and authorities on that. As I mentioned in the beginning, in Q1, a new government took office. We see a government which continued its support and ambitions within offshore wind.
Naturally, for us, that is key and very important that we have a continuation of the policy from before, but also a very predictable and stable policy within offshore wind. We are naturally happy to see that. We also had a step forward for our project on a more detailed project level since we now have a foreshore license in place. A foreshore license is basically a permit to do site investigation. In order to progress the design of the project, we need to do further site investigation as a natural part of the development schedule of the Codling project. This naturally ties very well into the other work that’s ongoing in the project where we are preparing for procurement, where we’re preparing for getting the scope and design in place on the back of the final consent determination on the project.
Overall, in both Scotland and Ireland, we’ve seen good steps forward on our projects, and we also see environments with continued support for offshore wind. With that, back to you, Anette. Thank you. Arvid Holt will now present Fred. Olsen 1848. Yes, thank you. We will do an update on floating wind, both on the market, as seen from the bottom up from the technology developer, and then we’ll look a bit at this floating solar market and the status on our project Brisel. Next one, please, Jørn. On the market for floating wind, we see that there is currently a dynamic in that market, and that dynamic is really driven by some of the projects coming to a stage of maturity where key decisions really have to be taken.
We see that the U.K. projects are leading the way, and that is key decisions on technology, that is key decisions on supply chain and on contract structures. We see a couple of effects of this, which is relevant for us. One is that we see that more parties are looking at the turbine floater as one unit, and that has been our view for a while. We also see that the larger EPCI wraps are being pushed, and that favors the larger EPCI companies that we need to relate to. In this stage, then conceptual solutions really have to be brought forward to document the facts. For our solution, Brunel, we see that as a benefit. Brunel has a basic design certificate at the mature design level, really meaning that Brunel's performance is documented and verified by a third party as a fact.
We also see that implementing a 15-megawatt turbine is a big turbine to implement on a floater, and from our perspective, having started with a 15-megawatt turbine from the start is a benefit, and that also gives Brunel good scaling capabilities. When you come to these floaters, there’s been quite a lot of them introduced over the last years, so that’s been a market with a lot of competition. The question is, is there any consolidation? From our side, yes, there is, but not necessarily in name, but certainly in function. From our side, we’ve looked at the semi-submersible concept from the start, and we believe in that, so that’s a prerequisite for this slide. We see I’ve highlighted two features here, which I think is important.
One is that we see more and more designs being balanced, so that means that the buoyancy point and the gravity point need to be aligned for better motions. For a fixed mode, single-tower design, most of these designs are moving their tower into the center, and you see that on most of these concepts now that they have tower-centered designs. Another one is also related to these huge turbines that you need stiffer towers. That means also heavier towers, and we see the concept of so-called stiff, stiff towers being implemented more and more. From our side, for Brunel, Brunel has been balanced from day one, and having dual towers being a single-point, more dual-tower design, that allows us to use the more traditional so-called soft stiff towers that’s used in both fixed wind as well. That concludes the perspectives on floating wind.
We move over to floating solar. Looking at the market there, we see that this market is growing. When it comes to utility-scale, large developments, Asia is really leading the way. It’s been the Philippines, it’s been Indonesia, and it’s been India initially. We also see now further countries like Thailand and Vietnam announcing projects for large-scale floating solar. We see growing attention for smaller and medium-sized developments in replacing generators on island communities. Europe is also moving forward, but it’s more slowly. In Northeastern Europe, North and Western Europe, we see that grid connection is key for the business case, so that favors local offtake, and it favors hybrid setups. In the South and Southeastern Europe, with a better capacity factor, we have more flexibility in the business case. That is a positive.
We see a large potential in hybridization with hydrodams, particularly in areas where you have dry and wet seasons. Finally, moving on to the next slide, a couple of points as a status update on our project Brisel. We have, this quarter, completed quite a comprehensive tank test at Sintef Orsten in Trondheim, which has confirmed expected motions, integrity, and mooring loads. We see that we get good cost reductions on working the supply chain and through configuration management of our system. That was it. Thank you. Thank you. Håkon Magne Ore, CEO of Fred. Olsen Windcarrier. Thank you, and good morning to everyone. First quarter, I think, was a step back to a more normal quarter. We had vessels coming out of planned yard stays, so activity increased.
On the market, we continue to see the same trends that we have focused on for the last year. There is limited vessel capacity available medium term, but we see a volatility in demand side, primarily driven by the challenges we see in the offshore wind value chain. That is creating a somewhat more volatile market. If we go over to the activity in the quarter, we had Bold Tern that completed yard stay in the first half of the quarter. It was strengthening the aft of the vessel to make a more generic sea fastening for the 15–16 megawatt generation turbines. It went straight on contract with Saipem, preparing to be part of a monopile drilling campaign on the Corsae project. Brave Tern commenced the energy project early January.
Very proud to say that this is a tricky site during the middle of the winter, and we completed ahead of P50 the program. Just a little testimony about the competence in the organization and the vessel post-upgrade. That vessel will now most likely go into yard late this quarter to do the same upgrade as we did on Bold Tern. Blue Tern remained on the Vestas O&M campaign until mid-February before it went into yard. It has been working more or less back to back for three years, so it really needs some maintenance. That yard stay ended early May, and the vessel is now mobilizing to do an O&M campaign for Siemens Gamesa in May. That is a replacement for a canceled turbine contract because the project, which it was supposed to install turbines for, has been delayed by two years.
Blue Tern started on the High Long project, installing the first turbines late this quarter. If we then go over to the financials, as I said, we are taking a step towards more normalized activity. Two vessels coming out of yard. We had 57% contract utilization. That means that we were able — we sold 57% of the days in the quarter, and that was basically all the days that we had available apart from transit and yard. When we were also in operation, we had 98% commercial utilization. Again, strong proof of a strong operational quarter. Yet another strong operational quarter. On the financials, we had revenues slightly north of $46 million and an EBITDA of close to $25 million for the quarter. We go over to the market and the backlog.
I think if you look at new contract award in general year to date, it has been somewhat below normal pace if you look at new turbine installation contracts. We have seen several contracts award in general, but most of them are linked to delayed projects or major O&M campaigns on the back of quality issues with the turbine. FOWIC secured one contract this quarter. That was more a standard O&M contract for Blue Tern for 100 days in 2025 and 2026. On the market side again, back to what I said initially, there is limited vessel availability in the next years, but there is some volatility in demand. There is, again, the market will then be very affected by, again, the timing of this volatility in demand in the medium term.
If there is a match between a vessel and demand, you will see some fluctuation in the day rate. Longer term, I think we have pointed it out. We see that the last years, the offshore value chain has had an issue. We have seen cost increasing. There has been capacity, and there have been quality issues. That is, of course, impacting the business case to the developers, which again shifts demand out to the right when they are working to try to get the business case in place. Again, this has been the case for two years, and that’s always been part of this business. What we have seen maybe is that that trend has accelerated somewhat the last month. On the positive side, I think we continue to see high tender activity, especially if we’re looking longer out in time.
I think that was the prepared remark for me. I’m happy to answer questions afterwards. Thank you. We are now moving into the session of questions and answers. Please, do you have some questions? Thank you. To ask a question, you will need to press star one on your telephone and wait for your name to be announced. To withdraw your question, please press star one again. We will now go to the first question. Your first question today comes from the line of Daniel Haugland from ABG Sundal Collier. Please go ahead. Hi everyone. Thanks for taking my question. I actually have a couple of questions, but I think I’m going to limit it to two at first, and then I’ll get back in line.
My first question is, we’ve all kind of seen Ørsted’s decision to halt the Hornsea 4 project this week. They are citing increased costs and supply chain risks on execution of that project. Now, that can obviously be project-specific, but I was wondering if you can comment on if anything has changed with respect to Codling, or whether you’re kind of seeing any similar effects in the supply chain and cost picture. That is my first question. Thank you. I think, Lars, you can answer this. Yes. Thank you for the question. I think firstly, it’s important to appreciate also what you said yourself, that projects are very different in nature. They have different seabed conditions. They have different distances to shore, different wind profiles, different designs. All of that results in different EVICs, CapEx and OpEx profiles.
Projects are also under different regulatory regimes and different CFD regimes, which result in different revenue profiles. To really have a meaningful opinion on Ørsted’s situation is very difficult. It is also very difficult to compare the situation Ørsted is in with Codling. What I can emphasize is that we remain confident in our Codling project. Codling is a fundamentally strong project. We have been very clear on a flexible development strategy for Codling, where we will be able to progress that project faster if we feel that is the best opportunity or alternatively delay it. That allows us to limit pre-FID commitments to a minimum. It also allows us to keep a very cost-disciplined project profile. On one side, that protects the project.
Secondly, it also allows us to capture new value by introducing potential new technology down the line to increase the value of the project. We remain confident in that strategy. I think, I hope that answers your question. Yeah, thank you for that. Obviously, I wasn’t alluding that these projects are similar in that sense. I think on the CFD, the prices look a bit the same, but other factors are obviously different. My second question is that in your accounts, you wrote that FOS has issued loans reflected under other financial fixed assets to the Codling JV. Two questions there. Can you say approximately how much Bonheur has lent to the Codling JV? Second, what is the carrying value of the equity stake of the Codling JV on your accounts now? Is that a question for you, Richard, or Lars?
It’s maybe a question for me, but we need to take some time to get to the exact figures. We’re not prepared to do that on this call. Yeah, we’ll have to come back to that. Yeah. Okay. Okay, I understand. It would just at least be interesting to know approximately the kind of amounts at a later stage when you have those numbers. Just kind of—yeah. Okay. Thank you. I’ll get back in line. Thank you.
I was just wondering, in terms of what you see in the supply chain industry these days, where do you see the largest bottlenecks, if any? I think there is a lot of things that are happening in the value chain, Lars. Yes. Yeah. I can maybe—thank you for the question. I can maybe try to add on to my question from before and say, I think Ørsted got a CFD, I think, roughly eight months ago, and now they then said they cannot progress the project. That is unfortunate for the industry, of course, overall, that we have these project delays or cancellations, as Håkon Magne Ore also alluded to. When we look at the supply chain now, it’s correct. We see supply chain being tight in some places, and we see it being less tight in other places.
It is very dynamic, and it is volatile, as Håkon Magne Ore also said. On the positive side for a project like Codling, we’ve also seen, for example, a slowdown in the American market. That’s potentially not positive for the industry as such, but for a project that is looking for capacity, that will have an impact, of course, on that assessment. I think it’s very difficult to comment specifically on where is the supply chain tight. We monitor it very closely on Codling. We see in the period we are looking at that there is supply available for a project like Codling. We have a large-scale project, which is interesting for the supply chain.
I will also say that over the last year to a year and a half, it’s probably our estimation that the tight supply chain has become a bit less tight than it was actually earlier, to put a comment to that. Maybe also to add that when you have a tight supply chain, there are also developments going in the positive direction on the technology side. Exactly. We see new capacity coming into the market, and we see new technology coming into the market. Back to the point I said before, what is very important from a development perspective is that we are flexible on how we execute the project.
What we want to avoid is being tied into a schedule where we have to make or are forced to make short-term commitments because then you can end up in a situation where you are positioned poorly towards the supply chain. That has been our strategy, which I’ve repeated a couple of times and which we’ve had focus for now, actually for a while in Fred. Olsen Seawind, and that will continue given the market volatility as it is now. Thank you, Lars. Okay. Thank you. Thank you so much. I have one more question on the onshore side. I have noticed that the topic of zonal pricing has come more up in the U.K. these days.
I was wondering if you could shed some light on how you assess this potential change in policy and how you sort of assess the risk for your Scottish wind farms given their location inside the U.K. Sophie, this is a big debate. I do not know if you can give a quick question to this, but— Yes, thank you. Definitely. The discussion of zonal pricing and locational marginal pricing is part of the review of electricity market arrangements that is going on currently in the U.K., and that is a big debate or sort of topic and reform. I think we are following that debate closely, of course, and influencing in whatever way we can. We are taking part in industry bodies and different groups and also talking to senior politicians directly.
We have been very clear with the government and others in our views that introducing zonal pricing is negative in the U.K. in terms of what they want to achieve in the Clean Power Act 2030. It will increase uncertainty, and it will also lead to less build-out of renewable energy. That is sort of the very helicopter view. I think it’s too early to comment specifically on how it will impact our specific wind farms, but we are quite firm in our view that we are recommending the officials not to implement this reform.
We have received signals that they are looking to close or decide on the zonal pricing before the AR7 round, which is the Allocation Round 7 — the upcoming Contracts for Difference auction in the U.K. That is at least a positive thing that will give certainty to the participants of that auction. Yes. Thank you. Thank you. Your next question comes from the line of Sindra Surbov, Arctic Asset Management. Please go ahead. Yes. Hello. Good morning. Just two topics or two questions from my side. First, forecasts for offshore wind installations have continued to decrease nearly quarter by quarter for the last two or three years. Most recently, Ørsted cancelled a more than 2-gigawatt project. To put it bluntly, can you promise that you will not contract any vessels now? Have you shelved any plans of possibly doing that?
Håkon Magne, this is a perfect question for you. Good morning, Sindra. I assume that you’re talking about a new turbine installation vessel. Is that correct? Yes. Yes, of course. Yeah.I think as part of the Bonheur group and the Bonheur policy, we never give forward guidance on what we are doing. I think as we have said — we are closely following the situation, we have a long-term strategy to remain a leading player within this segment. We have a strong operational platform. We have a strong financial platform. We are debt-free. We can take opportunities when they arise. It is the same answer. We are closely reviewing the situation. Okay. Thanks. Secondly, on renewables, once again, there is, let’s say, some technical issues. I’m aware that the transformer issue was not your fault, so to speak.
Four or five of your plants are no more than 20 years old. Should we be worried that, let’s say, the technical conditions are starting to put, let’s say, pressure on reliability? Would you expect repowering or doing something to mitigate that? Yeah. Thank you. It is correct that our wind farms are getting older. I think that is actually quite an exciting phase for us because it means that we are moving into the full life cycle of projects where we are now looking at repowering — the potential of newer, larger turbines replacing the existing ones — which is quite an exciting prospect. We are maturing these prospects of repowering and will, of course, comment on any projects as they are in that stage. I think with regard to our standards of operations, we have high standards of operations.
It’s like the machine rooms in the vessels, actually, where you want everything to be spick-and-span and very clean. I’ve actually been climbing quite a few turbines myself lately and see that even though we have older turbines, they should still look shipshape and be operating well. That is the sort of standard that we are striving for, and that remains a key priority for us and focus area at the moment. Okay. Thanks. Finally, one question more for renewables. The situation in Mid and Northern Sweden — with persistently low power prices — would you say that your, let’s say, medium-term price expectations are lower now than a couple of years ago when those plants were decided to build? Thank you again.
I think, in general, we see Northern Sweden as a very attractive market for onshore wind in terms of the wind resource, lack of people living there, and the stable regulatory regime, which is quite positive to onshore wind. I think the low prices and extreme capture discounts that we see now are due to the trapped power and the sort of lack of grid transmission between the northern and southern zones. We know that the TSO, Svenska Kraftnät, has quite a lot of focus on this and are looking to build out transmission lines between the zones. Our belief is that if they’re able to sort this out in the longer term, Northern Sweden will be a very attractive market going forward. Yes. And do you have any penalties when you can turn off the turbines rather than taking the cost of negative power prices, right?
That is correct. That is what we have done this quarter. I think it is also worth mentioning that we are looking into entering into ancillary services where you are then getting paid, for example, when you are curtailing, that you might start some production in order to balance the grid. Those imbalance-mechanism markets are proving quite attractive in Northern Sweden at the moment. That could potentially be a new revenue stream in the future. Okay. Would that be kind of a short-term arrangement, or is it like a longer-term contract where you reserve capacity for the grid operators? You do not reserve capacity longer term, but you have to do some work in the beginning in order to enter that market. Once you are in, you can sort of help balance the grid on a general basis. I think probably. Yeah.
That would be a fixed tariff plus money for the power delivered? I think probably this is a bit detailed right now, but certainly, we can come back to that. Yeah. We can definitely go more into detail about that. Okay. Okay. Excellent. Thank you. Thank you. Your next question comes from the line of Anders Rosenlund from SEB. Please go ahead. Thank you. I have a couple of questions. My first question is on the United Wind Logistics, which you’ve sold and where the sale was closed, and you provided some details in Note Eight of the report. Could you tell us how much revenues UWL generated in 2024, and how much of that is in your 2024 revenue reports or revenue line? Good morning, Anders. Sorry, we cannot disclose that.
We have a long-term partnership with our partner, and we do not disclose the details on revenues and so on. What we are trying to provide you with is the balance sheet effects in Note Eight, and that is as far as we can go. Sorry about that. Okay. My next question is on the renewables segment. Were there any high-price leaders in Q1? No, and they were only very negligible. I cannot pronounce that word. No.Okay. Thank you. I am not sure how to pronounce Leavies either, so that is fine. On Blue Tern, has the crane on Blue Tern been upgraded, or am I mistaken assuming that it is the last vessel to potentially be upgraded and broadened? No, I think you are correct. The crane has not been upgraded to do the 15-megawatt generation.
Okay. Thank you. Thank you.
Now that you sold the UWL and the cash position will kind of be even better than it already is—and I think I asked a similar question on Q4—but do you have any updated comments on what kind of opportunities you see for capital allocation going forward? Yeah. Thank you for that question, Daniel. Yes, there will be a… well, we closed the transaction in April, and obviously, then we have received the funds for our shares. I would say in the longer-term perspective, if we go back in history, we have now been operating for close to 180 years, and we have to be—and also according to our financial policy and capital allocation policy—we have to be utterly resilient both to cater for downturns but also be able to grab the opportunities that may arise going forward.
In that respect, close to NOK 600 million up and down on the cash — which is approximately the cash proceeds from UWL of shares and shareholder loans — does not make that much of a difference to that. We have to remember that we are positioned in growth industries, which are very capital-intensive. Just as an example now, the two projects that Renewable Energy have undertaken, Crystal Rig 4 and Windy Standard 3, those are gross CapEx of NOK 3 billion.
Your next question comes from the line of Helena Wandbo from DNB. Please go ahead. Yes. Thank you for taking a second round of questions. I have one more question related to the wind farms in Scotland. I see you have three consented wind farms, and during the previous AR6, you bid in two projects into that one and got quite a good price, I would say. My question is, do you plan to — what are your plans in terms of AR7? Are you planning to bid in these projects, and are they ready to be bid with the consents in place? Thank you. I think I will comment on whether we bid, possibly have one, if and when that is done.
What I can say is that what we do see with these new or upcoming allocation rounds in the U.K. is that in order for the U.K. government to reach their goals for 2030, the upcoming allocation rounds will have to be quite attractive. I think the U.K. is a main market now in Europe focusing on renewables, and that is very attractive. Thank you. I also just wondered how you sort of look at the possibility of bidding in potential repowering projects into these rounds. Is that a possibility for you? Yes. Repowering projects can also be bid into the CFD rounds as they are basically new projects just being built on sites where there have been wind farms before. Okay. Thank you. Thank you. There are currently no further questions. I will hand the call back to the room for closing remarks.