THE NORDIC POWER MARKET

Quantity

Price

Ø Demand

380 TWh

SupplySystem price

24 hours calculated into daily average

THE NASDAQ OMX COMMODITIES EXCHANGE

System price and the financial market

• The world' s largest, and most liquid power derivative exchange.

• Exceptional transparency creates an equal playing field.

• Regulated exchange and clearing house based in Oslo and Stockholm.

• 100 billion Euro market

• Futures , forwards, and options with 5 year horizon.

Source: Coeli.

2011-05-18 2

Finland NorwayDenmark SwedenRussian

Federation

Poland NetherlandsGermany

Export / Import

Energy

Production

Ø Demand =

Water

H2O 55 %209

Nuclear 22% 83

Coal,

Gas, Oil21% 80

Wind 2% 8

In TWh In %

380

+

-

Production

Costs

Geographical

Energy Production

Source: Coeli

2011-05-18 3

THE NORDIC POWER MARKET

The supply side is the fundamental key to the market

Demand 380 TWh

Hydro

Source: Coeli

THE NORDIC POWER MARKET

Supply & demand curve in a normal year

Nuclear

Gas

Heat/power & coal

2011-05-18 4

Demand 380 TWh

Hydro

THE NORDIC POWER MARKET

Supply & demand curve in a wet year

Nuclear

Heat/power &

coal

Source: Coeli

2011-05-18 5

Demand 380 TWh

Hydro

THE NORDIC POWER MARKET

Supply & demand curve in a dry year

Source: Coeli

Nuclear

Heat/power & coal

Gas

Oil

2011-05-18 6

-50%-45%-40%-35%-30%-25%-20%-15%-10%

-5%0%5%

10%15%20%25%30%35%40%45%50%55%60%

WEATHER – THE KEY FACTOR

Precipitation in Norway and Sweden 1932-2010

- Varying weather generates volatility and trends, i.e. trading opportunities.

Source: Coeli

2011-05-18 7

Correlation: 0.71

-50

-40

-30

-20

-10

0

10

200

10

20

30

40

50

60

70

80

90

Spot

price E

uro

/MW

h

Date

Spotprice Euro/MWh Hydrobalance in TWh

WEATHER – THE KEY FACTORThe hydrological balance

The hydrological balance is determined by

– Water in the reservoirs

– Snow in the mountains

– Soil/ground water

Non-hydrological parameters

– Wind

– Coal, oil, gas and carbon emissions price

– Import/export capacities on the grid

– Price levels in surrounding countries

Source: Coeli

2011-05-18 8

Correlation hydrobalance and spotprice – weekly spot price 2005 - 2010

COELI POWER SURGE FUND*

Correlation with different asset classes

Source: Coeli, Bloomberg, Dow Jones/Credit Suisse

2011-05-18 9

-60,00%

-40,00%

-20,00%

0,00%

20,00%

40,00%

60,00%

80,00%

Dow Jones Credit Suisse Hedge Fund Index MSCI World Coeli Power Surge Fund

Correlation to MSCI World Index -0,18

Correlation to DJ CS HF Index -0,02

Volatility Coeli Power Surge Fund 12,77%

Volatility MSCI World Index 13,78%

Volatility DJ CS HF Index 10,09%

*FORMERLY THE PLENUM POWER SURGE FUND LTD.

THANK YOU FOR YOUR ATTENTION

2011-05-18 10

Risks / Opportunities Nature of Risk Impact Probability Mitigation

Weather Actively

managed within

strategy

Change in volatility, price shifts

(up/down)

Create trading opportunities

High Normal fund management,

market timing

Demand shifts Actively

managed within

strategy

Change in volatility, price shifts

(up/down)

Create trading opportunities

High Normal fund management

Producer, e.g.:

- Nuclear outage

- Themal Power outage

Actively

managed within

strategy

Change in volatility, price shifts

(up/down)

Create trading opportunities

Middle Normal fund management

Infrastructure, e.g.:

- Disruption of power

grid

Actively

managed within

strategy

Change in volatility, price shifts

(up/down)

Create trading opportunities

Middle Normal fund management

Environmental policies,

e.g.:

- Kyoto Protocol

System risk Price shifts (up/down)

Short-term effect until

market has priced in new

reality

Create trading opportunities

Middle to high,

but decision

dates are well

known

Continuous monitoring of

news flow.

Position portfolio

accordingly

Price manipulation by

market participants

System risk Price shifts (up/down), liquidity

squeeze

Market/price distortions

Very low Stringent control of trade by

market surveillance

department

Political risk System risk Price shifts (up/down), liquidity

squeeze

Market/price distortions

Very low,

never

happened

since start of

Nordpool

Nordic countries are stable

democracies

COELI POWER SURGE FUND

Risk Assessment

2011-05-18 11

Snow amount in % (01.02.2010) Snow amount in % (01.02.2011)

Source: SeNorge

Source: NASDAQ OMXX Commodities2011-05-18 12

WEATHER – THE KEY FACTORReservoirs, snow maps and ground water levels

Source: SGU

THERMAL AND MACRO DEVELOPMENTTHE CONTINENTAL POWER MARKET

• Grid connections to Nordic/other countries

are very limited.

• Import/export flows and restrictions.

Source: entsoe

• Germany/France/Netherlands are the

main players on the EEX.

• Thermal production systems play an

important role in the energy mix.

2011-05-18 13

NASDAQ OMX COMMODITY EXCHANGE

Price volatility weekly system price 2005-2011

Source: Reuters

2011-05-18 14