senior vice president jan alne, statkraft energi as

side

1 Introkurs for nyansatte i Tyssedal

ISGAN Workshop 8th October 2013

Hydro , Wind & Solar integration

- from a Norwegian producer point of view

Senior Vice President Jan Alne,

Statkraft Energi AS

side


NORWAY-SUITABLE FOR HYDRO !

This project started i Tyssedal in

1906

The biggest high – head

development in Northern Europe

Foreign funding

TYSSEDAL SITE 1907

page 3 HARDANGER

090508

HARDANGER

090508

Penstocks Tyssedal

Statkraft’s production 2012

6

AGUA IMARA

SN POWER

STATKRAFT

Peru

Chile

Norway

UK

Sweden

Finland

Turkey

Brazil

Zambia

Germany

India Sri Lanka

Philippines

Laos

Nepal

Installed capacity1

17 000 MW

97% renewable energy

3 600

employees

60 TWh

Power production

Panama

(project)

1Including pro rata ownership in associates outside the Nordics

Statkraft is the leading RES producer in Europe

7

63,8

49,0

45,5

40,3

29,5 27,9 26,8

20,5 18,7

17,5

-

10

20

30

40

50

60

70

Statkraft EDF Vattenfall Enel Fortum Verbund Iberdrola E.ON GDF SUEZ Hidroelectrica

Ren

ew

ab

le e

lectr

icit

y p

rod

uc

tio

n (

TW

h)

Company

Top 10 renewable electricity producers in Europe in 2012

Adjusted figures – production outside Europe not included

Source: PwC

8

16750

11895 10535

3065

1338 424 50 22 5

833 7 6

-207

-5495 -5441

-43 -158

0

-1205

0 0

-3204

0

-10 000

-5 000

0

5 000

10 000

15 000

20 000

New Decommisioned

2012: RES are growing – fossils are taken out

MW

Kilde: EWEA

EU ETS: regulatory uncertainty reflected in price forecasts

9

0

5

10

15

20

25

2009 2010 2011 2012 2013 2014 2015 2016 2017

Thompson Reuters

Bloomberg

Market Prices

CO2 price pathways short run, EUR/Ton (Real 2013)

Sources: ICE, Thompson Reuters, IEA, EC 2050 Roadmap, Bloomberg

Prices are Real 2013 (Forward prices are discounted by 2% )

0,0 10,0 20,0 30,0 40,0 50,0 60,0 70,0 80,0

2020 2030

Market_extended

IEA WEO12 (New Policies)

IEA WEO13 (450 ppm)

EC 2050 Roadmap (Current policies)

EC 2050 Roadmap (Average decarbonisation)

CO2 price pathways long run, EUR/Ton (Real 2013)

Coal-fired production costs have fallen whereas gas-fired costs have increased

3

0

10

20

30

40

50

60

70

80

jan.09 jan.10 jan.11 jan.12 jan.13

Development in fuel and carbon costs, EUR/MWh

Hard Coal Gas (CCGT)

Sources: ICE & Heren (24.05.2013)

Coal @40%, Gas @55%,

Market situation in Germany for Statkraft‘s plants is poor

Spark spread has reduced

Plants have still operated in 2012 but at zero contribution margin

Impossible for efficient conventional power plants to cover fixed O&M costs

11

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

2009 2010 2011 2012

Knapsack 1

Herdecke

Emden 4

Robert Frank

Stromproduktion Statkraft Gasportfolio in TWh

-20000

-10000

0

10000

20000

30000

40000

50000

60000

70000

80000

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

jul-

20

MW

h/h

July 2020 & 2016

Demand

Net demand = (Demand - RES)

Net demand - bio - lign - nuc - chp (Jul 2020)

Net demand - bio - lign - nuc - chp (Jul 2016)

… and no improvement is expected

12

-20000

-10000

0

10000

20000

30000

40000

50000

60000

70000

80000

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

jul-

12

MW

h/h

July 2012

Demand

Net demand = (Demand - RES)

Net demand - bio - lign - nuc - chp

Source: Statkraft’s internal analysis

DE:

“Stillegungsverbot” to

be replaced by

capacity market by

end 2017

IT: Capacity market to

be implemented in

2017

ES: Capacity

payments.

BE: Financial

support for new

CCGTs proposed

FR: Capacity

obligation

model decided

and now being

designed

National capacity mechanisms being implemented despite EU’s call for coordinated action

NO, SE & FI:

Strategic reserve (if

security of supply is

at stake)

IR: Capacity

payments in

place since

2005

EU calling for coordination:

“If mechanisms are not well

designed, set up

prematurely or without

proper coordination at EU

level, they may be

counterproductive.”

UK: Developing auction

model; Detailed design

proposal published June

2013, first auction in 2014

13

National capacity mechanisms are

currently being implemented in Europe

The Norwegian/Swedish elcert market

The Norwegian target in 2020 is

67,5 % RES; The Swedish is 49%

The common green electricity

market with Sweden started up on 1

January 2012

26,4 TWh RES to be online before

end of 2020

Technology-neutral approach, also

implying hydropower of all sizes.

14

Almost no future increase in demand

15

Large Nordic power surplus expected 2020

16

New Norwegian interconnector capacity, 3500 MW under development

Project Startup Capacity

(MW)

Skagerrak 4

(Denmark)

Q4/2014 700

NORD.LINK Q4/2018 1400

NSN (UK) Q4/2020 1400

17 Source: Statnett

Norwegian import & export of electricity

Maximal yearly import has been 15,3 TWh

Maximal yearly export has been 22,1 TWh

Average values per week

How will the Nordic market develop?

A lot of new supply will come, but

there is not much new demand

New interconnectors take a long time

to develop

There are few fuel-switch-possibilities

in the Nordics

And would the Nordic power intensive

industry survive?

But could a growing electricity surplus

pave the way for a close down of the

Swedish nuclear plants?

19

Good growth opportunities within renewable energy

Statkraft’s investment plan for

2014-2020 is being developed :

- Hydro and wind in the Nordics?

- Offshore wind in the UK?

- Hydropower in France or the

Balkans?

- Hydropower outside Europe?

- Other or new technologies?

- Greenfield or M&A?

Favourable framework

conditions will be key

20

Sheringham Shoal, UK

Supporting the power system in Europe

0

10

20

30

40

50

60

70

80

1 2 3 4 5 6 7 8 9101112131415161718192021222324252627282930313233343536373839404142434445464748

Due to the energy regulating capacity,

Norway may support other power systems that

require backup solutions and storage.

Nordic hydro reservoirs content 121

TWh

Norway 85 TWh (Statkraft 35 TWh)

NORWEGIAN POSSIBILITIES

Appr. 50% of total hydro reservoirs in Europe – 85 TWh

Three alternative options:

1. Change the operation pattern in existing plants

2. Increase installed capacity

3. Build pumped hydro storage in connection with existing

reservoirs

Both increased capacity and pumped storage is possible where the distance to the Continent is the shortest

Without new greenfield assets or reservoirs,

but by extended use of exsisting

The hydrology vs energy consumption

23

0

1000

2000

3000

4000

5000

6000

7000

Mean

Inflow

Consumption

GWh/week

Week

Max.

Inflow

Min. Inflow

Data for Norway

Excisting PSH in

Norway developed

for

seasonal pumping

ULLA-FØRRE POWER PLANT SCHEME

sid

e

25

Blåsjø-Green battery

Ulla Førre- 200 MW / 5 TWh annual

prod- storage capacity 8000 TWh

25

Lio

ns

030

510

side


KVILLDAL : “ HIGHTECH FORMEL 1 “ !

27

CEDREN - Renewable energy respecting nature

►8 years of research: 2009 - 2016

►8 large research projects

►7 Norwegian research partners

►13 Industry partners and 2 management partners

►Budget: 36 MEuro (5 MEuro in 2013) – financed by the

Research Council and the Energy industry

►16 PhD and 4 Post-doc positions

Hydropower

technology for the

future

Environmental

design of

hydropower

Impacts on birds

and wildlife from

wind turbines and

power lines

Reconciling

environmental and

energy policy

concerns

Ma

in t

op

ics

Pag

e 30

SALMON CAUGHT IN ALTA RIVER– 30 KG Thanks for your

attention- good luck

to us all !

www.statkraft.com

THANK YOU

THANK YOU

senior vice president jan alne, statkraft energi as

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