EUROPEAN RENEWABLES EXPANSION

Ulf Eriksen, Statkraft Bergen, 11 June 2014

1 2 3 Will Europe’s green revolution continue?

Impacts on the power market

Renewable expansion

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Statkraft at a glance

Peru 163 MW (+ project)

Chile 94 MW

Turkey 20 MW (+ projects)

Nepal 21 MW

Philippines 179 MW

Brazil 77 MW

Panama (project)

Zambia 7 MW

Norway 12 518 MW Sweden

1 315 MW Finland 66 MW

UK 273 MW

Laos 100 MW

Germany 2 692 MW

India 82 MW

Installed capacity*

17 600 MW Power production (2013) 56 TWh

97% renewable energy 3 600 employees

AGUA IMARA

SN POWER

STATKRAFT

* Includes: Statkraft’s share of installed capacity. Statkraft SF’s share of installed capacity in Laos.

Albania (project)

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Statkraft is Europe’s largest RES producer

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Top 10 renewable electricity producers in Europe in 2012 * Top 10 electricity producers in Europe in 2012 *

Renewables Fossils / Nuclear

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4 * Adjusted figures – production outside Europe not included. Source: PWC

District Heating

Strategic focus areas

European Flexible Generation

Wind Power

Hydropower in Emerging Markets

Trading and Origination Investments directed to

1) Regulated income in Europe

2) Growth in emerging markets

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Trondheim

Oslo Stockholm

London Düsseldorf

Sofia

Amsterdam

Istanbul

Bukarest Beograd

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Nordic & UK T&O European T&O Global carbon

Trading & Origination (T&O) in Statkraft

2014: Trading activities in Brazil and India

RENEWABLE EXPANSION

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EU’s climate and energy targets

EU targets for 2020 - 20 % GHG reduction - 20 % renewables - 20 % energy efficiency

Proposed EU targets for 2030 - 40 % GHG reduction - 27 % renewables

EU target for 2050 - 80-95 % GHG reduction

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Germany’s plan: «Energiewende» Switch from coal and nuclear to renewables

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2005 2010 2015 2020 2025 2030 2040 2050

ConventionalRenewables

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Power production in Germany 2005-2050, TWh per year

Source: DLR and Fraunhofer IWES

Technology development: Wind is competitive - Solar picks up pace

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PV generation in Germany

Strong growth in solar power generation

2013 PV solar capacity:

Germany: 35,700 MW

Europe: 80,000 MW

Global: 137,000 MW

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GWh

Source: EWEA

Changes in EU electricity generation 2013

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Wind PV Gas Coal Biomass Hydro CSP Fuel oil Nuclear

Electricity consumption is falling

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1980 1985 1990 1995 2000 2005 2010

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EU27 Demand Growth

EU27 Demand Growth Trend (2% p.a.)

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1980 1985 1990 1995 2000 2005 2010

TWh

Germany Demand Growth

Eurelectric Historic growth CERA

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1980 1985 1990 1995 2000 2005 2010

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Eurelectric CERA Historic Growth

MARKET IMPACTS

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Drivers of energy markets

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Nordic spot

EUR/MWh

2005 2006 2007 2008 2009 2010 2011 2012 2013

Financial crisis

EU ETS 1

Nordic hydrology

Fuel price rise

Nordic hydrology

German renewables

Solar production affects peak prices

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German power price 15may13 German power price 15may08

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German power price 15may13 German power price 15may08 Solar production

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Price spikes: A story of the past

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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2006 2007 2008 2009 2010 2011 2012 2013

Number of hours with high prices (>150 €/MWh)

DE FR NL IT CZ HU

Deteriorated markets reflected in valuation of European utilities

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Value development1 1/1-2008 vs 28/2-2014 %

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-69%

1 Not adjusted for dividend

Value chain is changing

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Time for new business models?

Statkraft has direct sales of 8.700 MW in Germany - 5000 MW is remote controlled

Statkraft market share: 25% of German wind power

Statkraft turns local power production into a big virtual renewable power plant

8 700 MW – market access 5 000 MW – remote control

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The future is electric!

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WILL EUROPE’S GREEN REVOLUTION CONTINUE?

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Coal is back… Development of coal vs gas prices Carbon price (EUA) development

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Coal

Gas

Coal plants have the competitive edge

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Variable operating costs (€/MWh)

CO2 costs

Fuel costs

Variable OpEx

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1015202530354045

CCGT Kullkraftverk Coal plant

EEX power price, Germany 2014

Total RES investments in Europe is declining

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Q1 2004 – Q4 2013 $BN

Global investments in renewable and fossil power production

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2010 2011 2012 2013

RenewablesFossil fuel

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Todays European power market

RES entering the market

THANK YOU 29