NORDIC ENERGY SUMMIT. Christian Rynning-Tønnesen 19 March 2015

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1 NORDIC ENERGY SUMMIT Christian Rynning-Tønnesen 19 March 2015

2 Strong energy demand growth outside Europe Electricity demand (indexed in 2000) Peru India Turkey Brazil Chile Germany Emerging markets have grown % during the last decade while European markets were roughly flat Nordic

3 The world needs a climate agreement Global temperature 0.68 C Carbon dioxide ppm Arctic sea ice % change per decade Land ice billon metric -258 tons per year Sea level 3.18 mm per year Forest cover 1.5 million sq. km 3 Picture: NASA - Source for vital signs:

4 EU Energy union Continued decentralisation Continued RES support Market re-design Well functioning ETS 4

5 Massive cost reduction in solar PV /kwh 0,50 Levelised cost of energy for PV in Germany 0,40 0,30 0,20 Power price for consumers in Germany 0,10 Whole sale power price 0, Source: German Solar Industry Association / Bloomberg New Energy Finance

6 Renewables are replacing fossil fuel in EU in New Decommissioned 5000 MW Wind PV Gas Coal Biomass Hydro Waste Fuel oil Nuclear 6 Source: EWEA

7 Coal-fired capacity will be significantly reduced Coal Closure -29% Source: Statkraft

8 LCOE (NOK/ kwh) Hydro and wind is most competitive in the Nordic market 1,8 Production cost in Norway (2014) 1,6 1,4 1,2 1,0 0,8 0,6 0,4 0,2 0,0 Hydro Vannkraft Wind Vindkraft - onshore - land Kullkraft Coal Kjernekraft Nuclear Gasskraft Vindkraft Wind - offshore hav Biokraft Solar PV PV Capex Investeringskostnader Drifts- og vedlikeholdskostnader Brensels- og utslippskostnader Opex Fuel and emission costs 8 Source: NVE, report 2/2015, «Kostnader i Energisektoren»

9 Projected production mix Yearly production in TWh 2005 EU reference year Renewables Nuclear Germany UK Sweden Norway Fossil 2025 Renewables Nuclear Germany UK Sweden Norway Fossl 9

10 Statkraft overview Norway MW Sweden MW 100 % owned by the Norwegian state A- / Baa1 from S&P and Moody s Panama (project) Peru 182 MW (+ project) Installed capacity MW 1 Power production 56 TWh 99% renewable energy Chile 105 MW UK 243 MW Germany MW Albania (project) Turkey 20 MW (+ projects) Brazil 101 MW Zambia 6 MW India 91 MW Nepal 23 MW Laos 50 MW Philippines 146 MW STATKRAFT SN POWER/ AGUA IMARA 1 Statkraft s direct and indirect ownership in power plants

11 Strategic focus areas European Flexible Generation Market operations International Hydropower Wind District Heating Innovation 11

12 Majority ownership in Desenvix, Brazil 74 MW Monjolinho Large and growing power market The acquisition provides cash flow and new greenfield pipeline for the P&C unit 10 hydro power plants, 2 windfarms, transmission assets 12

13 Acquisition of majority in Pilmaiquén,Chile 52 MW Rucatayo Stable regulatory business environment with a low FX risk The acquisition provides cash flow and new greenfield pipeline for the P&C unit Operating plant is 100% merchant allowing commercial flexibility Located in an area with highly stable hydrologic history, providing diversification to existing assets 13

14 Kjøllefjord Statkraft s onshore wind power Under construction / operations Concessions / Under development Hitra Smøla Stamåsen Mörttjärnberget Björkhöjden Ögonfägnaden Baillie Berry Burn Andershaw Em Tollarpabjär Alltwalis 14

15 Advancing to lead offshore developer Offshore 150 km Statkraft s capabilities Offshore 50 km Onshore Onshore wind - Developer - 10 projects in UK, Sweden and Norway Offshore 20 km Sheringham Shoal Partner in construction Operator in O&M phase MW Offshore 40 km Dudgeon - Integrated partner in development and construction - 402MW Triton Knoll - Manager in development and construction phases - Up to 900MW Dogger Bank - 6 projects in total - Operator on one of the first four projects - Up to 7200MW Project complexity 15

16 Biofuel development with Södra Cell Ambition: Full scale commercial biofuel production 16

17 Statkraft has experienced strong growth Equity development + NOK 29 billion in net dividend NOK 88 billion NOK 12,4 billion NOK 75,6 billion equity increase Robust financial situation and ambitious capex program: NOK 61 billion from

18 Alternative financing models Examples of alternative financing structures: - Statkraft International Hydro Invest 67 % - SN Power 50% - UK onshore wind 51 % - UK offshore wind 40 % Statkraft s ambition: Be the industrial partner in order to leverage key industrial skills within O&M, energy management and trading operations Partners also in new projects 18

19 Snillfjord Fosen Wind power in mid-norway Fosen Vind AS MW Storheia 250 Roan 240 Kvenndalsfjellet 110 Total, min 600 Fosen SAE Vind AS MW Geitfjellet 200 Hitra Remmafjellet 100 Total, min 400 Snillfjord 19

20 Opportunity for external investors in Fosen Vind AS Statkraft Agder Energi NTE Trønder Energi Investor 14,5% 14,5% 50,1 % 20,9% % Service agreement Fosen Vind AS Roan 300 MW* Kvenndalsfjellet 120 MW* Storheia 220 MW* * Production capacity in the concession 20

21 Summary The climate challenge is increasingly influencing energy policies European energy transition from fossil to renewable energy Statkraft has a solid financial track record Possibilities for investors to co-invest with Statkraft in Fosen Vind AS and other projects 21

22 THANK YOU

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