Råoljeprisens og Kinas betydning for kraftmarkedet i Norge

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1 Råoljeprisens og Kinas betydning for kraftmarkedet i Norge Kort om NENA Et blikk på Kina og Asia Olje, Kull og Gass Oppsummering Ved Hans Gunnar Nåvik

2 Nena and Imarex Building a leading commodity marketplace Imarex ASA Exchange Clearing Brokerage Analysis Freight Fuel Oil Fish Freight Fuel Oil Nordic Power German Power Fish Power Gas Coal Emissions Oil Products Freight Nordic Power European Power Emissions Emissions Uranium Gas Metals ~300 employeesin 7 countries: Norway England USA Singapore Germany Spain -Switzerland

3 Nena - The Team Our team of 16 employees share among themselves more than 110 years of experience from the energy markets The expertise of the team ranges from economics, engineering, hydrology, computer science and finance Nena holds its headquarter in Oslo and additional offices in Zürich and Singapore

4 Our Services Nordic Power German Power Emission Dry Freight Long-term Nordic Power All services distributed on web and by

5 From a Chinese perspective Growth last 12 months Comparison Electricity output +436 TWh France yearly 483 TWh (cons.) Pig iron output +43 Mt US yearly 37 Mt (prod) Cement output +86 Mt EU15 yearly 250 Mt (prod) Raw Coal output +280 Mt US yearly 1000 Mt (prod) Iron ore import +69 Mt representing ½ global dry freight growth

6 From a S.Korean perspective Mt/month Coal import trends Second largest coal importer Close to 100 Mt/year EU-250 Mt/year Above 10% growth rate UK largest in EU Close to 45 Mt/year Negative growth rate Jan.06 Jul.06 Jan.07 Jul.07 Jan.08 Jul.08 Asia more and more dominating the global coal trade South Korea UK

7 Other Asia Japan Nuclear shut downs due to earthquake July 2007 Coal import growth 11 Mt India High economic growth Plans for huge growth in electricity and steel output Coal imports to grow very fast Vietnam Coal export going rapidly down Fast expansion in domestic coal consumption Indonesia Largest exporter of thermal coal Needs a lot more coal domestically

8 Global coal supply Mt Coal export Australia Indonesia Colombia US South Africa Russia SA and Russia is down! Australia tops out? Indonesia takes a brake after astonishing growth Domestic growth? Further mining growth? US coal fill in the gap? High marginal mining and transport cost More investment necessary

9 Power markets Spot price 12 months moving average prices /MWh Jul.00 Jul.01 Jul.02 Jul.03 Jul.04 Jul.05 Jul.06 Jul.07 Jul.08 Power Nordic Power Germany Nordic power correlates with German power Influenced by the same underlying price drivers Price drivers: Oil Gas Coal CO2 Weather Demand price elasticity Economical growth

10 Fuel markets Spot price change since July months moving average prices, $ terms 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% -50% Jul.00 Jul.01 Jul.02 Jul.03 Jul.04 Jul.05 Jul.06 Jul.07 Jul.08 Crude oil Brent Coal Australia Gas NBP Fuel up 300% to 400% Gas (NBP UK) very volatile Strong demand growth Supply issues Coal very strong particularly since summer 2007 Fuelling extreme economical growth in Asia Coal supply in lack of infrastructure world wide

11 Coal and dry freight Spot price change since July months moving average prices, $ terms 450% 400% 350% 300% 250% 200% 150% 100% 50% 0% -50% -100% Jul.00 Jul.01 Jul.02 Jul.03 Jul.04 Jul.05 Jul.06 Jul.07 Jul.08 Coal Australia C4 Freight C4 is a dry freight price index for Cape size shipments of coal from RB to ARA Dry freight prices have been leading for coal prices Freight cost significant part of the fuel cost China s extreme demand for iron ore main driver

12 Power and coal 600% 500% 400% 300% 200% 100% 0% Spot price change since July months moving average prices, $ terms CO2 cost -100% Jul.00 Jul.01 Jul.02 Jul.03 Jul.04 Jul.05 Jul.06 Jul.07 Jul.08 Power and coal markets long term correlation Coal lagging Available growth capacity Power much stronger until summer 2006 Natural gas CO2 Power Nordic Power Germany Coal Australia

13 Power and gas 600% 500% 400% 300% 200% 100% 0% Spot price change since July months moving average prices, $ terms Jul.00 Jul.01 Jul.02 Jul.03 Jul.04 Jul.05 Jul.06 Jul.07 Jul.08 Power Germany Gas NBP German power tracks natural gas Gas power plants more dominating throughout Europe Norway and the Nordics more and more integrated in the power and fuel complex Power links Gas links Coal dependent

14 Cost of coal and gas power prod. /MWh Jan.04 Jan.05 Jan.06 Jan.07 Jan.08 SRMC CCGT SRMC CPP Power market binds gas market to coal market CO2 Efficient substitution Huge investments in gas power Gas supply uncertain Europe dependent on both coal and gas The most costly fuel defines the power market

15 Summary The Asian tiger economies decisive Increasing importance on oil, gas and coal markets Oil leading indicator long term Coal and gas short term Coal tracking oil long term, not short term Coal and gas interdependent Norwegian power part of the global energy market Destined to track the German power market Fully coupled to the global fuel markets