Market Research Report : Renewable Energy Market in Norway 2009

Renewable Energy –
Renewable Energy Norway
August ‐ 2009

Executive Summary

 Norway is the leading producer of electricity based on renewable energy sources
Market  Hydro and wind energy are the predominant energy segments in Norway
 In 2008, installed capacity stands at 30,789 MW while electricity generated is pegged at 142,727
GWh
 Drivers: Conducive geographical distribution for power generation, high precipitation levels,
favorable water system, technological developments and fluctuating crude oil prices and falling
Drivers & petroleum production
Challenges  Challenges: Power distribution leading to cost escalations and conflicts with other business
Challenges: Power distribution leading to cost escalations and conflicts with other business
interests
 Energy21 – Promotion of environmentally friendly consumption and generation of energy
 ENOVA – Strategy for research and development of technology within the energy sector
 Introduction of the Offshore Renewable Energy Act Creating a regulatory framework for offshore
Introduction of the Offshore Renewable Energy Act – Creating a regulatory framework for offshore
Government wind plants
Initiatives  RENERGI Programme – Clean energy for the future
 International Cooperation – Participating towards expanding markets and in order to partake in
latest technological advancements
latest technological advancements
 Statkraft is the leading player in Norway accounting for generating 33.8% of total market
 Major Players
Multiple Energy Markets Hydro Power Wind Power
Competition Norsk Hydro
Norsk H dro E‐CO Energi
E CO Ener i Sway
S a

Agder Energi BKK NorWind

RENEWABLE ENERGY – NORWAY.PPT 2

•Market Overview
•Drivers & Challenges
•Government Bodies & Initiatives
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


The liberalized regime in the renewable energy sector in Norway
has led to a strongly growing market
Overview Installed Capacity
•In Europe, Norway is the leading producer of
MW
electricity based on renewable energy sources
40,000 +2%
•Renewable energy is the primary source of 30,313 30,789
28,327 28,793 29,268
30,000
electricity generation in Norway
•Hydro and wind energy are the predominant 20,000

renewable energy segments
renewable energy segments 10,000
•Players in solar and bio‐fuel market are 0
prevalent however they cater primarily to the 2004 2005 2006 2007 2008
export market due to the lack of domestic Electricity Generation (GWh)
demand
Thermal Power
•Private ownership is found in all areas of the Hydro Power
power sector (generation, transmission and Wind Power
GWh
trading) 137,948 137,387 142,727
150,000 121,715
121 715 0.8%
0 8%
0.7%
 ~49% of the private companies are solely engaged 110,122
0.9%
1.1%
0.5%
in trading 100,000
98.9% 98.3% 98.6%
•Expected to have access to up to 40 TWh of 50,000 99.2% 98.5%

renewable energy in 2020‐2025
0 0.2%
0 2% 0.4%
0 4% 0.6%
0 6% 0.7%
0 7% 0.6%
0 6%

2004 2005 2006 2007 2008


Hydropower is the primary source of energy in this segment and
has further potential due to the existing water system Hydro Energy

• Norway is the sixth largest hydro power producer in +1%
the world and has the world’s largest per capita hydro MW
28,691
28 691 29,043
29 043 29,474
29 474
power production
d i 30,000 27,925 28,268
28 268

• Electricity generation is the most important
commercial use of Norwegian watercourses 20,000

 There are about 4,000 river systems in Norway
• Kvilldal hydropower station in Rogaland county is
Kvilldal hydropower station in Rogaland county is 10,000
10 000

Norway’s largest, with a maximum generating
capacity of 1,240 MW 0
2004 2005 2006 2007 2008
 This corresponds to ~4% of Norway’s total hydropower
generating capacity Hydropower Potential (2009)
• Small hydropower plants include power plants with
installed capacity of up to 10 MW and can be
subdivided into the Developed
 Micro power stations (installed capacity up to 0.1 MW) Undeveloped
30%
 Mi i
Mini power stations (installed capacity up to 1 MW)
t ti (i t ll d it t 1 MW)
 Small power stations (installed capacity up to 10 MW)
• Conventional small power stations are not regulated 60% Expected annual
and are therefore only handled in accordance with hydropower potential
the Water Resources Act is 205.7 TWh


Long coastline makes this region extremely favorable for the
development of wind energy projects Wind Energy

• Hosts 18 wind farms and 200 wind turbines with an MW
installed capacity of 429 MW in 2008 500
+28% 429
• Major wind energy potential is located mostly on the 385
400
west coastal areas 325
300 267
• In 2008, the Norwegian Water Resources and Energy
Directorate (NVE) awarded licenses to another 18 200 160
projects with a combined installation of ~1,400 MW
projects with a combined installation of ~1 400 MW
100
• The government plans on developing wind power
stations with a generating capacity of 6‐9 TWh by 0
2004 2005 2006 2007 2008
2015
• A license to build and operate a wind farm is granted
A license to build and operate a wind farm is granted
Expected Production
for a period of 25 years
• Expected to develop huge sea‐based wind parks TWh
3
costing up to USD 44 bn by 2025 3.0
+83%
2.5
 Development requires large scale wind parks with installed
capacity of 5,000 to 8,000 MW 2.0 2
 The cost of installed capacity/MW is ~USD 3.3 ‐ 4.7mn 1.5
1.0 1
 The energy generated is expected to be equivalent to 8
nuclear power plants 0.5
0.0
2008 2009 2010e


•Market Overview
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


Drivers and challenges

Drivers
Conducive geographical distribution
for power generation
Challenges
High precipitation levels Power distribution leading to cost
escalations
Favorable water system
F bl t t
Conflicts with other business interests

Technological Developments

Fluctuating crude oil prices and falling
Fl t ti d il i d f lli
petroleum production


Geographical positioning of the nation coupled with high
precipitation levels are major drivers in the market
Conducive geographical distribution for power generation Impact
• High production per installed unit capacity is achieved due the favorable wind conditions
• The extended coastline provides for strong opportunity in wind power generation
• Fluctuations in power generation is minimal
 It has been estimated that on an average globally single wind farms can experience power swings from hour
to hour of up to 60% of its capacity
 Maximum hourly variation across 350 MW of aggregated wind farms in Germany is ~20%
 Greatest hourly variations in Norway is less than 10% (German ISET research)
Greatest hourly variations in Norway is less than 10% (German ISET research)
• The region experiences strong wind speeds annually making it an extremely favourable
destination for large scale wind farms which operate efficiently
 Typical sites at the coast have annual mean winds in the range of 8 to 10 m/s
 This is considerably better than the typical wind conditions prevalent in surrounding regions of Denmark or
y yp p g g
northern Germany

High Precipitation Levels Impact
• Precipitation is highest in coastal and central parts of western Norway and has attracted
Precipitation is highest in coastal and central parts of western Norway and has attracted
investors in this space
 The mean annual precipitation in large parts of western Norway is 3,000–3,500 mm
 Mean annual precipitation is lowest in the upper Otta valley (300 mm) and in inland parts of Finnmark
county (250mm)


The expansive water system is extremely conducive to hydro
power generation
Favourable water system Impact
• Norway’s fast flowing river systems provides for strong potential in hydropower generation
• The opportunity that is technically and financially available to generate electricity is currently
pegged at ~205 TWh per year
• Growth potential
 Developed mean annual generating capacity is 121.8 TWh
 Remaining potential for the development of power stations, that is not protected, stands at ~37.7 TWh per
year
year
 45.5 TWh per year of the total hydropower potential is located in protected watercourses and is not
available for development

Hydro‐Power Potential

1% Developed
5%
9% 3% Permanently Protected
1% Small power stations
p
Upgraded and new electricity production over 10 MW
22% 59% License Pending
License Granted
Under Construction


Large scale technological developments leading to cost efficient
energy production will boost the industry
Technological Developments Impact
• Major expenditure on R&D leading to technologically superior products has boosted the market
and made the process of power generation efficient and profitable
• Many players have been focusing on advancements in equipment used for generation, in order
to capture a larger market share
 Offshore wind power Technology
– Sway is creating windmills that float with strong resistance to large waves and tidal currents
– Preferred to fixed constructions as it is subject to lesser wear and tear with the water keeping it stable as a result of which
capital costs are reduced substantially
– The company plans on 5 MW prototype at an investment of USD 42.9 mn and is estimated to be operational by 2010
– StatoilHydro developed a prototype which was tested in Trondheim with Enova granting USD 9.8 mn
– Lyse wants to use floating windmills to realize a 25MW demonstration farm south‐east of the island of Utsira
– This is expected to lead to new opportunities for exploitation of offshore wind power, as the turbines could be placed even in
countries that lack shallow waters off their coasts
countries that lack shallow waters off their coasts
– Relocation of land‐based wind farms to locations miles out at sea will benefit military radar operations, fisheries, the shipping
industry, tourism, birdlife and thus wind power generation will have no impact on land use
• Modifications to existing turbines is expected to further growth in the industry
 Chapdrive partnered with the Centre for Renewable Energy and Viva AS on a USD 1.2 mn project to reduce
the weight of turbines that would be needed in large offshore wind tower structures with a third of the
the weight of turbines that would be needed in large offshore wind tower structures with a third of the
funding was provided by RENERGI
• A major advantage for wind parks in deep water is that they are hardly visible and thus receive
minimal public resistance


Variations in oil prices and falling petroleum production will allow for
major development of renewable energy
Fluctuating crude oil prices and falling petroleum production Impact
• Recent volatility in the prices of crude oil has affected levels of demand. This will act as a
major driver in the market as players are more inclined towards using power generated
through alternative inexhaustible sources of energy with marginal fluctuations in price
th h lt ti i h tibl f ith i l fl t ti i i
USD/barrel Crude Oil Prices
150

100
71.78
50

0
Aug‐07 Sep‐07 Nov‐07 Dec‐07 Jan‐08 Feb‐08 Jul‐08 Sep‐08 Nov‐08 Dec‐08 Jan‐09 Feb‐09 Mar‐09 Apr‐09 May‐09 Jun‐09 Jul‐09 Aug‐09

• Norway can harness its significant wind energy resources to deliver up to 40 TWh per year
 It will generate significant revenue from European customers to offset declining fossil fuel revenue

Petroleum Production Levels

‘000 barrels/day
‐6%
4,000
3,131 3,042 2,954
3,000 2,698 2,491 2,290 2,182
2,000
1,000
,
0
2002 2003 2004 2005 2006 2007 2008


Issues pertaining to power distribution and conflicting business
interests are acting as barriers in the market
Power distribution leading to cost escalations Impact
• Norway has one of the longest coastline which makes it a renewable energy hub, however, it
has relatively few inhabitants distributed across the country
• Major part of the population is mainly settled in south, south‐east of Norway while the
production is mainly along the western coast and northern region
• In order to reach the consumers, energy has to be transferred by overhead lines to the south
• Furthermore, large scale investments need to be made on undeveloped grids in order to access
a large consumer base
l b
• High cost of grid connections in remote areas with strong potential for wind energy deters
players from entering the market

Conflicts with other business interests Impact
p
• Development of wind power plants and associated infrastructure lead to major conflicts
• This clashes directly with business interests, such as tourism, reindeer husbandry, as well as
military radar installations and are addressed by the NVE’s license processing
• Projects along the coastline have seen strong local resistance primarily due to
 Disturbance of protected fauna
 Obstructing fisheries and recreational areas
 Leading to visual and audible pollution
• This has led to major cost escalations
 Start‐up delays affect 95% of wind power projects in Norway and the most common cause of delay is a
Start up delays affect 95% of wind power projects in Norway and the most common cause of delay is a
planning objection


•Market Overview
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


Framework of the government institutions in the energy sector

Ministry of Petroleum & Energy

Department for Economic Energy & Water Resource Climate Industry &
Oil & Gas Department
and Administrative Affairs Department Technology Department

Water Resources Hydro Power and Renewable and
Energy Policy Electricity Market
and Area Planning Energy Law Energy Efficiency

Norwegian Water Resources and
Enova SF Statnett SF
Energy Directorate

Ministry of Petroleum and Energy’s main task is to provide an integrated energy policy based on efficient use of
energy resources


Major organisations (1/2)

Bodies under the Ministry of Petroleum & Energy

Norwegian Water Resources and Energy Directorate
• Manages Norway’s watercourses
• Promotes efficient electricity trading, cost‐effective energy systems and
efficient energy use
• Plays a vital role in emergency response to flooding and dam failure
• Performs R&D activities and maintains international cooperation in its sphere

Statnett Gassanova
• Established in 1992 • Established in 2007
• Responsible for construction and operation of • It is the Government’s enterprise for carbon
the central grid capture and storage (CCS)
g
• Owns about 87% of the central grid, and g g pp
• Manage governmental interests and support
operates the entire system technology development within the area of
• Responsibilities include regulating the overall CCS
power balance at all times in order to • Promotes development of future‐oriented,
facilitate satisfactory supply quality across environment‐friendly and cost efficient gas
Norway
N power technology with CCS
t h l ith CCS


Major organisations (2/2)

Establishment of ENOVA

Purpose • Primary objective is to promote more environmentally friendly consumption and generation of energy

• Contribute to new, environmentally friendly energy generation and conservation equivalent to 12 TWh by
Target 2010, of which ~3 TWh shall be through wind power

• Since 2001, Enova has provided funding for 10 wind power plants with a total annual contractual production
of approximately 1.4 TWh
of approximately 1 4 TWh
Projects Funded
• Minimum requirements for funding include the final legal concession for the project and access to sufficient
grid capacity

Projects Sanctioned in ‘09
P j S i d i ‘09 Utility
U ili MW max
MW Subsidy (USD mn)
S b id (USD )
Hundhammerfjellet NTE 3.5 2.72
The energy ministry forwarded that these four
Hog‐Jæren Jæren Energi 80 84.65 projects is expected to add a total of 460
GWh/yr to the country's renewable output
Nygardsfjellet Nordkraft Vind 40 33.12
Fakken Troms Kraft 60 57.31

In 2009, the Norwegian government is planning on injecting USD 3.4 bn into the country's renewable
energy vehicle Enova
hi l E


Government initiatives (1/5)

Establishment of Energy21

In 2006, the Ministry of Petroleum and Energy initiated work to devise a comprehensive strategy for research
and development of technology within the energy sector
and development of technology within the energy sector

Recommendations for hydro Recommendations for wind Recommendations for
power power infrastructure and R&D

• Establishment of strong
• Reducing investment and
• Hydropower is expected to
Hydropower is expected to infrastructure for power
infrastructure for power
operational costs
continue to assume a transmission and hooking
• Environmental impact
central role in the power up to mainland grids
considerations of land‐
market of the future • Doubling of the R&D
based wind power
• Need for a more provision by the Ministry
production
liberalized, non‐regulated of Petroleum and Energy
• Research required on
power production regime in ‘09
offshore wind power
• Greater interaction with • Increase public
generation regularity,
the European power investments of NOK 400
operational costs and
market mn/yr which is expected to
mn/yr which is expected to
access
attract ~ NOK 2.4 bn



Introduction of the Offshore Renewable Energy Act

• Provide a regulatory framework for offshore wind plants in order that energy
Purpose infrastructure is planned, constructed and operated under considerations of energy
infrastructure is planned constructed and operated under considerations of energy
supply, environment, security, fisheries, sea transport and other interests

• Need for the development of infrastructure for offshore energy production
• Includes regulations on the process of applying for concessions, establishment, operation
and close‐down of offshore renewable energy production and offshore grid
• Regulations on compensation to fishermen, similar to the regulations in the petroleum
Key Aspects sector has been proposed
• Address issues related to security and working environment area fees system operation
Address issues related to security and working environment, area fees, system operation
and export and import of electrical energy
• Establishment of three renewable research centers which will identify sea areas suitable
for future development of offshore wind power

• Streamlining the application process thus making the procedure for entry efficient
• Feasibility studies will allow existing and new players to capitalize on the opportunities
Impact that will arise out of knowledge sharing
• Using the ample hydro‐electrical resources towards generating and exporting power to the
European market
E k



RENERGI Programme – Clean Energy for the Future

• Provide a regulatory framework for offshore wind plants in order that energy
Primary
infrastructure is planned, constructed and operated under considerations of energy
infrastructure is planned constructed and operated under considerations of energy
objective supply, environment, security, fisheries, sea transport and other interests

• New technologies, systems and solutions that facilitate energy restructuring by improving
the efficiency of energy production, transmission and use, making more energy available
th ffi i f d ti t i i d ki il bl
and improving system security and flexibility.
• Environment‐friendly energy systems that reduce emissions of greenhouse gases and
Secondary other air pollutants, improve land use, etc.
Objectives
• New internationally competitive goods and services related to the energy sector
New, internationally competitive goods and services related to the energy sector
• Knowledge and analysis as the basis for the authorities’ and industry’s long‐term energy
strategies, public debate and design of public policy instruments.
• Internationally competitive research communities in high‐priority fields that collaborate
extensively with international specialist environments and various types of users
extensively with international specialist environments and various types of users
USD mn Budget for the Programme
38.9
40
25.7 27.0
22.3 21.3 23.1
20

0
2004 2005 2006 2007 2008 2009



Other Initiatives

• The government is planning to achieving carbon neutrality by 2030 and is first targeting to
Carbon Neutral reduce its emissions by up to 17 mn tons by 2020
Policy •TTowards this endeavor, the government plans on increasing its investment on renewable energy
d thi d th t l i i it i t t bl
research four‐folds in 2009

• The centre party of Norway, Senterpartiet, has forwarded that the government should allocate
USD 915 mn – USD 1,220 mn per year to build up a wind power sector
Investments • Norwegian Government plans on investing USD 14mn into demonstration projects to promote
offshore wind energy, which it hopes will help cut carbon dioxide emissions by 30% by 2020
compared to 1990

• Entered the Renewable Energy and Energy Efficiency Partnership (REEEP) which an international
Entered the Renewable Energy and Energy Efficiency Partnership (REEEP) which an international
alliance of governments, NGOs and businesses that promotes renewable energy and energy
Energy efficient technology
Partnership • In 2007, Norwegian Government planned on investing USD 5mn on specific projects including
water pumps run on solar power technology and insulation of homes in poor areas towards
increasing the use of clean energy
i i th f l

• Norway is proposing to allocate up to USD3bn for green investments through a new investment
Funding out of
programme from its Government Pension Fund
Government
• This amount will be invested over a period of 5 years and will look at means of avoiding negative
This amount will be invested over a period of 5 years and will look at means of avoiding negative
Pension Fund
P i F d
economic repercussions of climate change



International Cooperation

Agreement/Association Highlights
European Economic Area
E E i A Came into effect on 1st J
•C i t ff t 1 January 2004 under which the European Free Trade Area countries will
2004 d hi h th E F T d A ti ill
(EEA) Agreement co‐operate on issues including provisions for electricity and gas markets, electricity from
renewable sources well as energy efficiency in buildings and of certain products
Competitiveness and • CIP is part of the EEA Agreement and is expected to continue between 2007–2013
Innovation Programme (CIP) • Norway contributes financially and also has the opportunity to apply for project support in the
areas of energy efficiency and renewable energy
Nordic Cooperation • Led to extensive collaboration between the system operator networks in each country
• Collaboration is sought after in the electricity market, sustainable energy, energy technologies,
and regional cooperation with neighboring areas
• Nordic regulators through NordREG and the Nordic system operators are important players in
Nordic regulators through NordREG and the Nordic system operators are important players in
the work of developing a functioning Nordic electricity market.
Baltic cooperation • Led to the Baltic Sea Region Energy Cooperation (BASREC)
• Countries in this association include Russia, Germany, Poland, Estonia, Latvia, Lithuania,
Sweden, Finland, Denmark, Iceland and Norway
European Energy Charter Created a framework for pan‐European energy cooperation with an objective to promote long‐
term co‐operation based on the principles of the market economy and non‐discrimination
Other Associations include: SAVE, ALTENER, cooperation with Russia and the Barents Area and International Energy Agency


•Market Overview
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


Legal framework for hydropower development

The Industrial Licensing Act The Watercourse Regulation Act The Water Resources Act

• In order to use a waterfall • Oversees the ability to use • Purpose is to ensure that
which is not owned by the a regulation reservoir to river systems and
State, for energy
State for energy store water in order to
t t i d t groundwater are used and
groundwater are used and
generation, a license is even out fluctuations in managed in accordance
needed water flow during the year with the interests of
• License is procured under  Ownership rights to a society
this Act if it is assumed waterfall doesn’t confer the • Main criterion for giving
that the waterfall can
h h f ll authority to use water from
h f permission for works in
i i f k i
provide an output a regulation reservoir for watercourses is that their
exceeding 4,000 natural power generation benefits outweigh the
horsepower after • Permitted water levels in a damages or inconvenience
regulation
g reservoir is stipulated in to public and private
p p
• It includes mandatory the license interests in the river or
terms relating to license • The Act includes obligatory catchments area
fees and the obligatory requirements for sale of • Some micro and mini
sale of power to the power and annual license power stations have
municipalities in which the
municipalities in which the fees to the respective
p negligible impact and do
negligible impact and do
waterfalls are situated government authorities not need a license


Administrative procedures involved in licensing hydropower
developments
Application pursuant As applic. watercourse
Developer Notification
to Watercourse license
Regulation Act /
Energy Act and Environment
Impact Assessment (EIA)
I tA t (EIA)

Processing of
application/EIA,
Approval of EIA,
Approval of EIA Consideration by
Consideration by
EIA programme
Ministry NVE Processing
Determined
Overall the Ministry/
evaluation/final Government
processing of
application

Submission to the
Other Authorities Public consultation Ministry of Public consultation Public consultation
Environment

Public consultation
Public consultation
Public consultation
General Public and as appli. Public
Public meetings
meetings
• Large scale projects that have far reaching consequences start with a notifications and is screened by the EIA under the Planning and Building Act
 An impact assessment is always required for all power stations larger than 40 GWh/year
• In order to make the application process faster, the Ministry has delegated the authority to license power stations pursuant to the Water Resources
Act to the NVE
• Power stations with an installed capacity of under 10 MW are subject to a simpler process in comparison with projects of larger magnitude


Legal framework for power lines, gas‐fired stations, wind farms,
etc.
The Energy Act

• This made Norway the first country in the world to create a liberalized market framework,
Purpose giving its electricity consumers the freedom to choose their power supplier

• The construction and operation of electrical installations
p
• Development of district heating systems
• Norms for electricity trading and foreign trade in power
Regulations via
• Controlling monopolistic operations
different
licenses • Address issues pertaining to reduction of electric power prices
• Metering, settlements and invoicing
• System coordination, rationing, electricity supply quality, energy planning and contingency
planning for power supplies

• The authority to make decisions pursuant to the Energy Act has largely been delegated to
Enforcing the Norwegian Water Resource and Energy Directorate
authorities • The Ministry of Petroleum and Energy has the authority to issue electricity export and
import permits
p p


Administrative procedures for licensing electrical installations

Application pursuant License issued
Developer to the Energy Act pursuant to the
Energy Act

Processing of
application/EIA,
Overall Processing of
Ministry NVE evaluation/final
Appeal processing
appeal by the
by NVE
processing of Ministry
application,
Decision by NVE

Other Authorities Public consultation Public consultation

As applic.
As applic. public meeting /
General Public public meeting / site inspection
site inspection

• The process encompasses applications for power lines, gas‐fired stations, wind farms, etc.
• A local area license is required for construction of lines and electricity distribution installations carrying a voltage of 22 kV or less
• Any entity that trades electricity or that may be involved in monopoly operations must hold a trading license
 Trading licenses are issued by the NVE
 A license is also required for foreign trade in electricity
 Ministry of Petroleum and Energy is responsible for issuing such licenses
 Licenses are also required for district heating plants with a total power output of more than 10MW


•Market Overview
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


Statkraft is the leading player in Europe in power generation
through renewable sources
Overview Market Share (’08)
Statkraft
•A large number of players with Statkraft
E‐CO Energi
dominating the domestic market Norsk Hydro
Norsk Hydro
27.7%
%
•Players choosing between 2 strategies 33.8% Agder Energi
BKK
 Diversified production by encompassing a wide Lyse Energi
variety of energy markets 1.2% 2.7%
2.1% Nord‐Trøndelag
2.4% 4.6% 6.6% Elektrisitetsverk
 Focussing on specific renewable energy markets
g p gy 5.4%
5 4% 7.8%
Eidsiva Energi
namely hydro, wind, solar or bio‐fuel 5.7% Hafslund
Sunnhordland Kraftlag
Others

Installed Capacity of Major Players (’08) Mean Annual Production (’08)
0 2,000 4,000 6,000 8,000 10,000 12,000 0 5 10 15 20 25 30 35 40 45
MW TWh
Statkraft 10,670 Statkraft 43.6
E‐CO Energi 2,871 E‐CO Energi 10.0
Norsk Hydro 1,828 Norsk Hydro 8.5
Agder Energi
A d E i 1,728 Agder Energi 7.4
BKK 1,655 BKK 7.0
Lyse Energi 1,558 Lyse Energi 5.9
Nord‐Trøndelag Nord‐Trøndelag
Elektrisitetsverk 800 3.5
Elektrisitetsverk
Eidsiva Energi 757 Eidsiva Energi 3.1
Hafslund 504 Hafslund 2.7
Sunnhordland Sunnhordland
Kraftlag 491 1.6
Kraftlag


Players in Multiple Energy Markets (1/6)
Company Snapshot: Statkraft
Corporate Information Financial Performance
Revenue Revenue Profit
Headquarters Oslo
USD bn Profit / Loss USD bn
Founded 1992
6 1.5
Area of Generates hydropower, wind power, gas 4.5
Expertise power and district heating 4 3.0 1.0
2.5
Key People
Key People Arvid Grundekjon (Chairman)
Arvid Grundekjon (Chairman) 2.0
2 0.5
Bard Mikkelsen (CEO)
0 0.0
2006 2007 2008 2009 (upto
Business Highlights Q2)

• Operates 149 hydropower plants and 1 gas power plant, 3 wind farms, 6 district heating plants in Norway
• Plans on developing facilities for 1.0 TWh of new hydropower capacity in Norway and 3.5 TWh outside Norway by
2015
• Opened a 2.9‐MW Rodberg hydroelectric plant in Buskerud County, Norway which is estimated to generate 15.5
Opened a 2.9 MW Rodberg hydroelectric plant in Buskerud County, Norway which is estimated to generate 15.5
GWh/year on an average
• In the period 2009‐2011, it is estimated that the company will invest ~USD 76.3 mn in a various R&D programmes,
projects and schemes. It is already associated with 5 research centers
• Plans on investing ~USD 654 mn in wind farm projects in Scotland


Company Snapshot: StatoilHydro
Corporate Information Business Highlights
Headquarters Stavanger • Major associations
 Installed a 2.3‐MW floating offshore wind turbine 12
Founded 2007 (Statoil and Hydro merged)
kilometers southeast of the Norwegian island of Karmoy.
Area of Wind, solar, tidal, wave and geothermal Partnered with Hywind who designed the turbine
Expertise energy generation  Invested in solar power company Brightsource
Financials Revenue USD 118 mn ( 08); Net Profit
Revenue – USD 118 mn (’08); Net Profit –  Part owner of Pelamis, set‐up a 2.25MW Aguqadoura
Part owner of Pelamis, set up a 2.25MW Aguqadoura
USD 7.7 mn (’08) facility for wave energy generation
 Installed a fully operational 300kW tidal prototype in
Key People Helge Lund (CEO)
Finnmark, northern Norway

Company Snapshot: Agder Energi
p y p g g
Headquarters Kristiansand • It currently hosts 31 wholly owned and 16 partly‐
owned power stations with an average annual
Founded 2000
production of 7.7 TWh
d ti f 7 7 TWh
Area of
Generation through hydro and wind energy • Entered into a joint venture with Statkraft towards
Expertise
developing new land‐based wind park projects in
Financials Revenue – USD 1.3 bn (’08); Net Profit – USD Norway
198 mn (’08)
 27 projects under planning
27 projects under planning
Key People Eivind Krokmo (President)  Capacity of 1500 MW by 2015


Company Snapshot: Norsk Hydro
Headquarters Oslo • In 2008, it produced ~11.4 TWh of renewable
hydroelectric power
Founded 1905
• Operates 17 hydroelectric facilities
Area of Primary metal, metal markets, rolled
Expertise products, extruded products, energy • Investing in solar energy in cooperation with partner
companies
Financials Revenue USD 15.9 bn ( 08); Profit USD
Revenue – USD 15 9 bn (’08); Profit – USD
575.7 mn (’08) • Invested USD 9.2 mn in Ascent Solar Technologies
Key People Terje Vareberg (Chairman) • Invested USD 24.5 mn in Norsun

Company Snapshot: Lyse
p y p y
Headquarters Stavanger • Plans on developing an offshore wind power plant in
the North Sea which is expected to generate 4.5 TW
Founded 1999
annually
ll
Area of Construction and operation of
• Production of hydro power is planned to be increased
Expertise infrastructure, production and sale of energy
and telecom products from 5.6 TWh by a further 250 GWh before 2013
• It plans on increasing capacity by ~1 TWh through
Financials N.A.
mainland‐based wind power
mainland‐based wind power
Key People Lars Anders Myhre (Chairman)


Company Snapshot: Nord‐Trondelag Elektrisitetsverk
Headquarters Steinkjer • It has an annual production capacity of 3345 GWh
Founded 1919 • Operates 24 wholly owned and 2 partly owned
hydroelectric power stations
Area of Operates wind turbines in areas exposed to
Expertise harsh weather conditions • Developed 2 wind farms in the Næroy
 Plans on developing Europe’s largest wind power park in
Financials Revenue USD 611.7mn ( 08); Profit USD
Revenue – USD 611 7mn (’08); Profit – USD Ytre Vikna
40.1mn (’08)
• Through its partnership with Bio Varme, it plans on
Key People Torbjorn R. Skjerve (Chairman)
engaging in the development of bio‐energy

Company Snapshot: Eidsiva Energi
p y p g
Headquarters Hamar • District heating
 Plans on developing district heating facility generating 200
Founded 2000
GWh of energy at a total investment of USD 57.2 mn which
GWh of energ at a total in estment of USD 57 2 mn hich
Area of Production of energy through biomass and is expected to reach completion by 2011
Expertise hydropower  Heating network in Hamar, Kongsvinger, Trysil is under
Financials N.A. expansion
• Hydropower
Key People
Key People Ola Morkved Rinnan (CEO)
Ola Morkved Rinnan (CEO)
 Generates3.2 TWh per year in 20 wholly owned and 14
partially owned production facilities


Company Snapshot: Hafslund
Headquarters Oslo • Mean annual generation totals 2,949 GWh
Founded 1898 • Provides ~1 TWh of energy for heating
• Developed a biofuel facility, BioEl Fredrikstad.
Area of Hydropower producer, largest district
Expertise heating supplier in Norway Expected total annual production is 140 GWh
Financials Revenue USD 1.9 bn ( 08); Profit USD
Revenue – USD 1 9 bn (’08); Profit – USD
111.9 mn (’08)
Key People Christian Brinch (Chairman)

Company Snapshot: Sunnhordland Kraftlag
p y p g
Headquarters Stord • Owns and operates a total of 8 power stations in
Kvinnherad, Fusa and Stord with a mean annual
Founded 1946
production makes up 1625 GWh
d ti k 1625 GWh
Area of Electricity, production, transmission and
• Working on hydropower projects in Ryfylke
Expertise wholesale
Haugalandet, Hardanger, Hardangerfjord
Financials Revenue – USD 120.4 (’07); Profit – USD
• Plans on working on major wind power projects in
45.7 mn (’07)
the western coast
the western coast
Key People Atle Neteland (Chairman)


Company Snapshot: Dong Energy
Headquarters Fredericia • Plans on building and operating an onshore wind
farm in the northern Norwegian municipality belt of
Founded 2006
Narvik
Area of  The Nygardsfjell 2 plant is expected to have a capacity of
Power generation, sales and distribution
Expertise 25.3‐33 MW
Financials Revenue – USD 12.6 bn ( 08); Profit – USD 1
Revenue – USD 12 6 bn (’08); Profit – USD 1  Expected to be developed through a JV with Norwegian
Expected to be developed through a JV with Norwegian
bn (’08) hydro‐power company Nordkraft
 Total investment required in the project is estimated at
Key People Anders Eldrup (CEO)
USD 57.7 mn of which USD 32.5 mn will be financed by
Enova
Company Snapshot: Troms Kraft
p y p
Headquarters Tromsø
• Owns and operates water power from 12 power
stations
Founded N.A.
NA
• Plans on developing a 2.5 TWh offshore wind farm
Area of with 250 turbines in the Vannoya area
Wind power generation and district heating
Expertise
 The turbines are expected to have a tower height of up to
Financials N.A. 110 m and rotors with a diameter of up to 130 m
Key People
Key People Robert Hermanse (Chairman)
Robert Hermanse (Chairman)  Cost for the project is estimated at USD 2.92 bn
p j
 The project may also come to include wave power


Players in Hydro Energy Market (1/2)
Company Snapshot: E‐CO Energi
Corporate Information Financial Performance
Headquarters Oslo Revenue Revenue Profit
USD mn Profit / Loss USD mn
Founded 2001 (Vattenfall acquired Oslo Energy,
companies previous brand) 800 250
665.7
600 479.4 200
Area of Ownership, development, operation and
Expertise management of hydropower 357.4 390.6 150
400
Key People Erik Nygaard (Chairman) 100
200 50
Odd oygarden (MD)
0 0
2005 2006 2007 2008
Business Highlights
• It has an average annual production of 9.7 TWh
• Owns and operates more than 70 power plants throughout southern Norway
 Largest production plants are in Hallingdal, Aurland, and Dark Foss‐Solbergfoss in Askim
• The company recently upgraded its Upper Vinstra Power Plant towards increasing its generation capacity
The company recently upgraded its Upper Vinstra Power Plant towards increasing its generation capacity
• Plans on developing 1000 GWh of new renewable power production by 2015
• Developing a new Stolsvatn Dam expected to be completed in 2009
• Their Lya Power Plant in Hallingdal was commissioned in early 2008


Players in Hydro Energy Market (2/2)
Company Snapshot: BKK
Headquarters Bergen • Leading power company in Western Norway
Founded 1920 • Operates 30 hydroelectric power plants
• Plans on developing a gas fired power plant at
Area of Production, wholesale, and transmission of
Expertise electrical power Mongstad towards meeting the growing energy
needs
Financials Revenue USD 737.7 mn ( 08); Profit USD
Revenue – USD 737 7 mn (’08); Profit – USD
137.1 mn (’08)
Key People Atle Neteland (CEO)


Players in Wind Energy Market (1/2)
Company Snapshot: Sway
Headquarters Radal • It is primarily focusing on developing offshore wind
technology in Norway
Founded 2001
• Plans on creating technologically advanced windmills
Area of that can float on strong waves and tidal currents
Development of wind turbines
Expertise
 It is expected the one 5MW prototype to be operational in
Financials N.A.
NA 2010
Key People Eystein Borgen (CEO)  An investment of ~USD 42.9 mn in realizing the prototype
is estimated

Company Snapshot: Scanwind
p y p
Headquarters Trondheim • Recently completed its project “Hundhammerfjell”
under 3 phases
Founded 1999
 Phase I: Erected a 3 MW turbine with a directly driven
h d b h d l d
Area of generator in Mar 2003
Developer and supplier of wind‐turbines
Expertise  Phase II: Installation of a 3 MW turbine with a standard
Financials N.A. double fed slip‐ring asynchronous generator in Oct 2004
 Phase III: Installing 13 turbines consisting of 3.5 MW
Key People
Key People Inge S. Garshol (MD)
Inge S Garshol (MD)
directly driven generators


Players in Wind Energy Market (2/2)
Company Snapshot: NorWind

Headquarters Bergen
• Focuses solely on offshore wind technology
• It has made strategic investments in companies with
Founded 2007
growing technologies
Area of Design and installation of fixed offshore
• NorWind acquired a 33.4 % ownership position in
Expertise foundations and installation of turbines
OWEC Tower (thus far, the only technology
Financials N.A.
NA installed on more than 30 meters water depth
Key People Inge K.Hansen (Chairman) • Entered into a JV with Grieg Group for the
development of technologically advanced offshore
wind turbines


•Market Overview
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


Key Developments

Date Development
Aug 2009 GE Energy acquired Swedish renewable energy group Morphic Technologies Norwegian subsidiary
Scanwind AS at USD 18.6 mn loss. This was primarily a strategic move with Morphic planning to focus on
its core fuel‐cell business.
it f l ll b i
Jun 2009 Alpiq Holding, a Swiss electric company, acquired 13.04% stake in Norwegian renewable energy plants
builder Conceptor Renewable Energy and Technology. This will allow Alpiq to expand their operations into
the Scandinavian countries and capitalize on the opportunities available.
Jun 2009
Jun 2009 Havgul Clean Energy plans on developing a wind park on the hills around Tonstad and south to Kvinesdal
Havgul Clean Energy plans on developing a wind park on the hills around Tonstad and south to Kvinesdal
in Sirdal municipality of south‐west Norway.
May 2009 Norsk Miljø Energi Sør plans on developing and operating a 31‐turbine, 102‐MW wind farm at Lista, in the
commune of Farsund. Park's output has been estimated at 280 GWh/yr.
Apr 2009
Apr 2009 Institute for Energy Technology developed a laboratory for solar energy at Kjellar. They plan on working
Institute for Energy Technology developed a laboratory for solar energy at Kjellar They plan on working
with the government as well as industrial players towards creating technologically superior solar products
allowing them to compete at the international market.
Nov 2008 Angelwind developed a state‐of‐the‐art gear box for wind turbines which will lead to a large scale
reduction in the weight of the nacelle in the wind turbine, making maintenance and repairs easier.
g , g p
Sept 2008 Norske Skog established Xynergo plans on setting up 1‐2 plants for the production of biodiesel based on
forestry waste. The first plant has been commissioned in 2015. This is expected to facilitate 15% of
Norway's total diesel output for land transportation.


•Market Overview
•Legal Framework
g
•Competition
•Key Developments
•Key Developments
•Appendix


Appendix I: Major hydropower stations

Largest Hydropower Power Stations in Norway (2008)
Power station County Max Capacity (MW) Mean Annual Production GWh/year
Kvilldal Rogaland
g 1 240 3 517
Tonstad Vest‐Agder 960 4 169
Aurland I Sogn og Fjordane 675 2 407
Saurdalm Rogaland 640 1 291
Sy‐Sima Hordaland 620 2 075
Rana Nordland 500 2 123
Lang‐Sima Hordaland 500 1 329
Tokke Telemark 430 2 221
Tyin Sogn og Fjordane 374 1 398
Hydropower stations in operation in Norway (2008)
Largest Hydropower Power Stations in Norway (2008)
MW Quantity Total output, MW Mean annual production GWh/year
0 – 0.1 201 8 41
0.1 – 1 231 110 490
1 – 10 368 1 247 5 640
10 –
10 – 100 253 9 223
9 223 41 348
41 348
100 ‐ 78 18 440 74 345


Appendix II: Major waterfalls and growth in offshore wind
power generation potential

Norway’s highest waterfalls (height calculated by virtually vertical head)
Waterfall Height (m) Phase Licensed/protected
Tyssestrengen
T t 300 Built
B ilt 1964 Tyssefaldene A/S
1964 T f ld A/S
Ringdalsfossen 300 Built 1964 Tyssefaldene A/S
Skykkjedalsfossen 300 Built 1973 Statkraft
Vettisfossen 275 Permanently protected 1923 Natural Environment Protection Act
Austerkrokfossen 256 Built 1966 Elektrokjemisk A/S
Søre Mardalsfossen 250 Built 1973 Statkraft
Storhoggfossen i Ulla 210 Built 1973 Statkraft
Vedalsfossen 200 Permanently protected
Permanently protected 1980 Protection plan II
1980 Protection plan II
Feigefossen 200 Permanently protected 1986 Protection plan III
Glutrefossen 171 Partly built 1973 Statkraft

Growth in Offshore wind power generation potential
p g p
Project Location Capacity Operational
LFloating Hywind Off Karmoy 3 2009
Havsul 1 Off MØre and RØmsdal 350 2015
Siragrunnen South of Stavanger 200 2015
Lista South of Lista 1000 2015


Appendix III: Wind power projects sanctioned by the
government
Wind Power Projects sanctioned by the government in 2008
Project Power (MW) Annual Production (GWh/year) Date of License
ANDMYRAN 160 620 Dec 2006
BESSAKERFJELLET, Sør‐Trøndelag 57 150 Nov 2004
FAKKEN, Troms 60 200 Dec 2006
BESSAKERFJELLET, Sør‐Trøndelag 90 200 Nov 2004
HUNDHAMMERFJELLET 3, Nord Sør Trøndelag
HUNDHAMMERFJELLET‐3, Nord Sør‐Trøndelag 51 160 Feb 2002
Feb 2002
HØG‐JÆREN, Rogaland 73 260 Sep 2004
KARMØY (OFFSHORE), Rogaland 3 NA Sep 2006
KVALVÅG, Hordaland 6 1 Feb 2007
KVITFJELL, Troms
KVITFJELL Troms 200 660 Feb 2002
Feb 2002
Vest‐Agder 102 280 Dec 2006
MIDTFJELLET, Hordaland 150 450 Feb 2007
NYGÅRDSFJELLET – STAGE 2, Nordland 40 120 Dec 2006
SELBJØRN Hordaland
SELBJØRN Hordaland 40 110 Feb 2007
F b 2007
SKALLHALSEN, Finnmark 65 190 Oct 2004
STOLMEN, Hordaland 6 1 Feb 2007
STORE KALSØY, Hordaland 9 1 Feb 2007
TYSVÆR, Rogaland
TYSVÆR Rogaland 39 110 Dec 2006
Dec 2006
YTRE VIKNA, Nord‐Trøndelag 249 870 Oct 2004


Market Research Report : Renewable Energy Market in Norway 2009

Market Research Report : Renewable Energy Market in Norway 2009

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