european renewables expansion
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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
2
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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Ren
ewab
le e
lect
ricity
pro
duct
ion
(TW
h)
Top 10 renewable electricity producers in Europe in 2012 * Top 10 electricity producers in Europe in 2012 *
Renewables Fossils / Nuclear
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Elec
tric
ity p
rodu
ctio
n (T
Wh)
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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-5000
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Decommissioned
MW
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
TWh
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
TWh
UK Demand Growth
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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EUR
/MW
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German power price 15may13 German power price 15may08
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/MW
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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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-48%
-72% -65%
-54%
-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
05
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
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