capturing the value potential in new energy 10-01-2006 • page: 2 strong drivers for new energy...
TRANSCRIPT
10-01-2006
Capturing the value potential in New Energy
Alexandra Bech GjørvHead of New Energy
Date: 10-01-2006 • Page: 2
Strong drivers for new energy solutions
0
5000
10000
15000
20000
2002 2030
Mto
e
Other renewablesHydroNuclearCoalGasOil
Energy demand will increase by 60 % by 2030
Date: 10-01-2006 • Page: 3
Replacement of oil and gas reserves is challenging
Strong drivers for new energy solutions
Date: 10-01-2006 • Page: 4
0
20
40
60
80
100
120
140
2002 2030
mbbl/d
Outside OPEC OPEC Unconventional oil
Security of supply
Strong drivers for new energy solutions
Date: 10-01-2006 • Page: 5
Increased awareness of climate change
Source: Prof. Socolow, Princeton Uni. US
Strong drivers for new energy solutions
Date: 10-01-2006 • Page: 6
Strong drivers for new energy solutions
New energy companies attract investment capital
Date: 10-01-2006 • Page: 7
Strong drivers for new energy solutions
0
50
100
150
200
250
2005 2015
EU: 70 000 employed within wind energy
1 000 employees
Date: 10-01-2006 • Page: 8
Strong drivers for new energy solutions
Authorities establishing incentivesto meet challenges
Date: 10-01-2006 • Page: 9
Predicting broad future energy mix
Date: 10-01-2006 • Page: 10
A significant growth market in new energy
Source: IEA
52 2160
60 1
930
120
600
17035
0
200
400
600
800
1000
1200
1400
Wind Solar Biopower Geothermal Wave
1
2
3
TWh/year
MBbl/day
Bio-fuel
2,5
0,5
2002 2030 for power and 2020 bio-fuels
Power in TWh/year and equivalent Mbbl/day, Bio-fuels in Mbbl/day
Date: 10-01-2006 • Page: 11
Power from fossil fuels – large uncertaintiesIncentives for renewables
20022038
0
15
30
45
60
€/MWh
Biopower
Offshore wind UK
Onshore wind Norway
Wave and tidal
In
Incentives
90
??
?Nuclear
?
Power price – Norway2007: 34 €/MWh
Power price – Germany2007: 44 €/MWh
?
30.11.05 – 133 €/MWh !!!!
Sources: NordPool, Hydro and Dale Simbeck (US consultant)
Date: 10-01-2006 • Page: 12
Industrial peers engage in several technologies
Wind
Solar
Hydro
Biopower
Geothermal
Carbon capture
Hydrogen
Biofuel
Shell BP TOTAL Statoil Hydro Vatten-fall Statkraft E-on Dong GE
Date: 10-01-2006 • Page: 13
Bio-power
Tidal
Hydro is positioned in the most mature new energy technologies
2005 Maturity of technology
Anticipated market potential - 2015
High
Low
Bio-fuel Wind onshore
Wind offshore
Wave
Geothermal
Solar crystalline
Solar thin filmHydrogen fuel
cells
Venture investment Hydro limited or not engagedHydro currently engaged
Wind nearshore
CommercialR&D
Small hydroHydrogen
Date: 10-01-2006 • Page: 14
Our talents
Hydro develops natural resources in innovative and efficient ways
A unique capability platform
Stakeholder management for access to resourcesCompetence in large scale project executionOffshore/geo experienceMetals and chemical processes and logisticsRelevant R&D and material scienceCommercial player in the relevant markets
Our values
Date: 10-01-2006 • Page: 15
Increasing our activities in new energy solutions Capabilities in place for significant growth A preferred partner through our technical, operational and commercial skills
Hydro’s New Energy ambitions
Date: 10-01-2006 • Page: 16
Our New Energy business
Date: 10-01-2006 • Page: 17
Hydrogen solutions for EuropeHydrogen fuelling systems from Hydro
Reykjavik
Hamburg
Berlin
ReykjavikReykjavik
Date: 10-01-2006 • Page: 18
Hydrogen solutions for EuropeHydrogen fuelling systems from Hydro
ReykjavikHamburg
Date: 10-01-2006 • Page: 19
Hydrogen solutions for EuropeHydrogen fuelling systems from Hydro
ReykjavikBerlin
Date: 10-01-2006 • Page: 20
Wind – hydrogen at Utsira
Date: 10-01-2006 • Page: 21
Hydro Technology Ventures
New Energy- Solar- Wind- Bio- Enabling- Distributed- Oceanic renewables
Oil and Gas- Accelerated application of
new technology
Energivekst
Date: 10-01-2006 • Page: 22
Investment in exciting energy technologiesWave power: Large resources, challenging developments
Date: 10-01-2006 • Page: 23
Our wind adventure
Date: 10-01-2006 • Page: 24
A successful early start at Havøygavlen
A significant 140 mill. NOK position in 2001Learning from tough terrain, complex winds and harsh climate Good commercial positioning gives IRR well above cost of capital
Date: 10-01-2006 • Page: 25
An attractive onshore portfolio in Norway
Excellent wind conditions
Finnmark
Fosen and Central Norway
South Western Norway
Incentive system in place 2007El-certificate system Norway/Sweden
Date: 10-01-2006 • Page: 26
Annual global wind power developmentActual 1990-2004 Forecast 2005-2009 Prediction 2010-2014
0
5 000
10 000
15 000
20 000
25 000
30 000
1990 2004 2009 2014
Source: BTM Consult ApS - March 2005 PredictionOffshore (forecast)Onshore (forecast)Existing capacity
MW
Date: 10-01-2006 • Page: 27
Why offshore wind?
Stronger, more stable winds
Shortage of good land sites
Avoiding community and environmental conflicts
Economies of scale
Date: 10-01-2006 • Page: 28
Challenging marine operations
Date: 10-01-2006 • Page: 29
Hydro’s E&P skills create value in New Energy
Expertise in marine operations Complex permitting is no obstaclePreferred partner through track record in project development, contract and risk management
Date: 10-01-2006 • Page: 30
Very attractive winds and support schemes Scira: 315 MW Offshore shallow waters Positioned for GBP 300 million investmentMany uncertainties – still an option
Acquired significant position offshore UK
Date: 10-01-2006 • Page: 31
Hywind – taking the next step
Capturing even better windsCost effective and robustMinimum offshore workSite independent, less conflicts
Date: 10-01-2006 • Page: 32
3 year R&D programHydro patented solutionsNext step is full-scale demo
Successful test of breakthrough technology
Date: 10-01-2006 • Page: 33
Commercialization
Demo
Demo park
Commercial park
Technical focus Cost focus Market focus
Date: 10-01-2006 • Page: 34
Deepwater sites near major consumption areas, with price/incentive premium
Map: NASA
A truly global potential
Date: 10-01-2006 • Page: 35
The gas in Ormen can generate 125 TWh/year for 20 years
Same as two offshore blocks of Hywind – Forever!
125 TWh Hywind
Hywind – a challenger to Ormen Lange?
Date: 10-01-2006 • Page: 36
Hywind
Date: 10-01-2006 • Page: 37
In order to utilize the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement:
This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company and certain of the plans and objectives of the Company with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. The actual results and developments may differ materially from those expressed or implied in the forward-looking statements due to any number of different factors. These factors include, but are not limited to, changes in costs and prices, changes in economic conditions, and changes in demand for the Company's products. Additional information, including information on factors which may affectHydro's business, is contained in the Company's 2004 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission.
With respect to each non-GAAP financial measure Hydro uses in connection with its financial reporting and other public communications, Hydro provides a presentation of what Hydro believes to be the most directly comparable GAAP financial measure and a reconciliation between the non-GAAP and GAAP measures. This information can be found in Hydro’s earnings press releases, quarterly reports and other written communications, all of which have been posted to Hydro’s website (www.hydro.com).
Forward-looking statements/use of non-GAAP financial measures
Date: 10-01-2006 • Page: 38