Offshore wind energy:

From Rödsand to Södra Midsjöbanken

Mark Porter, Regional Director Nordic

BALTEXPO 2011

Offshore Wind Energy – from Rödsand to Södra

Midsjöbanken

Rödsand II, 2010

Offshore is more than Onshore in water

Potential Dimensions

� 2,000 full load hours per year

� Limited space available

� Projects facing local opposition

� Wind turbines 1-3 MW

� Wind farms of 20-50 MW each

� Investment of €30-70 m per wind farm

� 4,000 full load hours per year � Wind turbines 2.3-5 MW

Onshore

� 4,000 full load hours per year

� Large space available

� Wind turbines 2.3-5 MW

� Wind farms of up to 1,000 MW each

� Investment of €1-3 bn per wind farm

Unlike onshore, project feasibility, technology, logistics and economics depend strongly on:

� Water depth and seabed conditions

� Distance to shore

� Tides, currents and waves

Offshore

Page 3

Offshore wind is key to EU´s 2020 renewables targets

Country 2020 Target Today

UK 13,000 MW 1,400 MW

DE 10,000 MW 60 MW

NL 5,000 MW 200 MW

F 5,000 MW 0 MW

Offshore wind energy plays a significant role in

the National Renewables Action Plans (NREAPs)

1 Does not include Belgium

~3,700 MW new offshore capacity per year

means the installation of

750 large 5 MW wind turbines per year

or

2 large 5 MW wind turbines every day

F 5,000 MW 0 MW

E 3,000 MW 0 MW

DK 1,300 MW 700 MW

EU total1 39,700 MW 2,400 MW

� Targeted growth from 2,400 MW installed

today to about 40,000 MW1 in 2020

� Required growth rate of average ~3,700

MW p.a.

� About €120 bn of investment required

� Tremendous budget exceeding financial

capabilities of single energy

companies/countries

Page 4

Rödsand: One of the world’s largest offshore wind farms

1 4,000kWh/household

� 207 MW

� 90 Turbines Siemens 2.3 MW

� Predicted yearly production 800 GWh

� 2% of the Danish electricity consumption

� Renewable energy to 229,000 Danish

households1

� In operation since July 2010

� Investment about 400 million Euros

� Construction 2008-2010

Page 5

Page 6

A CLEAR VISION FOR FUTURE DEVELOPMENT IN EUROPE

E.ON Offshore Road Map

Past Today Future options

Rødsand II (DK)

207 MW

Robin Rigg London Array2

e.g.

Södra Midsjöbanken

Nysted (DK)1

160 MW

Scroby Sands, 60 MW

Nordic

1 Joint Venture (JV) of E.ON (20%) and DONG (80%), sold 11/2010 2 JV of E.ON (30%), DONG (50%) and Masdar (20%), 3 JV of E.ON (26.25%), EWE (47.5%) and Vattenfall Europe (26.25%)

Alpha Ventus3

60 MW

Robin Rigg

180 MW

London Array2

630 + 370 MWUK Offshore

German far-shore

Projects

Scroby Sands, 60 MW

Blyth, 4 MW

Cuxhaven

5 MW (test)

UK

Germany

Page 7

E.ON Offshore Portfolio and focus on Baltic Sea

Page 8

Södra Midsjöbanken – European project with highly

competitive Offshore generation costs

� High wind speed and shallow waters

� Generation costs 30-40% below average

European Offshore projects

� Södra Midsjöbanken and NordBalt – first step

Excellent physical conditions

2

1

Page 9

� E.ON has worldwide track record in Offshore

generation

� Södra Midsjöbanken and NordBalt – first step

to single European market

� Competitive grid connection costs

E.ON offshore expertise

Access to interconnector

2

3

E.ON is committed to realize Södra Midsjöbanken as one of the first European

renewables projects

� Södra Midsjöbanken is a unique European cross-border

project fulfilling primary motives of future energy system:

� Low carbon

� Security of supply

Renewable energy generated in the Baltic Sea can be

transferred to all EU countries

� Security of supply

� Economical viability

� Södra Midsjöbanken enables physical transfer of Rene-

wables electricity due to connection to interconnector

NordBalt

� Södra Midsjöbanken supports the “flexible mechanism” of

the EU-Renewables directive

Södra Midsjöbanken sets the future of mutual energy systems and is a

forerunner for the European market in renewable energies

Page 10

• E.ON is developing Offshore Wind project in the

middle of the Baltic Sea – Södra Midsjöbanken

• Besides excellent physical conditions it has a

Södra Midsjöbanken – highly competitive wind Offshore

project offering green electricity to European countries

• Besides excellent physical conditions it has a

unique grid connection opportunity to NordBalt

interconnector between Sweden and Lithuania

• Lowest cost Offshore generation within Europe

for 2.5-3 TWh of renewable electricity (up to 40%

below offshore costs in Germany and UK)

E.ON is targeting the realization of Södra Midsjöbanken in an European

partnership with common interests in: securing the achievement of

Renewables targets and development of Offshore resources/expertise

Page 11

Thank you for your attention!

12

Backup

Renewables cooperation within Europe will benefit

all participating countries

Renewables capacities depend on costs, geographical and political conditions� Resources vary around � RES build-up can be

realized at lower costs

Background Cost advantages

Cooperation benefitsProduction

costs Domesctic only

RES-

Cooperation� Resources vary around

Europe, i.e. geographical conditions

� Different technologies match different conditions

� Each European country has different regulatory frameworks

Page 14

RES build-up can be

realized at lower costs

compared to stand-alone

solutions

� Optimal use of

Renewables capacities in

the internal European

market

� Balance RES position

within Europe

� More than one

cooperation partner

provides higher security

for Renewables investors

� Mutual benefits for

countries with surplus

and shortage of RES

energy

� Overall cost efficiency

of EU-energy system

RES

volume

Economic reasoning dictates:

Build RES where costs less

Cooperation

RES = Renewables energy sources

Arbitrage

E.ON is targeting to realize Södra Midsjöbanken in a long-

term partnershipTO MAKE THIS HAPPEN

E.ON will drive the process forward

'Just' bilateral agreements needed in order to reduce complexity

Willingness to cooperate and commitment are essential for

way forward

'Just' bilateral agreements needed in order to reduce complexity

Mutual interest for partners via JV-structure supporting the European

cross-border character

Long-term Power Purchase Agreements to give a stable investment

framework for a positive investment decision

Long-term country partnership including Sweden needed

Page 15

Shelf in the Baltic Sea offers highly favorable conditions for

Offshore generation in Europe

Average water depth in SMB: <20m

Average depth of Baltic Sea: >55m

300

turbines

1

8.5-9.5 m/s

Water depth

Average European

projectSMB

Wind speed 7-10 m/s 8.5-9.5 m/s

Water depth 25-45 m 15-25 m

Size400-600 MW

(DE, DK, Benelux) 700 MW

Grid connection Single line conncection Interconnector

Sea conditions

Tidal waves, salty water

(North Sea)

Low waves, low salinity

(Baltic Sea)

Page 16

Favorable conditions enable

offshore electricity generations

costs 30-40% below average

European level

<20m

Södra Midsjöbanken – European project connected to

NordBalt interconnector

2

NordBalt interconnector – part of the EU

initiative promoting internal European

market

� NordBalt will link the UPS grid (Eastern

Europe) with the NORDEL grid

(Scandinavia)

� Commissioning date: 2016

Page 17

� Commissioning date: 2016

� Over a 400 km long seacable, high voltage

300 kV

�Connection to NordBalt keeps grid costs

at competitive level

Connected to NordBalt Södra Midsjöbanken will deliver renewable electricity to whole

Europe at competitive price

Södra Midsjöbanken and connection to NordBalt –

A project with unique benefits for NORDICs and Baltics

� NordBalt will link the grid of the three Baltic

countries with the Nordpool grid

� 350 km HVDC subsea cable of up to 700 MW,

voltage level will be 300 kV

� Estimated life time: 30 years, Intention to be

2

Södra

Midsjöbanken

NordBalt

� Estimated life time: 30 years, Intention to be

completed in 2016

� Connection of neighboring wind farm possible

(permits needed)

� Offshore transformer station needed to connect

Södra Midsjöbanken

� EU has granted €175 m in investment support (Seacable with converter station

€131 m and transmission reinforcements in the Baltic grid €44 m)

� In July 2009, a Memorandum of Understanding (MoU) was signed between the

Lithuanian TSO, the Latvian TSO and the Swedish TSO concerning the

NordBalt cable

Page 18

UK

425

Nordic1.920

E.ON’S RENEWABLES CAPACITYAS OF DECEMBER 2010 (MW1)

66

225

E.ON is one of the global leading renewables players with expertise in Offshore…

� One of the world’s largest investor-owned power and gas companies

� More than 85,000 employees

3

1919

198

297

Italy

395

Iberia

Germany

North America

66

PolandFrance

1 E.ON Equity MW (COD’s and major announcements; Figures rounded), excluding large hydro

72� More than 85,000 employees

generated sales of just under €92 billion in 2010

� Clearly focused player with leading market positions in power and gas and approximately 30 million customers

� Operations in more than 30 countries

E.ON is commited to invest at least 2.6 bn EUR in R enewabes by 2013

…and reliable experienced partner to deliver new projects in the Baltic Sea

E.ON´s offshore wind energy portfolio E.ON Offshore Flagship project

3

� E.ON has worldwide an extensive and diversified portfolio of offshore assets and wind pipeline of around 4,000 MW

Södra Midsjöbanken will benefit from E.ONs global Off shore experience and Baltic Sea expertise

In operation

Under construction

In development

� 90 turbines in the Baltic Sea with total capacity of 207 MW

� Generates 800 GWh/year (supplies 229,000 homes)

� E.ON realized Rödsand II in 2010 below budget and in time