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Svenska KraftnätAnnual Report 2003
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Our mission is• To offer reliable, efficient and environ-
mentally-adapted transmission of elect-ricity on the national grid.
• To manage the system responsibilitycost-effectively.
• To promote an open Swedish, Nordicand European electricity market whichis exposed to competition.
• To work towards a robust and flexibleelectricity supply.
Svenska Kraftnät is a public utility whichbegan operations on 1 January 1992. Thecompany runs Sweden’s national powergrid and has system responsibility for thenational electricity supply. This responsi-bility means ensuring that the powersystem is in balance in real time and thatthe connected plants and installationswork together in a reliable way. The gridincludes a total of approximately 15,000km of 220 kV and 400 kV power lines,cross-border interconnectors and substa-tions. Svenska Kraftnät also operatescontrol systems, IT-systems and optofibres for broadband communications.
Svenska Kraftnät employs approxi-mately 270 people. Our head office is in
Vällingby, Stockholm, where the nationalcontrol centre Network Control also islocated. There are also offices in Halm-stad, Sundsvall and Sollefteå, where thereis a control centre for the northern partof the national grid. We also have a train-ing centre for linesmen at Åsbro, outsideÖrebro. Svenska Kraftnät also provideswork for a few hundred more people viasubcontracts to operate and maintain thegrid all across the country.
Svenska Kraftnät is also a groupwhich, during 2003, consisted of threesubsidiaries and seven associated compa-nies, the largest of which was the Nordicpower exchange Nord Pool.
An outline of Svenska Kraftnät
Operations during the yearEnergy entering the grid amounted to117.7 (125.2) TWh*.
The outage on 23 September causeddisruptions to deliveries amounting toapprox. 10,400 MWh.
In addition to this, there were 197(293) operational disruptions on the grid– the majority being caused by thunder-storms. Of these, 27 (23) disruptionsentailed supply outages for customers.The energy non-deliverable as a resultamounted to 17 (49) MWh.
Financial data in brief• Total operating revenue for the Group
was MSEK 3,982 (3,841).• Net income for the year was MSEK 288
(541).• The Groups’ return on adjusted equity,
after 28% tax equivalent, was 3.5 (6.6)%.• The debt-equity ratio was 0.49 (0.50).• The ratio of owners’ equity to total
assets was 56.7 (55.2)%.• Investments in the Group amounted to
MSEK 411 (MSEK 460, incl. a capitalincrease in Nord Pool). Of these, MSEK293 (235) was invested in the grid,MSEK 47 (85) in opto links, MSEK 33(1) in gas turbines, MSEK 20 (13) in theSwePol Link, and MSEK 18 (8) in in-tangible assets.
* Figures in brackets are for 2002.
2003 in brief
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2003 in brief 2
An outline of Svenska Kraftnät 2
Important operational events 4
A word from the Chairman 6
The DG: Another unusual year 7
The Svenska Kraftnät Group 8
Report of the Board of Directors 10
Income Statements 18
Balance Sheets 20
Changes in equity 22
Cashflow statement 23
Five-year financial review 24
Accounting principles 25
Notes to the Financial Statements 27
Proposed disposition of earnings 32
Audit report 32
Environmental work: Improvements in several areas 33
Major outages occurred during 2003 36
A vision for grid reinforcement in the Nordic area 38
Developments on the Nordic and European electricity markets 40
An attractive workplace – also for the parents of small children 42
The Board 44
Power industry terms and financial definitions 45
Addresses 46
Contents
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January• The reservoirs of the hydropower
plants were at a low level due to the dryweather during the autumn of 2002.The electricity demand during the win-ter season peaked at approx. 26,200MW on 9 January. The price of elect-ricity on the Nord Pool spot marketthen reached about SEK 1.00/kWh.
February• The extended substation at Sege near
Malmö was ready to go into service.Here we have installed 400 Mvar shuntcapacitors to regulate the voltage. Thisinvestment of MSEK 35 at the stationhas augmented the grid capacity insouthern Sweden.
March• Svenska Kraftnät reported on the status
of the expansion of the national opticalnetwork for broadband communica-tions, in accordance with our govern-ment assignment. The optical networkhad reached 215 (74%) of the country’s290 principal municipal centres.
• Within the program for the remainingelectrification of the country, as decidedby Parliament, Svenska Kraftnät hasallocated MSEK 6,3 to twelve remotedwellings.
• Operations during 2002 were presentedat Svenska Kraftnät’s annual Customerand Associate Day.
April• Former government minister Sven
Hulterström took office as the newChairman of Svenska Kraftnät’s Boardafter Director Per-Olof Eriksson.
• Svenska Kraftnät, together with thepower industry, the Swedish NationalEnergy Administration and SwedishTrade and Industry, investigated changesto the balance service’s rules. The objec-tive was to improve the possibility ofincreasing the number of balance pro-viders, primarily major power con-sumers.
May• The national system of renewable
electricity certificates came into forceon 1 May. Svenska Kraftnät’s brief is toissue and manage the certificates.
• A new system transformer at Grundforswas comissioned. The transformer, whichcost MSEK 26, has boosted our capacityto transmit power to Norway.
• Svenska Kraftnät allocated a furtherMSEK 7.1 to eight remote settlementsfor connection to the grid or otherpower supply. In doing so, a total ofMSEK 50 has been allocated to remain-ing electrification work since 1999.
• Svenska Kraftnät decided to increasethe grid tariff in 2004. This had remain-ed unchanged since 1998. The back-ground to the increase is rising electrici-ty prices.
• Svenska Kraftnät and Eltra embarkedupon the renewal of the Kontiskan 1DC link between Sweden and Jutland.The power converter stations at Sten-kullen, outside Gothenburg, and VesterHassing, in Jutland, are being replacedby new stations at a total cost of ap-proximately MSEK 400. The new Swe-dish station will be located closer to thecoast at Lindome. The capacity of thelink will be boosted from 270 MW to360 MW.
August• We reported on the power balance on
the Swedish electricity market duringthe past winter. At the same time, wemade a forecast regarding the powerbalance for the coming winter.
• Svenska Kraftnät procured 1,800 MWof reserve power. This is an element ofthe transitional solution that Parliamenthas adopted in order to safeguard thesupply of peak power in Sweden.
Important operational events
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“An important part of Svenska Kraftnät’s opera-tions is the settlement of flows of power over thegrid, which requires powerful computer support”,says unit manager Maria Jäderberg (on the left).Each day, large numbers of reports from thecountry’s network owners arrive at SvenskaKraftnät. Then we calculate the usage of the Gridand Balance Services and produce the correctinvoicing data. Maria is ably assisted by ChristinaEriksson and Kurt Lindgren.
September• A new control installation went into
service at the Hagby substation, northof Stockholm. This installation has costMSEK 24.
• On 23 September, a widespread poweroutage occurred in southern Sweden,south of a line between Norrköping andVarberg, and in eastern Denmark. Theoutage was due to the combined effectof a fault at Oskarshamn nuclear powerstation 3 – which was tripped – and afault in a switchyard in westernSweden, which led to two power sta-tions at Ringhals being disconnectedfrom the grid.
• Svenska Kraftnät’s mobile repair teamtook part in the international exercise“Nordic Peace 2003” in Finland.
October• The final stage of the rebuilt switchyard
at Hemsjö, in southern Sweden, wascomissioned. The refurbishment, whichcost approximately MSEK 100, has aug-mented the grid capacity in southernSweden.
November• Sunspot activity triggered some pro-
blems in Sweden’s power system. A fewlines and transformers were disconnect-ed from the grid. There were no outagesfor customers due to events on the na-tional grid.
• Svenska Kraftnät presented an analysisof the outage on 23 September. The re-port also detailed measures for furtherstrengthening of the grid reliability.Among other things, we will reviewhow the maintenance of our installa-tions is organised and bring forward aprogramme to renew critical 400 kVswitchyards.
December• During the year, Svenska Kraftnät issued
over five million renewable electricitycertificates.
“From 1 May 2003, when the renewable electrici-ty certificate system was introduced in Sweden,up until the end of the year, we have issued andregistered over five million certificates. We alsoregularly supply information about the price ofsold certificates”, says Jenny Fridström, on theleft. The working group also includes, from theleft, unit manager Magnus Stephansson, AnnikaLööw and Conrad Carlsson.
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Following several years of good financialresults, our result during 2003 was lowerthan normal. The fundamental reason isthat the dry year caused Svenska Kraftnäthigher costs and lower revenues thannormal. To this, we can add that the priceof energy in the energy part of the gridtariff has been very low. The tariff hasnow been adjusted to a level which isdeemed better able to reflect the long-range price trend for electricity.
Svenska Kraftnät continues to havethe lowest grid tariff in Europe.
The outage of 23 September, the firstone of any great magnitude for SvenskaKraftnät, has given rise to a raft of mea-sures aimed at further augmenting the ro-bustness of the grid. Among other things,the projecting of a 400 kV line fromcentral to southern Sweden has beenembarked upon.
However, it is important to stress thataugmented transmission networks alonewill not be able to safeguard the electrici-ty supply. The margins in the electricitygeneration system are small and it is myassessment that new electricity produc-tion is needed in order to achieve a satis-factory power supply in Sweden in thefuture. This applies in particular tosouthern Sweden.
This has been my first year asChairman of Svenska Kraftnät. I canhonestly say that collaboration on theBoard and between the Board and mana-gement has been good. My initial impres-sion remains; that Svenska Kraftnät is astable and competent company wellequipped for its responsible duties on theSwedish and Nordic electricity markets.
Stockholm, February 2004
Sven Hulterström
A word from the Chairman
Sven Hulterström, Chairman of the Board ofSvenska Kraftnät.
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In our last annual report, I described2002 as “an unusual year”. This was pri-marily due to the uneven supply of hydro-power in the electricity system: a lot atthe beginning of the year and little at theend. On top of this, the dry summer pro-duced lots of thunder storms. The outageswere few, however, and local.
This year was even more dramatic forour part. The scarcity of water kept elec-tricity prices very high during the springand rather high during the summer andautumn. An unusual transmission pat-tern – less from north to south – providedus with reduced grid revenues. The highprice of electricity led to increased costsfor procurement of grid losses and pri-mary regulation. Compared to a normalyear, these costs were approximatelyMSEK 250 higher and grid revenuesapproximately MSEK 150 lower. Thismeant that Svenska Kraftnät was not ableto achieve its required yield during 2003.
Increased usage fee in 2004We expect that the price of electricity willbe higher in the future than the very lowprice level which has been the case for afew years at the beginning of the new mil-lennium. We have thus adjusted the energypart of the grid tariff so that the price ofelectricity better reflects the future costlevel. The change, which has the supportof our Market Comittee, will entail anaverage increase from SEK 0.012 to SEK0.013 /kWh.
Major outageThe widespread outage on 23 Septemberwas, of course, a one-off event. At 12.30,the largest reactor at the Oskarshamnplant was stopped due to a faulty valve.Just under five minutes later, a disconnec-tor failed at our substation in Horrednear the west coast. An arc caused a short-circuit between two bus bars, entailingtwo nuclear power stations at Ringhalsbeing ”closed in”. In doing so, we werehit by the disconnection of three majorproduction plants and a severely weaken-ed grid, all within the course of a fewminutes. This was more than the systemcould bear and the voltage on the grid onthe east coast collapsed as a result. Theoutage affected southern Sweden, southof a line between Varberg and Norr-köping, as well as eastern Denmark.
Restoration of the supply went quitequickly. After an hour, there was voltageon the grid down to the southernmostparts of Sweden. Connection of the localnetworks was then able to take place at apace allowed by the production capacity.By 6 pm, all consumption throughoutSweden was reconnected. In eastern Den-
mark, there was a further delay of aboutan hour or so.
On the evening of the 23rd, we wereable to tentatively report on the causes ofthe outage. On 25 September, our initialreport was released, containing a detaileddescription of the course of events. On 4November, we published a more detailedanalysis, including a report on the mea-sures we were intending to take. At thesame time, a corresponding report wasmade by our counterpart in Zealand, El-kraft System, whom we were collaborat-ing closely with.
We are now implementing a numberof measures. Together with other Nordicgrid operators, we are reviewing Nordel’sgrid security guidelines. The preliminaryprojecting of a new 400 kV line fromcentral to southern Sweden has started.We have decided to rebuild the substationat Horred and do an overhaul of otherolder switchyards. An overhaul of discon-nectors is also under way.
The demands placed on the electricitysupply by a modern society are great –and should be so. It is my assessment thatwe have a robust electricity system inSweden, especially at national grid level.The measures we are currently taking willmake the grid even more robust.
Nordic and European electricity marketNordic electricity collaboration continuedduring the year. Among other things, aninitial draft was made of a Nordic gridinvestment plan.
Additionally, extensive work is beingcarried out to harmonize, in the long-term, the management of the capacity tocover peak demand in the Nordic area.Here, however, there are some basic dif-ferences between the countries. Parti-cularly in Sweden and Finland, there is anemphasis on the players active on theelectricity market also being responsiblefor the electricity supply being sufficient,while other countries would more seemto be reliant upon authority responsi-bility. It is my assessment that it will benecessary, in the long-term, to have clearand uniform liability conditions in theserespects in order that we can fully andcompletely have a single electricity mar-ket in the Nordic area.
The trend in Europe is based on grea-ter differences in the organisation andcomposition of the electricity systems thanis the case in the Nordic area. This is alsomaking the European Commission advo-cate stronger regulation and authoritysupervision in order to harmonize theelectricity systems and develop a singleelectricity market. This may be necessary
in some places, but here in the Nordicarea, there is nothing to be gained, in myview, from such increased bureaucrati-zation. We have, of course, been able todemonstrate that electricity markets canbe opened up and coordinated withoutmicro-management – perhaps even due tothe absence of this.
The Nordic power exchange NordPool continues to be the most successfulpower exchange in Europe. However,2003 was the first year when Nord Pooldid not enjoy any growth in volume,something which we have become accus-tomed to. Volumes on the spot marketwere approximately the same as during2002. On the financial market, volumeswere also relatively unchanged as regardsfinancial turnover, but were down sharplyin terms of the turnover of energy. Theprimary reason for this is that the highprices and the volatility of the market, atcertain times during the year, sharply in-creased demands for financial securitiesfrom the players. This had a restrainingeffect on trading volumes.
Skilful employeesNot least during the outage of 23 Sep-tember and in the following up, my em-ployees at Svenska Kraftnät showed greatqualities. Restoration of the grid wasachieved under considerable pressureworking against the clock at the NationalControl Centre. The work of analyzingthe situation put us on the right track thevery same afternoon and was subse-quently intensified. The report containingthe proposed measures was drawn upquickly and efficiently.
I would like to thank all my em-ployees for their fine efforts during 2003.Some of them appear in this annual re-port, telling us about their work.
Stockholm, February 2004
Jan Magnusson
A word from the DG:
Another unusual year
Jan Magnusson, Director General.
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SubsidiariesSwePol Link ABThe mission of the company is to operateand maintain a DC link between Swedenand Poland. The link is rated at 600 MW.
Svenska Kraftnät’s stake is 51%,Vattenfall AB owns 48% and the Polishgrid operator Polskie Sieci Elektro-Energetyczne SA owns 1%.Turnover during 2003: MSEK 280 (304)
SwePol Link Poland Sp.z.o.o. is awholly-owned subsidiary of SwePol LinkAB. This company owns the part of theDC link in Polish territory. Turnover during 2003: MSEK 82 (100).
Svenska Kraftnät Gasturbiner ABThe company, which is wholly-owned bySvenska Kraftnät, owns and operates gasturbine power plants. The company wasestablished in 1999 to enable SvenskaKraftnät to ensure, in the long-term, re-sources for stand-by emergency reservesto the power supply system. Turnover during 2003: MSEK 88 (52).
Svenska KraftKom ABThis company is wholly-owned bySvenska Kraftnät. During 2003, the ope-rations of this company have been insig-nificant. Last year, for the public utility’saccount, a certain amount of develop-ment and marketing was conducted inthe telecom sector. Turnover during 2003: MSEK 0 (2).
Associated companiesNord Pool ASANord Pool ASA is an exchange for finan-cial trading on the Nordic electricity mar-ket. The head office is in Oslo, withbranch offices in Stockholm, Helsinkiand Fredericia. Nord Pool is also activeon the European market, for instancethrough owning 17% of the Germanpower exchange EEX.
During 2003, trading on the futuresmarket amounted to 545.1 (1,018.5) TWh.The clearing operation amounted to1,218.6 (2,088.8) TWh.
Svenska Kraftnät owns 50% of NordPool ASA, the other 50% being ownedby Statnett SF. Turnover during 2003: MNOK 213 (300).
Nord Pool Spot ASThe physical trade in electricity, the spotmarket, is conducted via a separate com-pany: Nord Pool Spot AS.
The company is owned by SvenskaKraftnät, Statnett SF, Nord Pool ASA,Fingrid Oyj, Elkraft System a.m.b.a. andEltra a.m.b.a. Turnover during 2003: MNOK 36 (64).
The Svenska Kraftnät Group
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Nord Pool Consulting ASThis company sells consultancy services on deregulated electricity markets. Assign-ments are carried out using in-house staffas well as experts on loan from the owners.The company has an office in Oslo adja-cent to Nord Pool’s head office.
Svenska Kraftnät owned one third ofthe company up until 31 December 2003,when this stake was sold to Nord PoolASA. The other co-owners are Nord PoolASA and Statnett SF. Turnover during 2003: MNOK 8 (9).
Triangelbolaget D4 ABOn behalf of its co-owners, the companyadministers the opto links Stockholm-Oslo-Göteborg-Malmö-Stockholm. Reve-nues from leasing go directly to the co-owners.
The company is owned in equal sharesby Svenska Kraftnät, Vattenfall AB, For-tum Distribution AB and Sydkraft Bred-band AB. Turnover during 2003: MSEK 19 (106).
Kraftdragarna ABKraftdragarna AB’s primary mission is tosecure, on behalf of its owners, transportreadiness regarding transformers, reac-tors, and other heavy components in theelectricity supply system.
Kraftdragarna AB collaborates withStatnett Transport AS in order to furtheraugment its readiness ahead of break-down transportation.
Svenska Kraftnät owns 50%, Vatten-fall AB 25%, and Vattenfall RegionnätAB 25% of the company.Turnover during 2003: MSEK 13 (18).
STRI ABThis company conducts R&D in thepower transmission sector, mainly as com-missioned by its owners.
Svenska Kraftnät owns 25%, ABB AB50%, Statnett SF 12.5% and VattenfallAB 12.5 % of the company.Turnover during 2003: MSEK 50 (50).
Elforsk ABElforsk conducts joint operations in R&Don behalf of the Swedish power industry.
Svenska Kraftnät is primarily involvedin the parts concerning the transmissionof power and the evolution of the elect-ricity market. The most important focalpoints are environmental issues, the main-tenance and renewal of installations, andsupporting the projects of doctoral candi-dates.
Svenska Kraftnät owns 25% whiletrade organization Swedenergy owns75% of the company.Turnover during 2003: MSEK 107 (74).
The Nordic power exchange Nord Pool is theworld’s most successful power exchange. InMarch 2004, the power exchange opened a trad-ing centre for Swedish renewable electricity cer-tificates, which will benefit renewable energy.
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The reported figures are for 2003, withcomparative figures for 2002 in brackets.
Organization and operationsDuring 2003, the Svenska Kraftnät Groupconsisted of three subsidiaries and sevenassociated companies in Sweden and Nor-way. On 31 December, associated compa-ny Nord Pool Consulting AS was disposedof to another associated company, NordPool ASA.
Svenska Kraftnät’s main mission is tomanage and run Sweden’s national gridand overseas interconnectors. SvenskaKraftnät is also the system-responsibleauthority under the Electricity Act, whichentails being responsible for the momen-tary electricity balance on a short termbasis and the overall reliability of Swe-den’s power system. Additionally, SvenskaKraftnät is also the power contingencyauthority under the Power ContingencyAct, and is thus responsible for the energysupply sub-function of the civil sector ofSweden’s total defence.
Svenska Kraftnät’s business operation The objectives that the government hasset out in its appropriation document for2003, in respect of Svenska Kraftnät’sbusiness operations, are described below.
Financial targets Svenska Kraftnät must achieve an aver-age return on adjusted equity1), afterdeductions for tax equivalent, of 6%. In2003, the calculation of adjusted equitywas changed so that restricted reservesare now included at 100% instead of72%, as previously. This was mainlycompensated for by lowering the yieldrequirement from 7% to 6%. In reality,the change entails an increase in the yieldrequirement of 0.2 percentage points.Costs for remaining electricity work ofapproximately MSEK 10 per annum andpower supplements of approximatelyMSEK 15, which Svenska Kraftnät pro-cured on the instructions of the govern-ment, are to be met using profits.
Our return on adjusted equity was 3.5(6.6)% , entailing that we fell short of ourtarget of 6%. The reason for the low earn-ing capacity was the extraordinary hydro-logical situation which provided SvenskaKraftnät with lower revenues and highercosts than usual. When costs for powersupplements and remaining electrifi-cation work are deducted, the return is3.7%.
The debt-equity ratio2) was 0.49 (0.50),which falls short of the target of at least0.55.
The distribution of profits policy isthat 65% of the income for the year willbe distributed to the Swedish govern-ment.
ReliabilityOn 23 September, a major outage occur-red which left southern Sweden withoutpower for between one and five hours.The loss of supply is estimated at 10,400MWh.
Beside this event the number of tech-nical incidents on the grid was 197, ofwhich 26 entailed loss of supply for cus-tomers. The non-delivered energy amount-ed to 17 (49) MWh. The number of dis-ruptions was primarily due to widespreadthunderstorms during the summer. Belowleft, the number of service disruptionsdue to faults on the national grid during afive-year period is shown.
Cost-effectivenessOur cost-effectiveness must be on a parwith comparable companies. Our effective-ness is measured against other correspond-ing companies using comparative studies.These studies have shown that SvenskaKraftnät is one of the most cost-effectivegrid operators in the world. This enablesSvenska Kraftnät to maintain low gridtariffs, as indicated in the diagram onpage 14.
R&DSvenska Kraftnät’s R&D work is prima-rily carried out via assignments given tothe jointly-owned development companiesSTRI AB and Elforsk AB. Additionally,Svenska Kraftnät supports PhD candidateprojects and degree work at universitiesof technology.
The weather has a major impact onthe grid as regards transmission losses,grid reliability and utilization. The deve-lopment operation within this field isconducted at STRI AB together with gridoperators Statnett (Norway) and Fingrid(Finland). With the help of local weatherforecasts, the objective is to:
Report of the Board of Directors
2003 2002 2001 2000 1999
Disruptions due to fault on the national grid, no. 198 293 211 194 228
As above but with outages, no. 27 23 14 5 10
Non-deliverable energy, MWh/annum 10,417 49 23 91 96
1) By adjusted equity is meant the average of the restricted equity at the start of the year and at year-endplus 72% of the unrestricted equity.
2) The debt-equity ratio is defined as interest-bearing liabilities minus interest-bearing assets divided bythe adjusted equity at year-end including minority shares.
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• Increase the utilization of lines and sta-tion equipment.
• Reduce line losses caused by corona aris-ing from hoar-frost via voltage control.
• Predict and reduce the risk of servicedisruptions during severe weather con-ditions.
Together with other system operators inthe Nordic area, Svenska Kraftnät is in-volved in the development of optimizingthe operation of the Nordic power sy-stem through a project at the SINTEFresearch institute in Norway.
Svenska Kraftnät and the Swedish Na-tional Energy Administration are takingpart in a large-scale EU project whichwill run for five years. The project willanalyze how power systems change whenrenewable production is introduced on alarge-scale in the future European powersystem. STRI AB and Lund Institute ofTechnology are doing the work forSweden.
R&D is also being supported in thedam safety area. During the year, MSEK3 has been spent on twenty or so projects.All of these have been co-financed withthe Swedish power industry and, in somecases, with other interested parties viaElforsk AB. Among other things, the sta-bility and damage of dams has been studi-ed using full-scale tests in collaborationwith interested parties in Norway andCanada. In another project, which hasriver Ljusnan as a pilot case, dam owners,municipalities and county administra-tions are working to produce a prototypefor joint contingency management fordam breaches and high flows. The project,which will run for two years, is estimatedto be completed in 2004.
During 2003, Svenska Kraftnät spentMSEK 15 (20) on R&D.
Nordic and European collaborationThe Nordic System Operators’ coordinat-ing body, Nordel, has conducted a num-ber of projects during the year aimed atfurther developing the Nordic market. Asregards network expansions in the Nor-dic area, work is now focusing on closelyanalysing some of the projects reportedupon in the 2002 system developmentplan. The final report will be submittedin the summer of 2004.
The issue of how the supply of powerduring peak-demand can be maintainedon an open electricity market is relevantin all the Nordic countries. The solutionschosen thus far, however, differ funda-mentally between the countries. Togetherwith the Nordic Council of Ministers,Nordel has embarked upon developmentwork aimed at producing, on a Nordicbasis, proposals for long-term mechanismsand solutions which can, on a commer-cial basis, safeguard the balance betweensupply and demand during critical situa-tions. The results of this work will be
reported upon in the spring of 2004. Theproject has several parts:
• Price elasticity in the demand for elec-tricity when prices are high.
• Harmonization of legislation and rules.• Financial products for hedging during
power shortages.
Balance regulation has been coordinatedthroughout the Nordic area to the pointwhere it is now common to all countries.This means that regulation is done in thepart of the Nordic system where the costis at its lowest.
During the year, Nordel has publisheda report regarding the prerequisites foradditionally harmonizing the rules ofbalance settlement. In Norway, one-pricesettlement is used while other countriesuse two-price settlement. The latter en-tails that balance companies with animbalance “in the wrong direction” inrelation to the entire system will becharged more. The reason is to create theincentive for companies to maintain theirbalance – thus contributing to a state ofbalance being achieved throughout thesystem.
Another difference concerns how thecost data is defined for the balance ser-vice. In Sweden and Finland, part of theemergency reserve is financed via the ba-lance service. In Sweden, the costs of thepower reserve that Svenska Kraftnät hasto maintain during a transitional periodin the balance service are also included.In Norway and Denmark, the corre-sponding measures are financed via thegrid tariff.
The circulation for comment of Nord-el’s report shows that the players on theNordic market do not seem to considerthe differences between the countries’balance settlement rules so troublesomethat Nordic harmonization needs to be ashort-term requirement. Instead, theimportance of harmonization withinother areas, e.g. bottleneck managementand the management of the power balan-ce, was stressed. Nordel has thus decided,until further notice, not to pursue thisissue.
For a couple of years now, work hasbeen ongoing within Nordel to draw upcommon rules for managing bottlenecksin the network. The objective is to laydown common rules of play for manag-ing capacity at the borders and to takemeasures which reduce the risk of divid-ing the market up into price sectors. Thiscan take place using new methods of effi-ciently utilizing existing transmissioncapacity and via increased counter-trad-ing between countries. A report is expect-ed during the spring of 2004.
For several years, Nordel has beenworking with the development of a sy-stem to achieve financial settlement be-tween the grid operators regarding the
costs arising from transit power, i.e. utiliz-ing someone else’s network. During 2003and 2002, the Nordic grid operators com-pensated each other for their variable ex-penses, i.e. costs for transmission lossescaused by transit power. The outcome for2003 was a net income of MSEK 23 forSvenska Kraftnät.
In 2004, the Nordic grid operatorswill take part in the system of transit com-pensation devised by the European gridoperators’ coordinating body, ETSO. Indoing so, there will no longer be a needfor internal Nordic transit compensation.ETSO’s system includes compensation forfixed as well as variable costs arisingfrom transit power.
June 2003 saw the adoption of theEuropean Parliament’s and the EuropeanCommission’s proposal for changes tothe electricity market directive and a pro-posed regulation regarding the terms andconditions governing access to the net-works for cross-border power trading.The changes to the directive entail,among other things, increased marketpenetration, requirements for a distinctionfor system operators regarding transmis-sion and distribution, requirements forseparate accounting, rules for networkaccess, and the establishment of an inde-pendent supervisory authority which ap-proves in advance the tariffs or methodsof tariff setting, as well as certain issuesconcerning the system responsibility. Theregulation governing cross-border trad-ing includes, among other things, stipula-tions about financial compensation fortransit flows, harmonisation of nationalnetwork tariffs and bottleneck manage-ment.
In December 2003, the Electricity andGas market – European Harmonization(SOU 2003:113) report was unveiled, con-taining proposals for legislation changesas a consequence of the new electricityand gas market directives. The changesare proposed to come into force on 1 July2004.
The European Commission presented,in December 2003, its proposed measuresfor augmenting the security of supply ofthe electricity market.
Svenska Kraftnät’s contingency planning Here is a description of the measures im-plemented as a part of Svenska Kraftnät’scontingency planning during 2003.
Contingency organisationThe new contingency organisation,which Svenska Kraftnät is developing incollaboration with electric supply indus-try organisation Swedenergy, is based onthe cooperative organisation for manage-ment of repair work-forces during out-ages, established by the industry. Duringthe distribution outages managed duringthe year, parts of the joint-action organi-
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sation were involved, with good results.During the year, a new mobile radio com-munication system, Mobielex, was deve-loped with Mobitex as the national carri-er. The system is being tested during thewinter of 2003–2004 in collaborationwith Vattenfall AB. The intention is thatthe system will, in due course, be able towork as a joint mobile radio system forthe electricity industry.
Crisis management trainingDuring the year, approximately 500 powercompany employees have been trained inoperative action, which Svenska Kraftnätis conducting in collaboration with Swe-denergy. This training has been going onfor four years and has shown positiveresults.
Technical contingency measuresThe work of creating secure stand-bycontrol locations, which began in 2002,continued in 2003 when four operatingcentres were supplied with stand-byequipment. The gas turbines at Hallsta-vik, which subsidiary Svenska KraftnätGasturbiner AB acquired in 2002, havebeen enhanced.
Repair resources and international aidSvenska Kraftnät has taken part in theexercise Nordic Peace 2003 in Finland,with a mobile repair crew. Our partici-pation came under the framework ofSweden’s Partnership for Peace collabo-ration.
Equipment for two repair crews existsat Svenska Kraftnät’s training and storagefacility at Åsbro.
At Åsbro, there is also equipment forrapid repair work in the event of linedamage on the grid and regional net-works.
Training of persons on civil duty and employed fittersDuring 2003, Svenska Kraftnät providedbasic training for 85 persons on civil dutyat Åsbro for repairs of power lines andswitchyards, as well as 41 power stationoperators at the Vattenfall TrainingCentre at Jokkmokk. Refresher traininghas taken place of 109 persons on civilduty. Evaluations carried out by the CivilDuty Council and the respective trainingschool have been positive.
August saw the start of an enquiry“Resources for repairs” which will sub-mit proposals regarding, among otherthings, the level of ambition and thefocus of civil duty training. The enquiryis to be completed by December 2004.
During the year, Svenska Kraftnät hasconducted, for the fifth time since 1998,supplementary training for employed fit-ters. The purpose of this training is toprovide fitters, who normally work onlower voltage lines, with knowledge of
repairs on the grid and regional net-works.
External and internal,risk and vulnerability analysesAccording to the new contingency ordi-nance, Svenska Kraftnät has to conductrisk and vulnerability analyses and annu-ally report the results of these to thegovernment. During 2003, methods re-garding how analyses can be conductedin collaboration with the electricity in-dustry and collaborating authorities havebeen studied. An initial combined reportis estimated to take place in 2005.
Dam safetyDuring 2003, the focal point of dam safetywork has been supervision, contingencyorganisation and the provision of expertise.To facilitate the county administrations’supervision of dam safety, a manual hasbeen produced. A special project has beenconducted in order to find out how our pre-paredness should be developed as regardsdam breaches and high flows. During theyear, a requirement study regarding collegeeducation and research has been conductedin collaboration with Elforsk AB.
Remaining electrification workSubsidies for remaining electrificationwork have, since 1999, been provided onthe instructions of the government. Deci-sions were made on two occasions during2003 as regards subsidies totalling MSEK13 for electrifying 20 remote dwellings.In doing so, the available funds for 2003were utilized, including residual fundsfrom the previous year. Costs arise andare reported in step with the work beingcarried out.
Risk assessmentFor Svenska Kraftnät, commercial risksare deemed limited.
The transmission activity is both long-term and stable. Svenska Kraftnät’s cus-tomer base mainly consists of well-estab-lished and stable companies with goodequity/assets ratios. Svenska Kraftnät, byvirtue of its international operation, ispartially exposed to financial risks, pri-marily currency risks in conjunction withthe translation of foreign net assets andresults. Interest rate risks in connectionwith liquidity and liability managementare small, since Svenska Kraftnät’s equity/assets ratio is high and its volume of bor-rowing low.
During 2003, Svenska Kraftnät pro-cured electricity to cover transmissionlosses at a fixed price, in accordance withmulti-year agreements.
Utilization of the grid is affected bythe hydrological situation, by productionlevels at thermal power stations, and byexports/imports. During extensive hydro-power production, and the resulting high
transmission from northern to southernand central Sweden, Svenska Kraftnät’srevenues rise. Conversely, grid revenuesfall when the supply of hydropower isscarce and the import volume from the south is great. These fluctuations inthe result can, as a consequence of this,amount to several hundred million SEK.Thus, an assessment of Svenska Kraft-nät’s result has to apply to average con-ditions over a period of several years.
Svenska Kraftnät has the systemresponsibility for Sweden’s electricitysystem, as well as the responsibility forbalance settlement vis-à-vis the balanceproviders. To reduce the credit risk posedby national balance settlement, SvenskaKraftnät demands financial security fromthe balance providers. Guarantee require-ments have been tightened during 2003as a consequence of rising electricityprices.
The optical fibre activity has beenconducted in accordance with the objec-tive given to us by the government. In theautumn of 2001, Svenska Kraftnät in-formed the government that expansion tosome municipalities could not be carriedout on a commercial basis. The expan-sion of Svenska Kraftnät’s optical fibrenetwork has been going on at a reducedpace for the last year and has primarilyfocused on the needs of the grid.
The potential risk of disruptions caus-ing serious consequences for customerson the grid is still deemed slight. The gridis robustly built and has good opportuni-ties for reserve feeds, entailing that if oneline becomes disconnected, power cantake other routes to the customer. The riskof a major outage cannot, however, beentirely ruled out, which became clear on23 September.
The risk of power shortages in Swe-den’s electricity system diminished whenSvenska Kraftnät procured, as a transi-tional measure, a power reserve underthe limited-duration act governing powerreserves.
Our dependence on the outside worldis increasing through the electricity mar-kets becoming internationalised. Sweden’selectricity market is becoming increas-ingly dependent on the availability ofboth hydropower and thermal power inother countries. International transmissioncapacity requirements are also increas-ing. Additionally, methods for achievingthe payment of transit power have begunto be developed and applied. The interna-tionalisation of the electricity markets isincreasing the level of complexity forSvenska Kraftnät, as well as the demandsplaced on it. At the same time, an enlarg-ed electricity market will lead to the im-proved utilization of resources.
The model for transit compensationbeing applied within ETSO, which Sven-ska Kraftnät joined in january 2004, willaffect the financial result. In the event of
13
large flows through Sweden, SvenskaKraftnät will earn revenues. However, atthe same time, this will be giving rise toflows through Denmark and adjacentcountries, and thus incurring costs forSvenska Kraftnät. Using the model thatETSO currently applies, a net cost willnormally arise for grid companies likeSvenska Kraftnät with low grid fees. Thismeans increased costs for SvenskaKraftnät during 2004.
Group summary for 2003Turnover in the Svenska Kraftnät Grouprose by MSEK 141, or 3.7%, from MSEK3,841 to MSEK 3,982.
The Group’s network revenue fell byMSEK 115, amounting to MSEK 2,215.System revenue rose by MSEK 264 toMSEK 1,416 while revenue from the telecom operation fell by MSEK 6 toMSEK 64.
Operating expenses for the Groupamounted to MSEK 3,593 (3,224). Thisincrease is primarily due to increasedcosts regarding the purchasing of power,balance power and system operation ser-vices.
Payroll expenses amounted to MSEK178 (172).
Other operating expenses for theGroup rose by MSEK 348 comparedwith 2002. Costs for energy losses duringtransmission via the grid rose by MSEK108, due to a higher electricity priceduring the year. Balance power costs, i.e.purchased balance power, rose by MSEK213, which is also due to the higher priceof electricity. Costs for system operationservices rose by MSEK 78 due to thehigher price of hydropower for primaryregulation.
Group depreciation for the year on in-tangible and tangible fixed assets rose byMSEK 15 to MSEK 527.
Share of income in associated compa-nies amounted to MSEK 19, which isMSEK 21 down on 2002. Nord PoolASA is responsible for the greater part ofthis result. Depreciation of goodwill isincluded at just over MSEK 3 (3).
The operating income for the Group isMSEK 408, which is down by MSEK 249on 2002.
Net financing for the Group amountedto MSEK –118, MSEK 9 down on lastyear. This is primarily due to the disposalof shares in associated companies EL-EXSähköpörssi Oy and Nord Pool Spot ASduring 2002, which yielded a capital gainof MSEK 21 and was included in thefinancial revenues. Group financial reve-nues amounted to MSEK 13 (20) for2003. The fall was due to lower interestrate levels. Financial expenses amountedto MSEK 125 (148), as a consequence ofthe lower cost of financing loans in SwePolLink AB than during 2002.
The net income for the year, MSEK
288 (541), entails an earning capacity of3.5 (6.6)% on adjusted equity. The debt-equity ratio was 0.49 (0.50), which fallsshort of the goal of at least 0.55.
Reporting by business segmentThe results of the business operation con-cerning transmissions via the grid, thesystem responsibility, the telecom ope-ration, the power contingency operationand renewable electricity certificates areaccounted for and commented uponhere.
From 2002, Svenska Kraftnät’s incomestatement is divided up into system re-sponsibility and network. It is not, how-ever, self-evident how this division of costsinto a network section and a system sec-tion should be carried out. The account isrendered after an assessment of how thecosts should appropriately be distributedbetween each respective business sector.In some cases, an activity has not beenentirely attributable to one single busi-ness sector. In such cases, the cost hasbeen distributed as a standard item.
Network encompasses operations andexpenses relating to:
• the grid • cross-border interconnectors with the
other Nordic countries • network operation incl. control centres • part of the disruption reserve • counter-trading• electricity procurement to cover network
losses.
System responsibility includes operationsand expenses relating to:
• primary and secondary regulation • part of the disruption reserve • balance power settlement • balance power • Ediel, the electronic “postal service”.
As a special part of the system respon-sibility, measures for safeguarding thesupply of power to the electricity systemare included for a limited period (procuredpeak-power reserve).
NetworkThe grid tariff consists of a capacity partand a usage part. The capacity fee isbased on power annually subscribed toby the customer for entry and exit powerat each connection point. The fee variesgeographically across the country in away which will reflect the average costsfor the grid. For 2003, the fee for entrypower was SEK 5.00/kW in the southand SEK 25.00/kW in the north. For exitpower, the relationship was, in principle,the reverse. The exit power fee was SEK47.00/kW in the south and SEK 11.00/kWin the north.
Grid fees account for the bulk of trans-mission revenues. Other revenue items
are constraint and transit revenues. Con-straint revenues arise when the Nordicmarket has been divided up into separateprice sectors. Transit revenues are madeup of compensation for loss expensescaused by power flows generated exter-nally and travelling via the Swedish grid.A previously large revenue item, the onefor utilizing the cross-border interconnec-tors, has disappeared following the remo-val of the last cross-border tariff towardsDenmark.
Revenue from transmissionDuring the year, transmissions on thegrid amounted to 115.2 (122.5) TWh.Network fees brought in MSEK 1,622(1,741). Of these, the capacity fee ac-counted for 69 (62) % and the usage feefor 31 (38) %. The reason for the relation-ship changing is transmission levels dur-ing 2003 being less than those of 2002.
The table below shows transmissionrevenue.
Transmission revenue, MSEK
2003 2002
GridCapacity fees 1,113 1,083Usage fees 509 658
Total 1,622 1,741Overseas interconnectors 0 20Constraint revenue 163 183Transit revenue (gross) 74 35Misc. transmission revenue 43 39
Total 1,902 2,018
No. of customers connected to grid 30 29
Transmission via the grid and energy lossesEntry and exit accounts are up on 2002.The transmitted energy, on the otherhand, has fallen. This is due to a reducedsupply of hydropower in northern Swe-den.
Power transmission 2003 2002
Subscribed power, grid
Entry accounts. MW 20,864 20,003
Exit accounts. MW 21,330 21,096
Entry energy, grid, TWh 117.7 125.2
Exit energy, grid, TWh 115.2 122.5
Max exit power, grid, GWh/h 19.5 19.5
As a consequence of the reduced level oftransmission, transmission losses on thegrid have fallen slightly, as shown in thetable below.
Grid 2003 2002
Energy losses, TWh 2.5 2.7
Percentage of exit energy, % 2.1 2.2
Max power losses MWh/h(hour of max. energy loss) 731 678
14
Transmission feesA compehensive goal for Svenska Kraft-nät is to have the lowest possible costswhile retaining the same level of reliabili-ty, thus passing on low fees to our custo-mers.
During 2003, ETSO, the Europeangrid operators’ organisation, made an-other comparison of the grid tariffs of themember countries for representative trans-missions. As can be seen in the diagrambelow, the Swedish fee is low.
The operating result for the Networkbusiness division amounted to MSEK 486(770).
System responsibility The System Responsibility business divi-sion includes the balance service, Edieland, transitionally, the power reserve.
The focal point of the system respon-sibility consists of managing the nationalbalance between the production and con-sumption of electricity. This is achievedvia Svenska Kraftnät’s Balance Servicewhich is staffed around the clock. During2003, Svenska Kraftnät had agreementswith 33 Swedish companies regardingbalance. These companies are responsiblefor the balance 24 hours a day. They haveto plan toward achieving a state of balancebetween entry power (production andtrading) and exit power (consumption).
Subsequently, Svenska Kraftnät car-ries out balance settlement, i.e. financialsettlement of the imbalances. The diffe-rence between purchased and sold balancepower, i.e. the net revenue from thebalance service, amounted to MSEK 105(73).
To the System Responsibility businessdivision are ascribed the costs for reser-ves, which automatically regulate pro-duction to maintain the correct frequencyon the network (primary regulation).
The agreement governing balanceresponsibility was revised during 2003.The fee system has been modified, withthe aim of reducing the balance service’sprevious under-financing and to imple-
ment the limited-duration act which wasintroduced on 1 July 2003. According tothis act, Svenska Kraftnät is responsiblefor a peak-power reserve being availableconsisting of a maximum of 2,000 MW.In the new fee structure, which came intoforce in November 2003, a supplemen-tary fee for financing the peak-powerreserve, among other things, has beenintroduced.
The power reserve has generated reve-nues, primarily during January 2003, as aconsequence of plants being operated forthe owners’ use. The revenues will accrueto the balance responsible companies inaccordance with the transitional solutionagreed with the industry, which was inforce between January 2001 and March2003. The net income for the peak-powerreserve amounted to MSEK 49 (4). Overtime, this operation will be neutral forSvenska Kraftnät, with regard to results.
Svenska Kraftnät has 33 balance pro-viders. During the year, there was an en-quiry, together with representatives of theplayers, into whether or not the rules ofthe balance agreement could be modifiedin order to promote competition on theelectricity market. As a consequence, theterms and conditions of the consumptionbalance were changed to make it lessfinancially palpable for players to havesmall imbalances. This was achievedthrough the introduction of a deviationmargin.
The players on the electricity markethave agreements with Svenska Kraftnätregarding Ediel communication. Net re-venues for Ediel amounted to MSEK –3(–8). In order that the players themselvesmay be able to test different scenarios ofEdiel messages, Svenska Kraftnät has in-troduced a web-based system, the EdielPortal. This tests whether or not acceptedstandards are being met. The prerequi-sites for exchanging information betweenthe players, e.g. for changing supplier,will thus be improved. The Ediel Portalwill go into service during the first quarterof 2004.
The operating result for the SystemResponsibility business division wasMSEK –124 (–179).
Operations exposed to competitionThe companies exposed to competitionin the Group are; Nord Pool ASA, NordPool Spot AS, Nord Pool Consulting ASand Kraftdragarna AB. These are associ-ated companies and their accounts usethe percentage of capital method. Sharesof earnings during 2003 amounted toMSEK 19, compared with MSEK 40 for2002. The Nord Pool companies accountfor almost the entire share of earnings.The reduction is primarily due to lowervolumes on Nord Pool’s financial market.This in turn is due to the high guaranteecosts resulting from high prices and greatvolatility during 2003.
Telecom and optical fibre operationThe telecom network’s ongoing techno-logy-upgrade means that links are beingmoved from the older carrier frequencyand radio link networks to the opto-based SDH network, which has nowreached one hundred or so of a total of135 power and transformer stations onthe power grid. This means that, even to-day, the bulk of Svenska Kraftnät’s ope-rational telecom traffic goes via the optonetwork.
The most recent major expansions ofthe optical network have been implement-ed in central and upper Norrland. A newlink has been built by Svenska Kraftnätfrom the Östersund area up to Porjus bythe Luleälven river. By means of an agree-ment with another telecom operator, alink has also been established from Por-jus down to Sundsvall via Luleå. In thisway, a loop has been set up. A number ofgrid stations will be connected to them.
The public telecom network in theinterior of Norrland has been expandedrelatively little on the national level. TheNational Post and Telecom Agency hasthus contributed to the financing of afurther connection through upper Norr-land from the Luleälven river to the Ånger-manälven river.
Through collaboration with the muni-cipalities of Västerbotten, Svenska Kraft-nät has gained access to regional optofibres, providing opportunities to connectthe loop together through upper Norr-land in the middle. In this way, more sta-tions can be connected to the opto net-work. Additionally, the optical network’soperational reliability will be improvedby means of the loops becoming smaller.
The commercial optical operation’srevenue amounted to MSEK 50 (51). Theoperating income was MSEK 23, downby MSEK 6 on last year. This is primarilydue to depreciation for the year rising byMSEK 4 as a consequence of additionalinvestments during recent years. Invest-ments for the year amounted to MSEK47 (85).
With interest calculated for costingpurposes at 7% of employed capital, thenet income for the year is MSEK –3 (3).Interest calculated for costing purposes isbased on the business division’s assessedoverall risk.
Over and above revenue from externalcustomers on the optical network, Sven-ska Kraftnät, within the Telecom busi-ness division, had revenue of MSEK 14(19) for the data network, the telephonenetwork and the leasing of antenna sites.
Telecom’s overall operating revenueare MSEK 96 (94). These include MSEK32 (24) for intra-Group services for theNetwork business division. The operatingincome was MSEK 27 (26).
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A comparison of the grid tariffs (typical cases)of a number of European countries during2003. This has been complied by the Europeangrid operators’ organisation ETSO (EuropeanTransmission System Operators).
15
Contingency planningThe contingency planning, consisting ofpower contingency and dam safety, isfinanced via subsidies. The activity is thusneutral with regard to Svenska Kraftnät’sresults. The available funds for the yearof MSEK 267 have largely been utilized.
Svenska Kraftnät’s expenses for its owncontingency measures at grid installa-tions are financed using its own funds.
Government grantThe table at the bottom of the pageshows the allocated and utilized sums persubsidy-item (kSEK).
The brought forward frame relates tounutilized funds from the previous bud-get year.
Over and above this, subsidy financedcontributions have been received from theemergency preparedness authority at asum of kSEK 16,766.
The dividend paid in is reportedagainst a revenue heading, linked to thenational budget, in accordance with thetable below (kSEK).
Revenue heading, kSEKSum to deliver Delivered sum
2116 Parent entity’s delivered dividend 356,000 356,000
Renewable electricity certificatesOn 1 May 2003, a system of renewableelectricity certificates was introduced inorder to promote renewable electricityproduction in Sweden. The law providesproducers of renewable electricity withthe opportunity to obtain, from the go-vernment, a certificate for each MWh ofelectricity produced. The certificates canbe sold to electricity suppliers/consumers.These are obligated to purchase renewab-le electricity certificates equivalent to acertain part of their sales/consumption.
Svenska Kraftnät is responsible forissuing and managing the renewableelectricity certificates. Other supervisorytasks are the responsibility of the SwedishNational Energy Administration.
Svenska Kraftnät has issued just over5 million certificates for 2003. Since thesystem was introduced, approx. 4.6 mil-lion renewable electricity certificates havebeen turned over at an average price ofapproximately SEK 200/certificate (onecertificate = 1 MWh). Biofuel fired elec-
tricity production accounts for just under75% of the issued certificates, hydro-power for just over 17% and wind powerfor approx. 8%.
Svenska Kraftnät’s revenues from thissegment are MSEK 2 and the operatingincome is MSEK 0.
InvestmentsThe Svenska Kraftnät Group’s invest-ments for the year amounted to MSEK411 (460), see the diagram below and thetable above right.
The investments can be broken downas follows (MSEK):
2003 2002
Parent entity:Network investments 293 235Opto links 47 85Intangible assets 18 8Shares – in Nord Pool ASA(new issue) – 118
Subtotal for parent entity 358 446SwePol Link AB 20 13Svenska Kraftnät Gasturbiner AB 33 1
Total 411 460
The largest investment of MSEK 70 re-lates to the ongoing rebuild of stationsections belonging to the DC link be-tween the west coast of Sweden and Jut-land. The completion of a new substationat Hemsjö, in Blekinge, amounts toMSEK 40. The rebuild of the line be-tween Hallsberg and Moholm accountsfor MSEK 36, and the line betweenKrångede and Horndal for MSEK 21.
Financing and liquidityParent entity Svenska Kraftnät financesits operations using equity and loans fromthe National Debt Office. At the end of2003, borrowing amounted to MSEK 665(499) and liquid funds to MSEK 12 (51).Svenska Kraftnät’s cheque account withthe National Debt Office can be used upto a limit of MSEK 1,500.
SwePol Link AB has signed an agree-ment with Vattenfall AB regarding a loanof up to MSEK 2,750. The intention isthat this loan will be replaced by loans onthe financial market and, if required, to asmaller extent using co-owner loans.Svenska Kraftnät has been authorized bythe government to issue co-owner loansof up to MSEK 500 to SwePol Link AB.The government has additionally autho-rized the National Debt Office to issue aguarantee of up to MSEK 1,000 for loanswhich SwePol Link AB needs to take outon the financial market.
Borrowing by Svenska Kraftnät Gas-turbiner AB fell during the year fromMSEK 190 to MSEK 182. The bulk of thisfinancing has previously been carried outon the open financial market, but nowtakes place within the Group.
Liquid funds in the Group amountedto 99 MSEK (165).
EnvironmentSvenska Kraftnät must work towardssolutions that are sustainable in the long-term and which contribute to the nationalenvironmental quality goals being achiev-ed. Our environmental work primarilyfocuses on measures for limiting the cli-matic impact of our operations, reducingthe use of environmentally-destructive sub-stances and limiting the impact that linesand stations have on people’s living en-vironments and surroundings. SvenskaKraftnät’s efforts include benefiting thebiological multiplicity found in the powerline right of ways.
One goal is that transmissions on thegrid will entail as few energy losses aspossible. Svenska Kraftnät has been deve-loping, during recent years, methods ofreducing losses due to the corona effect,i.e. discharges into the air from powerlines. From 2003, measures are routinelybeing carried out from control rooms toreduce corona losses. In doing so, thesecan be reduced by about 10%.
2003 2002 2001 2000 1999
Parent Entity SwePol Link Svenska Kraftnät Gasturbiner AB
Investments (MSEK)
0
300
600
900
1,200
1,500
Grant accounts for parent entityDiscontinuation Amount assigned Reallocation
Political area Total defence in accordance for year according according to Deducted ClosingkSEK Opening amount with 3% rule to official document government decision expenses amount
6: 5 Civil defence
Subitem 1:2 – Power contingency measures 3,777 – 250,000 – –250,670 3,107
6: 21 Total defence
Subitem 1:2 – Parent entity Svenska Kraftnät 4,222 4,002 – 220 – –
Total government grant 7,999 4,002 250,000 220 250,670 3,107
16
Emissions of the greenhouse gas sulphurhexafluoride (SF6) from equipment atSvenska Kraftnät’s switchyards have beenfurther reduced during the year by replac-ing components. In doing so, gas cham-bers at switchyards and breakers havebecome tighter. Emissions have now beenreduced to just over 0.1% per annum ofthe installed volume of SF6 gas. Someexamples of other environmental impro-vements made at our installations are thereplacement of refrigerating machinescontaining CFCs and the phasing out ofcomponents containing quicksilver.
Power lines and stations must have aslittle effect on their surroundings as. A lotof consideration is paid to environmentalfactors like exposure to electrical and mag-netic fields and the impact on the country-side. Several enquiries and measures havebeen conducted during the year in orderto solve problems with magnetic fieldsclose to existing power lines. In the on-going project to build a new 400 kV linebetween Stenkullen and Lindome in theGothenburg area, great efforts are beingmade to find the best solutions from theenvironmental point of view. The projecthas chosen to prioritize people’s livingenvironments over other environmentalinterests, in cases when different interestsneed to be weighed against each other.
Management of the power lanes canbe adapted so that the biological multi-plicity benefits. During 2003, a number ofsubcontractors have been trained in amethod of locating places of great naturalvalue and suggesting management mea-sures for them. The trials that the SwedishUniversity of Agricultural Sciences is con-ducting for Svenska Kraftnät regardingthe adapted management of sample plotsin power line right of ways continuedduring 2003.
Among the other measure taken, wecan mention the continued developmentof new designs for reducing the impact ontheir surroundings made by power linesand a comparative study of methods fortaking samples of PCB in transformer oil.Svenska Kraftnät also gives financial sup-port to research into electric and magne-tic fields via Elforsk AB.
Svenska Kraftnät’s environmental po-licy emphasizes the importance of itsemployees being environmentally aware,that clear goals and routines exist as re-gards environmental work and that con-sideration for the environment permeatesdecisions made. During 2003, SvenskaKraftnät worked on the development andimprovement of the structure and routi-nes of its environmental managementsystem. Efforts are primarily focused oninstallation operations. Our system willcomply with the environmental manage-ment standard ISO 14001, but no certifi-cation is planned.
Customer contactsDuring 2003, we conducted a survey intowhat our customers and players thinkabout us. Twenty or so people in leadingpositions were interviewed.
Svenska Kraftnät’s image was positivethroughout the survey. Among otherpoints of view, it can be mentioned thatSvenska Kraftnät is perceived to be theengine of the Swedish electricity market.Our employees are regarded as professio-nal, business-like and competent. Moreperceptivity, however, was requested, aswas a clearer picture of how SvenskaKraftnät would like the electricity marketto develop.
The results of the survey have been fol-lowed up and discussed by the SvenskaKraftnät advisory committees. This way,we have obtained valuable points of viewregarding how we can further improveour work and prioritize issues that are ofcentral importance to our customers. Asregards the development of the electricitymarket, Svenska Kraftnät’s focus is oncontributing towards a commercial solu-tion to the peak-power issue, managingtransmission limitations and continuingthe work of harmonising the system ofrules on the international electricity mar-ket.
Svenska Kraftnät is also actively con-tributing to the work of improving theroutines and information structure of theelectricity market. The objective is to ob-tain a more efficient electricity market byincreasing the clarity of the rules and theexpertise of the players. This collabora-tion has resulted in the industry standardThe Swedish Electricity Market Manualbeing disseminated through extensivetraining efforts.
EmployeesThe number of full-time employees atyear-end was 264 (257), of whom 193(190) were men and 71 (67) women. Thepercentage of female managers is 25%,which largely corresponds to the totalpercentage of women, i.e. 27%. Staffturnover was 2.3 (2.5)%. The total sickabsence as a percentage of the number ofordinary working hours during 2003 was3.3 (3.7)%.
The average age at the company is 47(47). A breakdown by age and gendercan be seen in the table.
Within a period of five years, 35 em-ployees will leave Svenska Kraftnätthrough retirement. During the years thatfollow, retirements will increase evenmore.
Fulfilment of objectives 2003Svenska Kraftnät wishes to be an attrac-tive employer. The most important activi-ties for achieving this over-arching goalare:
• Interesting work.• Good leadership.• Good and safe working environment.• Planned expertise development.• Common values and attitudes.• Active equal opportunities work.• Good workplace for parents of small
children.• Recruitment of younger employees.• Internal mobility.
During 2003, a survey was conductedamong our employees which showed ahigh degree of staff satisfaction at Sven-ska Kraftnät. Results within all sub-areaswere better than the average at a largenumber of companies in the survey com-pany’s database.
The targets for sick absence (less than4%) and staff turnover (less than 4%)have been met, as has the target of increas-ing the number of female managers (2).
During 2003, 14 employees have beenrecruited, of whom 5 are female and 9male. The average age of these new em-ployees is 37. The target of increasing theage range has thus partially been met.
One of our other targets is encourag-ing internal mobility. During the year, 7employees have changed unit or depart-ment within the company.
The target of implementing, duringthe year, an accurate expertise analysiswith rectifying measures has been met, ashas the creation of a programme of ex-pertise exchange between old and youngemployees.
For a number of years, Svenska Kraft-nät has been offering its managers anadvanced leadership programme. A groupof 5 managers took part in this program-me during 2003.
Targets and focus for 2004 The ability of the workplace to changeand develop is of great significance tohow Svenska Kraftnät fulfils its mission –both now and in the future.
0
5
10
15
20
25
30
35
40
< 25
25–29
30–34
35–39
40–44
45–49
50–54> 60
55–59
Female Male
Number
Age
17
For our employees, it is crucial todevelop their expertise in line with theevolution of the company. Expertise de-velopment also has to aim at a futuresupply of leaders and the development ofspecialists, as well as other changesrequiring special endeavours, e.g. theeffect of high retirement numbers.
The supply of expertise will lead toSvenska Kraftnät maintaining its promi-nent role in this business sphere. A pre-requisite of this development is goodleadership, which through the partici-pation of our employees, will clearly dis-tribute the responsibility for our opera-tions, results and expertise development.
A further group of managers will be embarking upon Svenska Kraftnät’sleadership programme during 2004.
Our targets for 2004 are as follows:
• Employees must see Svenska Kraftnätas a very attractive employer.
• The age range must be increased via therecruitment of younger employees.
• The proportion of females and femalemanagers must increase to 30%.
• Staff turnover must continue to be on alow level.
• Health related absence must be reducedto 3%.
• Each employee at Svenska Kraftnätmust have a documented developmentplan based on a thorough expertise ana-lysis.
• Svenska Kraftnät must actively workfor planned expertise exchanges be-tween older and younger employees.
• Svenska Kraftnät must be seen as a verygood employer of parents with children.
Health related absenceHealth related absence was 3.7% duringthe first half of the year and 2.9% duringthe second, totalling 3.3 (3.7)%. Thehealth related absence for males is 3.1%,and for females 3.6%. The proportion oflong-term health related absence in ex-cess of 60 days was 1.9%. Health relatedabsence is calculated in such a way thatthe number of hours on sick leave is divi-ded by the total number of ordinary wor-king hours. Of our employees, 54%never had a single day’s sick absence dur-ing the year. Health related absence forthe age group up to 29 is 6.7%, for theage group between 30 and 49 it is 2.2%while for the age group over 50 it is3.8%.
Svenska Kraftnät conducted a healthsurvey including medical tests for all itsemployees during 2002, with a follow-upduring 2003. The follow-up shows thatemployees in all areas had improved theirphysical and mental health from a levelwhich, even during 2002, was complete-ly satisfactory. Of the total number ofemployees, 85% feel good or very good.
Svenska Kraftnät offers a number of
opportunities to our employees, individu-ally or in groups, in order to improvetheir health and fitness.
The supply of expertise 2005/2006The possibilities of recruiting competentemployees have improved during recentyears for labour market reasons. Never-theless, a certain amount of concern isjustified as the number of places at uni-versities offering education in the areas ofexpertise of significance to SvenskaKraftnät’s operations is relatively limited.
Bearing in mind Svenska Kraftnät’sage profile, it becomes necessary to em-ploy measures that will enable us toavoid shortages of expertise and labourin the future. Additionally, the propor-tion of females and female managersshould be increased at Svenska Kraftnät,primarily in the technology-oriented de-partments.
Our focus during 2005/2006 will be:
• Expertise analyses and personal deve-lopment plans for all employees.
• Programmes and activities for trans-ferring and exchanging expertise be-tween older and younger employees.
• Active recruitment of young graduateand female employees and managers.
• Improved university liaison.• Reduction of sick leave to less than 3%.
Incentive programme The purpose of Svenska Kraftnät’s incen-tive programme is to create commitmentin order to achieve a good level of relia-bility, good financial results and a highlevel of cost-effectiveness. In doing so,Svenska Kraftnät’s primary targets can bemet: an operationally reliable and effi-cient grid.
The programme includes all em-ployees except the Director General,whose financial terms and conditions areset by the government.
The incentive programme is set up insuch a way that the maximum outcome isone month’s wage. Target fulfilment for2003 was lower than during previousyears, partly due to the outage on 23rd ofSeptember and partly due to the poorerfinancial results.
The cost-effectiveness target, on theother hand, has been achieved in full.Altogether, this means an outcome of40% of one month’s wages, which will bepaid out in May 2004. Turnover for2003 is MSEK 5.7, including social secu-rity contributions.
The BoardThe Board of Svenska Kraftnät consistsof nine members, including two staff re-presentatives. During the year, the Boardmet five times. An evaluation of the workof the Board has been conducted.
The work of the Board has primarilyfocused on: • the financial efficiency of operations• major investments and agreements• the Nordic and European electricity
markets• the power issue• the outage of 23 September• the trend on the power exchange• customer and employees surveys• the supply of expertise.
The Board visited Helsinki for talks withthe Board of Fingrid Oyj.
1818
Comments on the income statements
Income Statements
Group Parent entityMSEK Note 2003 2002 2003 2002
Operating revenueNetwork revenue 1 2,215 2,330 1,902 2,018System responsibility revenue 2 1,416 1,152 1,419 1,152Telecom revenue 64 70 64 70Renewable electricity certificates 2 – 2 –Government grant for power contingency planning 3 267 275 267 275Capitalized work for own account 4 18 14 18 14
Total operating revenue 3,982 3,841 3,672 3,529
Operating expensesPayroll expenses 5 –178 –172 –177 –169Other operating expenses 6 –2,888 –2,540 –2,827 –2,508Depreciation of intangible and tangible fixed assets 12, 13 –527 –512 –390 –376
Total operating expenses –3,593 –3,224 –3,394 –3,053
Share of income in associated companies 11 19 40 – –
Operating income 7 408 657 278 476
Income from financial investmentsFinancial revenue 8 13 41 30 35Financial expense 9 –125 –148 –31 –24Translation gains/losses on consolidation –6 –2 – –
Income after financial items 290 548 277 487
Tax on income for the year 10 1 –5 – –Minority shares –3 –2 – –
Net income for the year 288 541 277 487
Operating revenue and expensesGroup operating revenue rose by MSEK141, or 3.7%, amounting to MSEK3,982 (3,841).
Group network revenue fell by MSEK115 on last year. During the year, trans-mission revenue on the grid fell by MSEK119; due to changed transmission pat-terns. Revenue from the overseas inter-connectors fell by MSEK 20, followingthe complete removal of cross-bordertariffs on 1 March 2002. Revenue fromcapacity fees fell by MSEK 20, becauseprice sectors occurred to a lesser extentthan during last year.
System responsibility revenue rose byMSEK 264, which can be explained bymore balance power being sold. The tele-com operation’s revenue fell by MSEK 6,due to lower prices during 2003. Govern-
ment grant for the power contingencyoperation have been provided with fundsof MSEK 267, corresponding to the costof running the contingency operation.New business division Renewable Elect-ricity Certificates earned revenues ofMSEK 2.
The Group’s operating expensesamounted to MSEK 3,593 (3,224).
Payroll expenses rose by MSEK 6. The Group’s other operating expenses
rose by MSEK 348. The cost of energylosses during transmissions on the gridrose by MSEK 108. During the year, theentire volume was purchased via long-term contracts. The cost of balancepower for the year rose, exceeding lastyear’s cost by MSEK 213, as a result ofthe higher electricity prices. Following agovernment decision, Svenska Kraftnät
purchased power supplements of approxi-mately 500 MW during the winter of2002/2003, costing MSEK 15.
Depreciation of intangible and tangiblefixed assets amounted to MSEK 527(512).
Operating incomeThe Group operating income fell byMSEK 249 to MSEK 408. The operatingincome consists of the day-to-day run-ning of the Group’s various business seg-ments plus income from shares in asso-ciated companies. The operating incomeincludes the Group’s depreciation.
The dominant activity of SvenskaKraftnät’s operations is Network, whoseoperating income amounted to MSEK486 (770). Several items concern both theNetwork operation and the System
19
responsibility. These activities have notbeen able to be entirely assigned to onebusiness division and then the expenseshave been distributed in a standardizedway.
The System responsibility activity pro-duced a deficit during 2003 of MSEK–124 (–179). This included expenses foran additional peak-power reserve amount-ing to MSEK 15 (54). Revenue from soldbalance power rose by MSEK 279, whilecosts for purchased balance power roseby MSEK 213.
The telecom operation’s contributionto the operating income was MSEK 27,compared with MSEK 26 last year, whichcan be explained by increased internalrevenues.
Companies exposed to competitionwithin the Group are Nord Pool ASA,
Nord Pool Spot AS, Nord Pool Con-sulting AS and Kraftdragarna AB. As allof these are associated companies, onlySvenska Kraftnät’s share of the earningsin each respective company is included inGroup result. Shares of income amoun-ted to MSEK 19, compared with MSEK40 for last year. Nord Pool ASA andNord Pool Spot AS account for the bulkof this.
The operating margin for the Groupamounted to 10.2%, which is 6.9 per-centage points lower than last year.
Net financingNet financing amounted to MSEK –118(–109). This is MSEK 9 down on lastyear, which is attributable to a gain ofMSEK 21 when selling shares in EL-EXSähköpörssi Oy and Nord Pool Spot AS
last year. Group interest income fell byMSEK 3 to 13 MSEK as a consequenceof the lower interest level on the financialmarket. Financial expenses amounted toMSEK 125, thus falling by MSEK 23.Most of this relates to the cost of financ-ing loans in the SwePol Link, which weredown MSEK 25 on last year. The parententity was hit by an exchange rate loss ofMSEK 9 on loans to Nord Pool ASA.
The interest cover ratio was 3.3 (4.6).
Net income for the yearNet income for the year was MSEK 288,which is MSEK 253 down on 2002. Thisresult entails a return of 3.5 (6.6)% onadjusted equity. The net profit marginwith deductions for standard taxationwas 5.2%, which is a fall of 4.9 percent-age points compared with 2002.
Adjustedequity (MSEK)
0
1,000
2,000
3,000
4,000
5,000
6,000
200320022001200019990
2
4
6
8
10
12
Return on adjusted equity (%)
Operating and net profit margin (%)
0
5
10
15
20
25
30
20032002200120001999
Operating margin Net profit margin
Operating income (MSEK)
0
100
200
300
400
500
600
700
800
900
1,000
20032002200120001999
Net income for the year (MSEK)
0
200
400
600
800
20032002200120001999
Result 7 %
Deprecia-tion 13 %
Net financing 3 %
Operatingexpenses 77 %
Cost distribution for 2003
20
Balance SheetsGroup Parent entity
MSEK Note 2003-12-31 2002-12-31 2003-12-31 2002-12-31
ASSETSFixed assets
Intangible fixed assets 12Balanced expenses for computer programs 14 9 14 9Land rights 73 76 73 76Usufruct 33 25 33 25Constructions in progress 12 – 12 –
Total intangible fixed assets 132 110 132 110
Tangible fixed assets 13Buildings and land 598 616 196 196Machinery and equipment 8,159 8,194 6,254 6,219Constructions in progress 324 430 289 387
Total tangible fixed assets 9,081 9,240 6,739 6,802
Financial fixed assetsShares and participations in Group companies 14 – – 12 12Receivables from Group companies – – 182 –Shares and participations in associated companies 15 300 300 177 179Tax claim 8 7 – –Receivables with associated companies 54 63 54 63Long-term receivables 2 2 3 2
Total financial fixed assets 364 372 428 256
Total fixed assets 9,577 9,722 7,299 7,168
Current assets
Inventories etcInventories 71 59 – –
Current receivablesAccounts receivable 281 383 272 348Receivables from Group companies – – 28 8Receivables from associated companies 5 5 5 5Other receivables 86 75 76 57Receivable from Government cheque account 16 49 88 49 88Prepaid expenses and accrued income 17 256 284 233 283
Total current receivables 677 835 663 789
Cash and bank balances 99 165 12 51
Total current assets 847 1,059 675 840
Total assets 10,424 10,781 7,974 8,008
21
Group Parent entityNote 2003-12-31 2002-12-31 2003-12-31 2002-12-31
EQUITY AND LIABILITIES
EquityRestricted equityGovernment capital 600 600 600 600Restricted reserves 3,454 3,435 3,314 3,314
Total restricted equity 4,054 4,035 3,914 3,914
Unrestricted equityUnrestricted reserves 2,291 2,125 2,283 2,152Net income for the year 288 541 277 487
Total unrestricted equity 2,579 2,666 2,560 2,639
Total equity 6,633 6,701 6,474 6,553
Minority interests 31 28 – –
Deferred tax liability 6 3 – –
Interest-bearing provision Allocated to pensions 18 195 190 195 190
Interest-bearing long-term liabilities 19 2,667 2,813 665 499
Non interest-bearing long-term liabilities Advances from customers 104 98 104 98Other long-term liabilities 2 3 2 3
Non interest-bearing long-term liabilities 106 101 106 101
Interest-bearing current liabilities 20 127 138 0 0
Non interest-bearing current liabilitiesAccounts payable 391 512 308 391Liabilities to Group companies – – 1 20Other liabilities 50 48 37 15Accrued expenses and prepaid income 21 218 247 188 239
Total non interest-bearing long-term liabilities 659 807 534 665
Total equity and liabilities 10,424 10,781 7,974 8,008
Pledged assets, etc None None None None
Contingent liabilities 22, 23 20 20 20 20
2222
Comments on the balance sheetsBalance sheet totalThe balance sheet total for the Groupwas MSEK 10,424 (10,781), down byMSEK 357.
Fixed assetsSvenska Kraftnät’s intangible fixed assetsconsist of land rights, utilization rightsfor fibre-optic links, and balanced ex-penses for computer programs. The valueof these is MSEK 132 (110). The increaseis due to investments of MSEK 10 in uti-lization rights for fibre-optic links plusinvestments of MSEK 18 in computerprograms.
Tangible fixed assets primarily consistof power lines, stations, buildings andland, fibre-optic links and other technicalinstallations, plus ongoing new installa-tions.
The value of the tangible fixed assetsamounted to MSEK 9,081 (9,240), a fallof MSEK 159. Net investments duringthe year were lower than depreciations.
Financial fixed assets consist of sharesin associated companies and long-termreceivables from associated companies.Shares in associated companies amountedto MSEK 300. The share of net income inthe income statement is MSEK 19, whichincreased the financial fixed assets. Dur-ing the year, MSEK 17 in dividend was re-ceived from Nord Pool ASA. The shares inNord Pool Consulting AS were disposed of.
Current assetsCurrent assets for the Group amountedto MSEK 847 (1,059). This reductionprimarily relates to accounts receivable,
which are MSEK 102 down due to lowerelectricity prices at the end of the yearcompared to December 2002. Liquidfunds amounted to MSEK 99 at year-end,falling by MSEK 66. This decrease is pri-marily due to the parent entity’s liquiditybeing low at year-end.
Equity Equity at year-end was MSEK 6,633(6,701), of which MSEK 2,579 (2,666)constituted unrestricted equity. During theyear, MSEK 356 (474) has been distribut-ed to the owner. Profit for the year in theGroup was MSEK 288 (541).
ProvisionsThe provision to pensions was MSEK 195(190), i.e. an increase of MSEK 5. An in-stalment of MSEK 14 was paid duringthe year. The provision is based on anactuarial calculation by the NationalGovernment Employee Pensions Boardand Svenska Kraftnät’s own factualdetails. The provision includes selectiveemployment tax.
LiabilitiesInterest-bearing long-term liabilities forthe Group consist of the financing of theparent entity by the National Debt Officeat MSEK 665 (499) plus external financ-ing of the subsidiaries at MSEK 2,001(2,314). The borrowing requirement ofthe Group fell during 2003 by MSEK164. The short-term portion of this bor-rowing is MSEK 127 (138). The averagerate of interest on loans for the Groupwas 4.3 (4.9)%.
Long-term liabilities which are noninterest-bearing consist in the main ofadvances from customers within the optooperation and amount to MSEK 104(98). Contract periods vary between 15and 25 years, with the advances beingbooked as income during this time. Thenet debt liability fell by MSEK 85,amounting to MSEK 2,897. The debt-equity ratio was 0.49 (0.50).
Equity/asset ratio (%)
0
10
20
30
40
50
60
20032002200120001999
Changes in equityGovernment Restricted Unrestricted Net income
Group capital reserves reserves for yearOpening equity, January 1, 2003Equity brought forward as per adopted balance sheet 600 3,435 2,125 541Allocation of profits as per government decision:– retained – – 541 –541– dividend – – –356 –Transfer between restricted and unrestricted reserves – 19 –19 –Net income for year – – – 288
December 31, 2003 600 3,454 2,291 288
During the financial year, the Group has not changed any of its accounting principles. The proposed appropriation of earnings in theannual report for 2002 was adopted by the government.
Parent entityOpening equity, January 1, 2003Equity brought forward as per adopted balance sheet 600 3,314 2,152 487Allocation of profits as per government decision:– retained – – 487 –487– dividend – – –356 –Net income for year – – – 277
December 31, 2003 600 3,314 2,283 277
Debt-equity ratio
0.0
0.1
0.2
0.3
0.4
0.5
0.6
20032002200120001999
23
The purpose of the cash flow statement isto describe the Svenska Kraftnät Group’sability to generate liquid assets. It is alsoto constitute a supplement to the descrip-tion of profitability and financial stand-ing in the income statement and balancesheets. By liquid assets is meant cash andbank balances.
The year’s operationsCash flow from the year’s operationsbefore changes in operating assets andliabilities fell by MSEK 145 to MSEK
844. Cash flow from the year’s operationsamounted to MSEK 842 (1,053). Thisdecrease is primarily due to the poorerresult prior to depreciations.
Investment activitiesGroup investments amounted to MSEK411 (460). Investments made in the pa-rent entity amounted to MSEK 358, withMSEK 20 going into SwePol Link ABand MSEK 33 going into Svenska Kraft-nät Gasturbiner AB. Investments weremade in the parent entity during 2002 to
the tune of MSEK 446 and in subsidiarySwePol Link to the tune of MSEK 14.
Financing activitiesInterest-bearing liabilities in the Groupfell by MSEK 164 (152). In the parententity, interest-bearing liabilities increasedby MSEK 166, while subsidiaries SwePolLink and Svenska Kraftnät GasturbinerAB reduced their external interest-bearingliabilities by MSEK 149 and MSEK 181,respectively. Dividend has been paid outat MSEK 356 (474).
Cash flow statementGroup Parent entity
MSEK 2003 2002 2003 2002
The year’s operationOperating income before depreciation 916 1,129 668 852Adjustment for items not included in cash flow 46 7 24 6Net interest paid –112 –145 –18 –21Translation difference –6 –2 – –
Cash flow from operations before change in working capital 844 989 674 837
Increase (–)/decrease (+) in inventories etc –12 3 – –Increase (–)/decrease (+) in short-term receivables 158 –120 126 –113Increase (+)/decrease (–) in short-term liabilities –148 181 –132 161
Cash flow from the year’s operation 842 1,053 668 885
Investment activitiesInvestments in intangible and tangible fixed assets –411 –460 –358 –446Change in long-term receivable 0 –43 –182 –39Sale of fixed assets 2 29 2 29
Cash flow from investment activities –409 –474 –538 –456
Financing activities Change in interest-bearing liabilities –164 –152 166 –34Advances from customers 21 – 21 –Dividend –356 –474 –356 –474
Cash flow from financing activities –499 –626 –169 –508
Cash flow for the year –66 –47 –39 –79
Liquid assets at beginning of year 165 212 51 130Liquid assets at year-end 99 165 12 51
Comments on the cash flow statement
24
Five-year financial review
Financial key figuresThe table below shows the trend for key figures over the last five years.The comparative figures have been converted to 2003 definitions.
Financial income etc for the five-year periodOver the last five-year period, the following statements of income have been reported, in summary, for the Group.
The increased operating revenue are due to the settlement model having changed, thus providing more gross balance power. Further-more, the settlement of final power has been added in 2001. A summary of the balance sheet for the corresponding period is asfollows:
Group 2003 2002 2001 2000 1999
Return on adjusted equity after taxes %3) 3.5 6.6 8.9 9.5 6.6
Return on total capital, % 3.9 6.4 8.3 7.7 5.8
Return on capital employed, % 4.6 8.4 10.6 9.7 7.4
Equity/assets ratio, % 56.7 55.2 55.4 53.9 52.7
Operating margin, % 10.2 17.1 23.7 25.9 21.0
Capital turnover rate, % 9.4 9.0 8.7 7.5 6.4
Debt-equity ratio, multiple 0.49 0.50 0.51 0.58 0.54
Self-financing level, multiple 2.0 2.3 3.3 1.2 0.7
Interest cover ratio, multiple 3.3 4.6 5.6 11.2 8.1
Cash flow from operation before changes in working capital 844 989 1,230 1,123 904
Net liability 2,897 2,982 3,062 3,383 3,034
Investments CAPEX 411 460 363 998 1,307
3) The yield requirement concerning the earning capacity of adjusted equity was 9% in 1998 and has subsequently been 7% up until 2002.From 2003, the yield requirement is 6% and has been modified in comparison with 2002. By adjusted equity is meant the average of therestricted equity at the start of the year and at year-end plus 72% of the unrestricted equity.
Summary of income statement 2003 2002 2001 2000 1999
Operating revenue 3,982 3,841 3,713 3,280 2,679
Operating expenses excl. depreciations –3,066 –2,712 –2,377 –2,055 –1,781
Depreciation –527 –512 –493 –404 –350
Share of income from associated companies 19 40 37 21 15
Operating income 408 657 880 842 563
Financial income 13 41 14 8 35
Financial expenses –125 –148 –159 –75 –74
Translation gains/losses on consolidation –6 –2 0 –7 7
Tax on income for year 1 –5 6 – –
Minority share –3 –2 –14 –5 –
Net income for year 288 541 727 763 526
Summary of Balance sheet as at 31/12 2003 2002 2001 2000 1999
Fixed assets 9,577 9,722 9,676 9,844 9,226
Current assets, excl. liquid funds 748 894 777 735 398
Cash and bank balances 99 165 212 139 1,404
Total assets 10,424 10,781 10,665 10,718 11,028
Equity 6,633 6,701 6,634 6,485 6,536
Loans1) 2,827 2,982 3,133 3,393 3,826
Other liabilities and pension provision 964 1,098 898 840 666
Total equity and liabilities 10,424 10,781 10,665 10,718 11,028
1) Including minority interests
At the beginning of 2003, the SvenskaKraftnät Group consisted of parent entitySvenska Kraftnät, which is a public utility,together with three subsidiaries andseven associated companies. The subsi-diaries and associated companies are jointstock companies, or the equivalent legalform in Svenska Kraftnät’s overseas ope-rations.
One of the subsidiaries, SwePol LinkAB, in turn has a wholly-owned subsi-diary in Poland.
System of rulesSvenska Kraftnät’s accounts comply withordinance (2000:606) governing theaccounts of public authorities as well asthe regulations and general advice of theSwedish National Financial ManagementAuthority. This ordinance corresponds tothe Accounting Act, but is adapted to thespecial circumstances applicable to go-vernment authorities and public utilities.The annual accounts have, with certainexceptions, as specified in official appro-priation documents, been drawn up inaccordance with ordinance (2000:605)governing annual accounts and suppor-tive documentation and the Swedish Na-tional Financial Management Authority’sregulations and general advice. Part ofSvenska Kraftnät’s operations – the power
contingency operation – is financed viastate subsidies. For this operation, sub-sidy ordinance (1996:1189) is also appli-cable, which among other things regu-lates the principles of subsidy settlementand how unutilized funds may be trans-ferred from one budget year to another.Svenska Kraftnät also has to comply withthe Swedish Financial Accounting Board’srecommendations as well as the Financialanalysts’ recommendations where theseare applicable to public utilities.
Svenska Kraftnät has adapted itsaccounts to the new accounting recom-mendations in ordinance (2000:606) andto the Swedish Financial AccountingBoard’s, which came into force on 1 Ja-nuary 2002. Of the new recommenda-tions, only RR 15 Intangible assets hasbrought about a change in the accountingprinciples, entailing a considerable impacton the figures. This recommendationmeans that land rights, effective 2002,will be depreciated after the assessed uti-lization period. During previous years,land rights have not been subject todepreciation.
For the companies of the Group, theAccounting Act, the Annual Accounts Actand corresponding special legislation,primarily the Companies Act, all apply.Three of the associated companies are
Norwegian. For these, the correspondingnational laws will apply.
The supervisory authority for thenetwork operation is the Swedish Natio-nal Energy Authority.
Consolidated accountsThe consolidated accounts encompassSvenska Kraftnät and all its subsidiariesand associated companies, both in Swe-den and abroad. The term subsidiarydenotes a legal entity wherein SvenskaKraftnät holds, or has at its disposal,more than half the votes, or owns stakesin the legal entity and has the sole right tobring a major influence to bear on this byvirtue of a contract or other provision.The term associated company denotes alegal entity that is not a subsidiary, butwherein Svenska Kraftnät owns stakesand wields a major influence on the legalentity’s operational and financial gover-nance.
The consolidated accounts have beendrawn up in accordance with the purchasemethod, which briefly means that theacquisition cost of shares in the subsidiaryis eliminated against the equity existing inthe subsidiary at the time of acquisition.The Swedish Financial Accounting Board’srecommendations in respect of conso-lidated financial statements are applied.
Accounting principles
25
26
Minority participations in the net ope-rating profit and equity of partly-ownedsubsidiaries are reported separately whencalculating the Group’s net operatingprofit and equity.
Internal profits and transactionswithin the group are eliminated in theconsolidated accounts.
The associated companies are report-ed in accordance with the percentage ofcapital method. This means that the bookvalue of shares and participations inassociated companies is set, in the conso-lidated accounts, at the Group’s stake inthe associated company’s equity and non-depreciated goodwill. By reason of this,Group results will include Svenska Kraft-nät’s stake in the associated company’sresult less the depreciation of goodwilland the rendered dividend. The stake isincluded in the restricted reserves.
Reporting foreign currencyAccounts payable and receivable in foreign currenciesAccounts payable and receivable in for-eign currencies have been valued at therate of exchange at year-end. Unrealizedexchange rate gains and losses are in-cluded in the results.
Translation of foreign subsidiaries and associated companiesSubsidiary SwePol Link’s Polish subsi-diary’s final accounts have been translatedto SEK in accordance with the monetarymethod, which entails monetary itemsbeing converted to the rate of exchangeat year-end while non-monetary items areconverted to the rate of exchange at thetime of investment. The conversion diffe-rence in monetary assets and liabilities isincluded in the results for the year andreported in the statement of income.
The monetary method is used becausethe Polish company’s operations are re-garded as an integral part of SwePol LinkAB’s operations.
The major currencies used in the con-solidated accounts are specified in thetable below.
Revenue accountingSvenska Kraftnät’s network revenue con-sist of both account fees and energy-de-pendent fees. Account fees or power feesare fixed annual fees that are recorded asrevenue linearly across the period thatthe fee is intended to cover, while the
energy-dependent fee is recorded as re-venue as and when Svenska Kraftnät’sservices are utilized.
System revenue consist of sold powerfor the balance service, revenues from theutilization of the Ediel IT system andrevenue for covering the cost of the peak-power reserve. Sold balance power isinvoiced fortnightly. All in all, if the cus-tomer has purchased power during theperiod, this will be reported as a revenuefor Svenska Kraftnät, but if the customerhas sold power instead, this will be report-ed as a balance power cost.
Other operating revenue are recordedas revenue in connection with the servicebeing provided. To a certain extent, cus-tomers can pay in advance. The advancewill then be settled against revenue in stepwith the service being provided.
Intangible fixed assetsIntangible fixed assets consist of landrights, utilization rights, ongoing installa-tion work and development costs forcomputer programs.
Effective 2002, Svenska Kraftnät de-preciates land rights after the assessedutilization period, which for line conces-sions is most frequently 40 years. Prior to2002, land rights were not normally writ-ten off.
Utilization rights concern opto linesand are depreciated over a period of 15-25 years
Tangible fixed assetsTangible fixed assets, in particular consist-ing of machinery, plant and equipment,station and line installations, and build-ings and land are recorded at the acquisi-tion value with deductions for accumu-lated depreciations. Investments comprisenew construction work, as well as exten-sions and rebuilds, which raise the stan-dard, quality or performance in the long-term. Maintenance is regarded to bework which is required to enable the faci-lity to be used in the originally intendedway, but which does not increase its per-formance or manifestly extend its life-span. Maintenance is charged to ex-penses using the current account method.
External contributions to investmentsreduce the investment’s acquisition valueby the corresponding amount.
Interest during the construction periodhas been capitalized during the construc-tion of installations costing significant
sums. Such capitalization occurred, forinstance, in the case of the SwePol Linkproject.
Depreciation according to planDepreciation according to plan are calcu-lated linearly on the assets’ original ac-quisition values with depreciation timesdetermined following assessment of theassets’ economic and technical lifespan.The annual depreciation rates are as fol-lows:
Lines excl marine cables and associated lines 2.5 %
Marine cables excl SwePol Link and associated lines 3.3 %
SwePol Link 5.0 %
Control facility sections of stations 6.7 %
Other station sections 3.3 %
Opto links 4.0 %
Reserve materials 6.7 %
Telecom and information systems 6.7 – 20.0 %
Gas turbine plants 5.0 %
PCs and machinery & equipment 33.3 %
Goodwill 10.0 %
TaxesSvenska Kraftnät’s subsidiaries are obli-gated to pay income tax as joint stockcompanies while Svenska Kraftnät isexempt from income tax. Deferred taxfor differences between recorded andfiscal results is not reported by the parententity or the Group, with the exceptionof SwePol Link Poland and the untaxedreserves in the Swedish subsidiaries.Deferred tax claims are reported to theextent that it is deemed probable that asufficient taxable surplus will becomeavailable within the foreseeable future.
InventoriesThe inventories have been valued at thelower of either the acquisition or marketvalues.
Pension CommitmentsThe capital value of pension commit-ments is calculated in accordance withtechnical bases and recorded as an allo-cation. This calculation has been madebased upon a recommendation by theBoard for State Collective BargainingInsurance. The interest portion of thepension costs for the year is reportedunder financial expenses.
Svenska Kraftnät pays a special pay-roll tax on pensions paid out in accor-dance with ordinance (1991:704) govern-ing the setting of special payroll tax onstate pension costs, and not on the basisof the allocation to pensions. As the pen-sion liability relates to future pensionpayments, an allocation for special pay-roll tax is made based on the size of thepension liability.
Average exchange rate Rate on accounting date
Country Currency 2003 2002 2003-12-31 2002-12-31
Finland EUR 9.1250 9.1627 9.0940 9.1925
Norway NOK 1.1418 1.2202 1.0805 1.2595
Poland PLZ 2.0787 2.3827 1.9400 2.3000
Overview of the major currencies used in the consolidated accounts
27
Notes to the Financial Statements
The sums in these notes are specified in MSEK, unless otherwisestated. Sums in brackets refer to 2002.
1 Network revenueGroup Parent entity
2003 2002 2003 2002
Capacity fee, grid 1 ,113 1,083 1,113 1,083Energy dependent fee, grid 509 658 509 658Usage fee, overseas 0 20 0 20Constraint revenue 163 183 163 183Transit revenue 74 35 74 35Transmission to/from Poland 280 304 – –Other operating revenue 76 47 43 39
Total 2,215 2,330 1,902 2,018
2 System revenueGroup Parent entity
2003 2002 2003 2002
Sold balance power 1,033 754 1,036 754Sold final power 81 120 81 120Sold supportive power 27 85 27 85Sold regulating power 105 41 105 41Peak-power reserve 156 140 156 140Ediel 14 12 14 12
Total 1,416 1,152 1,419 1,152
Sold balance power relates to invoiced revenues for the imbalancethat the balance providers have caused in the national powersystem.
3 Government grant for contingency planningGovernment grant refers to the funding used to finance the powercontingency planning. The funds correspond to an equally largeoperating expense for the power contingency planning, thus pro-viding the parent entity with a zero result.
The grant utilized during the year of 267 (275) have funded,among other things, contributions for maintaining gas turbines,securing the function of control centres, training civil duty con-scripts, procuring reserve materials and participating in NordicPeace.
4 Capitalized work for own accountThis item relates to labour costs for Svenska Kraftnät’s own staffcapitalized against investment projects. Investment projects relateto ongoing construction work as well as capitalized IT develop-ment projects.
Group Parent entity2003 2002 2003 2002
Investment in progress 12 12 12 12Capitalized development of computer programs 6 2 6 2
Total 18 14 18 14
Capitalization being reported on the income side enables thereporting of staff costs gross.
5 Payroll expensesThe average number of fulltime employees of the Group during2003 was 261 (249), of whom 259 (245) worked in the parententity and 2 (2) worked in the SwePol Link Group. Effective2003, Svenska KraftKom AB has no employees.
The gender ratio at year-end can be seen in the table below.Group Parent entity
2003 2002 2003 2002
Female 71 67 69 66Male 193 190 193 187
Total 264 257 262 253
Group payroll expenses amounted to 178 (172), of which wagecosts amounted to 108 (105). To this must be added social secu-rity contributions of 60 (59). These include pension costs of 24(20). The remainder relates to miscellaneous staff costs.
To the outgoing Chairman, the remuneration paid amountedto SEK 18,583, while to the incoming Chairman it amounted toSEK 58,664. The other Board members’ remunerations amountedto SEK 52,160 kronor each.
As regards those Board members who are employees ofSvenska Kraftnät, no remuneration was paid over and abovenormal wages. The Director General’s salary amounted to MSEK1.1 (1.0), while the pension cost for the year was MSEK 0.3. Theacting Director General’s salary amounted to MSEK 0.9 (0.8).For the Director General, pension terms and conditions are appli-cable in accordance with the ordinance governing the pensions ofheads of state corporations.
The composition of the Board, excluding the staff represen-tatives, can be seen in the table below.
2003 2002
Female 4 4Male 3 3
Total 7 7
6 Other operating expensesGroup Parent entity
2003 2002 2003 2002
Purchase of loss energy 623 515 623 515
Maintenance, operationalmeasures and leases on installations 286 270 222 216
Transit compensation 51 27 51 27
Purchased balance power 1,159 946 1,159 946
System operation services 264 186 264 206
Peak-power reserve 107 135 107 143
Additional peak-power reserve 15 54 15 54
External control centres 0 7 0 7
Own contingency measures 8 8 8 8
Research and development 15 20 15 20
Disposal losses 8 3 8 3
Contingency costs 227 241 227 241
Other expenses 125 128 128 122
Total 2,888 2,540 2,827 2,508
The item System operation services includes costs for counter-trading implemented by the balance service at MSEK 14 (11).The item Miscellaneous includes fees paid to auditors at the fol-lowing amounts.
Fees and expenses Group Parent entity2003 2002 2003 2002
National Audit Bureau
with appointed accountant 0.8 0.9 0.8 0.9
Other auditors 0.5 0.3 – –
Auditing duties 1.3 1.2 0.8 0.9
Other assignments 0.3 – – –
Toyal fees and expenses 1.6 1.2 0.8 0.9
The item Auditing duties relates to scrutinizing the annualaccounts and bookkeeping, as well as the stewardship of theBoard and the Director General/Managing Director, as well asother duties that are incumbent upon the auditor of the parententity/company. The item Other assignments includes consulta-tions.
7 Business segmentsOperating Operating
revenue incomeGroup 2003 2002 2003 2002
Network 2,233 2,344 486 770System responsibility 1,416 1,152 –124 –179Telecom 96 94 27 26Other companies exposed to competition – – 19 40Contingency planning 267 275 0 0Renewable electricity certificates 2 – 0 –Segment elimination –32 –24 – –
Total 3,982 3,841 408 657
The dominant business segments of the Group are Network andSystem Responsibility. The operating result includes the businesssegment’s external revenue and costs.
The Telecom operation has provided the Network operation withservices to the tune of 32 (24), which is reported as operatingrevenue for Telecom and as an equivalent increase in the operatingexpenses of the Network operation. Capitalized work for ownaccount is included in the Network operation’s revenues. With acost of capital of 7% on employed capital, the operating result forthe Telecom operation is –10 (–8). The poorer result is due tohigher depreciations.
8 Financial incomeGroup Parent entity
2003 2002 2003 2002
National Debt Office loans 0 21 17 19
Interest income 13 16 13 12
Other financial revenue 0 4 0 4
Total 13 41 30 35
9 Financial expensesGroup Parent entity
2003 2002 2003 2002
Interest expenses,National Debt Office loan 15 20 15 20
Interest expenses, other loans 93 124 – –
Interest expenses, pension liability 4 4 4 4
Exchange rate losses 9 – 9 –
Other financial expenses 4 – 3 –
Total 125 148 31 24
10 Tax on income for the yearGroup
2003 2002
Current tax 4 0
Deferred tax –3 –5
Total 1 –5
As the bulk of the Group’s income before tax is earned via theparent entity, which is exempt from income tax, the relationshipbetween the tax cost and the reported income before tax in theGroup is not reported
11 Share of income from associated companiesGroup
2003 2002
Nord Pool ASA 14 37
Nord Pool Spot AS 5 3
Total 19 40
The share in income from associated companies is reported aftertax and includes depreciation of goodwill at MSEK 3 (3). Theshare in income in the other associated companies was less thanMSEK 1.
28
29
12 Intangible fixed assetsIntangible fixed assets are made up of land rights in the form of easements and line rights, usufruct for fibre-optic links, and balancedexpenses for computer programs.
Balancedexpenses for Land- Usufruct Construction
Group and Parent entity computer programs rights for opto in progress Total
Opening acquisition value 0 165 26 9 200Investment 1 – 10 17 28Sales/disposal – – – – –Reclassifications 14 1 – –14 1
Closing accumulate acquisition value 15 166 36 12 229
Depreciation brought forward 0 89 1 – 90Sales/disposal – – – – – Depreciations for the year 1 4 2 – 7
Accumulated depreciation carried forward 1 93 3 0 97
PLANNED REMAINING VALUE CARRIED FORWARD 14 73 33 12 132
Depreciation, previous accounting year 0 4 1 – 5
13 Tangible fixed assets
Machinery andBuildings other technical Construction
Group and land installations in progress Total
Opening acquisition value 898 15,050 430 16,378Investment 14 49 320 383Sales/disposal –13 –50 0 –63Reclassifications 12 413 –426 –1
Acquisition values carried forward 911 15,462 324 16,697
Opening depreciation 282 6,856 0 7 138Sales/disposal –2 –40 0 –42Depreciation for the year 33 487 0 520
Accumulated depreciations carried forward 313 7,303 0 7,616
CLOSING PLANNED RESIDUAL VALUE 598 8,159 324 9,081
Depreciation, previous accounting year 35 472 0 507
Parent entity
Acquisition values brought forward 420 12,800 387 13,607Acquisitions – 3 327 330Sales/disposal –2 –46 – –48Reclassifications 12 412 –425 –1
Closing accumulated acquisition values carried forward 430 13,169 289 13,888
Opening depreciation 224 6,581 – 6,805Sales/disposal –1 –38 – –39Depreciations for the year 11 372 – 383
Closing accumulated depreciation 234 6,915 0 7,149
CLOSING PLANNED RESIDUAL VALUE 196 6,254 289 6,739
Depreciation, previous accounting year 12 359 0 371
The item Machinery and other technical installations includes, in particular, switchyard equipment, power lines, submarine cables,control installation sections, fibre-optics and telecom and information systems. The scrapping of assets primarily arises in con-junction with the commissioning of installations following reinvestment. The rateable value of properties in the Group is MSEK292 (288). Subsidies to the tune of 15 (9) have been received for investment in gas turbines.
30
16 Liability/receivable on Government cheque accountThe liability of 49 (88) carried forward consists of the diffe-rence between withdrawn/deposited funds from the Govern-ment’s cheque account and settled charges/delivered incomeagainst the national budget in accordance with the following:
Group and Parent entitykSEK 2003 2002
Opening balance (receivable+, liability–) 87,981 47,710
Settled against national budget: Subsidy 250,670 275,271
Income headings, dividend and small-scale energy –356,000 –474,000
Settled against government cheque account:Subsidies withdrawn –290,000 –235,000
Dividend paid in 356,000 474,000
Closing balance 48,651 87,981
17 Prepaid expenses and accrued incomeGroup Parent entity
2003 2002 2003 2002
Accrued network income 173 96 155 96
Accrued income, balance service 45 127 45 127
Accrued income, power reserve 0 34 0 34
Accrued income 5 10 5 10
Maintenance 15 – 15 –
Prepaid cost, opto 5 – 5 –
Other 13 17 8 16
Total 256 284 233 283
18 Provision for pensionsDuring the year, the part of the pension liability concerningsupplementary retirement pensions has been redeemed bySvenska Kraftnät. With effect from the beginning of the year,premiums are instead paid for this part.
Group and Parent entity2003 2002
Opening balance 190 168
Pensions paid –1 –1
Annual increase 16 24
Redemption of supplementary retirement pensions –14 –
Correction of previous pension liability – –5
Allocation to payroll tax 4 4
Closing balance 195 190
19 Interest-bearing long-term liabilities Group Parent entity
2003 2002 2003 2002
Liability to National Debt Office 665 499 665 499
Liability to credit institution 16 180 – –
Loans, other external 1,986 2,134 – –
Total 2,667 2,813 665 499
The liability to the National Debt Office relates to a rolling over-draft facility. Of the above loans, 637 (777) will fall due after fiveyears, for the Group, as will 0 (0) for the parent entity.
14 Shares in Group companiesCorporate Shares of Nominal Book
Company registration number Domicile equity, % No. value value
Svenska KraftKom AB 556575-7274 Stockholm 100 1 0 0Svenska Kraftnät Gasturbiner AB 556451-0260 Stockholm 100 900 9 9SwePol Link AB 556530-9829 Stockholm 51 306,000 3 3
Total 12 12
15 Shares in associated companiesCorporate Shares of Book value
Company registration number Domicile equity, % No. Group Parent entity
Nord Pool ASA NO 965662952 Lysaker 50 100,000 282 172Nord Pool Spot AS NO 984058098 Lysaker 20 2,880 8 0STRI AB 556314-8211 Ludvika 25 375 6 4Kraftdragarna AB 556518-0915 Västerås 50 5,000 4 1Elforsk AB 556455-5984 Stockholm 25 750 0 0Triangelbolaget D4 AB 556007-9799 Stockholm 25 525 0 0
Total 300 177
The acquisition value equals the book value in the parent entity.
31
20 Current liabilities, interest-bearingGroup Parent entity
2003 2002 2003 2002
Liability to credit institution – 11 – –
Loan, misc. external 127 127 – –
Total 127 138 – –
21 Accrued expenses and prepaid incomeGroup Parent entity
2003 2002 2003 2002
Balance service – purchased balance power 43 97 43 97
Loss-energy 60 24 60 24
Peak-power reserves/supplements 3 22 3 22
Transit compensation, net 19 14 19 14
Holiday pay, compensatory leave etc 18 22 18 22
Leases on installations, maintenance 17 20 17 18
Contingency operation 6 13 6 13
Interest expenses 4 5 4 5
Prepaid income 4 7 4 7
Other 44 23 14 17
Total 218 247 188 239
22 Contingent liabilitiesA guarantee has been issued for a loan of 20 (20) to STRI ABregarding the purchase of property. Svenska Kraftnät and its sub-sidiaries are not party to any legal, material proceedings which, inthe assessment of Svenska Kraftnät, could lead to a negative im-pact on results for the Group which are of a significant nature.
23 Future leasing commitmentsFuture contractual leasing fees fall due for payment as specifiedbelow. All rental agreements are operational leasing agreements.Sums for the parent entity also include commitments vis-à-vissubsidiary Svenska Kraftnät Gasturbiner AB.
Group Parent entity2003 2002 2003 2002
Within one year 279 259 311 292
Later than one year but within five years 444 318 575 449
Later than five years 7 7 203 236
Total 730 584 1,089 977
32
Audit report
The Group’s unrestricted equity amounts to MSEK 2,579, of which the result for theyear makes up MSEK 288. The Board proposes no appropriations to restricted equity.
Of the parent entity’s unrestricted equity of MSEK 2,560, of which the result for theyear makes up MSEK 277, it is proposed that MSEK 309 of the result for the year beallocated to dividend and that the deficit of MSEK –32 be retained. This is MSEK 174more than the requirements set forth in the appropriation document.
Stockholm, Sweden 20 February 2004.
Sven Hulterström ChairmanJan Magnusson Director GeneralViktoria AastrupYvonne Gustafsson Deputy ChairmanSussi KvartChristel Nettelvik SöderbergChrister SamuelssonErik Bengtsson Staff representativeLisa Björkling Staff representative
The National Audit Office (NAO) hasscrutinized Public utility Svenska Kraft-nät’s annual accounts, consolidatedaccounts and underlying accounts, aswell as its management’s stewardship, forthe accounting year 2003.
The management of the authority isresponsible for conducting its operationsefficiently and constitutionally. Responsi-bility includes providing the governmentwith a reliable report of Svenska Kraft-nät’s operations via its annual accounts.
It is the NAO’s responsibility, in ac-cordance with good accounting practice,to review the authority’s annual accounts,consolidated accounts and underlyingaccounts with the aim of assessing whetheror not the accounts are reliable and thebooks true and correct, and to check
whether the stewardship of the manage-ment is in agreement with the applicableordinances and special decisions.
The review has been carried out inaccordance with good auditing practice.This means that the review has beenplanned and conducted with the aim ofobtaining a reasonable basis for assessingwhether or not the annual and consoli-dated accounts are true and correct. Thereview has thus focused on a selection ofsignificant transactions and managementdecisions.
The review carried out provides a rea-sonable basis for the statement below.
The annual and consolidated accountshave been drawn up in compliance withthe ordinance governing the annualaccounts and budget data, government
appropriation documents and otherrulings relating to the authority.
The NAO deems the annual and con-solidated accounts to be substantially trueand correct.
Director of Auditing Kerstin Jönssonhas passed judgement in this matter.Director of Auditing, chartered accoun-tant Göran Selander has acted as theespecially appointed submitter. ChiefAuditor Gina Funnemark has participatedin the final processing.
The National Audit Office auditor’sreport was submitted on 1 March 2004.
Kerstin Jönsson Göran SelanderDirector of Auditing Director of Auditing
Proposed disposition of earnings
33
The environmental improvements thatSvenska Kraftnät is implementing arelinked to the fifteen national goals forenvironmental quality adopted by Parlia-ment. The measures primarily contributetowards meeting the following goals; li-mited environmental impact, a non-toxicenvironment, a safe radiation environ-ment, and a good environment in devel-oped areas. Additionally, we are endea-vouring to promote biological multiplicityin our power lanes. Biological multiplicityhas been proposed as the 16th nationalenvironmental quality goal.
During 2003, we have also been work-ing on improving the structure and rou-tines of our environmental managementsystem. The intention is to build up asimple but functional system which isprimarily focused on operations that con-cern our installations. Using the environ-mental management system, we will beable to improve the quality of our en-vironmental work though the uniformapplication of routines and methods.
Measures for limiting our environmental impactSvenska Kraftnät aims to achieve efficientenergy consumption and low energy los-ses. The emissions of climate-impactinggases that we give rise to must be as smallas possible.
During the transmission of power
across the network, energy losses arise.On the national grid, losses are approxi-mately 2% of the exit energy. For someyears, we have been developing methodsof reducing some of the losses arisingduring the winter due to the coronaeffect, i.e. discharges into the air frompower lines. The monitoring of coronalosses and measures to reduce these arenow being carried out on a routine basisby the staff of our control rooms. This isconditional upon the measures being car-ried out without reducing operationalreliability and that they reduce overalllosses on the grid. We estimate that co-rona losses, which constitute a tenth ofoverall grid losses, can be reduced byabout 10% using such measures.
During the year, emissions of the green-house gas sulphur hexafluoride (SF6),which is used in circuit breakers and ingasinsulated switchyards (GIS), haveamounted to 0.13% of the installed vo-lume. This is down on previous years. Atthe GIS switchyard at Järva, in northernStockholm, we have measured a level ofleakage which is greater than normal.Consequently, we have replaced burstingdiscs there in order to make the gaschambers gastight. In connection with theoverhaul of contact breakers, gasketshave been changed in order to achieve animproved seal.
During the year, more refrigerating
machines using HCFCs have been replac-ed by units using less environmentally-impacting refrigerants.
Business travelling made by SvenskaKraftnät’s staff continued to fall during2003. Some journeys have been replacedby video conferences. On average, onevideo conference has been held everyother working day.
Introduction of the energy certificate system On 1 May 2003, the system of renewableelectricity certificates was introduced.This is based upon the producers of re-newable energy obtaining certificates forthe electricity that they produce. EachMWh (megawatt hour) equals one cer-tificate. The sale of renewable electricitycertificates will provide producers withrevenues that are over and above whatthey make on selling electricity.
For renewable electricity certificatesto be issued, the generating plant musthave been approved by the SwedishNational Energy Administration. SvenskaKraftnät’s brief is to issue and managethese certificates. By the end of last year,we had issued approximately 5 millioncertificates.
To create a demand for the certifi-cates, an obligatory quota has been in-troduced. It is obligatory for electricity
Svenska Kraftnät and the environment:
The work of developing Svenska Kraftnät’s environmental management system is being conductedin the form of a project and involves many of our employees. Work focuses on operations that con-cern our installations. ”We are going through the various work processes to determine the environ-mental impact and what we can do about it”, says Eva Bergius who is our Environment Manager (third from left).
Improvements in several areas
suppliers and/or consumers to purchase acertain number of certificates in relationto their sale/consumption. Each year, thisobligatory quota increases, i.e. the num-ber of certificates that electricity suppli-ers/consumers are obliged to purchase.This will increase the demand for certi-ficates and in doing so stimulate the pro-duction of renewable electricity. In nor-mal cases, electricity suppliers will takecare of the purchasing of certificates fortheir customers and will thus be respon-sible for their obligatory quotas being met.
Coming closer to a non-toxic environment One of Svenska Kraftnät’s most impor-tant goals is to limit the use of environ-mentally-destructive substances. Thesesubstances are primarily heavy metalsand certain chemicals, e.g. impregnatingagents in wooden poles and foundations.
The decommissioning of componentscontaining quicksilver has continued dur-ing 2003. We also started work on thenew converter station for the Kontiskan 1 DC link (between Sweden and Jutland)at Lindome, south of Gothenburg. Thisstation will replace the one at Stenkullen,Lerum. When the new station is complet-ed, about 1,800 kg of mercury from theold gas-filled valves at Stenkullen will beable to be decommissioned.
Some equipment may contain oil con-taminated by PCB. It is always a routineprocedure, consequently, that we take oilsamples from equipment like this beforescrapping it. In an ongoing R&D project,different methods of testing for PCB intransformer oil are being compared.
Two modern oil storage tanks havebeen installed at the gas turbine plant atHallstavik, Uppland. The old tanks,which are still in situ, lack leakage con-tainment and have thus been deemedunsuitable for fuel storage. Following thisinvestment, Hallstavik gas turbine units 3and 4 can now be used to provide powerreserves.
Minor impact on our surroundings – an important environmental aspectSvenska Kraftnät’s objective is that ourpower lines and stations will affect theenvironment as little as possible. The ex-posure of people to electrical and mag-netic fields and the impact upon thecountryside are important environmentalfactors for us to consider. This is mostlypossible while we are building new instal-lations.
As during previous years, we haveconducted enquiries and implementedconcrete measures in order to get to gripswith the problems experienced by thoseliving close to our power lines, as regardsmagnetic fields. Among other things, we
have provided details of how a line inwestern Stockholm can be modified inorder to reduce the magnetic field in anadjacent school. This modification will bepaid for by the borough council for thearea.
The development of new designs forreducing the impact of power lines ontheir surroundings has continued atR&D company STRI AB, in Ludvika.The development work includes a 220 kVcompact pylon for built-up areas and apylon design for terminating under-ground cables.
As during previous years, SvenskaKraftnät has also contributed to R&D onelectrical and magnetic fields via its asso-ciated company Elforsk AB.
Living environment prioritized in the Stenkullen-Lindome project In its project to build a new 400 kV linebetween Stenkullen and Lindome, in theGothenburg area, Svenska Kraftnät pro-duced an environmental impact assess-ment (EIA) during the year. We have in-vestigated two alternative routes as wellas several alternative sections and tech-nical configurations within one of theroutes.
During the enquiry, it has at timesbeen necessary to weigh different environ-mental aspects against each other and tomake priorities. Due to the fact that thisline will pass close by a lot of residences,we have chosen to prioritize the livingenvironment over other considerations.We have thus proposed that the line berouted through the Härskog area of Här-ryda municipality, despite the fact thatthis is an area of national interest as re-gards the outdoor life.
By routing the line through the Här-skog area, we will be able to keep it awayfrom the developed part of the Skårtorpcommunity – with stronger magneticfields in homes as a result. Our assess-ment is that the line will have a negligibleeffect on the outdoor life. The impact on
34
Svenska Kraftnät is planning to build a new 400 kV line between the stations at Stenkullen and Lindome, in the Gothenburg area. When crossing trunkroad 40, one alternative would be to erect the line using specially designed compact pylons, which are well-suited to the environment in question (com-posite picture of design pylons in situ). See also the above picture.
the countryside and on the natural andcultural environments will also be slight.
On other sections, where developedareas lie close by, we propose that the lineshould be built using compact pylons.Compared with traditional π-towers,these are designed to cause weaker mag-netic fields which decay more rapidly asyou move laterally away from them. Theshorter distance between the line’s outerwires also requires a narrower power lane.
When crossing trunk road 40, the linewill be clearly exposed to its surround-ings. Here, an alternative could be erectingthe line using specially-designed compactpylons, which are well-suited to the en-vironment in question.
Forest inspectors being trained in biological multiplicityWith the help of our subcontractors, wewould like to adapt the management ofour power lanes in such a way that atten-tion is paid to sensitive environments andthe biological diversity benefits. In thepower lane, many species thrive whichhave their natural habitats in meadowsand pastures. These species are underthreat today because fewer and fewer ofthese areas remain.
In early summer 2003, Svenska Kraft-nät conducted a pilot training course onthe theme of “Biological multiplicity inthe power lane” for forest inspectors fromEltel Networks and Vattenfall ServiceSyd. The idea is that the forest inspectors,while simultaneously inspecting thepower lane, will also be able to find loca-tions with great natural assets and pro-pose a suitable type of management forthem. By modifying the management ofthe power lanes using rather smallmeans, e.g. keeping them open and re-moving clearing waste, the circumstancescan be improved for the threatened spe-cies, making them thrive even better.
During the summer, the forest inspec-tors tried out their newly-acquired skillsduring inspection work. The methodshowed itself to work well. At the par-ticularly valuable locations found duringinspections, particular care will be takenduring future clearing operations.
Since the spring of 2002, we have alsobeen collaborating with the Institutionfor Conservation Biology at the SwedishUniversity of Agricultural Sciences (SUAS).The SUAS is conducting experiments onsample plots in some power lanes in Upp-land and Småland using different types ofmanagement. During the summer of2002, an initial inventory of species wascarried out to determine the starting posi-tion. During 2003, the areas were manag-ed and inventoried once again. It will notbe possible until another few seasons ofenhanced management have elapsed tosee whether or not the desired positivechanges have occurred.
Environment and economicsWhen reporting Svenska Kraftnät’s envi-ronmental overheads and environmen-tally-related investments, we have app-lied the definitions that Statistics Swedenuses when investigating corporate expen-diture on environmental protection. Thisexpenditure relates to measures and acti-vities where the principal purpose hasbeen to prevent, reduce or eliminate anegative environmental impact.
35
Forest inspectors employed by Svenska Kraftnät’s subcontractors reviewing which species are typicalof this particular meadow just outside Uppsala.
Environmental overheads during 2003 (kSEK)
Environmental management 87
Oil decontamination 280
Disposal of PCB-contaminated oil 17
Ground water analyses, Lahall 40
Program for soil analysis, Hallstavik 110
Biological multiplicity, training and measures 207
Environmental surveys re. fish,SwePol Link 862
R&D:
• Electrical and magnetic fields 377
• Compact pylon for 220 kV, STRI 590
• Cable transition to pylon 400 kV,pre-study 290
• Methods of testing for PCB in transformer oil 61
• Biological multiplicity in power lanes 453
In total 3,374
Environmentally-related investment during 2003 (kSEK)
New oil storage tanks at Hallstavik 28,500
Measures for reducing magnetic fields 250
Conversion of refrigerants 204
Measures for reducing SF6-leakage 258
Replacement of components containing quicksilver 7
In total 29,219
S o m e e nv i ro n m e n t a l d at a
2003 2002 2001
Energy losses, TWh 2.5 2.7 2.8
Energy losses,percentage of exit energy, % 2.1 2.2 2.2
Emissions by CO2,from own gas turbines, tonnes 40,297* 3,611 2,287
Emissions of sulphur, from own gas turbines, kg 21,901* 1,995 1,238
Emissions ofnitric oxides,from own gasturbines, kg 197,913* 8,133 5,263
Volume of reple-nished SF6-gas, kg 21 31 47
Emissions of SF6-gas, percentage of installed volume, % 0.1 0.2 0.3
No. of business trips per employee per year 9.3 10.7 11.0
* Svenska Kraftnät’s gas turbines have been
employed much more than usual, due to the
power balance at the start of 2003.
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On September 23, southern Sweden andeastern Denmark were exposed to an ex-tensive power outage. Seen from SvenskaKraftnät’s perspective – as the SwedishSystem Operator – it had been twentyyears since anything like this had occur-red. The sometimes lengthy outagesoccurring on the distribution networkswhich are caused by storms and heavyfalls of snow lie outside our area of re-sponsibility. From the perspective of ourcustomers, of course, it is always bad tolose the electricity supply regardless of thecause. A characteristic for Svenska Kraft-nät’s area of responsibility is that atechnical fault can lead to outages notonly in large parts of Sweden but also inneighbouring countries.
Extensive black-outs in major powersystems almost never arise because of onesingle root cause. An exception to this is,of course, severe natural catastrophessuch as the earthquakes in Japan in 1995.It is typical that outages arise as a conse-quence of several different technicalfaults occurring close to each other intime, or through mutual interdependen-cies. Frequently, in this case, dormantfaults come to light, which had not beendiscovered or rectified previously.
Sometimes, critical situations can ariseor be exacerbated by incorrect humanactions. In many cases, it can also beestablished that active efforts during the
acute phase would have been enough toprevent minor misfunctions from develop-ing into widespread outages. These failingto materialize could be due to a lack oftraining, information, coordination or un-ambiguous powers to act. There are alsoexamples of effective interventions thathave saved major networks from collaps-ing.
USA and Canada in AugustThe major outages in the USA andCanada in August 2003, and in Italy inSeptember, share the fact that they eachaffected over fifty million inhabitants.Moreover, subsequent analyses haveshown that both outages could have beenavoided by means of resolute interven-tions on the part of the operationalmanagement concerned.
Over a period of approximately 4hours prior to the outage in the USA andCanada, a series of events occurredwhich, taken individually, were not par-ticularly remarkable. Together, however,they constituted a dangerous situation asregards system reliability. This antecedenttook place in northern Ohio and adjacentstates south of Lake Erie. The weather waswarm, but not so extreme that the con-sumption attributable to air conditioningunits would lead to the networks beingoverloaded initially.
However, the loss of production plants
generating close to 2,000 MW led totransmission lines becoming overloaded.One of these was disconnected after aflash-over to a tree, which had not beencleared away from a power right of way.By degrees, more and more disconnectedlines led to major shifts in the powerflows around Lake Erie, impacting uponthe states of Pennsylvania, New York,eastern Michigan and Ontario in Canada.Huge swings in power and voltage trig-gered protective devices, which discon-nected power plants and isolated parts ofthe grid. Some subnetworks survived thisturbulent phase while others collapsed,e.g. most of New York State.
The Task Force appointed by thegovernments of the US and Canada hasfocused on the lack of supervisory con-trol and monitoring of the numerousregional networks. These networks havegradually evolved from regional supplynetworks into the present-day intercon-nected parts of the three synchronousgrids in the USA. The development ofeffective control agencies with sufficientinformation and authority to interveneduring critical operational scenarios hasnot been carried out in step with thechanges otherwise taking place.
The lack of efficient coordination andcontrol that has been observed is bothorganisational and technical. The resultof these shortcomings was that the initial
Major outagesoccurredduring 2003
”During the afternoon of 23rd of September, we were able to clarify the primary course of events ofthis major outage”, says Anders Danell, pictured at right. He has been in charge of the work of analys-ing this outage, together with Erik Ek and Thomas Thor (in the middle), among others.
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situation, which was gradually becomingmore and more critical, was not dealtwith properly by the operational managersof the different companies. The correctcountermeasures were not taken, despitethe fact that there was time.
Italy in September When the black-out in Italy occurred onthe Saturday night, approx. 6,400 MWwas being imported, primarily fromSwitzerland and France, via a limitednumber of 400 and 220 kV lines in thealpine region. Consequently, these werecarrying a considerable load. The distur-bance had its origin in one of these 400kV lines in Switzerland being disconnected,whereupon the power was redistributedto the other lines. One of them was carry-ing a load far in excess of what it couldcope with and was disconnected afterapproximately 20 minutes. For both thesedisconnected lines, the reason has beenstated as flashovers to trees, which hadbeen allowed to grow too tall in thepower right of way.
The effect of these lines disappearingwas that the remaining lines were not ableto deal with transmitting the importedpower and were then disconnected, thusisolating Italy. Despite the active counter-measures subsequently taken, the systemcould not be brought back into balancein time before the power plants were dis-connected one after another by their pro-tection devices. All of Italy, with theexception of Sardinia, was plunged intodarkness.
Afterwards, it has been learnt that itwould have been possible to deal with theinitial stresses and strains, primarily byinterrupting the pumped storage plant inItaly, which were consuming 3,500 MW.
The Italian outage also revealed a factorwhich is increasingly coming to characte-rize the operation of major transmissionnetworks. The risk of critical operationalscenarios and power outages arising is atits highest if faults occur when the net-works are under the greatest loading.
Traditionally, this isassociated with timeswhen consumptionduring weekdays is atits highest. Gradually,production resourcesin many countries aretending to becomemore and more spar-se in relation to theincreased level ofconsumption. Manycountries or subsy-stems have periodi-cally or permanentlybecome dependentupon imports fortheir power balances.
This often leads totransmission networks carrying heavyloads for long periods, sometimes duringperiods, as well as in directions, whichwere not envisaged when the networkswere being dimensioned.
Southern Sweden and easternDenmark in SeptemberThe black-out in southern Sweden on 23September– as opposed to those takingplace in the USA/Canada and Italy – canbe characterized by several faults occur-ring either simultaneously or very close intime to each other. The initial loss of thelargest nuclear power block at Oskars-hamn was, in itself, an ordinary event,which would not normally lead to dif-ficulties. Measures were embarked upon,anyway, to make up for the loss.
The critical situation arose five minu-tes later, when a dormant fault in an dis-connector at the Horred substation onSweden’s west coast turned into a failure.This in turn led to a long arc arisingwhich short-circuited important parts ofthe switchyard. All protection devicesoperated correctly, however, in order todisconnect the faults. The result wasanother two large nuclear power blocksat Ringhals being disconnected and thegrid on the west coast being disrupted.
At this point, atotal of 3,000 MWof nuclear powergeneration had beenlost, along with thereactive power sup-port for the gridfrom the generatorsof these units. Thestrain was thus toogreat for the rest ofthe grid, which wasdivided in the then
weakest part of central Sweden. The sout-hern part of Sweden, and easternDenmark, did not have the prerequisitesto cope on their own and lost voltagewithin a few seconds.
This event shows that the transmis-sion system is sensitive during unusualand unfortunate circumstances, e.g. ifplants have to go off line for some reasonand with regard to defects at installationswhich are in service. Faults like theseoccur from time to time due to materialdefects or the age of the components. Bymeans of our normal practice to carryout maintenance and disturbance ana-lysis of the grid, we discover and correcta good many such defects every year. Indoing so, we eliminate apparently trivialfaults which could potentially result inmore severe disruptions. This has contri-buted to avoiding widespread outagesdue to faults on the national grid over aperiod of twenty years.
Svenska Kraftnät’s technical expertisewas able to clarify, as early as the after-noon of 23 September, the primary courseof events of the black-out. This was fur-ther confirmed by the extensive analysesforming the basis of the report publishedon 4 November. This report can be foundon our website; www.svk.se.
The outage will effect our work in the future The black-out of September 23 has ledSvenska Kraftnät to the conclusion thatwe should look into how the grid can bemade even more reliable. The risk of wide-spread disruptions has not increased overthe past decade. But the susceptibility ofsociety to outages – both physically andperceptually – has increased during thatperiod. Henceforth, this will manifestlycharacterise our focus and our work.
When the isolator at the Horred station failed, an arc arose which short-circuited parts of the switchyard. The damage to the isolator can be seen in the inset picture.
”Within one hour, my colleagues at the National Control Centre hadrestored the grid down to southern Sweden”, says Eva Werdin, dutyengineer at Svenska Kraftnät’s control room. Following this, it took a few more hours before all our customers had their supply restored.
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A vision for gridreinforcementin the Nordicarea
Transmission networks in focusIn the open electricity market of today,the transmission of power, especiallybetween countries, has come into focus.The capacity of the networks is impor-tant for the electricity market to functionwell. It is also clearly noticeable whenthis capacity is not sufficient for powertrading, e.g. by the occurrence of a pricedivision in spot trading.
The issues surrounding power trans-mission have thus come to affect and in-terest all the players on the electricitymarket in an entirely different way thanthey did previously. The reliability of thenetworks is also being noticed more to-day, especially after the outage of 23 Sep-tember 2003.
The ongoing and upcoming networkchanges that we can see will entail thatour capacity for transmission in a north-south direction will gradually increase.Measures to boost the capacity of thenetworks need to be taken along more orless the entire route, from the Continentto Arctic Scandinavia. With even morecables to the Continent, the Nordic area’senergy balance will be able to improvedue to an increased import capability.Through increased trading opportunities,Nordic hydropower will be able to pro-duce more during peak loads, whenprices on the Continent are at theirhighest.
The need for increased transmission The marketSince deregulation, which occurred inSweden in 1996, the electricity market isworking better and better. Price forma-tion is becoming more efficient and moretransparent via the open power ex-changes. Cross-border trading is beingeased by the removal of cross-bordertariffs and administrative obstacles. Theplayers in the marketplace are becomingmore and more experienced and effectivein their trading. This trend is continuingthe whole time.
Cross-border power trading is gradu-ally increasing, also between the Nordicarea and the Continent. Trading is in-creasingly being governed by differencesin the electricity spot price between NordPool the power exchanges of Europe.Low transaction costs ensure that tradingis often carried out as a full export or afull import.
The Swedish grid is being utilizedmore and more heavily in a north-southand a south-north direction. The naturalprice differences throughout the calendarday and week mean that power travelsnorthwards during the night and atweekends. During the day, when the needfor power on the Continent is great, likeits ability to pay, power travels south.
During years when there is either ascarse or an abundant water balance in
the Nordic area, there are significantpower transmissions via the electricitysystem. It is primarily during such yearswhen extensive bottlenecks can arise inthe system.
The energy and power balanceof the Nordic areaThe electrical energy balance of the Nor-dic area is becoming increasingly strained.As a whole, the area is dependent uponimports of power from the Continent andRussia. This situation will be intensifiedduring the coming years due to the increas-ing level of consumption.
Following deregulation of the electrici-ty market in 1996, a large amount of ther-mal power – which was not consideredprofitable to operate in Sweden, Finlandand Denmark – was decommissioned. Thepower balance suffered most from this.During recent years, some of these pro-duction units have again been made readyfor operation, partly because of measurestaken by society or system operators andpartly because of commercial decisionsmade by their owners. On the Continent,too, some capacity was “mothballed” dueto poor profitability following deregula-tion.
In the Nordic area, it is primarily Nor-way’s energy balance during dry yearswhich shows significant deficits.
”The new and augmented lines that are planned for the Nordic area will entail the transmissioncapacity between the Nordic countries gradually increasing”, says Elisabet Norgren, in the middle.Elisabet, Amanda Zhao and Magnus Danielsson work with grid development.
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Expansion of production A more wide-ranging expansion of windpower has so far taken place in Denmark.Wide-ranging expansions may comeabout in northern Norway, in the Swe-dish mountains and in the sea along thecoast of northern Sweden or in southernSweden. The projects under discussionare in the range of 500–1,000 MW. Con-sequently, in addition to a local connec-tion point with the nearest network, rein-forcement of the grid will also be requi-red; in many cases in order to transmitthe power over longer distances. It mightalso be necessary to reinforce the grid inorder to be able to transmit sufficientregulating power to manage the rapidvariations of wind power.
In Finland, there are plans to build athird nuclear power plant. Rated at1,600 MW, it will be the biggest produc-tion unit in the Nordic area. Its consider-able output power alone will entail thetransmission capacity between Swedenand Finland being reduced by about 300MW, if no measures are taken. Thepower plant will operate as a part of baseproduction and will have a lengthy utili-zation time. This will probably lead toelectricity exports from Finland for longperiods of time. A reinforcement of thetransmission capacity between our count-ries will thus be necessary.
Opportunities to accomplish reinforcementDuring recent years, system protectionschemes to support the grid capacity havebeen installed in southern Sweden andbetween Norway and Sweden. Becausesystem protection automatically discon-nects production or lines/cables in theevent of conductor failures – in order toavoid overloads in the rest of the network– the transmission capacity of the net-work can be increased.
In southern Sweden, shunt capacitorshave also been installed. When these areconnected, the voltage is increased and
thus also the transmission capacity.Another technique which boosts thetransmission capacity is installing seriescapacitors.
There is, however, a limit to howmuch of a network’s capacity can beexploited using such measures. The nextstep is to rebuild substations or build newones. One such example is the 400 kVstation at Hemsjö in southern Sweden,(Blekinge), which was commissioned in2003. The modern design of the stationhas reduced the risk of serious faults andboosted the southbound transmissioncapacity. A more substantial measure isbuilding new lines.
The necessary reinforcement facing uscan, in some cases, be met using severalof the measures mentioned. Concerningsouthern Sweden, however, the limit hasbeen reached as regards utilizing existingnetworks further. Here, only new lineswill provide a significant increase.
Vision of an expanded networkLine from central to southern Sweden.Today it is the network between centraland southern Sweden, which periodicallylimits the possibility of carrying majorelectricity exports southwards. Often,simultaneous full exports on the SwePolLink, Baltic Cable and Öresund intercon-nectors with Zealand are impossible. Thetransmission capacity towards southernSweden has, over a period of severalyears, gradually been increased by expand-ing lines, rebuilding stations and instal-ling reactive power and network protection.
To further increase the transmissioncapacity, new lines will be needed. A new400 kV line from central to southernSweden could be built along existingsystem for 220 and 130 kV lines. Thenew line would primarily boost thetransmission capacity southwards andmake the grid’s southern section morerobust.
Northern Sweden. The expansion ofwind power in the north requires expan-
sion of the network locally, as well ascapacity for transmitting the power south-wards. The grid capacity south of theLuleälven river will probably be a limit-ing factor. Here, the transmission capacitycan be increased by installing series capa-citors. These have existed for a long time,south of the Indalsälven river.
Finland. The need for reinforcementtowards Finland doesn’t only depend onthe north-south transmission capacity.The expansion of nuclear power in Fin-land is another reason for the networkneeding to be expanded. Reinforcementcan be achieved by increasing the Fenno-skan DC link or the lines in the north.The strategically most interesting expan-sion is a new DC cable in parallel withthe existing one. If the new installation isdesigned in the appropriate way, it will beable, together with the existing one, to beoperated as a bipol. This will then avoidthe return current going through water.
Skagerrak 4. The driving force forfurther reinforcement of power transmis-sions between Norway and Jutland isNorway’s increasingly tight energy bal-ance. The increased transmission capacitycan also be used for more efficient regu-lation of the rapid variations of Jutland’swind power. For various reasons, severalplanned cable projects from southernNorway have not been able to be realiz-ed. The project should be seen as an ac-companiment to reinforcement in Jutlandand increased capacity on the borderbetween Jutland and Germany.
The Great Belt. An interconnectoracross the Great Belt between Jutlandand Zealand in Denmark has been thesubject of discussion for many years. Ithas again become topical following theoutage on 23 September. Besides the factthat it will connect the two Danish sub-systems, it will also provide more effi-cient regulation of the variations inDanish wind power. Additionally, the linkcan connect Germany-Jutland-SouthernNorway/Sweden with Germany/Zealand/Poland-Southern Sweden, and directnorth-southbound power to a part of thenetwork with free capacity.
During the outage of September 23, itwas a long time before customers in Zea-land could be connected to the networkagain. A Great Belt link using new DCtechnology (HVDC) might have speededup this course of events.
The vision. The individual projects areto be seen as parts of a strategy of rein-forcing the Nordic transmission networkover a ten-year period. The driving forcesare the market’s need for increased cross-border power trading and the tight ener-gy balance and its accompanying importrequirements. Other driving forces arethe expansion of production, for instancelarge wind power plants, and the ambi-tion to attain increased flexibility andoperational reliability.
”The new 400 kV line between Stenkullen and Lindome will augment the electricity supply toGothenburg”, says Katrin Seuss from Svenska Kraftnät, pictured furthest to the right. She is a memberof the project group responsible for the line.
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Developmentson the Nordicand Europeanelectricitymarkets
Developments on the Nordic electricity marketThe integration of the Nordic electricitymarket has been rapid and successful.Largely speaking, the Nordic market isworking well, which was borne out bythe stresses and strains of the winter of2002–2003.
A reduced availability of hydro powerresulted in electricity generating plantswhich had been ”mothballed” going backinto service. Moreover, imports of elect-ricity increased while consumption fellslightly, especially in Norway.
The grid operators of the Nordic area– Svenska Kraftnät, Statnett, Fingrid andEltra (in Jutland/Funen) and ElkraftSystem (in Zealand) – are working ambi-tiously, within the framework of Nordel.Their objective is, within a range ofareas, to further harmonise the rules ofplay for the players active on the Nordicelectricity market.
Collaboration between the NordicSystem Operators means that expansionsof the network will be jointly planned,with the Nordic market’s requirements asa starting point. During the spring of2004, Nordel will provide details of thenext stage of the system developmentplan. An advanced socio-economic assess-ment will be made of the most interestingexpansion projects. Here, factors such asmarket benefit and market power will
also be illuminated. The objective is thatthe analysis will be able to form the basisfor prioritizing the projects.
Svenska Kraftnät has announced thereinforcement of the capacity for trans-mitting power to southern Sweden. Anew line from central to southern Swedenwill also enhance the reliability of Swe-den’s power system. Additionally, the linewill also bring improved opportunities oftrading in power with Denmark, Germanyand Poland.
Since Svenska Kraftnät’s inception in1992, the capacity for trading with Fin-land, Denmark and Norway has been in-creased by over 2,000 MW to 7,000 MW.
A good power balance is the foundationA good power balance is a preconditionfor a secure supply of electricity. Today,there are somewhat differing models fortackling the supply of power – i.e. thesupply capability during the hours ofpeak demand – in the Nordic area. A pre-condition for the Nordic electricity mar-ket’s long-term growth is that the playersof the Nordic area principally have thesame responsibility and incentive for in-vesting in new production capacity.
Shortly, Nordel is expected to presentthe results of work aimed at providing acommon ground for safeguarding thepower balance in the long-term. One fun-
damental point is that the rules will bebased on commercial principles. Thiswork also includes efforts that will pro-mote flexibility in electricity consump-tion in the event of high prices. Thiscould reduce the need for other measuresand develop products for hedging againstprice-spikes during power shortages.
Trading in power via internationallinks has increased since deregulation ofthe electricity market. This has led to themore efficient use of existing resources.As a consequence, constraints – so calledbottlenecks, where the technical capacityof the lines in some cases is lower thanthe players’ requirements as regards thetransmission of electricity – have arisenin places where we have not previouslyimposed restrictions to power trans-missions. In several cases, the capacityhas been boosted by installing networkprotection.
Within Nordel, several activities areongoing to ensure that the transmissioncapacity is used optimally and to reducethe risk of dividing up the electricity mar-ket. One such activity is the Nordic GridMaster Plan.
A clearer system of rules, new me-thods for determining capacity and in-creased use of counter-trading are otherelements of this work. One question, ofcourse, is how much counter-trading willbe required to reduce the risk of division
”The transmission of power between Sweden and other countries is becoming more and moreextensive”, says Marketing Manager Cecilia Hellner (on the left). Together with Christina Simón andHans Jacob Nilsen, she works on the development of opportunities for cross-border power trading.
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into price areas, and how the cost of thistrading is to be distributed. A reasonableprinciple is that whoever benefits fromcounter-trading should also bear the costof it.
In the long-term, some form of Nordic”marketplace fee” should be introduced,in the opinion of Svenska Kraftnät. Sucha fee would be able to finance measurestaken over and above what is justifiablefor supply reasons, but which is never-theless justifiable in order for the marketto be able to work better. This issue iscurrently being investigated by Nordel.
Integration of the European electricity market under wayThe European electricity market is alsodeveloping rapidly. The market is ex-panding through Poland, the Czech Re-public, Slovakia, Slovenia and Hungaryjoining the EU in 2004. The reformationof the Polish electricity market is of par-ticular interest to Sweden. The transmis-sion of power between Sweden andPoland via the SwePol Link is increas-ingly being carried out in accordancewith commercial principles, i.e. the direc-tion of the flows is governed by marketprices. During the winter of the dry yearof 2003, imports from Poland made avaluable contribution to the power supplyof the Nordic area.
The European Commission has pre-sented a strategy and a time plan forcompletion of the inner energy market.The goal is that consumers will be able tochoose their electricity supplier freelyfrom any EU country, without being hin-dered by national rules. This develop-ment is expected to take place graduallyand through the establishment of regionalelectricity markets, like the Nordic one.
EU directive and regulation will come into force in July 2004Changes to the electricity market direc-tive and the regulation governing cross-border trading in electricity will comeinto force on 1 July 2004. The directivecontains, among other things, dates forfully opening up the electricity markets ofthe EU, as well as requirements for inde-pendent supervisory authorities and non-discriminatory access to the grid.
The regulation contains stipulationsregarding the handling of the grid opera-tors’ costs during cross-border power trad-ing in order to remove discriminatoryborder tariffs. Grid operators who maketheir grids available for power transitswill obtain financial compensation forcosts connected with such transit flows.Compensation for transits will be financ-ed via the grid operators of the countriesgiving rise to the transit flows in othercountries’ grids.
Additionally, the regulation stipulatesthat the distribution of trading capacity
at bottlenecks during power transmissionis to be dealt with using commercial met-hods. Examples of these are market split-ting and counter-trading, which are usedon the Nordic electricity market. Secur-ing in this way an open and efficient uti-lization of the interconnectors for powertransmission will contribute towards pro-moting competition on the electricitymarket. Harmonisation of the grid tariffsis also pointed out as a precondition forcross-border power-trading.
Several other measures under considerationIn December 2003, the European Com-mission revealed proposed measures foraugmenting the supply security of theelectricity market. One measure is jointrules for safeguarding the power balance.The proposal is remarkable in severalways, especially with regard to how itviews the role and responsibility of thegovernment and the market with regardto peak load capacity.
According to the EU proposal, it is theduty of the grid operators to maintain thereserves necessary for ensuring a balancebetween supply and demand. FromSweden’s point of view, this is a dutywhich – at least in the long-term – clearlyhas to be left to the players active in themarketplace. Otherwise, there is a risk ofundermining price formation and the sig-nals sent to these players regarding theneed for investment.
The proposal also includes stipula-tions that provide the regulatory authori-ties with more responsibility for the dutiescurrently resting with the grid operators.Here, there is an obvious risk of increased– and unnecessary – bureaucracy. The
European grid operators have agreed, viatheir coordinating body ETSO, on prin-ciples for transit compensation for a fur-ther year. The system has been expandedand now includes a large part of the EU,including the accession countries, plusNorway and Switzerland. Imports fromadjacent countries are also affected.
Another change is that the grid opera-tors’ costs regarding transit compensationare to be financed via the grid tariff of therespective country. Consequently, specialfees will no longer be debited from themarket players exporting electricity.
The agreement on transit compensa-tion has certain shortcomings. DespiteSweden being a transit country, SvenskaKraftnät risks becoming a net contribu-tor to the joint fund. The reason for thisis that, in an international comparison,we have considerably lower costs on ourgrid. This in turn entails that our com-pensation claims for our infrastructureare considerably lower than most of theother grid operators’ claims. We get paidfor making the Swedish grid available fortransit flows and the compensation forthis is linked to the Swedish grid tariff’s(low) level.
When Svenska Kraftnät pays for thetransit flows it causes in other countries’networks, the price is higher because thecompensation is linked to the tariff levelin operation in these countries. Thus, theresult could be that we become net con-tributors, despite Sweden only being atransit country.
This model thus disfavours countrieswith low network costs. In our opinion,it must be seen as a temporary solutionwhich should evolve towards cost effici-ency gaining greater importance.
“At ETSO, the coordinating body of the European grid operators, one of the things we are working onis how compensation will be paid for power transits via an intermediate country”, says Roger Kearsley,second from the left. Roger is the Chairman of ETSO’s transit group. Here he is discussing market issueswith colleagues Jenny Fridström, Hans Jacob Nilsen and Cecilia Hellner (pictured in the foregroundwith her back to the camera).
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An attractive workplace – also for the parents of small children
Part of Svenska Kraftnät’s staff policy isbeing a good employer, also of parentswith small children. We try to live up tothis by:
• Supplementing parental allowance by upto 90% on all levels of income.
• Offering the opportunity to distance-working.
• Supplying IT aids for the home work-place.
• Having flexible hours of working.• Not discriminating against those on
parental leave during salary revisions.• Having a generally generous attitude
towards parents of small children.
Here are a few examples of those whohave made use of these opportunities.
Lars, Chief Financial Officer Lars Ericsson is Chief Financial Officerof Svenska Kraftnät and father of Danieland Joel.
– When we had our first son Daniel in2002, we decided to share our parentalleave right from the start. I presented myboss and my colleagues in the departmentwith a plan, which was well received byboth, says Lars. Thefact that I wouldadditionally be gettinga supplementary pa-rental wage fromSvenska Kraftnätsimplified our deci-sion.
This was the startof an arduous, enjoy-able and somewhatexerting time. In therun-up to closing theaccounts for 2002,things began to get
really demanding and Lars noticed thathis 50% working week was tending to in-crease considerably.
– My wife also works with financesand accounting and we both often haveto work very hard at the end of each year.The budget, final accounts and annualreport have to be drawn up during thisperiod.
Svenska Kraftnät is working towardsbeing an attractive workplace, amongother things through good leadership,responsible employees and commonvalues.
During 2003, we drew up some basiccommon values. These can be summa-rized using the keywords efficiency,quality, social responsibility, sprit ofcollaboration and team-spirit.
Lars Ericsson with his boys Daniel and Joel. All children newly-born to employees of Svenska Kraftnät get teddy bears in a beautiful shade of red used by the company.
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Lars mulled his situation over and then proposed a newsolution. This entailed working 75%, split into 50% atten-dance at the office and 25% distance-working – in accordancewith Svenska Kraftnät’s policy – and being on parental leavefor the remaining 25%. And that’s how it turned out.
In July 2003, Lars and his wife had another son. – So I continued with my parental leave part time, without
a break. During the 2003 annual accounts, my wife and I hadtwo small children to take care of. So we had to plan our timewell, concludes Lars.
Anna-Karin, EngineerAnna-Karin Gustafsson is an acting unit manager, engineerand the mother of Adam and Axel. Anna-Karin was on paren-tal leave periodically between September 1999 and August2003.
– Svenska Kraftnät has a healthy attitude towards theparents of small children. For me, my manager’s positive atti-tude has meant a lot.
– While on parental leave, I have been included in two salaryreviews and have not felt treated any differently to my col-leagues. I have been appraised ”as if I had been at work”, saysAnna-Karin.
Magnus, unit managerMagnus Stephansson is a newly-appointed unit manager andfather of twins Liv and Elias. Magnus was on parental leavebetween September 2003 and January 2004. In actual fact,these were his early months after being appointed as a managerat Svenska Kraftnät. Magnus is currently working 75%.
– Having a full life to me means being able to function atwork and at home. As a relatively new father, I was offered thejob of manager of the Market Design unit, explains Magnus.
– I knew that my employer’s view of what a full life meanswas the same as mine. This was an important part of acceptingthe managerial post. This means shouldering a double responsi-bility – as a dad and as a mainstay for my staff. So far, thingshave worked well, even though I have realised that things willinevitably get rather difficult in the future. As several people atmy unit have had similar experiences, I have encountered a lotof understanding from my colleagues as well. My unconditionalpresence is simply not always so important – the telephone andemail are excellent tools for communicating, concludesMagnus.
Pia, IT AssistantPia Edström works as an assistant in the IT department and isthe mother of Elliot. She went on parental leave in December2003.
– I think that Svenska Kraftnät has a very positive attituderegarding my parental leave and I am treated well and withinterest by my workmates and managers. The company madeit possible for me to connect to my office from home using myPC, so that I would be able to be a part of and involved in myjob the whole time. So I have plenty of opportunities to keepin touch with my workmates and closely follow events atSvenska Kraftnät, explains Pia.
– This will make things easier when I return to work.
Magnus Stephansson with twins Liv and Elias.
Pia Edström and son Elliot with his red teddy bear close at hand.
Anna-Karin Gustafsson with her children Adam and Axel.
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The Board
Sven Hulterström, Chairman
Born in 1938, apptd. 2003.
Other directorships: Chairman of AB Stokab.
Yvonne Gustafsson, Deputy Chairman
Born in 1952, apptd. 1995, Dep. Chairman 2001.
Director General, the Swedish National
Financial Management Authority.
Other directorships: Bofors Defence AB,
Styrelseakademien Stockholm.
Viktoria Aastrup
Born in 1971, apptd. 2001. Deputy Director,
the Ministry for Industry, Employment and
Communications.
Other directorships: Lernia AB,
Förvaltningsaktiebolaget Stattum.
Sussi Kvart
Born in 1956, apptd. 1999.
Senior Advisor, Sussi Kvart AB.
Other directorships: Hennes & Mauritz AB,
Chairman of the Board of KW Partners AB
and KB.
Christel Nettelvik Söderberg
Born in 1957, apptd. 2001.
Head of Swedish operation JET, Conoco
PhillipsNordic AB.
Christer Samuelsson
Born in 1954, apptd. 2001.
MD and Partner, Sensa Corporate Advisors AB.
Jan Magnusson
Born in 1948, apptd. 1998.
Director General of Svenska Kraftnät.
Other directorships: Chairman of the Board
of Nord Pool ASA.
Erik Bengtsson
Born in 1956, apptd. 2002.
Staff representative.
Representative of the Swedish Confederation
of Professional Associations.
Lisa Björkling
Born in 1955, apptd. 2001.
Staff representative.
Representative of the Swedish Federation
of Civil Servants.
Sven Hulterström Yvonne Gustafsson Viktoria Aastrup
Sussi Kvart Christel Nettelvik Söderberg Christer Samuelsson
Jan Magnusson Erik Bengtsson Lisa Björkling
45
Power industry termsBalance providerPower trading company that has enteredinto a balance responsibility agreement withSvenska Kraftnät. Balance providers areobligated to ensure that a state of balanceexists between the supply and consumptionof power in respect of their undertakings.
Balance settlementSvenska Kraftnät’s calculation of the balanceproviders’ imbalances on an hourly basis(balance power). This results in a financialsettlement being produced every fourteendays in the form of an invoice (SvenskaKraftnät has sold balance power) or pay-ment (the balance provider has sold balancepower).
Balance powerThe imbalance that the balance providerhas caused in the national electricity system.
BottleneckOverloads in congested sectors on the gridand cross-border interconnectors.
Load frequency controlSvenska Kraftnät is responsible for alwaysmaintaining the frequency of the electricalgrid at around 50 Hz. Deviations are com-pensated for via the rapid regulation of pro-duction.
Final powerThe difference between the actual, meteredvalues after 14 months and the prelimi-narily calculated data about consumption.
Counter tradingThe purchase/sale of electricity carried outby the system operator, i.e. Svenska Kraft-
nät in Sweden, to reduce the transmission ofelectricity in a constraint on the grid. Countertrading prevents customers from experienc-ing transmission limitations.
System protectionA system for boosting the transmissioncapacity and/or operational reliability. Forexample, system protection exists on theDC links between southern Sweden and thecontinent. System protection immediatelyreduces electricity exports on the DC links iftransmissions on the Swedish grid riskbecoming too great.
Point of connection tariffFee for connection to the grid. The fee isbased on the circumstances at the point ofconnection.
Profile settlementA model for keeping tabs on and distribut-ing the volume of consumed electricity notmeasured on an hourly basis. In doing so,deliveries can be correctly distributedamong the players concerned.
Final settlementSvenska Kraftnät calculates the differencebetween the balance providers’ actual de-liveries to profile customers (customerswhose consumption is not measured on anhourly basis) and their preliminarily cal-culated deliveries to these customers. Finalsettlement means that the costs are redistri-buted between the balance providers.
Constraint A constraint is a congested sector on thegrid.
Spot marketNord Pool’s spot market, which is a market-place for power. Agreements are made atlunchtime for all 24 hours of the followingcalendar day.
System-responsible company,
System OperatorA company responsible for the reliabilityand balance of the national electricitysystem. Svenska Kraftnät has this role inSweden.
System operation, (ancillary) servicesProcured services, primarily from powerproducers, which are necessary for thetechnical operation of the system. This pri-marily includes frequency regulation andaccess to gas turbines as a disruption reserve.
TransitThe transmission of electricity via an inter-mediate country.
Island operationIsland operation entails an electricity systembeing operated locally within a limited geo-graphic area (production, transmission andconsumption). The area may have been dis-connected spontaneously from the rest ofthe network or it may have been plannedspecifically for island operation.
Transmission lossesThe energy losses occurring in a network.
Financial definitionsNet loan liability Allocation and interest-bearing liabilitieswith deductions for financial interest-bear-ing assets.
Net profit marginThe income for the year with deductions forstandard tax at 28% in relation to operatingrevenues.
Earning capacity of adjusted equityThe earning capacity is defined as the in-come for the year with deductions for stan-dard tax (28%) divided by adjusted equitydefined as the mean value of the restrictedequity at the start of the year and at year-end (treasury capital and restricted reserves)and 72% of the unrestricted equity.
Earning capacity of employed capitalThe result for the year plus interest chargesin % of the average employed capital, i.e.
the balance sheet total less non interest-bearing liabilities including deferred stan-dard tax in equity.
Earning capacity of total capitalThis earning capacity is defined as the ratiobetween the income for the year plus interestcharges, and the total average capital.
Times interest earnedThe income for the year plus interest chargesdivided by interest charges. Specifies howmuch greater the income is compared withthe interest charges.
Operating marginOperating income in relation to operatingrevenues.
Degree of self-financing The degree of self-financing is defined as thecashflow prior to changes in the operating
capital and investments in relation to theinvestments for the year.
Debt-equity ratioThe debt-equity ratio is defined as interest-bearing liabilities minus interest-bearingassets divided by adjusted equity includingminority shares.
Equity/assets ratioThe equity/assts ratio is defined as theadjusted equity at year-end divided by thetotal capital. Adjusted equity is definedunder Earning capacity of adjusted equityabove.
46
Svenska Kraftnät, Head OfficeBox 526SE-162 15 VällingbySwedenVisitors: Jämtlandsgatan 99Tel: +46 8 739 7800Fax: +46 8 378405www.svk.se [email protected]
Svenska Kraftnät, HalmstadBox 819SE-301 18 HalmstadSwedenVisitors: Kristian IV:s väg 3Network Technology:Tel: +46 35 182240Fax: +46 35 182241Contingency:Tel: +46 35 182230Fax: +46 35 182239
Svenska Kraftnät DCSO,SollefteåNipan 51SE-881 52 SollefteåSwedenTel: +46 620 787610Fax: +46 620 12146
Svenska Kraftnät, SundsvallBox 138SE-851 03 Sundsvall SwedenVisitors: Erstagatan 2Tel: +46 60 195700Fax: +46 60 195709
Svenska Kraftnät,Åsbro Training CentreSE-690 45 ÅsbroSwedenTel: +46 582 50449Fax: +46 582 51210
Elforsk ABSE-101 53 StockholmSwedenTel: +46 8 677 2530Fax: +46 8 677 2535www.elforsk.se
Kraftdragarna ABSeglargatan 15SE-721 32 VästeråsSwedenTel: +46 21 178480Fax: +46 21 170485www.kraftdragarna.se
Nord Pool ASAP.b. 373NO-1326 LysakerNorwayTel: +47 67 528000Fax: +47 67 528001www.nordpool.com
Nord Pool Consulting ASP.b. 373NO-1326 LysakerNorwayTel: +47 67 108500Fax: +47 67 108501www.nordpoolconsulting.com
Nord Pool Spot ASP.b. 373NO-1326 LysakerNorwayTel: +47 67 528000Fax: +47 67 528001
STRI ABBox 707SE-771 80 LudvikaSwedenTel: +46 240 795 00Fax: +46 240 150 29www.stri.se
Svenska Kraftnät Gasturbiner ABBox 526SE-162 15 VällingbySwedenVisitors: Jämtlandsgatan 99Tel: +46 8 739 7800Fax: +46 8 378405
SwePol Link ABBox 526SE-162 15 VällingbySwedenVisitors: Jämtlandsgatan 99Tel: +46 8 739 7800Fax: +46 8 378405www.swepollink.svk.se
Triangelbolaget D4 ABSE-205 09 MalmöSwedenTel: +46 705 292811Fax: +46 46 292811www.triangelbolaget.se
Addresses
47
Editors: Mårten Norgren, Johnny Norling
Design: Vattenfall Support AB
Photos: Håkan Flank, Johnny Norling, Mårten Norgren
Printed by: Frilans Faktorn
Box 526, SE-162 15 Vällingby, Sweden Swbrd: +46 8 739 78 00 Fax: +46 8 37 84 05 Visitors: Jämtlandsgatan 99 Company reg. no: 202 100-4284
HVDC
HVDC
HVDC
HVDC
(220
kV
)
(220
kV)
N
N
N
N
N
N
N
N
Krajnik
GdanskRostock
LübeckKiel
Hamburg
Flensburg
RinghalsHelsing-borg
Cøpen-hagen
Gothen-burg
MalmöKarlshamn
Norrköping
Oskars-hamn
Biastystok
HasleStavanger
BergenRjukan
Oslo
Stockholm
Enköping
Nea
Trondheim
Tunnsjødal
Umeå
Sundsvall
Røssåga Rana
MelfjordSvartisen
Salten
Ofoten
Kobbelv
Narvik
Loviisa
Olkiluoto
Tallin
Tartu
Riga
Klaipeda
Ignalina
Latvia
Kaunas
Vilnius
Brest
HVDC
Kristiansand
Paide
Rauma
Forsmark
Kassø
0 100 200 km
N
Luleå
The power transmission networkin northwestern Europe
Hydro power plant
Thermal power plant (CHP)
Transformer or switching station
750 kV line
400 kV line
300 kV line
N
Joint operation link forvoltages below 220 kV
220 kV line
Extend 2003 CableOverhead line
275 kV AC –75 km
220 kV AC 4295 km
130 kV AC 7 km
The Swedish grid, comprises mainly 220 and400 kV lines, switchyards and transformer stationsand foreign links for alternating (AC) and directcurrent (DC).
400 kV AC 4 km10643 km
Planned/under construction
Sweden
Norway
Finland
Poland
Kaliningrad
Estonia
Lithuania
Russia
Belorussia
Denmark
Germany
Rovaniemi
HelsingforsÅbo
Vasa
Tammerfors
Kemi
Uleåborg
–
HVDC (High Voltage DC) 459 km115 km
–
Liepaja
Viborg
Slupsk
HVDC
Sindi