DONG Energy Renewables. DONG Energy International Paris April 2008

Transcription

1 DONG Energy Renewables Kim Ernst, Vice President DONG Energy International Paris April 2008

2 DONG Energy at a glance A leading utility company in the Nordic region Market leader in gas supply and electricity generation in Denmark Direct natural gas market share of approx. 60% and equivalent 35% market share in Sweden Leading power and heat producer in Denmark with a production capacity of approx. 5,500 MW. Renewables has additional capacity of 1,000 MW from wind turbines and hydro Electricity supply to more than 1 million customers Regulated infrastructure re activities ities Focused Gas E&P player with strong competencies Owns 67 licences (end 2005) and is currently producing approx. 35,000 boe/day Expected to increase to approx. 120,000 boe/day in 2010 Strong component of low risk, stable operating profits and conservative financial profile Shift in focus towards consolidation and integration Significant increase in EBITDA expected after 2007 due to Ormen Lange and synergies Stable long-term majority ownership by Danish Government *) Unaudited figures based on Preliminary Combined New Group Financials 2

3 Highlights Strong integrated presence across natural gas and power value chains FY2007 E&P Generation Distribution Markets Revenues ( 1) DKK 4.9bn (11%) DKK 12.3bn (27%) DKK 4.5bn (10%) DKK 24.6bn (52%) EBITDA (1) DKK 2.4bn (24%) DKK 3.7bn (37%) DKK 1.6bn (17%) DKK 2.2bn (22%) Focus areas Central power plants Offshore Wind Onshore Wind Hydro power Power distribution Natural gas distribution Natural gas storage Natural gas and/or power customers Total Revenue FY2007: DKK 41.6bn Total EBITDA FY2007: DKK 9.6bn Note: 1. Based on Group FY2007 figures, percentage distribution calculated before eliminations and other unallocated items 3

4 DONG Energy Renewables Organisation and competences 4

5 Renewables core activities Project Development Construction Production PROJEKTUDVIKLING Market analyses and identification of potential sites Acquisition of project rights Partnering Engineering i and project planning Procurement strategy and tendering Planning of operating phase Financing Construction of production facilities Project management Power production Operation and maintenance of assets 5

6 Current asset base of DONG Energy Renewables Market Denmark Operational Wind Hydro (MW) Total (MW) Net capacity (MW) No of WTG Norway Sweden Greece UK France Poland Total 629 MW MW 965 MW Wind farms Hydro power plants Assets under development or construction only All operating assets in Spain and Portugal 216 MW wind and 25 MW hydro together with a large pipeline of development projects were sold off in August 2007 due to a decision on strategic focus on Northern Europe Assets in operation and under development; wind and/or hydro power 6

7 Renewables is a major player among international utilities focusing on wind energy and is world leading within offshore wind energy Nysted Offshore Wind Farm The global offshore wind farms in operation Project/Country WTG MW Construction Vindeby (DK) 11x450kW, Bonus Lely (NL) 4x500kW, NedWind Tunø Knob (DK) 10x500kW, Vestas Dronten Isselmeer (NL) 28x600kW, Nordtank Bockstigen (SE) 5x550kW, Wind World Utgrunden (SE)* 7x1,5MW ENRON Blyth (UK) 2x2MW Vestas Middelgrunden (DK) 20x2MW Bonus Yttre Stengrund (SE)* 5x2MW NEG Micon Horns Rev I (DK) 80x2MW, Vestas DONG Energy Renewables - On- and offshore net capacity (MW) MW Palludan Flak (DK) 10x2.3MW, Bonus Nysted Offshore Windfarm (DK) 72x2.3MW, Bonus Arklow Banks phase I (UK) 7x3.6MW, GE Wind North Hoyle (UK) 30x2MW, Vestas Scroby Sands (UK) 30x2MW, Vestas Kentish Flats (UK)* 30x3MW, Vestas Onshore Offshore Barrow Offshore Wind Farm (UK) 30x3MW, Vestas Source: BTM March 2005, *Sold to Vattenfall 7

8 DONG Energy Renewables DONG Energy is committed to developing projects in the UK with an extensive number of projects in the pipeline Involved in 9 R1 & R2 projects (Barrow; Burbo; Shell Flat; Scarweather Sands; London Array; Walney; West of Duddon Sands; Gunfleet Sands I+II ) totalling 2830MW (DONG Energy share 1564MW) Recently formed a joint-venture Channel Energy Ltd (with Farm Energy) developing two 1500MW offshore projects in the SW of England 8

9 The permission and application process for erecting wind turbines in Zone de Développement Eolien (ZDE) Expected planning procedure ZDE Historic application proces Local accept, 4 years EIA 1 year Ploudalmézeau Bricqueville Montigny La Cour Jassienes Pargues Lignéville New application proces Building permit ½ year Echainvilliers ZDE, 2 years Le Langon EIA 1 year Building permit ½ year ZDE defines areas where to build wind turbines in communes covered. Discussions with local administrations are reduced. ZDE defines, e.g. maximum or minimum numbers of MW installed and turbine height in a given land area. Grenelle is expected to reduce application time further, goal is 6 months Environmental Impact Assesment (EIA) and building permit from local authorities still necessary Elsam France s operating wind farm Elsam France development projects with building application Departments applying for ZDE ZDE applied March 2007, 15 ZDEs have been approved 5 Paziols Feilluns Trevillach Source: SER, March ZDE are applied for and the number is expected to increase fast among the more than 36,000 communes Important to participate p in or initiate ZDE process in areas with existing wind turbine development rights. 9

10 Key observations from offshore wind development activities 10

11 Summary of key observations from offshore wind farm development Observations from consenting activities in EU include: Planning system is extremely complex Consenting and EIA work takes 3-5 years! (e.g. bird survey work started on London Array in autumn u 2002, consent by autumn u 2007) Costs up to 5m just for the consenting phase No guarantee for consent, therefore a huge risk on the developer Due to lack of data on the offshore environment, it is often a question about luck whether the site may have issues that could prevent consent to be granted Risk of public inquiry which is costly and time-consuming - more than a year s delay 11

12 Summary of key observations cont'd Need for a streamlined ( One-Stop Shop ) consenting process Several regulators involved (national, county and local level), and they do not coordinate their permitting activities Authorities are in general very flexible and obliging but deadlines are often exceeded by the authorities Huge number of statutory consultees/stakeholders Often expensive easements are required (i.e. crossing of railway can potentially cost several m in easement) NIMBYism is an issue even for remote offshore wind farms as onshore substations are required for large projects Regulators on the local level are often not aware of the government targets 12

13 Characteristics of the French offshore regime: Penalizes high production over 2800 full load hours in the operating period from 10 to 20 years the electricity price is fixed for 20 years, which means that the electricity cannot be sold at market price if this price should prove more advantageous only 60% inflation are being covered in the tarif the investor must cary the full grid connection costs high corporate tax and reduced average tax depreciation Conclusion: penalizes optimum production at good sites results in an unprofitable investment climate only few of the planned 4000 MW offshore will be established on the current commercial basis 13

14 French Offshore, 3000 h DKK/MWh 2500 Renewables offtake prices in different countries UK 2015 Poland Borkum Riff Dunkirk (offtake orice) 2040

15 French Offshore, 3800 h DKK/MWh 2500 Renewables offtake prices in different countries UK 2015 Poland Borkum Riff Dunkirk (offtake orice) 2040

16 Electric cars can utilise excess wind power and recharge at night using cheap electricity Electric cars make it possible to utilise more renewable energy A single 2 MW wind turbine can provide 3,000 electric cars with energy The electric cars will primarily il be recharged at night when excess wind power production is often available Batteries are four times more effective as an energy provider compared to hydrogen Even if all electricity were provided solely by coal-fired power plants, the CO 2 emission per car would be only 50% that of a traditional car If 20% of the Danish vehicle fleet were electric cars, a CO 2 reduction of million tonnes per year could be achieved. 16

17 17