Capturing the value potential in New Energy. Alexandra Bech Gjørv Head of New Energy

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1 Capturing the value potential in New Energy Alexandra Bech Gjørv Head of New Energy

2 Strong drivers for new energy solutions Energy demand will increase by 60 % by Mtoe Other renewables Hydro Nuclear Coal Gas Oil Date: Page: 2

3 Strong drivers for new energy solutions Replacement of oil and gas reserves is challenging Date: Page: 3

4 Strong drivers for new energy solutions Security of supply mbbl/d Outside OPEC OPEC Unconventional oil Date: Page: 4

5 Strong drivers for new energy solutions Increased awareness of climate change Source: Prof. Socolow, Princeton Uni. US Date: Page: 5

6 Strong drivers for new energy solutions New energy companies attract investment capital Date: Page: 6

7 Strong drivers for new energy solutions EU: employed within wind energy employees Date: Page: 7

8 Strong drivers for new energy solutions Authorities establishing incentives to meet challenges Date: Page: 8

9 Predicting broad future energy mix Date: Page: 9

10 A significant growth market in new energy TWh/year MBbl/day , ,5 Wind Solar Biopower Geothermal Wave Bio-fuel for power and 2020 bio-fuels Power in TWh/year and equivalent Mbbl/day, Bio-fuels in Mbbl/day Source: IEA Date: Page: 10

11 Power from fossil fuels large uncertainties Incentives for renewables /MWh!!!! 90 /MWh Wave and tidal? ? Power price Norway 2007: 34 /MWh Power price Germany 2007: 44 /MWh Nuclear Sources: NordPool, Hydro and Dale Simbeck (US consultant) In Offshore wind UK?? Biopower Onshore wind Norway? Incentives 2038 Date: Page: 11

12 Industrial peers engage in several technologies Shell BP TOTAL Statoil Hydro Vattenfall Statkraft E-on Dong GE Wind Solar Hydro Biopower Geothermal Carbon capture Hydrogen Biofuel Date: Page: 12

13 Hydro is positioned in the most mature new energy technologies Anticipated market potential High Wind offshore Bio-fuel Wind nearshore Solar crystalline Bio-power Wind onshore Solar thin film Low Wave Tidal Hydrogen fuel cells Geothermal Hydrogen Small hydro R&D 2005 Maturity of technology Commercial Hydro currently engaged Venture investment Hydro limited or not engaged Date: Page: 13

14 Hydro develops natural resources in innovative and efficient ways A unique capability platform Our talents Stakeholder management for access to resources Competence in large scale project execution Offshore/geo experience Metals and chemical processes and logistics Relevant R&D and material science Commercial player in the relevant markets Our values Date: Page: 14

15 Hydro s New Energy ambitions Increasing our activities in new energy solutions Capabilities in place for significant growth A preferred partner through our technical, operational and commercial skills Date: Page: 15

16 Our New Energy business Date: Page: 16

17 Hydrogen solutions for Europe Hydrogen fuelling systems from Hydro Reykjavik Reykjavik Reykjavik Hamburg Berlin Date: Page: 17

18 Hydrogen solutions for Europe Hydrogen fuelling systems from Hydro Hamburg Reykjavik Date: Page: 18

19 Hydrogen solutions for Europe Hydrogen fuelling systems from Hydro Reykjavik Berlin Date: Page: 19

20 Wind hydrogen at Utsira Date: Page: 20

21 Hydro Technology Ventures New Energy - Solar - Wind - Bio - Enabling - Distributed - Oceanic renewables Oil and Gas - Accelerated application of new technology Energi vekst Date: Page: 21

22 Investment in exciting energy technologies Wave power: Large resources, challenging developments Date: Page: 22

23 Our wind adventure Date: Page: 23

24 A successful early start at Havøygavlen A significant 140 mill. NOK position in 2001 Learning from tough terrain, complex winds and harsh climate Good commercial positioning gives IRR well above cost of capital Date: Page: 24

25 An attractive onshore portfolio in Norway Finnmark Excellent wind conditions Incentive system in place 2007 El-certificate system Norway/Sweden Fosen and Central Norway South Western Norway Date: Page: 25

26 Annual global wind power development Actual Forecast Prediction MW Source: BTM Consult ApS - March 2005 Existing capacity Onshore (forecast) Offshore (forecast) Prediction Date: Page: 26

27 Why offshore wind? Stronger, more stable winds Shortage of good land sites Avoiding community and environmental conflicts Economies of scale Date: Page: 27

28 Challenging marine operations Date: Page: 28

29 Hydro s E&P skills create value in New Energy Expertise in marine operations Complex permitting is no obstacle Preferred partner through track record in project development, contract and risk management Date: Page: 29

30 Acquired significant position offshore UK Very attractive winds and support schemes Scira: 315 MW Offshore shallow waters Positioned for GBP 300 million investment Many uncertainties still an option Date: Page: 30

31 Hywind taking the next step Capturing even better winds Cost effective and robust Minimum offshore work Site independent, less conflicts Date: Page: 31

32 Successful test of breakthrough technology 3 year R&D program Hydro patented solutions Next step is full-scale demo Date: Page: 32

33 Commercialization Commercial park Demo park Demo Technical focus Cost focus Market focus Date: Page: 33

34 A truly global potential Deepwater sites near major consumption areas, with price/incentive premium Map: NASA Date: Page: 34

35 125 TWh Hywind Hywind a challenger to Ormen Lange? The gas in Ormen can generate 125 TWh/year for 20 years Same as two offshore blocks of Hywind Forever! Date: Page: 35

36 Hywind Date: Page: 36

37 Forward-looking statements/ use of non-gaap financial measures In order to utilize the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, Hydro is providing the following cautionary statement: This presentation contains certain forward-looking statements with respect to the financial condition, results of operations and business of the Company and certain of the plans and objectives of the Company with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. The actual results and developments may differ materially from those expressed or implied in the forward-looking statements due to any number of different factors. These factors include, but are not limited to, changes in costs and prices, changes in economic conditions, and changes in demand for the Company's products. Additional information, including information on factors which may affect Hydro's business, is contained in the Company's 2004 Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission. With respect to each non-gaap financial measure Hydro uses in connection with its financial reporting and other public communications, Hydro provides a presentation of what Hydro believes to be the most directly comparable GAAP financial measure and a reconciliation between the non-gaap and GAAP measures. This information can be found in Hydro s earnings press releases, quarterly reports and other written communications, all of which have been posted to Hydro s website ( Date: Page: 37

38 Date: Page: 38

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