Possible role of Norwegian hydropower in the future European energy systemHåkon Egeland, Statkraft Energy, NorwayBerlin 21 FEBRUARY 2011

89%

3200EMPLOYEES..

277POWER AND DISTRICT HEATING PLANTS

33%OF NORWAY’S

POWER GENERATION

RENEWABLEENERGY

...IN MORE THAN

20COUNTRIES

WITHIN RENEWABLES IN EUROPENo. 1

OUR STRATEGY

District heating

Regional companies

Flexible generation and market operations•Hydropower and gas-fired power in North West Europe (incl. France), and small-scale hydro in Norway

•Energy management and market operations

Wind power•Onshore wind power in Norway and Sweden, consolidate UK portfolio

•Offshore wind power in UK, incl. Dogger Bank to concession

International hydropower•Hydropower development in Turkey and Albania

•SN Power in South America and Asia

Page 4

2009 2020

Wind 76.000 MW 180 – 230.000 MW

PV 16.000 MW 150.000 MW

STRONG GROWTH IN FLUCTUATING

ENERGY SOURCES

Sources: EurObservEr,;European Commission

EREC; EWEA, EPIA

Germany 2009 2020

Wind 26.000 MW 46.000 MW

PV 10.000 MW 52.000 MW

A NEED FOR FLEXIBILITY..

OED 20.01.115

..OR MAYBE NOT

January 2005 – November 2010, monthly peak/off peak ratio

1

1,5

2

2,5

3

3,5

EEX

PNEXT

UKPX

OED 20.01.116

Germany

France

UK

Reservoir management- the basic challenge in hydro optimization

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TITLE

0

1000

2000

3000

4000

5000

6000

7000

Mean Inflow

Consumption

GWh/week

Week

Max.Inflow

Min.Inflow

Data for Norway

NORWEGIAN POSSIBILITIES

Close to 50 % of the total hydro reservoirs in

Europe – 84 TWh

Three alternatives:

1. Change the operation pattern in existing

plants

2. Increase installed capacity

3. Build pumped hydro storage in connection

with existing reservoirs

Both increased capacity and pumped storage is possible where the distance to the Continent is the shortest

8 OED 20.01.11

side 9

TECHNICAL POTENTIAL

- SOUTHERN NORWAY

Pump Storage Plants (PSP) possibilities depend on

limitations in the change of water level in upper and lower

reservoirs and duration for pumping / generation.

PSP Capacity (MW) Increased capacity

Change in waterlevel duration pumping mode exisiting plants

24 hours 7 days 60 days (MW)

7500

0,5 m/hour 85000 30000 2600

0,1 m/hour 30000 16000 2600

0,01 m/hour 3200 3200 1500

The reservoir capacity of Lake Blåsjø is 7.8 TWhArea 80 km2, elevation :1055m Today, capacity:

• 320 MW Pumps

• 2050 MW Generation

• 5 TWh/a Mean annual production

ULLA FØRRE – AN EXAMPLE

New tunnels

New reversible pumping turbines

Existing tunnels

Existing powerplants

Exisiting pumping turbines

Legend

TodayPSP 0,3 GW

Generation 2 GW

FuturePSP 4 GW

Generation 6 GW

Statkraf

t

present

ation

12

TECHNOLOGY COMPETITION

TechnologyLong term

flexibility

Short term

flexibility

Real time

flexibility

Smart grid X X

DSM X

Electric cars X

Flexible

heatingX X

Demand side flexibility

Supply side flexibility

Nuclear,

lignite, coalX X (X)

Gas X X X

Hydro X X X

Battery X X

Compressed

airX (X)

Grid

integrationX X X

Rough assessment for 2020-2030 time frame

OED

20.01.11

13

MAIN CHALLENGES

Political and regulatory

issuesNational and EU regulations

Transmission capacity and

regulation

0

10

20

30

40

50

60

70

80

1 7

13

19

25

31

37

43

49

55

61

67

73

79

85

91

97

103

109

115

121

127

133

139

145

151

157

163

€/M

Wh

Gjennomsnittlig prisstruktur over uken i Tyskland og Syd-Norge 2002 -

2008

EXX

NO1

Average weekly price structure Germany and

Norway, 2002-2008

Norwegian issuesEnvironmental aspects

Security of supply

Public acceptance

Commercial modelsSecurity for long term

investments

Market design issues

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TITLE

q Balancing large scale integration of fluctuating wind and solar power is likely to be a major challenge in Europe

q Further development of flexible hydropower could be a part of the solution

q To succeed, public acceptance in Norway and development of business models are crucial..

q ..and sufficient development of

interconnections must be facilitated

SUMMING UP

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Our internet site:

www.statkraft.com

www.statkraft.de

Pump storage plant video:www.statkraft.com/energy-sources/hydropower/pumped-

storage-hydropower/