Modernizing the power capacities dr. Tomaž Štokelj Executive Manager, Sales & Trading division Holding Slovenske elektrarne d.o.o.

Summary HSE Group Investment policy Adapting to market conditions Key development projects in Slovenia Conclusion – new challenges ahead

HSE group in Western, Eastern and South-Eastern Europe

HSE group in Slovenia 574 MW 687 MW 168 MW HPP Boštanj 32,5 MW HPP Blanca 39 MW 160+180 MW

Production capacities of HSE DEM MW MVA Dravograd 25 36 Vuzenica 56 78 Vuhred 72 90 Ožbalt 73 Fala 58 74 Mariborski otok 60 Zlatoličje 114 148 Formin 116 Total 574 742 TEŠ MW MVA Blok 3 50 55 Blok 4 248 275 Blok 5 305 335 Gas turbine 1 42 Gas turbine 2 Total 687 749 TET MW MVA Production unit 2 110 125 Gas turbine 58  63 Total 168 188 SENG MW MVA Doblar 70 98 Plave 34 45 Solkan 32 39 Zadlaščica 8 10 Small HPP 16 19.4 Total 160 211 HESS (HSE 84,6% owner) MW MVA Boštanj 32,5 43,5 Blanca 39 49,5 Total 71,5 93 AVČE MW MVA Pumping 185 195  Generation 180

Production of HSE Group Production of HSE group in 2008: 7.771 GWh HPP (DEM, SENG, HE Boštanj) 3.270 GWh TPP (TEŠ, TET) 4.501 GWh

Investment Policy of HSE group We strive to achieve the following key goals: Increasing production capacity and reliability Increasing the share of renewable energy sources Lowering greenhouse gas emissions Application of new technologies of fossil fuel use Increasing energy efficiency Sustainable, environmentally sound use of energy sources Searching for new investments in SEE

Adapting to market conditions Recession effects Adapting activities to market conditions Price of emission allowances decreased Uncertain price after 2020 The price of electricity is changing (longterm planning is difficult) Support for RES increased Cooperation with local communities in placing production facilities in physical space Lower prices of equipment and energy sources electric energy

Balance of Europe in 2007 UCTE + Nordpool 2007 Production of el. energy: 3023 TWh Consumption of el. energy: 3015 TWh

Balance of Europe in 2009 UCTE + Nordpool 2009 Production of el. energy: 2881 TWh Consumption of el. energy: 2875 TWh

Production and consumption of electrical energy in Slovenia

Forward el. energy prices for year 2011 (on 9th of June 2010) 47,6 €/MWh 54,6 €/MWh 54,7 €/MWh 60 €/MWh 47,2 €/MWh 54,5 €/MWh 52 €/MWh 52,1 54,5 53,7 €/MWh 57,5 €/MWh 43 €/MWh 54,5 51,5* 72,7 €/MWh 47,4* 47,5* 44 €/MWh 48* 46,6 €/MWh 55 €/MWh* *Estimation

Main energent price movements

Price movements of el. energy for year ahead

Electrical energy price movements in Germany and in Slovenia There are no reasons, that Slovenian prices could be under EEX (Cross Border Capacities) Some traders are offering energy in Slovenia even under EEX

Key development Projects of HSE group HPPs on lower Sava river HPPs on middle Sava river Reconstruction of HPP Zlatoličje, HPP Formin HPPs on Mura River HPPs on Idrijca river HPP Učja, reconstruction of HPP Doblar 1, HPP Kobarid, HPP Kamno TEŠ Unit 6 TET reconstruction/CCGT/multifuel Pumped storage power station Avče and Kozjak Compliance with RES targets Reducing emissions Increasing reliability, stability and competitiveness of energy supply Preservation of coal production, Reducing import dependency, Lowering of emission factor (CO2/kWh)... Reserve/storage and potential of achieving favourable business results

Conclusion – New Challenges ahead New EU climate and energy legislation Renewal of National Energy Programme Financial and economic crisis

Thank you for your attention!