Future Nordic Grid Investments Ulf Moberg February, 2007

2 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel 1.What we are and what we do 2.What we are doing 3.What we will do

3 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel Nordel is a body for co-operation between the transmission system operators (TSOs) in the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden), whose primary objective is to create the conditions for, and to develop further, an efficient and harmonised Nordic electricity market.

4 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel Acts as one Nordic TSO Etablished Nordic Grid Code –Operational code –Planning code –Connection code The Nordic electricity market functions well … … but further development is first priority

5 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel Our vision for further development: A more efficient market and improved security of supply

6 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Examples of activities and projects today Harmonisation of connection code for wind farms Common Nordic principles for power system adequacy and tendering process for peak power Common software for balance management (in operation) Harmonisation of balance management rules and pricing Common training sessions for operational staff (efficient handling of disturbances) Congestions management principles Common planning of new investments

7 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Investments: What we do today On-going investment projects of 1 billion Euro A package of five large transmission projects –To improve the Nordic marked and –To improve system security A common Nordic planning process and a common Nordic investment plan

8 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel´s strategic projects Overall investments of 1 bill. Euro Improved electricity trade and better reliability

9 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel´s strategic projects Fenno-Skan km cable km overhead line Decided Commissioning mill Euro 800 MW Fenno-Skan km cable km overhead line Decided Commissioning mill Euro 800 MW Overall investments of 1 bill. Euro

10 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Fenno-Skan 2 HVDC Existing cable New cable

11 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel´s strategic projects Järpströmmen – Nea 400 kV line, 100 km Decided Commissioning mill Euro MW i stage 1, MW later Järpströmmen – Nea 400 kV line, 100 km Decided Commissioning mill Euro MW i stage 1, MW later Overall investments of 1 bill. Euro

12 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nea – Järpströmmen 400 kV line

13 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nea – Järpströmmen 400 kV line Design competition

14 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nea – Järpströmmen 400 kV line Asymmetrisk tvåsamhet - i relation följs vi åt ” Ihålig stolpkonstruktion som skall mjuka upp den starka strömmens hårdhet och förena den med moder jords mjuka former. En fröjd för fru älg och alla vi andra som njuter av naturen. Slingrande som en fjällbäck, fast rätt upp i himlen! Två vänners sköna skär på en snöig fjällsluttning… I relation människa – natur” Artist Anna Cronheden

15 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nea – Järpströmmen 400 kV line

16 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nea – Järpströmmen 400 kV line

17 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel´s strategic projects the South Link Sydlänken 400 km, HVDC option Decided Commissioning mill Euro MW the South Link Sydlänken 400 km, HVDC option Decided Commissioning mill Euro MW Overall investments of 1 bill. Euro

18 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s The South Link

19 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel´s strategic projects the Great Belt Storebaelt 56 km HVDC Decided Commissioning mill Euro MW the Great Belt Storebaelt 56 km HVDC Decided Commissioning mill Euro MW

20 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s The Great Belt Connection

21 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel´s strategic projects Skagerrak IV 245 km Decision during 2007 Commissioning 2012 (earliest) 260 mill Euro MW Skagerrak IV 245 km Decision during 2007 Commissioning 2012 (earliest) 260 mill Euro MW

22 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s The Big Five Overall investments of 1 bill Euro Improved electricity trade and better reliability Nordel report: Prioritized cross sections

23 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s What´s next? The Big Five are not the final stage Nordel will not rest The next Nordic System Development Plan has started –Scenarios for year –Simulations –Socio economic conciderations –Seminars with market actors and authorities –Finished in December 2007

24 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Next System Development Plan Aspects to be evaluated Market functioning –Bottlenecks and price differences –Market power (abuse of) Adequacy –Risk of energy shortage –Risk of power shortage Network losses Investment alternatives –Transmission –Generation

25 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Next System Development Plan Results System status Weaknesses in the system Interesting (profitable) new transmission projects Advantageous areas for new generation

26 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Nordel Summing Up We have a well functioning Nordic market Nordic TSO´s have gone from coordinated to common planning The Big Five are a result of this Financing: Agreement that –the distribution of costs between the countries was acceptable –the congestion rent in the Nordel system should be divided in pro rata relation to investment costs This has been achieved by the TSO’s alone. No pressure or interference from regulators or other authorities Next System Development Plan will give a basis for the next step to future investments

27 (28) O r g a n i s a t i o n f o r N o r d i c T r a n s m i s s i o n S y s t e m O p e r a t o r s Thank You!