Stakeholder Management on Scotland’s Norwegian Interconnector Project Edinburgh 16 th of May 2012 Richard Blanchfield NorthConnect UK PM & Head of Technical

Contents 1. NorthConnect Project Background 2. Internal Stakeholder Management Juggling an international JV project Juggling an international JV project 3. External Stakeholder Management Juggling multiple international interests Juggling multiple international interests

NorthConnect Owners 25% 16.7% Non-Norway(50%)Norway(50%)

Norwegian Partners

Direction of Energy Exports At day During night Storage for night time production Daily In dry periods In wet periods Clean water power replaces thermal energy Seasonal Windy Additional energy will be stored Calm Wind / Hydro Interoperability Dominated by thermal power (24h production - > daily price fluctuations) Increase of wind power - need for flexibility / storage UK Dominated by hydropower (flexible production -> seasonal price fluctuations) Dry years are a problem 50% of European storage Nordic

Facts & Figures Bi-directional VSC-HVDC technology Bi-directional VSC-HVDC technology 1400MW – ½ million homes (Glasgow) 1400MW – ½ million homes (Glasgow) Converter stations Aberdeenshire and the Western Fjords Converter stations Aberdeenshire and the Western Fjords 600 km (= Peterhead to Manchester) 600 km (= Peterhead to Manchester)

77 WP1 Pre- FEED Business Plan Business Plan UK Landing UK Landing WP2 Consultn. EIA / Surveys EIA / Surveys Consents Consents WP3 Planning Subsea Survey Subsea Survey Detail Design Detail Design Procurement Procurement Lead Times Installation & Construction Execution Financial Close Investment Decision Contract Awards Oct

Internal Stakeholder Management Juggling an international Joint Venture project

99 JV / Project Company Governance Derrick Allan SSE Derrick Allan SSE Odd Øygarden E-Co, CHAIR Odd Øygarden E-Co, CHAIR Per Swenzen Vattenfall Per Swenzen Vattenfall NCAS (BOARD) Project Management Team (PMT) Øyvind Stakkeland Agder Energi Øyvind Stakkeland Agder Energi Øle Gabrielson Lyse Øle Gabrielson Lyse NCKS (EXECUTIVE) Jo Viljam Drivdal CEO / PM Jo Viljam Drivdal CEO / PM

10 Project Delivery GovernanceNorwayUKSubsea Project Manager Commercial Department Permitting Department Permitting Department Technical Department WP1WP2WP3PH1PH2PH3

11 Too Many Cooks?  Five organisations, with own systems processes & Governance structures Five organisations, with own systems processes & Governance structures People at Board / PMT level from different companies, mostly part-time seconded into NorthConnect People at Board / PMT level from different companies, mostly part-time seconded into NorthConnect Significant SSE involvement in UK & Agder Energi in Norway Significant SSE involvement in UK & Agder Energi in Norway

PMT Owners Group 12 Governance & Teamwork WP2 Internal communications are a challenge: Internal communications are a challenge: 15 people in 10 different locations 15 people in 10 different locations Clarity of responsibility, activities and reporting Clarity of responsibility, activities and reporting E-room file sharing E-room file sharing Telcos & VC’s Telcos & VC’s Targetted meetings Targetted meetings

External Stakeholder Management Juggling multiple international interests

14 Breadth & Depth ScotlandNorwaySubseaUKEU Local Regional NationalResidentsCouncil Roads dept. Aberdeenshr.Energetica MSP’s Scottish Govt. ResidentsKommuneIndustryNVE MOPEStattnet Asset owners Environml.FisheriesMoDCoastguardJNCC Nat. Grid OfgemDECCCommissionACERENTSO-E

15 Communications Strategy Consistent message in all three markets Consistent message in all three markets Create a good perception of the project Create a good perception of the project Process for PR and media handling Process for PR and media handling Gradual and balanced escalation of effort Gradual and balanced escalation of effort Promote political dialogue Promote political dialogue Communications reference group Communications reference group

16 Techniques Statnett as TSO: ­ Tie-in to the domestic grid as TSO ­ Obligation for tie-in, but no time limits.... ­ Assessment of grid implications ­ Key input to Construction license, REA and FTLA SN’s Conflicting roles NRA (NVE) grants construction licence, but reports directly to MOPE focus on technical issues MOPE is the appeal body... Ministry of Petroleum and Energy (MOPE) MOPE grants: ­ Revenue Exemption (RE) ­ Foreign Trade License (FTL) MOPE focus on political and socio economic issues Owner of Statnett Statnett as: ­ Owner of ICs ­ Close adviser for MOPE ­ Adviser for NRA (NVE) ­ Key input to construction license, RE and FTL applications The key issues for permitting processes are the mixed roles of Statnett and the conflict of interest of MOPE as owner and regulator InfluenceDiagrams

17 Techniques StakeholderPositioning

18 Techniques Management Plan

In Conclusion

Conclusions An important project for Scotland An important project for Scotland Defining project Governance, processes and systems takes time Defining project Governance, processes and systems takes time Internal management is equally important to external management Internal management is equally important to external management Its all about people and relationships Its all about people and relationships

21 Glen CoeHardanger Fjord “From Wind to Hydro and back”