Lithuanian Energy Conference 2010

Energy system in compliance with interestsof national safety and economy.From strategy on paper to actual results

Sture LarssonTechnical Director, deputy CEOSvenska KraftnätThe Swedish Transmission System Operator

Development of energy systems

Principal objectives

>Security of supply

>Sustainability

>Economic viability

Present electricity energy balance inSweden

> Hydro 43 %> Nuclear 49 %> CHP (mainly biomass) 8 %

Total appr. 150 TWh

qHistorically built up in coordinated planningby state, municipal and private interests.

qPresently, expansion is driven by marketprices

- substantial upgrading of the nuclear capacity

State strategy to provideSecurity of Supply

qRegulated infrastructure> System Operator Authority (Svenska Kraftnät)

> Transmission and distribution grids

> Regulatory supervision of national Regulator

> Market mechanisms and rules ( NordPool Spot)

qCompetitive market for generation andsales

Investments to meet the climatic challenges

15.000.000.000.00015.000.000.000.000dollardollar

Investments in Electrical Energy up to 2030

source: World Energy Outlook, 2006(+ exchange rates corrections to 08)

1/3 to 1/2 of the investments needed in transmission

6

Hydro powerSolar power

DC transmissionWind power

Hydro200 GW

Solar 700 GW8000 km sq 90 x 90 km

Wind 300 GW25 000 km sq5000 x 10 km

A 20XX largeA 20XX large--net European visionnet European vision -- based on smart thinkingbased on smart thinking

0

5.000

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25.000

30.000

35.000

40.000

45.000

1999

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45,192 MW

Cum

ulat

ive N

amep

late

MW

Wind Generation in PJM - Operational and Proposed

www.pjm.com

* In planning queue - August 2009

Installed cap.167 000 MW

qNational planning target setto facilitate:

30 TWh / 12 000 MWqSummary of all identified

projects:> 36 000 MW / 90 TWh

qPresently installed capacity:Hydro 16 000 MWNuclear 9 000 MW

Wind Power Development Scenarios in Sweden

Economic incentivesSwedish system of Green Certificates

> Mandatory requirement on electricity consumption

> Each MWh in consumption must correspond to a specifiedvolume of certificates

> Requirements are defined as annual quotas (% of cons.)

> Certificates are issued for renewable production

> The price of certificates are determined on a market basis

> Present target to reach 25 TWh renewables by year 2020

> Long term stability, the system is scheduled at least until 2035

> Agreement to extend the system to include Norway

Skallhalsen, 65 MW

Domen, 100 MW

Laukvikdalsfjellet 70 MWGartefjell 40 MWHavøygavlen 40 MW

Hammerfest 110 MW

Raufjell 240 MW

725

155

835

25752615

2775

2900

Straumøya 26 MW

3930

Ytre Vikna 250 MW

Oksbåsheia 150 MW

Frøya 200 MW

Hitra 55 MWSmøla 150 MW

3955

4605

4855

6095

6815Harbaksfjellet 90 MW

Bessakerfjellet 50 MW

4905

5655

7285

Bugøynes 90 MW

Båtsfjord 120 MW

Sleneset 225 MW

Seglkollfjellet 350 MW

Rakkocearro 350 MWVannøya 135 MW

Haramsfjellet 66 MW895

Haugshornet 75 MW

7220

Snefjord 160 MW

3580

Andøya 260 MW

Fræna 65 MW

Rieppi 63 MW

1185

Flatneset 35 MW

Kvitfjell 200 MW

Kvenndalsfjellet 120 MW

Laksefjorden 100 MW

Skjøtningberg 400 MW

Gimsøy 50 MW

Digermulen 100 MW3100

Roan 180 MW

Hundhammerfjellet 48 MW

Sørøya 15 MW

Sjonfjellet 428 MW

Nordkyn 750 MW Eliastoppen 40 MW

Nygårdsfj. 40 MW

Fosen offsh.: 600 MW

Div. Vindparker Fosen statkraft 720 MW

Nord-Norge:Finnmark: 2900 MWTroms : 680 MWNordland: 1025 MWMidt-NorgeTrøndelag: 2210 MW Møre &Romsdal: 2215 MW

Total around 9000 MW

Identified projects in northern Norway

State strategy to provideSecurity of Supply

qRegulated infrastructure

qCompetitive market for generationand sales

qMarket for Green Certificates asinstrument to reach sustainabilitytargets

Wind development in a broader perspective

Wind expansion

Extensive wind development scenarios

q Wind capacity may reach levelsthat are highly significant in relation topresently installed generation capacity

q Implies a major transformationof the Nordic Power System andits physical characteristics

To develop the Nordic Power system tosupport the climate and energy policies laidout to reach the EU Commissionsustainability targets

20/20/20 at year 2020

…. and beyond that !

Joint objective of the Nordic TSO:s

Snitt 27000 MW

Snitt 13000 MW

Snitt 44500 MW

Impact on central System Operator objectives

TransmissionBalance regulationLoad-frequency control

Wind power induced balancing needs

Example from Germany Forecasting difficulties

Balancing need 10 000 MW

Balance regulation in hydro

-10000

-5000

0

5000

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15000

20000

25000

30000

Tor Fre Lör Sön Mån Tis Ons

MWh/h

+ Import / - ExportVattenkraftVindkraftVärmekraftKärnkraftElavändning

Extensively used todayEfficient, emission-free

Role of the Nordic Hydro Power

> Real time balance regulationof wind variations

> Back up for low wind generation

> Central European requests forthe regulation capacity

Balance Regulation in Hydro Power

> The regulation capacity of the Nordichydro power is extensive but not infinite

> The capacity is expected tobe used to its full ability

> In conflict with local environmentalconcerns and legally binding constraints

21

Balance regulationin generation

……and on the

demand side

Källa: Svensk Energi

Smart Grids - Demand flexibility

Vehicle-to-Grid (V2G) Vision

Based on vision from AC Propulsion

Market developments

> Expanded Balancing market

> Volatile pricing of balancing services

> Development of the Nordic decentralisedbalancing concept interacting with theTSO:s central role

> Spot market operating closer to real time

State strategy to provideSecurity of Supply

qRegulated infrastructure> System Operator Authority (Svenska Kraftnät)

> Transmission and distribution grids

> Regulatory supervision of national Regulator

> Development of Market mechanisms and rules ( NordPool Spot)

> Development of the TSO driven Balancing market

qCompetitive market for generation, salesand balance regulation resources

qMarket for Green Certificates asinstrument to reach sustainability targets

Enhanced transmission capacity needs

> Transport of wind generation

> Transport of back-up generation

> Facilitate use of efficient sources ofbalancing capacity

> Level out generation over largeareas

Extensive developmentof renewable generationcalls for substantialreinforcements intransmissiongrids andinterconnections

Tedious licensing is aserious obstacle

3rd AC interconnector toFinland

North-south inSweden and Norway

South-West LinkHVDC VSC

NordBaltHVDC VSC

Grid capacitymajor reinforcements

Nuclearupgradings

Swedish National Grid Investments

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1992 1995 1998 2001 2004 2007 2010 2013

MSEK

ENTSO-E 10 Year Network Development Plan, TYNDP

Evolving from a reliable transmission network designed foroptimization of generation resources …

…towards a transmission network implementing EU energy &climate policies and maximising welfare.

October 12, 2010 30

Electricity Directive 96/92/EC (1999)3rd Legislative Package for the Internal

Market in electricity (2009)

October 12, 2010 31

ENTSO-E 10 Year NetworkDevelopment Plan, TYNDP

2010-2014

2015+

Pilot TYNDP delivers

October 12, 2010 32

~14% of existing transmission line km

44%mid term

56%long term

78%

22%

AC > 300 kV29600 km 83%

17%

Total projects42100 km

DC 9600 km

AC < 300 kV2900 km

upgrade

new

Pilot TYNDP delivers

October 12, 2010 33

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October 12, 2010 34

RG Baltic Sea> Development of a coordinated extension plan of

interconnections between the Baltic States &Poland and Baltic States & Nordic area

> Long term drivers :ü RES integrationü Continental interconnections and North-

South reinforcements in Nordic countries

Pilot TYNDP delivers an overview of regional initiatives

State strategy to provideSecurity of Supply

qRegulated infrastructure> System Operator Authority (Svenska Kraftnät)

> Transmission and distribution grids

> Regulatory supervision of national Regulator

> Development of Market mechanisms and rules ( NordPool Spot)

> Development of the TSO driven Balancing market

> International coordination of expanded interconnections

qCompetitive market for generation, salesand balance regulation resources

qMarket for Green Certificates asinstrument to reach sustainability targets

InterconnectionsNordBalt

Objectives:EnhancedSecurity ofSupply

Integration ofthe Nordicand Balticelectricitymarkets

Integrated Nordic – Baltic market

> The most efficient way to share the benefit of theinterconnector among the Baltic states

> Open access to the interconnector as aninfrastructure asset

> Power exchange technology from NordPool Spot

An integrated market is a prerequisite for theSwedish commitment to build the interconnector

NordBalt connections to grid in Sweden andLithuania

39

The NordBalt Interconnector

European CommissionFinancial support from the EEPR funds

The Interconnector between Lithuania and Sweden 131 M€

Reinforcements in the Latvian Grid 44 M€

Total 175 M€

Necessary grid reinforcements in Lithuania and Swedenare financed separately on each side

41

ØCapacity 700 MW

ØVoltage 300 kV

ØLength ~450 km

ØTechnology VSC

Optofiber Cable 24pairs

The NordBalt Interconnector

42

J F MA MJ J A S OND2009

J F MA MJ J A S ON D2013

J F MA MJ J A S OND2012

J F MA MJ J A S OND2010

J F MA MJ J A S ON D2011

J F MAMJ J A S OND2014

J F MA MJ J A S ON D2015

J F MA MJ J A S OND2016

Design and manufacturing (sub-sea and land cable)

HVDCsub-sea cable

HVDC converterstation

NybroAC-station

Permits

HVDCland cable Sweden

Design and manufacturing (sub-sea and land cable)

InstallationDesign and manufacturing

Design, manufac. and install.

Installation

Install. Install.

Sweden

Commissioning

Commissioning

Commissioning

Commissioning

Singing of contractfor manufacturing

Singing of contract

Singing of contract

Singing of contract

Lithuania

KlaipėdaAC-station

Manufacturing and installationCommissioningSinging of contract

Singing of contractfor installation

NordBalt Interconnector, Time schedule

End of2015

Cable route in the Baltic sea

43

Potential development of wind power at SödraMidsjöbankarna with connection to NordBalt

44

Up to 2000 MW

Feasible by the chosen VSC technology

State strategy to provide Security of Supply,Sustainability and Economic viability

qRegulated infrastructure> System Operator Authority (Svenska Kraftnät)

> Transmission and distribution grids

> Regulatory supervision of national Regulator

> Development of Market mechanisms and rules ( NordPool Spot)

> Development of the TSO driven Balancing market

> International coordination of expanded interconnections

qCompetitive market for generation, salesand balance regulation resources

qInternational integration of MarketsqMarket for Green Certificates as

instrument to reach sustainability targets

Thanks for your attention !