PeoplePower 01 13 ENG Nett - Statkraft filei tisearlymorning,andRanaindustrial harbourisalreadyteemingwithactivity. Largecontainersaretransportedaway. Loadingandunloadingisconstant.There

A mAgAzine for StAtkrAft employeeS I no. 1 2013

10pages offinance andmarket

when Jens Bjørn staff presents thelatest quarterly report, the worldis ready to judge. we followed thechief financial officer on one of themost demanding days of the year.

hectic day inthe limelight

rana isall bubbly

statkraft'scriticalfriends

peru goesremotecontrol

the toughget going

in thewhitewilderness

2— statkraft

leader& content

people & power — 3

content

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04 from open icechannel ice-free fjordBusinesses in Rana rejoice

06 lima in complete controlSN Power leads the way in Peru

08 critical friendshipsStatkraft goes for untraditional friends

12 successful rehabilitationTiming was spot on in Kvilldal

18 man and the wildernessThe construction ofKjensvatn power plant

24 all eyes on the cfoFollow our CFO as he presents themost important document of the year

30 Understand acomplex marketPEOPLE & POWER presentsFinance 101

36 hydropowerthrough and throughBut Statkraft’s top turbineexpert is now retiring

photohansFredrikasbjørnsen

When Jens B. Staff presented the fourth quarterresults for 2012 he also presented the story ofa ‘perfect storm’. It’s about the financial crisis inEurope which has restrained the demand for power.Ambitious goals for renewable energy have ledto a power surplus. This turbulence is also downto record low CO2 prices, leading polluting coal tooutperform the more environmentally friendly gas-fired power.

Paradoxically, Germany’s ambitious energy trans-formation (energiwende) limits the performance ofcompanies which represent the future of renewableenergy. Statkraft is not immune to the very rapidand very extensive changes in the market either.

Therefore, it was also so inspiring and uplifting tofollow German Chancellor Angela Merkel's visit toNorway recently. She is Europe’s most powerfulpolitician. Her decisions affect businesses andconsumers directly. During the important energydialogue with the Norwegian Prime Minister, JensStoltenberg, Angela Merkel stressed the impor-tance of Norwegian hydropower and gas-fired powerto ensuring a stable and environmentally friendlyenergy supply. She believes that Norway’s role issignificant and met with CEO Christian Rynning-Tønnesen and other key top leaders to discuss theway forward. Statkraft’s CEO sees it like this: Wehave the competence to compete internationally.Politics and business work side by side. AngelaMerkel is pursuing two goals: She will both windup nuclear power by 2022 and ensure that 80 percent of Germany’s energy comes from renewablesources by 2050.

Therein lies the opportunity.

Bente e. engeslandSVP corporate communication

With the blue suit on

We have thecompetenceto competeinternationally.politics andbusiness Workside by side.

it is early morning, and Rana industrialharbour is already teeming with activity.Large containers are transported away.Loading and unloading is constant. Thereis a cold wind blowing. Old Man Winter

has a firm grip. Behind the vessels, the har-bour is ice-free, and the sea is a dark blue.What the residents here fear the most, is

that the so-called “Rana Ice” will take hold.In the past, when the fjord, the community’sonly link to the outside world, would freeze,Rana was isolated for months at the time.

Bubbles in the seaIn 1968, a bubble facility solved the prob-lem. Quite simply.The significance of this can hardly be

understated. In the beginning, the foundryNorsk Jernverk AS, coke and ammoniaproducer Norsk Koksverk AS and the min-ing company Rana Gruber AS dominated– companies that export their goods. Now,the Mo Industrial Park is the largest of itskind in Norway, and an industrial hub in Moi Rana with its own industrial terminal andharbour. The harbour here is now Norway’smost modern and the country’s sixth largest,measured in cargo tonnage.When the Norwegian Energy and Water

Resources Directorate (NVE), and now,Statkraft, developed the Rana Power Plant,one of the licence conditions was to main-tain an open lane in the ice during winters,so that ships could enter and exit the fjord

4— statkraft

current affairsMo i Rana

the harbour in mo i ranain northern norway isice-free during winter,thanks to two pipesthat blow air throughtiny holes and createbubbles in the water.text anne-Lise aakervik photo erik thaLLaug

ice-Free businessdeveLopment

“The upgrade gave us an energy-efficient andoil-free facility,” says Marianne Fineide.

the licenceonly called

for an ice-freelane, so that

ships could enter,but now the

entire rana fjordis ice-free

power pLant manager marianne Fineide


without fear of any ice.The power plant is located 10 minutes from

the town centre. This is also where powerplant manger Marianne Fineide has her of-fice. She is the boss of another important in-dustry that harvests the natural resources inthe area – hydropower. One kilometre insidethe mountain is a gargantuan hall, where fourlarge Francis turbines operate at capacity.“This is a large power plant. We produce

500 MW and our task is to run when pricesare high,” says Fineide, greeting two collea-gues who perform maintenance at the plant.“We also make sure the plant is spick and

span, to avoid unnecessary disruptions toour operations. We’ve just finished a majoroverhaul in the mountain hall. The flooring hasbeen replaced, and the walls have been paintedin light colours. Here at the Rana Power Plant,the sky is always blue,” she says, pointingto the ceiling. The cafeteria has retained its1960s style, and the dusk on the wall lends acertain tropical and holiday feel for the threeguys who are having their coffee break.

More freshwater, more iceThe power plant’s intake is from LakeStorakersvatnet. After passing through theturbine, the water enters the Rana River andfinds its way down to the harbour.“We’re adding more freshwater to the fjord

during winter than normal, and freshwaterfreezes more easily than saltwater,” saysFineide. “So there’s an added risk of ice with

the power plant. The facility starts at minusfive centigrade, but we’ll soon introducemore parameters that will ensure optimumstart-up. These include measuring the saltcontent of the fjord.”

Upgraded and efficientThe compressor building, housing three 960kW compressors, was recently upgraded at acost of NOK 19 million. From here, warm air ispushed through two pipes that are solidly-an-chored at a depth of 15 metres, suspendedbetween two jetties. The pipes have beenperforated with holes from 2 to 4 mm, andwere replaced and upgraded in 2007. Whenthe bubbles leave the nozzles, they expandas they rise to the surface, carrying with themwarmer saltwater from lower layers. Thismixes the freshwater in with the lower layers.This affects the entire harbour, and an ice-free harbour is now a given in Rana.“The upgrade gave us an energy-efficient

facility, so that no oil exits together with the air,”says Fineide. “The licence only called for an ice-free channel, so that ships could enter, but nowthe entire Rana fjord is ice-free. The facility’sefficiency surpassed everyone’s expectations.”

Excellent cooperationAnother person who is very pleased withthe harbour being ice-free, is, naturally, MoI Rana’s harbourmaster, Per Anders Nygaard.“It’s very important for businesses in Mo,”

he says.

Factsindustry in rana

the ore in the mountains around rana hasbeen well-known since the 18th century.commercial mining started in the 1800s.

rana gruber as was founded in 1937, and hasover the years been both publicly and private-ly owned. the owner since 2007 has beenLeonhard nielsen & sønner as (Lns).

the bubble facility made sure the “rana ice”was a thing of the past, contributing signifi-cantly to industrial development in the region.

Rana is all about the bubbles. “The bubble facility is very important for businesses in Mo,” the harbourmaster says.

Nygaard manages one of Norway’s largestindustrial harbours, and has an excellentrelationship with Statkraft.“We have about 1200 ships calling each

year, and last year was one for the recordbooks,” he says, adding that 4.1 tonnes ofcargo passed through – the highest volumeever in Mo i Rana.No wonder then that the harbourmaster

offers freshly made rum cake, coffee and avery happy smile. He still remembers the 51-52 winter, when the entire fjord froze over.The bubble facility was the first of its kind

in Norway. It was tested at MARINTEK’s seabasin in Trondheim, before being installed in1968. It was placed at the very end of the fjordand where the Rana River enters the sea.“The effect was tremendous,” Nygaard says.

6— statkraft

current affairsPeru

The process started with the semi-automationof the Pachachaca power plant.

reaching this milestonerepresents an important

step in our work to achieve theobjectives for sn power peruaLejandro ormeño

sn Power has been workingon the remote control projectsince 2010. It started with thesemi-automation of the La Oroyaand Pachachaca power plants,

and continues with the automation of keyprocesses at the Yaupi, Malpaso, Cahua andCallito Ciego power plants. Over the courseof this year, they will all be remotely control-led from the dispatch centre in Lima.

New training programmeThis project enables power plant operatorsto constantly monitor the condition of thehydropower plants. It also places SN Powerat the very forefront of managing and main-taining such power plants.“Reaching this milestone represents an

important step in our work to achieve the ob-jectives for SN Power Peru,” says AlejandroOrmeño of SN Power Peru. Not only from atechnical point of view, but also in terms oforganisation. ”The operation does not onlyinvolve a technological upgrade, but will alsoimpact the entire corporate culture.The way maintenance is carried out will

also be changed. The impact will also be feltin other parts of SN Power Peru. A specialtraining programme for power plant opera-tors, named Superador, has been introduced.

Lima in controL

According to SN Power Peru, it has made asignificant contribution to the success.The project started in 2011, and is now in

its final phase. All of the most critical agree-ments have been signed, and what remainsis only some minor additional work.

Peruvian pioneersFirst off the starting block was Gallito CiegoHPP, which started operations on 18 No-vember – operated from Lima. The projectcomprises two phases for each power plant,and the collected knowledge is transferredfrom the power plant operators to the peoplein the dispatch centre in Lima. The Yaupipower plant completed its first phase on11 December, making SN Power Peru thefirst power company in the country to re-motely operate a 160 MW power plant.“Both the planning and the implementation

have been in line with the requirements wehad set for the first phase,” says Ormeño,pleased with the accomplishment.

Completion in 2013The automation work at the other powerplants has been going on simultaneously forthe past few months. As a result, the entireprocess will be completed in 2013 – right onschedule.

sn power is the company with the highest effec-tive power output under remote control in peru.over the course of 2013, all of the company’spower plants in the country will be automated.text mirna sanchez

The Callito power plant will soon beunder full remote control from Lima.

Operators in Lima are in full control of anumber of remote power plants.


8— statkraft

featureEnvironmental partnership

criticaLFriendship

statkraft has entered into partnerships with threedifferentenvironmental organisations.all declare that

they will be critical friends to the company.text ruth astrid L. sæter photo Fredrik naumann

We wish to balancethe picture when

more renewable energyis developed


Nina Jensen,secretary general, WWF

Frederic Hauge,president, Bellona

Lars Haltbrekken, president, the NorwegianSociety of the Conservation of Nature

10— statkraft

featureEnvironmental partnership

the walls are decorated withphotos of large and smallpandas. On a flat screen, polarbears are tumbling around in theArctic ice, while cuddly versions

of various endangered animals are in a glassdisplay. We are at the offices of World Wild-life Fund (WWF), one of three environmentalorganisations which whom Statkraft recentlyrenewed its collaboration. WWF secretarygeneral Nina Jensen and Statkraft’s seniorvice president corporate communication,Bente E. Engesland, have met to discusstheir partnership.“Not only have we renewed our collaboration

with WWF, Bellona and the Norwegian Societyof the Conservation of Nature (Naturvern-forbundet) – we’ve also strengthened andrevitalised the content of the agreements,”says Engesland. “These are real and ruggedpartnerships founded on honest terms, andwe’re spending a lot of resources on this.”

Ambitious climate objectivesStatkraft is investing considerable effort, aswell as a couple of million kroner, on its part-nership with these environmental organisa-tions and the Norwegian Red Cross. The mainpurpose of these agreements is to strengthenenvironmental efforts and humanitarian work– both locally and internationally. At the same

time, there is a desire to share experience andincrease expertise through the cooperation.And an ambitious climate objective looms inthe distance: to contribute to solving globalclimate challenges.“The climate challenges are not solved by

individual players such as politicians, organi-sations or businesses,” says Engesland. “Thekey is working together – and time is runningout.” Nina Jensen is quick in her support.“Statkraft president and CEO Christian

Rynning-Tønnesen is an important voice inthe public discourse, and he is clear that weas a society must move on to becoming arenewables society if we are to solve the cli-mate challenge,” adds Jensen. “We in WWFshare this vision and goal with Statkraft,and this is exactly why Statkraft is a naturalpartner for us.”

Strategic partnershipYou don’t fear becoming a hostage of sorts –that WWF is seen as endorsing all Statkraft’sactivities?“No. Cooperation is a key aspect of our

strategy, because we know that those whocreate the problem can also be part of thesolution,” says Jensen. “We are also verypicky about who we enter into partnershipswith, there must be a true commitment onthe part of the company. When it comes to

Statkraft, we will take on the role of a criticalfriend, who helps balance the picture whenmore renewable energy is being developed.This development will of course have an im-pact on natural resources – where there is atrade-off with getting rid of more fossil fuels.”Adds Engesland: “All non-government

organisations need support. Would they bemore independent if the Ministry of ForeignAffairs supported them? It is the terms ofthe agreements that dictate the level ofindependence.”Specific targets and sub-targets for the

agreement between WWF and Statkraft havenot been established as of yet, but work isunderway.“We’re still starting out, and we need

to spend some time defining the targets,then how we can root and implement themlocally,” says Engesland. “It is important tomake sure that we do this as best we abso-lutely can.”Why does Statkraft want to cooperate with

three organisations that work within thesame field?“This is an important field for us,” says

Engesland. “We’re spending considerableresources on our collaboration. We have se-lected to partner with three organisations atthe same time to have a balance – we do notwant to be tied to one single organisation.”

“We promote Statkraft and their investments in renewable energy. And we oppose them when necessary,” says Nina Jensen of WWF (right). Senior vicepresident corporate communication Bente E. Engesland and Statkraft recently renewed its agreements with WWF, Bellona and Naturvernforbundet.


“our memBers encoun-ter Statkraft all over thecountry. We face majorchallenges in the yearsahead. It is extremelyimportant that we’re ableto solve the climate chal-

lenge without irreparable loss to nature.Norwegian river systems have been undermassive pressure for years, and it is im-portant to conserve as much as possibleof what’s left. As there is a major backlogof license applications, it is important tomake the right priorities and select theleast harmful projects and dismiss theothers. We need a renewables effort thatplays on the side of nature.We’re very pleased that Statkraft takes

responsibility and wants to cooperatewith Naturvernforbundet, although wewill have our share of disagreements inthe future. We hope that this dialogue willcontribute to renewable energy develop-ments that do not cause further loss ofunique environments.”

Factsstatkraft and theenvironmental PartnershiP

statkraft recently renewed its cooperation withthree environmental organisations in norway:wwF, bellona and naturvernforbundet. theagreements are all for three years, but vary incontent.

naturvernforbundet: Focus on norway. na-turvernforbundet is well represented acrossthe country, as well as where statkraft haspower plant groups. this will form the basisfor local and regional joint activities under theagreement.

bellona: primarily a focus on norway, butalso with a view towards brussels and the eu.the partnership comprises dialogue and jointactivities in relation to renewable energy andclimate, as well as the exchange of informationand cooperation on input to the eu regardingrenewable energy.

wwF: a national and european perspective. thekey area for this partnership is to work towardsa low-emission society, through focusing onrenewable energy, contributing to sustainablehydro and wind power, as well as promotinga dialogue with affected parties in areas ofdevelopment.

“what is the significance of the collaboration with statkraft?”

“ComBating Climatechanges caused byhuman activity is thegreatest challenge ofour time. Statkraft is thetop producer of renew-able energy in Europe.

Bellona is very pleased to have a closecooperation with the company.In order to achieve a low-emission society,

we need a massive effort to increase theproduction of renewable energy. After a 10-year struggle, Norway has green certificatesin place. This shows that we can succeed.What is important for both Statkraft andBellona is that we use this energy to reduceour large consumption of fossil fuels. Theelectrification of suitable offshore facilitiesis one prioritised area; getting more electriccars on Norway’s roads another. A thirdarea is tied to Europe’s massive renewableenergy efforts and Norway’s role.We greatly appreciate the leadership

that Statkraft displays and how involvedthe employees are.”

lars haltbrekkenthe norwegian society of theconservation of nature:

frederic haugebellona:

We share statkraft’s vision of arenewables society, and this is exactly

why statkraft is a natural partner for usnina, jensen, wwF norge

The development of the Alta power plant more than three decades ago was controversial. Statkraft now focuses on cooperating on shared objectives.

12— statkraft

current affairsRenovation of Kvilldal


nok 65 miLLionoverhaulgiving norway’s largest power plant a much neededoverhaul is costly. six months, nok 65 million,thousands of hours worked and epic amounts ofpaint, gravel and equipment were needed to restorethe kvilldal power plant to its former glory.text cato gjertsen photo statkraFt

NOK20

milliON

speNt ON

Hse

14— statkraft

current affairsRenovation of Kvilldal

the timing of the renovation ofthe power plant in the Ulla-Førreriver system was the first thingthat had to be decided. Kvilldal isa 1240 MW power plant, and has

a major impact on the Nordic power market.As a result, the power exchange had to benotified well in advance of the overhaul.

The right time“Region Western Norway worked closelywith colleagues at Lilleaker who specialisein production planning and power optimisa-tion,” says regional director Jan Alne. “It wasdecided that the drawdown would begin on 2July, that the two first units would be back inoperation on 5 November and the final tworight before Christmas. We kept that sche-dule all the way.” It should also be notedthat the timing of the overhaul was spot onas well. The average area price for Kvilldalwas between NOK 300 and 400 per MWhbetween 2010 and 2012. However, whenthe overhaul started it was NOK 80 and NOK280 when it was completed.“Also, we didn’t have any water loss during

the project period,” says Alne. “The flexi-bility of Ulla-Førre meant that the Surdalpumped-storage plant, which usually sup-plies Kvilldal’s intake reservoir, was runningaround the clock, pumping local influx to themain reservoir at Lake Blåsjø.”The projecthad two main objectives: to sandblast andpaint the four 170-metre pressure shafts,and to renovate and strengthen the globevalves, which could be described as thefaucets of the power plant. An additionalmeasuring column was also installed in theair cushion chamber.Of the many operations during the pro-

ject, it was the drawdown of the air cushionchamber that proved to be among the mostchallenging. The surface area of the chamberequals a football field and is 40 metres tall.One half is filled with water and the other withcompressed air. The amount of energy in thecompressed air equals 200 tonnes of TNT.To drawdown and refill the chamber withoutincident is highly demanding.

Focus on HSE“HSE was always at the core of the project,”

says Alne. “The water tunnels had beenpressurised for years and there was a riskof loose rocks. As a result, we had to securethe area where we suspected weakenedrock. In all, we used 800 bolts to securethe rock, which had to be drilled to a depthof between one and three metres.”In orderto access the site with vehicles, workersfirst had to make a gravel foundation in thetunnel. This was slow work. More than 700truckloads of gravel were used, all of whichhad to be removed at the end of the project.“Of the NOK 65 million spent on the

project, about NOK 20 million was spent onHSE efforts,” says Alne. “There was only oneminor injury – someone got something intheir eye.”One of the operations involved sandblas-

ting the pressure shaft for rust, and thensurface treating it. The shaft is at a 45 deg-ree angle towards the power plant, and thecrew had to perform this task while beingsecured to a cart, which in turn was securedat the top of the shaft.“It almost goes without saying that this sort

of work requires a lot of resources,” Alne says.

the shaft is at a45 degree angle,

so the crew had to besecured to a cart, whichin turn was secured atthe top of the shaftregionaL director jan aLne

people & power — 15people & power — 15

project projec tcostname type of work period (approx.)

øvre røssåga power plant complete overhaul of station 2014-2017 mnok 400

skjomen power plant new control facility 2012-2014 mnok 55

vinje power plant overhaul of unit 3 2013 mnok 65

tysso 2 overhaul of electro-technical facility 2013-2016 mnok 115

skallböle power plant complete overhaul of unit andelectro-technical facility 2012-2014 msek 137

trollheim power plant overhaul of waterway(intake and hatch structures) 2014-2016 mnok 60

haukeli power plant new power plant to replace the old one 2011-2013 mnok 83

dabbsjö dam rebuilding and strengthening 2012-2014 msek 125

hogga dam rebuilding and strengthening 2014-2015 mnok 70

tunhovd dam rebuilding and strengthening 2011-2013 mnok 166

Upcoming maJoroverhaUlsA selection of overhaul projects in Statkraftwhich are either underway or being planned:

when asked if a winningslalom run was in factmore about luck thananything else, legendarySwedish slalom skierIngemar Stenmark re-plied, “The more I train,the luckier I get.”Steinar Bysveen, execu-

tive vice president of production and industrialownership (now, EVP for Group Development)when the decision to overhaul Kvilldal wasmade, believes Stenmark’s words also apply toStatkraft’s success in renovating the Kvilldalpower plant.“We kept the budget and the original schedule,

the only HSE incident was someonewho gotsome dust in their eye, the timingwith regardto themarket was perfect, and therewas zerowater loss,” says Bysveen. “This project could notbe called anything by a complete success. Andthe reason for this successwas the thoroughplanning. By having strategies ready for any even-tuality, we arewell ‘trained,’ to use Stenmark’swords. That alsomeans you getmore luck.”

The same could be said about the movingof the four globe valves. A lack of spacemeant that only two of the valves could berenovated onsite. Weighing in at 120 tonneseach, it was an unusual sight for peoplein the area when the two remaining valveswere transported up 600 metres to theinstallation mine at the Saurdal power plantusing push and pull carts. Despite the chal-lenges, this and all other operations went asplanned.

Potential riskAlne says the project was a success. He be-lieves good planning is the most importantfactor in this. By making use of the expertiseamong people in the power plant group, theregional dispatch centre and the head office,the project gained an overview and controlof many potential hazards.“From beginning to end, the project was

characterised by excellent cooperation andinteraction across many disciplines inStatkraft,” Alne says.

“listened toingemar stenmark”

A total of 800 boltswere used to securethe rock, which had tobe drilled to a depth ofup to three metres.

the only hseincident was

someone who gotdust in their eyeexecutive vice president steinar bysveen

16— statkraft

current affairsIn-briefs

13Statkraft has a totalof 13 district heatingfacilities and bio-fuelfacilities. Of these, sixare in Norway, five inSweden and two inGermany.

the Cakit hydropower plant in turkey achieved arecord-high production. the 230 mw power plant reached atotal production of 98 gwh, an increase of 24 per cent fromthe year before. when the power plant entered into opera-tion in may of 2010, the estimated annual average productionwas 85 gwh. the power plant’s profits also exceeded bud-get, and the plant achieved earnings before interest, taxes,depreciation, and amortization (eBitda) of 82.4 per cent.

New record in Cakit

the norwegian government has deci-ded to award Statkraft Energi a licenceto develop the Ringedalen power plant inOdda municipality in Norway. According toplans, the plant will utilise the elevationdifference between Lake Mosdalsvatnand Lake Ringedalsvann, with an installedcapacity of around 20 MW. The completedplant will have an annual production ofabout 55 GWh. The cost of the project isestimated to be around NOK 200 million.Construction is scheduled to start in 2014.“The Ringedalen power plant is an environ-

mentally sound project, and will contributeto positive value creation in the local com-munity,” says development head for Nordichydropower Jon Ulrik Haaheim. “Statkraft willconsider implementing the project along witha new transmission tunnel to the Folgefonnadevelopment (the Blådal transfer).”There’s still room for developing hydro-

power in Norway. “The development of theRingedalen power plant will utilise the energyresources of an already regulated riversystem even more efficiently,” says Ministerof Petroleum and Energy, Ola Borten Moe.“This will be an important contribution to thegovernment’s ambition for development ofrenewable energy.”

RingedalengRantedliCenCe

The development of the Ringedalen power plant willutilise the energy resources in an already regulatedriver system more efficiently, according to the Ministerof Petroleum and Energy.


Happy Swedish customers

statkraft, togetherwith BKK, Haugaland Kraft,Sunnhordland Kraftlag andSognkraft have signed aletter of intent to change theownership of BKK and powerplants in Western Norway.The agreement forms the

basis for talks on a trans-action that will help clear

up ownership and facilitateimproved industrial coopera-tion between power compa-nies in Western Norway. Thetransaction, if implemented,will involve publicly-ownedpower companies acquiringshares in BKK and by doingso, increasing their owner-ship of hydropower genera-

tion in Western Norway. Thisalso means that Statkraftwill cease to be an owner ofBKK.The goal is to have the

commercial framework inplace before summer. Adeadline for the final agre-ement has not been set.

Cooling water gone astray causedthe short circuit at the Nedre Røssågapower plant in February.The incident led to the evacuation of

all 25 personnel at work at the time. Thehigh number was due to ongoing renova-tion work at the time.The cause of the short circuit was

concrete drilling being carried out as partof the renovation to install a new ven-tilation system. The cooling water fromthe drilling seeped through cracks in therock, down to the magnetic transformer,causing this to short circuit.

For the second year in a row, statkraft sverigeaB has set a new production record. in 2012, thecompany achieved production of one full twhabove the excepted normal year production. therecord was beaten in the following river systems:skellefteälven, Umeälven, gideälven, moälven,nätraån, Åseleälven, fjällsjöälven, indalsälven

and ljungan. despite the high production, lowelectricity prices led to a decrease in incometotalling almost sek 1 billion. the high hydropowerproduction is something swedish consumers couldappreciate. it should also help the environment,as the 2012 “surplus production” equals 278 000metric tonnes of co2 from coal-fired power plants.

power companies in the westwant more cooperation

treacherous cracksat nedre røssåga

statkraft and the red Cross haveentered into a collaboration agreement tostrengthen international humanitarian work,focusing on areas where Statkraft has a pres-ence. The objective is to increase awarenessof the significance of humanitarian efforts,mutual exchange of expertise and direct sup-port during crises.“Statkraft is focused on increasing its

social responsibility in areas where social andhumanitarian efforts are needed,” says com-munications director Bente E. Engesland.Turkey is one of the countries where specific

cooperation projects could be established.“We look forward to cooperating with Stat-

kraft and involving Statkraft employees in ourhumanitarian efforts,” says Åsne Havnelid,secretary general of the Red Cross.

red cross partnership in focus

Åsne Havnelid

18— statkraft

photo featureBuilding in the wilderness

the greatwhite openstatkraft’s new power plant isemerging in the white wilderness.photo hans Fredrik asbjørnsen text cato gjertsen

Leif Mattis Utsi is in full control of the massive wheeled loader inside the recentlymade tunnels at the coming Kjensvatn power plant.


20— statkraft


1. From Lake Gressvatn in theupper left corner of the photo, thewater will run in a six-kilometrelong tunnel down to the newlyconstructed power station whenthe work is complete. Until then,the water will be taken from theold river course. The entry point ofthe tunnel, where personnel andloaders drive out tons of rock eachday, can be seen in the right inthe photo.

2. Assistant project manager OddThoresen (left) and constructionmanager Erik Dahl Johansen notonly behave as the KatzenjammerKids, they also call each other bythe two brats’ names (Hans andFritz). Here pictured after a talltale on their way to the powerstation site.

3. Arne Steinstø is the foreman ofcontractor company Leonhard Nil-sen, one of the three sub-contrac-tors for the construction phase ofthe project. Steinstø is in charge ofthe engine fleet and the workshop.He has been involved during theentire construction period.

1

2


3

22— statkraft


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2


the Kjensvatn power plant, whichwill produce 80 GWh annually, isbeing developed at the foot ofNorthern Norway’s largest moun-tain, Mount Oksskolten in Hemnes

municipality. The area is as majestic as itis desolate. Just how desolate? Once youget off the nearest public road, you have 50kilometres of construction road before thenew power station emerges as a dark speckin the white landscape.The development comprises three con-struction areas. One is the power stationitself, the other is the construction of an800-metre transmission tunnel and at thethird site, a 20-kilometre 22 KV power line istaking shape.“There are certain apparent challengesassociated with constructing a new powerplant in such a rugged area in the middle ofwinter,” says Leif Nordseth, project managerfor the development of the Kjensvatn power

plant. “For instance, we don’t have roadaccess to all the construction sites. Snow-mobiles are therefore the only real transportoption in these areas.” The personnel at thepower station are not guaranteed that theconstruction road is open at all times. Untilnow, the road has not been closed for morethan just a few hours at a time, but duringthese situations, HSE restrictions on whatkind of work can be performed are in effect.“Statkraft has about eight people who workfull time on the project,” says Nordseth.“We also have 70 people from contractorsBleikvassli Gruber AS, Salten Nettjenesterand Leonhard Nilsen AS. These are com-panies based in Northern Norway and allhave broad experience with working in themountains during winter.” Progress is slightlybehind schedule, but Nordseth and his col-leagues believe they will complete the workon time. Commissioning and test productionwill start as planned in August 2014.

1. Project manager forthe development of theKjensvatn power plantLeif Nordseth, at the endof the access tunnel tothe power station. Aftera long and dark winterin the mountains, bothhe and his colleagueslook forward to some sunagain.

2. Nils Upstad (right) fromLeonhard Nilsen AS con-trols the drilling rig like hewas playing a video game.Steinar Fiskum keeps awatchful eye.

3. The ventilation pipehangs from the roof ofthe transfer tunnel, whichis being constructed bet-ween Lake Durmålsvat-net and the power station.Under the pipe, tire tracksshow where loaders andexcavators go, alwaysloaded with rocks.

4. Ingrid Boldermo, skil-led machine operator,is one of those who willmaintain the Kjensvatnpower plant once it iscompleted. She and hercolleagues look forwardto when power productionstarts in the autumn of2014.

there are certain apparent challengesassociated with constructing a new power

plant in such a rugged area in the middle of winter

23 4

24— statkraft

the big daysmiles all around as cfo Jens Bjørn staff shares anearly morning lift with the boss. But 90 minutes later,it is all business – as statkraft presents the mostimportant figures of the year to the public.text birger baug photo Fredrik naumann og eLLen johanne jarLi

featureFinance and market


FinanCeandmaRketThe powermarket is more de-manding and complex than everbefore. People&Power has fol-lowed CFO Jens Bjørn Staff as hepresents Statkraft’s most recentresults. On the following pages,you can also take the company’sown “Finance 101”.

26— statkraft


the night is still quiet in theunassuming functional apartmentbuilding on Oslo’s west side. Thewindows facing the street are alldark, but one.

There is a flurry of activity inside the apart-ment, at least for one person. This does notapply to four-year-old Jens Adrian, who islounging of the sofa, watching telly, giving hisdad time to consume a much-needed cupof coffee. When it takes effect 10 minuteslater, he even remembers to exchange theeye-catching slippers with spit-shined shoes.Anything else would have been embarras-sing when facing the media pack.“Eh, they might be a tad colourful…”He gives the slippers a final look, before

adding: “I bought them down the street. Theysay they’re in fashion.”Then he ties his laces, makes a final adjust-

ment of the tie. And he is ready.

Self-criticalThe reason why Staff is so selfcritical this Fe-bruary morning is that this is one of the biggestdays of the year for a CFO – the day he presentswhat he and his colleagues have been workingon and polishing for an entire year.The numbers.The fourth quarter results to be precise –

the final quarterly report for 2012, but alsothe results that say something about the yearas a whole. The results that decide if Stat-kraft will be described as a success or failurein the media, the results that could have asignificant impact on other, listed companies,the results that form the all-important basiswhen rating companies rate the company.In short: How easy it will be to finance all thegrand strategy plans for the coming year.A big, hectic and exciting day in other words.It is not all good news this morning. Staff

makes a second final check of the stockexchange notification and press release be-fore both are published at 8:00 sharp. He isarmed with his head, a carrot and two slicesof bread from the cafeteria. One with egg,the other with salmon.

Ready to go after thoroughpreparations for the press confe-rence. Just remember to changeout of those slippers.

There’s light in only one apart-ment in the building in westernOslo. Guess who?


this quarterly result is twofold, so it isa bit challenging to communicate

jens bjørn staFF

“Usually I have oatmeal every morning, butmy stash was empty. Oatmeal is the perfectstart of any day.”Then he reads a bit more, before glancing up.“It’s all good. Publish them.”

Critical expectationsWe leave him as he mumbles to himself,going through the presentation one finaltime. We walk to Statkraft’s auditorium.The hallway is filling up with people in suits,who switch between filling coffee cups andchatting with colleagues they have not seenfor a while.They are the traders, analysts, bankers

and some media representatives – but notas many as Staff and his crew had preparedfor. Perhaps there will not be as many criticalquestions as expected after all.Soon, most are in their seats. Only then do

president and CEO Christian Rynning-Tønnesenand CFO Staff arrive, together. The boss isintroduced by senior vice president, corpo-rate communication Bente E. Engesland.Rynning-Tønnesen gives a brief account ofthe key figures, before leaving the microp-hone, and details, to Staff.“Despite the Nordic power prices beingmuch lower in 2012 than in 2011, we havean increase of two per cent in our operatingprofit, and a net profit of 4671 milllion Nor-wegian kroner at year’s end…”Staff is confident. He looks out on the audi-

ence, not down on his notes. All is calm.“Power production increased four per cent,

compared with the fourth quarter of 2011.Fourth quarter still ended with a lossof 1.8billion Norwegian kroner. This is mainlycaused by write-offs in connection with theshareholding in E.ON…”There is a stir in the audience. Mobiles are

brought out, texts are sent. To the editorial de-partments, to the analysts at the head office.“Despite the write-down, the value of the

shareholding in E.ON must be regarded in abroader perspective. This is an investmentthat has, over all, and over many years,provided sound return…”

… a document he went throughone final time the day before.

Staff has a few quiet minuteson his way to work. In one hourand 50 minutes he will presentthe most important Statkraftdocument of the year…

28— statkraft28— statkraft


Staff goes through the other write-downs,such as the failing European gas powermarket. Due to falling carbon prices and thedevelopment of renewable energy sourcessuch as wind and solar and that access tothe national grid in India is now so poor thatpower must be sold locally at far lower prices.His answers are confident and concise. The

summary of the year and the near future areboth fundamentally positive. The audienceis noticeably calmer. When Engesland oncemore takes over the microphone, openingthe floor for questions, it is all quiet. Thereare no critical voices. One journalist staysbehind as the others leave, but he choosesthe CEO for clarifications.Staff can let his shoulders down. So far, so

good.During the debriefing in Christian Rynning-

Tønnesen’s office a little later, the sentimentis amicable.“You didn’t use your notes much. Very

credible,” the boss says.“Right on the money,” says Engesland,

before telling Rynning-Tønnesen that heneeds to talk with the Aftenposten news-paper, rather than having the meeting hewas supposed to.

Focusing on write-downsNews articles have already been publishedonline. Most are factual, neutral, but with afocus on the write-downs. However, over all,Statkraft does well in the media."This quarterly result is twofold, so it is a bit

challenging to communicate," Staff explains.Business is good, but Statkraft has also

written down assets, which is reflected inthe bottom line."The results from underlying operations,

measured as EBITDA, rose by 13 per centthis quarter compared with the same periodin 2011. This is due both to higher power pricesand higher production, as well as goodcontributions from market activities andcontract sales, and last, but not least, stablecost development," Staff says.The majority of the write-downs were due

it’s important that we also communi-cate negative news as well

jens bjørn staFF

A final energy top-off for thebody, and the absolutelyfinal read-through of the stockexchange notification and pressrelease.

The fourth quarter presentationis under way for media andfinancial experts.


to the major structural changes in the Germanpower market."Our goal is to provide a balanced and cor-

rectly emphasised quarterly presentation."Hopefully, that’s what the media will report,although that not always happens. And allin all, although the results for the fourthquarter this time was poorer than normal,we’ve done pretty well for the year as awhole. We’re also very well positioned forwhat will happen in the power market in thetime ahead,” says Staff.Then he rushes to an audiocast for ana-

lysts in the “Nore” conference room, underthe guidance of the experienced YngveFrøshaug. Staff is assisted by other key em-ployees, so that questions can be answeredby whoever is the most relevant experts.Questions come in a steady stream, fromDanske Bank and DnB Markets. However,what causes the most fuzz is a very detailedquestion from financial newswire Bloombergregarding the quality of Statkraft’s powerdelivery agreements leading up to 2020.Unni Hogseth, Johahn Ailo Kalstad and Staffmust all put their heads together in order toprovide a good reply.And then, this session is over too.“Unusually good questions this time,” says

Staff. “In previous years, we’ve had mostlypurely fact-based questions. But this timethey were of a strategic importance. Theyare so much more fun to reply to.”The worst is over now, and he can breathe

a sigh of relief. It is time for lunch and topractice before the recording of an Insightbroadcast a little later in the day. Stilldemanding stuff, but it is easier to com-municate with your own employees than theentire world.The big day is only over in the early eve-

ning, when Staff can sit back in the sofatogether with Jens Adrian.And tomorrow, there’s oatmeal again.

Audiocast with analysts in the"Nore" conference room. Thefinancial news wire Bloombergasks a difficult question. All thatis left is recording the "Insight"web cast.

"The media coverage is as weexpected, but they got the wholepicturetoo," says communicati-ons director Bente E. Engesland,as she talks withthe two whohave had their big day: Staff andPresident and CEO ChristianRynning-Tønnesen. Then theAftenposten newspaper calls ...

READ ABOUT EVERYTHING THAT IMPACTSSTATKRAFT'S PROFIT...

30— statkraft


aseller always wants thehighest possible price for theproduct, while a buyer wantsthe lowest possible price for thesame product. The point where

the two meet determine the price and thevolume produced and consumed.“As a producer, Statkraft wants to sell

why do co2 emissions go up when there is morewind and solar power? and why do we have situ-ations where producers have to pay to get rid ofpower? statkraft’s very own expert gives you abasic introduction to the complex power market.text cato gjertsen photo eLLen johanne jarLi

as much as possible at the highest pos-sible price. However, what is decisive is thecost of producing one additional unit of aproduct. The cost of producing one suchunit, one kWh, is called marginal cost. Thelower the marginal cost, the lower the powerprice in the market needs to be in order for itto be profitable to produce additional power

units,” says Ulf Eriksen, head of Nordic Tra-ding and Origination.Eriksen explains that hydropower, wind pow-

er and solar power have very low marginalcosts, because the raw material used is freeof charge. Then follows nuclear power, coaland natural gas, in ascending order, whereyou have you buy the fuel.

Complicated calculations“Hydropower constitutes about half theproduction in the Nordic power market inyears with normal precipitation. Because ofthe strong influence of hydro, available pro-duction, and thus market prices, are highlydependent on precipitation in Norway andSweden,” Eriksen says.Statkraft is able to prepare very good

forecasts due to the company’s hydrologyexpertise. But things can get even morecomplicated. In 2005, the EU establishedits own carbon quota market, and the quotaprices caused an increase in the marginal

FinanCe 101


the Power market is comprisedof many variables. These can oftencreate fairly obvious consequences,such as low water levels in the re-servoirs leading to higher prices. Butsome scenarios cause results thatare somewhat unexpected, such as:

a lot of wind and solar PowerCan inCrease the value ofhydroPower.High wind and solar power produc-tion does not have a considerableimpact on the value of hydro. Butthe instant weather conditions donot allow for wind or solar power pro-duction, hydro increases in value asthe water can be a back-up for briefperiods when these power sourcescannot be produced.

high wind and solar PowerProduCtion Causes more CoalPower and higher CarBonemissions.In Germany, small-scale develop-ment of solar and wind power isheavily subsidised. Power producersreceive a fixed price which is higherthan the market price, at the sametime as this power is given priorityin the market. This challenges otherpower production in Germany. Atthe same time, consumption is downdue to the financial crisis. This hascaused the lowest carbon priceson record. Combined with low coalprices and gas prices that haveremained consistently high, thishas caused polluting coal-poweredplants to increase power production,at the cost of more environmentally-friendly gas-fired power plants.

costs for gas power and coal power. As aresult, hydropower prices also increased, de-spite substantial precipitation in the Nordiccountries.The Nordic and continental markets have

become more closely connected in recentyears, and the significance of internationalfuel prices has increased. In August 2008,coal and oil prices reached record level,and caused a spike in power prices on thecontinent and in the Nordic region.Then the financial crisis came, and caused

a decrease in all prices, from shares to fueland power.

Wind outcompetes gasDuring this period, the EU also introduced its20-20-20 environmental objectives (20 percent increased energy efficiency, 20 per centlower carbon emissions and 20 per cent ofall energy will come from renewable sourcesby 2020). This is when planning power pro-duction really got complicated.

“The carbon objective leads to higher powerprices, while the two other objectives reduceprices. The price development then dependson the dominating measures. Throughsubsidies and other measures, Germanyhas experienced a massive increase in itssolar and wind energy production, after thenation’s government decided to shut down allnuclear power plants following the accident inJapan in 2011. As a result, Germany is able tocover its entire power demand with renewa-ble energy that has the same marginal costas hydropower on certain days. This meansreduced prices, especially during hours withhigh consumption, and as a result, increa-sed competition for Statkraft’s gas-poweredpower plants,” Erisken says.

Increased regulation?Eriksen indicates that the current marketmodel could be under threat if currenttrends continue.“Increased production of renewable power

will continue to push prices down. Duringsituations with low consumption in combina-tion with high solar and wind production, thetwo technologies could in fact produce morethan is needed. This results in negativeprices, as recently experienced in Germany,which means having to pay to get rid ofthe power (see separate article, ed. note.).If increased development causes more ofthese situations, the current model for de-termining prices in the market is challenged.This could mean increased regulation of themarket. The current development causes avery uncertain market situation and createsmajor challenges for Europe’s traditionalpower producers,” Eriksen says.

Adjusting to a new realityStatkraft is taking important steps tostrengthen its role in this volatile market.Client contact is at the top of the list. In a sit-uation where trading power on an exchangecould become less important, it will bemore important to sell power directly tocustomers. In addition to just trading power,customer activities will also entail chargingfor additional services, such as obtainingthe power and power certificates producersneed, as well as to offer hedging productsthat reduce customer risk.“In an uncertain future market situation,

such measures will ensure that we canuse our core expertise to secure continuedsound profits. Statkraft also offers itsexpertise and systems to trade power in themarket for smaller producers of renewablepower. So far, wind power in Germany andthe UK, as well as Norwegian small-scale po-wer production have been most important inthis regard. We’re now expanding to includeSwedish wind power,” Eriksen says.

Complicated? Yup. Difficult to follow? Yup.Uncertain development? Yup. The power market isexperiencing changes that border on the extreme,and in this article, Statkraft’s Ulf Eriksen attemptsto guide you through the complicated jungle that is

the power market.

Oh, is that sO?

32— statkraft


Christmas day 2012 did notturn out the way many Germanwind energy turbine owners hadplanned. Instead of relaxing athome and enjoying good foodwith the family, they had toswitch off the power generationfrom their wind energy turbinesand spend the holidays in soli-tude at the wind farms.This might sound like a sad storythus far, but there is a happy en-ding. German power costumerssaved 11 million euros. A grandChristmas present indeed.“This was caused by the

negative German power pricesat the end of December,” says,Alexander Küppers, projectmanager, virtual power plant.“Unseasonably warm weather,combined with the fact that a lotof industry had shut down dueto the holidays, made power de-mand so low that prices becamenegative. This happens when thepower supply is too large, andthe producers have to pay thegrid owners in order to get rid ofthe power.”Statkraft has entered into con-

tracts with wind energy turbineowners that enable the companyto externally switch off the powerproduction when negative pricesreach a certain level. However,these contracts entered intoeffect on 1 January 2013. Untilthat date, the turbines had tobe switched off manually at thewind farms. When prices on 24December, suddenly droppedto negative 220 euro per MW,dispatcher Anton Prokofiev de-cided to take immediate action.Prokofiev called his colleagueswho are in daily contact withthe owners of the wind turbineowners. Most were on holiday,some in Switzerland, and evenin South Africa. But they started

calling around, explained whatwas going on and managed tooquickly negotiate contracts forthe impending operation.“At the time, we didn’t know

how much it would cost us ifwe didn’t manage to switch thepower off, but we knew it wouldbe expensive,” Küppers says. “At00.00 hours, about 300 windenergy turbines were switchedoff in the same millisecond. Un-fortunately, the owners couldn’tgo home right afterwards. Theturbines have to be switched onand off at regular intervals toavoid major damage.”Over the course of 18 hours,

Statkraft had cut more than 300MW, and power prices increasedto a level where the turbinesonce more could operate asnormal.“Calculations afterwards

showed that Statkraft and thecustomers had saved 11 millioneuro on ‘Operation ChristmasTurbine Standstill’. Quick actionand excellent lines of communi-cation were key to this success.None of the turbine owners hadimagined they would spendChristmas alone together withtheir wind turbines. But we man-aged to save a massive amountfor our customers, and they wereall quite cheerful about it. And ifnothing else, Christmas 2012 isone that will be remembered byall,” Küppers says with a smile.

“our goal is to produce asmuch as possible when pri-ces are high, and as little aspossible when they’re low.The most important tools inachieving this optimisationare knowledge about thepower plants and the waterlevel in all our reservoirs,how large the influx is, andexpected developments inthe power market,” says PålStrøm, head of the groupdispatch centre.He says that his colleagues

spend much of their day

if nothing else, christmas2012 is one that will be

remembered by allaLexander küppers

a German Christmas Carol turninG Onthe fauCethowmuch power should eachof statkraft’s hydropowerplants produce today? thatis the question that 20 peopleat the group dispatch centreat lilleaker try to answer ona daily basis. to help themthey have analyses and priceforecasts from the around50 colleagues in the analysisenvironment.

the valueOf water

The value of thewater in thereservoir varies constantly. Anumber of national and inter-national factors impact theprice. Here are some scenariosthat illustrate when thewaterprice is high andwhen

it is low.


discussing and assessingthe data basis from theanalysts. Much of the data,such as future precipitationor expected price develop-ments in the power market,is uncertain. It is there-fore impossible to developsoftware that can give you a

“correct” answer.The analyses that form the

basis for scheduled powerproduction have differenttimeframes. Hydropowerplants with large reservoirs,such as Ulla-Førre, usuallyhave a more long-term per-spective.“These large plants have

a great deal of flexibility.This enables us to assessif they should produce insix months’ time, a yearor even further into the fu-ture, rather than tomorrow,”

Strøm says.The smaller the reservoir,

the less flexibility. Frequentanalyses and price forecastsare prepared, to minimisewater loss.“Statkraft uses a lot of

resources for analyses andhas a diverse composedteam compared with otherpower producers in theNordic region. This givesus an enormous strengthand a significant advantagewhen it comes to optimisingpower production.”

1. which of these energy sources hasthe highest marginal cost?

a. Hydropower B. Natural gas c. Coal

2. when does the water in the reservoirs havethe highest value? when the reservoir is:

a. Almost empty B. Half full c. Almost full

If you’ve completed our“Finance 101” course onthe preceding pages, you areready to take the test below.

The answers can be found on the intranet pages, whereyou also can take part in a competition with prizes.

taKe

tHetest

aNdwiNa

prize!

a lot oF pReCipitationloweR value

The reservoirs fill up, and thevalue of the water decreases.Prices drop to the very bottomwhen reservoirs overflow,and the influx cannot be used.

Cold weatheRhigheR value

The Nordic countries usemainly electricity to covertheir heating needs. Wheneverybody turns on the heatat the same time, the waterlevels in the reservoirs godown and prices increase.Prolonged periods with verycold weather, combinedwith little precipitation, hastriggered some very intensepublic debates about electri-city prices.

expensive Fossil FuelshigheR value

It is always cheaper to pro-duce 1 MW of hydropowerthan 1 MW of gas, coal oroil. As themarket determinespower prices based on thecost of producing the mostrecently produced unit(marginal pricing), increasedprices of raw materials, suchas coal, gas and oil, will causethe value of the water toincrease.

loweR CaRbon pRiCesloweR value

Power producers who usefossil fuels have to buycarbon quotas for their emiss-ions. These quotas determinea price for carbon emissions,and increase the competi-tiveness of emissions-freeenergy sources. But when theprice of carbon quotas drop,or becomes free, this effectdecreases. And the value ofthe water also decreases.

FeweR nuCleaR poweRplantshigheR value

Political decisions that influ-ence the overall availability ofproduced power, will influencethe composition of the totalpower production, and thus,the prices. The nuclear ac-cident at Fukushima in Japanin 2011 is one example of this.As a result of the accident,Germany decided to close allits nuclear plants. Althoughother countries are planningto increase their nuclear pow-er production, the immediatepower deficit must be coveredby other sources.

impaCt

FaCtoRs

wateRlevelin

theReseRvoiRs

wateR

value

Pål Strøm

34— statkraft

technology& environment

Brazilian PresidentDilmaRouseff was not subtle whenshe opened the wind farm inBarra dos Coquerios recently,together with employees ofDesenvix and SN Power. “Havingenergy means securing growth,”she said. “This wind farm will notonly produce clean energy, it isalso beautiful to look at.”The wind farm has a capacity

of 34.5 MW and is locatedin the north-eastern state ofSergipe.Country manager Joakim

Johnsen of SN Power was alsopresent, and he was impres-sed by what he saw.

“This project has been com-pleted in record time, and a lotof innovative solutions havebeen used,” he says.Desenvix, where SN Power

holds a 40 per cent ownershipinterest, owns 95 per cent ofthe new wind farm.The wind farm is especially

welcome now as the north-eastern part of Brazil is cur-rently experiencing a droughtthat has created problemsfor Brazil’s large hydropowerindustry. The authorities inSergipe are investing in windpower as a back-up for whensuch droughts occur.

Did you know that one singlewind powerturbine can provide enough electricity for105 634Nepalese households? Similarly,it would provide enough in Sri Lanka for21 552 households, for Peru 9 506,Germany 1 126 and Sweden 508.Norway, unsurprisingly, is at the bottomof the list with just 312 households.105634

bRazil’s pResidentopened wind FaRm

“The wind farm is also beautiful to look at,” says Brazil’s president.


Statkraft to construct newwind farm in Scotlandstatkraft is planning its second onshore windfarm in scotland. the location is near the famouslake inverness. the wind farm will have a capacityof 66.7 mw and an estimated annual production of184 gwh. this will be statkraft’s largest onshorewind farm in the Uk when it is completed in 2014.

the Berry Burn wind farm is located in northernscotland, 30 kilometres east of inverness, and willcomprise 29 wind energy turbines. statkraft has

developed the project since 2004. scottish autho-rities have been very positive about the project,and want to contribute to the strengthening ofstatkraft’s position in the Uk market.

statkraft is currently completing the constructionof the Baille wind farm in scotland. together withfour new wind farms in sweden, statkraft willsoon have an onshore capacity of 236 wind energyturbines and 633 mw outside norway’s borders.

Now even thebuilding is green…

the construction of the sheringhamshoal wind farm has now beencompleted. this week, the operationsorganisation scira offshore energymoved into their new custom-designedoffices, with the aptly named address“wind farm place.”wind farm place is located four tofive kilometres south of wells-next-the-sea in norfolk. this is a low-energybuilding with many energy-savingsolutions, including recycling of rain-water for use in the restrooms. thenew building houses the administra-tion of scira and is the base for alltechnical personnel who work withoperations and maintenance of thesheringham shoal offshore wind farm.“now that the wind farm is fullyoperational, we’re very pleased tofinally move into these offices, whichare tailor-made for our operations,”says einar strømsvåg, general mana-ger of scira.statoil and statkaft own 50 per centeach of scira offshore energy. thecompany took commission of the windfarm from the development organisa-tion in January this year.

laotian theun hinBounPower Company (THPC), whereStatkraft owns 20 per cent, hasopened two power stations inLaos. As with the existing powerstation, which was completed in1998, the two new stations willbe operated and maintained byStatkraft,“The expansion project in

Laos is a very good exampleof how utilising large, renewa-ble energy resources can becombined with sustainablesolutions. With this power

plant, Norwegian hydropowerexpertise contributes to profi-table, environmentally correctand sustainable investmentsinternationally,” says Statkraftpresident and CEO ChristianRynning-Tønnesen. He was pre-sent during the opening in Laos(photo, right).The ceremonyin January marked the officialopening of the two new powerstations, one new dam and anew power line with a total costof about 650 million US dollars.This expansion will double the

production of renewable energyto 3 TWH annually. With thenew dam, water from the rainseason can be stored for pro-duction during dry seasons.

expansion opened in laos

the Un panel on climate change hasestimated that we have to increase theshare of renewable energy from thecurrent eight per cent to around 80 percent globally by 2050 in order to limitglobal warming. the panel also con-cludes that greenhouse gas emissionsmust be cut by 50 per cent by 2050.

80

This is how the new wind farm will look.

Electrical power engineer Richard Nunn(left) and HSE head Adam Blake enjoy acup of coffee in the new building.

36— statkraft

the positionTorbjørn Eriksen

The oracleof The norTh

torbjørn eriksen loves turbinesand high regularity. no wonderit is difficult for him to quit.

text: ruth astrid L. sæter photo: erik thaLLhaug


the heart of the turBine: The runneris the vital part of any hydropower turbine

– and Torbjørn Eriksen is in possession of avital part of Statkraft’s turbine expertise.

hydropower isfantastic so

there’s a certain senseof nostalgia now

38— statkraft

the engineer’s fist stretchesits fingers, caressing the surfaceof the steel turbine shaft, whichrotates at 428 rounds per minute.The shaft transfers the energy

from the 40-year-old turbine below us tothe generator above our heads. As the 140000 horse power thunders, rushing water istransformed into electricity.The fingers belong to Torbjørn Eriksen. The

mechanical engineer has stopped by theSkjomen power station to check that every-thing is okay with nozzles, runners, valves andturbine regulators. He has worked in Statkraftfor ages and is considered to be one of thetop experts on turbines in the group.“It’s strange – my experience is that the

more you learn, the more you understandhow little you know,” Eriksen says with afriendly smile from behind his glasses. Youwill never hear him call himself an expert.But there is no escaping the fact that he hasbroad expertise and experience from aboutfour decades as an engineer.“My strength is that I can see how a power

plant is connected and that I have an over-view of the entire production. There’s notthat many who can say the same,” Eriksenpoints out, as he guides us through the tur-bines at the Skjomen power station.

Proud historyWe are right in the middle of the heart ofthe power production. The giddiness of the67-year-old engineer reveals that this iswhere his heart is as well. He points andexplains – about the six “needles” that shootwater at speeds of 105 metres per second.About how the water gets the 10-tonne Peltonwheel running, and how this speed trans-forms into electricity through the generator afew metres further up. About the three unitsin Skjomen that produce a total of 1.2 TWh of

clean energy every year – enough to provide60,000 households with a whole year’sworth of electricity. There are many detailsand the passion is strong.“Hydropower is fantastic,” he says. “A

turbine can have an efficiency of up to 96 percent, a dizzying number, and this is a cleanand renewable resource.”

He is proud that Norway has been at thevery forefront of developing turbines through-out hydropower history.“The Norwegian contribution has in par-

ticular been to increase the efficiency,” hesays. “And that’s an important job – becausethere’s a lot of money in each lost percent-age. One part of my job is to estimate the costand benefit effect of the hydropower plants.To weigh negative and positive aspects ofa development or expansion against eachother. A lot of what I do is assisted by simula-tion software that Statkraft has acquired.”Throughout his service in Statkraft, Eriksen

has not only ensured clever solutions andsound turbine maintenance in Northern Nor-way. He has also assisted SN Power in Laos,Nepal, Chile, and Peru, with everything fromprocurement assessments and conditionassessments to maintenance methods andinstallation of new equipment.“The international assignments have

provided me with many great experiences,”he says. “It is stressful to travel far away,to work efficiently for intense periods andperhaps also have problems communicatingand with the old stomach – but it has beenexciting. I know a little Spanish, which wasa great advantage when on assignments inSouth America.”

stillingenTorbjørn Eriksen

a turbine can havean efficiency ofup to 96 per cent,a dizzying number.

28 years in statkraft: Torbjørn Eriksen emphasisesthat Statkraft is an excellent workplace: “I’ve receivedmany opportunities for personal development, freedom,good working environment and security here.”


Nostalgia and modernityThe control room is home to 40 years ofhydropower history. The long lines of tallcontrol cupboards in grey have a 70s feelto them. The boards full of switches, but-tons and gauges, as well as relay cabinets,are about to become history. They are tobe replaced by far more modern controlscreens and PLC (Programmable LogicControl).“It’s kind of strange seeing the good, old

technology being phased out,” says Eriksen.“Everything has been controlled using relayshere. And these are components that are de-signed to last 40-50 years. This will now bereplaced with a system that will last around15 to 20 years. The old system gave you anice simple overview – besides, this is whatI was trained on. So yeah, there’s a certainsense of nostalgia now.” However, he doesagree that there are some advantages to amore modern system too.“A new control system requires less space,

and it also makes it easier to monitor theproduction and any faults,” he says. “Besides,a new control system also makes it easier tohave remote control. All power plants in RegionNorthern Norway – from Korgen in the southto Adamselv in the north – are controlled fromthe group dispatch centre in Korgen.”

Soon to retire – or…?The transition to the new is impactingTorbjørn Eriksen’s life too. Until 1 January2013, he was a full-time project managerin Statkraft. But this year, he will reach themagical 67-year limit – and was supposedto become a pensioner at the end of theyear. However, Statkraft still needs Eriksen’sexpertise for a while longer.“I’ve accepted to be available for another

year,” he says. “Over the course of 2013, I’llfollow up some projects and organise cour-ses for colleagues. I work one day a week onaverage now, so I’ve already cut down quitea bit. My wife also appreciates the smoothtransition.”He admits that it will be excitingto become a pensioner.“There’s plenty of projects to keep me busy

– like fixing the house up, finish redoing thecabin and travel with my wife,” he says. “Iwould also like to do some volunteer work,especially for humanitarian organisations.I’ve had some great years in Statkraft, andI’d like to use this opportunity to thank allmy colleagues for their excellent cooper-ation. I’m sure I’ll miss my job. Especiallythe technical challenges – finding good,practical solutions to various problems. I’llmiss that.”

name: torbjørn eriksen

age: 66 (will be 67 in may)

born: sørreisa, troms county, northern norway

lives: narvik, northern norway

position: project manager, technical staff,production north technical, narvik

education: mechanical and welding engineer

marital status: married, two children,seven grand children

hobbies: the cabin in eikfjord has been a renova-tion project for 15 years – and still is. spare time isspent on family, exercising and travelling.

Torbjørn Eriksen

the engineer in aCtion: Torbjørn Eriksen is athome on the turbine floor.

guru: Hans Olav Forsaa is the maintenance lead forPower Plant Group Imset – and calls Torbjlørn Eriksen aguru in terms of knowledge of turbines and power plants.

40— statkraft

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the history lessonPower development in the West

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(Kilde:«Detemmetvannet»avSekneog

Thue)

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mess

norway’s state hydropower history started in manyways with the Aura power plant in Møre og RomsdalCounty. There were many owners and developers untilGermany’s Nordag took over and developed the plantduring the war. The Norwegian state became the ownerin 1946 as part of the war compensation.However, the story goes back much further, and star-

ted with private construction work in 1913. At the time,there were great class divisions in Norway, somethingthe following report to the head office bears witness of:“Currently, two engineers are forced to stay in the

same house as the foremen and dine with them. Thisis not acceptable, and we must construct a newengineers’ mess as soon as possible.”The First World War stopped means for further devel-

opment, but the small power plant in the community ofDalen was ready for operation. The power station, likethe rest of the facility, was taken over by the state, butDalen I only survived until 1960. Aura power plant cur-rently comprises the two power stations Aura (290 MW)and Osbu (20 MW).The photo is from 1914, and shows the funicular up to

Hammaren during the construction of Dalen I.

Where it all began…

Documents

PeoplePower 01 13 ENG Nett - Statkraft filei tisearlymorning,andRanaindustrial harbourisalreadyteemingwithactivity. Largecontainersaretransportedaway. Loadingandunloadingisconstant.There