dong energy renewables kim ernst, vice president dong energy international paris 14-15 april 2008
Post on 17-Dec-2015
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DONG Energy at a glance
A leading utility company in the Nordic region
Market leader in gas supply and electricity generation in Denmark• Direct natural gas market share of approx. 60% and equivalent 35% market share in Sweden
• Leading power and heat producer in Denmark with a production capacity of approx. 5,500 MW. Renewables has additional capacity of 1,000 MW from wind turbines and hydro
• Electricity supply to more than 1 million customers
Regulated infrastructure activities
Focused Gas E&P player with strong competencies• Owns 67 licences (end 2005) and is currently producing approx. 35,000 boe/day
• Expected to increase to approx. 120,000 boe/day in 2010
*) Unaudited figures based on Preliminary Combined “New Group” Financials
Strong component of low risk, stable operating profits and conservative financial profile
Shift in focus towards consolidation and integration
Significant increase in EBITDA expected after 2007 due to Ormen Lange and synergies
Stable long-term majority ownership by Danish Government
Strong integrated presence across natural gas and power value chains
FY2007
Note: 1. Based on Group FY2007 figures, percentage distribution calculated before eliminations and other unallocated items
Total Revenue FY2007: DKK 41.6bn
Total EBITDA FY2007: DKK 9.6bn
Generation
DKK 12.3bn (27%)
DKK 3.7bn (37%)
Central power plants
Offshore WindOnshore WindHydro power
Revenues(
1)
EBITDA(1)
Distribution
Power distributionNatural gas distributionNatural gas storage
DKK 4.5bn (10%)
DKK 1.6bn (17%)
E&P
Focus areas
DKK 4.9bn (11%)
DKK 2.4bn (24%)
Markets
Natural gas and/or power customers
DKK 24.6bn (52%)
DKK 2.2bn (22%)
Highlights
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Renewables’ core activities
Market analyses and identification of potential sites
Acquisition of project rights
Partnering
Engineering and project planning
Procurement strategy and tendering
Planning of operating phase
Financing
PROJEKTUDVIKLING
Construction of production facilities
Project management
Power production
Operation and maintenance of assets
Project Development Construction Production
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Current asset base of DONG Energy Renewables
Wind farms
Hydro power plants
Assets in operation and under development; wind and/or hydro power
Assets under development or construction only
All operating assets in Spain and Portugal – 216 MW wind and 25 MW hydro – together with a large pipeline of development projects were sold off in August 2007 due to a decision on strategic focus on Northern Europe
Market
Operational WindHydro (MW) Total (MW)
Net capacity(MW)
No of WTG
Denmark 428 510 0 428
Norway 7 3 131 138
Sweden 0 0 205 205
Greece 19 31 0 19
UK 135 55 0 135
France 9 7 0 9
Poland 31 17 0 31
Total 629 MW 623 336 MW 965 MW
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Renewables is a major player among international utilities focusing on wind energy and is world leading within offshore wind energy
The global offshore wind farms in operation
DONG Energy Renewables - On- and offshore net capacity (MW)
446
279
0
100
200
300
400
500
Onshore Offshore
MW
, *Sold to Vattenfall
Project/Country WTG MW Construction
Vindeby (DK) 11x450kW, Bonus 4.95 1991
Lely (NL) 4x500kW, NedWind 2.0 1994
Tunø Knob (DK) 10x500kW, Vestas 5 1995
Dronten Isselmeer (NL) 28x600kW, Nordtank 16.8 1996
Bockstigen (SE) 5x550kW, Wind World 2.75 1997
Utgrunden (SE)* 7x1,5MW ENRON 10.5 2000
Blyth (UK) 2x2MW Vestas 4.0 2000
Middelgrunden (DK) 20x2MW Bonus 40.0 2000
Yttre Stengrund (SE)* 5x2MW NEG Micon 10.0 2001
Horns Rev I (DK) 80x2MW, Vestas 160.0 2002
Palludan Flak (DK) 10x2.3MW, Bonus 23.0 2002
Nysted Offshore Windfarm (DK) 72x2.3MW, Bonus 165.6 2003
Arklow Banks phase I (UK) 7x3.6MW, GE Wind 25.2 2003
North Hoyle (UK) 30x2MW, Vestas 60.0 2003
Scroby Sands (UK) 30x2MW, Vestas 60.0 2004
Kentish Flats (UK)* 30x3MW, Vestas 90.0 2005
Barrow Offshore Wind Farm (UK) 30x3MW, Vestas 90.0 2006
Nysted Offshore Wind Farm
Source: BTM March 2005
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DONG Energy Renewables
DONG Energy is committed to developing projects in the UK with an extensive number of projects in the pipeline
Involved in 9 R1 & R2 projects (Barrow; Burbo; Shell Flat; Scarweather Sands; London Array; Walney; West of Duddon Sands; Gunfleet Sands I+II ) totalling 2830MW (DONG Energy share 1564MW)
Recently formed a joint-venture Channel Energy Ltd (with Farm Energy) developing two 1500MW offshore projects in the SW of England
The permission and application process for erecting wind turbines in Zone de Développement Eolien (ZDE)
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ZDE, 2 years
EIA 1 year
Building permit ½ year
• March 2007, 15 ZDEs have been approved
• 300 ZDE are applied for and the number is expected to increase fast among the more than 36,000 communes
• Important to participate in or initiate ZDE process in areas with existing wind turbine development rights.
• ZDE defines areas where to build wind turbines in communes covered. Discussions with local administrations
are reduced.
• ZDE defines, e.g. maximum or minimum numbers of MW installed and turbine height in a given land area.
• Grenelle is expected to reduce application time further, goal is 6 months
• Environmental Impact Assesment (EIA) and building permit from local authorities still necessary
Expected planning procedure ZDE
Local accept, 4 years
EIA 1 year
Building permit ½ year
Historic application proces
New application proces
Source: SER, March 2007
Ploudalmézeau
Feilluns
Echainvilliers
Montigny La Cour
Trevillach
Paziols
Le Langon
Jassienes
Pargues
Lignéville
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Bricqueville
Elsam France development projects with building application
Departments applying for ZDE
ZDE applied
Elsam France’s operating wind farm
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Summary of key observations from offshore wind farm development
Observations from consenting activities in EU include: Planning system is extremely complex
Consenting and EIA work takes 3-5 years! (e.g. bird survey work started on London Array in autumn 2002, consent by autumn 2007)
Costs up to £5m just for the consenting phase
No guarantee for consent, therefore a huge risk on the developer
Due to lack of data on the offshore environment, it is often a question about luck whether the site may have issues that could prevent consent to be granted
Risk of public inquiry which is costly and time-consuming - more than a year’s delay
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Summary of key observations cont'd
Need for a streamlined (“One-Stop Shop”) consenting process
Several regulators involved (national, county and local level), and they do not coordinate their permitting activities
Authorities are in general very flexible and obliging but deadlines are often exceeded by the authorities
Huge number of statutory consultees/stakeholders
Often expensive easements are required (i.e. crossing of railway can potentially cost several £m in easement)
NIMBYism is an issue even for remote offshore wind farms as onshore substations are required for large projects
Regulators on the local level are often not aware of the government targets
Characteristics of the French offshore regime:
Penalizes high production over 2800 full load hours in the operating period from 10 to 20 years
the electricity price is fixed for 20 years, which means that the electricity cannot be sold at market price if this price should prove more advantageous
only 60% inflation are being covered in the tarif
the investor must cary the full grid connection costs
high corporate tax and reduced average tax depreciation
Conclusion:
penalizes optimum production at good sites
results in an unprofitable investment climate
only few of the planned 4000 MW offshore will be established on the current commercial basis
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Electric cars can utilise excess wind power and recharge at night using cheap electricity
Electric cars make it possible to utilise more renewable energy
A single 2 MW wind turbine can provide 3,000 electric cars with energy
The electric cars will primarily be recharged at night when excess wind power production is often available
Batteries are four times more effective as an energy provider compared to hydrogen
Even if all electricity were provided solely by coal-fired power plants, the CO2 emission per car would be only 50% that of a traditional car
If 20% of the Danish vehicle fleet were electric cars, a CO2 reduction of 1.1 million tonnes per year could be achieved.
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