1. © Vattenfall AB The Swedish Power Market Presented for Invest in Sweden Agency and Sun Microsystems Stockholm 20 March, 2009 Sandra Grauers Nilsson, Vattenfall Power Consultant

2. © Vattenfall AB 2 Content Energy and Electricity in Sweden The Nordic Power Market Consumer prices in Europe Supplier vs. Distributor in the Nordic Power Market

3. © Vattenfall AB 3 Content Energy and Electricity in Sweden The Nordic Power Market Consumer prices in Europe Supplier vs. Distributor in the Nordic Power Market

4. © Vattenfall AB 4 Total energy supply in Sweden 1973–2007 Source: Swedenergy

5. © Vattenfall AB 5 Electricity generation in Sweden by power type, TWh/year Source: Swedenergy

6. © Vattenfall AB 6 Installed wind power generation capacity in MW 2002-2007 Source: Swedenergy

7. © Vattenfall AB 7 In 2006, 97% of the electricty production was CO2-free Source: Swedish Energy Agency

8. © Vattenfall AB 8 Development of renewable electricity generation 2000–2007 Source: Swedenergy

9. © Vattenfall AB 9 Emissions of CO 2 equivalents in the world, tonnes per capita Source: Swedish Environmental Protection Agency

10. © Vattenfall AB 10 Ownership of electricity generation capacity Source: Swedenergy

11. © Vattenfall AB 11 Changes in ownership of electricity generation 1996- 2007 Source: Swedenergy

12. © Vattenfall AB 12 Content Energy and Electricity in Sweden The Nordic Power Market Consumer prices in Europe Supplier vs. Distributor in the Nordic Power Market

13. © Vattenfall AB 13 The Nordic Market - four countries Wind power Gas turbines Condensing Combined heat and power Nuclear power Hydro power 14 million customers, 73.000 MW, 390 TWh/year Full regulated TPA (third party access) National Grid companies, TSOs Some 350 power generating companies, 450 supplying companies and 550 regulated distribution companies The Nordic Power Exchange - Nord Pool Spot Market Futures Markets (EUA, CER Green certificates) Production capacity a normal year, TWh Source: Swedenergy

14. © Vattenfall AB 14 The Nordic Market Generation in Sweden, The Nordic region, Europe The 400/200 kV grid EU 27 +Norway ~ 3000 TWh Other renewables Net imports Hydro Nuclear Fossil fuels The Nordic Countries ~ 380 TWh Sweden ~ 150 TWh Source: Swedenergy

15. Markets for electricity trade Source: Swedenergy

16. © Vattenfall AB 16 The Nordic Power Exchange – traded volumes, TWh/year Clearing - (OTC) Futures Elspot Source: Swedish Energy Agency

17. Electricity consumption and price in the Nordic countries SEK/MWh Source: Swedenergy

18. © Vattenfall AB 18 Nordic spot prices – hydro power reservoirs TWh, EUR/MWh, EUR/ton Source: Swedenergy

19. The Nordic Power System Production capability, normal year CHP Industrial Hydro power (normal year) CHP District heating Gas turbine Wind power 04080120160200240280320360400 Oil condensing power Incremental operating costs Electricity consumption Nuclear power Coal condensing power Source: Swedenergy

20. The Nordic Power System Production capability, dry year 0 050100150200250300350400 2) Less supply 1) Less Hydro Power 3) Higher production costs Incremental operating costs Söre/kWh Source: Swedenergy

21. © Vattenfall AB 21 Runoff variations in relation to normal year runoff 1952−2007 Source: Swedenergy

22. © Vattenfall AB 22 Content Energy and Electricity in Sweden The Nordic Power Market Consumer prices in Europe Supplier vs. Distributor in the Nordic Power Market

23. 23 Electricity prices in Europe households 2 500-5 000 kWh/year, 2:nd half 2007 EUR/kWh Source: Eurostat

24. Källa: 24 Electricity prices for the industry 20-500 MWh/year, incl network and taxes, 2:nd half 2007 EUR/kWh Eurostat

25. © Vattenfall AB 25 Content Energy and Electricity in Sweden The Nordic Power Market Consumer prices in Europe Supplier vs. Distributor in the Nordic Power Market

26. © Vattenfall AB 26 l Production and sales in competition l Transmission and distribution as a monopoly Two Separate Legal Entities Source: Swedenergy

27. © Vattenfall AB 27 Electricity network regulation should aim to achieve... Efficient operation of the national grid as well as the regional and local networks Reasonable tariffs vs. service provided Competition in sales of electricity by creating non- discriminatory conditions for all Source: Swedenergy

28. © Vattenfall AB 28 Structure of Network Utilities in Sweden National Grid, Svenska kraftnät - 400-220 kV Regional networks - 10 operators - 40-130 kV Local networks - 180 operators < 40 kV, 5.3 million customers, average 29.000 cust./co. Source: Swedenergy

29. © Vattenfall AB 29 The deregulated electricity market Grid Generator Market Place Supplier Trader Customer CompetitionMonopoly Regional net Local net Customer TSO Production Consumption Customer Supplier Source: Swedenergy

30. © Vattenfall AB Thank you!

31. © Vattenfall AB 31 Extra material

32. © Vattenfall AB 32 Storage levels in the regulating reservoirs Source: Swedenergy

33. © Vattenfall AB 33 Source: Swedenergy

34. © Vattenfall AB 34 The residential and service sector has abandoned oil for electricity and district heating.. Source: Swedish Energy Agency

35. © Vattenfall AB 35..and the base for district heating has gone from fossil fuel to biomass Source: Swedish Energy Agency

36. © Vattenfall AB 36 Simultaneously, industry has switched to biomass and electricity Source: Swedish Energy Agency