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Vattenfall Heat Sweden 16:th of June 2014. 2 | Group Presentation 2014.

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Presentation on theme: "Vattenfall Heat Sweden 16:th of June 2014. 2 | Group Presentation 2014."— Presentation transcript:

1 Vattenfall Heat Sweden 16:th of June 2014

2 2 | Group Presentation 2014

3 This is Vattenfall One of Europe’s largest electricity producers 100%-owned by the Swedish state Main markets: Nordic countries, Germany, Netherlands Vattenfall also has operations in: UK (mainly within wind power) Main products: Electricity, Heat, Gas Operations span the entire energy value chain: Production, Distribution, Trading, Sales and energy advice 3 | Group Presentation 2014

4 Key data 2013 4 | Group Presentation 2014 Key facts Net sales 171,684 MSEK (19,379 MEUR*) Underlying operating profit 27,900 MSEK (3,149 MEUR*) Reported operating profit -6,453 MSEK (-728 MEUR*) Electricity generation181.7 TWh Sales of electricity203.3 TWh Sales of heat 30.2 TWh Sales of gas 55.8 TWh Number of employees (FTE) 31,819 Number of customers: Electricity6.2 million Gas1.9 million Electricity network4.3 million Exchange rate EUR/SEK 8.8591. Values in EUR shown only to facilitate comparisons between SEK and EUR Electricity generation Vattenfall produces electricity and heat from six energy sources: HydroNuclearCoalWindBiomassGas

5 History of Vattenfall 6 | Group Presentation 2014 2010–2013 Consolidation phase 2000–2009 Major expansion in Europe 1950–2000 Organic growth and national market deregulation 1909 Founding of The Swedish State Power Board 1951 Inauguration of Harsprånget, A hydro power plant in Sweden 1970–1980 Construction of 12 nuclear reactors in Sweden 1999–2009 Acquisitions in Germany, Poland and the Netherlands 2010 Inauguration of UK offshore wind farm Thanet 2011–2012 Divestments of non-core operations in Belgium, Finland and Poland 1909–1916 First large hydro power plants: Porjus, Olidan, Älvkarleby, Sweden 1909–1950 Part of developing the Swedish energy system From a domestic Swedish hydro power generator to an European energy company

6 Generation volume and installed capacity per region 13 | Group Presentation 2014 Group total generation (2013) Electricity181.7 TWh Hydro 35.6 TWh Nuclear 51.9 TWh Fossil 87.9 TWh Wind 3.9 TWh Biomass, waste 2.4 TWh Heat30.2 TWh (Gas sales55.8 TWh) * 20 374 14% * 81% 4% * Nordic 18 732 * * 13% * * ***** * 89 * * * * * Nordic 93 35% 56% 6% * Electricity generation, TWh Electricity capacity, MW * * * *Nordic Volume, TWh

7 Confidentiality class: High (C3) Heat market in Sweden Heat Market ~ 75 TWh/year District Heat67% Electricity22% Biofuels16% Oil 5%

8 Confidentiality class: High (C3) District heating in Sweden ~ 50 TWh/year Available in more than 500 cities/towns/villages The largest companies Fortum samägt av Stockholms stad8 E.ON5,5 Göteborg Energi3,6 Vattenfall3,4 Tekniska verken Linköping1,5 Mälarenergi Västerås1,5 ~TWh/year

9 Confidentiality class: High (C3) The use of district heating in Sweden

10 Confidentiality class: High (C3) Swedish district heating fuel input

11 Confidentiality class: High (C3) District heating prices

12 Confidentiality class: High (C3) 14 Heat Swedens operations Uppsala Heat supplied annually1700 GWh Electricity supplied annually200 GWh Employees169 FuelsPeat, Waste, Oil, Bio fuel Drefviken Heat supplied annually600 GWh Electricity supplied annually100 GWh Employees33 FuelsBio fuel, Oil, Waste Vänersborg Heat supplied annually 300 GWh Electricity supplied annually - Employees 14 Fuels Waste Heat, Bio oil Motala Heat supplied annually200 GWh Electricity supplied annually12 GWh Employees12 FuelsBio fuel, Oil Nyköping Heat supplied annually320 GWh Electricity supplied annually125 GWh Employees31 FuelsBio fuel, Oil Kalix DH Heat supplied annually 200 GWh Munksund 500 GWh Electricity supplied annually 180 GWh Employees 12 Fuels Peat, Bio fuel, Oil Gotlands Energi Heat supplied annually235 GWh Electricity supplied annually- Employees(3) FuelsBio fuel Västerbergslagens Energi Heat supplied annually250 GWh Electricity supplied annually- Employees45 FuelsBio fuel, Oil

13 Confidentiality class: High (C3) 13 Products District Heating 3 400 GWh Electricity 450 GWh Process heat 700 GWh Steam 90 GWh District cooling 45 GWh

14 Confidentiality class: High (C3) 14 Customers and market Customers are companies and private households, about 14 000 customers, 17 000 connections and 245 000 DEQ. Increased competition from other heating alternatives. Unregulated heat market.

15 Confidentiality class: High (C3) Heat Swedens fuel Fuelmix:

16 Confidentiality class: High (C3) 16 | BU Heat Sweden Operations | 13/01/2015 Market perspective -Stabel market shares > 85 % -Unregulated market with increased competition Growth potential for District heating -Limited Changed customer behavior, inceased demand for new solutions Focus on price, combined solutions Increased importance for climate Cities want sustainabaility, Energy efficiency, CHP Politics and new legislation being discussed Regulation, TPA Development and competition on market

17 Confidentiality class: High (C3) 17 | BU Heat Sweden Operations | 13/01/2015 Tough competition (Heat pumps) -Efficiency very important -New price models -New products, cooling etc Trust from our customers -Increased dialogue -Increased transparency Challenges

18 Confidentiality class: High (C3) Thanks!

19 Organisational structure as from January 2014 10 | Group Presentation 2014 CEO NordicContinental/UK Wind Distribution Sales HydroMining & Generation RinghalsHeat Forsmark Renewables Decomm. & Waste Nuclear Projects Corporate Staff Functions Asset Optimization and Trading Chief Financial Officer Operations Support

20 Confidentiality class: High (C3) 20 | BU Heat Sweden Operations | 13/01/2015 Changed customer behavior, increased demand for new solutions -Prisfokus samt kombinationslösningar värme - kyla -Lågt förtroende för stora energiföretag. Kunder tenderar att se fjärrvärmemarknaden som ett monopol och tycker att andra alternativ t.ex värmepumpar är mer oberoende. -Allt fler aktörer väljer att certifiera nybyggda eller befintliga fastigheter med någon form av miljöcertifiering. Flera av certifieringssystemen är inte så väl anpassade till fjärrvärme och fjärrkyla. -Kunderna efterfrågar lösningar, tjänster och uppföljning för att nå ökad energieffektivisering Increased importance for Climate -Städer vill ha hållbar utveckling och har som målsättning att kraftigt minska sina koldioxidutsläpp -Ökat fokus på energieffektivisering som drivs av kundernas attityd, marknaden och förordningar - leder till minskad efterfrågan per kund -20/20/20 på europeisk nivå men även starka krav på klimatskydd från länder och städer. Fjärrvärme ses som en del av lösningen -Fjärrvärme och el från kraftvärmeverk ses som en viktig del för hållbara städer, men ytterligare kommunikation behövs Politics and new legislation being discussed -Ny lagstiftning rörande energieffektivisering på EU-nivå och nationell nivå -Reglerat tillträde till fjärrvärmenäten, uppdrag från Sveriges regering till EI -Prisändringsprövning och likabehandling på fjärrvärmemarknaden, uppdrag från Sveriges regering till EI Development and competition on market (2)

21 Nordic Sticking to harmonized EU approach to energy market regulation  market provides the investment incentives Distributed generation and demand side participation less cost competitive in the Nordics compared with Continental General oversupply and low prices on the continent increasingly affecting Nordic market Vattenfall has reorganized the Group into two regions Continental/UK Increasingly national approach to energy market regulation  regulator provides the investment incentives Energiewende (Germany) New Energy Deal (Netherlands) Energy Market Reform (UK) Increased cost competitiveness of solar energy and demand side participation in Germany. Change is faster than expected Effective 1 January 2014 the Group was reorganized in two regions: Nordic and Continental/UK The new organisational structure enables the regions to focus on their respective topics and opens up for opportunities for risk-sharing in the Continental operations over time 9 | Group Presentation 2014

22 Vattenfall’s five strategic focus areas 11 | Group Presentation 2014 Work for a more efficient electricity market. Encourage the development of interconnectors. Manage implications of the EU Water Directive. Renewables growth Optimise the operational lifetime of existing nuclear power reactors. Strong Nordic Position Rate of growth of new installed capacity to be higher than the average rate of growth for ten defined countries in northern and central Europe. This must be balanced against limited financial resources and a growing surplus capacity in the Nordic market. Reduce CO 2 exposure from 88.4 billion tonnesin 2013 to 65 billiontonnes by 2012: Partnering/risk sharing Co-firing of biomass with coal Fuel switching. Lower operating hours in fossil plants due to more renewablesVattenfall aspires to beperceived as a “SmartEnergy Enabler” -meeting changingcustomer demands bydeveloping currentdownstream businessand prudentlydeveloping newprofitable businessmodels. Reduce cost level by a further SEK 4.5 billion by 2015. Continue to pursue Operational Excellence. Optimise maintenance investments. Divest or decommission non- core/non-performing assets. Growth in renewables Define measures to reduce Vattenfall’s CO 2 exposure Offer smart and sustainable energy solutions Stronger focus on Operational Excellence and cost- cutting Sustainable Heat and Electricity Production Sustainable Consumption Sustainable Financial Performance 12345

23 Confidentiality class: High (C3) Fact Vattenfall Heat TotalGermanyNetherlandsSweden Net turnover2,316 m€1,686 m€316 m€314 m€ Electricity Sales11.3 TWh10.1 TWh0.7 TWh0.5 TWh Heat Sales19.6 TWh13.3 TWh2.3 TWh4.0 TWh Grid length~5,500 km2,300 km1,750 km1,000 km Employees2,300 FTE1,400 FTE500 FTE400 FTE Not: Data från December 2011

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