Offshore wind energy:

From Rödsand to Södra Midsjöbanken

Mark Porter, Regional Director Nordic
BALTEXPO 2011
 Offshore Wind Energy – from Rödsand to Södra
Midsjöbanken

Rödsand II, 2010

Offshore is more than Onshore in water
Potential
2,000 full load hours per year
Limited space available
Projects facing local
opposition
Onshore
4,000 full load hours per year
Large space available
Offshore
Unlike onshore, project feasibility, technology, logistics and economics depend strongly on:
Water depth and seabed conditions
Distance to shore
Tides, currents and waves
Dimensions
Wind turbines 1-3 MW
Wind farms of 20-50 MW each
Investment of €30-70 m per wind
farm
Wind turbines 2.3-5 MW
Wind farms of up to 1,000 MW
each
Investment of €1-3 bn per wind
farm
Page 3
Offshore wind is key to EU´s 2020 renewables targets
Offshore wind energy plays a significant role in
the National Renewables Action Plans (NREAPs)
Country 2020 Target Today
UK 13,000 MW 1,400 MW
DE 10,000 MW 60 MW
NL 5,000 MW 200 MW
F 5,000 MW 0 MW
E 3,000 MW 0 MW
DK 1,300 MW 700 MW
EU total1 39,700 MW 2,400 MW
Targeted growth from 2,400 MW installed
today to about 40,000 MW1 in 2020
Required growth rate of average ~3,700
~3,700 MW new offshore capacity per year MW p.a.
means the installation of About €120 bn of investment required
750 large 5 MW wind turbines per year Tremendous budget exceeding financial
or capabilities of single energy
2 large 5 MW wind turbines every day companies/countries

1 Does not include Belgium Page 4

Rödsand: One of the world’s largest offshore wind farms

2% of the Danish electricity consumption

207 MW
90 Turbines Siemens 2.3 MW
Predicted yearly production 800 GWh
Renewable energy to 229,000 Danish
households1
In operation since July 2010
Investment about 400 million Euros
Construction 2008-2010

1 4,000kWh/household Page 5
Page 6
E.ON Offshore Road Map
A CLEAR VISION FOR FUTURE DEVELOPMENT IN EUROPE

Past Today Future options

Nysted (DK)1 Rødsand II (DK) e.g.

Nordic 160 MW 207 MW Södra Midsjöbanken

Scroby Sands, 60 MW Robin Rigg London Array2

UK Blyth, 4 MW 180 MW 630 + 370 MW
UK Offshore

Cuxhaven Alpha Ventus3 German far-shore

Germany 5 MW (test) 60 MW Projects

1 Joint Venture (JV) of E.ON (20%) and DONG (80%), sold 11/2010
2 JV of E.ON (30%), DONG (50%) and Masdar (20%),
3 JV of E.ON (26.25%), EWE (47.5%) and Vattenfall Europe (26.25%) Page 7
E.ON Offshore Portfolio and focus on Baltic Sea

Page 8
Södra Midsjöbanken – European project with highly
competitive Offshore generation costs
1 High wind speed and shallow waters
Excellent physical conditions Generation costs 30-40% below average
European Offshore projects

2
Södra Midsjöbanken and NordBalt – first step
Access to interconnector to single European market
Competitive grid connection costs

3
E.ON has worldwide track record in Offshore
E.ON offshore expertise generation

E.ON is committed to realize Södra Midsjöbanken as one of the first European

renewables projects
Page 9
Renewable energy generated in the Baltic Sea can be
transferred to all EU countries

Södra Midsjöbanken is a unique European cross-border

project fulfilling primary motives of future energy system:
Low carbon
Security of supply
Economical viability
Södra Midsjöbanken enables physical transfer of Rene-
wables electricity due to connection to interconnector
NordBalt
Södra Midsjöbanken supports the “flexible mechanism” of
the EU-Renewables directive

Södra Midsjöbanken sets the future of mutual energy systems and is a

forerunner for the European market in renewable energies

Page 10
Södra Midsjöbanken – highly competitive wind Offshore
project offering green electricity to European countries

• E.ON is developing Offshore Wind project in the

middle of the Baltic Sea – Södra Midsjöbanken

• Besides excellent physical conditions it has a

unique grid connection opportunity to NordBalt
interconnector between Sweden and Lithuania

• Lowest cost Offshore generation within Europe

for 2.5-3 TWh of renewable electricity (up to 40%
below offshore costs in Germany and UK)

E.ON is targeting the realization of Södra Midsjöbanken in an European

partnership with common interests in: securing the achievement of
Renewables targets and development of Offshore resources/expertise

Page 11
Thank you for your attention!

12
Backup
Renewables cooperation within Europe will benefit
all participating countries
Background Cost advantages
Renewables capacities depend Production
on costs, geographical and costs Domesctic only
political conditions
Resources vary around
RES-
Cooperation
Europe, i.e. geographical
conditions RES
volume
Different technologies
match different conditions Economic reasoning dictates:
Each European country has Build RES where costs less
different regulatory
frameworks Arbitrage
Mutual benefits for
countries with surplus
and shortage of RES
energy
Overall cost efficiency
of EU-energy system
RES = Renewables energy sources
Cooperation benefits
RES build-up can be
realized at lower costs
compared to stand-alone
solutions
Optimal use of
Renewables capacities in
the internal European
market
Balance RES position
within Europe
More than one
cooperation partner
provides higher security
for Renewables investors
Page 14
E.ON is targeting to realize Södra Midsjöbanken in a long-
term partnership
TO MAKE THIS HAPPEN

E.ON will drive the process forward

'Just' bilateral agreements needed in order to reduce complexity

Mutual interest for partners via JV-structure supporting the European

cross-border character

Long-term Power Purchase Agreements to give a stable investment

framework for a positive investment decision

Long-term country partnership including Sweden needed

Willingness to cooperate and commitment are essential for

way forward
Page 15
1 Shelf in the Baltic Sea offers highly favorable conditions for
Offshore generation in Europe
300
8.5-9.5 m/s turbines
Average water depth in SMB: <20m
Average depth of Baltic Sea: >55m

<20m
Water depth

Average European
SMB
project

Wind speed 7-10 m/s 8.5-9.5 m/s

Water depth 25-45 m 15-25 m

400-600 MW
Size (DE, DK, Benelux) 700 MW

Grid connection Single line conncection Interconnector

Favorable conditions enable
offshore electricity generations Tidal waves, salty water Low waves, low salinity
costs 30-40% below average
Sea conditions (North Sea) (Baltic Sea)
European level
Page 16
2 Södra Midsjöbanken – European project connected to
NordBalt interconnector NordBalt interconnector – part of the EU
initiative promoting internal European
market
NordBalt will link the UPS grid (Eastern
Europe) with the NORDEL grid
(Scandinavia)
Commissioning date: 2016
Over a 400 km long seacable, high voltage
300 kV

Connection to NordBalt keeps grid costs

at competitive level

Connected to NordBalt Södra Midsjöbanken will deliver renewable electricity to whole

Europe at competitive price
Page 17
2 Södra Midsjöbanken and connection to NordBalt –
A project with unique benefits for NORDICs and Baltics
NordBalt will link the grid of the three Baltic
countries with the Nordpool grid
350 km HVDC subsea cable of up to 700 MW,
voltage level will be 300 kV
Estimated life time: 30 years, Intention to be
NordBalt completed in 2016
Södra
Midsjöbanken
Connection of neighboring wind farm possible
(permits needed)
Offshore transformer station needed to connect
Södra Midsjöbanken

EU has granted €175 m in investment support (Seacable with converter station

€131 m and transmission reinforcements in the Baltic grid €44 m)
In July 2009, a Memorandum of Understanding (MoU) was signed between the
Lithuanian TSO, the Latvian TSO and the Swedish TSO concerning the
NordBalt cable
Page 18
3 E.ON is one of the global leading renewables players with
expertise in Offshore…
E.ON’S RENEWABLES CAPACITY
AS OF DECEMBER 2010 (MW1) 425 225
One of the world’s largest
investor-owned power and gas
1.920 companies
Nordic
UK
66 More than 85,000 employees
72
generated sales of just under
France
Poland €92 billion in 2010

395
297 Clearly focused player with
North America
leading market positions in
power and gas and
Italy
198 approximately 30 million
Iberia customers
Germany Operations in more than 30
countries

E.ON is commited to invest at least 2.6 bn EUR in Renewabes by 2013

1 E.ON Equity MW (COD’s and major announcements; Figures rounded), excluding large hydro 19
3 …and reliable experienced partner to deliver new projects
in the Baltic Sea
E.ON´s offshore wind energy portfolio E.ON Offshore Flagship project

In operation

Under construction

In development

90 turbines in the Baltic Sea with total

capacity of 207 MW
Generates 800 GWh/year (supplies
229,000 homes)
E.ON has worldwide an extensive and diversified portfolio of
offshore assets and wind pipeline of around 4,000 MW E.ON realized Rödsand II in 2010 below
budget and in time

Södra Midsjöbanken will benefit from E.ONs global Offshore experience and Baltic Sea expertise