The European Marketplace: Development & Outlook

RECS Market Meeting: Amsterdam, 14th March 2018

William Dixon, Portfolio Manager / Originator

Introduction to Agder Energi

Market Demand

1

2

Market Supply3

Price Development4

Publishing Statistics6

Conclusions5

Agenda

Activities:✓ Power production

8 TWh per year 49 Hydro power plants 1.700 MW installed capacity

✓ Investments in: new capacity in Norway companies in Germany and Sweden

Products & Services:✓ Portfolio management

physical power at Nordpool and EPEX balancing markets and intra-day

✓ In-house development of IT solutions for power markets

✓ Green certificates EECS GOs

➢ TÜV SÜD➢ Bra Miljöval➢ naturemade star➢ UK FiT eligible volumes➢ EPD

I-REC & US RECS

✓ Analysis

Introduction to Agder Energi

Locations:

• Kristiansand - HQ

• Arendal

• Berlin

• Stockholm

• Zurich

Introduction to Agder Energi

Market Demand

1

2

Market Supply3

Price Development4

Publishing Statistics6

Conclusions5

Agenda

Transaction Cancellations, by Country: All Technologies

Year Source: AIB

Market DemandVolu

me (

TW

h)

487 TWh

Renewable Transaction Cancellations, by Technology: All Countries

Year Source: AIB

Market DemandVolu

me (

TW

h)

470 TWh

Market Demand

The Netherlands Switzerland Sweden

Germany Austria Italy

Market Demand

Europe Middle East Africa Asia PacificAmericas

Sources: Bloomberg NEF, The Climate Group – February 2018

Sources: Bloomberg NEF, The Climate Group – February 2018

Market Demand

Europe Middle East Africa Asia PacificAmericas

Market Demand

Europe Middle East Africa Asia PacificAmericas

Sources: Bloomberg NEF, The Climate Group – February 2018

Market Demand

Source: Guardian

Market Demand

Sources: Guardian, BBC

Market Demand

Sources: BBC, Guardian

Market Demand

Sources: BBC, Guardian, EKOenergy

Market Demand

Sources: BBC, Guardian, EKOenergy, Transport&Environment.org

Market Demand

Sources: BBC, Guardian, EKOenergy, Transport&Environment.org

Introduction to Agder Energi

Market Demand

1

2

Market Supply3

Price Development4

Publishing Statistics6

Conclusions5

Agenda

GO Production Issuance, by Country: All Technologies

Year

Volu

me (

TW

h)

Source: AIB

Market Supply

434 TWh

GO Production Issuance: Renewable Technologies, all Countries

Year Source: AIB

Volu

me (

TW

h)

Market Supply

410 TWh

Market Supply

Sources: AIB, entso-e

Market Supply

Sources: AIB, entso-e

Market Supply

Source: entso-e

Volu

me (

GW

h)

Volu

me (

GW

h)

Market Supply

Source: entso-e

Volu

me (

GW

h)

Volu

me (

GW

h)

Volu

me (

GW

h)

Market Supply

Source: entso-e

Volu

me (

GW

h)

Volu

me (

GW

h)

Volu

me (

GW

h)

Volu

me (

GW

h)

Market Supply

Source: AIB

Volu

me (

TW

h)

GO Production Issuance: Renewable Technologies

-65TWh

-11TWh

-18TWh

-3TWh

-1TWh

-60GWh

508 TWh 410 TWh

Introduction to Agder Energi

Market Demand

1

2

Market Supply3

Price Development4

Publishing Statistics6

Conclusions5

Agenda

Price Development

Average Bid/Ask Prices for Hydro GOs (ICAP)

Source: ICAPYear / Week

Price (

€)

Price Development

Average Bid/Ask Prices for Hydro GOs (ICAP)

Source: AES; ICAPYear / Week

Price (

€)

Week 4-18: €0,485

Price Development

Source: GSE (22/01/18)

Hydro

Solar

Wind

Other

Price Development

Source: ORIGO – Jan 2018

Introduction to Agder Energi

Market Demand

1

2

Market Supply3

Price Development4

Publishing Statistics6

Conclusions5

Agenda

Conclusions

1. An increased number of market drivers

2. Currently forecast: 53 TWh reduction in EECS area renewable production in 2017

3. Changes in supplier strategies

4. Development of regional markets and preferences➢ Local production for local consumption➢ Year of consumption = Year of production

5. Corporate PPAs could facilitate the return of LEC prices for specific periods and could push voluntary ‘annual’ purchases to Q1/Q4 generation

Introduction to Agder Energi

Market Demand

1

2

Market Supply3

Price Development4

Publishing Statistics6

Conclusions5

Agenda

Publishing Statistics

Contact

William Dixon

Portfolio Manager / Originator

Mobile: +49 151 704 216 91

Email: william.dixon@ae.no

HEADQUARTERSKjøita 18N-4606KristiansandNORWAY

Phone: +47 38 60 70 00Email: green@ae.no

ZURICH OFFICE Mühlegasse 33 CH-8001 Zurich SWITZERLAND

Phone: +41 44 455 68 81 Email: green@ae.no

BERLIN OFFICEKurfürstendamm 72D-10709 BerlinGERMANY

Phone: +49 30 315 17 19 0

Thomas Eccard

Head of Green Markets

Mobile: +49 151 235 922 66

Email: thomas.eccard@ae.no