Fortum Corporation Supplying power for large scale businesses

Transcription

1 Fortum Corporation Supplying power for large scale businesses Ann Boije af Gennäs, Sales Manager, Origination Saara Rantanen, Originator, Origination

2 Content I. Fortum s competitive edge as Power Counterparty II. Key Market Drivers III. Origination s Power Offering IV. Contact information 2

3 Power producers in Nordic are operating in physical and financial market places Nord Pool Spot for physical trading Day-ahead spot market Balance adjustment market Regulating market NASDAQ, EEX, ICE for financial trading Standard contracts Derivatives market: futures, forwards, options, structured deals 3 Source:

4 What You Get When You Choose Fortum One of the leading utility companies in Europe BBB+ 50 Corporate credit rating by Standard & Poor s and Fitch TWh portfolio owner - expertise at your service 60 dedicated power traders Top notch Environmental value expertise Advanced risk mitigation tools 4

5 Our Competitive Edge As A Nordic Power Counterparty Fortum is a leading key player on the Nord Pool Power Markets with its own power assets Fortum s main production assets are hydro power and nuclear power Fortum is partner in one of Europe s biggest onshore wind farm projects with 40% holding in Blaiken Vind Fortum has extensive power and energy market knowledge with valuable production management experience Fortum has 24/7/365 availability at the trading desks in Espoo, Finland and Stockholm, Sweden 5

6 Fortum's European power and heat production Fortum's European power generation in 2014 Fortum's European heat production in 2014 Nuclear power 48% Coal 38% Biomass 2% Natural gas 2% Coal 4% Oil 1% Heat pumps, electricity 1% Waste 3% Peat 3% Natural gas 29% Hydro power 44% Biomass 25% European generation 50.1TWh (Generation capacity 9,851 MW) European production 8.2 TWh (Production capacity 3,936 MW) 6

7 Fortum's carbon exposure among the lowest in Europe g CO 2 /kwh electricity, % of Fortum's total power generation CO 2 -free 94% of Fortum s power generation in the EU CO 2 -free Close to 100% of the ongoing investment programme in the EU is CO 2 -free. Average 328 g/kwh DEI RWE Drax SSE CEZ Note: Fortum s specific emissions of the power generation in 2014 in the EU were 39 g/kwh and in total 177 g/kwh. Only European generation except Fortum total which includes Russia. E.ON Vattenfall EDP Enel Edipower EnBW Gas Natural Fenosa GDF SUEZ Dong Energy Fortum total Iberdrola PVO EDF Verbund Fortum EU Statkraft Source: PWC & Enerpresse, December 2014 Climate Change and Electricity, Fortum 7

8 Content I. Fortum s competitive edge as Power Counterparty II. Key Market Drivers III. Origination s Power Offering IV. Contact information 8

9 Fuel and CO 2 allowance prices 150 Crude oil price (ICE Brent) 35 CO 2 price (ICE ECX EUA) USD / bbl EUR / tco Coal price (ICE Rotterdam) 100 Gas price (ICE NBP) USD / t GBp / therm Source: ICE Market prices 5 August 2015; future quotations

10 Nordic year forwards Year10 Year11 Year12 Year13 Year14 Year15 Year16 Year17 Year18 Year19 Year /MWh 10 August Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q Source: Nasdaq Commodities

11 Content I. Fortum s competitive edge as Power Counterparty II. Key Market Drivers III. Origination s Power Offering IV. Contact information 11

12 What Fortum can offer to data centers? Physical electricity Long Term Power Purchase Agreements Green energy sources Optimisation of used electricity Demand Side Management (UPS systems and backup generators) Secure of financial result Structured and Non-standard financial products e.g. Peak Load contract and Asian options Heat/Cooling Option Data house cooling system, connected to district heating 12

13 Fortum s Data Center Business Offering Heat utilization in dh network & Cooling Possible in areas where Fortum district heating network is located. Fortum could act as intermediate between local district heating network and company. Back-power solutions, integration to CHP plant Different back-up power solutions connected with electricity portfolio management or without management Electricity sales and hedging services Electricity sales with green energy sources. Various products and services related to electricity sourcing and price risk mitigation Real estate development Opportunity to use real estate owned by Fortum for datacenter project development Fortum district heating networks are located in Espoo, Keski-Uusimaa and Joensuu area 13

14 Datacenter Excess Heat Utilization Concept With Fortum Datacenter CHP plant Heat pump Data center cooling District heating network Heat utilization - Heat pump provides cooling for the datacenter and transfers the excess heat to the district heating network. - The investment for heat pumps are similar compared to chillers. - Requires a connection to Fortum dh network CHP-plant data center integration - Lowering costs energy infrastructure - Avoided cost for back-up power - Absorption cooling possible 14

15 Physical power structure Physical Deliveries Physical base load Long term power contracts Spot electricity Forecasting Balancing service MW Base load electricity Realized consumption Balance power Spot Base load Benefits for the client t + Management of risk exposure related to acquisition of energy + Market based and efficient + Simple for the client 15

16 Green claims in Finland Renewable electricity is divided to: Grey electricity Guarantee of Origin (GO) Electricity consumer that claims in its marketing using renewable energy has to use GOs to support the claim* Two options: Buy renewable electricity from the retailer Buy grey electricity and GOs separately Price of GO depends on volume, type and potential other labels associated with the power plant *Law on Guarantee of Origins and Disclosure ( /1129) GO-market Electricity retailer Consumer Electricity market 16

17 Examples on structured products Helsinki Peak Effect: 10 MW Contract Period: Q1/2016 Peak definition: 8:00-20:00 EET Mo-Fri Reference price: Nord Pool Helsinki area Financial Settlement Price indication: /MWh Indications based on 5 th of May 2015 Benefits for the client Asian Call Option Effect: 10 MW Contract Period: Q1/2016 Reference price: Nord Pool Helsinki area Strike: 42 EUR/MWh Monthly averaging (look back) Financial Settlement Price indication: 2.15 /MWh Indications based on 05th of May Decreased risk of spot price volatility + Competent partner for financial markets 17

18 Typical data center energy solution The required level of availability hours and security sets requirements for energy solution and site selection. Cooling Main and back-up cooling systems required always. In Scandinavia free cooling option during the cold season (<+7-5 C) Power connection IT power sets requirements for grid connection Undisturbed electricity feed crucial for data center operations. Short (second fractions) disturbances and back up by the UPS systems. Back-up power Back-up power solution can be a doubled grid connection or own power generation. Back-up power is required for IT and separately for cooling process. Electricity sourcing Electricity hedging and buying organized. Back-up power units can be used to eliminate short electricity price peaks. 18

19 Data center cost structure examples Servers are around half of the data center life cycle costs. Energy infrastructure accounts around 25% of the total costs. Electricity costs account 20% Other infrastructure cost i.e. buildings etc are only 5%. Data center s life cycle costs 19% 23% 5% 53% The largest cost saving potential is in the energy infrastructure and energy efficiency these are Fortum s key area of expertise. Servers Power and cooling infrastructure Power Other infra 19

20 Content I. Fortum s competitive edge as Power Counterparty II. Key Market Drivers III. Origination s Power Offering IV. Contact information 20

21 We work in Origination Team Aleksi Nordlund Manager Origination aleksi.nordlund@fortum.com Ann Boije af Gennäs Manager Sales, Origination ann.boije.af.gennas@fortum.com Juha Ruokonen Manager Env. Values juha.ruokonen@fortum.com Martin Johansson Quantitative Analyst martin.johansson@fortum.com Joni Vuorela Originator joni.vuorela@fortum.com Saara Rantanen Originator saara.rantanen@fortum.com Roosa Nieminen Project Developer roosa.nieminen@fortum.com 21

22 For more information, please visit