Fortum strategy and how it has changed

Transcription

1 Fortum strategy and how it has changed CTO Heli Antila

2 Energy system in transition/disruption Fortum strategy Case examples

3 Future energy system features Summer Autumn Winter Spring Solar dominated / most competitive - Lower seasonality Wind dominated / most competitive - Clear Seasonality 3

4 Solar more competitive in sunbelt, wind in North World Solar and Wind LCOE s using newest publicly available data Wind more competitive and fits to seasonal demand 62 /MWh 46 /MWh 80 /MWh 47 /MWh 45 /MWh 34 /MWh 92 /MWh 52 /MWh /MWh 49 /MWh 80 /MWh 47 /MWh /MWh 32 /MWh 67 /MWh 50 /MWh /MWh 26 /MWh 51 /MWh 30 /MWh 65 /MWh 49 /MWh Solar more competitive and fits to seasonal demand 51 /MWh 30 /MWh /MWh 38 /MWh 38 /MWh 22 /MWh /MWh 44 /MWh 44 /MWh 34 /MWh 43 /MWh 25 /MWh 45 /MWh 26 /MWh 4 NOTE: Solar and wind resources and CAPEX may largely vary by individual projects, even on same region, thus impacting LCOE. Hence, figures are indicative and do not aim to present our geographical preferences for given technologies but rather illustrate progress of wind and solar globally, long-term. PV LCOE assumptions based on EU PV Technology Platform report and EU PVSEC 2015 paper. Wind CAPEX and OPEX Sweco: Incitamenten för investeringar i kraftproduktion, Capacity factors from BNEF LCOE low case. Indicative wind capacity factor for Russia from IFC Advisory: Services Russia s New Capacity-based Renewable Energy Support Scheme LCOE assumptions: 7% real WACC CAPEX, OPEX globally uniform; lifetime solar 30y, wind 25y Assumption that capacity factor will increase for solar 7,5% and wind by 15% from 2016 to % higher CAPEX for the rest of the world compared to low cost Nordic Uniform 20% corporate tax assumed

5 Transition towards Solar Economy is ongoing 5

6 Energy system in transition/disruption Fortum strategy Case examples

7 Fortum s Mission and Strategy UNTIL 1/2016 Mission Fortum s purpose is to create energy that improves life for present and future generations. We provide sustainable solutions for society and deliver excellent value to our shareholders. Strategy Build on the strong Nordic core Create solid earnings growth in Russia Build a platform for future growth Strong competence in CO 2 -free hydro and nuclear, efficient CHP production and energy markets 7

8 DEI RWE Drax SSE CEZ E.ON Vattenfall EDP Enel Edipower EnBW Gas Natural F ENGIE Dong Energy Iberdrola Fortum total PVO EDF Verbund Fortum EU Statkraft Fortum's carbon exposure is among the lowest in Europe Fortum s specific emissions of the power generation in the EU in 2015 were 21 g/kwh and in total 166 g/kwh Share of CO 2 -free power in Fortum s generation in 2015 g CO 2 /kwh electricity, Average 311 g/kwh 97% 64% Fortum in the EU Fortum total Note: Only European generation except Fortum total which includes Russia. In 2016 most of E.ON s generation was transferred to Uniper. Sources: PWC, November 2016, Climate Change and Electricity, Fortum 8

9 Global megatrends shaping the energy sector Climate change and resource efficiency Decarbonisation Renewables Circular economy Digitalisation, new technologies Competitive solar and wind New digitally-enabled solutions Storage Paris agreement moving forward World consumption 1.6 x sustainable level Strong political support in many countries Solar and wind cost decreased 50-70% past six years Reduced cost of connectivity enables VPP 1/3 of world s GDP growth from ~300 cities Most of the over 40 Megacities in 2030 are in South-Asia Competition from e.g. Apple & Google Li-Ion battery cost decreased 60-70% past six years Urbanisation Growth of cities especially in Asia Need for sustainable utility services Electrification Global waste levels exp. to double by 2025 Active customers Customers make conscious choices Decentralised production Demand response Automatic solutions enabled by machine learning 9

10 Fortum For a cleaner world 10

11 Strategy: Grow in solar and wind Target: Gigawatt-scale solar and wind portfolio We will continue to develop the solar and wind business to secure our longer-term competitiveness. Solar and wind technologies are rapidly maturing and importance of utility competences are growing. Solar: The immediate focus is in India. The next step will focus on the system integration, combining solar with new consumer solutions, demand response, electric vehicles and storage. Wind: Focus on areas closer to our current home markets, in the Nordics and in Russia. 11

12 New Ventures: Investment of EUR million Connectivity New technology Better utilisation of current asset base New markets Focus areas Connect existing asset base, focused on customer Digitalisation as an enabler PV-Dyesensitized, Polymer Battery Bio2X Wave CHP +, local fuels Hydro efficiency Storage, Recycling Geography Products and services Internal Start Up Fund Internal Start Up Internal Start Up Fund Investment type External Start Up (Early) Fund External Start Up (Existing demo, close to full scale demo, before IPO) Experiment portfolio External Start Up (Close to IPO and functioning market model, EBITA positive) 12

13 Energy system in transition/disruption Fortum strategy Case examples

14 Wind farms and projects Nygårdsfjellet Ånstadblåheia Sørfjord Norway Blaiken, Sweden Solberg, Sweden Ulyanovsk, Russia 14

15 Our solar plants in India 5 MW Amrit solar plant, Rajasthan 10 MW solar plant in Kapeli, Madhya Pradesh New investments In April 2016: Fortum signs PPA with NTPC to build up 70 MW solar plant at Bhadla solar park in Rajasthan In June 2016: Fortum signs another PPA with NTPC to build up 100 MW solar plant at Pavagada solar park in Karnataka 15

16 16 Fortum offers turnkey solar kits for private customers in Finland, Sweden and Norway

17 INTESEM virtual power plant project Finnish Meteorological Institute

18 INTESEM and other Fortum solar power initiatives INTESEM virtual power plant project Intelligent Solar Energy Management The goal is to find an optimal and cost-efficient solution for distributed solar energy. The project is creating a concept for a so-called virtual power plant (VPP), which means an aggregation of small-scale, geographically decentralised electricity production and consumption sites that can be centrally controlled like one large power plant. The pilot system consists of several solar power plants in Finland and Sweden Fortum participated in November, 2015 in solar power crowdsourcing organised by TRINE in Sweden to deliver off-grid solar power system to Kenya. Piloting ongoing of solar+battery storage systems in households Solar2Go Experiment ongoing together with Futurice 18

19 In Fortum s groundbreaking VPP-pilot household loads are sold to balance the system in the Frequency Containment Reserve (N) VPP = Virtual Power Plant 19

20 Fortum is building a Virtual Power Plant business for distributed demand-side resources, either b2c or b2b National TSO balancing Intraday markets Local DSO balancing Energy markets competence Hydro optimization Market forecasts 24/7 physical trading desk Good position in Nordics Fortum s trading Virtual power plant VPP The VPP-platform is a software solution to connect, monitor, optimize and control distributed loads and storages? Customer Access 1.3 million Nordic retail customers Existing and developing customer offerings Good contacts to major commercial, industrial and governmental counterparties in home markets 20 Customer experience and value

21 Blockchain known unknown just start doing something with others without knowing where and what you get Blockchain and energy 12/2015 No links found in Internet 2/2016 First energy case studies LO3 Energy, Brooklyn Microgrid concept RWE and Slock.it: BlockCharge - EV Charging via the Ethereum During 2016 At least two energy related innovation challenges The GTEC Blockchain Innovation Award EY challenge the application of blockchain solutions for Energy trading for the power and energy sectors. 10/2016 Idea of Energy Web foundation presented by Ewald Hesse in Cleantech Venture Day First European Energy Trade over the Blockchain took place in EMART Energy 2016 conference Now at least energy blockchain startups Blockchain and Fortum Q1/2016 Internal brainstorming and open discussion of the topic Q2-Q3/2016 Case study development with ETLA Publication: Industrial Blockchain Platforms: An Exercise in Use Case Development in the Energy Industry Q3/2016 BOND project begins research partners VTT, Aalto and Etla 21

22 Fortum HorsePower New bedding and manure service for horse stables New solid biofuel to internal and external customers The customer chooses a bedding material regular deliveries Regular manure pick-up Transport and feeding to plant process Sawdust Cutter shavings Wood pellets 22

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