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The President and CEO comments on the 2013 annual report

Over the course of 2013, Statnett completed 140 km of power lines, exceeding NOK 6 billion in investments.

2013 was the year when Statnett really started to see the results of what will be the next generation main grid by 2030. Several large projects were finalised, and the projects were completed on time and budget. In October, we also presented the revised Grid Development Plan. This confirms investments of NOK 5-7 billion in new power lines and substations every year for the next ten years. This means that Statnett achieved cruising speed as regards investments for the coming years.

Over the last few years, we have implemented measures to enable the company to handle large projects, both current and future. We have increased our staff and raised our expertise in line with the new challenges, and are working actively in the supplier market to ensure that our standards for quality, cost and health, safety and the environment are met. A comparison carried out by the Norwegian Water Resources and Energy Directorate (NVE) shows that Statnett is among the most efficient TSOs in Europe. At the same time, we are focusing on becoming more efficient, making further adjustments to the organisation in 2013. We have also implemented a programme to raise efficiency yearly by 5 percent over the next three years. Statnett also makes significant investments in research and development to find new and better applications for technology which can contribute to execute our development projects, and operate the power system in a more efficient manner.

In addition, the injection of new equity in 2013 from the Ministry of Petroleum and Energy (MPE) provides us with the financial ability to undertake the many and large projects that will ensure security of supply, facilitate development of society and provide sound climate solutions.

Operations and development

In parallel with our investments, Statnett must ensure security of supply, right here and now. This is demanding in a power system which is not just in the process of being rebuilt, but which also experiences major variations in consumption and generation.

In 2013, we had a good power situation for large parts of the year with the exception of a period in April/May as a result of little precipitation in the latter part of the winter. Inflow into hydropower reservoirs has fluctuated throughout the year, with high inflow in autumn and early winter, while temperatures have been unseasonably mild.

We have completed several projects in 2013. The new power line between Sima and Samnanger secures the supply into the Bergen area, while a new power line between Varangerbotn and Skogfoss strengthens the supply into east Finnmark. However, as in earlier years, we had power supply outages in 2013, including outages in north-western Norway and northern Norway which emphasised that new investments in power lines, transformer substations and upgrade projects are necessary to secure electrical supply for the future. However, it is not sufficient to build and upgrade. Grids must also be operated, 24 hours a day, all year round. Communication is essential to operate our advanced power system. We have multiple R&D-projects underway to develop more efficient solutions, such as the Smart Grid. This is a project to automate monitoring, management and operation of the power system. Everyone will have automatic electricity meters at home, and we are working on an electricity hub which will be important for the introduction of the new meters. 

The power system also depends on a well-functioning power market. The Nordic market is part of an increasingly integrated European market. From February 2014, the Nordic market became part of the north-west European market coupling, which covers 75 percent of the power consumption in Europe. This facilitates increased trading across national boundaries, more correct price formation for power and a more climate-friendly power system. In this perspective, it is also significant that Statnett has started the development of new international interconnectors in cooperation with National Grid in the UK and TenneT in Germany.

Outlook

In 2013, the international climate panel IPCC confirmed the need for more carbon-free energy, and we see that new renewable energy is being developed in Norway and, to an even larger extent, in other parts of Europe. In Germany, for instance, 200 MW of new wind power is installed every month. We also see that the power consumption is growing. A new Norwegian consumption record was set in 2013. In addition, 8 000 Norwegians bought an electric car in 2013, twice as many as in 2012. This forms the background when looking forward.

For Statnett, it will primarily be important to maintain the activity level we achieved in 2013. In 2014, several large projects will be completed, such as the cable across the outer Oslofjord (Ytre Oslofjord) and the Skagerrak 4 interconnector between Norway and Denmark. Now, new major tasks await Statnett. We will initiate a comprehensive upgrade project in southern Norway while operating the grid. Start-up for one of the largest power line projects in Norway, from Ofoten to Hammerfest, is also nearing completion. We have received a final licence for the first section from Ofoten to Balsfjord, and start-up is scheduled for May. Over the course of 2014, we will pass several important milestones for the major cable projects to Germany and the UK, and we will prepare Statnett for the consequences of the implementation of the EU's third electricity market package in Norway. A consultation proposal from the Ministry of Petroleum and Energy aims to assign the ownership of the remaining parts of main grid, which have so far has been owned by 20 or so different energy companies, to Statnett.

Health, environment and safety is also a core challenge for the industry, and Statnett puts HSE first. This is necessary as the operation and development of the power system include many work operations that can entail safety hazards. We expect that the industry players and the supplier industry will establish shared, high ambitions and realise them.

Over the course of 2013, Statnett achieved cruising speed for its investments in grids and facilities. This will provide us with the next generation main grid by 2030. A grid that will facilitate a future that we expect to be increasingly dependent on secure access to electricity. However, 2030 is a long way off, and we must now focus on the next few years. We have our heading - we are underway.

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