OSMOTIC POWER

- A NEW, RENEWABLE SOURCE OF ENERGY

Berlin Stein Erik Skilhagen January 2012 Head of Osmotic Power WITHIN RENEWABLES No. 1 IN EUROPE RENEWABLE 89% ENERGY POWER AND DISTRICT 283 HEATING PLANTS OF NORWAY’S POWER 33% GENERATION ...IN MORE THAN 3200 20 EMPLOYEES... COUNTRIES STATKRAFT’S STRATEGY

Deliver growth in pure energy Flexible European generation and market operations

International hydropower

Wind power

District heating Small scale hydropower

3  Meeting future energy and climate needs requires high growth and huge investments in renewables, across a broad range of technologies

 Osmotic power forms a natural part of the new renewable energy portfolio, providing clean baseload energy with low environmental impact,..

...requiring cost reductions, a conducive policy framework and a critical mass of developers to succeed

4 COMBATING CLIMATE CHANGE AND SECURITY OF SUPPLY ARE THE MAIN DRIVERS FOR ALL RENEWABLES

Source: IEA OSMOTIC POWER PART OF SOLUTION

Renewable electricity Wind generation in Europe (TWh) ~800- Ocean 3 000 Hydro 2°C 2050

Solar Bio- ~600 energy ~600

Geo- thermal Today by by 2020 2050 Source: Statkraft, EREC, ECF  Meeting future energy and climate needs requires high growth and huge investments in renewables, across a broad range of technologies

 Osmotic power forms a natural part of the new renewable energy portfolio, providing clean baseload energy with low environmental impact,..

...requiring cost reductions, a conducive policy framework and a critical mass of developers to succeed

7 OSMOTIC POWER A NEW, RENEWABLE SOURCE OF ENERGY

8 Company presentation 2009 THE OSMOTIC POWER CONCEPT WHY OSMOTIC POWER?

Constant power generation - “Base load”

Small ecological footprint

Decentralised source of energy

Based on proven technology, except Membrane & Module ABUNDANT RESOURCES

Resource criteria • Salt water with sufficient salinity • Fresh water availability and Global potential: 1600 - 1700 TWh/year* quality • Short distance European potential: 180 TWh/year* between salt water 11 * Source: Statkraft and fresh water 2009 – WORLD FIRST PROTOTYPE

• “Proof of concept” • System scale-up • Membrane and component testing and optimisation • Operation and maintenance experience MATURE AND IMMATURE COMPONENTS

Osmotic Power illustration (prototype)

Examples of immature components Membrane Pressure Pre- elements exchanger treatment

Fresh water Sea water Water Brackish water Valves Turbine pipes Examples of mature components PROTOTYPE – MAIN ACTIVITIES Operation since 2009 Main activities

Test membrane performance and monitor operation

Develop cleaning and maintenance of membranes

Test of high pressure units (turbine, energy recovery unit, valves etc.)

Pretreatment fresh water optimization

Pretreatment seawater optimization

Design and operation of single membrane module test units MEMBRANE PARTNER

Statkraft and Nitto Denko/Hydranautics have entered into an agreement in June 2011 for the development and supply of membranes for osmotic power to accelerate the development.

MARS 2007 sid e 15 THE NEXT STEPS

2 MW 25 MW Feasibility Prototype Vision towards 2030 Pilot Demo

2009  2013  ~2018: 

OP is spreading across the world OP an important business for Statkraft

Statkraft operated Other utility operated PILOT PLANT KEY CHALLENGES

Technology “good enough” for scaling up and reducing cost of energy

Available site with good water resources

Concession for building a 1-2 MW pilot plant

Governmental support for developing osmotic power as a new, promising renewable source of energy

Utilization of the pilot plant for industry development and bringing the technology down the learning curve  Meeting future energy and climate needs requires high growth and huge investments in renewables, across a broad range of technologies

 Osmotic power forms a natural part of the new renewable energy portfolio, providing clean baseload energy with low environmental impact,..

...requiring cost reductions, a conducive policy framework and a critical mass of developers to succeed

18 COST OF ENERGY

Pilot plant (1-5 MW) Full scale demonstration plant (25 MW) Commercial plants LCOE1 = high LCOE = 120 €/MWh Reduction towards 70-80 €/MWh within 2030

EUR/MWh 125 ~120 LCOE €/MWh 125 100 Base case High learning case 100 Low learning case 75 75

50 50

25 25

0

2018 2020 2022 2024 2026 2028 2030 0 Year Control Proj. Pipes Constru Pro- Mem- OPEX LCOE sys. mng ction cess brane

1. Levelized cost of energy Note: Base case with RO & OP combined for membrane-related learning, High learning case with only OP for all learning, Low learning case with RO and OP combined for all learning Source: EU Second Strategic Energy Review (2008), moderate fuel price scenario, osmotic power strategy and BCG team analysis 2009 A JOINT EFFORT TO BUILD THE INDUSTRY

Manufacturers Governments

• Technology suppliers • Increase awareness of osmotic integrated in the development power among policy makers of the technology and governments

• In a wide time-frame, • Establish regulation for site competition contributes to development and support for industrial growth deployment

• Osmotic power to be perceived Utilities • Secure access to sites for pilot as an attractive business plant and demonstration plant opportunity for membrane & • Deployment of osmotic power component manufacturers • Define needs and requirements towards technology suppliers and policy makers VISION FOR OSMOTIC POWER: “A GLOBAL FOOTPRINT BY 2030”

OP is spreading across the world 30 plants in operation worldwide Support schemes have helped OP move down the learning curve Price of OP power is 50-100 €/MWh1

OP an important business for Statkraft OP breakthrough has given a major publicity boost to Statkraft and the government Statkraft has a leading position in OP Statkraft operated operation in Europe Other utility operated Statkraft is organising the 3rd Osmosis Membrane summit in Barcelona – April 26-27. Past events in has been sucessfully organised in 2008 in Amsterdam and 2010 in San Diego

Organised as a post-event for EDS’ Desalination Conference

Conference web site: http://osmosis-summit.event123.no/ or send an E-mail to [email protected]

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