Finansiell rapportering Revisors beretning Annual report 2020 The future is electric! 1 Content This is Statnett Page 4 Highlights 2020 Page 8 Conditions for the financial framework Page 10 A word from the CEO Page 12 Group management Page 14 Group structure Page 15 Corporate governance Page 18 Risk management and internal control Page 22 Board of Directors Page 29 Sustainability report Page 30 Report from the Board of Directors Page 61 Financial reporting Page 76 Income Statement Page 76 Balance sheet Page 77 Changes in equity Page 78 Cash flow statement Page 79 Notes Page 80 Auditor’s report Page 146 2 The decade of electrification! We enable a safe, green and competitive energy system To succeed, we must utilize new technologies, knowledge and collaborate on future solutions 3 Annual Report 2020 This is Statnett This is Statnett Statnett operates the transmission grid, i.e. the grid Socio-economic development of the power grid connects electricity producers, consumers and The Norwegian Energy Act and Statnett’s Articles of underlying networks in a nationwide system. Statnett is Association require the power grid to be developed in a responsible for operating and developing an efficient socio-economically rational manner. This applies both to nationwide power grid with a high security of supply. At decisions made by Statnett and decisions made by the the same time, Statnett is tasked with enabling the authorities when issuing necessary permits for projects. national grid to handle the impact of increased renewable Socio-economic analyses ensure that decision-makers power production, new power intensive businesses and receive expertly prepared documentation and electrification to reduce CO2 emissions. This makes comparable decision-making support. Statnett an important contributor to value creation and an enabler for the establishment of new green industries, as well as to the fulfilment of national and international climate commitments. Statnett is the transmission system operator in Statnett is owned by the Norwegian state Norway Statnett is a state-owned enterprise established in Statnett is the operator of the transmission grid and accordance with the Act relating to state-owned system operator in the Norwegian power system enterprises and is owned by the Norwegian state (Transmission System Operator, TSO). Statnett is through the Ministry of Petroleum and Energy (OED). responsible for developing, operating and maintaining The Norwegian Water Resources and Energy the transmission grid in a socio-economically rational Directorate (NVE) is responsible for supervision in manner. accordance with watercourse and energy legislation. The Norwegian Energy Regulatory Authority (RME) is Statnett’s mandate is operationalized through three a regulatory authority, which performs its tasks as an integrated primary roles: independent authority. RME’s mandate is to ensure that operators comply with the regulations intended to • System administrator ensure competitive conditions in the power market and Responsible for safeguarding satisfactory delivery an efficiently run power grid. quality and system operation, as well as market solutions that contribute to efficient development In Norway, power transmission is a monopoly and utilization of the power system. franchise. State ownership is intended to contribute to • Grid owner rational socio-economic operation and development of We plan, design, build, operate and maintain the the transmission grid. Statnett is responsible for critical entire Norwegian transmission grid and grid infrastructure and performs assignments of major connections to other countries’ power systems in a importance for civil security. State ownership helps cost effective way. ensure neutrality. Our revenues are regulated by RME, which sets an upper limit for the tariffs we can charge • Power system planning We assess possible development needs related to for our services. This regulation is based on the transmission capacity and prepare an overall plan for premise that, over time, Statnett’s income will cover its costs and provide a reasonable return on invested the development of the transmission grid. capital, assuming efficient operation, utilization and Planning the nationwide power grid and being development of the grid. responsible for the system requires neutrality, transparency and trust. These tasks affect all players in the power market. The role of owner of the transmission grid also requires Statnett to work closely with the authorities and other stakeholders in planning the power system to ensure that the right capacity is available at the right time. 4 Annual Report 2020 This is Statnett Access to the power grid is part of the climate Statnett is implementing extensive digitalization solution measures in order to develop, operate and maintain the grid more cost effectively and to extend the operational We are in the decade of electrification. At the same time, lifespan of existing infrastructure. New, smart solutions there is a considerable need for upgrading existing can also help us make better use of the power system. facilities. The strong growth in electrification and new This will help ensure that customers do not pay more than renewable power production requires more automation, needed for a secure power supply. Together, increased interaction and faster exchange of information digitalization, efficient markets and cost reductions must throughout the power industry in Norway, the Nordic provide maximum security of supply for the investments countries and Europe. Statnett is mandated to ensure the made. operationally viable connection of new or increased consumption or production to the grid, while maintaining the power system’s security of supply. If connection to Health, safety and the environment (HSE) the existing grid is not operationally viable, Statnett must Everyone who works at or for Statnett should arrive investigate and make necessary investments in the home from work safely each day. Statnett adopts a zero transmission grid in accordance with prevailing laws and tolerance approach to accidents and has a target of regulations. becoming a leader in HSE among European TSOs and leading in digital security. Statnett’s customers Everyone who is connected to the transmission grid is a Statnett works safely and sustainably customer of Statnett. This means power producers, Statnett contributes to the UN’s Sustainable power consumers and owners of regional grids. In most Development Goals by facilitating electrification and cases, users are connected to regional grids and enter performing necessary tasks in a safe and sustainable into a connection agreement with grid operators other manner. In 2020, Statnett implemented a number of than Statnett. However, in such cases local grid measures in its daily work to ensure that the company operators must clarify with Statnett whether there is takes its share of responsibility for counteracting global sufficient capacity in the transmission grid. challenges such as climate change, social dumping, corruption and the loss of biodiversity. Among other We are entering the decade of electrification things, we have raised the issue of sustainability to a strategic level and strengthened our ambitions related to The power system must facilitate zero emissions from the key sustainability focus areas, such as decent working energy sector in 2050 and major emission cuts as early conditions, our own greenhouse gas emissions and as 2030. Electrification is central to achieving this goal. increased diversity in the company. Our work to Statnett’s strategy is to develop a future-proof and coordinate and intensify our efforts in the area of efficient power system that facilitates increased sustainability in recent years has yielded results: in 2020, renewable power production, new power-intensive the company was able to obtain its first two green bonds business activities and electrification in order to reduce totaling NOK 3.6 billion. carbon emissions. The company aims to help satisfy customers’ need for green energy and ensure good delivery quality and high available grid capacity. Reports and investigations are available To meet society’s needs, Statnett performs a number of We must develop methods and resources to minimize the analyses and investigations to provide a basis for risks of building too late or building too early or building decisions regarding additional potential measures. These the wrong types of infrastructure. Among other things, may include choice-of-concept studies, analyses related this includes digitalization and other solutions to make to specific projects, or background work. Statnett also better use of existing grid capacity, more comprehensive prepares a Grid Development Plan and Power System planning of reinvestments and new investments. It also Assessment every other year. means better market solutions, measures that promote more flexible consumption, new solutions for system Published reports can be viewed at www.statnett.no. operations as well as measures that can reduce the risk of faults and interruptions or reduce the social costs of power outages or limited grid capacity. 5 Annual Report 2020 This is Statnett Operations and development The transmission grid in Norway in 2020 Statnett operates around 11,412 km of high-voltage power lines, 174 transformer substations and 1,798 km of subsea and land cables across Norway. The power system is developed and managed by Statnett’s nationwide organization, which is also responsible