2019 Extract Of
ANNUAL REPORT 2019 EXTRACT OF
08 A TALK WITH THE CEOS Change at the top at Skagerak Energi
20 PURE DEVELOPMENT Fully electric future
48 PURE GROWTH More power from each drop
94 PURE WELFARE Welcome warmth 28 OUR STRATEGY The greenest credentials of all Contents This is Skagerak 06 Key figures 08 A word from the CEOs 14 Important events 16 Our facilities 18 History 20 Case study – Pure development
Operational performance
26 Management 28 Our strategy 32 Skagerak Kraft incl. key figures 36 Skagerak Nett incl. key figures 40 Skagerak Varme incl. key figures 44 Skagerak Energipartner incl. key figures 48 Case study – Pure growth
Corporate social responsibility
54 Our corporate social responsibility 56 Stakeholder dialogue 58 Climate-friendly production 64 Secure power supply 67 Dialogue with landowners 68 Health, safety and the working environment 72 HR policy and recruitment 76 Information security and ICT security 78 Social balance sheet 84 Sponsorship activities in 2019 94 Case study – Pure welfare
The Board's Report and Financial Statement
100 Report from the Board of Directors 2019 110 The Board of Directors 112 Corporate governance 120 Income statement 121 Total comprehensive income 122 Balance sheet 124 Statement of cash flows
06 Key figures 08 A word from the CEOs 14 Important events 16 Our facilities 18 History 20 Case study – Pure development
SKAGERAK THIS IS THIS IS SKAGERAK SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 3 THIS IS SKAGERAK This is Skagerak
OUR VISION
Skagerak Energi shall be a forward-looking supplier of clean energy that contributes to social welfare, economic growth and development. SKAGERAK ENERGI
OUR VALUES
Competent Responsible Innovative
We will use our knowledge and experi- We will create value while showing We will think new thoughts, develop ence to reach ambitious goals and be consideration for our employees, opportunities and create solutions. recognised as a leader in our industry. customers, society and the environment.
CORE ACTIVITIES EXTRACT OF ANNUAL REPORT 2019
Skagerak Skagerak Skagerak Skagerak Kraft Nett Varme Energipartner
Produced 4,947 GWh 7,135 GWh supplied to Supplied 151 GWh of heat Supplies energy solutions to 205,545 customers industry and the transport sector in the Nordic region
SKAGERAK ENERGI’S OTHER SHAREHOLDINGS
49% 33.4% 14.9% PAGE — 4 Air Liquide Skagerak Laugstol Fjordkraft
Supplier of natural and biogas Electrical contractor Power sales THIS IS SKAGERAK SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 5 THIS IS SKAGERAK Key figures 2015–2019
Unit 2019 2018 2017 2016 2015
Financial performance Gross operating revenues NOK million 3,376 3,450 2,773 2,489 2,381 Operating profit (EBIT) NOK million 1,681 1,432 1,107 568 894 Net profit for the year NOK million 2,152 1,070 531 378 692 Operating margin1 per cent 49.8 41.5 39.9 22.8 37.6 Return on equity2 per cent 29.9 18.7 10.4 8.0 16.5
Balance sheet Total assets NOK million 14,933 13,032 12,586 11,599 11,946 Total liabilities NOK million 6,668 6,894 7,274 6,710 7,343 Equity NOK million 8,265 6,138 5,312 4,889 4,603 SKAGERAK ENERGI Liquidity Cash flow from operating activities NOK million 1,101 1,515 931 986 602 Total investments NOK million 953 973 852 660 659
No. of employees Women 166 156 154 159 160 Men 470 477 457 451 457 Total 636 633 611 610 617
Production Power production GWh 4,947 5,820 5,949 5,993 6,071 Grid customers Number 205,545 198,666 194,327 190,496 188,700 Grid km 16,969 17,100 17,003 16,933 16,772 Electrical energy delivered to end users GWh 7,135 3) 7,485 7,282 7,110 7,008 Heat deliveries GWh 151 141 120 114 88
Other matters Purchase of goods and services NOK million 729 845 591 615 545 Tax and public charges paid NOK million 878 997 690 564 397
EXTRACT OF ANNUAL REPORT 2019 Sickness absence rate per cent 2.9 3.6 4.3 3.1 3.8 Total number of injuries per million working hours (H2) Number 10.5 2.1 2.2 4.2 6.8
INVESTMENTS RECRUITMENT SICKNESS ABSENCE RATE
52953 2.9% Investments for the year of NOK The Skagerak Group employed The sickness absence rate fell
PAGE — 6 953 million were mainly related 52 new staff in 2019, bringing the from 3.6 per cent in 2018 to to new grid facilities but also to total number of new recruits in the 2.9 per cent in 2019. power and heat production. last two years to 97.
1 (Operating profit * 100) / Gross operating revenues 2 (Net profit for the year * 100) / Average equity 3 Preliminary calculation THIS IS SKAGERAK
POWER PRICES NO2 AREA øre/kWh
40 Power prices remained high at the start of 2019 but fell significantly 35 as the year progressed. This was mainly due to a marked decrease in 30 the price of gas, which reduced the cost of producing gas power. This 25 in turn pushed down power prices in the German market, which also 20 impacted Nordic power prices.
15 Average price (23.8)
10 Power price NO2 area
5
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SKAGERAK ENERGI
POWER PRODUCTION ELECTRICAL ENERGY DELIVERED GWh DELIVERED HEAT GWh 7,135 151 -15%Skagerak Kraft’s total production amounted to 4,947 GWh, a decrease of 15 per cent in Skagerak Nett delivered 7,135 GWh of Skagerak Varme delivered 151 GWh of clean 2019. electricity to its customers, a decrease of energy to its district heating customers, an 4.9 per cent. increase of 7 per cent.
NET PROFIT FOR THE YEAR AFTER TAX NOK million
2,500 The increase of NOK 1,082 million in the net profit for the year 2,000 compared with 2018 is mainly attributable to the reduction in the 1,500
shareholding in Fjordkraft from EXTRACT OF ANNUAL REPORT 2019 1,000 29.7 per cent (NOK 462 million) and the revaluation of the residual 500 shareholding in the company (NOK 559 million). 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
CONTRIBUTION TO SOCIETY NOK billion INJURIES Number
16 14 12 NOK 10 8 6 billion 4 1.2 2 0 PAGE — 7 Skagerak Energi contributed 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 NOK 1.2 billion to regional financial activities in 2019. THIS IS SKAGERAK
Change at the top at Skagerak SKAGERAK ENERGI Energi
On 30 March this year, Jens Bjørn Staff (52) took over as CEO of Skagerak Energi. He was previously CFO at Orkla ASA and replaces Knut Barland (62), who steps down after leading Skagerak Energi since August 2008. Jens Bjørn is married with
four children and lives in Larvik. EXTRACT OF ANNUAL REPORT 2019 PAGE — 8
“No one knows quite how Europe will achieve the ambitious targets for zero greenhouse gas emissions by 2050 [...] But we do know that the power industry will play a key role along the way.”
JENS BJØRN STAFF INCOMING CEO THIS IS SKAGERAK You’re returning to an industry you know well right amount of electricity at the right time, but in having previously been CFO of Statkraft, Skagerak a smart way so that we maintain high quality and Energi’s largest shareholder. What are the greatest low costs, while delivering added value in the challenges facing Skagerak Energi? eyes of society and our customers. The power distribution industry is also currently undergoing Jens Bjørn: Norway is uniquely placed thanks structural changes. We will have to monitor these to its extensive renewable power production, closely and position ourselves for the future. most of which is flexible hydropower. The same applies to our company. No one knows exactly You’re leaving with best-ever result? A nice way to how Norway and the rest of Europe will achieve leave? the ambitious targets for zero greenhouse gas emissions by 2050 announced by the EU in Knut: Well, of course, even if some of it is down December. However, one thing that is certain to chance. We decided to sell more of our shares is that a major transformation will be required in Fjordkraft and did well from that, and the
in many areas of society, and that the power value of our remaining shareholding has also SKAGERAK ENERGI industry will make a key contribution to achieving increased. While these are one-off effects, they the target. The task facing our company is to are also the result of concerted efforts across adapt to a situation with an increasing share the company. The fact that all our wholly owned of non-flexible power, as coal, gas and nuclear subsidiaries are also performing very well is power is replaced by wind and solar energy, arguably just as important. and to exploit the resulting opportunities and challenges. Solar and wind power currently Knut: What I’m most pleased with, however, is account for less than 20 per cent of total power the progress we have made within HSE. I arrived production in Europe. If this share increases as from the oil and gas sector, so was used to high planned, the market will fundamentally change in standards. Everyone I met from Skagerak Energi the next few years. assured me that HSE and job safety were a top priority, but that’s not how it looked to me. I found this rather strange in an industry where so many hazardous operations are performed at heights
and there is a risk of serious electric shock EXTRACT OF ANNUAL REPORT 2019 “What I’m most pleased with, injuries. But now it IS a priority. Even though we unfortunately experienced an increase in the however, is the progress we number of injuries in 2019, all our departments are making a concerted and focused effort to have made within HSE.” reduce the potential for injuries.
KNUT BARLAND OUTGOING CEO The power market has changed significantly, and prices have fluctuated dramatically over the last 12 years?
Knut: I arrived at a time of good prices and saw Jens Bjørn: The changes in the market are not them climb even further. It would have been only affecting producers. Skagerak Nett is in the easy to think that all I had to do was sit back middle of a demanding transformation, where and count the money. However, when price levels the buzzwords are electrification and digitalisa- subsequently fell in the period 2011–2015 we
tion. Increased use of power in new areas, above were in a poor position. Lots of debt and high PAGE — 11 all in the transport sector, are resulting in new costs. We managed to turn things round thanks demands from customers. We must deliver the to the commitment and dedication of our loyal THIS IS SKAGERAK team. Cost savings were agreed and imple- The strategy states that the company aims to be mented in all departments. The owners for their climate neutral. part approved a moderate dividend policy, which has significantly strengthened our equity. Thanks Jens Bjørn: This is part and parcel of being a to the actions of our employees and owners, sustainable company. We deliver clean power along with improved power prices, we are now and clean heat, and we own half of a company much better placed and prepared to participate that sells biogas generated from local waste. in new activities. We earn money by selling guarantees of origin because our hydropower is generated with zero
You both believe you can achieve growth in these CO2 emissions. As a company, Skagerak Energi new areas? should “have the greenest credentials of all”, including when it comes to our own greenhouse Knut: Yes, and so do our owners. Society will gas emissions. have to manage the increased electrification in a
SKAGERAK ENERGI smart way, and we are preparing to play our part. What have you done to prepare to take over as We must develop solutions that create value for CEO? Skagerak and help prepare residents and busi- nesses in our region for the age of digitalisation Jens Bjørn: The work I have done in my previous and electrification. jobs has been the best preparation. The key to success is the motivation, input and exper- Jens Bjørn: The Board has made an exciting tise of the other 635 employees at Skagerak strategic choice and it’s my job, together with Energi. Developing this expertise, ensuring a the rest of the organisation, to put it into prac- good working environment, a good team spirit, tice. New needs and opportunities are arising and maintaining our focus on HSE will go a long in the interface between consumers, business, way towards helping us achieve our commercial society and traditional power and power distri- goals. Together we will ensure profitability and bution companies. We must identify our role growth and be an engine for development in our and participate in this changing market, and region. We will leave a mark, just like others have it is also extremely important to maintain and before us.
EXTRACT OF ANNUAL REPORT 2019 above all further develop Skagerak’s current core activities.
JENS BJØRN STAFF KNUT BARLAND INCOMING CEO OUTGOING CEO PAGE — 12 Wind, solar THIS IS SKAGERAK and hydropower
in Europe (GWh) SKAGERAK ENERGI WIND, SOLAR AND HYDROPOWER IN EUROPE GWh
1,400,000
1,200,000
1,000,000
800,000
600,000
400,000
200,000 EXTRACT OF ANNUAL REPORT 2019 0 2020 2025 2030 2035 2040 2045 2050
Hydropower Solar Wind onshore Wind offshore Source: DNV GL PAGE — 13 THIS IS SKAGERAK Important
events Acquisition of in 2019 Hjartdal Elverk In September, Skagerak Energi purchased Hjartdal Elverk. The power distribution business, with around 2,000 customers, was then merged with Skag-
SKAGERAK ENERGI erak Nett. Hjartdal is located in the centre of Skagerak Nett’s regional grid and there are plans to develop the existing electrician resource pool in Hjartdal to strengthen oper- ation of the regional grid in Upper Telemark. EXTRACT OF ANNUAL REPORT 2019
Unique research Jens Bjørn Staff Three innovation turbine in Seljord new CEO awards
A new unit was installed at On 14 November, Jens Bjørn Skagerak Nett received three Grunnåi power plant in Seljord Staff was announced as Skag- prizes for its innovation work during the year. The new unit erak Energi’s new CEO. Staff in 2019. The most recent was utilises flood water that previ- was previously CFO of the food the CINELDI prize for participa- ously largely bypassed the group Orkla. From 2011 to tion in a number of research station. The turbine on the new 2014, he performed the same and development projects. machine is unique in that it is role at Skagerak’s majority Earlier in the year, the company the only turbine in the world shareholder Statkraft. Staff received awards for a solution to have windows that make it takes over from Knut Barland, that allows electricians to work possible to watch the water hit who has been CEO since more independently and effi- the turbine runner. The runner 2008. ciently, and for a joint project
PAGE — 14 can be equipped with sensors with Sintef and other power to allow the machine to be distribution companies, which used for research. uses sensors to automatically restore power to customers in the event of faults. THIS IS SKAGERAK
Liquid biogas filling Official opening of Skagerak Nett station opened Skagerak Energilab passes 200,000 customer mark On 28 June, Air Liquide Skag- On 23 June, it was time for erak opened its first filling the official opening of Skag- On 5 June, Skagerak Nett station for lorries and large erak Energilab at the Skag- acquired its 200,000th vehicles at Borgeskogen near erak Arena on the day of the customer in Vestfold and Tele- Stokke. Here vehicles can fill match between first division mark. In the less than 20 years
up with liquid biogas (LBG), football teams Odd and Hauge- since the Skagerak Group was SKAGERAK ENERGI which provides a significantly sund. The Energylab consists launched, the power distri- greater range than compressed of 2,700 solar cell panels on bution company’s customer biogas (CBG). The station will the roof of the arena with an base has expanded by almost be supplied from Sweden until installed capacity of 800 kW 30,000. Apart from a small construction of Greve Biogas’s and a battery with a storage number of customers acquired liquid biogas factory in Tøns- capacity of 1 MWh. in the takeover of Løvenskiold- berg is completed. Fossum’s grid in 2016, all the growth has been organic. EXTRACT OF ANNUAL REPORT 2019
Skagerak Varme Shared systems Reduced passes milestone control centre with shareholding Midt-Telemark in Fjordkraft In 2019, Skagerak Varme passed 150 GWh in delivered After almost 18 months’ In spring, Skagerak Energi energy for the four plants at preparations, at the end of reduced its shareholding in Skien, Porsgrunn, Tønsberg 2019, Skagerak Nett took Fjordkraft from 29.7 per cent and Horten for the first time. In over responsibility for the to 14.9 per cent through the the last ten years, the district operation and monitoring of sale of 15.5 million shares in heating company has almost Midt-Telemark Energi’s grid. the power sales company. The quadrupled energy deliveries This includes the power grid sale had a significant impact from 40 GWh in 2010. In the in Midt-Telemark (previously on Skagerak’s net profit for same period, the renewable Sauherad and Bø) and Nome 2019, both through a gain on share has increased from municipalities. the sale and revaluation of the around 94 per cent to around residual shares. PAGE — 15 97 per cent. THIS IS SKAGERAK Our facilities
Key power stations:
Åbjøra Hjartdøla Brokke Tonstad power plant power plant power plant power plant SKAGERAK ENERGI Åbjøra power plant is located Hjartdøla power plant is The Brokke power plant is The Tonstad power plant in the Bægna watercourse. located in the municipality located in the municipality is located at the north end The power station is located of Hjartdal and is Skagerak of Valle in Aust-Agder and of the Sirdalsfjord, near in Valdres, south of Fagernes Kraft’s second-largest is one of Norway’s largest the town of Tonstad in and west of the Aurdalsfjord. wholly owned power plant. power stations. Vest-Agder. Tonstad power The power plant entered plant is Norway’s largest, operation in 1951. In measured by production. 2002, a new power station 250 metres further into the mountain started operation.
Production Power in Production Power Production Power Production Power in GWh MW in GWh in MW in GWh in MW in GWh in MW 562 95 499 120 1,718 328 3,800 960
In operation Fall in In operation Fall in In operation Fall in In operation Fall in since metres since metres since metres since metres 1951 442 1958 555 1964 303 1968 450
EXTRACT OF ANNUAL REPORT 2019 Municipality Municipality Municipality Municipality
Nord-Aurdal Hjartdal Valle Sirdal
Shareholding Shareholding Shareholding Shareholding 100% 100% 31.4% 14.6% PAGE — 16 THIS IS SKAGERAK
SIZE OF POWER PRODUCTION Skagerak’s share of produc- tion is shown for partly owned production
GWh > 100 100 200 300 400 500 600 SKAGERAK ENERGI Bergen
Geilo
Haugesund Oslo Haukeligrend
Notodden EXTRACT OF ANNUAL REPORT 2019
Vr dal
Stavanger
Porsgrunn
Arendal
Egersund PAGE — 17 Kristiansand Our power plants Our district heating plants Licence area Skagerak Nett THIS IS SKAGERAK 1912 We have a history SKK ESTABLISHED Skiensfjordens kommunale kraftselskap (SKK) was founded on 7 June 1912 by Gunnar Knudsen, industrialist and prime minister for two periods, 1908–1910 of collaboration and 1913–1920. Knudsen, founder of the pioneering company Laugstol Bruk, born in Arendal and resident of Skien, initiated a collaboration between Porsgrunn, Skien, Gjerpen and Solum to and innovation develop power generation in Grenland.
1915 FOUR POWER PLANTS IN SKAGERAK ENERGI GRENLAND By 1915, four power companies had been established in Grenland: Fritzøe verk, Porsgrunn kommunale elek- trisitetsverk, Skien Elektrisitetsverk and Langesund Kommunale kraftselskap.
1920 VESTFOLD KRAFT ESTABLISHED Vestfold Kraftelskap (VK) was founded in 1920 after the county council decided to purchase half of Fritzøe Verk / Treschow’s waterfall rights and electrical installations.
EXTRACT OF ANNUAL REPORT 2019 1885 LAUGSTOL BRUK BECOMES NORWAY’S FIRST POWER PLANT As early as 1885, six years after Thomas A. Edison produced the first incandes- 1947 cent light bulb, and three years after the world’s first power plant was opened in SKK AND VK COLLABORATE ON New York, Laugstol Bruk began producing ENERGY DEVELOPMENTS electricity in Skien. Its goal was first and The cooperation between SKK and VK foremost to create better and less flam- goes back a long way. As early as in mable light to use in its own operations. 1947, the two power companies signed It was here that electric light bulbs shone an agreement to jointly develop Åbjøra, for the first time in Norway. Hjartdøla, Bagn and Vierød.
1886 1965 FIRST PREMISES IN THE POWER PLANTS IN GREN- SANDEFJORD TO HAVE LAND ARE BUNDLED IN SKK ELECTRIC LIGHTING
PAGE — 18 By 1965, SKK had become an asso- In 1886, the newspaper Sandefjords ciation of all the power companies in Blad reported that “Mr Chamberlain Tres- the area, owned by Skien (50 per cent), chow has recently furnished Fritzøe Verks Porsgrunn (40 per cent) and Bamble Musikkorps [music band] with a most (10 per cent). splendid premises with electric lighting.” 1998–1999 2017 THIS IS SKAGERAK THE SKAGERAK GROUP IS AIR LIQUIDE JOINS AS BIOGAS STARTING TO TAKE SHAPE PARTNER In 1999, SKK took over Telekraft AS and In 2017, 51 per cent of the shares in in 1998 VK took over the first munici- Skagerak Naturgass were sold to Air pally owned power distribution operator, Liquide. The company is now called Air Tønsberg Energi. Within a few years, all Liquide Skagerak. the power plants in the county had been brought under the VK umbrella.
2018 1999 DISPOSAL OF SHARES IN FJORDKRAFT PROPOSED MERGER Fjordkraft launches IPO and Skagerak ANNOUNCED Energi reduces its shareholding from In 1999, a proposal was made to merge 48 to 29.7 per cent. In autumn 2019,
SKK and VK, with Statkraft as the the shareholding was further reduced to SKAGERAK ENERGI majority shareholder. In 2000, Statkraft 14.9 per cent. acquired 34 per cent of the shares of both SKK and VK. In December 2000, the owner municipalities in Vestfold and Grenland gave the green light for the merger, and on 1 January 2001 Skagerak Energi became a reality. 2019 ACQUISITION OF HJARTDAL ELVERK Skagerak Energi purchases Hjartdal Elverk. The power distribution business 2001 with around 2,000 customers was then merged with Skagerak Nett SKAGERAK ENERGI ESTABLISHED In May 2001, the new group was SKAGERAK ENERGIPARTNER officially launched. In September of the ESTABLISHED same year, the Vestfold municipalities sold their remaining shares in Skagerak Skagerak Energipartner is established Energi AS to Statkraft Holding AS, to contribute to electrification and use of alternative sustainable renewable increasing Statkraft’s shareholding in EXTRACT OF ANNUAL REPORT 2019 Skagerak Energi to 66.62 per cent. solutions in society, the transport sector, industry and agriculture.
2015 DISPOSAL OF SHARES IN SKAGERAK ELEKTRO/LAUGSTOL In autumn 2015, Skagerak Energi reduced its shareholding in Skagerak Elektro first to 49 per cent and then to 33.4 per cent. The company has changed its name to Laugstol. PAGE — 19 THIS IS SKAGERAK
PURE DEVELOPMENT SKAGERAK ENERGI Award-winning innovation
Skagerak Nett has won several awards for its research work. In a society undergoing major technological change, challenges
EXTRACT OF ANNUAL REPORT 2019 are being met through pilot projects and case studies, and the path from research to deployment in the power distribution company is short. PAGE — 20
THIS IS SKAGERAK Three innovation awards in 2019
1. Powel Innovation Award for providing engineers with new digital tools to improve the efficiency of work processes by 30 per cent through automation, mobility and an offensive approach.
2. The Smart Grid Centre’s Innovation Award for the project “Fault and outage manage- ment in smart distribution grids” together with Sintef, Hafslund, Eidsiva, Lyse and Istad. Here new technology is being used to reduce the duration of outages, the number of partial outages during fault localisation and outage costs.
3. The CINELDI Award for extensive contributions as an active user partner in the CINELDI research collaboration. Both as a member of several expert groups and as an
SKAGERAK ENERGI initiator of and participant in various pilot projects. The award was jointly awarded to Skagerak Nett and Skagerak employee Eivind Gramme.
Fully electric future including the flexibility provided by customers and energy stores, to meet the needs of tomor- Ambitious political targets and goals, and break- row’s low-emissions society. It is important to neck technological change, both on the supply identify cost-effective approaches that provide and demand side, will be important drivers of good delivery quality. Changes and new needs the low-emission society. Electricity is playing an must be viewed in context,” explains Gramme. increasingly central role. “We are on the way to becoming fully elec- Award winners tric, and the grid is what binds us together,”
EXTRACT OF ANNUAL REPORT 2019 comments chartered engineer Eivind Gramme. Skagerak Nett engages in research and devel- He is responsible for administering Skagerak opment to identify good solutions for the power Nett’s framework conditions and is heavily grid and society. Research takes place through involved in research and development work. internal and joint projects supported by organi- sations such as the Research Council of Norway. Eivind Gramme and Skagerak Nett are active Critical infrastructure members of the Centre for Intelligent Electricity Distribution (CINELDI). This is one of several Sales of electric cars are rising in Vestfold and research centres for environmentally friendly Telemark, and Sandefjord is the home port of energy partly funded by the Research Council of Color Hybrid, the world’s largest plug-in hybrid Norway. In 2019, Gramme and Skagerak Nett ship. An increasing number of smart and more received three awards for their work, including energy-efficient buildings are being established, the CINELDI award for outstanding contributions. and local, solar-based production is becoming “At CINELDI, we work on the power systems more widespread. All of this is important for, and of the future. System innovation is the key, making new demands of, critical infrastructure because tomorrow’s solutions could require
PAGE — 22 such as the power grid. several simultaneous changes. We play a central “We are working towards a more active grid role and are a creative contributor,” comments where we utilise a wide range of new solutions, Gramme. THIS IS SKAGERAK SKAGERAK ENERGI
Eivind Gramme, on the roof of Skagerak Arena, where Skagerak Energilab generates and stores electrical energy.
“We must pave the way for tomorrow’s low-emissions society. Satisfying our customers’ needs, being good advisers and choosing appropriate and future-proof solutions.”
— Eivind Gramme EXTRACT OF ANNUAL REPORT 2019
Research project Shortest possible path
In addition to CINELDI, Skagerak Nett is engaged in Executive Vice President Øivind Askvik is full of praise for several other exciting projects. One of these is Skag- this pioneering work at Skagerak Nett. erak Energilab, a pilot facility for local generation of solar “The work we are doing, and our focus on innovation, energy and storage of electrical energy, which is trialling are paying off. We have many bright people on our team several different types of new technology. who are helping us transition from the traditional to the Skagerak Nett is also working on solutions for grids innovative. The green and digital shift require us to make that repair themselves after outages. changes, and the awards we have won show that we are A third project, supported by Enova, is investigating heading in the right direction,” says the EVP. consumer flexibility as a resource for improving utilisation The very fact that researchers and users collabo- of the power grid. rate closely, often through joint initiatives involving pilot projects and case studies, ensures a short path from research to actual use.
“This makes forward-looking and interdiscipli- PAGE — 23 nary research important for us as a power distribution company,” comments Gramme. 26 Management 28 Our strategy 32 Skagerak Kraft incl. key figures 36 Skagerak Nett incl. key figures 40 Skakerak Varme incl. key figures 44 Skagerak Energipartner incl. key figures 48 Case study – Pure growth OPERATIONAL PERFORMANCE IN 2019 SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 25 OPERATIONAL PERFOR- MANCE OPERATIONAL PERFORMANCE IN 2019 Management
JENS BJØRN STAFF ØYSTEIN DISCH OLSRØD KRISTIAN NORHEIM CHRISTOPHER KJØLNER CEO OF SKAGERAK ENERGI EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT FINANCE COMMUNICATIONS AND STRATEGY AND BUSINESS PUBLIC RELATIONS DEVELOPMENT
Jens Bjørn Staff, born 1967, is Øystein Disch Olsrød, born 1971, Kristian Norheim, born 1976, is Christopher Kjølner, born 1972, the CEO of Skagerak Energi. He is Skagerak Energi’s Executive Skagerak Energi’s Executive Vice is Executive Vice President is a graduate economist and has Vice President for Finance. President for Communications for Strategy and Business SKAGERAK ENERGI extensive business experience Prior to joining the company, he and Public Relations. He came Development. Prior to joining from a number of companies, held the position of CFO Group to Skagerak from a position as Skagerak, he was a director of most recently as CFO and a at Reno Norden ASA. He has Senior Adviser at Gambit Hill offshore projects at Lorentzen member of the group manage- previously been the CFO of Green + Knowlton Strategies. He has and Stemoco. Before this he held ment team at Orkla ASA. Before Reefers ASA and Tide ASA. extensive experience from his a series of positions at General this he was CFO and SVP at Stat- Earlier in his career, he held key time as an active politician for Electric in Norway, the USA and kraft from 2011 to 2014. He also positions in various companies the Norwegian Progress Party the United Kingdom. Kjølner’s has many years’ management within the areas of finance, (2004–2015), including as an extensive business career also experience at Statoil. Staff took accounting, tax and charges, as MP for 2 years. Kristian Norheim includes experience of start-up up his position as CEO in 2020. well as business development holds an MA in South-East Euro- businesses and the finance and management. Øystein Disch pean studies from the National & industry. He has also worked on Olsrød is a state authorised Kapodistrian University of Athens. development projects in Liberia public accountant. Disch Olsrød In addition, he holds an honours in Africa. Kjølner has an MSc has been EVP Finance since degree in political science from in business administration and 2017. the University of Oslo. Norheim economics from the Norwegian has been EVP Communications Business School (BI). He has and Public Relations since 2017. been an Executive Vice President since 2019. EXTRACT OF ANNUAL REPORT 2019 PAGE — 26 OPERATIONAL PERFORMANCE IN 2019
BARBRO MALMGREN ØIVIND ASKVIK GEIR KULÅS EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT EXECUTIVE VICE PRESIDENT ORGANISATION SKAGERAK NETT SKAGERAK KRAFT
Barbro Malmgren, born 1959, Øivind Askvik, born 1975, is Geir Kulås, born 1969, is is Skagerak Energi’s Executive Executive Vice President of Executive Vice President of Vice President for Organisation, Skagerak Nett. He was previously Skagerak Kraft. He has extensive with responsibility for HR, HSE, the Global Service Manager for experience from various positions SKAGERAK ENERGI ICT and property. She came to Power Grid Automation at ABB. at Norsk Hydro. Among other Skagerak from the position of He held several key positions at things, he was the Foundry Communications Director at the ABB for 15 years, both nationally Manager and Production Manager South-Eastern Norway Regional and internationally, and has of Magnesium Norway, before Health Authority. Prior to that, extensive experience in the becoming Platform Manager for she was Chief Consultant at field of power products, power Oseberg C and then the Field Cap Gemini Ernst & Young, and systems and automation. Øivind Manager for Heimdal, Vale, and Assistant Director at the news- Askvik received his education Vilje at Hydro Oil & Energy. From paper Telemarksavisa, where she in the Norwegian Armed Forces 2012 to 2017, he was Executive also worked with management and holds an Executive MBA Vice President of Skagerak Nett. development in the A-pressen in economics and business Geir Kulås holds an MSc in group (now Amedia). She holds administration. Askvik has been industrial chemical engineering a degree in economics and Executive Vice President of Skag- from the Norwegian University of business administration from erak Nett since 2017. Science and Technology (NTNU), BI Norwegian Business School. and an MBA in economics and Malmgren has been an Executive business administration from the Vice President since 2005. Norwegian School of Economics and Business Administration (NHH). Kulås has been Executive Vice President of Skagerak Nett since 2017. EXTRACT OF ANNUAL REPORT 2019 PAGE — 27 OPERATIONAL PERFORMANCE IN 2019 SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 28 OPERATIONAL PERFORMANCE IN 2019
OUR STRATEGY The greenest credentials of all
The seriousness of the climate challenges facing the world came SKAGERAK ENERGI into sharper focus in 2019. Climate policy has become increas- ingly important and is present in more and more areas of society. The transition from fossil fuels to renewable energy will have a major impact on the European energy market.
kagerak Energi has the best green creden- electrification of society, we have established a tials of all in this market and is well posi- new subsidiary: Skagerak Energipartner AS. Stioned to contribute to the necessary Skagerak Energipartner supplies energy transition. Every kilowatt of clean power generated solutions to industry, the transport sector and
by Skagerak Energi that replaces one kilowatt of agriculture in the Nordic region. EXTRACT OF ANNUAL REPORT 2019 electricity generated by a coal-fired power plant in All production and operations must take the Europe reduces greenhouse gas emissions by one greatest possible consideration of people, the kilogram CO2. In this way, the company’s power environment and climate. You can read more production replaced 4.9 million tonnes CO2 gener- about this on page 58. ated by coal-fired power plants in Europe in 2019. We will continue to invest around NOK 1 billion a year to meet the challenges and More non-flexible power opportunities presented by climate issues. The production company is well placed financially and attaches great importance to developing the individual and The transition from coal and gas power produc- collective expertise of the Group’s workforce. tion to solar and wind power production is likely Skagerak Energi is organised as a group with to result in greater fluctuations in power prices. core activities bundled in the three wholly owned According to IEA, wind and solar power production subsidiaries Skagerak Nett, Skagerak Kraft and accounted for 14.5 per cent of total power produc- Skagerak Varme. tion in Europe in 2018. If wind and solar power
To utilise the Group’s expertise to exploit the are to replace power generated by coal, gas and PAGE — 29 new market opportunities being presented by the nuclear power plants, the share of non-flexible OPERATIONAL PERFORMANCE IN 2019 power will have to rise to at least 75 per cent. and perhaps temporarily store power in their This means European power production will electric cars or other batteries. This is making become increasingly dependent on the weather. To new demands of the electricity supply, but also counter this, methods will be developed for storing presenting opportunities to develop local solu- energy and tools introduced to manage demand. It tions to satisfy the increased demand. is uncertain how the European power system as a Skagerak Nett’s task is to ensure that whole will function in the future. However, greater everyone receives the electricity they need, when fluctuations in power prices are to be expected: they need it, and to contribute efficient methods there will be more periods of high prices, and of managing consumption, production and there will be more periods of low prices. storage in the grid. We must achieve this at the Skagerak Kraft’s task is to adapt to this and lowest possible cost. You can read more about generate the most power when prices are high. this on page 36 By doing this, the company will help flatten out price fluctuations in the best interests of society,
SKAGERAK ENERGI while maximising the company’s potential earn- ings. The other main task is to maximise produc- tion capacity given the framework conditions established by the authorities. You can read European green deal more about this on page 32. The EU’s new climate strategy has set more ambitious goals for the EEA. By 2030, greenhouse gas emissions are Increased load on to be reduced by at least 50 per cent, the power grid compared to the previous 40 per cent.
Increased electrification relating to electrical By 2050, the EEA is to be climate-neutral vehicles, data storage, heating and operation The current goals and policies will only of different types of commercial and agricul- reduce emissions by 60 per cent by 2050, tural machinery is increasing the demand for compared with 1990 levels. The new power, both in terms of annual consumption target represents a dramatic increase,
EXTRACT OF ANNUAL REPORT 2019 and output. Electrification of Norwegian oil and since it is expected to be increasingly diffi- gas production could increase demand by more cult and more expensive to reduce green- than 10 TWh. Energy Norway predicts that total house gas emissions as we approach demand in Norway could rise by between 30 and climate neutrality. 40 TWh in the period leading up to 2040. Given It would also involve, for example, that Norway’s total electricity consumption in a tightening of the EU’s system for 2019 was 133.5 TWh, this means that growth emissions allowance trading. This will contribute to an increase in the price of is expected to be between 22.5 and 30 per cent emissions allowances and consequently over 20 years. power prices in the European market, of Satisfying the increased output requirements which Norway is part. will be a challenge. Consumption is expected to Extending emissions allowance rise sharply in the afternoons, as this is when trading to parts of the transport sector will we charge our electric cars and switch on our also be considered. cookers, music systems, PCs and TVs. We can The goals will be established in a meet this challenge by making major investments special Climate Act that is expected in the distribution grid, or through smart meas- to be proposed during 2020. This will PAGE — 30 ures and adaptations. More and more consumers directly impact Norway, through the EEA are also expected to generate electricity them- Agreement. selves using solar panels or wind turbines, New markets Climate-friendly warmth OPERATIONAL PERFORMANCE IN 2019 In a new era of changing market conditions Since 1 January 2020, heating homes and and new grid requirements, new products and commercial premises with oil heating has been services will be required to satisfy the needs of prohibited in Norway. Skagerak Varme’s task is to customers, power distribution companies and supply buildings in the company’s licence areas power producers. with water for heating. This is an important part To exploit the Group’s potential in these of society’s efforts to reduce total greenhouse new emerging markets, we have established a gas emissions and exploit renewable resources new company under the parent company. You such as waste heat from industry and organic can read more about Skagerak Energipartner on waste and wood chippings from forests. You can page 44. read more about this on page 40. SKAGERAK ENERGI
Nuclear power 22.1%
Coal 19.5%
Gas 18.9% Share of power Hydro 16.8% production in Wind 11.1%
Europe 2018 Biopower plants 5.1%
Solar 3.7%
Other 2.8%
* Source: IEA EXTRACT OF ANNUAL REPORT 2019
NON-FLEXIBLE POWER IN EUROPE TWh
3,500
3,000
2,500
2,000
1,500
1,000
500 PAGE — 31
0 2020 2025 2030 2035 2040 2045 2050
Source: DNV GL OPERATIONAL PERFORMANCE IN 2019
Skagerak What were the most important Kraft investments in 2019? The business invested NOK 211 million in 2019 (NOK 130 million). The largest project was the completion of Grunnåi Unit 2, which has added 11.5 GWh of new power production, bringing total production to 66 GWh. The unit is equipped with more sensors than usual to allow the facility to be used for research purposes. The partly owned plants and regulation associations continued to be busy refurbishing
SKAGERAK ENERGI dams and control systems. Towards the end of 2019 in brief the year, the go-ahead was given for a new power plant at both Dalsfoss and Gjuvåa, and these Power production fell by 15 per cent, from projects will be in full swing in 2020. Both power 5,820 GWh in 2018 to 4,947 GWh in 2019, due plants will increase power production when to lower inflow. Systematic efforts were made to completed. achieve good prices for the power we produced. This included: Company strategy • Model development for both hydrology and trading activities to improve inflow forecasts The European power market is entering a period and how these are utilised; better exploita- of expected rising demand for electricity as part tion of trading opportunities and adaptation to of the green shift, in which solar and wind power future markets. production will replace coal, gas and nuclear • Efficiency improvements in maintenance, and power. This gives Skagerak Kraft major competi-
EXTRACT OF ANNUAL REPORT 2019 improved availability at our production facil- tive advantages, because our power is clean and ities at times of good prices based on more can be regulated. flexible planning. Our task is to: • Effective work on environmental aspects in our watercourses to allow us to achieve • Maximise the value of the water by generating optimum conditions while maintaining the power when prices are high value of both water and production flexibility. • Maximise green values by selling guarantees of origin under the EEA agreement We also developed the organisation’s exper- • Generate as much growth as possible through tise and resources to deal with more complex profitable green power projects day-to-day routines. New forms of collaboration and IT tools that facilitate information flow and We are developing increasingly advanced IT decentralisation of authority are being intro- models to predict when we should generate elec- duced, where building digital expertise repre- tricity. At the same time, the whole organisation sents an important focus area. must be prepared to be flexible, so that we can Sales of guarantees of origin are also a fully exploit periods of high prices and temporary
PAGE — 32 key element of Skagerak Kraft’s initiatives. price peaks. The prices of these certificates were generally weaker in 2019. OPERATIONAL PERFORMANCE IN 2019 “A committed organisation and new digital collaboration tools are presenting exciting opportunities for Skagerak Kraft as it enters 2020. We call this the Power of Collaboration.”
GEIR KULÅS EXECUTIVE VICE PRESIDENT SKAGERAK ENERGI
POWER PRODUCTION GWh
6,500
6,000
5,500
5,000
4,500
4,000 EXTRACT OF ANNUAL REPORT 2019
3,500
3,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2019 2018 2017 2016 2015
Revenues NOK million 1,953 2,009 1,571 1,145 1,577
Adjusted revenues* 1,922 2,044 1,567 1,375 1,219
EBITDA NOK million 1,468 1,564 1,157 727 1,126
Investments NOK million 211 130 100 104 113
Injuries 0 1 0 1 3 PAGE — 33
Sickness absence % 2.9 2.8 5.2 2.6 3.9
No. of employees 136 128 123 123 116
* Underlying revenue (net) adjusted for unrealised changes in value of power contracts. Skagerak Kraft in the European market
Cable/Power exchange The overall power exchange capacity at the end of 2020 will be 9,206 MW. This represents 26 per cent of total Norwegian power production capacity. This means that Norway is closely integrated with Europe’s power market.
Existing cable Under construction Licence applied for
Share of power production in Europe 2018
Per cent 2018 2050
Nuclear power 22 11 Coal 19 2 Gas 19 5 2018 2050 Hydro 17 10 Wind 11 40 Biopower plants 5 5 Solar 4 26 Other 3 2
Source: IEA The EU aims to be climate-neutral by 2050. This will require coal OPERATIONAL PERFORMANCE IN 2019 and gas to be replaced by renewable energy. More wind and solar production will result in much greater price fluctuations in line with weather conditions.
Skagerak Kraft must plan so it can generate as much as possible when prices are high and as little as possible when they are low.
WIND, SOLAR AND HYDROPOWER IN EUROPE GWh
1,400,000
1,200,000 SKAGERAK ENERGI
1,000,000
800,000
600,000
400,000
200,000
0 2020 2025 2030 2035 2040 2045 2050
Hydropower Solar Wind onshore Wind offshore Source: DNV GL EXTRACT OF ANNUAL REPORT 2019
PRICE INCREASE EMISSIONS ALLOWANCES THE NUMBER OF HOURS WITH EXTREME PRICES
EUR/tonne CO2 WILL INCREASE Hours per year 30 1,400
25 1,200 1,000 20 800 15 600 10 400 5 200 0 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2030 2040
The price of CO2 emissions allowances has risen sharply in the As non-flexible solar and wind power replaces coal and last two years. Higher emissions allowance prices are raising gas-fired power, extremely high or extremely low power market PAGE — 35 power prices in Europe. prices will become more frequent. As early as 2030, power is expected to have zero value for 314 hours a year, and this figure will increase to 760 hours in 2040. At the same time, the number of hours with extremely high prices will also increase.
Extremely high prices (50% above average) Extremely low prices (50% below average) Zero prices (free power) OPERATIONAL PERFORMANCE IN 2019 What were the most important Skagerak investments in 2019?
Investments in 2019 totalled NOK 673 million Nett (NOK 747 million), including NOK 570 million in grid facilities and NOK 23 million in AMS meters (Advanced Metering and Control Systems). Other investments totalled NOK 80 million. At Tørdal in Drangedal municipality, a new 2019 in brief regional substation is being built to reinforce security of supply in the region, connect new Significant cost reductions were implemented power production and supply new holiday homes. in 2019, which helped increase the yield to At Svelgfoss in Notodden, a major refurbish- 7.65 per cent, up from 3.64 per cent in 2018. ment has been implemented to improve HSE
SKAGERAK ENERGI The improvement in the return is attributable conditions and security of supply for both power to a sharp focus on efficiency improvements drawn from the grid in the area and feed-in of combined with a good and stable power supply. production. The company won three innovation awards Skagerak Nett has also purchased a number in 2019. The first was for the company’s work of grid facilities from Statnett to tidy up the on developing new field work methodology. The interface to satisfy new EU regulations. At Vegg- second, which was shared with Sintef and four bakken in Horten, a major reconstruction/rein- other power distribution companies, was for a vestment has been implemented to facilitate project to develop among other things a self- development of the city and reduce the risk of healing grid at Sande. The third, from CINELDI, hazardous conditions for our teams working at was awarded to an individual employee, Eivind the facility. Gramme, for his outstanding contributions and to Skagerak Nett for its focus on innovation. There were six injuries involving own Skagerak Nett’s strategy employees in the power distribution company in
EXTRACT OF ANNUAL REPORT 2019 2019. This is a major concern for the company The most important strategic drivers for the and concerted efforts have been made to iden- power distribution business relate to the digital tify risk-reducing measures since the second half shift and the green shift. of 2019. The digital shift encompasses elements Hjartdal Elverk’s power distribution business such as artificial intelligence, the Internet of has been merged with Skagerak Nett. Things, big data, machine learning, robotics and 2019 was a quiet year in terms of opera- mobile solutions. tional stoppages and planned outages.
“In 2019, the power distribution company focused on achieving efficiency gains through smart solutions and digitalisation. Three innova- tion awards, a strong improvement in results and positive feedback from the market indicate that
PAGE — 36 we are on the right track.”
ØIVIND ASKVIK EXECUTIVE VICE PRESIDENT OPERATIONAL PERFORMANCE IN 2019 The green shift will involve a comprehensive local transmission system responsibility in the electrification of the transport sector, including future. shipping. To be one of the top three comparable grid operators in the Norwegian Water Resources Strategic goals and priorities and Energy Directorate’s efficiency scores. To achieve the highest levels of customer satis- The company fell from third to fifth place in the faction among Norwegian power distribution above ratings in 2019. However, the company companies. Customer satisfaction levels fell has significantly improved its operating result slightly in 2019, despite efficiently delivered compared with the previous year, and quadrupled services. it since 2015, thanks to a focus on efficiency To be the preferred partner for other Norwe- improvements. A wave of industry consolidations gian grid operators. The company constantly has seen the operating and maintenance costs works to make itself more attractive and won of the most efficient companies generally fall in three innovation awards in 2019. recent years. To compete, Skagerak Nett must
To position the company to assume a DSO continually look for more cost-effective ways to SKAGERAK ENERGI role (distribution system operator). This would perform its duties, without compromising secu- involve Skagerak Nett being assigned greater rity of supply.
ELECTRICAL ENERGY DELIVERED TO END USERS GWh
8,000
7,500
7,000
6,500 EXTRACT OF ANNUAL REPORT 2019
6000
5500
5000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Amounts in NOK million 2019 2018 2017 2016 2015
Revenues 1,138 1,022 1,002 855 806
EBITDA 679 456 541 396 344
Investments 673 747 671 470 471
No. of injuries 6 1 2 3 4 PAGE — 37
Sickness absence rate 3.1 4.1 4.5 3.2 4.1
No. of employees 375 374 375 373 376 OPERATIONAL PERFORMANCE IN 2019 —— Skagerak’s grid The “new” - - - - Not part of Skagerak’s grid power grid
POWER PLANT
C
Batteries at power distribution company: Due to market conditions, the SKAGERAK ENERGI authorities have restricted power distribution companies’ TRANSFORMER SUBSTATION opportunities to own and operate batteries.
DATA OLTA E R
“HYPERSCALE” PROCESSING CENTRE
FAST-CHARGE FOR BUSES
TRANSFORMER SUBSTATION LARGECUSTOMERS INDUSTRIAL
FAST-CHARGE
FOR CARS
FERRY CHARGING EXTRACT OF ANNUAL REPORT 2019
ROADS
SUBSTATION COMMERCIALWITH SOLAR BUILDING PANELS
HOUSE WITH SOLAR PANELS LO OLTA E R
SHOPS
HOUSE
HOUSE WITH SOLAR PANELS
ELECTRIC CAR BATTERY BATTERY BATTERY
1) PROSUMERS 2) USING ELECTRIC VEHICLES 3) BATTERIES AT END USERS More and more customers will generate AS A BATTERY BANK In future, more business grid customers
PAGE — 38 their own electricity and then sell or Some electric vehicles are equipped will have the option of investing in store any surplus power. New meters with batteries that can return power to batteries instead of paying investment and new systems will make this flexible the grid. The solution is not currently contributions to the power distribution and efficient. It is not yet possible to widely used but could become more company to upgrade the grid. store power in batteries. widespread in the future. OPERATIONAL PERFORMANCE IN 2019 What happens when everyone gets home from work?
Around three-quarters of electricity used in homes is used to heat the building and water. Output problems often arise when this base load is high, for example on cold winter days. By transferring some of the base load, for example by storing heat in hot water tanks and heating cables, capacity can be freed up in periods of peak demand such as mornings and late afternoons/evenings. SKAGERAK ENERGI
04
03 12
01 05 09
02 08 EXTRACT OF ANNUAL REPORT 2019
07
11
10 06
13
How much power do you use? Charging stations
01 Refrigerator: 50–100W 08 Dishwasher: 2,000–2,500W Customers who buy electric vehicles 02 Stove: 1,000–10,000W 09 TV: 50–300W should also invest in a fixed charging
03 Toaster: 500–1,500W 10 Washing machine: 2,000–2,500W station on grounds of fire safety. These PAGE — 39 04 Kitchen appliances: 500–2,000W 11 Spin dryer: 500–2,000W stations make it safe to charge at night 05 Coffee maker: 1,000–1,500W 12 Heat pump: 200–4,000W when electricity prices are lower and 06 Kettle: 2,000–3,000W 13 Electric car charger: 1,400–22,000W there is less demand for power. 07 Laptop computer: 50–300W OPERATIONAL PERFORMANCE IN 2019 Skagerak Varme
SKAGERAK ENERGI 2019 in brief What were the most important investments in 2019? Skagerak Varme’s efforts to increase the base load at its facilities in Porsgrunn and Horten In 2019, we brought district heating to the centre have had favourable environmental and financial of Skien, connecting the City Hall among other consequences. The company also continued its buildings. In Tønsberg, the Olsrød area was focus on efficient and profitable expansion of connected to the main grid from Kilen heating the district heating grid and increased customer centre. The customers previously used a local connections. heating solution. This will now make it possible Passing 150 GWh in sales was a milestone to extend the pipe network to Tolvrud, where for the company in 2019, and also moved Skag- Tønsberg municipality wishes to convert several erak Varme up one place to eighth in the list of buildings to district heating. Connection of the Norway’s largest district heating companies. Norwegian Armed Forces’ buildings at Mørenga, In recent years, the company has focused Karljohansvern was the most important project
EXTRACT OF ANNUAL REPORT 2019 on replacing departing employees with staff in Horten in 2019. with new areas of expertise to complement the company’s existing skills base. In 2019, the company began to reap the rewards of this Company strategy approach, which will play an important role in equipping us to deal with a constantly acceler- Increased volume: To achieve good profita- ating rate of change, not least in digitalisation. bility, our facilities must be utilised as effi- ciently as possible. This involves acquiring more customers to spread the fixed costs of our pipe GOALS for 2020 network and control centres over, and generating greater quantities of heat. “Every øre counts”: We must identify both • Increase the energy volume to 171 GWh by cost savings and opportunities to increase the the end of 2020 (151 GWh in 2019). price of our products. A cost reduction or price increase of one øre puts NOK 1 million on the • Achieve EBITDA of NOK 46 million and a bottom line when you sell 100 GWh, and NOK
PAGE — 40 profit after tax by the end of 2020 (EBITDA of 2 million when you sell 200 GWh. NOK 42 million in 2019). OPERATIONAL PERFORMANCE IN 2019
“We will achieve our long-term goal of good profitability while constantly focusing on the next big challenge.”
SVEIN MORTEN ROGN CEO SKAGERAK ENERGI
DELIVERED HEAT GWh
160
140
120
100
80
60
40 EXTRACT OF ANNUAL REPORT 2019
20
0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Amounts in NOK million 2019 2018 2017 2016 2015
Revenues 125 108 85 76 62
EBITDA 42 28 20 10 2
Investments 47 68 68 50 38
No. of injuries 0 0 0 0 0 PAGE — 41
Sickness absence % 0.7 2 2.5 3.2 1.9
No. of employees 16 16 16 16 17 OPERATIONAL PERFORMANCE IN 2019 Skagerak Varme
Skien This is a conventional wood chip-fired district heating plant. Telemark hospital is the largest customer.
COMMERCIALBUILDING Horten % 98 HOT WATERSKIEN This is our smallest plant. It SYSTEMS SKAGERAK ENERGI uses heat pumps to draw heat from the sea.
Bioenergy 98% Oil 2%
82%
HORTEN HOT WATER SYSTEMS
Surplus heat 82%
HOSPITAL (heat pump 33% and seawater 67%) Fossil gas 18%
Porsgrunn This is the largest district heating plant. It utilises waste heat from Yara’s factories and EXTRACT OF ANNUAL REPORT 2019 supplies the industrial park and customers in the city centre.
SCHOOL Tønsberg The plant at Tønsberg is wood chip-fired and the PORSGRUNN biggest customer is the local HOT WATER 100% authority’s buildings. The fossil SYSTEMS share increased slightly due to a short-term technical problem.
Waste heat from industry 100%
93%
TØNSBERG HOT WATER SYSTEMS
Bioenergy 93%
SCHOOL (pellets 3% and wood chips 97%) PAGE — 42 Flexible electricity 1% Surplus heat 4% Fossil gas 2% OPERATIONAL PERFORMANCE IN 2019 Fossil sources (3%)
Electricity (1%)
Wood chips (53%)
Surplus heat (11%)
Distribution of Recycled heat (32%) energy sources, Skagerak Varme SKAGERAK ENERGI
DELIVERED HEAT GWh
Porsgrunn 48.5
Skien 44.8
Tønsberg 43.3
Horten 14
Skagerak Varme 150.6 0 20 40 60 80 100 120 140 160
Heat deliveries are almost the same size in Porsgrunn, Skien and Tønsberg. EXTRACT OF ANNUAL REPORT 2019
GROSS OPERATING PROFIT CAPACITY UTILISATION NOK million GWh
50 250 40 42.0 30 200 28.2 20 20.4 150 10 10.2 100 0 2.2 -2.4 50 -10 0 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
EBITDA have risen significantly over the last five years. Delivered heat Optimal capacity in the system PAGE — 43
To achieve full profitability, the facilities’ capacity must be fully utilised. This involves increasing sales to around 200 GWh. OPERATIONAL PERFORMANCE IN 2019 Skagerak Energipartner SKAGERAK ENERGI Climate changes are accelerating the pace of Securing the capacity to deliver high volumes of electrification. Industry, transport businesses, electricity (high output) in a short period would data storage, building sites and agriculture will be prohibitively expensive, if it meant upgrading all have to reduce their greenhouse gas emis- the entire network. Customers would also be sions through electrification and digitalisation of impacted through higher grid rental tariffs. processes. Power producers and power distribu- 3. The price of storing electricity is falling tion companies on the other hand find themselves and the ability to store electricity is increasing: in a new and difficult situation. The newly formed Batteries are becoming cheaper and will have Skagerak Energipartner must offer customers at increased energy density in the years to come. either end of the power line in the Nordic region everything they need for successful electrification. Skagerak Energipartner must deliver its prod- This process must be green, and profitable. ucts and services in the place where the customers receive their electricity. At this point, the company must make it easier and cheaper to
EXTRACT OF ANNUAL REPORT 2019 Three clear trends: supply customers with electricity. It is important that the businesses that 1. More and more non-flexible power production receive the electricity have the equipment and is being developed in Norway and Europe. Solar the knowledge to ensure that they do not use and wind power will result in more hours with more power than they need. It is also important high power prices and more hours with low power that they receive enough electricity when they prices. Larger price fluctuations will generate need it, and at the lowest possible price. Skag- greater uncertainty, and opportunities for both erak Energipartner must offer customers the gains and losses. In Germany alone, there were best possible power package. more than 200 hours of negative power prices in Skagerak Energipartner will build on the 2019, when customers were effectively paid to cumulative expertise of the Skagerak Group. use more electricity. 2. More and more people will require a lot of power at the same time. This means that power Customers consumption will increase at certain times of the day, and not just at certain times of the year Bus operators who want to electrify their bus
PAGE — 44 (notably in winter). Parts of the current grid are fleets: Skagerak Energipartner supplies energy not dimensioned for this, which means that solutions for charging stations and supplies the some of the network will have to be upgraded. electricity required by the buses. OPERATIONAL PERFORMANCE IN 2019
“We must offer customers at either end of the power line everything they need for successful electrification.”
CHRISTOPHER KJØLNER CEO SKAGERAK ENERGI Electric ferries: How can we enable ferry Power distribution companies of all sizes operators to charge their 1,000 kWh batteries throughout the Nordic region will have to make each time they dock to load and unload, without major investments in the distribution grid, the running oversized cables to the quayside? Tempo- grid that is closest to the businesses. Increased rary storage in a battery that “empties” each time power consumption due to electrification, and the ferry docks is one potential solution. demand for own production and temporary Businesses: It is expensive to draw large storage of electricity, are further complicating amounts of power each time industrial processes the picture. Skagerak Energipartner must deliver are started or buildings are heated in the morning. simpler and cheaper solutions for its customers. In future, it may be possible for businesses to Large batteries and increased digitalisa- generate their own electricity on their roofs. Skag- tion and smarter management of the grid could erak Energipartner’s task is to optimise arrange- both be part of the solution. This must benefit ments for production, temporary storage of elec- customers. tricity and possible resale to the grid. EXTRACT OF ANNUAL REPORT 2019 PAGE — 45
The battery at Skagerak Arena is the only of its kind in Norway, but various types of batteries are expected to play an important role in the electricity grid of the future. OPERATIONAL PERFORMANCE IN 2019 Skagerak Energipartner shall offer customers in the Nordic region all the things they need for successful electrification
SKAGERAK ENERGI TREND 1 TREND 2 TREND 3
Non-flexible power Peak loads The price of storing is resulting in price electricity is falling
fluctuations If everyone were to charge their electric car when they The price of storing electricity With a higher percentage of get home from work, energy in batteries is rapidly falling. non-flexible power produc- consumption would sky-rocket. Other storage technologies are tion, prices will fluctuate much Increased electrification is only also being developed. more. This in turn will create a adding to the problem. need for new products, which can level out the fluctuations. EXTRACT OF ANNUAL REPORT 2019
STRØMFORBRUK KL 16 KL 17 KL 18 PAGE — 46 OPERATIONAL PERFORMANCE IN 2019 Climate changes Three-quarters of all green- port, will increase greenhouse are accelerating house gas emissions derive gas emissions from the power the pace of from the combustion of oil, sector, if the situation does not gas and coal. Half of these change. This makes it impor- electrification CO2 emissions of more than tant that renewable power 35 billion tonnes derive from production quickly replaces the generation of electricity. In power production from coal addition, electrification of other and gas plants. sectors, in particular trans- SKAGERAK ENERGI
INDUSTRY FERRY EXTRACT OF ANNUAL REPORT 2019 More functions in the businesses’ Offer electric ferries smart charging area will be electrified. Own production solutions to avoid expensive grid and battery solutions could be a way developments. of reducing costs related to the expan- ELECTRICITY CONSUMPTION sion and use of the power grid.
TRANSPORT FARMING
Electrification of heavy traffic will Tractors and other agricultural require the construction of large fast- machinery could be electrified. Farms charge stations. Innovative solutions could become producers of solar PAGE — 47 will be required to keep grid costs and wind energy. Own use, sale and down and ensure efficient operations. temporary storage of electricity must be optimised. EXTRACT OF ANNUAL REPORT 2019 OPERATIONAL PERFORMANCE IN 2019
PURE GROWTH More power SKAGERAK ENERGI from each drop
Skagerak Kraft continuously works to draw more power from its existing hydropower plants. A new unit at Grunnåi is generating
considerable gains without encroaching EXTRACT OF ANNUAL REPORT 2019 on nature. PAGE — 49 OPERATIONAL PERFORMANCE IN 2019
OWNERS Grunnåi power plant
LOCATION Seljord municipality in Telemark % PRODUCTION 55 The power plant entered operation in 2006 and utilises a fall of 387 metres. An extra unit was installed in 2019. This increased the annual produc- tion by 11 GWh – enough to supply 550 households. The total annual production at Grunnåi power plant is
SKAGERAK ENERGI 66 GWh. Skagerak Kraft (55%) Local landowners (27%) Vest-Telemark Kraftlag (18%)
300 metres inside the moun- more power from the water Customisation tain, water from Grunnåi is than expected. fed through two units. At Hydropower production is custo- peak production, these units Better effect/power misation in practice. Downtime generate enough electricity to at the first unit needed to be as supply 3,300 households with The new unit was essentially low as possible to maintain the
EXTRACT OF ANNUAL REPORT 2019 electricity. designed to exploit the flood profitability of the project. Once the power plant at water, but in winter when there “Everything is customised Grunnåi had entered operation is little water, the new unit in accordance with heights and in 2006, Skagerak Kraft real- was switched to main power water volumes. Everything has ised that there was more water production. to fit together, and here it did. circulating than the unit was “The new turbine achieves Unit 2 has exceeded all expecta- designed for. efficiency of up to 92 per cent, tions,” says the project manager. “In particular during the 2 per cent higher than the first spring flood, a lot of water unit. Here we draw more power ran past the power plant. We from each drop,” explains the Everything in place thought it would be worth project manager. adding another unit,” explains The new turbine at Grunnåi Several factors made it Ingunn Granstrøm, project generates enough energy to possible to draw more power manager at Skagerak Kraft. supply 550 households with from the same amount of A feasibility study in 2015 electricity. water at Grunnåi. The machine identified further gains from hall had enough space for an
PAGE — 50 constructing an extra unit, and extra unit, and there was more when Unit 2 entered operation water than assumed when the in November 2019 it drew even first unit was built. OPERATIONAL PERFORMANCE IN 2019 SKAGERAK ENERGI
“Here we can see the beating heart of the hydropower plant.” EXTRACT OF ANNUAL REPORT 2019
— Ingunn Granstrøm
Beating heart up with the idea of putting a a PhD or master’s degree at The investment of NOK window in the turbine housing. the site as part of a collabora- 35.5 million is also being This gives our technical tion between Skagerak Kraft used for research. This is the experts the chance to extract and the Hydropower labora- only installation in the world more data from research into tory at the Norwegian Univer- of its type with windows in the hydropower. Sensors on the sity of Science and Technology turbine housing, where you can blades of the runner, and other (NTNU) and the University of watch energy being created gauges, make it possible South-Eastern Norway (USN). as 3,000 litres of water per to research how the water A digital twin of the generator second propel the Pelton behaves when the turbine is also being built at USN in turbine. is in production, and test Porsgrunn and a further twin
“This is the beating heart opportunities for efficiency will be built at NTNU. Both facil- PAGE — 51 of the hydropower plant,” improvements. ities will be used for research smiles Granstrøm, who came Students can complete purposes. 54 Our corporate social responsibility 56 Stakeholder dialogue 58 Climate-friendly production 64 Secure power supply 67 Dialogue with landowners 68 Health, safety and the working environment 72 HR policy and recruitment 76 Information security and ICT security 78 Social balance sheet 84 Sponsorship activities in 2019 94 Case study – Pure welfare CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 53 CORPORATE SOCIAL RE- SPONSIBILITY CORPORATE SOCIAL RESPONSIBILITY Our corporate social responsibility SKAGERAK ENERGI kagerak Energi’s vision is to ensure the sustainable One of the most important is to be a forward- and environmentally friendly things that Skagerak Energi can S looking supplier of production of clean energy do for local communities is to clean energy that contributes to and the safe and stable distri- ensure that we have healthy social welfare, economic growth bution of electricity to indus- finances, that we follow ethical and development. We exer- trial, commercial and private and responsible business prac- cise our social responsibility by customers. Skagerak Energi tices and that our employees creating value and helping to has set a goal of becoming enjoy themselves at work and fund growth and welfare in the climate-neutral. are not exposed to health region in an ethical and sustain- We administer critical infra- risks. Skagerak is a profitable able manner. This means that structure, where power outages company that creates good jobs we prioritise and manage our can have serious conse- and purchases large amounts resources in such a way that quences. Protecting people’s of goods and services, and we we generate growth and devel- lives and health, biodiversity pay taxes and fees as well as
EXTRACT OF ANNUAL REPORT 2019 opment for society and our and the climate is the founda- dividends to our owners. owners. tion of all our decisions and We are a force for good in Skagerak’s social mission activities. our region.
Goals and results
Goal 2019 2018 2017 2016 2015
Production capacity hydropower +52 GWh +11.5 +13 0 +2.5 0 GWh, normal year by 2021 5,744 5,732 5,719 5,719 5,716
No. of power outages per end user 0.9 2.3 1.5 1.3 1.5
Delivered heat GWh 171 in 2020 151 141 120 115 88 (renewable share) (100% in longer term) (97%) (93%) (93%) (93%) (95%)
No. of injuries 0 6 2 2 4 7
Sickness absence % 3.6 or lower 2.9 3.6 4.3 3.1 3.7
Waste separated at source % 87 or higher 86 87 80 85 65 PAGE — 54 Emissions of CO2 equivalents 0 2,845 2,266 2,104 1,763 1,987 (tonnes)
Licence breaches or serious 0 0 0 0 0 0 environmental non-conformances CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 55 CORPORATE SOCIAL RESPONSIBILITY Stakeholder dialogue SKAGERAK ENERGI aving roots in the region and positive cooperation with our stakeholders are Skagerak Energi’s H important for Skagerak Energi. Three of priority areas are the municipalities in the region have sharehold- ings in the Group, and Skagerak Energi is one of the region’s largest employers. Skagerak Energi is • Safeguarding life and health, ethics a driver of value creation in the region. and integrity The development of hydropower and power • A secure and stable energy supply grids entails interventions in ecosystems and landscapes. In order to make good decisions • Sustainable production, growth and and to guarantee knowledge-based manage- development ment of natural resources, we emphasise having • Motivated and competent employees substantial expertise and engaging in construc- • Research and technology tive dialogue with the authorities, our owners, development
EXTRACT OF ANNUAL REPORT 2019 environmental organisations, our customers, local business partners, local associations and other • Communication with stakeholders stakeholders. • Information and IT security Skagerak Energi has considered which areas • Responsible supplier management are essential for us to fulfil our social mission and properly manage our resources. The assessment • Economic contributions to the region is based on compliance with legal requirements through taxes, public charges, jobs, and licence terms and conditions, an under- procurements and support for organi- standing of the requirements and expectations of sational and cultural life the most important stakeholders, as well as the Group’s risk assessment and strategy. The following pages provide a more in-depth look into selected areas. In addition, we have compiled a detailed report according to the Global Reporting Initiative (GRI), which is included as an appendix to the annual report. PAGE — 56 Stakeholder table CORPORATE SOCIAL RESPONSIBILITY
Stakeholder group What are they concerned about? Arena for dialogue
Authorities • A secure and stable energy supply • Inspections • Safe and secure facilities • Systematised in connection with audits • Safe and responsible operation and and new licences development in line with regulations • Formalised meetings and ad hoc and permits dialogue on a case-by-case basis Owners (Statkraft and the municipalities • Safe, efficient, profitable and • Owner meetings, board meetings and of Skien, Porsgrunn and Bamble) responsible production and other formal meetings distribution of climate-friendly and • Reporting and ongoing dialogue with the renewable energy Statkraft Group
Employees • Workplace safety • Employee representatives on the Board SKAGERAK ENERGI • Co-determination of Directors • Job security • Various Group committees • Expertise development • Internal information meetings • Reputation • Organisational surveys • Performance appraisal interviews Customers • A secure and stable energy supply • Customer service centre • Price levels • Newsletters, advertisements • Formalised meetings and ad hoc dialogue on a case-by-case basis • Social media • Websites Storting (Norwegian Parliament) • Secure and stable power supply • Systematised in connection with audits • Climate and environment and new licences • Framework conditions • Formalised meetings and ad hoc • Corporate social responsibility dialogue on a case-by-case basis County authorities • Climate and environment • Systematised in connection with audits • Cultural sites and new licences • Formalised meetings and ad hoc dialogue on a case-by-case basis Host municipalities • Safe, efficient and responsible • Systematised in connection with audits operations and new licences
• Sensitive environmental interventions • Formalised meetings and ad hoc EXTRACT OF ANNUAL REPORT 2019 and conservation of biodiversity dialogue on a case-by-case basis Local population • Safe and secure facilities • Systematised in connection with audits • Sensitive environmental interventions and new licences • Safe and secure workplaces • Formalised meetings and ad hoc dialogue on a case-by-case basis Nature conservation interests and • Safe and secure facilities • Dialogue during audits and new licences organisations • Sensitive environmental interventions • Formalised meetings and ad hoc dialogue on a case-by-case basis Schools, universities and research • Expertise and technology • Formalised and informal meetings, institutions development information initiatives and career days • Work experience placements, career • Trainee programme, work experience and job opportunities placements • Opportunities for collaboration and • Guest lecturers assignments • Collaborative projects • Reputation Trade organisations • HSE, environment/climate, emergency • Formalised and informal meetings preparedness and corporate social • Conferences, courses and industry responsibility forums • Profitability and framework conditions • Collaborative projects • Expertise and technology development • Information and reputation
Suppliers and business partners • Business ethics in procurements • Formalised procurement processes PAGE — 57 • Reputation • Formalised meetings and ad hoc • Expertise and prestige projects dialogue for follow-up during the • Ability and willingness to pay contract period • Conferences, trade fairs, courses CORPORATE SOCIAL RESPONSIBILITY Climate-friendly production SKAGERAK ENERGI
ncreased renewable energy production makes a gas power plant emits 500 grams of CO2 an important contribution to reduced emis- per kWh. Isions of greenhouse gas emissions. Skagerak Efficient routines for the separating and Energi’s production and distribution of electricity treatment of waste, both at permanent locations from renewable hydropower and district heating and temporary construction sites, contribute to
help to reduce direct and indirect CO2 emissions. the recycling of resources. The average annual power production Reservoirs provide both flexibility and since 2014 is 6,000 GWh. If all this power had increased security of supply in combination with been generated by a coal-fired plant, this would wind and solar power production. have contributed annual greenhouse gas emis- Hydropower is renewable and produces no
sions of six million tonnes of CO2 equivalents. greenhouse gas emissions, but it is not without In addition to electricity, we also generated environmental impact. Both operation and devel- 151 GWh of district heating in 2019, which also opment entail interventions in ecosystems and makes a major contribution to reduced green- the landscape. Such interventions are minimised
EXTRACT OF ANNUAL REPORT 2019 house gas emissions compared with oil-fired through systematic environmental management heating. District heating helped its customers and various mitigating measures. Skagerak reduce their greenhouse gas emissions by emphasises responsible and knowledge-based
33,000 tonnes of CO2 in 2019. Total green- management of our facilities and a precautionary house gas emissions, including purchases of approach to environmental challenges. We goods and services (scopes 1–3), amounted continuously work to avoid, minimise, mitigate
to 2,845.4 tonnes of CO2 equivalents in 2019. or compensate for the negative environmental
When we divide total emissions of CO2 by the impacts that may result from our activities. The amount of energy produced of 5,098 GWh, regulation of water reservoirs is also an impor-
we get 0.4 grams of CO2 per kWh in 2019. By tant flood-mitigating measure during periods of comparison, a German coal-fired power plant high precipitation.
emits about 1.1 kilograms of CO2 per kWh and PAGE — 58 When we divide our total emissions of CO2 by the amount of energy of 5,098 GWh, we get
0.4 grams of CO2 per kWh in 2019. By comparison, a German coal-fired power plant emits about
1,100 grams CO2 per kWh. CORPORATE SOCIAL RESPONSIBILITY Results Our overall goal There were no significant non-conformances in maximum or minimum regulated water levels in 2019. Our overall goal is that all facilities The Group registers and treats environ- construction and operations should fulfil mental non-conformances in the same way as our requirements for: other HSE non-conformances. There were no • Continuous implementation of meas- major discharges or emissions to the external environment in 2019. The majority of envi- ures to reduce own CO2 emissions and purchases of allowances for ronmental non-conformances relate to waste residual emissions management. Skagerak Energi aims to be fully climate- • Responsible management of water neutral in future. As far as is possible, work resources and conservation of to reduce emissions is based on the Group’s biodiversity
SKAGERAK ENERGI climate accounts. At the end of the current • Good standards for operation, strategy period (2019–2021), the Group will inspections and systematic purchase emissions allowances to cover residual maintenance of facilities emissions. The climate accounts report in • Good working methods and tech- accordance with three scopes: nology to prevent emissions and Scope 1: Emissions from own operations discharges of pollutants Scope 2: Purchases of electricity for own operations • Our suppliers to meet the same Scope 3: Emissions relating to purchases of standards as we set ourselves services
In 2019, the Group’s total CO2 emissions
amounted to 2,845 tonnes of CO2 equiva- lents. The result is not directly comparable with the results in previous years as the scope of
EXTRACT OF ANNUAL REPORT 2019 reporting has changed. The total emissions break down as follows: scope 1, 2,505 tonnes; scope 2, 152 tonnes; scope 3, 188 tonnes. In 2019, 86 per cent of waste from the Skagerak Group was separated at source. This is approximately the same level as in 2018 (87 per cent). The total delivered waste volume was 1,102 tonnes, 13 per cent more than in 2018. The volume of waste varies depending on the projects the company is working on. PAGE — 60 CORPORATE SOCIAL RESPONSIBILITY CO2 EMISSIONS
Grams CO2/kWh
2.0
1.8
1.6 1.7 1.4
1.2
1.0 1.0 0.8 * The figure for 2019 is 0.6 not directly comparable 0.6 0.6 with previous years 0.4 0.4 0.4 0.4 due to a change in the 0.2 0.3 0.3 method of compiling the 0 statistics. 2011 2012 2013 2014 2015 2016 2017 2018 2019* SKAGERAK ENERGI
EMISSIONS FROM OWN OPERATIONS
Tonnes CO2
9,000
8,000 * The figure for 2019 is 7,000 not directly comparable 6,000 with previous years due to a change in the 5,000 method of compiling the 4,000 statistics.
3,000 Total mobile 2,000 sources District heating 1,000 facilities 0 SF6 EXTRACT OF ANNUAL REPORT 2019 2011 2012 2013 2014 2015 2016 2017 2018 2019*
WASTE Tonnes
1,800
1,600
1,400
1,200
1,000
800
600
400
Residual waste PAGE — 61 200 Waste separated 0 at source 2011 2012 2013 2014 2015 2016 2017 2018 2019 CORPORATE SOCIAL RESPONSIBILITY Skagerak Kraft Charging stations have been installed at all meeting places in line with our long-term goal of Skagerak Kraft produces clean energy and wants electrifying the Group’s vehicle fleet. to do so as sensitively as possible. Skagerak Skagerak Kraft sells guarantees of origin, Kraft has an environmental management system which are issued under a voluntary electricity certified to ISO 14001:2015. This involves labelling scheme that gives consumers a choice annual reporting of measures, results and between renewable and non-renewable power. All non-conformances, and the company is audited our power stations are approved to sell guaran- and challenged to improve its environmental tees of origin. performance by DNV GL each year. Skagerak Kraft participates in various The two most important parameters for arenas in the local community with a view to our climate work are increasing production of reducing environmental impacts in the region. clean power and optimising utilisation of water The company is represented on the Board of volumes. Last year, we increased our capacity by Directors of the industrial cluster Industrial
SKAGERAK ENERGI 11.5 GWh through the opening of the new unit Green Tech, which aims to make Grenland a at Grunnåi. The water utilisation rate has been climate-positive region. The main focus of Indus- assessed at 98.7 per cent, compared with a trial Green Tech is environmental technology. target figure of 96 per cent.
NEW HYDROPOWER PRODUCTION GWh
250
11.5 218.7 13 EXTRACT OF ANNUAL REPORT 2019 69.6 0 2.5 0 200
150
3.8 13.3 6 0 13 100 6 19
61
50 PAGE — 62 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Total new power Skagerak Nett Skagerak Varme CORPORATE SOCIAL RESPONSIBILITY
Skagerak Nett has established annual environ- In 2019, Skagerak Varme’s renewable energy mental goals since 2016. Some of these goals, share was an impressive 96.6 per cent. By such as the installation of oil meters at trans- helping customers to reduce their emissions former substations, have been included since by an amount much greater than the company’s the start. These meters provide the company own CO2 emissions, we contribute to sustainable with excellent control over run-offs from facili- development of local communities. Net climate ties, and in 2019 we installed 10 further meters, gains compared to using electrical or oil-fired bringing the total to 58. Waste separating rates boilers in 2019 totalled 33,000 tonnes of CO2. have also been a prioritised area since 2016. By comparison, total emissions from operations
In 2019, we faced a number of challenges in in 2019 amounted to around 1,000 tonnes CO2. projects that generated high volumes of mixed The CO2 emissions derive from the compa- waste. The volume of residual waste increased ny’s use of gas to cover consumption peaks
by nine per cent between 2018 and 2019. The during periods of extremely cold weather. The SKAGERAK ENERGI company implemented a number of information company covers these emissions by participating initiatives with regard to correct separation of in the EU’s emissions allowance scheme. waste during the year. NOX emissions in 2019 totalled Skagerak Nett replaced part of its car fleet 20.5 tonnes, unchanged from 2018. with new models in 2019. This will reduce emis- sions from driving. Due to the need to maintain emergency response capability, it is not prac- tical to replace engineers’ vehicles with electric vehicles for now. Despite focusing on minimising the use of vehicles, the number of kilometres DISTRIBUTION OF ENERGY SOURCE, HEAT IN 2019 driven rose by 1.6 per cent last year. Measures Per cent to reduce vehicle use include better resource management, establishment of external stores across the network area and more phone
conferences. EXTRACT OF ANNUAL REPORT 2019 Skagerak Nett aims to play a key role in the electrification of society. In 2019, a new hybrid ferry started operation in Sandefjord following an instructive collaboration between the ferry and power distribution companies. In Hjorten, prepa- rations are in full swing for charging new ferries at Norway’s busiest ferry route.
Fossil sources 3% PAGE — 63 Electricity 1% Wood chips 53% Surplus heat 11% Recycled heat 32% CORPORATE SOCIAL RESPONSIBILITY Secure power supply SKAGERAK ENERGI steadily increasing number of social Skagerak Energi has incorporated system- processes are being digitalised and atic risk management for all critical areas. Aelectrified, making them dependent on a Skagerak Nett and Skagerak Kraft have systems stable electricity supply. Power outages can have control centres that continuously monitor our major consequences for individual customers facilities and initiate and coordinate necessary and society as a whole. Skagerak Nett constantly emergency response actions. strives to develop and modernise the power grid. In 2019, we entered into an agreement with For Skagerak Energi, security of supply Midt-Telemark Energi, who are now benefiting means ensuring that our around 206,000 elec- from shared use of Skagerak Nett’s systems tricity customers experience as few outages as control centre. This results in quicker fault recti- possible and that district heating is delivered as fication for Midt-Telemark Energi’s customers agreed in those areas where Skagerak Varme in Nome, Sauherad and Bø municipalities. The has a licence. Our industry is subject to strict requirements
EXTRACT OF ANNUAL REPORT 2019 and guidelines, and Skagerak Energi has a good The Local Electrical Safety dialogue with the authorities to ensure regula- Inspection Authority (DLE) tory compliance. The Group has highly qualified employees who ensure good network planning, stable operations and sound decisions for the The Local Electrical Safety Inspection development or refurbishment of our facilities. Authority (DLE) is part of the public super- visory system and subject to the Norwe- gian Directorate for Civil Protection (DSB) Renewal and collaboration but is part of Skagerak Nett. The DLE works actively to provide information on Due to their relatively high age, the facilities and how to prevent fire hazards in connec- components in Skagerak Nett’s licence area will tion with the use of electrical equipment, undergo major replacements over the next few including training on electrical safety for children and young people in collaboration years. A high percentage of the reinvestments with schools. The DLE also assists the involve the connection of new customers, which police and fire service in the investigation requires increased capacity in the “back end” of of fires and inspects more than 10,000 PAGE — 64 the grid. A total of NOK 560 million was invested homes, holiday homes and businesses in the grid in 2019, an increase of 16 per cent each year. against 2018. CORPORATE SOCIAL RESPONSIBILITY companies will also collaborate on call-outs and during 2019, and the introduction of AMS fault rectification. (Advanced Metering Systems) was already resulting in quicker fault rectification by the end AMS and self-healing grids of the year. Deployment of sensors and advanced software are making it possible in some cases 2019 was a good year for Skagerak Nett’s to route the power round the areas with faults, customers. There were fewer long-term outages thereby affecting as few customers as possible. due to the weather than in 2018, when two This is what we call a self-healing grid. extreme weather events brought down power lines and resulted in difficult operating situa- tions. Just 0.9 per cent of customers experi- Skagerak Varme enced power outages of more than three minutes in 2019, compared with 2.4 per cent in 2018. Skagerak Varme has back-up solutions at In terms of total minutes, the average its heating centres that make it possible, for
customer was without power for 68 minutes in example, to start up gas-fired heating if waste SKAGERAK ENERGI 2019, compared with an average of 103 minutes heat from Yara is unavailable, or in the event of in the period 2009–2018. extremely cold weather. Replacement of meters was completed
OUTAGES LASTING LONGER THAN THREE MINUTES PER CUSTOMER Number
3.0
2.5 EXTRACT OF ANNUAL REPORT 2019
2.0
1.5
1.0
0.5
0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 PAGE — 65
Norway Skagerak Nett CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 66 Dialogue with CORPORATE SOCIAL RESPONSIBILITY landowners SKAGERAK ENERGI key group in Skagerak Energi’s dialogue Facility agreements with with various stakeholders are the land- landowners Aowners in the various municipalities that host the company’s facilities, whether power For some older facilities where there is no agree- plants or grid infrastructure. With 17,000 kilo- ment, Skagerak Nett still has the right to have its metres of grid infrastructure spread over Tele- facilities on the land. This could be due to an oral mark and Vestfold, thousands of landowners agreement being made at the time the facility have facilities on their land. was established, where the fact that our facilities are often highly visible means that the landowner knew what they were doing when the property Clearing of power lines was purchased. In other cases there is often no agreement due to the fact that the power plants Skagerak Nett must regularly clear the area were built on land – and the plants themselves around its power lines to ensure that trees do were – owned by the local authority.
not fall on the lines. If access roads have already If the landowner wishes to have a facility EXTRACT OF ANNUAL REPORT 2019 been established in the forest, contact is made removed, because they think a transformer with the landowner via an information sheet station or power line is causing an obstruction, and the relevant parties are contacted when the the landowner must cover the costs of removal. job is to be performed. It is important for Skag- Compensation for hosting a facility is erak that the job is done properly, and as a rule paid as a one-off payment when the facility is Skagerak performs the activity itself, but the established. landowner may assume responsibility subject to Skagerak emphasis treating all landowners further agreement. who contact the company in a pleasant and If the access road needs to be widened, professional manner. new agreements must be drawn up. The same also naturally applies if a new power line or new facility is to be constructed on someone’s land. In such cases, more extensive work is required to negotiate agreements, which are subse- quently recorded in the land registry. PAGE — 67 CORPORATE SOCIAL RESPONSIBILITY Health, safety and the working environment
kagerak Energi aims to be a leader in plans and reported improvement measures, preventive health, safety and the working rapidly corrects nonconformances and provides SKAGERAK ENERGI S environment (HSE). Our goal is zero appropriate workplace adaptations to accommo- injuries, low sickness absence and high job date special needs. satisfaction. Skagerak’s working environment commit- Skagerak Energi’s sickness absence rate tees contribute to the adoption of good action for 2019 closed on 2.9 per cent (3.6 per cent). plans and help ensure that planned measures The significant improvement compared with the are implemented and effective. We have working previous year is attributable to lower long-term environment committees in Skagerak Nett, Skag- sickness absence. Systematic work is performed erak Kraft and Skagerak Energi, where there are to encourage presence across the organisation. more than 50 employees. There is also a coor- According to provisional figures from Statistics dinating working environment committee for the Norway, the average sickness absence rate in all Group. Norwegian workplaces was 5.7 per cent in 2019, The Group has an agreement with an author- and 4.9 per cent for the Norwegian electrical, ised occupational health service, and we conduct water and waste handling sector. annual official health checks and reviews of the There were a total of six injuries in the physical working environment. Skagerak Energi
EXTRACT OF ANNUAL REPORT 2019 Skagerak Group involving the company’s own conducts an annual working environment survey employees in 2019, including three lost-time inju- which, in combination with other surveys and ries. While none of the injuries were serious, this reviews, provides a basis for the next year’s is a major increase compared with recent years improvement measures related to health and and is being followed up. There were six injuries the working environment. We also provide exten- involving contractors. sive annual safety training for large areas of the A working environment survey conducted by the organisation. agency Ennova revealed that Skagerak Energi has a good working environment with high levels of job satisfaction and loyalty among employees. Skag- Personal safety erak Energi has participated in the government’s inclusive working life (IA) scheme since 2002. The zero vision is guiding for HSE work in the Group, and the company believes that it will be possible to achieve zero injuries over the long Good organisation term. Injuries and near misses do not happen by themselves, they happen for a reason. The Group
PAGE — 68 We place great emphasis on managers’ pres- attaches great importance to preventing injuries ence and on open and constructive communi- and near misses. A high activity level in terms of cation. The Group effectively implements action HSE prevention work at all levels in the organi- CORPORATE SOCIAL RESPONSIBILITY
SICKNESS ABSENCE SKAGERAK ENERGI Per cent
7
6
5
4
All industries 3 Electricity, water and waste management 2 Skagerak Energi 2011 2012 2013 2014 2015 2016 2017 2018 2019 EXTRACT OF ANNUAL REPORT 2019
INJURIES Number
14
12
10
8
6
4 PAGE — 69
2 Number of lost-time injuries Number of non-lost-time 0 injuries 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CORPORATE SOCIAL RESPONSIBILITY
SKAGERAK ENERGI SICKNESS ABSENCE Per cent
5.0
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5 Long-term absence 0 Short-term absence 2011 2012 2013 2014 2015 2016 2017 2018 2019 EXTRACT OF ANNUAL REPORT 2019
TOTAL NUMBER OF IMPROVEMENT PROPOSALS 2011–2019 Number
1,000
900 920 924 800 808 700 728 600
500 579
400 439 404
PAGE — 70 300 301 200 211 100
0 2011 2012 2013 2014 2015 2016 2017 2018 2019 CORPORATE SOCIAL RESPONSIBILITY sation has produced results. Over time we have improvement. The quality of this work is reduced the number of injuries, given managers constantly improving. 2,406 non-conformances and employees a better understanding of risk, and improvement proposals were registered improved both equipment and procedures and in 2019 (2,328). All non-conformances are implemented safer working methods. Achieving corrected, while improvement proposals are eval- our zero vision will require us to implement a uated on a cost–benefit basis. high number of preventive HSE measures and Skagerak Energi complies with Norwe- demonstrate strong management commitment gian HSE legislation and line management is to HSE. responsible for monitoring day-to-day compli- The Green Zone project has been imple- ance. In addition, we conduct regular internal mented as a preventive measure throughout the audits, more extensive Group audits, and various Group. The path to being in “the green zone” different authorities conduct one or more inspec- starts with identifying risk, then assessing and tions annually. We investigate all serious inci- communicating risk and, finally, making the right dents and near misses with serious potential
choices. Skagerak Energi requires all contractors consequences. SKAGERAK ENERGI to have a strong focus on HSE and also requires that the working conditions for everyone who performs work for the Group comply with appli- High-potential incidents cable legislation. The Skagerak Group introduced a new HSE indi- cator for high-potential (HIPO) incidents in 2019. Constant focus on HSE at work The indicator has been developed together with Energy Norway. HIPO incidents are defined as HSE is a line responsibility. In 2019, we follows: conducted 1,303 (962) observation rounds • Accidents and near misses involving own related to behaviour-based safety and job safety employees, contractors or third parties that dialogues. These take place on site. We improve under marginally different circumstances could risk awareness and expertise by observing have resulted in serious injuries with perma- and discussing working methods and safe and nent health problems, or fatalities.
unsafe actions. Frequent communication also EXTRACT OF ANNUAL REPORT 2019 facilitates trust and transparency. Six incidents were classified as HIPO in 2019, The Group believes that a high level of including two incidents involving traffic. Careless activity in terms of reporting and processing behaviour in traffic is one the risks highlighted in non-conformances and improvement proposals the Group risk analysis and applies to both our is an important preventive element, and in this own personnel and third parties. way, all employees contribute to continuous
Figures apply to own employees Unit 2019 2018 2017
Sickness absence % 2.9 3.6 4.3
Personal injuries resulting in lost time or medical treatment Number 4 2 2
H2 (number of injuries per million working hours) Number 5.3 2.1 2.2
High Potential Incidents (HIPO) Number 6
Number of occupational health checks Number 172 195 222
Number of own employees who took the FSE course1 Number 344 346 361 PAGE — 71
Number of first-aid courses Number 348 380 344
1 FSE: The Regulation relating to safety in maintenance and operation of electrical installations CORPORATE SOCIAL RESPONSIBILITY HR policy and recruitment
kagerak Energi has recruited almost 100 success. All reputation-building is dependent employees over the last two years, both on internal commitment. Reputation-building Sto replace retirees, but also to secure and long-term recruitment at Skagerak Energi brand new areas of expertise to respond to tech- are part of our Employer Branding activities. A
SKAGERAK ENERGI nological developments in the industry. working environment survey conducted by the Efforts to build a good reputation among the agency Ennova revealed high levels of job satis- general public and young students in particular faction and loyalty among our employees. will be key to Skagerak Energi’s long-term
Universities and colleges EXTRACT OF ANNUAL REPORT 2019
Profiling Apprenticeships
Trainee Vestfold Diversity og Telemark
Life-phase- Summer project PAGE — 72 oriented for students personnel policy HR year 2019 in figures (2018 figures)
Employees retired with 24 (24) pension
Employees granted 3 (6) 100 per cent disability pension 66.1 Average retirement age
Average age of 62 (57) employees who were granted disability pension
Average length of 39.2 service for employees (38.5) who retired with pension/disability pension
New permanent 52 (45) employees
New apprentices 8 (6) CORPORATE SOCIAL RESPONSIBILITY “All reputation- building is based on internal commitment”
SKAGERAK ENERGI Bundle of measures Attractive new expertise Universities and colleges: Skagerak Energi The Group aims to offer equal opportunities for meets students at career days and various employment, skills development, promotion and universities and colleges and aims in particular other working conditions irrespective of gender, to attract energy and information technology ethnic background, sexual orientation, functional students. ability or social or cultural background. The Skagerak Group employed 52 new staff Apprenticeships: Skilled workers are in high in 2019, to add to the 45 new recruits in 2018, demand. Skagerak Energi is represented on out of a total workforce to 636. Only 20 of 118 the Board of Directors of the Electrical Trades employees over the age of 60 are women, so we Training Office and is actively endeavouring to are looking to address this imbalance through increase the number of apprentices in the busi- new recruitment. ness. The power distribution company employs At the reporting date, 19 (25 per cent) of at least 5 apprentices a year, and there are the Group’s 77 managers and 3 of the Board’s
EXTRACT OF ANNUAL REPORT 2019 normally 15 apprentices working for the company 9 members were women, 2 of whom were share- at any one time. The Group currently has holder-elected and 1 employee-elected. 19 apprentices. Ethics Trainee Vestfold og Telemark: The Group Our Code of Conduct and Whistleblower Guide- partners with Trainee Vestfold og Telemark, lines are designed to maintain high ethical which arranges an 18-month regional trainee standards and ensure that any notifications programme. Skagerak has employed eight are handled professionally and efficiently. We trainees under the programme, all of whom have conduct an annual round of dilemma training to been offered permanent employment. 88 per ensure compliance with our Code of Conduct and cent of programme participants in the region Whistleblower Guidelines. have obtained a permanent job in the area.
Summer project for students: In 2019, a nine- week summer project was initiated for students based on interdisciplinary competence and
PAGE — 74 diversity. In 2019, the subject was “The energy company of the future”. The summer project for students will be continued as an annual measure. CORPORATE SOCIAL RESPONSIBILITY
HIGH JOB SATISFACTION SKAGERAK ENERGI Index
85
80
75
70
65
60 * No survey was carried out in 2016. 55 Skagerak 50 Norway index (Ennova) 2015* 2017 2018 2019 EXTRACT OF ANNUAL REPORT 2019
AGE AND GENDER DISTRIBUTION Number
120
100
80
60
40 PAGE — 75
20 Men 0 Women < 20 20–24 25–29 30–34 35–39 40–44 45–49 50–54 55–59 60–64 ≥ 65 CORPORATE SOCIAL RESPONSIBILITY Information security and ICT security
The digitalisation of Skagerak Energi is gathering pace, and we are increasingly using cloud services, artificial intelligence and sensors to carry out advanced analyses and optimise the oper- ation of the power grid and power production. The current threat picture is imposing high requirements for information security. SKAGERAK ENERGI
ociety imposes strict demands on how we tained through various human, technical and protect our information and IT systems. organisational security barriers. S In their annual reports, the Norwegian Through advanced security monitoring, we Police Security Service (PST) and the Norwegian are able to detect and respond to abnormal
EXTRACT OF ANNUAL REPORT 2019 National Security Authority (NSM) emphasise that events in our computer network. Emergency a steadily increasing share of threats against response capabilities are also strengthened fundamental national interests are coming from through IT incident drills. cyberspace. Critical infrastructure services, in As part of our preventive security work, in particular in the power industry, are vulnerable 2019 we carried out several intrusion tests on targets for digital mapping and sabotage. our IT systems to verify that our security barriers Skagerak Energi attaches high importance function as intended. to work on information and IT security, and we Skagerak Energi will continue its work on are continuously improving our efforts to protect ongoing improvements and ensure that informa- information assets as the pace of digitalisation tion security is an integral part of all our busi- increases. ness processes. In 2019, we established a separate depart- ment for information security and recruited Safety culture is a personnel with the required expertise in the area. Safety culture is a focus area and all focus area and all employees receive training on safe digital
PAGE — 76 conduct. employees receive Risk assessments are conducted to identify training on safe digital and protect all our assets, and security is main- conduct. CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 77 CORPORATE SOCIAL RESPONSIBILITY SOCIAL BALANCE SHEET Generating record-high values SKAGERAK ENERGI kagerak Energi has never created greater Skagerak Energi generates substantial value for distribution to employees, economic activity in the region. The demand Sowners and the public sector. At the same generated from salaries, taxes, dividends and time, the owners have showed great restraint, purchases of goods and services totalled almost and have retained NOK 950 million that is to be NOK 1.2 billion in 2019. In 2019, the Group utilised for further development of the company. purchased goods and services worth almost Since 2011, almost NOK 3.4 billion has NOK 1.7 billion. If we assume that approxi- been retained to strengthen the company’s mately one third of these were purchased locally, equity. The strong results in 2018 and 2019 this directly yielded nearly NOK 600 million in in particular have strengthened the company’s demand for goods and services for local busi- equity. In 2010, NOK 917 million was distributed nesses. In addition, salaries and the dividends from reserves. It was not unusual to distribute paid to our three municipal shareholders Skien more than the company’s profits for the first ten (15.21 per cent), Porsgrunn (14.83 per cent) years due to high equity and moderate invest- and Bamble (3.34 per cent) will be used locally.
EXTRACT OF ANNUAL REPORT 2019 ment needs. However, the company is currently In total, this represents local demand of around investing around NOK 1 billion a year and has NOK 1.2 billion. adopted a moderate dividend policy. PAGE — 78 CORPORATE SOCIAL RESPONSIBILITY
CREATING MAJOR LOCAL DEMAND SKAGERAK ENERGI NOK million
Total local demand 1,169
Dividend paid to municipalities in 92 Grenland
Tax paid to host 115 municipalities
Gross salaries 407 paid to employees
Purchase of goods 555 and services locally
0 200 400 600 800 1,000 1,200 1,400 EXTRACT OF ANNUAL REPORT 2019
VALUE CREATION, SKAGERAK ENERGI NOK million
3,000
2,500
2,000
1,500
1,000 PAGE — 79
500
0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 CORPORATE SOCIAL RESPONSIBILITY Since 2011, almost NOK 3.4 billion has been set aside to strengthen the company’s equity.
SKAGERAK ENERGI RETAINED EARNINGS NOK million
1,000
750
500
250
0
-250
-500
-750
-1,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 EXTRACT OF ANNUAL REPORT 2019
DISTRIBUTION OF VALUE CREATION
Employees: 407 Interest etc. paid to lenders: 168 Dividends paid to shareholders: 278 Taxes and charges: 878 Retained earnings: 950 PAGE — 80 CORPORATE SOCIAL RESPONSIBILITY Paid enough tax to pay 2,356 In 2019, the company and its employees paid nursery school teachers around NOK 1 billion in taxes. A nursery school teacher receives a basic salary of NOK 429,700 a year. This means that the tax paid by Skagerak and its employees is enough to cover the sala- ries of 2,356 nursery school teachers. SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 81 CORPORATE SOCIAL RESPONSIBILITY Fifty different municipalities received a total of Taxes NOK 165.2 million in taxes from Skagerak Energi in 2019. Municipalities that host power facilities were the largest beneficiaries. Sirdal and Bykle paid to 50 municipalities top the list with NOK 18 million and NOK 17.5 million, respectively. The total of NOK 165 million relates to municipalities natural resource tax and licensing fees for power production and property tax paid by all areas of the Group. Skagerak Kraft was the biggest taxpayer, paying a total of NOK 153 million to the 50 host municipalities. The largest individual category was property tax at around NOK 74 million. SKAGERAK ENERGI
TAXES PAID TO HOST MUNICIPALITIES NOK million
Rollag 0.1 Sokndal 0.1 Ringerike 0.1 Øystre Slidre 0.1 Ullensvang 0.2 Lund 0.2 Gjesdal 0.2 Nome 0.2 Bø 0.3 Hjelmeland 0.3 Flekkefjord 0.3 EXTRACT OF ANNUAL REPORT 2019 Vinje 0.4 Drangedal 0.4 Sauherad 0.4 Jondal 0.6 Hemsedal 1.2 Bamble 1.3 Vang 1.3 Tokke 1.4 Kvinnherad 1.4 Bygland 1.4 Suldal 1.4 Vestre Slidre 1.5 Tinn 1.7 Siljan 1.7 Gol 1.9 Forsand 2.0 Kragerø 2.1 Flesberg 2.3 Kongsberg 2.3 Kviteseid 2.3 Porsgrunn 2.9 Nissedal 3.7 Skien 4.8 Kvinesdal 6.1 Fyresdal 6.2 Sør-Aurdal 6.2 Notodden 9.9 Valle 10.3
PAGE — 82 Seljord 10.8 Nore og Uvdal 11.3 Hjartdal 13.1 Nord-Aurdal 13.4 Bykle 17.5 Sirdal 18
0 2 4 6 8 10 12 14 16 18 20 CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 83 CORPORATE SOCIAL RESPONSIBILITY
SPONSORSHIP ACTIVITIES IN 2019 An active partner in the local community SKAGERAK ENERGI Through financial support and active engage- ment, Skagerak Energi must stand out as a regional player committed to social welfare, economic growth and development. Many perhaps know us best as a sponsor of elite sport due to the high profile this enjoys. However, we also sponsor teams across the Vestfold and Telemark region, cultural events, social service providers, and schools and universities. Vestfold and Telemark’s identity is created by the people who live here and the cultural life they are surrounded by. It is great to be able to support everything from football to theatre and
EXTRACT OF ANNUAL REPORT 2019 rock concerts, through organisations and events such as Odds Ballklubb in Skien, Porsgrunn International Theatre Festival and Fjordfesten in Sandfjord. Culture created by local talents, but of an international standard. We are dependent on our region being able to attract the best people. Our partnership with the University of South-Eastern Norway and DuVerden are helping create a platform for further growth. For us and for the region.
Kristian Norheim EVP, Communications and Public Relations PAGE — 84 EXTRACT OF ANNUAL REPORT 2019 CORPORATE SOCIAL RESPONSIBILITY DuVerden – an experience Lyk-z helping young people to centre for children, young return to society people and adults Lyk-z & døtre are a social entrepreneur who helps DuVerden Maritime Museum and Science Centre young people who have dropped out of school in Porsgrunn is an experience centre where visi- and work-life to find a way back into society. tors can learn about science, technology and the “Last year Skagerak Energi’s funding helped region’s unique maritime history in an interactive 24 young people from Telemark attend a seven- and exciting setting. week programme. Sixteen of these young people DuVerden welcomed a record 31,000 visi- have returned to school or work, and the rest tors in 2019. This included 13,000 school are making good progress,” explains managing students from Vestfold and Telemark and director and founder Ingeborg Omdal Lykseth. 18,000 members of the public who made their Course participants use the Lyk-z method, way to the maritime museum and science centre. which is based on neurophysiological theories,
SKAGERAK ENERGI “Skagerak Energi is extremely important for fundamental cognitive principles, communica- DuVerden and has been with us right from the tion theory from film production, leadership and start. They are genuinely interested in the centre coaching. Participants work trhough various and contribute financially, but also with advice topics such as identity, communication and and input on the future development of the influencing. centre. We were delighted to have the chance to The programme is highly structured, with six arrange a special sponsors’ day for Skagerak in hours’ training each day. Participants learn how December, with free entrance and refreshments to find the inner strength to escape from a dark for employees and their children and grandchil- place that can be filled with fear, depression, dren,” explains DuVerden director Frode Arntsen. suicidal thoughts and alcohol and narcotics. Last year special events such as Sea Sense After completing the seven-week course, the Day and Viking Day attracted some 1,000 visi- young people are followed up for six months. tors to the experience centre. According to DNV GL’s analysis of the DuVerden wants to stimulate more interest socio-economic benefits of returning young in science-based education and arranges events people to society, funding given by Skagerak
EXTRACT OF ANNUAL REPORT 2019 and regularly renews its various attractions to Energi to Lyk-z in 2019 generated an economic ensure a varied offering. gain of more than NOK 195 million. “We hope to continue to develop our part- nership with Skagerak Energi for many years to come,” concludes Arntsen. PAGE — 86
Photo: DuVerden Photo: Lyk-z CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI
Photo: Parkjazz
Quality music at Parkjazz EXTRACT OF ANNUAL REPORT 2019
Each Thursday from June until August, people “It’s invaluable for Parkjazz to have such a flock to Brekkeparken in Skien to listen to major local supporter as Skagerak Energi. It’s leading musicians from the Grenland region and important for our finances, but also for our repu- the international jazz scene. tation. It’s a seal of approval for our product. More than 3,700 people visited Parkjazz Skagerak has been our main sponsor since in Skien in 2019. The aim has always been to 2014 and has contributed stability and predicta- give local professional jazz musicians a stage to bility for our operations and planning,” explains perform and spotlight all the talented musicians festival founder Stordalen. who come from the region. The sponsorship agreements have enabled Skien and Grenland have produced many Parkjazz to hire international jazz musicians, jazz musicians since the 1970s, many of whom including, in 2019, the Jonathan Kreisberg can claim to be world-class. Parkjazz wishes Quartet. to help make the jazz scene a natural element of the appeal and identity of Grenland. The concerts were the idea of Skien municipality’s PAGE — 87 culture department and the musicians Sondre Stordalen and André Kassen. CORPORATE SOCIAL RESPONSIBILITY Odd – a green pioneer
“We want to make the people of Telemark proud Researching grid solutions by giving them outstanding experiences and After a successful launch in 2019, Skagerak Nett creating arenas to come together and feel as is investigating practical uses of the new flex- one. We aim to be role models in everything we ible technology. The tests are headed by project do, both on the pitch and with regard to the envi- manager Signe Marie Oland and the facility is ronment and the climate,” comments Einar Hånd- now controlled from Skagerak Nett’s systems lykken, managing director of Odd Football Club. control centre. Twenty different operation modes Odd, which is Norway’s oldest football club, will be run with selected functional and technical celebrated its 125th anniversary in 2019. Unfor- objectives. The aim is to evaluate the best way to tunately, the team missed out on third place utilise renewable power production in combina- and European qualification on goal difference in tion with a large energy store (battery) to supply 2019 but hope to put this right next year. power to multiple customers in a local grid.
SKAGERAK ENERGI In line with the club’s mission of making the The results will be important for the develop- people of Telemark proud, the club focuses on ment of Skagerak Nett’s strategy and a potential developing promising local players. Odd is sixth focus on batteries in the local grid. The initia- among elite European clubs when it comes to tive should be viewed in the context of Skagerak playing local players. Nett’s overall goal of reducing investment and Skagerak Energi has been one of Odd’s maintenance costs while maintaining a high most important supporters since the company quality of power deliveries. was founded. Today the sponsorship funds mainly pay for the naming rights for the stadium: Skagerak Arena.
From ZERO to Odd Håndlykken had gained extensive experience of the environmental movement before he joined Odd in 2013 and has definitely managed to put
EXTRACT OF ANNUAL REPORT 2019 a green stamp on the club and Skagerak Arena. The roof of the Skagerak Arena is covered in solar panels that produce 600 kWh per hour on a hot summer’s day and there is a 1,000 kWh battery on the outside of the stadium. When the sun shines, the battery charges, and when night falls and the floodlights require more energy, the battery quietly discharges. However, it has other uses too. PAGE — 88
Photo: Fredrik Hagen/NTB scanpix International theatre stage in Porsgrunn CORPORATE SOCIAL RESPONSIBILITY
Skagerak Energi partners with Porsgrunn Interna- “We want to help make Porsgrunn a vibrant tional Theatre Festival (PIT). PIT was first staged city. That’s why the festival invests significant in 1995 and has since become Norway’s largest sums in free events each year. Collaborations international theatre festival. with businesses and support from companies The annual festival is a folk festival and a such as Skagerak Energi enable PIT to maintain cultural beacon for the entire region. and strengthen the quality of the programme A total of 29 ensembles from 8 countries and create a vibrant city and festival atmos- put on a total of 133 shows during the 2019 phere, which has become PIT’s trademark. All festival. Attractions included a lavish opening the city’s a stage!” says festival organiser Trond event, the Brustein Ball, a daily street festival Hannemyr. with free performances from all over the world The festival was due to celebrate its 25th and various other concerts and workshops anniversary in 2020, but unfortunately this has
during the festival week. been cancelled due to the coronavirus pandemic. SKAGERAK ENERGI 21,500 people attended the performances Since it was first held in the 1990s, PIT has that were held in various parts of the city. The staged 31,000 shows by theatre groups from festival, which is Porsgrunn and Grenland’s 38 different countries and attracted a total of largest cultural event, is arranged by Grenland 540,000 spectators. Friteater. EXTRACT OF ANNUAL REPORT 2019 PAGE — 89
Photo: Hans Petter Eliassen CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 90 No power, no rock! Building bridges between CORPORATE SOCIAL RESPONSIBILITY Skagerak Energi is the main sponsor of the schools and local business music festival Skien Live. The festival, which takes place each summer on the dock in Skien, For two years, Skagerak Energi has helped name was held for the seventh time in 2019. The the Entrepreneur Teacher of the Year in Telemark programme includes rock music, a people’s party during the Growth Conference and has presented and a family concert. the prestigious “Gunnar Knudsen Prize – Best The festival started off as Klosterøya Live Innovation” for businesses run by young people in 2013 with the main aim of spotlighting both and students. regional and national artists and maintaining the In 2019, around 700 young people from tradition of holding a centre-based music festival Telemark and Vestfold took part in the County in the city. In 2019, the festival attracted around Championship for Young Peoples’ Businesses. 1,600 paying visitors. Ungt Entreprenørskap is a non-profit organi- The sponsorship agreement was continued sation that develops children and young people’s
in 2019, with Skagerak Energi signing up as creativity and self-belief. It builds bridges SKAGERAK ENERGI main sponsor for the next three years. between schools and local business and focuses “It’s extremely encouraging to see a solid on initiatives in innovation and entrepreneurship and long-established business helping boost on a daily basis. local cultural life in this way. Their support means Ungt Entreprenørskap and Skagerak Energi we can deliver an attractive programme; they work together to inspire young people to learn, supply us with power and roar us on,” confirms create and innovate. Children and young people Cecilie Kollstrøm. from primary school to higher education partic- Planning for 2020 is underway. Di Derre, ipate in Ungt Entreprenørskap’s events and Bigbang, Ole Paus & Motorpsycho, Gluecifer and competitions, where they learn to address Bendik are on the programme. The aim is for genuine social problems and set up, run, develop Skien Live to become an even brighter star in the and wind up companies. Norwegian music festival firmament. “Our partnership with Skagerak Energi “We will deliver good music and culture expe- is absolutely crucial for us. Those of us who riences in central locations to a broad public. work as bridge-builders between schools and
Our strong partnership with Skagerak Energi is employers are overjoyed when we get this EXTRACT OF ANNUAL REPORT 2019 helping make this possible,” explains Kollstrøm. competence into schools. It’s rewarding and inspiring to meet and learn from people with such specialist expertise,” comments Ann-Iren Haugen, managing director of Ungt Entreprenør- skap Vestfold and Telemark. PAGE — 91 CORPORATE SOCIAL RESPONSIBILITY THE NABOISHO PROJECT Bringing out the best in each other SKAGERAK ENERGI
In 2014, CEO Knut Barland laid the foundation By the end of 2019, the Naboisho Green stone for Mara Girls Leadership School in Kenya. Village programme in Masai Mara, which is Last year the first intake, a total of 16 girls, grad- supported by the Strømme Foundation and Skag- uated. This was a major step for the girls and erak Energi, had given 25,000 people access
EXTRACT OF ANNUAL REPORT 2019 very inspiring for all Skagerak Energi employees. to micro-financing, clean water, solar energy and The school was the best in the Mara region education. and fourth-best out of 90 schools in Narok county. All the leavers qualified for one of Kenya’s leading Donation scheme national and regional upper secondary schools. Employees sign up as donors with an optional “It’s a real honour to be involved in this amount that is deducted from their salary. initiative. Our colleagues and the company The company matches the amount that the have supported developments in this area employees give. since 2013. To be able to come here and see Skagerak has been partnering with the the progress that is being made is incredibly Strømme Foundation in Kenya since 2007. As inspiring,” comments Gunnar Møane, Skagerak a rough estimate, the Group and its employees Energi’s project manager for international aid. have contributed an average of just over The project is run by the Basecamp foundation NOK 1 million per year. through the Strømme Foundation, which is Skag- erak’s international aid partner.
PAGE — 92 Top: Meeting and getting to know the girls are important parts Bottom: Bright, clean classrooms, fresh colours, textbooks and of the project. And football is a universal sport that brings a talented and motivated principal and teachers are important people together. CEO Knut Barland has his eye on the ball. reasons for the success of Mara Girls Leadership School in Masai Mara. Here principal Mouline Otieno meets the students in one of the classes. CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 93 CORPORATE SOCIAL RESPONSIBILITY SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 94 CORPORATE SOCIAL RESPONSIBILITY
PURE WELFARE Welcome SKAGERAK ENERGI warmth
The warm glow that emanates from everything from building sites to hospitals is the result of the efficient utilisation
of waste heat from industry and biofuel. EXTRACT OF ANNUAL REPORT 2019 Skagerak Varme is offering more and more flexible solutions and areas of use to generate welcome warmth that would otherwise have been lost. PAGE — 95 CORPORATE SOCIAL RESPONSIBILITY Energy carrier trailers of fuel oil. Instead, we used fully treated bioenergy from the district heating centre at In practice, a district heating system is similar to Nylende,” explains Rogn. the human circulatory system. With roofs, windows and doors still to be Waste heat from industry at Herøya in fitted, the building naturally requires more heat Porsgrunn, or heat from wood chip furnaces at energy than it will when it is completed. A full Nylende in Skien, is pumped through underground year before the nursery school is due to be pipelines to everything from hospitals to nursery handed over, the building shell is being heated schools in Grenland. Skagerak Varme also has using heat from Nylende heating centre. heating facilities in Horten and Tønsberg. “The heating station is the heart, the pipe- lines the arteries. Just as blood flows through Disconnecting then the body carrying oxygen, so the water flows reconnecting through the pipeline carrying heat energy,”
SKAGERAK ENERGI explains Skagerak Varme AS CEO Svein Skagerak Varme also delivered district heating Morten Rogn. to the former Skien nursing home, which was previously on the site. Before the building was demolished, the heat was disconnected and the Flexible heat pipelines were capped. When Skien municipality builds Duestien nursery school on the same site, On the construction site where Skien munici- there will also be district heating in the pipes. pality is building Duestien nursery school, From August 2020, some 120 children, Skagerak Varme is making sure no one gets spread over eight blocks, will romp around in cold. Connecting to the district heating grid has a nursery school built from solid wood and a number of benefits. applying passive house principles. Instead of large tubes of warm air that swirl around the building site, Skagerak Varme has set up a temporary customer centre, which with the Saving electricity help of water hoses connected to fan coil units
EXTRACT OF ANNUAL REPORT 2019 transmits heat from the technical room through Connecting to the district heating grid limits the the whole building. load on the power grid. In an increasingly electri- Glue hardens and concrete surfaces dry fied society, district heating also helps to keep more quickly, and the workplace is tidier. grid rental tariffs down. “District heating is an environmentally “Hot water cannot be used to charge a friendly solution that also provides flexible heat mobile phone or power a refrigerator, but it can distribution on the construction site,” explains be used to heat buildings. We only have a finite Skagerak Varme project manager Frode Busk. amount of electrical energy, and it is better to use the electricity, which is a higher-value form of energy, for electric cars, computers and lighting, Three semi-trailers of fuel oil than for heating. And we can use more heat from industry or biowaste, instead of letting it go Last winter Skagerak Varme set up eight unused,” comments Rogn. systems on construction sites in four different towns. The alternative would have been to place traditional diesel heaters on the outside of the
PAGE — 96 building. “Heating this building site with fuel oil over the winter would require three fully-loaded semi- “The heating station is the heart, the pipes the CORPORATE SOCIAL RESPONSIBILITY arteries. Just as blood flows through the body carrying oxygen, so water flows through the pipes carrying heat energy.”
Svein Morten Rogn CEO, Skagerak Varme AS SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 97
Frode Busk (left) and Svein Morten Rogn outside Duestien nursery school which is being built in Skien. The new nursery school, which is constructed in solid wood and applying passive house principles, will naturally be heated using district heating. 100 Report from the Board of Directors 2019 112 The Board of Directors 114 Corporate governance 122 Income statement 123 Total comprehensive income 124 Balance sheet 126 Statement of cash flows THE BOARD'S REPORT SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 99 AND FINANCIAL STATEMENT THE BOARD'S REPORT AND FINANCIAL STATEMENT AND FINANCIAL STATEMENT THE BOARD'S REPORT Report from the Board of Directors 2019 Skagerak Energi Group (Comparative figures for 2018 are presented in parenthesis) SKAGERAK ENERGI
Operational performance shareholding in Fjordkraft, which sells electricity Skagerak Energi is a regional energy group head- to consumers. quartered in Porsgrunn. The company’s core Skagerak Energi’s vision is to be a forward- activities comprise power production, distribution looking supplier of clean energy that contributes
EXTRACT OF ANNUAL REPORT 2019 of electricity and district heating. These activi- to social welfare, economic growth and devel- ties are organised through Skagerak Energi AS’s opment. The Group’s business concept is to wholly owned subsidiaries. create value for customers, owners and society Skagerak Kraft produces hydropower in by producing, transporting and selling electricity, South Norway. Its 49 wholly or partly owned and by developing and delivering energy-related production facilities have generated an average products and services. Our operations are based of 6.0 TWh over the past five years. Skagerak on our core values – competent, responsible and Nett manages and develops the distribution innovative. grid in Vestfold and Grenland and the regional distribution grid in Vestfold and large parts of Telemark. At the end of the year, the company Market conditions had 205,545 customers. Skagerak Varme oper- ates district heating facilities in Vestfold and According to the Norwegian Water Resources and Telemark. Energy Directorate (NVE), there was 142.4 TWh Skagerak Energi also has a 49 per cent of precipitation in Norway in 2019, which is shareholding in Air Liquide Skagerak which 9 TWh above normal. The average tempera- PAGE — 100 markets and distributes natural gas and biogas, ture for the year was 0.3 degrees warmer than a 33.4 per cent stake in the electrical contractor normal. Overall reservoir levels in Norway closed business Laugstol, along with a 14.9 per cent the year virtually unchanged from the previous Highlights in 2019 AND FINANCIAL STATEMENT THE BOARD'S REPORT
3,376 1,293
Gross operating revenues totalled NOK 3,376 million Skagerak’s shareholding in the end user business Fjordkraft was SKAGERAK ENERGI (NOK 3,450 million), a decrease of 2 per cent. EBITDA, adjusted reduced from 29.7 per cent to 14.9 per cent during the year. The for unrealised changes in the value of energy contracts and sale generated an accounting profit of NOK 462 million, while changes in pension plans, came to NOK 2,058 million, up the change in value of the residual shareholding amounted to 2 per cent on the previous year. Profit after tax came in at NOK NOK 831 million. Together, these two items increased annual 2,152 million (NOK 1,070 million), an increase of 101 per cent. earnings by NOK 1,293 million.
Market power prices and Skagerak’s Skagerak Energi purchased all the Skagerak Energilab was officially own production were both lower than shares in Hjartdal Elverk and merged opened as a pilot project for the previous year. This resulted in the newly acquired company with production, storage and distribution of EXTRACT OF ANNUAL REPORT 2019 lower sales. The lower power prices Skagerak Nett during the year. electrical energy at Skagerak Arena. were partially offset by slightly higher grid tariffs.
200,000 6
Skagerak Nett gained its 200,000th An investment decision was approved There were six injuries involving own customer during the year. for the construction of two new power employees in 2019, compared with plants, at Dalsfoss and Gjuvåa. two in 2018. PAGE — 101 AND FINANCIAL STATEMENT THE BOARD'S REPORT year. At the end of week 52, reservoir levels shares and unrealised changes in value in in Norway were 63.3 per cent, 6.2 percentage Fjordkraft. points below the median. The tax expense for the year was NOK The power market in 2019 was strongly 722 million (NOK 816 million). impacted by a significant fall in the price of The profit after tax, adjusted for unrealised coal and gas. In 2019, gas power took over changes in the value of power contracts and in from coal power as the primary driver of the the residual shareholding in Fjordkraft, the gain average price of delivered power in both the on the sale of shares in Fjordkraft and changes Nordic and the German markets. The subse- in pension plans was NOK 768 million (NOK quent decrease in the gas price then became the 581 million). most important reason for the reduction in the Total investments in property, plant and delivered spot price in Skagerak Kraft’s primary equipment in 2019 came to NOK 953 million production area (NO2), from 54.3 øre/kWh (NOK 973 million). The bulk of the investments (31.1 øre/kWh) in January to 29.8 øre/kWh in were made in Skagerak Nett (71 per cent) and
SKAGERAK ENERGI September (44.7 øre/kWh). A slightly higher Skagerak Kraft (22 per cent). gas price, combined with dry and cold weather The net consolidated cash flow from oper- in October and November, boosted spot prices ating activities closed on NOK 1,101 million in the final quarter of the year. The average (NOK 1,515 million). All investments are spot price in South Norway (NO2) in 2019 was financed through operations. Net interest-bearing 38.6 øre/kWh (41.5 øre/kWh). liabilities were reduced from NOK 3.7 billion to NOK 3.6 billion. At the reporting date, total assets amounted Consolidated earnings and to NOK 14.9 billion (NOK 13.0 billion) while the financial performance equity ratio closed on 55 per cent (47 per cent). The market value of the production facilities is The Group prepares its financial statements in significantly higher than their book value. accordance with the Regulation on simplified application of International Financial Reporting Going concern Standards (IFRSs) of 21 January 2008. The financial statements have been prepared in
EXTRACT OF ANNUAL REPORT 2019 The Group posted gross operating revenues accordance with the going concern assumption. of NOK 3,376 million (NOK 3,450 million) in the The business has good financial solvency and reporting period, down 2 per cent on the previous sufficient liquidity, and, based on current fore- year. The reduction was primarily attributable to casts, is well placed in the market to achieve lower power production. long-term value creation. The profit after tax closed on NOK 2,152 million (NOK 1,070 million). Appropriation of net profit for the year EBITDA, adjusted for unrealised changes The Group and the parent company Skagerak in the value of energy contracts and changes in Energi AS posted net profits for the year of NOK pension plans, came to NOK 2,058 million, up 2,152 million and NOK 1,647 million, respec- 2 per cent on the previous year. tively. The Board proposes to the Annual General The share of profit/loss from associates Meeting of Skagerak Energi AS that the parent totalled NOK 47 million. This is NOK 47 million company’s net profit for the year be distributed lower than the previous year, primarily due to the as follows: reduced shareholding in Fjordkraft. Consolidated net financial items closed Transferred to other equity: NOK 1,647 million PAGE — 102 on NOK 1,146 million, compared with NOK Total appropriated: NOK 1,647 million 360 million the previous year. The change is primarily attributable to a gain on the sale of AND FINANCIAL STATEMENT THE BOARD'S REPORT A dividend of NOK 278 million has been Dalsfos power plant and Ala and Gjuvåa growth proposed for 2019. The Board has assessed the projects company’s equity and liquidity after the proposed For 2019 as a whole, Skagerak generated dividend and deems this to be reasonable based total production of 4,947 GWh, compared with on the risk and scope of the business. 5,820 GWh in 2018, a decrease of 15 per cent. There have been no events of material Skagerak’s production accounted for 3.7 per importance for an assessment of the financial cent of Norway’s total annual power production. statements since the end of the accounting At the start of 2020, Skagerak’s reservoir levels year. The Board believes that the annual finan- were slightly above the normal. cial statements fairly present Skagerak Energi’s Availability in our power plants was gener- assets and liabilities, financial position and ally very good in 2019. There were very few performance. unplanned outages. Important planned stop- pages included at Grunnåi (construction work on new unit) and Haukrei/Vrenga/Hølseter (replace-
Earnings, operations and ment of control systems). SKAGERAK ENERGI performance in business areas The business is exposed to significant market risk with regard to both volumes and prices. Power production The exploitation of waterfalls is strictly Gross operating revenues from the power regulated by the Norwegian Water Resources production business fell by 6 per cent to NOK and Energy Directorate’s (NVE) licensing 2,014 million during the reporting period (NOK terms, and many older licences are due to be 2,153 million) due to lower production. The revised in the coming years. Skagerak Kraft is increase in the recognised achieved price is currently involved in eight revisions and is busy attributable to losses on hedging contracts in preparing and reviewing the relevant documen- 2018 and was realised despite slightly lower tation and conducting on-site inspections of the market prices in 2019 compared with 2018. relevant watercourses with the NVE and local Operating costs including depreciation and stakeholders. amortisation fell by NOK 7 million compared The NVE also administers the regulations with the previous year. Costs relating to partly for dam safety. A significant tightening up of the
owned plants, increased activities in growth regulations means that many older dams will EXTRACT OF ANNUAL REPORT 2019 projects, property tax and licence fees rose by have to be modified at considerable cost. Skag- NOK 30 million. A change in the depreciation and erak and its partly owned facilities are making amortisation profile and pension plans contrib- good progress with the necessary upgrades, uted a reduction of NOK 37 million. which are due to continue until 2030. EBITDA, adjusted for unrealised changes in The company is focusing on developing new the value of power contracts, amounted to NOK hydropower projects, and in 2019 an investment 1,469 million (NOK 1,599 million), a decrease of decision was approved for a new power plant 8 per cent. at Dagsfoss in the Kragerø watercourse and at The business invested NOK 211 million Gjuvåa at Tuddal in Hjartdal municipality. (NOK 130 million) in property, plant and equip- Tax, in the form of property tax, licence ment. Major projects in 2019 included the fees, resource rent tax, natural resource tax and completion of Grunnåi Unit II, work on new general corporation tax, represents a significant control systems at Haukerei, Hogstad, Vrenga cost element for hydropower. The Energy Tax and Hølseter, and refurbishment and reinforce- Committee appointed by the Ministry of Finance ment of Breidvatn dam. The partly owned plants delivered its report including amendment PAGE — 103 and regulation associations continued to be busy proposals in 2019. The government rejected all refurbishing dams and control systems. Prepara- the proposals in February 2020. The industry tory works were also performed for the new believes that the resource rent tax system AND FINANCIAL STATEMENT THE BOARD'S REPORT should be changed so that individual power this resulted in lower operating costs. plants’ ordinary returns are exempted from EBITDA for 2019 closed on NOK 679 million resource rent tax, and so that resource rent tax (NOK 456 million), an improvement of 49 per does not prevent the refurbishment of Norwegian cent. Adjusting for the effect of the change in hydropower. pension plans, EBITDA would have been NOK 628 million, an improvement of 38 per cent. Power distribution Investments in 2019 totalled NOK In September 2019, Skagerak Energi purchased 673 million (NOK 747 million), including NOK Hjartdal Elverk AS, which was subsequently 570 million in grid facilities and NOK 23 million merged with Skagerak Nett AS. The company’s in AMS (Advanced Metering and Control figures for the last three months of the year have Systems). Other investments totalled NOK been recognised in Skagerak Nett’s financial 80 million. statements. The investments in the grid reflect high Skagerak Nett posted total gross oper- activity levels in our supply area relating to resi-
SKAGERAK ENERGI ating revenues of NOK 1,245 million in 2019 dential development, industry and business (NOK 1,209 million), an increase of 3 per cent. projects and electrification of the transport Customers in the local distribution grid reduced sector. their electricity consumption by almost 3 per With a large proportion of facilities and cent, while industrial customers’ consumption equipment reaching the end of its working life, fell by 7 per cent. However, higher tariffs and a reinvestments have also been high. These rein- high share of fixed prices meant that revenues vestments have mainly been made to reduce the rose in overall terms. risk of component failure and to maintain HSE Net operating revenues increased by 11 per requirements. cent to NOK 1,138 million (NOK 1,022 million). A number of major individual projects The increase is partly attributable to significantly are currently underway. In Tørdal in Drangedal lower power purchases for grid losses than in municipality, a new regional substation is being 2018 due to a reduction in market prices and constructed to reinforce security of supply in the volumes. The settlement of the grid rental with area, connect new power production and supply Statnett for the period 2016–2018 also had a new holiday homes. At Svelgfoss in Notodden, a
EXTRACT OF ANNUAL REPORT 2019 positive effect. major refurbishment has been implemented to In 2019, operating costs fell by 21 per cent improve HSE conditions and security of supply to NOK 718 million (NOK 904 million). Longer for both power drawn from the grid in the area useful lives for property, plant and equipment and feed-in of production. Skagerak Nett has reduced annual depreciation charges by NOK also purchased grid facilities from Statnett to 80 million. The recognised effect of changes to tidy up the interface to satisfy new EU regula- pension plans in 2019 had a positive non-recur- tions. At Veggbakken in Horten, a major recon- ring effect on profit of NOK 51 million. Adjusted struction/reinvestment has been implemented for these two non-recurring effects, operating to facilitate development of the city and reduce costs fell by NOK 56 million (6 per cent). the risk of hazardous conditions for our teams Prioritisation of own input in the investment working at the facility. area led to a significant reduction in employee Skagerak Nett delivered 7,135 GWh of benefit expenses for operations. Other operating power in 2019 (7,485 GWh), including 9.3 GWh costs fell by 8 per cent in 2019 compared with in Hjartdal following the merger on 1 October 2018 due to a strong focus on cost reductions 2019. At the end of the year, the company had in operations and maintenance. In contrast to 205,545 grid customers (198,666), including PAGE — 104 2018, there were no major operational stop- 2,605 customers in Hjartdal. Around 20,000 of pages in 2019. Together with a reduction in the above customers are business customers. items such as purchases of external services, Approximately 180,000 of the company’s AND FINANCIAL STATEMENT THE BOARD'S REPORT metering points are centrally invoiced. This District heating means that Skagerak Nett invoices the power Skagerak Varme recorded revenues of NOK supplier for the grid rental and not the customer 125 million in 2019 (NOK 108 million), which directly. represents growth of 16 per cent. The operating 2019 was a quiet year in terms of opera- profit came in at NOK 12.3 million, compared tional stoppages and planned outages. Skag- with NOK 3.2 million the previous year. In erak Nett’s customers were without power for 2019, the company recorded sales of 151 GWh an average of 1 hour and 8 minutes in 2019 (141 GWh), an increase of 7.1 per cent. EBITDA (2 hours and 53 minutes). Outage time in 2019 for the year totalled NOK 42.3 million (NOK was 35 minutes lower than the average for the 28.2 million), an increase of 50 per cent. years 2009–2018 and 1 hour 23 minutes lower In the reporting period, Skagerak Varme than the average for Norway as a whole. The signed new 5-year contracts with AT-Skog and reduction is primarily attributable to a year with Viken Skog to supply fuel for the woodchip-fired no major emergency response situations and heating centres in Skien and Tønsberg. A new
the fact that the number of planned outages 10-year agreement was also signed for waste SKAGERAK ENERGI was reduced following the almost 100 per cent heat from Yara in Porsgrunn. A number of minor roll-out of AMS by the end of 2019. Information modifications were made to several of the from the AMS system allows faults to be identi- heating centres to ensure efficient and stable fied at an earlier stage. This has also contributed operations. Various “condensation projects” to a reduction in outage times for our customers. in all four licence areas have also contrib- New meters have reduced the capacity required uted to a pleasing increase in customers. The for monitoring and maintenance and the company is also currently connecting several resources needed to shut down facilities and new customers who signed new agreements in read meters. 2019. Total investments in 2019 amounted to Skagerak’s power distribution business NOK 47.4 million (NOK 68 million), of which NOK is regulated by the NVE (the Norwegian Water 6 million (NOK 8 million) was financed via Enova. Resources and Energy Directorate), which In 2019, the company acquired Agder Energi imposes a wide range of requirements relating Varme’s shareholding (50 per cent) in Viking to activities, technical infrastructure, organi- Varme and merged the company with Skagerak
sation and competence. The business’s earn- Varme. The company undertakes various R&D EXTRACT OF ANNUAL REPORT 2019 ings are determined by the NVE using a model projects related to waste heat, solar energy and that rewards efficiency compared with other energy storage, and in the years ahead aims to power distribution companies. Skagerak Nett integrate these with current energy systems. On constantly endeavours to reduce its costs and the operations side, work has been performed improve the efficiency of its operations. on the blending of new cheaper fuels, and on At the reporting date, the capital base for communication and management systems. the power distribution business (NVE capital) amounted to NOK 4,383 million (NOK 3,991 Associates million). The NVE capital forms the basis on At the end of 2019, Skagerak Energi held share- which the yield is calculated, which in accord- holdings in Air Liquide Skagerak AS (49 per ance with the NVE’s income regulation model is cent), Laugstol AS (33.4 per cent) and Nape determined using a reference interest rate. The Kraft AS (49 per cent). The cumulative share of operating result from the company’s monopoly profits of these associates recognised in Skag- business generated a yield of 7.65 per cent (3.52 erak Energi’s consolidated income statement per cent), compared with a reference interest rate for 2019 amounted to NOK 47 million (NOK PAGE — 105 for 2019 of 5.71 per cent (6.05 per cent). 94 million), while NOK 89 million was recognised in the consolidated balance sheet. AND FINANCIAL STATEMENT THE BOARD'S REPORT Skagerak Energi’s shareholding in the listed tegic activity to attract the required talents to company Fjordkraft Holding ASA was reduced to the company. The Group’s extensive expertise 14.9 per cent during the year and is therefore no mapping, and associated non-conformance anal- longer classified as an associate. yses, are used to determine which activities are implemented. The results of our employee survey in 2019 Organisation and HSE revealed high levels of job satisfaction and engagement among Skagerak Energi employees. Personnel and organisation The Group as a whole is above the Norwegian Skagerak Energi is organised as a group comparison basis, but there are variations at comprising three subsidiaries and a parent company and section level. company, which, in addition to exercising its role Wherever possible, we facilitate flexible as owner, performs corporate and support func- working hours to accommodate employees tions for the subsidiaries. At the reporting date, during various phases of their lives. The Group
SKAGERAK ENERGI the Group employed 636 staff, which equates to also attaches importance to facilitating work for 604 full-time equivalents. employees with health issues. In 2019, we continued to offer work experi- ence to people outside the organisation looking 31 December 2019 31 December 2018 for workplace training or the opportunity to test No. of Full-time No. of Full-time their capacity for work. There has also been an Company employees equivalents employees equivalents increased focus on recruiting apprentices and Skagerak Nett 375 358.5 374 357 trainees. At the end of 2019, the Group had Skagerak Kraft 136 127 128 120 a total of 19 apprentices, 15 of whom were Parent company 109 102.5 107 101 employed at Skagerak Nett (energy installers),
Skagerak Varme 16 16 16 16 1 at Skagerak Kraft (energy operator) and 3 at the parent company (ICT). Four trainees work in Total 636 604 625 594 the parent company and the power distribution company. We are delighted to have recruited four female apprentices, three of whom work in the
EXTRACT OF ANNUAL REPORT 2019 Skagerak Energi systematically strives to traditionally male-dominated energy operator and attract, retain and develop skilled employees energy installer disciplines. to meet the company’s future requirements and implements various measures relating to Health and safety employee and manager development. The Group wishes Skagerak Energi to be a leader The knowledge required to run the company in preventive HSE work and sustainable value is changing at an ever-increasing rate. This creation. makes it vital that we continuously focus on At 2.9 per cent, Skagerak Energi’s sickness raising the expertise levels of the Group’s absence rate for 2019 was satisfactory, and an employees. Against this background, in 2019 we improvement on 3.6 per cent in 2018. System- developed a new tool to improve the quality of atic work is performed on facilitation and close our employee appraisals. follow-up across the organisation. At the same time, the energy sector is The zero vision is guiding for HSE work in undergoing rapid technical and commercial the Group, and the company believes that it will change, which in turn is demanding new areas be possible to achieve zero injuries in the long of expertise that the Group has not traditionally term. Injuries and near misses do not happen by PAGE — 106 recruited. In addition to actively promoting the themselves, they happen for a reason. Conse- development of our own employees, employer quently, they can be avoided. There were six inju- branding of Skagerak Energi is a prioritised stra- ries involving own personnel at Skagerak Energi AND FINANCIAL STATEMENT THE BOARD'S REPORT in 2019, a marked increase from two injuries Skagerak Energi aims to be climate-neutral the previous year. Three of the injuries involved by the end of the current strategy period (2019– absence from work and required medical treat- 2021). One of ways we are attempting to achieve ment. This resulted in H1 and H2 indicators for this is by purchasing emissions quotas. During own personnel of 2.6 and 5.3, respectively. The 2019, the Group resolved to have a fully electric H1 indicator records the total number of lost- vehicle fleet by 2030. The first vehicles to be time injuries per million working hours, while electrified will be pool and other passenger vehi- the H2 indicator records the total number of cles, while heavy vehicles will gradually be elec- injuries per million working hours. The F indi- trified in line with technological developments. cator (number of days’ absence due to injuries The climate balance sheet for 2019 is reported per million working hours) was 82.4 in 2019, in accordance with ISO 14064:2018, and compared with 106.1 in 2018. The F indicator includes scope 1, scope 2 and business travel gives an idea of the seriousness of injuries in from scope 3. The climate balance sheet only a company. The goal of zero injuries was not covers entities in which the Group has a share-
achieved, and the result is unsatisfactory. holding of at least 50 per cent. In the reporting SKAGERAK ENERGI The “Green zone” is a tool for identifying, period, the Group’s direct and indirect emissions evaluating and communicating risk to enable us of CO2 totalled 2,845 tonnes. The result is not to make the right choices to stay in the green directly comparable with the previous year as (safe) zone. Most injuries are the result of falls the scope of reporting has changed. The emis- or moving equipment and significant “Green sions primarily derive from the Group’s vehicle zone” activities have been performed across fleet and district heating business. Through its the Group to make activities such as manually activities, Skagerak Varme helps to significantly moving equipment safer. Skagerak Energi wishes reduce CO2 emissions at its customers. to achieve its goal of zero injuries by being a Skagerak Energi has efficient routines learning organisation with clear leadership and for separating and treating waste, and the clear HSE requirements. source-separation rate in 2019 was 86 per cent A series of targeted measures have been (87 per cent). taken to reduce injuries involving contractors. Skagerak Kraft is certified to ISO There were six such injuries in 2019. 14001:2015, Environmental management
systems. The company attaches importance to EXTRACT OF ANNUAL REPORT 2019 Non-discrimination helping maintain biodiversity in connection with The Group aims to offer equal opportunities for its facilities within the requirements and guide- employment, skills development, promotion and lines set out by the authorities. other working conditions irrespective of gender, Skagerak Kraft actively engages in research ethnic background, sexual orientation, functional and development projects with authorities and ability or social or cultural background. renowned institutions. The company passed two At the reporting date, 19 (25 per cent) of important milestones in 2019: the establish- the Group’s 77 managers and 3 of the Board’s ment of the research station at Grunnåi, where 9 members were women, 2 of whom were share- windows in the turbine housing make it possible holder-elected and 1 employee-elected. to watch the water hitting the blade runner and driving the machine round; the establishment of Environment Skagerak Energilab, which tests solar produc- Skagerak Energi’s vision is to be a forward- tion, battery technology and local distribution. looking supplier of clean energy that contributes to social welfare, economic growth and devel- PAGE — 107 opment. The company helps reduce society’s climate impact by producing and distributing clean energy from renewable sources. AND FINANCIAL STATEMENT THE BOARD'S REPORT Corporate governance and risk Market risk management Skagerak Energi is primarily exposed to market risk through its own production of electricity. For details of Skagerak Energi’s concerted focus Hydropower prices and production capacity will on efficient routines for corporate governance, fluctuate significantly and can have a major please refer to the separate report on page 112 impact on the company’s results. Revenues are of the Annual Report. normally subject to a degree of intrinsic hedging Skagerak Energi has established an over- due to the fact that prices are low in years of arching management system to help meet the high inflow and high production, and high in Group’s strategy and targets and secure an effec- years of low inflow and low production. Skagerak tive control environment. The Board adopted a Varme is exposed to commodity prices, power new Group-wide strategy for the period 2019– prices and competing energy solutions. 2021. You can read more about this on page 29 of the Extract of Annual Report. Regulatory and political risk
SKAGERAK ENERGI The Group uses a balanced scorecard The Group’s energy supply activities within system to implement strategy and measure Production, Power Distribution and Heat are performance. The management system also subject to licensing requirements and a high covers risk management, internal control, degree of public regulation. The power distribu- internal frameworks and guidelines, including tion business is a natural monopoly with publicly the company’s core values, Code of Conduct and regulated earnings. Skagerak Nett’s annual corporate social responsibility guidelines. income ceiling is determined each year by the Skagerak has zero tolerance for all forms of NVE and is impacted by changes in the regula- corruption. It is prohibited to offer, give, accept tory model. Skagerak Kraft and Skagerak Varme or receive bribes or other unlawful benefits for are exposed to significant political risk. Climate commercial or private gain. and energy policies are closely interlinked. Skagerak actively communicates its require- Measures are being implemented at both Euro- ments and expected behaviours, which are pean and national level to reduce emissions of
contained in the Group’s governing documents. the greenhouse gas CO2. This risk also affects We exercise particular vigilance in connec- Skagerak Varme due to the strong correlation
EXTRACT OF ANNUAL REPORT 2019 tion with procurement and the implementa- between the price of electricity and the price of tion of projects. All agreements entered into district heating. must be documented and must describe actual The most important climate measure in conditions, and agreed compensation must be the EEA is the emissions allowance scheme
commensurate with the service performed. for emissions of CO2 which applies to facilities Skagerak Energi’s businesses are exposed such as all coal- and gas-fired power plants in to risk in a number of areas and along the entire the EEA. The price of carbon emission allow- value chain. Risk management is an integral ances directly affects the cost of producing an part of the Group’s business operations and is extra kilowatt hour of energy in a thermal energy designed to maintain risk at an acceptable level plant. For much of the year, the price of thermal in a way that helps secure the achievement of power is price-setting for power on the continent, strategic and operational goals. The individual and therefore also affects the price of power business areas are responsible for risk manage- produced by Skagerak Kraft. While the price of ment and internal control. The Group conducts carbon emission allowances is determined by annual audits and internal supervision of supply and demand, the supply side is subject selected areas. to political regulation. This means that politically PAGE — 108 determined changes have a major impact on Skagerak Energi’s annual earnings. Other political decisions could also have AND FINANCIAL STATEMENT THE BOARD'S REPORT a major impact on Skagerak’s earnings. One Liquidity risk example is Germany’s decision to phase out The Group has access to liquid reserves through all coal-fired production by 2038. In the Nordic drawdown agreements with Statkraft. Liquidity region, the decision to introduce an electricity risk is deemed to be low. certificate scheme has triggered a significant increase in renewable energy development in Operational risk Sweden and Norway. Skagerak manages its operational risk through The price of guarantees of origin, where its workforce’s expertise, procedures, controls customers voluntarily pay more for renewable and emergency response plans. power, is closely related to people’s interest in A key part of the Group’s activities involves climate issues. Skagerak Energi’s revenues from critical infrastructure which serves many of the sales of guarantees of origin positively impact population’s basic needs. This makes security of the Group’s net annual earnings. supply a cornerstone of Skagerak’s operational planning and operations. Risk relating to security
Financial risk of supply is also incorporated in the overall risk SKAGERAK ENERGI Interest and exchange rate risk scenario at Group level and is subject to review Skagerak is indirectly exposed to fluctuations by the Board. in exchange rates. Produced power is sold over The Group has established a system for the Nord Pool power exchange, where prices are recording and reporting censurable conditions, quoted in EUR. Settlements in foreign currency undesired incidents and injuries/damage. All are translated to NOK on a daily basis through of Skagerak’s projects perform risk analyses participation in Statkraft’s in-house banking in order to assess and plan any appropriate solution. While some purchases and invest- required measures. ments are made in foreign currency, under the Group’s finance strategy, major purchases and investments must be currency-hedged using Outlook the exchange rate at the time of the invest- ment decision. Foreign exchange exposure After several years of increases, prices in the is therefore moderate. The Group operates a Nordic power market were on a downward
capital-intensive business and has, assuming trajectory for much of 2019. Major uncertainty EXTRACT OF ANNUAL REPORT 2019 a normal gearing level in relation to its assets, attaches to the future formation of electrical significant exposure to fluctuations in market power prices. Development of renewable power interest rates. Around 74 per cent of the Group’s production, both in the Nordic region and on the total non-current interest-bearing liabilities are continent, has led to increased supply of elec- financed using fixed interest rates. The Group is trical power during certain periods. The develop- additionally exposed to interest rate risk through ment of new non-flexible wind and solar power, the impact of interest rates on the power distri- which is highly dependent on weather condi- bution business’s income ceiling and the effect tions, could result in greater volatility in power of the tax-free allowance on the calculation of prices moving forward. Weather and precipitation resource rent tax for power generation. conditions in Norway will also impact produc- tion capacity and price formation as long as Credit risk exchange capacity is limited. Over the slightly Credit risk in connection with the sale of power longer term, exchange capacity with abroad is is linked to counterparty risk with the Nord Pool expected to increase. The phasing out of nuclear power exchange and is deemed to be limited. Credit and coal power in Europe is expected to result PAGE — 109 risk relating to power distribution is spread across in more non-flexible power production in Europe. multiple small counterparties, which means This suggests that flexible power production has there are good opportunities to limit any losses. the potential to generate increased value over AND FINANCIAL STATEMENT THE BOARD'S REPORT SKAGERAK ENERGI time. The significant power surplus in the Nordic tion of society and reduction of greenhouse gas region will play an important role in the electrifi- emissions. cation of society. There have been a number of structural changes The start of 2020 saw a strong fall in power in the sector over the last year. This trend is prices. This was due to hydrological factors (high expected to continue, and Skagerak Energi will precipitation and temperatures) in the Nordic actively endeavour to identify forward-looking region, a high share of non-flexible power produc- solutions that serve the interests of the Group tion both in the Nordic region and on the conti- and its customers. nent, and low commodity prices, primarily for The company has made the necessary gas. Power prices look likely to remain low for contingency arrangements to maintain responsi- the rest of the year. This will have a significant bility for critical infrastructure in the challenging impact on the Group’s earnings in 2020. conditions created by the coronavirus outbreak. In the next few years, operating conditions It is unclear how the current situation will play for many of the older hydropower plants will be out, and the uncertainty surrounding future
EXTRACT OF ANNUAL REPORT 2019 revised based on new and heightened environ- power prices and the general financial outlook mental requirements. It is important that the has increased. It was not possible to estimate Norwegian energy system maintains the flexibility the financial consequences of the outbreak at offered by hydropower, and that flood preven- the time of the preparation of the annual tion features prominently in the assessment financial statements. of framework revisions. Climate changes are expected to result in even wetter, warmer and wilder weather, making it important to have flex- ible hydropower plants with efficiently regulated reservoirs that can reduce flooding and prevent major damage. The power distribution business will continue to ramp up investments in the years to come. We will use targeted measures to improve the business’s efficiency moving forward. New business development initiatives will PAGE — 110 be intensified in future, and Skagerak Energi will endeavour to develop new profitable business opportunities that contribute to the electrifica- AND FINANCIAL STATEMENT THE BOARD'S REPORT Porsgrunn, 19 March 2020 The Board of Directors SKAGERAK ENERGI
Jon Vatnaland Rolf Erling Andersen Ida Helliesen Bjørn Nikolai Holsen Chair Deputy Chair Director Director
Kristin Steenfeldt-Foss Øystein Kåre Beyer Gunnar Møane Trond Erling Johansen Director Director Director Director
Kjersti Haugen Knut Barland Director CEO EXTRACT OF ANNUAL REPORT 2019 PAGE — 111 AND FINANCIAL STATEMENT THE BOARD'S REPORT The Board of Directors
SKAGERAK ENERGI JON ROLF ERLING BJØRN KRISTIN VATNALAND ANDERSEN HOLSEN STEENFELDT-FOSS CHAIR DEPUTY CHAIR DIRECTOR DIRECTOR
Jon Vatnaland, born 1975, chairs Rolf Erling Andersen, born Bjørn Holsen, born 1967, is a Kristin Steenfeldt-Foss, born the Board of Skagerak Energi and 1947, is Deputy Chair of the member of the Board of Skagerak 1964, is a member of the Board represents Statkraft. He is Exec- Board of Skagerak Energi and Energi and represents Statkraft. of Skagerak Energi and repre- utive Vice President for Corporate represents the municipality of He is Senior Vice President of sents Statkraft. She has exten- Staff at Statkraft. Prior to joining Skien. Andersen represents Business Development at Stat- sive experience from several Statkraft’s Group Management, the Norwegian Labour Party on kraft. Holsen has held several leadership roles at Statkraft, and he held the position of Managing Skien City Council. He was mayor different positions at Statkraft. now works as a Senior Adviser. Director and Country Coordinator of the city for a short period in He has also served as CFO of Kristin Steenfeldt-Foss has solid for Statkraft in the UK. He has a 1993, as well as from 1995 to Naturkraft and Country Manager industry experience, including PhD and a master’s degree from 1999 and from 2003 to 2011. In in the Philippines for SN Power. from several board positions in the University of Oslo. Vatnaland addition, he has been a member Bjørn Holsen holds an MSc in Norwegian power companies. has been Board Chair since of the Executive Board of the industrial economics from the She studied economics at the 2018. Norwegian Labour Party, head Norwegian University of Science University of Agder (UiA) and the of the Norwegian Labour Party’s and Technology (NTNU). Holsen Norwegian School of Economics Municipal Policy Committee and has been a board member since and Business Administration a deputy MP. Rolf Erling Andersen 2018. (NHH). Steenfeld-Foss was a is a qualified electrician, and he board member from 2006 to started his professional career 2009 and has now been a board as a high-voltage electrician at member since 2011. Skiensfjordens Kommunale Kraft- EXTRACT OF ANNUAL REPORT 2019 selskap (SKK), where he was also head of the Norwegian Electrician and Power Station Association (NEKF). Andersen has been Deputy Chair since 2004. PAGE — 112 AND FINANCIAL STATEMENT THE BOARD'S REPORT
ØYSTEIN KÅRE IDA GUNNAR KJERSTI TROND ERLING SKAGERAK ENERGI BEYER HELLIESEN MØANE HAUGEN JOHANSEN DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR
Øystein Kåre Beyer, born Ida Helliesen, born 1947, Gunnar Møane, born 1959, Kjersti Haugen, born 1966, Trond Erling Johansen, 1947, is a member of is a member of the Board is an employee repre- is an employee repre- born 1962, is an employee the Board of Skagerak of Skagerak Energi and sentative on the Board of sentative on the Board of representative on the Energi and represents the represents Statkraft. She Skagerak Energi. He has Skagerak Energi. She has Board of Skagerak Energi. municipality of Porsgrunn. has extensive experience extensive experience of many years’ experience of Trond Erling has extensive Beyer represents the from various management working at Skagerak Energi working at Skagerak Energi, experience as an engineer Norwegian Labour Party on positions at Norsk Hydro, and is Group Employee and her current position with Skagerak Nett, and Porsgrunn City Council. He as well as directorships in Representative. Møane is as Communications currently works as an was also the mayor of the other large companies. Ida has been a board member Adviser/Webmaster at the energy engineer at the city from 2003 to 2015. Helliesen holds an MSc since 2001. parent company. Haugen operations control centre. Øystein Beyer is a qualified from the Norwegian School has been a board member Johansen has been a board teacher and has worked of Economics and Business since 2008. member since 2018. in education, schools and Administration (NHH). healthcare. Beyer has been Helliesen has been a board a board member since member since 2008. 2016. EXTRACT OF ANNUAL REPORT 2019 PAGE — 113 AND FINANCIAL STATEMENT THE BOARD'S REPORT Corporate governance
SKAGERAK ENERGI Skagerak Energi AS has chosen, as far as possible, to follow the recommendations of the Norwegian Code of Practice for Corporate Governance published by the Norwegian Corporate Governance Board (NUES). Where there are deviations, these are explained in the text. See also the table on page 20 for a summary. The company has no listed instruments on any stock exchange and has therefore voluntarily introduced the NUES Code of Practice.
1 Corporate governance report
EXTRACT OF ANNUAL REPORT 2019 Skagerak Energi is governed by its owners through the requirements set out by the Annual General Meeting and the Board.
Ownership them. There is a mutual right of pre-emption for Ownership of Skagerak Energi is divided into the shares. three share classes, where class A shares give shareholders additional influence over issues Management system related to selecting locations. The class A The main elements of Skagerak’s overarching shares constitute 33.38 per cent of the shares management system are: and are owned by the three Grenland municipal- ities: Porsgrunn, Skien and Bamble. Statkraft • Articles of Association Industrial Holding owns the rest of the class B • Vision and Values and C shares. In addition, a shareholder agree- • Management and employee responsibility ment has been adopted which gives each share • Authorities class veto rights in certain other matters of stra- • Strategy, action plans and balanced tegic importance, including the appointment of scorecards PAGE — 114 the CEO. The shares in Skagerak Energi can only • Risk management be acquired by the state, Statkraft, municipal • Group principles and policies and county authorities or companies owned by • Work processes and procedures Ownership AND FINANCIAL STATEMENT THE BOARD'S REPORT SKAGERAK ENERGI EXTRACT OF ANNUAL REPORT 2019 PAGE — 115
3.34% 14.83% 15.21% 66.62% Bamble Porsgrunn Skien Statkraft AND FINANCIAL STATEMENT THE BOARD'S REPORT Ethical responsibility Strategy, action plans and balanced scorecards Skagerak’s business principles contain a The Board adopts corporate and business strat- description of its obligation to act in a sustain- egies. High investment needs make strategy able, ethical and socially responsible way, and and long-term planning an ongoing process that comply with all applicable legal requirements requires flexibility to optimally adapt to changing wherever Skagerak operates. The Group has conditions. Annual strategy discussions in indi- established a Code of Conduct that applies to vidual years can alternate between selected the entire Group, and which also includes expec- topics or a more comprehensive consideration of tations for the Group’s suppliers. Ethics and the Group’s strategic target profile and direction. integrity are created through corporate culture, To put the strategy into practice, action plans and the conduct of managers at all levels guides and balanced scorecards are used at Group, the direction of the company. Skagerak places company and department level. The score- particular emphasis on leadership training and cards contain key figures and indicators for the the importance of having managers lead by most important drivers for achieving set goals.
SKAGERAK ENERGI example and strengthen the positive culture and Employees’ goals are set during the annual values that the Group stands for. appraisal and development meeting.
Management and employee responsibility Group principles and policies Clear and defined roles and responsibilities, in Group principles and policies are applied across addition to having the right competence and qual- the Group and describe how Skagerak employees ifications, are important prerequisites for good should relate to a number of areas where profes- corporate governance and internal control. Good sional responsibility largely rests with the staff. leadership, an effective organisational structure, The principles are adopted by the CEO, while job descriptions and development plans are also Group policies are adopted by the responsible important elements in this context. Skagerak Executive Vice President. Group principles are has focused on extensive management training largely coordinated with Statkraft’s Group policies. and in recent years has concentrated on clarity in the leadership role. Managers are respon- Work processes sible for ensuring that activities within their area A good description of work processes is impor-
EXTRACT OF ANNUAL REPORT 2019 of responsibility are performed in accordance tant for ensuring the safety and quality of the with the management system and applicable work being carried out. Our work processes are laws and regulations. Managers are respon- built up using a graphical interface (LOSEN) sible both for their own business conduct and directed at employees, and in recent years, for their employees’ conduct and compliance. we have worked hard to gain a better overview All employees are responsible for familiarising of this field. An important point when working themselves with and performing their duties in on these processes is that the descriptions accordance with the requirements set out in should serve as a basis for further improve- Skagerak’s management system and applicable ments, both in terms of assessing reported laws and regulations. non-conformances and improvement work in groups. Competent process owners must be Authorities motivated to streamline and improve the main The Group has a mandate structure which regu- processes at Skagerak, as well as to ensure lates authority and describes the tasks and compliance with them. responsibilities that have been assigned to the Group’s Board of Directors, the CEO, and Control activities PAGE — 116 the boards of directors and management in Control activities in Skagerak’s management subsidiaries. system are set at three levels (first, second and third lines). Organisational AND FINANCIAL STATEMENT THE BOARD'S REPORT structure
Skagerak Energi AS
Knut Barland CEO SKAGERAK ENERGI
Finance Strategy and Business Development
Øystein Disch Olsrød Christopher Kjølner Executive Vice President Executive Vice President
Communications and Organisation
Public Relations EXTRACT OF ANNUAL REPORT 2019 Barbro Malmgren Kristian Norheim Executive Vice President Executive Vice President
Skagerak Skagerak Skagerak Skagerak Kraft AS Nett AS Varme AS Energipartner AS
Geir Kulås Øivind Askvik Svein Morten Rogn Christopher Kjølner Executive Vice Executive Vice CEO CEO President President PAGE — 117
AND FINANCIAL STATEMENT THE BOARD'S REPORT The first line includes staff and line company’s Annual General Meeting on 3 June managers (day-to-day management and control). 2020. Employees are responsible for implementing The Group’s dividend policy shall, among established internal control procedures through other things, reflect the need to maintain a their day-to-day tasks. The second line includes reasonable level of equity and liquidity in relation Skagerak’s managers who are responsible for to the scope of the business and its appurtenant designing, implementing and monitoring internal risk. In recent years, one third of the dividend control procedures within their areas of respon- basis has been distributed. The dividend basis sibility, such as revising and designing authority is defined as net profit for the year, adjusted for structures and governing documents, as well unrealised changes in value and gains/losses on as following up scorecards and action plans, sales. performing spot checks, etc. The third line is also responsible for ensuring that control activi- ties are established and followed up. 4 Equal treatment of
shareholders and transactions SKAGERAK ENERGI with related parties 2 Operations The company has three different classes of Skagerak Energi’s operations are concentrated shares, which are described in more detail on the production, sale and transmission of elec- under “Ownership” above. This is not in line tric power and other energy, as well as related with the NUES Code of Practice. The deviation is activities explained by the provisions of the shareholder The Group has approximately 630 agreement to give the individual owners addi- employees, an average power production of tional influence in certain matters. For all other approximately 5.7 TWh, around 199,000 grid matters, all shares have equal votes. All shares customers and sales revenues of approximately have the same right to dividends. NOK 3 billion. Skagerak does not sell power to Transactions with related parties are end users but is a co-owner of the power sales described in Note 28 to the financial statements. company Fjordkraft.
The company is organised as a group with EXTRACT OF ANNUAL REPORT 2019 core activities bundled in the three wholly owned 5 Shares and negotiability subsidiaries Skagerak Nett, Skagerak Kraft and Skagerak Varme. Skagerak Energi holds sizeable The negotiability of the shares is limited to the shareholdings in Air Liquide Skagerak, Fjordkraft Norwegian State, Statkraft, municipal and county and Laugstol. authorities or companies owned by these. This is The company’s strategy is adopted by the stated in the company’s Articles of Association. Board at Group level and applies to the entire This is a deviation from the NUES Code of Prac- Group and its subsidiaries. tice. There is a mutual right of pre-emption for the shares.
3 Equity and dividends 6 General meeting At the close of 2019, the Group had equity of NOK 8,265 million, which corresponds to an The company holds a general meeting in accord- equity ratio of 55 per cent. The Board of Directors ance with the Norwegian Limited Liability Compa- PAGE — 119 has proposed that a dividend of NOK 278 million nies Act. The company makes arrangements for be distributed in 2020. This is not deducted all shareholders to attend the general meeting. from equity until the final decision is made at the The general meeting considers the matters AND FINANCIAL STATEMENT THE BOARD'S REPORT described in legislation and the company’s causing us not to achieve our goals? Once a Articles of Association. year, we perform a full review of risk factors in the Group. The Board of Directors is presented with a report twice a year, where various risk 7 Nomination Committee factors are identified and discussed. We prepare an action plan to reduce the risk of something The company does not have a nomination going wrong or to increase the likelihood of committee. This is a deviation from the NUES achieving a benefit. Risk management should be Code of Practice. The shareholders’ agreement a natural consideration for all decision-makers stipulates that each shareholder group chooses and anyone striving to achieve a goal. For major its board members, which makes a nomination projects, we conduct a mandatory risk assess- committee unnecessary. Beyond this, there are ment before start-up. three employee representatives, elected by and among the employees. 11 Remuneration of the Board
SKAGERAK ENERGI of Directors
8 The Board of Directors, The members of the Board of Directors are remu- composition and independence nerated as approved by the general meeting. Board members receive no performance-related The Board consists of four members appointed remuneration. Statkraft’s employees do not by the majority owner (Statkraft), one repre- receive remuneration for their work on the Board. sentative from each of the two largest munic- For additional information, see Note 7 to the ipal owners and three employee-elected board financial statements. members. Of Statkraft’s four board members, at least one must be independent of the majority owner. This is a deviation from the NUES Code of 12 Remuneration of executive Practice. personnel
The CEO’s remuneration is determined by the
EXTRACT OF ANNUAL REPORT 2019 9 The work of the Board of Board, while executive personnel who report Directors to the CEO are remunerated as determined by the CEO. All remuneration is in accordance with The work of the Board is regulated by the Norwe- company policy. gian Limited Liability Companies Act, other rele- Information on remuneration of executive vant laws, the company’s Articles of Association personnel is stated in Note 7 to the financial and rules of procedure for the Board. statements. No separate compensation committee or audit committee have been established. The entire Board fills these tasks. 13 Information and communication
10 Risk management and Skagerak Energi has in recent years strengthened internal control efforts to understand all stakeholders’ require- ments, needs and expectations. In an ever more Skagerak Energi aims to actively assess risk in complex world, opportunities and expectations PAGE — 120 all parts of the value chain. Our risk manage- change rapidly, and the need for information and ment is based on the company’s business dialogue increases. Communication, dialogue goals. At all levels, we ask: What could go wrong, and cooperation with stakeholders will continue AND FINANCIAL STATEMENT THE BOARD'S REPORT to be highly prioritised. Information activities, 15 Auditor various events and meetings, informative web Deloitte AS is the company’s elected auditor. sites and external reporting will give stakeholders This is the same auditor as the company’s the best possible insight into our work. majority shareholder. The external auditor attends the Board meeting that adopts the final annual financial 14 Company takeovers statements, where the auditor meets the Board without management present. The shareholders’ agreement has provisions on The auditor’s remuneration is stated in pre-emption rights on the sale of shares in the Note 9. company. The same agreement also contains limitations on who can own shares in the company. SKAGERAK ENERGI
NORWEGIAN CODE OF PRACTICE FOR CORPORATE IN LINE WITH THE DEVIATIONS GOVERNANCE ISSUED BY THE NORWEGIAN CORPORATE NUES CODE OF EXPLAINED GOVERNANCE BOARD (NUES) PRACTICE IN THE TEXT
1. Report on corporate governance
2. Operational performance
3. Equity and dividends
4. Equal treatment of shareholders and transactions with related parties
5. Shares and negotiability EXTRACT OF ANNUAL REPORT 2019
6. General meeting
7. Nomination Committee
8. The Board of Directors, composition and independence
9. The work of the Board of Directors
10. Risk management and internal control
11. Remuneration of the Board of Directors
12. Remuneration paid to executive employees
13. Information and communication
14. Company takeovers
15. Auditor PAGE — 121 AND FINANCIAL STATEMENT THE BOARD'S REPORT Income statement
GROUP (All figures in NOK ’000) SKAGERAK ENERGI AS
2019 2018 2019 2018
Operating revenues 1,955,425 2,069,139 Power sales revenues 0 0 SKAGERAK ENERGI 1,206,226 1,176,400 Power distribution revenues 0 0 214,807 204,205 Other operating revenues 181,597 152,895 3,376,457 3,449,743 Gross operating revenues 181,597 152,895
197,831 275,802 Transmission costs 0 0 31,121 -35,139 Unrealised changes in the value of energy contracts 0 0 3,209,747 3,138,803 Net operating revenues 181,597 152,895
387,963 472,198 Employee benefits expenses 112,518 100,142 115,227 110,899 Property tax and licence fees 0 0 531,415 569,087 Other operating costs 110,459 114,092
2,175,141 1,986,619 EBITDA -41,381 -61,340
493,737 554,333 Depreciation, amortisation and impairments 43,932 14,483
1,681,404 1,432,286 Operating profit/loss (EBIT) -85,313 -75,823
46,945 93,632 Share of profit from subsidiaries and associates 381,410 389,663 EXTRACT OF ANNUAL REPORT 2019
Financial items 1,041,674 531,769 Financial income 1,275,636 668,510 167,525 169,583 Financial expenses 131,262 144,075 Unrealised changes in value of securities, interest and 271,636 -2,106 currency contracts 272,520 0 1,145,785 360,081 Net financial items 1,416,895 524,435
2,874,133 1,885,999 Profit before tax 1,712,993 838,276
722,487 816,186 Tax expense 65,506 57,560
2,151,647 1,069,812 Net profit for the year 1,647,486 780,716
Net profit for the year attributable to: 2,756 2,761 Non-controlling interests 2,148,891 1,067,051 Owners of the parent
Information about: Dividend paid 226,000 178,000 PAGE — 122 Total comprehensive AND FINANCIAL STATEMENT THE BOARD'S REPORT income
GROUP (All figures in NOK ’000) SKAGERAK ENERGI AS
2019 2018 2019 2018
2,151,647 1,069,812 Net profit for the year 1,647,486 780,716 SKAGERAK ENERGI OTHER COMPREHENSIVE INCOME Items that will not be reclassified to profit or loss in subsequent periods: 276,250 -82,017 Actuarial gains and losses on defined benefit pension plans 101,389 -36,298
-3,690 3,460 Items recognised in other comprehensive income in associates 0 0 -71,795 12,834 Tax relating to other comprehensive income -22,306 6,823 200,765 -65,723 Other comprehensive income after tax 79,084 -29,474
2,352,412 1,004,089 Total comprehensive income for the year 1,726,570 751,242
Total comprehensive income for the year attributable to: 2,796 2,751 Non-controlling interests 2,349,616 1,001,339 Owners of the parent EXTRACT OF ANNUAL REPORT 2019 PAGE — 123 AND FINANCIAL STATEMENT THE BOARD'S REPORT Balance sheet
GROUP (All figures in NOK ’000) SKAGERAK ENERGI AS
31 DEC 2019 31 DEC 2018 31 DEC 2019 31 DEC 2018
ASSETS SKAGERAK ENERGI Non-current assets 242,315 266,392 Intangible assets 4,940 24,591 11,478,992 10,718,598 Property, plant and equipment 351,648 178,643 89,377 241,159 Investments in subsidiaries and associates 4,926,609 4,920,064 1,841,200 540,608 Other non-current financial assets 6,901,372 5,779,577 13,651,885 11,766,756 Total non-current assets 12,184,570 10,902,874
Current assets 1,612 953 Inventories 0 0 485,497 462,354 Receivables 58,069 58,911 746,553 733,092 Receivable cash pool 0 0 47,321 68,498 Cash and cash equivalents 2,684 3,186 1,280,983 1,264,897 Total current assets 60,754 62,097
14,932,867 13,031,653 TOTAL ASSETS 12,245,324 10,964,971 EXTRACT OF ANNUAL REPORT 2019 PAGE — 124 AND FINANCIAL STATEMENT THE BOARD'S REPORT GROUP (All figures in NOK ’000) SKAGERAK ENERGI AS
31 DEC 2019 31 DEC 2018 31 DEC 2019 31 DEC 2018
EQUITY AND LIABILITIES
Equity 1,695,539 1,695,539 Share capital 1,695,539 1,695,539 399,211 399,211 Share premium fund 399,211 399,211 2,094,750 2,094,750 Paid-in equity 2,094,750 2,094,750
6,133,514 4,009,899 Other equity 5,851,487 4,350,917 6,133,514 4,009,899 Retained earnings 5,851,487 4,350,917
36,250 33,454 Non-controlling interests 0 0
8,264,514 6,138,102 Total equity 7,946,237 6,445,667
Liabilities SKAGERAK ENERGI 882,980 740,713 Provisions 63,823 70,140 2,990 12,322 Derivatives 0 0 3,123,524 3,536,310 Other non-current liabilities 2,897,656 3,350,000 4,009,493 4,289,345 Non-current liabilities 2,961,479 3,420,140
640,116 542,069 Interest-bearing liabilities 621,431 525,000 614,855 461,838 Current liabilities cash pool 586,226 454,392 636,425 755,366 Tax payable 68,162 51,641 10,281 31,186 Derivatives 0 0 757,182 813,747 Other non-interest-bearing liabilities 61,788 68,131 2,658,860 2,604,206 Current liabilities 1,337,607 1,099,164
6,668,353 6,893,551 Total liabilities 4,299,086 4,519,304
14,932,867 13,031,653 TOTAL EQUITY AND LIABILITIES 12,245,324 10,964,971 EXTRACT OF ANNUAL REPORT 2019
Porsgrunn, 19 March 2020 The Board of Directors
Jon Vatnaland Rolf Erling Andersen Ida Helliesen Bjørn Nikolai Holsen Chair Deputy Chair Director Director
Kristin Steenfeldt-Foss Øystein Kåre Beyer Gunnar Møane Trond Erling Johansen Director Director Director Director PAGE — 125
Kjersti Haugen Knut Barland Director CEO AND FINANCIAL STATEMENT THE BOARD'S REPORT Statement of cash flows
GROUP (All figures in NOK ’000) SKAGERAK ENERGI AS
2019 2018 2019 2018
Cash flow from operating activities 2,874,133 1,885,999 Profit before tax 1,712,993 838,276 SKAGERAK ENERGI -462,423 -537,901 Gains(-)/losses on sale of non-current assets -524,694 -560,826 493,737 554,333 Depreciation, amortisation and impairments 43,932 14,483 -862,583 37,244 Other items with no cash effect -874,910 0 -756,154 -474,746 Tax paid -51,641 -52,332
1,286,710 1,464,929 Net added from the year's activities 305,681 239,601
-82,553 101,422 Change in inventories and other current items -5,335 -5,139 36,610 49,098 Dividends from associates 2,448 49,098 -46,945 -93,632 Share of profit/loss from associates -2,448 -49,098 -92,538 -6,404 Change in other non-current items -112,452 293,187
1,101,284 1,515,414 Net cash flow from operating activities 187,893 527,649
Cash flow from investing activities Investments in property, plant and equipment: -350,541 -309,458 -relating to increase in capacity 0 0 -602,548 -658,763 -relating to reinvestments -26,709 -35,555 17,071 11,942 Sale of property, plant and equipment (sales proceeds) 282 2,439
EXTRACT OF ANNUAL REPORT 2019 1,472 1,006 New loans from other companies 0 25 -13,800 0 Payment of loans to other companies -13,800 0 497,477 593,679 Net proceeds/payments re investments in other companies 492,477 593,679
-450,870 -361,593 Net cash flow from investing activities 452,250 560,588
Cash flow from financing activities 139,557 -84,686 Change in cash pool 131,834 -10,597 -585,972 -908,362 Change in current/non-current liabilities -546,480 -900,000 -226,000 -178,000 Dividend paid -226,000 -178,000
-672,416 -1,171,048 Net cash flow from financing activities -640,645 -1,088,597
-22,002 -17,228 Net change in cash and cash equivalents -501 -359 68,498 85,726 Cash and cash equivalents 1 Jan 3,186 3,545 824 0 Cash added through mergers/acquisitions 0 0
47,321 68,498 Cash and cash equivalents 31 Dec 2,684 3,186 PAGE — 126 About the report
Office address Skagerak Energi AS’s Annual Report is intended Skagerak Energi AS Floodeløkka 1 to provide an as comprehensive and accurate a NO-3915 Porsgrunn, Norway picture as possible of the Group’s operations in Postal address 2019. The Report from the Board of Directors Skagerak Energi AS and annual financial statements form the core PO Box 80 NO-3901 Porsgrunn, Norway of the report, which reviews both financial and E-mail: [email protected] non-financial matters. Reporting on non-financial matters is restricted to companies wholly www.skagerakenergi.no owned by Skagerak Energi AS. In an addendum Telephone: +47 35 93 50 00 to the Annual Report, which can be viewed at Customer enquiries: +47 35 51 89 90 Fault reporting: +47 35 51 89 91 www.skagerakenergi.no, we have provided an Reporting officer: Kristian Norheim, EVP, overview of the Group’s reporting in accordance Communications and Public Relations with the Global Reporting Initiative (GRI), the Text: Stakeholder AS Layout: Mission AS internationally recognised reporting standard for Cover photo: Danielle MacInnes, Unsplash corporate social responsibility. Skagerak Energi’s Photo: Tom Riis (pages 2, 9, 12, 14, 21, Annual Report for the 2019 financial year has 23, 26–27, 33, 36, 41, 45, 51, 94, 96, 110–111), Dag Jenssen (pages 2, 3, 4, been prepared in accordance with GRI-G4. 15, 24, 28, 48, 55, 59, 73, 77, 85, 90, Reports from previous years can be viewed at 91, 99, 116), Vidar Nordli Mathisen, Unsplash (page 10), Kjell Løyland www.skagerakenergi.no (pages 14, 15, 53, 66, 83), Christopher Kjølner (page 14), Eli Aakre (page 15), Odds Ballklubb (page 15), Lorentzen & Stemoco (page 45), Ung entre- prenørskap (page 91), Egil Mongstad (page 93).