Lithuania – the region’s energy competence centre Litgrid 2015 Activity Report for Shareholders and the Public 27 April 2016, Vilnius Table of Implementation of Litgrid strategic goals contents Reliability of the electricity system and network Development of the organisation and the region’s energy competence centre Financial results Upcoming tasks for strategy continuity Strategic interconnections • The first electricity link between Lithuania and Poland, between the Baltic countries and Western Europe • The link has been in operation since 9 December 2015 • 163 km electricity transmission line Alytus-Elkas • 500 MW HVDC converter station near Alytus • Total project cost – € 580 million: € 150 million in Lithuania and € 430 million in Poland • EU funds – € 200 million (in Poland) and € 31 million (in Lithuania) 4 LitPol Link implementation 2009 2010 2011 2012 2013 2014 2015 2016 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D OBTAINING OF PERMITS 400 kV line DESIGN CONSTRUCTION OPERATION Alytus – state border OBTAINING OF PERMITS TERRITORIAL PLANNING AND DESIGN 400 kV line CONSTRUCTION OPERATION Elk – state border DESIGN, MANUFACTURING, AND CONSTRUCTION OPERATION HVDC OBTAINING OF PERMITS Converter Station TERRITORIAL PLANNING AND OBTAINING OF PERMITS DESIGN Alytus 330 kV CONSTRUCTION OPERATION Switchyard Expansion OBTAINING OF PERMITS Elk Substation Reconstruction TERRITORIAL PLANNING, DESIGN, AND CONSTRUCTION OPERATION Reinforcement of corner pylons on the line Alytus – state border Contract work resources of the line Alytus – state border before and after 26 June 2015 Iki 15.06.26 5 Before 26 June 2015 4,5 Po 15.06.26After 26 June 2015 4 3,5 3 2,5 2 1,5 1 0,5 0 PoliųFor įrengimui pylon ForGalvenų header KampuočiųFor corner Laidų tempimuiFor wire installation installationįrengimui suvirinimuireinforcement pulling 50% 40% 30% 20% 10% 0% Iki 15.04.01 Po 15.06.26 LaidųWire tempimas pulling PamatųInstallation montavimas for foundation NordBalt Implementation 2009 2010 2011 2012 2013 2014 2015 2016 J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D SEABOTTOM INVESTIGATION OBTAINING OF PERMITS – LT HVDC Cable OBTAINING OF PERMITS – SE DESIGN AND MANUFACTURING OPERATION PREPARATION LAYING LAYING WORKS OBTAINING OF PERMITS – LT HVDC OBTAINING OF PERMITS – SE Converters DESIGN, MANUFACTURING, AND INSTALLATION OPERATION Klaipėda TECHNICAL DESIGN OPERATION Transformer TECHNICAL DESIGN CONSTRUCTION Substation Reconstruction 330 kV OL TERRITORIAL PLANNING, DESIGN, AND OBTAINING OF PERMITS CONSTRUCTION OPERATION Klaipėda – Telšiai Nybro Substation DESIGN AND CONSTRUCTION OPERATION Reconstruction Horizontal drilling under the Curonian Spit 1 640 m under the the Curonian Lagoon and 800 m under sand dunes Cable pulling under the Curonian Lagoon 64 tons, 2 days from the delivery of the cable to the port to pulling under the Curonian Lagoon Crossing with the Nord Stream gas pipeline Concrete mattresses under and on the cable at a depth of 60 m Filling of the sea cable with rubble 58,860 tons of rubble delivered by 4 ships The symbolic links connection ceremony in the Grand Dukes Palace of Lithuania on 14 December 2015 A subsidiary of Litgrid has fully taken over the operation of the connections Electricity transmission never stops HVDC connections Electricity generators 24/7 electricity disconnected 138 times in disconnected 67 times in transmission to consumers 2013 Lithuania in 2014 is ensured by the Litgrid System Control Centre NordBalt – technologically complex and second-longest connection 35% Connection unavailability per Vyborg Link (RU-FI) 1981 1 9% year, % SwePol (SE-PL) 2000 254 35% HVDCLength jungčių of HVDC ilgis, connections, km km Storebaelt (DK-DK) 2010 57 8% Skageraak 4 (NO-DK) 2014 226 Skageraak 3 (NO-DK) 1993 213 17% Skageraak 2 (NO-DK) 1977 211 16% Skageraak 1 (NO-DK) 1976 212 16% NordNed (NO-NL) 2008 580 5% NordBalt (LT-SE) 2016 450 Konti-Skan 2 (SE-DK) 1988 150 23% Konti-Skan 1 (SE-DK) 2008 150 29% Kontek (DK-DE) 1986 160 4% Fenno-Skan 2 (FI-SE) 2011 299 7% Fenno-Skan 1 (FI-SE) 1989 233 13% Estlink 2 (FI-EE) 2014 171 15% Estlink 1 (FI-EE) 2006 105 13% Connection Baltic Cable (SE-DE) 1994 262 32% unavailability per year, % 0 100 200 300 400 500 600 700 Reliable and effective network In 2015, demand for electricity increased 1.4% • In 2015, 10.86 TWh of electricity was consumed in Lithuania • Electricity consumption by industrial companies increased more by than 3%, while the needs of the service sector grew 1.8% • Consumption by the population remained stable • Almost 16% of the consumed electricity was produced from renewable energy sources. Pramonė 6,5 TWh Industry TransportasTransport 6,0 ŽemėsAgriculture ūkis 5,5 Population GyventojaiServices and other consumers 5,0 Paslaugos ir kiti vartotojai 4,5 4,0 3,5 3,0 2,5 2,0 1,5 1,0 0,5 0,0 19901991199219931994199519961997199819992000200120022003200420052006200720082009201020112012201320142015 Best reliability indicators 2015 END = 4.5 MWh, AIT =0.23 min. 1,08 36,50 0,49 0,35 0,35 0,34 0,23 0,31 0,25 0,23 0,15 0,06 12,07 11,63 7,53 7,36 Operatoriaus atsakomybė 4,75 6,70 5,36 4,54 The operator’s responsibility 1,79 2,24 ENDTotal bendras, END, MWh MWh AITTotal bendras, AIT, min min 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 • The majority of disconnections is caused by natural conditions and other external causes • A quarter of incidents is caused by the careless behaviour of people in overhead line protection areas Facilities are reconstructed to maintain the reliability of the network 60 50 Nusidėvėjimo normatyvas, 40 Depreciation35 metai rate, 35 years 30 20 10 0 59 TP ≤ 35 y 80 TP ≥ 35 y 95 reconstructed 139 non-reconstructed substations substations Substation operation time, years • In 2015, 15 transformer substations were reconstructed • Substations, lines, and other facilities age and naturally wear, so investments in the network facilities are continued with rather high intensity Concern for smaller ones • In 2015, a total of 6,000 special wire markers, stork protection devices, additional insulators were installed and 121 nesting-boxes for kestrels were mounted • Works amounting to EUR 164,155 were performed • A monitoring plan was drawn up in order to assess the impact of the newly constructed and operating lines – LitPol Link and Klaipėda- Telšiai The sense of community and social responsibility - The website www.elektrosistorija.lt, which is designed to provide, in simple terms, general knowledge on the members, a brief history and present time of the electricity system, currently operating power stations and assurance of electricity demand as well as key development aspects - For four consecutive years, Litgrid employees plant forest trees on the occasion of the professional holiday of Power Engineer's Day - During 2015, the company received 25 groups of visitors who were interested in the electricity system and the strategic interconnection projects and learned about the specifics of the work of energy professionals - Attention to the activities of Litgrid from officials of various countries and experts and high-rank executives of international organisations brings Lithuania into an international focus www.elektrosistorija.lt Traditional forest planting 25 tour groups Litgrid – the company with Lithuanian and Swedish the strongest sense of Nasdaq award for the most heads of states community prominent progress Enhancement of the design and contract work quality and occupational safety To enhance the safety of the work of contractor and customer specialists To improve the quality of projects being implemented To manage risks more efficiently To raise the quality standard for contract work The expected result – better quality High-quality and reliable expert examination of projects The procurement of works is based on the Updated standard design principle of economic and work contracts efficiency The enhancement of Contract termination technical supervision and option occupational safety quality Financial results • Litgrid will pay EUR 0.0091 per share in dividends • Lower costs due to more efficient operating costs and ITT management • The asset value reduction after the asset evaluation performed in 2014 led to lower depreciation costs • The subsidiary Tetas operated profitably and paid dividends in 2015 Key financial indicators 19% reduction in transmission tariff rate Without regard to the result of asset depreciation 89% – for the implementation of strategic projects 250 208 2013 200 2014 159 2015 150 106 101 100 86 60 47 50 34 20 20 21 27 0 Pajamos, mln. eurų Veiklos sąnaudos, mln. eurų EBITDA, mln. eurų Investicijos, mln. eurų The reduced transmission tariff rate resulted in lower 80 income 0,8 70 0,7 60 0,6 50 0,5 40 0,4 30 0,3 20 0,2 10 0,1 0 0 2011 2012 2013 2014 2015 2016 Investicijos,Investments, mln.EUR millioneurų PerdavimoPrice cap, kainos cent/kWh viršutinė riba, ct/kWh Salaries and social Darbo užmokestis ir ElektrosElectricity perdavimo sale income SODRAinsurance 2% 9% pajamos TurtoAsset remontasrepair and ir priežiūramaintenance 5% BalansavimoBalancing energy energijos income 17% pajamos ITT paslaugos 31% ITT services 3% 9% SisteminiųSystem service paslaugų income MokesčiaiTaxes 4% pajamos 2% 50% ITT income PatalpųRent of premises;nuoma, ITC pajamos