Norsk Hydro Asa · OSL:NHY
Norsk Hydro Asa — Pareto Conference (January 2013)
22 slides from Norsk Hydro Asa's conference presentation, Jan 17, 2013
Slide 1: Hydropower as an integrated part of the aluminium business
Hydropower as an integrated part of the aluminium business Arvid Moss, Executive Vice President and Head of Energy and Corporate Business Development January 17, 2013
Slide 2: Hydro's new platform
Hydro’s new platform 01 (2)
Slide 3: Hydro's path towards global leadership
Hydro’s path towards global leadership Curtailing 26% of Launching USD primary metal capacity 300 program Announcing SAPA JV Creating the world’s leading aluminium solutions provider 2009 2010 2011 2012 Acquiring bauxite and Starting up Qatalum alumina assets (3)
Slide 4: Attractively positioned, global reach
Attractively positioned, global reach Norway Continental Europe • Leading upstream, midstream and • 900 000 tpy hydro-powered aluminium production Rolled Products positions • Technology centre, R&D for next-generation smelter • Recycling network • Hydropower developments North America • Alouette alu
Slide 5: ~80% of capital employed upstream
~80% of capital employed upstream Capital employed1 Energy; 4 % Downstream; 17 % Metal Markets; 3 % Bauxite & Alumina; 41 % Primary Metal; 35 % 1) Q3 2012, graph excludes NOK 7.9 billion in negative capital employed in Other and eliminations (5)
Slide 6: Aluminium is an energy play
Aluminium is an energy play 38% Primary 14% 2000 USD/t 29% Alumina Carbon 760 USD/t 280 USD/t Bauxite 34% 220 USD/t 34% 6% 25% Energy Energy Energy Energy 55 USD 260 USD 680 USD 15 USD Total energy cost: 1010 USD ~50 % Illustrative figures Source: CRU, Hydro Analysis (6)
Slide 7: Hydro's energy map
Hydro’s energy map Energy consumption in alumina refineries, smelters and rolling mills Europe Power 15.2 TWh North America Natural gas 2.4 TWh Power 1.6 TWh Middle East Power 4.6 TWh South America Power 4.2 TWh Australia/Asia Power 2.0 TWh Coal 5.6 TWh Natural gas 0.1 TWh Fuel oil 7.4 TWh 2012 esti
Slide 8: Aluminium industry from an energy perspective
Aluminium industry from an energy perspective 02 (8)
Slide 9: Aluminium prices reflecting current macro uncertainty
Aluminium prices reflecting current macro uncertainty LME 3-month in USD per mt 3 600 2 400 3 200 2 200 2 800 2 400 2 000 2 000 1 600 1 800 January April July October January 2012 2013 1 200 2006 2007 2008 2009 2010 2011 2012 2013 Source: Reuters Ecowin (9)
Slide 10: Long-term outlook remains encouraging
Long-term outlook remains encouraging Aluminium production will require much more energy in the future Demand for semis World outside China China Million mt 120 ~75% 100 49 80 36 60 23 53 40 45 35 20 0 2010 2015 2020 Source: CRU (10)
Slide 11: New capacity mostly based on captive power sourcing
New capacity mostly based on captive power sourcing Greenfield and major Greenfield expansions brownfield expansions since 2000* 19 % Captive Total new expansions: Non-captive 5,87 mt 81 % 24 % 76 % Major brownfield expansions (additional production since 2000) Captive Non-captive Total new expansio
Slide 12: Greenfield projects are to a much larger extent based on captive power sourcing
Greenfield projects are to a much larger extent based on captive power sourcing compared to older capacity Total primary production World ex. China 2012 Greenfield primary expansions after year 2000 Power sourcing Power sourcing 19 % 33 % 67 % 81 % Captive Non-captive Captive Non-captive Gaining acc
Slide 13: Hydro and the future of the Nordic power market
Hydro and the future of the Nordic power market 03 (13)
Slide 14: Hydro's value chain in Norway
Hydro’s value chain in Norway From hydropower to primary metal to products the world is demanding Telemark 3,0 0,5 No reversion 2044- Karmøy 2049 Normal production Sogn 9.5 3,2 Høyanger 2051-2057 Export Røldal-Suldal 2,8 Sunndal 2023 Stakraft 6,4 TWh (2000-2020) Årdal (14)
Slide 15: Norway export much more energy in solid state
Norway export much more energy in solid state Export for consumtion vs. value-adding Norwegian net export of hydropower Norwegian export of hydropower through cables: ~3 TWh/year through aluminium: 15-20 TWh/year (15)
Slide 16: Energy and climate in a global perspective
Energy and climate in a global perspective Carbon footprint should become key location factor in the future In tonnes CO2-equivalents per tonne aluminium Kina Australia USA EU27 Canada Norge Island Source: Institut für angewendte Ökologie (Öko-institut e.V.), 12.5.2011 (16)
Slide 17: Nordics turn towards considerable surplus
Nordics turn towards considerable surplus 4 key developments Consequences Global middeltemperatur Climate change Considerable surplus in Warmer, wetter, wilder– the Nordic power market more hydropower, less consumption for heating New renewables Green certificates result in increased production Drop
Slide 18: Interconnectors are no one-way street…
Interconnectors are no one-way street… Power flows both ways in accordance with supply and demand Considerable focus on interconnectors... ...but power will flow both ways 70 €/MWh 60 Eksisterende kabler 50 Eksisterende sjøkabler Nye sjøkabler 40 30 20 10 0 Monday Tuesday Wednesday Thursday Friday S
Slide 19: Clear relation between export-import and price changes
Clear relation between export-import and price changes Price difference between Norway and Germany, and export from Norway and Sweden in % of capacity 30 70% 50% 20 30% 10 10% EUR/MWh 0 -10% -10 -30% -20 -50% -30 -70% 2025 2008 2012 2005 2000 2007 2011 2001 2009 2004 2002 2006 2010 2003 Export as sh
Slide 20: Growing consensus among key stakeholders
Growing consensus among key stakeholders ’Energy Dialogue’, Energy Panel’, ’Energy Government Report’ For more than 100 years, access to renewable energy has contributed towards value creation and represented a competitive advantage for for Norwegian industry and business The Committee is of the opi
Slide 21: Different industries, common cause
Different industries, common cause Nordic EII’s and the energy sector have a joint challenge – and opportunity (21)
Slide 22: www.hydro.com
www.hydro.com