Svenska Kraftnät Annual report - svk.se · Svenska Kraftnät plans, builds, operates and maintains...

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• Somewhat higher transmission: 118 (117) TWh • Turnover of the business: SEK 6,326 (6,838) million • Excellent financial results: SEK 732 (676) million • Major investment programme to come • Environmental issues more in focus Annual report 2007 Svenska Kraftnät

Transcript of Svenska Kraftnät Annual report - svk.se · Svenska Kraftnät plans, builds, operates and maintains...

Page 1: Svenska Kraftnät Annual report - svk.se · Svenska Kraftnät plans, builds, operates and maintains the national grid for electricity. Parent-friendly company! In 2007 Svenska Kraftnät

•Somewhathighertransmission:118(117)TWh

•Turnoverofthebusiness:SEK6,326(6,838)million

•Excellentfinancialresults:SEK732(676)million

•Majorinvestmentprogrammetocome

•Environmentalissuesmoreinfocus

Annual report2007

Svenska Kraftnät

HVDC

HVDC

HVDC

StenungsundKungälvGöteborg

Varberg

Falkenberg

Gnosjö

Halmstad

Ängelholm

Helsingborg

LundMalmö

Trelleborg

(220 k

V)

(220

kV)

Lübeck

Flensburg

Ringhals

Helsing-borg

Cøpen-hagen

Gothen-burg

MalmöKarlshamn

Norrköping

Oskars-hamn

HasleStavanger

BergenRjukan

Oslo

Stockholm

Enköping

Nea

Trondheim

Tunnsjødal

Umeå

Sundsvall

Røssåga Rana

MelfjordSvartisen

Salten

Ofoten

Kobbelv

Narvik

Loviisa

Olkiluoto

Tallin

HVDC

Kristiansand

Rauma

Forsmark

0 100 200 km

N

Luleå

The power transmission networkin the Nordic Countries 2008

Hydro power plant

Thermal power plant (CHP)

Transformer or switching station

400 kV line

300 kV line

Joint operation link forvoltages below 220 kV

220 kV line

Extend 2008 CableOverhead line

275 kV AC –75 km

220 kV AC 4295 km

130 kV AC 7 km

The Swedish grid, comprises mainly 220 and400 kV lines, switchyards and transformerstations and foreign links for alternating (AC)and direct current (DC).

400 kV AC 4 km10643 km

Planned/under construction

Sweden

Norway

Finland

Denmark

Rovaniemi

HelsingforsÅbo

Vasa

Tammerfors

Kemi

Uleåborg

HVDC (High Voltage DC) 459 km115 km

Viborg

Slupsk

Tekn

ikre

dakt

örer

na A

B 2

008

HVDC

HVDC

HVDC

Rostock

The Swedish Natural GasNetwork(high pressure)

Eemshaven

Box 526, SE-162 15 Vällingby. Tel Swbrd: +46 8 739 78 00. Fax: +46 8 37 84 05 Visitors: Jämtlandsgatan 99. Corp. ID. no: 202 100-4284. Website: www.svk.se

Svenska K

raftnät Annualreport2

007

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Financial development

Operating income (MSEK)1 000

900

800

700

600

500

400

300

200

100

0

408

620

912

736

2003 2004 2005 2006 2007

Operating and net profit margin (%)

Operating margin Net profit margin with a deduction for tax

2003 2004 2005 2006 2007

18,0

16,0

14,0

12,0

10,0

8,0

6,0

4,0

2,0

0,0

Net income for the year (MSEK)1 000

900

800

700

600

500

400

300

200

100

0

291

538

880

676

2003 2004 2005 2006 2007

732

Operating revenue (MSEK)8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0

5 335

5 885

6 838

2003 2004 2005 2006 2007

6 326

5 633

Operating revenue per business segment 2007

Adjusted equity (MSEK) and return on adjusted equity (%)

Adjusted Equity Return on AE

6 500 12,0

10,0

8,0

6,0

4,0

2,0

0,0

6 000 5 9116 068

6 264 6 149

5 500

5 000

4 500

4 000

3 500

3 0002003 2004 2005 2006 2007

5 946Contingency planning

4%

Network 54%

System responsibility

– electricity40%

System responsibility – natural gas

1%Telecommunications

1%Electricity certificates

0,1%

864

2007inbrief

2007 2006

Operationsduringtheyear

Energy supplied TWh 120,5 119,8

Reliabilityperformance

Number of operational disturbances

in the national grid 150 181

Number of operational disturbances

with breakdowns 5 15

Non-supplied energy MWh 13 95

Financialfacts

The Group’s operating revenue MSEK 6 326 6 838

Consolidated income MSEK 732 676

Return on adjusted equity* % 8,9 7,9

Debt/equity ratio times 0,33 0,38

Investments MSEK 596 478

* after tax equivalence, 28 %

Financial overview 2007

Picturesonthefrontpage

Motorways for electricity! Svenska Kraftnät plans, builds, operates and maintains the national grid for electricity.

Parent-friendly company! In 2007 Svenska Kraftnät was acclaimed as the country’s most parent-friendly of the companies which employ a lot of engineers.

Serving society – around the clock! The Network Control Centre is manned day and night. From here Svenska Kraftnät monitors the national grid for electricity and ensures that there is a balance between generation and demand in the electricity system, and that there is a balance in the natural gas system.

We take responsibility for the environment! Through conscious maintenance of the powerline corridors we are promoting biological diversity. The Northern Brown Argus is a butterfly species that is present in our powerline corridors, but is red-listed in several European countries.

SvenskaKraftnät,HeadOfficeBox 526 162 15 Vällingby Visitors: Jämtlandsgatan 99 Tel: +46 8 739 78 00 Fax: +46 8 37 84 05 Website: www.svk.se e-mail: [email protected]

SvenskaKraftnät,HalmstadBox 819 301 18 Halmstad Visitors: Kristian IV:s väg 3 Tel: +46 35 18 22 40, +46 35 18 22 30 Fax: +46 35 18 22 41, +46 35 18 22 39

SvenskaKraftnät,SollefteåNipan 51 881 52 Sollefteå Tel: +46 620 78 76 10 Fax: +46 620 121 46

SvenskaKraftnät,SundsvallBox 138 851 03 Sundsvall Visitors: Erstagatan 2 Tel: +46 60 19 57 00 Fax: +46 60 19 57 09

SvenskaKraftnät,VästeråsMelker Kontorshotell721 83 VästeråsVisitors: Kopparbergsvägen 6Tel: +46 21 32 89 87 Fax: +46 21 32 89 88

SvenskaKraftnät,ÅsbroTrainingCentre690 45 Åsbro Tel: +46 582 838 00 Fax: +46 582 512 10

ElforskAB101 53 Stockholm Tel: +46 8 677 25 30 Fax: +46 8 677 25 35 Website: www.elforsk.se

KraftdragarnaABSeglargatan 15 721 32 Västerås Tel: +46 21 17 04 80 Fax: +46 21 17 04 85 Website: www.kraftdragarna.se

NordPoolASAP.b. 373 NO-1326 Lysaker, NorwayTel: +47 67 52 80 00 Fax: +47 67 52 80 01 Website: www.nordpool.com

NordPoolSpotASP.b. 373 NO-1326 Lysaker, NorwayTel: +47 67 52 80 10 Fax: +47 67 52 80 01

STRIABBox 707 771 80 Ludvika Tel: +46 240 795 00 Fax: +46 240 150 29 Website: www.stri.se

SvenskaKraftnätGasturbinerABBox 526 162 15 Vällingby Visitors: Jämtlandsgatan 99 Tel: +46 8 739 78 00 Fax: +46 8 37 84 05

SwePolLinkABBox 526 162 15 Vällingby Visitors: Jämtlandsgatan 99 Tel: +46 8 739 78 46 Fax: +46 8 37 50 39 Website: www.swepollink.se

TriangelbolagetD4ABBox 26237 21 Bjärred Tel: +46 705 29 28 11 Fax: +46 46 29 28 11 Website: www.triangelbolaget.se

Addresses

Editor: Johnny NorlingDesign & production of printed matter: Wikströms Tryckeri, UppsalaPhoto: Håkan Flank (pages 1, 3, 7, 8, 12, 13, 17, 18, 21, 22, 23, 25, 26, 27, 29, 30, 31, 32, 34, 36, 37, 39, 43, 63, 65, 66, 68, 69, 70, 73, 74, 76, 77). Johnny Norling (pages 5, 33, 34, 70, 78, 83). Jan Bergsten (butterfly, pages 1, 79). Eva Grusell (pages 71, 81). Krister Engström (page 75). Jonas Nilsson (page 46). Fortum (page 28).

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Contents

Important operational events during the past year .......... 4

A word from the chairman ............................................. 7

Director General’s statement ........................................ 8

This is Svenska kraftnät ............................................. 10

Svenska Kraftnät’s values .......................................... 11

The Svenska Kraftnät Group ....................................... 12

Svenska Kraftnät’s stakeholders ................................. 14

Report of the Board of Directors 2007 ......................... 15

Business segments .................................................... 20

Associated companies ................................................ 29

Research and development ......................................... 30

Nordic and European cooperation ................................ 31

Environment .............................................................. 33

Employees ................................................................. 35

Incentive programme 2007 ......................................... 38

Governance for the Group ........................................... 38

The Board of Directors and its work ............................. 39

Svenska Kraftnät’s internal controls ............................ 39

Financial reports ........................................................ 40

Income statements – the Group ................................................40

Balance sheet – the Group .......................................................42

Cash flow statements – the Group ............................................44

Change in equity – the Group ....................................................45

Income statements – Parent Entity ............................................47

Balance sheets – Parent Entity .................................................48

Cash flow statements – Parent Entity ........................................50

Change in equity – Parent Entity ................................................50

Seven year review for the Group ................................................51

Additional information and notes ................................. 52

Proposed disposition of earnings ................................. 62

Auditor’s report .......................................................... 62

The Board of Directors ............................................... 63

Wind power – a challenge for Svenska Kraftnät............. 64

The Nordic national grid is being expanded .................. 66

Twenty four hours in our control room .......................... 68

We are making ourselves more attractive ..................... 72

New features in the natural gas sector ......................... 74

Environment and sustainability .................................... 76

Power industry terms.................................................. 82

Definitions ................................................................. 82

Addresses ................................................................. 83

Serving society – around the clock! The Network Control Centre is manned day and night. From here Svenska Kraftnät monitors the national grid for electricity

and ensures that there is a balance between generation and demand in the electricity system, and that there is a balance in the natural gas system.

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Important operational events during the past year

January• Theoperationalsituationduringthe

ChristmasandNewYearholidayswascalmafterastrainedperiodintheweekbeforeChristmaswhenthreenuclearserviceblocksaswellasFenno-Skan,thesubmarinecabletoFinland,wereoutofservice.Thisresultedinaheavystrainonthenationalgridanditwasnecessarytoengageinextensivecountertrading.

• AfterNewYearalmostallnuclearpowerblockswerebackinproductionagain.Fenno-SkanwasstillnotoperationalandKontek,thesubmarinecablebetweenZea-landandGermany,wasoutofservicefromNewYear’sEveandforacoupleofmonthsafterwardsasitwasdamagedbyananchor.

• OlaAlterå,UndersecretaryofStateattheMinistryofIndustry,EmploymentandCommunications,visitedSvenskaKraftnäton9Januarytogainaninsightintoouroperationsandcurrentissues,includingtheSouthernLink,thepeakpowersitua-tion,theStockholmsStrömproject,envi-ronmentalissuesandtheNordicelectricitymarket.

• OnSunday1�JanuaryaseverestormhitSouthernandCentralSweden.Some275,000householdswerewithoutpowerintheeveningandmanyofthemweredisconnectedforaweek.Inaddition60–70,000householdshadnotelephoneconnectionandalmostalltrainservicesinWestSwedenwerecancelled.Thena-tionalgridwasnotaffectedbythestorm.However,afterthestormSvenskaKraftnätwasabletoplaceitsmaintenancestaffandequipmentatthedisposalofeffortstorestoretheregionalandlocalnetworks.

February• DuringthefirstweeksofFebruarythere

wasamaximumshortfallof2,700MWofnuclearpower,asseveralblocksinRing-halsandForsmarkwereoutofoperation.Atthesametimetherewascoldweatherandahighlevelofconsumption.This

resultedinhighelectricitypricesonthespotmarket,peakingat1,�00SEK/MWh.However,afterrepairworkitwaspossibletoconnectFenno-Skaninthemiddleofthefollowingmonth.

• OnWednesday21Februarybetween18.00and19.00lastyear’shighestcon-sumptionof26,�00MWwasequalledinSweden.Itwaspossibletomanagetheoperationalsituationbyactivatinggenera-tion,whichincludedthepowerreservethathadbeenprocured,inordertodealwiththenetworklimitationsbymeansofcountertrading.Amongotherthings,thisresultedinveryhighoperatingexpensesduringthemonth.

• SvenskaKraftnät’sBoardhelditsfirstmeetingoftheyearon22February.Amongotherthings,anumberofinvest-mentsinpowerlinesandstationswereauthorized.BeforethemeetingaseminarwasheldfortheBoardontheresultsoftheinvestigationregardingatechnicalsolutionfortheSouthernLink.

March• SvenskaKraftnät’sannualcustomerand

stakeholderdaywasheldon22March,providinganaccountofthepastyear.Thisyeartherewerealsopresentationsofthemajorexpansiontothenationalgridandhowwearedealingwiththegreenhousegassulphurhexafluoride(SF

6)whichis

usedinourcircuitbreakersandotherequipment.InadditionSvenskaKraftnät’senvironmentalprizewasawardedforthefirsttime.TheprizewassharedbetweenABBforthedevelopmentoftheCom-binedcircuit-breaker,andthebutterflyexpertIngemarFrycklundforhisworkwithendangeredspeciesinsitesincludingSvenskaKraftnät’spowerlinecorridors.

• Astheperiodofhisappointmentcametoanend,JanMagnussonleftSvenskaKraft-näton�1MarchafternineyearsasDirec-torGeneral.MrMagnussonhadbeenwith

SvenskaKraftnätfromthestart,initiallyin1991astheGovernment’sinvestigatorinadvanceofsettingupSvenskaKraftnät,thenasDeputyDirectorGeneralandDirectorGeneral.WhilewaitingfortheappointmentofanewDirectorGeneral,StureLarssonhasactedasinterimDirectorGeneral.

April• Afeasibilitystudyonaconnectionbe-

tweenLithuaniaandSwedenwasinitiatedinconjunctionwithLithuania’snationalgridcompany,LietuvosEnergija.SvenskaKraftnäthasalsobeencontactedregardingproposalsfornewcableconnectionswithLatvia,EstoniaandRussia.

• TheSwedishAssociationofGraduateEngineers(previously“Civilingenjörsför-bundet”)acclaimedSvenskaKraftnätas”Sweden’smostparent-friendlycompany”forengineers.

May• Inspring2006SvenskaKraftnätsubmit-

tedareporttotheGovernmentwiththeproposalthatactorsintheelectricitymar-ketshouldtakeoverresponsibilityforthepeakpowerreservefromSvenskaKraftnätwhenthecurrentActceasestoapplyin2008.InMaytheCompetitionAuthoritydisapprovedtheformationofsuchajointbodyfortheindustry.Insteaditwasre-commendedthatSvenskaKraftnätbegivencontinuedresponsibilityforprocurementuntilamarketsolutioncanbeputinplace.TheEnergyMarketInspectorate,whichpreviouslysupportedSvenskaKraftnät’sproposal,hasnowmadeastatementtotheGovernmentsuggestingthattheTempo-raryPowerReserveActshouldbeextendedbythreeyears.

• AtthemeetingofSvenskaKraftnät’sBoardon21MaydecisionsweretakenoninvestmentsinSödraSandbyandBorgvik.However,nodecisionwastakenonthe

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SouthernLink.TheBoardobservedthatithassufficientdatatomakeadecision,butthattheconsequencesofthedecisionarefar-reachingandthatthemattershouldconsequentlybedealtwithbyanewDirectorGeneral.

• On22May,theannualinformationdaywasheldforbalanceproviders.Amongotherthings,forthcomingchangesintheproposalforbalanceagreementsforelectricityfor2008(i.e.from1Novem-ber2007andoneyearforward)werepresented.

• TheissueofdealingwithcongestionisthesubjectofextensivediscussionsintheNordiccollaboration.TheSwedishstudyonpriceareasintheelectricitymarket,theso-calledPompeStudy,wassubmittedtotheNordicCouncilofMinistersonthelastdayofMay.ThestudywascarriedoutincollaborationbetweenSvenskaKraftnät,theElectricityMarketsInspectorate,Swe-denergyandtheConfederationofSwedishEnterprise.Theconclusionisthattheaimshouldbetohavethesmallestpossiblenumberofpriceareasthatareaslarge

aspossible.ThestudyproposesthattheNordicCouncilofMinisters,NordelorNordREGtakestheinitiativetotryoutacross-borderpriceareabetweentheNordichydro-andthermalpowerareasinordertoachievemoremarketintegration,effectiveutilizationofresources,healthycompeti-tionandamoreefficientlyfunctioningelectricitymarket.

June• SvenskaKraftnätreportsonthetaskof

clarifyingthepreconditionsforandtheconsequencesofintroducingpriorityac-cessforwindpowertothenationalgrid,andalsoofanalysingpossiblewaysofintegratingalarge-scaleexpansionofwindpowerintothebalanceregulationandshowinghowadditionalrequirementsforregulationresourcesaretobedealtwith.SvenskaKraftnät’sreport”Large-scaleexpansionofwindpower–someprecon-ditionsandconsequences”observesthatitistheissuesconcerningconnectiontothenetworkthatareimportantinrelationtoalarge-scaleexpansionofwindpower.The

reportsetsoutchangestothecustomarypracticeforpermissiontoconnectplantsforelectricitygenerationtothenationalgrid,inordertofacilitatetheexpansionofwindpower.Theexpansionofwindpowerwillplaceincreaseddemandsonthecapac-itytoregulatethebalancebetweensupplyandconsumptionofelectricity.Providedthatcurrentaccesstoregulatoryresourcesarenotreduced,SvenskaKraftnätconsid-ersthatanexpansionofapprox.10TWhcanbehandled.ContinuedexpansioninNorthernEuropeasawholewillhoweverplacefurtherdemandsontheregulatorycapacity.

• Procurementdecisionswereannouncedtothoseplantownerswhotookpartinthisyear´sbiddingforthepeakpowerreserve.Thepeakpowerreserveconsistsofatotalofjustunder2,000MW,�00MWofwhichcomprisesreductioninconsump-tion.Tenderswereevaluatedonthebasisofpriceandendurance.Itisinterestingtonotethatthepriceofthereservehasfalleneveryyear.ThetotalfixedannualcostisnowaroundSEK118million.

On 21 September the first spade entered the ground in the Uppsala ström project, which will provide Uppsala with a more secure electricity supply and more

opportunities to expand. The project is a collaboration between Svenska Kraftnät, Vattenfall Eldistribution and Uppsala municipality. The electricity network is being

expanded and will have more supply points, which will increase security of supply.

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• Theperiod16June–10Augustwascharacterisedbyextensiveworkinvolvinginterruptions,inturn,toallpowerlinestotheHorredstationinconnectionwiththeinstallationofanew,morereliableswitch-yard.ThisledtoreducedtradingcapacitytemporarilywithEastDenmark,GermanyandPolandforexportandimport.Theworkwasprecededbycarefulanalysesinordertoavoidthemarketbeingunneces-sarilyaffected.

• On20JuneSvenskaKraftnät’sdemon-strationareaforbiologicaldiversitywasopenedinpowerlinecorridorsnorth-eastofUppsala.Duringtheinaugurationpartici-pantswereabletoviewalargenumberofthespeciestypicaltomeadowandpasture-landthataretobefoundinthearea.

• On5JuneSvenskaKraftnättookthedecisiontopostponetheworkofconvert-ingtheswitchyardinStrömma,asthecontractors’staffwereexperiencingavarietyofhealthproblems.Atotalofsome15personsareworkingontheconversion.Duringthestoppageanalysesofcondi-tionsatthesitewerecarriedout,includingdrinking-water,groundradon,electricalandmagneticfields,low-frequencysoundandinfrasound.Occupationalmedicinesurveysandmedicalexaminationshavealsobeencarriedout.However,noexpla-nationforthehealthproblemshasthussofarbeendiscovered.Inconsultationwiththecontractorsonsite,SvenskaKraftnätconsequentlydecidedtoresumeworkinearlyAugust.Anumberofprecautionarymeasuresweretakentoreducetheriskoftheproblemsreoccuring.ForSvenskaKraftnät,whichorderedtheworksinStrömma,theproblemsareuniqueandhaveneveroccurredwithsimilarworkinotherswitchyards.

August• On�0AugustSvenskaKraftnät’sBoard

decidedthatthenationalgridtarifffor2008shouldbeunchangedincomparisonwith2007.OtherdecisionsincludedanewstationoutsideGävleandinterimdecisionswithintheStockholmsStrömproject.

September• Closeto200peoplefromtheelectricity

industrypractisedcrisiscommunications

inconnectionwithamockstormon18–19SeptemberinLjungbyandVäxjöinanexercisecalledSamvete07.ItwasajointeventbetweenSvenskaKraftnätandSwedenergyanditsmembercompanies.Regularexercisesofthistypeareimpor-tant.Theelectricityindustrymustbepreparedatalltimesincasetheseunlikelyeventsdoneverthelessoccur.

October• Thesystemmonitoringagreementthat

wasineffectbetweenSvenskaKraftnätandE.ONGasSverigeABceasedtoapplyin�0September2007.AfteraprocurementprocedureanewagreementwasconcludedwithSwedegasAB.Theagreementappliesfrom1October2007to�0September2009.TheagreementmeansthatSwedegasABwillsupportSvenskaKraftnätbymonitoringpressureandflowsinmeasuringandregulatingstations,certaincalculations,andalsobyprovidingadvice.

• On1–�OctoberSvenskaKraftnätarrangedseminarsfortheelectricityindustryintheÅsbrotrainingcentreunderthename”Kraftsamling2007”.Theseminarsconcernedwhatthenetworkcompaniesaredoingtomanagethe2�-hourrequirement,andwhichroleandresponsibilitySvenskaKraftnäthasastheauthorityforelectricitycontingencyplanning.Therewasalsoapresentationofwhatassistanceandresourcesareavailablenationallyandinternationallyintheeventofseveredisruptionstoelectricitysupply.

November• On8–9November2007therewasasevere

disturbancetotheDanishandSwedishnaturalgassystem.ProductionofnaturalgasontheDanishplatformsintheNorthSeawascompletelyorpartiallyshutdownforaperiodofapproximately2�hours,whichmeantthatsupplytotheDanishnaturalgassystemwascutduringthesameperiod.Thereasonforthestoppagewasstormyweatherthatcausedwavesinexcessofthecriticallevelsfortheplatforms.Energinet.dkdeclaredastateofemergencyfortheDanishnaturalgasmarket,whichmeantthatspecialrulescameintoeffectfortheDanishnaturalgassystem.ThisisthefirstoccasiononwhichacriticalstopinsupplyfromtheNorthSeatothe

DanishandSwedishnaturalgassystemshasoccurred.Astheproductionshut-downwasimplementedwithsomehoursadvancenotice,itwaspossibletopreparetheDanishandSwedishsystemforthesituation.WithintheframeworkofthecollaborationbetweenSvenskaKraftnätandEnerginet.dk,itwaspossibletoraisethepressureinadvanceofthestoppagebyimportinggasoverandabovethetradingparties’importlevels.Thelevelofpressurecouldtherebybemaintainedevenduringthecriticalperiod.SvenskaKraftnätdidnottakeanyfurthermeasureswithintheframeworkofitsresponsibilityformain-tainingthesystembalance.

• Lithuania’spresidentvisitedSvenskaKraftnätonWednesday1�NovemberinconnectionwithdiscussionsonaDClinkbetweenLithuaniaandSweden.

• ThetimetableforthenewDClinkbe-tweenSwedenandFinland,Fenno-Skan2,hastobechangedearlyinNovember.Commercialoperationsarenotnowexpectedtostartbefore�0November2011.Thereasonforthedelayisproblemsingettingthesubmarinecabledeliveredatthetimescheduled.

• AtSvenskaKraftnät’sBoardMeetingon21NovemberinterimdecisionsweretakenwithregardtotheprojectstoboostsupplytoUppsalaandLidingö.TheproposaltomoveoperationsattheheadofficefromRåckstatoanalternativelocationwasalsoapproved.On22DecemberacontractwassignedwithSkanskaregardingnewpremisesinSundbyberg.

December• On21Decemberitwasannouncedthat

OMXwastobuytheelectricityexchangeNordPoolASA’sclearingoperation,internationalderivativesbusinessanditsconsultancycompany.SvenskaKraftnätandStanettinNorwayeachown50%ofNordPoolASA.TradeinNordicfinancialelectricityderivativesremainunderNordPoolASA,asdoestradeintheelectricityspotmarketunderthecompanyNordPoolSpot.ThistransactionenablesthenationalgridcompaniesSvenskaKraftnätandStatnetttofocustheirownershiponthosesectionsthatareimportantfortheNordicelectricitymarket’scoreareas.

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ItisclearthatSvenskaKraftnäthasnowenteredaperiodofchange.

Asinthepast,itisimportantthatSvenskaKraftnätcontinuestofurtherimprovethereliabilityinthenationalgrid,andsupportdevelopmentsintheNordicelectricitymar-ket.DuringtheyearEuropeanpoliciesonenergyandenvironmenthaveincreasinglycometocharacterizethepreconditionsfortheoperation,sothatitconstitutesabroaderframingofthesegoals.Atthesametimeitclarifiesthatthesubstantialfocusondealingwithclimatedevelopmentwillneedtoleadtoatangibleshiftinenergysupply.ItisnaturalthatSvenskaKraftnätshouldsupportthisde-velopmentinitsoperations.Thesefutureper-spectivesweredealtwithataspecialstrategymeetingoftheBoardinOctober.

Investmentactivitieshavecontinuedtoexpand.Inafewyearstheywillreachalevelapproximately�timesashighaswasthecasesomeyearsago.TheinvestmentprojectinvolvestheentirespectrumfromthelargeNordicreinforcementprojects,reconstruc-tionsofentirestationstolargeandsmallreinvestments.Forexample,renewalsofanumberofpowerlinesareunderwaytoensuretheiravailabilityforalongtimetocome.Inaddition,substantialinvestmentsarebe-ingmadeinneworupgradedIT-systemsthatarenecessaryassupportforoperationssuchassystemsforoperationalmonitoring,settlementetc.DuringtheyeartheBoardhasmadeseveraldecisionswithintheseareas.

StockholmsStröm,whichinvolvesare-

structuringoftheelectricitysupplytothecapitalregion,comprisesalargenumberofsubprojects,someofwhichhavealreadycommencedafterauthorisationfromtheBoard.ThesameappliesfortheelectricitysupplytoUppsala.

ItisparticularlysatisfyingthattheBoardhasbeenabletoarriveataprincipaldecisioninrelationtotheprotractedissueofchoiceoftechnologyfortheSouthernLink.Bycon-sideringthisreinforcementintheperspectiveofthefutureenvironmentaladaptions,withanincreasingneedfortransmissioncapacity,theexpandedSouth-WesternLinkprojectemergesasanaturalsolution.ItalsomeansthatanumberofreinforcementrequirementsinWestSwedenandSouth-EastNorwaycanbedealtwithsimultaneously.

Managingalltheinvestmentprojectsmeansthattheorganisationisfacingamajortask.Itwillplacedemandsonexpertisewithinalargenumberoftechnicalareas,aswellaseffectiveprojectmanagement.Long-termfinancingfortheinvestmentshastobesecured.However,thechangesarenotonlyapparentintermsofthegrowingnumberofprojects.Securesupportsystemsandcommercialrelationshipsmustbefurtherdeveloped.Thestaffwillbegraduallyrejuve-nated.Alargenumberofyoungeremployeesandspecialistskillswillneedtoberecruited.Theymustallhavetheopportunitytobereceivedintotheorganisationwithasenseofcommunity,andbeabletodevelopintogoodstaffmembers,expertsormanagers.

TheBoarddecidedtorecommendthatoperationsaremovedtonewpremisesthatareentirelyourown.ItisanexpressionoftheBoard’sexpectationthatthiswillcon-tributetoSvenskaKraftnät´semergenceasamodern,competentandresponsiblecom-panybothforthepublicandforitsstaff.

Finally,itisverygratifyingthatanewDirectorGeneralhasnowbeenappointedandcantakeuphispositionfrom1March.MikaelOdenbergisjoiningSvenskaKraft-nätduringaninterestingperiodofchange,whichhewillhavetheopportunitytoinflu-enceinthefuture.

Stockholm, February 2008Sven Hulterström

A word from the chairman

Sven Hulterström, Chairman of Svenska Kraftnät’s

Board.

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Director General’s statement

Environmental responsibilityDuringthepastyearrealisationofglobalenvironmentaldevelopmentshasperme-atedtheconsciousnessofthegeneralpublic.Internationalundertakingsontryingtoturnrounddevelopmentshaveemergedinawaythathasneverhappenedbefore.InEuropetheEU,throughtheCommission,haspre-sentedfar-reachingplansfornewenergyandenvironmentalpolicies.

Atnationallevelgoalshavebeenmadeconcretethatwillentailconsiderablechangesinenergysupply.

Thisdevelopmentisincreasinglyde-mandingthatSvenskaKraftnätshouldoper-ateasaresponsiblecompanybothwithintheenvironmentalareaandwithinotherareaswhereethicalbehaviourisrequired.Whatisnowevidentisthatglobalenvironmentalconsiderationsmustbegivengreaterweightthanpreviously.Thesignificanceofthisshiftinperspectiveisnotthatthemorelocalenvi-ronmentalconsiderationsarelessimportant.Theyarestillofgreatimportanceinensuringthatthewell-beingofhumanbeings,ani-malsandplantsisnotjeopardized.However,handlingthebalancebetweenglobalandlocalenvironmentalconsiderationsbecomesincreasinglynecessary.

Transmission congestionsDespitethefactthatwinterinearly2007wasforthemostpartmild,duringsomeperiodsthetransmissionsituationwasunderpressure.ThiswasprimarilyduetoreductionsinnuclearpowerproductionatthesametimeastheFenno-SkanDClinkbetweenSwedenandFinlandwastakenoutofoperationforrepairofadamagedcable.Tolimittransmissionsonthenationalgridtosafelevelsitwasnecessarytoactivatethermalpowerproductiontoalleviatethesituation.SvenskaKraftnätincurredsubstantialcostsforthesecounter-trades.

Financingisviathenationalgridfeesthatthenationalgrid’scustomerspay.InreturntheyareofferedtheserviceofbeingabletooperatewithintheunifiedpriceareathatSwedencon-stitutes.Thepriceareacanbeenlargedprovidedthatthecustomersthatwouldbenefitfromitparticipateinpayingthecosts.

Thetransmissionnet-work,inparticularinSouthSweden,hasasubstantial,butneverthelesslimitedcapacity,thatmustnotbeexceededforreasonsofgridreliability.Itisconsequentlynotpossibletoalwaysbeabletomaintainunlimitedexportstoneighbouringcountries.Inreality,thedif-ferentmethodsthatareusedtomanagethenecessaryrestrictionsonlyentaildifferentwaysofallocatingthecoststhatappearwhentheelectricityisnotallowedtoflowfreely.AmongNordicoperators,therearedifferentopinionsregardingwhichmethodsshouldbeapplied.Fromacompetitionperspective,thevalueofmaintaininglargeareaswithacommonspotpriceisputinrelationtomoreeconomicviewthateveryresourceconflictmustbesignalledtothemarketparticipantsthroughdifferentiatedprices.

DuringtheyearSvenskaKraftnäthasbeenprimarilyworkingtoeliminatethephysicallimitationsbystrengtheningthenet-work.Thisconstitutesanessentialpartofthesubstantiallyincreasinginvestmentoperation.Tohandlethesituationbeforethereinforce-mentsareimplemented,wehaveendeav-ouredinavarietyofwaystofindsolutionstotheproblemofallocatingthecostsoftherestrictionsinareasonablewaybetweentheoperatorsconcerned.

The rise of wind powerSvenskaKraftnät’sroleinadaptingtoclimatedevelopmentisessentiallyanindirectone.Theprimarychangeswillneedtotakeplaceattheelectricitygenerationstage.Inthatcontextintensificationoftheexpansionofwindpowercomesfirst.ItisimportanttorealisethatthisdevelopmentisnotlimitedtoSweden.ThesamethingisgoingtotakeplaceinallourneighbouringcountriessothattheeffectsofdevelopingwindpowermustbeviewedattheveryleastinaNorthEuropeanperspective.Furthermore,forecastsindicateverylargevolumes,perhapsinthesameorderofmagnitudeastheexistinggen-erationcapacityintheNordicregion.

Windpowerwillbeconstructedandgen-eratedinvariouspartsofthecountry,atseaandawayfromthemajorareasofconsump-tion.Thevariationsinwindproductionmustbebalancedwithotherproductionsourcesorflexibilityontheconsumptionside.Thepreconditionforthistoworkisthatthetransmissionnetworksaresufficientlystrongandflexible.Theymustbeabletohandlethephysicalrequirementsaswellasfacilitate

Sture Larsson, acting Director General.

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themarketmechanismsthatarenecessarytoreachanadequatelevelofefficiency.ItisSvenskaKraftnät’stasktoensurethatthenationalgridisabletomeetthesedemandsandtherebyeffectivelysupportthedevelop-mentinenergyandenvironmentalpolicies.

The South West LinkTheSouthernLinkprojectwasinitiatedinordertoreinforcethenationalgridbetweencentralandsouthernSweden.InMaytheBoarddecidedtodelaymakingadecisiononchoiceoftechnologyfortheprojectuntilanewDirectorGeneralhadbeenappointed.However,inthelightoftheexternalfactorsthathavebeenreferredto,withtimeitbe-cameevidentthatitwasincreasinglyneces-sarytoevaluatewhethertheSouthernLinkshouldbebuiltinanalternativewaytothepreviousoptions.Theconclusionwasthatthereinforcementshouldbemadeasstrongasanytechnicalsolutioncouldprovide,atareasonablecost.AtthesametimetherestrictionsintransmissioncapacitytoandfromSouthernNorwayshouldbeelimi-nated,whichisclearlysetoutbyanalyseswithinNordel.Thisopenedthedoorfortheconstructionofanewstructurewithanop-timumcombinationofnewDCtechnologyandstrengtheningoftheACnetwork.TheBoardwasinformedoftheproposalforthenewexpandedproject,theSouthWestLink,duringtheautumn,andwasabletoarriveataprincipaldecisioninJanuary2008.

The gas operationGassupplyisgraduallybeingdevelopedto-wardsanopenmarketinlinewiththeEU’smorestringentGasMarketDirective.TheSwedishmarketwasopeneduptodomesticcustomersatmid-pointintheyear.ThevulnerabilityofgassupplywasdemonstratedinNovemberwhentheonlyinputfromtheDanishplatformsintheNorthSeawasshutdownforalmost2�hoursduringastorm.However,thesituationwasresolvedbeforeanyrealshortagearose,thoughitofferedtheopportunitytotesttheemergencyproce-duresthatpertainwithinSvenskaKraftnät’ssystemresponsibilityandwithvariousotheroperators.

The peak power situationInordertofindanewsolutiontothepeakpowersituationaproposalwaspresented

duringtheyearfromtheelectricityindustryastohowthefinancingofnecessarypowerreservescouldtakeplacewithoutrequir-ingtheparticipationofSvenskaKraftnät.However,therewereobjectionstothisfromacompetitionperspective.Insteadtheout-comewasthatthetemporaryPowerReserveActwasprolongedandthatSvenskaKraftnätistoprocureresourcesforafurtherthreewintersupto2010/2011.Ifthisisnottobeapermanentsolution,adecisivedevelop-mentofcommercialincentivesandproductswhichguaranteepowerisrequiredduringthesethreeyears.

Move to new premisesImmediatelybeforetheChristmasholidaywewereabletosignthecontractforournewpremisesinSundbyberg,whichwearemovingtoinmid-2009.Movingtheoperationwilloffernewpossibilitiestocre-atemethodsofworkingandgoodinternalcommunicationsthatareneededtodealwithourimportantchallengesinthefuture.Theperiodofchangethatwearegoingthrough

meansthatitisimportanttoutilizethecrea-tivitythatcanbereleasedbymeansofsuchaprocess.SvenskaKraftnätisdependentonbeinganattractiveemployerfortheyoungergenerationsthataregoingtotakethebusi-nessforwardinthelong-term.

Excellent resultsWewereabletofinishtheyearwithfinancialresultsshowingagoodmargintotheyieldrequirementandwithstatisticsthatdisplayahighlevelofgridreliability.Thesefiguresrevealcompetentandsolidworkonthepartofourstaffinlargeandsmallprojects,de-velopmentofITsupportfortheoperation,themanagementofthenationalgridaswellastheelectricityandgassystemandalargenumberofotheractivities.ForthisIwouldliketodirectalargethankyoutoallstaff.

Stockholm, February 2008Sture Larsson

Acting Director General until 29-02-2008

The South West Link extends the Southern Link with a connection westwards to Norway. It combines high-

voltage direct current in underground cables with alternating current in overhead lines, and has double the

capacity compared with the Southern Link. Jönköping will be the new nodal point in the southern section

of the national grid.

New nodal point at

Jönköping.

A combination of two

technologies with high

capacities.

AC powerline

DC ground cable of approx. 1,200 MW

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This is Svenska Kraftnät

SvenskaKraftnätmaintainsthenationalgridforelectricpower,whichcomprisesthecountry’s�00kVand220kVpowerlineswithstations,interconnectionswithneigh-bouringcountriesetc.WealsohavesystemresponsibilityforelectricityandnaturalgasinSweden.Ourprincipletaskistodevelopthenationalgridandtheelectricitymarketinordertomeetsociety’sneedforasecure

andeconomicelectricitysupply.Atthesametimewehavetofulfilenvironmentalrequire-mentsthataresetataveryhighlevel.

Wehaveapproximately�00employees,themajorityattheheadofficeinVällingbyinStockholm.WealsohaveofficesinSunds-vall,HalmstadandSollefteåalongwithatrainingcentreforpowerlinemechanicsinÅsbrooutsideÖrebro.Weemployafurther

coupleofhundredpeopleascontractorsforoperationandmaintenanceofthenationalgridthroughoutthecountry.In2007turno-verwasSEK6.�billion.

SvenskaKraftnäthasthreesubsidiariesandsixassociatedcompanies,thelargestofwhichisNordPool,theNordicelectricityexchange.Moreinformationisavailableonourwebsitewww.svk.se

Toprovidetransmissionofpoweronthenationalgridwellcompliancewithsecurity,efficiencyandenvironmentalrequirements.Toperformthesystemoperatorfunctionforelectricityandnaturalgascost-efficiently.

TopromoteanopenSwedish,NordicandEuropeanmarketforelectricityandnaturalgas.Toensurearobustnationwidesupplyofelectricity.

Organisation

Svenska Kraftnät is organised in six departments. The contingency planning staff lead the power contingency planning operation and the work on dam safety.

Svenska Kraftnät’s management

Board of Directors

Internal audit

Contingency planning staff

Management staff Law Environment Press officer R&D Stockholms Ström

Grid technology

Operation IT Market HumanResources

CorporateFinance

Contingency Planning Council

Planning Council

Electricity Market Council

Gas Market Council

Operations Council

Dam Safety Council

Our mission

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Incooperationwiththemanagementandtheemployees,SvenskaKraftnäthasworkedoutanddeterminedwhichvaluesbestsupportourambitiontobeoneofthemostef-fectivenationalgridcompaniesintheworld.Thevaluesaresummarisedinthewords:efficiency, quality, social responsibility, spirit of cooperation and teamwork.

Efficiency:Wefocusongoodleadershipandgoodroutinesinordertodotherightthingsinacost-consciousway.

Quality: Itisextremelyimportantthatthereisahighlevelofreliabilityintheelectricitysystem.Allaspectsofourworkmustthereforebecharacterisedbygoodquality,reliabi-lityandalong-termperspective.

Social responsibility: ElectricitysupplyissoimportantandofsuchbenefittosocietythatwemustworkwithahighlevelofcommitmenttoensurethatSwedenhasenoughelectricityeverysecondoftheday.Wealsohaveanenvironmentalresponsibilitytomakesurethatourpowerlinesandstationsaredesignedinsuchawaythattheyencroachaslittleaspossibleonhumanbeingsandthecountryside.Asacentralandneutralpartyintheopenelectricitymarket,itisimportantforustotreattheoperatorsequallyandtoprovidethemwithgoodinformation.

Spirit of cooperation: Wewanttohavesatisfiedcustomersandstakeholders.Weshallbesensitivetotheirneedsandkeentohavegoodcommunicationwiththem.

Teamwork: WithinSvenskaKraftnät,wewanttohaveastrongcorporatefeelingthatischaracterisedbyopenness,clarityandconsideration.

Svenska Kraftnät’s values

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Business segments in briefSvenskaKraftnät’soperationisdividedintothefollowingbusinesssegments:

• Network• Systemresponsibility–electricity• Telecommunications• Systemresponsibility–naturalgas• Renewableelectricitycertificates• Contingencyplanning

NetworkTheNetworksegmentcomprisestheconstruction,maintenanceandoperationofthenationalgridinSweden,whichconsistsof220kVand�00kVlineswithstationsandforeignlinksadministeredbySvenskaKraftnät,includingSwePolLink.SvenskaKraftnät’snetworkcustomers–i.e.ownersoflargeplantsconnectedtothenationalgrid,e.g.electricitygenerationfacilities,regionalnetworksandconsumptionfacilities–payforaccesstothenationalgrid,accord-ingtoapre-settariff.

Revenuealsoderivesfromcongestionrevenueandtransitcompensationforelec-tricityflowbetweentwoothercountriesviatheSwedishnationalgrid.Congestion

revenueisgeneratedwhentheNordicmarketisdividedupintodifferentpriceareasduetodemandfortransmissionbeinggreaterthanthecapacityofcross-borderinterconnectors.Therevenueisusedforin-vestmentsinincreasingcapacityandtherebyreducinglimitations.

System responsibility – electricitySystemresponsibilityforelectricityentailsSvenskaKraftnätensuringthatplantsinteractreliablywiththegridandwitheachotherandthatthereisabalancebetweenproductionandconsumptionofelectricity.Revenueandexpensesforsystemresponsi-bilityaregeneratedinrelationtotheman-agementofthebalancebetweenproductionandconsumptionofelectricity.ThisisdealtwithbySvenskaKraftnät’sBalanceService,whichismannedroundtheclock.

Telecommunications SvenskaKraftnäthasanationwidetele-communicationsnetworktomonitorandcontrolthenationalgrid,extendingfromMalmöinthesouthtoRitseminthenorth.ThehighlevelofcapacitygivesSvenskaKraftnätthepossibilityofleasingcapacitytoexternalcustomers,includingtelecomoperatorsandenergycompanies.Operating

revenueconsistspartlyofrevenuefromex-ternalcustomers,partlyofinternalrevenuefromtheNetworksegment.

System responsibility – natural gasItisSvenskaKraftnät’sresponsibilitythatthereisabalancebetweentheincomingsupplyandtheconsumptionofnaturalgasinSweden,butwedonotownthegaslines.Revenuesandexpensesforsystemresponsibilityaregeneratedinrelationtothemanagementofthebalancebetweeninputandextractionofnaturalgas.BalanceregulationisdealtwithbySvenskaKraftnät’sBalanceService.

Renewable electricity certificatesSvenskaKraftnätisresponsibleforissuingandaccountingforelectricitycertificates.TheSwedishEnergyAgencyisresponsibleforotherofficialtasks.Revenueconsistofaccountfees.

Contingency planningThecontingencyplanningoperationconsistsofelectricitypreparednessanddamsafety.Itisfinancedthroughgrants.Intermsoftheaccounts,theactivitiesareneutralforSvenskaKraftnät.

The Svenska Kraftnät Group

The Network division comprises expansion, maintenance and operation of the Swedish national grid for electricity. The network is monitored 24 hours a day from

our control centres. Contingency planning is another business segment, which also encompasses the responsibility that Svenska Kraftnät has as the authority for

dam safety in the country.

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SubsidiariesSwePol Link ABThetaskofthecompanyistooperateandmaintainaDClinkbetweenSwedenandPoland.Thelinkisratedat600MW.SwePolLinkABownsthepartofthelinkthatislo-catedonSwedishandinternationalterritory.

SvenskaKraftnät’sshareholdinginthecompanyis51 %,VattenfallABowns16 %andthePolishnationalgridcompanyPolskieSieciElektroenergetyczneSAowns�� %.

Group turnover in 2007: SEK 248 (232) million.

SwePolLinkPolandSp.zo.o.isawholly-ownedsubsidiaryofSwePol Link AB. ThecompanyownsthatpartoftheDClinkwhichrunsthroughPolishterritory.

Turnover in 2007: SEK 61 (58) million.Svenska Kraftnät Gasturbiner ABThecompanyiswholly-ownedbySvenskaKraftnät.Itwassetupin1999sothatSven-skaKraftnätcouldsecureresourcesinthelongtermfordealingwithdisruptionsinthepowersystem.

Turnover in 2007: SEK 73 (71) million. Svenska KraftKom ABThecompanyiswholly-ownedbySvenskaKraftnät.During2007,asin200�–2006,thecompany’soperationswereinsignificant.

Turnover in 2007: SEK 0 (0) million.

Associated companiesNord Pool ASANordPoolASAisanexchangeforfinancialtradingforoperatorsintheNordicelectricitymarket.TheheadofficeissituatedinOsloandtherearebranchofficesinStockholm,Helsinki,Fredericia,BerlinandAmsterdam.NordPoolisalsoactiveontheEuropeanmarket,forinstance,byowning17percentoftheGermanelectricityexchangeEEX.

During2007tradingonthefuturesmarketamountedto1,059.9(765.9)TWh.Clearingoperationsamountedto2,�69.2(2,160.�)TWh.

SvenskaKraftnätowns50%ofNordPoolASA.Theremaining50%isownedbyStatnettSF.Turnover in 2007: NOK 372 (327) mil-lion.

Nord Pool Spot ASThephysicaltradingexchangeinelectricity,thespotmarket,isconductedviaaseparatecompany:NordPoolSpotAS.During2007tradingamountedto290.6(2�9.9)TWh.

ThecompanyisownedbySvenskaKraft-nät,StatnettSF,NordPoolASA,FingridOyjandEnerginet.dk

Turnover in 2007: NOK 98 (96) million.

Triangelbolaget D4 ABThecompanyadministersthefibre-opticlinksbetweenStockholm,Oslo,Göteborg,MalmöandStockholmonbehalfofitspartners.Leasingrevenuegodirectlytothepartners.

ThecompanyisownedinequalsharesbySvenskaKraftnät,VattenfallAB,FortumDistributionABandTele2SydAB.

Turnover in 2007: SEK 29 (21) million.

Kraftdragarna ABTheprimarytaskofKraftdragarnaABistoprovideavailablefacilitiesonbehalfoftheownersforthetransportoftransformers,reactorsandotherheavycomponentsthatmakeuptheelectricitysupplysystem.

KraftdragarnaABcooperateswithStat-nettTransportAStofurtherstrengthenthe

levelofavailibilityforthetransportationofreplacementcomponents.

SvenskaKraftnätowns50%,VattenfallAB25%andVattenfallRegionnätAB25%ofthecompany.

Turnover in 2007: SEK 32 (32) million.

STRI ABThecompanyconductsresearchanddevelopmentwithinthefieldofelectricalpowertransmission,primarilyonbehalfofitspartners.

SvenskaKraftnätowns25%,ABBAB50 %,StatnettSF12.5%andVattenfallAB12.5%ofthecompany

Turnover in 2007: SEK 71 (64) million.

Elforsk ABElforskconductsjointoperationsinthefieldofresearchanddevelopment(R&D)onbe-halfoftheelectricalpowersectorinSweden.

SvenskaKraftnätismainlyinvolvedwith-inthoseareasthatconcernthetransmissionofelectricityandthedevelopmentoftheelec-tricitymarket.Themostimportantcentresoffocusareenvironmentalissues,maintenanceandtherenewalofplants,aswellasthepro-visionofsupportforpostgraduateprojects.

SvenskaKraftnätowns25%andthetradeassociationSwedenergyowns75%ofthecompany.

Turnover in 2007: SEK 86 (119) million.

Gas turbine power stations are important to enable operational reliability to be maintained in the event

of disruptions in the national grid. They can be started at very short notice. Olle Selin is MD of Svenska

Kraftnät’s subsidiary Svenska Kraftnät Gasturbiner AB.

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Electricity suppliers

Electricity network companies

Regional networks

Local networks

National grid

Electricity producers

Nord Pool, the Nordic electricity exchange

Electricity consumers

SvenskaKraftnätisastate-ownedpublicutilitythatsincebeingsetupin1992main-tainsthenationalgrid,thebackboneoftheSwedishelectricitysystem.Wealsoensurethatthereisabalancebetweenelectricityputinandextracted,sothatthefrequencyisalwayscloseto50Hz.Thisandourotheractivitiesaffectlargenumbersofpeopleandorganisations,allofwhichcanbeincludedasSvenskaKraftnät’sstakeholders.

The players in the electricity marketInitsroleasnationalgridcompanySvenskaKraftnäthasdirectcontactwithcompaniesthatownfacilitiesconnectedtothegrid,i.e.largeproductionplantsandregionalelectric-itynetworks.

Maintainingthebalancebetweengenera-tionanddemandofelectricityisconditionalonproductionbeingplannedonthebasisofforecastedconsumption.SvenskaKraftnätdoesthisincollaborationwiththebalanceproviders,whichhavetakenonfinancialresponsibilityforensuringthatthereissuf-ficientelectricityproducedtosatisfycon-sumption.Allelectricityconsumershavetohaveabalanceproviderfortheirconsump-

tion,however,inpracticetheelectricitysupplierensuresthatthereisone.Electricitysupplierscanbebalanceprovidersthem-selves,ortransfertheresponsibilitytoan-othercompany.ThelocalelectricitynetworkcompanysubmitstheconsumptionfigurestoSvenskaKraftnät,whichusesthemtocalculatewhetherthebalanceprovidershavesucceededinbalancingproductionagainstconsumption.

Companieswithsystemresponsibilityinothercountriesarealsoincludedasplayers.SvenskaKraftnätenjoysclosecooperationwiththesecompaniesinNorway,FinlandandDenmarkinoperatingtheelectricitysystemefficientlyandsafely.

Land owners and nearby residentsSvenskaKraftnätadministersapprox.15,000kmofpowerlines,andsome1�0substa-tions.Wearealsocontinuallybuildingnewfacilities.Landownersandnearbyresidentsareimportantstakeholders,andtheyaregiventheopportunitytoexpressanopinionwhenSvenskaKraftnätconvertsorbuildsnewfacilities.

The Government commissions our activitiesSvenskaKraftnät’sactivitiesareregulatedprimarilythroughaninstructionandanannualletterofgovernancethatisissuedbytheGovernment.Inconnectionwithadop-tionofthenationalbudget,Parliamentde-cidesonSvenskaKraftnät’sinvestmentsandfinancingactivities.AsapublicutilityandauthoritySvenskaKraftnätalsohasalargenumberofcontactswithotherauthorities.

A lot of other stakeholdersAbovewehaveonlymentionedasmallnumberofallourstakeholders.Examplesofotherare:municipalities,countyadminis-trativeboards,operatorsinthenaturalgasmarket,theNordPoolelectricityexchange,damowners,journalists,windpowercom-panies,universities,researchers,students,jobapplicants,ourstaff,interestorganisa-tions,suppliers,voluntaryorganisationsandfinancialinstitutions.

Svenska Kraftnät’s stakeholders

The national grid is the electricity network’s ”motorways”. The electricity produced is transmitted via the national grid to the regional networks and onward to

local networks to finally reach the electricity user. Electricity producers sell their electricity via the electricity exchange Nord Pool or to an electricity supplier, which

sells it onward to the electricity user. Electricity suppliers and electricity network companies have different roles. They are separate companies.

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Report of the Board of Directors 2007

Group operations and structure

Operations

SvenskaKraftnät’sprincipaltasksaretoadministerandoperatethenationalgridforelectricityinSweden,includingthelinkswithneighbouringcountries,andtobetheauthorityholdingsystemresponsibil-itypursuanttotheElectricityAct,whichinvolvesbeingresponsiblefortheongoinginstantaneouselectricitybalanceandtheoveralloperationalreliabilityoftheSwedishpowersystem.

Furthermore,SvenskaKraftnätistheauthorityholdingthesystemresponsibil-ityfornaturalgasinaccordancewiththeNaturalGasActandtheauthorityresponsi-bleforcontingencyplanninginaccordancewiththePowerContingencyAct.SvenskaKraftnätalsohasofficialdutiesinconnec-tionwithdamsafety,renewableelectricitycertificatesandguaranteesoforigin.

The Group’s structure

During2007,theSvenskaKraftnätGroupconsistedofthepublicutility,threesubsidi-ariesandsixassociatedcompaniesinSwedenandNorway.ThelargestassociatedcompanyisNordPoolASAwithitsheadofficeinOslo,Norway.InDecember2007anagree-mentwasreachedonthesaleofNordPool

ASA’sclearingandconsultancyoperationstoOMXinStockholm.Thetakeoverwillbeeffectedduringthelatterhalfof2008.

Since2005thegrouphashadsixbusi-nesssegments:Network,Systemresponsibil-ityforelectricity,Telecommunications,Sys-temresponsibilityfornaturalgas,ElectricitycertificatesandContingencyplanning.

Development of the market

TotalannualproductionofelectricityinSwedenincreasedby�percentcomparedwith2006andamountedto1��.6TWh1.Totalelectricityconsumptioninthecountrywassome1�5.9TWh–adecreaseof0.�TWhcomparedwiththepreviousyear.Thedecreaseisprimarilyduetothewarmerweather.Netimportsfellto1,�(6.0)TWhasaresultofincreasedhydroelectricpowerproductionastherewasabettersupplyofwaterthanlastyear.

Thedevelopmentisstronglycharacter-isedbytransmissioncongestionsthathavearisenintheNordicmarket.Afterthecopi-ousrainfallofthesummerandautumn,thereservoirsinSouthernNorwaywerefilledtoabovethenormallevelforthetimeofyear.AsubstantialinterestinexportingelectricitytoSwedenarosewhichexceededthetrans-missioncapacitybetweenthecountries.Thisaffectedelectricitypricesandpricedifferen-tialsoccurredbetweenthetwopriceareas,primarilybetweenSouthernNorwayandthe

restoftheNordicregion.Torestricttrans-missionthepriceareamethodwasapplied,whichledtoso-calledcongestionrevenuefortheNordicnationalgridcompanies.

Duringtheyearinputtothenation-algridamountedto120.�TWh,aslightincreaseonpreviousyears.Inthefourthquarterof2007inputincreasedbysome�percentcomparedwiththeequivalentperiodlastyear.

PeakelectricityconsumptioninSwedenduringtheyearoccurredon21Februarywhen26,200MWhwasconsumedinonehour.

Financial goals

TheSvenskaKraftnätGroupshallachieveanaveragereturnonadjustedequity,follow-ingdeductionfortaxequivalence,of6%.Thereturnonadjustedequityin2007was8.9(7.9)%,whichmeansthatthegoalwasexceeded.

Thedebt/equityratiowas��(�8),whichisinlinewiththegoalofamaximumof55percent.

Thedividendpolicyisthat65%ofan-nualnetincomeforthegroupshouldbeal-locatedtotheSwedishstate.Extradividendmayalsobeallocated.

1Source:Swedenergy

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InvestmentsmadebytheGroupduring2007amountedtoSEK596(�78)million.

Theinvestmentsaredistributedasfollows:

Alargenumberofmajorinvestmentprojectshavebeeninprogressduringtheyear.Thegoalistoconverttwoswitchyardsperyearinordertoraisegridreliabilityasmanyoftheswitchyardsareinthefinalphaseoftheirperiodofuse.Inaddition,earthwireshavebeenreplacedduetotheiradvancedage.

Examplesofsomelargeprojectsare:

AswitchyardwestofSollefteåhasbeenrebuiltatacostofSEK90(2�)millionTheinstallationcostofanewtrans-formerandtherebuildingofanewswitchyardnorth-westofSollefteåamountedtoSEK�0(5�)million

OngoingconversionofaswitchyardeastofVarberghascostSEK�0(2)millionthisyearThecostofconvertinganotherswitch-yardnorth-eastofVarbergamountedtoSEK25(57)millionChangingearthwiresandinstallingfibre-opticcablein290kilometresofpowerlinesbetweenSollefteåandGävlecostSEK28millionDuringtheyearSEK2�millionwaspaidtoreplaceearthlineson280kilometresofpowerlinesbetweenÖstersundandMoraRenewaloftheDClinkbetweentheSwedishwestcoastandJutlandhascostSEK29(28)millionduring2007ThesubsidiarySvenskaKraftnätGas-turbinerABhascarriedoutreplacementofcontrolequipmentinthegasturbineplantsatacostofSEK21million

Ongoing investment programmeAfterthemajordisruptionthattookplaceinSeptember200�,SvenskaKraftnätdecidedtoinitiateaconversionprogrammeforthe�00kVstationsinthenationalgrid.Thisworkisunderwayandduring2007therenewalofstationsoutsideSollefteå,VarbergandForsmarkcontinued.

Anotherprojectthatwasinitiatedafterthe200�disruptionwastobuildanewpow-erlinebetweencentralandsouthernSweden,theSouthernLink.Inmid-January2008SvenskaKraftnät’sBoarddecidedtoexpandtheprojectwithabranchtoNorway,andtodoublethecapacitycomparedwithear-

lierplans.Theexpandedproject,calledtheSouthWestLinkwillalsoremedybottlenecksinthenationalgridontheSwedishwestcoastandinlinkstoSouthernNorway.ThedecisionrepresentsastageintheprocessofbringingtheSwedishandNordicnationalgridsintolinewithEuropeanenergyanden-vironmentpolicyinthefuture.

TheSouthWestLinkwillbeconstructedinthreesections.DCtechnologywithun-dergroundcableisbeingusedfromastationinthevicinityofJönköpingandsouthtoHörbyinSkåne.ThelinktoSouthernNor-wayisplannedincooperationwithStatnett,theNorwegiannationalgridcompany,usingthesameDCtechnology.Itwillbeconnect-edatthestationoutsideJönköpingandtotheNorwegiannationalgridwestoftheOsloFjord.ProvidedthatStatnettcantakethenecessarydecisions,theywillconstructtheirsectionontheNorwegianside.Fromthesta-tionoutsideJönköpinganewACoverheadlineisbeingconstructednorthwardsouttoHallsberginNärkeinthesameoverheadlinecorridorasanexisting220kVline.Specialconsiderationwillbetakentothelocalenvi-ronmentinsensitivesections.

SvenskaKraftnätisbuildinganewDClinkbetweenSwedenandFinland(Fenno-Skan2)togetherwithFingridinFinland.ThelinkwillrunbetweenRaumainFinlandandFinnböleinGästriklandandtheplanistoputitintooperationinNovember2011.Inadditiontothesubmarinecable,thelinkincludestwonewconverterstations,70kmofanew500kVoverheadlineandanew�00kVswitchyardoutsideGävle.

Inautumn2007theSwedishgovernmentgrantedaconcessionforanew�00kVpow-erlinebetweenJärpströmmeninJämtlandandNeainNorwayatanoveralllengthof100km.Redundantsectionsoftheexisting275kVpowerlinewillbedemolishedandtheswitchyardinJärpströmmenrefurbished.

During2005SvenskaKraftnätcom-mencedaprogrammetoreplacetheoldesttypeofearthwiresontheoverheadlineswiththeaimofraisingreliabilityandper-sonalsafety.Theworkhascontinuedduring2007onthesectionMorainDalarna–GrumsinVärmland–KungälvinVästergöt-land.Theprogrammewillrunforanumberofyearstocome.

ToincreasereliabilityinthesupplytotheGöteborgarea,inconnectionwiththereconstructionoftheDClinktoDenmark,in2001SvenskaKraftnätdecidedtobuildanew�00kVoverheadlineinthecorridor

MSEK 2007 2006

Parent entity

Investments in grid 506 367 Investments in fibre-

optic cables 15 59 Other intangible

investments 36 49

Total Parent entity 557 462

SwePol Link 3 10

Svenska Kraftnät Gasturbiner AB 36 6

Total 596 478

0

100

200

300

400

500

600

700

2003 2004 2005 2006 2007

Affärsverket SwePol Link Svenska Kraftnät Gasturbiner AB

MSEK

Investments

The Group’s investments

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forthepreviousDCpowerlinebetweenthecoastandatransformerstationnorth-eastofGöteborg.Theconcessionhasnotyetbeengranted,andworkonpermitissueshasbeenproceedingduring2007.

SvenskaKraftnätisgoingtoinstallanewsectionof�00kVoverheadlineatSödraSandbyoutsideLundtoimprovetheenviron-mentforresidents.Theworkisexpectedtobecompletedduringthelatterpartof2009.

TheaimoftheStockholmsStrömprojectistoimprovetheprovision,reliabilityandenvironmentalconditionsforStockholm’selectricitysupply.During2007decisionshavebeentakenonanumberofsub-projects.

UppsalaStrömisanotherprojectwiththeaim,amongothers,ofincreasingreli-abilityintheUppsalaarea.Implementationoftheprojectcommencedduring2006andisacollaborativeventurebetweenSvenskaKraftnät,themunicipalityofUppsalaandVattenfallEldistributionAB.

Operating revenue and income for the year

OperatingrevenuefortheGroupdecreasedbysomesevenpercentandamountedtoSEK6,�26millioncomparedwithSEK6,8�8millionlastyear.ThedecreaseisprimarilyduetolowerrevenueforbalancepowerofSEK8�1million,asaresultofthelowermarketpriceforelectricity.Conges-tionrevenueincreasedduringthethirdquarteronaccountofthewatersituationinSouthernNorwayandmitigatedthe

decreaseinrevenuesbySEK�21million.TheGroup’soperatingexpensesamount-

edtoSEK5,5�1(6,150)million.CostsforpurchaseofbalancepowerduringtheyearwereSEK8�7millionlessasaconsequenceoftheloweraverageelectricitypriceincom-parisonwithlastyear.

DepreciationofintangibleandtangibleassetsfortheGroupincreasedbySEK21million.

GroupoperatingincomeamountedtoSEK86�million,whichisSEK128millionhigherthanin2006.TheoperatingmarginfortheGroupwas1�.7%,whichis2.9per-centagepointshigherthanlastyear.

Netfinancialincome/expensefor2007amountedtoSEK-127million,whichisadeteriorationofSEK72millionincom-parisonwithlastyear.Interestexpensesincreasedprimarilyduetoindexationofthepensionliabilityinaccordancewithnewse-curitygroundsthatweredeterminedbytheNationalGovernmentEmployeePensionsBoardandhigherinterestratescomparedwith2006.

NetincomefortheyearamountedtoSEK7�2(676)million.Thenetprofitmarginwithadeductionforstandardtaxamountedto8.�percent,whichisanin-creaseof1.2percentagepointscomparedwithlastyear.

Financing

TheparententityfinancesitsoperationswithequityandloansintheNationalDebt

Office.Attheendof2007,loansamountedtoSEK�71(709)millionandliquidfundstoSEK51(59)million.SvenskaKraftnäthasavariableloanparameterwiththeNa-tionalDebtOfficethatcanbeutiliseduptoSEK1,500million.

SinceFebruary2007thesubsidiarySwe-PolLinkABhashadaloanatHandelsbank-enofSEK1,2��million.TheNationalDebtOfficehasissuedamaximumguaran-teefortheloanofSEK150million.

AtyearendborrowinginSvenskaKraft-nätGasturbinerABamountedtoSEK157million.FinancingtakesplacewithintheGroup.

Risk managementTheGroup’sriskscanbearrangedundertwocategories:operationallyrelatedandfinan-ciallyrelatedfactors.Financialriskmanage-menttakesplaceatGrouplevelinaccord-ancewiththeguidelinesthatarespecifiedintheGroupfinancepolicy.

Operational risks

SvenskaKraftnät’soperationsareofcentralimportanceforSwedishelectricitysupply.Itmustthereforeberegardedasbeingofpar-ticularsocialimportanceinboththeshortandlongterms.Operationscanbesubjectedtodisturbancesandstressesofmanydiffer-entkinds.Thesemaybearesultoftechnicalshortfallsorintentionalactionsaimedatcausingdamage.Certainfactorsmayarisesuddenlywhereasotherscanbeobservedasslowprocessesinacertaindirectionthatmaysubsequentlyhaveanegativeimpactontheoperations.Inaseparatereport,SvenskaKraftnätgivesanoverallaccountofriskandvulnerabilityanalysesinaccordancewiththeOrdinance(2006:9�2)onCrisisManage-mentandEnhancedPreparedness.

Theeverydayworkandexpertiseofitsstaffmeansthattheorganisationhassig-nificantcapacitytoassesshowrisksandvulnerabilitiesarelinkedtogether.Theworkoffurtherreinforcingthisiscontinuallyinprogress.Withincertainareasitmayneedtobeextendedthroughgreaterbusinessintel-ligenceorstrengthenedbymeansofexternalefforts.Differenttypesofcooperationarealsoconductedinnetworkforminordertogatherexperiencefromotherareas,forex-amplewithintheITsecurityarea.

Thereislittleriskofoperationaldisrup-tionsinthenationalgrid,whichwouldhave

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seriousconsequencesforthecustomers.Thegridispowerfullystructuredwitham-plepotentialtomaintainelectricitysupplyevenduringdisturbedoperatingconditions.However,theriskofamajorpowerfailurecanneverbetotallyeliminated.SvenskaKraftnätistakingaseriesofmeasures,in-cludinganextensiveinvestmentprogramme,tofurtherincreasethereliabilityofthena-tionalgrid.

TheriskofpeakpowershortagesintheSwedishelectricitysystemhasbeenlimitedsinceSvenskaKraftnät,asaninterimmeas-ure,hasprocuredstandbypowerinaccord-ancewiththetemporaryPowerReserveAct(200�:��6).Theactwasduetocometoanendafterwinter2007/2008,butithasbeenextendedbytheGovernmentforafurtherthreeyears.

Financial risks

ThehydrologicalsituationintheNordicregion,generationincombinedheatandpowerplantsandexportsinfluencetheuseofthenationalgridforelectricity.SvenskaKraftnät’srevenueincreasesinconjunctionwithlarge-scalehydro-powergeneration,whichleadstoincreasedtransmissionsfromNortherntoSouthernandCentralSweden.

Revenuedecreasewhenthereisasmallsupplyofhydroelectricpowerandwhenthereisahighlevelofimportsfromthe

south.ThefluctuationsinearningsmayasaconsequenceamounttoseveralhundredmillionSEK.AssessmentofSvenskaKraft-nät’sresultsmustthereforeapplytotheaver-ageconditionsoveraperiodofseveralyears.

CongestionsariseintheNordicelectric-itymarketwhenthedemandtotransmitelectricityonthegridisgreaterthanthetransmissioncapacity.Thesizeofthecon-gestionsvaryduetotheflowonthegrid.Themethodappliedtorestricttransmis-sionsovernationalbordersleadtorevenues,whicharebasedondifferingelectricitypricesinthepriceareasondifferentsidesofabottleneck.TheserevenuesgototheNor-dicnationalgridcompaniesinaccordancewithadistributionquotaonwhichtheyhavedecided.

WithinSwedencountertradingissome-timesusedinordertoreducethetransmis-sionofelectricityinasectionofthegridwherethereisalimitedtransmissioncapac-ity.Countertradingmeansthatthecustom-ersdonotnoticethiscongestion.Thecostsforcountertradingarenormallylowinaproperlydevelopednationalgrid.However,countertradingexpensescanamounttotensofmillionsofkronorinextremeoperationalsituations,e.g.suchasoccurredinFebruary2007whenthenuclearpowerstationinFor-smarkwasoutofoperation.

SvenskaKraftnäthasexpensesforpri-maryregulationtomaintainthefrequency

intheelectricitysystem.Thesizeoftheex-pensesaredependentonwatersupplyinthereservoirsandonthepriceofelectricity.Incertainsituationstheseexpensescandoublecomparedwithnormalconditions.

ThedevelopmentofSvenskaKraftnät’sfibre-opticnetworkhascontinuedataslow-erpaceoverthepastyearandhasprimarilybeenfocusedontheneedsofthenationalgrid.Thereareconsequentlynosignificantcommercialrisks.

TheETSOmodelfortransitcompensa-tionthatisalsoappliedtoSvenskaKraftnätsince200�,influencesthefinancialoutcome.IftheflowofelectricitythroughSwedenishigh,SvenskaKraftnätreceivesrevenue,butatthesametimetheflowsaregenerallythroughDenmarkandneighbouringcoun-tries,incurringcostsforSvenskaKraftnät.Themodelthatiscurrentlyappliednormallyresultsinanetcostfornationalgridcom-paniesthat,likeSvenskaKraftnät,havelowgridcharges.In2007thisnetcostamount-edtoSEK19(�)million.

CustomersThecustomersconsistmainlyofwell-estab-lishedandstablecompanieswithahighlevelofsolvency.Altogether,SvenskaKraftnäthassome100customers,thetenlargestofwhichaccountfor75percentoftheturno-ver.ThismeansthatSvenskaKraftnäthasasounddistributionofcommercialrisks.

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InvestmentsOverthenextten-yearperiodSvenskaKraftnäthasanextremelylargeinvest-mentrequirement.InconjunctionwiththeotherNordicnationalgridcompanies,inspring200�SvenskaKraftnätpresentedaprogrammeofinvestmentstostrengthentheNordichigh-voltagenetworkforelectricity.TheintentionisthattheseinvestmentswillincreasethesecurityoftheelectricitysupplyandfurtherimprovethefunctionoftheNordicelectricitymarket.TheprogrammeincludesthefollowingfiveprojectsintheNordicpowernetwork:

Fenno-Skan2betweenSwedenandFinlandNea–JärpströmmenbetweenNorwayandSwedenTheSouthernLinkbetweenCentralandSouthernSweden,whichinJanuary2008becametheSouth-WesternLinkTheGreatBeltLinkinDenmarkSkagerak�betweenNorwayandDen-mark

BesidesthefiveNordicinvestmentsthereisaprogrammecostingSEK�–�billiontoreinforceStockholm’selectricitynetwork,themajorityofwhichitisassumedwillbefinancedbyotherstakeholders.Renewalofseveralswitchyardsinthenationalgridisex-pectedtoamounttoaroundSEK1billion.

Thetotalinvestmentcostduringthenextten-yearperiodforSvenskaKraftnätamountstoalmostSEK20billion,whichwillhaveanimpactonthethegroup’sfi-nancingandinterestexpenses.Theriskex-posureliesinthedelaytotheproject,whichinitsturnrepresentscostincreases.Theboomin2007,whichcouldbeobservedinhigherpricesformaterialsandlongerde-liverytimes,hasmeantthatwehavebeenforcedtopostponetheconstructionofthenewDClinkbetweenSwedenandFinlandbyoneyear.

Thosefactorsthatcouldhaveasignifi-cantimpactontheconsolidatedresult,apartfromthehydrologicalsituation,arelinkedwithcurrencyexchangeratesandelectric-ityprices.

Currency exposureSvenskaKraftnät’sinternationaloperationsmeanthatitistosomeextentexposedtoexchangerisksinconnectionwiththetrans-lationofforeignassetsandresults.SvenskaKraftnäthasnothedgeditsreceivablesand

••

liabilitiesinforeigncurrency.Theamountsinvolvedaremoderateinsizeanddonotaf-fectthefinancialresulttoanygreatextent.

Interest exposureInterestrisksinconnectionwithliquidityandliabilitymanagementarelow,sinceSvenskaKraftnät’sequity/assetsratioishighanditsborrowingvolumesmall.

Electricity pricesSvenskaKraftnätpurchaseselectricityinordertocoverthetransmissionlossesatafixedpriceinaccordancewithmulti-yearagreements.Thevolatilityintheelectric-itypriceaffectsrevenuesforsoldbalancepowerwithinthebusinesssegmentSystemresponsibilityforelectricity,howeverthereisalimitedeffectontheresult.

Credit risksThecustomersconsistofwell-establishedandstablecompanieswithahighlevelofsolvency.SystemresponsibilityforelectricityandnaturalgasincludesSvenskaKraftnät’sresponsibilityforthenationalbalancesettle-mentforthosecompaniesthatarebalanceproviders.Inordertodecreasethecreditriskthatarises,SvenskaKraftnätrequires

financialsecurityfromthosecompaniesthatarebalanceproviders.

Other risks

EnvironmentSvenskaKraftnätworksveryactivelywithenvironmentalissues.ForanumberofyearsSvenskaKraftnäthashadanenvironmentalmanagementsystemforconstructionactivi-tiesasanaidinstructuringitsenvironmen-talworkandensuringthatitisperformedeffectively.Environmentalrequirementsareplacedonallconstructionandmaintenancecontractstoreducetheenvironmentalrisks.Tocheckthattheenvironmentalrequire-mentsarebeingobservedSvenskaKraftnäthasimplementedapprovedenvironmentalauditsinanumberofcontractsduring2007.Theauditshaveledtomeasurestoproduceimprovements.Othermorelong-termmeasureswillbeimplementedduring2008.Severalenvironmentalauditswillbeimplementedduringthecomingyear.

ForthesubsidiarySvenskaKraftnätGas-turbinerABthefueltanksatthegasturbinefacilitiespreviouslyconstitutedanenviron-mentalrisk.During2007bankshavebeenconstructedaroundthefueltanksinthreeoftheplantstoreducetheriskofleakage.

Environmental aspects

and requirements

Environmental policy

Environmental goals

ImplementationFollowing-up

Evaluation and

improvementOrganisation

andresponsibility

Svenska Kraftnät’s environmental management system for construction activities is an aid in structuring

its environmental work and ensuring that it is performed effectively.

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NetworkTheNetworkdivisioncomprisesthecon-struction,maintenanceandoperationofthenationalgridinSweden,whichconsistsof220kVand�00kVlineswithstationsandforeignlinksadministeredbySvenskaKraftnät,includingSwePolLink.

SvenskaKraftnät’snetworkcustomersarebilledforaccesstoandutilizationofthenationalgrid,inaccordancewithapre-settariff.SvenskaKraftnätundertakesareviewofthetariffeveryyearanditisauthorisedbySvenskaKraftnät’sBoard.Thelasttimethetariffwaschangedwasin200�.

Thetariffconsistsofapowercomponentandanenergycomponent,andaccountsformostofthetransmissionrevenue.Thepowercomponentisbasedonthepowersubscribedtobythecustomeronanannualbasisforinputandextractionateachcon-nectionpoint.TheinputfeeisSEK5/kWinthesouthandincreaseslinearlywithlatitudetoSEK25 /kWinthenorth.TheextractionfeeisSEK�7/kWinthesouthdecreasinglinearlywithlatitudetoSEK11/kWinthenorth.Theenergycomponentisbasedonthetransmissionlossesinthenationalgridthatareoccasionedbyinputandextractionattheindividualconnectionpoints.Ifinputandextractionleadtoreducedtransmissionlossesapaymentismadetotherespectivecustomerdesignatedenergycompensation.

Otherincomeitemsarecongestionreve-nueandtransitrevenue.CongestionrevenuearegeneratedwhentheNordicmarketisdi-videdupintodifferentpriceareasduetolackofcapacityintheNordicgrid.Therevenueisusedforinvestmentsinincreasingthecapa-cityandtherebyreducingthelimitations.

Transitrevenueconsistsofreimburse-mentforcostsofelectricityflowingthroughthenationalgridwithitspointsoforigininothercountries.

Revenue for Network operations

NationalgridfeesamountedtoSEK2,��2(2,�07)million,whichisatthesamelevelas2006.Thepowerfeesaccountedforap-proximately�5(�7)%andtheenergyfeesforsome55(5�)%.Fewersubscriptionshaveledtoasmalldecreaseinthepowerfeesandhighertransmissionproducedasmall

increaseinthepowerfees.AnaccountisgivenbelowoftherevenuefromNetworkoperations.

CongestionrevenueamountedtoSEK6�1millionandincreasedmarkedlycomparedwith2006.Themainreasonfortheincreaseisthatafterthecopiousrainfallofthesum-merandautumn,thereservoirsinSouthernNorwaywerefilledtoabovethenormallevelforthetimeoftheyear.Asubstantialinte-restinexportingelectricitytoSwedenarosewhichexceededthetransmissioncapacitybetweenthecountries.Thisaffectedelectri-citypricesandpricedifferentialsoccurredbetweenthetwopriceareas,primarilybet-weenSouthernNorwayandtherestofthe

Nordicregion.Torestricttransmissionthepriceareamethodwasapplied,whichledtoso-calledcongestionrevenuesfortheNordicnationalgridcompanies.

TransitrevenuesamountedtoSEK112(1�9)million,whereasthecostsforthetransittransmissionweincurinothercountrieswereSEK1�1(1�2)million.

Transmission via the national grid and energy lossesDuringtheyeartransmissionwas117.7(117.�)TWh.Subscriptionsforinputandextractionweresomewhatlowerthanin2006.Thenumberofcustomersconnectedtothenationalgridwas21(21)

Power transmission 2007 2006

Power subscribed to on the national grid

Input subscription, MW 20 340 20 404

Extract subscription, MW 21 367 21 554

Max. power outtake from the national grid, GW 18 500 20 000

Energy fed into the nationalgrid, TWh 120,5 119,8

Energy extracted from the nationalgrid, TWh 117,7 117,3

Business segments

Network revenue

(MSEK) 2007 2006

National grid fees

Power fees 1 061 1 074

Energy fees 1 271 1 233

Total 2 332 2 307

Congestion revenue 641 320

Transit revenue 112 139

Transmission via

SwePol Link 246 232

Other network revenue 46 52

Grand total 3 377 3 050

The national grid comprises 15,000 km of

powerlines and well over one hundred con-

nection stations.

Ringhals

Helsing-borg

Göteborg

MalmöKarlshamn

Norrköping

Oskars-hamn

Stockholm

Enköping

Umeå

Sundsvall

Forsmark

0 100 200 km

N

Luleå

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Transmissionlossesonthenationalgridweresomewhathigherthanin2006andtheycostSEK762(698)million.Theincreasedcostsforpurchaseoflosspowerareprimarilyduetotheincreasedproductionofhydropowerinthenorthernpartofthecountry.

TheNetworksegment’sfinancialresultwaspositiveduringtheyearandwas:

OperatingrevenueincreasedbySEK��5millioncomparedwithlastyear.OperatingincomeamountedtoSEK791million,whichisSEK11�millionmorethanlastyear.Thehigheroperatingrevenueisduetorisingcon-gestionrevenue,whichduring2007amountedtoSEK6�1(�20)million.

InFebruarytwoextremeoperationalsitua-tionsaroseduetoadropinnuclearpowerpro-duction.ThisledtoSvenskaKraftnäthavingtousecountertradinginordertoreducethetransmissionofelectricitytoanothersectionofthegrid.CountertradingexpensesamountedtoSEK80million.Duringthesummercoun-tertradingtookplaceatacostofSEK��mil-lioninconnectionwithreconstructionworkinanewswitchyardnorth-eastofVarberg.DuringtheautumnanewswitchyardoutsideSollefteåhasbeenconvertedaccordingtothesameprogramme,whichledtoafurtherSEK�7millionincounterpurchasing.

Theoperatingmarginforthebusiness

segmentamountedto2�.2%,whichis1.2percentagepointshigherthantheequivalentperiodin2006.

Reliability performanceSvenskaKraftnät’sprincipalgoalisahighlevelofreliabilityperformanceintheNetworkoperation.Reliabilityperformancehasbeengoodduring2007.Therewere150(181)operationaldisturbancesinthegrid,mostofwhichweredealtwithbytheautomaticequip-mentbuiltintothetechnicalsystemswithouthavinganyimpactonpowersupplies.Thosedisturbancesinthenationalgridthatithasnotbeenpossibletodealwithsuccessfullyhaveonlyresultedinsmallvolumesofenergynotbeingsupplied.

Fivedisturbancesledtopoweroutagesforsubscribers.Thevolumeofenergythatwasnotsuppliedamountedto1�(95)MWh.Thenumberofoperationaldisturbancesinthena-tionalgridoverafiveyearperiodissetoutbelow.

Transmission losses national grid 2007 2006

Energy losses, TWh 2,8 2,5

Percentage of extracted energy, % 2,4 2,1

Maximum power losses, MWh/h (hour with highest energy losses) 634 806

Income statement – Network

MSEK 2007 2006

Operating revenue 3 409 3 074

Operating expenses -2 618 -2 397

Operating income 791 677

Operational disturbances 2007 2006 2005 2004 2003

Operational disturbances on the grid, no. 150 181 251 187 198

Ditto with power failure, no. 5 15 22 10 27

Non-supplied energy, MWh 13 95 4 25 10 400

Operational planning is important in maintaining operational reliability when connecting and disconnecting powerlines and equipment in the national grid, but also

in maintaining personal safety in conjunction with work on plants.

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Manned round the clock! Svenska Kraftnät’s Balance Service monitors the frequency, maintains the instantaneous electricity balance, deals with congestion in

transmission and distributes the expenses between balance providers.

System responsibility – electricity

AccordingtotheElectricityAct,systemresponsibilityforelectricityentailsSven-skaKraftnätensuringthatplantsinteractreliablyandthatthereisabalancebetweenproductionandconsumptionofelectric-ity.Ensuringthatplantsinteractreliablyisachievedprimarilythroughrulesandrequirementsinconnectionagreements,andregulationsfornetworkandproduc-tionfacilities.Thevolumeofrevenuesandexpensesforsystemresponsibilityaregeneratedinrelationtothemanagementofthebalancebetweenproductionandcon-sumptionofelectricity.ItisreportedunderthebusinesssegmentSystemresponsibility–electricity.

ThisisdealtwithbySvenskaKraftnät’sBalanceService,whichismannedroundtheclock.

Animportantpartofthebalanceregu-lationaretheapproximately�0balanceprovidersthathavesignedagreementswithSvenskaKraftnätregardingbalancerespon-sibility.Thecompanieshaveundertakentoplantheirinputofelectricity(generation

andpurchase)andtheirextraction(con-sumptionandsale)foreachhoursothattheybalanceeachother.SvenskaKraftnätthenconductsabalancesettlement,orinotherwordsperformsafinancialsettle-mentoftheimbalancesthathavearisenwhenthemeasuredvaluesforproduction

andconsumptionarereported.Acompanythatonehourreportsadeficit,buystheelectricity(balancepower)thatisrequiredtoachieveabalancefromSvenskaKraft-nät.Correspondingly,companiesthathaveasurplussellelectricitytoSvenskaKraftnät.ThepriceoftheelectricitythatisboughtorsoldisthehourlyrateontheelectricityspotmarketwithasurchargeforexpensesthatSvenskaKraftnäthasincurredinstartingorstoppingproduction,theso-calledupwards-/downwardsregulatingprice.ThedifferencebetweenpurchasedandsoldbalancepowerinthepublicutilityamountedtoSEK21�(209)million.Thedifferencearisesasthepowersoldalwayshasthesameorahigherpricethanthepowerbought.

Tobalancethepowersystemthereareautomaticreserves(so-calledprimaryregula-tion)thatincreasetheproductionwhenthefrequencyfallsanddecreasesitwhenthefrequencyrises.Theautomaticreservesarechieflylocatedatproducerswithhydro-elec-tricpowerproductionandareprocuredonaweeklyanddailybasis.Whentheautomaticreserveisnolongersufficienttomaintainthefrequencywithingivenlimitsthebal-anceserviceactivatesupwardsordown-wardsregulationbasedonalistofbidsfrom

An important aspect of Svenska Kraftnät’s system

responsibility for electricity is ensuring that the

frequency is maintained at a constant of close to

50 Hz.

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producersthathavethepotentialtostartorstopproduction.SvenskaKraftnätalsocol-laborateswithcompaniesthathavesystemresponsibilityinourneighbouringNordiccountriesinordertoalwaysregulatethebalancewhereitcantakeplaceatthelow-estprice.AsimilarsettlementtakesplacebetweentheNordicnationalgridcompaniesasbetweenSvenskaKraftnätandthebalanceproviders.

DisturbanceReserves,primarilyintheformofgasturbines,areinplacetodealwithmajoremergenciestotheelectricitybalance,forexampleifalargeproductionfacilityisshutdownduetofailure.SvenskaKraftnäthasaccesstothesereservespartlythroughagreementsandpartlythroughitsowngasturbinecompany.

AccordingtothePowerReserveAct,SvenskaKraftnätshallberesponsibleforensuringthatreservepowerofatmost2,000MWisavailableduringthewinter.ItwasoriginallyplannedthattheActwouldceaseafterthewinterof2007/2008,howeverithasnowbeenextendedtoapplyuntilthe

endofthe2010/2011winter.Thereservecontributestomanagingelectricitysupplyevenduringextremesituationsthatcanariseinextremelycoldweatherconditions.Dur-ingthe2007/2008winterthepowerreserveamountedto1,998MWThepowerreserveisfinancedbyaspecialfeethatispaidbythebalanceproviders.Thecostofthepowerre-servetotheGroupduringtheyearamount-edtoSEK129(1��)million.

Thefinancialresultforthebusinessseg-mentSystemresponsibilityforelectricitywas:

Withinthebusinesssegment,Systemre-sponsibility–electricity,operatingrevenue

decreasedbySEK857or25%comparedwith2006andamountedtoSEK2,5�1(�,�88)millionRevenuesforsoldbalancepowerdecreasedbySEK8�2millioncom-paredwithlastyear,whichismainlyduetothelowerpriceofelectricityduringtheyear.

Revenuesfromthecompanieswithbal-anceresponsibilityforthestatepeakpowerreserveamountedtoSEK126(151)million.Theserevenuesareaccountedduringthewintermonths.Thecostsofthepeakpowerreserveariseonaregularbasisastheagree-mentswithsuppliersareforoneorseveralyears.Revenueandexpensesareevenedoutoverthedurationoftheagreement.OperatingincomeamountedtoSEK-�8(-�1)million.Thesomewhathigherearningsfor2007arechieflyduetolowercostsforbothprimaryregulationandthepeakpowerreserve.Theoperatingmarginwas-1.2%,whichisadeteriorationof0.�percentagepointscomparedwithlastyear.

Thefinancialresultshouldbeassessedasanaverageoveraperiodofseveralyears.Fur-therinformationisavailableinnote8.

Income statement – System responsibility for electricity

MSEK 2007 2006

Operating revenue 2 531 3 388

Operating expenses -2 569 -3 429

Operating income -38 -41

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2�

Telecommunications

SvenskaKraftnäthasanationwidetelecom-municationsnetworktomonitorandcontrolthenationalgrid,extendingfromMalmöinthesouthtoRitseminthenorth.

In199�,afibre-opticnetworkwasin-stalledinthepowerlineearthwires.AtpresentSvenskaKraftnät’stelecommunica-tionsnetworkisinplaceforabout6,�00kmofownfibre-opticcablesandsome2,500offibre-opticcablesleasedfromothernetworkoperators.Theolderpartsofthisnetworkarebasedonlinecarrierviathepowerlinesandonradiolinkconnections.

SvenskaKraftnätoperatesatelecomnetworkonthefibre-opticnetworkwithaplatformthatisbasedonmoderntechnol-ogywithhighcapacityandgoodreliabil-ityperformance.Thetelecomnetworkisanimportantelementintherestorationfunc-tioninconnectionwithapotentialmajordisturbanceinthecountry’selectricitysupply.Inordertoguaranteereliableoperation,thetelecomnetworkisprovidedwithredundancyinbatteriesanddieselgenerators.Telecomtrafficisbeingsuccessivelyshiftedfromoldertomoremoderntechnologyasthebuildingofthefibre-opticnetworkgraduallyprogresses.

ThehighcapacityinthetelecomnetworkenablesSvenskaKraftnättoleasenetworkca-pacitytoexternalcustomers.SvenskaKraftnäthiresoutblackfibre(opticalfibrewithoutphysicalterminusequipment)to,forexam-ple,telecomoperators.Furthermore,activeconnectionsarehiredoutintheformofca-pacityto,primarily,energycompanies.

During2007thefibre-opticnetworkhasbeenexpandedoutwardsfromstationsincloseproximitytothesectionUmeå–Örn-sköldsvik–Sollefteå–Stöde–Sundsvall,aswellasthesectionGråska–HallstavikinNorthUppland.Inconjunctionwithotheropera-tors,SvenskaKraftnäthaslinkedupthefibre-opticnetworksinanumberoflocationsincentralNorrland,partlytobeabletoaccessmoreremotesitesinthepowernetworkeco-nomically,butalsotobeabletoofferthecus-tomersbetterservice.Besidestheseintercon-nections,fibre-opticcablesarealsoleasedbyregionalnetworkoperatorstoaccesssomeofthesmallerstationsinthenationalgrid.

DuringthepastyearSvenskaKraftnäthasalsointensifieditscollaborationwithStatnett

inNorwayandFingridinFinlandinordertolinkupthetelecomnetworksandtotherebyincreasesecurityinrelationtomonitoringtheNordicnationalgridforelectricity.TheconnectionwithNorthNorwaywillbeputintoeffectpartlybetweenRitsemandOfo-tensouthofNarvikontheNorwegianside,partlyinJämtlandinconnectionwiththereconstructionofthepowerlinebetweenJärp-strömmenandNea,eastofTrondheim.ThismeansthattheSwedishandNorwegianpow-ertelecommunicationsnetworksarelinkedtoeachotherinthreeplacesfromHaldeninthesouthtoNarvikinthenorth.ThisenhancesthelevelofrobustnessandreliabilitybetweenthecountriesandinthefutureSvenskaKraft-nätwillbeabletoofferNorwegiantelecomoperatorstheirownfiber-opticnetworkontheNarvik–Trondheim–Haldensection.TheconnectionwithNorthernFinlandisalongerroutingoffibre-opticcablesfromastationinthevicinityofJokkmokktoaFinnishstationwestofRovaniemi.

Operatingrevenueconsistspartlyofreve-nuefromexternalcustomersforleasingblackfibreandactiveconnections,partlyofinternalrevenue(calculatedaccordingtoastandard)fromtheNetworkbusinesssegment.

Therevenueearnedoncommercialfibre-opticoperationsamountedto62(56)mil-lionandtheoperatingincomewasSEK�5

(26)million.Theimprovementinresultsincomparisonwithlastyearischieflyduetoanumberofnewcustomeragreements.Withacalculatedinterestof7%onemployedcapital,theoperatingincomeforthefinancialyearwasSEK21(19)million.Investmentswithinfibre-opticoperationsfortheyearamountedtoSEK15(59)million.

WithintheTelecommunicationssegment,SvenskaKraftnäthasadditionalexternalreve-nueamountingtoSEK9(11)millionfortheleasingofdatanetworks,telephonenetworksandantennaspace.

ThetotalrevenueforTelecommunicationswasSEK10�(99)million.IncludedinthisisSEK�2(�2)millionininternalrevenuesfromtheNetworkbusinesssegment.Operat-ingincomeamountedtoSEK�0(�1)mil-lion.Thedeteriorationinoperatingincomeisexplainedbyahigherlevelofdepreciationduring2007.

Income statement – Telecommunications

MSEK 2007 2006

Operating revenue 103 99

Operating expenses -73 -68

Operating income 30 31

The fibre-optic network that Svenska

Kraftnät has at its disposal trans-

mits important information for mo-

nitoring and control of the electrical

power system.

Umeå

Gävle

Luleå

Sundsvall

Norrköping

Göteborg

Malmö

Östersund

Stockholm

Borlänge

Inhyrd optofiber

Planerad optokabel

Egen optokabel

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SvenskaKraftnäthashadsystemresponsibil-ityfornaturalgasinSwedensince1July2005.Amongotherthings,thecommissionmeansthatitisSvenskaKraftnät’srespon-sibilitythatthereisabalancebetweentheincomingsupplyandtheconsumptionofnaturalgasinSweden.Thegaslinesarenot

ownedbySvenskaKraftnät.Therearefivebalanceproviders.Operatingrevenuefor2007wasSEK�1(�6)million.ChangestoagreementshaveledtoanincreaseintradebetweenSvenskaKraftnätandthebalanceprovidersduringthefourthquarter,whichhasresultedinrevenuesand

expensesincreasingbySEK7million.On1October2007theconsumptionenergyfeewasloweredfromSEK1.1/MWhtoSEK0.9/MWh.Thedivision’sexpensestherebyamountedtoSEK�6(29)million.OperatingincomefellsomewhattoSEK5(7)million.

In its role as the authority with system responsibility for natural gas in Sweden, Svenska Kraftnät is responsible for there being a balance between natural gas fed

into the system and that consumed.

Income statement – System responsibility for natural gas

MSEK 2007 2006

Operating revenue 41 36

Operating expenses -36 -29

Operating income 5 7

Some facts about the gas network Thenationalgridismadeupofsteelpipeswithadiameterofaround50cm.Thedistributionpipelinesaremadeofsteelorplasticwithvariousdimensions.Thepressureinthenationalgridisamaximumof70bar.Thepressureisregulateddownto�bar.Thegasthatendcustomersreceiveisusuallyat0.1bar,buthigherpressureisusedforlargercustomerfacilities.

System responsibility – natural gas

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Swedenintroducedanelectricitycertificatessystemin200�topromoterenewableelec-tricitygeneration.TheActgivesproducersofrenewableelectricitytheopportunitytoreceiveoneelectricitycertificateperMWhofelectricitygenerated.Thecertificatescanbesoldtoelectricitysuppliersandelectricityconsumers,whoareboundtopurchaseelec-tricitycertificatescorrespondingtoacertainproportionoftheirsalesandconsumptionrespectively.

SvenskaKraftnätisresponsibleforis-suingandaccountingforelectricitycerti-ficates.TheSwedishEnergyAgencyisre-sponsibleforotherofficialtasks.

SvenskaKraftnätissued1�.2(11.9)mil-

lionelectricitycertificatesduring2007.Duringtheyearsome2�millionelectricitycertificateswereputintocirculationatanaveragepriceofaboutSEK195percertifi-cate.Sincetheintroductionofthesystemsome5�millioncertificateshavebeenis-sued.

Windpoweristhetypeofproductionthatisentitledtocertificatesthathasen-joyedthehighestpercentageincreaseduringtheyear.Ithasgonefromashareof8%in2006to10.8%in2007.Electricitygenera-tedfrombiofuelshasaccountedfor72.6%ofproductionentitledtocertificationandhydropowerfor16.6%.

Operatingrevenuefor2007amounted

toSEK10(20)million.TherevenuesnowconsistsolelyofaccountfeesthatamountedtoSEK10(19)million.Transmissionchar-geswerediscontinuedinthefourthquarterof2006andtherebyamountedtoSEK0(1)million.OperatingincomeamountedtoSEK7(1�)million.

Income statement – Renewable electricity certificates

MSEK 2007 2006

Operating revenue 10 20

Operating expenses -3 -6

Operating income 7 14

Renewable electricity certificates

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Contingencyplanning,consistingofelectric-itypreparednessanddamsafety,isfinancedthroughGovernmentappropriationsandgrantsfromtheSwedishEmergencyManage-mentAgency.Intermsoftheaccounts,theactivitiesareneutralforSvenskaKraftnät.Duringtheyear,atotalofSEK26�millionwasutilisedformeasures.ThesefundshaveprincipallybeenutilisedforthepurposesspecifiedinNote�.

Accordingtotheletterofgovernanceforthe2007fiscalyear,inaspecialreporttotheGovernmentSvenskaKraftnätpresentsanas-sessmentofitsplannedcapacitytocontributetoensuringthattheneedsofsocietyandindi-vidualscanbemetintheeventofanyfutureattackorwar,aswellasanassessmentofthecapacityintheeventofseverepressuresonsocietyduringpeacetime.Thisreportwassub-mittedtotheGovernmentatthesametimeastheReportoftheBoardofDirectors.

Thereportincludesanaccountofmeas-uresthatSvenskaKraftnäthastakenastheauthorityforelectricitycontingencyplanningtoincreasetheoverallcapacitytosupplyelec-tricityintermsofcontingencyplanninganddefence.

SvenskaKraftnäthasdrawnupandre-portedtargets,directionsforlong-termplan-ningandoperationalplansformeasuresthatarefinancedbythe7:5EmergencyManage-mentGranttotheEmergencyManagementAuthority(KBM).Thisdetaileddatacanbepresentedifnecessary.Basedonthis,meas-ureshavebeenimplementedtocontributetoensuringasatisfactorydefencecapacityintheeventofanyarmedattackinthefuture,andtoreducetherisksandconsequencesofaccidentsandseverepressuresonsocietyinpeacetime.Certainresourcesprocuredcanalsobeusedasacontributiontoalleviatingsufferinganddamagecausedbyaccidentsanddisastersinothercountries.

SvenskaKraftnäthasprimarilyfollowedtheplanningdirectionandoperationplan-ning,andhasalsoimplementedplannedprojects.Fulfilmentofobjectives,reportingofdiscrepanciesandassessmentofcapacityhasalsobeenreportedtoKBM.Assessmentofca-pacityhasbeendealtwithinthereportinac-cordancewithadesignatedassessmentscale.

During2007,SvenskaKraftnäthasheldbasictrainingfor62conscriptsintherepair

ofpowerlinesattheauthority’strainingcentreinÅsbroandfor59conscriptsintherepairofswitchyardsandpowerplantoperatorsatVattenfallTrainingCentreinJokkmokk.Duringtheyear,some�00personsfromtheelectricitysectorhaveundergonetrainingincrisismanagementforwhichSvenskaKraftnäthasbeenresponsibleinco-operationwithSwe-dEnergy.Inadditionamanagementexercisefocussingoncrisiscommunicationhasbeenimplemented.

ThefacilityatÅsbroalsoservesasaware-houseforstrategicspareequipmentforrapidrepairsinconnectionwithbreakdownsinthenationalgridandregionalnetworks.Theequipmentstoredthereincludesspecialpylonswhichcanbeassembledquicklyandanumberofstandbypowerunits.Therearealsocom-pletesetsofequipmentformobilerepaircrewsthatcanbemobilisedfornationalefforts.

ThroughagreementswiththeSwedish

ArmedForces,varioustypesofreinforcementcanbeaddedtodealwithdisruptionsintheelectricitysupply.Amongotherthingsrepairteamscanbedeployedbyair.Throughagree-mentswiththevoluntarydefenceorganisa-tions,humanresourcescanbemadeavailablefromtheMotorTransportationCorps,theVoluntaryFlyingCorps,theMotorTrans-portCorps,andtheWomen’s’TransportationCorps.

Thecapacityoftheelectricitysupplytocopewithcriticalsituationshasbeenre-inforcedinthatcontrolcentreshavebeenprovidedwithgreaterphysicalprotection,reinforcedremoteandspeechcommunica-tionandimprovedlocalpower.Theprospectsofmaintainingnecessarytelecommunicationshavebeenreinforcedthroughthedevelopmentofmobilecommandandcommunicationunits.Duringthecourseoftheyear,coopera-tionhasbeenestablishedbetweenelectricity

An important task in contingency planning is to support companies within electricity supply in their task of

increasing their capacity to deal with extreme situations.

Contingency planning

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andtelecomcompanieswiththeaimofasfaraspossiblesecuringcriticaltelecommunica-tionsintheeventofpowerfailures.AsthetheRakelmobiletelecommunicationssystemhasbeenopenedtoawidercircleofusers,theelectricitysupplyindustryhasevaluatedthepossibilityofutilizingitbothundernormalandabnormalconditions.

Measureshavebeentakeninanumberofproductionplants,primarilycombinedheatandpowerplants,tosafeguardtheirblack-startcapability,whenthereisnocontactwiththecentralelectricitysystem,andtosecuretheirislandoperationcapability.Thiscapabil-ityhasbeenverifiedbymeansoftesting.Inconnectionwiththetests,operatingstaffhavebeentrainedinrunningtheirinstallationswithadjacentnetworksinislandoperation.Amobiletransformerandswitchyardfacilityhasbeenacquired.

WithintheNordicElectricityPrepared-nessandSafetyForumthepossibilityofmu-tualassistancehasbeenbolsteredthroughtheproductionofequipmentlistsandchecklists,contactrouteshavebeentestedandtherehavebeenexercisesinprovidingassistance.

SvenskaKraftnätcollaborateswithSwe-denergy’smembercompaniesinanemer-gencycooperationorganisationconsistingofsevenelectricitycooperationareas.Thepur-poseoftheorganisationistoproduceagoodassessmentofthesituationandtocoordinaterepairresourcesinconnectionwithexten-siveelectricityfailureswithdamagedplants.TheinformationandreportingsystemSusie,whichhasbeendevelopedinordertosup-portthecooperationorganisation,hasbeenfurtherdevelopedandplacedatthedisposal

ofvariousSwedishauthorities,andalsootherNordicauthorities,thatneedtofollowtheelectricitysupplysituationduringcriticalsituations.

InitscapacityassectorauthorityfordamsafetySvenskaKraftnäthassubmittedaspecialreporttotheGovernmentonthedevelopmentofdamsafetyinthecountry.Amongotherthingsthereportisbasedontheproceduresbywhichdamoperatorsre-portannuallytothecountyadministrativeboardsondamsafetythatweredevelopedbySvenskaKraftnät.

Withintheframeworkofongoingtests,during2007onemoredamhasundergonespecialinspectionwiththeassistanceofin-ternationalexpertise.Theaimofthespecialinspectionsistoexaminewhethersafetyindams,wheretheconsequencesoffailureareparticularlygreat,maintainasatisfactoryinternationallevel,andtoprovidedatatoen-abledamownerstocontinuetheirworkondamsafetyandfortheauthorities’supervi-sion.

AnupdatedandtosomeextentrevisededitionofSvenskaKraftnät’smanual’’Damsafety–selfregulationandsupervision’’hasbeenpublishedduring2007.Inadditionabrochurehasbeenproducedinordertoclarifyrolesandspheresofresponsibilityinissuesthatinvolvedamsafetyandcontingen-cyplanningfordamfailuresindamsthatareclassifiedasfacilitieswithdangerousopera-tionsaccordingtotheCivilProtectionAct.

Incooperationwithotherprincipalpar-tiesfor”Guidelinesfordeterminationofde-signflowsfordamfacilities”SvenskaKraftnäthascompletedworkonanewedition.The

contentoftheoriginalguidelinesthatwereissuedbythe“FlowCommittee”in1990isbasicallyunchanged.Applicationoftheguidelinesinachangeableclimateisdealtwithinthenewedition.

Developmentprojectstocoordinatecontingencyplanningfordamfailureinthemajorpowergeneratingriversisinprogressinthefollowingrivers:Luleälven,Ljungan,DalälvenandGötaälv,inadditiontoLju-snanwhereapilotstudyhasalreadybeencarriedout.SvenskaKraftnätissupportingthisdevelopmentbycontributingfinanciallytotheproductionofcommonplanningdata,providedthattheoperatorsconcernedalongeachriverhaveagreedtodevelopcoordinatedcontingencyplanning.Aprojecthasbeenstartedtodevelopsystemstoalertthegeneralpublicintheeventofdamfailure.Twotrain-ingsessionsforrivergroupsontheconse-quencesofinterventioninwaterregulationhavebeenimplementedduringtheyear.Theaimistoprovidetheparticipantswithbasiccompetenceinassessingthetechnicalandle-galeffectsofinterventioninconnectionwithhighwaterflows.

Asastepinsecuringknowledgeandskillsprovisionwithintheareaofdamsafety,Sven-skaKraftnäthasprovidedfinancialsupportto,andparticipatedinthegoverningbodyfortheSwedishHydroPowerCentre,SVC,acentreforsupportofuniversityeducationandresearchwithinhydraulicengineering,waterturbinesandgenerators.SvenskaKraftnäthasalsoprovidedsupportforanumberofR&Dprojectswithintheareaofdamsafety.

Furtherinformationisavailableinnote�.

Dam safety is an area where Svenska Kraftnät has a central role. Our commission includes working to limit damage caused by high flows and drawing attention

to the need for research within the area. We also have the central responsibility for supervision with regard to issues of dam safety as per chapter 11 of the

Environmental Code.

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ThoseassociatedcompaniesintheGroupthathavehadthegreatestimpactonSvenskaKraftnät’snetincomeareNordPoolASA,NordPoolSpotASandKraftdragarnaAB.Sincetheyareassociatedcompanies,onlySvenskaKraftnät’sshareofincomeintherespectivecompaniesisincludedintheGroup’snetincome.Theshareofincomefor2007amountedtoSEK69millioncomparedwithSEK�8millionfor2006.TheimprovedincomeislargelyduetoincreasedtradingandclearingvolumesandhigherfinancialrevenuesinNordPoolASAcomparedwith2006.

MSEK 2007 2006

Nord Pool ASA 59 36

Nord Pool Spot AS 7 10

Kraftdragarna AB 1 1

Others 2 1

Total 69 48

Share of income in associated companies

Associated companies

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SvenskaKraftnät’sresearchanddevelopmentactivitiesaimatmakingthenationalgridandsystemresponsibilityoperationsevenbetterwithrespecttoreliabilityperformance,efficiencyandenvironmentalcompatibility.Developmentofknowledgeandexpertiseincollaborationwithuniversitiesisalsoaprioritisedarea.Researchanddevelopmentisalsosupportedwithintheareaofdamsafetyaswellasriskandvulnerabilityquestionsforthepowersystem.

SvenskaKraftnätoftenundertakesre-searchanddevelopmentincollaborationwithcompaniesintheindustryviathejoint-lyownedElforskAB.SvenskaKraftnätisalsojointownerofthedevelopmentcompanyStriABinLudvika.Otherco-ownersareABB,StatnettandVattenfall.Researchanddevelopmentprojectsareoftencarriedoutincollaborationwiththeco-owners.

During2007severaljointprojectshavebeeninitiatedbytheNordicnationalgridcompanies.

Measuringmethodsandinstructionsformaintenanceoftensionjoints.

Studiesofreliabilityindifferentdesignsofswitchyard.Thegoalistofindenhan-cedsolutionswithrespecttooperationalreliability,economyandmaintenance.

TheNordicprojecttoexchangemea-surementvaluesinrealtimeusingtimestampingiscontinuing.Thesystemwillbeputintooperationduring2008.ThereareanumberofinterestingapplicationsthatwillincreaseoperationalreliabilityandfacilitatebetteruseofthecapacityinourcommonNordicpowersystem.

SystemsconsistingofsensorssituatedonpowerlinestoprovidewarningofsaltandicecoveringsonlinesandtheirinsulatorsarecurrentlybeingtestedforsaltcoveringonthewestcoastandicecoveringonalineinDalarna.Thegoalistohaveanearlywarningsystemforextremeweatherconditions.

Maintenanceofpowerlinecorridors,i.e.loppingtreesandclearingvegetationisanimportantandmajoraspectofthemainte-nanceoperation.Newtechniquesforbetterassessmentofstatusandriskofdisruptionduetotalltreesinpowerlinecorridorshave

priority.Twodifferentprojectsareunderwayandtheyarebasedondifferenttechnolo-gies.Thefirstoneusesadvancedmeasuringtechniqueswithlasers.Thesecondmethodisbasedonthreedimensionalphotographycombinedwithadvancedcomputerisedinter-pretation.Thegoalistointroducetheoptionthatismostappropriateforourmaintenanceoperation.

DamsafetyisanimportantfieldintheHydraulicEngineeringsphereofcompeten-ce.Thesafeadministrationofthecountry’sagingstockofdamsrequiressoundknow-ledgeandcompetencewithinareassuchashydrology,hydraulicsanddamconstructiontechnology.Withobjectivesincludinggua-ranteeingtheprovisionofengineeringskillswithintheareaofdamsafety,SvenskaKraft-nätissupportingtheactivitiesattheSwedishHydroPowerCentre.InadditionsupportisbeingprovidedforanumberofR&Dpro-jectswithintheareaofdamsafety.

During2007,SvenskaKraftnätutilisedSEK29(27)millionforresearchanddeve-lopmentwithingridoperations,includingdamsafetyandcontingencyactivities.

Research and development

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The excellent Nordic cooperation is continuingCooperationwithinNordel–theNordicnationalgridcompanies–hascontinuedandbeenintensifiedduring2007.NordelhassetoutavisionforcooperationinthefutureandtofacilitatecommunicationregardingNordel’sworkwithgroupsofstakeholders.Nordel’sstrategicagendafortheworkcon-tainsfourmaincomponents:

AmoreefficientNordicelectricitymarketContinuedintegrationoftheNordicelec-tricitymarketwithadjacentareasStrengthenedandmoreeffectiveplanning-andoperatingprocesseswithinNordelStrengthenedcooperationwithsystemoperatorsinthenearbyNorthEuropeanregion

Workinthenextfewyearswillbefocussedontheseareas.

DuringtheyearNordelhasdrawnupguidelinesastohowresourcesforpeakloadcapacityshouldbemanaged.IfaNordiccountrydecidesthattheGovernmentorsys-temoperatorsneedtoimplementmeasurestoboostthepeakpowerbalancethenNordelhasproducedrecommendationsforhowthisistoproceed.Thestartingpointistominimisenegativeimpactsonthemarket.Recommen-dationsincludehowthepeakpowerreserveshouldbepricedandactivatedandalsohowitshouldbefinanced.

Furthermore,Nordelhasagreedonaproposalforharmonisationofthebalanceservice,includingequalizationofthechar-gesthatoperatorspay.Theproposalisnowbeingdiscussedwithsupervisoryauthoritiesandoperatorsineachcountryandthegoalisforthechangestobeimplementedby1January2009.

Toimproveoperationalreliabilityadeci-sionhasbeentakenonharmonisationofso-calledrampingofHVDC-connectionsbetweenNordelandcontinentalEurope.Thedecisionmeansthatthedifferencebetweenthepowertransmittedbetweentwoadjacenthoursislimited.Theriskoftoogreatvaria-tionsintheelectricitysystem’sfrequencycantherebybeavoided.

AnewITsystemforoperationalcollab-orationbetweentheNordiccontrolroomsisunderconstruction.Itwillbecommis-sionedin2009.

••

TheimplementationofNordel’sfiveprior-ityprojectsNea–Järpströmmen,theSouthernLink,Fenno-Skan2,theGreatBeltcon-nectionandSkagerak�areinprogress.TheSouthernLinkisnowpartofthelargerSouthWestLinkproject.Workonanewjointsys-temdevelopmentplanhasbeenunderwayduringtheyear.ItwillconstitutethebasisforthenextphaseofinvestmentsintheNordicnationalgridforanimprovedelectricitymar-ketandoperationalreliability.Theplanwillbepresentedinearly2008.

DuringtheyearNordelhasexpandedandformalisedcollaborationwithsystemopera-torsintheimmediatesurroundings.NordelandUCTEhavehadajointmeeting.Astatementofintentregardingcollaborationintermsofplanninghasbeenagreeduponbe-tweenNordelandBALTSO,representingtheBalticcountries.

European collaboration will become increasingly importantDuring2007SvenskaKraftnäthascontin-uedactivelyparticipatinginthedevelopmentoftheEuropeanelectricityandgasmarket.Thishasprimarilytakenplacethroughtheorganisationforcooperationbetweenthetransmissionsystemoperatorcompaniesforelectricity(ETSO)andgas(GIE),butalsowithintheso-calledregionalinitiativeforNorthernEurope(i.e.theNordicCountries,theBalticStates,GermanyandPoland).

The European Commission’s third energy packageTheEUCommission’s”StrategicEnergyReview”waspublishedinJanuary2007anditcontainedenvironmentalgoalsandpro-posalstoimprovetheenergymarkets.Thiswasmadeconcreteon19September2007inaproposalforathirdlegislationpackagetosupplementtheinternalmarketsforelectric-ityandgas.Thesedocumentshavecharacter-izedthediscussionduringtheyear.

Thepackageproposesthatexistingdirec-tivesfortheelectricityandgasmarkets,alongwithaccompanyingordinances,areadjustedwiththeaimofimprovingmarketfunctionsandincreasingsecurityofsupply.Further-more,itisproposedthatnationalsupervisoryagenciesshouldbestrongerandmoreinde-pendent,andthatanewEuropeanagencyforregulators(ACER)shouldbecreatedtoimprovethecollaboration.

CooperationbetweensystemoperatorsistobebolsteredthroughanewformalisedEuropeanbody,ENTSO,whichaccordingtotheproposalwouldreplacethepresentor-ganisationETSOandalsocovertheregionalcollaborations,e.g.UCTEandNordel.Thekeyareasforcooperationwillbetodevelopcommercialandtechnicalregulations,andtocoordinatesystemoperationandexpansionplanning.Inadditiontoitsannualreport,ENTSOisexpectedtopublishregularten-yearinvestmentplansandforecastsregar-

Nordic and European cooperation

Svenska Kraftnät’s staff take part in a number of joint forums within both the Nordic region and the rest of

Europe, both to develop operational reliability in electricity systems and to develop the electricity market.

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dingavailableproductionbothinwinterandsummer.Theworkwilllargelybeexecutedthroughregionalcooperation.

TheEUCommissionwouldalsoliketoeffectivelyseparateproduction/salesfromownershipofthenetworks.Inthefirstplaceamodelisrecommendedwheresystemre-sponsibilityislinkedwithownershipofthenationalgrids.SvenskaKraftnätisanexampleofsuchaTSOorganisation.Asanalterna-tive,anISOmodel,i.e.withanindependentbodyholdingsystemresponsibilitythatdoesnotownthenetwork,canbeacceptedasapossiblesecond-bestsolution.Itentailsonecompanytakingcareofoperation,planningexpansionofthenationalgridandenergymarketissues,whileoneorseveralseparatecompaniesownandhaveeconomicresponsi-bilityfortheactualnetworks.

TheNordicenergyministersappointedacommissionduringthesummerof2007toinvestigatethebenefitsanddisbenefitsofaNordicISO.

Work within ETSOAsaresultoftheproposalforthethirdpack-age,duringtheyearETSOhascommenceddiscussionswiththeregionalorganisationsforsystemoperators(UCTE,Nordeletc.).TheambitionistosetupENTSOonavoluntary

basisassoonaspossibleandtostartworkinthespiritofthepackagebeforeitisofficiallyadoptedinsomeform.

Theissueoftransitcompensationremainshighupontheagenda.Overanumberofyearsseveralauthoritieswhoholdsystemresponsibi-lityhavesignedvoluntaryagreementstocom-pensateeachotherfortransitflowsthroughthenationalgridscausedbyinternationalelectri-citytrade.However,ithasnotbeenpossibleforallpartiestoagreeonafinaldistributionmo-del.However,during2007allcountriesagreedonaninterimmodelforallocationofcompen-sationfor2008and2009.Thisisintendedtocreatetimetofindafinalmodelthatcanapplyfrom2010.

Theworkofincreasingtransparencyintheelectricitymarketcontinues.TheinformationplatformETSOVista(www.etsovista.org)hasbeenlaunchedandfurtherdeveloped.OtherissueswithwhichETSOhasbeeninvolvedincludebalanceregulation,dealingwithcon-gestionandpeakpowerbalances.

Regional work – Market coupling2007hasseenamarkeddevelopmenttowardsso-calledmarketcouplinginEurope.Theelectricityexchangesandpartieswithsystemresponsibilityindifferentcountriesarecoo-peratingtocreateamoreeffectivecommon

market,bysellingelectricityandtransmis-sioncapacitysimultaneously.ThisispartlyaconsequenceoftheEUCommissionandsupervisorybodieshavingtakentheinitiativeinthecreationofregionalforumstodeveloptheEuropeanelectricitymarketmorerapidly.

Marketcouplinghaspreviouslyonlybeenappliedbetweentheareasbelongingtothesamespotmarket.NordPoolwasapioneerinthiscontext.However,marketcouplinghasbeenunderwaybetweenFrance,BelgiumandtheNetherlandssinceNovember2006.Thishasproducedamoreefficientelectricitymar-ket,oftenwithacommonexchangepriceinallthreecountries(approximately60percentofthetime).Therearenowdifferentpricesonthethreeexchangesonly2percentofthetime.ThegoalistoexpandthecollaborationtoincludeGermanyandLuxembourgandtocreateacommonelectricityexchangein2009.

InJanuary2008anewcable,NorNed,wasputintooperationbetweentheNether-landsandNorway.Theintentionistomanagethetradingcapacityinthecablebymeansofmarketcoupling,howeverthereisstillnosuitablesolutionanditcanthereforenotbestarteduntilJanuary2009.Untilthentradingcapacitywillbesoldthoughaconventionalauctionthattakesplacebeforetheelectricitypricesareset.

AnotherprojectinvolvestheGerman-Da-nishlinkswheremarketcouplingistobein-troducedfromJune2008.Thecollaborationisbeingconductedwithinaspecialorganisa-tion,EMCC,thatisownedbytheconcernedbodieswithsystemresponsibilityandelectrici-tyexchanges.DiscussionshavebeeninitiatedbetweenBalticCable,EMCCandSvenskaKraftnättoalsomanagethecapacityintheSwedish-Germanlink,BalticCable,usingmarketcoupling.

Ifallplansareimplemented,fiveelectricityexchangesinninecountrieswillbeintercon-nectedin2009.ThisrepresentsamajorstepforwardfortheelectricitymarketinEurope.

UCTE–UnionfortheCoordinationofTransmissionofElectricity(organisationforsystemoperatorsinContinentalEurope)

BALTSO–TheorganisationforBalticsys-temoperators

ETSO–EuropeanTransmissionSystemOperators

GIE–GasInfrastructureEurope

ACER –AgencyforCooperationofEnergyRegulators

ENTSO–TheworkingnameforEuropeanNetworkofTransmissionSystemOperators

EMCC–EuropeanMarketCouplingCompany

Active participation in the development of the natural gas market in the Nordic region and in Europe is an

important task for a number of Svenska Kraftnät’s employees. This includes participation in the organisa-

tion for cooperation between the companies with system responsibility for gas (GIE).

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SvenskaKraftnät’senvironmentalresponsibili-tydoesnotonlycomprisethedirectimpactofitsactivitiesontheenvironment,forexample,theimpactofpowerlinesonthelandscape,thenaturalenvironmentandresidentialenvironments.Itsresponsibilityalsoentailstakingtheglobalenvironmentintoconsidera-tion,forexamplewhendesigningtheSwedishnationalgridforelectricitytofacilitatetheexpansionofrenewableenergygenerationinthecountry.

During2007theenvironmentalworkhasbeenfocussedonthefollowingoverallgoals:

EfficientenergyuseandalimitedimpactonclimateLimiteduseandlowestpossibleemissionsofhazardoussubstancesAlowlevelofencroachmentfrompower-linesandstationsRichbiologicaldiversityinourpowerlinecorridors

InitsenvironmentalpolicySvenskaKraftnätundertakestotakeenvironmentalresponsibil-itythrough:

continuallyendeavouringtoreducetheenvironmentalloadofitsactivitiesintegratingenvironmentalissuesintoallactivitiesincludingenvironmentalconsid-erationsinalldecisionssettingclearenvironmentaltargetsanddesigningproceduresforfollowing-up,evaluatingandimprovingtheenvironmen-talworktakingaccountofenvironmentalaspectsinprocurementsbysettingenvironmen-talrequirementsforoursuppliersandcontractors

ThedecisiontoconstructtheSouthWestLinksupportsthenationalenvironmentalqualityobjective’’Limitedimpactonclimate’’byprovidingbetterpreconditionsformanag-inganextensiveexpansionofwindpower

andothernewformsofgenerationsuchasbiofuelsandnaturalgas.

Transmissionlossesinthenationalgridarealsoanimportantenvironmentalaspectwithaglobalconnection.Oneofthefactorsthatdeterminesthesizeofthelossesisthetechni-caldesignoftheplants.Anewtooltoenableminimisationofthelossesduringoperationhasbeendeveloped.Thetoolmakesitpossibleforthestaffinthecontrolroomstosimplydeter-minewhatcontrolmeasuresthatwillbestlimitthetransmissionlosses.Thetoolisexpectedtobeoperationalinlate2008.

SvenskaKraftnätisworkingactivelytore-duceemissionsofthegreenhousegassulphurhexafluoride(SF

6)fromcircuit-breakersand

gas-insulatedswitchyards.Theamountofgasthatisputintotheequipmentiscontinuallymeasuredwiththeaimofdetectingandrec-tifyingabnormallyhighleakage.Equipmentthatleaksisreplacedorsealed,anddemandsareplacedonthemaintenancecontractors

Environment

Biological diversity in the powerline corridors is one of Svenska Kraftnät’s environmental goals. The recurrent clearances in the power line corridors create po-

tential refuges for endangered species that thrive in open habitats that are similar to the pastureland that was once common. Demonstration areas have been

set up in, for example, Lydinge in Uppland in order to emphasise the potential of the powerline corridor.

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withregardtohandlingthegas.SvenskaKraftnätisalsograduallytighteninguptherequirementsonsealswhenpurchasingnewproducts.Emissionsfromthenationalgrid’sfacilitiesarelow,lowerthanwhatisrequiredfornewequipmentaccordingtointernatio-nalstandards.

CO2emissionsfrombusinesstripswere

lowerin2007thanin2006,despitethefactthatSvenskaKraftnät’sinvestmentactivitiesaregrowingandthusprecipitatingagreaterrequirementfortravel.

AsSvenskaKraftnätisamajorpurcha-serofcontractservices,itisimportanttoensurethatthecontractorsengagedtaketheenvironmentintoconsideration.Themostimportanttoolsaretheenvironmentalrequi-rementsthatareincludedinthecontractualagreementsalongwithfollowing-upthattherequirementsaremet.Anumberofenviron-mentalauditsofconstructionandmainte-nancecontractshavebeencarriedoutduringtheyear.Theexperiencesgainedfromtheseauditshasledtoanumberofenvironmentalimprovementstothecontracts.Severalenvi-ronmentalauditswillbeundertakenduring2008withtheaimofachievingfurtherim-provements.

EquipmentfilledwithoilisusedinSvenskaKraftnät’sstationfacilities.Apro-jectisunderwaytocarryoutaninventoryofthedimensionsandstatusofoilcollectionpits.AnotherprojectinvolvessystematicallyregisteringallPCBanalysesthathavebeencarriedoutofoilsinpowertransformersandreactors.ThereareonlyasmallnumberoflocaltransformersthatarecontaminatedwithPCB.Aninventoryofbuildingswillbecar-

riedoutduring2008outtoclarifywhetheranybuildingscontainPCB.

During2007workhasbeencompletedontheconstructionofembankmentsaroundthesubsidiarySvenskaKraftnätGasturbinerAB’sfueltanksinthreeofthegasturbinefacilities.Thistherebyremovestheriskofalargeamountofoilbeingabletocontaminategroundandwaterintheeventofanydamagetoatank.Thelargesttankholds1�,500m�ofoil.

SvenskaKraftnät’senvironmentalprizewasawardedforthefirsttimeinMarch2007.Theaimofawardingtheprize,whichamountstoSEK100,000,istoencourageenvironmentalimprovementswithinSvenska

Kraftnät’sfieldofoperations.ThefirstprizewassharedbetweenthecompanyABB,whichhasdevelopedacircuit-breakerwithalargenumberofenvironmentalbenefits,andthebutterflyexpertIngemarFrycklund,whohasdemonstratedthroughmanyyearsofstudythatpowerlinecorridorsrepresentimportantsitesandrefugesforspeciesthatareotherwiseendangered.

Adaptingthemanagementofthepowerlinecorridorstobenefitbiologicaldiversityisalong-termgoal.Inventoriesofanumberofpowerlineshavebeencarriedoutduring2007withrespecttobiotopesthatarerichinspecies.Demonstrationareashavebeenorganisedwheretheresultsoftheadaptedmanagementpracticescanbestudied.Ama-nagementplanhasbeendrawnupincollabo-rationwiththecountyadministrativeboardinUppsalacountyforasectionofpowerlinewiththeaimofincreasingthenumbersoftheendangeredmarshfritillarybutterflyanditsdistributioninthearea.CollaborationwiththecountyadministrativeboardinJönköpingcountryisalsounderwayinaprojectwherethenaturalvaluesinpowerlinecorridorsareassessedandfollowed-up.

Duringtheyearallstaffhavecompletedaweb-basedenvironmentaltrainingcoursefollowedbyatest.Inadditionsomefiftyper-sonshavecompletedbasic,teacher-ledenvi-ronmentaltrainingandaroundthirtyprojectmanagersandmaintenancemanagershavereceivedtraininginwastemanagement.

A more detailed description of Svenska Kraftnät’s environmental work is to be found towards the end of the annual report.

Svenska Kraftnät’s prize for efforts that promote the environment was awarded for the first time in

early 2007.

All Svenska Kraftnät’s employees have successfully completed a web-based environmental training

course. The aim is to enable employees to use their knowledge to make active choices to benefit the

environment both at work and outside it.

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An attractive employer – characterised by re-sponsible enterpriseSvenskaKraftnätshallbeanattractiveemployerwithcompetentemployeeswhoarehappyintheirwork.

SvenskaKraftnät’svaluesareefficiency,quality,socialresponsibility,spiritofcoop-erationandteamwork.Thevaluesserveasguidanceinthetaskofachievingresponsibleenterpriseandbeingperceivedasanattrac-tiveemployer.Thefactthattheworkplaceisvalues-ledwithactiveresponsibilityforsocialdevelopmentattractsnewemployees.

SvenskaKraftnätensuressatisfactoryskillsprovisionbyeffectiveplanningandreplacementofexpertise.SvenskaKraftnäthasexplicittargetsforpresenceandabsenceduetoillness,moreevenageandgenderdistributionandincreasedethnicdiversity.SvenskaKraftnätcollaborateswithandsup-portsselecteduniversitiesinordertobolstertherecruitmentbaseandhasalsoinitiatedtargetedinputsinrelationtouppersecond-aryschools.

Staffshouldperceivethattheirresourcesareusedeffectivelyandthattheoperationisrunwithahighlevelofquality.

LeadershipwithinSvenskaKraftnätshouldbetarget-oriented,clear,transparentandexercisedincooperationwiththestaff.

Staff in 2007Thenumberoffull-timeemployedstaffintheGroupatyear-endwas287(289),ofwhom202(20�)weremenand85(86)women.Staffturnoveramountedto6.2(�.9)%.Sickleaveduringtheyearwas2.5(�.8)%.Theaverageagewithinthecom-panyis�7(�7).Distributionaccordingtoageandgenderisshowninthetablebelow.

Atotalof55employeesareduetoretirefromSvenskaKraftnätwithinthenextfiveyears.

Goals and outcomes for 2007During2007,SvenskaKraftnäthasper-formedanumberofactivitiesaimedatachievingthefollowinggoals:

ThestaffwillcontinuetoregardSvenskaKraftnätasanattractiveemployer.Theproportionoffemaleemployeeswillincreaseto�0%,aswilltheproportionoffemalemanagers.Staffturnoverwillremainatalowlevel.Sickleavewillbereducedtobelow�.0%andtheproportionoflong-termhealthyemployeeswillbe60%.Anewmanagementprogrammeforpro-spectivemanagerswillbestarted.Agedistributionwillincreasethroughtherecruitmentofyoungerstaff.Eachemployeeshallhaveapersonalde-velopmentplanbasedonafundamentalskillsanalysis.SvenskaKraftnätshallactivelypromoteaplannedtransferofexperiencefromoldertoyoungeremployees.SvenskaKraftnätshallberegardedboth

••

asacompanythatoffersequalopportuni-tiesandasaverygoodemployerfortheparentsofyoungchildren.Collaborationwithselecteduniversitieswillbefurtherdeveloped.Ethnicandculturaldiversityshallbepromoted,e.g.throughrecruitment.Thenumberofemployeeswhochangejobsinternally(jobrotation)willincreaseto15.

During2007atotalof18employeeswererecruited,8ofwhomwerewomenand10men.Theaverageageofthesenewemploy-eesis�8(�6).Staffturnoverhasincreasedduringtheyear,and10employeeshaveleftthecompany.8employeeshaveendedtheiremploymentduetoretirement.Duringtheyear11employeeschangedunitordepart-mentwithinthecompany.

Duringtheyear6trainees–threewomenandthreemen,allcertifiedengineers–com-pletedthetraineeperiodandweregivenper-manentpositions.

Theproportionoffemalestaffremains

Employees

50

45

40

35

30

25

20

15

10

5

025 –29 30–34 35–39 40–44 45–49 50–54 55–59 >60

Women Men

Quantity

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atthesamelevelaslastyear,justover29%.Theproportionoffemalemanagershadho-weverdecreasedto21%atyearend.

DuringtheyearSvenskaKraftnäthascontinuedtofocusoncreatingahealthiercompany.Keep-fitactivitiesarecentredonfouroverarchinggoalswiththelong-termaimthatSvenskaKraftnätwilltoanevengreaterextentbeasoundandhealthywork-place.Theseare:

Sickleaveshallbemax2.5%Thenumberoflong-termhealthyemployeesshallbeinexcessof65%Physicalfitnessshallonaverageincreaseby20%Thereshallbenowork-relatedlong-termillnesses

Inordertomeetthesetargets,thecompanyisconductingactivitiesinfoursub-areas:workingenvironment,leadership,fitnessandrehabilitation.Absenceduetoillnesshasfallensubstantiallycomparedwithlastyear,chieflyduetoaneffectiveprocessofgettingthelong-termsickbacktowork.

Theproportionoflong-termsickleave(longerthan60days)hasdecreasedto1.1(2.�)%,whichhashadasignificanteffectonthetotalincreaseinsickleave.51(55)%ofthestaffhavenothadonesingledayofsickleaveduringthecourseoftheyear.Attheendoftheyearoneofthecompany’semployeeswassickonalong-termbasis.

DuringthecourseoftheyearthecompanyhasinvestedSEK1�,000peremployeeinex-ternaldevelopmentactivities.DuringtheyearSvenskaKraftnätinstigatedaleadershippro-grammefor11managersthatwillcontinueduring2008.

Almostallemployeeshavehadatleastoneperformanceappraisalduringtheyear,whichhasalsoincludedarecordoftheneedfordevelopment.

Anannualanalysisismadeoftheexpe-rienceandexpertiseofemployeeswhoareduetofinishworkingatSvenskaKraftnätoverthenextfive-yearperiod.Thistasken-tailscompilingwhattypesofknowledgeareofcriticalimportancetothecompanyandwhichmustbetransferredtootheremploy-eesinsomeform.Onetotwoyearsbeforeanemployeeisduetogointoretirement,anas-

••

sessmentismadeofwhichactivitiesneedtobecarriedoutsothatimportantknowledgeisretainedwithinSvenskaKraftnät.During2007,thecompanyhasplannedforthistypeofskillstransferfor22employees.

Thegenderequalityplanandtheworkenvironmentplanhasbeenupdatedduringtheyearandthecompany’sperceptionisthatworkongenderequalityandtheworkenvironmentisregardedaspositive.Thestaffregardthecompanyasaverygoodemployerforparentsofyoungchildren.DuringtheyeartheSwedishAssociationofGraduateEngineersdesignatedSvenskaKraftnätasSweden’smostfamilyfriendlycompany,amongcompanieswhichemployalotofengineers.

Duringtheyearthecompanyhaspar-ticipatedinfourcareersfairs;twodaysatKTHinStockholm,onedayatChalmersinGöteborgandonedayattheUniversityinHalmstad.

Svenska Kraftnät’s goals for 2008SvenskaKraftnät’sstaffshouldperceivethattheirresourcesareusedeffectivelyandthattheoperationisrunwithahighlevelofqualityandwithsocialresponsibilityforsus-tainabledevelopment.SvenskaKraftnätwillfocusitsworkfor2008withinthefollowingtargetareas:

SkillsplanningHealthandfitnessGenderequalityanddiversityLeadershipWell-being,cooperationandgoodworkingconditions

Asurveyofattitudeswillbeimplementedduring2008togaugehowwellSvenskaKraft-nätisfulfillingitsgoals.

Skills planningDuring2008theincreasedrateofinvestmentwillhaveapronouncedeffectonskillsplan-ning.Therateofrecruitmentwillincreaseaswellastheneedforallstafftodeveloptheirownskillsinlinewiththesechanges.SvenskaKraftnätwillalsohavetoincreaseitsefforts

•••••

tostimulatejobrotationandgenerategreateropportunitiesforplannedskillstransfer.

Skillsplanningshallalsofocusonfuturemanagementprovisionandthedevelopmentofspecialists.Itisalsobasedonchangesthatrequirespecialefforts,primarilytheeffectofalargenumberofretirements.SvenskaKraftnätmustalsobeactiveatuppersecondaryschoolsanduniversitiesinordertosecurenewgenera-tionswithintheelectricityindustry.

Goals for 2008:Eachemployeeshallhaveapersonalde-velopmentplanbasedonafundamentalskillsanalysisSvenskaKraftnätshallactivelypromoteaplannedtransferofexperiencefromoldertoyoungeremployeesStaffturnoverwillremainatalowlevelCollaborationwithselecteduniversitiesanduppersecondaryschoolswillbefurtherdeveloped

••

Sick leave (%) Up to 29 years old 30–49 Over 50 Total

Women 0,4 4,6 3,4 3,8

Men 0,6 1,3 2,4 1,9

Total 0,5 2,6 2,6 2,5

The proportion of women in Svenska Kraftnät is almost 30 %. Despite the company having a large number of engineers, the goal is to increase the proportion.

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AgedistributionwillincreasethroughtherecruitmentofyoungerstaffThenumberofemployeeswhochangejobsinternally(jobrotation)willincreaseto15.SvenskaKraftnätwillinvestatleastSEK15,000peremployeeinskillsdevelop-ment

Health and fitness

DuringtheyearSvenskaKraftnätwillconti-nuetofocusoncreatingahealthycompany.Keep-fitactivitieswillbebothpreventiveandremedialandwillleadtoareductioninabsenceduetoill-healthandconsequentincreaseinattendanceatwork.Aclearlyarticulatedgoalisthatnoemployeesshouldbesickonalong-termbasis.

Goals for 2008• Sickleavewillbereducedtounder2.5%• Theproportionoflong-termhealthy

employeeswillincreaseto60%• Thereshallbenowork-relatedillnesses• Alllong-termsickshallreturntowork

Gender equality and diversitySvenskaKraftnätwilltakeactivemeasurestopromotebothgenderequalityanddiver-sity.Thelargenumberofretirementswillfacilitateactiverecruitmentofbothfemalestaffandemployeesfromothercultures.Thecompanyshallalsoberegardedasbeneficialfortheparentsofyoungchildren.

Goals for 2008Theproportionoffemaleemployeeswillincreaseto�0%andtheproportionoffemalemanagersto25%SvenskaKraftnätshallberegardedbothasacompanythatoffersequalopportu-nitiesandasaverygoodemployerfortheparentsofyoungchildrenEthnicandculturaldiversityshallbepro-moted,e.g.throughrecruitment

LeadershipFirst-rate,clearleadershipisanimportantprerequisiteincreatinganattractivecom-pany.SvenskaKraftnätmustactivelydevelopitsmanagers,butalsoensurethatitproducesagoodsupplyofmanagersforthefuture

Goals for 2008• Aprogrammetoproducefuturemanagers

shallbeimplementedduringtheyear• Amanagementprogrammefornewmana-

gersshallcommenceduringtheyear• Theproportionoffemalemanagerswithin

thecompanymustincrease

Well-being, cooperation and good wor-king conditionsTheannualsurveyofattitudeswillgivethecompanyinformationonhowwellwearelivinguptobeingacompanyinwhichemployeesfeelinvolved,arecontent,partici-pateandperformsatisfactorily.

Theattitudesurveywillfocusonmeasur-ingthefollowingtargetareas:

ThatthestaffcontinuetoregardSvenskaKraftnätasanattractiveemployerThatthestaffconsiderthatthereiscoo-perationinrelationtoimportantissuesThatSvenskaKraftnäthassufficientresourcestocarryoutitscommissionssatisfactorilyThattheworkischaracterisedbyef-ficiencyandqualityThattheleadershipwithinthecompanymaintainsahighqualityThatthestaffexperiencejobsatisfactionThattheworkenvironmentisregardedashealthyandsafeThatthestafffeelwell-informedThatskillsplanningisthoroughandfocusedonthefutureThatthestaffarehealthy,enjoytheirworkandconsidertheirworkingcondi-tionstobegood

Goals for 2008/2009Thesubstantiallyincreasedrateofinvest-mentwillhaveapronouncedeffectonthecompany’sskillsprovisioninthecomingyears.

Theprospectsforrecruitingskilledemployeeswillcontinuetobegood.WewillactivelyincreasetheproportionofwomenandfemalemanagerswithinSvenskaKraft-nät,primarilyintheengineeringdepartments.

••

••

The proportion of women in Svenska Kraftnät is almost 30 %. Despite the company having a large number of engineers, the goal is to increase the proportion.

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SvenskaKraftnätalsointendstoinvestinmeasuresthatfurtherreducesickleaveandincreasethenumberoffull-timehealthyemployees.

SvenskaKraftnätwillcontinuetocon-ductemployeesurveysinordertomeasuretheextenttowhichemployeesaresatisfiedwiththeirworkandthecompany.

Thefocusfor2008/2010willbe:NewrecruitmentofspecialistsinordertocopewiththeincreasedrateofinvestmentandlargenumberofretirementsActiverecruitmentofyoungacademicsandfemaleemployeesandmanagersSkillsanalysesandpersonaldevelopmentplansforallemployees

IncreasedfocusonourmanagersAfocusonthetransferofskillsfromoldertoyoungeremployeesSickleavereducedtounder2.5%Theproportionoffull-timehealthyemployeesshallbeatleast60%Goodcontactswithuppersecondaryschoolsanduniversities

••

••

Incentive programme 2007

ThepurposeofSvenskaKraftnät’sincen-tiveprogrammeistocreateinvolvementinordertoachieveahighlevelofoperationalreliability,asoundfinancialresult,goodcosteffectivenessandawell-function-ingcompany.ThiswillenableSvenskaKraftnät’sprimaryobjectivetobefulfilled:areliableandeffectivenationalgrid.

In2007therewerealsosub-goalsforreducedcarbondioxideemissionsduringbusinesstravel,environmentallyapprovedconstruc-tionandmaintenancecontractsandimple-mentationofcoursesintheenvironmentandIT-security.TheprogrammecoversallemployeesapartfromtheDirectorGeneral,whosefinancialconditionsaredeterminedbytheGovernment.

Theincentiveprogrammeisstructuredsothatthemaximumbonusisonemonth’ssalary.Theoutcomefor2007was100%ofamonthlysalary.Theallocationfor2007isSEK1�.�(7.9)million,includingnationalinsuranceexpenses.

Governance for the Group

TheoperationsoftheSvenskaKraftnätGroupfor2007havebeenregulatedprimarilythroughtheOrdinance(1991:201�),includ-ingtheinstructionfortheparententitySvenskaKraftnät,andthroughtheannualletterofgovernance.Inconnectionwiththeadoptionofthenationalbudgetforthenextyear,ParliamentdecidesonSvenskaKraftnät’sinvestmentsandfinancialoperations.Theletterofgovernance,withintheexpensearea21Energy,describestheassignmentsandregulatesthescope,conditionsandauthoriza-tionsforSvenskaKraftnät.

ThegovernmentappointstheBoardofDirec-torsandtheDirectorGeneralforSvenskaKraftnät.Accordingto5§oftheOrdinanceincludingtheinstructionforSvenskaKraft-nät,theDirectorGeneralandstaffrepresenta-tivesarealsoincludedintheBoard.

Accordingtotheletterofgovernance,thestatementofaccountsinSvenskaKraftnät’sannualandinterimreportsshallfollowthepoliciesandguidelinesintheStateowner-shippolicywheretheseareapplicablefortheSvenskaKraftnätGroup.

From1January2008theGovernmenthasissuedanewregulatoryordinance(2007:515),whichappliestoallGovern-mentauthoritiesandpublicutilities.AnewinstructionfortheparententitySvenskaKraftnät(2007:1119)hascomeintoeffectfrom1January2008.Anewordinanceoninternalgovernanceandcontrol(2007:60�)forSvenskaKraftnätasanauthorityalsoap-pliesfromthesamedate.

continued from previous page

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The Board of Directors

The Board of Directors and its work

TheBoardofSvenskaKraftnätconsistsoftenmembersincludingtwostaffassocia-tionrepresentatives.TheBoardhasheldfivemeetingsduringtheyear.

During2007theworkoftheBoardhasbeenprimarilyfocusedon:

Thecompany’slong-termdevelopmentFinancialefficiencyOngoinginvestmentprogramme

•••

TheneedforinvestmentinthenationalgridTheexpansionofwindpowerinSwedenTheNordicelectricityexchangeEnvironmentalissues

•••

Svenska Kraftnät’s internal controls

Theprimaryinternalcontroltakesplaceintheordinaryoperationinthelineorganisa-tion.Theinternalreport-andcontrolsystem

isbasedonannualfinancialplanningwithmonthlyreports.Inadditionthereisaninternalauditorwhoiscommissionedto

reviewtheoperationaccordingtoanannualauditingplan.

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Income statements – the Group

Jan–Dec Jan–Dec

MSEK Note 2007 2006

Operating revenue

Network revenue 1 3 377 3 050

System responsibility revenue – electricity 2 2 531 3 388

Telecommunications revenue 71 67

System responsibility revenue – natural gas 41 36

Renewable electricity certificates 10 20

Government grant for power contingency planning 3 264 253

Activated work for own account 4 32 24

Total operating revenue 6 326 6 838

Operating expenses

Personnel expenses 5 -251 -208

Purchase of loss power -762 -698

Purchased balancing power -2 177 -3 024

Other operating expenses 6 -1 751 -1 651

Depreciation of tangible

and intangible fixed assets 13,14 -590 -569

Total operating expenses -5 531 -6 150

Share of income in associated companies 7 69 48

Operating income 8 864 736

Result from financial investments

Result from other securities and receivables

that are fixed assets 9 11 2

Interest income and similar income items 10 7 3

Interest expenses and similar expense items 11 -145 -60

Income after financial items 737 681

Tax on income for the year 12 -5 -5

Net income for the year 732 676

Income attributable to:

The state 733 678

Minority shares -1 -2

Financial reports

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Operating revenue and expensesTheSvenskaKraftnätGroup’soperatingrev-enueamountedtoSEK6,�26(6,8�8)million,adecreaseofSEK512million.

TheGroup’snetworkrevenueincreasedbySEK�27millioncomparedwiththepreviousyear.TheincreaseisduetothesubstantialrisesincongestionrevenueduringthesecondhalfoftheyearthattotalledSEK6�1millioncom-paredwithSEK�20millionlastyear.EnergydependentrevenuesfromtransmissionsonthenationalgridalsoincreasedduringthelatterhalfoftheyearandtotalledSEK1,271(1,2��)million.

SystemresponsibilityrevenueforelectricityamountedtoSEK2,5�1millionanddecreasedbySEK857million.Includedinthisitemissoldbalancingpower,whichdecreasedbySEK799millionasaresultoflowerelectricitypricesduringtheyear.Thetelecommunicationsop-eration’sexternalrevenueincreasedduringtheyearafteranewagreementwiththecustomers,andamountedtoSEK71(67)million.SystemresponsibilityrevenuefornaturalgaswasSEK�1(�6)million.Theincreaseinrevenueisduetothefactthatcustomercontractshavebeenmodified.

ContingencyplanninghasutilisedfundsamountingtoSEK26�(25�)million,whichisequivalenttothecostsofcontingencymeasuresundertaken.Ofthese,SEK250(2�0)millionhasbeenfinancedbyappropriationsandSEK12(12)hasbeenreceivedintheformofgrantsfromtheSwedishEmergencyManagementAgencyandSEK2(1)millionfromtheNa-tionalPostandTelecomAgency.

Managementofrenewableelectricitycer-tificatesproducedrevenueofSEK10(20)mil-lion.Thefeesforrenewableelectricitycertifi-catesaresetbythegovernmentandregulatedinaccordancewiththeordinance(200�:120)onrenewableelectricitycertificates.TheleveloffeeswasloweredinOctober2006,whichexplainsthereducedrevenue.

TheGroup’soperatingexpensesamountedtoSEK5,5�1(6,150)million.

StaffexpensesamountedtoSEK251mil-lion,anincreaseofSEK��millioncomparedwithlastyear.Theincreaseisprimarilyduetonewmortalityassumptionsforcalculatingtheparententity’spensionliabilityandaprovisionforpayrolltaxonthepensionliability,togetherSEK22million.Lastyearadownwardadjust-mentwasmadetotheopeningpensionliabilityofSEK8million.

ExpensesforpurchaseoflosspowerwereSEK762million,whichisanincreaseofSEK

6�million.Theincreaseincostsisduetothefactthattransmissionlosseswere0.�TWhgreaterthanin2006.

ExpensesforbalancingpowerdecreasedbySEK8�7millionduringtheyearasaconse-quenceofthegenerallylowerelectricityprices.

TheGroup’sotheroperatingexpensesin-creasedbySEK100million.Costsforcoun-ter-tradeincreasedbySEK120millionduringtheyearasaresultofanumberoffactors.InFebruarySvenskaKraftnäthadtoresorttocounter-tradeinordertoreducetransmissionofelectricitytoanothersectionofthenationalgridwhentwoextremeoperationalsituationsaroseonaccountoflossofnucleargeneration.ExpensesforthesemeasuresamountedtoSEK80million.FurthercounterpurchasingwasimplementedduringthesummertoavalueofSEK��millioninconnectionwiththeworkofinstallinganewswitchyardnorth-eastofVarberg.

DepreciationoftangibleandintangiblefixedassetsamountedtoSEK590(569)mil-lion.

Operating incomeOperatingincomefortheGroupincreasedbySEK128milliontoSEK86�million.Operat-ingincomeconsistsofexternalrevenueandexpensesinthebusinesssegmentsandtheshareofincomefromassociatedcompanies.TheoperatingincomeincludesGroupdepreciationandwrite-downs.

ThepredominantbusinesssegmentinSvenskaKraftnät’soperationsisNetwork,withanoperatingincomefortheyearofSEK791(677)million.Theimprovedincomeislargelyduetoincreasedcongestionrevenuesduringthelattersixmonths.SomeitemsconcernboththebusinesssegmentsNetworkandSystemre-sponsibilityforelectricity.Ithasnotbeenpossi-bletoattributesomeactivitiestoasinglebusi-nesssegment.Thecostsforsuchactivitieshavebeenallocatedonastandardbasisbetweenthetwosegments.

ThebusinesssegmentSystemresponsibilityforelectricitygeneratedanoperatingincomeofSEK-�8(-�1)million.ThisisSEK�millionmorethanlastyearandisexplainedbysome-whatlowerexpensesforprimaryregulationonaccountofthelowerpriceofelectricity.

OperatingincomefromtelecomoperationsamountedtoSEK�0million,whichisadete-riorationofSEK1millioncomparedwithlastyear.Themainexplanationisincreaseddepre-ciationduring2007.

Therewasadecreaseinoperatingincome

fromtherenewableelectricitycertificateopera-tionofSEK7milliontoSEK7millionandSystemresponsibilityfornaturalgasshowedapositiveoperatingincomeofSEK5(7)mil-lion.

TherearesixassociatedcompaniesinthegroupandSvenskaKraftnätonlyincludesitsownshareofincomeintheresultsofthesecompaniesintheaccounts.Theshareofin-comefor2007amountedtoSEK69(�8)mil-lion.NordPoolASAisresponsibleforSEK59millionoftheSEK69millionthataffectstheoperatingincomeafterincreasedactivitywithintheclearingoperationduringtheyear.

TheoperatingmarginfortheGroupamountedto1�.7(10.8)%,whichis2.9per-centagepointshigherthanthepreviousyear.

Net financingTheGroup’snetfinancialincome/expenseamountedtoSEK-127(-55)million.ThisisadeteriorationofSEK72millioncomparedwith2006.

Theresultfromothersecuritiesandreceiva-blesthatarefixedassetsamountedtoSEK11(2)millionandhasbeenpositivelyaffectedduringtheyearasaresultofexchangeratedif-ferencesofSEK9million.

TheGroup’sinterestincomerosebySEK�milliontoanoutcomeofSEK7milliononac-countofhigherinterest-ratelevelsduring2007.

TheGroup’sinterestexpensesandsimi-laritemsamountedtoSEK1�5andtherebyincreasedbySEK85million.Theincreasedinterestexpensesareprimarilyduetothefactthattheparententityhasallocatedaprovisionforindexationofthecompany’spensionliabil-ityinaccordancewithnewsecuritygroundsthattheNationalGovernmentEmployeePen-sionsBoardhasadoptedforpublicutilities.SvenskaKraftnäthaschosentoapplythisfrom�1December2007.InterestexpensestherebyincreasedbySEK66million.Groupinterestexpenseshavegenerallyincreasedonaccountofhigherinterest-ratelevelsoninterest-bearingliabilities.

Theinterestcoverageratiofellto6.1(12.�)asaconsequenceofthis.

Net income for the yearTheGroup’snetincomefor2007amountedtoSEK7�2million,whichisSEK56millionhigherthanin2006.Theresultmeansareturnof8.9(7.9)%onadjustedequity.

Thenetprofitmarginwithadeductionforstandardtaxwas8.�(7.1)%.

Comments on Income Statements

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Balance sheet – the Group

MSEK Note 2007-12-31 2006-12-31

ASSETS Fixed assets Intangible fixed assets 13 226 224Tangible fixed assets 14 8 549 8 545Shares and participations in associated companies 16 403 357Long-term receivables 59 55 Income taxes recoverable 5 4 Total fixed assets 9 242 9 185

Current assets Inventories 93 89Current receivables 17 418 306Prepaid expenses and accrued income 19 577 412 Liquid funds 51 59 Total current assets 1 139 866

Total assets 10 381 10 051

EQUITY AND LIABILITIES

Equity referable to owners Government capital 600 600Other paid-up capital 3 314 3 314 Retained earnings incl. net income for the year 2 873 2 579 The Government’s capital 6 787 6 493

Minority interests 45 46

Total equity 6 832 6 539

Long-term liabilities Interest-bearing liabilities 20 1 616 1 960Non-interest-bearing liabilities 327 356Advance payments from customers 93 102Deferred tax 24 19 Provisions for pensions 21 361 253 Total long-term liabilities 2 421 2 690

Current liabilities Interest-bearing liabilities 22 98 98 Accounts payable 400 274Other liabilities 57 60 Accrued expenses and prepaid income 23 573 390 Total current liabilities 1 128 822

Total equity and liabilities 10 381 10 051

Pledged securities None None

Contingent liabilities 24, 25 20 20

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Comments on Balance Sheets

Balance sheet totalTheconsolidatedbalancesheettotalamountedtoSEK10,�81(10,051)million,whichisanincreaseofSEK��0million.

Fixed assetsSvenskaKraftnät’sintangiblefixedassetsconsistoflandrights,rightsofuseforfibre-opticcables,licencesandcapitalizedexpenditureforcomputerprograms.ThebookvalueoftheseisSEK226(22�)mil-lion.TheincreaseisduetothefactthatinvestmentsincomputerprogramsofSEK�5(�6)million,includinganewsettlementsystem,aregreaterthandepreciationfortheyear.

Thetangibleassetsconsistprimarilyofpowercables,stations,buildingsandland,fibre-opticconnectionsandothertechni-calfacilitiesandconstructioninprogress.ThevalueofthetangibleassetsamountedtoSEK8,5�9(8,5�5)million,whichisaslightincreaseofSEK�million.Netinvest-mentsduringtheyearhavebeenhigherthandepreciation.

Theotherfixedassetsconsistofpartici-pationsinassociatedcompanies,long-termreceivablesfromassociatedcompaniesandincometaxesrecoverable.ParticipationsinassociatedcompaniesamountedtoSEK�0�(�57)million.Profitparticipationinthefi-nancialstatementsisSEK69million,whichincreasedSvenskaKraftnät’sparticipationsinassociatedcompanies.Duringtheyear,theparententityreceivedadividendofSEK2�(19)fromNordPoolASA.

Current assetsCurrentassetsamountedtoSEK1,1�9(866)million.Theincreasemainlyrelatestoahigherlevelofaccountsreceivableandhigherprepaidexpensesandaccruedincomecomparedwith�1December2006.LiquidfundsamountedtoSEK51(59)millionatyearend,adecreaseofSEK8million.

Equity Equityatyear-endwasSEK6,8�2(6,5�9)million,ofwhichSEK2,87�(2,579)mil-lionconsistedofretainedearnings.Duringthecourseoftheyear,SEK��9(1,57�)

millionhasbeendistributedtotheGovern-ment.NetGroupincomefortheyearamountedtoSEK7�2(676)million.

Long-term liabilitiesTheGroup’slong-termliabilitiesthatareinterest-bearingconsistoftheparententity’sloanswiththeNationalDebtOfficeofSEK�71(709)millionandSwePolLink’sbankloansofSEK1,1�5(1,251)million.

Theinterest-bearingborrowingrequire-mentsintheGrouphavedecreasedduring2007bySEK���million.TheaverageinterestontheloansfortheGrouphasbeen�.9(�.�)%.

Advancepaymentsfromcustomerswith-infibre-opticoperationsamountedtoSEK9�(102)million.Theagreementperiodsvaryfrom15to25yearsandtheadvancepaymentsaretakenupasincomeduringthisperiod.

ThelevelofthenetloandebtdecreasedbySEK228millionandamountedtoSEK2,02�(2,252)million.Thedecreaseispri-marilyduetoimprovedoperatingincomefortheyear,whichdeliveredtheopportuni-tytoreducethedebttotheNationalDebtOffice.Thishadanimpactonthedebt/eq-uityratio,whichincreasedduringtheyearto��(�8)%.

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Cash flow statements – the Group

MSEK 2007 2006The year’s operations Operating income 864 736

Adjustment for items not included in cash flow

Depreciation 590 569

Other items -2 -22

Interest paid -79 -58

Cash flow from operations before changes in working capital 1 373 1 225

Changes in working capital Change in inventories -4 -16

Change in current receivables -277 58

Change in current liabilities 306 -31

Cash flow from the year’s operations 1 398 1 236

Investment activities Investments in tangible and intangible fixed assets -596 -478

Change in long-term receivables 0 0

Sale of fixed assets 0 2

Cash flow from investment activities -596 -476

Financing activities Change in interest-bearing liabilities -344 627

Change in other long-term liabilities -29 -26

Advance payments from customers 2 7

Dividend paid -439 -1 573

Cash flow from financing activities -810 -965

Cash flow for the year -8 -205

Liquid assets at the beginning of the year 59 264

Liquid assets at year-end 51 59

Comments on Cash Flow Statements

ThepurposeoftheCashFlowStatementistodescribethecapacityoftheSvenskaKraftnätGrouptogenerateliquidassetsandtoserveasacomplementtotheincomestatementandbalancesheetdescriptionsofprofitabilityandfinancialposition.Liquidassetsisunderstoodtobecashandbankbalances.

The year’s operationsCashflowfromtheyear’soperationsbeforechangesinoperatingcapitalincreasedbySEK1�8millioncomparedwiththepreviousyearandamountedtoSEK1,�7�

million.Cashflowfromtheyear’soperationsamountedtoSEK1,�98(1,2�6)million.Theimprovementisprimarilyaresultofthehigherlevelofoperatingincome.

Investment activitiesInvestmentsmadebytheGroupincreasedduringtheyearandamountedtoSEK596(�78)million.InvestmentsintheparententityamountedtoSEK557(�62)million,SEK�(10)millioninthesubsidiarySwePolLinkandSEK�6(6)millioninSvenskaKraftnätGasturbinerAB.

Financing activitiesTheGroup’sinterest-bearingliabilitiesdecreasedbySEK���million,whereastheyincreasedbySEK627millionin2006.

Interest-bearingliabilitiesintheparententitydecreasedbySEK2�8million,andinthesubsidiarySwePolLinkexternalin-terest-bearingliabilitiesdecreasedbySEK106million.SvenskaKraftnätGasturbinerAB’sin-Groupinterest-bearingliabilitywasunchangedatSEK157million.SEK��9(1,57�)millionhasbeenpaidtotheGov-ernment.

CashflowfortheyearamountedtoSEK-8millioncomparedwithSEK-205millionin2006.

Thedividendpaidisreportedagainstanincometitle,linkedtotheGovernmentbudget,inaccordancewiththetableonthenextpage,inTSEK.

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Referable to the Government Referable Total Government capital Other Profit brought Total to minority equity

paid-up forward incl. interests capital net income for MSEK the year

Opening balance 2006 600 3 314 3 474 7 388 48 7 436

Dividend — — -1 573 -1 573 — -1 573

Net income for the year — — 678 678 -2 676

Closing balance 2006 600 3 314 2 579 6 493 46 6 539

Opening balance 2007 600 3 314 2 579 6 493 46 6 539

Dividend — — -439 -439 — -439

Net income for the year — — 733 733 -1 732

Closing balance 2007 600 3 314 2 873 6 787 45 6 832

Change in equity – the Group

Profitbroughtforwardincludingnetincomefortheyearisconstitutedbyprofitaccruedintheparententity,insubsidiariesaswellasSvenskaKraftnät’sshareofprofitsfromassociatedcompanies.Previousprovisionstorestrictedreservesareincludedinthiscapitalitem.

TheabovestatementiscompiledasifSvenskaKraftnätwereanindependentgroupwithformalownership.SvenskaKraftnätisapublicutilityandapartoftheSwedishGovernment.

Theallocationofprofitproposedintheannualreportfor2006ofSEK��9millionwasadoptedbytheGovernment.

Profit brought forward including net income for the year

Income title, TSEK Amount to Amount

pay in paid in

2116 Parent entity’s delivered dividend 439 000 439 000

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Jan–Dec Jan–Dec

MSEK Note 2007 2006

Operating revenue

Network revenue 1 3 162 2 849

System responsibility revenue – electricity 2 2 532 3 389

Telecommunications revenue 71 67

System responsibility revenue – natural gas 41 36

Renewable electricity certificates 10 20

Government grant for power contingency planning 3 264 253

Activated work for own account 4 32 24

Total operating revenue 6 112 6 638

Operating expenses

Personnel expenses 5 -250 -208

Purchase of loss power -762 -698

Purchased balancing power -2 191 -3 027

Other operating expenses 6 -1 748 -1 652

Depreciation of tangible

and intangible fixed assets 13, 14 -446 -426

Total operating expenses -5 397 -6 011

Operating income 715 627

Result from financial investments

Result from other securities and receivables

that are fixed assets 9 41 26

Interest income and similar income items 10 7 2

Interest expenses and similar expense items 11 -89 -17

Income after financial items 674 638

Income statements – Parent Entity

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Balance sheets – Parent Entity

MSEK 2007-12-31 2006-12-31

ASSETS Note Fixed assets Intangible fixed assets 13 Capitalized expenditure for computer programmes 21 24Land rights 64 67Rights of use 46 49Construction work in progress 95 84Total intangible fixed assets 226 224 Tangible fixed assets 14 Buildings and land 223 169Machinery and equipment 5 832 5 989Construction work in progress 662 450Total tangible fixed assets 6 717 6 608 Financial fixed assets Shares and participations in Group companies 15 12 12Receivables from Group companies 145 144Shares and participations in associated companies 16 177 177Receivables from associated companies 59 55Total financial fixed assets 393 388

Total fixed assets 7 336 7 220 Current assets Inventories 6 2 Current receivables Accounts receivable 314 210Receivables from Group companies 29 26Receivables from associated companies 3 4Other receivables 48 18Receivables from the public utility’s cheque account 18 28 48Prepaid expenses and accrued income 19 574 411Total current receivables 996 717 Cash and bank balances 28 11 Total current assets 1 030 730 Total assets 8 366 7 950

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Balance sheets – Parent Entity

MSEK Note 2007-12-31 2006-12-31

EQUITY AND LIABILITIES

Equity

Restricted equity

Government capital 600 600

Restricted reserves 3 314 3 314

Total restricted equity 3 914 3 914

Retained earnings incl. net income for the year 1 875 1 676

Net income for the year 674 638

Total unrestricted equity 2 549 2 314

Total equity 6 463 6 228

Interest-bearing provisions

Provisions for pensions 21 361 253

Interest-bearing long-term liabilities 20 471 709

Non-interest-bearing long-term liabilities

Non-interest-bearing liabilities 0 1

Advance payments from customers 93 102

Total non-interest-bearing long-term liabilities 93 103

Non-interest-bearing current liabilities

Accounts payable 388 264

Other liabilities 19 27

Accrued expenses and prepaid income 23 571 366

Total non-interest-bearing current liabilities 978 657

Total equity and liabilities 8 366 7 950

Pledged securities None None

Contingent liabilities 24, 25 20 20

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Cash flow statements – Parent Entity

MSEK 2007 2006

The year’s operations

Operating income 715 627

Adjustment for items not included in cash flow

Depreciation 445 426

Other items 55 30

Interest paid -26 -16

Cash flow from operations before changes in

working capital 1 189 1 067

Changes in working capital

Change in inventories -4 3

Change in current receivables -279 49

Change in current liabilities 321 -39

Cash flow from the year’s operations 1 227 1 080

Investment activities

Investments in tangible and intangible fixed assets -557 -462

Change in long-term receivables 0 0

Sale of fixed assets 0 0

Cash flow from investment activities -557 -462

Financing activities

Dividend received 23 19

Change in interest-bearing liabilities -238 709

Change in other long-term liabilities -1 -1

Advance payments from customers 2 7

Dividend paid -439 -1 573

Cash flow from financing activities -653 -839

Cash flow for the year 17 -221

Liquid assets at the beginning of the year 11 232

Liquid assets at year-end 28 11

Liquid assets at year-end 11 232

Change in equity – Parent Entity

Profit brought forward

Other paid-up incl. net income

MSEK Government capital capital for the year Total

Opening balance 2006 600 3 314 3 249 7 163

Dividend — — -1 573 -1 573

Net income for the year — — 638 638

Closing balance 2006 600 3 314 2 314 6 228

Opening balance 2007 600 3 314 2 314 6 228

Dividend — — -439 -439

Net income for the year — — 674 674

Closing balance 2007 600 3 314 2 549 6 463

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MSEK 2007 2006 2005 2004 2003 2002 2001

Income statement

Operating revenue 6 326 6 838 5 885 5 335 5 633 5 096 4 887

Operating revenue excluding depreciation -4 941 -5 581 -4 445 -4 201 -4 717 -3 967 -3 551

Depreciation -590 -569 -558 -537 -527 -512 -493

Share of income in associated companies 69 48 30 23 19 40 37

Operating income 864 736 912 620 408 657 880

Financial items -127 -55 -29 -67 -118 -109 -145

Income after financial items 737 681 883 553 290 548 735

Tax on income for the year -5 -5 -3 -15 1 -5 6

Net income for the year 732 676 880 538 291 543 741

Balance sheet

Intangible fixed assets 226 224 207 171 132 110 74

Tangible fixed assets 8549 8 545 8 655 8 916 9 081 9 240 9 424

Financial fixed assets 467 416 391 372 364 372 178

Inventories 93 89 73 69 71 59 62

Current receivables 995 718 776 681 677 835 715

Liquid funds 51 59 264 120 99 165 212

Total assets 10 381 10 051 10 366 10 329 10 424 10 781 10 665

Equity 6 832 6 539 7 435 6 892 6 664 6 729 6 661

Long-term liabilities

Interest-bearing 1 616 1 960 1 333 2 423 2 667 2 813 2 968

Non-interest-bearing 444 477 505 111 112 104 104

Provisions 361 253 240 220 195 190 168

Current liabilities

Interest-bearing 98 98 98 128 127 138 138

Non-interest-bearing 1 030 724 755 555 659 807 626

Total equity and liabilities 10 381 10 051 10 366 10 329 10 424 10 781 10 665

Key business ratios

Return on adjusted equity after tax % 8,9 7,9 10,1 6,2 3,5 6,6 8,9

Return on total capital % 8,6 7,3 8,9 5,8 3,9 8,3 7,7

Return on capital employed % 10,7 9,0 10,8 6,7 4,6 8,4 10,6

Equity/assets ratio % 58,8 58,5 62,8 59,2 57 55,5 55,4

Operating margin % 13,7 10,8 15,5 11,6 7,2 12,9 18,0

Net profit margin after tax % 8,3 7,1 10,8 7,0 3,7 7,6 10,7

Capital turnover ratio % 61,9 67,0 56,9 51,4 53,1 48,1 45,6

Debt/equity ratio % 33 38 22 43 49 50 51

Self-financing level times 2,1 2,8 4,4 2,6 2,0 2,3 3,3

Interest coverage ratio times 6,1 12,4 21,5 7,6 3,3 4,6 5,6

Other

Internally allocated funds MSEK 1 364 1 225 1 417 1 089 844 989 1 230

Net liability MSEK 2 024 2 252 1 407 2 651 2 897 2 982 3 062

Investments MSEK 596 478 338 410 411 460 363

Average no. of employees 289 282 277 269 261 249 241

Energy supplied to the national grid TWh 120,5 119,8 127,7 123,5 117,7 125,2 125,1

Energy extracted from the national grid TWh 117,7 117,3 124,5 120,7 115,2 122,5 122,3

Energy losses TWh 2,8 2,5 3,2 2,7 2,5 2,7 2,8

Seven year review for the Group

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Additional information and notes

Accounting and valuation principlesBasis for drawing up the reportsSvenskaKraftnät’saccountscomplywithOrdinance(2000:606)onpublicauthor-itybook-keepingandtheSwedishNationalFinanceManagementAuthority’s(ESV’s)regulationsandgeneraladvice.Theordi-nancecorrespondswiththeBook-KeepingActbutisadaptedtothespecialprecondi-tionsthatapplyforGovernmentauthoritiesandutilities.WithcertainexceptionsthatarestipulatedinthedocumentonGovern-mentappropriations,theAnnualReportisdrawnupinaccordancewiththeOrdinance(2000:605)onannualreportsandbudgetinputandESV’sregulationsandgeneraladvice.PartofSvenskaKraftnät’soperations–contingencyplanning–isfinancedviaGovernmentgrants.Forthisparticularactiv-ity,theprovisionsofOrdinance(1996:1189)ongrantsalsoapplies,whichamongotherthingsregulatestheprinciplesforgrantset-tlementandhownon-utilisedfundsmayberetainedbetweendifferentbudgetyears.

SvenskaKraftnäthasmadedeparturesfromtheaboveordinancewhenpreparingtheGroup’sincomestatementsandbalancesheets,cashflowstatementsandchangesinequity.ThisisinordertoprovideamoretrueandfairpictureoftheGroup’sfinancialstatusandbettercomparabilitywithSwedishgroupsquotedonthestockexchange.

Preconditions for the drafting of the Group’s financial reportsTheparententity’sfunctionalcurrencyforreportingisSwedishkronorforboththeparententityandtheGroup.Allamountsthataregivenareroundedofftothenearestmillionkronor(MSEK)unlessotherwiseindicated.Itemsrelatedtoincomestatementsrefertotheperiod1January–�1December.Itemsrelatedtobalancesheetsreferto�1December.Figureswithinbracketsapplytothepreviousyear’svalues.

Consolidated accounts principlesThe extent of the groupSvenskaKraftnätcomprisestheparententity,theSvenskaKraftnätpublicutility,alongwiththreesubsidiariesandsixas-sociatedcompanies.TheparententityisaSwedishpublicutilitythathasitsheadofficeinStockholm.TheGroupisunderthecontrollinginfluenceoftheSwedishgovernment.

Thesubsidiariesandassociatedcom-paniesarelimitedliabilitycompaniesorcompanieswithacorrespondinglegalstatusabroad.

Oneofthesubsidiaries,SwePolLinkAB,hasinturnitsownwholly-ownedsubsidiaryinPoland.Consolidation principlesTheconsolidatedaccountsaredrawnupinaccordancewiththeacquisitionmethod,whichmeansbrieflythattheacquisitioncostforthesharesinthesubsidiaryareelimi-natedagainsttheequitythatexistsinthesubsidiaryatthetimeoftheacquisition.TherecommendationsoftheSwedishFinancialAccountingStandardsCouncilconcerningconsolidatedaccountsareapplied.

Minorityparticipationsinthenetin-comeandequityinpart-ownedsubsidiariesarepresentedseparatelyinthecalculationoftheGroup’snetincomeandequity.InternalprofitswithintheGroupareeliminatedintheirentirety.

Associatedcompaniesarereportedinaccordancewiththeequitymethod.ThismeansthatthebookvalueofsharesandparticipationsinassociatedcompaniesintheconsolidatedaccountsisvaluedattheGroup’sshareoftheassociatedcompanies’equity.SvenskaKraftnät’sshareoftheassoci-atedcompanies’resultistherebyincludedintheGroup’sresultanddividenddistributed.Theshareisincludedintheprofitbroughtforward.

Untaxed reserves/appropriationsWhendrawinguptheconsolidatedaccounts,untaxedreservesandappropriationsreportedintheindividualcompanieshavebeendividedupintodeferredtaxandrestrictedequity.Thedeferredtaxliabilityhasbeencalculatedatthecurrenttaxrate.Translation of foreign subsidiaries and associated companiesForallcompanieswithintheGrouplocalcur-rencycorrespondstothefunctionalcurrencyforthecompany.Swedishkronor,whichistheparentcompany’sfunctionalandreport-ingcurrency,isusedintheconsolidatedac-counts.Assetsandliabilitiesaretranslatedtotheexchangerateonthebalancesheetdate.Unrealisedexchangerategainsandexchangeratelossesareincludedintheresult.

ThesubsidiarySwePolLinkAB’sPolishsubsidiary’sannualaccountshavebeentrans-latedintoSwedishkronorinaccordancewiththemonetarymethod,whichmeansthatmonetaryitemsaretranslatedintothebal-ancesheetdaterateandnon-monetaryitemsintotherateatthetimeoftheinvestment.Thetranslationdifferencebetweenmon-etaryassetsandliabilitiesisincludedinthenetincomefortheyearfortheGroupandisreportedintheincomestatement.Themon-etarymethodisusedbecausetheoperationsofthePolishcompanyareregardedasanintegratedpartofSwePolLinkAB’sactivities.Revenue accountingRevenuesarereportedtotheextenttowhichitislikelythatthefinancialadvantageswillbetothebenefitoftheGroupandthattherevenuescanbecalculatedinareliableway.RevenuesarereportednetofVAT.Intra-groupsalesareeliminatedintheconsolidatedaccounts.

Network revenueNetworkrevenueconsistsofbothpowerchargesandenergydependentfees.Power

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chargesarefixedannualfeesforsubscrip-tionsthatarereportedasincomelinearlythroughouttheperiodwhichthefeeismeanttocover,whiletheenergy-dependentfeeisreportedasincomeinconnectionwiththeuseofSvenskaKraftnät’sservices.

System responsibility revenue for electricity Revenueconsistsofpowersoldforbalanceservices,revenuefortheuseoftheITsystemEdielandrevenueinordertocoverthecostsofpowerreserves.From1January2005theGroupreportsitsrevenueandexpensesgrossforsystemresponsibilityperhourinsteadofaspreviouslyperfourteendayperiod.Ifthecustomerhasoverallpurchasedpowerduringtheperiod,thisisshownasbalancingpowerrevenueforSvenskaKraftnätwhereasifthecustomerhasinsteadoverallsoldpower,itisreportedasabalancingpowercost.

System responsibility revenue for natural gas Revenueconsistsofsoldnaturalgasforthepowerbalancingservice.Systemresponsibil-ityfornaturalgasgeneratesbothrevenueforsoldnaturalgasaswellasexpensesforpurchasednaturalgas.Thisisreportedandsettledonagrossbasisperday.

Otheroperatingrevenueisreportedasrevenueinconjunctionwiththeprovisionoftheservice.Toacertainextent,customerscanpayinadvance.Theadvancepaymentisthendeductedagainstrevenueastheserviceiscarriedout.Segment accounting or line of businessTheSvenskaKraftnätGroup’sprimarysegmentsarelinesofbusiness.TheGroup’soperationsaredividedintosixbusinessseg-ments.Abusinesssegmentisaunitidentifia-blewithinSvenskaKraftnät’saccountsthatisdistinguishedfromotherbusinesssegmentsonthebasisoftherisksandopportunitiesinvolvedineachassignment.Interest incomeInterestincomeisreportedconcurrentlyasitisaccrued,i.e.itisaccountedintheincomestatementintheperiodinwhichitarises.Interest expensesInterestexpensesconsistofinterestandotherexpensesthatarisewhenborrowingcapital.Interestexpensesarereportedintheperiodtheyrelateto.InterestexpensesduringtheconstructionperiodareactivatedwiththeconstructionofcapitalassetsinexcessofSEK50million.

Receivables and liabilitiesAssetsandliabilitieshavebeenvaluedattheacquisitionvalueifnototherwisespecified.Doubtfuldebtsareenteredattheamountthatisestimatedwillbepaidafterindividualassessment.Receivables and liabilities in foreign currencyReceivablesandliabilitiesinforeigncurrencyarevaluedattheexchangerateonthebal-ancesheetdate.Thedifferencebetweenthevalueonthedateofacquisitionandthebal-ancesheetdatehasbeenaddedtotheresult.InventoriesTheinventoryconsistsofnaturalgasandfuelforoperatinggasturbines.Thestockhasbeenvaluedatthelowestoftheacquisitionvalueandtherealvalue.Liquid fundsLiquidfundscomprisecashandbankbal-ances.

Reporting of leasing agreementsAllleasingagreementsarereportedasopera-tionalleasesandwritten-offlinearly.Therearenofinancialleasingagreements.

Tangible fixed assetsTangiblefixedassetsarereportedattheiracquisitionvaluewithadeductionmadeforaccumulateddepreciationandwrite-downs.Investmentsareregardedasbeingnewcon-structionaswellasconversionsandexten-sionsthatinthelongtermincreasestandard,qualityorperformance.

Expenditureforrepairsandmaintenancearereportedasanexpenseintheperiodinwhichtheyoccur.Includedundermainte-nanceareworksthatareneededinorderforittobepossibleforafacilitytobeusedintheoriginalwayintended,butwhichdonot

increaseitsperformanceorsignificantlyex-tenditslifetime.

InterestexpensesduringtheconstructionperiodareactivatedwiththeconstructionoffacilitiesinexcessofSEK50million.Intangible fixed assetsExpenditureforlandrights,rightsofuseinfibre-opticconnections,licences,construc-tioninprogressanddevelopmentexpensesforcomputerprogrammesarecarriedfor-wardandwrittenofflinearlyoverthedura-tionofuse.Allintangiblefixedassetshavealimitedperiodofuse.Since2002landrightsarewrittenoffaccordingtotheassessedperiodofuse,whichforacableconcessionisusually�0years.

Rightsofuseareforfibre-opticcablesandarewrittenoffoveraperiodofbetween15and25yearsinaccordancewiththelengthofthecontractperiod.

Depreciation Depreciationaccordingtoplanisbasedontheacquisitionvalueoftheassetsandtheestimatedperiodofuse.Lineardepreciationisusedforallfixedassets.

ProvisionsAprovisionisreportedinthebalancesheetwhenthereisalegalorinformalundertak-ingasaconsequenceofaneventthathasoccurred,anditislikelythatanoutflowofresourcesisrequiredtosettletheundertakingandthattheamountcanbeestimatedinareliableway.TaxesSvenskaKraftnät’ssubsidiariesareobligedtopayincometaxforlimitedliabilitycom-panies,whereasSvenskaKraftnätasapublicutilityandpartoftheSwedishstateisfreefromincometax,i.e.isnotataxsubject.Deferredtaxfordifferencesbetweenthe

Theresidualvalueanddurationofuseofassetsisregularlycheckedandadjustedwhennecessary.

Annual depreciation rates Transmission lines, excluding submarine cables and associated lines 2,5 % Submarine cables, excluding SwePol Link, and associated lines 3,3 % SwePol Link 5,0 % Control equipment in stations 6,7 % Other station components 3,3 % Fibre-optic connections 4,0 % Spare parts 6,7 % Telecom and information systems 6,7 – 20,0 % Gas turbine plants 5,0 %

PCs and equipment 33,3 %

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reportedandfiscalresultisnotreportedbytheparententityandtheSvenskaKraftnätGroup,withtheexceptionofSwePolLinkPolandandforuntaxedreservesintheSwe-dishsubsidiaries.Deferredtaxreceivablesarereportedtotheextentthatsufficienttaxablesurplusisdeemedlikelytobeavailablewithintheforeseeablefuture.Pension commitmentsSince200�anewpensionagreement,PA-0�,appliesforstateemployeesbornin19��orlater.Foremployeesbornin19�2orearlierPA-91stillapplies.ThesizeofthepensionprovisioniscalculatedbytheNationalGo-vernmentEmployeePensionsBoard(SPV).PA-0�includesold-agepension,survivors’pensionanddisabilitypension.PA-0�includesthefollowingold-agepen-sions:

Contributionpensions–individualold-agepensionandsupplementaryold-agepension,Kåpan.Premiumsarepaidforthese.Defined-benefitpensions–old-agepen-siononincomesover7.5basicincomeandold-agepensioninaccordancewithtransitionalrulesforemployeesbornbetween19��and1972.

Thesecommitmentsarereportedundertheitem,Provisionforpensions.

Theyear’spensionprovisionshavebeenwrittenofftogetherwithpremiumspaid.Theinterestcomponentintheyear’spensionexpensesisreportedasaninterestexpense.Inadditiontothe2.5%interestrate,thein-terestcomponentalsoincludesindex-linkingofcertainbenefits.Some7%oftheemploy-

eeswerenotupdated,whichmeansthattheirpensionprovisionhasbeencalculatedatastandardrate.UpdatingmeansthatSPVcar-riesoutanoverallreviewofallthepositionsastateemployeehasheld,inboththepublicandprivatesectors.Iftherearegapsintheperiodofemploymentthepensionprovisionisenteredatastandardrate.Amongotherthings,thismeansthatSPVassumesthattheemployeehasbeeninstateemploymentfromtheageof28,andthattheprovisioniscalcu-latedwithafactorof0.95.Thismeansthattheactualprovisionmightbelessormore.SvenskaKraftnätconsidersthatthepensionprovisionisnottoolowandhaschosentore-portthepensionprovisioncalculatedbySPV.

Thepensionliabilityreportedisconsti-tutedbythetechnicallycalculatedassump-tionsthatSvenskaKraftnätisresponsibleforaccordingtothePA-91andPA-0�pensionagreements.Thepensionprovisioniscalcu-latedinaccordancewiththebasisthattheboardofSPVhaslaiddown.Thepensionprovisionincludescommitmentswithrespecttobothactivepersonnelandpensioners.

SvenskaKraftnätpaysaspecialpayrolltaxonpaidoutpensionsinaccordancewithOr-dinance(1991:70�)ontheestablishmentofspecialpayrolltaxonstatepensionexpensesandnotbasedonallocationsforpensions.Sincethepensionprovisionisforfuturepen-sionoutlays,anallocationismadeforspecialpayrolltaxbasedonthesizeofthepensionprovisionattheendoftheyear.

Government supportExternalcontributionstoinvestmentsreducetheacquisitionvalueoftheinvestmentbyanequivalentamount.

Research and development expensesDevelopmentworkisanintegratedaspectoftheoperationandreferstomeasuresforlong-termimprovementsthatarewrittenoffcontinuouslyduringtheyear.SvenskaKraftnätconductsresearchanddevelopmentworkwiththeaimofincreasingreliabilityperformance,effectivenessandenvironmen-taladaptationofthenetworkandsystemop-erations.Noexpensesarethereforeactivatedfordevelopment.Cash flow statementThecashflowstatementisdrawnupinac-cordancewiththeindirectmethod.There-portedcashflowcomprisestransactionsthatentailreceiptsandpayments.Thismeansthatdiscrepanciescanoccurcomparedwithchangesinindividualitemsinthebalancesheet.BorrowingBorrowingisreportedatanominalamount.Shares and participations in Group companiesSharesandparticipationsingroupcompa-niesarereportedatacquisitionvaluewithdeductionsforanywrite-downs.Dividendsreceivedarereportedwhentherighttoadividendisdeemedtobesecure.Supervisory AuthorityThesupervisoryauthorityfornetworkope-rationsistheEnergyMarketInspectorate,whichisanindependentauthorityfrom1January2008.

Group Parent entity

MSEK 2007 2006 2007 2006

Power revenue 1 061 1 074 1 096 1 109

Energy-dependent revenue 1 271 1 233 1 271 1 233

Congestion revenue 641 320 641 320

Transit revenue 112 139 112 139

Swe Pol Link 246 232 - -

Other revenue 46 52 42 48

Total 3 377 3 050 3 162 2 849

Group Parent entity

MSEK 2007 2006 2007 2006

Sold balancing power 1 994 2 793 1 995 2 794

Sold final power 121 66 121 66

Sold supportive power 72 125 72 125

Sold regulation power 212 247 212 247

Peak-power reserve 126 151 126 151

Ediel 6 6 6 6

Total 2 531 3 388 2 532 3 389

NotesNote 1 Network revenue Note 2 System responsibility revenue

– electricity

Soldbalancingpowerisforinvoicedincomefortheimbalancethatbalanceprovidershavecausedinthenationalelectricitysystem.

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Note 5 Staff Theaveragenumberofemployeesduring2007wasinthegroup289(282),ofwhom287(280)intheparententityand2(2)inPolandintheSwePolLinkGroup.

Thedistributionbetweenmenandwomenatyear-endcanbeseenfromthetablebelow.Thereisonemanandonewomenem-ployedinPoland.

TheGroup’sstaffexpensesamountedtoSEK251(208)mil-lion,ofwhichthepayrollcostswereSEK1�2(1�1)million.TothisshallbeaddedsocialfeesofSEK97(7�)million.IncludedintheseamountsarepensioncostsofSEK26(22)million.

Theincreaseinstaffexpensescomparedwithlastyearisprimarilyduetonewmortalityassumptionsforcalculatingtheparententity’spensionliabilityandaprovisionforpayrolltaxonthepensionliabil-ity,togetherSEK22million.Lastyearadownwardadjustmentwas

madetotheopeningpensionliabilityofSEK8million.DuringtheyeartheparententityhasreceivedSEK1.�(1.7)millioninfundingfromtheNationalBoardofTradetoemployyoungacademics.

ThefeepaidtotheChairmanoftheBoardamountedtoSEK78,996.ThefeespaidtootherBoardmembershaveamountedtoSEK52,992permemberforthewholeyear.NofeesarepaidtoBoardmemberswhoareemployedwithinSvenskaKraftnät,apartfromtheirnormalsalaries.

ThesalaryofthedepartedDirectorGeneralamountedtoSEK0.�(1.2)millionandthepensionexpensefortheyeartoSEK1.6(0.5)millionaccordingtocalculationsfromtheNationalGovernmentEmployeePensionsBoard.TheDeputyDirectorGeneralbecameactingDirectorGeneralon1April.HissalaryfortheyearasawholeamountedtoSEK1.2(1.0)millionandpensionexpensesamountedtoSEK0.5million.

ThecompositionoftheBoard,excludingstaffrepresentatives,canbeseenfromthetablebelow.

Grants accounts for the parent entity:

Political area Opening Allocation for the year Total Expenses Closing

Total defence amount as per annual letter of disposable amount

(TSEK) governance funds

7:5 Emergency preparedness

- Appropriation item 3, 10 031 250 000 -2 577 257 454 - 249 949

Electricity emergency measures

Inadditiontoappropriations,grantshavealsobeenreceivedfromtheEmergencyManagementAuthorityandtheNationalPostandTelecomAgencyforanamountofSEK1�,06�thousand,ofwhichSEK85thousandisnon-utilizedfundsfromthepreviousyear.OftheseSEK1�,920thousandwereutilized.

Forthisappropriation,thereisalsoaframeworkforauthorisation,thataccordingtocivillawisabindingundertakingthatentailsfutureexpensesassetoutinthetablebelow.

ThegrantsconsumedduringthecourseoftheyearamountingtoSEK26�(25�)millionhavebeenusedforthetrainingofconscripts,asacontributiontotheemergencyreserve,forthepurchaseofequipmentforimmediaterepairsinconnectionwithpowerlinefailuresingridandregionalnetworks,mobilecommandsupportforcrisismanagement,purchaseofequipmentforimmediaterepairsinconnectionwithpower-linefailuresandmeasuresinpowerplantstopermitislandoperation.

Allocated framework for Opening Outstanding Forecast

outstanding undertakings, TSEK commitments commitments 2008 2009 2010

230 000 174 378 333 959 138 655 86 271 70 577

Group and Parent entity

MSEK 2007 2006

Construction work in progress 27 18

Activated development of computer programs 5 6

Total 32 24

MSEK Group Parent entity

(Number) 2007 2006 2007 2006

Women 84 86 83 85

Men 203 203 202 202

Total 287 289 285 287

The Board 2007 2006

Women 3 2

Men 5 5

Total 8 7

Note 3 Government grant for power contingency planning

Note 4 Activated work for own account ThisitemconcernslabourcostsforSvenskaKraftnät’sownper-sonnelthatareactivatedagainstinvestmentprojects.InvestmentprojectsreferontheonehandtoconstructionworkinprogressandontheothertoactivatedITdevelopmentprojects.

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Note 6 Other operating expenses

IncludedinSystemoperationservicesarecostsforcounter-tradepro-videdbytheBalanceServiceamountingtoSEK181(6�)million.TheitemOtherincludespaymentstoaccountantsinthefollowingamounts:

Auditingcomprisesexaminationoftheannualaccountsandbook-keepingaswellastheadministrationbytheBoardofDirectorsandtheDirector-General/ManagingDirectorsandothertasksthatfallwithintheresponsibilityoftheparententity’sandthesubsidiaries’auditorstoperform.Includedamongothertasksareconsultationsinsubsidiaries.

Note 7 Share of income from associated companies

Shareofincomefromassociatedcompaniesisreportedaftertax.TheshareofincomefromtheotherassociatedcompanieswaslessthanSEK1million.

Note 8 Business segments

ThepredominantbusinesssegmentswithintheGroupareNetworkandSystemresponsibilityforelectricity.

Includedintheoperatingincomearethebusinesssegments’exter-nalrevenueandexpenses.ActivatedownworkisincludedinNetwork,seenote�.

SomeitemsconcernboththebusinesssegmentsNetworkandSys-temresponsibilityforelectricity.Whenithasnotbeenpossibletolinktheseactivitiestoabusinesssegment,thecostshavebeendistributedonastandardbasis.

BusinesssegmentTelecommunicationshasperformedservicesforNetworktoavalueof�2(�2)million,whichisreportedasoperatingincomeforTelecommunicationsandacorrespondingincreaseinoper-atingexpenseforNetwork.ActivatedownworkisincludedintheNet-workbusinesssegment’srevenueatanamountofSEK�2(2�)million.

WithinbusinesssegmentSystemresponsibilityforelectricity,thebalanceprovidershaveagreementswiththeparententityonfrequencymaintenanceandsettlementoftheirimbalances.Profittrendsintheparententityareshownbelowfortheyears2007and2006.

Group Parent entity

MSEK 2007 2006 2007 2006

Energy crediting 334 366 334 366

Operation & maintenance 276 261 239 233

Leases on fixed assets 46 45 46 45

Transit expenses 131 142 131 142

System operation services 458 330 485 358

Peak-power reserve 129 133 142 151

Own contingency planning costs 8 8 8 8

Research and development 27 22 27 22

Contingency planning expenses 198 190 212 203 Other 144 154 124 124

Total 1 751 1 651 1 748 1 652

Fees and expenses Group Parent entity

MSEK 2007 2006 2007 2006

Swedish National Audit Office 0,7 0,8 0,7 0,8

Other auditors 0,4 0,2 - -

Auditing expenses 1,1 1,0 0,7 0,88

Consultation, Deloitte & Touche - 0,3 - 0,3

Consultation, Ernst & Young 0,3 - 0,2 - Total 1,4 1,3 0,9 1,1

Group

MSEK 2007 2006

Nord Pool ASA 59 36

Nord Pool Spot AS 7 10

STRI 2 1 Kraftdragarna AB 1 1

Total 69 48

Group

Operating revenue Operating income

MSEK 2007 2006 2007 2006

Network 3 409 3 074 791 677

System responsibility – electricity 2 531 3 388 -38 -41

Telecommunications 103 99 30 31

System responsibility – natural gas 41 36 5 7

Renewable electricity certificates 10 20 7 14

Associated companies - - 69 48

Contingency 264 253 0 0

Segment elimination -32 -32 - -

Total 6 326 6 838 864 736

Parent entity

MSEK 2007 2006

Operating revenue

Balancing power revenue 2 382 3 232

Peak-power reserve 127 151

Ediel 6 6

Other system revenue 17 0

Total operating revenue 2 532 3 389

Operating expenses

Balancing power expenses -2 187 -3 023

System operation, primary regulation -181 -190

Disturbance reserve -45 -42

Peak-power reserve -142 -151

Ediel -4 -4

Other expenses -16 -20

Depreciation -1 -1

Total operating expenses -2 576 -3 431

Operating income -44 -42

Returnoncapitalemployedforthegroupis10.7(9.0)%.Thepre-dominantproportionofthecapitalemployedbelongstotheNetworkbusinesssegment.

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Note 9 Result from securities and receivables accounted for as fixed assets

Note 10 Interest income and similar income items

Note 11 Interest expenses and similar expense items

Note 12 Tax on income for the year

SincethemajorityoftheGroup’sincomebeforetaxisearnedintheparententity,whichisrelievedfromincometax,noaccountisgivenoftheconnectionbetweenthetaxexpensefortheyearandtherepor-tedincomebeforetaxintheGroup.

Group Parent entity

MSEK 2007 2006 2007 2006

Dividend on shares and participations in associated companies - - 23 19

Interest income on long-term receivables in subsidiaries - - 7 5

Interest income on long-term receivables in associated companies 2 5 2 5

Other interest income 4 1 4 1

Exchange rate differences 5 -4 5 -4

Total 11 2 41 26

Group Parent entity

MSEK 2007 2006 2007 2006

Interest income from bank balances 2 2 2 1

Other interest income 5 1 5 1

Total 7 3 7 2

Group Parent entity

MSEK 2007 2006 2007 2006

Interest expenses, Pension debt 71 5 71 5

Interest expenses, long-term credit 52 43 0 0

Interest expenses, National Debt Office loan 23 14 23 14

Interest expenses, current liabilities 3 1 3 1

Capitalised interest for new construction -9 -4 -9 -4

Exchange rate differences 2 1 - 1

Other financial expenses 3 - 1 -

Total 145 60 89 17

Group

MSEK 2007 2006

Current tax -3 -2

Deferred tax -2 -3

Total -5 -5

Group and Parent entity Capitalized Land Rights of use Construction Total expenditure for rights rights for fibre- in progress MSEK computer programs -optic cables

Opening acquisition value 52 170 65 84 371

Acquisitions - 0 - 35 35

Sales/disposal - - - - 0

Reclassifications 7 - 2 -24 -15

Closing accumulated acquisition value 59 170 67 95 391

Depreciation brought forward 28 103 16 0 147

Sales/disposal - - - - -

Depreciation for the year 10 3 5 - 18

Accumulated depreciation carried forward 38 106 21 0 165

PLANNED REMAINING VALUED CARRIED FORWARD 21 64 46 95 226

Depreciation previous fiscal year 10 4 4 - 18

Note 13 Intangible fixed assets

Intangiblefixedassetsconsistoflandrightsintheformofeasementsandlinerights,rightsofuseforfibre-opticcables,licencesandcapitalisedexpenditureforcomputerprograms.

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Group Buildings Machinery and Construction Total and land other technical in progress MSEK facilities

Opening acquisition value 911 16 112 457 17 480

Acquisitions 0 18 543 561

Sales/disposal -6 -96 -1 -103

Depreciation in connection with disposal 0 -11 0 -11

Reclassifications 51 278 -311 17

Closing accumulated acquisition value carried forward 956 16 301 688 17 944

Depreciation brought forward 413 8 522 - 8 935

Sales/disposal -25 -76 0 -101

Depreciation for the year 37 524 0 561

Accumulated depreciation carried forward 425 8 970 0 9 395

PLANNED REMAINING VALUED CARRIED FORWARD 531 7 331 688 8 549

Depreciation previous fiscal year 36 511 - 547

Parent entity Buildings Machinery and Construction Total and land other technical in progress MSEK facilities

Opening acquisition value 436 13 770 450 14 656

Acquisitions - - 522 522

Sales/disposal -6 -97 - -103

Depreciation in connection with disposal - -11 - -11

Reclassifications 50 277 -310 17

Closing accumulated acquisition value 480 13 939 662 15 081

Depreciation brought forward 267 7 781 0 8 048

Sales/disposal -24 -77 - -101

Depreciation for the year 14 403 - 417

Accumulated depreciation carried forward 257 8 107 0 8 364

PLANNED REMAINING VALUED CARRIED FORWARD 223 5 832 662 6 717

Depreciation previous fiscal year 13 392 - 405

Note 14 Tangible fixed assets

TheitemMachineryandothertechnicalfacilitiesincludesinparticularswitchyardequipment,powercables,submarinecables,controlequip-ment,fibre-opticactivitiesaswellastelecommunicationsandinformationsystems.Disposalsariseprimarilyinconnectionwiththecommission-ingoffacilitiesafterreinvestments.

ThetaxvalueforpropertiesintheGroupamountstoSEK�61(�61)million.Inthegroup,thesubsidiarySvenskaKraftnätGasturbinerABreceivedappropriationfundslastyearofSEK17millionforaninvestmentofSEK17millioninthegasturbineplantinArendal,Göteborg.

Company Corporate Domicile Share % Quantity Nominal Book

number value, MSEK value, MSEK

Svenska KraftKom AB 556575-7274 Stockholm 100 1 0 0

Svenska Kraftnät Gasturbiner AB 556451-0260 Stockholm 100 900 9 9

SwePol Link AB 556530-9829 Stockholm 51 306 000 3 3

Total 12 12

Note 15 Shares and participations in Group companies

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Note 16 Shares and participations in associated companies

Book value, MSEK

Company Corporate Domicile Share % Quantity Group Parent

number entity

Nord Pool ASA NO 965662952 Lysaker 50 100 000 367 172

Nord Pool Spot AS NO 984058098 Lysaker 20 2 880 19 0

Stri AB 556314-8211 Ludvika 25 375 9 4

Kraftdragarna AB 556518-0915 Västerås 50 5 000 7 1

Elforsk AB 556455-5984 Stockholm 25 750 1 0

Triangelbolaget D4 AB 556007-9799 Stockholm 25 525 0 0

Total 403 177

Theacquisitionvalueisthesameasthebookvalueintheparententity.SvenskaKraftnätownsafurther10%ofNordPoolSpotASviaNordPoolASA.

Note 17 Current receivables

Group

MSEK 2007 2006

Accounts receivable 336 230

Receivables from associated companies 3 4

Other receivables 51 24

Receivable from the public utility’s overdraft facility 28 48

Total 418 306

Note 18 Receivable from the public utility’s overdraft facilityThereceivablecarriedforwardofSEK28(�8)millionconsistsofthedifferencebetweenwithdrawn/depositedfundsfromthepublicutility’soverdraftfacilityanddeductedexpenses/depositedincome

Group and Parent entity (TSEK) 2007 2006

Opening balance (receivable +, liability -) 48 363 48 708

Settled against Government budget:

Appropriation 249 949 239 655 Income titles, dividend and small-scale energy -439 000 -1 573 000

Settled against public utility’s overdraft facility:

Appropriation funds withdrawn -270 000 -240 000

Dividend paid in 439 000 1 573 000

Balance carried forward 28 312 48 363

Group Parent entity

MSEK 2007 2006 2007 2006

Prepaid expenses Telecommunications 1 0 1 0

Other 16 14 13 14

Accrued income Network 233 292 233 292

System responsibility 317 97 317 97

Renewable electricity certificates 3 2 3 2

Natural gas 6 2 6 2 Telecommunications 0 3 0 4

Other 1 2 1 0

Total 577 412 574 411

Note 19 Prepaid expenses and accrued income

Note 20 Long-term interest-bearing liabilities

Group Parent entity

MSEK 2007 2006 2007 2006

The National Debt Office 471 709 471 709

Credit institutions 1 145 0 0 0

Loans, other external 0 1 251 0 0

Total 1 616 1 960 471 709

TheliabilitytotheNationalDebtOfficeisforthecurrentbankover-draft.Oftheotherexternalloans,atotalofSEK8�9(8�6)millionfallsdueforpaymentafterfiveyearsinthecaseoftheGroupandSEK0(0)millionfortheparententity.

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Note 22 Current interest-bearing liabilities

Group Parent entity

MSEK 2007 2006 2007 2006

Short-term part of long-term loans

Credit institutions 98 0 0 0

Other external 0 98 0 0

Total 98 98 0 0

Group Parent entity

MSEK 2007 2006 2007 2006

Accrued expense, balancing power 259 113 259 113

Accrued expense, primary regulation 10 0 10 0

Accrued expenses, power reserve 8 11 8 11

Accrued expense, energy compensation 40 37 40 37

Accrued expense, transmission losses 73 62 73 62

Transit compensation 54 29 54 29

Accrued staff expenses 32 24 32 24

Accrued leases on fixed assets 11 10 11 10

Accrued maintenance expenses 17 46 16 46

Accrued contingency expenses 41 13 41 13

Accrued expenses, natural gas 9 1 9 1

Accrued interest expenses 0 8 0 0

Accrued fuel expenses 0 12 0 0

Accrued expenses, other 7 10 6 6

Prepaid Telecommunications revenue 11 13 11 13

Prepaid income, other 1 1 1 1

Total 573 390 571 366

Note 23 Accrued expenses and prepaid income

Group and Parent entity MSEK 2007 2006

Opening balance 253 240

Adjustment for pension liability previously reported at too high a level - -8

Pensions paid -5 -4

Annual indexation of pension liability, 2007 calculation principle 20 19

Allocation for payroll tax, 2007 calculation principle 5 6

Indexation of pension liability at 2008 calculation principle 71 -

Indexation of payroll tax at 2008 calculation principle 17 -

Balance carried forward 361 253

Note 21 Provisions for pensions

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Note 24 Contingent liabilities

AguaranteehasbeenissuedforaloanofSEK20(20)milliontoStriABfortheacquisitionofaproperty.

Intheparententity’sassessment,SvenskaKraftnätanditssubsi-diariesarenotpartytoanylegalmaterialproceedingsthatcouldhaveasignificantnegativeimpactontheGroup’sresult.

Note 25 Future leasing commitments

Agreedfutureleasingfeesfalldueforpaymentasindicatedbelow.Allrentalagreementsareoperationalleasingagreements.TheamountsinthecaseoftheparententityalsoincludecommitmentstothesubsidiarySvenskaKraftnätGasturbinerAB.

Group Parent entity

MSEK 2007 2006 2007 2006

Within one year 198 233 246 283

Later than one year but within five years 286 312 452 480

Later than five years 194 6 277 132

Total 678 551 975 895

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Proposed disposition of earnings

SvenHulterström StureLarssonChairman Director General

Anna-StinaNordmark-Nilsson TomasBruceDeputy Chairman

BoDiczfalusy KarinStierna

ChristerSamuelsson Ann-SofieDanielsson

AgataPersson StureTörnstamStaff representative Staff representative

Stockholm21February2008

TheGroup’snon-restrictedequityamountstoSEK2,87�million,ofwhichtheresultfortheyearamountstoSEK7�2million.Oftheparententity’snon-restrictedequityofSEK2,5�9million,ofwhichtheresultfor

theyearamountstoSEK67�million,itisproposedthatSEK�76millionisallocatedfordividendinaccordancewiththedivi-dendpolicyandthatthesurplusbecarriedforward.

Theboardsuggeststhattheparententity’sincomestatementandbalancesheetaswellastheGroup’sincomestatementandbalancesheetareadoptedfor2007.

and adoption of income statements and balance sheets

TheSwedishNationalAuditOfficehasauditedthepublicutilitySvenskaKraftnät’sannualaccountsandconsolidatedaccountsagreedon21-02-2008,forthefinancialyear2007.

ThemanagementofthepublicutilitySvenskaKraftnätisresponsibleforensuringthattheoperationsareconductedefficient-lyandconstitutionally.ThisresponsibilityincludesensuringthattheGovernmentre-ceivesreliablefeedbackontheoperationsintheannualaccounts.

ItistheresponsibilityoftheSwedishNa-tionalAuditOffice,inaccordancewithgoodauditingstandards,toexaminethepublicutility’sannualaccounts.Thepurposeof

theinspectionistojudgewhethertheac-countsandunderlyingaccountingrecordsarereliableandthebookstrueandcorrect,andwhethertheadministrationoftheman-agementfollowsapplicableregulationsandspecialGovernmentdecisions.

Theaudithasbeenconductedinaccord-ancewithsoundauditingstandards.Thesestandardsrequirethattheauditbeplannedandconductedwiththeaimofobtainingreasonablegroundstoassesswhetherthean-nualaccountsandtheconsolidatedaccountsaretrueandcorrect.Theaudithasthusbeenmadeonaselectionofimportanttransac-tionsandadministrativedecisions.

TheNationalAuditofficedeemsthat

theauditcarriedouthasprovidedreason-ablegroundsonwhichtobasethefollowingstatement.

Theannualaccountsandtheconsolidat-edaccountshavebeenpreparedinaccord-ancewiththeOrdinanceonannualaccountsandbudgetdata,theGovernment’sappro-priationsdocumentandotherrulingsrelat-ingtothepublicutility.

TheSwedishNationalAuditOfficedeemsthattheannualaccountsareinalles-sentialrespectstrueandcorrect.

AuditDirectorGöranSelandermadethedecisioninthismatter.AuditManagerAnneBrynecontributedwiththedecision.

Auditor’s report for the Svenska Kraftnät public utility

TheAuditor’sReportoftheNationalSwedishAuditOfficewassubmittedon28.02.08.

GöranSelander AnneBryne

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The Board of Directors

StureLarssonborn19�7,appointedactingDirectorGeneralinApril2007.Technicaldirec-torofSvenskaKraftnät.

Christer Samuelsson born195�,appointed2001.MDandPartner,SensaCorpo-rateAdvisorsAB.

Anna-Stina Nordmark-Nilsson,Deputy Chairmanborn1956,appointed200�.MD,Företagarna

Other directorships:ChairpersonoftheNovumFoundationsCentreattheKarolinskaInsti-tute.BoardmemberofDiösFastigheterAB,SveaSkogAB.

Sven Hulterström, Chairman born19�8,appointed200�.

Other directorships:ChairmanofABStokab.

Tomas Bruceborn19��,appointed200�.ManagingDirector,SvenskaKolinstitutet.

Other directorships:ChairmanofCapitalCoolingEuropeAB,SvenskaOrienteringsförbundet.BoardmemberofABBorlängeEnergi,MobotecEuropeAB,GaiaLeadershipAB.

Karin Stierna born1970,appointed2007.Municipalcommissioner,Ström-sundmunicipality.

Agata Perssonborn19�6,appointed200�.Staffrepresentative.RepresentativeoftheSwedishConfederationofProfessional

Ann-Sofie Danielssonborn1959,appointed2007.Accountsandfinancedirec-tor,NCCAB.

Sture Törnstamborn19�7,appointed2005.Staffrepresentative.RepresentativeoftheSwedishFederationofCivilServantsST.

Bo Diczfalusyborn1952,appointed2005.Director,TheMinistryforIndustry,EmploymentandCommunications.

Other directorships:IEA(In-ternationalEnergyAgency).

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Wind power – a challenge for Svenska Kraftnät

During2007around1TWhofelectricitywasgeneratedinSwedenfromwindpower.Expansionhasremainedatarelativelycon-stantlevelofaround50MWperyearinre-centyears,withtheexceptionof2007whenitincreasedtoapprox.2�0MW(largelythankstotheLillgrundprojectinÖresund).ItistheelectricitycertificatesystemthathasproducedtheeconomicprerequisitesfortheexpansionofrenewablesourcesofenergyinSweden.Thecertificatesystemhasbeendesignedtoenable17TWhofnew,renew-ableelectricityproductiontobeconstructedbetween2002and2016.Thewindpowerindustry’stradeorganisationSwedishWindPowerestimatesthatapprox.7TWhofwindpowerisaccommodatedwithintoday’selectricitycertificatesystem.Therestofthe17TWhofenergywillbeconstitutedbycombinedheatandpowerplantsusingbiofu-els,andhydroelectricpower.

Inlate2007theSwedishEnergyAgencyproposedanewnationalplanningtargetof�0TWhofwindpowerby2020,dividedinto20TWhonlandand10TWhatsea.Thetargetrepresentsasignalofhowmuchwindpoweritmustbepossibletohandleinthephysicalplanning.ForSvenskaKraftnätthetargetoffersaguideastohowthenation-algridforelectricityneedstobeexpanded.

Thereareconsequentlylarge-scaleexpecta-tionsridingontheexpansionofwindpowerinSweden.Therearealargenumberofmajorwindpowerfacilitiesinplanningthroughoutthecountry.Themapbelowshowsaselectionofplannedwindpowerfacilitieslargerthan25 MW.Iftheplantsarebuilt,theywillgen-erateatleast�0TWhperyear.Furthermore,itshouldbeaddedthatalargeexpansionofwindpowerisbeingplannedinourneigh-bouringcountries,aboveallinNorway.TheexpansiontherewillnaturallyalsohaveanimpactontheSwedishsystem.

SvenskaKraftnäthasbeenengagedforsometimeinalargenumberofactivitiesin-volvingtheintroductionoflarge-scalewindpowerintheSwedishpowersystem.Con-nectingwindpowertothenationalgridwillbeoneofSvenskaKraftnät’slargestchallengesinthenextfewyears.

Consideration of the environment in all decisionsDuringtheyearSvenskaKraftnäthasbeenworkingactivelytofacilitatetheconnectionoffurtherwindpowertothepowersystem.Thisisalsoinlinewithourenvironmentalpolicy.Environmentalissuesareintegratedintoactivitiesandconsiderationtotheenvi-ronmentisweighedupinalldecisions.Ifitisassumedthatwindpowerwillreplacecoalpoweratthemargins,everykWhofelectric-itygeneratedfromwindpowerwillrepresentareductionincarbondioxideemissionsof850g.If18TWhofwindpowerwastoreplacecoalpower,itwouldconsequentlyentailadecreaseincarbondioxideemissionsof15.�milliontonnes.

Theproductionofelectricitythatisre-quiredtocoverthelossesthatariseincon-junctionwithtransmissionofelectricityonthenationalgridentailamajorenvironmen-

talimpact.ForSvenskaKraftnätacentraltaskinitsenvironmentalworkisthereforetoreducethelossesinthenationalgridwiththeaimofreducingthisenvironmentalimpact.Fromalossesperspectiveitismorebeneficialtoproduceelectricityclosetotheconsum-ers.AsalargeproportionofconsumptionisinSouthernSweden–whichisadeficitareaintermsofelectricitygeneration–thereareconsequentlytwoenvironmentalbenefitsinestablishingwindpowerthere:environmen-tally-friendlyelectricityproductionisintro-ducedandtransmissionlossesarereduced.

On�1May2007SvenskaKraftnätpub-lishedthereport”Large-scaleexpansionofwindpower–somepreconditionsandconsequences”,whichproposesmeasurestofacilitatetheconnectionofwindpower.Amongotherthingsitproposesthatacer-tainamountofoversubscriptioninradialpowerlinesinthenationalgridispermitted.

Planned wind power plants. If all the plants are built, they will generate at least 40 TWh per year.

Source: The Swedish Energy Agency.

Årjäng55 st

Tönsen30 st

Taggen60 st

Laholm22 st

Bondön18 st

Storrun12 st

Sjisjka30 st

Havsnäs48 st

Brattön10 st

Kårehamn21 st

Forsmark15 st

Blaiken100 st

Saxberget18 st

Uljabuouda12 st

Trolleboda30 st

Lillhärdal90 st

Kyrkberget11 st

Bliekevare20 st

Skottarevet30 st

Lunnekullen50 st

Korpfjället15 st

Glötesvålen30 st

Utgrunden II24 st

Finngrunden130 st

Tolvmanstegen24 st

Stor-Rotliden40 st

Luongastunturi60 st

Kriegers Flak128 st

Gabrielsberget40 st

Töftedalsfjället23 st

StoraMiddelgrundet

110 st Södra Midsjöbanken180-230 st

Rautiorova-Taka-Aapua19 st

Markbygden400-1000 st

Klocktjärnan132 st

Storgrundet53 st

Vindpark Vänern10 st

Säliträdberget8 st

Hedboberget15 st

Key to symbols

Construction underway

Being planned

Lakes

Land areas

Offshore banks

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Thismeansthatalargergenerationcapac-itythanthemaximumcapacityoftheradialpowerlinesispermittedtobeconnected.Occasionswhenthecapacityisexceededarethenhandledbymeansofso-calledcounter-trade.SvenskaKraftnätpaysaproducertoreduceitsproductionuntilthereisonceagaincapacityavailableinthepowerline.Newreg-ulationshavealsobeendrawnupwithregardtoconnectionofwindpowertocross-borderinterconnectors,accordingtothesameprin-cipleasforradialpowerlines.

Inearly2007theGovernmentdecidedtoappointacommissiontolookintocon-nectionofplantsforrenewableelectricityproductiontothenetwork.SvenskaKraftnätisparticipatinginthecommission’sexpertteam.Themaintaskistoevaluatewhetherthecurrentregulationscreateobstaclestoalarge-scaledevelopmentandexpansionofrenewableelectricitygeneration,andalsotoofferproposalsforchangestotheextenttheyareconsiderednecessary.ThecommissionsubmitteditsfinalreportinFebruary2008anditispossiblethatnewregulationswillbeinplaceby2009attheearliest.

European study of consequencesDuring2007SvenskaKraftnäthastakenpartinaEuropeanwindpowerstudy–EWIS(EuropeanWindIntegrationStudy).TheEuropeannationalgridcompaniesareimplementingthestudytogetherinordertoassesstheimpactoftheexpectedexpansionofwindpoweronthepowersystem.Thestudy,whichisbeingfinancedbytheEU,focusesontheexpansionofwindpowerinEuropeupto2015.Thecurrentsituationinthevariouscountriesisbeinganalysedasafirststep:establishedwindpower,regulations,gridcodes,subsidiessystemetc.Thiswillbefollowedbyfuturescenariosupto2015fordevelopmentoftheexpansion.Thescenariosaresubsequentlyanalysedinasimulationtooltoassesstheconsequencesoftheexpansionofwindpowerinthesystem.Theoverallcostsandbenefitstosocietyofwindpowerwillalsobeestimated.Measurestodealwiththeexpansionwillbeproposedwithregardto,forinstance,reinforcingnetworks,thein-creasedneedforbalanceregulation,technicalrequirementsonwindpower.Afinalreportwillbepublishedinautumn2009.

”Taskforceforrenewableenergy”,whichanswerstotheNordicCouncilofMinistershaslaunchedtheprojectNordVind,withtheparticipationofSvenskaKraftnät.Phase1oftheNordvindprojectwascompleteddur-ing2007.Thisstageinvolvedthemapping

ofcentralareasthatareofimportancefortheexpansionofwindpower,suchasofficialplanning,networkplanning,networkcon-nectionsandmarketingdesign.Therehasalsobeenanattempttocharttheconditionsineachcountrywithregardtoplanning,permitprocesses,acceptancebythegeneralpublic,networkconnectionandeconomy.Phase2oftheworkstartedattheturnoftheyear2007/2008.Inthisphase,inconjunc-tionwithGermanyandDenmark,SvenskaKraftnätwillworkontheKriegersFlakwindpowerprojectinordertoexchangeexperienc-esandtoinstigatejointnetworkplanning.

SvenskaKraftnätisalsoundertakingtwostudiesinwhichtheexpansionofwindpow-erisanimportantfactor.Theyareexpectedtobecompletedinearly2008.Onestudyfocusesonthetransmissionsection2,whichisabottleneckinthenationalgridinCentralSweden,andtheotheronSouthernSweden.Bothstudiesanalysetheconsequencesofad-ditionalwindpowerforthenationalgrid’scapacitytotransmitelectricity,andalsoiden-tifytheneedfornetworkreinforcements.

New system development plan from NordelAmajortaskisunderwaywithinNordel,thecollaborativeNordicorganisation,todrawupthenextsystemdevelopmentplan.Workontheplanhasincludedtheanticipateddevel-opmentofwindpowerintheNordicregionasanimportantaspect.Theaimoftheplanistoprovideproposalsforfuturereinforce-

mentstothenetworkthatarenecessaryandprofitableintheNordicpowersystem.Theanalyseshavefocusedondevelopmentupto2015,howevertheyhavealsobeencheckedagainstscenariosupto2025.Nordel’snewnetworkdevelopmentplanwillbepresentedinearly2008.

Togetherwiththeregionalnetworkcom-paniesVattenfall,FortumandE.ON,in2007SvenskaKraftnätestablishedaspecialteamforwindpowerissues.Theelectricitynet-workmustdealwiththeexpansionofwindpowerandtheteamisdiscussingtheoverallaspectsintermsofsystems.

SvenskaKraftnäthasreceivedalargenumberofenquiriesduringtheyearregard-ingconnectionofwindpowerfacilitiestothenationalgrid.Thenecessaryanalysesandin-vestigationshavebeencarriedouttoestablishtherequirementformeasurestobetakeninthenationalgrid.Theenquiriesaredealtwithinaccordancewiththeproceduresdescribedonourwebsite,inthedocument”SvenskaKraftnät’sguidelinesforwindpowerconnec-tion”.Thedocumenthasbeenproducedasassistanceandguidanceforcompaniesthatwanttoconnectwindpowerplantstothenationalgrid.

SvenskaKraftnätisinadditionamemberofreferencegroupsforanumberofwindpowerstudies,andisinvolvedinseveraldoctoralprojectsrelatedtowindpoweratuniversities.

Svenska Kraftnät is working actively to facilitate the connection of more wind power into the power system.

The report ”Large-scale expansion of wind power – some preconditions and consequences”, was published

during 2007.

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The Nordic national grid is being expanded

Historically,planningforthenationalgridhasbeenconductedintermsofnationalconsiderationsintheNordicregion,duringthelastdecadehowever,thedevelopmenthasmovedincreasinglytowardsmoreintegratedNordicjointplanningandexpansionofthenationalgridintheNordiccountries.TheNordicnationalgridcompanieshavebeenconductingjointstudiesforsomeconsider-abletimeofhowtheNordicelectricitynet-workshouldbedevelopedinordertomeettherequirementssetbythevariousoperatorsintheelectricitymarket.TheworkiscarriedoutonanongoingbasiswithinNordel,theorganisationforcooperationbetweentheNordiccountries,anditispresentedinsystemdevelopmentplansthatareproducedregularly.ThisregionalcooperationwithinnetworkplanninganddevelopmentbetweentheNordicnationalgridcompaniesisuniqueinEuropeandshowsthatNordelisafront-runnerintheworkofproducingawell-func-tioningregionalelectricitymarket.TheworkhasresultedinthreejointNordicsystemdevelopmentplansduringthelastdecade.

Successful Nordic cooperationEvidenceofthesuccessthattheNordiccoop-erationrepresentsisthefactthattransmissioncapacitybetweentheNordiccountriesis20–60%ofthemaximumconsumptionineachcountry,wellinexcessofthetargetthattheEUhassetof10%.

DraftingaNordicsystemdevelopmentplanisanextensivetaskthatwilltakeacou-pleofyears.TheworkiscarriedoutinteamswithrepresentativesfromtheNordicnationalgridcompanies.Anoverarchingcriterionfortheworkisthatthedevelopmentofthenet-workiscarriedoutfromaNordicperspec-tive,takingintoconsiderationenvironmen-talissues.ItisthusabenefitfortheNordicelectricitymarketasawholeandthepowersystemthatconstitutesthebasiswhenevalu-atingthedifferentprojects’profitability.

TheNordicnationalgridcompaniesarehowevernotcontentwiththeseresultsbutarenowlookingforwardtothenextstageinthedevelopmentoftheNordicelectricitymarket.Strategicplansforthisdevelopmenthavebeendrawnup,andforthecontinuedexpansionofthenetworkitmeansthattheplanningareawillbeenlarged.Nordelisnowworkingontheestablishmentofamulti-re-gionalplanningprocessincludingtheadja-centgeographicalareas.ThiscorrespondswellwiththeworkthatisnowbeingconductedwithintheEUforamoreintegratedEuro-peanelectricitymarket,whereregionalinitia-tivesarewelcomedinordertolinktheEuro-peansub-areasmorecloselytoeachother.

InadditiontheNordicnationalgridcom-panieswillreviewthedecisionandpermitprocessesineachcountryinordertostudytheprospectsofbothobtaininganevenmoreefficientplanningprocess,andspeedingup

theleadtimesfortheinvestmentprojects–toenablethenecessaryinvestmentstobeeffect-edinashortertimethanisthecasetoday.

The Nordic system development plans ThefirstplanthatwasproducedbyNordelwaspublishedin2002.Thesystemdevel-opmentplanwasbasedoncalculationsofenergybalancesanditsaimwastoidentifythecongestedtransmissionconstraintswherereinforcementsofthenetworkwereconsid-eredtobeofinterestforfurtherstudies.Theplanfocusedontheenergyandpeakpowerbalancefor2005andspecifiedanumberofareasintheNordicregionforfurtherstudiesthatwereofgreatsignificancefortheelectric-itymarket.Theplandidnotpresentanycon-creteproposalsforinvestments,astechnicalsolutionstoachieveincreasedtransmissioncapacityandcostsforthemwerenotpartofthestudy.

Five priority projectsNordel’snextsystemdevelopmentplanwascalled”Priorityconstraints”andwaspub-lishedin200�.Theplanfocusedontheen-ergysituationintheNordicregionin2010andstudiedwhichinternalNordicpowertransmissionconnectionswereimportantforawell-functioningNordicelectricitymarket.Criticallycongestedtransmissionsectionswereidentified.Measurestoincreasetheca-pacitywerestudiedandtheircostswerecal-

Evidence of the success of Nordic cooperation in developing the network in the Nordic region is the fact that the transmission capacity between the Nordic

countries is 20–60 % of the maximum consumption in each country, which clearly surpasses the target of 10 % set by the EU.

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culatedandsetagainstthebenefitsthattheincreasedtransmissioncapacitydelivered.

Theoverallevaluationledtothepresenta-tionofapackageoffivepriorityprojectstoreinforcefivecongestedtransmissioncon-straintsintheNordicsystem.Thefiveprior-ityprojectsare:

AreinforcementoftransmissioncapacityinSouthernSwedenAnew�00kVpowerlinebetweenJärpströmmeninJämtlandandNeainNorwayAnewHVDClinkbetweenSwedenandFinlandAnHVDClinkovertheGreatBeltbe-tweenJutlandandZealandinDenmarkAnewHVDClinkbetweenNorwayandJutlandinDenmark

ThenationalgridcompaniesintheNordiccountriesmadesubstantialundertakingstoimplementthesefiveprojectsthatwereofimportancefortheNordicelectricitymarket.Andtodayfourofthefiveprojectshavebeenauthorised.Twooftheprojectshavearrivedatanadvancedstageintheirimplementationandareexpectedtobeputintooperationin2009and2011respectively.Thismustbeviewedasremarkablyrapidprogressofsuchlarge-scaleinfrastructureprojects.Thecurrentsituationforthefiveprojectsisasfollows:

SvenskaKraftnättookthedecisiontoimplementthereinforcementoftransmis-sioncapacitytoSouthernSweden,theprojectthathasbeencalled”theSouthernLink”,oneyearaftercompletionofthede-velopmentplan.InJanuary2008SvenskaKraftnätalsotookthedecisiononwhichtechnologywastobeused.Itwillbeacom-binationofDC-andACtechnology.AnACpowerlinewillbeinstalledinanexistingpowerlinecorridorbetweenHallsbergandastationclosetoJönköping.Fromthissta-tionnewDCtechnologywillbeusedbothsouthtoSkåneandwestintoNorway.Theexpandedprojecthasbeengiventhename”SouthWestLink”.

ThereinforcementbetweenJärpström-meninSwedenandNeainNorwayisbeingconstructedasa�00kVoverheadline.Allpermitshavebeenreceivedforthepowerlinethatisestimatedtobereadybythesummerof2009.

Fenno-Skan2,thenewHVDClinkbetweenSwedenandFinland,willruninparallelwiththeexistingHVDClink.Sven-skaKraftnätandFingridhavedecidedto

undertakereinforcements,andtheworkofprocurementandobtainingthenecessarypermitsisunderway.Thelinkisexpectedtobereadytobeputintooperationin2011.

ThenewconnectionovertheGreatBelthasbeenauthorisedandprocured.Comple-tionoftheHVDClinkisestimatedfor2010.

ReinforcementoftheexistingHVDClinkbetweenNorwayandJutlandisstillbeingin-vestigatedbyStatnettandEnerginet.dk.Adecisiononwhethertogoaheadwiththeprojectisexpectedduringthefirsthalfof2008.

System development plan 2007Nordelisnowinthefinalphaseoftheworkofproducingthenextsystemdevelopmentplan.ThisreviewstheenergyandpeakpowersituationintheNordicregionfor2015andforanumberofdifferentscenariosfor2025.Thescenariosfor2015includereinforcementofallfivepriorityconstraintareasthatweredescribedaboveandtheenergybalanceintheNordicregionisexpectedtobebolsteredcomparedwithprevioussystemdevelop-mentplans.TheanalysesclearlydemonstratethatthereinforcementsofthefivepriorityconstraintareasthatNordelrecommendedin200�,andthatarenowbeingimplemented,willdeliverasignificantboosttotheNordicnationalgrid.

TherearearelativelysmallnumberofbottleneckswithintheNordicpowertrans-missionsystemthatrequirefurtherstrength-eningaccordingtotheanalysesfor2015.TheanalysesalsoshowthattheimprovedNordicenergybalancemakesstudyingtheconnec-tionstocountriesoutsidetheNordicregionofinterestaswell.Thesystemdevelopmentplansummarisesthemostimportantnet-workreinforcementsthatarebeinginvesti-gatedwithineachcountryandthatwillalsocontributetoabetterfunctioningelectricitymarket.Thepossiblereinforcementsofcon-straintareasforwhichNordelisrecommend-ingfurtherstudiesare:

ReinforcementofthenetworkonthewestcoastinSweden,andalsothenetworkaroundOsloinNorway(theSouthWestLinkwillfulfilthisrequirementforrein-forcement)Increasedcapacityinnorth-southdirec-tionintheareaaroundTrondheiminNorway,whichwillincreasethecapacityintheNordicnetworkIncreasedcapacityinthefarnorthofNorway

IncreasedreinforcementfromtheNordicregiontothesurroundingworldInternalnetworkreinforcementineachcountry

InadditiontothereinforcementsthathavebeenidentifiedwithinNordel’soverallplan-ning,anumberofreinforcementsarealsobeingplannedwithineachcountry,whichdirectlyorindirectlyhaveapositiveeffectontheelectricitymarket.Theaimoftheplannedreinforcementsistoincreasethecapacityinthenationalgrid,butalsotoimproveopera-tionalreliability,whichistothebenefitofallpartiesinthemarket.

Animportantpartofthisisthepro-grammethatSvenskaKraftnäthasbeenpur-suingforanumberofyearstorenewswitch-ingstations.Theaimistoimprovethedesignofanumberofthemostimportantstationsbyreplacingtheoldswitchyardswithmoderndoublecircuit-breakerswitchyardsexecutedwithso-calleddisconnectioncircuit-break-ers.Hitherto,twoorthreestationshavebeenrenewedperyear,andtheprogrammewillcontinueforafewyearstocome.

Anotherimportantreinforcementistheongoingproject”StockholmsStröm”,theaimofwhichistoboostfuturesupplytotheStockholmarea.Ofthesubprojects,specialattentionshouldbedrawntotheplanned�00kVcablethatistobelaidunderStock-holm’scentraldistrictstolinktogetherthenetworkintheregion’snorthernandsouth-ernparts.

ThereinforcementintheGöteborgregionthathasbeendecided,entailingtheconstruc-tionofanew�00kVpowerlinebetweenStenkullenandLindome,willtakeplaceinthenearerfuture.Thispowerlinehasthead-ditionaladvantageofalsoreinforcingpartsofthetransmissioncorridorthatrunsalongtheSwedishwestcoastandthatisimportantfortheelectricitytradewithNorwayandDenmark.

Anotherprojectthatisunderinvestiga-tionisaDCconnectionbetweenSwedenandLithuania.Thelinkisexpectedtobe700MWandconnectedinoneoftheexis-tingsubstationsinSouthernSweden.Adeci-siononsuchalinkisexpectedduring2008.

ThefinalphaseofconnectingupanewDClinkbetweenNorwayandHollandiscurrentlyunderwayinNorway.The550kmlongcablewillbeabletotransmit700MWandwillbethelongestsubmarinecablelinkintheworld.

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Twenty four hours in our control room

SvenskaKraftnätcontrolsandmonitorstheelectricityandnaturalgasnetworksfromtwocontrolrooms.Thenationalcontrolroom,NetworkControl,islocatedinconnectiontotheheadofficeinRåckstatogetherwitharegionalcontrolcentreforSouthSweden.AregionalcontrolcentreforthenorthernpartofthecountryissituatedinSollefteå.Therearetwoprincipalgoalsfortheoperation.Firstly,thatnobodyworkinginourplantsshouldruntheriskofcomingintocontactwithlivecomponents.Secondly,thattheelectricityandgasnetworksshouldbeoper-atedwithahighlevelofreliabilityandnodisruptions.

Thisarticlegivesanaccountofwhataunique,butneverthelesstypical,2�-hourscanbelikeinourcontrolrooms.Butfirstafewwordsonthevariousrolesthatthestaffhave.

The task of the control centre operation (DC)istoregulatethevoltageonthena-tionalgridforelectricity,monitorandrectifyfaultsthatariseinSvenskaKraftnät’splants,controlDClinksandgasturbinepowerstations,restorethenetworkafterdisrup-tionsanddisconnectplantsinconjunctionwithmaintenanceorinvestmentwork.DuringthenightDCsarealsotheextendedarmsofthedutyengineer(vhi)whenthispersonisoncallinanadjacentroom.Frombeingmannedbyonepersonatnight-timeinRåcksta–whichmonitorstheentiregrid–staffinglevelsforDCsrisetothreeinRåckstaandtwoinSollefteåduringday-timetosubsequentlybegraduallyreducedduringtheevening

The main task of the Balance Serviceistoberesponsibleroundtheclockformaintainingabalancebetweenthecountry’sproductionandconsumptionofelectricity.Iftheautomaticresources–whichincreaseordecreasethelevelofproduction–arenotsufficient,theBalanceServiceactivatesstartorstopofproductionwithoperatorsthathavesubmittedsuchbids(so-calledregula-tionbids).TheworktakesplaceinclosecooperationwithothersystemoperatorsintheNordicregion,primarilywithNorway.TheBalanceservicealsodealswithSvenskaKraftnät’sresponsibilityforthebalanceinthegasnetwork.

The duty engineer,vhi,havetheoverallresponsibilityforthepowersystemandthemostimportanttasksarecalculatingthecapacityinthenetworkandtherequirementforreserveswithwhichtooperatethesystemreliably.Inaddition,eachmorningthedutyengineerallocatecapacitytotheelectricityspotmarketandotherexportsforthenext2�hours.

The telecommunications control engi-neer,tki.Acentralpartofthecontrolandmonitoringofthepowersystemisaccesstoinformationandancillarysystemstoenabledecisionstobetakenwiththecorrectdata.ToensurethattheancillarysystemsandinformationgatheringisfunctioningthereisatkiinNetworkControlwiththetaskofcontrollingandmonitoringtheseoperations.ThetkiispresentinNetworkControlduringofficehoursandisonstandbyatothertimes.

The nightThenightisnormallythemostcalmperiod.Ofcourse,thereasonisthatconsumptionthenislowerandthereareonlyminorvari-ations.NetworkControlismannedduringthenightbyonepersoneachfortheControlCentreoperationandtheBalanceService.

Tonightitisrelativelycalm.DCconnectsanumberofdevicestokeepdownvoltagelevelsinthenetwork,whichisacommonmeasurewhenconsumptionislow.Inad-ditiona�00kVpowerlineinthenorthisdisconnectedinordertoreducetheso-calledcoronalosses.Coronaoccursinconjunction

withtheformationoffrostonthepowerlinesandresultsindischargestowardsthesur-roundingair,whichcauselossesthatcanbegreaterthanthosewhichariseintherestofthenetworkifthepowerlineisdisconnected.FortheBalanceServicethemostdramaticeventisthataproductionfacilityinDen-markofapprox.�00MWisdisconnectedduetoafault.Tocovertheresultantdeficit,approximatelyanequivalentamountofhy-droelectricgenerationisstartedinSwedenfordeliverytoDenmark.

The morning

UnlesssomethingunforeseenhappensthevhiarrivesatNetworkControlataroundsixinthemorning.Thingsmainlygoasplannedthismorningandtherearemarginsinthetransmissioncapacityandreserves,sotheworkofestablishingtheavailablecapac-ityfortheelectricityspotmarketandotherexportsforthenext2�hoursgetsunderway.Oneparameterinthisjobistheconsump-tionofelectricity.Cold,windandalowlevelofsunshineproduceincreasedconsumption,weatherforecastsarethereforeanimportantbasisforconsumptionforecasts.Aconsump-tionforecastisproducedforeachofthedif-ferentpartsofthecountrythatareborderedbycongestioninthenationalgrid.Aforecastissubsequentlyproducedofhowmuchistobeproducedwithineacharea.FinallyaplanisdrawnupofthelikelyoutcomefortheelectricitytradedbetweenSwedenandthenearbycountriesforthenext2�hours.

The control room in Råcksta is manned round the clock.

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Thedifferentpartsarebroughttogetherandtheresultisaforecastofhowmuchelec-tricityisexpectedtoenterthenationalgridinthenext2�hours.Thevhi´staskisthentoallocatetransmissioncapacitytotheelec-tricityspotmarketandotherexportsonthebasisofthecapacitythathasbeencalculatedinthenetwork.

– RING! The alarm goes!Anuclearpowerblockisdisconnectedfromthenetworkduetofaultsinitscoolingequipment.1,200MWofproductioninSouthSwedendis-sappearsandregulationresources,primarilyinNorwayandNorthernSwedenautomati-callyincreaseproductiontocompensateforthemissingnuclearpower.Thisresultsinincreasedtransportofelectricityinasouth-erlydirectionandabottleneckissoheavilyloadedthatitspermittedtransmissionlimitisexceeded.ThevhigivesinstructionsforgasturbinepowerstationsinSouthernSwedentostartproductionequivalenttotheamountbywhichtransmissionexceedsthebottle-neck.ThemajorityofthegasturbinesarestartedbytheDCviaremotecontrolfromNetworkControl.Increasedtransmissiononthenationalgridalsoentailslowervoltage,whichmeansthattheDCneedstoregulate

thevoltageupwardsbyconnectingso-calledshuntcondensors.Afterabouttenminutesthegasturbinesareproducingthepowerorderedandtransmissioninthebottleneckisbelowtheapplicablelimit.Thevhireceivestheinformationthatthenuclearpowerblockisexpectedtobephasedintothenetworkagainwithinfivehours,whichwouldmeanthesituationreturningtonormalbytheeveningwhenconsumptiononceagainrises.Sothattherelativelycostlyoperationofthegasturbinescanbediscontinued,theBalanceServiceimplementsonepowertransactionwithPolandandonewithDenmark,whichtogethermeanthatallthegasturbinescanbeshutdownwithinanhour.

Thedisturbanceoccursduringaperiodofthemorningwhenconsumptionrisesandtheexchangeofpowerbetweenthevariousneighbouringcountrieschanges.Evenwith-outdisturbancesthisisanintensiveperiodfortheBalanceService,asalotofplannedstartsbyproducersaremovedinordertofendoffdiscrepanciesinthefrequencythatexceedthosepermitted.Dependingonwhichmeasuresaretaken,upwardsordown-wardsregulationpriceshavetobesetforeve-ryhourasabasisforpricinginthebalance

settlement.InthisworktheBalanceServiceenjoysclosecooperationwiththecom-panywithsystemresponsibilityinNorway,whichnormallyhasplentyofeasilyregulatedhydroelectricpower.Towards9–10inthemorningtheconsumptionlevelstabilisesandthesituationcalmsdown.

ThecontrolcentreinSollefteåwasbusydisconnectinga�00kVpowerlinewhenthedisturbanceoccurred.Thereasonwasplannedmaintenanceandasalwayswithsuchconnections,theytakeplaceaccordingtowritteninstructions,aso-calledswitchingschedule.Themostimportantfunctionoftheswitchingscheduleistoensurethatno-bodyworkingattheplantriskscomingintocontactwithlivecomponents.Onaccountofthedisturbancetheconnectionsaretem-porarilystopped,toberesumedwhenthesituationiscalmer,andthemaintenancethatwasplannedwillhavetowait.

Justafter8o’clockthevhideterminesthetransmissioncapacitiesthataretoapplyfortheelectricityspotmarketandforotherim-portsandexportsforthenext2�hours.ThevaluesaredispatchedtoNordPoolSpotforpublicationandasinputdatafortheelectrici-tyspottradeforthenext2�hours.Oncethis

The Balance Service is located in Stockholm. It is important to ensure that there is a constant balance between production and consumption.

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hasbeenpublished,thecapacitiesareguaran-teedfortheoperators,andeventsthatcausethecapacitiestobereducedtolevelsbelowwhattheoperatorsneedhavetobedealtwithbymeansofso-calledcounter-trade.

DaytimeThepowertransactionswithPolandandDenmarkcanbeconcludedataround11a.m.asthetransmissionlevelonthenationalgridhasfallen.TheBalanceServiceensuresthatthesetransactions,alongwiththosethatarearesultofoperatingthegasturbines,areenteredintothesettlementsystem.Thecalm-ersituationalsomeansthatthecontrolcentreinSollefteåcancontinuewiththedisconnec-tionofthe�00kVpowerlineandsubmitaso-calledworkcertificatetothecontractorswhoaregoingtoundertakethemaintenance.Whenthepowerlinehasbeendisconnected,asystemthatperformscalculationsinrealtimeenablesthevhitoascertainthesizeofthetransmissioncapacitywithoutthepowerline.Inthiscasetheanalysesthatwerecarriedoutinadvancearecorrectandthecapacityisonlyreducedmarginally.

ThevhiiscontactedbyhiscolleaguesinDenmark.Acoal-firedpowerstationonZealandhastobetakenoutofoperationto-morrowandthereservecapacitywillbetoolowunlessEnerginet.dktakesmeasures.OnepossibilityisthatSvenskaKraftnäthasasur-plusinSouthernSwedenthatDenmarkcanutilize.However,apreliminaryanalysisshowsthatthiscapacityisnotavailable,adefinitivedecisioncanbegivenlaterintheafternoonwhentheelectricityspotmarkethasfin-ishedandtheoperatorshavesubmittedtheirproductionplans.ThedecisionmeansthatEnerginet.dkwillpreparetostartupanother

powerstation.AtthispointitistimefortheBalanceServicetodeterminetomorrow’slim-itsinthenaturalgasnetwork.Indistinctiontotheelectricitynetwork,theredoesnotneedtobeaprecisemomentarybalancebetweensupplyanddemand.Inertiainthenaturalgasnetworkmeansthatonashorttermbasisthebalanceproviderscanborroworsupplymoregasthantheactualconsumption.

Thisimbalanceisaccumulatedinaso-calledbalanceaccountforeachbalancepro-vider.TheSwedishnaturalgasmodeltherebyallowstheoperatorsthatareresponsibleforbalancestohaveacertainimbalanceper2�hours.TheBalanceServicethereforecalcu-lateseveryday,takingoperationalreliabilityandtheprevailingpressureinthenetworkintoaccount,howmuchroomthebalanceprovidersarepermittedtouse,andtherebytheextenttowhichtheyarepermittedtomakechangesintheirbalanceaccounts.

AfternoonTheresultsfromtheelectricityspotmarketarepublishedintheearlyafternoonandonlythencanthevhiobtainananswerastowhetherthereissufficienttransmissioncapacitybetweenSwedenandtheneigh-bouringcountries.Whentherearelargediscrepancies,whichmeanthatthenationalgrid’scapacityisinsufficient,itcanbeneces-sarytoactivatemeasuresatthisearlystagefortomorrow.Forexample,itmightinvolveproductionfacilitiesthathaveastart-uptimeof10–20hours,orpowertransactionswithourneighbouringcountriesthatrequireadvanceplanning.Thedatafortomorrow’stransmissionisfurtherimprovedlaterintheafternoonwhenallthebalanceproviderssubmittheirproductionplans.Atthispointthevhicanobtainarelativelyprecisepicture

oftomorrow’stransmissionbasedontheseproductionplansandourownforecastsforconsumption,importandexport.ThevhiandtheBalanceServicetogethergothroughthepreconditionsanddecidewhetheranyspecialmeasuresneedtobetaken.

Thenuclearpowerstationprovidesnoti-ficationthattheearlierplanforrestartisnotpossibleandgivesanewtimeof12tomor-row.Thedecisionmeansthatthevhiwillneedtostartacoupleofgasturbineswhendarknessfallsandconsumptionincreases.Theanalysisoftomorrow’stransmissionshowsthatthetransmissionlimitsarenotexceededandnoadditionalmeasuresareneeded.

TheonsetofdarknessproducesasimilarsituationfortheBalanceServiceasduringthemorning’sloading.Severalplannedpro-ductionstartsbytheproducersneedtobebroughtforwardtomatchtheupturnintheconsumptionlevel.

EveningThecontractornotifiesthatmaintenanceonthe�00kVpowerlinehasbeencompletedandsubmitsaso-calledoperationcertificatetotheDCinSollefteå,whichsubsequentlycontinuestheconnectionsinaccordancewiththeswitchingscheduleandputsthepowerlineintooperation.

Theincreaseinelectricityconsumptiongraduallysubsides.Consumptiondecreasesinlinewiththepopulationfinishingcooking,startingtoturnofflightsandfinallygoingtobed.Duringthisperiodthestaffinthecontrolroomsisgraduallyreducedtofinallyendupwherewestarted,withtwopeopleinNetworkControl.Auniquedayofoperationsisatanend.

Svenska Kraftnät has a control centre in Sollefteå that primarily monitors the northern section of the

national grid, but also the rest of the grid if it becomes necessary.

The control centre operation in Stockholm primarily

monitors the southern section of the national grid.

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Fairy flax thrives in the powerline corridor.

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Duringthe1990sasawholeandthefirstyearsafterthemillennium,thefocushasbeenonadministrationofthenationalgridforelectricity.Inprinciplenonewpower-lineswerebuiltduringthisperiodandtheoperationhasbeencharacterisedbystability.Themajorinvestmentsweremadeduringthe1950sand1960swhenthenationalgridwasconstructed,andduringthe1980swhennuclearpowergenerationwasconnected.Butnowthisischanging.NewmarketandenvironmentalrequirementsarebeingplacedonSwedishelectricitytransmission.ThenationalgridmustdealwithfuturewindpowerandnewconnectionsfromboththeNordiccountriesandothersintheEUhaveeitherbeendecidedorareunderdiscussion.Furthermore,alargenumberofswitchyards,transformersandconnectionstationsneedtoberebuiltorreplacedintheirentirety.Therateofinvestmentwillthereforeincreasesubstantiallyinthenexttenyears.Thereisamajorneedtorecruitskillednewemployees,andthepressureonrecruitmentwillnotbehelpedbythefactthatinthenextfive-yearperiod55employeeswillretirefromSvenskaKraftnät,mostofwhomarehighlyskilled.Itisthereforeimportantthatweclearlydem-onstratethatweareanattractiveemployer.

Major infrastructure projects Ouremployeeswillbegreatlyaffectedbythemajorinfrastructureprojectsthatareplanned.Oneexampleisthe”SouthWestLink”whereSvenskaKraftnätisgoingtoconstructthelargest,longestandmost

powerfulgroundcableintheworld.SvenskaKraftnätneedstobolsteritsexpertisewithinalargenumberofareas,includingprojectmanagersandengineerswithinelectricpowerandIT,butwealsoneedtostrengthenourpositionwithintheareasofmarketandadministration.

Interesting job assignments in a high-technology companySvenskaKraftnätalmostexclusivelyrecruitsgraduates.Thejobassignmentswithinthecompanyhavebothdepthandbreadthandoftendealwithnewtechnologies.SvenskaKraftnätoffersattractivejobassignmentsthatarechallengingandprovidedevelop-mentforbothgroupsandindividuals.

Weregularlyconductsurveysandanaly-sesonwhetherthereisaneedtoexpandthecapacityofourtransmissions.Wealsoworkwithlandandpermitissuesanddescriptionsofenvironmentalconsequencesofplannedconstruction.Knowledgeofcontrolequip-mentandtechnologyensuresthatwemakethebestchoiceoftechnology.Aprocurementphaseissubsequentlyinstigatedinwhichcontractorssubmittenders.Thebestbidisacceptedandthentheactualconstructioncommences–whichisoftenimplementedoveraperiodofseveralyears.Whenthecon-structionphaseiscompletedourmainte-nanceteamtakesoverandensuresthatthequalityofthenationalgridismaintained.

Theoperationalactivitiesensuresthattheelectricityinthenationalgridflowsroundtheclock.Operationsneedtobe

plannedandthisisdonethroughjobas-signmentssuchasdealingwithscheduledoutages,determiningcapacity,switchingschedules,operationalinstructionsandreli-abilityissues.SvenskaKraftnätisalsoabletosimulateourpowersysteminapowerfulreal-timesimulator.

Onthemarketsideweareworkingonformulatingregulationstocontributetoanelectricitymarketthatisopenandwithnorestrictionsoncompetition.

WithintheITfieldweareworkingondevelopment,administrationandoperationofthesystemsthatareneededtoenablethenationalgridtobebuiltandmonitored,sothattradecanbeconductedandthatallelectricityflowscanbereadandconvertedintoinvoices.

European cooperationThefutureoftheelectricitysupplyisanimportantissuethatisundercontinualdiscussionwithintheEU.Theissuesrevolvearoundfuturegeneration,transmissioncapacitybetweencountries,environmentalimpactandtechnicaldevelopment.SvenskaKraftnät’sstaffparticipateinworkingpartiesthroughoutEuropewheretheseissuesarediscussed.

Modern new premisesIn2009SvenskaKraftnätwillmoveintoanewlybuiltbuildingofitsown.Itwillprovidetheopportunitytocreatemodernandflexibleworkplaceswiththegreatestpos-sibleenvironmentalconsiderationinterms

We are making our organisation more attractive

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ofconstructionmethod,choiceofmaterials,interiorfittingsandrunningofthebuilding.Thegoalistocertifythebuildingasa”greenbuilding”.

Healthy and parent-friendly companySvenskaKraftnätisahealthyworkplace.In2007sickleavewasunder2.5%andmorethanhalfofthestaffdidnothaveasingledayoffsick.Ourworkisbothpreventiveandremedial,withaclearobjectivethatallstaffshouldreturntoworkafteralong-termillness.

AtthestartoftheyearSvenskaKraftnätwasdesignatedthemostparent-friendlycom-panyamongthecompaniesthatemployalotofengineers.Adistinctionthatclearlydem-onstratesthatthecompany’sgenderequalityworkhasbeensuccessful.

Focus on environmental issuesSvenskaKraftnäthasaclearfocusonenvironmentalissues.Wesetahighlevelof

environmentalrequirementswhenprocuringconstructionandmaintenancecontracts.Ifwearetoattractnewemployeesitisveryim-portantthatSvenskaKraftnätworksactivelywiththeseissues.

Social responsibilitySvenskaKraftnätisacompanythatisimpor-tanttosociety.Itisourresponsibilitythatelectricityistransferredfromproductiontoconsumptionatalltimes,withinthecountry,butalsotoourneighbours.Ifthenationalgridforelectricityisnotoperationalthereareconsequencesinalmostallareasofsociety.StaffatSvenskaKraftnätarekeenlyawareofthisresponsibilityandalwayshavethisover-ridinggoalinfrontofthem–theelectricitymustgetthrough!Inlinewiththiswemustbeperceivedasaresponsiblecompanythattakesresponsibilityfortheenvironment,itsemployeesanditsfinancialsituationinboththeshortandthelongterm.

TeamworkOneofSvenskaKraftnät’sfundamentalval-uesisteamwork.Wewanttohavestaffthatenjoycooperatingbothwithinthecompanyandexternally,andwhounderstandthesignificanceofsharingtheirskills.Whentheoperatingsystemisunderpressureitisadditionallyimportantthatcommunicationandcooperationworkwell,bothinsideandoutsidethecompany.

A stable company with a high turnover and good financial resultsAfundamentalpreconditionwhenapplicantsareselectingtheirfutureemployeristhatithasasatisfactoryfinancialsituation.SvenskaKraftnätputstheemphasisonastablelong-termfinancialsituation,atthesametimeasmeetingtheyieldrequirementsthatareaskedofus.Inthelasttenyearswehavemetthesetargetsninetimesoutoften.

At Svenska Kraftnät it is perfectly alright to combine a managerial position with being a parent. At the start of 2007 the Swedish Association of Graduate Engine-

ers designated Svenska Kraftnät as Sweden’s most parent friendly company of the companies that employ a lot of engineers.

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New features in the natural gas sector

Natural gas market opened upOn1July2007thefinalstageinthederegulationofthenaturalgasmarketwasimplemented,givingdomesticcustomerstheopportunitytofreelyselecttheirsupplierofnaturalgas.Deregulationcommencedin2001whenlargeindustrialconsumerswereabletoselectsupplier.Sincethentheprocesshastakenplaceinstages,untilthefinalstagehalfwaythrough2007.

Svenska Kraftnät’s roleWhenthenewNaturalGasActcameintoeffecton1July2005SvenskaKraftnätwasappointedastheauthorityholdingsystemresponsibility.ThismeansthatSvenskaKraftnätisresponsibleformaintainingtheshort-termbalancebetweeninputandex-tractionfromtheSwedishnaturalgassystem.OneaspectofthisisthatSvenskaKraftnätsignsagreementswithbalanceproviders.TherearecurrentlyfivebalanceprovidersintheSwedishnaturalgasmarket.Thesecompaniesundertaketoplanforbalancesforthecustomersforwhichtheyhavebalanceresponsibilityandtheyarefinanciallyrespon-siblefortheimbalancestheycause.SvenskaKraftnätisresponsibleformonitoringthesystemandwhennecessaryimplementingmeasurestomaintainthebalanceinthesystem.

Togetherwiththetwotransmissionnet-workoperators,SwedegasandEONGasSverige,SvenskaKraftnätsupervisestheworkoftheGasMarketCommittee,whichin-cludesrepresentativesofbothbalanceprovid-ersanddistributionnetworkoperators,alongwithconsumersandthetradeassociationofthegasmarket.Thecommitteeisaninfor-mationandcooperationforumforSvenskaKraftnätandtheoperatorsofthetransmis-sionnetworks,anditdealswithissuescon-cerningtariffs,developmentofcontractualtermsandothermoregeneralissuesregardingthedevelopmentofthegasmarket.

Duringtheyearconsumptionofnaturalgasamountedtoapproximately11.5TWh(measuredingrosscalorificvalue).

What is happening in the market?

New combined heat and power plants

ThenewRyacombinedheatandpowerplantwascommissionedinGöteborgattheturnoftheyear2006/2007.Theplanthasacapacityof260MWofelectricityand290MWofheatandiscurrentlythelargestsingleconsumerofnaturalgasinSweden.InMalmötheÖresundplantisbeingcon-vertedintoamoderngas-firedcombinedheatandpowerplant.Thisplantwillhaveacapacityof�00MWofelectricityand�50MWofheatandwilltherebybesomewhatlargerthantheRyaplant.ThenewÖresundplantisexpectedtobeputintooperationon1January2009.Theoverallannualcon-sumptioninthesetwoplantsmayamountto7–8TWh.However,thepowerstationsarepartiallyreplacingotherplants,whichmeansthatthenetincreaseinconsumptionofnaturalgasismorelikelytobearoundhalfthatlevel.

Storage facility for gasThereisastoragefacilityfornaturalgasinSwedenthatwascommissionedon1May2006.Thestoreisademonstrationfacilityanditisrelativelysmall,comprising10mil-lionnormalcubicmetres.AsSwedendoesnothavetherightgeologicalconditionsforthetypeofstoragefacilitythatisnor-mallyusedforseasonalstorageofnaturalgas,Sweden’smarketwillcontinuetobedependentonstorageinothercountriesinordertoevenoutthefluctuationsintheconsumptionpattern.Theclosestlargestor-agefacilityislocatedinDenmark.

Biogas in the natural gas network

TodaysmallamountsofbiogasaremixedintotheSwedishnaturalgasnetwork.Inmostcasesthebiogasisaresidualprod-uctfromactivitiesatsewageworksandwastedisposalplants.Afterprocessingtheupgradedbiogascanbefedintothenaturalgasnetworkanddistributedtocustomers.Accordingtovariousstudiesthereiscon-siderablepotentialforproductionofbiogas

The natural gas network offers an opportunity to distribute biogas to customers, at the same time as it pro-

vides an equalisation effect and back-up in the event of disruptions to biogas production. According to vari-

ous studies there is considerable potential for production of biogas in Sweden. The potential from biological

processes (from, for instance, sewage slurry, manure and energy crops) is estimated at about 15 TWh.

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inSweden.Thepotentialfrombiologicalprocesses(from,forinstance,sewageslurry,manureandenergycrops)isestimatedatabout15TWh.Thenaturalgasnetworkoffersanopportunitytodistributebiogastocustomers,atthesametimeasitprovidesanequalisationeffectandback-upintheeventofdisruptionstobiogasproduction.BothGöteborgandMalmöarecurrentlyplanningforlargebiogasproductionfa-cilitieswithso-calledthermalgasificationofwoodenrawmaterials.TheplantinGöteborgisplannedtobe100MWandisestimatedtoproducearound0.8TWhofbiogasayear.TheplantwillbeconnectedtotheSwedishnaturalgasnetworkandcommissioningisplannedfor2012.

Supply to the Swedish marketSincenaturalgaswasintroducedontotheSwedishmarket,SwedishcustomershavebeenexclusivelysuppliedwithgasfromtheDanishNorthSeafields.OvertheyearsthesehaveofferedasecuresupplyofgastoSwedishcustomers.AstheDanishnaturalgasfieldsarenowapproachingpeakproduction,fallingproductionlevelsarehowevertobeexpectedinthenearfuture.ThismeansthatthereisreasontolookatalternativeoptionsforsupplyingtheSwedishmarketwithgas.ForsomeyearspreliminaryproceedingshavebeenjointlyunderwaybetweenSwedishandNorwegianoperatorstoexaminethepossibilityofreal-isinganewoffshorepipeline,Skanled.ThepipelinewillextendalongtheNorwegian

southcoasttotheindustrialareassouthofOsloandonwardovertotheSwedishwestcoast.ItalsoincludesanoffshoottoDen-markandtheDanishnaturalgassystem.Adecisiononinvestmentisexpectedduring2009,anditwouldtherebybepossibletoputthepipelineintooperationin2012.

ThenewsupplypipewouldenableScandinavia’slargestoilrefinery,PreeminLysekil,toreplaceoilwithnaturalgas.Itwouldtherebybepossibletoachievelargereductionsincarbondioxideemissions.ThechemicalindustryisconsideringnewinvestmentsinStenungsundiftheprojectisrealised.AnothersupplyroutetoSwe-dencouldalsodeliverimprovementstothecompetitionsituationinthemarket.

Besidesthepositiveeffectsdetailedabove,anadditionalsupplypipewouldgiveSwedenimprovedsecurityofsupplyinconjunctionwithcriticalsupplysitua-tions.Ashort-livedcriticaleventoccurredduringautumn2007whenproductionwasstoppedontheDanishplatformsonac-countofaseverestorm.Ifasimilardisrup-tiontosupplieswastooccurinthefuture,asecondsupplyroutewouldgivetheSwedishnaturalgasmarketacompletelydifferentsupplyoption.

The world around usInconjunctionwithNordpool,Energinet.dkisplanningtostartagasexchangeinDen-markinearly2008.Theexchangewillfacili-tatetradewithpartiesthatarenotcurrentlyabletotradeanonymouslyinDenmark.Anexchangealsobringsaboutmoretranspar-entpricefixing.AtpresentthereareasmallnumberofmarketplacesforgasinEurope.TwonewmarketplacesforgasweresetupinGermanyduring2007.

Since2006ajointprojectbetweentheregulatoryauthoritiesandthecompanieswithsystemresponsibilityhasbeenunderwaywithintheEUtoimprovetheregulationsforthecommercialoperators.TheobjectiveistoachieveincreasedcompetitionintheEurope-annaturalgasmarket.TheworkgoesunderthenameoftheGasRegionalInitiativeandSwedenispartofthenorthwestregion.TheworkwasinitiatedbytheEUCommission.

Attheendof2007theEUCommissionpublishedtheso-calledthirdenergypolicypackageincludingaproposalformorestrin-gentdirectivesfortheEuropeanelectricityandnaturalgasmarkets.Amongotherthingstheproposalsentailarequirementforsepara-tionbetweentradingandnetworkopera-tions.Itisalsoproposedthattheregulatoryauthoritiesaregivenmoresubstantialpowersinthemarket.

The Swedish natural gas network. Source: Swe-

dish Gas Association

The Rya combined heat and power plant came on line in Göteborg at the turn of the year 2006/2007. The

plant has a capacity of 260 MW of electricity and 290 MW of heat and is today the largest single consumer of

natural gas in Sweden.

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Environment and sustainability

SvenskaKraftnäthasasolidambitiontobearesponsiblecompanyasouroperationisextremelyimportanttosocietyandislong-termincharacter.InrecentyearsSvenskaKraftnäthasreinforceditsenvironmentalworkinanumberofways,includingthroughsupportingtechnicaldevelopmentsthatareenvironmentallycompatible,adoptingastrictmagneticfieldpolicyandsettingenvironmentalrequirementswhenprocuringcontractservices.

SvenskaKraftnätisanimportantplayerwhenitcomestodeliveringtheSwedishenvironmentalgoals.Asastateutility,Sven-skaKraftnäthasaspecialresponsibilitytocontributetobeneficialsocialdevelopmentinSweden.Itsroleintermsoftheenviron-mentdoesnotthereforeonlyincludetakingresponsibilityforthedirectimpactofitsop-erationsontheenvironment,theimpactoffacilitiesonthelandscape,thenaturalenvi-ronmentandresidentialenvironment,forex-ample.AnimportantaspectofenvironmentalresponsibilityisalsotoconfiguretheSwedishnationalgridtofacilitatetheexpansionofre-newableenergyproductioninthecountry.

Asamajorpurchaserofcontractservices,itisimportanttoensurethatthecontractors

engagedtaketheenvironmentintoconsidera-tion.Themostimportanttoolsaretheenvi-ronmentalrequirementsthatareincludedinthecontractualagreementsalongwithfollow-ing-upthattheenvironmentalrequirementsaremet.Inconjunctionwithcontractors,during2007SvenskaKraftnäthasfocuseditsworkinparticularonimprovementswithinthisarea.

Environmental policy and goals SvenskaKraftnäthashighambitionswithregardtotakingenvironmentalresponsibility,anditisdoingsoby

continuallyendeavouringtoreducetheenvironmentalloadofitsactivitiesintegratingenvironmentalissuesintoallactivitiesincludingenvironmentalconsid-erationsinalldecisionssettingclearenvironmentaltargetsanddesigningproceduresforfollowing-up,evaluatingandimprovingtheenviron-mentalworktakingaccountofenvironmentalaspectsinprocurementsbysettingenvironmen-

talrequirementsforoursuppliersandcontractors.

Thefollowingoverarchingenvironmentalgoalshavebeenformulatedfortheoperation:

Theemissionsofgreenhousegasescausedbyoperationsshallbecontinuouslydecreased.Stationsandpowerlinesshallbelocatedanddesignedinanenvironmentallycom-patiblemannerinordertopromotetheexpansionofrenewableenergyproductioninthecountry.Hazardoussubstancesshallbesuccessivelyphasedout.Thosehazardoussubstancesthatareusedshallbehandledsothattheydonotleakoutintotheenvironment.Theprecautionaryprincipleregardinglow-frequencyelectricalandmagneticfieldsshallbefollowedthroughtheap-plicationofSvenskaKraftnät’smagneticfieldpolicy.Biologicaldiversityinthepowerlinecor-ridorsshallbebenefitedandthehabitatsofendangeredspeciespreserved.

SvenskaKraftnät’sstaffaredisplayinggreatcommitmenttotheenvironmentalwork.

A number of environmental audits have been carried out during the year in relation to construction and maintenance contracts in order to check whether the

environmental requirements we set out in contractor agreements are being met. As Svenska Kraftnät is a major purchaser of contract services, it is important

to ensure that the contractors we engage take the environment into consideration. The experiences gained from the audits has led to a number of environmental

improvements to the contracts.

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During2007theincentiveprogrammehascontainedthreegoalswithintheenvironmen-talfield.Allthreegoalswereachieved.Thegoalswere:

Approvedresultsshallbeachievedinenvi-ronmentalauditsoffiverandomlyselectedconstructionandmaintenancecontracts.Bytheendoftheyearallstaffmusthavesuccessfullycompletedaweb-basedenvi-ronmentaltrainingcourse.EmissionsofCO

2frombusinesstravel

shalldecreasein2007comparedwith2006.

Processes with an environmental impact Planning the national gridPlanningthenationalgridentailsanenvi-ronmentalimpactintermsofdecisionsthataretakenonforthcomingextensions,wherepowerlinesandstationsaretobelocatedandwhichtechnicaldesigntheyaretohave.AnimportantglobalenvironmentalaspectisthatthesolutionsselectedmustfacilitatetheexpansionofrenewableenergyproductioninSweden.Anotherglobalenvironmentalaspectistheenergylossesthatoccurfromtheelectricitynetwork.Oneofthefactorsthatdeterminesthesizeofthelossesisthetechni-caldesignoftheplants.

Locationanddesignofpowerlinesandstationsnaturallyalsohasaneffectonthelocalenvironment.Landthatispartofcul-tivation,forestryorrecreationareascanbeutilized.Indenselypopulatedareaspeople’slocalenvironmentcanbeaffectedthroughtheimpactonthelandscape,exposuretoelectromagneticfieldsandnoisepollution.

Furtherenvironmentalaspectstotakeintoaccountwhenplanningthenationalgridarethesubstancesandmaterialsthatareintheplants.Suchsubstancesthatarehazardousfortheenvironmentareusedinassmallamountsaspossible.

Thenationalenvironmentalgoalsthataffectplanningofthenationalgridare:

Limitedimpactonclimate–choiceoftechnicalsolutionandlocationofplantscanbeofmajorsignificancefromaclimateperspective,forinstance,throughtheextentofenergylosses.Non-toxicenvironment–thechoiceoftechnicaldesigndetermineswhatamountsof,forinstance,oilandmetalswillbeused.Swarmingwetlands,Livingforests,Rich

agriculturallandscapesandMagnificentmountainenvironments–impactscanariseifdifferenttypesofvaluablenaturalenvironmentneedtobeutilized.Goodbuiltenvironment–powerlinesandstationsaffectthelandscape,noisepollu-tioncanarise.Saferadiationenvironment–locationanddesignofpowerlinesdeterminethelevelofexposuretoelectromagneticfieldspeopleinthelocalitywillbesubjectto.Arichplantandanimallife–therecanbeanegativeeffectifinstallationofanewpowerlineentailsdamagingvaluablenaturalareas,andpositiveifthepowerlinecorridorcanbeaarefugeforendangeredspecies.

Goals and measures Itgoeswithoutsayingthatnowadaysenvi-ronmentalaspectsaretakenintoaccountandweighedupinnetworksurveysandfeasibilitystudies.Onmanyoccasionsenvironmentalissuescanbedecisiveinplanninganddesign-ingnewplants.

Extensiveworkisputintodraftingenvi-ronmentalimpactassessments(EIA)inourpowerlineprojects.TheEIAisanimportantpartofthepermitapplicationforapower-line.AnEIAprovidesadetailedaccountoftheenvironmentalimpactaplannedpow-erlineisexpectedtoentail.Alternativesolu-tionsareanalysedandareportiscompiledofconsultationswithauthorities,localresi-

dentsandinterestgroups.IntheStockholmsStrömprojectSvenska

Kraftnäthasinvestigatedanentirelynewde-signforthefuturenetworkfortheStockholmregion.150kilometresofoldpowerlineswillberemoved.Mostoftheserunthroughdenselypopulatedareas.Greatconsidera-tionhasbeenpaidtotheenvironmentwhendesigningthenewplantsthatareneeded.Insomeplacespylonsandstationbuildingswillbedeignedinconsultationwithdesignersandarchitects.

SvenskaKraftnätisworkingactivelytofacilitatetheexpansionofwindpowerinthecountry.Theguidelinesforconnectingelec-tricitygenerationfacilitiestotheelectricitynetworkhavebeenreviewedinareportthatwassubmittedtotheGovernmentinJune2007.Itwilltherebybeeasiertoconnectfa-cilitiessuchaswindpowerplants.

Agoalfor2007wastohavestartedaprogrammeforresearchanddevelopment(R&D)focusedontheenvironment.TheenvironmentisanimportantareainSvenskaKraftnät’sresearchanddevelopmentopera-tion.Severalprojectsareunderwaywiththeaimofdevelopingnewtechnologythatwillreducetheenvironmentalimpactofourplants.AtotalofSEK�millionwasusedforR&Dwithintheenvironmentalareaduring2007.

SvenskaKraftnät’senvironmentalprizewasawardedforthefirsttimeinMarch2007.Theaimofawardingtheprize,which

Green cars comprised 60 % of Svenska Kraftnät’s company cars during 2007.

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amountstoSEK100,000,istoencourageenvironmentalimprovementswithinSven-skaKraftnät’sfieldofoperations.ThefirstprizewassharedbetweenthecompanyABB,whichhasdevelopedacircuit-breakerwithalargenumberofenvironmentalbenefits,andthebutterflyexpertIngemarFrycklund,whohasdemonstratedthroughmanyyearsofstudythatpowerlinecorridorsrepresentim-portantsitesandrefugesforspeciesthatareotherwiseendangered.

Extensions and conversionsAlargeproportionofSvenskaKraftnät’senvironmentalimpactarisesinconnectionwithnewbuildingandconversionsofpow-erlinesandstations,andalsoinconjunctionwithscrappingoldequipment.Emissionstakeplacefromcontractor’smachineryandvehicles.Sensitivegroundandvegetationcanbedamagedinconjunctionwithconstructionwork.Environmentallyhazardoussubstancescanbepresentintheequipmentthatisdemolished,whichiswhythehandlingprocesswhendismantlingplantsisoftheutmostimportance.Whennewequipmentandmaterialsarepurchasedtheremustbeaguaranteethatnoundesirablesubstancesareincluded.AllconstructionforSvenskaKraftnätiscarriedoutbycontractors.The

mostimportanttoolstoavoidenvironmentalimpactarethereforesettingenvironmentalrequirementswhenprocuringcontractsandfollowinguptheenvironmentalrequirementswhenthecontractsareimplemented.

Extensionsandconversionisaffectedprimarilybythefollowingnationalenviron-mentalgoals:

Limitedimpactonclimate,Freshairandonlynaturalacidification–emis-sionsfromcontractor’smachineryandtransports.Non-toxicenvironment–dischargeofcontaminantsintogroundandwaterinconnectionwithconstructionworkanddemolitionofoldequipment.Goodbuiltenvironment–wastedisposal.

Goals and measuresDuring2007SvenskaKraftnätstartedtoapplynewenvironmentalrequirementsforconstructionandplantcontractsthatweredrawnupinconjunctionwiththecontractor.Specialtoolshavebeendevelopedtoevaluatetendersandfollowing-upofenvironmentalrequirements.Aweb-basedenvironmentaltrainingcourse,speciallyadaptedforthecon-tractors’projectmanagers,sitemanagersandsupervisors,hasalsobeenproduced.In2007�7personssuccessfullycompletedthecourse.

Onegoalduring2007wasthatapprovedresultsshallbeachievedinenvironmentalauditsoffiverandomlyselectedconstructionandmaintenancecontracts.Inordertogetanideaofwhatshortcomingstheremightbeinthecontracts,tostartwithtwotrialauditswerecarriedout.Theexperiencesfromtheseledtoanumberofenvironmentalimprove-mentsinthecontractsduringtheautumn.Thefivecontractorsthatwereauditedattheendoftheyearwerejudgedtobeverysatis-factoryinmostareas.Severalenvironmentalauditswillbeundertakenduring2008withtheaimoffurtherimprovingtheenviron-mentalworkinthecontracts.

MaintenanceThemaintenanceoperationisimportantforSvenskaKraftnät’senvironmentalperform-ance.Itinvolveshandlingsubstancesandmaterials,personsandequipmentaretrans-portedandmachineryisusedforjobssuchasclearanceandgrasscutting.Therearerisksofundesirableemissionsofhazardoussub-stances,suchasthegreenhousegassulphurhexafluoride(SF

6)incircuit-breakersand

gas-insulatedswitchyards,andoilsinvarioustypesofequipment.Animportantareaiswastedisposalandhowwornoutequipmentisdealtwith.Themaintenanceiscarriedout

A long-term environmental goal for Svenska Kraftnät is to adapt the management of the power line corridors to benefit biological diversity. Four areas in Uppland

have been arranged as viewing areas where the results of adapted maintenance can be studied in powerline corridors. There are information boards in the areas

that describe the maintenance and the species of interest that are to be found in the area.

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bycontractors,environmentally-compatibleprocurementisthereforeacentralissueincontrollingtheenvironmentalimpact.

Ithasbeenshownthattherecurrentclear-ancesinthepowerlinecorridorscanbringaboutpositiveeffectsforplantandanimalspeciesthataredependentonopenground.Somepowerlinecorridorsareextremelyrichinspeciesandconstitutehabitatsforspeciesthatareindangerofextinction.

Anumberofnationalenvironmentalgoalsaffectthemaintenanceprocess:

Limitedimpactonclimate,Freshairandonlynaturalacidification–emissionsfromtransportsandcontractors’machin-eryandalsoemissionsofSF

6-gas.

Non-toxicenvironment–dischargeofcontaminantsfromoldequipmentintogroundandwater.Goodbuiltenvironment–wastedisposal,noisepollution(fromtransformersandpowerlines).Arichplantandanimallife–someenvi-ronmentscanbedisturbedbyclearanceswhileotherenvironmentshaveincreasedinnaturalvaluethroughkeepingthegroundopen.

Goals and measuresEnvironmentalauditshavebeenimple-mentedinfourmaintenancecontractsduring2007.Seethesection”Newbuildingandconversions”.Theauditshaveledtoanumberofmeasurestoimprovethemain-tenanceoperation.Othermorelongtermmeasureswillbeimplementedduring2008.Amongotherthings,betterroutinesandsystemsforenvironmentalreportingwillbeproduced.Thiswillmakeiteasiertofollowupincidents,consumptionofoilandothersubstances,dealingwithwasteetc.

SincethepropertiesofSF6-gasthataffect

theclimatebecamegenerallyknown,SvenskaKraftnäthasbeenactivelyworkingtoreduceemissionsfromtheplants.Theamountofgasthatisputinismeasuredcontinuously.Thisisdonetoenableabnormallylargeleakstobetracedandrectified.Equipmentthatleaksisreplacedorsealed,anddemandsareplacedonthemaintenancecontractorswithregardtohandlingthegasandtrainingstaff.SvenskaKraftnätisalsograduallytighteninguptherequirementsonsealswhenpurchasingnewproducts.Emissionsfromthenationalgrid’sfacilitiesarelow,lowerthanwhatisrequiredfornewequipmentaccordingtointernationalstandards.DuringtheyearmeasureshavebeentakentoreduceabnormallylargeleakageofSF

6fromoneofourcircuit-breakers.New

testingequipmenthasalsobeenpurchasedtomeasuredewpointandtheproportionofSF

6

incircuit-breakers.ThisenablestheSF6-gas

tobeutilizedinsteadofbeingreleasedaswithprevioustestingequipment.InconjunctionwiththerepairofaGISplant(gas-insulatedswitchyard)10kgofSF

6-gaswasmistakenly

released.Anumberofincidentsentailingdischarge

ofoilhaveoccurredduringtheyear.Howev-er,decontaminationalwaystakesplaceimme-diatelyafteradischarge,whichiswhythereisrarelyanylastingcontaminationofthegroundasaresult.DamagetotheÖresundcablecausedabout�,000litresofoiltoleakout.Extensivedecontaminationworkmeantthatthebulkoftheoilcouldbedealtwith,butacoupleofhundredlitresofoilwerelostinthesea.Aprojectisunderwaytocarryoutaninventoryofthedimensionsandstatusofoilcollectionpits.Sofaronlyonedefectivepithasbeenfound.Thiswillbedealtwithduring2008.AnotherprojectisunderwaytosystematicallyregisterallPCBanalysesofoilsinpowertransformersandreactors.ThereareonlyasmallnumberoflocaltransformersthatarecontaminatedwithPCB.Aninven-toryofbuildingswillbecarriedduring2008outtoclarifywhetheranycontainPCB.

Along-termgoalistoadaptthemanage-mentofthepowerlinecorridorstobenefitbiologicaldiversity.Severalmeasureswereimplementedduring2007.Inventoriesofanumberofpowerlinecorridorsinrespectofspecies-richbiotopeshavebeenundertakeninconnectionwithforestinspections.FourareasinpowerlinecorridorsinUpplandhavebeenarrangedasdemonstrationareaswherethere-sultsofadaptedmaintenancecanbestudied.Informationboardsdescribethemaintenanceandthespeciesofinterestthataretobefoundinthearea.Duringthesummerinventoriesofbutterflieswerecarriedoutintheseareas.In

oneareaaspeciesofbutterflywasdiscoveredthathasneverpreviouslybeenfoundinSwe-den,Ancyliskenneli.InconjunctionwiththecountyadministrativeboardinUppsalacoun-ty,wehavedrawnupamaintenanceplanforasectionofpowerlinewheretheendangeredmarshfritillarybutterflyistobefound.Theaimisthatbyadaptingthemaintenanceofthepowerlinecorridorthebutterflywillbeencouragedtoincreaseinnumbersandspreadthroughoutthearea.Wehavealsocollabo-ratedwiththecountyadministrativeboardinJönköpingcountryinaprojectwherethenaturalvaluesinpowerlinecorridorsareas-sessedandfollowedup.Acontinuationofthisprojectisplannedduring2008.

Grid operationsNationalgridoperationscomprisespartlyashorttermplanningstageformeasuresthathavetobetaken,partlyamonitoringstageinrealtimethattakesplaceinthecontrolcen-tres.Tosomeextentthisoffersthepossibilityofaffectingthesizeofthenetworklossesthroughoperationalmeasures.Thiscantakeplacethrough,forinstance,disconnectingpowerlines,whichreducesthevoltage.

AsubsidiarywithinSvenskaKraftnätownsanumberofgasturbineplants.Thegasturbinesareusedsolelyasback-uppowerstationsduringshortperiodsinordertodealwithdisturbancesandextremesituationsinthepowersystem.Theemissionsfromthesegasturbinesinvolveanimpactontheclimate,amongotherthings.

Thenationalenvironmentalgoalsthatpri-marilyconcernoperationalmeasuresare:

Limitedimpactonclimate–operationaldecisionsthataretakenaffecttransmis-sionlosses,thereareemissionsfromgasturbinesiftheyhavetobeused.

The rare butterfly species Ancylis kenneli.

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Goals and measuresAnewtooltominimisethenetworklossesinthenationalgridhasbeendeveloped.Thetoolwillenablestaffinthecontrolroomstosimplydeterminewhatcontrolmeasuresthatwillbestreducethetransmissionlosses.During2007theuserinterfacehasbeendevelopedandtestedwithsatisfactoryresults.During2008thetoolwillbegivenatrialrunandevaluatedsothathopefullyattheendoftheyearitwillbepossibletoputitintooperation.

Thegasturbineshavebeenrunmoredur-ing2007thanduringtheprecedingyears.ThismeansthatemissionsofCO

2havealso

beengreater.ThemainreasonthatthegasturbineshavebeenrunisthattheForsmarknuclearpowerstationhasperiodicallybeenshutdownduringtheyear.Workconstruct-ingembankmentsaroundthefueltanksinthreeofthegasturbineplantswascompletedduring2007.Thistherebyremovestheriskofalargeamountofoilbeingabletocon-taminategroundandwaterintheeventofanydamagetoatank.Thelargesttankholds1�,500m�ofoil.

Office activitiesEnvironmentalaspectsintermsofofficeactivitiesareheating,ventilation/coolingandconsumptionofelectricityinpremises,inte-riorfittings,ITequipment,consumptionofofficesuppliesandwaste.Oneenvironmentalaspectsofrelativelymajorsignificanceisthebusinesstripsmadebystaff.

Thenationalenvironmentalgoalsthatcon-cernofficeactivitiesare:

Limitedimpactonclimate,Freshairandonlynaturalacidification–emissionsfromtransportsandbusinesstrips,heatingandconsumptionofelectricity.Goodbuiltenvironment–wastedisposalandgoodinteriorenvironment.

Goals and measuresOnegoalduringtheyearhasbeenthatCO

2

emissionsfrombusinesstravelwillbelessthanthatfor2006.ItwaspredictedthatthegoalwouldbedifficulttoachieveasSvenskaKraftnät’sinvestmentoperationisgrowing,andthusprecipitatingagreaterrequirementfortravel.Despitethisthegoalhasbeenachievedwithsomemargin.Contributoryfactorsarereducedairtravel,reducedcartravel(morecarshares),moregreencarsetc.

Anothergoalfor2007wasthatallstaffwouldcompleteaweb-basedenvironmentaltrainingcourseandpassasubsequenttest.ThecoursedealtwithbothenvironmentalissuesthatconcernSvenskaKraftnät’sopera-tionsandmoregeneralenvironmentalissues.Thegoalwasachievedandwillhopefullyleadtoalargenumberofemployeesbecomingmoreenvironmentallyawarethanpreviously.

AgoalthathaslongbeeninplaceisthatallnewlyemployedstaffatSvenskaKraftnätwillreceivebasicteacherledenvironmentaltraining.Some50personshavecompletedthiscourseduring2007.Inadditionatrain-ingdayonwasteandwastedisposalwasim-plementedforsome�0projectmanagersandmaintenancemanagers.

Environmental performanceTheenvironmentalimpactfromSvenskaKraftnät’smainprocesseshavebeendescribedabove.Thetwoenvironmentalqualitygoals,LimitedimpactonclimateandNon-toxicenvironmentcanberegardedasthemostimportantgoalsonthebasisofSvenskaKraftnät’soperationsandsociety’svalues.Themeasuresthathavebeenimplementedtocon-tributetotheachievementofthesegoalsaredescribedaboveundertherespectiveprocess.

Limited impact on climateTheSwedishenvironmentalgoal,Limitedimpactonclimatemeansthatthecontentofgreenhousegasesintheatmospheremustbestabilisedatanamountlowerthan550partpermillion(ppm).TheSwedishemissionsofgreenhousegasesmust,asanaveragevaluefortheyears2008–2012,beatleastfourpercentlowerthantheemissionsin1990.Inonepro-posaltheGovernmentmakestheassessmentthatemissionsforSwedenin2020shouldbe25percentlowerthanemissionsin1990.

ItisimportantthatSvenskaKraftnätisanexamplewhenitcomestoreducingemissionsofgreenhousegases.SvenskaKraftnät’sactivi-tiesaffecttheclimatethroughthetransmis-sionlossesthatoccurinthenationalgrid,throughemissionsfromourgasturbines,emissionsofSF

6-gas,transportsandtravel,as

wellasenergyconsumptioninstationsandoffices.

Key indicators – Non-toxic environment

2007 2006 2005

Discharge of oil into ground and water, litres5 46506 - -

Environmental deconta- mination, cost, TSEK 780 - -

Mercury, amount removed, kg 0,1 1781 -

Pylons impregnated with arsenic, number removed 44 - -

Key indicators – Impact on climate

2007 2006 2005

Energy losses, % of energy extracted from the grid 2,4 2,1 2,6

Reduced losses as a result of operational measures, GWh1 2.5 2,6 -

CO2 emissions, own gas turbines,

tonnes 6018 4760 3805

Amount of SF6-gas added, kg, 68 27 762

Emissions of SF6 -gas, tonnes

CO2-equivalents3 1510 599 1687

SF6-gas emissions, proportion

of installed quantity, % 0,3 0,1 0,44

Emissions of CO2, all business

trips, tonnes 395 428 -

% of company cars that are environmental cars 60 40 30

Notes1Referstocoronalosses

2Ofwhich��kgduetobreakdowns

�TheGWPvalueforSF6is22200.

�Emissionsnotduetobreakdownsamountedto0.2%

5Thebulkofthisoilhasbeendecontaminatedanddestroyed

6Ofwhichonedischargeof�,000litreswascausedbydamagetotheÖresundcable

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81

Quaking-grass in powerline corridor.

Non-toxic environmentWhenchemicalproducts,goods,buildingsetc.aremanufactured,usedandscrapped,thereisariskofchemicalsubstancesenter-ingtheenvironment.Theenvironmentalgoal,Non-toxicenvironmentmeansthatwithinthespaceofageneration

theproportionofsubstancesthatoccurnaturallyintheenvironmentshouldbeclosetothebackgroundlevels

theproportionsofnon-naturalsubstanc-esintheenvironmentshouldbeclosetozeroandtheirimpactontheecosystemnegligiblecontaminatedareasshouldbeinvesti-gatedandifnecessarydealtwith.

SvenskaKraftnäthasarelativelylargeimpactintermsoftheenvironmentalgoal,Non-toxicenvironment.Thisispartlyduetothe

responsibilityforlargescaleequipmentthatinmanycaseswasinstalledlongagowhenknowledgeofmaterialsandenvironmentaleffectswaslessthanitistoday.Insomecasesthereisnonew,lessenvironmentallyhazard-oustechnologyavailablethatcanreplacetheoldequipment.Oil,woodpreservative(creo-sote),otherchemicalsandheavymetalsaresubstancesthatareusedinouroperations.

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Ancillary services Procuredservices,primarilyfrompowerpro-ducers,whicharenecessaryforthetechnicaloperationofthesystem.Theseservicesprimarilycomprisefrequencyregulationandaccesstogasturbinesasanemergencyreserve.

Balance power Theimbalancethatthebalanceproviderhascausedinthenationalelectricitysystem.

Balance provider PowertradingcompanythathasenteredintoabalanceresponsibilityagreementwithSvenskaKraftnät.Balanceprovidersareobligedtoensurethatastateofbalanceexistsbetweenthesupplyandconsumptionofpowerinrespectoftheirundertakings.

Balance settlement SvenskaKraftnät’scalculationofthebalanceproviders’imbalancesonanhourlybasis(balancepower).Thisresultsinafinancialsettlementbeingproducedeveryfourteendaysintheformofaninvoice(SvenskaKraftnäthassoldbalancepower)orpayment(thebalanceproviderhassoldbalancepower).

Bottleneck Sectionoftheelectricitynetworkwherethetransmissioncapacityisinsufficientandwherecongestionsappearfrequently.

Congestion Asituationwhenthedemandfortransmissionthroughasectionofthegridisexceedingthecapacity.

Counter trading Thepurchase/saleofelectricitybythesystem,oper-ator,i.eSvenskaKraftnätinSweden,toreducethetransmissionofelectricityinacongestedsectiononthegrid.Countertradingpreventscustomersfromexperiencingtransmissionlimitations.

Final power Thedifferencebetweentheactual,meteredvaluesafter1�monthsandtheprovisionallycalculatedvalues.

Final settlement SvenskaKraftnätcalculatesthedifferencebetweenthebalanceproviders’actualdeliveriestoprofilecustomers(customerswhoseconsumptionisnotmeasuredonanhourlybasis)andtheirprovision-ally-calculateddeliveriestothesecustomers.Finalsettlementmeansthatthecostsareredistributedbetweenthebalanceproviders.

Island operation Entailsanelectricitysystembeingoperatedlocallywithinalimitedgeographicarea(production,trans-missionandconsumption).Islandoperationcanbenecessaryifdamagetothetransmissionnetworkmakesitimpossibleforanareatobeconnectedtotheelectricitysystemotherwise.

Load frequency control SvenskaKraftnätisresponsibleforpermanentlymaintainingthefrequencyoftheelectricalgridataround50Hz.Deviationsarecompensatedforviatherapidregulationofproduction.

Point of connection tariff Chargingmodelforutilizingtheelectricitynetwork.Thesizeofthechargeisdependent

upon,amongotherthings,theconnectionpoint’sgeographicallocation.

Profile settlement Amodelforcalculatinganddistributingthevolumeofconsumedelectricitynotmeasuredonanhourlybasis.Indoingso,deliveriescanbedistributedamongtheplayersconcerned.

Spot market NordPool’sspotmarket,whichisamarketplaceforpower.Agreementsaremadeatlunchtimeforall2�hoursofthefollowingcalendarday.

System protection Automaticsystemforboostingtransmissioncapacityand/oroperationalreliability.Forexample,systemprotectionexistsontheDClinksbetweenSouthernSwedenandtheContinent.Systemprotectionim-mediatelyreduceselectricityexportsontheDClinksiftransmissionlevelsinconstraint�(alinerunningapproximatelyfromOskarshamntoVarberg)riskbecomingtoohigh.

System-responsible company (Transmission System Operator, TSO) Acompanyresponsibleforthereliabilityandbalanceofthenationalelectricitysystem.SvenskaKraftnäthasthisroleinSweden.

Transit Thetransmission,ortransiting,ofpowerviaa”thirdcountry”.

Transmission losses

Theenergylossesoccurringinanetwork.

Power industry terms

Debt/equity ratio Interest-bearingliabilitiesdividedbyadjustedequityincludingminorityshares.

Equity/assets ratio Adjustedequityatyearendinrelationtototalcapital.Adjustedequityisdefinedunder“Returnonadjustedequity”.

Interest coverage ratio Theincomefortheyearplusinterestchargesdividedbyinterestcharges.

Net loan liability Allocationandinterest-bearingliabilitieswithdeduc-tionsforfinancialinterest-bearingassets.

Net profit margin Theincomefortheyearwithdeductionsforstand-ardtaxat28%inrelationtooperatingrevenues.

Operating margin Operatingincomeinrelationtooperatingrevenues.

Return on adjusted equity Theincomefortheyearwithdeductionsforstandardtaxat28%inrelationtoadjustedequity.Adjustedequityisdefinedastheaverageoftheyear’sopeningandclosingrestrictedequity(treasurycapitalandrestrictedreserves)and72%ofthenon-restrictedequity.

Return on capital employed Theresultfortheyearplusinterestchargesinrela-tiontoaverageemployedcapital.Averageemployedcapitalisthethebalancesheettotallessnoninter-est-bearingliabilitiesincludingdeferredstandardtaxinequity.

Return on total capital Theresultfortheyearplusinterestchargesinrela-tiontototalaveragecapital.

Self-financing level Cashflowpriortochangesinoperatingcapitalandinvestmentsdividedbyinvestmentsfortheyear.

Definitions

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Financial development

Operating income (MSEK)1 000

900

800

700

600

500

400

300

200

100

0

408

620

912

736

2003 2004 2005 2006 2007

Operating and net profit margin (%)

Operating margin Net profit margin with a deduction for tax

2003 2004 2005 2006 2007

18,0

16,0

14,0

12,0

10,0

8,0

6,0

4,0

2,0

0,0

Net income for the year (MSEK)1 000

900

800

700

600

500

400

300

200

100

0

291

538

880

676

2003 2004 2005 2006 2007

732

Operating revenue (MSEK)8 000

7 000

6 000

5 000

4 000

3 000

2 000

1 000

0

5 335

5 885

6 838

2003 2004 2005 2006 2007

6 326

5 633

Operating revenue per business segment 2007

Adjusted equity (MSEK) and return on adjusted equity (%)

Adjusted Equity Return on AE

6 500 12,0

10,0

8,0

6,0

4,0

2,0

0,0

6 000 5 9116 068

6 264 6 149

5 500

5 000

4 500

4 000

3 500

3 0002003 2004 2005 2006 2007

5 946Contingency planning

4%

Network 54%

System responsibility

– electricity40%

System responsibility – natural gas

1%Telecommunications

1%Electricity certificates

0,1%

864

2007inbrief

2007 2006

Operationsduringtheyear

Energy supplied TWh 120,5 119,8

Reliabilityperformance

Number of operational disturbances

in the national grid 150 181

Number of operational disturbances

with breakdowns 5 15

Non-supplied energy MWh 13 95

Financialfacts

The Group’s operating revenue MSEK 6 326 6 838

Consolidated income MSEK 732 676

Return on adjusted equity* % 8,9 7,9

Debt/equity ratio times 0,33 0,38

Investments MSEK 596 478

* after tax equivalence, 28 %

Financial overview 2007

Picturesonthefrontpage

Motorways for electricity! Svenska Kraftnät plans, builds, operates and maintains the national grid for electricity.

Parent-friendly company! In 2007 Svenska Kraftnät was acclaimed as the country’s most parent-friendly of the companies which employ a lot of engineers.

Serving society – around the clock! The Network Control Centre is manned day and night. From here Svenska Kraftnät monitors the national grid for electricity and ensures that there is a balance between generation and demand in the electricity system, and that there is a balance in the natural gas system.

We take responsibility for the environment! Through conscious maintenance of the powerline corridors we are promoting biological diversity. The Northern Brown Argus is a butterfly species that is present in our powerline corridors, but is red-listed in several European countries.

SvenskaKraftnät,HeadOfficeBox 526 162 15 Vällingby Visitors: Jämtlandsgatan 99 Tel: +46 8 739 78 00 Fax: +46 8 37 84 05 Website: www.svk.se e-mail: [email protected]

SvenskaKraftnät,HalmstadBox 819 301 18 Halmstad Visitors: Kristian IV:s väg 3 Tel: +46 35 18 22 40, +46 35 18 22 30 Fax: +46 35 18 22 41, +46 35 18 22 39

SvenskaKraftnät,SollefteåNipan 51 881 52 Sollefteå Tel: +46 620 78 76 10 Fax: +46 620 121 46

SvenskaKraftnät,SundsvallBox 138 851 03 Sundsvall Visitors: Erstagatan 2 Tel: +46 60 19 57 00 Fax: +46 60 19 57 09

SvenskaKraftnät,VästeråsMelker Kontorshotell721 83 VästeråsVisitors: Kopparbergsvägen 6Tel: +46 21 32 89 87 Fax: +46 21 32 89 88

SvenskaKraftnät,ÅsbroTrainingCentre690 45 Åsbro Tel: +46 582 838 00 Fax: +46 582 512 10

ElforskAB101 53 Stockholm Tel: +46 8 677 25 30 Fax: +46 8 677 25 35 Website: www.elforsk.se

KraftdragarnaABSeglargatan 15 721 32 Västerås Tel: +46 21 17 04 80 Fax: +46 21 17 04 85 Website: www.kraftdragarna.se

NordPoolASAP.b. 373 NO-1326 Lysaker, NorwayTel: +47 67 52 80 00 Fax: +47 67 52 80 01 Website: www.nordpool.com

NordPoolSpotASP.b. 373 NO-1326 Lysaker, NorwayTel: +47 67 52 80 10 Fax: +47 67 52 80 01

STRIABBox 707 771 80 Ludvika Tel: +46 240 795 00 Fax: +46 240 150 29 Website: www.stri.se

SvenskaKraftnätGasturbinerABBox 526 162 15 Vällingby Visitors: Jämtlandsgatan 99 Tel: +46 8 739 78 00 Fax: +46 8 37 84 05

SwePolLinkABBox 526 162 15 Vällingby Visitors: Jämtlandsgatan 99 Tel: +46 8 739 78 46 Fax: +46 8 37 50 39 Website: www.swepollink.se

TriangelbolagetD4ABBox 26237 21 Bjärred Tel: +46 705 29 28 11 Fax: +46 46 29 28 11 Website: www.triangelbolaget.se

Addresses

Editor: Johnny NorlingDesign & production of printed matter: Wikströms Tryckeri, UppsalaPhoto: Håkan Flank (pages 1, 3, 7, 8, 12, 13, 17, 18, 21, 22, 23, 25, 26, 27, 29, 30, 31, 32, 34, 36, 37, 39, 43, 63, 65, 66, 68, 69, 70, 73, 74, 76, 77). Johnny Norling (pages 5, 33, 34, 70, 78, 83). Jan Bergsten (butterfly, pages 1, 79). Eva Grusell (pages 71, 81). Krister Engström (page 75). Jonas Nilsson (page 46). Fortum (page 28).

Page 84: Svenska Kraftnät Annual report - svk.se · Svenska Kraftnät plans, builds, operates and maintains the national grid for electricity. Parent-friendly company! In 2007 Svenska Kraftnät

•Somewhathighertransmission:118(117)TWh

•Turnoverofthebusiness:SEK6,326(6,838)million

•Excellentfinancialresults:SEK732(676)million

•Majorinvestmentprogrammetocome

•Environmentalissuesmoreinfocus

Annual report2007

Svenska Kraftnät

HVDC

HVDC

HVDC

StenungsundKungälvGöteborg

Varberg

Falkenberg

Gnosjö

Halmstad

Ängelholm

Helsingborg

LundMalmö

Trelleborg

(220 k

V)

(220

kV)

Lübeck

Flensburg

Ringhals

Helsing-borg

Cøpen-hagen

Gothen-burg

MalmöKarlshamn

Norrköping

Oskars-hamn

HasleStavanger

BergenRjukan

Oslo

Stockholm

Enköping

Nea

Trondheim

Tunnsjødal

Umeå

Sundsvall

Røssåga Rana

MelfjordSvartisen

Salten

Ofoten

Kobbelv

Narvik

Loviisa

Olkiluoto

Tallin

HVDC

Kristiansand

Rauma

Forsmark

0 100 200 km

N

Luleå

The power transmission networkin the Nordic Countries 2008

Hydro power plant

Thermal power plant (CHP)

Transformer or switching station

400 kV line

300 kV line

Joint operation link forvoltages below 220 kV

220 kV line

Extend 2008 CableOverhead line

275 kV AC –75 km

220 kV AC 4295 km

130 kV AC 7 km

The Swedish grid, comprises mainly 220 and400 kV lines, switchyards and transformerstations and foreign links for alternating (AC)and direct current (DC).

400 kV AC 4 km10643 km

Planned/under construction

Sweden

Norway

Finland

Denmark

Rovaniemi

HelsingforsÅbo

Vasa

Tammerfors

Kemi

Uleåborg

HVDC (High Voltage DC) 459 km115 km

Viborg

Slupsk

Tekn

ikre

dakt

örer

na A

B 2

008

HVDC

HVDC

HVDC

Rostock

The Swedish Natural GasNetwork(high pressure)

Eemshaven

Box 526, SE-162 15 Vällingby. Tel Swbrd: +46 8 739 78 00. Fax: +46 8 37 84 05 Visitors: Jämtlandsgatan 99. Corp. ID. no: 202 100-4284. Website: www.svk.se

Svenska K

raftnät Annualreport2

007