Vattenfall publishes its fourth report on the electricity market

Vattenfall has today published its electricity market report “Vattenfall’s Views on the Electricity Market 2005”, which aims at increasing the understanding of Europe’s open power markets. The report, published for the fourth time now, will be officially presented during a seminar at Hilton Stockholm (see below).

“We believe that our best contribution to building trust in the market is by being open and sharing our knowledge and understanding of the present state of our home markets, the trends on the integrated electricity market in Europe and how we judge its future development. Our hope and firm belief is that we can thereby improve the understanding of the electricity markets in a wider audience and contribute to building a good basis for reasonable expectations,” says Vattenfall’s President and CEO, Lars G Josefsson. The report devotes special attention to those European markets where Vattenfall has its operations: · The Nordic electricity market continues to be characterised by expectations of low growth (~ 0.6 % p.a.). The supply side continues to be strong under normal hydrological conditions with relatively low prices. A new market characteristic of Nordic electricity prices that has emerged during the period is the influence of the market price of the European CO2 allowances. · The German electricity market, like the Nordic market, is expected to continue to grow at a slow pace (~ 0.5 % p.a.). After 2010, demand growth is expected to slow down further still, to 0.1% p.a. Wholesale spot price levels have been showing an increasing trend during 2005 and have been driven mainly by extremely high fuel prices and high CO2 emission prices. Wind power capacity in Germany has increased rapidly in the last few years driven by large subsidies. · The Polish electricity market is expected to continue to grow at a relatively high rate (1.7 % p.a.). Market restructuring has continued to be slow, since new privatisation projects have not yet been carried through. As a consequence of EU membership, Poland will need to continue over the next few years to rapidly implement liberalisation, to enforce stricter environmental regulations (currently only met by a small proportion of the installed capacity), and to resolve cross-border trade issues. Vattenfall’s Views on the Electricity Market 2005 contains two parts, the first being a brief overview of the development of the market the second consisting of supporting articles on wholesale electricity markets in Germany, Poland and the Nordic region, pricing mechanisms and the European emissions trading scheme, electricity price trends for the power-intensive industrial sector, electricity price trends for household customers and, finally, price formation before and after liberalisation. Vattenfall’s President & CEO Lars G Josefsson will officially present the report today during a seminar at Hilton Stockholm, Guldgränd 8, 12:30h (doors open 12:00h). The seminar will include presentations by Torger Lien, CEO of the Nordic power exchange Nordpool, Oslo, Hans-Bernd Menzel, CEO of the German power exchange EEX, Leipzig. Media are welcome to attend the seminar. More details on the seminar can be found here: http://www.vattenfall.se/om_vattenfall/html_mail/emd/index.htm Vattenfall’s Views on the Electricity Market 2005 can be downloaded at http://www.vattenfall.com/files/responsibilities/electricity_mark_rep_2005.pdf It can also be ordered by e-mail (contact birgitta.lagerstrom@vattenfall.com ). For further information, please contact: Arne Mogren, Head of Public Affairs, phone: +46 (0) 8 739 52 34. Martin May, Head of Group Media Relations, phone: +46 (0) 8 739 52 70. From Vattenfall's Press Office, telephone: +46 (0)8 739 50 10.