Hi everyone, and welcome to Cloudberry's Capital Market Day 2022. Welcome to everyone here in our office in Oslo, and welcome to all of you that is following us online. This is our first Capital Market Day. In a Cloudberry tradition, we do a lot of things for the first time, so I hope that this will be to your satisfaction. We of course appreciate also feedback from you on this session. Today, I'm joined by several of my colleagues. We have prepared a broad presentation of Cloudberry. I think you have seen the agenda that we have also put out on our homepage.
We would like you to get a broader understanding and a better understanding of what we do and who we are. We go through the agenda, and we will try to keep to the time slots here. People who wants to follow some of the presentations can rely on the time schedule. I will start off with my colleague, Suna Alkan here on a general presentation of the company. Suna will give you an introduction to our ESG focus. Then I will give the word to Olav Botnen, who is here to give us an update on the power market. That is, of course, extremely exciting these days.
We're looking forward to your presentation as well. After that, we will hear from our Chief Projects Officer, Charlotte Bergqvist, who will then go through the portfolio of projects, focusing on some of the coming projects. We have some wind projects that are quite close to where we're taking an investment decision. We will have her talking about the portfolio. After the break, we will have Jon Gunnar Solli, Chief Operating Officer, sitting here, taking us through the production portfolio. Also, we will dive into some of the assets to show you the value creation we have done on some of the early assets, hydropower and wind power assets. That will be interesting.
Last but not least, will Stig J. Østebrøt take you through the operation part of Cloudberry and talk about the Captiva team, the management of assets and operational. Last but not least also there, the Captiva Portal that is very much in use in Cloudberry and among our peers. That is the program. Hopefully you will get a better understanding of Cloudberry. Please also use the opportunity to ask questions. We have a plan for at least a short Q&A session after each presentation. For those of you who are present, we have a microphone, and we will give that to you. Please raise your hands.
For those who are following us online, then please use the Q&A button on your page, and we will try to answer as many of the questions as possible. That's short about the agenda and how we are going to go about it. Let me start with giving you introduction to Cloudberry. I know for some of you this is well-known but also for the new, those who don't know Cloudberry that well, it's important to understand where we're coming from. The idea behind Cloudberry is really to was to create a local focused developer and owner of renewable assets.
We wanted to be the Nordic IPP, the Nordic independent power producer, that has a very clear focus and is very much local and in the markets that we have our projects. We started off by creating the production segment, producing assets, three, four hydropower plants and a wind farm in Norway. From that production portfolio, we then went into the development segment in Sweden and in Norway. We think it's important to own the development portfolio, to have the development competence in-house. Through the last couple of years we have been developing the development team, both on the hydro side but especially on the wind side, both onshore and offshore.
Earlier end of last year early this year, we did acquisition of Captiva and added then the third leg, the operation segment of the business. We can now cover the whole life cycle from the very greenfield projects to the ones that are in operation and that we are currently managing. The other side of the idea of being a local independent power producer is also to be a public one. This exposure is interesting for certain investors, both private and public.
As the only listed company on Oslo Stock Exchange, we feel that we have found a nice spot and we're very much on the public radar going forward. We listed on Euronext Growth in 2020. We uplisted to the main list last year. This spring we were also part of the main index in Oslo. That has gone according to plan and been an interesting journey, and we are happy to have established that platform now, and that we have done the job of getting it listed.
We have been growing the portfolio, but we have also been growing the team quite rapidly from a very small team a couple of years back to now more than 30 people. It will grow further. I would think we will be around 50 people at the end of the year, beginning of next year. Here you see some of us. You will learn more about the different people today, and also the different segments. We feel that using our network, using our local knowledge, we have been able to attract the people that we have wanted to get on board.
Latest today, Ingrid joined us from Norsk Gjenvinning, and we are very happy to have you on board today, Ingrid, and good day to start. Moving on from who we are to what we have done. As a part of the strategy, we wanted to create a company that had a diversified portfolio. Diversified on different technologies, different price areas, different areas of the Nordics. I think we have succeeded pretty well. We have focused on the south of Norway and south of Sweden. We have been, you know, seeing that this development, that we will have the higher demand for renewable power in the south.
You have the phasing out of the nuclear in the south of Sweden. We have the interconnectors out of Norway and also out of Sweden. That's why we have been focusing on the southern parts of both Sweden and Norway. If you see the blue dots here, we have now in production all 28 power plants, Skåland being the last one in NO2. They are all connected. They are all on grid. We have also two wind farms in production. That's the Røymyra wind farm outside Stavanger, and Odal wind outside or close to the airport here in Oslo. The third wind farm is Holm on the border of Oslo, Norway and Sweden, that we are currently constructing.
The Vestas is on site, and we are currently now erecting the towers. It will be hopefully fully production end of this year, beginning of next year. That was the production portfolio. On the development side, we have projects from very early phase. We have a large pipeline of projects. From that pipeline, we have a backlog today, 15 projects. With the backlog, we have exclusive rights. We have entered into land lease agreements, water lease agreements, and we have been working on the grid connection and so forth. In the backlog we have projects that are mature as a development project.
The work we are doing on these projects is to get them into the next box here, the yellow box, to get the construction permit. Of course, that's a valuable uptick when you get a right to build these projects. We have four wind assets in SE3. They are more or less ready to build. At least three of them that we will take investment decisions on during 2022. The fourth one is probably coming next year. We have a concession, but we are now awaiting larger capacity in the grid. That is a diversified portfolio. We have also some hydropower projects, both early stage.
Our largest hydropower project is close to 90 GWh. A very interesting project, but early phase. We have also some ongoing permits when we have to work on the permits and the grid connection to get them to the next phase. All in all, we see active market. Norway now opening up on the wind side again, and that we follow quite closely. We are working on our Norwegian wind project that we have been hiding in the drawer for the last three years. They are now up, and we are currently working on them.
In Sweden, there is full steam ahead on the wind, both offshore and onshore that Charlotte will tell us more about later. All in all, we feel this portfolio is growing, and to have three or four projects, construction projects in parallel is a new situation for us and we are very much looking forward to do these projects over the next years. Just mention that one of these is also the Stenkalles project that we sold off to Hafslund 50% earlier this summer. That's the shallow water project [uncertain] . Moving on to Cloudberry's value creation.
That is something we can talk a lot about, but it's different stages here. I think it depends who you ask who will tell you where the biggest value creation is made. I would say that these early-stage greenfield projects is important for us because that it has to do with being local and being in the market and have the network, and to be able to be out with the landowners to understand the stakeholders, to understand the local industry, to understand the grid issues, the security of supply, and so on. On the green box here on the left side, it's really where we see that it's important to be in the market.
I thought that was a Norwegian specialty to be very local, but we see the same in Sweden. It's really important that we are in Karlstad, in Värmland, we are in Eskilstuna, and we are also in Gothenburg to be present in Sweden. It takes a lot of time. It's not a high-cost process, but it takes time. It takes, unfortunately, often too much time. We have five-10 years to get a concession is too long. Now we know that the government is working on speeding up those processes. Then moving on to the yellow box, commercializing processes.
I mean also here, we have assets that we have developed ourselves. Then it's about getting them to concession ready to build, detail planning, grid planning and get them ready to final investment decision. But we also do transactions in that phase. Here we have Munkhyttan and Kafjärden, which is project developed by others, but where we have acquired them on an early stage, just when they got permit. This is also very important stage where we can do both in-house projects, but also we can acquire projects from the market.
On the last box here, it's of course develop the project build it run it, and also to develop the assets. Even though we have built-in assets, we have several assets that we now are looking at developing with the reservoir capacity, upgrading a turbine, adding a new turbine and, you know, tweaking the OpEx and the operation of the assets. That is something we also have a focus on. That was a little bit about the value creation we see, and we see that we can add value in all these phases. My last slide before I give the word to Suna, this is really Olav's specialty.
It's actually his research that we have in the background of this graph. The thing is that for those who have been following the market for some time, we see that historically, we have had a power price ±30-35 EUR. If you go back here 10 years, but if you go back 15 and 20 years, you will see that it's been a power price on that level. Now we have extreme prices. What we see, and what Olav will tell more about, is that we probably have a shift in a couple of years, and that it probably will never get back to the historic level.
We see that several others who are looking at the power prices in the Nordics going forward think that it's not very likely that we will go back to the historically low level. Low compared to the continent and the U.K. That was a little bit of introduction from my side. I will come back later with some more comments, but now I'll give the word to Suna Alkan, our Chief Sustainability Officer. Suna?
Thank you Anders Yes. Okay. Thank you very much. Hello, everybody. I will talk a little bit about our ESG approach in the company. My name is Suna Alkan, and I'm the Sustainability Manager in the company. All right. In Cloudberry, sustainability is at the core of our business, and we take great pride in powering the transition to a sustainable future by providing renewable energy today and for future generations. We develop, own, and operate our business in a responsible manner, and sustainability underpins everything we do. Why do we say this? How does sustainability underpin everything we do? First of all, because it is expected from our investors, from our employees, other stakeholders that we work with, they expect that we report thoroughly and accordingly to required laws and regulations.
Furthermore, ESG is of high priority to us also because we see that we create more value to our shareholders in a more meaningful way when we have a sustainable approach. Two years ago, in Cloudberry, we decided to begin reporting sustainability in our organization. In many ways, our sustainability reporting journey started in 2020. Nevertheless, we realized quite quickly that we had to take one step at a time. We conducted the materiality analysis based on the inputs from our stakeholders, and we identified the sustainability topics that are material for us and our stakeholders. It was also the starting point for us of calculating our emissions, and we began working with assessing the climate-related risks and opportunities in the company and for us. Last year, Cloudberry's reporting journey was extended.
As a part of strengthening the ESG management, we established our ESG committee, consisting of two board members and the sustainability manager. The committee reviews relevant ESG initiatives and also aligns and makes sure that we are aligned to the sustainability strategy. This year, we are working on the scenario analysis on our climate-related risks, and we will continue to screen the Scope 3 emissions in our value chain. We have already reported the production and the development segment as taxonomy-eligible, and for the time being, our power plants are under assessment by DNV, the third party. We use the third party to align us with the taxonomy regulations, and this will be reported on this year. Cloudberry has high ambitions on reporting and communicating our ESG activities, and we are still in a very early stage.
Like I said, we have to take a step at a time, but we try to sum it up here on this slide, the journey we are on, and you can read and download our reports, sustainability reports and other reports on our web page. Reporting in full transparency is very important. Good corporate governance is the foundation for value creation and trustworthiness. I'm not done with this. Thank you. We work to ensure transparent and consistent reporting aligned with these directives that you see at this slide. In a regulated market with improved or even new standards to be set on sustainability reporting, be prepared for this also going forward. How do we create value with ESG focus for our shareholders? Is ESG more than reports, standards, and directives? We say yes.
ESG is important to us because we believe that we create value and more value for our shareholders and our stakeholders by having this sustainability approach. It all starts with our identity, our values, our purpose to provide renewable energy for the long term. These are all reflected in the way we act, the way we work, and the way we go about our business by developing and producing renewable energy, by acting as a trustworthy company, by taking climate action and avoiding emissions wherever we can, alignment to the EU Taxonomy, and apply good corporate governance. One of our core principles, working closely with and invest in local stakeholder relations with a long-term local commitment. All of this is securing competitive advantage and leading to a tangible result that we convert to value for our shareholders.
This is giving us access to projects of high quality, cooperation with valuable business partners, access to attractive funding, access to talents that wants to work with us. Efficient operations by organizing our company as best as we can every day, and local value creation, in that meaning finding solutions, supporting solutions that are sustainable to create value for all those who are involved. That was just an overview. You will see more ESG in practice further on today. To sum up why we are having this sustainable approach in everything we do and why this is important to us, our shareholders and stakeholders, they expect us to navigate our business in and according to laws and directives. Furthermore, we see that we create value in the company for our shareholders and stakeholders with ESG focus by measuring ESG and by focusing on ESG. Anders?
Yeah.
You want to continue?
Thank you so much, Suna Alkan. Thank you, and it's an important message you have there that ESG is so much more than reporting and following the directives and so on. We want to use ESG and as an active part of developing our business and to be aligned with all the regulations that is currently coming. Taxonomy being one of those frameworks that we need to report on. From that just a short summary on the overall presentation of Cloudberry. We have started a journey, and the journey has a goal of becoming the leading independent power producer in the Nordics.
We are not quite there, but I think we have proved that the strategy is working. I think you will, you can expect to see more of the same. I'll be very surprised if we are diverting from the strategy. I think we will stay local, stay Nordic, stay as a producer, developer and producer of renewable energy. Could add that we can look at other technologies. We could look at solar or we can look at storage in different forms. And also of course other countries in the Nordics. More of the same is probably what we could sum it up with.
To continue the growth, we want to be able to continue the growth with a very strong financial position. That is important for us. We know that things go up and down. We know that it has a value to have that flexibility, that we don't have to enter into any PPAs or any hedging agreements because your bank wants you to do it. It has to be because we think this is the right level for us. That flexibility, have you seen so many times over the last years. We see it today on some of the larger utilities also that is stuck in a very difficult place because of hedging requirements and so forth.
Flexibility and strong financial position and also then to develop the project portfolio, develop the projects, adapt the power plants with the latest technology to make them even more efficient, cost efficient and producing even more renewable energy. I think time is running. Do we have time for some questions?
Yeah, a couple of minutes.
Yeah.
We're thinking if there's someone from the audience who wants to ask questions, just hands up and I come around. Anders, you would like to speak, so we have some few minutes. One question that came in is, are you able to attract the right people?
Yes. That is a good question because we have. I spend a lot of time building the team and it is a competitive market when you are doing renewable energy these days. We are very happy to be Nordic. I think it's important that we are. We have our very clear culture. We have our values and our purpose, and that attracts a lot of talent. We are Nordic, that we can attract people in Sweden and in Norway, and we can. We have the ability to use these resources also cross-border. We have kind of flexibility that is important. We have a large network. We have been using the network.
I mean except for maybe one or two out of these 30, we have used our network to recruit people. It is. I think yes, the answer is yes.
Just one more before Olav starts. This was to you, Suna. How do you work with ESG through the organization?
Well that's a good question. First of all, I think that we are in a good position in terms of when we talk about talents coming to the organization, they are concerned about the environment, the way we work. The social aspect. That's a good starting point when you want to also.
Okay.
You lost your mic.
Yeah, I gave it to the next speaker.
Yeah.
Sorry. Okay. It's important for us to, for the people that come to us, that works with us, they are very much concerned about the ESG aspects. Most importantly is focusing on our footprint, our impact when we are developing our projects, when we are constructing, and also, of course, when we are producing. But since we are a young company, we are working with structures, routines, procedures. We have our ESG due diligence before all investment decisions are taking, et cetera. We put things into, how can I say? Like a system so we can be organized and try to have a full control of this. I think the bottom line here is that we want to make a difference.
We wanna be a part of the transition to a sustainable future, and in that way, we have to do it with the ESG thoughts in mind.
Great. Thank you. We move on, and I'm happy to welcome Olav Botnen from Volue. Olav and I, we go way back. He's been an important contributor to Cloudberry to help us come a long way we have. What is the single most important thing for Cloudberry? Any guesses? Power price, maybe? We are looking forward to hear your thoughts on the market and the power price going forward.
Thank you very much.
Yes.
Where are prices heading? That's the big question for this market. That's my job to answer. It's more complicated and more difficult than ever because it's the man leading the prices now is Putin, so that's the major problem for us now. We have a joke in our organization now. If you want to have an analysis of power prices going forward, you have to ask Putin himself. That's probably the answer now. Anyway, the gas market has been on a very tough ride. This is the toughest ride also for the power market ever, what we are into now. We have never seen prices like this. It's like 10-20 double of normal levels.
We have never observed anything like this any time in history. It's the toughest journey ever we are in the middle of. All of it is related to gas prices, more or less. Gas prices had, like two years ago, it was deep down at EUR 10-15 per MWh in TTF terms. One week ago, we were up at EUR 350. It's more like 20 times what it were a couple of years ago. It's a dramatic shift in gas prices, and that's spreading one-to-one nearly into the power markets. You know, if you are burning gas in a gas-fired generation plant, then you have 50% of efficiency rate, and then you double that price.
EUR 350 will be EUR 700 after it's burned in a gas-fired plant. You have to add CO2 costs on top of that again, and CO2 costs were one week ago at EUR 90, and that means like EUR 50 addition to EUR 700, and that's EUR 750 was the top for the gas-fired generation cost. That's the main price-setting element in Europe and also in South and Northern now. This is a really tough ride. The alternative is coal, and coal is also coming up in parallel with the gas prices, and it's been a tough ride also there from $50 per ton up to $300, even $400 per ton, which is an eight doubling of the coal prices.
Anyway, coal is still cheap as an input to coal-fired generation because coal-fired generation costs are EUR 200 and some EUR compared to EUR 600-EUR 700 for gas-fired generation. It's only one third of the price approximately compared to gas-fired now. We have also a lot of other things than Putin which has affected the markets lately. We had a bullish weather both last year and this year so far. We had this COVID recovery thing, which also gave a push up in consumption levels for gas and power. Finally, this Russian supply concerns in Europe. The result is all-time-high prices and reshuffling all supply chains from Russia, and awaiting the consequences for the global economy. That's the next point, which is soon to come.
China had in 2021 an increase of power consumption of 10%. India is even higher with 15% increase in their power consumption and their power generation. It's a dramatic shift also before Putin started his, let's call it operation, special operations. That's the word for, from Putin. Then we have a situation in Europe which need like 5,000 TWh of gas per year, and Putin is responsible for 1,800 of those 5,000 TWh. Most of those volumes are probably stranded now. Maybe 20%-30% of it has been delivered so far this year. I don't know what the future will bring. The worst case is zero, and that's what Germany is heading towards, zero from Putin. Germany is most affected by the Russian stop of exports.
It's been a low gas flow to Europe over the latest 13 months, that's giving a lot of concerns for shortage because you cannot find any alternative for those 1,800 TWh here and now. It will take like seven years to fix that volume for Europe, that's the problem. Europe is short by maybe 400 TWh-600 TWh, and somebody have to take that volume, and the only place to put it is probably on reduction of industrial purposes. You can imagine what will happen in Europe when you have like 300 TWh-400 TWh short for the industrial consumers of power and gas. That's quite a tough shortage.
Households cannot take that big cut because they use gas directly in heating purposes, even though they maybe will live with 19 or 17 degrees in their houses this winter, it's not sufficient. Another problem is that coal is a dying industry, so nobody want to invest in coal anymore. Also, the Norwegian Oil Fund is out of coal, and that is also pushing prices up in the coal market because we have no response from supply chains for the high prices. On top of this, the CO2 market has been coming up from EUR 20 up to nearly EUR 100. Today it's a little bit below EUR 80, but it's still very high. It's four to five double also there. That also push up the prices for gas-fired and coal-fired generation costs.
You have a large macroeconomic risk, so that's the problem now, and that's also more and more in focus for Europe now. It's probably not sustainable to be up at EUR 100 or something like that in that market going forward. Here is the cost for gas-fired and coal-fired generation in some points of time. If you go back two years ago or so, then cost for producing coal and gas-fired was less than EUR 50 . In March, it was up to tenfold or even more this year for gas-fired and like, it's four or fivefold for coal-fired generation. Yesterday, we were up at EUR 500 for gas-fired and EUR 225 for coal-fired generation costs.
Nowadays, with the balance in Europe, 500 is more or less what you can expect also for power prices if gas-fired generation costs are like there. This is also nearly a forecast for Germany as long as the gas price is as it is. If you look forward to the years, the year of 2023, we are nearly at the same prices. It's reduced to approximately half for gas, by 2025 in the market, but it's still high prices on coal-fired generation. Our forecast for 2030 is much lower. We expect to 2030, we expect something of a normalized situation in both markets and also in emission markets. This is more like a long-term sustainable level, and those prices we see here are not sustainable at all.
Nobody can survive on those prices of industries or household or whatever. It's killing these consumers if it will be there for a lot of time. It's not sustainable. Here are some price levels for the winter all over Europe and some history from start of this year onwards. As you can see, or probably not see, but anyway, France is on top. Switzerland is very connected. U.K. is also connected to France via several cable links. Those are at the top for the winter perspectives, and we are talking about more than EUR 1,000 for France, more than EUR 1,000, and that's not sustainable. They use it also in households for heating purposes there. This is a tough game for them.
As I showed here in the graph, France has all-time low nuclear generation forecast for this winter, because a lot of reactors are out of business and normally they have like 400 TWh of nuclear generation in their country. On top of that, they are in the worst dry situation ever in a 100 Years perspective or so. They have the driest year in history on top of the worst nuclear year ever. They are then in a situation in France, they need 100% or a maximum of import as they can get for the winter from U.K, from Germany, and they will then buy gas-fired generation. That's the only alternative. They don't have sufficient of gas-fired generation inside the country.
They will also buy gas-fired generation in competition with south of Norway if Norway still have dry conditions in the coming weeks and months. In worst case, we might receive, sorry, the French prices also here because we are buying the same gas-fired generation from Germany as they want. If it's a cold winter, then we are there. In bottom here is northern Norway, as you probably can imagine, and northern Sweden is also there. Spain has done some active regulation of the market there. Gas-fired generation are lucky to receive gas at 50 EUR instead of 300 EUR there. That's why Spain is so low in price level. It's an artificial level with, let's say, subsidized gas as input to the gas-fired generation to keep prices low for gas-fired generation.
The way the hunt for subsidizing is by increasing profit taxation of the power generators in Spain. They take it from the windfall profit from the generators in the next step. Maybe that's the way also EU will go to find a way to go for some kind of average price instead of marginal pricing of the market. Then we are jumping to the dry situation in Norway. We have a hydrological balance in Norway 10 TWh negative with a deficit of water in the south of Norway of 13 TWh compared to normal situation. We have 3 TWh of oversupply of water in the mid and northern part. Nowadays, it's only in the northern part and not in the mid part anymore.
Because in the mid part of Norway, we now have a small undersupply impact of hydro. Dry situation throughout this year. We are following the track from the red curve here, negative throughout this year. For south of Norway, the reservoir situation is deep down. Here is the autumn culmination below 60% in south of Norway and a low spring culmination at nearly 10%. That's very close to the actual limit for the regulator to do some kind of active regulation of the market in a quite strong deficit situation. We have had like 8 TWh of lower precipitation this year in the southern Norway. This is NO2 in fact. It's where the worst situation is. 8 TWh of undersupply of precipitation so far this year. That's dramatic.
One of the driest years ever. If you look into south of Norway and simulated reservoir levels throughout the winter, we will probably have like 30% risk for coming into a territory with some kind of active regulation from the regulator of the power consumption before we come to the end of the winter season. Intervention is probably 30% risk for this winter. That means if the dry conditions continue like they do outdoors now, that's forecasted for the coming 10 days. If it's still there, that kind of weather we see now, when we're entering October, then it's very alarming, in fact, because October is normally the most precipitation of the year in that month. October is the wettest month of the year normally.
If it's totally dry, well, the deficit will increase quickly day by day, very quickly. That's a frustrating thing if that will happen for south of Norway. Prices in a more historical level. Here is prices for this winter and the next year and so on included compared to the history. We see it's the biggest step ever in history. We have never. This is back to 1992 when deregulation started in Norway. We have never been into this, not anything like this at all, because prices have been less than EUR 30 on average over all the period. Now we are like 300, which is tenfold. We have tenfold the level. You can imagine what will happen with the consumers at those levels.
This is not a good situation for consumers, which had to pay for 10 years of electricity in one year. There's a lot of export in the pipeline out of the Nordic, especially from Sweden and also from Denmark. It's very high exports. However, not so much from south of Norway because there are no water to export anymore. Simple as that. We see that, for instance, Estonia is taking like 7 TWh-8 TWh per year out of Finland. Lithuania is taking like 5 TWh per year out of Sweden. Poland is taking also 4 TWh-5 TWh per year out of Sweden. If you go to Sweden and south to Germany is taking 3 TWh-4 TWh out of Sweden, and so on.
Denmark is exporting up to 10 TWh-14 TWh to Germany of their wind power generation. Netherlands is nearly in balance vis-a-vis Jutland. If you go to Netherlands, when the cable link is back in business, we are exporting like 3 TWh-4 TWh there. Between Norway and Germany, coming up from like 4 TWh this year, up to 5 TWh the next years. U.K. is starting at very low level this year at 6 TWh, coming up to 9 TWh next year if the water levels are at normal situation again. Anyway, we are coming up to a level of 40 TWh of export this year out of the Nordic, coming up to 50 TWh-60 TWh the two, three coming years.
Exports will still be there, and we have a quite high forecast, as you can see here, for a lot of the areas in the Nordic. We will dive into the details in the next slides. First, we'll check also what's happening in the north. In the north, we have too much water, so the autumn culmination is at 90%, which is in average terms very high, and also in a situation where you nearly have lost control of the price. It's a lot of explanations why north and south has disconnected totally. I think we will go very quickly through it. It's simply that we have so much reservoirs full in the north while we are nearly empty in south. That's one thing.
We have the grid constraints between the mid and south of Norway, and also the grid constraints from north to south in Sweden and from SE3 into Norway. There's also quite heavy constraints. We have a very large wind farm development up in northern part of Sweden and also in the northern part and mid part of Norway. The south has been connected so dramatically to Europe. Now we have like 5,300 MW of export potential over the cable links out of southern Norway. That's so much that you will never probably see wet conditions in the market prices anymore. It will be exported out on the way. Nearly no periods with prices diving down to nearly nothing in the south of Norway anymore.
Only for short term when the solar or wind is crashing the prices for one day or some hours. Yeah. I think we jump a little bit. If you look into the grid connections in the Nordic system, it looks nice at the first glance. If you dive into the detail, it's not nice at all because it's two different thing, what is the physical export potential or import potential here and there, and compared with what is actually flowing between the areas. You will see that over the Sognefjord in the mid part of Norway, the capacity is 500 MW, but it's operated at 200 MW or 100 MW. If you go to the connection between Sweden and southern Norway, it should have been like 2,100 MW of capacity.
In actual operation, we are talking about 400 MW-500 MW instead of 2,000 MW. So it's less than 25% of capacity in operation. That's related to something I will tell the next slide. Also in the north-south in Sweden, the connection is like 7,300 MW of capacity, but it's operated below 6,000 MW. That's the reason they also have to reduce the capacity in north-south in Norway, because this is two parallel synchronized grids, which has to be operated in pair with each other. If Sweden reduce capacity north-south, Norway has to do the same. Yes, here is the reason behind the problem in Sweden.
The Ringhals 1 and 2 decommissioning a couple of years ago, which gave a hole in the supply in Gothenburg area, which has to be supplied from the eastern part into Gothenburg. That is giving a lot of problems for the SE3 when it comes to grid operations. To comply with all kind of the N-1 criterion, they have to be very careful with all traffic in and out of that price zone. That's affecting Norway very deeply. The oversupply up in north of Sweden will fall slightly on the way to 2030. Also, the oversupply in north of Norway will go the same way. Can you give me a signal of timing here? Yeah. We have five minutes yes. Good.
A couple of minutes for questions, too. Dive directly into prices. I think it's sufficient of the grid problems now. The price forecast for, from us is very different north and south. In the south, we have like EUR 300 and even higher prices in the front end, falling gradually from like EUR 300 next year down to EUR 140 on the way to 2026. In the northernmost zone, we are starting at a much higher level than we observe in the spot market nowadays. We increase year by year the prices from, let's say, EUR 50 next year to EUR 70, to EUR 80 and to EUR 90. It's EUR 10 up every year as we go onto 2026.
If you had included 2027, the prices north and south are nearly at the same level. In south of Norway, where NO2, NO1 and NO5 have nearly the same price forecast, we see that the spread is quite dramatic. It's from EUR 250 for Q4 for this price zone, up to EUR 600. Let's say EUR 250 up to EUR 600 is a very dramatic shift, and the weather can do everything in between those price levels. This is a probability factor for weather. The spread is big, but the average of all of those weather forecasts are like EUR 380 . As we can see, prices are coming down step by step as the fuel prices are coming down in the market. For NO1 and NO5, it's nearly the same forecast.
It's very equal, so to say, with NO2. NO3 and NO4 has very different prices, but the trend is, as I told you, step by step upwards until you hit southernmost prices. That will happen probably by 2027 or so, which is the last slide from me. This is from a long-term forecast which is probably not relevant anymore for the front end because gas prices have gone to a heavily high level now. Anyway, we see that by 2027, 2028 onwards, prices are quite the same. It's not any major differences anymore to talk about compared to what it is now, where we have prices up to EUR 100- EUR 500 nowadays. We are at nearly EUR 1-EUR 100 when you go to 2027 onwards.
That means we will have a dramatic shift in the north with higher consumption from new industrials going online there and also new grid development north-south over the coming years. It's a rather tough mixture of things ongoing now in these markets, both fuel markets at the crazy level and very strong development of new consumption in the north and more connection also to the north when simultaneously as the power consumption grows up there in the north. Yes, I think that's it from me. We have probably one or two minutes left.
Yeah. Now, Olav, thank you very much. Extremely interesting and extreme numbers. As you say, the low and high scenarios are extremely different. We got some questions first. Just some. If these are nominal or inflation-adjusted, then as we understand, it's inflation is not in your numbers, so
Correctly. It's nominal terms.
It's nominal terms.
Except for the last slide. The last slide there is in real terms.
Yeah.
Otherwise, all those prices are in nominal terms.
And-
It's comparable with the market prices.
Yes
Of Nasdaq.
Yes. We also got one on, we always heard that it's water that drives the prices, especially since we have Cloudberry's in the south of Norway.
Mm.
You made a comment about this, that it's maybe more now the European pricing. Can you put some flavor in, into this type of argument?
Yes. As you probably have observed, the NO2 price is now 100% connected to Germany for the time being. Of course, it's so dramatic price variations in Germany nowadays with price forecasts or price traded in the market going up and down by up to EUR 200 per day. It's very difficult to freeze any kind of assumptions for Germany when you have intra-day movements of EUR 200 in one day. I think now we are talking about EUR 600 for the winter and EUR 500 approximately for coming year. That will probably also be close to the prices you see in south of Norway in the driest scenarios. We are still in a dry scenario. Remember that. We are at a dry scenario for the first 10 days at least.
Very good. Last question. One here. One was about Russia. How long do you have the Russian situation in your numbers here? How have you.
We expect that it will take seven years before Russian gas supply will enter the market somewhere in the world. Not in Europe, but in Asia, probably.
Mm.
Either by LNG supply or by new pipelines to the eastern part of the country.
Last from here. Yeah. What's the building blocks for getting the electricity price down from 2025, and, you know, the future years from capacity build from renewables?
Well, we have included, of course, what's in the pipeline here and there, but it's not so much in the pipeline for now. In Norway, we have full stop still in the wind power on, onshore at least, and offshore is still quite far away from us in time. In Sweden it has also nearly stopped up in the north. It's somewhat in the south end, but not big. In Finland, it's a quite high increase from wind farms nowadays. There is full speed in wind farm development in Finland nowadays. But the total is quite low inflow on new power generation in the Nordics for the coming two, three years ahead. Very low compared to what were the case a couple of years ago.
It's restarting later on when we come close to 2030. Probably somewhat earlier after what's happened in the front end now. Anyway, it's still quite low development of power generation in the Nordic. However, power consumption is the king now for the coming 10 years probably, where we see that the oversupply in general for the Nordic will be eaten up. The oversupply is eaten up by a new industrial consumption, which is coming quickly over the period from 2024 to 2028. Much quicker than power generation. It's eating up all oversupply on the way to 2030 in our forecasts. Yeah.
Thank you very much, Olav.
Yeah.
Very nice. You maybe stay for the last. You're having a break, or are you leaving us now?
I'm leaving after the break.
Leaving after the break.
Yeah.
Maybe some more questions in the break after Charlotte as well.
Yeah.
Thank you.
Okay. Charlotte is next one.
Yes. Are you saying that?
Yeah, I'm just going to introduce you.
Oh, really? Thank you.
Thank you, Olav.
Very interesting. I just wanted to introduce Charlotte. Charlotte, you have been working with wind development most of your life.
Yes.
Have vast experience both from the Swedish offshore wind sector, but also from the infrastructure sector, and has been working very closely with the Swedish TSO as a board member. We are super happy to have you on board in Cloudberry, heading the development team out of the Gothenburg office. Please.
Thanks. I'm super happy to be here. Thank you, Olav. Interesting and dramatic numbers you show us. That tells me that we need to accelerate even more the development of what we're doing. If we cannot provide the renewable assets we need, we cannot do a lot of things that we would like to do. I feel even more motivated. My name is Charlotte Bergqvist, and I'm Heading the Development team and operations within Cloudberry. As Anders said, I've been with the wind industry since I stepped out of university. That was early 2000. I was one of the young wind pioneers in Sweden. There was not so many that believed us by then, but we, for some reason, we believed in ourselves.
From there, I've been heading one of the bigger developers in Sweden, wpd, a German one, and then as Anders said, I was always also later on part of different board works. I've been the Vice Chair of Svenska kraftnät for a couple of years, and also the Chairman of the Board of Power Circle, which is an industry organization that works for electrification of society. I felt I was done. We are at this electrification of society, so I need to step back and do what I can to provide the assets. I joined Cloudberry first of January and really happy to be here. It's easy to forget how fast this change has come. I remember five years ago, I met this guy, Peter Carlsson, that wanted to build a battery factory.
No one from us knew who he was. Now he is the guy who I think all of you know him established Northvolt and is now on to even not one or two or three. He's building a lot of battery factories around Europe. The electrification has really been a key to transforming industries and transportation to from fossil or decarbonize these sectors. Thanks to the electrification, we can do a lot of things. There's a clear driver and there is a very clear why to me why we need to add these assets very quickly right now. This picture shows some estimations.
We've heard from Olav how you see the market, but this is also some numbers compiled by the Swedish wind energy industry on how the need for new capacity is more or less look like the coming years. You know as I know that it takes time to develop these assets. The estimate is that already by 2030, we will have more or less a 50% increased need of capacity in the Swedish market. If we look into 2050, we see that number triple. Those are all driven by that the electricity is a way to decarbonize many processes. What could we do? Midterm, I don't know, we have an election in Sweden, maybe you follow it.
There's a lot of this debate on what kind of source of energy we should have. I think we need everything. What we need to do is to bring them up in short or midterm. What we can do is to add wind, large scale wind, and also to some part solar. Also very encouraging to see what's happening in Norway. As Anders was saying, we are seeing a restart of the industry. Also Norway is hopefully getting up to speed. There's been a three-year stop, but now the licensing by the authorities has reopened. We feel we are well positioned. We have some interesting projects, and there's a team working, very focused on this. Hopefully we'll tell you more about the specific developments in Norway quite soon.
This picture is here to illustrate our process and how we work within the development segment. We cover everything from early phase until first power. I just want to leave a comment on these different phases. Looking into early development, this is where we do all the pre-studies. We do a lot of local investigations to understand the environmental impact, if there's any grid capacity available, what's the local opinion. There is a thorough analysis being done before we go and secure the land, because the day you go and secure the land with landowners, you also increase expectations. There's important step before signing any land leases where we need to qualify the site. If the site also is good enough.
Every site is not good enough for a for example a wind project. When we secure the rights, this is when we sign the land lease, it goes into our backlog. The number of projects in the backlog, they all have a land lease signed in some way. When the land leases are signed, we start the permitting work. It's a lot about finding out how this project would influence the local environment. We need to answer a lot of questions around how that environmental impact is in this specific site. There's a lot of local stakeholder dialogues taking place. There is a lot of dialogues with authorities, with different experts and also, of course, securing the grid access.
Here is a great benefit that Cloudberry, the way we work, we stay local, we are local, we try to understand the local context. Until now, we've been quite efficient in driving these processes, and hopefully we will be efficient in the future. Once we get the construction permit, of course the value is going up. It's a clear milestone. There are complications both in Sweden and Norway on how you get this permit, but the key to us is to work locally to understand the local conditions and to find ways when there is local opposition or things are happening to find ways to come through. After the construction permit, we start the preconstruction and procurement activities to find out, is there a business case?
How do we in the best way construct this project? When that package is on the table, we can also then take the investment decision and do the construction. After doing the construction, we end up in this first power. From here, we can either sell it to someone or hand it over to our production segment that we will listen to in a little while. We have a quite dynamic approach to this process, so we can enter or exit at any time. We can find a partnership with some local developer. Maybe we do things together or as we show you later, we buy a project and we continue the journey. Yeah, we find opportunities all the way.
We can also sell off something if there's someone else more suitable to drive the project from different stages. This is what the portfolio looks like right now. You see the different phases as I was commenting on the previous slide. If we start on the offshore, we have early development, a number of projects, and those are not yet official. The licensing process in Sweden is that it's open to everyone. Everyone can file an application, and you don't have the right to the water until you have your permit. Of course, the day you hand in your permit, you are like first in line at the authority.
The key here is to do quite thorough pre-studies to understand in what way this project would influence the environment and also be very efficient from the day you start your hearing process until you hand in your application. Otherwise, you risk other ones to join you and come to the same area. That has happened a few times. We have a number of projects. All of them are. I will tell you more about that later. All of them have some specific criteria. On the offshore, we also have the Stenkalles Grund wind project that I think that maybe most of you heard of. I will do a little deep dive into Stenkalles in a minute.
It's a project in the Lake Vänern, and it's at a pre-construction phase, so we hope to be able to construct it. On the lower, we have the onshore. We have the backlog, as we were commenting before. Those are projects where we have the land rights. We have 15 projects in both Norway and Sweden. Moving over to development, we have first of all the quite large project, Björneskansberget. It's a fully in-house developed project. We are in the middle of the permission process, and the next milestone is to file the application. Also Duvhällen, all the permits in place. We are waiting for grid capacity. Hopefully, we can start pre-construction work sometime next year. We have Munkhyttan and Kafjärden, which are two projects that are both permitted, fully permitted, and in a pre-construction phase.
We're now looking into the procurement and planning to have a final investment decision later this year. In the end there, Hån is the project where it's under construction right now. We're just about to erect the turbines. Hopefully, first power this year. It's an in-house project that all of us very proud of Hån. It's just on the border between Sweden and Norway. Let me just do a little deep dive into the offshore business. First of all, we have the Stenkalles project. It's also in-house developed project. It's in the Lake of Vänern, 18 turbines, 100 MW. We now have Hafslund on a binding term sheet. Hopefully, this transaction will go through in a couple of weeks. We have them with us.
This project has a great value to our company because we are learning how to do things, and we are learning how we would construct the first unsubsidized offshore project in Sweden, which would be quite a challenge, but it would be fantastic. Because if we look at the offshore business in general, what we've seen until now, many of the projects that's been constructed in the bigger world of offshore has been quite far off the sea, quite off the coast. They are far out, it's very salty, a lot of corrosion, very windy, harsh wind, high waves, a lot of tides. There's so many things, so you need to have a technology that's very adapted to those conditions.
It's quite difficult to get there if you look at those, for example, German project, 100 km outside the coast. It's you need some really tough technology to meet those demands. What we've seen in the Baltic Sea, and we also see in Vänern, is the conditions are completely different. Both in Vänern and the Baltic Sea, we have salty water, but not so salt. In Vänern, of course, sweet water. We have many sites that are not so far off, so you get an easy access. We don't have so much waves. We have ice that we can deal with. It's been dealt with before in the offshore environment. But it's less salt, it's less corrosion, it's less waves, it's less tides.
This, if you look at these conditions, we see that we can do things in a different way. That's what we're trying to show you at Stenkalles, the Stenkalles Grund project. We need to prove this cost efficiency, or we are planning to prove this cost efficiency throughout the value chain when we work in less harsh environments. The plan is to go forward with this project with an investment decision later this year. Learning at Stenkalles, how do we construct this project? How do we do them unsubsidized? We also want to transfer this knowledge into our portfolio. What we're looking for, we have a pipeline of about 2,500 MW. It's mainly in the Baltic Sea.
There are some sites on the West Coast that we are evaluating. We, of course, want to duplicate this knowledge. Yes, we would like to stay quite close to shore, and we do not want to go far. We'd like to do these projects so we can decide ourselves. We don't get dependent on any transmission grid to being built or anything else. We would like to stay closer to shore. It requires a lot of work with the local community so that they would accept to see the turbines. We think short term or mid-term, this is the way to bring offshore wind in the sea and within the next 10 years.
This picture also shows you the locations, the projects we have, also the offices. Now we are the development team. We are based in Oslo, Karlstad, Eskilstuna, and Kungsbacka, a team of 11 people. Many of them, or some of them joined together with me now from first of January, and some of them has been in the company for a long time. Just to wrap up the development, a little comment on the Cloudberry way. What we're trying to do is to find the right locations. We need to do these early evaluations and pre-studies to understand all the environmental impacts and the local conditions before we go forward. Some of the projects we leave behind because we think this is not gonna work.
We need to find the right locations and also work closely with local stakeholders and also other local developers to understand where are the good sites. When we find the right locations, we need to find the right solutions. We need to work closely with the local community that actually get a little bit influenced by this project and understand how can we do this in a good way. If we understand that early, we can do some adjustments and hopefully get a smoother process for everybody involved. Also, use suitable technical solutions to limit our footprint. In the Hån project, we, for example, evaluated the building of roads.
How do we do that in a good way so that we don't affect the environment so much? Last but not least, understand the local needs. Is there anything we can do that bring value to the community while we are there? Also find ways to collaborate with local industry. We need to. Yeah, the why. Why would you build a wind project in my backyard? It's much easier to explain if you have that true link between value and impact. Yeah, that was me. Time was, okay.
I heard you were fast.
I was fast. I speak very fast.
Yeah.
Sorry. I'm happy to take questions if there's any questions.
Yeah. We got some questions here. First and foremost is saying that do you expect any tax support to speed up or any government support to speed up the processes?
Yeah.
One phase financial, but also.
Yeah
To basically get this moving quicker.
Yeah. One of the biggest hurdles, if we look at Sweden now or Norway, maybe following, is the municipalities have this called kommunal veto, which is a way to say yes or no to a project quite late. The problem is not that they have to say yes or no, the problem is that the answer is coming very late. There is a proposal on the table that the veto right will still be there, but needs to be there early. Please let us know if this project in this place is okay or not, then we can spend money on all our investigations and environmental impact and how we would mitigate risks and so on. That proposal was on the table this spring.
It was not going through the Swedish Parliament for many reasons. I was very frustrated when I saw that did not happen. There is a majority in the Parliament for this decision, but they wanted some to tweak it a little bit. Looking forward for change in the veto, that would definitely help us to navigate early stage, so we go to the right places. Yeah.
A question about more specific activities you plan to grow the project portfolio or the backlog.
Yes. We are having, of course, many ways to increase the portfolio. One is to do in-house work, to speed up the work we do when we are screening areas, discussing with different municipalities and areas where we could start developments. The other way is to find and use our network where we know many local developers. A local developer can be a two, three person company that has good ideas on where to have a local wind farm. Maybe they live in the area, but when it comes to a little bit further ahead in the process, it starts to cost a lot of money.
We can have a good combination of the local knowledge, and we can help them with the financing. Also acquire projects or go into partnerships. I think those three.
Yes. Audience, very nice.
I think this is a very, very interesting part of Cloudberry. One of the things I struggle with is the track record. What is actually the track record of the development team as of now? I understand that you have a good background, but the projects that currently are maturing.
Yeah
In the development pipeline is primarily acquired projects, right? So.
Yeah.
I have-
Maybe I go back to this picture. I go back to this picture. Cloudberry acquired the company Scanergy. I think it was two- years ago now. They've been around since I started with the wind in Sweden, in different under the different names, but they've been around for many years. The Stenkalles project is developed by the Scanergy team in Karlstad, for example. It's been within this company since the start. If you look at also the Björnetjänsberget and the Duvhällen are in-house projects. The Munkhyttan and Kafjärden are acquired projects, and Hån is also in-house developed project.
Scanergy was one of those, I would say, local, developers that also developed projects that were sold to other, companies to bring them all the way in the value chain.
Mm-hmm.
In that sense, we have. Yeah. Mm-hmm.
The Stenkalles project, that you started development of that project in 2010, I've read somewhere.
Yeah.
Is that representative or is there more near term to be capitalized on the Scanergy?
Portfolio
Initiatives from say late 2018, 2019 that we don't see? Is that part, is that the backlog that we're currently seeing or?
Yeah.
'Cause it takes time to do something from scratch, and you've ramped up headcount-wise, et cetera, recently. When will that bear fruits, [uncertain ]
I think the Stenkalles project is one example that we were successful in developing a project. In the backlog, there is a few projects which are being in this pre-study phase, where we're looking into the different aspects of how we would go forward. Yeah, maybe Christian helps me out.
Yeah. Again, I was on one of the boards also on Scanergy from 2009. A lot of the history, and also remember a lot of these projects in the backlog, and also Stenkalles was put back because it wasn't a strong enough driver for power prices were low. You were waiting for that technology was gonna develop better turbines, but also to have good enough economy in this project. I think that's also very important that we expect it obviously to go faster now when this technology and the power prices looks more promising. Just keep that in mind as well.
Yeah. It's fair to say that you have a roster which is rather mature since you have history from it.
Sure.
Okay. Just the Björn. Was it on the-
Björn Kärnsberget.
Kärnsberget. That's not consented, is it?
No, it's in the process.
Okay. My second question is I just added up the offshore applications in Sweden.
Yes.
Only offshore adds up to 250 TWh.
Yeah.
It's probably roughly the same onshore in application process or application place.
Yeah, yeah.
The question is on the offshore side, how much do you expect the Swedish authorities to permit and at what stages? How much can we expect to be permitted within say 2025 or where you have some ambitions? And does that require you to take a very large share of those permits?
I think it's very positive that many offshore projects are being developed because there is a lot of space out there, and we've done nothing almost in Sweden. Just a few offshore projects are around. I would say that many of the projects that you've been seeing, it's quite far off the coast. There's a few older ones that are closer to the shore, but many of those are like, you can follow the economic zone, and you see it's like a pattern of different projects. The reason for them to go to the economic zone is that they don't have to deal with the municipality veto. When you go to the economic zone, you don't need a yes or no.
We are trying a little other approach because I believe that the projects that will be developed closer to shore. It's a big challenge locally to create a local acceptance or local engagement into that project. It's economically the project that we can build within five-10 years. It will take much longer for the projects outside the economic zone to be built. They will also be dependent probably on the Svenska Kraftnät new regime where they would connect different offshore wind farms to their grids. That's also a big lottery if you would get that connection or not. Our idea is to try to go a little closer to shore, work very actively with the local communities. It can be done.
We just had a permit coming out in Gävle or outside Söderhamn in Sweden, not from our side, another, my old employer. It's possible. You just have to have that local approach to get the local opinion with you. I guess all the applications that goes within offshore, many of those are in the economic zone. Some of them also say, "Well, we're gonna go floating." A floating technology is even more far away.
I appreciate I don't have the mic, but your illustration is that you will need 370 TWh in 2050.
Yeah.
In 2050, that'll be 75, so it's pretty long time till 2025. You already have 500 MW applied for. I'm just trying to get some sort of figures on.
Yeah. Well, my
Sorry.
Yeah. My thinking is that the projects with the best business case will be built first. Yeah? If you have a project outside far off, this big portfolio is being developed, the further out, I think the more they will Yeah, that will come later. That's my idea.
Mm.
Is that answering your question?
No. We have a break in 2 minutes.
Yeah, yeah.
We can continue.
No, I appreciate the question, and it's not easy.
Yeah.
It's not easy, but it's. We definitely need more capacity. We have great possibilities to also use the offshore in Sweden, and that hasn't been done so far. Many players are there, but we also believe that we have some good cases. Of course, we are starting, and maybe that's also a benefit.
All right.
Maybe.
Very good. Last question is back to the onshore, and you can just keep it there.
Yeah.
What are the final milestones before making the final investment decision on Munkhyttan and Kafjärden?
Yes. We are in the procurement phase right now. Hopefully within a couple of months, we'll be ready to make the final investment decision. The procurement phase is, of course, to define who is delivering the turbine, who is building the foundation, who's building the roads, how would the grid connection in detail be done, and so on.
All right. Thank you. As scheduled, I think we're right on time. A 15-minute break with some drinks, coffee outside. See you back in 12 minutes. All right, thank you.
Thanks.
Hi, everyone, and welcome back to the Cloudberry presentation at Cloudberry Capital Market Day. We have now come to the production segment and our production company led by Chief Operating Officer Jon Gunnar Solli. He has been with us from the very beginning and have your background from the financial side, but also from the hydropower side and had been on the board of Clemens Kraft and has also been involved in financing of renewable assets and infrastructure. Well, welcome, Jon Gunnar, and we are looking forward to hear more of the about the production portfolio and the assets.
Thank you, Anders. Hi, everyone. Jon Gunnar Solli, heading up the production side of Cloudberry. I will focus on three topics. I will briefly go into power production, power sales, how that is handled, our portfolio and portfolio construction, and finish up with the operational model that we have established within Cloudberry. Production of electric power. Probably most of you know the wind side. The wind side is very standardized. You have strict models, same models, mass produced, whilst on the hydropower side, every plant is actually tailor-made for the gross head and the amount of water available for production. There are, in principle, on the hydro side, three main types of turbines.
It's the Pelton, which is most frequently used in, at least in Norwegian small-scale hydro, Francis and Kaplan. Illustrated on this figure down here. Typically Pelton is with very high gross heights and less amounts of water. Then you have on the very low end, the Kaplan turbine, which is used for lower fall heights or gross heights and larger amounts of water. All power plants are fully automated. That means that they start themselves and they stop themselves. This can also be, you can also control them remotely. Actually on your mobile phone, you can start to stop a power plant, and you can see the alarms and so forth. It's a very automated operation in total.
If you look at the OpEx picture, typically hydro is lower operational cost than what we see on wind. Wind is higher. The lifetime expectancy for hydropower generators and turbines are 60-80 years, while the same on wind is 25-35 years. Land leases that we pay to the owners is typically a percentage of gross income, meaning that they fluctuate with the changes in revenues. If you look at sale of electric power, all physical power is traded over or via Nord Pool. The way it works is that day of or day ahead of the production day, the producers report the expected production the next day, and the suppliers, they report the demand. In the interface between those two, the prices are set.
On production, if your production deviates from what you have reported the previous day, then you have to balance that out in the intraday market. There is a penalty for that, but in our setup, we avoid that penalty, so we don't carry that risk. Also, the power is traded in euros, but you can choose to get the settlement in another currency. Typically, that is Swedish krona or Norwegian krona. On the derivative side, which there is a lot of focus around there is in principle two types of contracts. It's either the power purchase agreements bilateral, and there is the standard instruments traded on Nasdaq. The bilateral agreements are normally of longer term and also larger volumes of power.
Historically, typically it's been with large industrial companies having huge power consumption. The picture is changing, and we see that there is coming new entrants into the market, which I would assume want to have a more green profile. On Nasdaq, you have the trading of the traditional, more traditional financial instruments, futures and options. There is, I would argue, a limited liquidity if you go for contracts longer than 18 months, which is challenging because it's lower liquidity also impacts pricing. Yeah. Moving more into the portfolio, I guess some of you have seen this. It was in the quarterly presentation. Very much of what we currently have in production is hydro. We have one small wind farm.
During second part of this year, we will get in Odal and Hån, and that will increase our portfolio or almost double it when it comes to production. In 2023, the annual production is around 520 GWh. During the construction of our portfolio, we take a lot of different issues into consideration. We look at asset type. We try to have a mix of hydro and wind. We try to have a geographical spread of the assets. We look at the price area. We look at the production mix in that area. That can impact pricing.
If it is an asset that is in production, we have a very thorough technical due diligence of the asset to make sure that we don't get any bad surprises. We try to look for opportunities to add value, and that goes especially for asset in production, and find if there are areas where we can do things to increase or add value to the asset. Also, ESG is an integrated part of our investment process, meaning that we have a very close look at impact on the environmental or other ESG issues, or that can pop up related to the assets.
These pictures show the profile of the production over the year for the current portfolio that we have, or we will have in 2023 in production. The reason why we have the combination of wind and hydro is that typically wind produce more in winter and hydro more in the summer. Historically, we have seen that power prices was higher in winter, lower in the summer. During the last, let's say five to 10 years, we see a very changing picture. We have had the summers with very high prices and higher than winters. We try to aim at having a fairly flat production profile over the year.
We believe that this will reduce the overall risk of the portfolio. Looking ahead now, we see that we phase in some larger wind projects which will improve the overall production profile of the portfolio. Precipitation, as Olav mentioned, this year it's been dry. These two charts are from Norwegian Meteorological Institute showing the precipitation in or during the winter season in Norway, 2021 winter and last winter. As you can see on the map to the right, southern part of Norway was extremely dry. The year before, it was extremely wet. The parts where we had lot of precipitation last winter, year before was very dry.
This is why we want to or when we sort of put together a portfolio, we try to balance this out and have a good geographical spread for the assets. Also we can see that the kind of volatility in precipitation is larger than for instance what we see on wind. Wind is more stable year on year than precipitation. Pricing areas. The map in the middle, you see the pricing areas. When we have constructed the portfolio, we have had a focus at least on the NO3 and south. Also, we have on the wind side been very clear that we want to be on SE3 and SE4, well especially SE3.
I believe that we have been fairly good on sort of building and constructing the portfolio. We have only one asset in NO4 where prices are very low. That plant was stopped in June. So there is no current production there. But I think sort of overall we have a good balance when it comes to pricing areas in the portfolio. That got a final approval in February to build new transmission cable between NO3 and NO5. And that is expected to be fully operational in 2035, and we believe that that will also reduce the price differences that we see between NO3 and the three lowest price areas, or, sorry, southernmost price areas in Norway.
Sort of for the portfolio as such, we are fairly good position in my view, looking at the prices in the short to medium term. Looking at the portfolio and some of the characteristics that we currently have in it. The average, and that is production weighted, age of the portfolio is one point nine years, meaning that we have a very new and state-of-the-art equipment. We buy from high quality producers. We feel confidence about the quality. Also, this item that we look for something special when we acquire assets.
Currently on the portfolio that we have in production on the hydro side, we have two plants or two rivers. We both will have two new plants, and we will have possibility to regulate. That's in process. We have one river where we see whether we can add an additional plant to what is there already. That is all. There we have regulation. We have two plants where we are now applying for concession to have the possibility to regulate the water flow. We have a lot of initiatives ongoing in order to add or improve the value of the assets in production.
Also, we look at the land and fall leases we have. Fairly long average duration. On the wind side, it's 31 years, and on the hydro side, 57 years. I work very closely with Stig and his team in Captiva. We have implemented Tyde, which is a tool developed by Captiva. Artificial intelligence where we monitor sensors, get information downloaded each second from the different sensors in the plants. The ambition is that we will move from what today is more kind of a reactive maintenance of plants to a proactive. Typically, you see a breakdown on a plant when production is going at full speed. When it's full speed, you don't want it to stop.
Being able to use the Tyde tool, you can avoid that, and you can plan necessary maintenance and do that in periods where production is at very low levels. We could say also the quite big spread that we see in pricing between the different pricing areas. We believe that there can come very interesting opportunities, and the possibility to develop and build the portfolio further. We have also just to mention that, we have signed during 2022 four leases for approximately 100 GW of production, hydro production. Those we are in the process of preparing the concession applications.
It is a challenge, and I think that at least here in Norway is that the regulating body and we currently are struggling with the very long times to process the concessions. It has been addressed, and hopefully we will see that is improved. Overall, we believe that we have built a good portfolio, a diversified portfolio, taking into consideration the different risks that we are exposed to. We could also mention, I forgot that, there was a hedging. Because we have slowly been building up our hedging strategy.
The reason why it has taken some time is that if you have a small portfolio, it's actually very hard to do the hedge, because you can run into shortfall risk, meaning that you don't have enough production underlying to cover the financial derivative on top. But we have started to build up now. Last we did this week, a hedge for 4 GW in NO2, where we will get EUR 132 MW for the next five years for that portfolio. This is just an illustration to show you a little bit about the portfolio that we've built. The first asset we bought, that was an enterprise value. It was Røymyra wind farm. Enterprise value, NOK 33 million.
We expect an EBITDA this year around NOK 19 million on that plant. If you look at the largest hydro asset that we have, which is Nestane, the enterprise value acquired was NOK 162 million, and we expect NOK 62 million in EBITDA on that plant this year. Last, we have the largest asset that we own, which is the Odal wind farm. Please note that the EBITDA there is only approximately 50% because that has been put into operation throughout second, third quarter. That's approximately half of EBITDA this year or 50% of normal production.
What also should be kind of mentioned here is that the policy that we have is that we do long-term financing, 50% of enterprise value, meaning that the return on equity here is very, very interesting. Valuation of assets, power assets and sensitivities. Renewable assets are priced based on discounted cash flows, cash flow models. You have a fixed period, and the period you calculate on is normally the PPA or the forward contract. The largest sensitivities when it comes to pricing is the power price and the assumptions you have on power prices. Cloudberry does not have a view or an own view on power prices, so we use Volue.
Which is Olav Botnen's from Volue and their long-term market prices analysis. Energy yield, meaning the actual production you get out of a plant is of course also very important to valuation. One thing I would like to point at is this all-in rate, which is the interest or the price for funding the loans that we have. That has a fairly low impact on the valuation, very unlike real estate, for instance, where it has a very huge impact. I could also mention that we have as a policy that we fix all interest on the loans that we take up when we acquire plants or when we build plants.
I think we can say 15 years or more on all debt that we currently have on the balance sheet. Yes. Okay. Finally, I will touch upon the operating platform we have. Cloudberry production is a fairly small unit. I can say it's one person, and that's me. But we have from day one we decided to have a scalable, flexible, and cost-efficient platform. We decided that we will partner up with long-term partnerships with service providers who will actually carry out more the support functions and the daily functions related to the power plants. We have now good relationships. I can, you probably know most of the names there. Proxima, that's our alarm central for the hydropower plants.
That means that if something happens and an alarm goes off, then we have a 24/7 service there handling such situations. We also have agreements with local landowners that do physical inspections of the different plants every one to two weeks. No, every one to two weeks. That is just to safeguard. If you have a special incident, it's important that you have somebody that actually can go to the plants to check. Our power sales is handled, the physical sales is handled by World Connect in Bergen. Also, we have, or we do, our derivative trading. We have lines with World Connect and Axpo currently.
We are looking to extend the number of counterparties on that part, but they have to approve us or give us lines basically for trading. Yeah. I can say that also one of the things with the setup that we have, we have now kind of a plug and play, and that means that we have standardized the process of onboarding new assets, so it's very efficient, and the model is working very, very well. I believe that we now have a good level of operational costs related to the plants. Also worth mentioning is that on the wind farms, we have long-term maintenance agreements with the producers of the plants. Okay.
Yeah. Very nice. 5 minutes, 4 minutes. Some questions come in here. You mentioned ESG. Have you rejected projects due to ESG profiles?
Yes. In fact, we have. We have had two M&A processes that we were involved in where we decided to withdraw or not to give any firm bids due to ESG matters. One of them was biodiversity, and in the other instance, it was related to tax issues.
Another question: Will you aim at fixing more fixed contracts?
I think that.
PPAs?
I think the answer to that is yes, we will have more fixed price contracts in the future. We need to have a certain or a fairly big amount of production before, in a price area, before you go into fixing the prices. That is avoiding the shortfall risk. We have seen the last years that there's been a tradition to hedge against the system price. We were very clear that we will not hedge against the system price, and we have had the power producers losing hundreds of millions NOK on hedging against the system price.
The answer is we will hedge more in the future, but we need to have within the respective price areas a portfolio where we have enough certainty that we have the production underlying to support the overlying instruments.
Very good. I'll just continue here. Yeah, I'll come up in a second. How do higher power prices affect your margins on wind and hydro?
Well, of course, we very much have a flat base of costs in a hydro plant or a wind farm. Very much of the costs are more or less fixed. The only thing that is variable or very variable is of course the land lease that you pay, which is a part or a percentage of gross income. Higher prices mean increased earnings. Yes, definitely.
I think increased earnings, as you say, on wind, typically we pay 4% of the gross revenue.
Yeah.
Higher prices, the EBITDA margin is also expected to be higher on wind.
Yeah.
On hydro, it's a little more mixed pictures where we also have some profit-sharing agreements.
Yeah, in the portfolio.
Yes.
We have that.
Yes.
Yeah.
Thank you. It seems to me that the prices that you hedged for last week is slightly below what Volue is forecasting for the next five years, and you said that you don't have a view on prices. My question is really why do you need to hedge? You have low leverage. You have excellent assets. Shouldn't you rather offer that market exposure to your investors?
I can answer first on that. It's from early on when we started the company, we said we wanted a fair balance between fixed and spot exposure. We're following that strategy. Obviously, we're, as Gunnar said, it will take a time for us to build up the fixed exposure, and that's also been the clear mandate by our board to have a balance. We set a balance on the revenue side and also a balance on the debt side, where we said about 50% debt and equity. We can draw up more debt, and has been able to do that also there, but that's been the base strategy from day one. That's the reason we're doing it.
Please elaborate.
Yeah, I mean, it's I agree with Christian. Also we have said that I mean, we have a sort of a base of fixed costs. What we have learned now is that markets are very volatile. Currently, prices are very high, and we don't see them going down in the short term. Nevertheless, it's like we can go back to 2020, where the average price was NOK 0.12 or about 12 Norwegian öre over the year. We have said that we actually would like to sort of secure a stable cash flow so we can cover our fixed cost base.
Okay. Also you said that you used the word selective buyer, I think, or the expression selective buyer a couple of times. But you've been very active buying assets, and that's great. Could you talk a little bit about how these processes have been? Have they been buyer or seller initiated? Have you concluded the majority or have you walked away? 'Cause that's real interesting in terms of adding producing capacity going forward.
We have been very active on the market. I mean, there's been a lot of transactions, especially within the small-scale hydro market. Our hit rate, if you ask for that, is approximately 10%. So that means that, nine out of 10 processes we are into, we do not succeed. It's approximate number. It's very different. We have been involved in open processes. Some of the processes have been close processes. Some of them have been on our initiatives. So it's kind of a I would say a fairly broad range of processes. Yeah.
I also think just to elaborate on that, given Cloudberry is getting more known in the Nordic market.
Yeah.
We see also more interest for project owners coming in since we are a Nordic company, that they want to look if we can buy or do something together. We believe that strategy is working to be local in the area. Gunnar, thank you very much.
Thank you.
We have one more session, so unless you maybe introduce Stig.
Thank you. Thank you, Jon-Gunnar. Welcome to Stig. Stig is an old-timer in the renewable sector. One of the founders of Captiva. I think you have spent at least the last 15 years building Captiva, and is very knowledgeable both when it comes to the technological side, but also to the renewable assets. It's quite a unique combination, the team that you're running, Stig, with both the technology focus but also a lot of knowledge to the renewable assets. Please, we're looking forward to hear more about the operations.
Thanks a lot. Thanks a lot, Anders. It's always nice to be introduced by you, Anders, because you are flattering me all the time. Let's do this more often. My name is Stig J. Østebrøt. I'm the Chief Technology Officer in Cloudberry now, heading the rather new business segment operations. The business segment operations is a result from the acquisition of the company Captiva that was done now January this year. As Anders said, I was one of the founders 16 years ago. You are correct, which is more than 15, to be precise. Been heading Captiva the last 10 years, a little bit more than 10 years.
I carry with me quite a lot of history. A lot of good history, a lot of bad experiences that you learn a lot from. In total, I feel pretty well equipped for the new task. What I'm going to do now is to give you an overview, quite high level of what is the business segment operations, since it's a new one. Maybe not a lot of juicy stuff there, but hopefully it's interesting enough. As a little spice to it all, I have included a couple of examples on the technology we provide both to Cloudberry but also other clients.
What we do today, and this is like trying to sum up what we do and why we do it. We have a two-sided strategy. We deliver management services to owners of wind and hydropower in the Nordics. Nordic focus for us as well. A team of a bit more than 25 technical and commercial experts, industrial experts. Quite senior team, experienced from and recruited from companies like technical consultants like DNV, equipment suppliers from the turbine side, for example, like Rainpower, Aker, Voith. Quite senior, which is quite natural when you build a company. You build the senior side first, and now we are ramping up with more junior talented resources.
A traditional service strategy, operating plants. We deliver wall-to-wall services to typical foreign investors without any local organization. On the other side, which has been really important for us for the last years, is to develop the digital side of the services. Realizing the fact that being relevant in this market on the management services, we need to be in front on the digital side as well. Quite soon we saw that since we are within a niche, at least on hydro, wind is more widespread throughout Europe, but on hydro, it's difficult to be just in line with the other customers of suppliers of digital solutions.
We wanted to go do that more seriously and develop some own solutions as well. To do so, we needed to serve a larger market than only using the digital solutions on our own management services. That's why we have also a separate product strategy where we are supporting many other asset owners where we don't manage the asset but with digital solutions. What we're trying to make out of this is a combination in the intersection between industrial expertise and the software development, where we have in the same office we have the users of the digital solutions. We on a daily basis operating the plant.
The software developers sitting side by side. That makes the line between those who really knows the problems that the developers needs to solve and those trying to solve the problem really close. I'm going to show you a couple of examples quite soon. This is what we do, and always an important question is why we do it. The value proposition we propose to our clients is to maximize the client's asset performance with insight. It's insight based on our experience, insight based on that we are hands-on on the client's assets every day.
We are data-driven and use data and analysis to gain additional insight. While this is our mission, the purpose of doing this is that what we can accomplish, because since we are our capital is ourselves, it's human capital-based. It's not capital-intensive in normal sense. What's getting us up in the morning is being able to generate even more renewable energy without any additional environmental negative impact. It's always the same discussion all over every time. There's a reason why onshore wind power development in Norway has stopped.
It's a trade-off all the time between the negative side of the wind project in the Nordics, among those representing the international owners of the Fosen Vind from the very beginning, even before the construction started, and have been heading the advisory committee on that project since 2015. We do market placement in terms of selling the power on behalf of power producers on Nord Pool. As Jon Gunnar mentioned with the scheduling and the day-ahead forecasting, do that for more than 300 plants and approximately one terawatt.
Digital solutions, we have now close to 500 hydro plants connected to our platform, which account for, I think it's, 40%-45% of all hydro plants in Norway between one and 10 MW, and more than 50 of what's relevant to have there. I would guess you will have a little peek there later. Our main office is in Oslo, newly co-located with the Cloudberry team. During the winter, we also opened an office in Bern, Switzerland with a small team. two there now, soon three, because we have some important clients there and there are many potential clients there that are not existing clients yet, but we're trying to do something with that.
Our client base is, we have a quite strong position on international owners, both industrial and financial, from the continent, owning assets in the Nordics. With the digital strategy, we also are more relevant for many of the domestic players that have their own organization. If I move on to use some minutes on what we delivered today on the digital side, we have two products that's developed at the moment. The portal is a tool, a more high-level management tool where we collect data from, not actually from the plants, but we collect them from open APIs and combine. We have metering data on hourly production.
We have the market prices in the same database. We integrate towards open weather APIs. Based on that, we can very easily give an overview of production figures, compare different plants in different regions. You can easily provide prognosis based on forward prices and prognosed production for the plants year to come. It's more a high-level management tool, visualizing the data, not real deep. The deep part comes in the product we call Tyde, which is an analytic tool based on sensor stream sensor data. I will just make a couple of comments to those two products. The portal is actually something, the story behind it's a bit amusing.
We started the project three years ago, and it was very simple. We wanted to scrap the monthly report distributed on a PDF on an email, typically day 10 or 15 after the month was over. Typically one asset manager doing scrambling to gather the data and everything. First of all, we thought that could easily be done a lot more effective. More importantly, it is. There is no really good reason why a monthly report, that we even should report monthly or that it should be that the data should be available two to six weeks after everything was happening. Because the data is quite easily available.
Like now, all the data you need until midnight yesterday is available if you just collect them in the right way and scramble them together. That was our plan to be a lot more transparent with our clients. Instead of sitting on their data and reporting it to them two to six weeks later, we took the chance to give them access to the same data we use at the same time. Not once a month, because in our opinion, first of all, the August figures should not be reported late September. Today is the first of September, so that's more than sufficient to report our August figures. Why don't do that.
The second is that you should not need to wait for one month before you have an updated figure, at least not how the prices are fluctuating today. Second of September should be sufficient. That's fully doable. It started out as a project to be a lot more modern on how we report to our clients. Two months after we launched the product internally, the whole Europe shut down due to Corona. We launched a campaign guessing that there was a lot of other managers sitting around not having a good information flow on their plants because they were home at their home office, and that was something new for most of us. Not now, but at that time it was.
That really hit it off quite well. Now we started with 40 plants in this reporting system. Two years later, almost 500. That makes us able also to do very interesting benchmarking. Two to three weeks ago, it was even difficult to do weather benchmarking because the data was not that accessible. Weather APIs all over the world is much better now. Every time a plant is producing way beyond or way below your budget, it's probably something with the weather to do. If you don't have weather data, you don't have a clue whether you are good or bad. Combining that in addition with the best benchmark you can have is all other plants in the same region, for example.
This is the data we are combining. The goal is to produce as much value as we can at as low cost as we can. We don't need to integrate physically to the plants, and then we are able to provide a lot of value without being too expensive. Okay. Tyde is something different, and this is where we dive into a rabbit hole. Let's hope we get out before my time slot is over. Jon Gunnar mentioned it. It's implemented on Talvori's plants now.
In Tyde, we use both physics-based methods, where we know a certain relationship between an input variable and an output variable, and we can program the formula, the algebra in between. We can combine this theoretical-based and physics-based formula with the known inputs, and then we can calculate an estimated output and can compare with the actual output. That's one method. The other method is the data-driven methods, typically on machine learning, where you simply just put in all the data you have or not all the data you have. In a structured way, you put in the data, and you let the machines find the patterns and then estimate the next outcome.
If the outcomes is deviating significantly from the actual outcome, then the machine itself finds the anomalies or the deviations. This is an example of the first method, physics-based method. I'm not an engineer, but I understand the engineers learn at the technical learning universities the relationship between the energy available upstream a river and how much that water should generate based on height and all the attributes with the power plant. Very, very many of these attributes and variables are known, but not all. What you see here is an example where we have calculated and estimated the power output.
What should the power plant produce given the input variables that we are able to measure accurately? That is the white line, while the red line is simply the actual power output from the plant. This is the graph over an eight-day period. You see three periods here. In total, it's 20 hours where these graphs are deviating significantly. The deviation, significantly in this case, is 7%-8%. What we did then is to look closer into to find if there's something else strange happening at the same time, and there is, of course. In this case, it was the needles on a Pelton turbine.
One of the needles, one of six needles that did not find the right position in a certain operating area. That's. You can see that with the blue line here doing like this in certain areas. The point is this is really hard to find with traditional systems. You need the high frequency on the data, and you need to be able to combine this time series to find it. It's a very easy thing to fix. It's simply reprogramming the PLC at the power plant, and then you can make this work seamlessly.
Just this easy example, if you assume that the frequency of this eight-day period is representative throughout the year, that would mean a lost production of 165 MWh . Again, not super much when we are talking about because that's 0.2 GWh . Like, when we are talking about how much the portfolio is going to grow the traditional way, it's not much. With a simple example like this, 0.5-2.0% production increase with no CapEx at all. At normal prices, if that even exists, around NOK 70,000 per year of value. At current prices, NOK 800,000 . Now we have connected 60 plants to the system.
We have examples from more or less every plant we have investigated so far. This is going to be commercialized now the next 12 months. Okay, I need to speed up. To put operation as a business segment into the Cloudberry context, this is at least how we see it is from consisting of development and production is quite easy. Development develops assets, and production owns the assets. Development is one of the feeder of new assets, and M&A is another feeder. What we add with the operation segment is the management of the assets, obviously, and also the digital side.
I think what's important to remember is that the operations as a business segment serves a lot more than only the Cloudberry assets. What we gain by that is that we have an organizational scale that's a lot more. We can build a complete power company in a totally different way. Maybe if the operation side of Cloudberry was going to be sized accordingly to the goals on the asset portfolio size, we were looking at, I don't know, two to three, maybe 4 FTEs in total. Captiva has now 40.
I think a very strong synergy is that we are able to build an organization, attract talent, have an in-house know-how that is on a whole other scale than if we're going to do this the traditional way. The digital strategy is already there and integrated. Some examples of ESG in practice. We're doing operations of hydro plants, systematic compliance of permit requirements is key. We do this on our own assets. We do that. We do deliver this as a service. We do it on all the plants with that we operate. We also deliver internal control services to other clients as well.
The way we have attacked reporting and information flow with the portal, I think it's a perfect example of how transparency is a good thing, and bringing information to everyone at the same time. Suna mentioned the taxonomy compliance project. We will now launch a digital solution on plant level EU Taxonomy compliance together with DNV. We are running the first pilot projects there now, but that's also an interesting approach where we see a lot of consultants looking forward to write a lot of hours on advising on the EU compliance, and we are going to disrupt that business really before it even started. Okay. By way of summary, we are a data-driven operator and manager of wind and hydro projects in the Nordics.
We have a separate digital strategy and product strategy on the digital solutions, and it's the combination of these two that makes us unique in our niche. I think it's a very important point that where Cloudberry is now is that we are able to manage a lot more than we own, and we are able to digitalize a lot more than we manage. In total, that brings us to a very different scale, and also ensures that Cloudberry is a solid and professional asset owner with first-class technology. That's everything for me. Christian?
Yes. Very good. I see you got some research grants to work on Tyde. Here comes some questions. How do you plan to monetize on these technologies that you're now developing?
We will launch or we're establishing now a research program together with NTNU and the Norwegian University of Science and Technology and SINTEF. Where the aim is to develop this tool even further. The whole idea is to connect as many plants as possible to the Tyde platform and make these data available for scientists. That's the project that we have been granted funding for. That's more a product development track, I would say, but it will be run in combination with industrial partners.
Mm.
That's a very important part of our commercialization plan.
As a question to you, Anders, with all this data available, should Cloudberry report more often than quarterly on our production?
Good question. It's a warning, though. We have to warn everyone that if you start using the portal, you're going to be addicted. I check it every morning, and I check it every evening. It's a fantastic tool for a manager of a power company with all the information that is coming. I don't know if it's any more questions, Christian, or?
No, I think we're on time, I think.
On time? Yeah. Yeah.
Yeah.
Well, thank you, Stig.
Yep.
As you now have heard from Stig, we are not only a independent power producer in the Nordics, we are a modern independent power producer in the Nordics.
Mm.
Of course, building infrastructure, wind farms and hydropower plants, that's very costly and it's a long life cycle of all those assets. To now try to make these assets smarter and to make the production more efficient and to be able to plan for maintenance and so on is. We have seen some examples of what you lose if you have a hydropower plant stopping in the middle of a now in a high-price regime. This is super efficient, and we use it every day.
As Stig said, we have access to so much more also from other power plants. It's really a super tool. We are happy to have you on board. We can also be able to develop that further with our own power plants. Yeah.
I was just wondering, the business model here, is it a subscription-based kind of service, or is it a one-off, or is it to only get the data in a way that's to Cloudberry's benefit? How does it work?
I guess you're asking primarily on the digital side.
Yes.
It's a subscription-based, so it's like the Spotify model. It's in different levels. We aim to provide a quite easy entry level, appreciating the value of the data, the network effect of the data. We even have a free level to gain as much data as possible. We have more advanced functions. We have like statistical calculations on the plants that can be used in hedging strategies, for example. We have land lease modules where you can effectively calculate land lease, as one example. Different modules on top that the clients pay more for. Yeah.
More will come.
More will come.
That's very good. Okay. I think we have no further questions from the audience here and not from the ones following us online. I would like to thank you all. Thank you also the Cloudberrians that has contributed today. Always good to have you around. Thank you for using your time on Cloudberry. We say thank you from Cloudberry. Bye.