Hi, everyone, and welcome to Cloudberry's third quarter presentation. I'm joined here today by my colleague, Christian Helland, and we will take you through the presentation. But before we start on the presentation, we would like to show you why we are one day late. Yesterday, we were at Sundby Wind Farm in Sweden, SE3, and had the first production from this wind farm that we have managed to construct in about eight months' time. And it is a fantastic project using old foundations with new technology, and you will hear more about Sundby going forward when we have taken over the turbines from Vestas. But it has been a fantastic project so far, and we are—we believe that this will also be the case when we have taken it over.
As mentioned, I'm joined by Christian, and we have a presentation that we will dive into, and I will take you through the first two sections, and then Christian will take you through the financials. We have a Q&A button here that you should use, and we will try to answer as many of the questions after the presentation. Yes, let me. We start with the highlights. You will see here on the right side that we have had a strong operational quarter. We have more than doubled the power production from last year until Q3 this year from 70 GWh to 155 GWh. And in addition to that, we see that the construction projects are going forward according to time and budget, and also several of them developing better than the time and budget. So, on Sundby, as we just showed you, we have seen the first production.
We have energized the first three turbines. The next turbine will start test production this week, and we will hopefully taking over all the turbines by the end of the year. Øvre Kvemma is another construction project that we have developed over the last years. We will actually energize the hydropower plant next week, and we will start gently the test production in Øvre Kvemma, and that will take the next couple of months. Munkhyttan, it's our next wind project in Sweden, in SE3, where we have done the infrastructure, and we are now waiting for the spring and the turbines to arrive, and we will hopefully have first production from Munkhyttan by summer 2024.
As we mentioned on the Capital Markets Day, we would like to see more of our production with fixed price PPAs, and we are very happy to see that we have managed to sign the three-year PPA on an attractive level in DK1, taking our merchant exposure down from 95%- 88%. And as we also mentioned on the Capital Markets Day, we will further look for offtake opportunities and hopefully get a fixed price part of the portfolio on 20%-30% over the next year. We do have also more dialogues ongoing on the PPA side. And last but not least, we have had a term sheet signed with our partner in Denmark, Skovgaard, on a climate park, hybrid project of a total of around 210 MW.
And we are happy to share this, and it shows some of the value creation that we do, when entering Denmark and together with our partner, Skovgaard. Yes, just two words on Cloudberry. If you see here on the left side, you see our business model. Cloudberry is developing and an owner and operator of renewable assets in the Nordics. We do everything from early-phase greenfield projects. We take the project through the permitting process, the procurement process, and we also manage the construction of the assets, and also operate the assets when they are producing. You see here our portfolio is diversified on early stage projects in the backlog, where we have the exclusive projects. We have some construction permits that we are working on to get ready to build. We have a project under construction, and we have a large production portfolio of more than 235 MW.
Here on the right side, you see the map where we have mapped the different projects. Today, we are active in Scandinavia, and we have focused on price areas south in Norway, south in Sweden, and Denmark, to find the most attractive pricing of our production. And this is how it's been developing. We have been growing the production portfolio over the last years, starting out with very little production, only hydro in Norway. We have diversified the portfolio, diversified it on technology. So we have in production today, hydropower and wind power. We have also solar projects, both in the hybrid project in Denmark, but also standalone permit projects that are in the permit phase in Norway, and that we will also see in Sweden. We have entered into three different countries, diversifying the portfolio, risk mitigation when it comes to the political risk of the renewable sector.
As I mentioned, we have also been focusing on the different price areas, where we see that having the project in the right price area can mean a lot for the financials of those projects. We see that the interconnectors out of Norway and also out of Sweden has affected the price level in Scandinavia. From first of January, we will also have a new interconnector between Denmark and UK that will also link our production even closer to the European continent and the U.K. This one you have seen many times before, but it gives you a good overview of what we have under construction and those projects we have mentioned. You see, we have the next projects we would be Duvhällen and Stenkalles, where we have permits in place, and we are working in parallel to get these projects ready to build.
When it comes to the Duvhällen project, we are also working on the numbers. We have 60 MW here in our model, but it's it could also be more than 60. We have a dialogue with the grid owner on the capacity of the grid. Yeah, just two words on our climate park in Denmark. As you remember, we entered into a partnership with Skovgaard in Denmark on the Odin portfolio, 51 producing turbines. But as important as the production portfolio was also the development agreement that we entered into with Skovgaard. So we have a first right of offer on new development projects, and here we have one example of what can come out of the cooperation with Skovgaard.
Today we have 175 MW of permitted solar, but we are also working on a wind farm in the climate park, so we will have a hybrid of wind and solar. And it's in DK1, and we think this is an excellent project to work with Skovgaard on. It's a large project both for Skovgaard and Cloudberry. So, when it's ready to build, we will probably also look for a partner on this project. But, we are very happy to see that the cooperation in Denmark is going very well, and you will see more of those kind of projects also coming out of the development agreement with Skovgaard. Yes, on the ESG and H&S side , we do have no health and safety issues and incidents the last quarter. It's important, and no environmental damages recorded on the projects.
And we have also managed to double the avoided emissions from around 17,000 ton of CO2 equivalents to 35,000 tons of CO2 equivalents. So as the portfolio grows and we are getting more and more project into production, we also see that we managed to avoid emissions. So that was it from me now. I will hand over to Christian, and then we will sum it up after the presentation. Thank you.
Thank you, Anders. So, then I get the privilege to talk about the numbers. So before going into the details, just a little recap of how we're thinking of creating value over time. So the focus for Cloudberry always been on creating long-term fundamental values in a conservative way. So again, low debt ratio, but showing that we're able to deliver the projects on time, on cost, and also focus on the right projects in the right areas. So we also have shown now the market that the value of some of our assets for third-party buyers.
So as always, try to use our equity as efficiently as possible to grow this over time by cash flow from the assets, but also actively farm down on assets where we can be controlling owners, but farm down and show value creation and use our equity efficiently into new projects. So we'll be disciplined with our capital. We see it's a rough market, even though the inflation now is falling in the Eurozone and so forth. We see that it's still important to have disciplined capital. So that remains the main focus for us, and we come into some specific details on the next slides. So just to sum it up, we didn't do any project sales this quarter.
Last year, in the same quarter, we had one project sale, so that obviously was a successful sale on the Hån project. So in this quarter, it was a little softer financials. We're very pleased with our production, growing it twofolds, more than twofolds. But it has been a lot of water participation in Norway, and building up a lot of the hydro balance here in Norway. So the average price was only 50 øre, 0.5 NOK, where last year was 2.4 NOK. So this, we are all aware of. We are merchant exposed, and we'll vary a lot from quarter to quarter. So going forward, you will see us much more reporting on year to date, on more one-year or trends.
This short-term volatility is a little more evened out. Anders also mentioned our PPA at 1.2 NOK, giving our investors a feeling of at least where we are more midterm and long-term pricing from institutional investors. So here you see, again, no project sales. We also report our proportionate figures, which is obviously what we as a management is focusing on. That's also including Forte and the Odal numbers. Odal, again, very low prices in specifically Norway during the quarter, so it's been very low income and revenue on hydro and also the wind in NO1. The balance sheet. Very clean balance sheet, robust balance sheet.
As always, focused on remaining and have a healthy balance sheet, flexible balance sheet, flexible debt facility with SR Bank and our local savings banks. So we have also increased the debt facility, so we have the possibility to grow and draw up debt when needed. We have financed now our projects, both Sundby and Munkhyttan, with equity, so it's no debt in those, but we obviously have full flexibility to draw up this debt. So very comfortable position, strong cash balance, strong flexibility in our on our debt. And showing here the consolidated equity, which is based on the book values. And we've also shown over the last quarters that some of our assets is significantly priced above these levels.
Here we dive a little more into the segments. We will focus on the next slide on the production segment, which is our main segment. Also focus a little on the development. Good progress. As Anders mentioned, it's important for us now to show that we're successful both in Norway on hydro development, which Captiva is helping us with, the Swedish team, both onshore and also shallow water, and now the partner agreement we have in Skovgaard, which is working very well. So we're very pleased with now showing the market what... that we can focus on project that's we see as value accretive, where we combine solar and wind, and we get much better profitability from these type of projects. So development segment, going forward. The operational segment, remember, is two parts of that.
One is assisting a lot of Cloudberry on the construction projects, on the development, which is very key to our business. The other part is a digital part, which has been investing quite significantly over the last two years, where we now have slowed down and will slow down next year, the investments in digital. The portal is now up and running in full scale, and we'll also have now included solar to it. So there we will see some less cost going forward, but stronger than ever, the development part of Captiva and the asset management part is assisting Cloudberry significantly. So to the production segment, more than doubling the volumes, but a soft quarter with power prices.
We're capturing better power prices in Denmark than in Norway and Sweden at the moment. Again, significant difference from last year, where it was 2.4 NOK per kWh, now 0.5 NOK per kWh. Again, a lot of hydro in the magazines here in Norway at the moment, but we've already seen snow coming, cold weather, so it's a lot of pickup in power prices already. Also mention that also on the PPA we did, we get these Guarantees of Origin as a renewable producer. This has increased from very low levels now to much more interesting levels. So this is 10-15 million NOK.
We write 240,000 GOs, which is not sold, which is our balance sheet, where we will receive 100% EBITDA margin on those, and with today's prices estimated about 10-15 million NOK. Again, back to the strategy. For us, focus on cash flow, EBITDA, focus on balance sheet remains key focuses, growing these fundamental values. We see we're very strongly positioned with a lot of network now in the Nordic countries, so we feel our strategy is working very well, and now we just continue to capitalize on the most accretive projects, where we see Nees Hede, Duvhällen is very good projects in the southern part of the Nordics.
We'll remain disciplined with our capital, focus again on the project where we add most value to our shareholders and allocate capital to primarily hydro in Norway, wind in Sweden, and we see wind and solar as very interesting combinations in Denmark. Also, where we see the most radiation is in Denmark, so we get better profitability there. Again, M&A, yes, but in the earlier phases where we can add value as a developer. So again, in the initial phases, 2, 3 years back, yeah, we did some M&A to get the more critical mass on our development or on our production side. Now we see that the interesting part for us is projects where we can add value as a developer and get much more of the value uptick in the projects.
So we'll still do some M&A, but less capital intensive. Yeah, and there's a little about the market and summary before we open up for Q&A. Thanks.
Thank you, Christian. Yeah, we like to say that Cloudberry is perfectly positioned for the energy transition. We see that there is a massive demand for more renewable energy in the Nordics. We see daily that the industry in Scandinavia is demanding a more renewable energy. We see that the EU is driving the transition and putting more pressure on the process, that it should go faster. We see also that it's a bigger local acceptance for renewable projects in the Nordics. So all in all, I think we have a positive underlying drive for more renewable in the mix.
When it comes to the power prices, yes, Q3 is usually a soft quarter. We have, as Christian said, already seen that the price level has picked up due to colder weather and going into Q4. And here you see the system price from Volue estimates from Volue. And we believe in this shift from pre-COVID, pre-Ukraine war that it will be a shift on higher power prices also going forward. But coming from extreme levels last year, we see that it has more normalized now on the levels that you see here or a little above.
And we see that also entering into a PPA for three years in DK1, we see that the price level actually indicates that they also think that it will be a higher price level going forward. All in all, we are exposed to the merchant risk, but we have... We believe that this is the right combination of merchant risk and a more fixed price strategy on and PPAs going forward. Moving on to the summary before we will try to answer the questions. As I mentioned, we are very happy to see that the production portfolio has more than doubled. We have a track record now that we are almost doubling the production every year.
Yes, we have had a dip in the power prices. That's due to heavy rain, but also the third quarter in general is a soft quarter. We see already that this is picking up. I think if we don't get more renewables into the mix and more new projects, you will also see that that will affect the price of electricity going forward. On the tax side, we have an ongoing process now in Norway. So this is an issue for the Norwegian assets. It's only wind assets. We have one large wind asset in Norway, which is Odal Wind, so this is isolated to the Odal project and will not affect the other wind, hydro, and solar projects that we have in the Nordics. But the process is ongoing. We have been working with all the political parties.
We have been in the parliament in front of the standing energy committee and working closely with the whole renewable sector in Norway. The sector is very active now, and we will see a decision from the government and the parliament on this issue before end of 2023. It has created a lot of uncertainty, which is, of course, not good for any of the players in the renewable sector. But we still believe that the worst is on the table, and that we will see some adjustments or changes that will make this more attractive for the sector. So that was the tax issue, which is a Norwegian issue. When it comes to Denmark, we see that we have shown now the positive development we have on the cooperation with our Danish partner.
We see a very strong drive in Denmark for more renewables to manage the projects that are linked to the PTX, Power-to-X, and also the infrastructure that the tight connection they have to the continent and Germany. So, it's a very attractive area for us. And last but not least, we see the construction permits and how we are managing those projects in a very good way. Managing those projects that they can deliver on time and cost, or even before time and on lower than budget. So, we are very happy with the construction team and all the people working on those projects. So,... Yeah, thank you so much, and then, let's move over to Q&As.
I've taken notice while Anders was talking here, so I'll start with some of the financial questions. The first, are you doing more disposals of assets? And I think this is also linked to the question, or capital needed for Nees Hede. So this is how we're working. We see, again, we saw now in SE3, there is high willingness to pay for producing wind. We saw a transaction here recently at NOK 7.5 per kWh. So at the moment, very good cash balance, good debt facility, so nothing needed. But we see, for example, Nees Hede, 12 to maybe 24 months of development. Big project for us.
We can, if needed, farm down Duvhällen or others to again recycle the capital efficiently, and we see the value of our assets is high in the market. So again, a lot of flexibility in this model to finance Nees Hede. We will obviously discuss with our partner, Skovgaard, if we are doing the full project or also if it's natural to bring in a partner in such a big project in Denmark. But still a lot of development work to be done there over what we believe is typically 24 months. EU again has come back and they say we're speeding up the time to get into permitting. So a lot of positive drivers there.
Again, we think our balance sheet has a lot of flexibility to take on these projects and also use farm downs when needed. Hydro tax, Norway. Yes, it's correct that the super profit tax has been proposed to be canceled from first of October. So we are not expecting any more super profit tax. That was canceled earlier than expected. It was expected to be lasting until year end 2024. So that's obviously positive news. We expect the Norwegian wind tax obviously is what we are spending a lot of time on with the politicians now over the next weeks. And volumes of wind, this is also a rule of thumb, but, yes, fall or the winter season normally produces two-thirds of the volume for wind, one-third in the summer months.
So it's. We see good wind conditions now, picking up, especially in Denmark, where we have a lot of wind. So this is true. We expect higher volumes from our wind portfolio in the winter season. So that's a good question. Also on Øvre Kvemma, a question there, when revenue is expected? This is expected, now we see the plant is completed. We're starting test production, and the grid connection is expecting first half next year. So this, we are not more precise on the dates, but we expected, as mentioned, also long time back, it's first half next year. Anders, you may be a little more on the projects as well. There was some projects questions around Odal and so forth.
Yeah. Yeah, on the Odal question, as we... As you know, we have the SG 4.X turbine, Siemens Gamesa turbine on, in Odal, and we have some issues there, as they have in general. Those are covered by the guarantee. So the guarantee work is Siemens who is doing as we speak. And that will, of course, also affect the production because some of the blades and so forth has to go down and to be repaired, and then that will affect the production. But we have also a uptime guarantee on the wind farm, so it's also covered by the guarantee.
The guarantee has a cap, but we don't— It's too early to say how this will play out, but at least the actual work on the wind farm is covered by the Siemens guarantee. We had also questions here on the hydropower plant, and as I mentioned, it will be connected to the grid next week. We have energizing the power plant. Then it will take some months to do the test production. It's a longer process. On the wind side, we have a 240-hour test on the Sundby turbines, but on the hydropower side, we have several months with testing to adjust, and it also going to pick up over time.
So, you cannot expect a production of any size this year, but next year. Then we had also some tax questions, and yes, the tax proposal does not cover any of our hydropower plants, and we do not see any signs of introducing any super profit or ground rent tax on the hydropower assets that we have in our portfolio. I think that was the questions I would like to ask-answer. So Christian?
Yeah. Keep coming in, a lot there. The buyback program, as mentioned in the stock release, we are maximum buying back 7 million, but initially we start with buying back 3 million shares now before New Year. So that program is now started. So that's again, we have maximum 14.6 as the buyback price, and maximum 7 million before the next general assembly, where we do 3 million before New Year's. And is GOs part of the revenue? As said, yes, GOs is part of the revenue, but we have a big balance of unsold GOs, which will hopefully come on the revenue next quarter. It's also important to mention it's some question about received price and so forth.
So the revenue we report is obviously the actual revenue we receive after cannibalization effects and so forth. We're very aware of cannibalization effects, especially of wind in Denmark, where and so forth, but these are the actual revenue. We got some question about scale and overhead costs. We report NOK 14 million of the quarter in overhead costs. Be aware that 50% of this is warrants, which is not in the money, and does not have also a cash effect. So we have 6 people on the corporate segment, so we believe we're quite efficient and a lean overhead, and we also believe the corporate adds significant value to the development segment and so forth. But again, scale, yes, it's important.
So, we have the plan to increase our 3 and 30. As mentioned, our strategy is clear. We see that scale is important, but again, we try to keep a lean organization so we can be dynamic and have a cost focus. So cost focus is key for us, but and keep a lean organization. Yes, buyback. I think that was at least what I... Do you see other questions coming up?
No.
No? Okay. So then I think we will say thank you for taking your time, and look forward to seeing you again soon. Thank you.