DONG Energy

Business activities  

Exploration & Production

Value creation
Exploration & Production creates value through a number of activities in the upstream part of the energy value chain - from own exploration to natural gas and oil production. Exploration & Production's natural gas production travels further down the value chain to the business area Energy Markets, where it creates additional value by forming part of the overall natural gas portfolio. The objective is for equity natural gas production to meet 30% of DONG Energy's needs, thereby strengthening security of supply.

At the end of 2010, DONG Energy had a total of 73 licences in Northern Europe; 13 production licences, 11 under development and 49 exploration and appraisal licences. DONG Energy is the operator on 10 licences in Denmark, seven in Norway, eight in the UK and one in Greenland.

Significant events
2010 was marked by several significant events supporting DONG Energy's growth strategy. The Nini East field on Danish shelf was put into production, followed by the Norwegian Trym field at the beginning of 2011. Both projects have been successful and executed as planned.

Exploration for new reserves resulted in two new discoveries; one in the Solsort licence in Denmark operated by Exploration & Production and one in the Edradour licence in the UK in which Exploration & Production is licence partner. In 2010, it was also decided to develop the Laggan-Tormore licences in the UK, Marulk in Norway and initiating further development of the Syd Arne field in Denmark, and DONG Energy was also awarded a new licence in West Greenland, three in the UK and one in Norway.

Renewables

Leader in offshore wind power
Over 20 years experience of offshore wind farm development makes DONG Energy the current market leader in offshore wind power. The majority of DONG Energy's wind farms are based in north-west Europe, and we have built more wind farms than any other company in the world.

Clean and reliable energy
DONG Energy aims to supply clean and reliable energy. We develop, build and run wind farms and are well on the way to reaching the target of a minimum wind capacity of 3,000 MW in 2020.

We currently have 1,035 MW of on- and offshore wind power in operation and 1,316 MW under construction. In 2010 14.5% of DONG Energy's power production came from wind power.

The main focus of Renewables is to maintain and develop DONG Energy's leading market position within offshore wind power in North-West Europe. We will do this through:

• Taking advantage of the Group's strengths
• Developing and strengthening our project pipeline
• Industrialising and optimising processes in the construction and operational phase
• Entering partnerships and sell-offs to focus on offshore wind.

Generation

Highly efficient power plants
Most of our power plants combine heat and power production in order to increase the exploitation of fuel resources. Our strategy is to maintain and optimise our current thermal-based production in the Nordic power market, while also increasing the use of CO2-neutral biofuels.Growth is happening abroad, and is also where we have put two new gas-fired power plants into operation, in Norway and in England. We are also in the process of building a power plant in Holland. These projects are based on our core areas of expertise within thermal power production, and these new plants will contribute with a total capacity of approx. 1,500 MW.

More energy with less CO2
In 2006 around 15 % of DONG Energy's power and heat production was based on renewable energy or CO2-neutral fuels, while 85 % was based on fossil fuels. In 2009, under the title of 85/15, DONG Energy set itself the following target for 2040: to have reduced CO2 emissions in power and heat production per energy unit produced to 15 % of the 2006 levels. In just 10 years the CO2 emissions are expected to halve (from 638 g/kWh to 320 g/kWh).

The targets for 2020 will largely be met through extensive investment in renewable energy. Equally important will be an increased use of biomass and natural gas in power and heat production.

Energy Markets

Main activities
Being responsible for the optimization of the commodity exposure in DONG Energy, we buy and sell energy on international energy wholesale markets to create value for DONG Energy and our business partners.

Our main activities are:

• Energy related commodity trading
• Energy sales to industrial customers and energy retailers
• Procurement of natural gas

A strong heritage
We build our business on a strong heritage:

• Long term relationships with major producers of natural gas
• Developed partnerships with energy retailers
• Part of the DONG Energy group - backed by a solid financial position, a stable ownership structure and assets across the energy value chain
• Strong presence in North European energy traded markets and first mover as shipper in North European gas markets in connection with the liberalization

Sales & Distribution

Our activities
Our activities include:

• Power distribution to about 980,000 Danish power customers
• Natural gas distribution to about 123,000 of Danish natural gas distribution customers
• Distributing a gas volume of 11.4 TWH, we are the second largest provider of natural gas in Denmark
• Natural gas storage at our Stenlille facility
• Partnerships on climate with companies, municipalities and organisations
• Smart Energy - development of our future intelligent power production, consumption and distribution
• Energy counselling for the private and public sector

We own and operate Denmark's only oil pipeline, which transports oil and condensate from the Gorm E platform in the North Sea to the oil terminal in Fredericia, from where it is led to Danish oil producers. The pipeline is 330 km long a third of which is onshore.

We continually work to improve efficiency and reliable supply throughout our power grids, natural gas distribution network, and natural gas storage facility

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