Cloudberry Clean Energy Annual report 2020

Cloudberry Annual report 2020 Board of Directors report 24 the second half of the year was stable and ended slightly better than normal. Loss related to the break- down of the turbine was limited, as it was covered by an availability guarantee from the turbine manufac- turer and production interruption insurance. In total, Cloudberry’s production was 21 GWh for 2020. Annual production is expected to increase considerably in 2021, following acquisitions made in 2020, as well as the completion of power plants under construction. Construction projects Construction of Cloudberry’s hydropower plants Åmotsfoss, Nessane, Bjørgelva and the Odal wind- farm have progressed according to plan. Covid-19 challenges did not have a material impact on construction progress during 2020. Nessane and Bjørgelva both commenced production and were connected to the grid in December. The two hydro- power plants are now in the commissioning period and the plan is a handover to Cloudberry in the first half of 2021. Realized Power prices A warmer than normal winter and general business slowdown due to the Covid-19 pandemic led to lower power demand, resulting in lower prices. Higher than normal reservoir levels also contributed to low electricity prices, particularly during first half of the year. Low power prices continued in the third quar- ter, whilst prices increased in the fourth quarter. For the full year, the average system price ended at NOK 11.5/kWh, the lowest level since 2000. Cloudberry Production has a fixed power price through a power purchase agreement (PPA) covering about 2/3 of Cloudberry’s fully owned production in 2020. M&A activities 2020 was a very active year for Cloudberry, being involved in several merger and acquisition (M&A) processes. In June, an agreement to purchase a 34% ownership in a portfolio of 14 producing hydropower plants (including a power purchase agreement) was entered into. Financial close was achieved in the fourth quarter. In September, an agreement to acquire 100% ownership of Åmotsfoss Kraft AS, a hydropower plant with expected 22,5 GWh of annual production was signed. The power plant is currently under construction and is expected to be handed over after commissioning in the third quarter of 2021. In December, three purchase agreements were entered into: · Acquisition of 15% of Odal Vindkraftverk AS, a windfarm with expected annual production of 526 GWh. The transaction included an option to increase the ownership to 33,4% before 30 June 2021. The windfarm is currently under construction, and the first turbines are expected to commence operation in fourth quarter 2021. · Acquisition of 100% of Selselva Kraft AS (part of the 40 GWh hydro portfolio), a hydropower plant with expected annual production of 20 GWh. The plant is in operation. Financial close was achieved in January 2021 (see subsequent events). · Acquisition of 100% of Skåråna Kraft AS and two undisclosed hydropower plants (part of the 40 GWh hydro portfolio). The power plants are under construction and are expected to commence operation in fourth quarter 2021. Financial close is expected during 2021. See note 29 subsequent events. Cloudberry Develop Cloudberry Develop was established in 2008 and has a significant on- and offshore development portfolio with renewable assets in Sweden and Norway. Since inception, ten projects have been fully developed and sold to infrastructure investors and European insurance companies. Going forward Cloudberry has the option to either sell or maintain in-house projects for long-term cash flow. Larger projects may be farmed down in order to diversify risk. Cloudberry Develop, segment 2020 Revenue NOK million - EBITDA NOK million -8 Construction permits MW 151 Backlog MW 370 This segment develops hydro and wind power assets from early stage to obtaining construction permits. Assets developed are then transferred to Cloudberry Production or wholly or partly sold. Construction is normally outsourced to local partners. Cloudberry Develop is focused on growing and improving the Nordic backlog of renewable pro- jects. To ensure progress, two new employees were