ELtra 2004 annual report

2
On January 1, 2005, the company Energinet.dk was
established by the Danish state. In future, Energinet.dk
will be responsible for system operation as well as both
the natural gas transmission grids and the electricity
transmission grids in Denmark. The company was
formed following a merger between Eltra (Western
Denmark), Elkraft (Eastern Denmark) and Gastra.
The background for the establishment of Energinet.dk
is a political desire to promote efficient competition
within the electricity and natural gas markets through
a separation of the ownership of, on the one hand, sys-
tem operation and transmission activities and, on the
other hand, production and trading activities.
As part of a broad political compromise to address a
number of energy-political issues, most political par-
ties represented in the Danish Parliament on March
29, 2004 therefore agreed that all system operation
and transmission activities should be undertaken by
a state-owned enterprise. It was subsequently decid-
ed to include natural gas activities in Energinet.dk.
With the establishment of Energinet.dk, Danish
politicians have ensured that system operation and
the overall transmission of both electricity and nat-
Eltra - Part of Energinet.dk
The Annual Report Illustrations
The "Konti-Skan 1" interconnection between
Northern Jutland and Sweden created an internatio-
nal stir when it was opened in 1965. The technology
(high-voltage direct current) was rather new and so
far untested in the chosen size. A back-breaking com-
missioning period followed. But after a couple of
years with innumerable outages on the interconnec-
tion and several incidents of destruction of the sub-
marine cable to Sweden, the operation calmed down.
Since then, the interconnection has played a very
important part in the comprehensive energy exchange
between the Nordic countries.
After 40 years in service, facilities at the substation
are now technically outdated and thus ready to retire.
And yet: As a Phoenix, the system appears in the
spring of 2005 in a technically redesigned/renewed
and somewhat larger version (380 MW compared to
270 MW so far) after a few years of work.
Photographer Jørgen Schytte, Copenhagen, paid a
visit to the substation in Vester Hassing in mid-March
2005 and captured subjects from old and new facili-
ties alike.

3
ural gas will in future be under public ownership,
clearly separated from the commercial interests
affiliated with production and trading. Through this
separation of ownership, a basis is created for effi-
cient competition in the Danish energy sector, while
the security of supply for the Danish people is guar-
anteed by a publicly owned enterprise.
Energinet.dk is established as an independent public
undertaking. Energinet.dk will own, operate and devel-
op the natural gas transmission grids and the electricity
transmission grids, while also being in charge of system
operation. Furthermore, the undertaking will ensure
coherent and holistic planning which must form the
basis of an assessment of environmental issues and
market conditions, the security of supply and energy
conservation as well as research and development in
connection with an environmentally friendly and
secure electricity and gas system. Finally, Energinet.dk
will acquire and operate regional electricity trans-
mission grids and gas distribution grids, which in the
event of a sale must be sold to the state.
Energinet.dk will be domiciled in the Triangle Region
Denmark. Initially, activities will be maintained in
Birkerød, Skærbæk and Ballerup, which means that
following the merger, Energinet.dk will continue to
pursue activities in both Eastern and Western Denmark.
Energinet.dk will have approx. 450 employees and an
annual turnover of more than DKK 10 billion.
Energinet.dk - Main Responsibilities
As system operator, Energinet.dk will be responsible
for four main tasks:
● Ensuring the physical operation of the system in
the short and long term
● Administering market access and planning market
function
● Planning, developing and operating the overall trans-
mission grid and the international interconnections
● Ensuring that the electricity and natural gas systems
live up to the energy policies pursued in Denmark.
A special challenge for Energinet.dk is the efficient
incorporation of wind power into the overall energy
system.
An important element in ensuring an efficient energy
market is a more expedient coupling with the
German market as well as the establishment of addi-
tional transmission capacity between Denmark and
our neighbouring countries.
As regards natural gas, the dominance of DONG has
increased the need to focus on the competitive situa-
tion in the Danish natural gas market, including the
introduction of market-driven gas pricing. At the
end of 2003 Gastra initiated the appointment of a
taskforce, GasPool 2004, in collaboration with Nord
Pool AGA with a view to assessing the scope for
establishing a Danish natural gas exchange. Such an
exchange would represent a significant contribution
to the further development of a liberalised Danish
natural gas market.
Planning, constructing and operating transmission
grids, including international interconnections, are
major tasks. Denmark has, as the only country in
Europe, two different synchronous electricity sys-
tems: Western Denmark is physically part of the con-
tinental UCTE system, while Eastern Denmark is
integrated into the Nordic electricity system Nordel.
Expanding transmission capacity is an important
prerequisite for an efficient market and for the con-
tinued incorporation of new offshore wind farms.
Under the auspices of Nordel, a number of construc-
tion projects running into billions of kroner are
being planned. In Denmark, particular focus is on
the establishment of a link across the Great Belt and
the expansion of the Skagerrak connections.
Finally, Energinet.dk is responsible for ensuring that
the energy system lives up to the energy policies
pursued in Denmark. This involves, among other
things, the implementation of sophisticated systems
for system operation, monitoring and control, allow-
ing the handling of considerable volumes of wind
power. Energinet.dk will launch and support rele-
vant research and development projects concerning
renewable energy.
Read more at www.energinet.dk.
Peder Østermark
Andreasen, CEO of
Energinet.dk
Niels Fog, Chairman
of Energinet.dk

4
Eltra’s Last Year of Operation 5
Management’s Report 7
Intellectual Capital Resources 11
Corporate Information 12
Legislation 14
Cooperative Bodies 16
Review of Operation 17
Highlights for the Western Danish
Power System 2004 28
2004 in Retrospect 30
Accounts 2004 32
Statement of Board of Directors and Management 46
Auditors’ Report 47
Accounting Policies 48
Profit and Loss Account 51
Assets 52
Liabilities 53
Changes in Net Capital 54
Cash Flow Analysis 54
Notes 55
Owners of Eltra amba 65
Table of Contents

5
On March 29, 2004 a com-
promise was reached
between the Danish govern-
ment and the industrial
organisation Elfor concern-
ing the capital affairs of the
local grid companies. As
part of the compromise, the
rule concerning the tying-
up of approx. half of the
grid companies’ capital was
abolished. In return, the
Danish government wanted
the transfer - free of charge
- of the two transmission
system operators Eltra and
Elkraft, which were owned
by the local grid companies.
The Danish Minister of
Economic and Business
Affairs stated that his desire
was not motivated by dis-
satisfaction with the compe-
tences, professionalism,
independence or autonomy
of the two companies.
On the contrary. The reason
was political concern about
the uncertainty which
might arise concerning the
infrastructure in connection
with any future mergers
and acquisitions among the
owners.
On June 4, 2004 a large
majority of the members of
the Danish Parliament
adopted the March compro-
mise by passing the neces-
sary legislation, which
included a number of
amendments to the Danish
Electricity Supply Act (Lov
om Elforsyning), the Danish
Heat Supply Act (Lov om
Varmeforsyning) and the
Danish Natural Gas Supply
Act (Lov om Naturgas-
forsyning).
On December 14, 2004 the
Danish Act on Energinet
Danmark (Lov om Energinet
Danmark) was passed by a
massive majority of mem-
bers of the Danish
Parliament. A total of 108
members voted in favour,
none against, while one
member abstained.
Under the new act it would
be possible for the company
to subsequently change its
name. That happened already
on January 6, 2005 when the
new company’s Supervisory
Board approved Energinet.dk
as the official name.
The transfer of Eltra amba to
the Danish state was consid-
ered by Eltra’s Committee of
Representatives at ordinary
meetings held on April 28
and November 24. However,
the decision was solely a
matter between the owners -
the local grid companies in
Western Denmark - and the
Danish government. By the
expiry of the deadline on
December 18, the agreement
had been signed by all the
parties.
At its meeting in November,
the Committee of
Representatives approved
the budget for 2005 cover-
ing what had so far been
Eltra’s activities in Western
Denmark.
On January 6, 2005 Eltra’s
Articles of Association were
amended to reflect the new
status of the Danish
Minister of Business and
Economic Affairs as the
sole owner of Eltra amba.
On the same day, the
Supervisory Board of
Energinet.dk took over as
Board of Directors of Eltra,
which will for the time
being be continuing its
operations unchanged.
The necessary legal and
financial formalia are
expected to be in place for
Energinet.dk to be able to
take over by mid-May with
retrospective effect from
January 1, 2005.
Eltra’s Last Year of Operation

7
Eltra’s Annual Report con-
sists of separate accounts
for each of Eltra’s authori-
sations as a system operator
and transmission company.
The system operation
accounts are self-financing
accounts. This means that
all necessary costs can be
included in the tariffs. Any
excess revenue or deficits
are included in the tariffs
for the coming years.
The system operation
accounts are divided into
four separate accounts with
their own excess revenue/
deficit for each of the tariffs
of the system operator: PP
tariff (page 33), PSO tariff
(page 36), grid tariff (page
40) and ancillary services
tariff (page 43). The PP tariff
disappears in 2005 as the
consumers’ obligation to
purchase environmentally
friendly electricity is abol-
ished. Any excess revenue
from previous years’ PP tar-
iff is included in the PSO
tariff for 2005.
Transmission is subject to
revenue caps which are deter-
mined and announced by the
Danish Energy Regulatory
Authority and which stipu-
late maximum income levels.
The accounts show either
excess revenue or a deficit
from Eltra’s activities as a
transmission company.
Tariffs
Eltra changed its tariffs
twice in 2004. On April 1,
the PSO tariff was reduced
from DKK 0.04 per kWh to
0.029 per kWh. The reason
was that the Danish Minister
of Business and Economic
Affairs, as part of a follow-
up on the power station
agreement, abolished subsi-
dies for utility-owned wind
turbines which had been
connected to the grid prior
to January 1, 2000.
At the request of the Danish
Energy Regulatory Authority,
the system operator’s oper-
ating costs will, as from
2004, be divided between a
grid tariff and an ancillary
services tariff. Initially, the
grid tariff was DKK 0.004
per kWh. On September 1, it
was increased to DKK 0.01
per kWh. The increase was
primarily attributable to
lower “congestion rent” from
Nord Pool Spot.
At the beginning of the year,
the ancillary services tariff
was DKK 0.015 per kWh. On
September 1, it was increased
to DKK 0.022 per kWh. The
reason for this increase was
higher reserve capacity
costs than budgeted for.
By the end of the year, the
accumulated deficit in the
tariffs of the system oper-
ator amounted to DKK 95
million. The entire deficit
has been included in the
tariffs for 2005.
Transmission
Transmission earned a profit
on ordinary activities before
tax of DKK 36 million. The
profit includes a profit of
DKK 3 million from the sub-
sidiary Eltra 409. Relative to
the year before, this repre-
sents a fall of DKK 109 mil-
lion. The fall is primarily
attributable to the decision
by the Board of Directors
not to utilise the entire rev-
enue cap announced by the
Authority as well as to the
fact that in 2003 revenue
exceeded the cap.
Relative to the budget for
2004, the profit before tax
was DKK 17 million lower
on account of the calcula-
tion of too high a rate of
return on net assets in 2003.
The budget for 2005 shows
a profit before tax of DKK
102 million.
Allocation of Profits
It is proposed that Eltra’s
profit of DKK 25 million be
used for consolidation pur-
poses.
The return on the share cap-
ital of DKK 18.6 million
amounts to 6.2 per cent.
Eltra Maintains High Rating
In October Eltra was placed
on “positive outlook” by
Standard & Poor’s. This
means that the fundamental
AA rating was unchanged,
but also indicates that any
future change would be
positive.
Standard & Poor’s gives as
the reason for its positive
assessment the fact that
Eltra operates under a 20-
year authorisation in a
monopoly market, that the
form of regulation is trans-
parent and supportive, that
Eltra owns the transmission
grid in Western Denmark
and that Eltra’s finances are
healthy.
However, Standard & Poor’s
also highlights a few weak-
nesses: A risk of a lower
revenue cap and a risk of
heavy investments on
account of political deci-
sions as well as a risk of
losses on counterparties in
the real-time market.
Standard & Poor’s believes
that the merger into Energi-
net.dk may have a positive
effect on the company’s rat-
ing, and that the transfer of
Eltra’s rights and obligations
to Energinet.dk will increase
its creditworthiness.
Financing
Eltra did not raise any
long-term loans in 2004. At
the end of 2004, Eltra’s loan
portfolio was DKK 2,074
million, all converted into
Danish kroner. Eighty-five
per cent of the portfolio is
made up of floating-rate
loans, while 15 per cent is
fixed-rate loans. The effect-
ive borrowing rate in 2004
was as low as 2.36 per cent.
In 2002, Eltra raised a loan
from the European
Investment Bank of USD
150 million. Thanks to the
weak US dollar, Eltra realised
an exchange gain of DKK
454 million on this loan,
which was offset by a corre-
sponding loss on financial
instruments as the loan had
been hedged when arranged.
In 2004 Eltra was a busy
user of the Swedish
Commercial Paper
Programme (CP), among
other things on account of
the year’s deficit. In the
course of the year, Eltra
issued commercial papers
totalling SEK 4.4 billion
with an average size of
SEK 80 million and a dura-
tion of 3-6 weeks. At the end
of 2004, Eltra had outstand-
ing CPs of SEK 550 million.
The average interest rate for
these short-term papers was
between Stibor -0.10 per cent
and Stibor -0.13 per cent.
At the end of 2004, DKK
2.01 billion of the total
approved long-term bor-
rowing limit of DKK 2.6
billion had been utilised.
The short-term borrowing
limit for overdraft and
back-up facilities (DKK
700 million) was unused.
Special Risk Areas
Financial risks:
Eltra’s daily cash flow is
Management’s Report

8
controlled by powers of
attorney etc. approved by
Eltra’s Board of Directors.
With the exception of special
rules for powers of attorney,
the raising of loans, credits
and financial instruments
are approved under a finan-
cial management strategy
considered by the Board of
Directors once a year.
Eltra’s financial management
strategy must be cautious,
i.e. tight frameworks have
been fixed for open positions.
The key elements of the
strategy are: Counterparties
must have an AA(-) rating.
Financial instruments must
only be used for hedging. At
least 25 per cent of the loan
portfolio must be floating-
rate loans. At least 60 per cent
of Eltra’s foreign exchange
risk must be hedged in
Danish kroner. Continual
reports must be submitted to
the Board of Directors etc.
Business risks:
As system operator, Eltra has
a number of customers with
a theoretical risk of loss.
Eltra has demanded provision
of guarantees for the players
that have been approved as
balance-responsible market
players. All market players
must provide a bank guaran-
tee for an amount correspond-
ing to one month’s debt to
Eltra, however, at least DKK
2 million. As transmission
operator, Eltra does not
usually pay for services
until they have been sup-
plied. A certain amount is
usually held back until the
service has been finally
approved. In cases where
products must be manufac-
tured to order, e.g. cables, the
supplier typically demands a
prepayment of approx. 30 per
cent. In such cases, Eltra
credit-rates the suppliers.
After the End of the
Financial Year
On January 1, 2005, Eltra
was transferred to the Danish
state, and in the course of
spring 2005 the company will
be merged with Elkraft and
Gastra to form Energinet.dk
with retrospective effect from
January 1, 2005. Until this
happens, Eltra amba con-
tinues, but with the state as
sole owner. Energinet.dk is
subject to the provisions of
the Danish Financial State-
ments Act for Class D com-
panies. This is not expected
to affect the financial stand-
ing of the company in 2005.
Nord Pool Spot AS
In 2004, Nord Pool Spot AS,
which is co-owned by Nord
Pool ASA and the system oper-
ators in Norway, Sweden,
Finland and Denmark,
achieved an Elspot turnover
of 165.7 TWh, up 41 per cent
on the year before. Elspot’s
market share relative to total
electricity consumption in
the Nordic market area also
grew considerably - from 31
per cent to 43 per cent. Nord
Pool Spot AS returned a
profit of NOK 28.1 million
(2003: NOK 21.8 million).
In 2004, a total of 37 new
customers started trading at
Nord Pool Spot AS. The total
number of customers was 270.
With a new settlement sys-
tem which was introduced in
April 2004, settlements are
now daily. This has resulted
in a considerable reduction
in debtors and creditors, and
it has been possible to reduce
requirements as regards the
security to be furnished by
customers. So far, the consid-
erable outstanding amounts
have, according to Norwegian
legislation, prevented the
payment of dividend to own-
ers. For 2004, it has been pro-
posed that dividend of 10 per
cent of the profit be paid,
corresponding to NOK 2.9
million to Eltra.
At the end of 2004, Nord
Pool Spot AS had 25
employees working at the
head office in Oslo and at
the offices in Stockholm,
Helsinki and Fredericia.
Head of Market Division
Peter Jørgensen is Eltra’s
representative on the Board
of Nord Pool Spot AS.
ETSO
Eltra is a member of the
organisation of European
Transmission System
Operators (ETSO). ETSO,
the coordinating body of the
system operators in relation
to the EU, is primarily
involved in the development
of the European electricity
market and the long-term
security of supply in Europe.
ETSO continues to work
intensely to improve the cur-
rent scheme on financial
compensation for the cost of
transit between system oper-
ators. Another important
field of work is the develop-
ment of efficient methods for
handling congestion in the
complex European transmis-
sion grid. The security of
supply has been the object of
increasing attention in recent
years and is one of ETSO’s
special fields of work. Eltra
plays as active role on several
ETSO taskforces.
Eltra and UCTE
In 2004, Eltra applied to
become a full member of the
UCTE, which is a formalised
cooperative body for the
coherent a.c. system on the
European Continent, includ-
ing the grid in Western
Denmark. Eltra has for some
years been an associated
member of the organisation,
but has not had full access to
the work within the UCTE.
This has been of less signifi-
cance for as long as the col-
laboration primarily consisted
of non-binding recommenda-
tions.
In recent years, these recom-
mendations have, however,
been replaced by policies
concerning operational col-
laboration which are then
translated into sets of agree-
ments between the countries
involved.
Consequently, Eltra is now
applying for full member-
ship. As a member of the
UCTE, Eltra must increase
its efforts within the UCTE,
but this will probably have a
positive impact on the daily
relations across the Danish-
German border. In terms of
security of operations,
Western Denmark is heavily
dependent on the a.c. con-
nection to the UCTE system.
The stronger commitment to
the UCTE will not affect
Eltra’s relations with Nordel.
Deficits in the Tariffs of the System Operator
Amounts in DKK 1,000
Accumulated deficit PP PSO Ancillary Grid Total
Total deficit year-end 2002 79,072 -291,600 -77,963 -225,490 -515,981
Deficit in 2003 -23,414 225,071 45,791 59,895 307,343
Total deficit year-end 2003 55,658 -66,528 -32,172 -165,596 -208,638
Deficit in 2004 -149,539 110,246 133,615 209,082 303,405
Total deficit year-end 2004 -93,880 43,717 101,443 43,486 94,766

9
Accounts 2004 by Authorisation Area
Amounts in DKK 1,000 System operator Transmission Eltra
PP sales 4,661,677 4,661,677
PSO revenue 663,321 663,321
Grid sales 455,643 455,643
Ancillary services sales 432,427 432,427
Deficit for the year 303,405 303,405
Payment for 400 kV and international interconnections* 0 228,637 0
Net turnover* 6,516,472 228,637 6,516,472
Work performed on Eltra’s account 13,910 38,223 52,133
Other operating revenue 0 17,202 17,202
Activity for the year 6,530,382 284,062 6,585,807
Total costs relating to electricity purchase 4,714,370 0 4,714,370
Gross profit 1,816,012 284,062 1,871,437
Payment for 400 kV and international interconnections* 228,637 0 0
Other external operating costs 1,437,307 36,246 1,473,553
Wages, salaries and pension costs 68,094 58,524 126,618
Depreciation/amortisation of fixed assets 45,580 134,423 180,003
Operating profit/loss 36,395 54,869 91,264
Income from subsidiaries 0 2,505 2,505
Financial income 0 2,669 2,669
Financial costs 35,818 24,187 60,005
Profit/loss on ordinary activities before tax 577 35,856 36,432
Tax on ordinary activities 173 11,215 11,388
Net profit for the year 404 24,641 25,045
Appropriation statement:
Retained earnings 23,291
Net revaluation according to the equity method 1,754
Profit from sideline activities 0
Net profit for the year 25,045
*The Transmission Division makes all its services available to the system operator in return for payment. The total revenue from the 400 kV and the international intercon-
nections, including the profit from transmission activities, has thus been charged to the system operator’s profit and loss account under the item Payment for 400 kV and
international interconnections. This internal payment has been eliminated in the total profit/loss for Eltra.

10
Questions for Nordel
In September the Nordic
Ministers for Energy in-
creased focus on developing
the joint Nordic electricity
market with the Akureyri
declaration: “Further and in-
creased cooperation within
the Nordic electricity market”.
The declaration states that
the Nordic electricity market
is a concrete example of a
well-functioning regional
electricity market which is
unique from a European as
well as a global point of view.
Before March 2005, the
Nordic Council of Ministers
has therefore asked the sys-
tem operators in the Nordic
countries to prepare reports
on:
- The joint handling of sys-
tem operations in the
Nordic countries, including
- The nature of system oper-
ations and the division of
responsibilities between
system operators and mar-
ket players
- Joint power model
- The development of ques-
tions concerning system
operations in the Nordic
countries
- Joint grid investments in
the Nordic countries.
Nordel immediately started
work, which is organised into
four projects. Eltra partici-
pates in all the groups. The
work is coordinated via
Nordel’s Planning, Operations,
Market committees, and the
results will be presented to
the Nordic Council of
Ministers’ Electricity Market
Group in March 2005.The
Akureyri declaration was,
e.g., inspired by Nordel’s
study concerning grid expan-
sion across five priority cross-
sections from spring 2004. It
would be a positive step if the
Nordic countries could agree
on a joint financing model
with a view to expanding the
transmission grid. Particular
focus is directed at the con-
gestion rent received by the
system operators when con-
gestion occurs in the grid.
Infrastructure Plan
One element in the energy-
political agreement of March
29, 2004 was a national action
plan for the future Danish
infrastructure towards 2010
with a view to increasing the
security of supply, creating
well-functioning market
competition and incorporat-
ing renewable energy.
The action plan comprises
major new transmission con-
nections in Denmark, includ-
ing a power link between
Western and Eastern Denmark,
the possible expansion of the
high-voltage grid following,
for example, the grid con-
nection of wind farms and
the expansion/construction
of new international inter-
connections. Eltra has in col-
laboration with Elkraft
System and the Danish Energy
Regulatory Authority been
involved in the work on the
national action plan, which
is expected to be considered
by the Danish Parliament in
the course of spring 2005.
Technical Grid Committee
West
In spring, Eltra’s manage-
ment completed a series of
regional meetings with the
local grid companies in
Western Denmark on the
establishment of Technical
Grid Committee West, a hub
for a formalised collabora-
tion between the system
operator, regional grid com-
panies and local grid compa-
nies concerning the operation
and development of the com-
plex electricity system in
Western Denmark. The com-
mittee is expected to be
appointed in spring 2005.
Emergency Matters
(new requirements/tasks)
Since autumn 2001, the sys-
tem operators have played
the role of coordinator of the
civil emergency preparedness
within the electricity sector.
This has meant, among other
things, that Elkraft and Eltra
have taken turns to hold the
chairmanship of the Danish
Electricity Companies’ Pre-
paredness Committee, while
also taking part in national
emergency preparedness activ-
ities in collaboration with the
Danish Energy Authority, in-
cluding the preparation of
the national vulnerability
survey published in January
2004. Finally, the companies
have assisted the Danish
Energy Authority in connec-
tion with the Nordic emer-
gency preparedness activities.
The tasks are undertaken in
pursuance of Section 85 b of
the Danish Electricity Supply
Act. Following the amend-
ment of the act in June 2004,
this section now includes a
provision concerning the
inspection of the emergency
preparedness activities of the
companies engaged in emer-
gency preparedness plan-
ning, including local grid
companies and production
companies with the requisite
authorisations. Among other
things, the provision author-
ises the minister to lay down
rules concerning the emer-
gency preparedness and
inspection activities, includ-
ing rules stipulating that the
inspection of the companies’
emergency preparedness
activities must be carried out
by the system operators. The
system operators’ own emer-
gency preparedness planning
is monitored by the Danish
Energy Authority.
The government order con-
cerning emergency prepared-
ness in the electricity sector
comes into force on February
1, 2005.

11
A Year of Focus on Leadership
2004 was in many ways a
year in which the manage-
ment showed its mettle. The
political announcement in
March concerning the immi-
nent merger with Elkraft
meant that Eltra’s manage-
ment was faced with a situ-
ation of considerable uncer-
tainty surrounding coming
changes to the company, at
the same time as having to
maintain their focus on the
competent and reliable day-
to-day operation of the elec-
tricity system in Western
Denmark.
Eltra’s internal management
development programme
with four different lines was
implemented in earnest. The
programme consists of a
number of obligatory, inter-
nal modules supplemented by
external modules which are
selected in accordance with
the needs and requirements
of the individual managers.
The four lines are:
1. “Pre-manager”,
which makes it possible
for a group of young
employees, through per-
sonal clarification, to
establish whether they
wish to pursue a career as
a manager or specialist in
their working lives.
2. “The new manager”.
The target group is
employees with less than
three years of managerial
experience.
3. “The experienced manager”.
The course is designed for
managers with more than
three years of experience.
4. “The strategic manager”.
The target group is man-
agers with strategic
responsibility.
Note:
“Gross” shows the total number of employees at Eltra as at December 31.
“Net” is the gross figure less protective jobs and flexible jobs, trainees and
substitutes.
Intellectual Capital Resources
Human Capital
2002 2003 2003 2004 2004
Gross Net Gross Net
Number of employees 243 253 236 248 230
Gender distribution
Male 157 166 159 163 156
Female 81 87 77 85 74
Full-time
equivalent 237 247 235 244 229
Gender distribution
Male 156 164 159 162 156
Female 81 83 76 82 73
Age distribution (per cent)
– 24 years 1 2 0 2 0
25 – 34 years 16 13 12 11 10
35 – 44 years 28 30 31 31 33
45 – 54 years 29 28 29 28 28
55 – 64 years 26 27 28 27 28
65 years 0 0 0 1 1
Seniority (per cent)
– 5 years 31 29 24 24 21
5 – 10 years 15 19 21 23 24
10 – 15 years 11 10 11 8 8
15 – 20 years 11 12 12 14 14
20 years 32 30 32 31 33
Staff mix (per cent)
Managers 9 10 11 10 11
Academics 28 26 28 26 28
Commercial and
clerical employees 19 18 20 18 19
Technicians 23 23 24 23 25
Skilled and
unskilled workers 21 23 17 23 17

12
Corporate Information
Ownership
Until December 31, 2004, Eltra was owned by 43 local grid
companies in Western Denmark. The members’ shares of
the net capital are the contributed capital as well as a pro-
portionate share of the additional assets of the limited li-
ability co-operative - calculated in proportion to the mem-
bers’ consumption of kWh. See owners and owner shares
on page 65.
As at January 1, 2005, all 43 local grid companies trans-
ferred their ownership shares to the Danish state, and as
from the beginning of 2005, Eltra is thus wholly owned by
the Danish state.
Board of Directors (until
January 6, 2005)
Mr Hans Schiøtt, Lystrup (Chairman)
Mr Tage Thomsen, Holstebro (Deputy Chairman)
Mr Jens-Ove Simonsen, Jebjerg
Mr Leo Mikkelsen, Hjørring
Mr Peder Kolby Pedersen, Vejle
Mr Niels Rasmussen, Odense
Mr Kresten Philipsen, Aabenraa
Mr Martin Glerup, Aars
Ms Helga Moos, Member of the Danish Parliament, Nordborg
Supervisory Board (from
January 6, 2005)
Mr Niels Fog, Vordingborg (Chairman)
Ms Birgitte Kiær Ahring, Hørsholm
Mr Erik Dahl, Kgs. Lyngby
Mr Niels Arne Gadegaard, Odense
Mr Poul Erik Morthorst, Roskilde
Mr Peter Møllgaard, Værløse
Ms Birgitte Nielsen, Copenhagen Ø
Mr Hans Schiøtt, Lystrup
Employee representatives (until ordinary elections
on April 6, 2005):
Mr Søren Juel Hansen, Birkerød (Gastra)
Mr Thomas Goth Hartmann, Copenhagen Ø (Elkraft)
Ms Lone Thomhav, Fredericia (Eltra)
Management
Mr Georg Styrbro, Chief Executive Officer (until March 1, 2005)
Mr Peder Ø. Andreasen, Chief Executive Officer (from
March 1, 2005)
Management Team
Mr Georg Styrbro, Chief Executive Officer (until March 1,
2005)
Mr Peder Ø. Andreasen, Chief Executive Officer (from
March 1, 2005)
Mr Paul-Frederik Bach, Deputy Director
Mr Carsten Jensen, Head of Transmission Division
Mr Jørgen Munk Hansen, Chief Financial Officer
Mr Per Sørensen, Head of Operation Division
Mr Peter Jørgensen, Head of Market Division
Mr Per Andersen, Head of Information
Ms Hanne Berg, Head of Human Resources
Auditors
KPMG, C. Jespersen, State Authorised Public Accountants
CVR no. 25 33 57 75
7th and last year of operation
January 1 - December 31, 2004

14
- Consumers living on small islands without grid connec-
tions to the coherent grid can be offered electricity at the
same prices as other electricity consumers. The system
operator must cover the additional price.
- Two new offshore wind farms of 400 MW in all must be
constructed.
- A number of older wind turbines are replaced by newer
and larger turbines.
- The consumer’s obligation to purchase wind power and
local CHP production is abolished, and as from January
1, 2005, consumers may purchase all their electricity in
the market.
- The settlement for environmentally friendly electricity is
converted into financial support dependent on the mar-
ket price. The total settlement price paid to the genera-
tors is basically unchanged. The power stations are given
the option of participating in the reserve and regulating
power market.
Government order no. 1367 of December 15, 2004 concern-
ing subsidies for local CHP etc.
The purchase obligation and payment according to the
three-rate tariff are abolished after January 1, 2005 for
units in excess of 10 MW. These units will in future sell
their energy to the market themselves. Instead, the units
are given financial support (basic amount) amounting to
the same level of support as under the three-rate tariff.
The new support is conditional upon the units being on
stand-by and fully available to the electricity market.
Units between 5 and 10 MW can continue to use the three-
rate tariff for another two years. Units of under 5 MW can
continue to use the three-rate tariff indefinitely. However,
all units are free to transfer to the new scheme immediately.
ing grid connection of wind turbines and subsidies
The order primarily concerns the new scrapping scheme for
old wind turbines with a capacity of under 450 kW. Up to a
total of 175 MW can be scrapped in Denmark as a whole
before December 15, 2009. A scrapping certificate entitles
the holder to a subsidy of DKK 0.12 per kWh for approx. 5
years. In consequence thereof, new wind turbines with a
combined capacity of approx. 400 MW are being erected.
ing subsidies for electricity production and other RE units
Existing totally RE units go from three-rate tariff plus a
subsidy of DKK 0.10 or DKK 0.27 per kWh to a fixed
price of DKK 0.60 per kWh for a period of 20 years from
the time of grid connection, however, at least 15 years from
January 1, 2004.
New biogas plants receive DKK 0.60 per kWh for 10 years,
and then DKK 0.40 per kWh for another 10 years.
Existing units firing RE fuels and other fuels (primarily
gas) receive a subsidy of DKK 0.26 per kWh for 20 years
from the time of grid connection, however, at least 15 years
from January 1, 2004. New co-fired units receive a subsidy
for the RE share of DKK 0.26 per kWh for a period of 10
Legislation and Decisions
Danish Act on Energinet.dk
Purpose: to promote efficient competition in the electricity
and natural gas markets through separating the ownership
of system operators and transmission from production and
trading. System operation and transmission will in future
be handled by a state-owned enterprise. Independent pub-
lic undertaking:
- Merger of Gastra, Elkraft Transmission, Elkraft System
and Eltra as from January 1, 2005.
- Tax-exempt merger for the owners.
- Energinet.dk parent with two subsidiaries as operating
companies for electricity and natural gas.
- The company’s finances are separate from those of the
state. The company cannot disburse dividend or net capi-
tal to the owner.
- Energinet.dk can include the necessary costs in the price
(break-even principle).
- The National Audit Office of Denmark acts as auditors
for Energinet.dk.
- Supervisory Board consisting of 11 members. Eight mem-
bers appointed by the owner - 2 of them following rec-
ommendation of Elfor. Furthermore, 3 members elected
by and from among employees.
- Advisory stakeholder forum representing a wide selec-
tion of stakeholders.
Amendments to the Danish Electricity Supply Act
As a consequence of the political agreement of March
2004, a number of amendments were introduced to the
Danish Electricity Act in spring 2004. The most important
changes affecting the system operator are as follows:
- The capital issue is solved by doing away with the con-
cepts of free and tied net capital and introducing a sim-
pler price regulation of the local and regional grid com-
panies. In future, the tariffs of these companies must be
regulated in accordance with general price trends.
- The local grid companies transfer their ownership shares
in Elkraft and Eltra to the state.
- The Danish state, represented by Energinet.dk, is granted
a preemptive right and obligation to purchase the
132/150 kV grid. The intention is for Energinet.dk to take
over the regional transmission grid - in step with the
wishes of the owners. The preemptive right to purchase
is, among other things, triggered if more than 50 per cent
of the ownership shares in a local grid company which
owns the transmission grid change ownership. The price
may be fixed by a valuation committee according to the
rules governing expropriation.
- Financial aspects, emergency preparedness and the need
for competition may in future be included in the assess-
ment of the need to expand the transmission grid.
- A national action plan for the future infrastructure must
be prepared.
Legislation

15
Complaint concerning the Grid and Ancillary Services
Tariffs of the System Operator
The Energy Regulatory Authority has rejected a complaint
from the Danish Association of End Users of Energy (FSE)
that Eltra and Elkraft System’s grid and ancillary services
tariffs are not distributed evenly on consumption and pro-
duction. The Danish Energy Regulatory Authority referred
to the fact that Eltra and Elkraft are working with the other
Nordic system operators to harmonise the feed-in tariffs.
FSE has appealed against the Danish Energy Regulatory
Authority’s decision to the Energy Complaints Board.
Complaint Upheld but Must Give up Claim
Eltra’s complaint concerning Energigruppen Jylland’s spe-
cial settlement prices for biogas and biomass-fired CHP
units has been upheld. However, the decision applies only
from the time of submission of the complaint (February
2001). Eltra appealed against this decision to the Energy
Complaints Board. The Board, however, upheld the
Authority’s decision, which means that Eltra must give up
a claim for DKK 467,000 plus interest against Energigrup-
pen Jylland.
Rent at Horns Rev
On June 24, 2004 the Energy Complaints Board decided
that Elsam should not pay rent for the use of Eltra’s trans-
former platform at Horns Rev. In its decision, the Board
specifies that Eltra is bound by an old promise of rent
freedom. This promise was made when the entire Horns
Rev project had to be financed via the PSO tariff.
However, subsequent amendments to the Danish
Electricity Supply Act make this impossible. Eltra must
now transfer the costs to the transmission accounts.
Complaint from DV-Energi
The Danish Energy Regulatory Authority has decided that
Eltra’s administration charge for the sale of electricity
from wind turbines on market terms is not too low.
Agreement with NV Net Approved
The Energy Complaints Board has decided that Eltra can
pay NV Net’s costs relating to the renovation of the 150 kV
grid in connection with the establishment of the 400 kV
line between Trige and the Nordjyllandsværket power sta-
tion. This overrides the decision previously made by the
Danish Energy Regulatory Authority.
Decisions concerning Revenue Caps
In 2004, the Danish Energy Regulatory Authority made
two decisions concerning Eltra’s revenue cap. The revenue
cap was increased by DKK 5 million in respect of Horns
Rev, while individual efficiency requirements of DKK 2
million were made. The decisions subsequently became
superfluous as the Danish Energy Authority introduced a
transitional order concerning revenue caps which came
into force with retrospective effect from January 1, 2004.
Elsam was Right
The arbitration case concerning payment for regulating
power has now been concluded. The arbitration tribunal
held that Elsam’s pricing of regulating power was in com-
pliance with the agreement made. The decision did not
affect the accounts as Elsam’s pricing had been applied
during the hearing of the arbitration case.
Cases before the Danish Energy
Regulatory Authority and the
Energy Complaints Board
years, and then DKK 0.06 per kWh for another 10 years.
A national ceiling has been fixed of 8 PJ for biogas plants
which can receive subsidies over and above the electricity
price (The ceiling represents a doubling of current capacity).
The system operator administers the allocation of subsi-
dies, ensuring that the ceiling is complied with.
Government order no. 1016 of October 18, 2004 concerning
payment for consideration by the authorities in pursuance
of the Danish Electricity Supply Act
The Danish Energy Authority reduces Eltra’s payments to the
Danish Energy Regulatory Authority from DKK 0.0011 per
kWh to DKK 0.00082 per kWh in 2004. This results in savings
of approx. DKK 6 million on the system tariff in 2004.
Government order no. 1 of January 6, 2004 on guarantees
of origin for electricity produced from renewable energy
resources
According to the order, these guarantees must be issued by
the system operators. The guarantees of origin, which must
be in writing, must, among other things, contain informa-
tion about the electricity production unit, the category of
RE electricity and the volume of RE electricity production
in a given period. The system operators must also prepare
a standard form to be used for applying for guarantees as
well as handling the registration of all guarantees issued.
Transitional order concerning revenue caps – applicable
only in 2004
The minister has issued a transitional order concerning
revenue caps for local and regional grid companies in 2004.
The revenue cap for this year is based on the tariffs bud-
geted by the companies as at January 1, 2004 and reported
to the Danish Energy Regulatory Authority. For Eltra, this
translates into a revenue cap of DKK 245 million. The
Danish Energy Authority is currently working on the rev-
enue caps for 2005 onwards. Here, a projection will basical-
ly be made of the revenue cap for 2004, while an efficiency
requirement will not be made until 2008. From 2005,
Energinet.dk will not be subject to the revenue cap order.

16
The Consumers’ Committee
The Consumers’ Committee is to ensure an ongoing dia-
logue between Eltra’s Board of Directors and the players in
the electricity transmission system. The Consumers’
Committee is entitled to comment on important questions
of a general nature concerning market access and can
request that its views be sent to Eltra’s Board of Directors.
In accordance with Eltra’s Articles of Association, Eltra’s
Board of Directors has set up the Consumers’ Committee
on the recommendations of a number of trade associations.
Members (Year-end 2004)
Professor Jørgen Grønnegård Christensen,
Aarhus University (Chairman)
Mr Hans Christian Sørensen, EO
the Danish Wind Turbine Association
Mr Asbjørn Bjerre, EO,
the Danish Wind Turbine Association
Mr Michael Mikkelsen, CEO,
Dansk Elhandel
Mr Leif Nielsen, M.Sc. (Economics),
Dansk Elhandel
Mr Chr. Pedersen, CEO,
the Confederation of Danish Industries
Mr Niels O. Gram, Energy Manager
the Confederation of Danish Industries
Mr Erik Nørregaard Hansen, EO,
the Association of Danish CHP Enterprises
Mr Mogens Uhrskov, Operations Manager
the Danish District Heating Association
Mr Ebbe Seligmann, CEO,
Elfor
Mr Hans Duus Jørgensen, EO,
Elfor
Mr Finn Lunde Nielsen, Senior Lecturer,
Elsam
Mr Erik Folkersen, EO,
Elsam
Mr Niels-Ole Bjerregaard, Chief Official Veterinarian,
the Consumer Council
Ms Rut Jørgensen,
Chairman of the Family Committee, the Consumer
Council
Mr Per Storm Mortensen, Plumber,
the Federation of Small and Medium-sized Enterprises
Mr Henrik Lilja, Energy Political Assistant,
the Federation of Small and Medium-sized Enterprises
Mr Steen Schütt, Project Manager,
the Agricultural Council of Denmark
Mr Jens Astrup Madsen, Senior Consultant
the Agricultural Council of Denmark
Mr Martin Windelin, Economist
the Economic Council of the Labour Movement (external
participant)
The Transmission Committee
The Committee creates the framework for the cooperation
needed by the regional grid companies and Eltra to per-
form their tasks in accordance with current legislation.
Among other things, the Committee considers Eltra’s
annual Plan for the Construction and Reconstruction of
the Transmission Grid.
Mr Kim Nielsen, NV Net
Mr Børge Terkelsen, N1
Mr Poul E. Thomsen, Vestjyske Net
Mr Søren T. Nielsen, FynsNet
Mr Paul-Frederik Bach, Eltra (Chairman)
Mr Per Sørensen, Eltra
Mr Carsten Jensen, Eltra
Mr Lars Højbjerg Nielsen, Eltra (Secretary)
The Grid Committee
The Committee is a technical forum for the cooperation
between the local grid companies, regional grid companies
and Eltra, as provided by the Danish Electricity Supply
Act. Elfor appoints five members from amongst the local
grid companies in Western Denmark, the regional grid
companies appoint two members and Eltra appoints three
members. Furthermore, a representative of Elfor’s secre-
tariat serves on the Committee.
Mr Jacob Andreasen, Sydvest Energi Net
Mr Jan E. Andersen, EnergiMidt Net
Mr Jens Høgsberg, MES Net
Mr Kim Nielsen, NV Net
Mr Leif Juul Jørgensen, HEF Net
Mr Niels Erik Knudsen, Energi Fyn Net
Mr Søren T. Nielsen, FynsNet
Mr Robert Olsen, Elfor
Mr Paul-Frederik Bach, Eltra (Chairman)
Mr Carsten Jensen, Eltra
Mr Per Sørensen, Eltra
Mr John Eli Nielsen, Eltra (Secretary)
Cooperative Bodies

17
Handling Congestion
A taskforce under Nordel’s
Market Committee has
since the beginning of 2003
been looking at the hand-
ling of congestion in the
Nordic region. The report
“Rules for Congestion
Management - Evaluation
of Availability of Capacity
and Possibilities for
Increased Counter Trade”
was published in August
2004. The report suggests
that limited counter trade
be introduced in the plan-
ning phase. However, atten-
tion must be drawn to the
distortion of the market
which may be entailed by
counter trade as the spot
price will no longer neces-
sarily reflect any scarcity of
transmission and produc-
tion capacity.
Following publication, com-
ments on the report were
invited from commercial
players, regulators and
Nord Pool, a total of ten
players. The comments can
be divided into two cate-
gories. Six players believe
that counter trade should
be avoided on account of
the distortion of the market
which counter trade may
lead to, and at the same
time the TSOs should not be
involved in price wars. The
rest of the players believe
that counter trade should
be introduced to a degree
which will ensure uniform
area prices.
To conclude the work, the
conference “Congestion
Management in the Nordic
Electricity Market” was
held in January 2005. For
further information visit
www.nordel.org.
Review of Operation
Market

18
Market Coupling with
Germany
Ever since the auctioning of
trading capacity between
Jutland and Germany was
introduced in its present
form in autumn 2000, Eltra
has been working to estab-
lish a direct market cou-
pling between Nord Pool
Spot and EEX. Unlike the
auctions, market coupling
can ensure that exchanges
in the market will always
take place in accordance
with current price signals,
resulting in the most econ-
omical utilisation of cap-
acity. In autumn 2003 the
system operator E.ON Netz
agreed to investigate the
scope for introducing mar-
ket coupling. However, in
June 2004, E.ON Netz
announced that internal
German assessments did
not indicate grounds for
coupling the Danish and
the German markets. The
weightiest German argu-
ments were that with mar-
ket coupling it would be
necessary for the EEX
exchange to be open 7 days
a week rather than the cur-
rent 5 days a week, and that
the accelerated market cou-
pling with Denmark will
lead to an undesirable
development of the regional
European electricity mar-
kets at different rates.
Eltra does not share these
views and hopes that the
development process will be
enhanced once Germany
gets an independent regula-
tor for energy in 2005 and
once the EU Commission,
via the regional mini-fora,
increases focus on conges-
tion management between
the regions.
Changing Electricity Supplier
Three per cent of customers
have changed electricity
supplier since the electricity
market came to comprise
the retail sector two years
ago. This may be a very
modest number, but the
group accounts for approx.
40 per cent of electricity
consumption in Denmark.
Also, the opening of the re-
tail market has resulted in
extensive IT problems. There
have been persistent prob-
lems with the handling of
measuring data when con-
sumers have changed sup-
pliers. Customers subject to
settlement by load profiles
have experienced particular
problems. The local grid
companies have, together
with their IT suppliers,
worked hard to rectify mat-
ters. At the beginning of
2005, the situation seems to
be under control.
The rules “elMarked2003”,
which describe how players
should act in the retail mar-
ket, have been adjusted and
developed on an ongoing ba-
sis. In the autumn, the rules
were turned into a set of
regulations as such from the
system operators. Read more
at: www.elmarked2003.dk.
Hourly Readings for 20,000
More
At the end of 2004, the
threshold for compulsory
hourly readings was reduced
from 200,000 kWh to
100,000 kWh. This means
that 20,000 new consumers
have had their electricity
meters replaced by modern
remotely read meters. It is
realistic to expect the
threshold for remotely read
hourly reading to be
reduced to approx. 20,000
kWh by 2008.
Eltra’s ISO-certified quality
management system has for
three years handled all mas-
ter data from wind turbines
in Western Denmark. Since
spring 2004 the quality
management system has
also handled master data
for other electricity-gener-
ating units in Western Den-
mark. The quality assur-
ance procedures surround-
ing settlements and the
master data registers are
now so smooth-running that
in future Dansk Standard
will only perform one audit
a year - against two so far.
RE Certificates
In 2004 Eltra issued more
than 230,000 electronic
guarantees of origin, corres-
ponding to 230 GWh. Most
were exported to electricity
consumers in the Nether-
lands. The guarantees were
issued pursuant to the Order
on guarantees of origin for
electricity produced from
renewable energy sources,
which came into force on
January 15, 2004. The order
is based on an EU Directive
which has been implement-
ed differently in the EU
member states.
Consequently, the market for
trade in guarantees of origin
remains relatively small.
Harmonisation is needed to
create a market as such.
Another directive which is
being implemented in differ-
ent ways is the EU’s
Electricity Market Directive
which stipulates that con-
sumers must be informed of
the composition of the fuel
mix used to generate the
electricity consumed in a
given period. This is attrib-
utable not least to the fact
that the EU Directive allows
a large number of interpre-
tations of how the labelling
scheme should be introduced
and of which information it
should be based on.
The EU Directive came into
force on July 1, 2004. So far,
no government circular has
been issued on the direc-
tive’s implementation in
Denmark. In 2004, Sweden
and Norway agreed to estab-
lish a joint market for RE
certificates which will prob-
ably be realised in early
2007. If Denmark joins the
Swedish-Norwegian project,
the market volume of RE
certificates will from the
outset be such that the nec-
essary liquidity will be
available to create a success-
ful RE market. To this should
be added that through par-
ticipation in the European
RECS certificate project
Denmark has already gained
solid experience in the issu-
ing and handling of certifi-
cates.
Price-elastic Electricity
Consumption
Nordel has in the project
“Ensuring Balance between
Demand and Supply in the
Nordic Electricity Market”
described price-elastic elec-
tricity consumption as an
important element in a
well-functioning market.
Price-elastic consumption
can, among other things,
help ensure that the market
can handle power shortages
and electricity overflow,
while creating stable incen-
tives for investing in new
capacity.
In an electricity market
with inelastic demand, it
may be difficult to find
price equilibria in extreme
situations. Depending on
the situation, this may
result in Eltra ordering the
disconnection of consump-
tion or production in order
to maintain balance in the
system.
To follow up on the Nordel
project, Eltra has - in col-
laboration with Elkraft
System - prepared an action
plan aimed at “promoting
price-elastic electricity con-
sumption”. Furthermore,
Eltra has been working
with the issue in connection
with the Danish Energy
Authority’s security of sup-
ply project. A background
document on the subject
can be studied at Eltra’s
website together with the
action plan.

19
Electricity Storage
Demonstration Project
Eltra is preparing the con-
struction of a 1 MW elec-
tricity storage facility as a
demonstration project at the
Tjele substation. The pur-
pose of the project is to
demonstrate the use of the
electricity storage facility as
a system component for fast
power regulation. An EU
tender process was initiated
on November 16, 2004, and
so far three applicants have
been prequalified to bid.
The contract is expected to
be awarded to the successful
bidder in spring 2005.
Technical Regulations
Eltra has prepared new rules
for connecting wind turbines,
both wind turbines connected
to grids with voltages below
100 kV (primarily land-based
wind turbines) and wind tur-
bines connected to grids with
voltages above 100 kV (pri-
marily offshore wind farms).
The new rules will be used in
connection with the Danish
Energy Authority’s invitation
of tenders for offshore wind
farms at Horns Rev and
Rødsand. Furthermore, regu-
lations will be prepared for
the connection of CHP plants
with voltages above and
below 1.5 MW. Following a
hearing, they will be ready in
spring 2005. All regulations
concerning the connection of
production units to the grid
are being prepared in close
collaboration with Elkraft
System. In 2004, the following
regulations concerning oper-
ations in Western Denmark
were issued:
1) Regulations concerning
operations management
and system operation for
the transmission grid.
2) Regulations concerning
the operation of and work
on units.
3) Voltage and Mvar regula-
tion.
4) Measuring regulation for
system operation purposes.
5) Ancillary services and
system settings etc.
The above regulations are
available at the Eltra web-
site: www.eltra.dk.
Renewal of Konti-Skan 1
Work on renewing the almost
40-year-old d.c. interconnec-
tion Konti-Skan 1 between
Vester Hassing near Aalborg
and Lindome, south of
Gothenburg in Sweden, is
well under way. At the end of
November the two new con-
verter transformers, each
weighing 205 tonnes, were
placed on their foundations
in Vester Hassing. Since then,
the supplier - Areva - has
been busy with the installa-
tion work. Concurrently,
Eltra’s Subtations and
Telecommunications depart-
ments are building the
appurtenant 400 kV substa-
tion and establishing the
necessary communication.
Konti-Skan 1 is expected to
be energised around June 1,
2005. The final handover to
commercial operation will
probably take place on Oct-
ober 1, 2005. By then, the
transmission capacity for
Konti-Skan 1 will have been
increased from 270 MW to
380 MW. The Konti-Skan
connection will thus have a
total capacity of 740 MW
towards Sweden.
Northern Jutland
Connection Open
After 10-12 years of political
and technical negotiations
and discussions and 3 years
of detailed engineering and
construction, the 400 kV
connection between Aarhus
and Aalborg was finally
commissioned in 2004, there-
by eliminating considerable
congestion in both the
Danish and the Nordic elec-
tricity system. The first sec-
tion of the connection
between the 400 kV substa-
tions, in Trige north of
Aarhus and in Ferslev south
of Aalborg, was commis-
sioned on March 5. At the
same time, four new 400 kV
cable substations in Tebbestrup
and Hornbæk near Randers
and in Katbjerg and Bram-
slev near Mariager Fjord
were commissioned.
The cable substation in
Hornbæk is equipped with a
fixed 100 Mvar inductive
reactor for compensation of
the 400 kV cables across the
Gudenaa river and Mariager
Fjord.
The second section - between
Ferslev and the Nordjyllands-
værket power station, includ-
ing the cable substations in
Skudshale and Gistrup - was
commissioned on August 19.
The Ferslev substation has,
Transmission

20
for example, been fitted with
two couplable inductive
reactors of 70 Mvar and one
fixed inductive reactor of 140
Mvar for compensation of the
400 kV cables in the Indkilde-
dalen valley. The fixed 140
Mvar reactor was originally
located in Tjele. There, it was
replaced by two couplable 70
Mvar reactors similar to the
reactors in Ferslev.
Benchmarking at Sea
In collaboration with SEAS
and Elkraft, benchmarking
has been carried out of the
power connections to the
Horns Rev A and Nysted A
offshore wind farms. Both
systems have cost around
DKK 300 million, but the
costs of the individual sys-
tem elements differ mater-
ially. Thus, the Horns Rev
platform has been consider-
ably more expensive than
the platform at Nysted on
account of weather require-
ments. On the other hand,
the costs of grid expansion
have been considerably
higher for Nysted than for
Horns Rev on account of
the relatively weak 132 kV
grid on Southern Zealand
and Lolland-Falster.
Digital Fault Recorders
The mechanical fault plot-
ters in the 400 kV substa-
tions are being replaced by
digital fault recorders. The
replacements improve the
scope for collecting and ana-
lysing data during grid dis-
turbances. The replacement
is expected to be complete
at the beginning of 2006.
New Country Agreement
After a series of tough nego-
tiations, Danish Agriculture
and the Association of Danish
Energy Companies conclud-
ed a new Country Agreement
on September 1, 2004.
The agreement entailed a
considerable upward
adjustment of the compen-
sation paid to landowners
living very close to the new
400 kV overhead lines. At
the same time, the agree-
ment stipulates new rates
of settlement for cabling on
agricultural land.
The new agreement was well
received by landowners
along the Northern Jutland
connection. Earlier, Eltra
had promised that the com-
pensatory amounts would be
adjusted in accordance with
the new agreement. In con-
sequence, a large number of
arbitration cases were can-
celled. Some cases are, how-
ever, being taken to the courts.
The Association of Danish
Energy Companies and
Danish Agriculture have
agreed that any new court
decisions will be assessed
every year with a view to
ensuring the best possible
ongoing adjustment of the
agreement on compensation.
Reconstruction of Kassø-
Vejen
The 400 kV Kassø-Vejen
project is currently being
considered by the author-
ities. The plan is to replace
an existing one-circuit over-
head line with new pylons
capable of carrying two 400
kV circuits. The existing
line is very important to
daily operations, and it
must therefore be built in a
new cable route, but very
close to the existing one.
Preliminary planning has
shown that it makes sense
to revise cable routes when-
ever an opportunity arises.
The first public hearing
phase was held in the period
November 2003 - January
2004. As it would appear
that not many people had
taken note of the hearing in
the counties of Southern
Jutland and Ribe, Eltra sent
out material to all land-
owners along the route.
Most of the landowners
who will be directly affect-
ed by the project have thus
been informed directly.
The companies Sydvest
Energi, TRE-FOR, ESS, Syd
Net and Sydøstjyske Net
will be affected by the pro-
ject. Eltra has been in close
dialogue with these com-
panies concerning the pos-
sibilities for renovating
underlying grids following
the construction of the 400
kV overhead line.
Special Website
At the end of 2004, an EIA
report had been submitted
for consideration by the
counties of Ribe and
Southern Jutland. A hearing
of the proposal for an adden-
dum to the regional plan is
expected to start in
March/April 2005. The final
addendum to the regional
plan can then be adopted in
September 2005. A special
project website will be set up
once the hearing phase starts.
Ring Connection to
Vester Hassing
Eltra wishes to add tops to
the nine low Danube towers
between the Nordjyllands-
værket power station and
Vester Hassing with a view
to establishing an addition-
al 400 kV circuit along the
section. In this way, the 400
kV ring connection in
Northern Jutland will be
taken to the a.c. substation
in Vester Hassing, which
marks the starting point of
the Konti-Skan connection
between Jutland and
Sweden. At the end of 2004,
the County of Northern
Jutland was ready to pres-
ent a proposal for an
addendum to the regional
plan. The public hearing
will take place between
January 22 and February
23, 2005.
Mapping of Submarine
Cables
In 2004, Eltra carried out a
new mapping of its submar-
ine cables. Thanks to new
measuring methods com-
bined with considerable
experience, Eltra now
knows the exact location of
the cables on the seabed.
The mapping is intended
both to contribute to the
prevention of cable faults
and to provide means of
identifying any faults that
may nevertheless occur.
Optic Fibres
In connection with the con-
struction of the Northern
Jutland line, a 48-fibre
optic-fibre connection has
been established along the
Trige-Ferslev-Nordjyllands-
værket section (114 km).
The optic fibre has been
looped into all six cable sub-
stations along the way.
The optic-fibre section
between Ferslev and Tjele
has been laid on a new
OPGW 48-fibre section via
the Mosbæk substation.
Remote Control
The possibility of retrieving
online data (meterings and
alarms) via the mobile net-
work has been established.
Work on the DELFIN project
was put on hold in April on
account of the imminent
merger. The project was
launched three years ago
with a view to replacing the
EDOS remote control sys-
tem which cannot be ser-
viced after 2007. Detailed
requirements specifications
have been prepared which,
with minor modifications,
can be harmonised with a
similar system in Eastern
Denmark once work on the
project is resumed under the
auspices of Energinet.dk.
Collaboration with
Local Grid Companies
Eltra wishes to expand its
telecommunications system.
A number of meetings have
been held with the local grid
companies. Work is currently
going into mapping the com-
munications infrastructure
available. The projects involve
exchanging online operating
data, establishing secure tele-
phone lines to the individual
operations centres and any
swopping of optic fibres.
Emergency Power
The emergency power system
which previously covered
Eltra’s control centre systems
and telecommunications sys-
tems has been expanded to
provide a secure power sup-
ply for all IT systems at the
operations centre.

21
Competence Centre at DTU
A new competence centre
for electric technology has
been established at the
Ørsted Institute at the
Technical University of
Denmark. Eltra provides
professional support for the
centre, also contributing
start-up funding amounting
to DKK 10 million distrib-
uted equally over the first
five years. The background
for the centre is that the
modern, environmentally
conscious society of the
future demands electricity
systems which can handle a
considerable volume of
local production from wind
turbines, fuel cells, solar
cells and mini-CHP units.
The vision for the centre is
that it should become a hub
in a national and interna-
tional network where
knowledge about electricity
supply grids can be accu-
mulated.
Nordic Research Project
Eltra also engages in col-
laboration with the
University of Aalborg and
other research and educa-
tional establishments in
Denmark and abroad.
One joint project is “Large-
scale integration of wind
energy into the Nordic
grid” in which a large num-
ber of universities, local
grid companies and indus-
trial enterprises in the
Nordic region participate.
The purpose of the project
is to establish a Nordic
forum for exchanging
knowledge and experience
within wind technology.
The project is organised as
four Ph.D. projects in
Denmark, Norway, Sweden
and Finland. The project is
sponsored by Nordic
Energy Research.
Wind Forecasts
Eltra is heading an ambi-
tious development project
concerning wind forecasts.
The project is known as the
“Ensemble forecast project”
or simply “MELTRA”.
The project is being under-
taken in collaboration with
WEPROG, a meteorological
specialist firm.
MELTRA is currently
undergoing an online test
phase on a PC cluster con-
sisting of 92 cpus. Every
hour, a total of 75 wind
forecasts are calculated to
predict developments in 48-
72 hours’ time.
The system has been shown
to be stable as regards both
software and hardware.
Furthermore, the system
has demonstrated a level of
functionality and a poten-
tial which far exceeds that
of Eltra’s existing forecast-
ing tool.
2005 will see the complete
validation, verification and
documentation of the system
with a view to MELTRA
being included in Eltra’s
routine operations in 2006.
Eltra and the Environment
Each year Eltra calculates
the combined environmen-
tal impacts of electricity
and CHP production in West-
ern Denmark. The results
are published in the annual
Environmental Plan which
comes out in April.
The Environmental Plan
does not include the envir-
onmental impacts of oper-
ating Eltra’s high-voltage
grid. These impacts include
losses in high-voltage lines,
cables and HVDC substa-
tions.
Losses in Eltra’s grids
account for approx. 2 per
cent of electricity trans-
ports. In 2004, the total loss
in Eltra’s system was 474
GWh, against 513 GWh in
2003. The difference is due
to a lower level of
exchanges with neighbour-
ing countries.
Visual environmental
impacts are reduced with
overhead lines being
replaced by underground
cabling. In collaboration
with the regional grid com-
panies, an additional
approx. 30 kilometres of
150 kV overhead lines will
be replaced by cables in the
period up to 2012. See
Eltra’s Plan for the
Construction and
Reconstruction of the
Transmission Grid 2004.
Eltra has investigated the
level of SF6 gas emissions
from the transmission grid.
SF6 gas is used as an insu-
lation gas in switches, cable
terminations and other sub-
station components. SF6 gas
is a very aggressive green-
house gas. A total of 7 ton-
nes of SF6 gas are installed
in the high-voltage systems
with voltages above 100 kV
in Western Denmark.
During normal operations,
approx. 4 kg of gas are
emitted a year. There have
been no breakdowns in the
400 kV system since 1988.
Consequently, the report
concludes that SF6 gas
emissions from the trans-
mission system are not a
problem. Eltra will contin-
ue to monitor developments
as the use of SF6 gas is
expected to increase in the
coming years, among other
things as a result of the
increased use of under-
ground cables.
Electricity Labelling 2004
In July 2004, new EU rules
were introduced which
oblige electricity suppliers
to label the electricity sup-
plied to end customers
every year. The electricity
label must, as a minimum,
include information about
fuel consumption, CO2 emis-
sions and any use of nuclear
power. Eltra has, in collabor-
ation with a number of sup-
ply companies in Western
Denmark, developed a for-
mat for this electricity label.
Subsidies for RE Research
In 2004, Eltra allocated its
entire framework budget of
DKK 59 million for PSO
R&D into environmentally
friendly electricity produc-
tion technologies. The sub-
sidies helped launch projects
with a total budget of DKK
80 million. The projects
included the development of
fuel cells, improved combus-
tion etc. of biomass, wind
power, solar cells and wave
power.
With a view to directing
focus onto offshore wind
power stations, in August
Eltra invited applications
for special subsidies of max.
DKK 5 million. The sub-
sidies were allocated to
three projects. Elfor, Elkraft
System and Eltra have,
together with the Danish
Energy Authority, laid down
a new set of joint rules and
forms for use in connection
with applications for and
the administration of PSO
R&D funding.
In May 2004, Eltra pub-
lished “Environmentally
Friendly Electricity
Production 2004. Research
and Development”, which
describes the PSO R&D pro-
gramme.
System

22
Western Denmark boasts a
world record for the share
of electricity generated by
wind power. There is politi-
cal agreement that expand-
ing wind power must be a
substantial Danish contri-
bution to meeting the tar-
gets in the Kyoto Agreement.
However, this is only possible
if the necessary scope can be
created for handling even
greater volumes of wind
power in Denmark, from the
point of view of consumption
as well as ancillary services.
So far, substantial volumes of
wind power have successful-
ly been integrated into the
electricity system in Western
Denmark. This is attribut-
able partly to Western
Denmark’s relatively strong
international interconnec-
tions as well as the extensive
access to buying regulating
and ancillary services in our
neighbouring countries.
There are, however, signs
that soon we will not be able
to expect more help from our
neighbours. Consequently,
any further expansion of
Danish wind power is
dependent on simultaneously
expanding the infrastructure
and establishing domestic
scope for the delivery of
ancillary services.
The current electricity sup-
ply infrastructure has devel-
oped into a system with a
limited number of large-
scale power stations. Such
an infrastructure does not
ensure the desired efficiency
and security of supply if
production is decentralised.
It is particularly unsuitable
for handling large volumes
of wind power.
Eltra must ensure a balance
between consumption and
production at the moment
of operation. The balancing
is achieved via the regulat-
ing power market in which
generators offer to change
their production relative to
the plan against payment.
Eltra collaborates with the
other Nordic system oper-
ators on the delivery of reg-
ulating power, and Eltra is
currently working to become
integrated into the Nordic
regulating power market.
However, due to congestion
on the transmission lines to
Norway and Sweden, there
are times when it is physical-
ly impossible to obtain regu-
lating power in the Nordic
region. With a view to ensuring
the availability of resources,
Eltra therefore enters into
agreements concerning
regulating power with sup-
pliers in Western Denmark.
Eltra has since January 1, 2004
bought regulating reserves
via EU tenders. Since April
1, 2004, the tenders have
been monthly. These reserves
receive a capacity payment
per MW for being on stand-
by to deliver a certain vol-
ume of power to the regulat-
ing power market. In this
way, these reserves guaran-
tee a minimum supply in the
regulating power market
which enables Eltra to
maintain a security of sup-
ply and comply with all
international obligations.
The energy company Elsam
was virtually the only bidder
in 2004. Nevertheless, the
open EU tenders have had
considerable signal value.
They have, among other
The need for a new system
architecture is assessed on
the basis of a number of
targets with regard to the
quality of system opera-
tions. These targets will
typically concern areas such
as security of operations,
stability, emergency pre-
paredness and servicing the
market and end customers.
In Denmark, improvements
are needed in the following
areas:
- All electricity production
- primary and local - must
be sold on market terms
- The price signals in the
market must continuously
be communicated to end-
users who must be given
the possibility and a finan-
cial incentive to react to
these signals (demand
response)
- The reactive power of the
system must be managed
efficiently
- The introduction of access
to information and com-
munication systems
(radio/telephony) in keep-
ing with the times for
local grid companies, mar-
ket players and customers.
During critical operation,
there is also a need for:
- direct intervention in pro-
duction (especially wind
power)
- the efficient disconnection
of consumption (both man-
ually and automatically) and
- the secure and rapid start-
up from dead grid.
Close to the Limit
Purchase of Reserves

23
things, resulted in enquiries,
and at the end of 2004 Eltra
concluded an agreement
with a Norwegian player on
the delivery of upward regu-
lation reserves. The player is
establishing a 25 MW gas
turbine plant in Esbjerg.
This marks the first estab-
lishment of production units
on market terms following
the liberalisation of the
Danish electricity sector.
Furthermore, a framework
agreement has been signed
with the same player con-
cerning the pooling of emer-
gency power units in West-
ern Denmark for use as up-
ward regulation reserves.
In February and March 2004,
Eltra purchased up to 150
MW of upward regulation
reserves placed in Norway
via the Norwegian system
operator Statnett. This was
possible because of consis-
tently large exports from
Denmark to Norway and
Sweden in the period in
question, leaving plenty of
capacity for Danish imports.
Reserve and regulating
power is generally cheap in
Norway which is dominated
by hydropower. Consequently,
Eltra is continuously assess-
ing the possibility of placing
agreements on part of the
necessary reserves in Norway.
The scope for such agree-
ments being made has im-
proved with the Northern
Jutland line which has
increased the transmission
capacity across the Skager-
rak considerably, and with
exports from Denmark to
Southern Norway generally
being considerable during
the winter period.
The open tenders and the
plant in Esbjerg are, further-
more, a clear signal to domes-
tic local CHP units that par-
ticipating in the reserve mar-
ket is attractive. Eltra will
endeavour to develop the ten-
der procedure with a view to
allowing as many suppliers
as possible to bid.
The Danish electricity mar-
ket was in 2004 supported
by a number of important
decisions concerning CHP
production. As a precondi-
tion for the merger with
NESA, the Danish Competition
Council ordered Elsam to
sell 75 local CHP units (230
MW in all) while at the same
time precluding Elsam from
buying or building new local
CHP units for the next 12
years. Another precondition
for the merger was that Elsam
should make 600 MW of pro-
duction capacity available
annually to the market with
a view to distributing the
supply of “physical electrici-
ty” on more hands.
Furthermore, after a couple
of years of negotiations, the
Danish Parliament decided
that within a period of two
years all local CHP units
above 5 MW must operate
on market terms. In Western
Denmark this meant that
35 units with a combined
capacity of 787 MW decided
on a market solution as from
January 1, 2005.
All these measures will meet
a pressing need for improved
competition both in the
spot market and in connec-
tion with the delivery of
ancillary services.
A central legislative element
is the production-independ-
ent subsidies which are
determined as the difference
between the units’ earnings
under the three-rate tariff
and the market prices on the
basis of the actual operating
Improved Competition in the Market
conditions over a period of
several years. The advantage
of fixed subsidies which are
unrelated to current produc-
tion levels is that the units
are given a financial incen-
tive to optimise their heat-
ing and power production in
relation to the market.
The PUDDEL Project
To participate in the regu-
lating power market, par-
ticipants must have access
to the necessary tools and
understand how to use
them. This applies, for
example, to extended com-
munication between pro-
duction units, the balance-
responsible players and
Eltra.
In early spring Eltra there-
fore launched the PUDDEL
project: - Pilot project for
development and demon-
stration of operational sup-
port tools and communica-
tion tools for local electri-
city production in a liber-
alised market.
Thirty local CHP units and
six production balance-
responsible players partici-
pate in the project. The pro-
duction units and balance-
responsible players are
linked by a special MPLS
network and various soft-
ware programs have been
developed and tested. The
PUDDEL project will be
concluded with a proper
operating phase on market
terms in March-April 2005.

24
Western Denmark is to a
very large extent a transit
country between the Nordic
hydropower-based system
and the continental thermal
systems. Eltra is charged
with creating a market
design and with developing
congestion handling to
ensure smooth price forma-
tion in Western Denmark.
The challenge consists pri-
marily in optimising the
interaction with neighbour-
ing markets to ensure per-
fect competition in Western
Denmark and in integrating
the considerable and vary-
ing production volume from
wind turbines.
In 2004, water levels in the
Nordic power station reser-
voirs increased from 20 per
cent below mean level to
mean level. At the same time
the Nordic system price fell
from just over DKK 200 per
MWh to approx. DKK 180
per MWh. In the summer
period, the price was, however,
approx. DKK 250 per MWh.
The general fall in prices
was also reflected in Western
Denmark. As coal prices
have been increasing since
the end of 2003, the low
exchange prices have, of
course, bothered the owners
of coal-fired power stations.
Generally speaking, price
levels in 2004 are deemed to
reflect the variable costs of
electricity production in
Western Denmark. The situ-
ation can therefore be char-
acterised as a result of gener-
ally successful price forma-
tion.
Part of a Larger Electricity
Market
Western Denmark is part of
a coherent Nordic market
with a joint exchange. At the
same time, Western Denmark
is, via capacity auctions,
related to the German mar-
ket. Price formation in Western
Denmark and exchanges
with the Nordic countries
were satisfactory in 2004.
Thanks to the new Northern
Jutland line, the available
capacity between Western
Denmark and the Nordic
market has increased. In
practice, this has meant that
situations with 0 prices have
been reduced considerably.
At the same time, the com-
pletion of the line has
resulted in a closer coupling
with the Nordic region and
a relatively weaker coupling
with Germany. The spot
price in Western Denmark
has to a lesser extent than
previously followed the
German price. It is believed
that the German price at
EEX during high-load situ-
ations was higher than the
variable costs of commercial
power stations in Denmark.
In situations where the area
price in Western Denmark is
identical to the EEX price
and there is plenty of power
in Western Denmark, price
formation is not perfect. In
May, there were indications
that this phenomenon would
arise over the summer, as we
saw in summer 2003. However,
this was not the case.
Wrong Flow 40 Per Cent
of the Time
The flow across the Danish-
German border was better
than in previous years.
However, congestion hand-
ling was only reasonably
satisfactory compared with
congestion handling in the
Nordic countries. All in all,
the flow was wrong 40 per
cent of the time.
The capacity auction on the
border only works in situ-
ations where the spot price
in Western Denmark and
Germany can be accurately
predicted. The commercial
players buy capacity on the
transmission connection on
the basis of expectations
with regard to the spot
prices in both market areas.
In 2004, this meant that the
flow - contrary to the
nature of the market - went
from a high-price area to a
low-price area 21 per cent
of the time. For an addi-
tional 19 per cent of the
time, the connection was
only half-full (although in
the right direction) despite
there being a price differ-
ence between Western
Denmark and Germany.
Challenge: Perfect Price Formation

25
wind power at Horns Rev
are realised, it would be
best for the landowners and
the cheapest for electricity
consumers if early account
is taken of a 400 kV or
HVDC solution between
Blåvand and Karlsgårde.
A 400 kV line between
Karlsgårde and Herning
would, if constructed, fol-
low the route of the 150 kV
line currently running
between Karlsgårde and
Herning. This line would
then be removed.
Eltra is busy preparing the
plans necessary for the
authorities to start consid-
ering the project, including
meetings and negotiations
with the affected land-
owners.
Even the next 200 MW off-
shore wind farm at Horns
Rev makes it necessary to
start a thorough expansion
of the high-voltage grid in
Western Jutland. The new
wind farm, which is expect-
ed to be commissioned in
2008, will require the con-
struction of a new trans-
former platform 30 km out
to sea, the laying of a 150
kV cable between the wind
farm and Karlsgårde and
the establishment of a 400
kV connection between
Endrup and Karlsgårde.
Further expansion at Horns
Rev. Replacing older land-
based wind turbines with
new turbines double the
size. Increased capacity
across the German border
and a fourth cable to
Norway. If just a couple of
these projects are imple-
mented, it will be necessary
to build a 400 kV connec-
tion on the Karlsgårde-
Herning-Idomlund (Holste-
bro) section.
In addition, if the politi-
cians’ thoughts about erect-
ing up to 1,000 MW more
Offshore Wind Farms Spark Need
for 400 kV Expansion

26
Maintaining a Balance
The large share of wind
power in Western Denmark
requires flexible solutions to
ensure the necessary balance
between production and
consumption. Interaction
with the neighbouring areas
is important for a smoothly
operating market, but also
for being able to create a
physical balance between
consumption and production
in critical situations.
Until December 31, the large
share of local CHP-based
electricity production
enjoyed priority access to
the grid at a politically fixed
price - thereby often con-
tributing materially to the
balance problem. As from
January 1, 2005, this has
changed slightly as all local
units over 10 MW - in real-
ity approx. half of the local
CHP-based electricity pro-
duction - must now be sold
on the market. In two years’
time, this requirement will
apply to all units over 5 MW.
Even though the local pro-
duction will largely be gov-
erned by market signals,
Eltra is retaining its emer-
gency plans which make it
possible to stop selected
plants in critical periods.
This will make Western
Denmark less dependent on
help from neighbouring
areas.
Emergency Plans to Relieve
Power Surplus
Emergency plans are effect-
ed in situations with low
consumption, with a high
level of wind power produc-
tion and with limited access
to neighbouring areas. This
is done very primitively by
sending a text message to
selected generators. The
plans also make it possible
to stop a small number of
wind turbines.
West Coast Cross-section at
Gothenburg
Svenska Kraftnät often
restricts capacity on the
Konti-Skan connection in
low-load periods in the
direction from Jutland to
Sweden. The constraints
most often hit Konti-Skan 2,
which is connected to the
Swedish grid south of
Gothenburg. Following com-
missioning in October 2005,
the renovated Konti-Skan 1
will be routed to the same
location as Konti-Skan 2.
If Svenska Kraftnät does
not introduce grid changes,
considerable constraints can
be expected on the entire
Konti-Skan connection (740
MW) once the renovated
Konti-Skan 1 is put into
operation. The reason for the
Swedish constraints is inter-
nal congestion in the
Gothenburg area. The immi-
nent construction of a 400
MW gas-fired power station
in Gothenburg and the
expansion of capacity at the
Ringhals nuclear power
plant will give rise to fur-
ther constraints on the West
Coast cross-section.
However, closing down
Barsebäck could improve
the situation somewhat.
Transfer of Operations
Management
Eltra has taken over the
operations management of
all Eltra-owned plants with
effect from November 1,
2004. In this context, tech-
nical regulations have been
updated to ensure oper-
ations management, coor-
dination, collaboration and
operation of the 150 kV and
400 kV transmission grid.
This is happening in close
collaboration with the oper-
ations managers for the 150
kV grid.
The operations management
organisation involves the
Operations division and the
Transmission. The Trans-
mission represents Eltra as
plant owner with depart-
ments for cables, HVAC
substations, HVDC substa-
tions and buildings.
Transmission is in charge of
the construction and main-
tenance of Eltra’s transmis-
sion system.
The Operations is responsi-
ble for the security of supply
and system balance.
Operations monitors and
manages the overall trans-
mission grid and the inter-
national interconnections
and maintains close contacts
with other control centres in
Denmark and abroad.
Ancillary Services and
Regulating Reserves
In step with the expiry of
the power station agreement
in January and July 2004,
Eltra obtained the necessary
ancillary services and regu-
lating reserves on market

terms. Eltra must as a mini-
mum ensure access to
reserves corresponding to an
outage of the largest pro-
duction unit. Furthermore,
Eltra must secure the neces-
sary reserves for the consid-
erable volume of wind pow-
er production.
Primary regulating reserves
were contained in the power
station agreement up until
July 1, 2004. Other reserves
were procured via an EU
tender in January 2004.
Primary regulating reserves
are tendered at six-monthly
intervals. Automatic regulat-
ing reserves are tendered
quarterly and manual regu-
lating reserves monthly.
The automatic regulating
reserves help maintain a
balance right up to the
moment of operation. For
this purpose, an LFC (Load
Frequency Controller) is
used, computing the imbal-
ance for the Eltra area on an
ongoing basis. In the event
of imbalance, a message is
sent directly to the supplier
to regulate as desired. The
function has been used since
April 1, 2004 with the possi-
bility of 100 MW +/- regula-
tion. Furthermore, Eltra has
an agreement with Statnett
concerning 50 MW of regu-
lation on the Skagerrak con-
nection in the period up
until December 31, 2005.
Wind Production from
Horns Rev
The wind production from
Horns Rev varies a lot.
Production varies from 50
per cent to 100 per cent of
the nominal capacity if the
wind speed increases from
approx. 9 to 11.5 metres per
second. In practice from 80
to 160 MW. Such changes in
wind speed are normal and
can happen within a few
minutes. In this context,
technical regulations have
been updated to ensure
operations management,
coordination, collaboration
and operation of the 150 kV
and 400 kV transmission
grid. All in close collabora-
tion with the operations
managers for the 150 kV
grid.
The variations place consid-
erable demands on the flex-
ibility of the rest of the sys-
tem. It is therefore essential
that focus be directed at
regulating properties when
preparing the terms for con-
nection of future wind
farms. The need for regula-
tion will become consider-
ably greater if several wind
farms are placed in the same
location.
Transmission Grid
Relatively few faults were
recorded in the transmission
grid in 2004. Most of the
faults recorded were
attributable to lightning
striking the 150 kV grid.
Thanks to the new Northern
Jutland line, there is cur-
rently no internal congestion
in Western Denmark when
the transmission grid is gen-
erally intact. The construc-
tion of the line caused a
number of interruptions to
the rest of the grid, and
especially in the first six
months of the year this had
some impact on the trans-
port capacity in the system
in Western Denmark.
Several planned mainten-
ance projects in the rest of
the transmission grid had to
be postponed for the sake of
security of operations and
market capacity.
Operations Exercise from
Eltra’s Emergency Control
Centre
In October Eltra’s Opera-
tions management success-
fully tested Eltra’s emer-
gency control centre. The
purpose of the one-week
exercise was to test all the
functions in the emergency
control centre, i.e. opera-
tional monitoring, opera-
tions planning and the IT
and telecom systems.
27

28
Highlights for the Western Danish Power System 2004
The Power System
Commissioning and DecommissioningEnergy Balance in GWh
490 MW
460 MW
1000MW
950MW
1200MW
800MW
Production
Facilities at
Year-end and
International
Interconnections
Primary units*):
Power: 3,516 MW
Number of units: 11
Local units*):
Power: 1,593 MW
Number of units: 558
Wind power:
Power: 2,379 MW
Number of
turbines: 4,161
*) Includes 40 MW bioboiler at Unit 3
of the Enstedværket power station.
639 GWh
1351 GWh1481GWh
3781GWh
4096GWh
2265GWh
Physical
Exchanges
with
Neighbouring
Areas
Production:
24,665 GWh
Imports:
5,097 GWh
Consumption:
21,246 GWh
Exports:
8,516 GWh
Number of units MW
Commissioning of local units 11 22
Decommissioning of local units 12 8
Commissioning of wind turbines 10 10
Decommissioning of wind turbines 5 4
2001 2002 2003 2004
Number of end-users *) 1.6m 1.6m 1.6m 1.6m
Number of local grid companies 54 50 70 71
Number of regional grid companies (150 kV) 6 6 6 6
Balance-responsible players 25 32 35 36
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Maximum 3,639.1 MW
27.01.04
Minimum 1,281.0 MW
17.07.04
0
20
40
60
80
100
120
20042003200220012000
99.3
82.1
89.7
77.2
90.4
0
500
1,000
1,500
2,000
2,500
3,000
WindLocal CHP
20042003200220012000
1515
1843
1532
1943
1555
2319
1579
2374
1593
2379
-20
-15
-10
-5
0
5
10
15
20
25
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
TowardsGermanyTowardsDenmark
Monthly Auctions of Capacity towards Germany, DKK per MW
Electricity Load in Western Denmark
Meteorological Data
Wind relative to normal years in per cent (normal year = 100)
Local Units, Development in MW
2000 2001 2002 2003 2004
Primary production 11,340.3 12,861.9 12,928.4 16,161.2 12,951.2
Local production*) 6,245.1 6,811.2 6,723.2 6,839.5 6,838.9
Wind production 3,383.7 3,389.9 3,825.0 4,363.4 4,874.8
Total production 20,969.1 23,062.9 23,476.6 27,364.1 24,664.9
Net exports 299.3 2,186.9 2,618.6 6,320.9 3,418.9
Consumption inc. losses 20,669.8 20,876.1 20,858.0 21,043.2 21,246.0
Commissioning in 2004 + 0.9 % + 1.0 % - 0.1 % + 0.9 % + 1.0 %
*) Includes production at the bioboiler at Unit 3 of the Enstedværket power station.
Source: Energi- og Miljødata
*) Source: Dansk Energi

Environmental Impact Statement for Electricity
Supplied in Western Denmark in 2004
Statement for Statement for Statement for
consumption PO non-PO
supplied via the grid production production
See note 1 See note 2 See note 3
Emissions to air g per kWh g per kWh g per kWh
CO2 (Carbon dioxide - greenh. gas) note 3 509 271 666
CH4 (Methane - greenhouse gas) 0.55 1.25 0.01
N2O (Dinitrogen oxide - greenh. gas) 0.01 0.01 0.01
SO2 (Sulphur dioxide) 0.12 0.04 0.18
NOx (Nitrogen oxides) 1.03 0.90 1.09
NMVOC (Unburnt) 0.13 0.28 0.01
CO (Carbon oxide) 0.28 0.50 0.11
Particles 0.02 0.01 0.03
Residual products
Coal fly ashes 15 0.3 26
Coal slag 1.8 0.02 3.1
Gypsum 3.7 0.1 6
SDAP 0.54 - 0.92
Waste slag 11 24.4 0.01
MSWI-ACP residues 1.3 3.09 0.001
Bioashes 0.6 0.42 0.70
Fuel consumption
Coal 153 3 258
Oil 2.9 0.84 4.33
Natural gas note 4 47 86 17
Biofuels 30 24 33
Waste 55 126 0.1
Nuclear power (g oil equivalent) 3.6 - 6.1
29
0
10
20
30
Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.
Upward regulation
price
Spot price
Downward regulation price
2000 2001 2002 2003 2004
Area price Denmark West
in DKK per MWh (avg.) 122 177 189 250 214
Nord Pool’s system price
in DKK per MWh (avg.) 95 172 200 273 215
Average addition to the price,
upward regulation in DKK per MWh 57 51 52 36 22
Average deduction from the price,
downward regulation in DKK per MWh 75 87 98 107 32
Nord Pool’s turnover in % of con-
sumption, purchases in Denmark West 30 34 47 36 51
Nord Pool’s turnover in % of con-
sumption, sales in Denmark West 21 49 49 66 58
Upward regulation in GWh (sum) 638 638 746 606 663
Downward regulation in GWh (sum) 519 605 490 582 539
Selected Market Data, Annual Values
Upward and Downward Regulating Prices in
Eltra’s Area, DKK 0.01 per kWh
2004 2003 2002 2001
Amounts in DKK million Eltra System Trans- Eltra System Trans- Eltra System Trans- Eltra System Trans-
total operator mission total operator mission total operator mission total operator mission
Net turnover for the year 6,516 6,516 229 6,362 6,362 316 6,365 6,365 318 5,986 5,986 319
Profit/loss before tax 36 1 36 146 1 145 149 1 148 109 0 109
Net profit for the year 25 0 25 102 0 101 104 0 103 227 0 227
Balance sheet total 5,218 1,832 3,385 5,162 2,108 3,054 4,801 2,173 2,627 3,945 1,408 2,537
Investments in tangible fixed assets 318 13 305 572 25 547 517 21 496 340 17 323
Net capital 2,064 13 2,052 2,040 12 2,028 1,939 12 1,927 1,833 12 1,821
Deficit for the year 303 303 0 307 307 0 -440 -440 0 -345 -345 0
Liquidity ratio 112.11 180.60 55.13 123.64 158.72 79.27 111.05 139.86 81.33 63.56 74.76 24.05
Return on net assets 1.80% 1.75% 4.02% 5.91% 4.76% 6.65% 5.34% 6.34%
Return on net capital 1.22% 1.21% 5.12% 5.13% 5.50% 5.51% 4.41% 4.44%
Solvency ratio 39.57% 0.69% 60.61% 39.52% 0.58% 66.40% 40.38% 0.54% 73.34% 46.46% 0.82% 71.80%
Financial Key Figures and Ratios
Profitand
LossAcc.
BalanceSheetKeyFigures
DKK 0.01 per kWh 1/1-31/3 2004 1/4-31/8 2004 1/9-31/12 2004
Low High Peak Average Low High Peak Average Low High Peak Average
load load load load load load load load load load load load
PP tariff 39.1 47.4 52.3 44.3 39.1 47.4 52.3 44.3 39.1 47.4 52.3 44.3
PSO tariff 4.0 4.0 4.0 4.0 2.9 2.9 2.9 2.9 2.9 2.9 2.9 2.9
Grid tariff - production 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Grid tariff - consumption 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 1.0 1.0 1.0 1.0
System tariff 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 2.2 2.2 2.2 2.2
Note 1: This statement (for distribution) is recommended for green accounts etc., as it comprises
adjustments for grid losses in the transmission grid and for imports/exports of electricity. Remember to
adjust for grid losses in the distribution grid when calculating the environmental impact on consumers.
Note 2: These statements (ex works) are not recommended for green accounts etc., as they do not
comprise adjustments for grid losses in the transmission grid and electricity imports/exports.
Note 3: SF6 gas has been included in the CO2 value as CO2 equivalent at a factor of 23,900.
Note 4: Converted into nm3 per kWh by dividing with 835.9 g per nm3, i.e. for electricity supplied
via the grid 0.057 nm3 per kWh.

30
January 1:
Joint European transit
agreement (CBT agreement)
comes into force.
January 12:
Crane on lorry hits 150 kV
line during work on Trige
substation. Three-minute
power cut on Djursland,
Aarhus without heating for
five hours.
February 4:
Eltra’s Board of Directors
approves the takeover by
Eltra of the 20 kV submarine
cable between Sæby and
Læsø, thereby assuming
responsibility for securing
the island’s electricity supply.
March 29:
The Danish government and
the electricity sector agree
on a political package which
resolves a large number of
“outstanding” energy-politi-
cal issues. According to this
agreement, the state takes
over Eltra and Elkraft from
January 1, 2005.
April 21:
More than 100 people
turned up for Eltra’s infor-
mation meeting about the
PUDDEL project.
April 28:
Following a lengthy debate,
Eltra’s Committee of Repre-
sentatives took note of the
political “package solution”
of March 29 at its ordinary
spring meeting in Vejle.
May 4-5:
The Nordic Council of
Ministers and Nordel hold a
power seminar at Hotel
Petri in Copenhagen.
May 6:
Eltra enters into an agree-
ment with Norwegian
EffektPartner on the draw-
ing of ancillary services
from a number of emergency
power plants.
June 17:
Senior Lecturer Arne Heide
Nielsen, the Ørsted Institute,
DTU and Senior Lecturer
Henrik Lund, University of
Aalborg, are critics when
Eltra presents System
Report 2004 to the press at a
meeting in Copenhagen.
June 17:
Eltra and Elkraft invite all
the local grid companies in
Denmark to Fredericia for
an information meeting
about the new emergency
preparedness tasks for the
electricity supply sector.
August 17:
Joint Eltra-Elkraft informa-
tion meeting in Fredericia
about this year’s R&D PSO
projects.
August 18:
Eltra holds meeting with the
local grid companies on react-
ive power (Mvar seminar).
September 15:
Eltra’s last consumer con-
ference is held for 100 par-
ticipants at Hindsgavl
Manor in Middelfart.
Speakers include Professor
Svend Hyllebjerg,
Chairman of the Danish
Competition Council. The
members of the Consumers’
Committee argue in favour
of the committee being res-
urrected within the frame-
work of the new nationwide
system operator.
2004 in Retrospect

31
September 18:
The Northern Jutland line is
inaugurated at an event at
the Gistrup cable substation
on the southeastern out-
skirts of Aalborg.
September 29:
Ten CHP units register for
the relay protection project.
September 29:
Eltra signs an agreement
with the Ørsted Institute,
DTU, concerning support
for a new competence centre
(Centre for Electric
Technology) totalling DKK
10 million over five years.
November 11:
First reading by the Danish
Parliament of the Danish Act
on Energinet.dk. According
to the bill, the company will
be domiciled in the Triangle
Region Denmark.
November 11:
The Danish Minister of
Economic and Business
Affairs appoints the
Supervisory Board of
Energinet.dk with Niels Fog,
Vordingborg, as Chairman.
November 24:
Eltra’s Committee of
Representatives holds its last
ordinary meeting in Vejle.
November 29:
The University of Aalborg
premieres “Forbindelsen - Et
sted mellem demokrati og
højspænding”, a film describ-
ing the democratic process
resulting in the construction
of the Northern Jutland line.
The film was produced for
Eltra by AM-Production. The
premiere was organised by
the Department of
Development and Planning
(AAU), the Danish Society of
Engineers’ Northern Jutland
region and Eltra.
December 14:
The Danish Parliament
passes the Danish Act on
Energinet.dk.
December 1:
Eltra enters into an agree-
ment with Norwegian
EffektPartner on the draw-
ing of reserve power from a
25 MW gas turbine which is
moved from Norway to
Esbjerg.
December 14:
The Danish Parliament
passes the Danish Act on
Energinet.dk with a large
majority.

32
Transmission
Accounts
Northern Jutland Line
The Northern Jutland line
between Aarhus and
Aalborg was commissioned
in September. This has
resulted in an increase in
depreciation and financial
costs relative to 2003.
Net profit for the year
The net profit before tax
was DKK 36 million, a
quarter of the profit for
2003. In addition to the pre-
viously mentioned correc-
tions to the revenue cap, the
change is attributable to
increasing wages, salaries
and pension costs and
depreciation/amortisation.
The profit after tax was
DKK 25 million.
Transmission Accounts
Amounts in DKK 1,000 Accounts 2004 Accounts 2003
Payment for 400 kV and international interconnections 228,637 315,740
Work performed on Eltra’s account 38,223 35,874
Other operating income 17,202 19,761
Activity for the year 284,062 371,376
Other external operating costs 36,246 34,003
Wages, salaries and pension costs 58,524 53,627
Depreciation/amortisation of fixed assets 134,423 122,866
Operating profit/loss 54,869 160,880
Income from subsidiaries 2,505 2,745
Financial income 2,669 3,779
Financial costs 24,187 22,530
Profit/loss on ordinary activities before tax 35,856 144,874
Tax on ordinary activities 11,215 43,421
Net profit for the year 24,641 101,453
Revenue Cap of the Year
The revenue cap for 2004 is
DKK 308 million. In 2003,
the return on net assets was
too high, for which reason
the revenue cap has been
reduced by DKK 16 million.
In autumn 2003, Eltra’s
Board of Directors decided
not to charge DKK 63 mil-
lion of the approved revenue
cap. This means that the
total revenue cap charged
for 2004 is DKK 229 million.
Transmission is subject to rev-
enue caps which are deter-
mined and announced by the
Authority and which stipulate
maximum income levels. The
accounts show either excess
revenue or a deficit from
Eltra’s activities as a transmis-
sion company.
Eltra can charge for operation
and maintenance of the 400
kV grid and the international
interconnections, deprecia-
tion/amortisation on fixed
assets and financing costs in
connection with new invest-
ments in so far as these are
not incorporated into the basic
cap.
A transitional order was
issued concerning revenue
caps for local and regional
grid companies in 2004. This
means that Eltra’s revenue
cap is based on the tariff as
at January 1, 2004.
Energinet.dk will not be sub-
ject to the revenue cap order.
Accounts 2004

ELtra 2004 annual report

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ELtra 2004 annual report