Stockholm, Sweden September 16, 2009 Marc Mühlenbach Analyst +34 93 272 6776

1. EU 2020: Offshore Wind Implications Stockholm, Sweden September 16, 2009 Marc MühlenbachAnalyst +34 93 272 6776 mmuhlenbach@emerging-energy.com www.emerging-energy.com

2. EU 2020: Offshore Wind Implications The Reality on the Ground Source: EU Commission EU commitment at the highest policy levels in the form of offshore stimulus funding has been granted for €565m with offshore wind clearly emerging as a key piece to achieving the EU’s vision for 2020

3. EU 2020: Offshore Wind Implications UK, Germany to Anchor European Offshore through 2020 772 Average MW additions/yr 2009-2020 XMW 708 Capacity Installed (MW) 241 132 113 113 70 86 79 56 52 Market Maturity Offshore growth is expected in 13 EU markets + Norway, with key markets Germany and the UK adding a combined 18 GW by 2020

4. EU 2020: Offshore Wind Implications Utility Positioning to Realise Offshore Potential in EU 2020’s Vision To realise the role of offshore in the EU’s vision for 2020, these utilities must execute their North Sea and Baltic Sea project pipelines

5. EU 2020: Offshore Wind Implications Transmission, Stable Production Incentives Weigh on Industry Growth Overview of Key Policy Issues for Offshore Development • No coherent offshore transmission build-out policy has led to varied results across the region • Offshore transmission build-out has proved time consuming, particularly as it is largely taking place on a project by project basis • Offshore transmission build-out challenge increases as projects move further out to sea Issue 1: Offshore Transmission • Offshore remuneration schemes have led to over 1.5 GW of developments in eight European markets to date • Some key markets, particularly in Scandinavia, are yet to clearly define their incentive mechanisms • Trend across the region has been for a recent increase in incentive mechanisms irrespective of type of support scheme Issue 2: Offshore Incentive Mechanisms • Public support schemes have led to feasibility and offshore potential studies in new markets as well as the establishment of important research and development centres driving key markets forwards • Pilot and key projects across the region have benefited from public support, assuring project flow across the region Issue 3: Industry Development

6. EU 2020: Offshore Wind Implications Transmission Pipeline Evolving, Varying Paths to Execution Comments Transmission Build-Out and Potential Wind Capacity (est.) • Total transmission build-out potential based on current developments is estimated at approximately 20 GW in Europe’s currently active markets • Costly and time consuming pan-regional build-out necessary for full-scale offshore wind integration in the EU • To reach EER’s forecasted 32 GW, new markets will have to activate projects and transmission hurdles need to be overcome Transmission build-out is not coherent across the region and will require pan-regional developments to realise the full-scale potential of offshore wind

7. EU 2020: Offshore Wind Implications Incentive Mechanisms on the Rise Comments • Feed-in Tariff and Tendering processes have led to 722 MW of installations; GC mechanisms have led to 764 MW of installations • Vast development potential in key Northern markets (Sweden, Norway, Finland) await full implementation or improvement of incentive mechanisms • Recent changes in offshore incentives have led to increased activity in key markets such as Germany and the UK Feed in Tariff/Tendering Process (722 MW) GC Mechanism (764 MW) Mechanism Being Defined (24 MW) Over 1.5 GW have been equally installed among Europe’s two main type of incentive mechanism. The trend for either has been an increase in support

8. EU 2020: Offshore Wind Implications Industry Development on National and EU Level Select Public Support for Industry Development Comments • National industry development has taken place in the form of technology development, project advancement and studies assessing offshore potential • On a supranational level, funding from the EIB has led to rescuing key projects (Belwind, London Array, Greater Gabbard) • Subsidies for manufacturers by local states, cities and ports have promoted the development of production facilities Public support for industry development has led to key R&D efforts in new markets, pilot projects and transmission developments

9. EU 2020: Offshore Wind Implications Offshore Expansion to Secure Growing Share in EU Energy Mix Offshore MW Installed and Forecast, 2000-2020 Analysis • Over 32 GW of total offshore wind installations are expected across 13 European markets • This represents a total of 19% of total wind growth in the period from 2009 to 2020, or 7% of total capacity installed for all energy producing technologies • Offshore wind will represent 27% of total wind installations by 2020, up from a current 5% Source: Emerging Energy Research Total offshore wind installed by 2020 is expected to be over 32 GW, accounting for 19% of total wind installations in Europe between 2009 and 2020

10. EU 2020: Offshore Wind Implications Forecasting Methodology 1 2 3 4 EER defines the current market environment by examining historical trends and market snapshots, and by mapping markets’ relative maturity EER considers short-term, mid-term, and long-term market drivers and inhibitors gathered from primary research, assessing relevant market participants on a bottom-up and top-down, country-by-country basis EER’s baseline market assumptions are outlined in three- to five-year increments EER establishes base-case, high-growth, and low-growth scenarios • Key Data • Projects under construction • Signed PPAs • Project financing secured • Construction phase complete • Fully permitted projects • Firm turbine orders • Confirmed project tenders • Key Data • Projects entering permitting (onshore and offshore) • Developer CAPEX plans • Turbine production capacity • Component production capacity • Turbine framework agreements • Government targets and plans • Policy incentives • Existing grid capacity • Announced tenders • Key Data • Long-term project pipeline • Grid penetration • Government targets • Energy mix evolution • Offshore and repowering • Total technical potential • Grid integration viability/storage technology • Overall political will • Key Assumptions • Project execution probability • Turbine delivery and erection lead times • Supply chain expansion onshore/offshore • Cost of energy • Energy mix evolution • Wind penetration level – grid take-up • Competition • Technology improvement • Industrial/ manufacturing build-out • Key Assumptions • Wind energy incentives • Energy mix objectives • Infrastructure planning • Cost of energy scenarios • Market saturation point • New technology impacts Market Environment Short-Term Inputs Year 1−3 Mid Term Inputs Year 4−6 Long Term Inputs Year 7−10 EER Base-Case Scenario EER Forecast Scenarios Market Snapshot Market Maturity Wind Resources Regulatory Mechanisms Site Approval Utility/ Grid Issues Competition Sources • Developers • Utilities • Turbine suppliers • Government agencies • Permitting authorities • Project finance banks • Component suppliers • Transmission system operators (TSOs) Ongoing Intelligence Collection

11. EU 2020: Offshore Wind Implications Key Takeaways • Offshore wind will assume a growing role in achieving the EU’s vision for 2020 by contributing to more than one fourth of total wind growth by 2020 and growing to nearly 33 GW installed • Key European Players, including EPC companies and utilities, are well positioned across mature markets in Northern Europe to realize offshore wind potential • It has taken a coherent EU vision for 2020 renewable energy targets to spur the offshore wind sector. This has led to member states creating conducive market environments to encouraging pipeline development • Ongoing industry expansion through continued influx of utility, turbine and EPC players will create stable industry environment alongside near-term, targeted EU funding support • EU set to lead global offshore expansion with 80% of global offshore wind installed between 2009 and 2020