Analyst PRESENTATION Årsmøde Offshore Wind Energy in Europe Michael Guldbrandtsen mg@consultmake.com
Offshore wind development Offshore wind farms have grown significantly 1991 22 22 Vindeby Horns Rev 1 Hornsea 4.95MW 16MW 1,2MW.45MW 2.MW 7.MW ~2,2 ~15, ~1,, Location of wind farms further from shore to harvest more energy output and enhanced wind farm performance. 2
Offshore wind development Offshore wind development has been concentrated in a few markets Cum. offshore wind capacity, 2-216 (GW) North Sea offshore wind capacity, YE216 15 North Sea capacity Global capacity 1 5 1 2 3 4 5 6 7 8 9 1 11 12 13 14 15 16 With 9% of global offshore wind capacity located in the North Sea region, these countries will continue to climb the learning curve and harvest clean, reliable and affordable energy. 3
Offshore wind development North Sea region to add 34GW capacity with existing policies Offshore markets: New capacity 217e-226e Offshore market forecasts: 215-226e 5 1 25 (GW) United Kingdom Germany Netherlands France Belgium Denmark Sweden Ireland Finland Norway Poland Portugal China Japan Taiwan South Korea U.S. 1.GW 34.3GW 29.GW 12 11 1 9 8 7 6 5 4 3 2 1 15 16 +11.4% 17e 18e 19e 2e 21e 22e 23e 24e 25e 26e U.S. Rest of Asia Pacific China Rest of Europe North Sea Long leadtime for offshore wind farms and alignment with national wind targets leave limited room for more aggressive North Sea build-out through 225. 4
European offshore wind power demand 216 highest year on record for FIDs in Europe European FIDs, 21 to 216 Grid-connected capacity (GW) 6 5 4 +19% 3 2 1 21 211 212 213 214 215 216 Finland Sweden Denmark Belgium France Netherlands Germany UK 217 FIDs will be at a lower level than 216, but will be followed by another record-year for FIDs in Europe 218 as developers FID big round 2 offshore projects in the UK. 5
European offshore wind power demand Decommissioning will remain a niche market through 226 European offshore wind growth (MW) 35 3 25 2 15 1 5 216e 217e 218e 219e 22e 221e 222e 223e 224e 225e 226e Portugal Ireland Sweden Denmark France Netherlands Germany UK Between 217 and 226, only around 7MW will be decommissioned, and until 22 only small-scale projects of sizes up to 1MW will be decommissioned. 6
Offshore wind potential Offshore wind is at start of the learning curve with large potential to reduce gap to grid parity Technology lifetime (years) Installed global capacity (GW) Coal 114 Coal 1,97 Gas 76 Gas 1,6 Nuclear 64 Nuclear 41 PV 39 PV 113 Wind onshore 34 Wind onshore 44 Wind offshore 24 Wind offshore 11, Siemens, Siemens Being one of the youngest electricity sources having not yet gained economies of scale and standardisation, offshore wind has large cost reduction potential. 7
Offshore wind potential Record low offshore subsidy prices increase confidence in sector Recently awarded subsidies EUR/MWh 2 EUR/MWh 2 LCOE development, 217-225e 15 East Anglia 15 1 Neart na Gaoithe Horns Rev 3 Borselle I & II Hornsea Two Triton Knoll Gode Wind 3 Borssele III & IV Moray 1 Industry s 22 target 5Danish Nearshore Tender Kriegers Flak 215 216 217 218 Note: Time of award of subsidy He Dreiht OWP West Borkum Riffgrund West II Strike price 5 Subsidy cap 17e Germany UK 22e Netherlands 25e Year Note: LCOE level at FID. Outcome of the first German tender indicates that Germany and the UK will follow the Netherlands below ~6EUR/MWh in LCOE by 222 on a FID basis. 8
Offshore wind potential Developers and governments in key role to drive development Technology development Development of larger and more reliable turbines Develop next generation foundations Redevelop the transmission solution for far-from-shore projects Optimized O&M solutions Supply chain maturation Consolidation of business to provide for few suppliers having critical business mass for innovation, yet being in competition Develop industrialized supply chain, standardization of main components and serial production Political support Secure transparent long term planning horizon on EU and national level Ensure stable support levels during the transition towards lower cost-of-energy Create level playing field and set fair price for CO2 Developers & OEMs are to push technology innovation, risk mitigation and entrance of new technologies Developers and governments to secure supply chain development Governments to support future buildout in the mid- to long- term with stable and transparent frameworks Source: DONG, Siemens, MAKE Modelled cost of energy reductions are possible but require clear roadmap for all industry stakeholders. 9
Contact Michael Guldbrandtsen mg@consultmake.com consultmake.com 217 MAKE Consulting A/S. All rights reserved. Reproduction or distribution of this report in any form without prior written permission is strictly forbidden. Violation of the above restrictions will be subjects to legal action under the Danish Arbitration Act. The information herein is taken from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions, analyses and forecasts on which they are based. MAKE Consulting A/S cannot be held liable for any errors in this report, neither can MAKE Consulting A/S be liable for any financial loss or damage caused by the use of the information presented in this report. Denmark Sønder Allé 9 DK-8 Aarhus T +45 726 6628 U.S. 117 N. Jefferson Street Suite 4 Chicago, IL 6661 T +1 312 441 959 U.S. 33 Bradford St Concord, MA 1742 T +1 978 448 3186 China No.19, 47 Shaanxi Bei Road, Jing an District Shanghai 241 T +86 21 513 1819 Germany Neuer Wall 1 2354 Hamburg T +49 4 822 15 3111 1