Wind Turbine Manufacturing A cost-quality comparison (Based on information from the Financial Times fDi Benchmark tool – April 2012)

Competitiveness of Scottish Central Belt Value for Money Overall Attractiveness Quality of the Location Annual Operating Costs Quality Competitiveness General Business Environment Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment Contents

 The following analysis is based on fDi Benchmark, an online location benchmarking tool provided by the Financial Times (FT)  fDi Benchmark compared the Scottish Central Belt with the leading locations globally for Wind Turbine manufacturing based on an analysis of over 55 quality factors and 10 cost factors  A key emphasis was placed on: - Presence of industrial cluster – size of the industry, track record and export competitiveness - Infrastructure and accessibility – access to major overseas markets, quality of local infrastructure and quality of utilities - Labour availability and quality – overall size of labour market, tightness and competition for labour and experienced industry-specific staff  Other factors including the general business environment and living environment were also assessed Benchmarking Study

Project Profile Overview Cost FactorUsage Amount Property Total Occupancy cost (industrial rent)30,000 m² Weighting Model OverviewWeight Presence of an Industrial Cluster50 Infrastructure and Accessibility25 Labour Availability and Quality10 General Business Environment10 Living Environment5 Employee TypeProfile Head count Human Resources Human Resources Advisor1 Human Resources Manager1 Manufacturing Head of Manufacturing1 Production Manager1 Production Operative (Highly Skilled)29 Production Operative (Skilled)26 Quality Control Manager1 Quality Control Specialist5 R&D / Engineering Engineer8 Senior Engineer1 Administration Secretary1

fDi Benchmark Matrix The fDi Benchmark Matrix shows the trade off between cost and quality across the 7 selected locations for the Wind Turbine Manufacturing profile. The average cost and quality score is 100 for the selected locations. Source: fDi Intelligence, from the Financial Times Ltd The ‘ideal’ quadrant is the top left (high quality/lower operating costs)

fDi Benchmark Matrix The matrix is based on the weighting and cost model for the Wind Turbine Manufacturing profile. The weighting model identifies the key location criteria for the project and the cost model shows the primary cost inputs for the operation. The cost and quality scores are calculated using real data on all the location requirements and cost inputs. The results indicate the different location solutions for the investor as follows:  the Scottish Central Belt offer higher quality at lower cost than the average of all the selected locations  London offer higher quality but at higher cost  Lille, Liverpool, Newcastle offer lower cost, but at lower quality The Operating Cost value is in GBP - United Kingdom Pound LocationQualitative Score Operating Cost Index Operating Cost Value Bremerhaven ,209,303 Copenhagen ,586,536 Lille ,278,485 Liverpool ,659,246 London ,726,550 Newcastle ,499,504 Scottish Central Belt ,398,403 Source: fDi Intelligence, from the Financial Times Ltd

Location Attractiveness Index The location attractiveness index shows the overall attractiveness of the 7 selected locations for the Wind Turbine Manufacturing profile. The ratio of quality to cost is 50:50 Source: fDi Intelligence, from the Financial Times Ltd

Cost Quality Competitiveness The cost quality competitiveness uses the results of the fDi Benchmark Matrix to show the value for money of each location option. The graph shows that:  The top locations offering the highest quality for a given level of cost are the Scottish Central Belt and London  the Scottish Central Belt and London offer an above average level of quality and good value for money as their relative quality is higher than their relative cost Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness The annual operating cost calculation for Wind Turbine Manufacturing is based on the following primary input costs: Labour Cost  The average cost across the selected locations for Wind Turbine Manufacturing is GBP 5,051,146  The greatest cost saving between the selected locations is GBP 5,227,046 per annum  The values in the chart below are in GBP - United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd

Cost Competitiveness LocationLabour CostProperty Bremerhaven3,587,3261,621,976 Copenhagen3,277,0542,309,481 Lille2,545,7151,732,769 Liverpool1,972,3041,686,941 London2,569,0176,157,533 Newcastle1,980,1141,519,390 Scottish Central Belt1,919,3972,479,005 The locations with the lowest operating costs are Newcastle and Liverpool In terms of the individual cost factors, the locations with the lowest costs are:  Labour Cost: Liverpool and the Scottish Central Belt  Property: Bremerhaven and Newcastle The values in the table below are in GBP - United Kingdom Pound Source: fDi Intelligence, from the Financial Times Ltd

Quality Competitiveness 11 The quality competitiveness assessment is based on the weight model for the Wind Turbine Manufacturing profile which assesses each location across the following location factors: General Business Environment, Labour Availability and Quality, Presence of an Industrial Cluster, Infrastructure and Accessibility and Living Environment. The average score for the selected locations is 100. The locations with the highest quality scores are London and the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd

Quality Competitiveness Location General Business Environment Labour Availability and Quality Presence of an Industrial Cluster Infrastructure and Accessibility Living Environment Bremerhaven Copenhagen Lille Liverpool London Newcastle Scottish Central Belt In terms of the individual quality factors, the locations with the highest scores are:  General Business Environment: London and Copenhagen  Labour Availability and Quality: London and the Scottish Central Belt  Presence of an Industrial Cluster: the Scottish Central Belt and London  Infrastructure and Accessibility: London and Copenhagen  Living Environment: the Scottish Central Belt and London Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment The quality competitiveness breakdown for General Business Environment for the Wind Turbine Manufacturing profile is shown below The locations with the highest overall scores for General Business Environment are London and Copenhagen Source: fDi Intelligence, from the Financial Times Ltd

General Business Environment Location Economic growth and stability Operating risk Taxation and incentives Regulatory environment Bremerhaven Copenhagen Lille Liverpool London Newcastle Scottish Central Belt In terms of the individual quality criteria within General Business Environment, the locations with the highest scores are:  Economic growth and stability: London and Copenhagen  Operating risk: London and the Scottish Central Belt  Taxation and incentives: London and Copenhagen  Regulatory environment: London and Copenhagen Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality The quality competitiveness breakdown for Labour Availability and Quality for the Wind Turbine Manufacturing profile is shown below The locations with the highest overall scores for Labour Availability and Quality are London and the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd

Labour Availability and Quality Location Overall size of labour market Tightness and competition for labour Experienced industry-specific staff Flexibility of labour regulations Bremerhaven Copenhagen Lille Liverpool London Newcastle Scottish Central Belt In terms of the individual quality criteria within Labour Availability and Quality, the locations with the highest scores are:  Overall size of labour market: London and the Scottish Central Belt  Tightness and competition for labour: Liverpool and Lille  Experienced industry-specific staff: London and the Scottish Central Belt  Flexibility of labour regulations: Copenhagen and Liverpool Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster The quality competitiveness breakdown for Presence of an Industrial Cluster for the Wind Turbine Manufacturing profile is shown below The locations with the highest overall scores for Presence of an Industrial Cluster are the Scottish Central Belt and London Source: fDi Intelligence, from the Financial Times Ltd

Presence of an Industrial Cluster Location Size of industryTrack record Research and Development Capabilities Bremerhaven Copenhagen Lille Liverpool London Newcastle Scottish Central Belt In terms of the individual quality criteria within Presence of an Industrial Cluster, the locations with the highest scores are:  Size of industry: London and Bremerhaven  Track record: London and the Scottish Central Belt  Research and Development Capabilities: London and Copenhagen Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility The quality competitiveness breakdown for Infrastructure and Accessibility for the Wind Turbine Manufacturing profile is shown below The locations with the highest overall scores for Infrastructure and Accessibility are London and Copenhagen Source: fDi Intelligence, from the Financial Times Ltd

Infrastructure and Accessibility Location Access to major overseas markets Quality of utilities Quality of ICT infrastructure Bremerhaven Copenhagen Lille Liverpool London Newcastle Scottish Central Belt In terms of the individual quality criteria within Infrastructure and Accessibility, the locations with the highest scores are:  Access to major overseas markets: London and Copenhagen  Quality of utilities: Copenhagen and Bremerhaven  Quality of ICT infrastructure: Copenhagen and the Scottish Central Belt Source: fDi Intelligence, from the Financial Times Ltd

Living Environment The quality competitiveness breakdown for Living Environment for the Wind Turbine Manufacturing profile is shown below The locations with the highest overall scores for Living Environment are Liverpool and London Source: fDi Intelligence, from the Financial Times Ltd

Living Environment Location Cost of living Attractiveness for international staff Bremerhaven Copenhagen Lille Liverpool London Newcastle Scottish Central Belt In terms of the individual quality criteria within Living Environment, the locations with the highest scores are:  Cost of living: the Scottish Central Belt and Liverpool  Attractiveness for international staff: London and Copenhagen Source: fDi Intelligence, from the Financial Times Ltd

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