Sr. Steve Sawyer GWEC 10:05 a 10:25 Mirada general sobre los mercados eólicos Latinoamericanos

Beijing | Brussels | Washington Global Wind Power Update II Congreso Latinamericano de Energía Eólica June 13, 2016

Beijing | Brussels | Washington GWEC – Uniting the global wind industry and its representative associations C0 Members Associations C1, C2 and C3 Members

Beijing | Brussels | London Outline 1.Introduction global markets annual and cumulative 3.Top 10 annual and cumulative markets 4.Regional Distribution 5.Offshore offshore market 7.Projections Latin America stats 9.Some observations on policy, auctions, and prices 10.New Markets 11.Summary and conclusions

Beijing | Brussels | London 2015 growth: 17% 16 yr avg. growth: 24.2% Beijing | Brussels | Washington

16 yr avg. growth: 24.9% 2015 growth: 22%

Beijing | Brussels | London Beijing | Brussels | Washington

Beijing | Brussels | London Beijing | Brussels | Washington

Beijing | Brussels | London Beijing | Brussels | Washington

OECD vs non-OECD: Annual Market

Beijing | Brussels | Washington OECD vs non-OECD: Cumulative Market

Beijing | Brussels | London

Beijing | Brussels | Washington

Wind Power installed capacity increase in LAC in % 5% Wind Power installed capacity in LAC LAC Wind Power installed capacity in 2015 means 9% global Annual WP installed capacity in LAC

18 Wind Power installed capacity forecast for LAC in 2020 Beijing | Brussels | Washington Fuente: GWEC; Enero 2010

Beijing | Brussels | London Some expression of political commitment from the government Effective rule of law and transparency Financing Mechanisms: a clear and effective pricing structure Grid Access: Provisions for priority access to the grid; connection availability and ease of grid access for wind farms A government and/or industry led strategy for public and community buy- in/acceptance and awareness – give them a stake! An industrial development and employment strategy A functioning finance sector Key Elements for any Policy to work

Beijing | Brussels | London Questions in relation to Auctions 1.Is the bar set high enough to keep out speculators? 2.What do you get at the end of the auction: a contract, or a chance for one? 3.Consequences/penalties for not living up to the terms of the auction? 4.Is there pre-qualification of the projects? 5.Where are the sites? 6.How much is being auctioned at any given time? What is the visibility? 7.Who’s responsible for the grid connection? 8.How does local content figure?

Beijing | Brussels | Washington Auctions and Prices 1.Auctions very much in fashion – if only goal is price, then fine 2.Very low prices in Morocco (~30/MWh), Peru (~40/MWh), South Africa (<40- 50/MWh), Mexico (40-60 /MWh), Brazil (~50/MWh) are a unique set of circumstances which are unlikely to be replicated widely: Excellent wind resources; Very low capital costs; balance sheet or govt backed; Very low development costs; Long term PPAs; 3. However, only Brazil and South Africa are ‘proven’ in the sense that the programme has been running for a while and projects have been built. At least some of the apparent ‘low’ prices are a result of currency fluctuations (SA and BR are done in local currency) 4. Average US costs (PPA + PTC) = ~45/MWh (avg CF ~34%) 5. Obsession with LCOE cost will fade as system requirements play a larger role with greater penetration.

New Markets BRAZIL MEXICO EGYPTMOROCCO TUNISIA KENYA SOUTH AFRICA MONGOLIA VIETNAM THAILAND SRI LANKA ETHIOPIA TANZANIA PAKISTAN Beijing | Brussels | Washington URUGUAY CHILE PHILIPPINES ARGENTINA IRAN GHANA INDONESIA

Beijing | Brussels | Washington Conclusions Unexpected growth (22%) in 2015, mostly China, US and Germany should be less spectacular. Wind supplied about half of all global power generation growth in markets with more than 1,000 MW; 8 with more than 10,000 MW; Proliferation of new markets in Africa, Asia, and Latin America. Technology evolution continues, but incrementally, not spectacularly, except perhaps in offshore. Costs continue to come down and wind is the cheapest way to add capacity in a growing number of markets in Africa, Asia and Latin America, as well as the in US and Canada. Offshore costs still coming down the learning curve. ~4% of global electricity supply now, should be 6-8% by 2020, 18-20% by 2030, around 1/3 by 2050 if we are to get to grips with the climate problem.

Thank you! For more information: Steve Sawyer, GWEC Beijing | Brussels | Washington