March 2, 2014 One sector, one target, one message The pathway towards 100 EUR / MWh in 2023

Before I start … … our key messages: 40% cost reduction can only be achieved when all stakeholders act together Constructing 3.45 GW offshore wind in less than a decade demands a master plan TenneT needs to be assigned as the grid developer and owner Use round 2 permits as a steppingstone towards a centralized far shore roll-out

The Dutch offshore wind market opens up new opportunities for all Energy Agreement (for sustainable growth) signed on September 6, 2013: A 14% renewable energy share in 2020 (today 4%) A 16% renewable energy share in 2023 1,5% energy savings per year (or 100 PJ savings in 2020) 15.000 new jobs Wind will be key to reach above and the targets are: Onshore: 6 GW to be operational in 2020 Offshore: 4.45 GW to be operational in 2023 Today's installed total capacity: Onshore: 2.5 GW Offshore: 1 GW (installed and under construction) That is: we need to install another 3.5 GW onshore and 3.45 GW offshore

Dutch offshore wind market: Status and outlook based on (projected) year of commercial operation Gemini 150 x SWT-4.0-130 | 2 x 300 MW Energy Agreement September 6, 2013 OWEZ (2006) 36 x Vestas V-90 | 108 MW Westermeerwind 48 x SWT-3.0-108 | 144 MW PAWP (2008) 60 x Vestas V-80 | 120 MW Luchterduinen 43 x Vestas V-112 | 129 MW 450 144 108 120 129

Electricity from wind is still seen as expensive BUT this will only happen if the Levelised Cost of Electricity (LCOE) will reduce from today’s level to 100 EUR / MWh in 2023 Electricity from wind is still seen as expensive AND …. subsidies won’t last forever

Lifecycle electricity output We take our share... BUT we need your contribution as well to reach the target! Primary target: 40% by 2020*) Offshore wind industry target: -40% in less than a decade CAPEX OPEX Optimize resource productivity (OPEX) + 160 Direct drive (CAPEX) Larger rotor blades (lifecycle electricity output) LCOE € / MWh = 130 Lifecycle electricity output 100 2010 2020 *) http://www.nwea.nl/greendeal

However, providing a “contribution” is not sufficient: We have to act together! One sector, one target!

Or to put it differently: All for one & one for all

AND we do need a master plan to avoid the Round 2 situation:

Change mindset: from project-2-project to portfolio thinking Focus is key to construct and operate the 3.45 GW in the most cost-efficient way Change mindset: from project-2-project to portfolio thinking Start with the desired end situation in 2023 Assign TenneT as grid developer and owner Use round 2 permits as a steppingstone towards a centralized far shore roll-out Select “IJmuiden ver” area as the main focus area Nearshore area is a nice-2-have for future projects Max 1 GW Maximum learnings Sharing grid connection cost O&M synergies No EIA performed Public resistance Limited space Conflict with Oil & Gas industry Max 1-1,5 GW Located North East of Belgian projects

Assign TenneT as grid developer and owner: key arguments 10-15% LCOE reduction: Cost of capital CAPEX OPEX Speed International alignment Cross-project benefits Enabling exploring synergies between turbines and grid Lessons learned from 6.2 GW Financing by TSO: -33% Depreciation period: 40 years Standardization: -10% Centralized O&M: -10% Cable redundancy: = 4% more yield Purchasing power: -10% Less dune crossings: -10%

Preliminary business case review shows that the “Centralized Far Shore” scenario results in the required 40% cost reduction Name Base case Decentralized “cf. round 2” Scenario A Centralized Offshore Scenario B Far Shore CAPEX 100 84 90 OPEX 80 AEP 112 120 LCOE 62 59 IJmuiden Ver Island for O&M and substation Industrialization and standardization of cables Depreciation electrical infrastructure in 40 years Redundancy and standardization of cables Higher wind speed

One sector, one target, and ... One message

Thank you very much for your attention! Thank you for your attention! Questions?