Renewable Energy Workshop 2012 Global Market Impacts on Wind and PV Technologies A Presentation to the Bucknell University Renewable Energy Workshop – 12 May 2012 PS10 CSP Plant – Andalucia, Spain

Review two renewable energy technologies current market drivers Technology, economics, electricity demand, environmental concerns, modularity and construction ease, government policy Resulting Market Trends US and Global Impact on Renewable Costs and Electricity Prices

Over $3/watt

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

Source: EIA Energy Outlook 2009 (Early Release), Table 1, 2008 Data CO 2 Emissions (millions of metric tons. and per quad) Petroleum: 2598, 64.0 Natural Gas: 1198,53.0 Coal: 2115, 92.3 About 86% Fossil Fuels 1 Quad = 293 billion kWh (actual) 1 Quad = 98 billion kWh (used, taking into account efficiency)

US EIA US EIA Source:

Prime Movers (World Electricity 1998,2005,2008 & US 2009) Fossil Fuel (Thermal) powered – 62.8% 66.0% 67.8% 69.1% Nuclear fission – 16.9% 15.2% 13.5% 20.2% Hydro powered – 18.8% 16.7% 15.9% 6.8% Renewables & Other** – 1.5% 2.1% 2.8% 3.9% ** - Other includes geothermal, wood, solar and biomass Fossil Hydro Nuclear Source: USDOE - EIA and IEA.org

Energy in Quads Source: EIA Annual Energy Outlook, 2010 Data says we will be 81% Fossil in 2035!!

USA – 99.9 China – 73.8 Russia – 30.4 Japan – 22.8 India – 17.7 Germany – 14.6 Canada – 14.0 France – 11.4 UK – 9.8 Brazil – 9.6 World total is 472; Average per 100 Million people is about If world used US average total consumption would be about 2148 quad! Source: US DOE EIA

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

SOURCE: S.Kurtz, Opportunities and Challenges for Development of a Mature Concentrating Photovltaic Power Industry, NREL Technical Report Feb 2009

Historic Market Growth Technology improvement Near mass production in China

SOURCE: U.K.W. Schwabe MSE Thesis 2011 Rowan University

2010 – 143% 2011 – 31.8% CAGR – 61.5% SOURCE: Schwabe and Jansson

SOURCE: U.K.W. Schwabe MSE Thesis 2011 Rowan University 2011> 62 GW <$0.95/ W

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

SOURCE: U.K.W. Schwabe MSE Thesis 2011 Rowan University

SOURCES: Prometheus Institute, INTEGRATED SYSTEMS, RAI Services, Inc. 2012

EIA - NJ All Sector Weighted Average: ¢ /kWh Moving Toward Grid Parity 2012 EIA – PA Residential Average: 12.6 ¢ /kWh SOURCES: U.K.W. Schwabe, INTEGRATED SYSTEMS 2011 USDoL NY/NJ Average: 20.2 ¢ /kWh

Source:

Source: National Renewable Energy Lab (NREL), Energy Analysis Office

SOURCE: Renewables 2011 – Global Status Report

Global Hydro Capacity Continues to increase Large projects less so than small projects Wind Most rapidly expanding in terms of capacity Solar Photovoltaics (PV) Most rapidly expanding in terms of growth rate

SOURCE: Jansson 2012

World Annual Generation Changes New YearΔ Growth Wind & PV% GW 33 GW 21 % GW 46 GW 36 % GW 54 GW 34% GW 65 GW 106%

World Wind demand is again expected to be higher than 2011 demand US market growth of 1,695MW (new wind) projects is 52% higher than 2011 Quarter 1* World Photovoltaic demand is also expected to exceed 2011 performance Q1'12 global PV demand is now forecast at 6.9 GW, down 35% Q/Q, but up a huge 146% Y/Y** SOURCES: * - American Wind Energy Association - * * - Solarbuzz - germany-drive-global-pv-demand-146-yy-qhttp://solarbuzz.com/our-research/recent-findings/expectations-policy-adjustments- germany-drive-global-pv-demand-146-yy-q

Cents per kWh Min Max 2012* Wind Costs (2009) PV Costs (2009) * - Does not include 30% Federal Tax Credit, depends on local resource 2009 Data Source:

Wind $1.5 - $2.00 / Watt PV $2 – $3.50 / Watt Coal $3-$3.50 / Watt Gas $1-$1.50 / Watt Nuclear $ / Watt SOURCE: SOURCE:

The U.S average residential retail price of electricity was cents per kWh in 2010 SOURCE:

SOURCE: U.S. Dept. of Labor – BLS –News Release 30 Nov 2011

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

Climate Change is… SOURCE: 2011 Gallup Poll

You are Here 396 ppm

Next year over 400 ppm !

Source:

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

Homeowners and Businesses 30% Renewable Energy Investment Tax Credit Businesses and Investors Accelerated Depreciation

30 States with min. standards 7 States with voluntary goals SOURCE:

Source: State renewable portfolio standard State renewable portfolio goal Solar water heating eligible * Extra credit for solar or customer-sited renewables Includes separate tier of non-renewable alternative resources WA: 15% by 2020* CA: 20% by 2010 NV : 25% by 2025* AZ: 15% by 2025 NM: 20% by 2020 (IOUs) 10% by 2020 (co-ops) HI: 40% by 2030 Minimum solar or customer-sited requirement TX: 5,880 MW by 2015 UT: 20% by 2025* CO: 20% by 2020 (IOUs) 10% by 2020 (co-ops & large munis)* MT: 15% by 2015 ND: 10% by 2015 SD: 10% by 2015 IA: 105 MW MN: 25% by 2025 (Xcel: 30% by 2020) MO: 15 % by 2021 WI : Varies by utility; 10% by 2015 goal MI: 10% + 1,100 MW by 2015* OH : 25% by 2025 ME: 30% by 2000 New RE: 10% by 2017 NH: 23.8% by 2025 MA: 15% by % annual increase (Class I Renewables) RI: 16% by 2020 CT: 23% by 2020 NY: 24% by 2013 NJ: 22.5% by 2021 PA: 18% by 2020 MD: 20% by 2022 DE: 20% by 2019* DC: 20% by 2020 VA: 15% by 2025* NC : 12.5% by 2021 (IOUs) 10% by 2018 (co-ops & munis) VT: (1) RE meets any increase in retail sales by 2012; (2) 20% RE & CHP by states & DC have an RPS 7 states have goals KS: 20% by 2020 OR : 25% by 2025 (large utilities )* 5% - 10% by 2025 (smaller utilities) IL: 25% by 2025

SOURCE:

SOURCE: Time Period SREC Value Autumn 2009 – December 2010 $250-$300 / MWhr January 2011 – March 2011 $176 -$250 / MWhr April 2011 $ 100 / MWhr May-June 2011$ 80 / MWhr July 2011$ 50 / MWhr August 2011$ 25 / MWhr Sep-December 2011 $ / MWhr January 2012$ / MWhr February 2012$ / MWhr March 2012$ / MWhr April 2012$ 20 / MWhr

1) Growing Global Energy/Electrical Demand 2) Technology Experience and R&D 3) Increasing Cost Competitiveness 4) Growing Environmental Concerns 5) Governmental Policy Initiatives Tax Credits, Feed-in Tariffs, RPS and RECs 6) Rapid/Modular/Ease of Construction

Designed in 6 months Permitted in 3 months Constructed in 6 months

Loss of any one market driver will not change momentum of this industry Most of states in the US (including PA) now have aggressive renewable portfolio standards requiring ever increasing levels of wind, solar and other renewable based electricity. New Jerseys Experiment was a success – one state can impact global markets and investment in a renewable technology The global demand for wind systems and photovoltaic (PV) systems has been doubling every 1-3 years.