1 The Italian Onshore Market At a Glance Presentation Document European Wind Energy Conference, Warsaw, April 21, 2010 Speaker: Elena Farné, MAKE Consulting Wind Energy Sector

2 Regional targets Current status: Maximum wind potential according to the 2007 Position Paper of the Italian Government: 12,000 MW, including 2,000 MW offshore, or 22 TWh by Expected changes: Many of the 20 Italian regional governments issued guidelines and regional targets in order to reach the targets; others have not initiated such measures, but could do so during the next year. Incentive system Current status: At the end of 2008, the Italian government dealt with concerns related to the value of green certificates (Certificati Verdi or CVs) for plants coming on-line after January 1, These adjustments have regulated the balance between supply and demand in order to solve possible speculative fluctuations, which in 2008 affected the value of the CVs. Now, in the case that CVs exceed demand, they can be returned to the government-sponsored enterprise (GSE), receiving the average CV price for the previous year. Small wind plants (up to 200 kW capacity) can opt for the CV system or for a comprehensive tariff of EUR per kWh. Additional regulations issued in 2008 included a fixed reference price for the CVs, calculated as the difference between EUR 180 per MWh and the annual market electricity price. New installations can benefit from the CVs or the comprehensive tariff for 15 years. In June 2009 the Italian Parliament issued a law which changes the obligatory quota in terms of renewable energy generation which was moved from the utility companies/ IPPs to the power distributors, losing part of its effect as RE catalyst. Key legislative changes/growth drivers next months

3 Top-down parameters Targets: The Position Paper issued by the Italian government set a maximum wind potential target of 12,000 MW, of which 2,000 MW is coming from offshore, equivalent to 22.6 TWh in As part of the EU 2020 program, Italy targets a renewable share of 17% of its final energy consumption. Forecast of power production: In June 2009, Terna, the Italian Grid Operator, estimated an Internal Gross Power Demand of TWh in It is expected that the power coming from wind will be able to supply 22.6 TWh, equal to approximately 5.6 % of the 2020 power demand. Fixed assumption: 2020 renewable energy target of 17% Variable assumption: Ternas scenario

4 Market facilitators Incentive schemes: A fixed reference price for the CVs has been introduced, which is calculated as the difference between EUR 180,00 per MWh and the annual market electricity price. New installations can benefit from the CVs or the comprehensive tariff for 15 years. Permitting In May 2009, Italys highest court clearly established that regions cannot issue regulations or procedures to cover gaps in the national legislation. This precedent creates a climate of uncertainty and demands for an urgent implementation of national guidelines, expected by mid-2010, in order to standardize the requirements for wind power plants. Grid capacity: Terna, the Italian Transmission Operator, plans to invest EUR 550 million in the national transmission grid to support the development of RES, and in particular wind energy, through the repowering of existing lines, construction of new lines, and construction of connecting plants, which represent the most significant part of planned investments. Terna expects 9,600 MW wind installations by 2013, and its plans for new connections include: The 500-kV DC1,000 MW submarine cable between Sardinia and the mainland (to be completed by Q2 2010) and an enhanced connection to Sicily (they will guarantee an increase of 3,700 MW of transmissible energy from wind); A new connection Italy-Montenegro; and Increased transmission lines between North and South. Variable assumption: Design of CV incentive system Variable assumption: Upgrading and expansion of grid Variable assumption: Level of improvements to national permitting process

5 External factors: Financial environment: Wind projects have experienced significant difficulties in acquiring financing during the last 12 months. The crisis has hit small developers and IPPs the hardest as these are dependent on project financing to move projects ahead. Developers and IPPs with longer track records and stronger financial backgrounds rely on financial leasing. Despite progress, the financial environment is still not as favorable for wind projects as before the crisis. Competitiveness of wind power: The fall in oil prices and natural gas caused by the downturn in economic activity has affected the competitiveness of wind power negatively. However, there seems to be a general consensus that the long term prices for fossil fuels will be at levels that will make wind power a competitive energy source as long as it is supported by an incentive scheme. Variable assumption: Speed of improvement in financial environment Fixed assumption: Wind power will remain cost-competitive compared with power production based on fossil fuels

6 Market forecast Source: MAKE Consulting

7 MAKE Consulting Aarhus, Denmark Chicago, USA Boston, USA Tianjin, P. R. China Copyright © 2010 MAKE Consulting A/S. All rights reserved. Reproduction or distribution of this presentation in any form without prior written permission is strictly forbidden. Violation of the above restrictions will be subject 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 presentation, neither can MAKE Consulting A/S be liable for any financial loss or damage caused by the use of the information presented in this presentation. Reports and notes recently compiled by MAKE Consulting: Changing market dynamics eminent for manufacturers in China (flash note, 16 April, 2010) GE and Siemens dive into the European offshore market (flash note, March 31, 2010) India setting the stage for growth (research note, 29 March, 2010) WTG OEM market shares 2009 (research note, 17 March, 2010) Daewoo's wind ambitions sail into Nova Scotia (flash note, 12 March, 2010) Market Outlook (market report, 4 March 2010) BARD and Gamesa join forces as offshore competition intensifies (flash note, 22 February 2010) 2H 2009 WTG order activity slow; expected to pick-up in 2010 (research note, 21 January 2010) ITC ruling adds to competitive MMW segment in the U.S. (flash note, 18 January 2010) Iberdrola ARRA grants drive strong year in the U.S. (flash note, 13 January 2010)