New frontiers for alternative energy Notes This slide pack is for internal presentation and internal distribution This slide pack is for external presentation but NOT for external distribution For copies of the AE brochure contact Lisa Hunter For further information on AE refer to www.bpalternativenergy.com Reid Buckley, Vice-President, BP Alternative Energy

Energy demand 2005-2030 Billion tonnes oil equivalent - Reference scenario represents ‘business-as-usual’ - Alternative scenario assumes all climate change and energy security policies now being considered by governments are adopted Source: IEA World Economic Outlook 2007

Source: IEA World Economic Outlook 2007 CO2 emissions 2005-2030 Billion tonnes CO2 Reference scenario represents ‘business-as-usual’ Alternative scenario assumes all climate change and energy security policies now being considered by governments are adopted 2°C scenario shows IEA calculation of path needed to prevent temperatures rising 2°C over pre-industrial levels Source: IEA World Economic Outlook 2007

Energy drivers Demand Climate change Energy security High energy prices

Energy criteria Availability Sustainability Reliability Affordability

Alternative energy Low-or-no carbon Plentiful Secure Increasingly attractive economically “I’d put my money on the sun and solar energy. What a source of power! I hope we don’t have to wait until oil and coal run out before we tackle that.” Thomas Edison, 1931

Policy support for alternative energy Policy targets in 66 countries Feed-in tariffs in 37 countries Mandates for biofuels in 17 countries Source: Ren21 Global Status Report 2007, Renewable Energy Policy Network

Alternative energy: the market today Demand growth p.a. since 2001 Global new investment in clean energy $148.4bn 150 10 20 30 40 Total Primary Energy Wind Solar Biofuels % 125 60% Growth 100 $86.5bn 75 58% Growth $bn $54.6bn 50 91% Growth $28.6bn 25 The energy industry faces a difficult balancing act – how to meet growing customer demands for convenient and accessible energy – in the developed and developing world - while simultaneously addressing concerns about climate change and the security of their energy supply. Primary energy = coal, oil, gas, nuclear, hydro, biomass and other renewables Fastest growing sector of the global energy market. Investment now exceeds $100bn p.a. With such growth brings opportunity for AE, however this market has also attracted many new dynamic competitors all vying to participate in this growth opportunity. 2004 2005 2006 2007 Sources: Primary energy based on IEA WEO reference scenario. Renewables based on New Energy Finance Grossed-up estimate based on disclosed deals. New investment only. Source: New Energy Finance 8 8

Alternative energy: the market today Demand growth p.a. since 2001 Global new investment in clean energy $148.4bn 150 10 20 30 40 Total Primary Energy Wind Solar Biofuels % 125 60% Growth 100 $86.5bn 75 58% Growth Jobs in renewable energy – 2,400,000 $bn $54.6bn 50 91% Growth $28.6bn 25 The energy industry faces a difficult balancing act – how to meet growing customer demands for convenient and accessible energy – in the developed and developing world - while simultaneously addressing concerns about climate change and the security of their energy supply. Primary energy = coal, oil, gas, nuclear, hydro, biomass and other renewables Fastest growing sector of the global energy market. Investment now exceeds $100bn p.a. With such growth brings opportunity for AE, however this market has also attracted many new dynamic competitors all vying to participate in this growth opportunity. 2004 2005 2006 2007 Sources: Primary energy based on IEA WEO reference scenario. Renewables based on New Energy Finance Grossed-up estimate based on disclosed deals. New investment only. Source: New Energy Finance 9 9

Proportions of world energy today

US wind capacity - beating the projections GW Actual capacity end-2007 EIA projection from 2004

BP Alternative Energy 12

BP Alternative Energy: a growing global business Solar PV facility / market Wind power Hydrogen power Biofuels facility / market Gas fired power Investing $1.5bn in 2008 – as much as in previous two years combined

BP Alternative Energy: solar power 30 years’ experience, 20 offices, 2000+ employees, installations in 160 countries. Manufacturing facilities in Frederick US, Bangalore, Madrid, Xian and Sydney. Expecting to grow 60%+ by 2012. Expanding production to achieve target sales of around 800MW with similar levels of production by 2010 Includes $97m expansion at Frederick – largest integrated solar manufacturing plant in US Advanced Mono² process; support for research projects Market Context The solar photovoltaic (PV) market continued to grow in 2007, both in installed capacity and production although it was held back by a worldwide shortage of solar grade silicon. The solar market is growing at around 30% p.a. (IEA reference scenario 2007) Global solar sales to reach around 4,000MW by 2010. In recent years, BP Solar’s technology initiatives have focused on the development of new silicon feedstock and alternative wafer fabrication techniques. These advances, coupled with BP Solar’s significant improvements in device efficiency, provide a sound footing in the march towards grid parity (where solar electricity costs the same as conventional retail electricity) in the face of rising material costs. Moreover, the current scale of the solar industry, continued investment in solar R&D and sustained government support will allow the economic introduction of these advances in coming years. To date BP Solar’s modules installed worldwide will offset more than 14 million metric tons of CO2 during their lifetime. That’s the equivalent of planting more than five million acres of trees!

BP Alternative Energy: wind power Expected installed gross capacity MW 3GW 1GW US land portfolio with potential for 15GW Market Context The solar photovoltaic (PV) market continued to grow in 2007, both in installed capacity and production although it was held back by a worldwide shortage of solar grade silicon. The solar market is growing at around 30% p.a. (IEA reference scenario 2007) Global solar sales to reach around 4,000MW by 2010. In recent years, BP Solar’s technology initiatives have focused on the development of new silicon feedstock and alternative wafer fabrication techniques. These advances, coupled with BP Solar’s significant improvements in device efficiency, provide a sound footing in the march towards grid parity (where solar electricity costs the same as conventional retail electricity) in the face of rising material costs. Moreover, the current scale of the solar industry, continued investment in solar R&D and sustained government support will allow the economic introduction of these advances in coming years. To date BP Solar’s modules installed worldwide will offset more than 14 million metric tons of CO2 during their lifetime. That’s the equivalent of planting more than five million acres of trees! 30 MW 15 15

BP Alternative Energy: wind power Built: Colorado: Cedar Creek wind farm with partner Babcock & Brown – 300MW Dhule, India - project built with partner Suzlon – 40MW Netherlands: Two farms – total 30MW Under construction: Indiana: Fowler Ridge wind farm with Dominion – Phase I - 400MW Texas: Silver Star project with Clipper - 60MW; Sherbino project with NRG Energy - 150MW Kansas: Flat Ridge farm with Westar Energy - 100MW California – re-powering Edom Hills – 20MW Market Context The solar photovoltaic (PV) market continued to grow in 2007, both in installed capacity and production although it was held back by a worldwide shortage of solar grade silicon. The solar market is growing at around 30% p.a. (IEA reference scenario 2007) Global solar sales to reach around 4,000MW by 2010. In recent years, BP Solar’s technology initiatives have focused on the development of new silicon feedstock and alternative wafer fabrication techniques. These advances, coupled with BP Solar’s significant improvements in device efficiency, provide a sound footing in the march towards grid parity (where solar electricity costs the same as conventional retail electricity) in the face of rising material costs. Moreover, the current scale of the solar industry, continued investment in solar R&D and sustained government support will allow the economic introduction of these advances in coming years. To date BP Solar’s modules installed worldwide will offset more than 14 million metric tons of CO2 during their lifetime. That’s the equivalent of planting more than five million acres of trees! 16 16

BP Alternative Energy: biofuels Producing ‘good’ biofuels – which reduce emissions and enhance security without damaging habitats and forests $1bn investment in Brazilian ethanol – made from sustainable sugar-cane - the most efficient feedstock currently available - greenhouse gas emissions reductions of up to 80% Working with DuPont to demonstrate biobutanol Investing $500 million over 10 years in the Energy Biosciences Institute to explore advanced biofuels and other applications of biotech to energy Market Context The solar photovoltaic (PV) market continued to grow in 2007, both in installed capacity and production although it was held back by a worldwide shortage of solar grade silicon. The solar market is growing at around 30% p.a. (IEA reference scenario 2007) Global solar sales to reach around 4,000MW by 2010. In recent years, BP Solar’s technology initiatives have focused on the development of new silicon feedstock and alternative wafer fabrication techniques. These advances, coupled with BP Solar’s significant improvements in device efficiency, provide a sound footing in the march towards grid parity (where solar electricity costs the same as conventional retail electricity) in the face of rising material costs. Moreover, the current scale of the solar industry, continued investment in solar R&D and sustained government support will allow the economic introduction of these advances in coming years. To date BP Solar’s modules installed worldwide will offset more than 14 million metric tons of CO2 during their lifetime. That’s the equivalent of planting more than five million acres of trees! 17 17

Concept for Abu Dhabi power station BP Alternative Energy: hydrogen energy A schematic of the proposed Abu Dhabi plant - If applied to just 5 percent of the new electricity-generating capacity that the world is projected to require by 2050, hydrogen power projects would have the potential to reduce global CO2 emissions by around one billion tonnes a year. The most recent project to be proposed is in Abu Dhabi, where early stage engineering design work is underway. Here, a 420MW natural-gas based hydrogen power plant could produce low-carbon electricity and capture up to 1.7 million tonnes of CO2 each year, injecting it into a producing oil field to maintain pressure and enabling the natural gas currently used for that purpose to be produced and sold. The CO2 could also potentially enable previously unrecoverable oil to be produced. Concept for Abu Dhabi power station

New policies on alternative energy Climate high on agenda for G8 and UN Climate summit in Copenhagen December 2009 Carbon price of up to $60 projected by 2012* National legislation or proposals underway in many countries *Source: New Energy Finance

Alternative energy: future market drivers Global new investment in 2030 - Clean Tech forecast Demand growth p.a. 2005-2030E % 5 10 15 20 25 Total Primary Energy Wind Solar Biofuels Sources: Primary energy based on IEA WEO 2007 reference scenario. Renewables based on New Energy Finance 3000 $2-3trn 2000 $bn 1000 $148bn 2007 2030 Across the world we're at an inflection point as far as the future energy mix is concerned. If we act now to develop sustainable regulatory and fiscal structures, we will be able to smooth the transition to a lower carbon economy of the future. Global population is forecast to grow by 1.5 billion by 2030 so, it is clear that the rapid economic and demographic growth forecast for the next 20 years is going to require even more primary energy - about 50% more than we use today, according to forecasts from the International Energy Agency. This rapid rise in demand is driving the increase in greenhouse gas emissions. But much of this growth in demand is taking place in countries with very little indigenous oil and gas supplies. This, in turn, has magnified concerns for energy security. Therefore, these two challenges, climate change and energy security, need to be solved together. Source: New Energy Finance, Nov 2007 20 20

Solar potential – Central America

Wind potential – Central America

New frontiers for alternative energy Notes This slide pack is for internal presentation and internal distribution This slide pack is for external presentation but NOT for external distribution For copies of the AE brochure contact Lisa Hunter For further information on AE refer to www.bpalternativenergy.com Reid Buckley, Vice-President, BP Alternative Energy 23