The Challenges to the Offshore Supply Chain Presentation Document The Challenges to the Offshore Supply Chain Wind Energy Sector European Wind Energy Conference, Warsaw, April 22, 2010 Speaker: Thomas Karst, MAKE Consulting

MAKE Consulting A/S MAKE Consulting is an advisory company specialized in the renewable energy market with particular focus on intelligence and strategy for the wind energy market. MAKE Consulting employs a team of professional and independent advisors with documented experience from the international wind energy industry providing an in-house detailed market intelligence which we make every effort to translate into a product that provides the players with a competitive advantage. MAKE Consulting has offices in Aarhus/Denmark and in Chicago and Boston/USA and Tianjin/P. R. China. MAKE Consulting A/S, www@MAKE-Consulting.com Speaker: Thomas Karst. Masters in Chemical Engineering 11 years experience in wind energy from NEG Micon, Vestas and MAKE Consulting.

Contents 1. European Offshore Installations 2008 - 2020 2. Key Supply Chain Issues 3. Key Suppliers – WTG’s and Vessels 4. Conclusion

European Offshore Installations 2008-2020e Offshore installation development in Europe, 2008–2020e MWs WTGs CAGR 09-14e: 43.7%(MW) 30.8%(WTG) CAGR 15-20e: 7.8%(MW) 3.3%(WTG) Significant growth expected in the years 2010 to 2015 of more than 40% (CAGR) puts high demands to the supply chain of equipment and infrastructure service Grand Total Installed Base 895 WTG’s 2270 MW

Key Supply Chain Issues Onshore vs. offshore Balanced preference between onshore and offshore market. WTG’s WTG supply and mean time between failure Installation vessels Inadequate number and capacity Port facilities Inadequate infrastructure, too few and too expensive Offshore cabling Yet a technical challenge Grid connections Insufficient capacity to evacuate and transport power Investment in technology and facilities required No pre-investment orders guarantee

WTG supply OEM expected product offering Supply chain perspective 1st generation WTG’s Present 1st generation offshore WTG’s, 2 manufacturers were considered as contenders Vestas/NEG Micon and Siemens 2nd Generation WTG’s 2nd generation offshore WTG’s introduced in 2009 and under test At least 6 manufacturers are now considered contenders Vestas, Siemens, REpower, Areva, BARD, Sinovel 3rd Generation Wind Turbines 3rd generation offshore WTG’s are announced and tests are expected to start in 2012-2013 At least 10 manufacturers are announced as contenders Vestas, Siemens, REpower, Areva, BARD, Sinovel, GE Energy, Nordex, Darwind, Acciona, Gamesa, etc. Supply chain perspective There are no constraints expected from the WTG supply chain The main concern is the operational capability of the many new WTG models Source: MAKE Consulting

WTG Size and Number WTG numbers and size 2010-15 Supply chain perspective 1st Generation WTG’s 2-3 MW in nominal capacity Rotor diameter less than 100 meters Nacelle weight less than 200T Majority of foundations were monopile or gravity type 2nd Generation WTG’s 3-5 MW in nominal capacity Rotor diameter in excess of 100 meters Nacelle weight between 200T and 450T Heavy monopile or gravity type still in play but large tripod, jacket etc. structures becoming standard 3rd Generation Wind Turbines 5-7 MW in nominal capacity Rotor diameter in excess of 120 meters Nacelle weight between 400T and 600 T Gravity foundation still in play but large tripod, jacket etc. structures will dominate Supply chain perspective Number of annual WTG installations increases by 100% Average size of WTG increases by more than 50% and the foundations will increase even more The majority of present vessels, cranes and infrastructure is not designed to handle 2nd and 3rd generation of WTG’s Source: MAKE Consulting

Vessel supply perspective Vessel Availability Vessel availability 2010-2015 Vessel supply perspective Existing offshore fleet 20 vessels are present in operation with WTG and foundation installation By 2012 at least 6 of these are anticipated to be obsolete due to size, capability, cost, H&S etc. Present available vessel days offshore are: 4060 (at 71% availability) 3735 (at 65% availability) Future offshore fleet 9 new vessels have been confirmed and some of these are presently under construction By 2015 the fleet will then consist of 23 vessels A majority of the vessels will be capable of handling 2nd generation WTG’s and foundations 2015 estimated available vessel days offshore are: 5610 (at 71% availability) 5160 (at 65% availability Presently available vessels Owner Vessel 2010 2011 2012 2013 2014 2015 A2Sea Sea Jack   Sea Power Sea Energy Sea Worker GeoSea Buzzard Goliath Vagant Fugro Seacore Excalibur Jackup Barge JB 114 JB 115 Jumbo Offshore Jumbo Javelin Seajacks Kraken Leviatian LISA Hochtief Odin Thor MPI Resolution Seaway H. Lifting Stanislav Yudin Ballast Nedam Svanen Bard Offshore Windlift I Vessels confirmed and under construction  Adventure Discovery Jackup Barg JB 117 Master Marine Service Jack 1 RWE Seabreeze II RWE Seabreeze 1 RWE Seabreeze 2 Fred Olsen Windcarriers II Unknown Supply chain perspective Crane, load and operational capacity of the new vessels are designed for 2nd generation WTG’s and foundations Net increase in offshore installation fleet will be approx. 3-4 Vessel days available will increase by 35-40% Source: MAKE Consulting

Vessel Supply and Demand 2010-2015 Demand vs. vessel availability 2010-2015 Long term view 2010 to 2015 WTG average size will increase by 30% Foundation average size will increase by 50% Installation days per WTG and foundation will increase by close to 100% (5d to 9.5d) Number of WTG’s to be installed will increase by close to 100% 200-240% increase in demand for vessel days Vessel days available increases only by 40% No new vessels can be ordered and delivered in less than 2 years A vessel delay of 1 year will reduce capacity by approx. 5% Conclusion The growth between 2010 and 2015 in WTG/foundation size and numbers, water depth, shore distance etc. constitutes a significant demand to the supply chain for technical and infrastructure services By 2015 capacity of vessel days may fall short by up to 10-20% of demand Source: MAKE Consulting

Short term conservative view Vessel Supply and Demand 2010-2012 (conservative) Demand vs. vessel availability 2010-2012 Short term conservative view 2010 to 2012 WTG average size will increase by 30% Foundation average size will increase by 50% Installation days per WTG and foundation will increase by up to 50% (5d to 7.5d) Number of WTG’s to be installed will increase by close to 95% 190% increase in demand for vessel days Vessel days available increases only by 20% No new vessels can be ordered and delivered in less than 2 years A vessel delay of 1 year will reduce capacity by approx. 5% Conclusion The growth between 2010 and 2012 constitutes an even more significant demand to the supply chain for technical and infrastructure services than over the long run between 2010 and 2015 Capacity of vessel days may fall short by up to 10 to 15% of demand Source: MAKE Consulting

Short term optimistic view Vessel Supply and Demand 2010-2012 (optimistic) Demand vs. vessel availability 2010-2012 Short term optimistic view 2010 to 2012 WTG average size will increase by 30% Foundation average size will increase by 50% Installation days per WTG and foundation will increase by up to 30% (5d to 6.5d) Number of WTG’s to be installed will increase by close to 95% 150% increase in demand for vessel days Vessel days available increases only by 20% No new vessels can be ordered and delivered in less than 2 years A vessel delay of 1 year will reduce capacity by approx. 5% Conclusion Improvements in the number of average installation days per WTG and foundation has significant influence on the vessel demand Improving the total installation time per unit by one day improves capacity by approx. 10% Optimistically capacity of vessel days may meet or fall short by up to 5% of demand Source: MAKE Consulting

Conclusions Supply chain challenges for WTG’s and installation vessels At least 6 WTG manufacturers will be contenders There are no constraints expected on the supply of WTG’s Operational performance for offshore WTG is still a concern, particularly for the many new models Installation fleet long term (2010-2015) Offshore installation fleet will grow from 20 to 23 vessel Net increase in offshore installation fleet will be approx. 3-4, corresponding to between 35% and 40% increase in vessel days Demand for vessel days will increase between 200% and 240% Fleet capacity is at present destined to fall short by 2015 by up to 20% Installation fleet short term (2010-2012) Installation days per WTG and foundation will increase between 30% and 50% Annual number of offshore WTG installations will grow 95% Demand for vessel days will increase by between 150% and 190% Conservatively the capacity of vessel days may fall short by up to 15% of demand Optimistically the capacity of vessel days may meet or fall short of demand by up to 5%

Thank you!

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) MAKE Consulting Aarhus, Denmark (Head Office) Chicago, USA Boston, USA Tianjin, P. R. China www.make-consulting.com 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.