Growth Opportunities in the Cleantech Industry The World Bank Knowledge Economy Forum IX, Berlin Nikolai Dobrott, Managing Partner May 7, 2010

Between 2010 and 2030 global primary energy demand is projected to grow by 34%. 2 Projected Primary Energy Demand [Mtoe] 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Source: IEA World Energy Outlook

Globally renewable energy deployment has grown significantly. 3 World renewable net electricity generating capacity development [GW] Source: IEA Renewables information 2009.

Promoting clean technologies represents a highly attractive opportunity to meet future energy challenges. Advantages of clean technologies Less dependency on fossil fuels and prices Energy security through diversified energy mix Decentralized energy supply and cost- effective opportunities for rural electrification Highly reduced CO 2 emissions and opportunity for CDM projects Creating a local growth industry Qualified jobs Global renewable energy market size in 2008 and 2018e [billion USD] 4 Source: Clean Edge 2009

Within ten years installed renewable capacities in Germany have almost quadrupled. 5 Cumulative installed capacities [GW] Source: BMU 2010

Renewable energies have become a significant industry in Germany. Renewable energies in numbers (2009) 16.1% of electricity consumption 8.4% of heat production EUR 17.7 bn investment in new installations (+19.4%) EUR 33.4 bn in revenues (+8.9%) 292,900 jobs in total 6 Source: BMU , , , , ,900 Job development in the renewable energy sector 2004–2009

The eastern German ‘Solar Valley’ – an example for successful cluster development. Area: 108,585 km² Inhabitants: ~16 million (1/5 of Germany’s total; incl. 3.5 million in Berlin) Eastern Germany features the world’s largest PV industry cluster:  Wafer-based technology: 28 companies with a production capacity of more than 3,7 GW  Thin-film technology: 26 companies  Equipment suppliers: 13 large companies  Research: several world-class institutes  Education: several universities and colleges with solar-specific courses  Approx. 15,000 direct employees 7 Source: Germany Trade & Invest Equipment for thin-film, automation laser processing Leipzig Frankfurt Munich Hamburg Germany Leipzig Berlin Stuttgart Düsseldorf Frankfurt PV companies Equipment manufacturers Research institutions Solar Valley Dresden

By implementing effective policy measures, Germany has taken the lead in solar energy within a few years. Annually installed PV capacities [MWp] PV industry turnover development [m EUR] ,000 1,500 2,000 2,500 3,000 3,500 4, ,000 roofs program Renewed feed- in tariff law Feed-in tariff law Renewed feed- in tariff law Source: BMU 2010.

Best practice example for short term policy measures: 100,000 roof program in Germany. Key data of the program Duration: 5 years (Jan – Dec. 2003) Effects: Generated 345 MW of installed capacity, almost 100% of total PV growth during this period 73,787 loans supported Total loan volume: EUR 1.6 bn. Costs: ca. EUR 250 million Policy design: Long maturity loans with low interest rates: 1.9% p.a. undertaken by state-owned KfW bank Further policy measures during program: Renewable Energy Sources Act (2001) Annually installed PV capacities [MWp] 9 Source: Apricum Research ,000 roofs program

10 Reliable government support leads to high installed capacities and the development of local manufacturing. PV cell production world market share 2009 Installed capacity 2009 Germany Spain Japan USA South Korea Italy China France Source: Apricum Research 2010 Best practice

Major drivers for cluster development are dependent on political will and commitment. 11

Apricum proposes a three-way approach to develop a self- sustaining Cleantech cluster. 12 Self-sustaining Cleantech cluster Local manufacturing Developing targeted manufacturing incentives in identified key solar applications. Domestic demand R&D Extension of market incentive schemes (e.g. FIT), specifically targeting identified key solar applications. Enabling targeted incentives for key innovations Promoting Cleantech and solar energy R&D Exploiting the full potential of the pool of well-educated and versatile workforce.

Apricum has the experience and strength to support your location in cluster development. Global Cleantech industry and market expertise competency experience in economic development: Thorough understanding of industry requirements for market entry, location analysis and site selection Excellent connection to industry players worldwide Experts in investment promotion and cluster development including market and manufacturing incentive schemes Consultancy project record for states and regions in Germany, USA and Middle East International team of experienced consultants Country representative in emerging markets 13

Client Project summary Saudi Arabian governmental institution and KAUST – King Abdullah University of Science and Technology Steps taken by Apricum Development of a national solar strategy Location benchmarking vs. leading sites around the world for all segments of the value chain Global R&D best-practice analysis Development of solar investment promotion strategy Solar investor attraction and targeting Result Identification of high-potential solar R&D fields Full roadmap for the development of a solar industry SERVICES Institutional/governmental advisory – selected references. 14

Client Portland Metropolitan Area, USA Project summary Third-largest city in the Pacific Northwest Region of the U.S.; plans to become number-one U.S. solar and important Cleantech manufacturing site Steps taken by Apricum Cleantech positioning and investment attraction strategy Evaluate site attractiveness based on Cleantech manufacturer’s decision model Benchmark Portland sites in relation to alternative sites worldwide Identify relevant site parameters that can be influenced on a local basis Segment potential investors and set up meetings with selected companies Result Interview potential investors for evaluation of Portland’s site attractiveness Developed investor targeting strategy including measures to increase site attractiveness SERVICES Institutional/governmental advisory – selected references. 15

SERVICES Institutional/governmental advisory – selected references. 16 Client Project summary Economic development agency of the German Federal State of Saxony Steps taken by Apricum Develop investor attraction strategy for selected Cleantech industry segments Analyze market potential of selected Cleantech segments Evaluate attractiveness of Saxony as investment location, benchmark against worldwide investment locations Derive target segments, i.e., most attractive Cleantech segments for investment attraction Develop investment attraction strategy and derive USP Result Identify potential investors in target segments and profile identified potential investors Investment attraction strategy completed within eight weeks; prepared client to approach investors in subsequent phase, assisted by Apricum

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Renewable industries turnover in Germany (2009). 19 Solar PV 9 million Biomass 11.4 million Wind EUR 5.6 million Solar thermal EUR 4.9 million Water EUR 1.4 million Total EUR million Source: BMU 2010.

Country Main market support scheme Cumulative PV capacity (2009) World market share PV cell production (2009) Germany Uncapped FIT (since 1991) 9,100 MW15.0% Spain Capped FIT (since 2008) 3,500 MW1.0 % Japan FIT (since 2008) 2,640 MW12.6 % USATax credits, RPS (since 2006)1,380 MW4.4 % South KoreaCapped FIT (uncapped until 2008)453 MW1.9 % ItalyCapped FIT (since 2005)900 MW0.7 % China Capped regional tendering processes (since 2010) 200 MW38.0 % FranceFIT (since 2009)285 MW0.4 % 20 Capacities vs. cell production share 2009.