WILL THE WIND CEASE TO BLOW FOR THE WIND INDUSTRY? Aidan Cronin Vestas Wind Systems A/S

2 Agenda Looking good US looks to drive market Fantastic technological progress Where we belong in power Why worry? Global energy policy Importance of policy Challenges we face Rules of success In summary

3 Emerging Energy Research Projected market growth US & Canada

4 Giant steps summarised Source Jos Beurskens, ECN

5 Fuel Source Comparison Wind Coal Natural Gas Nuclear Efficiency (1) Operation Emissions SubsidiesDispatchability Capacity factors 25%-40% Capacity factors 60%-80% Intermittent/No n-dispatchable 0.00 kg CO2/kWh Production incentives, capital grants Base load/semi- dispatchable kg CO2/kWh (3) Fuel exploitation subsidies, social subsidies (local mining) Capacity factors 20-70% Fully dispatchable kg CO2/kWh (4) Fuel exploitation subsidies Capacity factor 70-85% Base load/semi- dispatchable 0 kg CO2/MWh, radioactive waste with half life 100-1,000 years Fuel, waste management, security Price Volatility Non e Medium High +69% / MMBTU 2005 (2) High Sources: (1)Estimates for efficiency based on reports, discussions with utilities and developers for projects in Europe and North (2) America.Actual figures vary widely by market, and in the case of thermal whether it is used as base or peak load. Emerging Energy Research, Cambridge Mass (3) /daily/gasprice.html, – Brent crude, Natural gas prices. (3) World Average Coal Emissions/kWh , Page 178, IEA, “CO2 Emissions from Fuel Combustion 2005” (4) World Average Gas Emissions/kWh , Page 184, IEA, “CO2 Emissions from Fuel Combustion 2005” (5 )World Average Oil Emissions/kWh , Page 181, IEA, “CO2 Emissions from Fuel Combustion 2005” Supply Stability/ Reserves High Medium Low Oil 20-60% Capacity factors Fully dispatchable Fuel exploitation subsidies High +32% / barrel crude 2005 (2) Low kg CO2/kWh (5)

6 Why worry? If our industry does not appreciate, respect and influence the different drivers and stoppers which impact the industry currently and may in the future then, our impact and future can be short lived. In this era of global communication with increased media attention and a growing, more media vocal anti-wind movement it is imperative that wind has a proactive approach to our place in energy supply.

7 The global energy sector is a mess Global energy policy is a mess and we also have to deal with the mess Political tensions with Russia National interests are distorting energy markets Terrorism – terrorists have learnt that disruption of fossil fuels supply is easy and effective. Attempted attack on the Abqaig oil processing plant. This is a nerve centre of the world´s oil trade. Damaging the facility.. Would be unleashing a hurricane that engulfs the world. Within days all governments would step in to curtail consumption in a coordinated effort. Source Fadil Gheit, analyst at Oppenheimer and Company as quoted in the Financial times on 25/02/2006, page 1.

8 Policy is of prime importance If we do not have a proactive renewable energy policy strategy, less wind will be built in the future. Policy work is vital to our industry as without being active in this area we risk even more political instability in different market areas. Policy is not a short term result giver it is a hard often semi- invisible activity designed to give correct results.. Energy Policy work is not marketing it is a stategic tool that can be used to shape and stabilise the future market

9 Challenges we have R&D Energy Policy The media war The civil and political arena The funding arena The planning arena The grid arena

10 The 10 rules of future wind success Keep up strategic policy initiatives to ensure our continued growth and integrity. Stick together as an industry and more importantly stick with the other renewable Create more synergies with all actors including Politicians, Energy Agencies, TSO´s and Utilities Fight for Funding for basic research Fight for balanced Media attention and impact Fight for Focussed results and policy within our arena Create communicators Protect what we have Influence policy and people Believe in what we do Bury the ”IF” and bring on the ”When ”

11 In summary Misinformation abounds in the energy industry The attack on science, (Bush) US Importance we sell a real world Good well researched sources are pillars in building a position Need outside sources to bench mark our position What the IEA says is brilliant. Need credible energy scenarios. Times have changed = no green ticket anymore. Well done everybody but lets continue to be a dynamic disruptive technology for the time it takes to make us a globally accepted main stream power source.

12 V MW, Australia Wind - Safe, Local, Renewable, Clean Energy and delightfully disruptive