Supply Opportunities in Canada’s Wind Energy Market Stephen Rach CanWEA Toronto, Ontario October 6, 2010

About CanWEA National industry association for the wind energy industry in Canada More than 450 members including wind turbine manufacturers, component suppliers, wind energy project developers, owners and operators and a broad range of service providers to the wind energy industry Our mission is to promote the responsible and sustainable growth of the wind energy industry in Canada We are engaged in: Policy development and advocacy Federally and in all provinces Communications and public outreach Educational and networking opportunities

Canadian Wind Market 38% average annual market growth in past 10 years 2010: 750 MW 2011: 1,000 + MW Wind power currently supplies almost 2 % of Canada’s electricity Enough power to meet the needs of over 1,400,000 homes

Wind in Canada: Federal Policies Federal government has committed by 2020 Produce 90% of electricity from non-emitting sources Reduce green house gas (GHG) emissions to 20% below 2006 levels Federal government has committed by 2050 Reduce GHG emissions 60% - 70% below 2006 levels EcoEnergy Provides incentive for wind: 1 cent/kWh for ~4,000 MW Funding is fully allocated and Budget 2010 did not provide extension Difficult given that the US has put in place an incentive that is 3x greater than EcoEnergy, is refundable and extends to 2012

Wind in Canada: Provincial Policies Ontario – IPSP: 4,600 MW by 2020 Expected to be higher due to the Green Energy Act Quebec – 4,000 MW by 2016 Alberta – Building transmission to support 3,200 MW BC – Wind can easily contribute 1,500 MW to targets Maritime Provinces – Minimum 1,200 MW by 2015 If all of these commitments are met, CanWEA believes this represents a minimum of 12,000 MW by 2015 Wind: Canada's infinite source of clean energy.

,499 MW 0.81 MW 104 MW 1,248 MW 663 MW 195 MW 164 MW 54.7 MW MW 656 MW MW 400 MW 80 MW 371 MW 1,000 MW 13,151 MW 500 MW 139 MW 300 MW 500 MW The Canadian Wind Market

Quebec Wind Market Developed through a series of RFP’s from Hydro-Quebec RFP 1 – 2003: 1,000 MW GE Wind 3 farms remain to be constructed by 2011 [370 MW] RFP 2 – 2005: 2,000 MW REpower & Enercon Farms will be in operation between 2011 and 2015 RFP 3 – 2010: 500 MW Community and First Nations developments 25 MW Max size Awards expected by end of 2010

Quebec Market Local Content Requirements 60% or more of total wind project expenses must be made in Quebec Minimum 30% of the turbine costs must be sourced from the RCM of Matane and Gaspe Region RFP’s 2 & 3 represent a $5.9 Billion market opportunity Local Content Requirements 60% or more of total wind project expenses must be made in Quebec Minimum 30% of the turbine costs must be sourced from the RCM of Matane and Gaspe Region RFP’s 2 & 3 represent a $5.9 Billion market opportunity

Ontario Market Green Energy and Green Economy Act (GEA) The most comprehensive package of policies to stimulate renewable energy development in North America Feed-in Tariff (FIT) Rates Onshore ¢ / kWh Offshore ¢ / kWh Local Content Requirements Ramp up from 25% to 50% domestic content by 2012 Working with the government to determine how 50% can be achieved

Ontario Market OPA Wind FIT Awards April , MW 47 on-shore / 1 off-shore 800 kW – 300 MW Some turbine OEMs awarded General Electric Siemens Vestas Enercon $ 4.2 billion market opportunity 1, MW 47 on-shore / 1 off-shore 800 kW – 300 MW Some turbine OEMs awarded General Electric Siemens Vestas Enercon $ 4.2 billion market opportunity

Canadian Wind Market Offshore Wind Offshore wind market in Canada is in the early stages of development Regulations are not fully established Offshore Developments Windstream Wolfe Island Shoals Inc. Kingston, Ontario FIT contract for 300 MW in April, 2010 Other proposals are in the evaluation stage

Major Component Suppliers in Canada Proposed / Under Construction

Canadian Wind Market Immediate Supply Opportunities Large component manufacturing Towers and blades Forgings and castings Component machining Nacelle covers and sub-components Generators, gear boxes and transformers Wind farm construction services Engineering, procurement & construction Logistics Geotechnical and site services Craning

Transformers Gears Generators Gear boxes Castings for rotor hubs and main frames Forgings for main shafts Large bearings Canadian Wind Market Long term Opportunities

Canadian Wind Market Wind Farm Operation Phase There is substantial opportunity when wind farms are in operation Operations and maintenance (O&M) industry to service wind farms Turbine maintenance Gear box refurbishment Spare parts Minimum $ 1 billion market opportunity for operations and maintenance services

Market Entry Strategy Visit CanWEA.ca Subscribe to WindLink CanWEA / CME Manufacturing Opportunities Report Attend the CanWEA Annual Conference November 1-3, 2010, Montreal, QC Join CanWEA

Thank You