1. European Biogas Power Plant Markets: Untapped Potential Providing Substantial Growth Opportunities Ian French 8th May 2003

2. EU Biogas Power Plants8th May 2003 Market Overview Relatively new concept Emissions reductions Sustainable development Cutting-edge development Undeveloped competitive arena Incentives essential Substantial growth opportunities BIOGAS EXPLOITATION

3. EU Biogas Power Plants8th May 2003 Improved waste management techniques Diminished risk of soil degeneration Rationale Offsetting of fossil fuelled generating capacities Reduced eutrophication AD stabilisation of matter On-site heat & power Biogas & Sustainable Development

4. EU Biogas Power Plants8th May 2003 Market Drivers and Restraints Drivers Restraints EU renewable energy targets Sustainable developmen t issues Price distortions Lack of awareness Low grid power tariffs Initial investment costs Green certificate uncertainty Efficient waste management Green certificates On-site power generation Information issues Operational guarantees Falling installation & operating costs Political & economic support mechanisms

5. EU Biogas Power Plants8th May 2003 Market Demand, Prospects & Awareness Awareness Potential LFL WWT IND AGRI Demand

6. EU Biogas Power Plants8th May 2003 Market Forecast

7. EU Biogas Power Plants8th May 2003 Expected Biogas Exploitation in Europe: EU White Paper (1997) - Frost & Sullivan (2002) 38.4TWh by 2010 EU expected biogas exploitation (through landfill, WWT, agriculture) Frost & Sullivan biogas exploitation (through landfill, WWT, agriculture, industry) 21.8TWh by 2010 A projected shortfall difference of 16.6TWh

8. EU Biogas Power Plants8th May 2003 % Breakdown by Geography & Sector

9. EU Biogas Power Plants8th May 2003 Competitive Issues Increasing competition Growing interest from larger companies Growing niche market Room for company development New entrants Acquisitions and mergers Undeveloped international company interests Fragmented markets

10. EU Biogas Power Plants8th May 2003 Conclusion: Market Issues Uncertainty & Importance Grid Growing competitiveness Promotion & awareness DG markets Environmental legislation Consistent government incentives Unsupported market Very Certain High Importance Low Importance Very Uncertain

11. EU Biogas Power Plants8th May 2003 Questions For more information call: +44 (0)20 7343 8383 email: enquiries@frost.com www.power.frost.com