1. Supply Chain Restructures to Capture New Opportunities Outside Europe 2010 EWEC Warsaw, Poland April 2010 Europe Wind Energy Advisory Eduard Sala de Vedruna Research Director Emerging Energy Research +34 93 467 6750 esaladevedruna@emerging-energy.com

2. Page 2European Wind Energy Advisory – EWEC Warsaw – April 2010 Supply Chain Restructures to Capture New Opportunities Outside Europe Overview Global installed wind capacity overview by region Wind market forecasts by world region Leading turbine supplier established manufacturing presence Key global market entry barriers, opportunities Global manufacturing capacity investment shifts Turbine supplier component sourcing strategy overview Component suppliers’ strategy overview European players strategies overview Managing key challenges in a globalized wind industry Conclusions

3. Page 3European Wind Energy Advisory – EWEC Warsaw – April 2010 75.4 GW 39.1 GW 1.27 GW 1 GW 39.1GW Europe accounts for over 48% of total wind capacity installed worldwide followed by North America and Asia on roughly equal footing Installed Wind Power Base by World Region, YE 2009 Source: Emerging Energy Research Supply Chain Restructures to Capture New Opportunities Outside Europe Global Installed Wind Capacity Overview by Region

4. Page 4European Wind Energy Advisory – EWEC Warsaw – April 2010 EER Projected Annual Wind Capacity Growth, 2009–2020 Asia will lead global annual wind capacity additions that will nearly double between 2009 and 2020 while Europe should account for 28% of the global wind growth Source: Emerging Energy Research Supply Chain Restructures to Capture New Opportunities Outside Europe Wind Market Forecasts by World Region

5. Page 5European Wind Energy Advisory – EWEC Warsaw – April 2010 Wind has become a global industry with leading European players establishing a transnational presence to serve booming demand in new markets Supply Chain Restructures to Capture New Opportunities Outside Europe Leading Turbine Supplier Established Manufacturing Presence SupplierEuropeNorth AmericaAsia PacificOther Vestas Denmark, Germany, Norway, Sweden, Italy, Spain USChina, India GamesaSpainUSChina Enercon Germany, Portugal, Sweden, Turkey IndiaBrazil SiemensDenmark, GermanyUS AccionaSpainUS NordexGermanyChina Suzlon/REpowerGermanyIndia, China Alstom EcotecniaSpain Assembly Assembly and components Source: Emerging Energy Research

6. Page 6European Wind Energy Advisory – EWEC Warsaw – April 2010 Public support is playing an important role in relocation, with governments stimulating the creation of a local wind manufacturing industry Supply Chain Restructures to Capture New Opportunities Outside Europe Key Global Wind Market Entry Barriers, Opportunities Favorable customs duties/ export credit assistance/financial and tax incentives Combination of ‘carrot and stick’ policies Source: Emerging Energy Research

7. Page 7European Wind Energy Advisory – EWEC Warsaw – April 2010 Wind Manufacturing Trends Overview Source: Vendors, Emerging Energy Research Supply Chain Restructures to Capture New Opportunities Outside Europe Global Manufacturing Capacity Investment Shifts USA: Siemens Nordex REpower Alstom Ingeteam Winergy USA: Siemens Nordex REpower Alstom Ingeteam Winergy UK: Gamesa Siemens UK: Gamesa Siemens Brazil: Fuhrländer Vestas Siemens Alstom Brazil: Fuhrländer Vestas Siemens Alstom Canada: REpower Enercon Canada: REpower Enercon China: Siemens LM China: Siemens LM Vietnam: Fuhrländer India: WinWinD Gamesa Siemens India: WinWinD Gamesa Siemens Planned/New Local Presence Initial Build-up Expansion/Investment in 2009 Capacity Relocation in 2009 Poland: LM Europeans increasingly shifting production capacity to southern Europe, offshore product segments, Asia, and the US

8. Page 8European Wind Energy Advisory – EWEC Warsaw – April 2010 Source: Emerging Energy Research Supply Chain Restructures to Capture New Opportunities Outside Europe Turbine Supplier Component Sourcing Strategy Overview As competition increases turbine vendors are reconsidering procurement models to accommodate IP safeguard with supply chain build out flexibility Sourcing Strategy Overview By Component

9. Page 9European Wind Energy Advisory – EWEC Warsaw – April 2010 Proliferation of local tower suppliers as new markets scale With turbine manufacturers taking a broader approach to component supply, component suppliers are adjusting their strategies accordingly Market Concentration Local Regional Global FragmentedConcentratedConsolidated Production Facility Geographic Footprint Note: Bubble size indicates relative market value Core set of 5-6 large-scale generator suppliers mainly exporting from regional hubs, with new entrants emerging Towers Blades Gearboxes Generators Bearings Few players able to supply full bearings product portfolio, serving multiple industries with expanding global production networks, while several pitch and yaw suppliers entering Consolidated group of large-scale gearbox suppliers under pressure as regional players scale One large independent blade supplier, several small- scale regional players contending with in-house production Source: Vendors, Emerging Energy Research Supply Chain Restructures to Capture New Opportunities Outside Europe Component Suppliers’ Strategy Overview

10. Page 10European Wind Energy Advisory – EWEC Warsaw – April 2010 European players are adjusting their capacity build out to market growth potential, public support and local content requirements CompanyEquipment Origin Country DestinationOverview SiemensWind TurbinesDenmark China Acquisition of local industrial suppliers GISAP (GIS Steel & Aluminum Products) and Yangtze Delta Manufacturing USOver $36 million in tax credits for facilities in Florida and Illinois UKTo invest £80m to build a wind turbine factory LM GlasfiberBladesDenmarkChina Expansion of existing facility in Qin Huang Dao to supply increasing orders. New production facility in China announced after inking a 2,000 MW agreement with Chinese Envision Energy NordexWind turbinesGermanyUSWill receive $22M in tax credits for its Jonesboro plant VestasWind turbinesDenmarkUS Vestas Towers America Inc. will receive $21.6 million in federal tax credits and Vestas Blades America $30.2 million via the U.S. DOE Alstom WindWind turbinesSpain BrazilSignature of a MoI with the Government of the state of Bahia US$2.7 million in tax credits for an assembly facility in Texas REpowerWind turbinesGermanyCanada Supply of the capacity awarded by the Saint-Laurent Énergies consortium in Québe’s capacity tender IngeteamGeneratorsSpainUS$1.66 million in tax credits for a facility in Milwaukee WinergyGearboxesGermanyUS$12.8 million in tax credits for a facility in Illinois Supply Chain Restructures to Capture New Opportunities Outside Europe European Players Strategies Overview Source: Emerging Energy Research

11. Page 11European Wind Energy Advisory – EWEC Warsaw – April 2010 Despite improving access to client base, wind turbine suppliers must address a number of challenges associated with transnational wind manufacturing operations Political & Regulatory Challenges Increased exposure to wind policy framework changes (i.e. PTC expiration in the US, new capacity limitations, National Action Plans, decrease in ROCs value) Corporate environments differences Management Challenges Lack of skilled labor force, know-how Streamlining quality standards across regions Managing international workforce Supply Chain Management & Logistical Challenges Component supply value chain management Transportation and cost issues Location selection Exacerbated component supply bottlenecks Quality assurance Maintenance, repair of critical components IPR infringements by local partners Supply Chain Restructures to Capture New Opportunities Outside Europe Managing Key Challenges in a Globalized Wind Industry Source: Emerging Energy Research

12. Page 12European Wind Energy Advisory – EWEC Warsaw – April 2010 Global demand shift will create new opportunities and challenges for industry players. US and Chinese demand, as well as Europe offshore infrastructure build-out, likely to remain strong drivers of industry supply chain strategy –Although global demand is increasingly shifting to Asia, Europe will be the second larger wind power region, Offshore accounting for nearly a quarter of the region’s growth by 2020 –Improving policy incentives will accelerate the build-up of supply chain capacity in the US. Low electricity prices and scarcity of PPAs might slowdown the level of new capacity added in the US in the short term –China’s sustained growth has cemented Asia Pacific as a growth center. However, China’s increasing shift to favoring local suppliers seems to limit to 15% the addressable market for non-Chinese players As competition increases and growth is displaced to new markets and segments, turbine manufacturers and suppliers are repositioning along the supply chain and moving to new wind power demand hubs to tap into new opportunities In the process of expanding their manufacturing presence, wind suppliers are facing political and operational challenges which they must consider when making their distribution strategies –While geographic diversification of demand has played a key role in market relocation, policy has also played a part in driving wind turbine suppliers to establish manufacturing operations in key markets as these look to comply with local content requirements and/or to have access to investment benefits –Although regional diversification represents significant benefits, wind turbine suppliers face significant political and operational challenges when moving abroad, which they must consider when making their distribution strategies Supply Chain Restructures to Capture New Opportunities Outside Europe Conclusions

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