1. The Challenges to the Offshore Supply Chain
Presentation Document
The Challenges to the Offshore Supply Chain
Wind Energy Sector
European Wind Energy Conference, Warsaw, April 22, 2010
Speaker: Thomas Karst, MAKE Consulting

2. MAKE Consulting A/S
MAKE Consulting is an advisory company specialized in the renewable energy market with particular focus on intelligence and strategy for the wind energy market.
MAKE Consulting employs a team of professional and independent advisors with documented experience from the international wind energy industry providing an in-house detailed market intelligence which we make every effort to translate into a product that provides the players with a competitive advantage.
MAKE Consulting has offices in Aarhus/Denmark and in Chicago and Boston/USA and Tianjin/P. R. China.
MAKE Consulting A/S,
Speaker:
Thomas Karst.
Masters in Chemical Engineering
11 years experience in wind energy from NEG Micon, Vestas and MAKE Consulting.

3. Contents 1. European Offshore Installations 2008 - 2020
2. Key Supply Chain Issues
3. Key Suppliers – WTG’s and Vessels
4. Conclusion

4. European Offshore Installations 2008-2020e
Offshore installation development in Europe, 2008–2020e
MWs
WTGs
CAGR 09-14e: 43.7%(MW) 30.8%(WTG)
CAGR 15-20e: 7.8%(MW) 3.3%(WTG)
Significant growth expected in the years 2010 to 2015 of more than 40% (CAGR) puts high demands to the supply chain of equipment and infrastructure service
Grand Total Installed Base
895 WTG’s
2270 MW

5. Key Supply Chain Issues
Onshore vs. offshore
Balanced preference between onshore and offshore market.
WTG’s
WTG supply and mean time between failure
Installation vessels
Inadequate number and capacity
Port facilities
Inadequate infrastructure, too few and too expensive
Offshore cabling
Yet a technical challenge
Grid connections
Insufficient capacity to evacuate and transport power
Investment in technology and facilities required
No pre-investment orders guarantee

6. WTG supply OEM expected product offering Supply chain perspective
1st generation WTG’s
Present 1st generation offshore WTG’s, 2 manufacturers were considered as contenders
Vestas/NEG Micon and Siemens
2nd Generation WTG’s
2nd generation offshore WTG’s introduced in 2009 and under test
At least 6 manufacturers are now considered contenders
Vestas, Siemens, REpower, Areva, BARD, Sinovel
3rd Generation Wind Turbines
3rd generation offshore WTG’s are announced and tests are expected to start in
At least 10 manufacturers are announced as contenders
Vestas, Siemens, REpower, Areva, BARD, Sinovel, GE Energy, Nordex, Darwind, Acciona, Gamesa, etc.
Supply chain perspective
There are no constraints expected from the WTG supply chain
The main concern is the operational capability of the many new WTG models
Source: MAKE Consulting

7. WTG Size and Number WTG numbers and size 2010-15
Supply chain perspective
1st Generation WTG’s
2-3 MW in nominal capacity
Rotor diameter less than 100 meters
Nacelle weight less than 200T
Majority of foundations were monopile or gravity type
2nd Generation WTG’s
3-5 MW in nominal capacity
Rotor diameter in excess of 100 meters
Nacelle weight between 200T and 450T
Heavy monopile or gravity type still in play but large tripod, jacket etc. structures becoming standard
3rd Generation Wind Turbines
5-7 MW in nominal capacity
Rotor diameter in excess of 120 meters
Nacelle weight between 400T and 600 T
Gravity foundation still in play but large tripod, jacket etc. structures will dominate
Supply chain perspective
Number of annual WTG installations increases by 100%
Average size of WTG increases by more than 50% and the foundations will increase even more
The majority of present vessels, cranes and infrastructure is not designed to handle 2nd and 3rd generation of WTG’s
Source: MAKE Consulting

8. Vessel supply perspective
Vessel Availability
Vessel availability
Vessel supply perspective
Existing offshore fleet
20 vessels are present in operation with WTG and foundation installation
By 2012 at least 6 of these are anticipated to be obsolete due to size, capability, cost, H&S etc.
Present available vessel days offshore are:
4060 (at 71% availability)
3735 (at 65% availability)
Future offshore fleet
9 new vessels have been confirmed and some of these are presently under construction
By 2015 the fleet will then consist of 23 vessels
A majority of the vessels will be capable of handling 2nd generation WTG’s and foundations
2015 estimated available vessel days offshore are:
5610 (at 71% availability)
5160 (at 65% availability
Presently available vessels
Owner
Vessel
2010
2011
2012
2013
2014
2015
A2Sea
Sea Jack
Sea Power
Sea Energy
Sea Worker
GeoSea
Buzzard
Goliath
Vagant
Fugro Seacore
Excalibur
Jackup Barge
JB 114
JB 115
Jumbo Offshore
Jumbo Javelin
Seajacks
Kraken
Leviatian
LISA
Hochtief
Odin
Thor
MPI
Resolution
Seaway H. Lifting
Stanislav Yudin
Ballast Nedam
Svanen
Bard Offshore
Windlift I
Vessels confirmed and under construction 
Adventure
Discovery
Jackup Barg
JB 117
Master Marine
Service Jack 1
RWE Seabreeze II
RWE Seabreeze 1
RWE Seabreeze 2
Fred Olsen
Windcarriers II
Unknown
Supply chain perspective
Crane, load and operational capacity of the new vessels are designed for 2nd generation WTG’s and foundations
Net increase in offshore installation fleet will be approx. 3-4
Vessel days available will increase by 35-40%
Source: MAKE Consulting

9. Vessel Supply and Demand 2010-2015
Demand vs. vessel availability
Long term view
2010 to 2015
WTG average size will increase by 30%
Foundation average size will increase by 50%
Installation days per WTG and foundation will increase by close to 100% (5d to 9.5d)
Number of WTG’s to be installed will increase by close to 100%
% increase in demand for vessel days
Vessel days available increases only by 40%
No new vessels can be ordered and delivered in less than 2 years
A vessel delay of 1 year will reduce capacity by approx. 5%
Conclusion
The growth between 2010 and 2015 in WTG/foundation size and numbers, water depth, shore distance etc. constitutes a significant demand to the supply chain for technical and infrastructure services
By 2015 capacity of vessel days may fall short by up to 10-20% of demand
Source: MAKE Consulting

10. Short term conservative view
Vessel Supply and Demand (conservative)
Demand vs. vessel availability
Short term conservative view
2010 to 2012
WTG average size will increase by 30%
Foundation average size will increase by 50%
Installation days per WTG and foundation will increase by up to 50% (5d to 7.5d)
Number of WTG’s to be installed will increase by close to 95%
190% increase in demand for vessel days
Vessel days available increases only by 20%
No new vessels can be ordered and delivered in less than 2 years
A vessel delay of 1 year will reduce capacity by approx. 5%
Conclusion
The growth between 2010 and 2012 constitutes an even more significant demand to the supply chain for technical and infrastructure services than over the long run between 2010 and 2015
Capacity of vessel days may fall short by up to 10 to 15% of demand
Source: MAKE Consulting

11. Short term optimistic view
Vessel Supply and Demand (optimistic)
Demand vs. vessel availability
Short term optimistic view
2010 to 2012
WTG average size will increase by 30%
Foundation average size will increase by 50%
Installation days per WTG and foundation will increase by up to 30% (5d to 6.5d)
Number of WTG’s to be installed will increase by close to 95%
150% increase in demand for vessel days
Vessel days available increases only by 20%
No new vessels can be ordered and delivered in less than 2 years
A vessel delay of 1 year will reduce capacity by approx. 5%
Conclusion
Improvements in the number of average installation days per WTG and foundation has significant influence on the vessel demand
Improving the total installation time per unit by one day improves capacity by approx. 10%
Optimistically capacity of vessel days may meet or fall short by up to 5% of demand
Source: MAKE Consulting

12. Conclusions Supply chain challenges for WTG’s and installation vessels
At least 6 WTG manufacturers will be contenders
There are no constraints expected on the supply of WTG’s
Operational performance for offshore WTG is still a concern, particularly for the many new models
Installation fleet long term ( )
Offshore installation fleet will grow from 20 to 23 vessel
Net increase in offshore installation fleet will be approx. 3-4, corresponding to between 35% and 40% increase in vessel days
Demand for vessel days will increase between 200% and 240%
Fleet capacity is at present destined to fall short by 2015 by up to 20%
Installation fleet short term ( )
Installation days per WTG and foundation will increase between 30% and 50%
Annual number of offshore WTG installations will grow 95%
Demand for vessel days will increase by between 150% and 190%
Conservatively the capacity of vessel days may fall short by up to 15% of demand
Optimistically the capacity of vessel days may meet or fall short of demand by up to 5%

13. Thank you!

14. Reports and notes recently compiled by MAKE Consulting:
Changing market dynamics eminent for manufacturers in China
(flash note, 16 April, 2010)
GE and Siemens dive into the European offshore market (flash note, March 31, 2010)
India setting the stage for growth
(research note, 29 March, 2010)
WTG OEM market shares 2009
(research note, 17 March, 2010)
Daewoo's wind ambitions sail into Nova Scotia
(flash note, 12 March, 2010)
Market Outlook
(market report, 4 March 2010)
BARD and Gamesa join forces as offshore competition intensifies
(flash note, 22 February 2010)
2H 2009 WTG order activity slow; expected to pick-up in 2010
(research note, 21 January 2010)
ITC ruling adds to competitive MMW segment in the U.S.
(flash note, 18 January 2010)
Iberdrola ARRA grants drive strong year in the U.S.
(flash note, 13 January 2010)
MAKE Consulting
Aarhus, Denmark (Head Office)
Chicago, USA
Boston, USA
Tianjin, P. R. China
Copyright © 2010 MAKE Consulting A/S. All rights reserved.
Reproduction or distribution of this presentation in any form without prior written permission is strictly forbidden. Violation of the above restrictions will be subject to legal action under the Danish Arbitration Act. The information herein is taken from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions, analyses and forecasts on which they are based. MAKE Consulting A/S cannot be held liable for any errors in this presentation, neither can MAKE Consulting A/S be liable for any financial loss or damage caused by the use of the information presented in this presentation.