1. October 30, 2007 © SKF Group Slide 0

2. Wind energy market from the perspective of a major sub-supplier Presented at EWEC 2009 Stefan Karlsson Global Segment Manager – Renewable Energy Marseille 2009-03-19

3. October 30, 2007 © SKF Group Slide 2 The dynamic wind energy market 1

4. October 30, 2007 © SKF Group Slide 3 Demographic Dynamics Resource Scarcity Environmental Focus Main reasons behind massive growth in wind energy Growth in energy demand Security of energy supply Reduction of CO2-emission

5. October 30, 2007 © SKF Group Slide 4 Wind energy market size almost tripled in 5 years Key challenges on supply chain; Speed of growth – capacity constrains Rapid globalisation – logistic challenges Expanding turbine sizes – new & larger components Lack of predictive maintenance – stock management

6. October 30, 2007 © SKF Group Slide 5 Wind industry technology challenges Industry Key Issues Wind gearbox technology Pitch system technology Testing of key-components Offshore reliability Cold climate applications System for early detection of failures Windfarm asset management Lifetime return on investment The SKF test-rig for the large mainshaft ”Nautilus” bearing.

7. October 30, 2007 © SKF Group Slide 6 Supply Chain Constrains - limiting market growth Source: BTM-Supply Chain Assessment, August 2008

8. October 30, 2007 © SKF Group Slide 7 2 SKF, a driving force in wind energy

9. October 30, 2007 © SKF Group Slide 8 SKF – a truly global company Established: 1907 Sales 2008: SEK 63,361 million (~6 B€) Employees: 44,799 Production sites: 110 in 28 countries SKF presence: in over 130 countries Distributors/dealers:15,000 locations Global certificates:ISO 14001 OHSAS 18001 certification SKF group vision; ”To equip the world with SKF-knowledge”

10. October 30, 2007 © SKF Group Slide 9 It is being present and active in: What is SKF knowledge?

11. October 30, 2007 © SKF Group Slide 10 Pitch bearings Yaw bearing Mainshaft housings and locknuts Condition Monitoring WindCon/WebCon Couplings Automatic distributed lubrication system Monitoring and diagnostics services Mechanical repairs & refurbishment Sealing solutions Bolt tensioning tools Tower alignment services Engineering Consultancy Services Plain bearings Maintenance tools and grease SKF contribution to wind turbine technology Gearbox bearings TRB/CRB/SRB/CARB/DRTRB Generator bearings DGBB/InsoCoated/Hybrid Mainshaft bearing(s) SRB/CARB/TRB/DRTRB

12. October 30, 2007 © SKF Group Slide 11 Market growth vs. SKF growth in wind energy Index; Year 2002=100%

13. October 30, 2007 © SKF Group Slide 12 Capacity Development of SKF Large Size Bearings Complete new factory built in Dalian China 2006, expanded with additional capacity/range 2009. Complete new factory built in Ahmadabad, India will initate deliveries during 2009. New manufacturing channel for pitch & yaw-bearings built in Avallon, France 2006. New manufacturing channel for XXL-bearings in Göteborg, Sweden at present under construction. Capacity expansion at Hannover plant, USA, and at Schweinfurt plant, Germany Capacity development; 2010 / 2005 +350%

14. October 30, 2007 © SKF Group Slide 13 SKF Large Size Bearing Capacity Development  SKF develops manufacturing capacity in line with plans from our key-customers in wind energy business community.  Being a truly global company, SKF is prepared to develop manufacturing capacity in new emerging markets, when justified.  Development of new manufacturing capacity has a long leadtime;  For elimination of bottlenecks (new machinery leadtimes); 12-30 months  To build a complete new manufacturing line; 18-30 months  For a new greenfield manufacturing unit; 2-6 years (local variations) Need to focus on customer forecasts and capacity requirements 2011-2012.

15. October 30, 2007 © SKF Group Slide 14 3 Predicting the future of wind….

16. October 30, 2007 © SKF Group Slide 15 The growth has just started……….. Ten years ago, wind energy contributed to 0,1% of the worlds total generation of electricity. Today, wind energy contribute to 1% of global electricity. Ten years from now, predictions estimate that wind energy will contribute to 6% of global electricity supply. Over the last 5 years, over 30% of all new installed electricity generating capacity in EU has been in form of wind energy. The EU-Committment of 20-2020 will require 12-15% of Europes electricity to be powered by wind by 2020.

17. October 30, 2007 © SKF Group Slide 16 Source: BTM report November 2008 “Exploding” China stretching supply chain further Installed MW Forecast National targets 2020 2010 already passed during 2007 Most likely passed during 2011 2030 100.000 MW Most likely passed before 2020

18. October 30, 2007 © SKF Group Slide 17 BTM-report 2004 Predicting the future of wind energy business….. Most likely Scenario ?

19. October 30, 2007 © SKF Group Slide 18 SKF The Knowledge Engineering Company