5 Killer Apps of Offshore Wind Prosperity

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1 Southeast Coastal Wind Conference, 11 th September 2013 GL Garrad Hassan A Decade of Offshore Wind Experience

2 Huge Potential How do we get there? 10 GW by 2020? 54 GW by 2030? 5 GW installed * * Inspired by Naill Fergusson s 6 Killer Apps of Prosperity

3 Deployment and investment occurs where political noises remain consistently positive over the course of many years.

4 Offshore costs over the last decade have confounded learning curve theory but industry is now truly starting to understand both costs and risks Status Announced Contracted Under Construction Operational Wind Farm Size (MW) Thornton Bank I BARD Offshore : competition for early mover advantage, lack of expertise Vindeby Lely Tuno Knob Irene Vorrink Bockstigen Utgrunden Blyth Horns Rev Samsø Middelgrunden North Hoyle Nysted Yttre Stengrund Scroby Sands Alpha Ventus Thornton Bank II Thornton Bank III Borkum Riffgrund Borkum West II Meerwind Belwind Phase 1 Humber Gateway Northwind NV Walney Phase II Walney Phase I Teeside Thanet Greater Gabbard Wikinger Rhyl Flats Nordsee Ost Sheringham Shoal London Array Rodsand II Anholt Princess Amalia (Q7) Robin Rigg Gwynt y Mor Gunfleet Phase I & II Lincs Kentish Flats Setana Barrow Beatrice Burbo LID Egmond Lillgrund Dong Hai Horns Rev II Ormonde Baltic I West of Duddon Nordergründe : Price readjustment, onshore boom and commodity pricing : Turbine supplydemand rebalance, competitive procurement, supply chain growth.

5 The Grand Economic Bargain European governments have pledged to support offshore wind through premium energy pricing in exchange for industry substantially lowering the cost of energy. Strong federal or state support which takes a long-term view on costs is needed, through regulated PPAs or structures such as the NJ OREC system

6 NA investors Project Size Blackstone Meerwind 288 MW Caisse de dépôt et placement du Québec London Array 630 MW Northwind Power Gemini 600 MW Offshore wind is an increasingly proven asset class and a diversity of new financing options can enable the United States to leapfrog the early utility backed model of development used in Europe.

7 4. Manageable Risk Industry at large has become better at quantifying risks and when these risks have been properly assessed, contingency budgets have been appropriate.

8 4. Manageable Risk 5 key technical risks in the U.S. context Design risk imported from OEMs with proven track record. Offshore construction Local experience. 3. Jones Act. 4. Interface risk. 5. Hurricanes

9 We now have wind turbines and infrastructure which has been proven to work in the hostile offshore environment. The U.S. can download this valuable experience to accelerate deployment while minimizing the technical delays and costs incurred by early offshore pioneers. - Summary Consistent political noises needed Industry and government must to work together U.S. set to capitalize on new financing diversity Better understanding of risk allocation through experience Offshore a proven but still maturing technology

10 Thank you For more information please contact: Craig Houston GL Garrad Hassan Appendix 1: Hurricanes

11 Appendix 2: Water Depth 9/11/2013