Renewable and Alternative Energy Industry Insights

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1 Inside 2 Renewable 3 Public Effects Energy Electricity Generation Company Overview Independent Power Producers Capital Markets Observations Independent Power Producers August 2009 Public Company Overview Other Renewable and Alternative Energy Participants of the Recovery Act on Renewable Energy Renewable and Alternative Energy Industry Insights Focus: Electric Power Producers The electricity supply generated from renewable energy sources is expected to double in the next 25 years to become approximately 14% of total generation, making it the fastest growing source of electric energy. While renewable energy growth projections look favorable for investment in the industry, observed multiples and total M&A deal volume in the independent power producer industry declined in 2008 from a peak in 2007 primarily as a result of tight credit markets and the global economic recession. In an effort to counteract the effects of the global recession, President Barack Obama signed into law the American Recovery and Reinvestment Act of 2009 (the Recovery Act ) on February 17, 2009, which contains $43 billion for direct investments and an additional $22 billion in tax incentives targeted for the energy sector. Specifically, the Recovery Act designated $16.8 billion to the Office of Energy Efficiency and Renewable Energy ( EERE ) for investment in renewable energy. Of the $16.8 billion, $3.1 billion will be distributed to states for direct investment in renewable energy under the State Energy Program. Contacts Robert A. Bartell, CFA Managing Director [email protected] As funds from the Recovery Act begin to flow through the U.S. economy, the renewable electricity generation industry could potentially see a surge in capital markets activity. David N. Rowe Director [email protected] Mark J. Kwilosz Director [email protected] Sources: Energy Information Administration / Annual Energy Outlook 2009 Capital IQ U.S. Department of Energy Energy Efficiency and Renewable Energy

2 Renewable Energy Electricity Generation Electricity generation from renewable energy is projected to double by This represents a 3.2% annual growth rate, which is the highest among all fuel sources. In comparison, the total electricity generation supply is expected to grow 0.9% per year over the same period. Projected Electricity Generation Billion Kilowatthours 6,000 5,000 4,000 3,000 2,000 Renewable energy leads projected growth at 3.2% per annum. Fuel Sources (annual growth) Renewable Sources* (3.2%) Other (1.1%) Nuclear (0.5%) Natural Gas (0.6%) Petroleum (-0.3%) Coal (0.8%) 1, Source: Energy Information Administration / Annual Energy Outlook Electricity Generation by Fuel Source 2030 Projected Electricity Generation by Fuel Source Renewable Sources* 8% Other 1% Other 0% Renewable Sources* 14% Nuclear 19% Coal 49% Nuclear 18% Coal 47% Natural Gas 21% Natural Gas 20% Petroleum Petroleum 2% 1% Source: Energy Information Administration / Annual Energy Outlook 2009 Source: Energy Information Administration / Annual Energy Outlook 2009 While total electricity generation by renewable sources was 8% in 2007, it is projected to become 14% of total generation by 2030 due to the strong anticipated growth of renewable energy. * Renewable sources include conventional hydroelectric, geothermal, wood, wood waste, biogenic municipal waste, landfill gas, other biomass, solar, and wind power. Other energy includes non-biogenic municipal waste. Renewable and Alternative Energy Industry Insights August

3 Public Company Overview Independent Power Producers Independent power producers engage in the ownership, development, construction, and operation of power generation facilities. They primarily sell electric power to utility companies and other end users. Within in the past two decades, many of these companies have begun to develop facilities that generate electricity from renewable sources, including but not limited to geothermal, biomass, landfill gas, solar and wind power. As depicted in the charts below, the proportion of power produced by renewable sources varies widely among industry participants. NRG Energy, Inc. Transalta Corp. Nuclear 5% Wind 1% Other Renewable 5% Oil 16% Gas 24% Gas 45% Coal 33% Hydro 10% Coal 61% Source: NRG Energy, Inc. Filings Source: Transalta Corp. Filings International Power Plc Pumped Storage 7% Hydro 1% Wind 6% Oil 3% Iberdrola Energias Renovables, S.A.U. Hydro 3% Other 0% Coal 23% Gas 60% Wind 97% Source: International Power Plc Filings Source: Iberdrola Energias Renovables, S.A.U. Filings Renewable and Alternative Energy Industry Insights August

4 Public Company Overview Independent Power Producers COMPANY INFORMATION MARKET DATA Credit Metrics EBITDA Growth EBITDA Margin Enterprise Value as a Multiple of Stock Price % of 52-Wk Debt / Debt / LTM 2009E LTM MW Company Name 2009E 2010E LTM 2009E on 6/30/09 High Capital EBITDA EBITDA EBITDA Revenue Capacity North America The AES Corporation $ % 60.9% 4.3x -4.3% -0.4% 27.3% 30.2% 5.7x 5.8x 1.56x 0.56x Calpine Corp Constellation Energy Group, Inc NRG Energy, Inc Ormat Technologies Inc Reliant Energy Inc NM NM NM Transalta Corp Mean (North America) Median (North America) Mean (Europe) Median (Europe) Mean (Australia / South America) Median (Australia / South America) 49.0% 50.9% 4.4x 13.2% 19.6% 22.6% 25.6% 8.9x 9.0x 2.02x 1.15x 57.1% 58.6% 4.0x 2.1% 2.0% 27.3% 30.2% 7.9x 7.6x 1.56x 0.58x Europe EDF Energies Nouvelles S.A. $ % 40.5% 10.0x 46.0% 37.8% 20.1% 31.6% 21.4x 14.7x 4.31x 1.50x EDP Renováveis Iberdrola Energías Renovables, S.A.U International Power Plc % 38.0% 6.1x 33.5% 24.6% 44.4% 51.1% 16.0x 11.6x 7.33x 1.97x 70.7% 31.7% 5.5x 32.3% 29.9% 45.0% 48.6% 17.9x 12.6x 6.41x 1.90x Australia / South America Infigen Energy 1 $ % 66.0% 5.6x 11.4% 10.5% 65.2% 73.0% 7.4x 7.8x 4.80x 0.60x Empresa Nacional De Electricidad S.A NM NA 79.6% 45.0% 3.8x 11.4% 2.5% 56.9% 59.7% 7.4x 8.6x 4.22x 0.60x 79.6% 45.0% 3.8x 11.4% 2.5% 56.9% 59.7% 7.4x 8.6x 4.22x 0.60x Mean (Aggregate) Median (Aggregate) 60.6% 46.0% 4.9x 20.5% 18.5% 34.6% 38.7% 11.0x 9.7x 3.99x 1.38x 59.5% 51.3% 4.6x 11.4% 10.5% 32.3% 33.1% 8.0x 8.4x 2.49x 0.85x 1 Babcock & Brown Wind Partners changed its name to Infigen Energy Limited on April 29, LTM = Latest Twelve Months CAGR = Compounded Annual Growth Rate Enterprise Value = (Market Capitalization) + (Debt + Preferred Stock + Minority Interest) - (Cash & Equivalents) EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization Source: Bloomberg, Capital IQ, SEC filings As seen above, many independent power producers have significant amounts of debt, which, combined with tight credit markets and the global recession, hindered growth opportunities within the industry in Additionally, analysts are expecting a slow down in revenue and EBITDA growth for companies in the independent power producer industry primarily due to the effects of the global recession. For the selected group of publicly traded independent power producers, EBITDA growth in 2009 and 2010 is projected to be 11.4% and 10.5%, respectively. Companies with higher projected EBITDA growth generally trade at higher EBITDA multiples. In addition, companies with higher EBITDA margins generally trade at higher multiples of revenue. Many analysts expect the Recovery Act to help loosen credit markets and re-start new and existing projects in the independent power producer industry beyond Further, according to NRG Energy, Inc., the independent power producing industry will likely see consolidation over the long-term. Likely company combinations include utility-merchant (vertical integration) or merchant-merchant (horizontal integrations). In addition, U.S. electricity generating companies may focus on European foreign power companies as potential targets. Besides the renewable energy investment opportunities in the U.S., opportunities also exist globally. Despite the current global economic weakness, emerging markets around the world are perpetually in need of power. According to RBC Capital Markets, the U.S. has approximately 3kW/person of installed power capacity, which compares to 0.5kW/person for the rest of the world. This large gap in electricity supply for the rest of the world could provide an investment opportunity for renewable energy companies once financing for new projects becomes feasible, especially given the current political goodwill for renewable energy. Renewable and Alternative Energy Industry Insights August

5 Public Company Overview Independent Power Producers The chart below compares an index of selected independent power producers stock prices to several other market indices. From Q through Q3 2008, independent power producers outperformed the broader market, but over the past 9 months, the industry s stock performance has fallen back in line with the market. Historical 3-Year Price Index S&P 500 Renewable IPP Index Russell 2000 NASDAQ Source: Capital IQ Historical Equity Pricing Data: FT.com FTSE is a trade mark of the London Stock Exchange and The Financial Times and used by FTSE International Limited under license. Capital IQ is licensed by FTSE International Limited to publish the FTSE. Projected growth and multiples of LTM performance have declined recently as the global economy headed toward a recession. Growth is expected to improve as the global economy stabilizes and programs from the Recovery Act begin taking effect. Historical Multiples and Projected Growth of Independent Power Producers Public Companies EV / LTM EBITDA 20.0x 18.0x 16.0x 14.0x 12.0x 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x Q Q Q Q Q Q Q Q Q Q Q Q Q % 45% 35% 25% 15% 5% -5% -15% GROWTH NTM Revenue Growth NTM EBITDA Growth EV / LTM EBITDA Source: Capital IQ NTM = Next Twelve Months LTM = Last Twelve Months Renewable and Alternative Energy Industry Insights August

6 Capital Markets Observations Independent Power Producers M&A Transactions 2006 YTD 2009 ($ in Millions) Private Placements 2006 YTD 2009 ($ in Millions) $70,000 $60,000 $50,000 $40,000 $30,000 $20,000 $10,000 $0 (54) (50) (51) (23) YTD Through June 30, 2009 $25,000 $20,000 $15,000 $10,000 $5,000 $0 (60) (71) (53) (41) YTD Through June 30, 2009 Aggregate Offering Size Aggregate Offering Size Source: Capital IQ ( ) # of Transactions Source: Capital IQ ( ) # of Transactions Public Equity Issues 2006 YTD 2009 ($ in Millions) Public Debt Issues 2006 YTD 2009 ($ in Millions) $16,000 $14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 (6 ) (24 ) (13 ) YTD Through June 30, 2009 (8) $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 (4) (6 ) YTD Through June 30, 2009 (6) (6) Source: Capital IQ Aggregate Offering Size ( ) # of Transactions Source: Capital IQ Aggregate Offering Size ( ) # of Transactions The charts above illustrate the changes in the capital markets environment for independent power producers over the past three years. As indicated above, 2007 was a strong year in the capital markets for this industry as companies took advantage of a bull market and ample availability of credit. As credit markets tightened and the world economy went into a recession during 2008, there was a significant decline in activity. However, with the signing of the Recovery Act, there may be a surge in investments by independent power producers in late 2009 and beyond. Renewable and Alternative Energy Industry Insights August

7 Public Company Overview Other Renewable and Alternative Energy Participants Selected Public Company Analysis Solar Equipment Manufacturers COMPANY INFORMATION MARKET DATA Credit Metrics EBITDA Growth EBITDA Margin Enterprise Value as a Multiple of Stock Price % of 52- Debt / Debt / LTM 2009E LTM Company Name 2009E 2010E LTM 2009E on 6/30/09 Wk High Capital EBITDA EBITDA EBITDA Revenue North America Energy Conversion Devices, Inc. $ % 32.8% 4.1x NM 133.8% 22.0% 8.8% 7.7x 20.7x 1.69x Evergreen Solar Inc NM NM NM NM NM NM NM 3.99 First Solar, Inc % SunPower Corporation Mean (North America) Median (North America) 30.6% 23.3% 2.2x 200.0% 61.8% 27.0% 17.2% 13.5x 19.4x 4.10x 24.1% 24.8% 2.1x 200.0% 59.1% 22.0% 17.3% 11.5x 20.7x 2.84x Europe Aleo Solar AG $ % 48.5% 4.6x -32.3% 48.6% 5.2% 4.9% 9.1x 8.4x 0.47x Centrosolar AG CENTROTEC Sustainable AG Centrotherm photovoltaics AG Conergy AG NM NM NM NM 0.1 NM NM 0.68 ErSol Solar Energy AG NM Manz Automation AG Phönix Solar AG NM PV Crystalox Solar Plc Q-Cells SE Renewable Energy Corporation ASA Roth & Rau AG SMA Solar Technology AG SolarWorld Ag Solon SE Mean (Europe) Median (Europe) 51.0% 40.4% 4.5x -20.3% 67.2% 8.3% 7.7% 9.0x 9.6x 0.62x 50.8% 49.9% 3.7x -25.5% 33.3% 7.5% 6.8% 8.3x 7.6x 0.45x Asia JA Solar Holdings Co., Ltd. $ % 28.4% 4.7x 62.4% -89.1% 9.6% 31.0% 12.7x 7.1x 1.21x LDK Solar Co.Ltd Sumco Corporation Suntech Power Holdings Co. Ltd Yingli Green Energy Holding Co. Ltd Mean (Asia) Median (Asia) Mean (Aggregate) Median (Aggregate) 42.8% 36.8% 7.9x 20.7% -31.0% 15.0% 28.1% 17.7x 12.0x 1.85x 37.4% 34.6% 4.7x 16.7% -10.3% 16.2% 19.6% 16.7x 13.8x 1.76x 42.7% 29.4% 4.3x 10.4% 33.7% 18.5% 17.9% 12.0x 12.1x 2.00x 41.7% 28.7% 3.1x -10.2% 30.2% 16.3% 14.5% 10.6x 11.0x 1.67x $ in USD millions except per share data LTM = Latest Twelve Months CAGR = Compounded Annual Growth Rate Enterprise Value = (Market Capitalization) + (Debt + Preferred Stock + Minority Interest) - (Cash & Equivalents) EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization Source: Bloomberg, Capital IQ, SEC filings Renewable and Alternative Energy Industry Insights August

8 Public Company Overview Other Renewable and Alternative Energy Participants Selected Public Company Analysis Wind Energy Equipment Manufacturers COMPANY INFORMATION Company Name MARKET DATA Stock % of 52- Price Wk High Credit Metrics Debt / Debt / Capital EBITDA EBITDA Growth EBITDA Margin 2009E 2010E LTM 2009E Enterprise Value as a Multiple of LTM EBITDA 2009E EBITDA LTM Revenue North America Broadwind Energy, Inc. $ % 3.6% NM NA NA -0.3% NA NM NA 4.79x Europe Gamesa Corporación Tecnológica S.A x 21.9% 22.0% x 7.2x 0.74 Nordex Ag Repower Systems Ag Vestas Wind Systems A/S Energiekontor Ag NA NA 20.1 NA 10.3 NA 2.06 Plambeck Neue Energien Ag NA NA 2.5 NA 36.2 NA 0.92 Asia Suzlon Energy Ltd Xinjiang Goldwind Science & Technology Co., Ltd Mean Median 54.6% 19.9% 4.6x 11.8% 30.4% 9.7% 9.1% 16.6x 12.6x 2.07x 51.5% 4.1% 1.1x 5.2% 25.7% 8.9% 10.1% 10.4x 10.6x 1.14x Selected Public Company Analysis Bio Fuel Producers COMPANY INFORMATION Company Name MARKET DATA Stock % of 52- Price Wk High Credit Metrics Debt / Debt / Capital EBITDA EBITDA Growth EBITDA Margin 2009E 2010E LTM 2009E Enterprise Value as a Multiple of LTM EBITDA 2009E EBITDA LTM Revenue 4Energy Invest Nv $ % 31.4% 6.6x 42.6% 93.9% 44.1% 48.5% 18.2x 12.8x 8.05x Abengoa Sa Biofuel Energy Corp NM NA NA NM NA NM NA 0.99 Brasil Ecodiesel Industry NM NA NA NM NA NM NA 2.11 Cropenergies Ag Envitec Biogas Ag Green Plains Renewable Energy, Inc NM NA NA 0.8 NA NM NA 0.96 Polish Energy Partners S.A NA NA 42.6 NA 18.4 NA 7.86 Schmack Biogas Ag NM NM NM NM 2.4 NM Verbio Ag Verenium Corporation NM NM NM NM NM NM NM 3.13 Mean Median 59.6% 48.5% 7.5x 95.8% 49.1% 16.2% 15.3% 18.3x 10.3x 2.57x 71.8% 42.1% 7.5x 50.6% 47.4% 5.3% 11.2% 18.3x 8.9x 1.45x Selected Public Company Analysis Fuel Cell Equipment Manufacturers COMPANY INFORMATION Company Name MARKET DATA Stock % of 52- Price Wk High Credit Metrics Debt / Debt / Capital EBITDA EBITDA Growth EBITDA Margin 2009E 2010E LTM 2009E Enterprise Value as a Multiple of LTM EBITDA 2009E EBITDA LTM Revenue Ballard Power Systems Inc. $ % 0.0% NM NM NM NM NM NM NM 1.60x FuelCell Energy Inc NM NM NM NM NM NM NM 3.54 Hydrogenics Corp NM NA NA NM NA NM NA 0.96 Plug Power Inc NM NM NM NM NM NM NM 1.49 Mean Median 37.1% 9.3% NA NA NA NA NA NA NA 1.90x 39.0% 0.6% NA NA NA NA NA NA NA 1.55x $ in USD millions except per share data As of June 30, 2009 LTM = Latest Twelve Months CAGR = Compounded Annual Growth Rate Enterprise Value = (Market Capitalization) + (Debt + Preferred Stock + Minority Interest) - (Cash & Equivalents) EBITDA = Earnings Before Interest, Taxes, Depreciation and Amortization Source: Bloomberg, Capital IQ, SEC filings Renewable and Alternative Energy Industry Insights August

9 Effects of the Recovery Act on Renewable Energy The Recovery Act was signed into law by President Barack Obama on February 17, The Recovery Act provides for approximately $787 billion of government funding to help stimulate the economy. The Recovery Act is intended to provide stimulus to the U.S. economy by allowing for federal tax cuts, increased unemployment benefits, and spending in the energy, education, healthcare, and infrastructure sectors. $43 billion has been designated to energy development, with a significant portion dedicated to renewable energy projects. In addition, another $22 billion of the total $288 billion in tax relief has been granted for use in the energy sector. Recovery Act Targeted Investments ($ in Billions) Tax Relief $288 State and Local Fiscal Relief 144 Infrastructure and Science 111 Protecting the Vulnerable 81 Health Care 59 Education and Training 53 Energy 43 Other 8 Total $787 Source: Note: Tax relief - includes $15B for infrastructure and science, $61B for protecting the vulnerable, $25B for education and training and $22B for energy. As a result of the signing of the Recovery Act, approximately $16.8 billion has been designated to the EERE. Many of the programs listed below provide for direct investment in renewable energy. For example, the Applied Research, Development, Demonstration and Deployment program includes $800 million for a Biomass Program and $400 million for a Geothermal Technologies Program. Recovery Act Targeted Investments ($ in Billions) $5.0 Weatherization Assistance Program $3.2 Energy Efficiency and Conservation Block Grants $3.1 State Energy Program $2.5 Applied Research, Development, Demonstration and Deployment $2.0 Advanced Battery Manufacturing Grants $0.4 Transportation Electrification $0.3 Energy Efficient Appliance Rebate Program and ENERGY STAR $0.3 Alternative-Fueled-Vehicles Pilot Grant Program $16.8 Total Use of Funds Source: U.S. Department of Energy Energy Efficiency and Renewable Energy Renewable and Alternative Energy Industry Insights August

10 Effects of the Recovery Act on Renewable Energy The table below provides a description of the Recovery Act-funded EERE programs. The Office of Energy Efficiency and Renewable Energy Programs Program Weatherization Assistance Program Energy Efficiency and Conservation Block Grants State Energy Program Applied Research, Development, Demonstration and Deployment Advanced Battery Manufacturing Grants Transportation Electrification Energy Efficient Appliance Rebate Program and ENERGY STAR Alternative-Fueled-Vehicles Pilot Grant Program Description Provides funds for the development of cost-effective energy efficiency measures for existing residential and multi-family for low-income residents. Provides grants to U.S. local governments, states, territories, and Indian tribes. The grants provide funds that are intended to reduce energy use and fossil fuel emissions, and improve energy efficiency. The State Energy Program was created by Congress in The additional money is intended to provide states with funds to carry out their clean energy programs and projects. More detail is provided on the following page. Funds are available for research, development, demonstration and deployment of energy efficiency and renewable energy technologies. A portion of the funds are available for the development of solar, hydrogen, and hydroelectric technologies. In addition, $800 million is designated for biomass projects and $400 million is designated for geothermal projects. The funds will be used to develop the next-generation plug-in hybrid electric vehicles and advanced battery components. The grants will be used for projects that accelerate the market introduction and penetration of advanced electric drive vehicles. The program provides rebates to consumers for purchasing an ENERGY STAR appliance. Provides funds for projects that expand the use of alternative fueled vehicles and advanced technology vehicles. Source: U.S. Department of Energy Energy Efficiency and Renewable Energy Renewable and Alternative Energy Industry Insights August

11 Effects of the Recovery Act on Renewable Energy 2009 Recovery Act and State Funding ($ in Millions) $61 $26 $25 $22 $26 $27 $42 $226 $35 $29 $55 $35 $25 $49 $32 $24 $31 $38 $47 $40 $41 $57 $39 $56 $82 $101 $69 $96 $53 $66 $33 $51 $100 $70 $76 $123 $24 $39 $74 $24.2 $52 District of Columbia $22 $55 $219 $72 $40 $56 $83 $28 Source: U.S. Department of Energy Energy Efficiency and Renewable Energy The U.S. Department of Energy ( DOE ) State Energy Program will distribute $3.1 billion to states under the Recovery Act. According to the Recovery Act, in order for projects to be eligible to receive funds, the DOE provided guidance that projects, programs, and measures should be designed to: Save energy Create or retain jobs Increase energy generation from renewable resources Reduce greenhouse gas emissions Renewable and Alternative Energy Industry Insights August

12 Duff & Phelps Experience Representative Duff & Phelps Industry Experience Duff & Phelps provides advisory services in mergers and acquisitions, financings, and restructurings for renewable and alternate energy clients worldwide. Duff & Phelps professionals have significant knowledge of the renewable and alternative energy subsectors and possess senior-level relationships with many leading participants in the industry. The firm s world class capabilities and resources, combined with an agile and responsive delivery, distinguish the Duff & Phelps client experience. Duff & Phelps provides a broad offering of investment banking and financial advisory services to some of the most recognized names in the renewable and alternative energy industry, as well as numerous middle market participants. Atlantic Power Corporation was formed to acquire indirect interests in 15 power generation projects primarily in the U.S. through an offering of Income Participating Securities has completed a merger with subsidiaries of NTR has completed the sale of certain energy assets owned by affiliated entities to Rhone Clean Tech Fund l, L.P. has completed a transaction involving the contribution by related Ridgewood trusts of landfill gas electricity generation assets, located in Providence Rhode Island to a newly formed entity in exchance for ownership in the new entity. Financial advisor to U.S. tax counsel and the board of directors of Atlantic Power Corporation Financial advisor to the board of directors of Green Plains Renewable Energy, Inc. Financial advisor to the board of directors of the affiliated entities and Ritchie Capital Management, L.L.C. Financial advisor to the special committee appointed by Ridgewood Renewable Power LLC > FINANCIAL OPINION > FAIRNESS OPINION > FAIRNESS OPINION > FAIRNESS OPINION (NYSE: BTU) has completed a tax-free spin-off of coal assets and operations in West Virginia and Kentucky Patriot Coal (NYSE: PCX) Financial advisor to the board of directors of Peabody Energy Corporation Industry: Energy Primary Energy Recycling Corporation was formed Primary Energy to Recycling acquire Corporation indirect was formed to acquire indirect interests in five projects interests in five projects located in located in the U.S. through an offering of the U.S. Enhanced through Income an Securities. offering of Enhanced Income Securities Duff & Phelps served as independent financial advisor and issued a financial opinion to Financial U.S. advisor tax counsel and to the Board U.S. of tax Directors counsel of Primary Energy Recycling Corporation. and the board of directors of Primary Energy Recycling Corporation (NYSE: (NYSE:KED) KED) The undersigned served as financial advisor to the Board of Financial advisor to the board Directors of Kayne Anderson Energy Development Company and provided of directors third-party of valuation Kayne consulting Anderson services. Energy Development Company (NYSE: TXU) has been acquired by affiliates of Kohlberg Kravis Roberts & Co. and TPG Financial advisor to TXU Corp. > SOLVENCY OPINION > FINANCIAL OPINION > VALUATION OPINION > SOLVENCY OPINION Renewable and Alternative Energy Industry Insights August

13 Leaders in Investment Banking Services 2008 Fairness Opinion Rankings - U.S. Rank Financial Advisor No. of Deals 1* JP Morgan 71 1* Goldman Sachs & Co Duff & Phelps 45 4 Houlihan Lokey 43 5 UBS 42 6 Morgan Stanley 40 7 Barclays Capital 34 8 Merrill Lynch 33 9 Deutsche Bank AG Sandler O Neill Partners Creidt Suisse Citigroup 27 Announced and Completed Deals (*) - Tie Source: Thomson Financial 2008 Bankruptcy Rankings - Global Rank Firm No. of Active Cases 1 Houlihan Lokey 35 2 Mesirow Financial 31 3 Chanin Capital Partners, 18 a Duff & Phelps Company 4* Jefferies & Co. 17 4* Navigant Capital Advisors 17 5 Rothschild 15 6 Moelis & Co Lazard 11 8 General Capital Partners 10 9 Gordian Group 9 10 Imperial Capital 7 Includes all debtor, creditor and other assignments within active bankruptcy cases. All cases active as of Dec. 31, 2008.(*) - Tie Source: The Deal 2008 Middle Market M&A Rankings - U.S. Rank Financial Advisor No. of Deals 1 Houlihan Lokey 93 2 Lazard 40 3 GW Equity 39 4* Duff & Phelps 38 4* RBC Capital Markets 38 6 Lincoln International 35 7* Jefferies & Co. 34 7* William Blair & Co McGladrey Capital Markets 33 10* Goldman Sachs & Co * JP Morgan 32 Investment Banking Services Mergers and Acquisition Advisory Financial Restructuring and Special Situations Fairness Opinions Solvency Opinions Business Valuation Opinions ESOP and ERISA Advisory Private Placement of Debt and Equity Commercially Reasonable Debt Opinions Undisclosed Values / Values up to 100 million Announced and Completed Deals (*) - Tie Source: Thomson Financial Renewable and Alternative Energy Industry Insights August

14 Contacts Robert A. Bartell, CFA Managing Director David N. Rowe Director Mark J. Kwilosz Director Amsterdam Atlanta Austin Boston Chicago Cincinnati Dallas Denver Detroit Houston London Los Angeles Morristown Munich New York Paris Philadelphia Plano San Francisco Seattle Shanghai Silicon Valley Tokyo Washington, DC Metro About Duff & Phelps As a leading global independent provider of financial advisory and investment banking services, Duff & Phelps delivers trusted advice to our clients principally in the areas of valuation, transactions, financial restructuring, dispute and taxation. Our world class capabilities and resources, combined with an agile and responsive delivery, distinguish our clients experience in working with us. With more than 1,200 employees serving clients worldwide through offices in North America, Europe and Asia, Duff & Phelps is committed to fulfilling its mission to protect, recover and maximize value for its clients. Investment banking services in North America are provided by Duff & Phelps Securities, LLC. Investment banking services in Europe are provided by Duff & Phelps Securities Ltd. Duff & Phelps Securities Ltd. is authorized and regulated by the Financial Services Authority. Investment Banking services in France are provided by Duff & Phelps SAS. For more information, visit (NYSE: DUF) Copyright 2009 Duff & Phelps Corporation. All rights reserved. duffandphelps.com DP091020