December 15, Beijing Brussels Washington

December 15, 2016 Beijing Brussels Washington

Beijing C0 Members C1, C2 and C3 Members Associations GWEC Uniting the global wind industry and its representative associations Brussels Washington

Outline: 1. Status of global power markets 2. Status of global wind power markets 3. Short term projections 4. Global Wind Energy Outlook Scenarios 5. New markets 6. Conclusions and Looking Ahead

The Current Renewable and Power Market

300,000 [MW/a] Global Power Plants - Annual Market 1970-2014 Sources: Platts, REN21, EWEA, GWEC, EPIA, National Statistics, IEA, Breyer - Data Compilation: Dr.Sven Teske/UTS Nuclear Power Plants Coal Power Plants 250,000 200,000 Oil Power Plants Gas Power Plants (incl. Oil) Biomass Geothermal Hydro 150,000 100,000 50,000 0 1970 1971 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Global Power Plant Market Conditions: Global: Power Plant Market Shares: 2004-2014 Nuclear Power Plants 1.3% Coal Power Plants 36.1% Solar Photovoltaic 8.1% Concentrated Solar Power 0.2% Wind 15.2% Hydro 12.0% Oil Power Plants 3.7% Gas Power Plants (incl. Oil) 21.4% Biomass 1.8% Geothermal 0.1%

Source: REN21 GSR 2016 Beijing Brussels Washington

Status Wind Power Market Beijing Brussels Washington

Beijing Beijing Brussels Brussels Washington London 2015 growth: 17% 16 yr avg. growth: 24.2%

2015 growth: 22% 16 yr avg. growth: 24.9%

Beijing Beijing Brussels Brussels Washington London

40,000 35,000 OECD vs non-oecd: Annual Market 30,000 25,000 MW 20,000 15,000 10,000 5,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 OECD 10,969 15,138 18,543 22,505 16,408 18,370 26,834 15,425 21,058 25,369 Non-OECD 3,798 5,232 8,341 16,059 22,683 22,262 18,200 20,371 30,989 37,644

300,000 OECD vs non-oecd: Cumulative Market 250,000 200,000 MW 150,000 100,000 50,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 OECD 63,867 78,677 97,115 119,504 135,766 153,667 180,203 195,225 215,737 240,816 Non-OECD 10,155 15,371 23,708 39,765 62,467 84,713 102,930 123,720 154,745 192,389

Beijing Brussels London

Key Findings Unexpected growth (22%) in 2015, mostly China, US and Germany. 2016 should be less spectacular. Wind supplied about half of all global power generation growth in 2015, more than any other technology 28 markets with more than 1,000 MW; 9 with more than 10,000 MW; Proliferation of new markets in Africa, Asia, and Latin America. Technology evolution continues, but incrementally, not spectacularly, except perhaps in offshore. Costs continue to come down and wind is the cheapest way to add capacity in a growing number of markets in Africa, Asia and Latin America, as well as the in US and Canada. Offshore costs still coming down the learning curve, but dramatic progress of late

Development of Long Term Wind Market Projections Beijing Brussels London

The Scenarios Main Assumptions IEA New Policies scenario: based on International Energy Agency (IEA) 2015 World Energy Outlook IEA assessment has then been extended up to 2050 from UTS-ISF IEA 450 scenario: based on International Energy Agency (IEA) 2015 World Energy Outlook: sets out an energy pathway consistent with the goal of having about a 50% chance of limiting the global increase in average temperature to 2 C / 450 parts per million of carbon-dioxide equivalent (ppm CO2-eq IEA assessment has then been extended up to 2050 from UTS-ISF GWEC Moderate scenario: takes into account all policy measures to support renewable energy either under way or planned around the world assumes that renewables or wind targets set by many countries are successfully implemented GWEC Advanced scenario: assumption is that all policy options in favour of renewable energy are selected and the political will is there to carry them out

Climate Imperative: Paris Agreement means zero emissions power sector well before 2050 1.29 billion tons/annum

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New Markets MEXICO Peru BRAZIL TUNISIA IRAN MONGOLIA MOROCCO EGYPT PAKISTAN VIETNAM THAILAND ETHIOPIA PHILIPPINES GHANA KENYA SRI LANKA INDONESIA TANZANIA CHILE URUGUAY ARGENTINA SOUTH AFRICA

How to stay on the Advanced Scenario track The industry has been back on the Advanced Scenario track for the past two years. How to stay there? Governments are still subsidizing fossil fuel production and consumption to the tune of somewhere between $US 500 billion and $US 6 trillion per annum. This has to stop, and soon. New market designs are necessary to drive both electricity system transformation and the proper valuation of carbon-free and flexible generation. The old utility model is dead or dying just about everywhere; International institutions have to stop talking out of both sides of their mouths and top financing fossil fuel projects with international development finance. Renewables have won or are winning the price war; now we have to win the struggle over the system design; Any decision to build a fossil fueled power plant today means either: a) investing in a stranded asset; or b b) governments weren t serious in Paris

Conclusions Asian market driving global growth Asia is power hungry European market uncertain, especially after 2020 North America uncharacteristically stable through 2020 Largest growth markets by percentage are in Africa and Latin America Downward price pressure continues Accelerating consolidation of players in the OECD and to some extent in China, but new players continue to emerge in Africa, Asia and Latin America

Looking Ahead Climate Policy ~4% of global electricity supply now, should be 6-8% by 2020, 18-20% by 2030, around 1/3 by 2050 if we are to get to grips with the climate problem; With the entry into force of the Paris Agreement, governments now need to demonstrate that they re serious about implementing the targets; Early implementation key to have any chance to meet 2 degrees C target; Either the 2 degrees target and especially the 1.5 degrees target means complete decarbonisation of the power sector well before 2050. Any decision to build a fossil fueled power plant today means: a) investing in a stranded asset; b) governments weren t serious in Paris

Looking Ahead (2) The Paris Agreement needs to be embedded in concrete action plans in order for wind power to achieve its maximum potential, but for the short term we will continue to face... Uncertainty: - in international political landscape, and in various countries - in the future of the carbon markets - in new climate-related funds Focus on national/regional legislation and markets Market drivers all still in place, and increasingly prominent: energy security; cost stability; macroeconomic security; local economic development and job creation; local environment and climate

Thank you! Steve Sawyer steve.sawyer@gwec.net