2012 Asia Pacific Energy & Power Outlook

Ravi K, Vice President - Energy & Power Services Practice, Asia Pacific

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Top Predictions for 2012 in Asia Pacific

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44

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66

77

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Renewable Energy Markets to witness a growth of 20 percent in terms of total investments, during 2012

Renewable Energy Markets to witness a growth of 20 percent in terms of total investments, during 2012

Oil & Gas upstream capital expenditure to increase by 10 percent and refining capacity additions to double in 2012

Oil & Gas upstream capital expenditure to increase by 10 percent and refining capacity additions to double in 2012

Energy Management Market to see a growth rate of 13.7 percent in 2012, riding on government support; but still facing resistance from industries

Energy Management Market to see a growth rate of 13.7 percent in 2012, riding on government support; but still facing resistance from industries

Global leading companies will continue to scout for smart grid technology acquisitions, but utilities will be slow to adopt in Asia Pacific

Global leading companies will continue to scout for smart grid technology acquisitions, but utilities will be slow to adopt in Asia Pacific

Mobile Computing and Disaster Management to drive investments in Network Power SystemsMobile Computing and Disaster Management to drive investments in Network Power Systems

Durban Climate Change Talks – Expect no path breaking agreements, but incremental progress possible

Durban Climate Change Talks – Expect no path breaking agreements, but incremental progress possible

Conventional Power Generation and T&D Infrastructure development will be the single largest source of revenue for the power equipment industry

Conventional Power Generation and T&D Infrastructure development will be the single largest source of revenue for the power equipment industry

88 Traditional Energy Companies will be increasingly challenged by the unconventional competitors and startups, with focus on niche technologies and new business models

Traditional Energy Companies will be increasingly challenged by the unconventional competitors and startups, with focus on niche technologies and new business models

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Major Drivers 2012 for Energy & Power in Asia Pacific

Growth in Energy Demand

Focus on Smart Energy by

developed Asia Pacific

Massive investment in

power infrastructure by developing Asia

Energy Security and

Fuel DiversityNatural disaster driven

demand for automation and backup power

Increasing affordability of green energy

Source: Frost & Sullivan.

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Slow pace of market

liberalization

Project cost escalation and

currency fluctuation

Global economic

uncertainties could affect

export driven Asia

Impasse on climate change

treaty

Bilateral & multi-lateral -

political & trade issues

Key Restraints Summary

Source: Frost & Sullivan.

Key Restraints in 2012 for Energy & Power in Asia Pacific

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Coal, Gas, Nuclear, Diesel,

Wind, Solar, LNG Imports,

Refineries

Regional Hotspots of Opportunities in Asia Pacific

• Smart Grids• Solar Power• LNG Liquefaction

• Deep water E&P• Solar PV• Coal & Gas to Power• Energy Efficiency• Network Power Supplies

Coal, Solar, Nuclear, Wind, Smart Grids, LNG Imports, Refineries

• Solar PV• Smart Grids• Energy Efficiency• Network Power Supplies

• Smart Grids• Solar PV• Wind• Energy Efficiency

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Executive Summary—CEO’s Perspective on Solar

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Malaysia emerging as the favored destination in Southeast Asia for new PV manufacturing plants (e.g. Bosch & Panasonic)

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Thailand, a hotbed for solar PV market in Southeast Asia till 2011 is likely to remain weak in 2012 due to the flood crisis

4The recent passage of the ‘Carbon Tax’ in Australia will give a fillip to the solar PV market

5Implementation of a net FIT will help sustain Japan’s position in the solar PV market

1China – not just a global manufacturing center for solar; fastest growing market in Asia especially on-grid solar PV

Source: Frost & Sullivan analysis.

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Solar PV Installed Capacity Forecast, 2012

Annual Installed Capacity, 2012

5,330 MW 38.6%

MARKET GROWTH (2012)

450 MW 1,360 MW2,600 MW

500 MW 150 MW

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Executive Summary—CEO’s Perspective on Wind

2China will continue be the biggest national annual market globally due to China’s thirst for energy and promotion of renewables

3Japan’s onshore market is expected to continue experiencing a slow down because of extreme weather, complicated authorization process and grid connectivity

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Australia will be better positioned for growth- provided that its government can restore profitable Renewable Energy Credit (REC) pricing levels for wind project in the near term

5The offshore wind power market will emerge in Asia Pacific from 2012, mainly driven by China

1The Asia Pacific will continue to be the fastest-growing wind market worldwide in 2012 in terms of installed capacity, followed by North America and Europe

Source: Frost & Sullivan analysis.

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Market Forecasts 2012 for Wind

60,512

105,949

100,870

6,876

North America Europe Asia Pacific ROW

Cumulative Installed Capacity, 2012 Annual Installed Capacity, 2012

21,257 MW

26.7%

Capacity Growth (2012)

15,000 MW 2,200 MW

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Executive Summary—CEO’s Perspective on Conventional Power

2Countries will increase their focus on T&D planning because of ageing infrastructure and bottlenecks in bulk power evacuation

3Ongoing power shortages in several emerging markets will continue to drive the demand for diesel and small gas fired plants

4Asia Pacific region continues to be the largest market for LNG with China, India and Southeast Asia ramping up on regasification terminals

5While as much in demand, actual imports of coal for power into India and China could suffer due to policies by Indonesia & Australia making imports expensive

1Coal fired power plants will continue to lead in terms of capacity creation, but focus will be on ultra supercritical boilers and other backend pollution control technologies

Source: Frost & Sullivan analysis.

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Key Highlights for Conventional Power

Anticipated Investments

$130-140

Billion

Attractive Countries

China, India, Indonesia

VietnamMongolia

Growth Rate in 2012

4.0-5.0%

Market Drivers

Fastest base load

additions

Easy availability of

fuels

Segments to Watch

• Supercritical

plants

• CCS

development

Major Changes Expected

Technology shift to clean coal fired generation plant

using ultra supercritical

Market Restraints

Obtaining financial

closure on time

Environmental

concerns

Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.

Pricing Trends

‘Decline’ for gas because

of economies of scale.

“Increase” for coal

because of domestic

shortages in India &

China

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Executive Summary—CEO’s Perspective on Nuclear

2With stringent national regulations on maintenance, and local authorities’ reluctance to approve restarts, there is a concern that by April or May 2012 Japan may have very small nuclear output for the first time since 1966

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South Korean enterprises are among those hoping to pick up overseas contracts at the expense of Japanese companies because of relatively limited opposition to the country’s domestic nuclear program and government support

4With only five reactors with 3,900 MW of capacity currently under construction and 4,385 MW in operation, achieving India’s massive proposed growth in capacity may be difficult because of financial, institutional, political and local issues

5The Vietnam's nuclear program, which posited the construction of four 1,000 MW reactions, is unlikely to be affected by Fukushima. This is witnessed by Vietnam’s willingness to use Japanese technology and resources

1The Fukushima disaster is unlikely to have a long term impact on China’s nuclear growth and has reinforced central government concerns about the technology, ownership, and geographic spread of future Chinese nuclear capacity

Source: Frost & Sullivan analysis.

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Executive Summary—CEO’s Perspective on Smart Grids

2Industry could see some major mergers as bigger players like CISCO, Schneider, Toshiba become more aggressive

3Strategic international partnerships would need to be forged to cater to diverse technology requirements

4Educating the customers the key to successful AMI implementation for utilities

5Choice between Wifi vs Zigbee as HAN communication standard

1IPO results of global leaders such as Silver Spring Networks could define way forward for the smart grid industry

Source: Frost & Sullivan analysis.

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Key Highlights for Smart Grids

Anticipated Investments

US$ 10 Billion

Attractive Countries

ChinaAustralia

KoreaThailand

Growth Rate in 2012

60-70%

Market Drivers

Investments in grid

modernization

Segments to Watch

AMIHV TechnologiesGrid Automation

Major Changes Expected

Key pilot projects in Korea and

Australia likely to near completion

Market Restraints

Ambiguity over technology and business case

Stable IncreasingDecreasing Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis.

Pricing Trends

Price of meters, energy storage and renewable

energy are following a

downward trend

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Regional Hotspots of Opportunities for Smart Grids

Smart meter roll out in Victoria would peak in 2012 as the deployment enters the penultimate year of the plan

State Grid Corporation of China would invest close to US$10 Billion in multiple Smart Grid technologies

Testing the integrated operation of US$200 million smart grid pilot in Korea would enter the final phase

As part of its US$13 Billion funding over 15 years, Thailand would announce locations for smart grid pilots

India expected to release the Smart Grid standards and accelerate nearly 10 pilot projects

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For Additional Information

Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 5832djeremiah@frost.com

Carrie LowCorporate CommunicationsAsia Pacific+603 6204 5910carrie.low@frost.com

Ravi KrishnaswamyVice PresidentEnergy & Power Systemsapacfrost@frost.com

Jessie LohCorporate CommunicationsAsia Pacific+65 6890 0942jessie.loh@frost.com