Renewable Energy and Climate ChangeWhat we can do to help???

Paulo Fernando SoaresChief Executive OfficerSuzlon Energy Tianjin Ltd – Beijing Branch

BiographyPaulo Fernando Soares has joined Suzlon Energy Ltd in Jul 2005.

Previously to Suzlon, Paulo has worked fro 15 years in the Hydro Power business, in Brazil and China, where he has acquired experience in the areas of Manufacturing, Project Management, Engineering, Cost estimate, Project Cost Control and others. He was an employee from Siemens Hydro in Brazil from 1988 to 2000 and from Voith Siemens Hydro in China from 2000 to 2005.

Paulo has 5 years experience in the Hydro-Power Business industry in China, dealing with all the five power group companies, and was responsible for the execution of major projects.

At Suzlon, Paulo has taken the responsibility to establish the Beijing Office and, together with his team, has successfully negotiated 325 MW in Suzlon contracts in China

In The last 24 months Suzlon has grown into a major player in China, with about 850 employees and a factory with capacity to manufacture 600 MW/year, established in Tianjin.

Paulo has a bachelor degree in Mechanical Engineering at Faculdade de Engenharia Industrial – FEI and a Executive MBA in General Management at Fundação Dom Cabral – FDC, both in Brazil.

Brazilian Indian Company China

Engineer

Hydro Power Wind Power

Manufacturing, Engineering Project

Management Contract

Administration Sales and

Marketing

Some general facts and issues affecting our planet

The Greenhouse Effect

Source: Greenpeace / EREC – Energy [R]evolution l Jan 2007

The greenhouse effect is the process by which the atmosphere traps some of the sun’s energy, warming the earth and moderating our climate. A human-driven increase in greenhouse gases’ is increasing this effect artificially, raising global temperatures and disrupting our climate.

These greenhouse gases include carbon dioxide, produced by burning fossil fuels and through deforestation, methane, released from agriculture, animals and landfill sites, and nitrous oxide, resulting from agricultural production plus a variety of industrial chemicals.

OECDOrganization for Economic Development and Cooperation

16 Core Global RisksLikelihood with Severity by Number of Deaths

Source: Global Risks 2007 World Economic Forum Report 2007

Note: For seven of the core global risks, severity by number of deaths was not applicable. Likelihood was based on actuarial principles where possible.For most risks, however, qualitative assessment was used.

Carbon emissions are growing above trend and there are indications that feedback mechanisms, particularly increased heat-absorption caused by Arctic ice-melt, will increase the speed and scale of warming. New research argues that the increasing intensity of North Atlantic hurricanes is due to global warming.

Climate Change – Electricity Demand per region

The OECD regions (shown in red), led by North America, had the highest demand per capita in 2005. In total, they accounted for about 60% of global electricity use despite having less than 20% of the world’s population.

In contrast, the non-OECD regions have much lower levels of per-capita electricity use today but their populations are huge. These markets will grow significantly – both in population size and electricity use.

By 2030, even though per-capita non-OECD consumption will still be well below OECD levels, the increases will be dramatic. Non-OECD electricity use will be about 70% higher on a per-capita basis, with total demand more than doubling.

Electricity consumption on a per-capita basis is generally very different in OECD versus non-OECD countries.

While this distinction is important on its own, its significance can be further highlighted by contrasting the level of electricity use per capita relative to population levels across OECD and non-OECD regions.

Source: Exxon Mobil l The Outlook for Energy - A View to 2030

Climate Change – Electricity Demand per region

Climate Change – Energy Demand and CO2 emissions

Renewable Energy Global Consumption

Renewable energy supplies 18 percent of the world’s final energy consumption, counting traditional biomass, large hydropower, and “new” renewables (small hydro, modern biomass, wind, solar, geothermal, and biofuels – see Fig 1)

Traditional biomass, primarily for cooking and heating, represents about 13 percent and is growing slowly or even declining in some regions as biomass is used more efficiently or replaced by more modern energy forms.

Large hydropower represents 3 percent and is growing modestly, primarily in developing countries. New renewables represent 2.4 percent and are growing very rapidly in developed countries and in some developing countries

Source: REN21 – Global Status Report 2007

Renewable Energy Targets Policy targets for renewable energy exist in

at least 66 countries worldwide. By 2007, at least 64 countries had a national target for renewable energy supply, including all 27 European Union countries

In early 2007, the European Commission adopted new binding targets for 2020, including 20 percent of final energy and 10 percent of transport fuels. The 20 percent final energy target could imply 34 percent of electricity provided by renewables by 2020, according to the European Commission.

Similar to the existing electricity targets, individual countries will need to agree on and adopt their own targets to meet the 20 percent EU-wide target;

The 64 countries with national targets include 22 developing countries: Algeria, Argentina, Brazil, China, the Dominican Republic, Egypt, India, Indonesia, Iran, Jordan, Malaysia, Mali, Morocco, Nigeria, Pakistan, the Philippines, Senegal, South Africa, Syria, Thailand, Tunisia, and Uganda.

Source: REN21 – Global Status Report 2007

Renewable Energy Global Resources

Nature offers a variety of freely available options for producing energy. It is mainly a question of how to convert sunlight, wind, biomass or water into electricity, heat or power as efficiently, sustainably and cost effectively as possible.

On average, the energy in the sunshine that reaches the earth is about one kilowatt per square meter worldwide. According to the Research Association for Solar Power, power is gushing from renewable energy sources at a rate of 2,850 times more energy than is needed in the world today. In one day, the sunlight which reaches the earth produces enough energy to satisfy the world’s current power requirements for eight years. Even though only a percentage of that potential is technically accessible, this is still enough to provide just under six times more power than the world currently requires.Source: Greenpeace / EREC – Energy [R]evolution l Jan 2007

Climate Change – Energy Demand

While population and economic growth are fundamental drivers of overall energy demand, the types of energy used to meet specific needs are influenced by a variety of additional factors. These include economics, supply availability, income levels and public policies.

In 2005, global primary energy consumption was approximately 230 MBDOE, comprised of fossil fuels – oil, natural gas and coal – plus other non-fossil energy, namely nuclear power and renewable sources.

By 2030, energy demand is expected to reach almost 325 MBDOE, or approximately 40 percent more than in 2005.

Overall global demand and the need for particular energy types are also influenced considerably by the growing and diverse requirements of the major demand sectors – power generation, transportation, industrial and residential/commercial.

Each of the major demand sectors will experience considerable growth through 2030. The largest sector today – and the one with greatest anticipated volume growth going forward – is power generation. The fastest-growing sector – and the one most important to oil demand – is transportation. These two sectors will have a dramatic impact on energy trends through 2030.Source: Exxon Mobil l The Outlook for Energy - A View to 2030

Climate Change – Energy Demand In China

Driven by the electrification of both household and enterprise energy use, the Chinese economy has created as much new demand for power since 2000 as the total demand for power in France, Germany and the UK combined. In 2006 and 2007 alone China added over 200 GW of new capacity, equivalent to the double entire installed base of Africa.

Over 75 percent of the demand growth in recent years has come from the power sector, as electricity demand boomed and alternative fuel sources for generating that electricity (hydro, natural gas, wind and nuclear) failed to keep pace (figure 22).

Of the 50 percent of coal not consumed by the power sector, the majority is sold directly to industry for use in boilers, coking ovens and on-site (“inside the fence”) power generation.

Household coal consumption; which accounted for 20 percent of total demand in 1985, has dropped to 4 percent as China’s residents move into homes equipped with gas and electricity for cooking and heating.

The lion’s share of the country’s electricity is consumed by industry, with 10 percent going to iron and steel production alone

Source: China Energy – A guide for the perplexed / Daniel Rosen and Trevor Houser May 2007

Climate Change – Oil Reserves and Consumption

World Oil Consumption rose just under 650,000b/d, about half of the 10-year average. OECD Consumption fell by 400,000 b/d, the biggest decline since 1983

Oil consumption growth was above average in China and oil-exporting Countries

Source: BP Statistical Review of World Energy 2007

Climate Change – Coal Reserves and Consumption

Source: BP Statistical Review of World Energy 2007

Coal was again the world’s fastest growing fossil fuel in 2006. Global consumption rose by 4.5% compared wit a 10 year average of 2.8%.

The Asia Pacific region accounted for nearly 90% of the global growth in consumption and 80% of growth in production.

Wind Power

The Wind Cycle – Where???

Wind Power Resources – China and USA

Wind distribution map of China, shows that the north of the country and costal areas are the most favorable for wind farms. Regions in Tibet with high winds have extremely difficult access and are not yet developed.

In the USA, the main wind resources are in the Midwest, in the area of the grand lakes and in the Rockies

Since early recorded history, people have been harnessing the energy of the wind. Wind energy propelled boats along the Nile River as early as 5000 B.C. By 200 B.C., simple windmills in China were pumping water, while vertical-axis windmills with woven reed sails were grinding grain in Persia and the Middle East

By the 11th century, people in the Middle East were using windmills extensively for food production; returning merchants and crusaders carried this idea back to Europe.

The Dutch refined the windmill and adapted it for draining lakes and marshes in the Rhine River Delta.

When settlers took this technology to the New World in the late 19th century, they began using windmills to pump water for farms and ranches

The Wind Turbines – development cycle

The Wind Turbines – development cycle

The Wind Turbines – How it works?

1. The wind blows on the blades [1] and makes them turn.

2. The blades turns a shaft [5] inside the nacelle [11] (the box at the top of the turbine)

3. The shaft goes into a gearbox [6] which increases the rotation speed enough for...

4. The generator [7], which uses magnetic fields to convert the rotational energy into electrical energy. These are similar to those found in normal power stations.

5. The power output goes to a transformer, which converts the electricity coming out of the generator at around 700 Volts (V) to the right voltage for distribution system, typically 33,000 V.

Windpower Global Installations

Windpower Global Installations

In the USA, every 1MW of wind power installed can generate electricity for about 300 households;

In China, due to the fact that the consumption per capita is much lower than in the USA, every 1 MW of windpower installed can generate power for about 1,800 households

05A 06A 07A 10E 20E 06E - '20E

20 MLe0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0RE cap. ex-hydro

Hydro

Non RE Sources

Power Capacity DevelopmentActual 2007 x Target in 2010

The targets for RE (excluding Large Hydro) must be reviewed to more realistic numbers considering the current development of the industry.

Installed capacity growth Actual x Target

Source: National Development & Reform Commission; "Renewable Energy Sources Medium to Long Term Development Plan" report publishedAugust 2007, released 4 September 2007. National capacity = Merrill Lynch AsiaPac Utilities Research Estimates

517.2622.0

917.0

1,493.7

976.5

1.493.7

0.64% 0.76% 1.08% 4.14% 6.00% 6.06%% REDespite the fact that the government has set ambitious targets for 2010 and 2020, it is important to define whether Large Hydro is part of the target:

Analysis

Power Generation

Installed capacity

Power Generation

GW [%] TWh[%]

Thermal 554.0 77.59 2,698.0 82.86

Hydro 145.0 20.31 486.7 14.95

Nuclear 8.8 1.23 62.6 1.92

Wind 5.9 0.83 5.6 0.17

Others --- --- 3.0 0.09

Total 714.0 100.0 3,255.9 100.0

713.0

1.17%

Incl. Nuclear – 2007: 8.8GW 2006: 5.3GW

Electricity generation profile in 2007:

Inst. Capacity

%RE -Incl. Hydro %RE-Excl. Hydro

2006 A 21.33% 0.76%

2007 A 20.34% 1.08%

2010 F 21.20% 1.17%

2020 F 24.22% 4.14%

Power Capacity Development in ChinaRenewable Energy Sources

AnalysisInstalled capacity growth Actual x Target

120.3

200.8

361.9

241.6

390.9

97.3%

96.5%

94.6%

82.9%

75.7%

76.7%

% H

132.7

Source: National Development & Reform Commission; "Renewable Energy Sources Medium to Long Term Development Plan" report publishedAugust 2007, released 4 September 2007. National capacity = Merrill Lynch AsiaPac Utilities Research Estimates

Hydro Capacity 2006A

2007A

2010F

2020F

Large Hydro 72.0 NA 140.0

225.0

Pumped Storage 7.0 NA NA NA

Small Hydro 38.0 NA 50.0 75.0

Total 117.0

145.0

190.0

300.0

If we analyze the breakdown of the different Renewable Energy sources and its development forecast, we will clearly see that Large Hydro will be the main player, attracting the bulk of the investments.

The breakdown figures  (in GW) for hydro is as follows:

Renewable energy sources not derived from Large Hydro schemes should have development priority in order to avoid the repetition of the 2007 situation, when droughts in the south pushed the consumption of eletricity generated by coal fired thermo power plants

Windpower Facts Advantages

Wind energy is fueled by the wind, so it's a clean fuel source. Wind energy doesn't pollute the air like power plants that rely on combustion of fossil fuels, such as coal or natural gas. Wind turbines don't produce atmospheric emissions that cause acid rain or greenhouse gasses.

Wind energy is a domestic source of energy;

Wind energy relies on the renewable power of the wind, which can't be used up. Wind is actually a form of solar energy; winds are caused by the heating of the atmosphere by the sun, the rotation of the earth, and the earth's surface irregularities.

Wind energy is one of the lowest-priced renewable energy technologies available today, costing between 4 and 6 cents per kilowatt-hour, depending upon the wind resource and project financing of the particular project.

Wind turbines can be built on farms or ranches, thus benefiting the economy in rural areas, where most of the best wind sites are found. Farmers and ranchers can continue to work the land because the wind turbines use only a fraction of the land. Wind power plant owners make rent payments to the farmer or rancher for the use of the land.

Windpower Facts Disadvantages

Disadvantages• Wind power must compete with conventional generation sources on a cost

basis. Depending on how energetic a wind site is, the wind farm may or may not be cost competitive. Even though the cost of wind power has decreased dramatically in the past 10 years, the technology requires a higher initial investment than fossil-fueled generators.

• The major challenge to using wind as a source of power is that the wind is intermittent and it does not always blow when electricity is needed. Wind energy cannot be stored (unless batteries are used); and not all winds can be harnessed to meet the timing of electricity demands.

• Good wind sites are often located in remote locations, far from cities where the electricity is needed.

• Although wind power plants have relatively little impact on the environment compared to other conventional power plants, there is some concern over the noise produced by the rotor blades, aesthetic (visual) impacts, and sometimes birds have been killed by flying into the rotors. Most of these problems have been resolved or greatly reduced through technological development or by properly sitting wind plants.

Wind farms

Wind farms

Offshore Wind farms

Offshore Wind farms

Hydro Power

Hydropower Facts

► The flow of water has been used for thousands of years to provide mechanical energy to grind grain, drive sawmills, and pump water .

► Hydropower is a renewable source of energy. Water continuously moves through a global cycle, evaporating from lakes and oceans, forming clouds, precipitating as rain or snow, and flowing back to the oceans. This water cycle is produced by the sun and driven by gravity.

► Hydropower facilities can capture the energy in flowing water by damming a river (impoundment), or channeling a portion of a river through a generating facility (diversion).

The Hydro Cycle – a renewable source of energy

Hydropower Facts

► Is abundant: Hydroelectricity makes up around 10 percent of the nation’s electric supply and about 20 percent worldwide, and furnishing an estimated 80 percent of renewable electricity in the U.S.

► Is renewable: It makes use of the hydrological cycle that consists of a never-ending, timeless cycle of evaporation and precipitation. 

► Is clean: It produces zero emissions in the generation of electricity and, in its use, we avoid burning additional carbon-based fossil fuels.

► Is reliable: It is a fast, flexible and firm generation source that helps maintain the reliability of the electric grid.

Hydropower Facts

► Is inexpensive: In the U.S., hydropower is produced for an average of $7 per megawatt-hour (MWh) or about one-third the cost of using fossil or nuclear fuels and less than one-sixth the cost of using natural gas.

► Provides recreational opportunities: The 2000-plus federally licensed hydropower projects provided two and a half times as many recreation days as all the U.S. national forest trails put together and eight times as many recreation days as Yosemite and Yellowstone Park combined. Projects provide a variety of water-based recreation, including fishing, water sports, boating, water fowl hunting, and whitewater sports.

► Provides multipurpose projects. Other multipurpose uses for hydropower reservoirs include flood control, inland navigation, and industrial, municipal, and agricultural water supply.

The Hydro Power Plant – How it works????

The Hydro Power Plant in the past

► Just having water in the river isn't enough. A good hydropower site must have enough stream-flow as well as enough head. For example, the Mississippi River has tremendous stream-flow, but only a few of its dams are high enough to provide the head needed for efficient hydropower development. Dams in the arid West may have plenty of head, but not enough stream-flow.

► The first U.S. hydroelectric power plant opened on the Fox River near Appleton, Wisconsin, on September 30, 1882.

Hydropower Facts

► Worldwide, hydropower plants produce about 24 percent of the world's electricity and supply more than 1 billion people with power.

► The world's hydropower plants output a combined total of 675,000 megawatts, the energy equivalent of 3.6 billion barrels of oil, according to the National Renewable Energy Laboratory.

► There are more than 2,000 hydropower plants operating in the United States, making hydropower the country's largest renewable energy source.

Purpose of Dams and World capacity

Recreation 38.4%

Flood Control 17.7%

Fire and farm Ponds 17.1%

Irrigation 11.0%

Tailing and

Others 8.0%

Undetermined 3.8%

Hydroelectric. 2.9%

Debris Control 0.8% Navigation 0.4%

Source: http://www.fema.gov/hazard/damfailure/benefits.shtm

Afr

ica

Asia

Austr

ala

sia

Euro

pe

N+

C A

meri

ca

South

Am

e..

.

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Technical Feasibility

Current Production

Realistic Development

The Hydro Cycle – a renewable source of energy

Hydropower Facts Advantages and Disadvantages

Advantages A hydro-electric power scheme uses

a renewable source of energy and therefore does not consume limited fossil fuels or pollute the atmosphere with combustion gases.

Unlike conventional coal-fired power stations, which take hours to start up, hydro-electric power stations can begin generating electricity very speedily. So hydro-electric plants are particularly useful for responding to sudden increases in the demand for electricity by customers.

These stations need only a small staff to operate and maintain them and are not subject to fluctuations in fuel prices.

Disadvantages Hydro-electric generation often

requires the construction of dams, which may result in serious environmental damage. It may involve the serious inundation of large areas of land and the loss of wildlife habitat; an impact on fish breeding; changes in water flow and the river eco-system; changes in sediment and salt contents; and so on.

Water storage schemes are very costly to build.

Different Hydro Power Plants

Storage projects impound water behind a dam, forming a reservoir.

Water is released through turbine-generators to produce electricity. The water storage and release cycles can be relatively short, for instance, storing water at night for daytime power generation. Or, the cycles can be long, storing spring runoff for generation in the summer when air conditioner use increases power demand.

Some projects operate on multi-year cycles carrying over water in a wet year to offset the effects of dry years.

Yellowtail Dam Bighorn River - MO

Different Hydro Power Plants – Pumped Storage

Pumped-storage" projects use off-peak electricity to pump water from a lower reservoir to an upper reservoir. During periods of high electrical demand, the water is released back to the lower reservoir to generate electricity.

Different Hydro Power Plants – Storage Projects

Storage projects impound water behind a dam, forming a reservoir. Water is released through turbine-generators to produce electricity.

The water storage and release cycles can be relatively short, for instance, storing water at night for daytime power generation. Or, the cycles can be long, storing spring runoff for generation in the summer when air conditioner use increases power demand. Some projects operate on multi-year cycles carrying over water in a wet year to offset the effects of dry years.

Yellowtail Dam Bighorn River - MO

Different Hydro Power Plants – Run of the River

"Run-of-river" projects typically use relatively low dams where the amount of water running through the powerhouse is determined by the water flowing in the river. Because these plants generally do not hold back water behind storage dams, they tend to affect upstream water levels and downstream stream flow less than storage projects. Electricity generation from these plants will vary with changes in the amount of water flowing in the river.

Hydropower Plants – Hoover Dam (USA)

Hydropower Plants – Three Gorges (China)

The Hydropower Plant – Inside a Power Plant

The Hydropower Plant – Inside a Power Plant

The Hydro-generator – Itaipu (Brazil)

Thank You

Cool websites

► www.nationmaster.com► www.howstuffworks.com► The World Fact book -

www.cia.gov/library/publications/download/

Climate Change – Energy Intensity

► Energy Intensity is simply the measure of how much energy is consumed in a country (or industry) for each RMB of economic output. As such it can either be reduced by cutting the amount of energy consumed or raising the value of the output. The easiest way to achieve the former is by raising the cost of energy (or the associate environmental externalities) and thus provide with companies with an incentive to consume less. Yet, as doing so would reduce the competitiveness of exiting State owned heavy industry firms, efforts by Beijing on this front are often frustrated by provincial opposition.

► A more politically expedient way to improve energy intensity, and the one Beijing has chosen to embrace, is to raise the value (and the price tag) of the industrial goods is that energy is being used to create. By assigning energy intensity targets to each province (who in turn delegate them to local energy hungry enterprises) without addressing the cost of power, land, capital or environmental compliance, the cheapest way for industry to reach their goals is to extend their cost advantage into higher value steel, aluminum, glass of Chemical products, thus raising total revenue faster than energy consumption.

1. improving the efficiency of capital allocation in a way that reflects full costs and removes the ingrained bias toward heavy industry lending;

2. continuing reform of energy prices in conjunction with improved data collection and price transparency;3. Incorporating environmental costs in a way that incentivizes cleaner behavior, rather than relying on

administrative controls alone.

Climate Change – Carbon Capture technology

1. improving the efficiency of capital allocation in a way that reflects full costs and removes the ingrained bias toward heavy industry lending;

2. continuing reform of energy prices in conjunction with improved data collection and price transparency;

Electricity Installed Capacity Development Facts and figures 2006 and 2007 According to the China Electricity Council (CEC), China's power generating capacity rose

14.3% i (compared to 20.3% in 2006) and reached 713GW by the end of 2007 (compared to 517GW in 2005, and 622GW in 2006), an net increase of 196GW in the last 2 years;

CEC estimated that China's annual power consumption will be increased by at least 15 % and newly launched power generation units will contribute over 91GW this year. However, as CEC pointed out, the power generation sector will face more pressure the rest of this year, especially from the rapid price rise of coal.

The State Grid Corp of China and China Southern Power Grid, are stepping up the expansion of the nationwide power grid, which will involve a total investment of more than USD 131.5 billion during the 11th Five-Year Plan period (2006-2010).

China's Thermal Power installed capacity rose by 13.94% (compared to 23.7% in 2006) to 551.5 GW. Hydropower installed capacity increased by 12.75% to 145.0 GW. In the first six months of 2007, hydropower generation hit a three-year low, China's thermal power growth bridged the demand-supply gap. China's power generation industry used more than 590.78 mm tons of coal in the first half of this year, up nearly 18 % year-on-year

The proportion of coal-fired power in the total installed capacity of China rose by 2.15% in 2005 with hydropower down 2.03%, making the country's power supply structure more unbalanced. Inner Mongolia, southwestern Yunnan Province and eastern Shandong Province were the top three provinces, in which the installed capacity rose by over 30 percent in 2006.

Market Development in ChinaPotential Investments (Billion USD) – NDRC Estimate

RE Technology

Potential by end of 2004

by end of 2006

2010 targets

2020 targets

Investments for 2004-2020

Hydro 400 GW 100 GW 128 GW 160 GW(190 GW)

300 GW RMB 1,100.0 bnUSD 136.4 bn

Wind 1,000 GW 250 GW onshore 750 GW offshore

0.76 GW 2,6 GW 5 GW(8GW)

30 GW RMB 200.0 bnUSD 20.2 bn

Solar PV 3,340 – 8,400 MJ/m2 60 MW NA 1 GW RMB 32.0 bnUSD 3.7 bn

Biomass (power generation)

Agriculture waste: 700 m ton/yearWood waste: 800 – 1,000 m ton /yearUrban Waste: 130 m ton/year

2,000 MW

1 GW(5.5 GW)

5 GW RMB 110 bnUSD 13.9 bn

Total 166 GW

336 GW

RMB 1,442 bnUSD 174.2 bn

Source: CLP – China under the Magnyfing Glass Workshop Sep 2006 / CREIA Nov 14, 05

(1) Considering USD 1,182/kW as average capital cost, we would have an investment of USD 35.5 billion, of which USD 2.0 billion was spent in 2005 and 2006. The average investment/year will about USD 2.4 billion/year; However, considering that the installed capacity will be significantly higher by 2020, reaching at least 60GW, we expect investment levels to be at minimum of USD 75 billion.

The Wind Cycle – a renewable source of energy

Hydropower FactsWorld Potential and Source of Energy

Market Development East Asia RegionGrowth Forecast [MW]

BTM Market Forecast 2008-12 Total [MW]

5,651

8,550

10,325

12,000

13,550

15,600

Analysis

Indian and China will be the backbone of the development of Wind Business in the East Asia region; however, competion in both Countries is very developed, with India facing problems with land availability

India (app. 25%) and China (app 60%) will be the most important market in the Asian region. All other countries combines will account for only 15% of the total additions;

Furthermore, markets such as Japan and Taiwan presents challenging conditions either due to equipment needed or due to competition;

Development in Countries such as Philippines (especially), Vietnam and Thailand is starting to accelerate; however level of development of the grid, weather conditions (typhoon area in Vietnam and Philippines and lack of wind in Thailand), might affect market potential;

Market Environment Current Status Installed Capacity x Government Targets

An analysis of the current government targets compared to the installed capacity basis shows a very large potential in the East Asian region in the coming years.

Furthermore, it is also important to note that while some targets are very challenging (Taiwan and South Korea), other are clearly underestimated (China) ;

According to recent forecast, about 30,000 MW of new capacity will be installed until 2010, substantially increasing the importance of the region in the Wind power business; however, vast majority of it will be in India and China.

Analysis

China , Japan, South Korea and Taiwan will be the leading palyers in the East Asian region in the comming 5 years; however small players may also present

interesting opportunities.

MW Installed Ownership, Pipeline Development

China

Japan

South Korea

Taiwan

Philippines

0

2,0

00

4,0

00

6,0

00

8,0

00

10,0

00

12,0

00

14,0

00

16,0

00

18,0

00

20,0

00

30,000

20,000

2,500

2,159

417

5,897

1,681

235

224

25 Installed

Government Target

2020

TargetYear

2030

2010

2010

2013

Market Development in ChinaGrowth Forecast [MW]

Source: Azure Suzlon Proprietaty Report / Azure International - CWEA statistics / Energy Research Institute from the NDRCNew Energy Finance – Interesting Times – Focus on Clean Energy Investment Opportunities in China Sep 18, 06

EER 2008 – 135,000Goldman Sachs 2008 –

108,000ERI l NDRC- 2008 – 120,000

Merrill Lynch 2007 – 50,000

NEF 2006 – 75,000Azure 2006 – 54,000

ERI – NDRC 15GW

Goldwind65GW

The Hydro Power Plant

The Hydro Power Plant