Offshore Wind Power As a Pillar of the Energy Transition

Jan Mrosik, CEO Power Transmission & Smart Grid Divisions | Siemens AG Offshore Wind Power as a pillar of the energy transition

Erlangen, July 2014

Full-scope provider of offshore wind projects

Wind Power Power Transmission Energy Service

New dimensions World record Innovation 6 MW 800 kV More output offshore for through wind turbines direct-current transmission modernization

• The largest offshore-markets are Great Britain and Germany • Significant expansion of offshore wind power planned in both countries

Germany Great Britain

6.5 gigawatts planned by 2020 1 gigawatt (Round 1  completed) 8.5 gigawatts planned by 2030 7 gigawatts (Round 2  ongoing)

23 gigawatts (potential further expansion) 2 gigawatts (Expansion 1&2  ongoing)

32 gigawatts (Round 3  planned)

9 gigawatts (Scotland  planned) 38 gigawatts 51 gigawatts

Offshore wind share in power mix Offshore wind share in power mix 4% by 2020 10% by 2030 10% by 2020 27% by 2030

Under con- Online Consented Planned Total struction Belgium 571 666 1,149 990 3,376 Croatia 0 0 0 500 500 Denmark 1,271 0 54 4,148 5,473 Estonia 0 0 0 950 950 Finland 26 0 0 3,770 3,796 France 0 0 2,920 3,110 6,030 Germany 520 2,447 6,682 28,321 37,870 Greece 0 0 714 3,687 4,401 Ireland 25 0 2,100 1,908 4,033 Italy 0 0 683 2,305 2,988 Latvia 0 0 200 0 200 Malta 0 0 0 149 149 Netherlands 247 417 2,772 2,976 6,412 Norway 2 0 407 8,915 9,324 Poland 0 0 0 10,595 10,595 Portugal 2 0 0 476 478 Spain 5 0 20 6,788 6,813 Sweden 212 0 991 8.276 9,479 United Kingdom 3,681 1,394 6,582 38,892 50,509 Total Europe 6,562 4,924 25,134 126,134 163,376 Source: EWEA – European Wind Energy Association (Mai 2014) Unrestricted © Siemens AG 2014. All rights reserved. Page 4 July 2014 Energy Sector Benefits of offshore wind power

...sustainability …wide acceptance …higher yield

7 months to a positive energy balance 76% acceptance in GB Significantly higher yield (on average, an offshore wind farm redeems the per turbine energy input for fabrication, transport, and Typical annual yields installation after this period) Inland Coastal Offshore (onshore) 2.3 MW Nearly CO2-free power 7 GWh 9 GWh – turbine generation 3.6 MW – 12 GWh 18 GWh (taking into account fabrication, transport, turbine 6.0 MW installation, and maintenance, CO2 emissions – 23 GWh 31 GWh turbine are only 7-12g CO2/kWh) Offshore wind …high level of reliability power means …reasonably priced electricity 97% availability higher initial German EEG tariff and better investments, For 12 years at 15 euro cts or 8 years at but also… 19 euro cts/kWh and then: 3.5 cts/kWh More than 2 decades (=price level electricity exchange) of operation have already been tried-and-tested by Siemens Short-term cost reduction offshore wind turbine plants Cost reduction to 10 euro cts/kWh target by 2020

…steadier yields …enormous potential 100% more full-load hours 50% more capacity (Wind turbines with a total output of 30 gigawatts (GW) (Offshore, with potentially more than 4,000 operating hours annually currently installed in Germany, 15 more gigawatts offshore at full-load compared with onshore wind power installations) planned by 2030)

Siemens Wind Power Wind Power Division (on- and offshore), FY 2013 • €6.6 billion in new orders received • €5.2 billion in revenues • >€13 billion in order backlog (March 31, 2014)

Siemens has already commissioned more than 1,250 offshore wind turbines with a total capacity of 4 gigawatts (GW) to supply 4 million households with electricity

Another 1,350 offshore wind turbines with a total capacity of nearly 6 gigawatts are on the order backlog

Completed projects Ongoing projects

1991 – Vindeby, DK (11 x 0.45 MW) Gwynt Y Mor, GB (160 x SWT-3.6-107) 2000 – Middelgrunden, DK (20 x SWT-2.0-76) West of Duddon Sands, GB (108 x SWT-3.6-120) 2002 – Samsø, DK (10 x SWT-2.3-82) Teesside, GB (27 x SWT-2.3-93) 2002 – Rønland, DK (4 x SWT-2.3-93) EnBW Baltic 2, DE (80 x SWT-3.6-120) 2003 – Rødsand/Nysted, DK (72 x SWT-2.3-82) Riffgat, DE (30 x SWT-3.6-107) 2003 – Frederikshavn, DK (1 x SWT-2.3-82) DanTysk, DE (80 x SWT-3.6-120) 2007 – Lillgrund, SE (48 x SWT-2.3-93) Borkum Riffgrund 1, DE (89 x SWT-3.6-120) 2007 – Burbo Banks, GB (25 x SWT-3.6-107) Borkum Riffgrund 2, DE (73 x SWT-3.6-120) 2008 – Lynn/Inner Dowsing, GB (54 x SWT-3.6-107) Meerwind Süd Ost, DE (80 x SWT-3.6-120) 2009 – Horns Rev II, DK (91 x SWT-2.3-92) Amrumbank West, DE (80 x SWT-3.6-120) 2009 – Hywind, NO (1 x SWT-2.3-82) Butendiek, DE (80 x SWT-3.6-120) 2009 – Gunfleet Sands, GB (48 x SWT-3.6-107) Westermost Rough, GB (35 x SWT-6.0-154) 2009 – Rhyl Flats, GB (25 x SWT-3.6-107) Godewind 1, DE (42x SWT-6.0-154) 2010 – Rødsand II, DK (90 x SWT-2.3-93) Godewind 2, DE (55x SWT-6.0-154) 2010 – Pori, FI (1 x SWT-2.3-101) Gemini, NL (150x SWT-4.0-130) 2011 – EnBW Baltic 1, DE (21 x SWT-2.3-93) 2012 – Walney 1, GB (51 x SWT-3.6-107) 2012 – Walney 2, GB (51 x SWT-3.6-120) 2012 – Rudong Intertidal, CN (21 x SWT-2.3-101) 2012 – Gunfleet Sands, GB (2 x SWT-6.0-120) 2012 – Sheringham Shoal, GB (88 x SWT-3.6-107) 2012 – Greater Gabbard, GB (140 x SWT-3.6-107) 2013 – London Array, GB (175 x SWT-3.6-120) 2013 – Lincs, GB (75 x SWT-3.6-120) 2013 – Anholt, DK (111 x SWT-3.6-120)

Siemens Power Transmission Power Transmission Division, FY 2013 • €5.7 billion in new orders received • €6.2 billion in revenues • >€7 billion in order backlog (March 31, 2014)

The Power Transmission Division has already commissioned 7 offshore grid connections with a total output of 2 gigawatts (GW)

Another 7 offshore grid connections for a total of nearly 5 gigawatts have been ordered

5 offshore grid connections with 3.8 9 offshore grid connections with 3 gigawatts capacity in high-voltage direct- gigawatts capacity in AC technology current technology (HVDC)

Completed projects Ongoing projects

2007 – Lillgrund, SE (110 MW) BorWin2, DE (800 MW) Cable links 2008 – Lynn & Inner Dowsing, GB (194 MW) HelWin1, DE (576 MW) 2010 – Thanet, GB (300 MW) longer than HelWin2, DE (690 MW) 2010 – Greater Gabbard, GB (500 MW) around 80 km SylWin1, DE (864 MW) 2010 – Bard 1, DE (400 MW) are more BorWin3, DE (900 MW) 2011 – Galloper, GB (140 MW) economical 2013 – London Array, GB (630 MW) and technically better when HVDC Ongoing projects technology is used Gwynt y Mor, GB (576 MW) Lincs, GB (270 MW)

Siemens Wind Power Service • 2,500 wind power service specialists employed • Service for > 50% of the installed global offshore base • Secures high offshore wind farm availability (≥ 97%)

Siemens actually provides service for 1,000 offshore wind turbines with a total output of more than 3 gigawatts (GW) that supply 3 million households with clean electricity

Service contracts for 1,000 more offshore wind turbines with an output of more than 4 gigawatts have been signed

Completed offshore projects currently Projects under construction with signed under service and warrantly agreements service and warranty contracts 2003 – Rødsand/Nysted, DK (72 x SWT-2.3-82) Gwynt Y Mor, GB (160 x SWT-3.6-107) 2007 – Lillgrund, SE (48 x SWT-2.3-93) West of Duddon Sands, GB (108 x SWT-3.6-120) 2007 – Burbo Banks, GB (25 x SWT-3.6-107) Teesside, GB (27 x SWT-2.3-93) 2008 – Lynn/Inner Dowsing, GB (54 x SWT-3.6-107) EnBW Baltic 2, DE (80 x SWT-3.6-120) 2009 – Horns Rev II, DK (91 x SWT-2.3-92) Riffgat, DE (30 x SWT-3.6-107) 2009 – Hywind, NO (1 x SWT-2.3-82) DanTysk, DE (80 x SWT-3.6-120) 2009 – Gunfleet Sands, GB (48 x SWT-3.6-107) Borkum Riffgrund 1, DE (77 x SWT-3.6-120) 2009 – Rhyl Flats, GB (25 x SWT-3.6-107) Meerwind Süd Ost, DE (80 x SWT-3.6-120) 2010 – Rødsand II, DK (90 x SWT-2.3-93) Amrumbank West, DE (80 x SWT-3.6-120) 2011 – EnBW Baltic 1, DE (21 x SWT-2.3-93) Butendiek, DE (80 x SWT-3.6-120) 2011 – Avedore, DE (1x SWT-3.6-120) Gemini, NL (150x SWT-4.0-130) 2012 – Walney 1, GB (51 x SWT-3.6-107) 2012 – Walney 2, GB (51 x SWT-3.6-120) 2012 – Rudong Intertidal, CN (21 x SWT-2.3-101) 2013 – Sheringham Shoal, GB (88 x SWT-3.6-107) 2013 – Greater Gabbard, GB (140 x SWT-3.6-107) 2013 – Anholt, DK (111 x SWT-3.6-120) 2013 – London Array, GB (175 x SWT-3.6-120) 2013 – Lincs, GB (69 x SWT-3.6-120)

Siemens

• HelWin1 (576 MW)

• HelWin2 (690 MW)

• BorWin2 (800 MW)

• BorWin3 (900 MW)

• SylWin1 (864 MW)

Competition

• BorWin1 (400 MW)

• DolWin1 (800 MW)

• DolWin2 (900 MW)

• DolWin3 (900 MW)

To be awarded

• BorWin4 (900 MW)

576 megawatts output 690 megawatts output 864 megawatts output Power for 600,000 households Power for 700,000 households Power for 900,000 households Start: 2nd half of 2014 Start: 1st half of 2015 Start: 1st half of 2015

HelWin1 HelWin 2 SylWin1

800 megawatts output 900 megawatts output Power for 800,000 households Power for 900,000 households Start: 1st half of 2015 Start: 2019

BorWin 2 BorWin 3

Order Con- Construc- Equipping Installation Installation Commis- Commer- entry struction tion land platform baseframe platform sioning cial platform station operation

HelWin1 2010 2014

BorWin2 2010 2015

SylWin1 2011 2015

HelWin2 2011 2015

BorWin3 2014 2019

1. Optimal risk management Strong partners Platform realized by general contractor (design, construction, installation)

2. Reliable time schedules Experience (project execution in 4 years possible, 5 years including bad weather buffer)

3. Appropriate cost calculation Standards (Execution experience, certainty about norms and standards to apply)

Reliable delivery dates and realistic cost calculations

Over the medium term: Great demand in HVDC grid connections • At present, 7 gigawatts of HVDC grid links ordered in Germany • One converter platform needed for each 900 megawatts of transmission capacity • Also in Great Britain wind farms located more than 80 kilometers off the coast are planned

Track record of cost reduction by 40% in each decade

Image:: Bladt Industries A/S

Goal: Cost reduction to 10 euro cts/kWh by 2020

Turbines Foundations Grid connection Operation & Service • Reduced part costs • Standard-design • Reduced complexitiy • Durable parts • Higher electricity yield • Industrial manufacturing • Smaller platforms • Less maintenance • Industrialization • Scales of production • Innovations • Higher availability

Goal: Cost reduction of 30-40% by 2020

1st milestone: Reduction of space DC compact switchgear requirement from Market entry starting now for 320 kV >4,000 cbm to 200 cbm