Jérôme Pécresse, President & CEO GE Renewable Energy

Unleashing Limitless Energy with Renewables Jérôme Pécresse, President & CEO GE Renewable Energy

1 © 2017 General Electric Company. Proprietary. All Rights Reserved. Agenda § GE Renewable Energy: Who we are ? § Renewables are mainstream power generation § Major industry trends and GE’s response Ø Growth diversifying globally Ø Trends driving hybridization Ø LCoE ¯, Competition … funding a challenge Ø New players supporting offshore wind growth Ø LM Wind Power overview Ø Hydro: a key pillar of the energy transition Ø Whole industry in digital transition

2016 REVENUES

POWER AVIATION RENEWABLE OIL & GAS HEALTHCARE TRANSPORTATION ENERGY CONNECTIONS ENERGY & LIGHTING $27B $26.3B $10B $12.9B $18.3B $4.7B $15.1B 55K 45K 22K 34K 54K 10K 53K EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES EMPLOYEES

We are a global digital industrial company, transforming industry with software-defined machines and solutions that are connected, responsive and predictive. With products and services ranging from aircraft engines, power generation and oil and gas production equipment to medical imaging, financing and industrial products. Since our incorporation in 1892, we have developed or acquired new technologies and services that have considerably broadened and changed the scope of our activities.

Onshore Wind Offshore Wind Hydro LM Wind Power

CEO: Pete McCabe CEO: John Lavelle CEO: Yves Rannou CEO: Marc De Jong

$10B 80+ 22,000+ 400GW 25% 35,000+ 13,000 REVENUE* COUNTRIES GLOBAL INSTALLED BASE OF WORLD’S HYDRO WIND TURBINES TURBINES EMPLOYEES INSTALLED BASE INSTALLED ON PREDIX

Unleashing limitless energy for our customers and the world

Renewables and Gas lead growth Gas Engines 2% 3%

28% 21% Solar GT Plants

$/MWh ~300GW/year Average LCoE trends 11% 160 Fossil Steam Wind Onshore 3% Other Ren 140 Solar PV Hydro Standard 4% 120 Wind Fossil Nuclear 100 19% 9% Hydro 80 60 Renewables 62% 40 of new global capacity Legend: 20 over next 10 years 0 LCoE parity in 2016 2015 2030 2040 LCoE parity by 2025 Source: GE, BNEF, IEA

Declining subsidies, more auctions, competition with solar

Electricity generation by source

In 2022 Renewable energy generation to expand by over a third with its share Renewable additions by technology increasing to 30%

Source: IEA Renewable Energy Medium-Term Market Report 2016

Whole industry in digital transition … Every generator, consumer is getting Growth diversifying globally … connected … MEAT, China, India, South-East Asia

GE Actions: A Digital Ecosystem GE Actions: GE Renewable Energy’s Optimized for Renewable Energy footprint and product portfolio expanding

Hydro: a key pillar of the energy Industry Trends Driving Hybridization … transition … Flexibility, grid integration challenges … mature technology enhanced by PSP Trends GE Actions: A comprehensive range of GE Actions: Hybrid and storage offerings solutions including PSP

New players supporting offshore LCoE â, competition á … funding a wind growth … challenge … energy transition, portfolio … PPAs bankability, LCoE towards <$3c by diversification ‘20 GE Actions: GE Offshore Wind GE Actions: GE Renewable Energy 1) technological, geographical expansion enables and arranges PPAs

GLOBAL Growth Growth Growth ** 1% Growth 5% 8% Russia & CIS: 5 GW/year 8% Growth Europe: 34 GW/year 59%, 175GW China: 89 GW/year 5% NAM: 30 GW/year 70%, 27GW 29%, 1GW MENAT: 67%, 60GW 67%, 20GW 35 GW/year Growth Gas India: 37 GW/year North Asia: 15 GW/year 6% (Japan, Korea, Taiwan) Steam plants 32%, 10GW 60%, 9GW Nuclear 51%, 19GW Growth LATAM: 21 GW/year SSA: 12 GW/year Hydro 6% Growth Wind Onshore 62%, 13GW 8% 51%, 6GW South Asia: 22 GW/year Wind Offshore TOTAL RE Growth 45%, 10GW (ASEAN + ANZ) Growth PV 10% Growth 5% Storage 2% World ~300 GW/year average*

*’17-’26 average orders; excludes oil recip. engines and partial coverage of very small sizes of GT, ST ** Renewables installed base CAGR over ‘17-’26 period 8 © 2017 General Electric Company. Proprietary. All Rights Reserved. GE Renewable Energy global footprint Local domain expertise across all regions

Global Footprint Presence in 60+ countries Production sites Engineering sites Global businesses HQ* Global presence

* Including commercial presence

2MW platform … 3MW platform … 28K+ turbines in 2K+ turbines in 20+ countries 20+ countries Land

3.8-130 3.2-103 4.8-158 3.6-137 2.75-120

Constraints 2MW-107 2MW-116 1.85-87 1.85-82.5

1.7-100 MW Low High Wind speed Prudential Wind fundamentals …LCOE leadership is king Tower 250m CapEx + OpEx Levelized Cost ofEnergy (LCOE) = Annual Energy Production (AEP) Levers… 10% r in: 200m • AEP = 9% $ in LCOE • CapEx = 8% $ in LCOE • OpEx = 1% $ in LCOE 150m Wind Turbine Cost components %Cost Blades 20-30% 100m Towers 20-30% ` Gearbox 10-20% Electrical 10-20% 50m Other 10-20% ‘04 ‘12 ‘15 ‘18 ‘19 0m

Output (MW) –Rotor Diam. (m) –Tower Height (m) 1.5-77-65 1.6-100-80 2.3-116-80 3.6-137-131 4.8-158-161 CAGRs AEP (GWh) ------9% Turbine CapEx ($/MW) ------(3%) Price ($CapEx/AEP) ------(6%) Confidential. Not to be copied, distributed, or reproduced without prior approval. 10 LCOE ($/MWh) $90/MWh $55/MWh $45/MWh $40/MWh << (8%) A little bit about LM Wind Power*

• Since 1978, LM Wind Power has produced DENMARK more than 185,000 blades corresponding to a Headquarters Engineering Test Center capacity of approximately 77GW CANADA Production facilities: 1 POLAND • Contributing to saving more than 147 million Production facilities: 1 CHINA Production facilities: 3 tons of CO2 per year USA TURKEY Production facilities: 2 SPAIN Production facilities: 1 • ~6,500** employees, 13 manufacturing Production facilities: 2

facilities in 8 countries on 4 continents INDIA • Rotor solutions are supplied to 30 global and Production facilities: 2 national wind turbine manufacturers, for Onshore and Offshore wind BRAZIL Production facilities: 1

LM Wind Power: a leading blade supplier to the wind industry.

1. Renewables reaching grid parity Australia identified 1 GW of potential Wind sites to retrofit with Solar 2. Record deployment of variable renewable generation 3. Exponential cost reductions for batteries India with 1GW Hybrid target till ‘22 4. Renewables baseload + flexibility via storage 5. Digital solutions enabling integration of multi-gen sources Brazil PLS 107/2017 bill entitles 6. Rural electrification Wind+Solar Hybrids to participate in energy auctions 7. Decarbonization 8. Emergence of distributed generation Ireland Compensation for curtailed wind to end ‘18 - case for Storage

Qinghai province announced 3.3GW of Wind installations encouraging the integration of energy storage

Tayabpur - India Gaildorf - Germany Red Lake Falls - US

• 15 kW microgrid with solar, batteries, • 4 GE 3.4 – 137 wind turbines; @ each • 2 GE 2.3-116 wind turbines and a diesel engine wind turbine integrated water • 1MW solar power conversion • All production data transmitted in reservoir equipment real-time to Predix for analysis • Topography requirement – 150m • GE’s Wind Integrated Solar Energy • GE Predix and field agent for remote elevation for Pumped Storage (WiSE) technology platform monitoring and diagnostics • Max Boegl towers and EPC capabilities • AEP improvement • 24/7 power to electrify a village • Intermittent wind and PSP as reliable • Lower CapEx baseload power source

Renewable integration and grid stability

Congestion Management and microgrid

Challenges Applications RES integration or distributed energy resources Stabilization of variable RES / Microgrid Ageing of the electrical grid Grid stability (ancillary service) Management of energy flow variations Congestion management Battery Energy Storage Solution = multi-functionality

Confidential. Not to be copied, distributed, or reproduced without prior approval. Typical Business Cases

Wind Farm PV Integration through PPA Leverage project financing Frequency Regulation

Ø Solar integration into the grid Ø Increase wind farm load factor Ø Charge when grid frequency is (ramp control) (limitations in grid connection) high (production > consummation) Ø Peak consumption management Ø Decreasing revenue risk due to predictability Ø Discharge when grid frequency is low Generated PV power vs. VPP power

1 PV Optimal VPP active power 0.9 schedule example VPP Pmax VPP 0.8 Pmin VPP

0.7

0.6 Maximum power Negative ramp- p u ] [ limitation control 0.5 P o w e r Minimum power 0.4 Positive ramp- guarantee German Market for Regulating Reserve k€/MW/year control 200 0.3 PCR

0.2 SCR - neg SCR - pos 0.1 MR - neg MR - pos 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 0

time [h] 2012 2013 2014 2015

Viable new business models for the customer

Confidential. Not to be copied, distributed, or reproduced without prior approval. November 24, 2017 16 LCoE ¯, Competition … funding a challenge

Global wind vs. solar LCOE, ’17-’25

OklahomaAverage (US) LCOE trendsIndia Saudi Arabia 8m/s,Average 198w/m2 LCOE6.5m/s, trends 230w/m2 7m/s, 270w/m2 • Scale & Technology drive LCOE trend • Tariffs vs. auctions/tenders … increases price pressure • More zero-subsidy auctions awarded

Wind vs. solar, ‘20 LCOE advantage • Policy… often procured separately • Morocco 850MW Wind @ $3c/kWh • India sets new Wind record below $2c/kWh • Germany Offshore Wind 1.4GW @ $4.4/kWh • Clear path to grid parity

Accelerating long term transformation of the energy sector … funding becoming a challenge

Long term contract between: TULLAHENNEL WIND FARM, IRELAND Generator (Produces electricity) GE Renewable Energy and GE Energy Financial Services (EFS) to provide a 15-year Corporate Purchase Power & Off-Taker (Purchases electricity) Agreement (PPA) to Microsoft

ü COMMIT to renewable energy and reliable power generation assets ü GAIN visibility and increase stability in energy procurement ü REDUCE environmental impact and energy costs

Microsoft’s first wind farm outside the US

Bringing new, clean energy to the Irish grid

Competitive Scalable Local GE Store success story with GE EFS partnership 18 © 2017 General Electric Company.© Proprietary. 2017 General All Electric Rights Reserved.Company. Proprietary. All Rights Reserved. New players supporting offshore wind growth

Investment intentions … … to manage core business risk Daily Crude Oil Prices ($/Barrel) Bloomberg

The Guardian

REcharge Brent West Texas Intermediate

Statoil … and build upon core competencies + Large ticket size Shell + Project management skills + Complex/high entry requirements + Supply chain commonalities Eni + Predictable revenue stream + Decouple financial performance & valuation + Relatively lower risks 19 © 2017 General Electric Company. Proprietary. All Rights Reserved. GE Offshore Wind Evolution

Projects

3 French Projects Block Island Merkur Merkur Xinghua Gulf (1.4 GW) Awarded (30 MW) Awarded (396 MW) Awarded Financial Close Awarded

Block Island Installed

2012 2013 2014 2015 2016 2017 2018

Haliade Type A Certificate Haliade Proto Haliade Sea Demo Saint Nazaire GE-Alstom LM Wind Le Carnet Belwind Factory Inauguration Integration Acquisition

Organization & Technology Confidential. Not to be copied, distributed, or reproduced without prior approval. 20 GE Offshore Wind technological, geographical expansion Merkur 396 MW

Osterlid 6 MW

Belwind 6 MW Block Island 30 MW

Fuqing Xinghua Bay 18 MW Le Carnet 6 MW

Fécamp 498 MW

Courseulles 450 MW

Installed (48 MW) Saint-Nazaire 480 MW Under Construction (414 MW) Groix (floating) 24 MW Order Backlog (1,428 MW) Leucate (floating) 24 MW

Only Offshore Wind Turbine OEM with installations in 3 continents

ELECTRICITY PRODUCTION SUSTAINABLE DEV’ WATER MANAGEMENT Hydropower is the perfect Hydropower is one of the oldest As Hydropower experts, water enabler of renewable expansion. ways used for producing management is at the core of our electricity at the lowest LCoE*. expertise benefiting to local • Affordable activities. • Reliable • Energy independency • Storable • Local Communities • Agriculture & irrigation • Flexible • Concentrated & distributed • Water security • Climate resilience • Flows management • Sanitation

…playing a key role in the renewables expansion

*LCoE: Levelized Cost of Energy 22 We develop a comprehensive range of hydro solutions GE‘s Hydro Solutions capitalizing on 100+ years of experience in the industry

GE'S HYDRO TURBINES AND/ OR GENERATORS ARE PRESENT IN GENERATORS SERVICES DIGITAL 25% OF THE TOTAL INSTALLED CAPACITY WORLDWIDE

TURBINES

CONTROL SYSTEMS 25+ YEARS OF GLOBAL O&M PLANT OPERATING EXPERIENCE AND POWER ELECTRONICS HYDRO MOBILIZATION ACTIVITIES MECHANICAL BALANCE OF PLANT & GRID SOLUTIONS

Confidential. Not to be copied, distributed, or reproduced without prior approval. 23 GE PROPRIETORY AND CONFIDENTIAL INFORMATION Addressing grid stability challenging w/ PSP technology

Provide flexibility to balance base load generation

Wind Production in Denmark in 2009 MW 4000

3500

3000

2500

2000 actual

1500

Complement intermittent renewable energies 1000

500 average (765 MW) 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec source ENERGIENEK

Optimize electrical grids

© 2015 General Electric Company. Proprietary. All Rights Reserved Confidential. Not to be copied, distributed, or reproduced without prior approval. Title or Job Number | XX 24 Month 201X Whole Industry in Transition Global electricity industry is undergoing radical transformation. Every generator, T&D and consumer is getting connected causing increased complexity and matrix interactions – driving new business models.

5 Billion 3 Trillion 400 Million 50% 350 Billion 800% internet users IP devices electric cars reduction in CO2 Renewable Growth in Renewable 2020 2030 2040 2050 conversion Power Generation 2035 2035 Source: The Future of Source: Cisco (50 Billion Source: BNEF global EV sales Source: European the Internet — 7 Big by 2020) and Morgan forecast by geography, 2015– Commission — Source: BNEF global EV sales Source: BNEF global EV sales Predictions of 2020, Stanley (75 Billion by 2040, Bloomberg New Energy Climate Action forecast by geography, 2015– forecast by geography, 2015– Dospeedtest.com 2020), GE Estimate Finance, 02/25/16, GE Estimate 2040, Bloomberg New Energy 2040, Bloomberg New Energy Finance, 02/25/16, GE Estimate Finance, 02/25/16, GE Estimate

Electricity Value Network — Digital Solutions for Power & UtilitiesConfidential. Not to be copied, distributed,© 2017 General or Electric reproduced Company without prior approval. November 24, 2017 2 © 2017 General Electric Company - All rights reserved Digital – Delivering customer outcomes For GE, as for other major global businesses, digital is transformational and a fundamental source of growth and future sector positioning covering all aspects of customer and industry-facing digital innovation. 13,000+ Turbines running on Predix operating 24/7

20% 80% Increase in Of issues resolved in turbine resets <10 minutes

OPTIMIZED ENHANCED MINIMIZED IMPROVED asset & operations business performance risk grid management and performance integration

26 © 2017 General Electric Company. Proprietary. All Rights Reserved. 1 OUTCOMES Turbine Trip the INDUSTRIAL INTERNET platform Business Revenue á @ Turbine Edge Built for massive industrial data volumes 2 and powerful analytics, to speed Optimization Penalties â Gearbox Vibrations operational and business innovation

AEP á Operations Optimization Planned Cost â

3 Asset Availability á Low Wind 6 Performance Cyber Threat Management Unplanned Cost â @ Wind Farm Edge

4 Intermittent Grid Risk â 5 Platform Underperforming Cost to Serve â Sector

© 2017 General Electric Company. Proprietary. All Rights Reserved. Digital Hydro Disruption THIS IS NOW THIS IS TOMORROW Incremental change & challenging environment Unlock HPP potential: The IoT + Brilliant Factory

How to Increase Return On Investment ? Understand the past Predict the future AI & statistics Modeling Supply Chain Operations • Cost pressure Steam Turbines Power Plant Operations • Disparate Data & Technology Leap Engines Industrial Locomotives Data • Under-utilized Data + 700K +

• Unplanned downtime

• Limited flexibility 3D Printing

Confidential. Not to be copied, distributed, or reproduced without prior approval. GE PROPRIETARY AND CONFIDENTIAL INFORMATION THE FUTURE of RENEWABLES looks STRONG

Nobody should ever have to choose between affordable, reliable, and sustainable energy.