Offshore Wind Power: NASEO 2019 Energy Policy Outlook Conference February 5-8, 2019 Washington, D.C. Matthew A. Morrissey Head of New England Markets February 7, 2019 Ørsted Offshore Overview – Globally North America Europe Asia Pacific Bay State Wind Unparalleled experience and track record Revolution Wind South Fork Block Island Ocean Wind Garden State 25+ years of experience and Skipjack Formosa 1.1 Coastal Virginia Formosa 1.2 1991 track record in the 2018 Greater Changhua projects offshore wind power sector Anholt 25 offshore wind farms 5 offshore wind farms West of Duddon Sands in operation under construction Walney Extension Horns Rev 1 & 2 Westermost Rough Avedøre Hornsea 1 Walney 1 & 2 Hornsea 2 Vindeby Hornsea 3 & 4 Nysted Isle of Man Race Bank Gode Wind 2 Lincs Gode Wind 4 Barrow Gode Wind 3 5.6 GW ~ 2,300 3.4 GW under Gunfleet Sands 1 & 2 Gode Wind 1 Constructed Dedicated Burbo Bank Ext. construction Borkum Riffgrund 1 capacity employees Burbo Bank Borkum Riffgrund 2 Gunfleet Sands 3 Borssele 1&2 Borkum Riffgrund West 1&2 London Array OWP West 15 million ~ 1,100 20 In operation people with turbines Partnerships clean Under construction World's leading electricity operator Under development Decommissioned after 25 years 2 Ørsted U.S. Offshore Wind Attractive and geographically diverse portfolio of offshore wind assets: potential for 8-10GW In Operation Block Island Wind Farm: 30MW Projects with revenue contracts (secured or soon to be secured) South Fork Wind Farm: 130MW Skipjack Wind Farm: 120MW Revolution Wind: 700MW (400MW to RI, 300MW to CT) Development projects Ocean Wind: potential for up to 3.5GW of development Garden State Offshore Energy: potential for up to 1.2GW of development Bay State Wind: potential for up to 2GW of development ( 50/50 JV with Eversource) Coastal Virginia Offshore Wind: 12MW demo project Additional lease areas MA/RI lease area(s): potential for up to 1.5GW of development 3 5 Rapid Advances in Offshore Turbine Technology 12MW 8MW 6MW 3MW – Onshore 360’ Connecticut State Capitol Building – 2015 – 600’ 2017 – 722’ 2021 – 853’ 287’ Levelized cost of electricity for different technologies The rapid cost reductions in the industry, have made offshore wind power competitive relative to conventional power generation based on fossil fuels USD/MWh 2016 prices 2012 2017 $189 $75 $63 $75 $80 $82 $129 Offshore* Offshore** Onshore Solar PV Natural gas Coal Nuclear*** Source: Bloomberg New Energy Finance (BNEF) for CCGT and Coal plants for Northwest Europe, Danish Energy Agency and BNEF for Offshore Wind. For offshore wind: Including cost of transmission – Calculated as Levelized revenue (subsidy and market price) of electricity over 25yrs lifetime as a proxy for the levelized cost of society. 3,5% real discount rate used. *Generic Offshore Wind, Northwest Europe, FID 2012. In 2012 our goal was to reduce offshore wind costs to 100 Euro/MWh in 2020, ** Hornsea 2, UK, *** Hinkley Point, UK. 7 Same approach as for Offshore Wind. Strike price of 92,5 £/MWh in 2012 real prices. Lifetime of 60yrs, 91% capacity factor. Offshore Wind Demand on the East Coast State offshore wind programs New York 9,000 MW New Jersey 3,500 MW Massachusetts *800 MW Virginia *2,000 MW Total: 16,900 MW State offshore wind procurements Massachusetts 800 MW Rhode Island 400 MW Maryland 368 MW Connecticut 300 MW 8 Q&A Matthew A. Morrissey Head of New England Markets [email protected].