“From India to the world….

Suzlon Energy and the global market for wind

power...”
Nyborg Strand, Denmark

Maj, 2008

Jørgen Højstrup
© Suzlon Energy A/S, Denmark
Contents

World Market

Suzlon group profile

Manufacturing locations
 The Big Picture....

• Surging global investment capital flows for RE:

Reached a record of $100 billion in 2006 ($ 80 billion in 2005)

• RE’s now more than a ”blip” on the radar screen:

-Account for 18% of new global investment in power generation
-Compete head-on with coal and gas in terms of new installed generating capacity

• Increased need for financing

The need for financing in Asia Pasific is enormous, particular when viewed against the
Regions growing demand for energy
-China’s energy consumption grew by nearly 50% between 2000-04
-India will account for a thrid of global energy demand by 2050

• Increased demand...
To adress soaring demand, China and India are projected to build nearly 800 new coal-fired
power plants over the next 5 years

Against this background, Sustainable Energy financing initiatives are a critical priority

Sources: UNEP, June 2007

Opportunities

 Increasing energy demand

 Increase in cost of energy


 Global shift towards Renewable Energy (RE) sources

 Wind – a mega trend in RE markets

Fossil Fuels

Political Framework More mature technology

 The New World Order...

UK Germany Japan US

China

Italy France Germany Japan

India

Italy France Germany

Russia

Italy France Germany

Brazil

G6

BRICs

*cars indicate when BRICs US$GDP exceeds US$GDP in the G6

2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050

Source: Goldman Sachs

 Growth in Demand for Energy...

18.000 57% 0,6

16.000

0,5
46%
14.000

12.000 0,4
36%

Cumulative growthh
10.000
Mtoe

0,3
25%
8.000

6.000 0,2

14%

4.000

0,1

2.000

0 0
2004 2010 2015 2020 2025 2030

Source: MAKE Consulting, The Wind Forecast, December 2007

 Demand vs. Supply (2005-30e)...

12%

30.000

10%

8%

Surplus development - 5 year

25.000
TWh

6%

4%
20.000

2%

15.000 0%
Power Generation - Supply Power Generation - Demand Generation capacity surplus
2005 2010 2015 2020 2025 2030

Source: MAKE Consulting, The Wind Forecast, December 2007

 Wind: a promising renewable energy source

Wind: Cost competitive with conventional power Potential to power the future

6.5 Critical Success Parameters Wind Energy Status

(US cents/ kWh)

5.5
✔
Cost Competitiveness
4.5 (3-6 cents/kWh)‫‏‬

3.5

2.5
✔
Nuclear CCGT Coal Steam IGCC Wind Established Base
(19.8 GW capacity addition in 2007)‫‏‬
Source: IEA WEO 2006 / BTM Consult ApS WMU
2006 Fastest growing renewable energy source*

50% 60% 70% 80% 90% 100%

✔
Resource Availability (72 TW potential estimated globally
at 80m hub height)‫‏‬
1990 125 4 36 1

✔
Magnitude (5 times present global energy
2004 227 82 56 4 usage, 7 times electricity usage)‫‏‬

Biomass & Waste Wind Geothermal Solar

Source: BTM Consult ApS WMU 2007 and Journal of
Source: IEA WEO 2006 * Generation in TWh Geophysical Research, 2005 : Stanford University
8
 Alternative energy – what is the alternative?

450

400

350

300
Euro/MWh

250

200

150

100

50

0
Onshore Offshore Biomass Geothermal Solar CSP Solar PV
Wind Wind

Fuel Opex Capex

Sources: Emerging Energy Research, December 2006

 ...and wind is cheaper than oil, gas and coal

100

90

80

70
Euro/MWh

60

50

40

30

20

10

0
Traditional IGCC IGCC + CCS CCGT Onshore Offshore
Coal Wind Wind

EUR30 Carbon Fuel Opex Capex

Sources: Emerging Energy Research, December 2006

Barries to exploting wind energy...

• The‫‏‬Australian‫‏&‏‬Chinese‫‏‬paradox‫‏‬of‫“‏‬Cheap”‫‏‬electricity,‫‏‬driven‫‏‬by‫‏‬extensive‫‏‬use‫‏‬of‫‏‬coal

• Lack of policy directives and incentives

• Lack of wind energy data

• Lack of research co-ordination

• Grid access
 How to accelerate RE...

Conditions for accelerating renewable energy :

• Establish minimum requirements of renewable energy production on power producers

• Long-term (10-15 years) PPAs

• Financing based on project cash flows rather than balance sheet financing

• Tenure of financing to be based on project cash flows

• Attract commercial financing based on secure policy and legal framework

 How to accelerate RE...

Conditions for accelerating renewable energy:

• Lower domestic interest rates for renewable energy projects

• Incentives based on power generation rather than investment

• Determination of preferable wind areas to secure infrastructure and grid capacity

• Commitment to grid construction and improvement

• Clearly defined permitting procedures

 The Global Challenge
• Demand for wind energy much larger than supply
• New manufacturers coming up in India, China and ....
• China: 50-100 windturbine manufacturers
• Lots of investors interested in entering wind energy
production
 Denmark’s strong points
• Innovative and efficient work culture
• Well-educated work force
• Globalisation of work force – coupling our work culture
and experience with good educations and low wages in
third world countries
Suzlon Group

Suzlon Group
 Suzlon Energy
• Indian ownership
• Established 1994
• Market Leader in India for 9 years
• International office in Denmark opened 2005
• Hansen Gearboxes 2006
• Repower wind turbines 2007
• Growing much faster than world market
In top 5 wind turbine manufacturers
today
In top 3 ”tomorrow”
Vertical Integration
 Suzlon group production facilities

Trampe
Husum

Baotou
Bremerhaven
Pipestone
Baroda
Edegem
Dhulia TBD
Lommel Daman
Tianjin

Coimbatore
Bhuj

Coimbatore
Pune

Udupi Pondi

Suzlon existing facilities Hansen production facilities REpower production facilities

Suzlon facilities in progress/planned Hansen facilities in progress/planned REpower facilities in progress/planned
THANK YOU