Barr 160829 sandia_blade_workshop

1. Analyst PRESENTATION
The Dynamic Wind
Energy Market and
Impact on Blade
Technology
Aaron Barr
ab@consultmake.com
August 30, 2014

2. Contents
2
2016 Sandia Wind Turbine Blade Workshop
August, 2016
 Global wind energy market dynamics
– Long-term market forecast by region
– Long term United States demand driven by PTC extension
– Economies of scale accelerate LCOE gains in North America
– Traditional markets to drive installs, while new markets emerge
 Blade market and technology trends
– Recent mergers and acquisitions will impact blade technology
– Historically MW-limited markets see 3MW movement
– Best in class products defined by blades
– Modular portfolio strategies lead to rapid turbine proliferation
– Blade lengths will continue to grow in all regions
– Blade technology prospects and impact on LCOE
– Blades a central focus of O&M technology development

3. Delivering
renewable
energy
insight
8 September 2016 3
Global wind energy
market dynamics

4. Global grid-connected forecast: 2013-2025 – Updated outlook published 08/24
Long-term market forecast by region
Global Wind Energy Market Dynamics
Source: MAKE
Long-term sustained installations in China underpins global market forecast
2015 saw a record year for installations, similar levels expected to persist for next decade
4
2016 Sandia Wind Turbine Blade Workshop
August, 2016
80
40
20
60
0
´20e´18e´15
+0.8%
´23e´22e
(GW)
´21e´19e´17e´16e ’24e ’25e
China
Latin America Southern Europe
North America
Asia Pacific (excl. China)Africa and Middle East
Northern Europe Eastern Europe

5. United States market outlook, 2013-2025e (GW) – Updated outlook published 08/24
Long term United States demand driven by PTC extension
Global Wind Energy Market Dynamics
5
2016 Sandia Wind Turbine Blade Workshop
August, 2016
0
2
12
6
10
4
8
GWGridConnected
+14%
-31%
-22%
-17%
-26%+9%
2024e
+24%
2025e
+4%
-11%
2023e2018e 2019e 2022e2017e 2020e2015 2021e2016e
StrongerWeaker
Transmission
PTC
Retirements
LCOE
C&I demand
CPP/RES
Gas prices
Solar power
BarriersDrivers

6. Regional economies of scale in North America
Economies of scale accelerate LCOE gains in North America
Contributors and benefits of regional scale
Global Wind Energy Market Dynamics
Contributors to regional growth and scale
 Excellent and consistent wind resources
 Limited terrain complexity – flat sites
 Large tracts of land with few constraints
 Infrastructure – transmission and rail
 Local supply chain – turbines, services, equipment
Benefits of regional scale
 Capital equipment savings – local network of cranes,
trucks and equipment
 Turbine pricing – Familiarity reduces risk to OEMs
and allows for lower turbine pricing
 BOP pricing – well understood foundation and road
design and construction reduces BOP costs
 Experience – Money and time savings due to
experienced local network of installers
 O&M savings – Highly trained and fluid network of
technicians lead to cost savings in maintenanceNote: Unsubsidized LCOE. Local assumptions for debt, equity, CAPEX, CF, wind
Source; MAKE
Installation centers of Texas and the Midwest benefit from experience of 17+ GW
LCOE lessons learned from the “Wind Belt” are now being applied to emerging markets
6
2016 Sandia Wind Turbine Blade Workshop
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30
35
40
45
50
55
60
65
70
75
80
85
90
0 2 4 6 8 10 12 14 16 18 20 22 24
LCOE–USD/MWh
Midwest
66
Total cumulative GW
83
Northeast
47
58
Texas
Canada
US Average
2015 annual
installations (GW)

7. Top 20 markets: New capacity 2016e-2025e
Traditional markets to drive installs, while new markets emerge
Top 20 emerging markets by regions: 2015-25e
Global Wind Energy Market Dynamics
Note: “Emerging” countries with less than 1GW installed at YE2015
Source: MAKE
China, US and Germany to contribute 60% to global installs over next decade
Significant growth expected in emerging markets of Africa and the Middle East
7
2016 Sandia Wind Turbine Blade Workshop
August 2016
0 20 40 60 28010080
Canada
France
South Africa
(GW)
Netherlands
Turkey
Sweden
Australia
Others
Mexico
India
Japan
Brazil
Germany
U.S.
China
United Kingdom
73
263
7
6
5
4
3
2
0
1
+20.9%
´25e´24e´23e´22e´21e´20e´17e ´18e´16e´15 ´19e
(GW)

8. Delivering
renewable
energy
insight
8 September 2016 8
Blade market and
technology trends

9. Diverging technical paths within OEM M&A
Recent mergers and acquisitions will impact blade technology
Technology acquisitions to secure blade IP
Lower
CAPEX
Various options
Higher
CAPEX
Blade
Materials Glass Carbon
Blade
Sourcing
3rd party
suppliers
Vertically
integrated
Blade
Structure
Shells
& web
Single
infusion
Pitch
Systems Electric Hydraulic
Converter
Types
Partial
Power
Full
Power
Tower
technology Steel Concrete
Blade market and technology trends
Source: MAKE, Espacenet
Only includes USPTO filings made prior to acquisitions
Looming industry consolidation will force tough technical choices in blade technology
M&A will lead to restriction of some blade innovation through exclusive access to IP
9
2016 Sandia Wind Turbine Blade Workshop
August 2016
NordexAccionaGamesaSiemens
8 20
3
11
7
18Modwind
Patent
Applications
Rodpack
Granted
Patents
29
Blade
Dynamics
10
28
GE acquired
Deployment TBD
Vestas acquired
Not evident in products
Senvion acquired
Use in offshore 74.4m blade,
Note: CAPEX: Capital expenditure on either component or factory level

10. Orders for 3MW products on the rise in US
Historically MW-limited markets see 3MW movement
3MW capacity factors are catching up
Blade market and technology trends
Note: Orders shown only include those with known turbine types
Orders shown may not include balance of PTC Safe Harbor orders
Note: Gross capacity factor at 8.5m/s
Construction cost given at a plant level – 150MW plant assumed
BOP and O&M cost savings for larger turbines, combined with economies of scale have
blurred the lines between MW-limited and turbine-limited markets
10
2016 Sandia Wind Turbine Blade Workshop
August, 2016
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Announced
Orders*
4,80212,870
20142012
8,402*
2013
8,5891,128
2015
>3.5MW2.3-2.791.0-1.79MW 1.8-2.29 2.8-3.49
58.4
55.7 55.7
V110-2.0
-5%
58.4
V136-3.45
3.XMW
-6%
2.XMW
Construction cost savings are significant

11. 150
200
250
300
350
1.5 2.0 2.5 3.0 3.5 4.0 4.5
SpecificRating(W/m2)
MW Rating
Specific rating used to define leaders
Best in class products defined by blades
Global best in class positioning
Blade market and technology trends
Competitive positioning defined by blade length for each MW class
Near-term focus of OEMs will be growing rotors in 2MW and 3.5MW class
11
2016 Sandia Wind Turbine Blade Workshop
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IEC I IEC IIIIEC II Leading turbine
OEMs recent
focus on 2MW
rotor growth
Next Generation
to grow 3M+
class rotors
60
70
80
90
100
110
120
130
140
150
1.0 1.5 2.0 2.5 3.0 3.5 4.0
RotorDiameter,m Turbine Rating, MW
IEC I Best in Class IEC II IEC III
Source: MAKETurbines certified as S-class are categorized according to certified Vavg

12. Portfolio evolution among top OEMs
Modular portfolio strategies lead to rapid turbine proliferation
Blade market and technology trends
Modular product strategies are being used to maximize component reuse
Blade design and resulting loading is critical to maintain structural components
12
2016 Sandia Wind Turbine Blade Workshop
August, 2016
Component reuse within Vestas 3MW platform
Note: *V126 blade is a structural shell, all others are box-spar design
0
5
10
15
20
25
5 10 15 20 25 30 35 40
Markets served
2015
2010
2015
2015
2010
2010
Windturbineproductsoffered
SiemensVestasGE# platforms
Source: MAKE
26%
V105
51%
24%
25%
Totalcostofturbine-$/MW
24%
28%
V112
49%
25%
+15%
V126
44%
3%
52%
V117
48%
IdenticalSimilarDifferent
Similar:
Blade*
Generator
Minor components
Identical:
Gearbox
Main Bearing
Converter
Pitch System
Yaw System
Different:
Tower
Blade*

13. Blade lengths will continue to grow in all regions
Blade market and technology trends
Blades continue to grow in length, with the largest changes occurring in the Americas and
Europe. <40m blades expected to only be deployed to the highest wind sites.
13
2016 Sandia Wind Turbine Blade Workshop
August, 2016
AMER
Onshore
EMEA
Onshore
APAC
Onshore
2014 ’20e’18e’16e
45-49.99m 70m or Greater60-69.99m<45m 55-59.99m50-54.99m
’20e’16e ’18e2014 ’16e ’18e2014 ’20e ’20e2014 ’16e ’18e
Global
Offshore

14. 0
High
LCOE
Baseline
LCOE
-5% +5%
-5%
+5%
Carbon fiber
Baseline
Flatback airfoils
Swept blade
Slender airfoils
Jet actuators
Flaps
Polyester
H-Glass
Pultrusions
Technology roadmap Promising blade technologies
Near term technologies
 Pultrusions expected to be used
more frequently in structural spars
as alternative to prepreg and to
combat ongoing quality issues
 Higher penetration of H-glass to be
used as lower-cost alternative to
carbon fiber
 Flatbacks, VGs and serrations are
becoming mainstream technology
options
Long term technologies
 Additional sensors in blades to
measure and react to loading
 Actively controlled aerodynamic
profiles
 Segmented blades to ease
shipping constraints
Blade technology prospects and impact on LCOE
Blade market and technology trends
Source: MAKE
Further gains in blade technology are critical to sustained LCOE improvement
Controls and improved sensing is a strong enabler to the next generation of blades
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2016 Sandia Wind Turbine Blade Workshop
August, 2016
Changeinenergy
production(Mwh)
Change in turbine CAPEX
(USD/MW)
Improved LCOE MW experience
AerodynamicsManufacture Materials
Low LCOE

15. Fleet eligible for PTC 80/20 overhaul (GW)
Blades a central focus of O&M technology development
Energy gain from aftermarket upgrades
Blade market and technology trends
Source: MAKE Source: MAKE
Turbines may re-qualify for 10 more years of PTC if 80% of turbine value is replaced
Blade retrofits may face constraints from supply chain ramping up to meet PTC cycle
15
2016 Sandia Wind Turbine Blade Workshop
August, 2016
1.1
5.2
3.2
2006 2009
4.7
1.8
2005
1.8
2011 20122010
3.7
20082007
1.4
Siemens SWT 101
Siemens SWT93
GE 1.5 SLE
GE 1.5 XLE
Gamesa G87
1
1
1
2
2
3
4
8
% Typical energy gain
Leading edge tape
Extended cut-out
Wake management
Site pitch optimization
Yaw misalignment
MW upgrade
Aerodynamic features
Blade extensions
All turbines3-5 suppliers1-2 suppliers
High cost
upgrades may
not be worth
CAPEX
investment

16. Contact
consultmake.com
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Aaron Barr
ab@consultmake.com
16
2016 Sandia Wind Turbine Blade Workshop
August, 2016