Sandia 2014 Wind Turbine Blade Workshop- Barr

1. Analyst PRESENTATION
Blade technology
trends and market
developments
August 26, 2014
Aaron Barr
ab@consultmake.com

2. Contents
2
Post-PTC US Wind Energy Economics
August, 2014
ƒ Market Dynamics
– Global market to experience moderate growth, US faces uncertain future
– Wind energy cost of electricity is growing increasingly competitive
ƒ Blade technology trends
– New products are trending towards lower windspeeds and longer blades
– Longer blades face challenges in cost-effective scaling and transportation
– Advanced materials are emerging with promise to displace carbon fiber
ƒ Appendix: Promising blade technology innovations
– Reinforcements & Resins
– Processes & core materials
– Aerodynamic concepts

3. Delivering
renewable
energy
insight
Global market
dynamics
25 August 2014 3

4. Market Dynamics
Long-term market forecast by region
Global grid-connected forecast: 2013-2023 – Updated outlook published 08/20
Source: MAKE
China
Asia Pacific (excl. China)
Eastern Europe
Africa and Middle East
Northern Europe
Southern Europe
North America
Latin America
Long-term sustained installations in China underpins global market forecast
Significant rebound from 2013 slump is expected to persist for foreseeable future
4
Blade technology trends and market developments
August, 2014
80
60
40
20
0
´23e
(GW)
+7.2%
´13 ´14e ´15e ´16e ´17e ´18e ´19e ´20e ´21e ´22e

5. US Market Dynamics
Long term United States demand remains volatile
United States market outlook, 2013-2023e (GW) – Updated outlook published 08/20
Economic drivers replace PTC support
5.0 5.1 5.5
9
8
7
6
5
4
3
2
1
Uncertainty on PTC “start of physical work” has pushed many projects into 2015
Early August PTC guidance puts 2H2014 and 2015 developments on fast track
5
Blade technology trends and market developments
August, 2014
Source: MAKE
1.3
3.3
4.7 5.5
3.9
8.5
4.6
1.1
0
+342.1%
‘18e ‘19e '20e ‘21e
(GW)
‘22e
-71.7%
‘13 ‘14e '15e ‘16e ‘17e ‘23e
2013 PTC 2014 PTC PTC void Major RES deadlines
Toward
2025

6. US Market Dynamics
US LCOE by technology, vs 2013 wholesale prices
Regional US LCOE dynamics
Wind Energy
ƒ Latest generation of turbines have
LCOE competitive with natural gas
ƒ Driven by >40% capacity factors and
lower cost O&M practices
Natural Gas
ƒ Historic low natural gas prices
expected to rise in near term
ƒ Favorable LCOE and balancing
flexibility driving adoption of gas.
Coal
ƒ Emerging risk of emissions
regulations has largely halted new
developments of coal plants
Nuclear
ƒ Latest generation of nuclear
technology is prohibitively expensive
due to safety and fuel handling
concerns
Wind energy increasingly cost competitive
50
105
130
108
75
120
83
43
105
60
40
67
Source: MAKE
Note: Unsubsidized LCOE. Wholesale price represents 2013 average.
Only considering newly constructed power plants – expansions not considered
NEPOOL
Onshore wind in favorable wind conditions is currently competitive without subsidies.
Future gas and coal fuel escalation risk reinforces the case for continued wind installs.
6
Blade technology trends and market developments
August, 2014
150
100
0
LCOE $/MWh
45
ERCOT
Nuclear
Coal
Thermal
Nat Gas
Comb. Cycle
Onshore
Wind
Range CARBON O&M FUEL INVEST

7. Delivering
renewable
energy
insight
Blade market and
technology trends
25 August 2014 7

8. Blade market and technology trends
New products increasingly targeted towards lower winds
Product wind class installs, 2011-2016
21%
51%
27%
IECI
(10m/s)
IECII
(8.5m/s)
12%
37%
50%
49%
32%
Source: MAKE
IEC Certification of turbine, may not indicate resource
450
400
350
300
250
IEC II (8.5 m/s) IEC III (7.5 m/s)
200
2000 ‘04 ‘08 ‘12
Specific Rating (W/m2)
Longer rotors on turbines certified for low winds (IEC III) routinely being deployed into
medium wind conditions – provides a double-dip for project economics
8
Blade technology trends and market developments
August, 2014
19%
2011
IECIII
(7.5m/s)
2016e
2012
Specific ratings of new products
Source: MAKE
Top 15 OEMs only
2000 ‘04 ‘08 ‘12
- 21%
- 28%
Year of introduction

9. 50+ meter blades expected to become global mainstream
Global blade length segmentation
2016 outlook on blade segmentation
Blade market and technology trends
1% 2% 7%
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
>70m
60-69.99m
50-59.99m
45-49.99m
40-44.99m
51%
39%
3% 7%
Source: MAKE Source: MAKE
24%
31%
12%
8%
42%
10%
7%
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.
9
Blade technology trends and market developments
August, 2014
38%
15%
33%
28%
11%
43%
4%
17%
0%
2012 2016e
<40m
1%
APAC
41%
3%
EMEA
13.9
AMER
8.7
20%
2016 GW: 26.3

10. Blade market and technology trends
Rotor scaling faces cost challenges, met through technology
US Cost barriers for large rotor turbines
Source: MAKE
53
46
66 60*
1.70
Cost effective rotor scaling can be very difficult, and requires clever adoption of low-cost
technology to meet LCOE goals
10
Blade technology trends and market developments
August, 2014
Units Mainstream Next Gen 1.X
Color
Turbine Rating (MW) 1.8 1.8
Rotor Diameter (meters) 100 124
Specific Rating (W/m2) 230 150
+16%
Capacity
Factor (%)
9%
LCOE
(USD/MWh)
CAPEX/MW
(USD $k/kW)
+6%
1.60
Added cost components
Blades
12 meters longer ~5 tons per blade
Tower
10-12 meters taller ~35 tons of steel
Machine structure
New gearbox / shaft / hub / bedplate
Foundations
Weight increase ~30%
Roads & Electrical collection
Turbine spacing increases 7-10 km

11. Blade transport in the US becomes looming bottleneck
Trailer pinch in 2015 for 53m+ blades
Rear overhang restrictions in US
Blade market and technology trends
Enforcing rear overhang restrictions
Early indicators of restrictive policy
Major port for blade import
Domestic blade manufacturing Primary region of US
development
Total available trailer
equipment for wind
10.3GW
0.9
12.9GW
Order backlog
for 2015
commissioning
5.5
Source: MAKE Source: MAKE, Logisticus Group
US logistics carriers hesitant to invest in new equipment, creating a trailer pinch in 2015
Longer blades drive the need for innovation on transport and blade segmentation
11
Blade technology trends and market developments
August, 2014
-20%
Trailer
availability,
2015e
Trailer
availability,
2012e
8.5GW
MAKE
forecast
2015e
<53m blades
•PEODGHV
3.0
Available equipment
and drivers are down
9.4 Trailer shortage
capable of
hauling 53m+
blades

12. Carbon fiber blade material usage outlook
Carbon Fiber Penetration Has Grown
Long-term Trends May Reverse
Blade market and technology trends
Growth of turbine size has driven carbon adoption
ƒ New turbines with larger rotors utilize carbon fiber
as first option
Stiffness of carbon fiber blades provides options
ƒ Carbon fiber allows OEMs to leverage existing
hardware in the rest of the turbine
Cost pressures are forcing the hand of top OEMs
ƒ Profitability pressures are favoring high modulus
as a preferred alternative
25
20
15
10
5
Source: MAKE
Adoption trend has been positive, but emergence of high-modulus glass is voiding the
business case for carbon fiber
12
Blade technology trends and market developments
August, 2014
0
2010
23
2012
Percent Utilization of Carbon Fiber
2016
19
2013
17
12
2011
14

13. Delivering
renewable
energy
insight
Appendix:
Promising blade
technology innovations
25 August 2014 13

14. Commercial status of blade materials – reinforcements resins
Blade material commercial landscape
Commercial
Maturity
Blade market and technology trends
Low High
Material Features, benefits and drawbacks Maturity Trend
Source: MAKE
E-glass and epoxy dominate the market due to cost position and track record, high
modulus glass expected to gain share at the expense of high-priced carbon fiber
14
Blade technology trends and market developments
August, 2014
Reinforcements
E-Glass • Ample capacity, low cost
H-Glass • Increased stiffness over E-glass
S-Glass • High performance with cost penalty
Carbon fiber • World-class stiffness, cost and material handling concerns
Resins
Epoxy • Excellent mechanical properties
Polyester • Lower cycle times and material costs
Vinyl esters • Good compromise on material properties, cost and cycle time
Future
Trends
Decrease Increase

15. Commercial status – processes and core materials
Blade structures commercial landscape
Commercial
Maturity
Blade market and technology trends
Source: MAKE
Low High
Features, benefits and drawbacks Maturity Trend
Box spars and prepreg technology used by Vestas and Gamesa face lower utilization
Pultrusion technology shows significant promise, but advancing slowly
15
Blade technology trends and market developments
August, 2014
Process
Structural shell • Flexible to advanced geometries, reliance upon bonding paste
Box spar • Potential for automation, high capital cost of equipment
Prepreg plys • Material handling and temperature concerns
Dry fiber layup • Quality and repeatability concerns, cost leadership
Pultrusions • Excellent quality control, material property limitations
Core materials
PVC • Dominant material, lower strength than balsa
Balsa • Low cost, material consistency concerns, high resin uptake
PET • Lower cost and improved material consistency over balsa
SAN • Lower weight and reduced resin update
Tycor • Reduced resin uptake, highly engineered reinforced core
Future
Trends
Decrease Increase

16. Blade market and technology trends
Blade aerodynamics commercial landscape
Commercial
Maturity
Commercial status – aerodynamic concepts
Source: MAKE
Low High
Features, benefits and drawbacks Maturity Trend
Significant blade aerodynamic occurring in the aftermarket as performance upgrades.
16
Blade technology trends and market developments
August, 2014
Aerodynamic features
Trailing edge features Reduced noise, higher efficiency
Vortex Generators Improved efficiency, aftermarket upgrade option
Winglets Higher aerodynamic efficiency, reduced tip noise
Swept blade Load shedding bend-twist coupling, complex manufacture
Flatback airfoils Lower blade weight, increased root lift and efficiency
Slender airfoils Improved efficiency, increased demand on material strength
Gurney flaps Passive flap on trailing edge, low cost, bonding concerns
Leading edge slats Increased lift, higher manufacturing costs
Trailing edge flaps Active control of trailing edge, complicated manufacturing
Jet actuators Increased lift, high energy use, reliability concerns
Future
Trends
Decrease Increase

17. Contact
consultmake.com
© 2014 MAKE Consulting A/S. All rights reserved. Reproduction or distribution of this report in any form without prior written permission is strictly forbidden.
Violation of the above restrictions will be subjects to legal action under the Danish Arbitration Act. The information herein is taken from sources considered
reliable, but its accuracy and completeness are not warranted, nor are the opinions, analyses and forecasts on which they are based. MAKE Consulting A/S
cannot be held liable for any errors in this report, neither can MAKE Consulting A/S be liable for any financial loss or damage caused by the use of the
information presented in this report.
Denmark
U.S.
U.S.
Sønder Allé 9
117 N. Jefferson Street
225 Franklin Street
DK-8000
Suite 400
26th floor
Aarhus
Chicago, IL 60661
Boston, MA 02110
T +45 7026 6628
T +1 312 441 9590
T +1 978 448 3186
China
Level 26, Shanghai
Times Sq. Office Tower,
Shanghai 200021
T +86 22 2318 5066
U.K.
18B Charles Street
London,
WIJ 5DU
T +44 207 129 1433
Germany
Neuer Wall 10
20354
Hamburg
T +44 207 129 1433
Aaron Barr
ab@consultmake.com
17
Blade technology trends and market developments
August, 2014