Vergnet SA presentation RENEWABLE ENERGY CONFERENCE 24/11/2010

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1 Vergnet SA presentation RENEWABLE ENERGY CONFERENCE 24/11/2010 1

2 Balanced mix : the new model for modern energy policy 2010 Typical France daily mix (RTE) Procurement security Strategic independence Complementary Resources Local sources : renewable energy 2020 Objective: 23% wind energy in France (50% in unconnected islands) 2

3 Thermal energy sources are limited to the next 2 3 generations Fossil energy years Nuclear energy years (French Atomic Energy Centre CEA report) Visibility for Nuclear is not greater than for fossil energy 3

4 Renewable Hydro Wind Solar Visibility for Renewable energy is infinite, to be completed by new technologies Energy for the future 4 th generation nuclear plants (rapid neutron) Deep Geothermal plants 4

5 Two worlds of wind energy, one mature industry Traditional wind farms» Big plants connected to High Voltage distribution network» Huge investments by major companies New approach (but historical one): distributed generation» Local production and consumption» Rural players» Reasonable Human investment and size» Smart grids Barrel price US$ , Oil vs Wind break even point Wind power cheaper Oil power cheaper 5 6 6, wind speed m/s 5

6 Distributed generation : a new hope for rural areas in Europe Medium costs, real energy production» Reasonable investment, comparable with farmers usual investments» About 400 to 500 MWh per year New profitable activity for farmers» 20% of farming income and financial stability said Mr K. Armonas, farmer and owner of Birzai 250 kw wind turbine (in Lietuvos Rytas, 15/07/2010) New work opportunities in rural areas» Installation and maintenance can be done by local small companies 6

7 Main countries are following the way of distributed generation with dedicated incentives : Feed In Tariff / Subsidies Country Specific Feed In Tariff Subsidies Comments Italy 300 EUR/MWh No Guaranteed during 15 years for turbines up to 200 kw Great Britain 210 /MWh, i.e. 250 EUR/MWh No Guaranteed tarif for 20 years for turbines up to 500 kw Northern Ireland ~ 230 /MWh, i.e. 280 EUR/MWh No 4 Renewable Obligation Certificates for turbines up to 250 kw France No No Specific rules up to 250 kw United States Yes 50 to 70% of the investment Various subsidies, from local and federal administration 7

8 Vergnet survey about distributed generation potential market Mature potential markets Confirmed mature markets Açores Greek islands Canaries Lithuania Netherlands Estonia UK Slovenia Portugal Belgium Greece Germany Ireland Malta Spain Balkans Latvia Italy Potential new markets Confirmed new markets 8

9 Lithuania : a pioneer in stand by for distributed generation First country to decide subsidies to distributed wind energy More than 100 applying farmer with real and bankable projects One Vergnet turbine inaugurated in Birzai in July 2010 with average 98% availability Contracts for other 35 mid size turbines Knowledge transfer to Lithuanian company for installation and maintenance Opportunity for technology transfer in Lithuania for the whole sub-region (Baltic, Poland, Bielorussia) Birzai, Lithuania Today everything is blocked 9

10 Visibility and legitimacy for wind energy All countries are developing a balanced energy mix Wind energy offers infinite visibility at competitive price Wind energy distributed generation is becoming part of the solution Like all new industrial techniques, it needs National help at the beginning Distributed generation contributes to the development of rural areas Its cost has to be compared to real rural electricity cost 25 Real cost of kwh versus number of rural customers kwh cost (euro cents) Number of customers per km of HV/LV line To develop distributed energy, a specific higher tariff is needed 10