Industry view on the development of turbine technology and the (market) value of wind Dr. Thomas Korzeniewski Chief Product Manager, Product Strategy 22 nd November 2017
Vestas facts Undisputed global wind leader 2 We have more than 38,000 turbines under service agreements, or around 71 GW 29.11.2017
Agenda 1 Industry & Product Directions 2020+ 2 Most Recent Vestas Product Responses 3 Technology Leadership: Challenging The Boundaries 4 Towards Sustainable Energy Solutions: Hybrids With Vestas 5 Q&A 3 Industry, Product & Technology Update
Industry & Product Directions
Market Directions - Renewables Record Year 2016 and significant build-out projected through 2022 Renewable electricity capacity growth by technology 1.200 1.100 1.000 900 800 700 600 500 400 300 200 100 (GW) 0 1999-2004 2005-10 2011-16 2017-22 (%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% % from wind and solar Additional (accelerated case) Others Hydropower Solar PV Wind Record new additions of renewables in 2016; Wind & Solar PV (160 GW+) beating fossils (Coal & Gas, net 75GW+) by far IEA 2017: High growth 2017-2022 > 80% of renewables growth in Wind and Solar PV 5 Industry, Product & Technology Update Source: IEA (10/2017); Product Strategy analyses.
Market Directions - Renewables Price discovery through competitive auctions effectively reduces costs along the value chain Announced wind and solar PV average auction prices (USD/MWh) 180 160 140 120 100 80 60 40 20 Onshore wind average auction price Solar PV average Auction price Record new additions of renewables in 2016; Wind & Solar PV (160 GW+) beating fossils (Coal & Gas, net 75GW+) by far IEA 2017: High growth 2017-2022 > 80% of renewables growth in Wind and Solar PV Auctions: Technology advances enabling efficiency & cost gains driving down LCOE 0 2012 2013 2014 2015 2016 2017 2018 2019 2020 6 Industry, Product & Technology Update Source: IEA (10/2017); Product Strategy analyses.
Market Directions - Renewables Growth projections moving focus to China, India and Middle-East Africa Renewable capacity growth by country/region (GW) 400 350 300 250 200 Record new additions of renewables in 2016; Wind & Solar PV (160 GW+) beating fossils (Coal & Gas, net 75GW+) by far IEA 2017: High growth 2017-2022 > 80% of renewables growth in Wind and Solar PV Driven by technology advances enabling efficiency & cost gains driving down LCOE 150 100 50 0 China US EU India Japan Brazil MEA 2011-16 2017-22 China continues to lead growth while India expected to overtake the EU. MEA grows. 7 Industry, Product & Technology Update Source: IEA (10/2017); Product Strategy analyses. MEA= Middle East, Africa
Market Directions - Renewables Next challenge: integrating even larger shares of wind and solar into power systems VRE share in annual electricity generation 2016-22 Denmark Ireland Spain Germany UK Italy Australia US China India Brazil Japan 0% 10% 20% 30% 40% 50% 60% 70% 80% PV share in 2016 Wind share in 2016 Additional PV share in 2022 Additional wind share in 2022 Record new additions of renewables in 2016; Wind & Solar PV (160 GW+) beating fossils (Coal & Gas, net 75GW+) by far IEA 2017: High growth 2017-2022 > 80% of renewables growth in Wind and Solar PV Driven by technology advances enabling efficiency & cost gains driving down LCOE China continues to lead growth while India expected to overtake the EU. MEA grows. System integration more & more critical. More flexible power solutions & systems, adapted market design & policies needed. 8 Industry, Product & Technology Update Source: IEA (10/2017); Product Strategy analyses. MEA= Middle East, Africa
Product Directions - Onshore Wind Observers expect continued growth - with rotors outpacing ratings for better low wind WTGs Average rating expected to grow further globally; Vestas ahead as 3MW first mover. MAKE Trends IEA Trends Vestas Directions Rotor diameter growth expected to outpace ratings growth. Specific ratings [W/m 2 ] expected to continue downward trend better capacity factors and low wind properties. MAKE: By 21/ 22 a WTG for medium to low wind would e.g. have a 4.5MW-160m+ rotor or 5MW -166m+ rotor configuration 9 Industry, Product & Technology Update Source: MAKE Consulting: Next Generation Wind Turbine Models (06/2017), Product Strategy analyses.
Most Recent Product Responses - 4 MW Update 10 Industry, Product & Technology Update
Successful evolution of the proven 3-4MW platform More annual energy production from same trusted platform Wind Tropical/strong wind High wind Medium wind Low wind Year of Announcement 3.0 MW First Vestas 3 MW WTG V90-3.0 MW V112-3.0 MW 2010 3.3 MW 3.45 MW Upgrade to 3.3 MW nominal rating New rotors: 105m, 117m, 126m V105-3.3 MW V112-3.3 MW V117-3.3 MW V126-3.3 MW Upgrade to 3.45 MW nominal rating New rotor: 136 m Up to 3.6 MW Power Optimised Mode V105-3.45 MW V112-3.45 MW V117-3.45 MW V126-3.45 MW V136-3.45 MW 2012/13 2015 3.45/4.2 MW New rotor: 150 m New segment: IEC T-class Up to 4.2 MW Power Optimised Mode Platform naming: 4MW V117-4.2 MW V105-3.45 MW V112-3.45 MW V117-3.45 MW V126-3.45 MW V136-3.45 MW V136-4.2 MW V150-4.2 MW 2017 NEW in 2017 4.2MW & 150 Rotor Up to 56% AEP increase since 2010* Double digit AEP gains across wind classes 11 Industry, Product & Technology Update
V136-4.2 MW Turbine Variant High production at industry leading sound power levels for medium winds Highest Output Wind turbine in 150m Tip Height Segment Low Sound Power Segment leading sound power level at 103.9 db(a) Enhanced siteability Upgraded gearbox powering lower rotor rotational speed, enabling enhanced project specific siteability and/or project specific lifetimes of 25 years + More Power Upgraded generator to 4.0 MW nominal rating with 4.2 MW Power Optimised Mode Maximum 103.9 db(a) -1.6 db(a) compared to V136-3.45 MW project specific lifetimes of 25 years + Up to 11 % AEP Increase* Versatile Tower Offering Accommodating 150-230 m tip height. Option for site specific towers *Compared to V136-3.45 MW. Depending on wind condition Delivery Spring 2019 12 Industry, Product & Technology Update
V150-4.2 MW Turbine Variant Low to medium wind offering in auctions to further reduce LCOE Delivery Spring 2019 Up to 241 m tip height Larger Swept Area Blade length increased to 73.7 m using Vestas most advanced aerofoil design and materials Higher Energy Production Combined with increase in capacity factor Up to 21% AEP Increase* 17,671 m² swept area +22% swept area* Reduced Sound Power Levels Segment leading energy production combined with very low 104.9 db(a) Maximum 104.9 db(a) Versatile Tower Offering Site specific tower portfolio to meet tip heights ranging from 180-241 meter leveraging industry leading 166 m hub height *Compared to V136-3.45 MW. Depending on wind condition 13 Industry, Product & Technology Update
Today Evolution of Vestas Tall Tower Technology Taller towers allow for higher, less turbulent wind speeds Site specific towers Larger diameter, segmented sections Diameter x 2 = thickness x 1/4 Larger diameter, nonsegmented sections Diameter x 2 = thickness x 1/4 Advanced controls? 2010 to 2013 2013 to 2015 2015 to 2017 2018+
Technology Leadership 15 Industry, Product & Technology Update
Vestas InteliLight - Active Aviation Light Management Aviation light activation based on aircraft position Before: Aviation lights are normally turned on 24 hours a day regardless of aircraft presence. Aviation lights provide unnecessary lighting of annoyance to wind park neighbours, thus restricting the development of wind power in many areas. After: Radars detect and track aircraft movements and activate aviation lights whenever an aircraft enters the warning area defined around a wind farm *) *) warning area defined by national regulations 8 km minimum tracking range for 1 m^2 RCS Aviation lights kept off in normal operation No requirements on aircraft 16 29 November, 2017
Cable Stayed Tower Technology Efficient steel tower based on proven cable technology - enabling higher hub heights while improving transportability. 17 Industry, Product & Technology Update HH137 Demonstrator Østerild Test Center Northern Denmark
Multi-Rotor Demonstrator DTU Test Center Central Denmark Multi-rotor operation is safe and no additional noise is generated no unexpected loads or vibrations 18 Industry, Product & Technology Update
Energy markets evolve New business opportunities arise from market developments Wind is part of complex and evolving energy networks with changing technical and commercial requirements. even more individual solutions required Sustainable Energy Solutions leverage the benefits of different energy generation and integrates them into energy networks on grid and micro-grid scale. 19 Industry, Product & Technology Update
Vestas Capabilities Applying expertise and experience to hybrid power plants Expertise 35 years of meeting complex & varying grid requirements Deep WTG product knowledge & understanding of synergies Key components built in-house operating with profit since 2012 Hybrid Competence Systems Advanced Power Plant Controller already managing large wind plants Largest wind database in the industry Performance data of 33k WTG as input to build the optimal controller SCADA operated since 2012 Experience 100+ EPC projects in 26 countries Lem Kjær WTG+storage hybrid power plant since 2012 Louzes WTG+solar operating since 2012 20 Industry, Product & Technology Update
World s first utility-scale hybrid power plant Combining wind, solar & storage Kennedy Energy Park, Australia: Close partnership with key players on demanding project 43 MW 15 MW AC 2 MW / 4 MWh SMA / Jinko Solar Australia Pilot contracted for 2018 delivery 21 Industry, Product & Technology Update
Q&A Thank you for your attention! 22