rsted U.S. Offshore Wind Clint Plummer PJM Footprint Roundtable - PowerPoint PPT Presentation

Ørsted U.S. Offshore Wind Clint Plummer PJM Footprint Roundtable April 24, 2019 0

Ørsted Offshore overview Ørsted offshore wind global footprint Unparalleled experience and track record Europe North America Asia Pacific Bay State Wind Revolution Wind South Fork Block Island Ocean Wind Garden State 25+ years of experience Skipjack Formosa 1.1 and track record in the 1991 2019 Coastal Virginia Formosa 1.2 Greater Changhua projects offshore wind power sector Anholt 3 offshore wind farms 26 offshore wind farms in operation under construction West of Duddon Sands Horns Rev 1 & 2 Walney Extension Westermost Rough Avedøre Hornsea 1 Walney 1 & 2 Vindeby Hornsea 2 Hornsea 3 & 4 Nysted Isle of Man Race Bank Gode Wind 2 Lincs Gode Wind 4 Barrow 3.4 GW ~ 2,450 5.6 GW Gode Wind 3 Constructed Gunfleet Sands 1 & 2 under Dedicated Gode Wind 1 Burbo Bank Ext. capacity construction employees Borkum Riffgrund 1 Burbo Bank Borkum Riffgrund 2 Gunfleet Sands 3 Borssele 1&2 Borkum Riffgrund West 1&2 London Array OWP West ~ 1,150 4 U.S. 13 million turbines states In operation people with World's America’s clean Under construction leading leading electricity operator developer Under development Decommissioned after 25 years 1 Ørsted Offshore, March 2019

Ørsted U.S. Offshore Wind Our geographically diverse portfolio can serve the East Coast with 8-10GW Most advanced project portfolio in America Northeast Atlantic Cluster Mid-Atlantic Cluster

Europe has approached the question of OSW transmission assets in two main ways The “segmented” approach Managed outside tender Competitive tenders enforce price pressure (TSO/DSO) (Developer) Examples.. (DK far from shore auctions) The “full scope” approach Competitive tenders enforce price pressure Managed outside tender (Developer) (TSO/DSO) Examples.. (DK nearshore auctions) 3

In Germany transmission delays led to offshore wind farms being stranded without grid connection for up to several years The “segmented” approach led to costly grid delays in Germany 3 challenges of a “segmented” approach Cost increase due to transmission delays 1 1. Interface issues (USDm for 400MW OSW farm) ▪ Managing the interface between two complex 486 interdependent, yet separately led, processes proved a challenge and source of big delays 360 2. Sub-optimal risk allocation ▪ Risks were not allocated to the player best able to 235 deal with them (the developer), and managing them proved a challenge to the TSO 117 3. Complexity ▪ The German set-up introduced more players but had an unclear distribution of responsibilities and 0.5 year 1 year 1.5 year 2 years delay delay delay delay compensation - This complexity led to “gridlock” according to one First 8 German OSW farms experienced ▪ government representative - Delays of 6-24 months (average of 13 months) - Cost overruns of up to 93%  Splitting the scope prevents developers from Delayed transmission assets built by TSO were major driver of ▪ optimizing size, solutions and life-time of transmission this assets and the wind farm Cost of compensating developers for lost revenues = $1.3 bn ▪ - This was funded by extra levy on rate payers Sources: Hertie School of Governance, ‘Offshore Wind Power Expansion in Germany’; 1. Cost calculated by increasing construction time in LCoE model by 6-24 months for 2023 Netztransparenz 2013&2014; AURES COD. Conservative estimate as it doesn’t include increased OPEX or CAPEX Source: DONG Energy; Hertie School of Governance 4