Third Issue of the Wind Turbine Price Index Shows No Signs of a Price
  Recovery

Business Wire

LONDON & NEW YORK -- August 04, 2010

Wind turbine contract prices signed in 2010 for delivery in H2 2010 and H1
2011 continue to point to a significant decline compared to 2008 prices. This
reduction amounts to some 15%, according to the third issue of the Wind
Turbine Price Index (WTPI), published this week by leading industry analysis
company Bloomberg New Energy Finance.

Bloomberg New Energy Finance analysis shows that turbine prices peaked at EUR
1.22m/MW for contracts signed in 2008 for delivery in H1 2009. Nevertheless,
current over-supply in the global market - mainly due to financing issues for
wind projects – has led to a sharp fall in pricing for contracts signed in
2010 for delivery in H2 2010 and H1 2011, with average prices coming at EUR
1.04m/MW. The Index shows no signs of a price recovery in the near future.

The Wind Turbine Price Index (WTPI), published twice a year, is based on
confidential data provided by 22 turbine buyers – amongst them utilities/power
players, independent power producers and project developers, as well as
financial investors. The sample includes nearly 110 individual contracts
totaling 5.6GW of contracted capacity – or 25% of the annual wind market – the
most authoritative reference for turbine pricing in the industry. The sample
also includes contracts in 24 different markets, with 14 manufacturers
represented in the analysis.

Key findings include:

• Global turbine contracts signed in 2010 for delivery in H2 2010 and H1 2011
average EUR 1.04m/MW, down by 15% from peak values of EUR 1.22m/MW. This is
close to the figure reported in the last WTPI, in December 2009. Contracts
currently under negotiation for delivery in H2 2011 show identical pricing at
EUR 1.04m/MW, with no signs of a price recovery in the near future. Prices
quoted in this report include the turbines plus transport to site (marine and
overland) excluding VAT and all other construction costs.

• Markets with exposure to electricity prices display the largest decrease -
especially in the US where power purchase agreement prices have softened and
those agreements are hard to secure. Average pricing in the Americas for
contracts negotiated in 2010 for delivery in 2010 and 2011 falls in the range
$1.36m/MW-$1.48m/MW. Pricing in Eastern European markets also showed a
significant decrease, with average pricing slightly above EUR 1.00m/MW for
deliveries in 2010, down 24% from peak values of EUR 1.32m/MW.

• Several contracts for Tier 1 (leading) manufacturers with over-capacity in
2009-10 and large inventories showed values significantly below average - in
some cases well below the EUR 1.00m/MW benchmark.

• Full service operation and maintenance prices displayed a slight decrease,
averaging EUR 29,000-35,000/MW per year for the first five years of operation,
down from EUR 34,000-42,000/MW. More importantly, an increasing number of
contracts are being agreed for 15 years of O&M, as manufacturers attempt to
capture these revenues and make more competitive offerings.

• Procurement officers for some of the main turbine buyers expect a further
decrease in pricing in 2010 and 2011, of 4% and 1% respectively. They only
expect price increases from 2013, a significantly more conservative attitude
than in the previous report.

William Young, manager of the Wind Insight Service at Bloomberg New Energy
Finance, said: “Expectations for turbine prices have never been so low, and
the current market oversupply will continue for quite a while longer. That may
not be great for wind turbine manufacturers, but the good news for the sector
is that it will improve the competitiveness of wind with gas, coal and nuclear
as a means of generating electricity.”

The Bloomberg New Energy Finance Wind Turbine Price Index executive summary is
available to Wind Insight Service subscribers here:

http://www.bnef.com/Insight/2050.

Companies that provided data for inclusion in the Index have received a more
detailed report free of charge. The Index will be updated twice a year, and we
are in discussion with additional companies planning to participate. If your
company has bought or sold wind turbines during 2008-10, and you would like to
participate in the survey please email Eduardo Tabbush, who is responsible for
producing the Index report (etabbush@bloomberg.net).

To read the Press Release, either open the attachment on this email, or access
online via the Bloomberg New Energy Finance website by clicking below -

http://www.bnef.com/Download/pressreleases/124/pdffile/?utm_source=newsletter&utm_medium=email&utm_campaign=sendPressReleases.

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