1. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 1 / / / / / / / / / / / / / / / / GLOBAL STEG MARKET OUTLOOK ESKOM CSP AND SOLAR AUGMENTATION CONFERENCE, JOHANNESBURG 26 AUGUST 2013 DEREK CAMPBELL

2. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 2 / / THE DEFINITIVE SOURCE OF INSIGHT, DATA AND NEWS ON THE TRANSFORMATION OF THE ENERGY SECTOR San Francisco Sao Paulo Washington New York Cape Town Sydney London Beijing New Delhi Hong Kong Tokyo Singapore Zurich

3. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 3 / / COVERAGE: UNIQUE BREADTH.... Wind Solar Geothermal Biofuels, Biomass & Waste to Energy RENEWABLE ENERGY Smart Grid & Demand Response, Power Storage, Advanced Transportation, Energy Efficiency ENERGY-SMART TECHNOLOGIES CCS WATER EU ETS Australia Global / Kyoto North America CARBON MARKETS EU RECs North America RECs Asian RECs RENEWABLE ENERGY CERTIFICATES POWER SECTORSMARKETS GAS

4. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 4 / / CONTENTS 1. CURRENT STATE OF THE MARKET 2. POTENTIAL TO REDUCE LCOE 4. 2014 AND BEYOND 3. IMPLICATIONS OF NATURAL GAS ON STEG

5. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 5 / / NEW BUILD ASSET FINANCE OF STEG PROJECTS BY REGION, 2005-2012 ($BN) Source: Bloomberg New Energy Finance

6. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 6 / / GLOBAL SOLAR THERMAL CAPACITY, 1995-2013 (MW) Source: Bloomberg New Energy Finance

7. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 7 / / ABANDONED STEG PROJECTS (MW) Source: Bloomberg New Energy Finance

8. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 8 / / WHY THE SLOWDOWN? Initial capital expenditure is high and there have been bankruptcies as companies struggle with liquidity Partly in consequence of runaway PV build (and also the Spanish debt crisis), government support has been removed or switched to PV. PV wins solar tenders. Rapid decline of PV costs makes STEG a less attractive option for generating clean energy from large sunny areas PV POLICY SUPPORT FINANCE Increasing concern over availability of water resources for cooling and washing WATER

9. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 9 / / CONTENTS 1. CURRENT STATE OF THE MARKET 2. POTENTIAL TO REDUCE LCOE 4. 2014 AND BEYOND 3. IMPLICATIONS OF NATURAL GAS ON STEG

10. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 10 / / SOLAR THERMAL LCOES ($/MWH) Source: Bloomberg New Energy Finance

11. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 11 / / TECHNOLOGY INNOVATION Cost of components (eg mirrors, steam turbines) is extremely high Each plant is designed differently, so skilled engineers are required and customisation difficult Reducing component costs through optimising design to use less material, or lower cost material, or to improve efficiency Achieve economies of scale through increasing the plant size Add storage, or hybridise STEG with fossil fuel, to increase utilisation of the turbine. This can also help STEG power output match power demand – something PV or wind cannot do Source: Bloomberg New Energy Finance CURRENT COSTREDUCING COSTS

12. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 12 / / CONTENTS 1. CURRENT STATE OF THE MARKET 2. POTENTIAL TO REDUCE LCOE 4. 2014 AND BEYOND 3. IMPLICATIONS OF NATURAL GAS ON STEG

13. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 13 / / GAS EFFECTS ON STEG Gas reserves risen by 34% between 2000-2012 Large pipeline of LNG terminals and exploration Cheaper gas means cheaper electricity Gas sets the price of electricity and reduces peak hour prices for STEG Source: B.P, Bloomberg New Energy Finance TCM BCM

14. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 14 / / LCOE IN 2013 ($/MWH) Source: Bloomberg New Energy Finance

15. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 15 / / CONTENTS 1. CURRENT STATE OF THE MARKET 2. POTENTIAL TO REDUCE LCOE 4. 2014 AND BEYOND 3. IMPLICATIONS OF NATURAL GAS ON STEG

16. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 16 / / 2014 AND BEYOND There will be some markets where the advantages of STEG over PV are valued – for example, weak power grids, or countries with a strong evening electricity demand peak Several countries (Australia, Morocco, India) are also offering tenders for one or two large STEG projects Saudi Arabian market 2.1GW in 2 rounds of bidding, by 2032 25GW (although BNEF believes the long term target may be shifted towards PV) Cost reductions and technology improvements continue to be made by companies like BrightSource and Abengoa, which are building plants and gaining the experience to make the technology better

17. GLOBAL STEG MARKET OUTLOOK, 26 AUGUST 2013 17 / / COPYRIGHT AND DISCLAIMER This publication is the copyright of Bloomberg New Energy Finance. No portion of this document may be photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of Bloomberg New Energy Finance. The information contained in this publication is derived from carefully selected sources we believe are reasonable. We do not guarantee its accuracy or completeness and nothing in this document shall be construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New Energy Finance, Bloomberg Finance L.P., Bloomberg L.P. or any of their affiliates ("Bloomberg"). The opinions presented are subject to change without notice. Bloomberg accepts no responsibility for any liability arising from use of this document or its contents. Nothing herein shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Bloomberg of an investment strategy or whether or not to "buy," "sell" or "hold" an investment.

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