1. Jakob Larsen SVP, Vestas Shared Service Center
Vestas Wind Systems A/S Sustainability and Corporate Social Responsibility
V MW Lem 2010 turbine
Jakob Larsen
SVP, Vestas Shared Service Center
[Date & Month 20XX,]

2. Vestas in brief
The only global wind energy company
We employ more than 19,500 people worldwide and have more than 35 years of experience with wind energy
19,500+
29,000+
55,500+
€ 6.9b
We monitor around 29,000 turbines, or more than 56 GW, day and night and the data is used for efficient service planning and pre-emptive maintenance
We have installed more than 55,500 turbines or more than 71 GW cumulative installed capacity in 74 countries worldwide spanning six continents
Vestas revenue for the full year 2014 was EUR 6.9 billion
Vestas corporate presentation

3. From blacksmith to global wind leader
Vestas’ journey
1898:
Blacksmith H.S. Hansen arrives in Lem
1945:
VEstjysk STaalteknik A/S becomes VESTAS
1979:
First turbine after agricultural vehicles, etc.
1987:
Vestas Wind Systems A/S
1991:
Turbine no
2013:
Anders Runevad, CEO
2004:
Merger: NEG Micon & Vestas
2012:
50 Gigawatt milestone.
2014:
Profitable Growth for Vestas & MHI Vestas founded
2010:
Wind. It means the world to us.
The story of how we got to where we are today contains many successes and a few setbacks. However, all our experiences have prepared us to harness the power of modern energy as the world moves further into the 21st century.
Vestas corporate presentation

4. Vestas locations around the world
Vestas has a unique global reach in sales, installation and manufacturing
Philippines:
Sales & service
Global hub for Vestas shared Service
One of Vestas’ key strengths is our global presence which provides us with an unmatched scale (reducing costs) and a customer intimacy across all continents.
Vestas is a truly global company with sales offices, manufacturing facilities and installed capacity across the globe.
NB! Some locations have been removed to keep the map simple. Focus has been to highlight regional hubs plus locations that underline global presence (e.g. Brazil, Mexico, India)
Global headquarters
Sales & Service
Production
Research
Vestas corporate presentation

5. The case for wind
V112, Macarthur Windfarm, Australia

6. Wind expected to grow by 4.1% (CAGR)
59.6GW average over 10-years beats the 2014 record by 11 GW and underpins wind’s competitiveness
Source: MAKE
Vestas corporate presentation

7. The Present: Wind increasingly often cheapest new power source
Minimum LCoE of wind repeatedly below coal and gas
Current LCoE ranges
$/MWh (nominal; excluding subsidies)
Key takes
New wind – on global level – is cost-competitive with coal and gas already today. 36
115 44
100 43
108 74
104 76
132 59
101 55
224 55
129 31
143 36
224
Coal
CCGT
Onshore wind 44
132
Note: AMER – North and Latin America
AMER
Wind: LCoE in Brazil lowest in the region (Ø 49 $/MWh) due to good wind ressources (capacity factors sometimes exceeding 50% - up to 62%) and low CAPEX (recent wind auctions having further suppressed capex and IRRs); US LCoEs close behind – with 5-84 $ (outlier at upper boundary related to projects in US states with less wind ressources such as Vermont or New Hampshire); Uruguay (Ø 63 $/MWh), Argentina (Ø 65 $/MWh), Canada (Ø 67 $/MWh) follow, Chile’s LCoE keeps being impacted by congestion along transmission grid resulting in low wind production (Ø 85 $/MWh). Outliers, such as Honduras (Ø 113 $/MWh) and Costa Rica (Ø 108 $/MWh) penalized by higher capex and higher financing costs
Natural gas CCGT: Natural gas cheapest in US (low gas prices and stable CAPEX) – but higher LCoEs in Latin America, which has significantly higher gas prices
Coal – behind wind and natural gas, also due to increased emission regulations in the US
EMEA
Wind: In EMEA region, Sweden, France and Germany rank first with average LCoEs between 75 and 82 $/MWh - essentially due to higher average capacity factors (27 to 31%) and comparatively good financing conditions, LCoE of most EMEA countries improved on average due toessentially due to higher average capacity factors (27 to 31%) and comparatively good financing conditions
Natural gas CCGT: Includes only Germany and UK – onshore wind cheaper than natural gas plants in Germany
Coal: Includes UK, Germany and Turkey – Turkish coal produces lowest LCoEs in the region, but onshore wind in Germany cheaper than new coal
APAC
Wind: Average APAC onshore wind LCoE up by 5 $/MWh due to progressing build-out in Southeas Asia. Higher costs of construction and lower capacity factors in these regions have increased the global average. Increase in average onshore wind LCOE masks however important cost improvements across all APAC countries on individual level – mainly due to decreased capex and improved financing conditions. The upper boarder of APAC wind LCoE decreased in consequence from 280 $/MWh to 224 $/MWh (-20%). India’s wind energy has the lowest LCoE range in Asia – due in large part to low CAPEX; China follows with with an average LCoE of 75 $/MWh; Philippines, Indonesia, Vietnam, Malaysia, Thailand follow with larger LCoE ranges from up to 224 $/MWh – large LCoE band largely due to important wind ressource differences within the different countries, but also due to higher country risks and perceived high technology risks on renewables in these countries;
Natural gas CCGT: Vietnam has cheapest gas LCoE in the region based on high capacity factors and cheap gas prices; average gas prices in China and India are close; Japan, Thailand and Philippines having relatively high gas prices
Coal: Coal remains cheapest power source in Asia – cheapest in India due to low domestic coal prices followed by Vietnam, Indonesia and China.
Key takeaways
New wind is increaslingly often cheapest new power source and is in many places in the world cost-competitive with new coal and gas already today.
Minimum LCoE of wind below or on par with gas - worldwide
Source for regional comments: BNEF, H Wind Levelized Cost of Electricity Updates, 03/2015 31
143
Sources: BNEF, Fossil and Wind LCOE ranges by region, H1 2015; GLOBAL: BNEF, Levelised cost of Electricity update: H1 2015, 03/2015
Vestas corporate presentation

8. The Future: Downward trend of wind LCoE set to continue
Continuous decrease of onshore wind LCoE to reach a global average of 54 $/MWh by 2030
Forecasted decrease of LCoE in
$/MWh (real; excluding subsidies)
Key takes
Onshore wind LCoE set to decrease
by 10% from 2013 until 2020
and by 20% from 2020 until 2030
2020 LCoE of wind of 68 $/MWh to be competitive with coal and gas in EU and US – even without a carbon price
-1,4%*
-2,2%*
Assuming a learning curve of 14% (implying that costs fall 14% every time installed capacity doubles), BNEF estimates an CAGR of onshore wind LCoE of -1.4% until (to reach a global average of 68 USD/MWh) and of -2.2% per year from until 2030 (to reach a global average of 54 USD/MWh).
By 2020 onshore wind LCoE (capacity factor 32% or above) is expected to be on average lower than US and EU coal and gas LCoE – even without a carbon price. Onshore wind’s competitive advantage is expected to amplify further until 2030 as technology, operational and financing costs decline.
Key takeaways
By 2020, global onshore wind to reach on average 68 $/MWh (a decrease of 10% compared to 2013) – at the same time EU coal and gas are expected to average 76 and 83 $/MWh respectively (without a price on carbon); global onshore wind LCoE also lower than US coal of 77 $/MWh and approching US gas of 59 $/MWh
By 2030, onshore wind is generally expected to be cheaper than EU and US coal and gas – with or without a carbon price
* CAGR - Compound annual growth rate
40% capacity factor
32% capacity factor
20% capacity factor
Sources: BNEF, 2030 Market Outlook – Wind, 06/2014
Vestas corporate presentation

9. Sustainability performance
MW turbines in Solano USA

10. Vestas’ customers save water
Vestas’ turbines are an environmental choice with high energy payback
Water requirements of electricity generation (m3/MWh)
Energy payback
(Ratio of energy produced compared to energy used)
37.00
17.00
12.00
10.00
8.00
1.00
0.42
0.28
V MW
Tidal streamTidal stream
Wave
Solar conc.Solar conc.
Solar PVSolar PV
Nuclear
Gas
Coal
Water savings: Replacing water-intensive fossil-fuel based power generation; each megawatt-hour generated by wind energy can save more than litres of water. The U.S. Department of Energy concludes that 20% wind in the U.S. energy mix by 2030 would trigger cumulative water savings of four trillion gallons or 15 trillion litres of water by At the same time emissions of million metric tons of CO2 would have been avoided.
Note on 100% - since no water is used under normal condition to generate 1 MWh electricity out of wind – replacing 1 MWh of fossil fueled electricity replaces the respective amount of water needed (e.g. 0,7 m3/MWh in regard to gas, 2,7 m3/MWh in regard to nuclear).
And even if taking a lifecycle perspective, wind power is highly water efficient - Wind energy uses throughout its full life cycle less water than other power generating technologies require just for the electricity generation. Following to the LCA of the Vestas turbine V , the total water footprint amounts to 59 l/MWh – corresponding to 8% of the water needed to generate 1 MWh in a wet-cooled Natural Gas Combined Cycle (NGCC) plant, without accounting neither for the water required to build the gas plant nor for the water consumption of gas extraction and processing.
Energy payback: A V MW wind plant has an energy payback of 8 months which means that over the full life cycle it will return 37 times more energy back to society than it consumed.
The graph on the left shows the range in results - max and min - e.g of CO2 per kWh, accounting for example for technology differences by country for coal, say. or Vestas turbine results then range accounts for different wind class, turbine set-up, etc
Water-use data sources:
GaBi databases, 2006 and Life Cycle Assessment of Electricity Production from a V MW GridStreamer Wind Plant- December 2011.
Energy payback data sources:
1. World Coal Association. Coal & the Environment - Coal Use & the Environment - Improving Efficiencies. 2. The Offshore Valuation: A valuation of the UK’s offshore renewable energy resource. Published in the United Kingdom 2010 by the Public Interest Research Centre. ISBN  PE International (2012). PE International - GaBi 6 databases 2011, LBP, University of Stuttgart and PE INTERNATIONAL GmbH 4. PE International (2011) Life cycle assessment of electricity production from a V MW wind plant - February 2011, PE International, Leinfelden-Echterdingen, Germany.
Abbreviations:
NGCC CT = Natural Gas Combined Cycle Combustion Turbine
Supercritical PC CT = Pulverised Coal Combustion Turbine
CSP through CT = Concentrated Solar Power
CC = Combined Cycle
CT = Combustion Turbine
CSP = Concentrated Solar Power
H = Hydro
IC = Internal Combustion
ST = Steam Turbine
PV = Photovoltaic
WT = Wind Turbine
100%
8 months
Note: water-requirements does not refer to a water footprint under the ISO standard.
Sources: DHI 2010, Harvard 2010, IEEE 2010, NREL 2003, Stillwell et al. 2009, US DoE 2006, US DoE 2009, WEC 2010, WEF 2009, WEF 2011, Western Resource Advocates 2008, EWEA 2014; Vestas LCA for V MW & GaBi databases, 2006
** for medium wind conditions
Vestas corporate presentation

11. Safety comes first at Vestas
Dramatic and ongoing improvements in safety
Per 1 million working hours
Key takes
In 2014 there was record low 1,6 injuries per one million working hours
Vestas is committed to eliminating all injuries not just lost time injuries. We will do this by focusing more on awareness and behavior.
2008
2007
2006
2014
2009
2012
2011
2010
2013
Vestas’ goal is zero injuries. We are of the belief that all injuries can be prevented if every hazard is managed and if the right behavior is in place.
Vestas 5 safety principles:
All injuries can be prevented
Every hazard can be managed
Management is accountable for safety
People are the most critical factor in safety effort
Working safely is a condition of employment
Examples of how Vestas improves safety:
Since 2007, Vestas has deployed a Safety Awareness Programme for employees and managers to raise the awareness of safety with the ultimate objective of eliminating all industrial injuries.
In innovations - Vestas is working to improve safety through innovation. The V MW was deigned to be one of the most innovative turbines in the market and at the same time one of the safest to service. The nacelle of the V MW has 60% increased work space compared to earlier models. This further improves the conditions for safe turbine servicing and makes it more convenient for the maintenance crew.
Through Safety Walks - In 2011, safety walks where carried out
Safety walks gives a regular, required physical process for management to ensure that safety procedures are followed
Safety walks enables managers to show leadership and walk the talk
Safety walks increase safety awareness and safe behavior among employees through dialogue
Lost time injuries
Vestas corporate presentation

12. Sustainability and CSR
V112, Macarthur Windfarm, Australia

13. Human rights and Labour rights
Vestas recognizes its responsibility to respect human rights as set out in the United Nations Universal Declaration of Human Rights
Situation today and the key challenge:
Very different labour markets and Government regulation and enforcement of human rights and labour rights
Vestas Approach:
Global policies with local adaptation
Collaborating actively with unions in many countries (varying success)
Apply the Vestas Policies and procedures in “non unionised” Countries
Comply to local legislation or with international standards if higher (unless local law is prohibiting this):
Get the basics in place: comply to labour laws
Long term objectives and short term targets
Prioritise initiatives as close to our core business as possible or where we do business (no/little philanthropy)
Fundamental believe of having a consultative approach with employees, unions and authorities
Open and honest external communication (Published an annual Sustainability report for the past 15+ years / Communication on Progress report for UN Global Compact)
Journey from Health and Safety committees towards Sustainability committees covering a broader scope (global reach/Vestas standard)
Assuming a learning curve of 14% (implying that costs fall 14% every time installed capacity doubles), BNEF estimates an CAGR of onshore wind LCoE of -1.4% until (to reach a global average of 68 USD/MWh) and of -2.2% per year from until 2030 (to reach a global average of 54 USD/MWh).
By 2020 onshore wind LCoE (capacity factor 32% or above) is expected to be on average lower than US and EU coal and gas LCoE – even without a carbon price. Onshore wind’s competitive advantage is expected to amplify further until 2030 as technology, operational and financing costs decline.
Key takeaways
By 2020, global onshore wind to reach on average 68 $/MWh (a decrease of 10% compared to 2013) – at the same time EU coal and gas are expected to average 76 and 83 $/MWh respectively (without a price on carbon); global onshore wind LCoE also lower than US coal of 77 $/MWh and approching US gas of 59 $/MWh
By 2030, onshore wind is generally expected to be cheaper than EU and US coal and gas – with or without a carbon price
Sources: BNEF, 2030 Market Outlook – Wind, 06/2014
Vestas corporate presentation

14. Human rights and Labour rights
Vestas recognizes its responsibility to respect human rights as set out in the United Nations Universal Declaration of Human Rights
Examples of local initiatives:
Use spare wood to build school furniture's (India)
Support to local sports clubs (globally)
Fast re-connecting wind farms in Japan after the nuclear accident (support local infrastructure – invested in specialists and protecting equipment) (Japan)
Dyslexia training / support to 500+ employees (Denmark)
Philippines:
Support to specific charity organizations
Typhoon disaster support
Established a Sustainability Committee
Specific employee consultation team to support a successful relocation of office
Informal lunch and Coffee meetings between various levels of management and employees
Take inputs from employees serious
Assuming a learning curve of 14% (implying that costs fall 14% every time installed capacity doubles), BNEF estimates an CAGR of onshore wind LCoE of -1.4% until (to reach a global average of 68 USD/MWh) and of -2.2% per year from until 2030 (to reach a global average of 54 USD/MWh).
By 2020 onshore wind LCoE (capacity factor 32% or above) is expected to be on average lower than US and EU coal and gas LCoE – even without a carbon price. Onshore wind’s competitive advantage is expected to amplify further until 2030 as technology, operational and financing costs decline.
Key takeaways
By 2020, global onshore wind to reach on average 68 $/MWh (a decrease of 10% compared to 2013) – at the same time EU coal and gas are expected to average 76 and 83 $/MWh respectively (without a price on carbon); global onshore wind LCoE also lower than US coal of 77 $/MWh and approching US gas of 59 $/MWh
By 2030, onshore wind is generally expected to be cheaper than EU and US coal and gas – with or without a carbon price
Sources: BNEF, 2030 Market Outlook – Wind, 06/2014
Vestas corporate presentation

15. Summary: Need to have global policies but act locally
Strong policies needed
Appropriate training programs needed to get the company policies and standards embedded in the leadership culture – we are up against local legislation, culture and tribal knowledge
Do not see Sustainability/CSR as a separate issue – need to be embedded in the business model
Higher successes if related to core business or where you do business
Don’t be afraid of involving key authorities, unions and employees
Vestas have had success of applying this consultative approach even in countries where this is not the norm:
Higher employees satisfaction, less conflicts and reduced employee turnover
Be open about policies, objectives, targets and report progress openly
Assuming a learning curve of 14% (implying that costs fall 14% every time installed capacity doubles), BNEF estimates an CAGR of onshore wind LCoE of -1.4% until (to reach a global average of 68 USD/MWh) and of -2.2% per year from until 2030 (to reach a global average of 54 USD/MWh).
By 2020 onshore wind LCoE (capacity factor 32% or above) is expected to be on average lower than US and EU coal and gas LCoE – even without a carbon price. Onshore wind’s competitive advantage is expected to amplify further until 2030 as technology, operational and financing costs decline.
Key takeaways
By 2020, global onshore wind to reach on average 68 $/MWh (a decrease of 10% compared to 2013) – at the same time EU coal and gas are expected to average 76 and 83 $/MWh respectively (without a price on carbon); global onshore wind LCoE also lower than US coal of 77 $/MWh and approching US gas of 59 $/MWh
By 2030, onshore wind is generally expected to be cheaper than EU and US coal and gas – with or without a carbon price
Sources: BNEF, 2030 Market Outlook – Wind, 06/2014
Vestas corporate presentation

16. Thank you for your attention
Any Questions?
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