DONG Energy Renewables Kim Ernst, Vice President DONG Energy International Paris 14-15 April 2008.

DONG Energy Renewables

Kim Ernst, Vice President

DONG Energy International

Paris 14-15 April 2008

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DONG Energy at a glance

A leading utility company in the Nordic region

Market leader in gas supply and electricity generation in Denmark• Direct natural gas market share of approx. 60% and equivalent 35% market share in Sweden

• Leading power and heat producer in Denmark with a production capacity of approx. 5,500 MW. Renewables has additional capacity of 1,000 MW from wind turbines and hydro

• Electricity supply to more than 1 million customers

Regulated infrastructure activities

Focused Gas E&P player with strong competencies• Owns 67 licences (end 2005) and is currently producing approx. 35,000 boe/day

• Expected to increase to approx. 120,000 boe/day in 2010

*) Unaudited figures based on Preliminary Combined “New Group” Financials

Strong component of low risk, stable operating profits and conservative financial profile

Shift in focus towards consolidation and integration

Significant increase in EBITDA expected after 2007 due to Ormen Lange and synergies

Stable long-term majority ownership by Danish Government

Strong integrated presence across natural gas and power value chains

FY2007

Note: 1. Based on Group FY2007 figures, percentage distribution calculated before eliminations and other unallocated items

Total Revenue FY2007: DKK 41.6bn

Total EBITDA FY2007: DKK 9.6bn

Generation

DKK 12.3bn (27%)

DKK 3.7bn (37%)

Central power plants

Offshore WindOnshore WindHydro power

Revenues(

1)

EBITDA(1)

Distribution

Power distributionNatural gas distributionNatural gas storage

DKK 4.5bn (10%)

DKK 1.6bn (17%)

E&P

Focus areas

DKK 4.9bn (11%)

DKK 2.4bn (24%)

Markets

Natural gas and/or power customers

DKK 24.6bn (52%)

DKK 2.2bn (22%)

Highlights

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DONG Energy Renewables

Organisation and competences

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Renewables’ core activities

Market analyses and identification of potential sites

Acquisition of project rights

Partnering

Engineering and project planning

Procurement strategy and tendering

Planning of operating phase

Financing

PROJEKTUDVIKLING

Construction of production facilities

Project management

Power production

Operation and maintenance of assets

Project Development Construction Production

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Current asset base of DONG Energy Renewables

Wind farms

Hydro power plants

Assets in operation and under development; wind and/or hydro power

Assets under development or construction only

All operating assets in Spain and Portugal – 216 MW wind and 25 MW hydro – together with a large pipeline of development projects were sold off in August 2007 due to a decision on strategic focus on Northern Europe

Market

Operational WindHydro (MW) Total (MW)

Net capacity(MW)

No of WTG

Denmark 428 510 0 428

Norway 7 3 131 138

Sweden 0 0 205 205

Greece 19 31 0 19

UK 135 55 0 135

France 9 7 0 9

Poland 31 17 0 31

Total 629 MW 623 336 MW 965 MW

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Renewables is a major player among international utilities focusing on wind energy and is world leading within offshore wind energy

The global offshore wind farms in operation

DONG Energy Renewables - On- and offshore net capacity (MW)

446

279

0

100

200

300

400

500

Onshore Offshore

MW

, *Sold to Vattenfall

Project/Country WTG MW Construction

Vindeby (DK) 11x450kW, Bonus 4.95 1991

Lely (NL) 4x500kW, NedWind 2.0 1994

Tunø Knob (DK) 10x500kW, Vestas 5 1995

Dronten Isselmeer (NL) 28x600kW, Nordtank 16.8 1996

Bockstigen (SE) 5x550kW, Wind World 2.75 1997

Utgrunden (SE)* 7x1,5MW ENRON 10.5 2000

Blyth (UK) 2x2MW Vestas 4.0 2000

Middelgrunden (DK) 20x2MW Bonus 40.0 2000

Yttre Stengrund (SE)* 5x2MW NEG Micon 10.0 2001

Horns Rev I (DK) 80x2MW, Vestas 160.0 2002

Palludan Flak (DK) 10x2.3MW, Bonus 23.0 2002

Nysted Offshore Windfarm (DK) 72x2.3MW, Bonus 165.6 2003

Arklow Banks phase I (UK) 7x3.6MW, GE Wind 25.2 2003

North Hoyle (UK) 30x2MW, Vestas 60.0 2003

Scroby Sands (UK) 30x2MW, Vestas 60.0 2004

Kentish Flats (UK)* 30x3MW, Vestas 90.0 2005

Barrow Offshore Wind Farm (UK) 30x3MW, Vestas 90.0 2006

Nysted Offshore Wind Farm

Source: BTM March 2005

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DONG Energy Renewables

DONG Energy is committed to developing projects in the UK with an extensive number of projects in the pipeline

Involved in 9 R1 & R2 projects (Barrow; Burbo; Shell Flat; Scarweather Sands; London Array; Walney; West of Duddon Sands; Gunfleet Sands I+II ) totalling 2830MW (DONG Energy share 1564MW)

Recently formed a joint-venture Channel Energy Ltd (with Farm Energy) developing two 1500MW offshore projects in the SW of England

The permission and application process for erecting wind turbines in Zone de Développement Eolien (ZDE)

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ZDE, 2 years

EIA 1 year

Building permit ½ year

• March 2007, 15 ZDEs have been approved

• 300 ZDE are applied for and the number is expected to increase fast among the more than 36,000 communes

• Important to participate in or initiate ZDE process in areas with existing wind turbine development rights.

• ZDE defines areas where to build wind turbines in communes covered. Discussions with local administrations

are reduced.

• ZDE defines, e.g. maximum or minimum numbers of MW installed and turbine height in a given land area.

• Grenelle is expected to reduce application time further, goal is 6 months

• Environmental Impact Assesment (EIA) and building permit from local authorities still necessary

Expected planning procedure ZDE

Local accept, 4 years

EIA 1 year

Building permit ½ year

Historic application proces

New application proces

Source: SER, March 2007

Ploudalmézeau

Feilluns

Echainvilliers

Montigny La Cour

Trevillach

Paziols

Le Langon

Jassienes

Pargues

Lignéville

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Bricqueville

Elsam France development projects with building application

Departments applying for ZDE

ZDE applied

Elsam France’s operating wind farm

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Key observations from offshore wind development

activities

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Summary of key observations from offshore wind farm development

Observations from consenting activities in EU include: Planning system is extremely complex

Consenting and EIA work takes 3-5 years! (e.g. bird survey work started on London Array in autumn 2002, consent by autumn 2007)

Costs up to £5m just for the consenting phase

No guarantee for consent, therefore a huge risk on the developer

Due to lack of data on the offshore environment, it is often a question about luck whether the site may have issues that could prevent consent to be granted

Risk of public inquiry which is costly and time-consuming - more than a year’s delay

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Summary of key observations cont'd

Need for a streamlined (“One-Stop Shop”) consenting process

Several regulators involved (national, county and local level), and they do not coordinate their permitting activities

Authorities are in general very flexible and obliging but deadlines are often exceeded by the authorities

Huge number of statutory consultees/stakeholders

Often expensive easements are required (i.e. crossing of railway can potentially cost several £m in easement)

NIMBYism is an issue even for remote offshore wind farms as onshore substations are required for large projects

Regulators on the local level are often not aware of the government targets

Characteristics of the French offshore regime:

Penalizes high production over 2800 full load hours in the operating period from 10 to 20 years

the electricity price is fixed for 20 years, which means that the electricity cannot be sold at market price if this price should prove more advantageous

only 60% inflation are being covered in the tarif

the investor must cary the full grid connection costs

high corporate tax and reduced average tax depreciation

Conclusion:

penalizes optimum production at good sites

results in an unprofitable investment climate

only few of the planned 4000 MW offshore will be established on the current commercial basis

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French Offshore, 3000 h

French Offshore, 3800 h

Electric cars can utilise excess wind power and recharge at night using cheap electricity

Electric cars make it possible to utilise more renewable energy

A single 2 MW wind turbine can provide 3,000 electric cars with energy

The electric cars will primarily be recharged at night when excess wind power production is often available

Batteries are four times more effective as an energy provider compared to hydrogen

Even if all electricity were provided solely by coal-fired power plants, the CO2 emission per car would be only 50% that of a traditional car

If 20% of the Danish vehicle fleet were electric cars, a CO2 reduction of 1.1 million tonnes per year could be achieved.

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