Maintenance market for wind onshore and EnBW's strategy» 15th International Power Summit 21-23 February 2018, Budapest, Hungary Mathias Bauer Head of Maintenance Renewables EnBW Energie Baden-Württemberg AG Dirk Dollmann Chief Commercial Officer Connected Wind Services A/S
Agenda 1. EnBW - Energie Baden-Württemberg AG (Who, where, yesterday - today and beyond) 2. EnBW s perspective and strategy for the wind onshore market 3. Connected Wind Services - an independent service provider s view on the market development 4. Conclusio 2
Profile EnBW Energie Baden-Württemberg AG One of the largest energy supply companies in Germany Business segments: Sales, Grids, Renewable Energies, Generation and Trading Annual revenue in 2016: more than 19 billion euros Customers: around 5.5 million Employees: around 20,000 3
EnBW s 2020 Strategy with a clear focus: Energiewende. Safe. Hands on. Status in 2012 Target for 2020 Share of result 2020 Sales 0.2 billion +100% 0.4 billion 15% Grids 0.8 billion +25% 1.0 billion 40% Renewable Energies 0.2 billion +250% 0.7 billion 30% Generation and Trading 1.2 billion -80% 0.3 billion 15% Adjusted EBITDA 2.4 billion 2.4 billion Strong growth and investment approach in renewable energy, primarily wind onshore + offshore 4
Where we already are : Important generation locations of the EnBW Group Conventional & renewable Generation organized in one business unit Germany Baden-Württemberg Onshore wind farm Offshore wind farm Photovoltaic power plant Hydroelectric power plant Biomass power plant Conventional power plant Nuclear power plant 1 Long-term procurement agreements and partly owned power plants are included in own electricity production. 2 Partially or completely in the grid reserve (NetzResV). 3 At the project planning/ planning stage. 4 At the project development stage. 5 Currently being dismantled. 5
Strong Growth appetite of EnBW in renewables Wind Onshore growth @ EnBW Wind Offshore growth @ EnBW 3.500 3.500 3.000 3.000 2.500 2.500 2.000 2.000 1.500 1.500 1.000 in MW 2.000 1.000 in MW 1.845 500 1.000 500 945 0 256 2016 2020 2025 0 336 2016 2020 2025 minority and serviced portfolio own portfolio (majority) upside case own portfolio (majority) 6
Renewable Energy act in Germany: EEG (Erneuerbare Energien Gesetz), main elements EEG until end of 2016 EEG 2017: Year 2017 EEG 2017: Year 2018 Since 2000 promotion of renewable energy in Germany is governed by the EEG The fundamentals are unchanged, even after the latest reform in 2017: Renewables will preferably be feed in the grid Energy from renewable sources is funded at a given rate Grid connection is granted BImSchG as main element of erection license Licenses 2016 have to be built till end of 2018 all Wind turbines erected in a specific year get same feed-in tarif Feed-in-tarif is tendered, 2,8 GW, splitted in 4 rounds tender participants need BImSchG Citizen companies can apply without BImSchG Tender price results: Ø Round 1: 5,71 ct / kwh Ø Round 2: 4,28 ct / kwh Ø Round 3: 3,82 ct / kwh General logic will be the same as in 2017, only change in 2018: In first two rounds, all participants in the tender need BImSchG In round 3 + 4 citizen energy companies can also apply without BImSchG 7
EnBW Strategy & Goals Wind onshore Main strategic directions of impact 8
EnBW Strategy & Goals Wind onshore Main strategic directions of impact 9
Project Development Wind Onshore EnBW in 2016 within Top3 project developers in the onshore german market Five project development offices with strong regional involvement and presence lead to a continously growing pipeline: 3.012 3.236 in MW 1.912 1.987 2.184 Assessment/ negotiation In planning (sites secured) Erection phase In operation Projekt development offices 1.338 574 31.12.2014 990 35 31.07.2016 880 172 31.07.2017 10
EnBW Strategy & Goals Wind onshore Main strategic directions of impact 11
EnBW Strategy & Goals Wind onshore Operational Services and Partner models in brief Operational Services for EnBW-portfolio and third parties Operation, Service and Maintenance of WPs CMS and data analyses 24/7 remote surveillance and control Energy direct marketing Financial Investment Participation Citizen Electricity Windparks directly funded by private people A share or a WTG for our partners Fair, green energy for local people 12
EnBW Strategy & Goals Wind onshore Main strategic directions of impact 13
EnBW s maintenance strategy From full service to in house Large Utility O&M Strategy 22% 13% 64% 24% 38% 14% 17% 62% 45% In house ISP OEM Large Utility major component Replacement Strategy 34% 34% 47% 14% 14% 1% 1% 9% 51% 51% 43% 1% Market Capped Supply agreement Full wrap Source: Bloomberg New Energy Finance Wind EMEA Research Note 09/16 < 2016 Today > 2017 14
EnBW s maintenance strategy From full service to inhouse Reduce dependancy on outside knowledge & skills by creating inhouse knowledge & manpower Increased flexibility of service and maintenance schedules and concepts Increase Yield Optimised resource planning Increased WTG quality and availability Optimised WTG ability for direct marketing Reduction of maintenance cost Access free market for spares & services Smart Maintenance strategy (e.g. CMS implementation, RDS-PP based order processing and tracking, ) Support EnBW s onshore ramp up with flexible and self determined maintenance concepts Establishing a new business segment at EnBW 15
EnBW s in house maintenance strategy Status Quo, Goal and Vision Onshore MW ramp up Optimise cost Know-How and staff ramp up Make or Buy ; open market sourcing Self determined service & maintenance strategy Optimisation of direct marketing Spare part synergy Scale economy noticable at spares Materials management installed (stock and logistic) Synergy with EnBW s conventional sites (workshop, staff, stock, ) Service & maintenance Strategy on component MTTF 1) level Industrial scale service & maintenance Exchange and selective stock of large components Optimised sourcing strategy with suppliers (disposability, on site delivery, ) Market price driven service & maintenance Closed loop CIP 2) established Step 1 Step 2 Step 3 yesterday today ready for the next step Time 1) Mean time to failure 2) Continuous improvement process 16
Rationales for Acquisition of Connected Wind Services Opportunity Excellent opportunity to acquire an mid-size company specialised in the field of wind maintenance service Acquisition of CWS Market position CWS has a leading position in the market of independent service providers in Denmark & Sweden with good potential in the German market. Accelerated growth EnBW fastly deepens its supply chain in a strategic direction where organic growth would have resulted in a slower goal accomplishment. Cost optimization With regard to the expected pressure on maintenance cost arising from EEG 2017 regulations CWS opens options for optimizations. 17
Connected Wind Services (CWS) Company Profile About Service-Portfolio Key Figures - Founded in 1987 as DMP Mølleservice in Balle, Denmark - Acquisition of Windservice NF (D) & Hanstholmmøllen Vind (DK) in 2013, Triventus (S) in 2014 - CWS has more than 25 years of experience as an Independent Service Provider (ISP) for wind turbines (WTG) in Denmark, Sweden and Germany - About 1.570 WTG in total - ~1.050 WTG in Denmark, #1 ISP in Denmark - ~250 WTG in Sweden, #1 ISP in Sweden - ~270 WTG in Germany, #8 ISP in Germany - Refurbishment of WTG gears - About 190 employees - Main Locations and Offices in Balle, Denmark Rantrum Germany Falkenberg, Sweden 18
Connected Wind Services (CWS) Geographical footprint Denmark (Balle) 110+ employees and 14 service teams 1,050+ wind turbines under service The leading ISP in Denmark with 22% market share of all turbines in onshore operation and 60% of all turbines serviced by ISPs Germany (Rantrum) 45+ employees and 15+ service teams 270+ wind turbines under service Regarded as high quality provider in Germany Sweden (Falkenberg) 35+ employees and 12 service teams 250+ wind turbines under service The leading ISP in Sweden Business activities Service stations with local service teams in Germany, Sweden and Denmark Service projects executed across all European countries Spares and major components shipped in retail sales to all European countries and worldwide 19
Connected Wind Services (CWS) Main Business Areas SERVICE & MAINTENANCE All you need to keep your operations up and running full force SERVICE PROJECTS Take advantage of an experienced special project service organization and one of the largest inhouse refurbishment factories in Europe COMPONENTS & SPARE PARTS Benifit of a large stock of new, refurbished & discontinued components and spare parts to keep you running 20
Basic things to run a Wind Turbine Real Ownership and options Real ownership means The key for future successful Operations and Maintenance of Wind turbines is to get full ownership of the turbine, meaning full-documentation, full access to software, etc. If you as owner achieve this, you can choose by whom and how the Operations and Maintenance is done, if it s; your own company, the manufacturer or/and an Independent Service Provider Real ownership brings a lot of options Every owner has other demands to service his assets in the best way, that could be in a Full Service Contract Basic Service Contract Service Contract with Availability Warranty and without Main Components In-house Service with or without external Support etc. 21
Service under tough conditions How can we support you We work closely with you to make sure you get the most out of the full life cycle of your wind turbines. Our modular offerings mean we can offer you everything from performance upgrades and improvements and 24/7-surveillance to basic scheduled service of your wind turbines. everything from fast sourcing of a spare part to a fully fitted plug n play solution. We improve our understanding for customer requirements and needs in daily business with EnBW as our shareholder and ambitious customer. COMPONENTS & SPARE PARTS System and solution provider Supply of new, refurbished or discontinued main components and spare parts Specialist in gearbox refurbishment Strong supplier network Technical support SERVICE & MAINTENANCE Flexible service solutions and offerings Service contracts or subcontracting Surveillance 24/7 Technical administration Commercial administration SERVICE & MAINTENANCE Scheduled Service Unscheduled service SERVICE PROJECTS and corrective maintenance Preventive maintenance Predictive maintenance Main component repair or replacement Retrofits and upgrades Gear services and up tower repairs Turbine and component inspection Decommissioning and turbine refurbishment Re-installation and commissioning Specialist in gearbox replacements Blade inspection and repair Upgrades 22
Connected Wind Services (CWS) Contact Group Headquarter: Connected Wind Services A/S +45 5080 2045 info@connectedwind.com www.connectedwind.com Operational Entities: Connected Wind Services Danmark A/S +45 8623 0155 info.dk@connectedwind.com www.connectedwind.dk Connected Wind Services Refurbishment A/S +45 2260 4800 info.ref@connectedwind.com www.connectedwind.com Connected Wind Services Sverige AB +46 10 45 40 800 info.se@connectedwind.com www.connectedwind.se SERVICE & MAINTENANCE Scheduled Service Unscheduled service and corrective maintenance Connected Wind Preventive maintenance Services Predictive maintenance Deutschland GmbH +49 4848 901 28-0 info.de@connectedwind.com www.connectedwind.de 23
Conclusio 1. Latest changes in EEG are challenging for project development in the German wind onshore market and are a real market changer 2. A trend from full service contracts with OEM to in-house maintenance of WTG can be observed for large utilities 3. EnBW s straight forward approach for operation & maintenance is governed by digitalisation and automation aiming on an industrialised scale and low LCC 4. Connected Wind Services (CWS) as an Independent Service Provider can offer you all you need for your Wind Turbine with regard to Service & Maintenance Service Projects Components and Spare Parts 24
Headline Von Thank EnBW you Lorem Baltic1 for your und zu ipsum EnBW attention» Baltic2.» 42pt Powerpoint» 15th International Power Summit 21-23 February 2018, Budapest, Hungary Mathias Bauer Dirk Dollmann Head of Maintenance Renewables Chief Commercial Officer EnBW Energie Baden-Württemberg AG Connected Wind Services A/S Email: ma.bauer@enbw.com Dirk.Dollmann@connectedwind.com Phone: +49 7131 187 2215 +45 5080 2045