INDICTA  18, rue Horace Vernet F 92136 ISSY les Mlx Cedex 33 (0)1 55 57 09 00  33 (0)1 55 57 08 42 contact@indicta

1. MARINE RENEWABLE ENERGIES Innovative and alternative sources of funding for ocean energy Antoine RABAIN EnergyDepartmentDirector Dublin, 11th June 2014 • INDICTA •  18, rue Horace Vernet • F 92136 ISSY les Mlx Cedex • 33 (0)1 55 57 09 00  33 (0)1 55 57 08 42 • contact@indicta.com

2. CONTENTS • INDICTA & scope of the intervention • Why do we need Marine Renewable Energy (MRE) ? • Key points in MRE & perspectives • Focus on 2 major economic issues • Some strategic & innovative levers to respond to these economic issues • Public finance • Crowdfunding • New mechanisms & breakthrough in economic models • ANNEX – A little more about INDICTA

3. INDICTA and MREA convergence of energy and maritime economies STRATEGY CONSULTING AND OPERATIONAL SUPPORT Over 6 years of analysis on issues of MRE development in France, Europe and worldwide … … & more globally on {energy ; climate} issues OPPORTUNITIES DEVELOPEMENTS OUR CUSTOMERS : • Industrials and major contractors • Small/medium companies & start-ups • Institutional players (clusters, public departments, regions, …) OPERATIONAL SUPPORT STUDIES STRATEGIES ECONOMICS & MARKETS TECHNOLOGIES POLITICS & REGULATION

4. From energy and climate issues ... to the potential response of MRE ENERGY – CLIMATE ISSUE : RE AS KEY SOLUTION… … CALLING FOR THE DEVELOPMENT OF NEW ENERGY SECTORS GHG Emissions (Gt CO2) Source: INDICTA 70 • HYDRAULIC • ONSHORE WIND • SOLAR PV MATURESECTORS RENEWABLE ENERGIES ‘+4 - 6°C’ « as usual » trajectory 60 ENERGY EFFICIENCY Strategic lever in Europe EMERGINGSECTORS 50 • MARINEENERGIES • GEOTHERMAL • NEW SOLAR(CSP,…) NUCLEAR CCS 40 Ambitioustrajectory ‘+2°C’ FOSSIL FUEL SWITCH (coal to gas) 30 2010 2020 2030 2040 2050 4

5. Some of key issues we’ve covered since 2007 in MRE’s markets Location of production facilities and industrialoptimisation master plans Geography of potentiels Key marketdrivers - Prospectives Sub-contracting & partnerships INDUSTRIALI-SATION Environmentalimpacts, evaluation of local socio-economicbenefits & co-activites Stakeholders& co-activites Job creationpotential Promotion & valorisation of skills PROJECTSACCEPTABILITY Visibility on LevelisedCost of Energy (LCoE) by mastering the marine environmentthroughout the projectlifecycle Engineering & design Construction & installation Operations & maintenance RISKSMANAGEMENT Innovative business models and support mechanisms for the emergence of commercial markets Public support(Feed-In-Tariffs, testing sites,…) Privatefinancing(Banks,…) Crowdfunding & radical innovations FINANCIALENGINEERING

6. CONTENTS • INDICTA & scope of the intervention • Why do we need Marine Renewable Energy (MRE) ? • Key points in MRE & perspectives • Focus on 2 major economic issues • Some strategic & innovative levers to respond to these economic issues • Public finance • Crowdfunding • New mechanisms & breakthrough in economic models • ANNEX – A little more about INDICTA

7. A multitude of MRE segments witha large scope of energy applications FIELD OF APPLICATION ELECTRICITY FRESH WATER HEATING / COOLING Maturity • LARGE TIDAL RANGE Technologicalproximity + • SMALL TIDAL RANGE Source: INDICTA • 7 PREDOMINANT MRE SEGMENTS • FIXED WIND KINETICENERGY LARGE MARINE TIDAL STREAM Technologicalproximity 5 strategic segments SMALL MARINE, FLUVIAL & ESTUARIAN TIDAL STREAM • 3 ALTERNATIVE MRE SEGMENTS • FLOATING WIND Technologicalproximity • WAVE POWER - THERMALENERGY • SEAWATER HEATING • OCEAN THERMAL ENERGY CONVERSION CHEMICALENERGY • SWAC: Sea Water Air Conditioning • Heatpump • OSMOTIC PRESSURE Legend • Large scaleenergy production • Small scaleenergy production

8. INDICTA’s voluntarist scenario for the 5 strategic MRE segments A major contribution potential to address the {energy ; climate} equation ≈ 15 – 20% of global electricity mix by 2050 Worldwide technical potential : ≈ 20’000 TWh Equivalent to our world actual electricity consumption ! Source: INDICTA  Ambitious yet accessible perspectives

9. First economic issue: securing the huge financial needsSeveral dozen of G€ to achieve CAPEX before 2020 in Europe only • Around 15 private banks finance ≈80% of project’s CAPEX • Tickets between 100 & 200 M€ 2020 perspectives: • 1G€ / bank / year • From 5 to 10 tickets / year 2030 perspectives: • 2G€ / bank / year • From 10 to 20 tickets / year Worldwide prospective Source: INDICTA Annual investments (CAPEX in G€) Installed MRE capacity (in GW) ≈ 100 Fixed offshore wind Other emerging MRE including floating wind ≈ 50

10. An other key issue: reinforcing economic competitiveness & social acceptabiltyFrom 170 to 350 €/MWh today, towards a target cost range between 100 to 120 €/MWh around 2030 (except OTEC) • CRITICAL NEEDS IN: • Planification • Visibilityon local industrialload • Economies of scaleand export potential • New marine operations • Service models • Industriallogistics & ports • Public support • R&D & technological innovation • Smart grids, energystorage,… • Financial engineering & innovations • Project risks management • New economicmodels(public finance, crowdfunding,...) & breakthrough innovations withothermarkets (electricmobility,…) Source: INDICTA

11. CONTENTS • INDICTA & scope of the intervention • Why do we need Marine Renewable Energy (MRE) ? • Key points in MRE & perspectives • Focus on 2 major economic issues • Some strategic & innovative levers to respond to these economic issues • Public finance • Crowdfunding • New mechanisms & breakthrough in economic models • ANNEX – A little more about INDICTA

12. Public finance & Internal Rate of Return (IRR)An immediate and effective lever to drop LCOE Impact of several levers on LCOE LCOE (€/MWh) -4pts -6pts -2pts IRR ≈10% IRR ≈8% +25% Produc- ible IRR ≈6% -30% CAPEX -60% OPEX ≈ ≈ ≈ Mean IRR ≈12% -7% -14% -21% LCOE drop Source: INDICTA Based on tidal stream segment IRR decrease The use of public banks for CAPEX funding could help decrease rapidly and significantly usual IRR rate

13. Crowdfunding & new models A wide range of innovations throughout the value chain to improve social acceptability & economic attractiveness of MRE Two major types of mechanisms upstream downstream Infrastructure’sinvestment (CAPEX) Cost of Energy (LCOE) GREEN ENERGY PROVIDERS CROWDFUNDING BREAKTROUGH IN ECONOMIC MODELS Ex : Sustainablemobility

14. Crowdfunding, a multi-benefit tool A new source of project funding(vs. funds availability issues) CROWDFUNDING A social acceptability improver(vs. NIMBY syndrome) An interesting source of income for people (vs. “traditional” investments) Sources of payback and income Starting point Intermediate a) Local Cooperatives DIRECT CROWDFUNDING • Several thousands of people • Investing hundreds to thousands of € each • Able to collect up to • tens of M€ Direct financial income « free » kWh b) Investment platforms INDIRECT CROWDFUNDING Tax rebate

15. Crowdfunding, a big potential tool for financing MRE’s CAPEX • Almost half of Germany’s RE capacity currently owned by citizens and farmers (≈33,5GW) French savingsin 2012 Annual crowdfunding in 2012 New savings World 2bn€ 50bn€ • 10 times the annual RE CAPEX in France (2012) 4’000bn€ Europe 735M€ Total savings France 27M€ Source : Massolution Source : Observatoire des marché de l’épargne et du crédit Objective : find the good balance between local/national scope mechanisms to satisfy levels of CAPEX of projects Main crowdfunding countries : a European lead

16. Innovations on downstream mechanisms upstream downstream Infrastructure’sinvestment (CAPEX) Cost of Energy (LCOE) GREEN ENERGY PROVIDERS CROWDFUNDING BREAKTROUGH IN ECONOMIC MODELS Ex : Sustainablemobility Two more major types of downstream mechanisms

17. Green energy providers, from virtual to effective mechanisms GREEN ENERGY PROVIDER A consumers involvement and then a better awareness of costs of energy Starting point Intermediate • People : • concerned about energy and climate issues • willing to pay more to consume 100% guaranteed renewable energy a) NATIONAL cooperatives b) LOCAL cooperatives adequacy supply / demand Subscribers electricity consumption Renewable energy production electric grid Not owned grid Locally owned grid NATIONAL cooperatives ANNUAL adjustment VIRTUAL mechanism LOCAL cooperatives REAL TIME adjustment EFFECTIVE mechanism Evolution Plugged into national grid Directly plugged into RE production sources Storage

18. Innovations on downstream mechanisms upstream downstream Infrastructure’sinvestment (CAPEX) Cost of Energy (LCOE) GREEN ENERGY PROVIDERS CROWDFUNDING BREAKTROUGH IN ECONOMIC MODELS Ex : Sustainablemobility Two more major types of downstream mechanisms

19. Sustainable mobility, a breakthrough model SUSTAINABLE MOBILITY ≈10€/100km • Innovative offers, still competitive with conventional car, where « green drivers » can pay more to fuel their electric cars in order to develop and invest in : • RE energycapacity • Electric cars industry ! min. -30% -50% vs. oil fuel x2 Coupling local developments ≈2,5€/100km Conventional car Electric car OPEX ONLY Coupling the development for RE energy and electric cars could support the financing challenge of MRE and maximize the lever on social acceptability

20. CONCLUSIONGreen ecosystem: towards a virtuous circle ? Green ecosystem RE production crowdfunding (direct and/or indirect) green energy providers RE funding “Green consumers” Electric cars • electric cars and more generally innovative offers • with local socioeconomic benefits • & economic attractiveness built locally paying more their electric fuel Creation of a green ecosystem involving green consumers funding RE by: • investing in RE production capacity with crowdfunding (direct and/or indirect mechanisms) • green energy providers

21. Thank you for your attention Antoine RABAIN EnergyDepartmentDirector INDICTA antoine.rabain@indicta.com 18, rue Horace Vernet 92136 Issy-Les-Moulineaux Cedex tél: +33 (0)1-55-57-19-52 http://www.indicta.com Alexis GOUVERNNEC (1936 – 2007) Brittany - FRANCE “A chaque fois que nous nous sommes tournés vers l’océan, notre région a connu de longues périodes de prospérité.” “Every time we turned towards the ocean, our region has experienced long periods of prosperity.”

22. CONTENTS • INDICTA & scope of the intervention • Why do we need Marine Renewable Energy (MRE) ? • Key points in MRE & perspectives • Focus on 2 major economic issues • Some strategic & innovative levers to respond to these economic issues • Public finance • Crowdfunding • New mechanisms & breakthrough in economic models • ANNEX – A little more about INDICTA

23. AN INDEPENDANT STRATEGIC CONSULTANCY AT THE CONVERGENCE OF 3 ISSUES: { ECONOMICS ; TECHNOLOGIES ; POLITICS } POSITIONING • Consulting firmspecialised in economicstudies, strategic consulting & business development • Specialised in transforming commercial markets and emergingmarkets, spécialisée dans les filières structurées en transformation et les marchés émergents withhightechnological and innovation dimensions • In complex and internationalenvironments OPPORTUNITES DEVELOPMENTS BUSINESSDEVELOPMENT STRATEGIES STUDIES • ROLE • Support strategicgrowth& opportunitydetection, implement • developmentstrategies & projetcs • Understand & anticipate the issue in the business environment • Define & document strategies to establishroadmaps • Support the implementation of operationalprojects and business development actions MARKETS TECHNOLOGIES POLITICS & REGULATIONS

24. A RECOGNISED EXPERIENCE ON 3 CLOSELY RELATED SECTORS: ENERGY ; RESOURCES ; CLEANTECHS SECTOR FIELDS OF EXPERTISE • RENEWABLE ENERGIES • MARINE ENERGIES • CONVENTIONAL ENERGIES • ENERGY INFRASTRUCTURES ENERGY • MARITIME ECONOMY & INNOVATIONS • FOSSIL RESOURCES(INC. DEEPSHORE INNOVATIONS) • MINING RESOURCES(WATER, ONSHORE & SEABED MINING) RESOURCES • CLIMATE ECONOMICS • CARBON ISSUES & CCS • NEW BUSINESS MODELS • INNOVATIVE PROPULSION CLEANTECHS

25. OUR CONSULTING SERVICES 3 OFFER LEVELS DEPENDING ON THE SITUATION OF YOUR NEEDS

26. THE WORLD MARITIME ECONOMY GROWTH AND THE MRE AT THE HEART OF OUR EXPERTISE • Emerging MRE marketswithhighgrowthpotential • MRE markets at the crossroads of marine issues: • Interactionswith marine transport and logisticsactivities, offshore services, scientificresearch, oceanography,… • Synergies and mutualisations are possible with aquaculture, algae culture, desalinisation,…

27. ENABLING STRATEGIC DECISION-MAKING AND SUPPORTING BUSINESS DEVELOPMENT FOR LARGE CORPORATIONS, SME’s, START-UPS & INSTITUTIONAL ACTORS IN MRE MARKETS • More than 250 MRE technologies analyzed at their various stages of maturity, covering all MRE segments • Evaluation of MRE’s contribution potential to the future world energy mix • Market forecasts to 2020 - 2030 - 2050 : key market drivers and growth dynamics • Levelised Cost of Energy (LCoE) modellingfor each technology segment (€/MWh) • Market penetration and growth strategies (Business Plans, roadmaps, acquisitions,…) • Socio-economic impacts of projects : job creation potential in France and Europe,… • Structuring of integrated industrial sectors with strong export potential

28. BACK UP

29. World potential for the 5 strategic MRE segmentsA major contribution potential to adress the {energy ; climate} equation Worldwide technical potential : ≈ 20’000 TWh Equivalent to our world actual electricity consumption ! Source: INDICTA

30. Key example on direct crowdfunding Middelgrunden project (mid 90’s) - Denmark DIRECT CROWD- FUNDING Offshore wind farm 40MW (20 x 2MW) Total CAPEX : 48M€ Ownership : 50% Dong Energy 50% Local cooperative Local investment : 24M€ by 8’500 local peoples • Share price≈570€ • Average investment • per head ≈2’800€ ! Local single project Total ROI ≈3,5%/y (on 20 years) Close to “traditional” investment, like life insurance Favorable to MRE due to specific & large acceptability issues Unfavorable to certain MRE due to higher CAPEX (>2G€ with share price > 100M€)

31. Key example on indirect crowdfunding Lumo platform - France INDIRECT CROWDFUNDING Renewable energy projects (onshore wind, solar PV, hydropower, MRE, …) Investment from 25€ to 5’000€ per head Up to 20% of total project CAPEX National multi projects Close to “traditional” investment, like life insurance Total ROI ≈3 to 5%/y (on 12 to 18 years) Favorable to MRE with higher CAPEX Less lever on MRE acceptability issues