An Overview of the U.S. Wind Energy Industry

1. An Overview of theU.S. Wind Energy Industry Presented byEdward ZaelkePresident, American Wind Energy AssociationPartner, Chadbourne & Parke LLP, Los Angeles, CaliforniaELFA Financial Institutions ConferenceDallas, TexasApril 16, 2007

2. The Current State of theU.S. Wind Energy Industry 22% Growth Rate over the past 5 years27% Growth Rate in 2006 30 to 35% Growth expected in 200711,603 MW installed capacity at the end of 2006 (compared to approximately 970,000 MW of overall installed capacity of U.S. electricity generation)Wind = 2nd leading source of new generation

3. Wind Energy Growth • What is causing this recent growth in the U.S. wind energy industry? • Can the growth in the U.S. wind energy industry continue?

4. U.S. Wind Energy Installed Capacity 1980-2007 (est.)

5. Three Primary Factors are Fueling the Recent Growth of Wind Energy in the United States • Cost Competitiveness Created by Technological Advances • Government Financial Support • State Renewable Portfolio Standards

6. The Cost of Wind Energy Production(Cents per Kwh)

7. The Cost of Wind Energy vs. Other Technologies Source: Simmons & Company International

8. Government Financial Support for Wind Energy In the United States, 63.4% of the average capital costs of a wind energy project is “paid” by the federal government. Another 10% is “paid” by state and local governments.

9. State Renewable Portfolio Standards now Exist in 21 States and the District of Columbia • Current and Proposed RPS requirements would see approximately 43,000 - 55,000 MW installed by 2020 • Additional renewable energy “goals” established in IL, IA, VT, and ME

10. U.S. Wind Energy – Can the Growth Continue? Consider the following drivers: • Environmental Concerns • Fuel Diversity • Energy Security • Increasing Electricity Demand • Resource Availability

11. 1. Environmental Concerns Over 40% of the Greenhouse-causing CO2 emissions come from our production of electricity. U.S. CO2 Emissions Source: U.S. Environmental Protection Agency

12. 2. Fuel Diversity How does the U.S. Currently Generate its Electricity? Total = 4,055 Billion KWhElectric Utility Plants = 63.0%Independent PowerProducers & CombinedHeat and Power Plants = 37.0% Source: Energy Information Administration, Form EIA-860, “Annual Electric Generator Report.”

13. 3. Energy Security Issues How will the U.S. meet its future natural gas needs? Source: Wall Street Journal The countries listed above hold 73% of the global reserves of natural gas.

14. 4. Increasing Electricity Demand Electricity Demand is Expected to Increase by 19% Over the Next Decade Source: North American Electric Reliability Council, 2006 Long-Term Reliability Assessment, October 2006

15. Regional Wind Resource (GW) First bar is Onshore, second offshore

16. National Supply Curve, 20% Available Transmission Wind costs are with PTC and do not include integration costs

17. Policy Matters! Consider the Current Political Climate • New Congress • Global Warming Concerns • International Pressures • Continuing National Security Issues • Creation of Domestic Jobs

18. Conclusion: The Growth Outlook for Wind Energy • In a stable policy environment 200,000 to 350,000 MW of new wind energy capacity in the U.S. is possible. • 45,000 to 75,000 MW of new capacity over the next 8 to 10 years is likely if public support continues. • What will be required? • Renewal of Federal Production Tax Credit • Federal Renewable Portfolio Standard • Transmission Investment • Continuing Cost Competitiveness (which may include the impact of a carbon tax)

19. Contact Information Edward W. ZaelkePartnerChadbourne & Parke LLP350 S. Grand Avenue, 33rd FloorLos Angeles, California 90071Phone: (213) 892-2012email: ezaelke@chadbourne.com