2012 Asia Pacific Energy & Power Outlook

2012 Asia Pacific Energy & Power Outlook Ravi K, Vice President - Energy & Power Services Practice, Asia Pacific

Top Predictions for 2012 in Asia Pacific Conventional Power Generation and T&D Infrastructure development will be the single1 largest source of revenue for the power equipment industry Renewable Energy Markets to witness a growth of 20 percent in terms of total investments,2 during 2012 Oil & Gas upstream capital expenditure to increase by 10 percent and refining capacity3 additions to double in 2012 Energy Management Market to see a growth rate of 13.7 percent in 2012, riding on4 government support; but still facing resistance from industries Global leading companies will continue to scout for smart grid technology acquisitions, but5 utilities will be slow to adopt in Asia Pacific6 Mobile Computing and Disaster Management to drive investments in Network Power Systems Durban Climate Change Talks – Expect no path breaking agreements, but incremental7 progress possible Traditional Energy Companies will be increasingly challenged by the unconventional8 competitors and startups, with focus on niche technologies and new business models 2

Major Drivers 2012 for Energy & Power in Asia Pacific Energy Security and Natural Fuel Diversitydisaster driven demand forautomation and backup power Focus on Smart Massive Energy by Increasing investment in Growth in Energy developed Asia affordability of power Demand Pacific green energy infrastructure by developing Asia Source: Frost & Sullivan. 3

Key Restraints Summary Energy & Power in Asia PacificKey Restraints in 2012 for Global economic Bilateral & Project cost uncertainties multi-lateral - escalation and could affect political & currency export driven trade issues fluctuation Impasse on Asia climate change treaty Slow pace of market liberalization Source: Frost & Sullivan. 4

Regional Hotspots of Opportunities in Asia Pacific • Solar PV • Smart Grids • Energy Efficiency • Network Power Supplies Coal, Solar, Nuclear, • Smart Grids Wind, Smart • Solar PV Grids, LNG • Wind Imports, Refineries • Energy Efficiency • Smart Grids • Solar Power • LNG Liquefaction • Deep water E&P • Solar PVCoal, Gas, Nucle • Coal & Gas to Power ar, Diesel, Wind, • Energy Efficiency Solar, LNG • Network Power SuppliesImports, Refineri es 5

Executive Summary—CEO’s Perspective on Solar China – not just a global manufacturing1 center for solar; fastest growing market in Asia especially on-grid solar PV Malaysia emerging as the favored destination in Southeast Asia for new2 PV manufacturing plants (e.g. Bosch & Panasonic) Thailand, a hotbed for solar PV market in Southeast Asia till 2011 is likely to3 remain weak in 2012 due to the flood crisis The recent passage of the „Carbon Tax‟4 in Australia will give a fillip to the solar PV market Implementation of a net FIT will help5 sustain Japan‟s position in the solar PV market Source: Frost & Sullivan analysis. 6

Solar PV Installed Capacity Forecast, 2012 Annual Installed Capacity, 2012 MARKET GROWTH (2012) 450 MW 2,600 MW 1,360 MW 500 MW 150 MW 7

Executive Summary—CEO’s Perspective on Wind The Asia Pacific will continue to be the fastest-growing wind market worldwide in1 2012 in terms of installed capacity, followed by North America and Europe China will continue be the biggest national2 annual market globally due to China‟s thirst for energy and promotion of renewables Japan‟s onshore market is expected to continue experiencing a slow down because3 of extreme weather, complicated authorization process and grid connectivity Australia will be better positioned for growth- provided that its government can restore4 profitable Renewable Energy Credit (REC) pricing levels for wind project in the near term The offshore wind power market will emerge5 in Asia Pacific from 2012, mainly driven by China Source: Frost & Sullivan analysis. 8

Market Forecasts 2012 for Wind Cumulative Installed Capacity, 2012 Annual Installed Capacity, 2012 6,876 60,512 100,870 105,949 North America Europe Asia Pacific ROW Capacity Growth (2012)15,000 MW 2,200 MW 9

Executive Summary—CEO’s Perspective on ConventionalPower Coal fired power plants will continue to lead in terms of capacity creation, but focus will1 be on ultra supercritical boilers and other backend pollution control technologies Countries will increase their focus on T&D2 planning because of ageing infrastructure and bottlenecks in bulk power evacuation Ongoing power shortages in several3 emerging markets will continue to drive the demand for diesel and small gas fired plants Asia Pacific region continues to be the largest market for LNG with China, India and4 Southeast Asia ramping up on regasification terminals While as much in demand, actual imports of coal for power into India and China could5 suffer due to policies by Indonesia & Australia making imports expensive Source: Frost & Sullivan analysis. 10

Key Highlights for Conventional Power Anticipated Growth Rate in Attractive Pricing Trends Investments 2012 Countries „Decline‟ for gas because of economies of scale. China, $130-140 “Increase” for coal India, Indonesia 4.0-5.0% Billion because of domestic Vietnam shortages in India & Mongolia China Market Drivers Market Restraints Segments to Watch Major Changes Expected Obtaining financial • Supercritical Technology shift to Fastest base load closure on time plants clean coal fired additions generation plant Easy availability of Environmental • CCS using ultra fuels concerns development supercritical Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis. 11

Executive Summary—CEO’s Perspective on Nuclear The Fukushima disaster is unlikely to have a long term impact on China‟s nuclear growth and has reinforced central 1 government concerns about the technology, ownership, and geographic spread of future Chinese nuclear capacity With stringent national regulations on maintenance, and local authorities‟ reluctance to approve restarts, there is a 2 concern that by April or May 2012 Japan may have very small nuclear output for the first time since 1966 South Korean enterprises are among those hoping to pick up overseas contracts at the expense of Japanese companies 3 because of relatively limited opposition to the country‟s domestic nuclear program and government support With only five reactors with 3,900 MW of capacity currently under construction and 4,385 MW in operation, achieving 4 India‟s massive proposed growth in capacity may be difficult because of financial, institutional, political and local issues The Vietnams nuclear program, which posited the construction of four 1,000 MW reactions, is unlikely to be 5 affected by Fukushima. This is witnessed by Vietnam‟s willingness to use Japanese technology and resources Source: Frost & Sullivan analysis. 12

Executive Summary—CEO’s Perspective on Smart Grids IPO results of global leaders such as Silver1 Spring Networks could define way forward for the smart grid industry Industry could see some major mergers as2 bigger players like CISCO, Schneider, Toshiba become more aggressive Strategic international partnerships would3 need to be forged to cater to diverse technology requirements Educating the customers the key to4 successful AMI implementation for utilities Choice between Wifi vs Zigbee as HAN5 communication standard Source: Frost & Sullivan analysis. 13

Key Highlights for Smart Grids Anticipated Growth Rate in Pricing Trends Attractive Countries Investments 2012 Price of China meters, energy storage and Australia US$ 10 Billion 60-70% Korea renewable energy are Thailand following a downward trend Market Drivers Market Restraints Segments to Watch Major Changes Expected Ambiguity over AMI Key pilot projects Investments in grid technology and HV Technologies in Korea and modernization business case Grid Automation Australia likely to near completionDecreasing Stable Increasing Note: All figures are rounded. The base year is 2010. Source: Frost & Sullivan analysis. 14

Regional Hotspots of Opportunities for Smart GridsState Grid Corporation ofChina would invest close toUS$10 Billion in multiple Testing the integratedSmart Grid technologies operation of US$200 million smart grid pilot in Korea would enter the final phase As part of its US$13 Billion funding over 15 years, Thailand would announce locations for smart grid pilots India expected to release the Smart Grid standards and accelerate nearly 10 pilot Smart meter roll out in Victoria would projects peak in 2012 as the deployment enters the penultimate year of the plan 15

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For Additional Information Donna Jeremiah Carrie Low Corporate Communications Corporate Communications Asia Pacific Asia Pacific +603 6204 5832 +603 6204 5910 djeremiah@frost.com carrie.low@frost.com Jessie Loh Ravi Krishnaswamy Corporate Communications Vice President Asia Pacific Energy & Power Systems +65 6890 0942 apacfrost@frost.com jessie.loh@frost.com 17

2012 Asia Pacific Energy & Power Outlook

by Frost & Sullivan on Dec 20, 2011

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