“We Accelerate Growth”

Top 10 Global Energy Trends

Presented byBeatrice Shepherd,

Director CEE, Russia & CIS

Moscow and Warsaw, January 2011

2© Frost & Sullivan 2010

2010 20202015Major Trend

1

2

3

4

5

6

7

8

9

10 Market Liberalisation

Most power generation markets fully liberalisedFocus on emerging markets retail liberalisation

Growing trans-regional power trading

Power Demand Growth

Big expansion of electric/hybrid vehicles

Global electrification reaches 80%

Non-OECD countries Surpass OECD

China becomes largest consumer

Shale gas boom in USANew Age of Natural Gas

CCGT favourite generation technology Growth in global pipeline networkMassive boost in LNG availability

SmarterGrids Smart meters take off in US and Europe

Expansion of virtual power plantsSmart meters reach most consumers in developed world

Clean Coal Commercialisa

tion Commercial CCS viability & large-scale dev-t

Ultrasupercritical technology becomes prevalentCarbon Capture and Storage pilot plants

Energy Storage Grid-scale energy storage takes off (pumped storage, CAES)

Improved battery technologies emerge (Li-ion, NiZn, Molten Salt)

Energy storage market reaches $50 billion

Nuclear resurgence Massive nuclear expansion in China

Nuclear renaissance in some European countries

56 reactors under construction globally 480+ reactors operational

Energy Efficiency Global coverage for energy-efficient lighting

Green buildings become norm in developed world Global penetration of micro-renewables and micro-CHP

Renewable grid parity

Solar and wind reach grid parity in EU and Japan Grid parity reached in majority of developed world

Renewables share in powergeneration: 25% - globally, 30% - EU

Demand Management

“Peak shaving” through energy efficiency,promotion of embedded generation

Smart meters optimise consumer usage patterns and flatten peak demand

Direct load control of smart appliances via remote man-t

Top 10 Global Energy Trends

3© Frost & Sullivan 2010

World Energy Consumption 2030

7.15 exajoule+44 %

Sou

rce:

EIA

, Int

erna

tiona

l Ene

rgy

Out

look

(200

9).

= 28% of global energy consumption

+ 25% energy consumption

Electric Vehicles Boom

• € 500 million• 5 million EV by 2030

• $2.2 billion• Mandatory CS by 2015

• $ 2.4 billion• 1 million HEV by 2015

25 GW per year up to 2020 are required

Power Demand Growth

Big expansion of electric/hybrid vehicles

Global electrification reaches 80%

Non-OECD countries Surpass OECD

China becomes largest consumer

4© Frost & Sullivan 2010

• Technology of choice for the years to come:

• Gas-fired generation – most established technology – safe bet.

• More efficient, cleaner and require less capital costs per MW than coal-fired power stations;

• Quicker to build than nuclear reactors.

Combined Cycle Gas Turbines (CCGT)LNG Boost and US Shale Gas Boom

Shale gas boom in USANew Age of Natural Gas

CCGT favourite generation technology Growth in global pipeline networkMassive boost in LNG availability

5© Frost & Sullivan 2010

Country / Region Clean Coal Technology Policy Initiatives

United States

• DoE “Clean Coal Technology Programme and Clean Coal Power Initiative”

• FutureGen Industrial Alliance, Inc.

Canada

• ecoENERGY Technology Initiative (2007)

• ban on new dirty coal plants after 2012

Australia

• COAL21 Action Plan

• Clean coal projects underway – CS Energy Callide Oxyfuel, ZeroGen

China

• All new coal-fired power plants to be of state-of-the-art commercially available technology (2008).

• World’s most efficient (supercritical and ultrasupercritical) coal-fired power plants to be built in China.

Europe

• EU target: to deploy up to 12 carbon capture and storage pilot plants by 2015.

• UK: no new coal plants without carbon capture and storage (2009).

Clean Coal Technology Roadmap

Clean Coal Commercialisation

Commercial CCS viability & large-scale dev-t Ultrasupercritical technology becomes prevalent

Carbon Capture and Storage pilot plants

6© Frost & Sullivan 2010

IAEA Pessimistic Frost & Sullivan IAEA Optimistic

372 GW

2008

473 GW

590GW

1990

320 GW 748 GW120 GW 140 GW 140 GW

Total Installed Capacity Decommissioned Added

+57 GW +358 GW+221 GW

5 GW

+516 GW

Forecast Scenario 2030

Nuclear resurgence Massive nuclear expansion in China

Nuclear renaissance in some European countries

56 reactors under construction globally 480+ reactors operational

7© Frost & Sullivan 2010

• EU: 20% renewable energy by 2020;

• US: 22 states with 10-20% renewable targets;

• China: 100 GW of renewable energy by 2020

• Cost reductions are underway

• Technology advancements

• New renewable capacities

Renewable Grid Parity – cost of producing electricity from fossil fuels is equal or cheaper to the cost of producing energy from renewable sources.

Renewable grid parity

Solar and wind reach grid parity in EU and Japan Grid parity reached in majority of developed world

Renewables share in powergeneration: 25% - globally, 30% - EU

8© Frost & Sullivan 2010

Manual meter reading: monthly reading of kWh

Automatic Meter Reading (AMR): one-way monthly kWh readings, theft/outage detection and restoration

Advanced Metering Infrastructure (AMI): on-demand reads, programmable load intervals, two-way metering communication, times of use (TOU), demand response, critical peak pricing (CPP), real-time pricing (RTP).

Smart Meters: solid state platform, integrated communications, remote connect and disconnect; voltage, current readings; power factor correction; detailed power outage data, advanced theft detection.

Smart Grid: residential and commercial energy man-t services; Home Area Network (HAN) gateways with power line communication or radio frequency; web-based applications – demand response, pre-payment, load control, revenue protection; distribution – load profiling, phase balancing, transformer optimization, energy forecasting, outage detection, restoration automation, work force and asset man-t.

Government regulation

and fundingReduction in power theft and fraud

Demand response strategies

Dwindling energy

resourcesIndication of

power outage and

fault location

Carbon footprint reduction

SmarterGrids Smart meters take off in US and Europe

Expansion of virtual power plantsSmart meters reach most consumers in developed world

Demand Management

“Peak shaving” through energy efficiency,promotion of embedded generation

Smart meters optimise consumer usage patterns and flatten peak demand

Direct load control of smart appliances via remote man-t

9© Frost & Sullivan 2010

1980 20001990

Evolution of Energy

Efficiency Technologies in Buildings

2010 2020

SystemsIntegration

BuildingManagement

& Control

BuildingAutomation

GreenBuildings

ITConvergenceFunctional

Controllers

HomeAutomation

Building Control

Building Automation

Smart Buildings

EnergyControl

Construction& Operational

Efficiency

Building Performance

IntegratedNetworking

EnergyManagement

EnhancedManagement

IntelligentBuildingsHVAC Control

IntelligentGreen

BuildingsSecurityConvergence

SmartCity

Low EnergyLighting

Micro-Renewables

Micro-Generation

SmartGrids

Energy Efficiency Global coverage for energy-efficient lighting

Green buildings become norm in developed world Global penetration of micro-renewables and micro-CHP

10© Frost & Sullivan 2010

Energy Storage Grid-scale energy storage takes off (pumped storage, CAES)

Improved battery technologies emerge (Li-ion, NiZn, Molten Salt)

Energy storage market reaches $50 billion

11© Frost & Sullivan 2010

Market Liberalisation

Most power generation markets fully liberalisedFocus on emerging markets retail liberalisation

Growing trans-regional power trading

Nordic Power Exchange world’s first multination electric

power trading platform

“truly integrated pan-European energy market” is pursued

Both countries are systematically working towards further

liberalisation of their energy markets

12© Frost & Sullivan 2010

Russian Energy Policy of the Future Amidst Global Trends

• Renewable opportunities, primarily in hydropower and wind

• Explore LNG potential as rival suppliers are increasingly active in key export markets (EU, Asia)

• Invest in clean coal technology

• Catch up in terms of smart meters deployment and expand smart grid development

• Russia has the potential to emerge as the world‘s largest nuclear power nation

• Tackle surging power demand;

• explore EV potential

• Improve energy efficiency of residential and industrial sectors;

• effective energy storage

• Continue with market liberalisation, eventually move towards trans-regional power trading

Russian Role to Play

13© Frost & Sullivan 2010

For additional information

Joanna LewandowskaCorporate CommunicationsICT Europe(0048) 22 390 41 46 joanna.lewandowska@frost.com