Challenges facing the Renewable Energies Business Group

Strong growth prospects

Offshore wind energy

At the end of 2008, offshore wind energy in Europe represented almost 1.5 gigawatts (GW) and numerous offshore wind farms were launched, representing an additional 37 GW of power.  By 2015, the annual growth should have reached 3 to 5 GW.

• In Germany, statutory conditions promote the development of offshore wind farms. Almost 32 projects have been authorized, representing 10 GW of power.
• The United Kingdom also has a very promising market, with 8 GW expected by the end of 2014.

Within this growing emergent industry, AREVA hopes to:

• Hold a 25% market share within Europe in 2012,
• Penetrate the North American and Asian markets (and China in particular). The group already has a presence in these regions to support the development of offshore wind farm,
• fit on the French market and to participate in the tender provided by the Government in 2011 which represents the construction and installation of 1,200 wind turbines.

AREVA is the only industrial operator to have a high power M5000 wind turbine (5 MW) specially designed for offshore usage. Nearly 250 AREVA M5000 turbines have been chosen to equip European offshore wind farms. Additionally, the group acquired a German manufacturer of rotor blades in late 2009 - a crucial part of the industrial value chain.

Bioenergy

According to the AIE's "Scenarios & Strategies to 2050" study, the share of electricity production from biomass is set to change from 1.3% in 2003 to between 2 and 5% by 2050. The power of installed biomass energy is almost 62 GW and is set to increase by 6 to 9% over the next five years. The main areas of growth are centered within emergent countries with strong potential such as India, China and Brazil. The United States also shows good potential.

AREVA is the world's leading supplier of turnkey bioenergy solutions, with over a hundred power plants, meaning almost 2900 MW installed capacity. The group hopes to hold 5% of the global market in 2012.

• In Brazil, AREVA holds 40% of the biomass market, representing 600 million tons of sugar cane. Production should double, despite the constraints imposed by the government on cane cultivation, within the scope of new environmental laws. Almost 80% of biomass power plants from bagasse have been modernized in order to increase their yield. Other resources will also contribute to this growth such as wood and household waste. The total production capacity reaches almost 70 GW. 
• AREVA has been present in India since 2003 with the construction of several biomass power plants with a capacity of between 6 and 10MW inclusive under its belt. In July 2009, the group concluded a strategic partnership with Astonfield Renewable Resources for the construction of around a dozen biomass power plants with a cumulative production capacity of 100MW.
  India is also an access platform for countries with high potential in Southern Asia. AREVA's Indian subsidiary is primarily active in Thailand where two projects are currently under construction in Roi-Et and Suwannaphum and will enable exploitation of the energy-giving properties of the rice husks produced by the operation of rice mills.
• In the United States, most biomass business uses wood as a fuel, representing 60,000 MW of the installed production capacity. According to forecasts made buy the International Energy Agency (IEA) and other experts, this capacity could be doubled within the next ten years.
  In 2008, AREVA started working with the American electricity company, Duke Energy, to create a joint-venture, ADAGE®, dedicated to the development of a standardized set of biomass power plants, mainly producing electricity from wood waste. The RPS schematic applied by over half the States also represents a real opportunity to develop this business.

Finally, AREVA is one of the few players in the sector to support its clients in obtaining, and then reselling, carbon credits as a result of their biomass power plant projects.

Solar power

Among the various existing technologies, AREVA has chosen to position itself within concentrated solar power (CSP) with a focus on two technologies: concentrated thermal solar power and concentrated photovoltaic solar power (CPV). These two technologies present significant synergies with the group's own nuclear expertise. The CSP represents a large portion of the development of renewable energies the world over with an average annual growth of 18%:

• 400MW of equipment for thermodynamic solar power was installed in 2007
• More than 1000 additional MW in 2009
• 9000 MW are anticipated in 2012

Hydrogen power and energy storage

The use of hydrogen as an energy vector combined with a fuel cell holds great potential given the benefits it provides:

• High yield,
• Sustainable storage capacity,
• Respect for the environment.

AREVA's strategy is to industrialize, through its subsidiary Hélion, the production of stationary electric generators and to develop embedded technologies meeting specific requirements, in particular for transportation.

The environment, a major challenge

The Renewable Energies Business Group illustrates AREVA's very mission: to enable the largest possible number of people to have access to energy that is cleaner, safer and more economical.

Renewable energy benefits from the process set in motion by Kyoto which favors this solution to mitigate the effects of greenhouse gases. Moreover they are increasingly competitive due to the rising prices of fossil fuel energies.

In Europe the Council defined clear objectives such as "3 times 20":

• 20% renewable energy in the final power consumption
• 20% energy efficiency gains
• 20% reduction in greenhouse gases

This trend is also present in other geographical regions with an increase in political initiatives in both North America and in emerging countries such as China, India and Brazil.