Renewable Energy: A Market Perspective from Industry Renewable Energy: A Market Perspective from Industry

February 16, 2011

Bob Rasmussen The Shaw Group

The Shaw Group is Fortune 314 Energy Company (Nuclear Power; Clean Coal; Natural Gas; Geothermal;Refineries; Biomass; LFG, PV, Fabrication; Environmental; Base Operating Support; D/B; and Consulting)

Outline

• Market

• Conundrums

• Observations/Experience

• Future

Market

• Market Potential -- $20B+ over next 10 Years

• Wide Range of Workloads/Contract Vehicles

– Consulting

– Renewables

– Infrastructure

• Federally Funded ~ 20 percent

• Developer/Utility Funded > 80 percent

Conundrums

• Major Needs o National Securityo Readiness o Mandates o Stretch Goals

• Urgency/Action Needed

• Significant Opportunities

• Limited $o Capital Budgetso Premium Payments

• Extended Project Timelines

• Short of Expectations

Observations

• DOD Energy Projects are Generally Complex

• Straight-Forward PV Install Project Using Federal Dollars Can Be Problematic

• EULs/PPAs/PPVs require extensive site-specific knowledge

• Obtaining internal management support for unique/one-off projects becoming increasingly difficult

• DOD Market Focus and Opportunities Shifting

• Limited Support for Utility Scale Renewable Energy Projects

• Net Zero, Distributed Power and PPAs for discrete projects are High Interest

• ESPCs, UESCs and PPAs will remain active

Future • Federal Energy Projects will Remain Major Market Focus for Shaw

with Adjustments: • More Focus on Expected Return for Business Development

Investment Dollars (Federal vs Commercial for BD $) • Less Support for Shaping Front End of Projects (e.g.,Measured

Responses to RFIs)• Continuing Pressure to Obtain Upfront Project Information • Longer Term Projects Will Require More Internal Work to Justify • Emphasis will be on “Real” Projects with Short Term Potential • Risk Analysis and Mitigation are Continuing Priorities

• The Major Challenge will be Balancing Energy Security, Energy Independence and Financing/Cost Effectiveness