Wartsilä Corporate PowerPoint

WÄRTSILÄNorthwest Power and Conservation CouncilFebruary 27, 2014

Wärtsilä in shortBusiness AreasPOWERPLANTS SHIPPOWERSERVICESFounded in 1834Headquarters in Helsinki FinlandNet Sales 4.7 billion (2012)Presence in 170 locations in 70 countriesNet Sales by BusinessService40%Ship Power28%Power Plants32%2 Wärtsilä 25 February 2014What we bring to the marketEfficiency EnvironmentalSolutionsFuelFlexibilityWe have 2 plants, Trieste(IT) & Vaasa (FI)Over 4300 MW production capacity3,98% of Net Sales R&D Budget (2012)Personnel 18,887Net Sales by Market AreaAmericas21%Other11%Europe25%Asia43%

Wärtsilä Power Plants Worldwide *EuropeOutput: 12,093 MWPlants: 1792Engines: 3360USA 2,300 MWTotal Output:52,943 MWPlants: 4,675Engines: 10,520Countries: 169AsiaOutput: 18,651 MWPlants: 1643Engines: 3625AmericasOutput: 10,660 MWPlants: 389Engines: 1317Flexible baseloadGrid stability & peakingIndustrial self-generationOil & gas3 WärtsiläAfrica & Middle EastOutput: 11,539 MWPlants: 851Engines: 2718* Includes plants on order and in construction

Wärtsilä Lifecycle support around the worldà 70 countries à 160 locations à 11,000 people à 7,500 field service forcesWe are the only player in the market able to offer our clients 24/7 support, globally,in the fields of logistics, technical support and field service from a single source.4 Wärtsilä

About Wärtsilä in North AmericaWärtsilä USA since 1979.Currently 650 employeesin North AmericaFINLANDITALYHelsinki, Wärtsilä HQHouston, USA HQMain FactoriesUS Service Offices5 Wärtsilä

Wärtsilä Gas Engines» 20V34SG*- 9.3 MW / unit45% efficiency» 18V50SG*- 18.8 MW / unit46% efficiency» Combined Cycle (Flexicycle )50.4% efficiency» Arranged in parallelto configure anysize plant in the 10 to 500 MW size range» Required project MW capacitymet by multi-unit solution* Similar Engines in DF configuration on gas/liquid fuel Wärtsilä

Wärtsilä Gas EnginesOutputHeat SG9,341 kWe18,759 kWe7,461 Btu/kWh 7,375 Btu/kWh8,271 Btu/kWh 8,176 Btu/kWh720 rpm514 rpm42’ x 11’ x 15’143 US tons63’ x 18’ x 21’391 US tons* At generator terminals (pf 0.8, 0% tolerance)7 Wärtsilä

Wärtsilä Duel Fuel Engines20V34DF18V50DF9,341 kWe17,076 kWe7,525 Btu/kWh8,341 Btu/kWh7,460 Btu/kWh8,271 Btu/kWhSpeed720 rpm514 rpmStart Time(min)2 / 5 / 107 / 10OutputHeat Rate*(LHV)(HHV)* At generator terminals (pf 0.8, 0% tolerance) when operatingon natural gas with 1% liquid pilot fuel Wärtsilä8 Wärtsilä

Best simple cycle efficiencyWe offer the best simple cycle efficiencyavailable in the market at 46%. Typical net plantheat rate of 8400 Btu/kWh HHV at 95 FOur power plants achieve high efficiencyin a wide range of ambient conditions9 Wärtsilä

Loading sequences for power plantsLoad %Load %2 minutes to full load!100100909080807070Additionalpower fromWärtsilä oal Fired power plantAeroderivative GT power plant (GTSC)Combined Cycle power plant (GTCC)Combustion Engine power plant (W34SG)Industrial GT power plant (GTSC)1020 WärtsiläNote: Start up times from warm stand-by!55 mins

Unloading sequences for power plantsLoad %Load 5Combined Cycle power plant (GTCC)Industrial GT power plant (GTSC)Combustion Engine power plant11 Wärtsilä202530354045 mins

Loading and unloading of a W34SG plantLoad %Load %Min. up-time: 0 min100100909080802 min tofull load701 min fullunloading7060605040Non-spinning reservesSpinning reserves Available in 30 sec & full output in 2 min No fuel consumption & no emissions No wear Ramp rate 100 % / min Frequency balancing40303020200,5 min tosynchronisation10001210Min. down-time: 5 min3/01Cycle #1234Min. load per genset: 30 % (*)56Cycle #2Wärtsilä 34 gas power plant(*) A power plant with e.g. 10 gensets can correspondlingly operate at 3 % of its total nominal output.Note: Start-up times from hot stand-by!1250 Wärtsilä78mins0

Cycling of a W34SG plantLoad %Load %10010090Fast Ramp Rate801 min from 30 %load to full load90807070606050504040No maintenance impactfrom frequent cycling302030201010001234Wärtsilä 34 gas power plantNote: Start-up times from hot stand-by!13 Wärtsilä567891011 mins

Quick Start·Start up and loading of a Gas Engine power plant compared to a GTCC120%Gas Engine100%Load [%]80%Gas Turbine Combined Cycle60%Case Study*40%STEC PearsallSTEC Sam RayburnERCOT Market at 3,000/MWhERCOT Market at 100/MWhERCOT Market at 30/MWh20%24 x W20V34SG Simple Cycle3 x 1 GE LM6000 Combined Cycle 895,000 per start 30,000 per start 10,000 per start* John Packard, STEC, PowerGen 2011 Presentation0%020406080100MinutesGE power14 WärtsiläGT power120140160180

Combustion Engines, Multiple unit efficiencyRelative part load efficiency per technology100%98%Relative efficiency95%93%90%88%Gas EnginesSPG85%Gas Turbine OCGT-HD83%CCGT-HDGas Turbine CCGT80%78%75%50%60%70%80%Relative output Wärtsilä90%100%

No start penalties & No start-up costsUnlimited starts & stops with no impact oncost or maintenance schedule.This is unique, no competing technology offers the same.Dispatcher’s dream plantPlains End 227 MWColorado16 Wärtsilä

Emissions» Nox - Nitrogen oxides: 5 ppm (0.064 g/kWh) (as NO2)(dry, at 15 vol-% O2) - with SCR» CO - Carbon monoxide: 15 ppm (0.12 g/kWh)(dry, at 15 vol-% O2) - with CO catalyst» VOC 25 ppm (0.12 g/kWh)(dry, at 15 vol-% O2)» Particulates (total) (0.12 g/kWh)(at 15 vol-% O2)17 Wärtsilä

Noise levels18 WärtsiläEngine noise at 1 meter: 115 dBAPower House interior: 110 dBAOutside: typical design is 65 dBA @ 600 ftbut can meet local requirements

Minimum water useWärtsilä’ solutions minimize not only fuel butalso water consumption thereby providingmajor environmental benefits.Our powerplants use a closed loop cooling system thatrequires minimum waterSimple Cycle water consumption 1 gal/engine/weekCombined Cycle water consumption is 1/3 of GTCC Plant1919 Wärtsilä

Low pressure gasWärtsilä power plants use lowpressure natural gas (75 psig).No need for aux. gas compressoror high pressure gas line20 Wärtsilä

ModularityOur modular design allowsfor easy capacity additionsand makes it simple for ourcustomers to construct anoptimally sized plant21 Wärtsilä

Busting a myth: the power density disadvantage200 m90 m100 m90 m2x CCGTOutput: 360MWArea req.: 20,000m2Power density:18 kW/m28x 18MW Gas EngineOutput: 155MWArea req.:8,100m2Power density: 19kW/m2Comparison Wärtsilä

Availability and reliability22x18V50SGMWFirm capacityDaysCCGT (2-2-1)MWFirm capacityDaysComparison Wärtsilä

Light industrial look to the plantWärtsilä design makes the projectlook like a commercial building.No visible smoke, fumes or steamrelease24 Wärtsilä

Levelized Cost, Capex OpexKEMA study (CAISO) & Redpoint (UK) studies .1) Adding SPG reduces OPEX, total operational cost of fleet2) But we have not addressed CAPEXTo take CAPEX into account (along with OPEX), we can look at levelized cost1)2)3)4)For simple cycle, look at capacity factors 10% to 20%For others (GTCC, Flexicycle) look at capacity factor of 30% & 40%Assume plant running 80% loadDaily starts/stops, across 5 day / week (hours per day adjusted to achieve cf).25 Wärtsilä Wärtsilä

Wärtsilä 200 MW vs. Industrial GT (10% cf)200 MW Wärtsilä simplecycle200 MW Industrial GT26 Wärtsilä Wärtsilä

Wärtsilä vs. Industrial GT (200 MW)10% CFTotal Production Cost80 MUSDSavings20% CFBusbar Cost134 MUSDSavings27 Wärtsilä Wärtsilä

Wärtsilä vs. Aero GT (200 MW)10% CFBusbar Cost63 MUSDSavings85 MUSDSavings20% CF28Total Production Cost Wärtsilä Wärtsilä

Wärtsilä Flexicycle vs. GTCC 1x1 (300 MW)30% CFTotal Production Cost142 MUSDSavings40% CFBusbar Cost127 MUSDSavings29 Wärtsilä Wärtsilä

System benefits of Smart Power GenerationNEED FOR SYSTEMFLEXIBILITYSMART POWERGENERATION CAN1.Unplannedoutages of powerplants or/andtransmission lines Provide spincapacity forregulation,spinning reserve,load following2.Electricitydemand (load)deviating from theforecast3.Intermittentrenewablegeneration outputdeviating fromforecast Provide MW togrid in 1 minute orless Produce energy &AS at highefficiency over awide load rangeSmartPowerGeneration WärtsiläSYSTEM BENEFITSOF SMART POWERGENERATIONVALUE OF SMARTPOWERGENERATION Reduce costlycycling/starts forhigh efficiencythermal plants Reduced use offuels Enable highefficiency thermalplants to full loadinstead of partload Reduced systemoperating costs Enable stoppingpart loaded lowefficiency steampower plants (thatare providingreserves) Lower cost ofelectricity toconsumersSmartPowerSystem Reduced CO2emissions Lower wholesaleprice of electricity

REDUCTION OF CYCLING ON THE GTCC Recip units can cycle on and off asneeded w/o start/stop penalty High efficiency from part loadthrough full load Take over AS provision (LoadFollowing, Reg Up) and ramping Reduce Cycling on the GTCCs anddon’t exercise the stress curve onthe GTs and HRSGs as much thusreducing maintenance cost andmaintaining life of the GTCCs31 Wärtsilä

Recent Wärtsilä US Flexible PowerØØØØØØØØ32 Wärtsilä34SGPlains End I / II, Colorado, 227 MWBarrick, Nevada, 116 MWMidwest Energy, Kansas, 76 MWSTEC Texas 203 MWGreenville, Texas, 25 MWModesto, California, 50 MWGolden Spread Texas 170 MWLea County Coop 43 MW

Wärtsilä Smart Power Generation - Texas34SG3 x 20V34SG25 MW – GEUS – Greenville, TX18 x 20V34SG 170 MW – GSEC - Abernathy, TX24 x 20V34SG 203 MW – STEC - Pearsall, TX33 Wärtsilä

GEUS – Greenville, Texas3434 Wärtsilä3 x 20V34SG25 MW

STEC – Pearsall, Texas24 x 20V34SG 203 MW35 Wärtsilä34SGThe South Texas Electric Cooperative (STEC) PearsallPower Plant in addition to serving load at membercooperatives, participates in the ERCOT AncillaryServices Market providing quick start reserves, spinningreserves , regulation and other high value products.

Wärtsilä Smart Power Generation50SGNEW 12x18V50SG PROJECTSSTEC Red GateEdinburg, TXSimple Cycle 221 MW *Future Combined Cycle 239 MW *The South Texas Electric Cooperative (STEC) Red Gate Power Project is one Wärtsilä's new flexiblepower plants with fast start, fast ramping, high efficiency at full and part load with minimal water use.Commercial operation is planned for early 2015. The plant layout will accommodate future expansion toFlexicycleTM (combined cycle). * Net Output at 95 F36 WärtsiläPGE Port Westward IIClatskanie, OR

Wärtsilä Smart Power Generation - California37Pacific Gas & Electric, Humboldt - Eureka, California10 x 18V50DF - 162 MW Wärtsilä50DF

PGE – PORT WESTWARD II 2,964 Stone Columnscompleted for soilstabilization Engine Halls underway Underground pipe andelectric underway Tie Ins to PW1 started Wärtsilä12 x 18V50 SG (224 MW)

Wärtsilä Smart Power Generation - Azerbaijan21 x 18V50SG384 MW Boyuk Shor – Baku, Azerbaijan39 Wärtsilä50SG

Reciprocating engines in the 21st century» Reciprocating engines are no longer atechnology only suitable for small-sizedprojects or emergency generation» Today’s engines are competitive in manyaspects– All plant sizes 1-600 MW– Operation on all kinds of gas and liquidfuels– Baseload, grid stability, standby-backup– Combined cycle, CHP, trigeneration– Industrial self-generation» They are excellent for SmartPower Generation, a concept inwhich Wärtsilä is the globalleaderHistory Wärtsilä

ConclusionsToday’s reciprocating engines. are generally more efficient than comparable gas turbinetechnology. perform much better at part load and at extreme ambientconditions. are less sensitive to changing operational conditions. offer better availability. offer solutions for all kind of industrial needs. are very competitive in terms of CAPEX and OPEXConclusions Wärtsilä

Wärtsilä the Leader in Smart Power GenerationPlease visit our website at:smartpowergeneration.comJohn RobbinsBusiness Development ManagerWest Coast RegionWärtsilä North America, Inc.(503) 720 – 3081John.robbins@wartsila.com42 Wärtsilä

Gas Engine ·Start up and loading of a Gas Engine power plant compared to a GTCC Quick Start Case Study* STEC Pearsall 24 x W20V34SG Simple Cycle STEC Sam Rayburn 3 x 1 GE LM6000 Combined Cycle ERCOT Market at 3,000/MWh 895,000 per start ERCOT Market at 100/MWh 30,000 per start