Richard Ousey, Associate Director, Government & Infrastructure Advisory, Grant Thornton UK LLP

1. Future Solent - The road to a new economy -
The National Context & opportunities in Offshore wind and Green Deal supply chain
Richard Ousey - Grant Thornton UK LLP
richard.ousey@uk.gt.com
DD: 07917 071 784
© 2012 - Grant Thornton UK LLP. All rights reserved.

2. Contents
1. Grant Thornton UK Overview - EES, MAS, Growth Accelerator
2. The National Context - recent developments & market drivers
3. Offshore Wind - Overview & Supply Chain opportunities
4. Green Deal - Overview & Supply Chain opportunities
5. Qs
Appendices
- Links to recent GTUK publications
- Manufacturing Advisory Service - Overview
- Growth Accelerator- Overview
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3. 1. Grant Thornton UK - Overview - EES, MAS, Growth Accelerator
© 2012 - Grant Thornton UK LLP. All rights reserved.

4. Our firm: Grant Thornton
Grant Thornton is a leading The Grant Thornton Approach
• partner / director led assignments from inception
financial and business adviser •
•
solutions-oriented service offering
focus on building collaborative and enduring relationships
• pro-active, independent and commercial approach
The Grant Thornton Approach
• member firms in 100 countries
• 500 offices worldwide
• over 30,000 employees
• 2,600 partners
• worldwide revenue of US$4 billion
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5. Grant Thornton UK LLP: Advisory services
Grant Thornton
Audit
Tax
Advisory services
Government & Infrastructure Advisory Business Risk Services
Recovery & Reorganisation Forensic & Investigation Services
Mergers & Acquisitions Transaction Advisory Services
Valuations Capital Markets
Grant Thornton provides the full spectrum of services

6. Introduction to EES
 Grant Thornton has a team dedicated to the Energy, Environment and Sustainability (EES)
sector which has been active over the last 10 years as a leading financial adviser supporting
Sector Focus dynamic organisations
 Our team takes a holistic view of the EES sector and understands its complexities and
Integrated
interfaces as we have an integrated and focused approach to these areas
Approach  We offer a cohesive international team composed of people across all service lines and sectors
in multiple locations
 Grant Thornton offers core capabilities in each of the EES areas including financial advisory
services in wind, wave & tidal, solar, biomass, waste, hydro, CHP and energy efficiency
Core Capabilities  This is combined with other specialist advisory services such as forensic
investigations, leasing, transaction support, corporate finance as well as accounting and
tax
 Grant Thornton has a diversified client base of public and private sector organisations
Diversified client
 Grant Thornton advises major public sector bodies setting policy and regulation or procuring
base projects as well as debt and equity providers, utilities and independent developers
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7. EES - Activity Map
Energy Environment
Waste to Energy
Anaerobic Digestion
Biomass Solid waste
management
Onshore Water
renewables
Offshore: Sustainable
grid, ports, sup Cities
ply chain, wave Low Carbon
& tidal Transport
Hydro
Nuclear
Energy Efficiency
Green Deal Resource
District Heating Management
Corporate
governance, du
e diligence
Sustainability
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8. Grant Thornton UK LLP - EES team - Services
8

9. Grant Thornton UK LLP - Manufacturing Advisory Service (MAS)
and Growth Accelerator
Manufacturing Advisory Service Growth Accelerator
GTUK has been heading up MAS in England Bespoke, intensive 1:1 coaching support to
since Jan 2012 - took over from RDAs businesses designed around their individual
barriers to growth
Strategic and technical support to SMEs to drive Targeting 26,000 companies with high growth
business growth potential
Focus on Strategy, Innovation, Efficiency and Eligible companies are those who employ up to 250
Supply Chain connections people with revenues below £40m
Provides free 1 day business review for qualifying Core Services (i) Business Development coaching
businesses (ii) Access to Finance (iii) Help to Innovate (iv)
Leadership and Management
Up to £1,000 funding (or max 50%) of Grants of between £500 and £2,900 depending on
improvement project or £3,000 for more the size of business
significant 'Step Change' project
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10. Grant Thornton UK LLP - Manufacturing Advisory Service
(MAS) and Growth Accelerator - Contact details
National helpline - 0845 658 9600
www.mymas.org
Twitter @mymas_mfg
david.a.hare@uk.gt.com
www.growthaccelerator.com
Twitter Domain: @GrowthAccel
Twitter Hashtag: #highgrowth
LinkedIn Company Page: GrowthAccelerator
YouTube: www.youtube.com/user/growthaccel
Blog: www.growthaccelerator.com/news-blog
10

11. 2. The National Context - recent developments &
market drivers
© 2012 - Grant Thornton UK LLP. All rights reserved.

12. The National Context - Market Drivers
The sector in the UK is being driven by cost-conscious customers and government intervention
Survey of businesses to understand reason for uptake of clean technologies
Source - GT International Business Report 2012 - Cleantech Sector Focus
12

13. The National Context - recent developments
Govt White Paper Renewable Heat Incentive DECC announcement on
Energy Market Reform (RHI) Scheme launched Non Solar PV tariffs
Carbon Price Floor Commercial properties intially, New tariff rates for AD, hyrdo, micro
20 year tariff payments, no export CHP and (Small) Wind. Wind
tariff reductions of 8-41% but other tariffs
retained
Contract for Difference Feed in Tariffs Domestic properties - launch
("CfD") delayed but vouchers available.
£300 Solar Thermal, £950 biomass Ongoing reductions in tariffs rates but
boiler, £850 air source heat pump, not to commence until April 14
£1,250 ground/air source heat pump
Capacity Mechanism Take up to date not great Exemption for community schemes to
achieve EPC level D
Potential additional revenue stream
Emissions Performance Standard for District Energy Schemes
Jul-11 Nov-11 Feb-12 Jul-12
DECC announcement DECC - Renewable Obligation
on Solar PV tariffs Certificate ('ROC') rebanding
Tariffs to be lowered to target a typical 5- AD - Plants below 5 MW to be
8% investment return excluded from ROCs from 1 April
2013, those over 5MW 2 ROCs per
55% step down rates after March 12 & MWh to 2016/17 then 1.8
further step down July
Export tariffs up to 4.5p (from 3.1p) Higher than expected ROC banding
for Energy from Waste CHP (1) &
Payment periods down 25 to 20 years standard gasification and pyroloysis
(2 to 2014/15 then 1.9 then 1.8)
Further 6 monthly tariff reductions
linked to deployment levels - est 10% 13

14. The National Context - City Region CO2 analysis
DECC CO2 emissions analysis - Kt of carbon dioxide per capita
City Region analysis
City Region Population (000) Total, 2010
South Hampshire 992.30 5.84
London 9,816.30 6.02 For 2012 South Hampshire has the lowest Kt CO2 emissions per Capita
Nottingham 872.80 6.17
Greater Birmingham 2,884.40 6.18 Signifcantly lower than nat avg. in Industry and Commercial
West of England 1,098.00 6.22
North East 1,119.60 6.22
Glasgow 1,796.60 6.32
Leeds 2,249.50 6.51
Belfast 657.20 6.71
Greater Manchester 3,472.20 6.79
Liverpool 1,472.70 6.93
Cardiff 1,122.50 7.20
Leicester 955.30 7.31
Sheffield 1,784.40 7.49
Aberdeen 462.90 8.02
Derry 228.20 8.22
Edinburgh 1,201.80 8.52
Coventry 548.70 9.12
Hull 759.90 16.99
Swansea 681.90 19.01
Total 34,177.20
% UK population 55%
Industry and Domestic Road Transport
Commercial
South Hampshire 992.30 2.02 2.01 1.77 5.84
National Average 3.88 2.27 1.88 8.09
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15. 3. Offshore Wind - Overview & Supply Chain
opportunities
© 2012 - Grant Thornton UK LLP. All rights reserved.

16. Scope of the UK Offshore Wind Opportunity
• UK is officially the windiest place in Europe
• Coalition Government stated that Offshore Wind will be a central part of its energy
strategy going forward
• Offshore doesn't suffer from the same level of 'NIMBY/Daily Mail' rage that tends
to accompany every onshore wind proposal
• The size of the future offshore windfarms to be delivered as part of Round 3 in
deeper water will dwarf that of previous rounds
• Nature of the plant and logistics will tend to favour supply chain businesses situated
close to the offshore wind areas for Solent Rampion and West of Isle of Wight are
key focus Round 3 zones
16

17. Scope of the UK Offshore Wind Opportunity (2)
• Estimates vary but of the £75bn manufacturing opportunity coming out of the
UK's Offshore Wind Round 3 opportunity (2015-) only 5% will be manufactured in
England
• Offshore Wind Developers’ Forum vision for “the UK to be the centre of offshore
wind technology and deployment, with a competitive supply chain in the UK,
providing over 50% of the content of offshore wind farm projects”
• Grant Thornton on behalf of MAS recently submitted a Regional Growth Fund bid
with partners Renewable UK and Advanced Manufacturing Institute to help
stimulate the national Offshore Wind SME supply chain. Even at a conservative
estimate we concluded that Round 3 offers a £15bn manufacturing opportunity
• With Round 3 kicking off in 2015, however, lead time not great so right now is a
critical 'tipping point' in terms of seizing the opportunity
17

18. Scope of the UK Offshore Wind opportunity - (3)
Crown Estates - Guide to an Offshore Wind Farm
Eg 500 MW Wind Farm
£ms
Upfront
Impact Surveys 8.4
Met Station 8.5
Sea Bed Surveys 9.0
Geophysical surveys 1.5
Geotechincal surveys 12.5
Front-end eng/design surveys 1.0
40.9
Wind Turbine
Nacelle 2.5
Rotor 1.5
Tower 1.0
5.0
Balance of Plant
Cables 80.0
Turbine Foundation 300.0
Offshore Substation 50.0
430.0
Installation and commissioning
Export cable laying 80.0
Foundation Installation 100.0
Array Cable laying 60.0
Construction port 15.0
Offshore Substation installation 10.0
Turbine Installation 140.0
405.0
Operations and Maintenance
O&M 40.0
Total 920.9
Source - Crown Estates 18

19. RGF Bid - Manufacturing Supply Chain Opportunities
Turbine Components Non-Turbine
Components
Towers Foundations & Transition
Pieces
Gearbox / Generator Subsea Cables
Blades DC, substation electrical
systems
Nacelle components
Value of Castings & Forgings
Manufacturing
Opportunity
19

20. RGF Bid - Key Learning Points
• On the manufacturing side feedback from OEMs/Tier 1s is that at this time it was not the
'sexy' stuff they would want from manufacturers, turbines etc. but the lower technology kit
i.e. Foundations, Cables, Metal ladders etc.
• May in the longer term be opportunity to develop the higher tech / intellectual property
type componentry / technology
• For SMEs, about establishing contacts to understand who Tier 2 and Tier 3 are supplying
in to the Siemens / Vestas of this World
• Recurring message from Tier 1 and OEMs we spoke to was that SMEs often create a
market in their head which doesn't necessarily exist in reality
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21. Offshore Wind - Other Opportunity areas
Maintenance Anchors & Transport to and
Vessels - Cable / Pipe laying Platforms - accommodation on
Supply & Manufacture, new offshore
Installation installation & installations
ongoing O&M
Surveys -
Development
Environmental, Skilled
of Port Health &
Met Station, Personnel
Facilities Safety
Geophysical.
Geotechnical
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22. 4. Green Deal - Overview & Supply Chain opportunities
© 2012 - Grant Thornton UK LLP. All rights reserved.

23. The Green Deal - What is it?
• A delivery and funding model allowing householders to receives a package of energy
efficiency measures at no up-front cost
• The Green Deal will include
 owner-occupiers
 private and social rented sectors and
 commercial sector (SME?)
• Customer only has to deal with the Green Deal Provider
• Rigorous accreditation and Quality Assurance
Goes live in October 2012
23

24. Green Deal - What is it (2)
• Green Deal offers nothing new in terms of energy efficiency measures, the
'innovation' is around the model to deliver these measures
• Being appointed Green Deal Provider WILL NOT guarantee exclusivity over
properties in the affected area
• Green Deal finance will not be structured as a conventional loan: the householder
will be liable for the repayments only whilst they live in the property, debt stays
with the meter and passes on to the new occupier
• The cost of the measures plus interest is paid back over the long term through
repayments made via energy bills
• The cost of the repayments must be equal to or less than the likely energy bill
savings over a max period of 25 years in order to satisfy the 'Golden Rule' - see over
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25. The Golden Rule
Insulation Illustration
Annual Without Green Deal Green Deal
household cost Green Deal Impact (insulation)
Energy bill £1,194 - £365 £829
Green Deal cost - + £355 £355
Total £1,194 - £10 £1,184
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26. Green Deal - Overview
ECO
Regulatory oversight
Financial Regulator Ofgem Bill payments
£
Finance Provider £ Electricity supplier £ Electricity bill payer
Green Deal
payments
Green Deal £ Liability attaches to the
regulator meter
Green Deal Provider
£ Upfront payment £
Installer Assessor
26

27. Current Green Deal Initiatives
• Birmingham Energy Savers ("BES") - Significant Guinea Pig project (see below)
• Manchester, Bristol, Cardiff, Newcastle, Nottingham, Stoke LAs all developing
• Seeing groups of Housing Associations also exploring potential group delivery
models
27

28. Green Deal - Supply Chain Opportunities
• DECC have estimated that if all 26 million householders adopt Green Deal
measures then this would generate around 225,000 jobs nationwide
• Govt. has also announced that 1,000 Green Deal apprentices will get supporting
funding
• For smaller SMEs targeting assessor / installation contracts the best route to
market will be to fully understand the supply chain that sits below the main
Green Deal providers.
• B&Q - Strong local presence and likely Green Deal Provider
• The 'challenge' to all businesses will be finding a way to work around the
constraints of the Golden Rule. Green Deal providers are likely to scrutinise
margin in the wider supply chain.
• One solution to this will be to 'Cross sell' other renewable technologies - Solar
Solar PV, RHI etc. while on site
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29. Questions
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30. Appendices
Appendix 1 - Recent GTUK publications
Appendix 2 - Manufacturing Advisory Service - Overview
Appendix 3 - Growth Accelerator - Overview
© 2012 - Grant Thornton UK LLP. All rights reserved.

31. Grant Thornton EES - Selected Recent Reports
Grant Thornton produces thought-pieces on EES-related
opportunities and challenges for individuals, communities and
organisations
Links to the reports:
 http://www.grant-thornton.co.uk/PageFiles/3481/Sustainable_Cities_Full_Report.pdf
 http://www.gtfinland.com/files/ibr2012%20-%20cleantech%20sector%20report.pdf
 http://www.grant-thornton.co.uk/Global/Waste_Sector_report_2011.pdf
31

32. THE MANUFACTURING ADVISORY SERVICE
• A national single common delivery service to all manufacturing
businesses in England from 1st January 2012 delivered by the
Manufacturing Advisory Consortium which GTUK leads
• Built upon the foundations of a successful service.
• Delivering strategic and technical support to SMEs.
• Driving Business Growth.

33. MANUFACTURING ADVISORY SERVICE (MAS)
• If they buy products & put them together (assemble)...
they are a manufacturer
• If they make any kind of physical product ...
they are a manufacturer
• We work with all companies who make any kind of product…
• Printers, Bakers, Furniture Makers!
• Designers who outsource manufacturing
• Logistics companies in manufacturing

34. ELIGIBLE PROJECTS
• Those demonstrating a good fit with at least one overarching
objective :-
• Driving Business growth
• Developing advanced manufacturing capabilities
• Creating high value jobs
• Improvement of resource efficiency (carbon footprint)

35. CLIENT JOURNEY
Level 3
Best Practice Events and Self Help collateral
Manufacturing Review
Direct Calls Level 4 Intervention
Enquiry Handling
Foundation
Foundation
Improvement
Email Level 1
Level 2
Website
Step Change
Step Change
MAS Client
Referrals
Transformation
External
Referrals
Level 5
Active Referrals
Integrated Action Plan

36. SUBSIDY GUIDELINES
• Foundation Project
Up to £1,000, up to 50% of total project costs and up to £300 per day subsidy.
• Step Change Project
Up to £3,000, up to 50% of total project costs and up to £300 per day subsidy.
• Repeat Projects
1st Project in rolling 12 month period – up to 50% subsidy
2nd Project in rolling 12 month period – up to 40% subsidy
3rd Project in rolling 12 month period – up to 30% subsidy

37. Growth Accelerator
Premium service delivered in partnership with government to drive
private sector growth in the economy
England wide service targeting up to 10,000 businesses per year with
high growth potential to achieve their ambition
Not a universal service and not a replacement for Business Link
Ambition to deliver £2bn of growth
Bespoke, intensive 1:1 coaching support to businesses designed
around their individual barriers to growth

38. Target Companies Investment
• Growth ambition Micro and start-up businesses (up
to 9 employees) – £600
• Scalable business model
Small businesses
• Willingness to invest in their (10 to 49 employees) – £1,500
own growth
Medium-sized companies
• Ability to grow by 20% per (50 to 249 employees) – £3,000
annum for 3 years

39. Support
Bespoke package of support including:
Business development coaching - strategy, driving the sales engine
Access to Finance - growth capital, debt and equity
Help to Innovate - new products, protecting and commercialising IP
Leadership and Management - senior management effectiveness
Access to a peer group masterclasses
Commercial impact not days!!!

40. Energy, Environment and Sustainability | Summer 2012
© 2012 Grant Thornton UK LLP. All rights reserved.
‘Grant Thornton’ means Grant Thornton UK LLP,
a limited liability partnership.
Grant Thornton UK LLP is a member firm within
Grant Thornton International Ltd (‘Grant Thornton International’).
Grant Thornton International and the member firms are not
a worldwide partnership. Services are delivered by the member
firms independently.
This proposal is made by Grant Thornton UK LLP and is in all
respects subject to the negotiation, agreement and signing of
a specific contract/letter of engagement.
The client names quoted within this proposal are disclosed on a confidential basis. All information in this proposal
is released strictly
for the purpose of this process and must not be disclosed to any
other parties without express consent from Grant Thornton UK LLP.
© 2012 Grant Thornton UK LLP. All rights reserved
40
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