Future Vision of Green EnergyPresented by Scott Sandell | October 2010

© 2010 NEA. All rights reserved.

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Quickly, an introduction

»Who am I?Scott Sandell, General Partner at NEA

Joined the firm in 1996

Previously at software startup (C-ATS), Microsoft, and Boston

Consulting Group

Focus on Information Technology and Alternative Energy

Also co-lead NEA’s China practice and Global IT Team

Member of NEA Management Committee

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A snapshot of venture capital

Significant impact on the economy» VC-backed companies accounted for 12.1 million jobs and $2.9 trillion in revenue in the U.S.

The venture capital asset class is about $179 billion» $9 billion in new capital has been raised in 2010 YTD by 124 venture firms

» $17 billion in capital was invested in 2,497 companies in the first 3 quarters of 2010

» Invested sectors: biotechnology 19%; software 17%; clean tech 17%; Internet 15%

» Stages: seed $2B; early stage $4B ; expansion stage $6B; later stage $5B

$2.9 billion U.S.-based V.C. investments in Cleantech YTD (vs. $1.6 billion last year)

» 208 cleantech deals in the first 3 quarters of 2010

Sources: National Venture Capital Association and Global Insight

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• Founded in 1977, NEA is the world’s largest venture capital firm today

• $11.0B in committed capital across 13 funds

• Global reach with 65 professional staff in six offices and investing activities on three continents

• Industry-leading domain experience in:

Information Technology

Energy Technology

Healthcare

• Experienced general partner group

• Extensive network of entrepreneurs and industry experts

Who is NEA?

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We Build Transformative Companies

» 167 IPOs and 271 M&A exits since inceptionMore liquidity events than any other VC firm

» Our top 100 companies . . .Have generated over $100B in peak annual revenuesHave created a collective peak market cap of over $450BHave employed over 290K people

» Today, NEA has 250 active investments in the next generation of market leaders

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SELECTED NOTABLE INVESTMENTS

* Denotes companies that were #1 or #2 in their markets when NEA achieved liquidity

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Scale and Capital

Commitment

EnergyTechnology

Relationships

Domain Expertise

Diversified Strategy

» One of the largest VC portfolios in energy technology» $1 Billion committed; already helped 30 portfolio companies raise $1.5Bn+

» Core team of 10 investment professionals with deep technology expertise across the US and abroad (China, India)

» Portfolio spans both the supply side (generation, storage) and the demand side (efficiency, conservation) of the energy equation, across electricity and clean fuels

NEA in Energy Technology

NEA is fully committed towards achieving industry leadership in energy technology investing

Government & Research Key Industry PartnersUtilities

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Agni

NEA Energy Portfolio Overview

ElectricityFuel

Demand (Efficiency & Conservation) Supply (Generation & Storage)7

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We have a BIG problem…

By 2050, the world needs 28 terawatts (TW) of primary power…

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…because energy demand tripled in last 25 years and the need will accelerate

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»Per-capita still plenty of room for growth as China and other Non-OECDcountries continue to prosper

»China surpassed US as the largest energy consumer and market for green energy financing this year

Source: U.S. EIA

100

1,000

10,000

100,000

1,000 10,000 100,000 1,000,000 10,000,000Energy Consumption per Capita (kWh / person)

GD

P pe

r Cap

ita ($

/ yr

/ pe

rson

)

Qua

drill

ion

BTU

Energy Consumption by OECD & Non-OECD Countries

Source: World Resource Institute

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Putting the 10 TW challenge in perspective

» 10 TW is equivalent of building 10,000 gigawatts nuclear reactors at one every other day for the next 50 years

» It takes 9 years to build one reactor today, plus constraints with storage

» Energy efficiency programs are crucial for short term; longer term it’s included with 28 TW use and assumes 2.8 kW per person

» Solar offers high hope: 89,000 TW of sun light power reaches Earth everyday

» Demand is growing too fast to depend on one solution; each alternative (wind, solar, geothermal, biomass) offers something different

» Concentrated PV doesn’t work in Germany but it wins in Abu Dhabi

» Wind is great at night, but demand peaks during the day

Source: www.undp.org/energy/weaover2004

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The potential of solar

The small black dots show the area of solar panels needed to generate all of the worlds energy (18TW) using 8% efficient PVs.

Source: Wikipedia

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There is huge opportunity

Solar is a great technology, but it’s not the only one!• Wind

• Energy from waste

• Geothermal

• Smart grid

• Battery technology

• Fuel cells

• Hydro

• Biofuels

• LEDs

• and more…

Multiple energy generation and efficiency solutions to the problem

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What does this look like?

This is what you know how to do…how can you apply it here?

$ / Millions of Instruction

s(in

 log scale)

10M+

1M+

1B+

100M+

Mainframe

Minicomputer

Workstation

Personalcomputer

Mobilephone

Driving down the cost of computing has made computing ubiquitous

10B+

Devices or users (in log scale)

1E+6

1E+7

1E+8

1E+9

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Balance of system costs are underappreciated

Applying iNEMI expertise to balance of system components

39%49% 50%

Sources: Barclays Capital, IPHE

Standardizing BoS components can significantly drive down costs

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A closer look at solar BoS costs

Source: Barclays Capital

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Manufacturing know-how and scale matters

Applying iNEMI expertise to high volume manufacturing

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There are challenges ahead…

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» Global economic downturn has decreased funding sources for green energy companies across all stages

Startups, manufacturing scale-up, project finance, etc.

» Subsidies are uncertain and unfair

Early nature of the market and technology still relies on subsidies

Solar and wind markets have suffered (Germany, Spain, U.S., etc.)

From 2002 – 2008 subsidies to fossil fuels totaled $72bn, while renewables subsidies totaled $29bn over the same period

» Projects utilizing new and innovative technologies are difficult to finance

Limited pockets of capital willing to take on the risk over a long period of time

» Traditional dirty energy is abundant and very cheap

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…but here are just a few reasons for hope

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» Green energy funding trends are moving in the right direction

» Technology innovation and progress continues

» Share of green energy is growing

» Green jobs can help rebuild the global economy

» Governments worldwide continue to make green energy a priority

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Reason for hope:Green energy funding trends

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Green Energy VC Funding

Funding for green energy continues despite bumps in the road

Global Green Energy IPOs

China Green Energy IPOs

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Reason for hope:Global government support

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Source: Bloomberg New Energy Finance

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Reason for hope:Green energy is growing globally

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Source: Bloomberg New Energy Finance

Power capacity added:% renewable power

Global power capacity:% renewable power

10%

16% 15%

21%

31%

36%

4% 5% 5% 6% 6% 7%

0%

5%

10%

15%

20%

25%

30%

35%

40%

2004 2005 2006 2007 2008 2009

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Reason for hope:Green energy creates jobs

22Source: Navigant Consulting, 2010

Green energy jobs created in the U.S. alone by a national renewable energy standard

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Solar PV

Dry WallEfficient Windows

Smart-Grid Platform

High-Efficiency LEDs

Fuel Cells

Behavioral Modification

Grid Storage

Solar PV

Plug-in Hybrid Electric Vehicles

NEA sees hope in our own portfolio…

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…with our companies changing the world today

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“Empire State Building Completes Groundbreaking Building-Wide Window

Refurbishment; New Jobs Created, 96% of Original Materials Reused

Johnson Controls and Serious Materials refurbish 6,514 windows to dramatically

reduce energy output”

Fisker Automotive unveiled the first factory-built luxury plug-in Karma. Designed by Fisker Automotive co-founder, CEO and executive design director Henrik Fisker, the four-door, four-passenger Karma combines style with high efficiency and low emissions to deliver what the company calls "an

uncompromised, premium vehicle that sets the tone for the future of driving."

“Adobe Powers San Jose Headquarters with Bloom Energy Fuel Cells

Largest “Bloom Box” Installation to Date Will Generate 30 Percent of Adobe HQ Electricity Needs,

Promote Sustainability”

“Suniva has announced that the U.S. Department of Energy Loan Guarantee Program is initiating discussions with

Suniva for a loan of approximately $141M. Suniva plans to start the construction of a new manufacturing plant in

Saginaw County, Michigan. Building such a manufacturing plant could create approximately 500 direct jobs at Suniva,

while creating an additional 2,000 indirect jobs for the Michigan economy according to the Michigan Economic

Development Corporation.”

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Conclusion

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There is carnage around us, but strong companies with a compelling value proposition and a global

outlook will survive and ultimately thrive…