Energy Developments Limited - ASX2012/08/22 · EDL business overview Notes: 1. Includes 21MW which are operated and maintained only 2. Includes 12MW US Lorain expansion project (commissioned—Jul-12)

2012 Full Year Results

22 August 2012

Energy Developments Limited

Greg Pritchard Managing Director

Gerard Dover Chief Financial Officer

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Important Notice

Forward Looking Statements

Statements contained in this presentation, particularly those regarding possible or assumed future performance, estimated earnings of Energy

Developments Limited ABN 84 053 410 263 (―EDL‖ or the ―company‖), potential growth of the company, industry growth or other trend

projections are or may be forward looking statements. Such statements relate to future events and expectations and therefore involve unknown

risks and uncertainties. Actual results may differ materially from those expressed or implied by these forward looking statements.

No offer of securities

Nothing in this presentation should be construed as an offer to sell or a solicitation of an offer to buy or sell EDL shares in any jurisdiction.

Reliance on third party information

Certain of the views expressed in this presentation contain information that has been derived from publicly available sources that have not been

independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This

presentation should not be relied upon as a recommendation or forecast by EDL.

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Agenda

• Highlights

• Group Financial Results

• Business Performance

• Regulatory and Market Update

• Priorities and Outlook

Presenters:

Greg Pritchard Managing Director

Gerard Dover Chief Financial Officer

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Positioned to benefit from global

focus on clean energy

Defensive revenue streams

Proven expertise in the development

of specialist power projects and

emissions abatement solutions

Well capitalised with disciplined

approach to investment

opportunities

Established leadership in key

growth markets

Key Investment Highlights

EDL owns and operates a global portfolio of over 700MW of clean and remote energy projects

4

3

5

– Total fixed price revenue: >88%; Capacity based revenue: > 50%

– Revenues from A-rated counterparties: ~50%

– Customer focus with track record of contract renewals: >274MW in last 12 months

– Increasing free cash flow providing opportunities to reinvest

– A$22.5m of equity capital raised in FY12

– A$445m of corporate debt facilities established in FY12

– Target return hurdles for new investments

– Low cost and established clean energy technologies

– Bi-partisan support for RET and CFI in Australia; continued support for renewables in

UK and key US States

– WCMG and Vent Air Methane business provides low cost carbon abatement solutions

2

– Significant brownfield expansions of remote mining operations in Australia

– Remote Energy demand over next 5-10 years estimated at ~1.5GW

– Recently announced ~53MW McArthur River power station expansion

– Incumbent WCMG operator in Australia’s quality coking coal regions

– Increasing land fill access rights in fragmented US market

1

– Leading provider of clean energy from land fill and waste coal mine gas (methane)

– Australia’s leading specialist provider of remote power < 100MW segment

– In-house technical and O&M capability supported by remote condition monitoring and

track record of safe and reliable operations

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EDL business overview

Notes:

1. Includes 21MW which are operated and maintained only

2. Includes 12MW US Lorain expansion project (commissioned—Jul-12)

3. 50% owned JV

A global portfolio of Clean Energy assets and a leading Remote Energy business in Australia

4

Australia—Clean Energy

(Commenced Operations: 1992)

Installed capacity: ~262MW Installed capacity: ~80MW

US—Clean Energy


Installed capacity: ~89MW2

Site MW

Mucking 21

Rainham 17

Pitsea 15

Greece3 12

Other 15

Total 80

Site MW

Lorain County 27

Carbon Limestone 25

Covel 10

Tessman 8

Taylor 8

Other 11

Total 89

Site MW

Appin/Tower 97

Moranbah North 46

German Creek 32

Lucas Heights 17

Clayton /

Springvale

15

Other 55

Total 262

Australia—Remote Energy


Installed capacity: ~280MW1

Site MW

WKPP 70

Cannington 40

Pine Creek 35

Sunrise Dam 28

McArthur River 24

Other 83

Total 280

Europe —Clean Energy


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– FY13F EBITDA guidance of A$150m to A$160m

– On-market buy-back announced

– TRIFR continues to improve (down to 2.1 in FY12 from 4.1 in

FY11)

– MW / Employee increased from 1.6 to 1.7

– Continued success in extending key gas and project agreements

– Installed operational capacity up 115MW3 (18%) to 711MW

– Increased Remote Energy capability and leadership: enGen

acquisition performing in line with expectations with platform for

further growth

– 28MW of projects currently in development or commissioning

– 61MW of new projects committed

– Funding in place

– Revenue of A$323m, an increase of 24% on FY11

– EBITDA1 of A$135m, up 10% on FY11

– Net operating cash flow of A$71m, an increase of 5% on FY11

– Investment of A$163m in acquisitions and expansions

– New debt facilities of A$445m2 established

FY12 Result Highlights

Successful year with a significant increase in scale and earnings growth

Positioned for continuing growth

Profitable Growth

Investment and

Enhanced Scale

Operational

Improvements

5

6MW commissioned in FY12

13MW expansion under development

enGen – Remote Energy Site

German Creek

Carbon Limestone (US)

Outlook

Note:

1. Earnings before interest, tax, depreciation, amortisation and specific items

2. Includes US$20m (exchange rate A$1.00/US$1.00)

3. Includes enGen acquisition of 98MW

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Performance Overview

12 months ended 30 June FY12 FY11 FY10 Change

FY11 -FY12

Revenue (A$m) 322.6 259.2 263.6 +24%

EBITDA before specific items (A$m) 135.2 122.8 126.8 +10%

Profit/(loss) before tax (A$m) 11.4 (45.0) 25.3 nm

EPS (cents per share) 5.6 (18.4) 10.5 nm

Capex and investment (A$m) 162.5 34.1 19.5 nm

Stay-in-business capex (A$m) 19.1 18.4 18.1 nm

Net operating cash flow (A$m) 70.5 67.3 75.6 +5%

Net debt/EBITDA3 (x) 3.2 2.7 2.9 0.5

Safety (LTIFR) 2.1 4.1 5.9 (49%)

Generation (MWh) 3,153 2,952 3,018 +7%

Installed capacity (MW) 711 5961 5992 +19%

Underlying business performance remains solid

Note:

1. Excludes August 2011 enGen acquisition (98MW)

2. French LFG (14MW) and Packington JV (5MW) sold in FY10

3. EBITDA before specific items

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0

750

1,500

2,250

3,000

3,750

FY08 FY09 FY10 FY11 FY12

AU Clean Energy AU Remote Energy UK Clean Energy US Clean Energy

0

25

50

75

100

125

150

175



=

0

200

400

600

800



=

0

100

200

300


Contracted / Recontracted Black Uncontracted Black Uncontracted Green

7 7

Recent Performance History

Installed capacity (MW) Revenue (A$m)

Total generation (GWh) EBITDA (A$m)

CAGR = 5.8%

CAGR = 6.2%

CAGR = 7.7%

CAGR = 8.1%

Proven track record of operational and financial performance

Note:

AU Clean Energy and AU Remote Energy cumulatively referred to as Australia by Management

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343 341363 365

409

102

0

100

200

300

400

500


EDL Employees enGen Employees

0

5

10

15

20

25

FY00 FY02 FY04 FY06 FY08 FY10 FY12

8

Safety and People

EDL’s Health, Safety and Environment track record is its social license to operate and key to continued

success Total lost time injury frequency rate

8

Employee numbers

Moving towards a ‘Zero Harm’ target globally

Excellent industry-leading safety

performance

LTIFR improved c.50% to 2.1

74 of 76 sites 12 months LTI free to June

2012

Net employee numbers reduced 12% (post

enGen acquisition)

– improved MW/FTE from 1.6 in FY11 to

1.7x in FY12

Strategies in place to attract and retain key

talent N

um

ber

of

Em

plo

yees

Fre

quency R

ate

(per

mill

ion h

ours

work

ed)

Safety

People

Environment Two minor reportable incidents

467

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0

50

100

150

200


Stay in business capex Growth capex Acquisitions

9

Investing in Growth

Project MW Comments

Aug-11 enGen 98 Acquisition of ~98MW of

remote power generation

capacity

Dec-11 McArthur River

expansion

3 Expansion at existing remote

power station

Jun-12 US brownfield

expansions

28 Key US site expansions:

Carbon, Lorain and Taylor

218MW of generation have been acquired, developed or are fully funded and in development since FY11

FY12 Acquisition and Expansion Capex Capex (A$m)

Current / upcoming expansion projects

Project MW Comments

Jul-12 Hill 60 15 Expansion of remote power

station

Nov-12 German Creek

expansion

13 Expansion of WCMG power

station

Jun-13 US greenfield site

expansions

8 Leveraging existing landfill

operator relationship

Jan-14 McArthur River 53 Further expansion at existing

remote power station

Target return on capital employed > 10%

enGen: Acquired in August-2011

McArthur River: Expanded December-2011,

further expansions beginning August-2012

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Proven

track

record

Growth

platform

Leader in

Remote

Energy

Low risk

revenues

High quality

customers

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enGen Acquisition

Significantly enhanced EDL's position in the Remote Energy market

~98MW of installed generation focused on remote off-grid mine sites and remote communities

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3

2

– Proven track record in industry

– > 30 years operating experience

– Focus on fuel efficient customer solutions

– Horizon Power; AngloGold Ashanti;

Barrick Mining Corp; Newmont

– Well positioned for extensions /

expansions

– Fixed revenues based on installed capacity

– Customer takes fuel risk

EDL RE Asset Locations post acquisition

4

– Platform for further expansions in the key

Western Australian market

– Market demand over next 5-10 years

estimated at ~1.5GW

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– Leading specialist provider of remote

power < 100MW in Australia

– 280MW installed

– 66MW in development

KEY: enGen Asset

Existing EDL RE Asset For

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Recent Success in Contract Extensions

Excellent track record of contract renewals

Site Counterparty MW Length Contract Type

Appin Tower BHP ~74 4 years to 2016 Tolling Services Agreement

Carbon Limestone and Lorain

County (US)

AMP Ohio 56 10 years to 2021 Power Purchase Agreement

MRM Phase 3 Expansion Xstrata ~53 20 years Tolling Services Agreement

Cannington mine BHP 40 4 years to 2018 Tolling Services Agreement

Sunrise Dam mine AngloAshanti Gold 28 2 year PPA extension Tolling Services Agreement

Darlot mine Barrick Gold 12 2 year PPA extension Tolling Services Agreement

Taylor County (US) Coweta Fayette Electric 8 15 year PPA extension Power Purchase Agreement

MRM Short-term Expansion Xstrata ~3 3 years to 2015 Tolling Services Agreement

Yulara CNG Transport Power & Water Corp N/A 7 years to 2018 CNG Supply Agreement

Recent off-take renewals

~274MW of off-take contracts have been agreed or extended since June 2011

Note:

1. Tolling Services Agreement: EDL is paid a fixed capacity tariff for installed generation capacity and a variable energy tariff for electricity generated

2. Power Purchase Agreement: EDL is paid for electricity generated

3. CNG Supply Agreement: EDL is paid for the installed compressed natural gas (CNG) infrastructure and the transport of the CNG

Site Counterparty MW Length Contract Type

Carbon Limestone, Lorain

County (US)

Republic Services 56 27 years to 2039 Landfill Gas Supply Agreement

Pitsea and Rainham (UK) Veolia 32 17 years to 2029 Landfill Gas Supply Agreement

Taylor County (US) Veolia 8 20 years to 2032 Landfill Gas Supply Agreement

Recent supply renewals

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Agenda

• Highlights





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Income Statement

Income Statement (A$m) FY12 FY11 FY10 Change

FY11 -FY12

Revenue 322.6 259.2 263.6 +24%

Operating EBITDA 158.1 142.5 142.5 +11%

Corporate and Development (22.9) (19.7) (15.7) +16%

EBITDA before specific items 135.2 122.8 126.8 +10%

D&A (59.6) (52.0) (52.2) +15%

Net financing costs (38.0) (33.6) (33.6) +13%

Profit before tax and specific items 37.6 37.2 41.0 +1%

Specific items

Business strategy, acquisition, disposal and integration costs (7.3) (11.1) (15.7) (34%)

Impairment (39.0) (54.0) — (28%)

Finance costs 20.1 (17.1) — nm

Profit before tax 11.4 (45.0) 25.3 nm

Tax expense (2.1) 16.2 (8.9) nm

Net profit 9.3 (28.8) 16.4 nm

Group results

Specific Items Commentary

Business strategy, acquisition, disposal and integration costs in FY12 includes costs incurred through the enGen acquisition and compares to A$11.1m of

costs in FY11 that mainly relate to losses on disposal of certain foreign operations and advisory costs

Impairment expense in FY12 includes A$26.9m resulting from cessation of the NGAC scheme in June 2012. The Australian Government's Clean Energy

Future Plan includes a number of legislated changes that may have a positive impact on EDL from 1 July 2012 and are described in more detail on pages

25 and 26. No revenue from these legislative changes will be recorded until the Plan has been finalised and can be reliably measured. Other asset

impairments in FY12 are A$12.1m. This compares to A$49m in WKPP impairment and A$5.1 of other impairments in FY11

Finance costs in FY12 relate to a $20.1m exchange gain on settlement of foreign currency loans and capitalised fee write-offs of A$17.1m in FY11

associated with the July 2011 refinancing

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Aust105.4

AU121.9

Europe34.3

Europe31.9

US2.7

(5.8)

6.4

(2.2)

19.1

(1.8)

US4.3

FY11 Operating EBITDA Volume Price Costs New assets FX FY12 Operating EBITDA

AU105.4

AU184.1

AU245.9

Europe55.2

US19.9

(8.6)

6.4(3.7)

69.3

FY11 Revenue Volume Price New assets FX FY12 Revenue

US

Europe56.3

Revenue and EBITDA

14

Notes:

1. Excludes Corporate and Development costs and specific items

2. Includes changes in capacity-based volume revenues

Group revenue (FY11 to FY12) (A$m)

1

AU 2.1

Europe 3.9

US 0.4

AU 67.8

US 1.7

Europe (2.6)

US (1.1)

AU2 (7.6)

Europe (0.3)

US (0.7)

Group Operating EBITDA1 (FY11 to FY12) (A$m)

AU 2.1

Europe 3.9

US 0.4

AU 18.2

US 0.9

AU2 (5.3)

Europe (0.2)

US (0.3)

AU 1.5

Europe (4.5)

US 0.8

Europe (1.6)

US (0.2)

US

20.4 US

19.9

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Cash Flow

Cash flows (A$m) FY12 FY11 FY10 FY12-FY11

Change

EBITDA 135.2 122.8 126.8 +10%

Business strategy, acquisition, disposal and integration costs (7.3) (3.9) (15.7) +87%

Change in working capital and non-cash items (17.5) (16.3) 2.8 +7%

Cash from operations 110.4 102.6 113.9 +8%

Net finance costs (36.5) (29.8) (32.8) +22%

Tax paid (3.4) (5.5) (5.5) (38%)

Net operating cash flow 70.5 67.3 75.6 +5%

Stay-in-business capex (19.1) (18.4) (18.1) (3%)

Net operating cashflow after stay-in-business capex 51.4 48.9 57.5 +5%

Strong and stable cash flow conversion

Commentary

Mature technology and operations across all regions

producing strong cash flows

Cash flows are impacted by timing of generation and sale of

green credits

Stable stay-in-business capex despite significant increase in

MW

Opportunities to optimise working capital

Change in working capital and

non cash items ($Am)

FY12 FY11 FY10

Greece JV (3.2) (3.5) (4.3)

Change in Green credits on hand (7.8) (7.1) 2.1

Change in Working Capital (6.5) (5.7) 5.0

(17.5) (16.3) 2.8

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FY12 Sources A$m

Net operating cash flow 70.5

Rights issue proceeds 22.5

Net increase in borrowings 63.2

Other net proceeds 2.0

Cash on hand at 30 June 2011 70.1

FX on Cash 0.5

Total Sources 228.8

16 16

Sources and Uses

Commentary

Appropriate balance of debt and equity used to fund acquisitions and expansions

FY12 Uses A$m

Australia—Remote Energy 111.8

United States—Clean Energy 44.3

Lease extensions and gas rights 8.0

Other capex 2.8

Stay-in-business capex 19.1

Uses 186.0

Cash on hand at 30 June 2012 42.8

Total Uses 228.8

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Balance Sheet

(A$m) FY12 FY11 FY10

Cash 42.8 70.1 67.7

Receivables,

Inventory, Green

Credits and

Prepayments

77.3 75.9 70.7

Property, Plant and

Equipment

643.7 568.6 646.4

Goodwill and

Intangibles

52.6 9.0 2.5

Deferred tax and other

assets

40.8 32.5 36.6

Total assets 857.2 756.1 823.9

Payables and

provisions

52.6 60.1 56.3

Borrowings and other

financial liabilities

480.6 396.8 438.8

Interest rate swap

liabilities

32.8 15.8 22.7

Deferred revenue 18.2 11.8 12.6

Deferred tax liabilities 6.4 7.6 9.1

Total liabilities 590.6 492.1 539.5

NET ASSETS 266.6 264.0 284.4

FY12 FY11 FY10

Net Debt (A$m) 437.8 326.7 371.1

Net Debt / EBITDA1 3.2x 2.7x 2.9x

EBITDA1 / Interest 3.6x 3.7x 3.8x

Debt to Assets 56% 52% 51%

Average Interest Rate 7.5% 7.1% 7.8%

Balance sheet Debt ratios

FY12 FY11 FY10

Debtor Days 52 42 44

Creditor Days 50 98 81

Inventory ($m) 15.4 12.5 11.4

Working capital

Note:

1. Before specific items

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18

Funding Strength

18

Debt maturity profile—facility size

Funding capacity

Multi-Option

Syndicated

Facility

(including

revolver)

WKPP Project

Finance

CAT Finance

Committed A$425.0m A$142.8m US$20.0m

Drawn

(at 30 Jun-12)

A$372.9m A$127.4m US$10.7m

Available A$52.1m A$15.4m US$9.3m

– New financing facilities provide headroom to fund near term

growth. EDL continues to assess alternate sources of funding

– Export Credit Guarantees to support financing of equipment

purchases

Current funding facilities

Current financing activities

0

100

200

300

Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Feb-18

Syndicated facility Revolver CAT Finance WKPP

– New multi-option syndicated corporate facility allows EDL to

appropriately finance its large portfolio of small scale generation

assets

– Established in July 2011

– Increased to A$425m in June 2012

– New US$20m Caterpillar Financial Australia facility agreed in May

2012 for the purposes of Caterpillar equipment purchases

– No significant refinancing until June 2016

– Significant headroom with all debt covenants

– Net leverage ratio < 3.75x1

– Net interest coverage ratio > 2.50x1

– Total gearing2 < 65%1

Note:

1. Multi Option Syndicated Facility covenant only (i.e. excludes WKPP Project Finance debt)

2. Calculated as total debt to total assets

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63.0 58.9

(6.6)

2.3

FY11 EBITDA Volume Price Costs FY12 EBITDA

0.2

20 20



Australia’s largest landfill gas power generator and largest operator of waste coal mine gas (WCMG) projects

Commentary

Higher market black prices offset by reduction in green credit prices

Tolling contract extensions achieved but with a lower capacity

Costs carefully managed to improve operational efficiency

Development of German Creek WCMG expansion (13MW) to be

completed by November 2012

Operating EBITDA (A$m)

Note:

1. Includes changes in capacity-based revenues

1

(A$m) FY12 FY11 FY10 Change

FY11-FY12

Operating capacity (MW) 262 262 262 +0%

Revenue 92.3 101.8 105.0 (9%)

Black 70.8 74.4 77.8 (5%)

Green 21.5 27.4 27.2 (22%)

Operating costs (33.4) (38.8) (42.7) (14%)

Cost of sales (6.1) (9.2) (13.1) (34%)

Direct O&M (9.9) (11.9) (13.4) (17%)

Indirect O&M (17.4) (17.7) (16.2) (2%)

Operating EBITDA 58.9 63.0 62.3 (7%)

margin (%) 63.8 61.9 59.3 +1.9

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Australia—Remote Energy

Australia—RE1

Remote Energy business provides essential infrastructure to remote mining operations and towns and

communities, beyond the reach of the electricity grid

Note:

1. Includes WKPP and enGen contribution for 10 months (acquired 31 August 2011)

Commentary

Continued growth across remote energy portfolio with the acquisition of

enGen in August 2011

Excluding enGen, contract negotiations and increased demand for

remote energy has resulted in a 4% increase in revenue

Expansion project at Hill 60 (WA) (15 MW) was completed in July 2012

and will provide a further uplift in revenues in FY13

Synergy benefits in the RE portfolio include reduction of 35 FTE positions


42.4

63.0

18.21.9

FY11 EBITDA enGenacquisition

Volume Price Costs FY12 EBITDA

(0.8)

1.3


FY11-FY12


Revenue 153.6 82.3 78.9 +87%

Black 153.6 82.3 78.9 +87%

Operating costs (90.6) (39.9) (38.9) 127%

Cost of sales (48.6) (13.1) (14.1) nm

Direct O&M (10.8) (6.9) (7.5) +57%

Indirect O&M (31.2) (19.9) (17.3) +57%


margin (%) 41.0 51.5 50.7 (10.5)

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Europe—Clean Energy

Europe

EDL's European operations comprise ten LFG sites, mainly located close to London, and the Greece JV

Commentary

UK operations experienced gas restrictions from over-tipping and

increased outages, offset by stronger wholesale prices

Indexed fixed price contracts continue to provide revenue certainty, with

green revenues increasing 2%

Cost of sales increased due to the renegotiation of certain royalty

arrangements as part of landfill gas extensions, yielding a significant NPV

uplift

UK Government continues to support UK green energy through

Renewable Obligation legislation

Foreign exchange negatively impacts JV share of profits

Europe Operating EBITDA (A$m)


FY11-FY12

Operating capacity (MW) 80 80 80 0%

UK Revenue 53.1 51.7 54.3 +3%

Black 31.6 30.6 33.6 +3%

Green 21.5 21.1 20.7 +2%

UK Operating costs (24.4) (20.9) (21.4) +17%

Cost of sales (9.9) (6.8) (8.0) +46%

Direct O&M (8.2) (7.6) (7.7) +8%

Indirect O&M (6.3) (6.5) (5.7) (3%)

UK Operating EBITDA 28.7 30.8 32.9 (7%)

margin (%) 54.0 59.6 60.6 (5.6)

Share of profits from JVs 3.2 3.5 4.3 (9%)

Europe Operating EBITDA 31.9 34.3 37.2 (7%)

34.3 31.9

3.9

(4.5)

FY11 EBITDA Price Volume Costs FX FY12 EBITDA

(0.4)

(0.2)

(1.6)

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United States—Clean Energy

US

Commentary

US business generation increased due to the partial contribution from

expansion projects recently completed at Taylor, Carbon and Lorain (28

MW)

Ohio (the location of EDL’s largest operating sites) has recently

reaffirmed its commitment to renewable energy, underpinning the outlook

for green energy

Continued focus on operational improvement and efficiencies

Further greenfield investment of 8MW expected to commence operation

in FY13

New 10 year PPA with AMP Ohio commenced in January 2012 with price

increases locked in over the contract

Project capex supported by US Treasury grants (US$6.4m recouped in

FY12)

Recent expansions in key US states with supportive renewable energy policies



FY11-FY12


Revenue 20.4 19.9 21.1 +3%

Black 16.5 15.8 18.1 +4%

Green 3.9 4.1 3.0 (5%)

Operating costs (16.1) (17.2) (18.2) (7%)

Cost of sales (2.2) (1.3) (2.4) +69%

Direct O&M (6.3) (8.1) (8.0) (22%)

Indirect O&M (7.6) (7.8) (7.8) (4%)


2.7

4.3

0.4

0.9

FY11EBITDA

Price Volume New assets Costs FX FY12EBITDA

(0.2)

(0.3)

0.8

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EDL will benefit from operating in a more certain regulatory regime 25 25

Regulatory Update

– The United States currently has no national renewable energy or carbon abatement policy

– Ohio, EDL’s largest operating market with 59MW of installed generation (64% of total US installed generation), has recently reaffirmed

its commitment to the RPS target (25% of all generation from renewable sources by 2025)

– Under Ohio law, at least 50% of certificates surrendered under the RPS by retailers must be sourced from within Ohio,

underpinning the value of EDL’s green certificates

EDL is manoeuvred through a changing regulatory environment

Clean Energy—Australia

Clean Energy—United States

– Current target of 15% of all generation from renewable sources by 2015

– No material change

Clean Energy—United Kingdom

– Clean Energy Future legislation, effective 1 July 2012 saw the introduction of a $23/tonne carbon price flowing through to increased

National Electricity Market pricing from 1 July

– Renewable Energy Target (―RET‖) scheme has been amended to include WCMG generation assets for a transition period to 2020

– RET generation cap for EDL Moranbah North and German Creek power stations has been agreed (528GWh pa) and accreditation

completed

– Carbon Farming Initiative legislation is operational, providing some incentives for EDL’s landfill gas sites

– Formal accreditation process expected to be completed shortly

– Initiatives have been undertaken to maximise emissions abatement from EDL managed landfill sites

– NSW Greenhouse Gas Reduction Scheme (―GGAS‖) has closed as of 1 July 2012 – absence of transitional provisions resulted in write-off

of NGAC inventory of $18.8m after tax at 30 June 2012

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Clean Energy will be favourably impacted by Australia’s Clean Energy Future legislation

26

Australian Carbon Tax

Net positive impact on EDL’s financial performance

26

Impact on EDL's

Black Revenue

As existing PPAs expire, EDL expects to negotiate

new PPAs or sell direct to the NEM at pricing inclusive

of the cost of carbon

Impact on EDL's

Green Revenue

LFG: Certain sites eligible for the creation of ACCUs

under the CFI legislation, as well as the continued

creation of LGCs under the RET1

WCMG: German Creek and Moranbah North projects

(77MW), will be eligible for the creation of LGCs

under the RET, for a transitional period of 8 years

(EDL RET cap of 528GWh will translate to 528,000

LGCs per annum)

Impact on EDL's

Costs

The carbon price will not apply to EDL’s LFG sites

Revenue uplift will exceed the cost, as the

emissions intensity of WCMG generation (0.6tCO2-

e/MWh) is less than the average for the

Queensland grid (0.86tCO2-e/MWh)

Clean Energy Remote Energy

No impact – generation is not grid connected

(carbon cost is a pass-through to the counterparty

under the PPA or Power Supply Agreement)

N/A

No impact – carbon cost is passed-through to the

counterparty under the PPA

Note:

1. Subject to finalisation of CFI regulations and the LFG accreditation process

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Agenda

• Highlights





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Development projects

commissioned on time and

budget

Building pipeline in growth

markets

Drive operational

improvements across the

business

Extend access agreements to gas

supplies

Continue accessing diversified

funding sources

28 28

Priorities in FY13

– AU Remote Energy: MRM (53MW in development for commissioning by January-14), and

Hill 60 (15MW by August-12)

– AU Clean Energy: German Creek (13MW by November-12)

– US Clean Energy: US greenfield (8MW by June-13)

– Australian Clean Energy focused on extending access to long-dated gas reserves -

LFG and WCMG

– Increase capacity factors in Clean Energy

– Continue to streamline O&M activities and cost base

– Procurement and working capital efficiencies

– Secure and expand capacity with key customers

– Australian Clean Energy: Extend and expand Bowen Basin WCMG assets

– Australian Remote Energy: Extend and expand with existing and

prospective resources customers and power off-takers

– US Clean Energy: Further brownfield and greenfield expansions; leverage

strong counterparty relationships e.g. Republic (no.2 US waste company)

– Access broad corporate and project level funding sources

– Retain strong cash flow for reinvestment in profitable growth

– Enable bidding for new projects on a ―fully funded basis‖

EDL has five key areas of strategic focus for FY13

1

5

4

2

3

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FY12 FY13Low

FY13High

4.3 6 8

Guidance – Key assumptions FY13

Guidance

Australian ACCU certificate price ($) 21

Australian LGC certificate price ($) 37

AUD:USD Exchange Rate 1.05

AUD:GBP Exchange Rate 0.65

Capital management initiatives

On-market buy-back

Up to A$5m of EDL shares over the next 12 months

– Does not limit EDL's focus on reinvestment in profitable growth

– Takes advantage of volatility or weakness in equity markets

Amount brought back will depend on market conditions, alternative

investment opportunities and other factors

29 29

Outlook

EDL expects to achieve a significant uplift in FY13 EBITDA

(A$m) 1H12

(Actual)

2H12

(Actual)

FY12

(Actual)

1H13

Guidance

2H13

Guidance

FY13

Guidance

EBITDA

Australia1 47 52 99 55-58 58-61 113-119

UK 15 17 32 15-16 16-17 31-33

US 1 3 4 3-4 3-4 6-8

Total

EBITDA 63 72 135 73-78 77-82 150-160

Commissioning of new capacity on the dates shown above

99.0

FY12 FY13

Low

FY13

High

113119

Note:

1. Australia includes Clean Energy, Remote Energy and Corporate Costs

Australia

FY12 FY13

Low

FY13

High

31.9 31 33

UK

FY12 1H 2H

US

Note:

1. Includes corporate costs

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Outlook—Forecast Growth in MW from Committed Projects

In development and committed project pipeline forecast to increase installed capacity by 13% from FY12

Note:

1. Includes committed projects only

582

711748

801

FY11 ClosingInstalled MW

enGenAcquisition

US Expansion MRMExpansion

FY12 ClosingMW

Hill 60 Wyandot Sand Valley German CreekExpansion

FY13 ForecastMW

McArthur RiverExpansion

FY14 ForecastMW

9828 3

15 3 513

53

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Appendix A

Additional information

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Technology

Technology Overview Generation Process Example

Clean

Energy:

Landfill Gas

Landfill gas (LFG) produced from the anaerobic decomposition of

biodegradable waste which has been deposited in landfill sites

LFG consists of ~50% methane, with the balance of gas content

carbon dioxide and trace amounts of volatile organic gases

– Methane is 21 times more potent than carbon dioxide in its

greenhouse effect on climate change

Generating power from landfill gas is a conventional process with

few technical barriers to the exploitation of the resource

LFG generation is now regarded as one of the most mature and

successful renewable energy technologies, providing efficient base

load generation

Following the completion of the tipping process,

waste deposited in the landfill site is covered and

allowed to decompose

– The conditions in the landfill are carefully

controlled to promote the production of gases

The gases are collected via a system of wells and

pipes that extract gas from the site and supply the

engines

– Generation engines are typically

containerised, installed onsite and connected

to the gas supply and the electricity

transmission network

Clean

Energy:

WCMG

Pre-draining and post draining of coal seams liberates methane gas

trapped within the seam

Coal mining process has always required the removal of methane

for safety reasons, however, more recently there are also strong

environmental and commercial considerations for draining and

beneficiating the gas

Historically, the methane has been either flared or released directly

into the atmosphere, however, given WCMG can be used as a fuel

for power generation, there is an opportunity to capture the gas and

generate electricity

WCMG is extracted from the coal seam through

three distinct processes:

– Surface to in-seam

– Underground to in-seam

– Surface to goaf

Gas extracted through is then transported via

pipeline to an EDL WCMG generation facility

– Generation engines are typically

containerised, installed onsite and connected

to the gas supply and the electricity

transmission network

Remote

Energy

Remote energy provides electricity to remote towns, communities

and mines that are not connected to the electricity network

EDL provides power to its customers either on a tolling basis or with

a cost pass-through of fuel costs, thereby reducing input cost risk

EDL has developed remote area power plants

which utilise natural gas (pipeline, LNG or CNG)

and/or distillate to economically meet the energy

requirements of mining operations, remote towns

and communities and other off grid locations

Power Generation from Waste Coal Mine Gas

Broome Power Station (WKPP)

EDL operates proven, reliable, low technology assets

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FX impact

33

Profit and Loss

Balance sheet

(1.0)

4.4

-1.3

(0.2)

0.5

(0.9)

0.5

(3.2)

(2.1)

FX on PPE

and

intangibles

FX on

Investments

FX on cash FX on

borrow ings

FX on

payables

FX on

receivables

FX on

others

Net impact

FY12

Average rate: FY12 FY11

AUD:GBP 0.6507 0.6210

AUD:USD 1.0365 1.0027

AUD:EURO 0.7717 0.7248

Closing rate:

AUD:GBP 0.6505 0.6614

AUD:USD 1.0159 1.0595

AUD:EURO 0.8077 0.7362

(3.7)

1.8

0.5

0.2 0.3(0.8)

FX on Revenue FX on Operating Expense FX on Depreciation FX on Financing Costs FX impact - other Net FX Loss before tax

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Appendix B

Glossary

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Glossary

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Term Definition

ACCU Australian Carbon Credit Units (AU)

AMP Ohio American Municipal Power - Ohio

Black Revenues Revenues from the sale of electricity

CAGR Compound Annual Growth Rate

CE Clean Energy

CEF Clean Energy Future (AU)

CFI Carbon Farming Initiative (AU)

CNG Compressed Natural Gas

EDL Energy Developments Limited

enGen Energy Generation Pty Ltd

GGAS Greenhouse Gas Reduction Scheme (AU)

Green Revenues Revenues from the sale of regulatory credits

LFG Landfill Gas

LGC Large Scale Generation Certificate

LTI Lost Time Injury

LTIFR Lost Time Injury Frequency Rate

MRM McArthur River Mine

MW Megawatt

Term Definition

MWh Megawatt Hour

NEM National Electricity Market (AU)

NGAC New South Wales Greenhouse Gas Abatement Certificate

O&M Operations and Maintenance

PPA Power Purchase Agreements

RE Remote Energy

REC Renewable Energy Certificate (US)

RET Renewable Energy Target (AU)

ROC Renewable Obligation Certificates (UK)

RPS Renewable Portfolio Standard (US)

TRIFR Total Recordable Injury Frequency Rate

TSA Tolling Services Agreement

UK United Kingdom

US United States

VAM Vent Air Methane

WCMG Waste Coal Mine Gas

WKPP West Kimberley Power Project (AU)

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Documents

Energy Developments Limited - ASX2012/08/22 · EDL business overview Notes: 1. Includes 21MW which are operated and maintained only 2. Includes 12MW US Lorain expansion project (commissioned—Jul-12)