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Presented by Daniel E. DuBois
Lessons Learned
• Developers – don’t fall in love with your projects
• What do I mean ?
Lessons Learned
• Is your project doomed (and you don’t know it)?
• Some clues – 1. Unrealistic economics2. The community hates it (or you)3. No transmission4. It’s a money pit
Unrealistic Economics
• Major components – Scale– Wind resource– Capital costs (turbines + BOP)– Expected return– O&M (planned & unplanned)– Revenue
Unrealistic Economics
• Create some practical guidelines • Example – (assumptions)
– Scale = 50MW (land – 100 acres /WTG)– Wind = 7 m/s (30% NCF)– Installed costs = $2,000 / MW installed– O&M = $50-70k/WTG – Projected return 9% IRR
• Revenue = $80/mWh escalated at 2%
Unrealistic Economics
Wind vs. Required Revenues
$0.00
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
$0.16
6.0 6.5 7.0 7.5 8.0 8.5
Average Wind Speed in M/S
Pri
ce
Pe
r K
illo
wa
tt H
ou
r
Based on the production of a 50MW project requiring a 9% IRR Unlevered Return
Community relations
• Positive community relations is critical– It is the root of every permitting process
• Is it not going well?– Some clues –
• Misinformation (rumors)• Organized opposition• Law suits
Community relations
• What to do?– Improve communication– Regular local presence (local office)– Town hall meetings– Enlist supporters (land owners)– Monthly newsletter
Interconnection vs. Transmission
• Do you have interconnection problems ?
– Distance - On-site vs. miles– Property rights– Competition
• Do you have transmission problems?
– Deliverability standard– Energy/capacity– Curtailment
Money Pit
• Is your project a money pit?– Are you over budget?– Unforeseen expenses
• Law suits• Transmission studies
– Are you behind schedule• Permitting delays
• Contingency planning
Conclusions
• Evaluate development projects – Objectively– Realistically– Often