wind energy workshop_PLN.pdf

Working in Partnership. Delivering Capacity.

Wind Energy Project DevelopmentKnowledge Transfer Workshop with PLN

Jakarta, Indonesia

28th October 2014

Commercial in Confidence

CWP Renewables – Australia’s Leading Wind Energy DeveloperIn Partnership with WHyPGen-BPPT

Page 2Commercial in Confidence

Contents Page

Hallett 1 Snowtown 1 Canunda Mt Millar Hallett 2

CONFIDENTIALITY

This document contains proprietary and confidential information, which is provided on a commercial in confidence basis. It may not be reproduced or provided in any manner

to any third party without the consent of CWP Renewables Pty Ltd.

© Copyright CWP Renewables Pty Ltd 2014

This work and the information contained in it are the copyright of CWP Renewables Pty Ltd. No part of this document may be reprinted or reproduced without the consent of

CWP Renewables Pty Ltd.

Disclaimer:

Whilst every effort has been made to ensure the accuracy of this information, the publisher accepts no responsibility for any discrepancies and omissions that may be

contained herein.

Document prepared by:

………………………………………..Kam Ho

Engineering Manager

M: 0488 042 903

T: 02 4013 4640

[email protected]

Workshop Agenda & Introductions

Section 1 Overview of Global Wind Energy Markets & Policies

Section 2 Life Cycle of Wind Farm Project Development

Section 3 Energy Resource Assessments

Section 4 Wind Farm Design & Analysis

Section 5 Financing Wind Farm Projects


Agenda – Day 1

Tuesday 28th October 2014

Open Book Discussions Regarding Wind Energy Projects

8:30am – 10:00am

• Wind Energy Projects – Life Cycle & Role in Power Generation

• Global Wind Energy Markets and Policies

• Understanding Energy Resource Assessments

• Financing Wind Energy Projects

Energy Resource Assessments

10:00am - 12:00pm

• Principles of Wind Flow

• Wind Resource Monitoring Programmes

• Met Masts, SODARs, LIDARs – Components, Designs and Factors

• Mesoscale and Long-Term Reference Points

• Wind Farm Modelling & Layout Design

• Probability of Exceedance (PoE) and Uncertainties

Lunch 12:00pm - 1:00pm

Wind Farm Design & Analysis

1:00pm – 3:00pm

• Overview of Software Packages: WindPRO/WASP, Meteodyn & OpenWind

• Importing Wind Data and Development of Generic Wind Farm Layout

• MCP - Measure, Correlate, Predict

• Wind Data Processing and Preliminary Energy Calculations

• Preliminary Energy Calculations

Financial Models & Wind Farm Project Financing3:00pm – 4:30pm

• Economic Viability of Wind Farm Projects

• Project Financing & Financial Models

Boco Rock Wind Farm Case Study 4:30pm – 5:30pm


Agenda – Day 2

Day 2: Demonstration of Energy Resource Assessment & Financial Models

Wednesday 29th

October 2014

Wind Farm Design & Analysis

8:30am - 10:00am

• Overview of Software Packages: WindPRO/WASP, Meteodyn & OpenWind

• Importing Wind Data and Development of Generic Wind Farm Layout

• MCP - Measure, Correlate, Predict

• Wind Data Processing and Preliminary Energy Calculations

• Preliminary Energy Calculations

Financial Models & Wind Farm Project Financing

10:30am - 12:00pm• Economic Viability of Wind Farm Projects

• Project Financing & Financial Models

Lunch 12:00pm - 1:00pm

Case Study - Boco Rock Wind Farm

1:00pm - 3:00pm• Project Development & Energy Resource Assessment

• Project Financing

Questions & Answers 3:00pm - 5:00pm


About Speakers

Engineering Manager

Melbourne, Australia

Professional Qualifications

BEng

MEnvEng

Kam HoKam joined the Wind Prospect team in January 2010 and was responsible for the growth of Wind

Prospect’s advisory interests in the Asia-Pacific region excluding the Philippines over the past 4 years,

delivering technical due diligence and advisory services on over 2.5 GW of wind farm projects around the

world. Kam is currently responsible for CWP Renewables’ engineering requirements and bringing projects

to Financial Close.

Kam has 9 years’ experience in the renewable energy industry and holds an Honours degree in Electronic

& Electrical Engineering from the University of Strathclyde and a Masters degree in Environmental

Engineering from the University of Melbourne.

Energy Resource Manager

Adelaide, Australia

Professional Qualifications

BEng

BSc

Mike MiddletonMike has been with Wind Prospect since 2004, joining as an Operations and Development Engineer and

most recently leading Wind Prospect’s global Energy Resources services team based in Bristol, UK. Mike

has a combination of project development and technical expertise and was the Development Manager for

the 132 MW North Brown Hill Wind Farm in South Australia. Mike is currently responsible for managing

CWP Renewables’ development portfolio’s energy resource assessments and procurement matters.

Mike has nearly 10 years’ experience in the wind energy industry and holds a double degree – Bachelors of

Engineering (Computer Systems Engineering) and Bachelors of Science (Applied Maths, Pure Maths and

Computer Science) from the University of Adelaide, Australia.


CWP Renewables

North Brown Hill Snowtown 1 Canunda Mt Millar Hallett Hill

‘CWP Renewables’ is a Joint-Venture between two leading global renewable

energy developers with over two decades of experience and track record in the

development of successful renewable energy projects

The Wind Prospect Group was founded in early 1990’s and was responsible for the development of

UK’s 2nd onshore wind farm. The Wind Prospect Group works in partnership with local communities

and has successfully developed over 3,500 MW of renewable energy projects around the world. The

Group’s 200-strong advisory and consultancy team has advised on over 40,000 MW of wind and

solar projects globally, with 20 offices in over 10 countries.

Continental Wind Partners was founded in 2006 when it began developing

projects in Central & Eastern Europe. It has developed, financed and built solar

and wind farms in the CEE region. From 2007 to 2012 Continental Wind Partners

developed and managed the construction of Europe’s largest onshore wind

farm, the 600 MW Fantanele Wind Farm in Romania. Continental Wind Partners

currently has 650 MW of advanced wind project developments across Central

and Eastern Europe.

Wind Prospect Group

Staff 200

Offices 20

MW Developed 3,500 MW

MW Advised 40,000 MW

Continental Wind Partners

Staff 62

Offices 5

MW Developed 1,400 MW


Wind Energy Project Development Track Record

250 MW Solar Dawn

Queensland

2011

Partnership between AREVA,

CWP Renewables and CS Energy

46 MW Canunda

South Australia

2005

Developed and Owner’s

Engineer on behalf of GDF Suez

440 MW Hallett Portfolio

South Australia

2007-2011

Developed the Hallett Wind

Farm portfolio consisting of 5

sites

370 MW Snowtown I & II

South Australia

2008

Developed Snowtown I and

Snowtown II Wind Farm projects

111 MW Willogoleche

South Australia

2004 - 2011

Developed Willogoleche Hill

and Willogoleche Hill Extension

Wind Farms

113 MW Boco Rock

New South Wales

2013

Developed and project financed

Boco Rock Wind Farm Stage 1

70 MW Mt Millar

South Australia

2002

Developed Mt Millar Wind Farm

and acquired by Tarong Energy

186 MW Barn Hill

South Australia

2013

Project managed the variation

for Barn Hill Wind Farm on

behalf of AGL

Over 3 GW of Development Expertise

319 MW Sapphire

New South Wales, 2013

513 MW Dandaragan

Western Australia, 2012

Development approvals

Yandin Wind Farm

Waddi Wind Farm

Mt Millar Wind Farm

Willatook Wind Farm

Hallett Wind Farms

Canunda Wind Farm Boco Rock Wind Farm

Solar Dawn CSP

Sapphire Wind Farm

Crudine Range Wind FarmSnowtown I & II Wind Farms


Boco Rock Wind Farm: Development

CWP Renewables successfully brought Stage One of Boco

Rock Wind Farm (113.18 MW) to Financial Close in June 2013,

including raising $ 250 million in non-recourse project

financing and $ 110 million in equity through the sale of the

project to Thai-listed utility EGCO.

Financing of 113

MW Wind Farm

June 2013

Project Summary

CAPEX $361 million

EPC Contract $270 million

Senior Debt $250 million

Construction 2013 – 2014

Principal Contractors GE-Downer EDI

Energy Offtaker EnergyAustralia

Wind Turbines58 x GE 1.7-100

9 x GE 1.62-100

132 kV line 25 km

Grid Operator Essential Energy

33 kV cables 90 km

Transformers 2 x 132 kV

113.18 MW Boco Rock Wind Farm, NSW

� CWP Renewables identified the site and fully developed the project, securing

land, grid and PPA contracts along with all the necessary approvals

� CWP Renewables partnered with GE Energy Financial Services (GE EFS) in March

2012 to bring Stage 1 of the project to Financial Close.

� Stage 1 consists of 67 units of GE Energy 1.7/1.62-100 wind turbines with a total

nameplate capacity of 113.18 MW.

� Enterprise value of $361 million with $250 million from 5 International Banks

and $110 million equity from EGCO.

� CWP Renewables retains the Asset Management role for the project which is

now operational. In this role CWP Renewables has managed all aspects of the

project through construction and now operations.


Wind Prospect – Advisory Services

Achim Hoehne

Director

Bristol, United [email protected]

Ari Liddell

General Manager

Bristol, United Kingdom

[email protected]

Alex Tancock

General Manager

Hong Kong, [email protected]

Barthelemy Rouer

General Manager

Paris, [email protected]

Ray Rysbergen

Country Manager

Manila, [email protected]

We constantly aim to exceed our clients’ expectations and provide exceptional level of advice. Wind Prospect has had “both feet” in this industry for many

years, and so have many of our colleagues who come from development, modelling, tendering, financing, construction or operation. Linking the professional

experience of every single one of our 250 colleagues into the pool of knowledge of Wind Prospect is opening up an exceptionally strong source for advice to

our clients.

Over recent years we have worked in 27 countries, covering over 40 GW of wind farm projects. Experience like that is hard to find, particularly in emerging

markets, where unique local requirements have to be paired with deep industry experience. With strong experience from Europe and Australia, Wind Prospect

has been successfully servicing emerging markets in Asia and Africa for many years.

Oscar van Rooy

General Manager

Cape Town, South [email protected]


Wind Prospect - Advisory Track Record

Pre-Construction600 MW Fantanelee Wind Farm

Continental Wind Partners LLC

Romania Project Management201 MW Hong Kong Offshore Wind Farm

China Light & Power

Hong Kong, PRC

Wind Resource120 MW Onshore Wind Farm

Confidential

Taiwan

Technical Due Diligence650 MW Wind Portfolio

Confidential

PakistanPre-Construction

54 MW San Lorenzo Wind Farm

TAREC

Philippines

Project Development440 MW Hallett Portfolio

AGL Energy

Australia

Technical Due Diligence420 MW Macarthur Wind Farm

Malakoff

Australia

Technical Due Diligence2,800 MW Wind Portfolio

Oklahoma Gas & Electric

United States

Wind Resource44 MW Onshore Wind Farm

Mainstream Renewables

Chile

Wind Resource600 MW Wind Project Development

Confidential

Canada

>8 GW

>10 GW

>25 GW

>10 GW

Technical Due Diligence142.8 MW Onshore Wind Farm

Confidential

South Africa

Wind Resource5.2 MW Onshore Wind Farm

Development Bank of Southern Africa

South Africa

Technical Due DiligenceBorde Gais Wind Portfolio

Tenaga Nasional

Ireland


Macarthur Wind Farm: Advisory

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

July 2003

Site Identified

June 2006

Planning Approval

December 2008

Planning Amendments

August 2010

EPCC Signed

September 2011

Financial CloseJune 2013

New Equity

Project at a Glance

CAPEX $970 million

EPC $850 million

Construction 2010 – 2013

Principle Contractors Vestas-Leighton

Off-take AGL Energy

Turbines Vestas V112 3.0 MW

132 kV line 15 km

Grid Operator SPAusnet

Connection Voltage 500 kV

33 kV cables 150 km

Transformers 2 x 132 kV

50% Sale of

Macarthur WF

June 2013

The Project was co-developed by Meridian Energy and AGL Energy with

construction commencing in August 2010. The Project achieved COD on January

2013 and Meridian Energy’s 50% share in Macarthur Wind Farm was acquired by

Malakoff Corporation Berhad in June 2013.

� Macarthur Wind Farm is an unincorporated Joint Venture (UJV) between AGL

Energy and Malakoff Corporation

� Located in south-west Victoria it is the largest operational wind farm in the

Southern Hemisphere

� Total installed capacity of 420 MW consisting of 140 units of the Vestas V112

wind turbine

� Connected into the NEM at 132 kV/ 500 kV Tarrone Substation

� Project was initially co-developed by Meridian Energy and AGL Energy

� Construction commenced on August 2010 with an EPC Contract signed with

Vestas-Leighton Contractors consortium

� Project achieved COD on January 2013

� Meridian Energy’s 50 % share was acquired by Malakoff Corporation in June

2013

UJV Macarthur Wind Farm

Macarthur Wind Farm Pty Ltd

AGL Energy

50% Interest

Malakoff Wind Macarthur

Malakoff Corporation

50% Interest

January 2010

Tip Height Increase


AGL Energy

About AGL Energy (AGL)

AGL is the largest Australian gas and electricity retailer, with over six million customers across SA, VIC and NSW. Its generation portfolio includes brown coal, gas, wind and hydro power stations. AGL acquired the Hallett Portfolio (440 MW) from Wind Prospect. Hallett 1, 2, 4 and 5 has now been constructed and are operational – forming the largest operational wind farm project in Australia.

“Wind Prospect’s pivotal role in the development of the Hallett Portfolio for AGL Energy has enabled us to be

one of the leading renewable energy utilities in Australia today.”

Nigel BeanHead of Generation Development

AGL Energy

About Hallett Portfolio

Wind Prospect began developing the Hallett wind portfolio of projects, consisting of five clusters in 2003. AGL Energy and Wind Prospect signed a development partnership agreement in 2004, which provided AGL Energy with exclusivity of the five projects around the township of Hallett.

Hallett 1, 2, 4 and 5 entered construction between 2007 to 2011, and with a nameplate capacity of 350.7 MW, the cluster of projects form the largest operational wind farm in Australia. The projects utilise the Suzlon S88 2.1 MW wind turbine with 80 metre tall towers.

Hallett 3 is currently in the planning process and is expected to add an additional 90 MW of wind generation capacity. Wind Prospect’s project development team, led by Michael Vawser and Doreen Marchesan was responsible for overseeing the project development and approvals process for the Hallett Portfolio.

Hallett Hill, South Australia, Australia


EDP & HgCapital

About EDP Renováveis (EDPR)

EDPR is a world leader in renewable energy, with over 7.1 GW in generation assets including over 180 wind farm projects across the world. EDPR is majority owned by EDP Group (Energias de Portugal), Portugal’s largest utility company.

“Wind Prospect Group was commissioned to carry out a due diligence project for a portfolio consisting of different sites within

a tight deadline. Successfully, a team was assembled with collaborators across the UK.

Collaborators were asked to be proactive about delivering timely feedback and meet targets deadlines before actual project

commenced. We consider Wind Prospect Group to be a reliable company and we look forward to collaborating with them on

future projects.”

Enrique AlvarezHead of Offshore Wind

EDP Renováveis

About HgCapital

HgCapital is a leading European mid-market private equity firm. Founded in 1985, HgCapital is fully independent with offices in London and Munich and over €3 billion of assets under management. HgCapital’s dedicated renewable energy fund - Hg Renewable Power Partners (€300 million) – holds controlling interests in 21 European renewable energy projects in construction and operation with an enterprise value in excess of €700 million and a further 15 projects under development.

“Wind Prospect continue to provide an ever increasing level of service for our operating portfolio. They maintain a professional approach to all operating requirements from efficient & detailed monitoring, reporting and site management through to valuable pre/post-warranty O&M advisory services. We highly recommend

them as a quality partner and service provider.”

HgCapital


CLP & E.On

About China Light & Power (CLP)

CLP is a leading Hong Kong electric company that has businesses across a number of Asian markets and Australia. CLP operates over 20,000 MW of power generation plants in mainland China and is emerging as a leader in wind energy in India.

“Utilising their experience and knowledge across the life cycle of wind farm projects, Wind Prospect assisted CLP in successfully

completing technical due diligence on potential wind farm developments in excess of 2,000 MW in China, as well as working

with us on the proposed Hong Kong Offshore Wind Farm.”

China Light & Power

About E.On

E.On is the world’s largest investor-owned electric utility service provider based in Germany. E.On owns and operates nearly 4,000 MW of onshore and offshore wind projects around the world. E.Onhas over 450 MW of wind farm projects in the UK, including the Robin Rigg 180 MW offshore wind project.

Wind Prospect and E.On has been developing and delivering wind farm projects in partnership since 2000 and are continuing to deliver pre-construction and advisory services for E.On.

“Wind Prospect has developed a track record and expertise in wind farm planning development and construction. It’s a one stop shop

where a client can choose from as little or as much help as he wants to make his project a success.

Good advice and professional service is assured, and E.On are pleased to recommend Wind Prospect to new and prospective

clients.”

Martin RobertsProject Manager

E.On


EDF & GDF Suez

About EDF Energy

EDF Energy is one of the UK’s largest energy companies with over 9,000 MW in generation capacity. EDF Energy generates about one-fifth of UK’s electricity supply and is a wholly-owned subsidiary of the EDF Group, one of the Europe’s largest energy groups.

“Wind Prospect has constructed over 250 MW of wind farm projects for EDF over more than a decade and are currently

assisting us with over 250 MW of future projects.

They continue to maintain a professional approach and excellent attitude to the job with full ownership and responsibility being

taken by the Project Manager. We would thoroughly recommend them as a quality partner in all aspects of wind farm development,

construction, operations and consultancy.”

Christian EgalChief Executive Officer

EDF Energy Renewables

About International Power (IPR-GDF SUEZ)

International Power is one of the world’s leading power generation companies with over 66 GW of assets. International Power is majority-owned by GDF Suez and has considerable presence in Australia such as the ownership of the Hazelwood Power Station.

Wind Prospect assisted International Power in developing its Canunda Wind Farm project in South Australia.

“Wind Prospect assisted International Power in developing the Canunda Wind Farm, as well as acting as Owner’s Engineer during

construction.

We have been very pleased with their quality of work and expertise in wind farm projects and related development activities, and continue to utilise Wind Prospect’s services within Australia.”

Glen ThomsonGeneral Manager Business Development

IPR-GDF SUEZ Australia


2SECTION

Global Wind Energy Overview


Global Renewable Energy Capacity

106.1GW

26.3GW

189.3GW

7.8GW

154.9GW

2.1GW

2.1GW

Bloomberg New Energy Finance, 2013

Note: Excludes large-scale hydro


Global Renewable Energy Capacity

Compunded Annual Growth Rates of Renewable Energy SectorsGlobal Renewable Energy Capacity by Sector (2000-2013)

0

100

200

300

400

500

600

2013201220112010200920082007200620052004200320022001

Small Hydro

Marine

Geothermal

Biomass and Waste

Biofuels

Solar

Wind

16%

29%

5%6%

2%

12%

3%

16%14%

5%8%

3%5%

4%

0%

5%

10%

15%

20%

25%

30%

35%

WindBiofuelsGeothermalSmall Hydro

CAGR 2008-2013

CAGR 2001-2013

0

100

200

300

400

500

20132012201120102009200820072006200520042003200220012000

Commissioned

Financed

Announced

Cumulative Capacity

Global Renewable Energy Capacity by Development Status in GW (2000-2013)


Global Wind Installed Capacity

77.4GW

4.0GW

123.2GW

4.9GW

118.3GW

0.8GW

1.5GW

Bloomberg New Energy Finance, 2013


Wind Power Growth

Wind energy has experienced exponential growth in the past decade,

with nearly 200 GW of installed capacity to date. A number of

complimentary aspects have contributed to the growth of wind power:

Energy Subsidies & Policies:

• Supportive Government policies and subsidies, such as an Emissions Trading

Scheme, Renewable Energy Target and/or Feed in Tariffs

• Supportive Government project planning policies which simplify the planning

process and scope on assessing wind farms

Community Acceptance:

• Growing community support and acknowledgment to wind farms providing

secondary income, particularly to a changing agricultural environment

• Support for renewable energy in lieu of fossil fuel or nuclear power plants

• Improving community consultation and communications with regards to the

development of wind farms

Technological Improvements:

• Continued evolution in wind turbine technology platforms and growth in turbine

blade lengths

• Improved rotor controlled mechanisms and gearbox designs which have reduced

failure rates and operational costs

• Increased efficiency of turbines – thus reducing cost per kWh of newer generation

turbines


Global Wind Power Market

EU Europe

35%

Non EU

Europe

1%

North America

& Caribbean

23%

Middle East &

North Africa

1%

Central &

South America

1%

Asia

37%

Oceania

2%

Total Installed Wind Energy Capacity by Region (2013)

0

40

80

120

160

200

240

280

320

360

20132012201120102009200820072006200520042003200220012000

EU Europe

Non EU Europe

North America & Caribbean

Middle East & North Africa

Central & South America

Asia

Oceania

Africa (excluding North Africa)

Other

Global Wind Energy Capacity by Region (2000-2013)

� Wind power is expanding to new markets, aided by falling prices. Total wind power capacity by the end of 2012 was enough to meet

approximately 3% of global electricity consumption.

� In the EU, wind capacity operating in 2012 was enough to cover 7% of the region’s electricity consumption in a normal wind year. Several

countries met higher shares of their electricity demand with wind: Denmark 30%, Portugal 20%, Spain 16.3%, Germany 7.7%.

� Four German states had enough capacity at year’s end to meet over 49% of their electricity needs with wind, and through the month of July

the state of South Australia generated 26% of its electricity from wind power.

� More than 80% of annual installations in the next decade will happen in 12 key countries. Spain and Germany as major growth drivers of the

past slowly reach saturation.

� China sees major and dynamic growth which will turn the country into the largest global market. USA with large growth potential but

uncertain political framework. India, UK, France with untapped potential. Canada, Brazil, Australia and South Africa with strong growth.


Installed Wind Capacity – Asia Pacific Region

12 46 30 150 207 407 564 6232,234 2,501

16,084

62,364

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Pacific

Islands

Vietnam Philippines Pakistan Thailand South

Korea

Taiwan New

Zealand

Australia Japan India China

Inst

all

ed

Ca

pa

city

(M

W)


Reducing Cost of Energy

Levelised Cost of Electricity – Solar PV (USD/MWh)

315292

315293

307

249235 245

201 197 188164 166 162

135

291 291 291275 272

211 219229

166 163 161148

135 132 123

0

50

100

150

200

250

300

350

Q3 2009 Q4 2009 Q1 2010 Q2_2010 Q3_2010 Q4_2010 Q1_2011 Q2_2011 Q3_2011 Q4_2011 Q1_2012 Q2_2012 Q3_2012 Q4_2012 Q1_2012

PV - Thin Film PV - c-Si PV - c-Si Tracking

Levelised Cost of Electricity – Wind (USD/MWh)

96 90 86 8693

82 84 87 8275 77 80 82 83 81

151

169178 176

185176

184 190

208219 226 228

220 219 218

0

50

100

150

200

250

Q3 2009 Q4 2009 Q1 2010 Q2_2010 Q3_2010 Q4_2010 Q1_2011 Q2_2011 Q3_2011 Q4_2011 Q1_2012 Q2_2012 Q3_2012 Q4_2012 Q1_2012

Wind - Onshore Wind - Offshore


Renewable Energy Policy Groups

Renewable Energy

Certificates

Feed in Tariff &

Tariff Auctions

Tax Benefits incl

Accelerated

Depreciation

Grant/ Direct Subsidy


National Electricity Market

� Mainland Australia consists of four major islanded grid networks:

� National Electricity Market

� Western Power (South West Western Australia)

� Horizon Power (North West Western Australia)

� PowerWater (Northern Territory)


� The National Electricity Market (NEM) is the largest interconnected wholesale market in the

world spanning over 8,000 km from Queensland through to South Australia and Tasmania.

� All States and Territories in the East Coast of Australia are connected into the NEM:

Queensland, New South Wales, Tasmania, Victoria and South Australia.

� The NEM is managed and operated by the Australian Energy Market Operator (AEMO) with a

total installed capacity over 50,000 MW.

Wholesale Market

� Each State has a Regional Reference Node (RRN) in which generators and users within the

State bid and is dispatch accordingly.

� A number of interconnectors between each State provides greater market flexibility and

adaptability of localised network constraints.

� Only about 20% of the electricity retail tariff is accounted by the electricity spot price.

The Market Ceiling Price

� The maximum spot price is set at $13,100 per MWh (13/14)

The Market Floor Price

� The minimum spot price is set at -$1,100 per MWh (13/14)


www.aemo.com.au

www.aer.gov.au

Australian Energy Regulator (AER)


3SECTION

Wind Energy Projects

Life Cycle Overview


Wind Turbine – Key Components


Wind Turbine Evolution


Tower Types

Hybrid concrete/steel towers

Lower section concrete

Used in taller structures

Easier to transport as the sections can be divided in

approx. 5m each

A good alternative when steel prices go up

Steel towers

Most common tower type,

3 sections, transported by long vehicle

Challenging for transport

Dependent on steel prices

Lattice towers

Cheaper than steel and concrete

Limited height/strength

Increased visual impact

Rarely used for modern turbines


Wind Turbine Blades

• Energy in the wind is limited

• More blades means the less power each can extract

• So each must be narrower to maintain efficiency

• Even with 3 blades, they must be fairly narrow

• Difficult to build strong, thin blades.

• Finally comes down to aesthetics. 3 turbine blades are considered to be most visually appealing.


IEC Wind Turbine Classes

Wind Turbine Class 61400-1 2005 I II III

Vref Extreme wind (turbulent) (m/s) 50 42.5 37.5

Vave Mean wind speed (m/s) 10.0 8.5 7.5

Ve50 Extreme wind (steady) (m/s) 70 59.5 52.5

Turbulence class A 0.16

Turbulence class B 0.14

Turbulence class C 0.12

Shear exponent α 0.2

• Every wind turbine model has to be certified as a minimum with an A - Design

Certificate according to IEC 61400-1 2005 (Edition 3)

• Required by financiers on project finance deals, required by insurance companies and

by most active investors in the wind power industry


Wind Farm Economics

PROJECT

LENDER

EQUITY

INVESTOR

EQUIPMENT

SUPPLIERS

PROJECT

DEVELOPER

PROJECT NPV

Operations

All about sale of electricity

Project Developers have a major role in

determining the realisation of wind farm

projects, along with an Equity Investor’s

hurdle rate for returns

Revenues = Resource x Availability x Power Price

Wind Resource ($/MWh)

- Strong wind monitoring regime

- Speed, direction, pressure, temperature

- Minimal uncertainties (P50 vs P90)

- Quality anemometers and equipment

- Favourable long-term correlations

- Wind turbine site suitability

Losses & Availability (%)

- Electrical losses

- Wake losses

- Plant availability

- Grid interruptions

- Scheduled maintenance

- Power curve and reliability

- Blade icing/ degradation

Power Purchase Agreement ($/MWh)

- Electricity price

- Green certificates (RECs)

- Carbon price

- Duration of agreement

- Capacity payments


Managing Wind Project Contracting Risk

TECHNICAL

DUE DILIGENCE

Planning &

Environmental

Risk Wind Analysis

Contracts,

Warranties

& interface risk

Ground and Access Risk

Programme risk

Asset Life of

Technology &

Lifecycle

Costs,

benchmarking

& contingency

Technology track-

record


Overall Project Bankability Considerations

Planning

Construction

Grid

Offtake

Financing

Nameplate Capacity

Micrositing Capability

Tip Height

Wind Resource

Planning Expiry

EPC vs BOP

Delay Liabilities

Environmental Management

Community Management

Construction Risk

Congestion RiskConnection Standards

PPA vs Merchant

Bundled or Unbundled

Contract for Differences

Tenure vs Upfront

Change of Law Risk

Project Finance

Balance Sheet

All Equity

Grant Funding

Project Bankability Considerations

Availability


Investment Considerations

Three categories of wind farm projects:

Green Field

• Early stage wind farm projects which have to secure long-term on site wind

resource, land tenure and crucially – Planning Consent;

• Higher risk due to longer project timeframe – and risk associated with Planning

Application;

• Planning Consent typically involves an extensive Environmental Impact

Assessment.

Green Field Development

Brown Field Purchase & Funding

Site Identification | Wind Resource Monitoring | Planning & Approvals | Consent & Sale | WTG Procurement | BOP Procurement | Engineering & Design | Agreements & PPA | Financial Close

Operational Acquisition

Brown Field

• Project with Planning Consent but may not necessarily include all secured land

tenure(s);

• Power Purchase Agreement and all other pre-construction works to achieve

Financial Close may still be pending.

Operational/ Post-FC

• Acquisition of a project post-Financial Close which may be under construction

or in operation.


Project Prefeasibility Assessments

• Land Ownership Types

• Land Ownership Boundaries

• Distance Between Dwellings & Townships

• Community Support for Utility Scale Wind Farms

• Existing Land Use Types, Zoning & Future

Developments

• Resource Leasing

Land Suitability

Road Access & Geography

Grid Interconnection

Wind Resource


Road Access & Site Geography

• Port Facilities

• Site Access – Turnings and Requirements

• Site Geography – Access Restrictions

Land Suitability



Wind Resource

http://www.youtube.com/watch?v=7tg0518Jde4



• Type of Electricity Network and Vicinity to Wind Farm

• Network Load

• Network Access Standards

• Connection Type – Mesh, Tie In, Tee

Land Suitability

Road Access & GeographyGrid

Interconnection

Wind Resource


Wind Resource

Land Suitability



Wind Resource

8.51 m/s

6.75 m/s

• Identifying Potential Wind Resource – Meteorology

Data or Mesoscale Models

• Construction of Onsite Measurement Masts

• Mobilisation of Ground-based SODARs and LIDARs


Environmental Impact Assessments

• Purpose:

– To provide information for decision-making on

environmental consequences of proposed actions

– To promote environmentally sound and sustainable

development through the identification of appropriate

enhancement and mitigation measures

• Definition:

“…systematic process to identify, predict and evaluate the

environment effects of proposed actions and project…”

“…whenever appropriate, social, cultural and health effects are

considered as an integral component of EIA...”

“…particular attention is given in EIA to preventing, mitigating

and offsetting significant adverse effects of proposed

undertakings…”


Shadow Flicker Assessment

• Sun passes behind rotating blades of wind turbines casting an

intermittent shadow

• Shadow flicker is an effect when viewed from a stationary

position as the blade shadow appears to flick on and off

• Duration of shadow flicker and locations likely to be impacted

can be calculated from geometry of wind turbine and latitude

of the site

• International regulations are in place on shadow flicker – but

certain countries are more stringent that others

• In some states in Australia, wind farm planning guidelines

require that shadow flicker experienced immediately

surrounding the area of a dwelling (garden fenced area) does

not exceed 30 hours per year as a result of the operation of the

wind farm.

• Peer reviewed research have illustrated that the wind turbine

shadow flicker does not pose a ‘significant risk to health’ but

pose as an annoyance to the local community and should be

avoided or kept at a minimum

• General rule of thumb is that shadow can be casted 10x rotor

diameter


Shadow Flicker Assessment

http://www.youtube.com/watch?v=MbIe0iUtelQ

http://www.youtube.com/watch?v=sdhYcVgYemM


Ecology Assessment

Ecology assessments should consider:

• whether flora (plants) or fauna (animals) species are

protected under any environmental legislation;

• the sensitivity of any protected species to disturbance;

• the potential loss of habitat of protected species; and

• measures to minimise impacts on any native species.

Ramsar wetlands are protected under the Ramsar

Convention, which is an intergovernmental treaty for the

conservation and sustainable use of wetlands.

References are often made to the International Union for

Conservation of Nature (IUCN) Red List Classification

• Assists in highlighting species which are threatened;

• Flora impacts can be mitigated through “bio-offsets”;

• Fauna impacts can be mitigated through “controlled

measures” such as limited construction timeframe or stop

dates on operational of wind turbines

• Woolnorth Wind Farm – Orange Bellied Parrots

• Bald Hills Wind Farm – Orange Bellied Parrots

• Boco Rock Wind Farm – Earless Dragons


Noise Assessment

Noise is often the most important factor in

determining the separation distance between

wind turbines and sensitive receptors.

• Noise assessment is therefore significant in

determining the size and viability of a wind

farm project.

• Currently no internationally agreed noise

standards – highly dependent on country and

may differ from day to night

• Some countries acknowledge higher noise

limit at higher wind speeds

http://www.abc.net.au/4corners/special_eds/20110725/wind/

Base noise limit Background noise limit margin Comment

World Health Organisation 43 dB(A)

Victoria & South Australia 40 dB(A) 5 dB(A) The greater of the above limits apply

New South Wales 35 dB(A) 5 dB(A) The greater of the above limits apply

New Zealand 40 dB(A) 5 dB(A) The greater of the above limits apply

United Kingdom40 dB(A) (day time)

43 dB(A) (night time)5 dB(A) The greater of the above limits applies

Denmark44 dB(A) at 8m/s

42 dB(A) at 6m/s

No background noise limit is applied.

The noise limits are determined for wind

speeds taken at 10m above the ground.



Noise Impact Assessment


Visual Impact Assessment

The level of visual impact of a wind farm will

depend on the extent of change to the landscape

caused by the development, taking into account:

• Visibility of the development;

• Locations and distances from which the

development can be viewed;

• Landscape values; and

• Sensitivity to the landscape to change

Photomontages are often developed to assist the

community in visualising the presence of the wind

farm


Grid Access Considerations

Grid Capital Expenditure

Quantifying costs of connection in the network, such as the wind

farm substation, transmission line augmentations and switchyard

Operational & Maintenance

Quantifying long-term annual operational costs for maintaining

connecting electrical infrastructure

Marginal Loss Factors

Gaining an understanding of MLFs and future trends such as load

and generation variations with regards to Regional Reference

Nodes.

Network Congestion

Modelling the risk of congestion as more intermittent generation

projects are connected into the network

Network Stability

Understanding the performance of wind generators as projects

are connected into weaker grid networks – the need to balance

security of supply and cost of connection


Wind Farm Grid Connection

Wind Turbine

Generator

Internal Reticulation Network

(Overhead or Underground)

Wind Farm Collector

SubstationWind Farm Transmission Line (Optional) Network Switching Station

0.69kV >11 kV >66 kV >66 kV >66 kV

Reticulation Voltage

The internal reticulation voltage is dependent

on a number of factor such as carrying

capacity (MW) of each circuit and specific

project requirements. 33 kV is by far the most

common globally, though certain projects do

use 22 kV or 11 kV reticulation cables.

Transformer Voltage

The role of the transformer

is to transform the medium

voltage (33 kV) to a higher

voltage for efficient long-

distance power

transmission. The high

voltage side of the

transformer is dependent

on the grid network voltage

(e.g. 132 kV).

Transmission Line

A high voltage transmission line between

the collector substation and switching

station is only required if they are not

located adjacent to each other. The

transmission line at varying voltages will

require different easement widths.

Switching Station

A switching station safely connects

new generators into the wider

transmission network. A switching

station usually does not contain

step up transformers – only

network switching equipment such

as circuit breakers and isolators.


Wind Farm Reticulation - Construction

Photos from Grasmere Wind Farm, Verve Energy

1. Trenching Along Cable Route 2. Open Trench Without Cables Installed

3. Cable Transported to Site 4. Moving Cable Drums to Trench


Wind Farm Reticulation - Construction

Photos from Grasmere Wind Farm, Verve Energy

5. Three single-core cables installed in trench

6. 22 kV single core XLPE cables

7. Rigid plastic installed as

mechanical protection

8. Deep Cable Trench for

Parallel XLPE Cables


General WTG Components


Grid Performance – Technical Considerations

Assessment Considerations

• Reactive Power Capability

• Fault Ride Through

• LV/HV Tolerance

• Grid Strength (SCR)

• Voltage Imbalance

• Voltage Regulation

• Frequency Distortion

• Harmonic Distortion

• Islanding

• Fault Current

Assessment Process

• Steady State Simulations – PSS/e or DIGSilent

• Reactive Power Capability (WTG and Park)

• Electricity Quality (Harmonics)

• LV/HV Tolerance

• Frequency Distortion

• Grid Strength

• Islanding

• Fault Current

• Dynamic Simulations – PSS/e or DIGSilent

• Islanding/Inter-tripping

• Voltage Imbalance

• Voltage Regulation

• Fault Ride Through

• Wind Turbine Transient Modelling – ATP/PSCAD

• Quality of Electricity Modelling

• Wind Turbine Model Dynamic Validation:

• Validating PSS/e Model Assumptions

• Real Life Test Scenarios

• Needs Verifications by NSP


A-Z for Financing Wind Projects

A Availability

B Birds & Bats

C Certification

D Due Diligence

E Energy Yield

F Financing

G Grid Connection

H Hub Heights

I IRR

J Joint Venture

K Shape Factor

L Liquidated Damages

M Measurement Campaigns

N Net Losses

O Operational Plans

P Power Purchase Agreement

R Rotor Sizes

S Subsidies & Policies

T Technology Risk

U Uncertainty

V Viability

W Warranties

Y Yaw


5SECTION

Financing Wind Farms


Project Funding

All Equity Balance Sheet Recourse Non-Recourse

Project Funding OptionsGenerically there are four types of project funding options as detailed below. Each has its merits and limitations with the Non-Recourse Project

Financing the most “bankable” as the Project Lenders will not seek recourse from the Project Owner should it result in a default.

All Equity funding option is

uncommon for large-scale

renewable energy projects as

the capability to leverage results

in an improved rate of return for

principle investors.

The only case study for such an

arrangement in Australia is

Hepburn Park Wind Farm, which

was funded through private

investors and grants from

various parties with a total

enterprise value of $12 million,

paid upfront.

All Equity is the only

“unleveraged” financing option.

Balance Sheet financing is the

most common option for

vertically-integrated utilities or

large-scale generators to fund

the construction of wind farm

projects in Australia.

Utilities such as AGL Energy and

TrustPower use their corporate

balance sheet which has access

to debt to fund construction of

projects during the short term

until the debt term expires.

This allows utilities to de-risk

projects at an earlier stage and

only seek non-recourse financing

when the asset is in operation.

Recourse financing requires the

Project Owner to provide a

Company Guarantee to lenders

and therefore limits the

lender’s exposure in the event

of construction delays or

payment defaults by the wind

farm.

Limited recourse financing has

been mobilised recently, such

as Portland 4 Wind Farm which

was partially funded by CEFC

with liabilities bounded with

Pacific Hydro and its parent

company to limit CEFC’s

exposure to electricity pricing

risks.

Non-Recourse financing is the

most bankable method for wind

farm projects and requires all

approvals and contracts to be

agreed to the satisfaction of the

lenders.

Project lenders do not have

recourse against the Project

Owner and therefore non-

recourse financed wind farms are

usually developed to the best-

practice as it is deemed lowest-

risk to institutional investors.


Project Financing Structure

SPV

Leasehold Land

Permissions and Consents

Power

Offtaker

Bank

Senior Debt

& Hedging

Turbine supplier/installer/

Operative company

Balance of Plant

Contractor

Equity

Shareholders

Equity

Power Purchase Agreement (PPA).

Debt

Shareholder AgreementCredit Documentation

Grid Company

Parent Co

Surety

Parent Co

or Surety

Development Fee

Grid Connection Agreement

Turbine

Supply

Agreement

(TSA)

Operating &

Maintenance

Contract

(O&M)

PPA Direct

Agreement

BoP Direct

Agreement

Balance

of Plant

Contract

(BoP)

TSA Direct

Agreement

O&M Direct

Agreement

Interface

Agreement

Intercreditor


Technical Inputs

• Energy yield (P50, P90, sometimes ‘capacity factor’)

• Remaining development costs / developer premium

• Capital costs

– All costs for construction, either through EPC or multi-contract

– Turbines, towers, foundations, roads, grid connection, substation

– Developer premium

• Operating costs

– O&M agreement for length of signed contract (2-10 years)

– Assumed extension or alternate provider

– Assumed period of total operation (20 years)

• Decommissioning reserve

• Programme

• Constraints / Loss adjustment factors

• PPA/Tariff

• Lease arrangements


• Inflation (estimates, sensitivity)

• Bundled PPA tariff or forecast merchant power prices

• Exchange rates

• Discount rate

• Contingency (development, construction, operation)

• Transaction costs.

• Payment profile for contractors

• Financing costs (incl. DD)

• Interest rate

• Equity

• Cost of capital

• Debt

• Interest rate and tenor

• DSCR

• Reserve accounts

• Depreciation

• Debtor / creditor days

Commercial Inputs


Project Capital Costs - CAPEX

• Capital costs will vary according to contractual structure:

– Engineer, Procure and Construct (EPC), also referred to as a turnkey construction contract

(TCC)

– Multi-contract

• Can be as few as 2 or 3, but may be 10 or more

– Pre-construction and engineering design

– Turbine procurement, installation and commissioning

– Civil works

– Electrical supply, installation and commissioning

– Project management

• Choice depends on

– Financing route

– Experience

• Costs vary because of risk transfer


Operational Costs - OPEX

• Typical wind farm operational costs

– Lease / rental payment to landowners

– Insurances: public liability, mechanical break down, and business interruption

– Plant and site maintenance and management

– Continuous 24/7 monitoring

– Energy imports (real and reactive power)

– Generation / Transmission use of system charges

– Any local land or tax charges


P50 and Debt Service Cover

Probability of Exceedance

• Probability of Exceedance (PoE) refers to the chances that a particular

measure will be surpassed by the value in another, randomly selected

measure:

– The Central Estimate (P50): 50% chance that the result will be

lower and a 50% chance the result will be higher than the

predicted long term energy yield

• Individual uncertainties combined to give results for various PoE energy

levels for 1, 10 or 20 years

– Equity general looks at P50 and P75

– Senior Debt general looks at P75, P90 and even P99

Senior Debt

• Lenders tend to have limited upside and is exposed to a larger downside and therefore

puts in substantial layer of protection to control risk through the “Debt Service

Coverage Ratio” (DSCR).

• DSCR is the amount of cash flow available to meet annual interest and principal

payments on debt, including other sinking fund payments.

• DSCR less than 1 would mean a negative cash flow (e.g. project operating

income is insufficient to repay senior debt).

• If DSCR is less than the minimum (calculated) threshold then the Project would

have to reduce its debt limit and increase its equity contribution.

DSCR = Net Operating Income

Total Debt Service

DSCR is determined by Project Lenders,

not Developers. However it is important

to note that Developers have the

opportunity to influence through WTG

technology, PPA terms and most

important – reducing uncertainty with

wind resource (P99)


Equity Returns Considerations

Equity usually has the lowest priority when it comes to distribution of cash – e.g. post operational expenses, interestand principal repayments and tax liabilities.

Net Present Value (NPV)NPV is the difference between the present value of cash inflows and the

present value of cash outflows. NPV is used in capital budgeting to analyse

the profitability of an investment or project. NPV compares the value of a

dollar today and to the value of that same dollar in the future, taking inflation

and returns into account. NPV analysis is sensitive to the reliability of future

cash inflows than an investment or project will yield.

The XNPV function in Excel requires Discount Rate, Net Cashflows and

Dates of distributions in order to calculate the NPV.

Internal Rate of Return (IRR)The IRR is the rate of return used in capital budgeting to measure and compare the profitability of investments, e.g. the

expected rate of growth from the project and is sometimes referred to as the “Economic Rate of Return” (ERR). The higher the

Project IRR, the more attractive it is for investors.

The hurdle rates for investors range substantially depending on the timing of equity entry (development, construction or

operational) and the type of investors. Infrastructure Investors may have a lower hurdle rate but generally isn’t willing to accept

construction or development risk.

The XIRR function in Excel requires Net Cashflows, Dates and Guess values in order to calculate the IRR. The Guess value is

10% by default.

Documents

wind energy workshop_PLN.pdf