European Energy and Nordic Power Partners Presentation kw, Johannesburg, South Africa

Transcription

1 European Energy and Nordic Power Partners Presentation kw, Johannesburg, South Africa

2 Introduction to the European Energy Group European Energy Our development activities European Energy A/S was founded in 2004 by Knud Erik Andersen and Mikael Dystrup Pedersen. The Company is a privately owned Danish company operating in the renewable energy sector MW EURM 680 EURM 520 MW Since 2004 until we have developed, constructed or invested in: 56 onshore wind farms 19 solar farms corresponding to a total investment of EUR 680M and 520 MW capacity Equity has increased sharply over the last 10 years Equity 2004: EUR 4M Equity 2013: EUR 53M Equity 2014E: EUR 59M Operating asset portfolio: Total capacity (partially owned): 364 MW Owned by EE: 124 MW Assets managed by EE: 404 MW Extensive project pipeline exceeding 2,700 MW Approx. 1,200 MW of the pipeline relates to near-shore wind projects Equity growth Equity 59M M M E -

3 Business model DEVELOP FINANCE Partial sale of turn-key project Sale of electricity ASSET MANAGEMENT CONSTRUCT European Energy s business model is based on: sale of turn-key projects primarily developed by the use of in-house competencies sale of electricity generated by the renewable energy power plants and asset management of wind and solar farms

4 Business Model European Energy & Nordic Power Partners holistic value chain approach Traditional focus P h a s e s Politics / law making Project development Financing Farm Power sales Partial sell-off D e t a i l s Ensuring sound judicial surroundings for investments Designate geographical areas for renewable energy Cooperation with partners on: Land lease and power purchase agreements Turbines / Modules Operations agreements Production estimates by independent verifiers Wind / solar studies Construct project financing via various ownership models Construct renewable energy plants B2B power sales to utility companies via power purchase agreements Administration of power plant operations Partial sell-off to third parties, usually 50% - 80% of the assets Time Frame Ongoing months 1-6 months 1-6 months years Risk Mgmt. Preliminary countryspecific study Project-specific risk assessment Financing through nonrecourse loans Full service O&M against operative risk Guaranteed tariffs or PPAs The business model extends the financial investment case with deep know-how in renewable energy project development, construction, operation, and key local insight in buyers of projects. Continuous risk-evaluation activities are carried out throughout the whole development period, particularly in the initial market access and initial project assessment stages. 4

5 Corporate structure and ownership Corporate structure Board of directors European Energy A/S Knud Erik Andersen, CEO and founder Education: Master of Science from DTU Experience: Founder European Energy A/S in Cofounder and CEO of Inside Technology A/S which was sold to Kontron AG in 2003 Illustrative overview Jens-Peter Zink, Executive VP Education: Cand.merc.aud (accountant) from Copenhagen Business School Experience: Joined European Energy in Prior to joining European Energy Jens-Peter worked ten years for KPMG Denmark in various positions including Manager M&A European Energy A/S is the parent company of the group European Energy A/S owns several subsidiaries that in turn own additional subsidiaries/associates In addition, European Energy A/S owns several subsidiaries and associates directly Mikael Dystrup Pedersen, CTO, Chairman and founder Education: Master of Science in Electrical Engineering, DTU Experience: Joined European Energy in Prior to joining European Energy Mikael worked for Sentic A/S (CTO Wind Turbine Controller) and Inside Technology (CTO Box Products Inside). Mikael is also co-founder of Inside Technology A/S and Xytel Systems A/S European Energy A/S is fully owned by the board of directors

6 Market drivers PEST analysis Political trends Economic trends Many governments wish to reduce dependency on fragile states, eastern European countries wish to reduce dependency on Russia The recent nuclear accident in Japan has increased political will to phase out nuclear power Focus on job creation from new business segments based on renewable energy On the other hand Governments are phasing out/reducing the levels of subsidy for Renewable Energy Sources ( RES ) Prices of CO2 quotas have been low due to lack of political will The reduction of subsidy levels reduces RES investment activity on the short- and medium term Long-term interest rates have been pushed down and investors seek yield - While government bonds yield 2-3%, renewable energy projects yield 5-6% - Operational infrastructure alternative to high yield bonds can provide inflation protection Institutional investments in European renewable energy projects have increased since 2008 Institutional investors are increasingly focused on developing products appropriate for renewables, which is assumed to ease project financing in the future further New types of investors with appetite for RES increases liquidity and improves financing opportunity which increase RES investment activity Social trends Technological trends Climate change has increased public awareness about RES and strengthened support for expanded capacity In line with the growth in population and increased global wealth, electricity consumption is assumed to increase significantly - Global energy demand is expected to grow by one third by 2035 Populations, notably in Europe, are critical towards nuclear power production Pension savers preoccupied with socially responsible management of savings Air pollution around major cities in China forces the Chinese government to stimulate renewable investments Population growth will increase the demand for electricity, but not necessarily RES. Therefore no direct positive influence on RES investment activity Electricity production from tried and tested technology has become increasingly competitive throughout the past 5-7 years Some RES are expected to reach grid parity i.e. marginal production price becomes competitive with fossil fuelled electricity production within the next 3-5 years The competitiveness from onshore wind leads to an expected CAGR of 10% till 2030 with a global installed capacity of 1.6 TW Overcapacity among hardware producers is driving down prices Phasing out conventional (old) power plants increases demand for new sources of electricity Decreasing hardware prices makes RES increasingly attractive as sources of electricity. This influences RES activity levels positively

7 EUR / W EUR / Wp Technological development reduces subsidy dependence Wind Solar Investment cost (EUR/MW) 1,50 Wind 1,40 1,30 1,20 1,10 1,00 0,90 0, MWh/MW Investment cost (EUR/MW) 6 Solar Year New investments will be fuelled by increasingly competitive investment costs 30% and 40% reduction for onshore and offshore wind between 2012 and 2030 Analysts at Bloomberg and MAKE consult expect onshore wind turbines to reach grid parity within the next 2-4 years Price per installed capacity has decreased and efficiency increased In some developing countries we already experience diesel parity from solar PV electricity production Cost of energy (EUR/MWh) Fossil fuel Renewable energy Subsidy element Grid parity Sources: Bloomberg New Energy Finance, GTM Research

8 RES competitiveness in 2014 The wholesale price for Futures is about EUR 0,04/kWh. This price mainly covers the short-term operating costs of the power plants, but not the investment costs. The full cost of a new coal-or gas-fired power plant will be 7 to 11 eurocents / kwh. Prices for electricity by source (eurocent/kwh) ,25 10 Sigmar Gabriel, Vice-Chancellor and Federal Minister of Economics and Energy of Germany, January The government will guarantee the nuclear powerplant a price of up to 92.50* pounds per megawatt-hour of electricity for 35 years, more than twice the current market rate, EDF and the British government said on Monday * Corresponding to EUR MWh (0,.125/kWh) Reuters, October ,67 3,9 Onshore wind turbines in Denmark receive market price (EUR 0,039/kWh) and a subsidy corresponding to EUR 0,0067/kWh per year if evenly distributed over the lifetime of a turbine (25 years) 2 Knud-Erik Andersen, CEO, European Energy, January German fossil fuel based electricity production UK nuclear 35-year PPA Denmark market + subsidy (25 yr. annual avg.)

9 Diversified pipeline onshore and near-shore > 2,700 MW Wind projects Total onshore wind capacity ~1,066 Total near-shore wind capacity ~1,200 TOTAL WIND CAPACITY ~2,266 Solar PV projects Total Solar PV capacity 275 Total wind and SolarPV capcity ~2,541 Wind projects in the EE pipeline Solar PV projects in the EE pipeline R R R R R Wind projects Total wind power 180 Solar PV projects Total Solar PV 25 Total wind power and PV ~205 R R Excluding the NPP pipeline (not to be disclosed)

10 Danish near-shore project development focus on the coastlines In 2012, EE applied to the Danish Energy Agency under the open door legislation in order to get permission to investigate the business potential in 5 near shore locations in Denmark The total potential volume of near-shore projects in Denmark exceeds 1,200 MW In 2013 the Danish Energy Agency published the tender process for six near shore wind farms EE has secured the best locations with superior wind resources in Omø South and Jammerland Bay The two projects represent a potential of 560+ MW new capacity and a total construction investment in the excess of 1.2 billion euro. Near-shore wind farms (Jutland), Denmark JAMMERBUGT NORD JAMMERBUGTEN HANSTHOLM ØST JUTLAND Near-shore Wind farms (Zealand), Denmark OMØ SOUTH 320 MW Capacity Orbicon selected as EIA sub-contractor Geo-physic survey completed EIA report finalized in Q JAMMERLAND BAY 240 MW Capacity Orbicon A/S selected as EIA sub-contractor Geo-physic survey completed EIA report finalized in Q ZEALAND

11 Nordic Power Partners Joint Venture between European Energy and the Danish Climate Investment Fund The value proposition is to develop wind and solar photovoltaic projects from green field until ready-to-build stage Geographical scope is emerging markets and developing countries The projects are developed through the successful business model of European Energy and by utilizing IFU s vast experience in investments in such countries OECD DAC Countries - countries and territories eligible to receive official development assistance (ODA) NPP focus

12 PEST analysis Emerging Markets all up from low level Political trends Economic trends Many emerging markets are suffering from the consequences of lack of electricity Long-term interest rates have been pushed down and investors seek yield The cost of lacking or unstable electricity supply is many times higher than RE generation cost. Fast electrical expansion is only possible with Diesel or with RE, of which RE is cheaper. In many countries RE is even cheaper than the existing generation capacity Distributed energy ensures energy and employment outside the cities and serves as regional development engine On the other hand Corruption and lack of government Unstable political environment Lack of Energy. RE is the cheapest technology for quick fixes Corruption and unstable political is not good for long term investment Institutional investments in European renewable energy projects have increased since 2008 Increased investments in emerging markets Institutional investors are increasingly focused on developing products appropriate for renewables, which is assumed to ease project financing in the future further On the other hand Unstable political environment Closed markets New types of investors with appetite for RES increases liquidity and improves financing opportunity which increase RES investment activity Social trends Technological trends Climate change has increased public awareness about RES and strengthened support for expanded capacity In line with the growth in population and increased global wealth, electricity consumption is assumed to increase significantly - Global energy demand is expected to grow by one third by 2035 Air pollution around major cities in China forces the Chinese government to stimulate renewable investments Emerging markets often have more focus on development than the visible impact of turbines or solarparks On the other hand Corruption Population growth will increase the demand for electricity, but not necessarily RES. Therefore no direct positive influence on RES investment activity Electricity production from tried and tested technology has become increasingly competitive throughout the past 5-7 years Some RES are expected to reach grid parity i.e. marginal production price becomes competitive with fossil fuelled electricity production within the next 3-5 years The competitiveness from onshore wind leads to an expected CAGR of 10% till 2030 with a global installed capacity of 1.6 TW Overcapacity among hardware producers is driving down prices Phasing out conventional (old) power plants increases demand for new sources of electricity Decreasing hardware prices makes RES increasingly attractive as sources of electricity. This influences RES activity levels positively

13 Why is EE and IFU/DCIF a good match? European Energy Long term project development track record Operational experience Financing track record Strong Engineering background Deep technical insight in PV and Wind Legal experience International network within RE IFU & DCIF International track record Local offices Danish State ownership Financial strength International network with governments Experience with public donor financing institutions Focus on investments in already developed projects 2010

14 NPP Achievements First three quarters of 2014 The first two solar PV projects on the Maldives are solely awaiting administrative permits The development of a 82 MW wind project in Jordan has progressed The development pipeline exceeds 200 MW Expectations for the rest of 2014 / beginning of 2015 Construction of the first two projects on the Maldives will be initiated Further expansion of the pipeline on the Maldives

15 Thank You for Your attention! Nordic Power Partners P/S Gyngemose Parkvej Søborg Denmark Tel.: Fax: