Creating Bankable Renewable Energy Projects in Emerging Markets. Kai Ilham Klingenhagen Business Development, Asia Pacific juwi AG

Transcription

1 Creating Bankable Renewable Energy Projects in Emerging Markets Kai Ilham Klingenhagen Business Development, Asia Pacific juwi AG

2 Contents Juwi at a Glance Utility Scale Projects 1. Renewable Energy Project Development 2. What Lenders and Investors Look for? 3. Risk Assessment and Mitigation 4. Conclusions Project Development Case Studies (References) Fuel Saver Projects (Hybrid Solutions) 1. Motivation and Functionality Confidential 2

3 juwi at a Glance Company structure Founded in 1996 by Fred Jung and Matthias Willenbacher (juwi), pioneers for renewable energies with agricultural roots juwi Holding AG is an owner-managed group of companies and not listed on the stock exchange Employees > 1,800 employees (in 18 countries) Annual energy output around 4.5 billion kilowatt-hours corresponds to the annual power demand of around 1.3 million households Investment volume (since 1996) around 5 billion Euro Revenues around 1.1 billion Euro in 2012 Total capacity around 2,500 megawatt (est. 2,200 plants) juwi headquarters in Wörrstadt

4 Our Vision 100% Renewable Energies Clean Power Production Energy Efficiency Green Buildings Electromobility Hydro Power Geothermal Energy Bio Energy Solar Energy Wind Energy Joint-Ventures Research & Development Work together to implement renewable energies economically and reliably with passion

5 International Offices, Project Locations and New Markets Western Europe Germany, France, Great Britain (In cooperation: Switzerland) Southern Europe Italy, Spain, Greece Eastern Europe Czech Republic, Poland, Bulgaria Americas USA/Canada, Costa Rica, Chile Asia Singapore (Japan, Thailand, Malaysia) India Africa South Africa

6 Utility Scale Projects Renewable Energy Project Development Confidential 6

7 Renewable Energy Project Development Goal-oriented integration - Project Definition + Consulting & Acquisition Planning Development Financing & Sales Construction Management + Risk - Confidential 7

8 Typical project Structure Juwi Investor EPC PD SPV RE plant Equity Debt Debt Facility Bank Pledge of all rights and securities Confidential 8

9 Project Development Key Interfaces Confidential 9

10 Utility Scale Projects What to Investors and Lenders look for? Confidential 10

11 Project Financing - What do investors/lenders look for? Transparency Longevity Certainty & Consistency

12 Perceived Risk Project Finance Feasibility Matrix HIGH NON-BANKABLE PROJECT GOVERNMENT SUPPORT MARKET ECONOMICS PROJECT ECONOMICS FINANCIAL STRUCTURING BANKABLE CONTRACT STRUCTURE SECURITY PACKAGE Financial market-forms / financial products Bond Investor / Lender requirements LOW PROJECT SPONSOR SUPPORT Project Sponsor requirements LOW Bankability HIGH Confidential 12

13 Who will finance projects? HIGH P E R C E I V E D R I S K PUBLIC SECTOR: WORLD BANK PRIVATE SECTOR: DFI s EXPORT CREDIT AGENCIES INSURANCE COMPANIES COMMERCIAL BANKS INSTITUTIONAL INVESTORS CAPITAL MARKETS BANKABLE LOW LOW BANKABILITY HIGH Confidential 13

14 Utility Scale Projects Risk Assessment and Mitigation Confidential 14

15 Project Level Considerations Technical and Commercial Resource Assessment Equipment Selection Project Finance Considerations Project Setup Contractual Structure Non- Recourse Financing vs Full/Partial Recourse Financing Return on Investments Confidential 15

16 Resource Assessment Resource Drives project Revenue - Key input into the financial model Key consideration during due diligence and often flawed or overlooked Solar Bankable to use 10 years of satellite and terrestrial data (Eg. Meteonorm) On site data analysis to look at shading, site specific factors, sandy, salty conditions etc. Yield assessment software to account for all types of losses to build up a realistic performance measure Scenario analysis with a P75, P90 and P120 Solar Irradiance levels Wind Atleast one year of On site data which are correlated to long term weather data Turbine layout optimized using various software considering the different constraints Various probability considerations for performance evaluations Biomass Feedstock supply availability and quality Seasonal variations in feedstock characteristics. Key is Supply Vs Demand. Correlation with Fossil Fuels Confidential 16

17 Equipment Selection Design Review and Due Diligence Site specific considerations, review portfolio performance, design innovations Compare with industry standard practices and check on reference plants Done through a technical consultant/expert Supplier and Engineering track record Manufacturer experience, bankability and quality of product International experience and track record with internal standards Reference plants and warranty claims Schedule Vs Delays Slightly higher capital costs with longer project life vs slightly lower capital costs and recurring problems Warranties, Guarantees Commitment to replace defective equipment, Spare part availability, product warranties and assignability Linear power output warranties - Modules, 3 rd party insurance backing etc. Confidential 17

18 Contractual Structure EPC Contracts Tender process/private negotiation Risk allocation and quality determination is very important. Price should not be the only consideration Type of procurement and contracting affects the guarantee and performance level EPC structure with a single contractor or a smaller consortium preferred Clear Allocation of responsibilities and performance for the whole plant Tax optimization with Split onshore and offshore contracts O&M Risks Often overlooked once construction has been completed Quality of O&M servicer very important Fixed Price Vs. Cost Plus Structure Performance Standards Compliance with other project Documents and legal framework Confidential 18

19 Conclusions GOVT SUPPORT Acceptable country risk? Regulatory framework IPP s bankable? What scheme to support renewables? FIT, Adder etc. MARKET ECONOMICS Electricity shortages? Base load opportunity? Supportive industry? Specific sources (such as hydro) available that make other RES less-bankable? How does specific RE project compare to other Energyprojects? PROJECT ECONOMICS CONTRACT STRUCTURE SECURITY PACKAGE SPONSOR SUPPORT Technology to be used, efficiencies and track record turbines? Costs per MW? Use of carbon credits and subsidies from support scheme? Financing options? Single borrower? Long term PPA possible with validity exceeding longest debt tenor? Turnkey contractor under fixed price date certain contract? Reputable O&M contractor? (in windparks often equipment vendor) Product warranties? (in windparks generally a minimum of 5 years) Comprehensive risk coverage available from equipment vendors? Security possible on land or other assets? Reputable and experienced sponsor? Level of equity investment? Level of contingent equity available for completion? Confidential 19

20 Project Development Case Studies Confidential 20

21 Energy Mix Components: Wind Energy Enercon E-126 Schneebergerhof, Germany Confidential 21

22 Energy Mix Components: Solar Energy Former military area in Brandenburg, Germany (71 MW) Selected References Lieberose, Eastern Germany Free-field / 71 megawatts Torreilles, Pyrenees, France Free-field / 12 megawatts Blue Wing, Texas, USA Free-field / 16 megawatts Muggensturm, Southern Germany Logistics centre / 1.8 megawatts Verona, Northern Italy Soccer stadium / 1.0 megawatts Michelin, Homburg, Germany Solar Carport / 1.0 megawatts India 7 Projects ~ 72 MW Offgrid Installations in Africa Solar soccer stadium in Mainz, Germany (850 kw) Confidential 22

23 Energy Mix Components: Solar Energy Germany s largest PV rooftop system: 7,4 MW rooftop - Goodyear Dunlop in Philippsburg Confidential 23

24 Waldpolenz, Germany: 40 MWp

25 Jacksonville, Florida, USA: 15 MWp

26 Energy Mix Components: Wind Energy Selected References Flat Water Wind Farm, Nebraska (USA) 40 turbines / 60 megawatts Guanacaste Wind Farm (Costa Rica) 55 turbines / 49.5 megawatts Rheinhessen-Pfalz Wind Farm (Germany) 27 turbines / 32.3 megawatts Wind farm at juwi s headquarters in Wörrstadt, Germany Plouguin/Kerherhal Wind Farm (France) 7 turbines / 14 megawatts Stypulow Wind Farm (Poland) 3 turbines / 4.5 megawatts Wind generation in the forest at Mehringer Höhe Confidential 26

27 Thank You Very Much for Your Attention! Contact: Kai Ilham Klingenhagen juwi Renewable Energies Pte Ltd 27

28 Fuel Saver Projects Fuel Saver Motivation and Functionality Confidential 28

29 Why to hybridize your diesel plant? / kwh The price for PV systems decreased by more than 60% in the last 3 years Fuel costs for Diesel Generators are constantly rising Today Time In many countries PV-Diesel Systems present already today an economical viable solution. This effect will even increase in the next years.

30 Generation costs by diesel generators In most of the sunbelt countries generation costs by diesel generators are > 0,30 / kwh Whereas generation costs in the same area by PV applications are < 0,15 / KWh 1) 1) E.g. in Germany feed in tarrif for 1MW plants is currently at 0,13 / kwh

31 Savings due to PV-Diesel Applications 1) Quick payback period of investment (3 6 years) High price stability as PV part will not increase Break even after 4,5 years Savings: 6 Million during 20 years. 1) Specifications Load 900kW, 7.8 MWh/year Load Increase Rate: 0 % per year Inflation Rate: 3 % per year WACC: 5.3 % per year Current Diesel Price: 0.8 /Liter Increase of Diesel Price: 3 % per year Price of PV System: 1,350 /kwp Diesel Generator System: 1000 kva PV System: 1 MW

32 The Solar Fuel Saver (SFS) Solar power is directly injected in the diesel generator mini grid Reduction of fuel consumption due to solar energy penetration No batteries are needed The SFS controller manages the Solar power output according to the operation of the Diesel generator

33 Functionality of the SFS The solar power reduces the power generated by the diesel generator As soon as the generator reaches critical part load operation the SFS controller decreases the power output of the solar plant

34 SFS Technical Data Solar Plant Solar Saver 70 Solar Saver 250 Solar Saver 500 Solar Saver 1000 Solar System 70 kwp 250 kwp 500 kwp 1 MWp Mounting structure free-field or roof-top Compatibility Recommended Diesel Generator Size 135 kva (108 kw) 400 kva (320 kw) 910 kva (725 kw ) 1500 kva (1200 kw) Diesel Generator Output Voltage Diesel Generator Output Frequency Communication and monitoring Data Transmission Display (3 Phase) 50 or 60 Hz Via GSM, Ethernet or USB-drives x 480 pixel touch screen panel Environmental Conditions Operating Temperature -20 C to + 50 C Relative Humidity 5% to 95%

35 Hotels and Resorts Daytime loads as air-conditioning, cooling or pumping can be covered Pumping Systems High solar fraction, as loads can be adapted to sun behave Residential Areas Supermarkets have good load profiles, as they are mostly running at daytime Individual solutions for small villages Mining Industry Good preconditions according to constant loads at relatively high power output

36 Thank You Very Much for Your Attention! Contact: Kai Ilham Klingenhagen juwi Renewable Energies Pte Ltd 36