GERMAN-AMERICAN CHAMBER OF COMMERCE: Jobs Through Exports & US Factories

Transcription

1 GERMAN-AMERICAN CHAMBER OF COMMERCE: Jobs Through Exports & US Factories KC Sahl, NRG Bluewater Wind October 18,

2 Safe Harbor Statement This Presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of Forward-looking statements are subject to certain risks, uncertainties and assumptions and typically can be identified by the use of words such as expect, estimate, should, anticipate, forecast, plan, guidance, believe, will and similar terms. Such forward-looking statements include information relating to NRG Bluewater Wind, an NRG Company, and NRG s offshore wind development strategy and projects. Although NRG believes that these expectations are reasonable, it can give no assurance that these expectations will prove to have been correct, and actual results may vary materially. Factors that could cause actual results to differ materially from those contemplated above include, among others, general economic conditions, hazards customary in the power industry, weather conditions, construction delays, competition in wholesale power markets, the volatility of energy and fuel prices, failure of customers to perform under contracts, changes in the wholesale power markets, changes in government regulation of markets and of environmental emissions, the condition of capital markets generally, and the inability to implement value enhancing improvements to plant operations and companywide processes. NRG undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. The foregoing review of factors that could cause actual results to differ materially from those contemplated in the forward-looking statements included in this Presentation should be considered in connection with information regarding risks and uncertainties that may affect NRG's future results included in NRG's filings with the Securities and Exchange Commission at 1

3 Offshore Wind Works 46 Offshore wind parks: in 10 European and Asian countries Operational since ,048 MW (2.9 million EU households equivalent) as of end of MW installed in 2010, from 308 turbines, 51% annual growth 3,000 MW in 10 wind parks under construction 32,000 MW awarded in UK Round 3 19,000 MW of fully consented European wind parks today 194,390 MW: Global wind total, estimated to generate 420 TWh/year and eliminate 250 million tons of CO2 annually the equivalent of removing 50 million cars from the road forever 40,180 MW installed in U.S., or equivalent of 100% of electricity of more than 11.1 million households, with 36% average annual growth rate,

4 Local Supply Chain and Jobs Go Together Components are very large, expensive to ship In wind, Supply chain follows projects EU On land, EU Offshore, US On land Next is US Offshore Jobs that cannot be exported 3

5 Economic Benefits of the Mid-Atlantic Wind Park $1++ billion private investment $200+ million expected direct wages for Delaware workers Expected to bring over 500 construction and up to Operations and Maintenance direct jobs to Delaware Regional economic development: offshore staging hub, able to service multiple projects Specific outreach to local contractors: NRG Bluewater committed to local bidders conferences to attract local labor Opportunities for large contracts to Delaware ports Construction Operations and Maintenance Project will be supported by full union job with Project Labor Agreement Increased tourism projected at 2.5% (per University of Delaware) Visitors center in local beach community, one UK experience shows 35,000 visitors per year 4

6 Education & Training Current vacuum for wind turbine technicians seeking training east of the Mississippi only four programs currently offered No OSW-specific training currently available Work with colleges to assure that the curriculum will fully prepare graduates to enter the workforce Encourage college-corporate partnerships for manufacturer needs outside of the offshore workers curriculum Curriculum is developed as part of larger renewable energy program that also addresses solar, small wind, and energy efficiency increases marketability of educational institutions 5

7 Developers Driving Economic Opportunities Education Economic support for skills training: Bluewater & Del Tech Advisory to curriculum development for skills training Cooperation with universities Economic Development Offices and Organizations Education of industry needs Demonstrate local activity in the industry Active participation in groups working to develop renewable industries Real Estate Development of port facilities Coordinate construction and manufacturing facilities development Unions Project Labor Agreements (PLAs) Development of skills training programs Local Business Development RFQs for major suppliers include local manufacturing criteria Local bidder conferences 6

8 Wind-Related Jobs Source: AWEA, U.S. Wind Industry Annual Report, Year Ending

9 Fast-Growing U.S. Wind Industry Adds New Jobs 40% OF NEW GENERATION IN ; OVER 400 PLANTS NATIONWIDE UTILITY-SCALE WIND MANUFACTURING Graphic source: AWEA U.S. Wind Industry Annual Market Report, 2009 Manufacturing data updated through November 2010, includes wind-related facilities 8

10 Most States Have Established Long- Term Renewable Electricity Standards Mandatory RES Voluntary standard or goal 9

11 Lack of Consistent Policy for Wind Creates a Boom-Bust Cycle >45% Drop 93% Drop 73% Drop 77% Drop OFF ON OFF ON OFF ON ON BUSH-ERA INVESTMENT TAX CREDIT Source: AWEA 3Q 2010 Market Report 10

12 Mid-Atlantic Wind Park BOEMRE Lease Area Map Scale Source: simplified 11

13 Delaware: The Mid-Atlantic Wind Park Located miles, East of Rehoboth Beach, DE Encompasses 450 MW of wind capacity over 103,000 acres, envisioned to be constructed in 2 phases (200 & 250 MW) Multiple port facilities available to support construction and O&M activities Turbine arrays utilizing wide spacing (12 rotor diameters) to optimize production, minimize wake losses Separated from shipping lanes by at least 0.5 nautical mile buffer Site Control NRG Wind was deemed only officially qualified applicant for lease of Outer Continental Shelf off the coast of Delaware next step is to negotiate lease 12

14 Key Development Milestones Power Purchase secured 200 MW Power Purchase Agreement with Delmarva Power & Light Interconnection signed Interconnection Services Agreement and Construction Services Agreement for (up to) 450 MW with PJM/Delmarva Power & Light Site Control secured Determination of No Competitive Interest initiating a non-competitive leasing process with the Department of the Interior Permitting anticipated Finding of No Significant Impact leading to lease signing with the Department of the Interior Financing seeking reinstatement of the Loan Guarantee Program with US Department of Energy as well as private financing options Met Tower conducting final permitting investigations with various consultants Wind Assessment production estimates recently updated by AWS TruePower 13

15 Project Development: DE Success as Example 5 Pillars of Successful Project: 1. Site Control 103,000 acre Lease by end Wind Data 8 years from 5 meter NOAA buoy near site. 3. Permits Met Tower nearly done; Project by March Interconnection 450 MW Agreement; $1.8 MM LC posted. 5. Offtake Delmarva 200 MW PPA June Foundations of OSW Project Finance: A. Turbines robust OEM supply chain B year O&M programs offere C. EPC, contractors engaged in US market D. Project Finance structure, designed by active OSW banks IF DOE Loan Guarantee not available 14

16 Site Attributes Easily constructible water depths of 30 to 100 feet (10 to 30 meters) Soil conditions suited for monopile foundations as confirmed by geophysical and geotechnical studies Low biological & archaeological sensitivity Reasonable distance to ports & onshore interconnection points Closest turbine approximately 13 nautical miles (22 km) from shore A major hurricane (category 3 or higher) has not made landfall in coastal Delaware since records began in

17 Mid-Atlantic Wind Park Project size: MW 150 turbines at most Enough energy to serve up to 153,000 Delaware households Closest turbine is more than 13 highway miles east of Rehoboth, DE 16

18 Why Public Officials and Public Policy Support OSW: The Green Economy Generator Immediate Jobs Can Be Created to Lay the Foundation for this Industry: Vessel construction Electric grid upgrades Port upgrades Turbine equipment & other supply chain manufacturing in coastal states Job Training: NRG funding wind and solar training at DelTech Project Jobs in 2-3 years in Delaware, Maryland, New Jersey, New York, Rhode Island: Focused on Job Creation and Training. Ex/DE: $200 M direct local wages and 500 jobs PLUS CRITICAL MASS FOR LOCAL MANUFACTURING 17

19 New Jersey OREC: Structure for Long-Term Contract Policy Support Governor signed legislation on August 19, 2010 establishing the Offshore Renewable Energy Certificate (OREC) Program, which mandates up to 1,100 MW carve-out for OSW in State RPS Highly unlikely that NJ can meet RPS mandated MWs without OSW Governor Christie announced closing 645 MW Oyster Creek in 2019 and rejecting new coal Request for Proposal Project size: up to 1,100 MW Project location: all 10 miles + offshore BPU anticipates opening OREC application window Q1 of 2012 for 20- year, fixed-price Power Contract ( OREC ) for up to 1,100 MW 11 developers submitted project site proposals to BOEMRE (DOI) June 6, 2011 NRG received BOEMRE interim policy lease for Met Tower in

20 Offshore Wind Information University of Delaware American Wind Energy Association British Wind Energy Association European Wind Energy Association Danish Wind Power Utility Wind Integration Group Bureau of Ocean Energy Management, Regulation and Enforcement Government Task Force 19