Creating Bankable Renewable Energy Projects in · PDF fileCreating Bankable Renewable Energy...
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1 Creating Bankable Renewable Energy Projects in Emerging Markets Kai Ilham Klingenhagen Business Development , Asia Pacific juwi AG 09.04.2013
Transcript of Creating Bankable Renewable Energy Projects in · PDF fileCreating Bankable Renewable Energy...
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Creating Bankable Renewable
Energy Projects in Emerging
Markets
Kai Ilham Klingenhagen
Business Development , Asia Pacific
juwi AG
09.04.2013
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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
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)
Revenues
around 1.1 billion Euro in 2012
Total capacity
around 2,500 megawatt (est. 2,200 plants)
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
juwi headquarters in Wörrstadt
Our Vision
Hyd
ro P
ow
er
Ge
oth
erm
al E
ne
rgy
Bio
En
erg
y
So
lar E
ne
rgy
Win
d E
ne
rgy
Ele
ctro
mobility
Gre
en
Bu
ildin
gs
Work together to implement renewable energies
economically and reliably with passion
100% Renewable Energies
Energy Efficiency Clean Power Production
Joint-Ventures Research & Development
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
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Renewable Energy
Project
Development
Confidential
Utility Scale Projects
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Renewable Energy Project Development
Goal-oriented integration
Consulting &
Acquisition Planning Development
Financing &
Sales Construction Management
Confidential
Risk
Project Definition -
+
+
-
Confidential 8
Juwi Investor
SPV
RE plant Equity
Debt Bank
Debt Facility
Pledge of all rights and securities
EPC PD
Typical project Structure
Project Development – Key Interfaces
Confidential 9
10
What to Investors
and Lenders look
for?
Confidential
Utility Scale Projects
Project Financing - What do investors/Lenders look for?
Source: Deutsche Bank, 2010
Transparency
Longevity
Certainty & Consistency
Confidential 12
LOW
HIGH
BANKABLE
PROJECT
HIGH
LOW
SPONSOR
SUPPORT
SECURITY
PACKAGE
CONTRACT
STRUCTURE
PROJECT
ECONOMICS
Pe
rce
ive
d R
isk
Bankability
FINANCIAL
STRUCTURING
Financial market-forms /
financial products
Bond Investor / Lender
requirements
Project Sponsor
requirements
MARKET
ECONOMICS
GOVERNMENT
SUPPORT NON-BANKABLE
PROJECT
Project Finance Feasibility Matrix
Confidential 13
BANKABILITY LOW HIGH
HIGH
LOW
P
E
R
C
E
I
V
E
D
R
I
S
K
BANKABLE
PUBLIC SECTOR:
WORLD BANK
PRIVATE SECTOR: DFI’s
EXPORT CREDIT
AGENCIES
INSURANCE
COMPANIES
COMMERCIAL BANKS
INSTITUTIONAL INVESTORS
CAPITAL MARKETS
Who will finance projects?
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Risk Assessment
and Mitigation
Confidential
Utility Scale Projects
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
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
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, 3rd party insurance backing etc.
Confidential 17
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
Confidential 19
• Acceptable country risk?
• Regulatory framework IPP’s bankable?
• What scheme to support renewables? – FIT , Adder etc.
• 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?
• 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?
GOVT
SUPPORT
MARKET
ECONOMICS
PROJECT
ECONOMICS
CONTRACT
STRUCTURE
SECURITY
PACKAGE
SPONSOR
SUPPORT
Conclusions
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Project
Development Case
Studies
Confidential
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Energy Mix Components: Wind Energy
Enercon E-126 Schneebergerhof, Germany
Confidential
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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
Energy Mix Components: Solar Energy
Solar soccer stadium in Mainz, Germany (850 kW)
Former military area in Brandenburg, Germany (71 MW)
Confidential
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Germany’s largest PV rooftop system:
7,4 MW rooftop - Goodyear Dunlop in Philippsburg
Energy Mix Components: Solar Energy
Confidential
Waldpolenz, Germany: 40 MWp
Jacksonville, Florida, USA: 15 MWp
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Energy Mix Components: Wind Energy
Wind farm at juwi´s headquarters in Wörrstadt, Germany
Wind generation in the forest at Mehringer Höhe
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
Plouguin/Kerherhal Wind Farm (France)
7 turbines / 14 megawatts
Stypulow Wind Farm (Poland)
3 turbines / 4.5 megawatts
Confidential
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Thank You Very Much for
Your Attention!
Contact:
Kai Ilham Klingenhagen
juwi Renewable Energies Pte Ltd
www.juwi.com
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Fuel Saver
Motivation and
Functionality
Confidential
Fuel Saver Projects
Why to hybridize your diesel plant?
• The price for PV systems
decreased by more than
60% in the last 3 years
• Fuel costs for Diesel
Generators are
constantly rising
In many countries PV-Diesel Systems present already today an economical viable
solution. This effect will even increase in the next years.
Time
€ / kWh
Today
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 € / KWh1)
1) E.g. in Germany feed in tarrif for 1MW plants is currently at 0,13 €/ kWh
Savings due to PV-Diesel Applications
Break even
after 4,5
years
• Quick payback period of
investment (3 – 6 years)
• High price stability as PV part
will not increase
• 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
1)
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
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
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
380-415 (3 Phase)
Diesel Generator Output Frequency
50 or 60 Hz
Communication and monitoring
Data Transmission Via GSM, Ethernet or USB-drives
Display 5.7 “ 640 x 480 pixel touch screen panel
Environmental Conditions
Operating Temperature -20 °C to + 50 °C
Relative Humidity 5% to 95%
Hotels and Resorts
Residential Areas
Mining Industry
Pumping Systems
Daytime loads as air-conditioning , cooling or pumping
can be covered
Supermarkets have good load profiles, as they are mostly
running at daytime
Individual solutions for small villages
Good preconditions according to constant loads at
relatively high power output
High solar fraction, as loads can be adapted to sun
behave
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Thank You Very Much for
Your Attention!
Contact:
Kai Ilham Klingenhagen
juwi Renewable Energies Pte Ltd
www.juwi.com
