Wind Power Romania
Transcript of Wind Power Romania
Enel Green Power
Wind Power RomaniaCase Studies from Developments in Romania
Building a Wind Farm in Romania, from Inception to Connection
Carlo Pignoloni, General Manager, Enel Green Power Romania Bucharest 19th January 2011
19th January 2011 - Conference Wind - Bucharest
2
EGP GROUPHighlights
EBITDA up by 6% to 966€m
Production up by 10% to 15.8TWh
Best-in-class net income up by 17% to 352€m
Net installed capacity up by 26% to approximately 5.9GW
Strong cash-flow generation with FFO exceeding 730€m
19th January 2011 - Conference Wind - Bucharest
3
EGP GROUPResults – operational highlights
9M 2009 9M 2010
14.415.8
+10%
9M 2009 9M 2010
4,6695,884 +26%
Net installed capacity (MW) Net production (TWh)
19th January 2011 - Conference Wind - Bucharest
4
2.504 2.538
1.3862.472
728
742132
51
9M 2009 9M 2010
EGP GROUPNet Installed capacity(MW)
+1,215 MW (+26%)
+23%
+2%
By technology By geography
OtherWindGeothermalHydro
4,669
5,884
2.736
2.145
788
2.951
1.145
788
9M 2009 9M 2010
Iberia & Latin AmericaNorth America
Italy & Europe
4,669
5,884
+1,215 MW (+26%)
+5%
+21%
19th January 2011 - Conference Wind - Bucharest
5
8,5 8,2
1,8 3,2
3,83,9
0,40,2
9M 2009 9M 2010
EGP GROUPNet Production(TWh)
+79%
+2%
By technology By geography
OtherWindGeothermalHydro
14.415.8
9,3
4,5
1,9
9,4
3,3
1,7
9M 2009 9M 2010
Iberia & Latin AmericaNorth America
Italy & Europe
+1%
+12%
-4%
+33%
High and stable load factor at 44%
+10% +10%
14.415.8
19th January 2011 - Conference Wind - Bucharest
6
9M 2009 9M 20109M 2009 9M 2010 9M 2009 9M 2010
Revenues(1) EBITDA Group net income
1,363
1,581
915 966
301352
+16%
+6%
+17%
1. Including effect of hedging activities relating to commodity risk management
EGP GROUPResults – financial highlights9M 2009 – 9M 2010 (€m)
+22.3%+22.1%Group net income margin on total revenues
19th January 2011 - Conference Wind - Bucharest
7
EGP presence
Operating 5,884 MW
Enel Green Power
Pipeline 30.4 GW
Operating 788 MW
North America
Pipeline 8.3 GW
Operating 2,145 MW
Iberia and Latin America
Pipeline 15.8 GW
Operating 2,951 MW
Italy and Europe
Pipeline 6.1 GW
EGP GROUPActual 2010 – Footprint 9M
19th January 2011 - Conference Wind - Bucharest
8
EGP Group
Business Development
Engineering, Procurement & Construction
Operations & Maintenance
• Business Development to optimize pipeline management with the goal of ensuring the best CapEx allocation and maximizing return on investment
• Engineering and Construction to manage projects portfolio according to time, costs and quality targets and optimize technological competences and capabilities
• Procurement to maximize synergies at global level
Clear focus on the value chain
Operational Excellence
• Divisional competence center for O&M practices and performance control and for the definition of related policies and processes
• Monitor and control divisional O&M practices and performance• Analyze best practices and define policies and actions to improve
O&M performance• Business Areas to benefit from integrated approach
The operational model as a lever for value creation
19th January 2011 - Conference Wind - Bucharest
9
SC
OU
TIN
G
ProjectsValuation
Pipeline Management
ProjectsExecution
• Market knowledge• Standardization• Clear evaluation criteria
• Pipeline planning and control
• Permitting management• Local stakeholders
management
• Safety• Competences optimization• Project management
Focus on pipeline flow
I Phase II Phase III Phase
EGP GroupBest in class in pipeline management
19th January 2011 - Conference Wind - Bucharest
10
EGP Romania
Entity:
Enel Green Power Romania represents the evolution of an existing development company (Blue Line Impex), fully focused, as Enel Green Power Group’s arm, on the Romanian renewable energy market.
Background:
2007: - Acquisition of 100% of Blue Line shares with 244 MW wind project pipeline located in Dobrogea Region.
2009: - Blue Line becomes EGP Romania.
- Achievement of the first Building Permit and the construction start of the first wind farm.
2010: - First EGP wind farms in operation.
- Achievement of the Building Permit for all 244 MW.
Rationale:
Strategic: consolidate the Enel’s leadership in the Romanian market, becoming one of the biggest players in renewable energy;
Technical: the quality of the resource – wind, hydro, biomass – is among the best in Europe; Economical: good investment returns based on regulatory framework – approved but not yet implemented
19th January 2011 - Conference Wind - Bucharest
11
Organization and HR: In 2008: 2 employees End of 2011: around 40 employees
EGP Romania
3 Offices:
Bucharest Tulcea Constanta
19th January 2011 - Conference Wind - Bucharest
12
DOBROGEA Region
Operational 34 MW
Under Construction 140 MW
Ready to built 70 MW
Call Option 272 MW
Other opportunities: 210 MW
BANAT Region
Ready to built : 48 MW
TOTAL 774 MW
EGP RomaniaStatus of the EGP Romania Wind PipelineSummary
19th January 2011 - Conference Wind - Bucharest
13
Romania
EGP Romania Status of the EGP Romania Wind PipelineOperational
AGIGHIOL - 34 MW
1. Technology: WIND
2. Installed capacity: 34 MW (GAMESA G87 - 2.0 MW @ 100m x 17 WTG)
3. Operational: since December 2010
4. Location: Valea Nucarilor Municipality, Tulcea County, Dobrogea Region
AGIGHIOL – 34 MW
19th January 2011 - Conference Wind - Bucharest
14
SALBATICA 1
CORUGEA
SALBATICA 2
Project name
The Advanced Projects pipeline is composed by 4 wind farms for an overall installed capacity of 482 MW,
of which 210 MW will be operational by the end of 2011.
Call Option
SALBATICA1
SALBATICA2
Call Option
70 MW
70 MW
70 MW
272 MW
CORUGEA
TOT. 482 MW
EGP RomaniaStatus of the EGP Romania Wind PipelineAdvanced Projects
19th January 2011 - Conference Wind - Bucharest
15
Building a Wind Farm in Romania, from Inception to Connection:
• Permitting
• Construction
• Trading
EGP Romania Case study
19th January 2011 - Conference Wind - Bucharest
16
EGP Romania Case study: Permitting
Permitting path
Based on our experience, the time needed for achieving the Building Permit of the Wind Farm takes between 1.5 years and 2.5 years.
Securing the land rights: Private lands:
Type of contracts: - Sales Purchase Contract
- Servitude Contract Problem: - Fragmentation
- Confusion regarding land ownership – faulty retrocession
- Cadastral documentation wrong or missing
- Regulation regarding cadastral documentation is constantly modifying. Solution: - The existence of a well documented and updated Ground Book
Public lands:
Type of contracts: - Concession Contract
- Join Venture Contract (Asociere in Participatiune) Problem: - Unclear statement of the law regarding the right of land usage title
- The law is not applied in its own purpose
- Lack of transparency for the Joint Venture Contract
19th January 2011 - Conference Wind - Bucharest
17
Grid connection permit:
Problem: The grid is overbooked with projects that are not going to be operational. Solution: The existence of a structured system of capacity booking based on financial
guaranties.
Building permit:
Fact: The WTG tower to be considered as a construction Problem: - Longer period of time to obtain the building permit
- Much higher cost for the authorization taxes.
EGP Romania Case study: Permitting
19th January 2011 - Conference Wind - Bucharest
18
Environmental and Urbanism permits:
Problem: - Due to the authorities lack of experience and the haziness of the law, the plans are often considered as projects, reason for which we confront with a duplication of the procedures.
- The existing law is not well adapted to the renewable energy sector
- The law is not applied in its own purpose, therefore we don’t have a unitary application of it inside the EU
- The approval of the PUZ (Zonal Urban Plan) for small areas
Solution: - The PUZ should be kept inside the city hall’s property instead of the developer’s property.
EGP Romania Case study: Permitting
19th January 2011 - Conference Wind - Bucharest
19
Permitting during construction:
Inconsistencies between authorized permitted documents and various cadastral authorities at the level of deeds and land titles ( plots alignment and borders of National Cadastre Office different than permitted authorizations).
Environmental severe constraints related to wildlife presence.
Logistic:
Logistic Management of manpower and material resources critical for keeping the site progressing through a limited space availability.
Long supply routes for raw materials (reinforcing bars, concrete, sand, crushed stone) urging the Contractors to pile up stocks within the restricted space.
Cooperation and close partnership with local regulators and agencies for overweight cargo : Road authority, highway police patrol, City Hall transportation department.
EGP Romania Case study: Construction
19th January 2011 - Conference Wind - Bucharest
20
Project Management:
Strong need for an Overall Designer to oversee the work packages integration “ as one”: turbines, BOP, Electrical Systems, Power evacuation, Grid Integration
TSO and Distribution Company follow up from the Project Initiating all the way down to the power injection day to keep them abreast with Project objective
Design and Engineering streamline through local entities for drawings naturalization before execution
Significant number of local authorities with strong input requirements affecting the design and execution
EGP Romania Case study: Construction
19th January 2011 - Conference Wind - Bucharest
21
EGP Romania Case study: Trading
• Price hedging as far as wholesale market sales
• Evaluation about imbalances penalties
• Price and volume hedging as far as green certificate sales
• Business plan can be effectively performed only on the basis of powerful trading market model as regards both green certificate and brown energy
• Hedging risk is ran by the investor all over plant life
Foreshadow return are significantly challenged by market rules
19th January 2011 - Conference Wind - Bucharest
22
Q&A
22