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Renewable Power Initiative 2013Dustin Crockett | Neo Viridis Energy, LLC
Renewable Business OverviewSolar and Wind Projects
Americas Scope of Opportunity
Product representation and market development in North and South America for wind and solar technology Specific wind technology – provide marketing material and case
studies Specific solar technology – provide marketing material and case
studies Develop(ed) client and project relationship in North and South
America Financial funding to supply technology in North and South America PPA or Lease development funding in U.S. or financial partner
Americas for Solar Financial partner for planned expansion for Wind
Extended offering Americas partners project development, project management,
permitting, and EPC design and oversight offerings, where applicable
Partners EPC design, and experience construction installation workforce, where applicable
Note: All parties have to have NDA and CA prior to engaging project details and service offerings.
Client Project
Project/Deal Development
& Management
Partner Funding
Partner Technology
Provider
Partner Engineering,
where applicable
Partner Contracting ,
where applicable
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY. 3
Stakeholder Structure
Partne
r(s) Wind & Solar Provider Technology &
Engineering
Financial Institution Funding for Technology or Project
EPC or EPC Support
Engineering Design
Experienced Installation Workforce
Neo Viridis
Wind & Solar Developer
Project Development
End‐User/Utility
Strategic Relationships
Government Policy & Regulations
Corporate, Public & Legal
Project Management
Country Experience
Project Development & Management Experience
Stakeholder Value Proposition Financing will strengthen deals and projects in North and South America, so that Partnering technology and
resources will be utilized on these projects Wind and Solar developers will advance projects that are slowed or stopped by financial hurdles North and South American utilities and countries will achieve their planned renewable goals in a timely
manner Other opportunities for technology in these countries for future renewable, water, and infrastructure projects
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY. 4
Teaming / Partnerships
Developer Land Purchasing / Leasing Power Purchase Negotiations Interconnection Processes Renewable Program Applications &
Contracting Environment Studies Property Surveying / Zoning EPC Solar Manufactures Utilities / End‐User
“We bring the parties together to for the best available projects.“
5©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Our Value
North and South America representation and relationships Increase hit rate from traditional marketing to deal/project development Develop market presence Remove competition in market place Capacity to vet opportunities to minimize lost effort Streamline project schedule and reduce project risk
Energy Security & Reliability
Energy Equity (Accessibility
& Affordability)
Dependable Partners
Environmental Sustainability (Low Carbon
Source)
6©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Typical Initial Steps to a Partnership
Market Representation Only
Deliver Projects at Any Phase
Americas Arm of the Company
Project Development Only
Identify best available projects
Technology financed projects development for piece of project
Market & Project Development & Representation
As presented above, but
MNDA & CAInformation / Proposition Discussions
Binding Letter of Intent
Initial Project Risk
IdentificationContract
Proposal Phase Compensated Phase
7©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Project Risk Appetite
Probability of Risk Occurring
Probability of Impact
Risk Event Drivers Impact Drivers
Impact LossesRisk Event
All parties need to examine their Risk Appetite before determining area they want to provide services and technology.
8©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Typical Compensation Model
Product Representation Project Based
Project Development Project Based
Compensation scheme aligns both party’s goals and objectives which can only lead to higher probability of timely success. Our executives and business partners have held senior operational positions in some of the largest energy and water companies in the world. Excela is committed on representing our clients and on providing advisory services with the highest level of professionalism
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Known Opportunities
Region Solar Projects Solar (MW) Wind Projects Wind (MW)
Europe 4 127 2 66Eastern Europe 4 102 2 210South America 3 500 0 0
Current Known Network Opportunities (no advertising or offering presented)
10©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
South America Market / Opportunities
Chile
Wind
Wind is a viable and promising renewable energy source for Chile. There are currently over 45
wind projects currently under development or being considered, and 126 MW of wind projects
under construction in addition to the 172 MW that is in current use. The Global Wind Energy
Council estimates that there is 40 GW, or 40,000 MW of wind potential in Chile
Solar
Solar power in Chile has the potential of producing all of the electricity used in Chile. Northern
Chile has one of the highest solar incidence in the world. In 2012, the 1 MW Calama Solar 3
became the first solar power plant in the country. Solar Chile is planning on building utility
scale solar power plants in the Atacama Desert. A 30.24 MW plant is planned. A 100 MW
photovoltaic plant is planned by SunEdison and CAP. Abengoa Solar is building a parabolic
trough concentrated solar power plant there. 3,100 MW of solar projects have been approved,
and an additional 908 MW are under review.
Colombia
Wind
The wind regime in Colombia is among the best in South America. Offshore regions of the
northern part of Colombia, such as in the Guajira Department, have been classified with class
7 winds (over 10 meters per second (m/s)). The only other region in Latin America with such
high wind power classification is the Patagonia region of Chile and Argentina. Colombia has
an estimated theoretical wind power potential of 21 GW just in the Guajira Department—
enough to generate sufficient power to meet the national demand almost twice over.
However, the country only has an installed capacity of 19.5 MW of wind energy, tapping only
0.4% of its theoretical wind potential. This capacity is concentrated in a single project, the
Jepírachi Wind Project, developed by Empresas Públicas de Medellín (EPM) under a Carbon
Finance mechanism arranged by the World Bank. There are several projects under
consideration, including a 200 MW project in Ipapure,
Solar
Colombia has significant solar power resources because of its location in the equatorial zone,
but the country sits in a complex region of the Andes where climatic conditions vary. The daily
average radiation is 4.5 kWh/m2, and the area with the best solar resource is the Guajira
Peninsula, with 6 kWh/m2 of radiation. Of the 6 MW of solar power installed in Colombia
(equivalent to about 78,000 average‐size solar panels), 57 percent is distributed in rural
applications and 43 percent in communication towers and road signaling.
Brazil
Wind
Brazil has 148 wind farms with an installed capacity of 3.6 gigawatts, according to the Brazilian
wind power association, known as Abeeolica. The group forecasts that by 2017, the total will
reach 8.7 gigawatts. In two 2011 auctions, Rio Bravo won contracts for its wind farms at an
average rate of 120 reais ($52) a megawatt‐hour. That compares with an average of about 135
reais a megawatt‐hour for small hydropower and biomass plants in the most recent
government power auction, in December, according to the energy research center, known as
EPE. Wind projects in that auction averaged about 119 reais.
Solar
The total installed photovoltaic power capacity in Brazil is estimated to be between 12 and 15
MWp, of which 50% is for telecommunications systems and 50% for rural energy systems. It is
less than 0.01% of the energy in Brazil. Brazil has one of the highest solar incidence in the
world.
Panama
Wind
Goldwind closed financing via a $71 million loan for what will become Panama's first ever wind
farm in August 2013. The company is to supply 22 2.5MW turbines to the Penonome project,
which is located in Cocle province on the country's southern coast. The 55MW is the first
phase of a plan to build the project up to 220MW by 2014. The project is to be closed via a $71
million 10‐year facility from Banco Internacional de Costa Rica (BiCSA) and Banco Espirito
Santo de Investimento. The full $440‐million project will supply some 7% of Panama’s
electricity needs. 16 Additional Wind Farms are expected to be developed by 2015.
Solar
Greenwood Biosar, a joint venture between Greenwood Energy and Biosar completed design
and construction of a 2.4‐megawatt (MW) solar PV project in Panama’s Herrera Province for
Enel Green Power Panama in early 2014. The solar array is located nine miles from the city of
Chitre, is Panama’s first utility‐scale solar PV installation, and can provide 30 percent of the
surrounding area’s electricity demand – equivalent to 2,600 homes. The project has now been
interconnected to the La Empresa de Generacion Electricita (EGESA) grid network.
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Americas Renewables Challenges
Unprecedented uncertainty in North and South American energy sector. As energy demands continue to increase energy security, reliability, affordability, quality (clean/green) and equitability is fundamental to economic and human development. The greatest challenges in energy are: Energy prices and volatility Climate change (future of CO2 and pricing) Access to Capital Energy efficiency Infrastructure / interconnects
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Renewable Energy Markets Pricing
In 2013, the Americas is Solar PV is estimated at 8 GW and projected to be between 12.5‐19 GW
by 2017 according to EPIA
U.S. Pricing
Solar
Wind
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
SolarUnited States
14
Standard U.S. Project Development Phases
BEPTC™ Baseline Economics Policy Technology Consensus SROPTTC™ Site Resource Off‐take Permits Technology Team Capital
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Current Deal Drivers ‐ Solar
Pre‐Construction Phase, capital commitment for sales and design costs. Additionally: Identify proper building site with a creditworthy solar customer Research applicable state and federal incentive programs and understanding which
incentives the project is qualified for Design a system that generates enough energy (and therefore, revenue) to produce a return
on investment (ROI) Set up the Special Project Entity (“SPE”), if applicable; and Secure vendor financing for the installation’s components, such as PV panels, inverters and
racking hardware. Construction Phase
The solar project developer will typically utilize a third‐party engineering, procurement and construction service (“EPC”) to install the system.
The developer needs capital to pay the EPC, which typically comes from a construction loan or equity investments.
Post‐Interconnection Following completion of construction, a utility company inspection will generally occur
within one month, after which, provided the system passes inspection and the application documentation is approved, the solar project receives permission to operate and connect to the power grid. This step is typically referred to as “Interconnection.”
Solar power system begins commercial operation and the solar customer begins making payments to the SPE under the lease or under a power purchase agreement (“PPA”) pursuant to which the solar customer purchases the power output of the solar project.
Alternatively, if a feed‐in tariff program is offered by the local electric utility, the SPE will lease the rooftop space from the building owner and enter into a PPA directly with the utility.
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Solar Project Motivation
What we call “project motivation” is created through strong fundamentals and provides the source of commitment and clarity of purpose that are necessary to both generate the resources required to develop a project and the perseverance required to make it happen. Without properly establishing project motivation, the necessary resources (funding and skilled human resources) will not be brought to bear. A fundamental, but common, mistake in early‐stage project development is to jump to technical or financial details prior to building consensus among project stakeholders and establishing project motivation that is sufficient to maintain a sustained effort backed by common purpose. Scheduled reduction in Investment Tax Credit (ITC) from 30% to 10% on January 1, 2017 Minnesota’s 2013 Energy Omnibus Bill requires 1.5% or all power to be from
solar or approximately 300MW by 2020
17
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
U.S. Business & Industry Motivation ‐ Solar
State: Federal
Incentive Type: Corporate Tax Credit ‐‐ eligible systems placed in service on or before December 31, 2016**:
Eligible Renewable/Oth
er Technologies:
Solar Water Heat, Solar Space Heat, Solar Thermal Electric, Solar Thermal Process Heat, Photovoltaics, Wind, Geothermal Electric, Fuel Cells, Geothermal Heat Pumps, Municipal Solid Waste, CHP/Cogeneration, Solar Hybrid Lighting, Tidal Energy, Fuel Cells using Renewable Fuels, Microturbines, Geothermal Direct‐Use
Applicable Sectors:
Commercial, Industrial, Utility, Agricultural
Amount: 30% for solar, fuel cells, small wind*10% for geothermal, microturbines and CHP
Maximum Incentive:
Fuel cells: $1,500 per 0.5 kWMicroturbines: $200 per kWSmall wind turbines placed in service 10/4/08 ‐ 12/31/08: $4,000Small wind turbines placed in service after 12/31/08: no limitAll other eligible technologies: no limit
Eligible System Size:
Small wind turbines: 100 kW or lessFuel cells: 0.5 kW or greaterMicroturbines: 2 MW or lessCHP: 50 MW or less*
Equipment Requirements:
Fuel cells, microturbines and CHP systems must meet specific energy‐efficiency criteria
Authority 1: 26 USC § 48
Authority 2: Instructions for IRS Form 3468
Authority 3: IRS Form 3468
Authority 4:Date Enacted:Date Effective:
H.R. 8 (American Taxpayer Relief Act of 2012)01/02/201301/02/2013
Business Energy Investment Tax Credit (ITC)
18©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
U.S. PPA vs. Lease ‐ Solar
Third‐party financing of solar energy primarily occurs through two models: power purchase agreements (PPAs) and solar leases. PPA Model In the PPA model, an installer/developer builds a solar
energy system on a customer’s property at no cost. The solar energy system offsets the customer’s electric utility bill, and the developer sells the power generated to the customer at a fixed rate, typically lower than the local utility. At the end of the PPA contract term, property owners can extend the contract and even buy the solar energy system from the developer.
Lease Model In the lease model, a customer will sign a contract with
an installer/developer and pay for the solar energy system over a period of years or decades, rather than paying for the power produced. Solar leases can be structured so customers pay no up‐front costs, some of the system cost, or purchase the system before the end of the lease term. Similar leasing structures are commonly used in many other industries, including automobiles and office equipment.
19©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
Example: U.S. Duke Energy Needs ‐ Solar
Location: Continental US (exception Hawaii) Location Exclusions:Carolinas, Georgia, Duke Franchise Territories
(Duke Energy cannot be the offtake), and no U.S. Territories (Puerto Rico) Generation: PV Solar‐Thin, Poly or Mono, Fixed or Tracking Size:Greater than or equal to 20 MW (aggregated ok) Interconnection: Studies complete, IA underway or complete,
reasonable security requirements, if any Land:Under lease or sale option with sufficient size to support the MW
proposed Ownership:Duke to own 100% just prior to COD; if the project has scale
then this could be modified to something less than 100% Permitted: Fully permitted or very close to being permitted Tax Utilization: Duke ITC Development Expense:Developer responsibility with the possible
exception of security requirements Duke is offering developers an opportunity to “partner” in pursuing RFP bids
and or bilateral PPA discussions regarding their projects. The developer would have the benefit of Duke’s strong reputation, a $118+ billion dollar balance sheet, no financing, credit support, a very strong tax appetite (no tax equity required) and a reasonable cost of capital. In turn, Duke Energy would have the benefit of bidding with developer, in strong PV Solar project to quality power offtakes and completing a solar transaction on a win‐win basis.
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.
WindProducts
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Wind Product Overview
Objectives Identify overall project objectives:
Technical objectives Schedule objectives Cost objectives Special objectives
Non‐goals
Success Factor Identify elements that are key to the success of the
project, such as: Satisfied clients or stakeholders Met project objectives Completed within budget (lump sum or turnkey
offerings?) Delivered on time
Market differentiators
Deliverables What products or services will be offered to
projects? How will they be delivered Typical client requirements
Implementation Capabilities Tasks/activities Procedures Tools/technology Project change control process
Risk Management Process Process
Quality Management & Performance Measures Product quality management Product quality background Defect resolution
Cost Competitive cost analysis
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©2013, NEO VIRIDIS ENERGY, LLC. PRIVILEGED AND CONFIDENTIAL INFORMATION ONLY.