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Page 1© Athens, February 2006
The European market place for wind park projects
Christian Grütte
Page 2©
• The European market place for wind park projects
Agenda
• Leonardo Venablers
Page 3©
• Consulting and financial advisory services in the markets of renewable energies
• Based in Barcelona; partner network across Europe, America and Asia
• Background in strategy consultancy, financing and business development
Leonardo Venablers – Consultancy and advisory firm within the international renewable energy markets
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- Business development- Partnerships & alliances
- Distribution & pricing- Benchmarking- Project management
- Deal identification- Investor selection- M&A moderation- Due diligence- Financial advisory
- Executive workshops- Strategy development- Market assessment- Competitive intelligence- Regulatory analysis- Business modelling
Leonardo Venablers – Services aligned to overcome specific growth inhibitors of respective renewable energy sectors
VisionVision VentureVenture ValueValue
Wind Photovoltaic Solar thermal Biofuels Biomass
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• The European market place for wind park projects
Agenda
• Leonardo Venablers
Page 6©
The renewable energy dilemma requires a thorough investment strategy for
internationalization
• Resources in most attractive regions often over-developed
• Regulation subject to political swings and not harmonised
• Realization faces local barriers to influence stake holders and off-takers
• Reach for decentralised projects and pipelines limited by lack of transparency
• Return requirements of corporate and financial investors are competing
International Investments: Big picture vs. opportunity driven?
¿…?
The renewable energy dilemma
Page 7©
Germany FranceSpain Italy UK
captive
non-captive
Relative market size of captive wind investments in selective countries
• Increasing captive development due to industrial policy or tariff regulation
• Independent developers with cash constraints and lack of retail investors
• New market entrants increase demand on the free available project market
100%
80%
60%
40%
20%
0% 20% 40% 60% 80% 100%
Captive wind park development channel investments – independent project market limited
Source: EWEA, AEE, BWEA, BWE, Suivi Eolien, Leonardo Venablers Analysis & Estimates
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Under development
All Licenses
Turn-key Under operation
Steady Yield
Return maximisation
Tax incentives
StrategicAsset
• Corporate investors assume wind park investments as strategic assets, therefore they will consider all entry points, including portfolio and corporate deals
Retail Investors
Financial Investors
Corporate Investors
Investment Driver
Entry Point
As third party investors gain market experience they will seek
co-development in order to reach projects and realize returns
• Financial investors are divided between IPP-type reaching for return maximisation and pension fund type with steady yield orientation
• Retail investors in Germany had been primarily attracted by tax incentives, however green investor profile increasingly present
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UK I F E
2002 2003 2004 2005
200-400
200-300
150-200
100-150
Developement margin in ‘000 €/MW
700
650
600
650
German turn-key prices in €/MWh
Development prices driven by national peculiarities and new investors rushing into the markets
Source: Leonardo Venablers Analysis & Estimates
United Kingdom
• Higher average wind speeds drive prices
• Utility advantage within ROC tradingItaly
• High certificates prices and low wind
• Corporate investors rather passiveFrance
• Utility and financial investor rush
• Expensive grid connection
Spain
• Wholesale market favour utilities with higher margin potential over fixed tariff scheme
• Combined pipeline and asset deals traded between 1.0-1.9 mln €/MWGermany
• Diminishing tax incentives lead closed-end fund model dying out
• Anglo-Saxon and private Danish investors revitalise market
• Low wind sites and years together with decreasing tariffs bring margins below 10%
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Internationalizing wind investments require an integrative approach in order to assess market
opportunitiesThe “5R” – Investment
Radar
• ReturnsIt’s more than wind hours and tariffs!
Reach Realization
Returns
ResourcesRegulation • ResourcesA lot of wind means a lot of competition
• RegulationTypically made for domestic investors
• RealizationUnderstanding local peculiarities
• ReachAddress entry point into the market
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Thank you for your interest - at your service !
Christian GrütteManaging Partner
Mobile: +34 678 002 [email protected]
