Scandia Wind Southwest LLC

Development of large scale windpower

Presentation for landowners

Bovina May 8th 2009

Presentation overview

1. Who are we

2. What we have done

3. Why the Panhandle

4. The challenges every developer face in the Panhandle

5. The project

6. The business model

7. The way forward

1. Organize negotiating team

2. Tentative time frame for negotiations

3. Cost coverage

8. Q&A

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The partners

Proposed Wind Farm Services

• Development

• Technical expertise

• Construction Financing

82 years aggregate wind energy experience

44 years aggregate wind energy experience

A member of the Havgul/ Alpha Wind/PWC alliance

Strong local committment

Consultant Consortium

Proposed Wind Farm Services

• Development

• Technical expertise

• Construction Financing

Fredrikson & Byron

Legal

Hoffman & Brobst

Finance proformas

RNR Engineering

Grid consultant

Multiple financing sources

Development financingConstruction financingPermanent financing

Alpha Wind Energy

Technical support

Havgul clean energy

Project development

HAVGUL Clean Energy AS• Wind power project development company, based in Oslo, Norway.

• The business concept is to develop wind power projects from greenfield or early phase development, to a stage where all required permits are in place, technical feasability studies are performed and the project can be realized on the international market.

• Financed by a large Swedish/US green investment fund

• Extend activities to include US, Poland and Sweden – and possibly other fast growing markets.

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Ketil Reed AasgaardPartner/Managing director

Harald DirdalPartner/Project director

Kalle HesstvedtPartner/Communication and PA

Emil ThorkildsenPartner/Legal director

Track record

• Andmyran wind park, 160 MW

• The Havsul project, 1500 MW

• Kvitfjell, 200 MW

• Siragrunnen, 200 MW

• Havøygavlen, 40 MW

Andmyran Wind Park

The Havsul projects – Havsul I

Alpha Wind Energy

Extensive experience from various parts of Wind Power Industry from– Project development– Wind measurements– WTG manufacturers technical support, group sales & marketing – Technical advisor to Danish Wind Turbine Owners Association.– Combined 82 years of Wind Power Experience– 7 employees currently, but expanding– Extensive use of partnerships and consultants.

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AWE Wind Farm development

• Land lease agreements• Site feasibility study• Wind metering & long term correlation of data• Wind turbine micro siting and optimization

– Includes complex terrain requiring CFD analysis• EIS including noise, visual, shadow study etc.• Site production estimations• Full project analysis, design and installation• Full bankable report in cooperation with a bank approved third party• Turbine selection and EPC contracting• Operational Management

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AWE Wind Farm development

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AWE, Current Wind metering locations

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AWE, Current Wind metering locations

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Why the Panhandle

1. Best wind conditions in Texas

2. Large areas of suitable land

3. General positive attitude among the land owners and the population in general

4. Perfectly located in the cross roads of the ERCOT, SPP and WECC grid areas

5. A region in need for new industries

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Why the Panhandle

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Transmission Expansion- Plans laid for specific transmission lines

- Dovetails with Scandia’s Phase II & Phase III strategies

The challenges every developer faces

• The grid is a huge constraint in the ERCOT and SPP grid systems.• Large consumption in the south• Weak grid into the Panhandle• The Panhandle loop will only cover the projects already under planning

The strategy is as follows:

• Make the projects so large that they will attract new lines into the region• State of the art project documentation for financial closing

– Detailled wind assessment program– Very selective turbine choice– Bankable land lease agreements– Commercial business model where all owners have the same exit strategy

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The project

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Visualization of one site layout

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The business model

• Ownership in the project company– Land owners put in an exclusive right for the company to develop their

land– No payments to the land owner during the development phase– Payment at joint exit point– Estimate at least 10 times the payment for this model compared to a

standard option fee per acre payment assuming a 5 years development phase

• Royalty payments for each turbine placed on your land normal for the region beginning when the project is being built

21.04.23 20Take over by large utility(ies)

Development phase Operational phase

10% ownership in the development

Individual land lease agreement payments

The way forward

• We suggest the land owners form a group of 3-5 people given the power of attorney to negotiate on the land owners behalf

• The group select a lawyer representing them in the negotiations

• We are willing to cover the lawyer costs up to an amount agreed upon between the parties

• We hope the total process should not last longer than 3 months

• When the agreement are finished negotiated, the negotiating group will present the agreement to the remaining land owners for signature.

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Q&A

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