Project Teaser

Romanian 90 MW Wind Farm

Published October 2014 Copyright © 2013-2014

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Project Description

The Project co-founders (2) are proposing to develop a wind-powered generating facility with a minimum capacity of approximately 90 MW (up to 270 MW estimated to €450 Million). In addition to the wind turbines, the Project will involve construction of 16 permanent wind measuring masts and a meteorological tower, digging of windmill foundations, a system of gravel access roads, a buried electrical collection system, an operation and maintenance building and a collection substation/point of interconnection switchyard (the 220kV power line is 14% loaded and is 6 km away from the respective plot).

The Project will be developed on a plot (non-agricultural land) totaling minimum 400 hectares (up to 1200 hectares) elevated around 1000 – 1400 meters above the sea level in Oltenia region which will be leased for minimum 20 years to the new SPV to be founded. The Project development and building is currently anticipated to commence in autumn 2014 and to finish in autumn 2016.

Figure 1: The Proposed Plot Landscape

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Once built, the wind turbines and associated components operate in almost completely automated fashion. The Project will, however, employ administrative personnel. No anticipated wind turbine was chosen for the Project but there are 3 proposed models (Enercon E-82 E3, Siemens SWT-3-101, Enercon E-126) which the co-founders would suggest to be used. These wind turbines begin to generate electricity at wind speed as low as 3 m/s. This turbine’s rotational speed varies between 6 and 14 rpm depending on the wind velocity. High-speed shutdown occurs when constant wind velocity exceeds roughly 30 m/s to avoid excessive wear and tear that may shorten the turbine’s useful life. Each wind turbine has a computer to control critical functions, monitor wind conditions, and report data.

Figure 2: Enercon E-82 E3 Power Curve (DS)

Figure 3: Enercon E-126 Power Curve (DS)

Figure 4: 3 Turbine Models Power Curves (Excel)

Figure 5: Empirical Calculation for This Location

Figure 6: Profit & Loss (Yearly) – 90MW

Figure 7: Monthly Break Even Analysis – 90MW

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Horary wind

speed [m/s]

Hours % Enercon E-82 E3

[kW]

Power [kW]

Siemens SWT-3-101

[kW]

Power [kW]

Enercon E-126 [kW]

Power [kW]

3,5 35 0.53 55 1925 50 1750 115 4025

4 44 0.67 82 3608 70 3080 175 7700

5 74 1.13 174 12876 165 12210 410 30340

6 135 2.06 321 43335 310 41850 760 102600

7 356 5.44 532 189392 500 178000 1250 445000

8 580 8.85 815 472700 790 458200 1900 1102000

9 586 8.95 1180 691480 1115 653390 2700 1582200

10 620 9.47 1580 979600 1510 936200 3750 2325000

11 645 9.85 1900 1225500 1850 1193250 4850 3128250

12 655 10 2200 1441000 2000 1310000 5750 3766250

13 525 8.02 2480 1302000 2420 1270500 6500 3412500

14 495 7.56 2700 1336500 2650 1311750 7000 3465000

15 384 5.86 2850 1094400 2830 1086720 7350 2822400

16 344 5.25 2950 1014800 3000 1032000 7500 2580000

17 296 4.52 3020 893920 3020 893920 7580 2243680

18 248 3.79 3020 748960 3020 748960 7580 1879840

19 185 2.82 3020 558700 3020 558700 7580 1402300

20 134 2.05 3020 404680 3020 404680 7580 1015720

21 115 1.76 3020 347300 3020 347300 7580 871700

22 65 0.99 3020 196300 3020 196300 7580 492700

23 17 0.26 3020 51340 3020 51340 7580 128860

24 12 0.18 3020 36240 3020 36240 7580 90960

TOTAL 6.550 100 13.046.556 12.726.340

32.899.025

Table 1: 3 Turbine Models Power calculations

Business Opportunity

The potential of Romania in wind energy is considered the highest in SEE. The Oltenia, Moldova and Dobrogea provinces were considered the most appropriate areas for Wind farm developments. Even if the wind is free, wind energy producers receive incentives (Green Certificates) from the state besides the electricity retail price, because the investments are very high. Through its progressive legislation, the government is creating one of Europe’s friendliest environments for RE developers and is encouraging future investments in the wind sector and not only. So, since 2004 green energy producers receive 1 Green Certificate for each MWh of energy delivered into the system. In July 2010, the Romanian Parliament amended the law 139/2010 giving more incentives to RE producers. Finally, in July 2011, the European Commission had approved the law 139/2010. For instance, those in the wind sector (where 80% of green energy investments will go), get 2 Green Certificates for 1 MWh until 2017 after that just single but it’s not the case anymore as ANRE notified on overcompensation issue so, the Parliament amended the law GD 994/2013 in December 2013. Main changes regard the reduction of Green Certificates for wind from 2 to 1,5 took place in January 1, 2014 . These changes will be effective until January 1, 2018 . After that, other reduction of Green Certificates will take place from 2 to 1,75 for 1 MWh.

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The Project Scenario

• The Project is to manufacture and build at least a 90 MW Wind farm in a highly desirable location in Romania with proven wind velocity conditions (MAWS of 7,2 m/s and CF of 86% in Oltenia region). The final Wind farm capacity will be decided together with the investor and can reach up to 270 MW .

• The average amount of the deal is estimated to be in the region of €160 Million (for a 90 MW Wind farm) advanced over 2-yrs period to cover manufacturing and management costs and could be paid off in period of less than 7-yrs based on revenues.

� €117.000.000 – total cost of wind turbines (1,3 Million €/MW) � €1.600.000 – turbines transportation � €1.600.000 – foundations & pedestals � €200.000 – turbines installing using a crane � €250.000 – land development and leasing � €18.000.000 – ATR (100.000 – 200.000 €/MW) � €1.600.000 – CA (1% of total investment) � €2.580.000 – project development and expenses � €17.170.000 – contingency

• Operational activity is at the end of the 2nd year with current estimates showing yearly revenues (including incentives) of approx. €42,1 Million .

• AEP = 316,791 GWh, ROI = 21,9%, NPV = €227,9 Million, IRR = 27% .

• From that point on this would be a very profitable venture for all concerned.

• Opportunities to blue print this process and do more deals throughout Romania as demand continues to increase for alternative energy.

Action Plan

• Site Location – The proposed Wind farm will be built on a leased plot of 400 hectares from the Local Council (co-founders have a Mandate). The proposed Wind farm would be located 300 km west to Bucharest city (Capital of Romania). No agriculture is made in this zone. The plot location is hilly, nearby County road with a 14% loaded crossing 220kV HT national grid line 6 km away.

• Company Formation – We as a Managing team are willing to incorporate the appropriate corporate structure that will best benefit both the project proponents and the investor. Considerations will include the need for a Romanian based entity that satisfies the requirements of the governing body.

• Administrative Process – The admin. process takes cca. 14 months for a Wind farm.

• Technical expertise - We have the experience from other projects; one of the projects is quite the same level and is situated very close to the proposed one, 9 km away from it which makes us quiet confident that the administrative process will not be a problem.