Gilkes Energy Brochure - Lo Res

8/22/2019 Gilkes Energy Brochure - Lo Res

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AN INTRODUCTION TO GILKES ENERGYPROJECT FINANCE AND DEVELOPMENT

HYDROPOWER


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GILKES ENERGY LTD IS A WHOLLY-OWNED SUBSIDIARY OFGILBERT GILKES & GORDON LTD AND WAS ESTABLISHED IN2008 IN ORDER TO HELP OUR CLIENTS DEVELOP AND FINANCEHYDROPOWER PROJECTS.

Hydro projects are capital intensive and time consuming but i structured and fnancedcorrectly can provide secure income streams or more than 50 years. We can explain youroptions in simple no-nonsense terms and help you structure and fnance your project in themost tax-efcient, air and low-risk way.

We also develop our own projects and invest into other projects in the orm o Joint Ventures(JVs) with estates and landowners. JVs can be more than just raising capital - with thecorrect partner they are an ideal way o bringing in external expertise and maximizing thepotential success o the project.

Gilkes funding the earlyplanning and feasibilitycostswith the estate/landowner investing ata later date when somerisk has been removed

Gilkes investing equityalongside the estate/landowner at the sametime, for example a50/50 joint venture

Gilkes nancing thewhole developmentwith a rental paid to theestate/landowner

Gilkes providingtechnical and nancialmodelling services butnot actually providingany funding

ONE TWO THREE FOUR

FINANCE OPTIONS INCLUDE:

AN INTRODUCTION TO GILKES ENERGY

1 www.gilkesenergy.com


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GILKES ENERGY PROVIDES THREEMAIN SERVICES:

Project easibilityTo help you decide i your proposed scheme istechnically easible and economically attractive.

Project investment & fnancingTo help you structure and fnance your projectin the most tax-efcient, air and low-risk way.

Project management & maintenanceWe work very closely with our partners, suppliersand contractors to manage projects to ruition.

2www.gilkesenergy.com


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4 Catchment mapping and ow analysis

To provide an estimate o the likely ow available throughout the year (Flow Duration Curve).

4 Turbine selection and optimisation

Choosing the optimum turbine and generator confguration or your project.

4 Energy generation analysis

4 Financial modeling and structuring

To calculate and estimate the expected project capital costs, operating costs and revenues and to help youcalculate the optimum combination o bank debt/equity, in order to fnance your project.

IF YOU ARE A LANDOWNER OR FARMER WITH A RIVER ORSTREAM CROSSING YOUR LAND, A HYDRO DEVELOPMENT MAYBE A WAY OF GENERATING VALUABLE LONG-TERM INCOME.

Hydro developments can last in excess o 50 years, and structured correctly could providefnancial security or the arm/estate or generations. We work very closely with a number ohydro consultants and other experts to help you understand the key issues associated withyour potential project and assess its economic and technical easibility.

We will work with you to develop a number o alternative options and work through the varioustechnical and fnancial issues in order to develop the optimum solution or your individualcircumstances.

PROJECT FEASIBILITY


PROJECT FEASIBILITY STEPS INCLUDE:

LOGANBECK BRIDGE

BECKFOOT

LOW PARK

POWERHOUSE

RIVER DUDDON

INTAKE


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HYDRO PROJECTS ARE CAPITAL INTENSIVE AND TIMECONSUMING BUT IF STRUCTURED AND FINANCED CORRECTLYCAN PROVIDE AN ATTRACTIVE LONG TERM INVESTMENT.

The UK Feed-In-Tari (FiTs) provides a guaranteed price or electricity generated by hydroprojects. This price is indexed against the Retail Price Index (RPI) so protects your investmentagainst the eects o ination. However, the equity requirement necessary to bring a projectto ruition can be signifcant even ater borrowing a loan rom the bank. We can step-in andhelp plug the gap in order that the scheme can be ully unded. Our partners are usuallyreassured to have an expert developer rather than a passive investor as a ellow shareholder.Once we are a partner in a JV we are partners or the long term, share the risks and rewardso the project and are incentivised to keep the scheme running as efciently as possible overthe longterm.

We have developed a number o investment and fnancing structures (more details below) tohelp our customers and partners realize their projects. We aim to be as exible as possiblein order to maximize the deliverability o any project and have developed a sophisticatedfnancial model which calculates the estimated income, unding requirement and all thenecessary ratios required by a bank. This model helps us select the optimum structure, raisedebt fnance rom a bank and generally expedite the project through to ruition.

PROJECT INVESTMENT & FINANCING


FINANCING AND INVESTMENT SERVICES TO HELP YOUR SCHEME:

4 Early-stage easibility and planning costs

Early-stage easibility costs can be expensive and i outcomes are uncertain and you are reluctantto take this risk we are willing to und these initial costs in exchange or a minority share in thescheme. I the scheme ails to proceed or any reason then all costs are met by Gilkes. As with mostdevelopments o this kind investment made at an early-stage would normally equate to a slightlyhigher proportion o the equity relative to investment which is made later on in the project. This isknown as a development premium or risk premium and is a common way o compensating theearly-stage investor or the risk o schemes not proceeding.

4 Joint Ventures

The simplest orm o Joint Venture is a 50/50JV where both the landowner and Gilkes each und50% o the equity and own 50% o the project. I investment is applied rom both parties at the sametime throughout the project then no risk premium is applied. Gilkes takes a exible approach andother orms o JV are possible or example 60/40 or 40/60 depending on the landowners capitalavailable and attitude to risk.


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WE WORK VERY CLOSELY WITH OUR PARTNERS, SUPPLIERSAND CONTRACTORS TO MANAGE PROJECTS TO FRUITION.

As a JV partner Gilkes interests are aligned completely with those o the estate/landowner.Projects are managed with a ocus on keeping the construction phase to time and budget. Werecognise that a project which is late or has cost overruns erodes the Return On Investment(ROI) or the landowner and having Gilkes as a JV partner provides a reassuring incentive tomanage the project as eectively as possible. Once the scheme is operational, Gilkes would

normally take responsibility or the maintenance and monitoring o the scheme in order to keepthe equipment running as efciently as possible throughout its lietime.

PROJECT MANAGEMENT & MAINTENANCE


REMOTE MONITORING

4 Remote monitoring equipment willbe installed to allow Gilkes and thelandowner to monitor power output,operate the plant and troubleshootwhen necessary.

4 Metrics such as power output, totalenergy generation, intake level sensorposition, spear control valve positionand running speed are all displayed ona password-protected website.

4 The website is then available to anyonewith a web-connected PC or handhelddevice such as a Blackberry or iPhone(with the appropriate security).


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CASE STUDYLOGAN GILL

Logan Gill orms a tributary o the River Duddon, with the site being located just two miles rom the village oBroughton-in-Furness. This site is situated in the Lake District National Park and hence added mitigations werenecessary in order to preserve the natural environment. The inlet o the scheme is located on Corney Fell beore thewater travels 1km down a 600mm pipe to the traditionally stoned turbine house. The scheme is known as a run oriver scheme which means the water is used as the river provides it and not stored or impounded beore use.The turbine used in this scheme was a 16.5 HCTI Twin Jet Turgo system which has peak power o 450kW andgenerates approx 1,500MWh o energy per annum, enough to supply approx 300 average sized households. Theproject is one o the frst in the UK to use the Feed In Tari scheme (FiTs) which provides renewable generators with

a guaranteed energy price. The project is a Joint Venture between Gilkes and Ellergreen Hydro www.ellergreen.coma developer o hydro schemes ocussed on England and Wales.

Gross Head: 96.5mNet Head at Design Flow: 90.19mFlow: 0.6 m/sTurbine type: Twin Jet Turgo 16.5 HCTI_TJ

Speed: 1000rpmOutput power: 450kW1,500 MWh/year



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CONTACT

Email: [email protected]: 01539 720028Fax: 01539 732110www.gilkesenergy.com

Gilkes Energy LtdA wholly owned subsidiary o Gilbert Gilkes & Gordon Ltd Kendal, Cumbria, LA9 7BZRegistration No.173768 London.

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Gilkes Energy Brochure - Lo Res