JLL AES Information Session

29 October 15

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• Select a Wind and/or Solar project, then arrange Contractual & Legal contracts

• Inform the forum on the process of aggregation timeline and requirements

• Talk to developers to determine available projects

• Participants execute Engagement Letters to participate in the program

• Aggregate load and finalize Request For Proposal document

• Run tender process

• Release a questionnaire to better understand the client needs

• Review questionnaire feedback, initial program size

• Hold meetings with forum members individually and JLL RE expert from

US: 6-9th October

The “Aggregation” process update

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• Begin buying Renewable Energy

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Results from the Questionnaire

Load Aggregated to date

Over 101,500 MwhAverage energy cost:15.03 c/kwh

1/12/15

6/1/17

31/12/18

0%

20%

40%

60%

10 11 to 15 other

Term

0 10 20 30 40 50 60 70 80 90 100

Other

Type of renewable project, eg wind vs solar

Internal deadlines

Marketing opportunities

Internal policies

Value for money

Influencing Factors

The aggregated load looks large,

where do we go from here?

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I have a publicly stated carbon reduction goal, but no plan to meet the goal.

We’ve considered renewable energy, but put plans on hold due to cost and risk concerns.

I don’t fully understand all aspects of alternative energy, It feels like a big risk that could come back on me.

I’m getting multiple calls from different vendors –who can I actually trust?

What “outside influences” can affect PPA pricing, 1) RET goals met quickly, 2) currency volatility?

Corporate carbon goals clear, but achieving them…

How do we get outside expertise/support when its not in our budgets?

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AES mission: Overcome client’s carbon reduction challenges by providing a global, cost free solution

• Client Challenges: Meeting corporate carbon reduction goals while dealing with numerous unsolicited vendor call and conflicting information from various sources, leading to confusion and doubt.

• Overcoming Client Challenges: JLL AES acts as Client’s Advocate, eliminates confusion/doubt through market intelligence and subject matter expertise.

• JLL Program: JLL assess properties, conducts a sophisticated bidding process, supports negotiation of energy agreements with winning developer.

RESULT: Client realizes carbon goals through a

no out of pocket, risk free program !

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Lets get this out of the way now, who’s paying JLL?

• Traditional consultancy fee structures: Fees paid for each step of the development process the consultant takes a “finders fee” from the developer of ~10% of project costs. Client pays for studies that may not result in projects.

No Project = Still Payment

• JLL’s Client Advocacy fee structure: JLL takes all program development risk, paid when Power Purchase Contract (PPA) is executed.

− A transparent fee of 3% of the project cost is charged to and paid for by the winning developer at PPA execution.

− Fees can be offset by incentives, absorbed by the developer as avoided sales and marketing costs or amortized across the kWh consumed.

No Project = No Payment

Our fee structure: Success based, client focused, risk free

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How we drive programs from concept through delivery

Programs are completed in a timely manner.

Environmental goals are met.

No capital or operating expense put at risk.

Review current sustainability goals against target

Define strategy for reaching target, set Success Factors

Sort and filter portfolio to finalize targeted sites/kWh load

Identify and review potential offsite technology options

Project potential savings from different deal structures

Facilitate tenders, support selection process and contract negotiations

Complete implementation planning to ensure program’s success

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AES serves clients globally

North America: US & Canada

Latin American and the Caribbean: Mexico, Panama, Columbia, Brazil and Puerto Rico

With AES teams strategically placed around the globe, JLL is well-positioned to serve clients

in rapidly changing markets.

APAC: Australia, Hong Kong, China, India, Japan and Malaysia

Europe: UK, France, Germany and Italy

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Experience ensures success: AES clients worldwide

Solar site rental evaluations in US and UK

Renewable energy strategy assessment

Global assessment of corporate financing options for renewable energy projects

Solar roof rental assessments in US and Italy

Solar PPA RFI and RFP process in Puerto Rico

Solar site assessments in US & Mexico

“Best use” renewable energy RFP management

Roof rental assessment and RFP management in Canada and Italy

1,000+ site solar Client Advocacy in Mexico

900 kW solar PPA in Puerto Rico,

Global “Renewable Energy Playbook”Solar PPA and central

plant/co-gen outsourcing assessment Solar site assessmentSolar roof rental and central plant

outsourcing assessment

GERMAN GLOBAL FINANCIAL INSTITUTION

LEADING US HEALTHCARE PROVIDER

Solar Client Advocacy for 200 sites

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JLL AES program experience ensures success

• Solar (~250 MW at over 200 sites)− Harvard University (MA)

− Bank of America (multiple CA sites)

− Intel (TX)

− Kashiwa (Japan)

− Intuit (CA)

− German global financial institution (NJ/NY)

− Honeywell (Puerto Rico)

− Two leading national healthcare providers (CO/CA)

− National small-box retailer: Over 8,000 stores in US

• Non-solar

− 241 MW of installed wind: Planning & Permitting for multiple developers in EMEA

− 300 MW biomass: Planning & Permitting for multiple developers in EMEA

− 30 MW fuel cell installation: Wireless provider (US)

− 400 kW fuel cell installation: Nokia (US)

− Comprehensive energy retrofit program: Empire State Building, New York

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Case Study 1: Health Organization On-site Solar Program

Beginning with over 400 sites in CA, JLL facilitated a screening and selection process that lead to aggregation of the largest solar carport project in history

• Two step screening process: Power Usage Sizing & Physical Sizing

• Compared Usage Sizing to Physical Sizing, used minimum value as site’s potential

- Screening resulted in over 170 sites receiving solar carports

- Project size = 70 MW

• JLL ran multiple bids that lead to the selection of a single vendor that would sell power at a discount significantly lower than initially anticipated

RESULT: Client secured a 20 year Power Purchase Agreement for 97.5 million kWh/year

• Enough electricity to power 16.2K homes

• Energy savings in Year 1 were nearly $3 million, ~15% lower than utility bill would have been!

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Case Study 2: Rooftop onsite solar program

Aggregated sites across 5 states that lead to an RFP for on/off-site solar

• Site screen 1: Top 5 solar states chosen based on incentive and avoided cost/kWh (HI, CA, PR, MA and NY)

• Site screen 2: Store viability

- Sites that Client is responsible for

- Sites currently without solar

- Sites that had $/kWh costs of $.09/kWh (after a 30% reduction for demand costs)

• Bidder screening

- Prequalified bidders based on market knowledge (can beat pricing hurdle of $0.09/kWh)

- New bidders screened through a one time pricing exercise

- Twenty qualified bidders responded to the RFP

ANTICIPATED RESULT: Secure Power Purchase Agreement for 45 million kWh/year. Savings between $0.02 - $0.03/kWh (over $1M Year 1 savings).

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Case Study 3: Small box retailer’s microgrid opportunity

• Objective/Challenge

- Need to “keep the lights on” during gird outages (primarily storm related)

- Reduce HVAC life cycle costs (5-7 year RTU change outs)

• A path forward developed

- Screen multiple technology providers to determine proper application

- Disqualify vendors that can’t provide an offering via an Energy Services Agreement (ESA)

- Contract that will provide power 24/7, even during grid outages

- Conditioned space AND provide power security without any capital expense

• Guaranteed energy savings, even in low energy cost states like Florida ($0.09/kWh)

Anticipated result: Client achieves operational and savings goals

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To avoid Client CapEx investment for 200: 75 kW diesel stand-by generators, an

alternative strategy was developed that lead to a “limited bid” process

Store

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Case Study 4: Offsite community solar gardens in Minnesota

AES aggregated client’s 105 site load, bid it to offsite

Community Solar Garden developers

• Evaluated portfolio to determine target sites within Xcel service territory

• Screened and vetted potential bidders

• Facilitated a competitive bidding process to achieve the lowest possible price for Community Solar Garden credits

- Project size: 25 MW

- RFP responses received and executive summary shared with Client within 3 weeks

- Client selected multiple winners to meet load requirements

- Managed critical deal terms: Assured winner allowed the greatest latitude in terms of future load reduction due to site closings or energy conservation efforts

ANTICIPATED RESULT: Client savings projected to be 10% or higher

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Case Study 5: New shopping center onsite solar in Hawaii

Securing 1 MW of rooftop solar PV across multiple buildings in shopping center

• Evaluated the common area and individual tenant’s energy needs for client

• Crafted a deal structure that allows for “Back-to-Back” Power Purchase Agreements

- Client will buy power from solar developer via a PPA, remarket excess power to tenants

- Client can profit from the spread between PPA and tenant’s electricity rates

- Can use lower cost “green power” to attract new tenants to the center

• Screened and vetted potential bidders

• JLL facilitated a competitive bidding process to achieve the lowest possible $/kWh and best deal structure for the Client

- One winner selected from pre-screened, highly qualified bidders

- PPA price less than 50% of the utility cost

- Master meter, sub-meter structure system used to manage billing process and tenant flexibility

ANTICIPATED RESULT: Significant client energy savings and new revenue stream when the mall opens in 2016

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Case Study 6: Global green energy demand

A global leader in food manufacturing is working with JLL to source, secure

renewable energy for their operations in targeted countries

• Reviewed available opportunities with solar developers in targeted markets

• Evaluating different technologies in each market to determined best fit for Client’s needs

• Educating client on national, regional incentives and credits available for alternative energy projects

- Assessing the value of new legislation and it’s potential economic benefit for new projects

- Exploring “grandfathered” or legacy projects that may deliver the lowest cost solution

• JLL is fostering relationships with organizations at different stages of project development

- Meeting with utilities to better understand the infrastructure and interconnect process

- Interviewing a wide range of development companies offering various alternative energy solutions

- Supporting client’s finance team to determine if it should utilize PPAs or funding from reputable sources with attractive financing terms

ANTICIPATED RESULT: Client to offset 100% of its carbon footprint AND save money!

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If it seems to good to be true…

No program is perfect, and PPAs have their own “issues” that clients will need

to understand/communicate clearly with other internal decision makers:

• Length of contract: PPA terms can range from 10-20 years

• Termination options: Contracts can be cancelled, transferred to other locations, sold to other end users or into the wholesale market. Termination values/exposure can be negotiated to mitigate risk.

• Fixed consumption commitments: To allow for usage variations, PPA volumes are typically contracted at levels that provide a comfortable cushion to absorb change (i.e. purchase only 20-50% of usage in Tranche1, prepare strategy for remaining load).

• Technology may change: It could, however, there are no ground breaking technologies that will meet financing “bankability” challenge in the foreseeable future.

- Waiting only delays the savings potential available now

- Risks chance of RETs being met sooner than expected or AU$ volatility driving prices higher

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Why lock in energy prices now?

• CSIRO Projections

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Achieving carbon goals, where to start…

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Next steps:

• Review your carbon goals, current progress, strategy for meeting commitment

• Define acceptable deal structure terms, Success Factors

• Identify targeted locations, portfolio/kWh usage patterns

• Finalize site screening, load percentage to be included in Tranche 1

• Execute JLL Engagement Letter

• Release tenders, vendor selection and Tranche 1 contract negotiation process

• Prepare for program expansion

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Thank you!

Wangari Muchiri

Sustainability Manager+61 2 9220 8504Wangari.muchiri@ap.jll.com

Simone Concha

Sustainability Director 61431057710 Simone.conchak@ap.jll.com

Dave Gralnik

SVP, Global Director of Alternative Energy Services+1 760 476 2724 dave.gralnik@am.jll.com

COPYRIGHT © JONES LANG LASALLE IP, INC. 2014

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Program Contracting Structure

Aggregator/Client Advocate