Presentation on Locally-Owned Wind Market Community Wind Community - PowerPoint PPT Presentation

Presentation on Locally-Owned Wind Market

Community Wind Community Wind What is Community Wind? Why is Community Wind important? � Locally owned, utility scale wind Locally owned, utility scale wind � For the US to reach 20% wind, we need For the US to reach 20% wind, we need projects of all sizes � Typically smaller, varying from 2MW to 100MW � More participants = more stakeholders involved involved � Single or multiple local owners � Single or multiple local owners � Political power = stable, wind-friendly � Sell power to the grid or offset policies end-use power consumption � Maximize value of wind for local Maximize value of wind for local communities Community Wind - 3.4x impact on local job creation; 5.0x economic impact on the local region, relative to a corporate-owned development OwnEnergy (Kildegaard, A and Myers-Kuykindall, J: University of Minnesota, Morris) Empowering the Future 2

OwnEnergy Background OwnEnergy Background Who We Are What Makes Us Unique Better, cheaper, faster renewable energy development Differentiated Business Model: � company company Accelerates and simplifies development process � Focused on small to mid-size projects � Innovative process that emphasizes standardization � (10 – 80 MW) Lower development risk via disciplined: � Include local partners in project development and • project screening process p j g p � ownership hi partner acquisition process � Industry leading team (50+ years) from: � Connects individuals with renewable power and creates � Goldman Sachs, AES, FPLE and GE � leading brand Bottom Line We include local landowners, developers and • communities in an unprecedented way We develop higher-margin projects at a lower cost, W d l h h l • capturing low-hanging fruit in smaller opportunities OwnEnergy Empowering the Future 3

Lessons Learned � Local ownership typically results in more control and a significantly greater financial outcome for community members than a lease � Smaller, locally-owned projects can be developed faster with less opposition � Smaller projects have fewer transmission constraints � S ll j t h f t i i t i t � Local developers have difficulty accessing project finance and proven turbines without a pipeline and track record p p 4

Community and Mid-Sized Wind Projects Community and Mid Sized Wind Projects Niche sectors will account for an increasing proportion of the US market as large-market growth moderates 3,000 10% MW) ion Community Community MW (left scale) MW (left scale) Community Wind (M 2 700 2,700 9% 9% ind Market Penetrati Penetration (right scale) 2,400 8% Wind 2,100 7% 1,800 6% 1,500 5% 2,187 MW of new capacity 2008- 2,187 MW of new capacity 2008 1 200 1,200 4% 4% Cumulative Community Wi 2011 (2,495 MW total in 2011) 900 3% 600 2% State + 10% USDA 300 1% Projection taken from updated forecast by Mark 0 0% Bolinger; Lawrence Berkely National Labs 2007 2008 2009 2010 2011 12000 Mid-Sized (10-80 MW) Mid-Sized (10-80 MW) 10000 Wind Projects Wind Projects Wind Projects Wind Projects 8000 8000 6000 4,177 MW of new capacity 2008-2011 (9,915 MW total in 2011) 4000 2000 2007 market size according to AWEA. The mid-sized market has grown 20% on average over the last five k t h 20% th l t fi 0 years. Projections based on OwnEnergy estimates 2006 2007 2008 2009 2010 2011 2012 5

Landowner Rationale/ Community Benefits Landowner Rationale/ Community Benefits After-Tax Cumulative Returns 30 MW Capacity 40% Net Capacity Factor $ 55 Power & REC's $ 2,313 Capital costs per MW After-Tax Cumulative Returns 6,500 Equity Equity 5,500 4,500 Average annual after ‐ tax income, Equity case $325k $000's 3,500 Lease 2,500 Average annual after ‐ tax income, Lease case $195k i L $195k 1,500 500 (500) ‐ 2.5 ‐ 2 ‐ 1.5 ‐ 1 ‐ 0.5 COD 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Development Operations Lease Lease Equity Equity • Assume active role as local partner in • Apply relevant business experience and development of wind project entrepreneurial nature • Share resulting profits • Be involved in a business venture that: • Optimize financial outcome from wind - provides net positive impact on development on their property environment - contributes to energy independence contributes to energy independence 6

Community Wind European Experience Community Wind – European Experience � Approximately 80% of wind power in Germany, Denmark, power in Germany, Denmark, Sweden and the UK are community owned � German Drivers: � Long term fixed tariffs � Priority grid connection P i i id i � Overall marketing scheme – “Everyone can produce y p electricity” � Ease and availability for financing 7

Current Domestic Policies for Community Wind � Production Tax Credit � USDA Section 9006 grants � USDA Section 9006 grants � Community Based Energy Development (C-BED) � State production tax credits targeted at community wind � State investment tax credits � State investment tax credits � Standard offer pricing for wind QFs � Met tower loan programs p g 8

Additional Policies for Community Wind y � Renewable Portfolio Standards � Carve-outs for locally-owned projects � Creation of nation-wide RPS � Streamlined permitting & transmission process for locally-owned projects � Nationwide interpretation of 20MW FERC rule � Power off-take � Uniformity in PURPA pricing � Standardized PPA Contracts � Pre-established norms for calculating wind intermittency discount / capacity value � Increase Net Metering Capacity � Access to capital for landowners to install met towers and pursue p p development � Production Incentives � Long-term extension of PTC � Long term extension of PTC � Alternative cash incentive 9

Why Community Wind in OK? Why Community Wind in OK? � Focus economic benefits in the community � New economic growth engine � Smaller projects can utilize existing transmission existing transmission � Smaller projects can be built faster � Local stakeholders facilitate community support � S � Smaller projects can be built to ll j t b b ilt t serve local load 10

Development Process Development Process Phase I – Screening Phase II – Early Devl. Phase III – Late Devl. Phase IIIa – Financing Phase IV – Construction Phase V – O+M Prospecting Evaluating Contracting Financing Building O+M � Siting � Negotiate power � Raise capital � Engineering & g g p p g g � Feasibility � Feasibility � Desktop Studies purchase agreements Construction � Land Acquisition and Balance of plant management � Locally-Oriented contracts Development 6 months 12 months 18 - 24 months 24 - 36 months 1 month Typical Timeline 11

Contact Details J Jacob Susman b S Chief Executive Officer OwnEnergy, Inc. 45 Main Street, Suite 538 Brooklyn, NY 11201 Office: (646) 898 – 3694 Mobile: (215) 805 – 1686 jacob.susman@ownenergy.net 12