bizando - minieolico 60kw - november 2013

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Small Wind Plants (Minieolico) Opportunity for Investment in Italy November 2013

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NEW RELEASE - The project proposed by Bizando is characterized by a number of extremely positive factors: - Turnkey approach, by the acquisition of sites up to the plant in operation. - Very streamlined authorization process. - Rates of return on investment of high interest. - Ability to modulate the investment based on the needs of the investor. Bizando proposes a program development framework - focused in the southern regions of Italy - which includes: - Systematic search for suitable sites to be allocated to the installation of small wind turbines of 60KW. - Support for all administrative practices for the acquisition of sites and for obtaining all necessary approvals. - Design and construction of turnkey plants. - Management and operation of the plant for the entire period of its useful life.

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Page 1: Bizando - Minieolico 60KW - November 2013

Small  Wind  Plants  (Minieolico)  

Opportunity  for  Investment  in  Italy  

November  2013  

Page 2: Bizando - Minieolico 60KW - November 2013

Agenda  §  About  Us  

§  Introduction  to  minieolico  (small  wind  plants)  

§  The  market  

§  The  regulatory  framework  

§  The  financial  aspects  

§  The  implementation  aspects.  

§  Our  proposal  

§  Findings  

Page 3: Bizando - Minieolico 60KW - November 2013

About  us  §  Since  2010  Bizando  has  been  active  in  the  renewable  energy  sector  by  supporting  the  

production  of  energy  from  sources  which  use  does  not  affect  natural  resources.  

§  Bizando  has  actively  participated  in  the  development  of  large  photovoltaic  and  wind  projects  in  different  Italian  regions,  including  Basilicata,  Campania,  Lazio  and  Sardinia  

§  Bizando  operates  through  a  network  of  commercial  and  technical  partners  by  offering  personalized  and  comprehensive  services:  §  addressing  the  requirements  of  the  projects    §  satisfying  the  objectives  of  "value  for  money"  imposed  by  the  client  

§  Bizando  is  able  to  offer  solutions  "turnkey"  in  the  field  of  renewable  energy,  with  particular  reference  to  the  mini  wind  turbines  and  hybrid  thermodynamic  systems.  

§  Bizando  is  also  active  in  other  areas,  such  as  management  consulting  in  telecommunications,  the  supply  of  mass  SMS  mode  'managed  service'  and  the  development  of  apps  for  all  types  of  mobile  devices  

Page 4: Bizando - Minieolico 60KW - November 2013

The  origins  of  the  minieolico  (small  wind  plants)  §  Minieolico  was  born  and  developed  primarily   to  meet   the  electricity   requirements  of  isolated  users  (off-­‐grid).  

§  Today   almost   all   of   the   installation   is   oriented   to   the  generation   and   transfer   of   the  generated  energy  into  the  grid.  

§  The  development   is   supported   thanks   to   the   specific   incentive  policies   promoted  by  each  country  

Page 5: Bizando - Minieolico 60KW - November 2013

Definitions  §  The  definition  of  minieolico  does  not  follow  a  single  rule  because  it  is  tied  to  a  logic  based  on  the  regulatory  legislation  that  varies  from  country  to  country.  

§  Regarding  Italy,  minieolico  plants  are  considered  those  that  have  power  in  a  range  of  20Kw  -­‐  200Kw  and  the  generator  can  be  placed  both  in  horizontal  than  vertical  way.  

§  The  lower  limit  coincides  with  the  minimum  investment  threshold  for  structured  finance  operations.  

Page 6: Bizando - Minieolico 60KW - November 2013

Attractiveness  of  the  industry  §  I’s  appropriate  to  consider  that  the  traditional  minieolico  and  the  traditional  wind  power  

plants,  have  similar  needs  (even  if  the  second  ones  belong  to  a  field  more  developed  and  mature,  beyond  the  evident  scale  factor)  

§  However,  the  developmental  potentialities  of  the  minieolico  are  favored  by  some  peculiar  aspects  that  make  more  affordable  this  type  of  installation  compared  to  those  of  large  power  plants:  §  Simplicity  in  implementation  and  reduced  time  of  delivery  and  installation  

§  Lower  investment  values  §  Reduced  time  for  the  authorization  procedure.  

§  Acceptable  timeframe  for  connections.  §  Lower  problems  of  saturation  of  the  electrical  capacity  of  the  network.  §  Increased  availability  of  suitable  sites.  

§  Perception  of  greater  stability  of  the  incentive  scheme.  §  Better  impact  on  public  opinion  and  public  administrations.  

Page 7: Bizando - Minieolico 60KW - November 2013

Global  wind  market  §  Globally,  wind  power  is  a  mature  and  spread  business  with  an  installed  capacity  of  238GW  in  2011  

§  0.4  GW  are  represented  by  the  minieolico  industry,  distributed  mainly  among  China,  the  United  States,  Canada,  Great  Britain  

0  50000  

100000  150000  200000  

USA   Cina   UK  Germania   Canada   Spagna  

Polonia  Giappone  

Italia  Svezia  

Corea  del  Sud  

179000  166000  

42970  15000   12600  

7020   7000  5900  

5030  1700  

1040  

Cumulative  Installed  Capacity  (KW)  

Page 8: Bizando - Minieolico 60KW - November 2013

Forecasts  of  development  for  the  minieolico  The  forecasts  of  minieolico  installed  worldwide  up  to  2020  are  excellent  both  on  an  annual  basis  (industry  studies  provide  at  least  30%  /  year)  than  on  cumulated.  

Page 9: Bizando - Minieolico 60KW - November 2013

The  development  in  Italy  §  In  Italy,  the  installed  capacity  in  2011  was  14MW.  

§  In  2012  it  grew  by  50%  to  a  total  of  21MW,  with  less  than  400  installations  

§  The  installed  capacity  in  2020  is  estimated  to  1GW.  

§  The  presence  of  historical  wind  data  in  the  localities  where  the  great  plants  were  installed  facilitates  the  development  of  minielico  especially  in  the  southern  regions.  

Diffusion  of  minieolico  in  Italian  municipalities  

(*)    Various  sources,  Legambiente,  Politecnico  di  Milano  

Page 10: Bizando - Minieolico 60KW - November 2013

The  authorization  aspects  §  Regulatory  compliance  is  one  of  the  assessment  criteria  in  financing  transactions  since  a  not  completely  outlined  picture  may  cause  situations  of  potential  administrative  litigation.  

§  Article.  12  of  Legislative  Decree  no.  N.  387/2003  and  national  guidelines  in  DM  10/9/2010  state  that  single  interventions  depending  on  the  installed  power  may  be  subject  to  Prior  communication,  Report  of  Home  Activity  (DIA)  or  Single  Authorization  (AU).  

§  Wind  power  plants  with  a  capacity  of  no  more  than  60KW  can  be  made  with  the  discipline  of  the  DIA  (today  PAS,  the  simplified  authorization  procedure).  

Page 11: Bizando - Minieolico 60KW - November 2013

The  incentives  §  The  incentive  mechanism  of  the  Ministerial  Decree  

of  18/12/2008,  which  is  valid  for  all  systems  that  will  be  entered  into  operation  before  31  December  2012  (with  subsequent  extension  of  four  months  in  2013),  allows  qualified  plants  IAFR,  for  size  from  1  kW  up  to  200  kW,  the  ability  to  access  at  an  "all-­‐inclusive"fixed  rate  delivered  by  the  Energy  Services  Operator  (GSE),  which  provides  for  15  years  €  300  /  MWh,  provided  that  there  is  a  total  sale  of  energy  produced.  

§  The  Implementing  Decrees,  the  so-­‐called  Romani  Decree  published  in  July  2012,  introduce  a  new  pricing  system  for  plants  that  will  come  into  service  after  December  31,  2012  and  after  the  transitional  period  of  4  months.  

§  Specifically,  there  is  a  incentive  tariff  basis,  for  20  years  of  useful  life  of  the  plants,  amounting  to  291  €  /  MWh  for  power  up  to  20  kW  and  268  €  /  MWh  for  power  between  20  and  200  kW.  

Page 12: Bizando - Minieolico 60KW - November 2013

Turnkey  Project  §  We  are  able  to  offer  an  investment  characterized  by:  

§  ”Turnkey”  approach    

§  Payment  methods  based  on  the  phases  of  the  development  (progressive  "development  fee")  

§  We  performed  a  thorough  scouting  for  lands  and  for  turbines  

§  For  economic  evaluations,  our  reference  turbine  was  considered;  at  the  same  time  we  are  open  to  consider  alternative  scenarios,  with  other  turbines  selected  by  us  or  chosen  by  the  investor.  

Page 13: Bizando - Minieolico 60KW - November 2013

The  turbine  (60KW)  §  Truly  innovative  project  based  on  a  highly  efficient  generator  with  unique  patent  that  allows  you  to  minimize  the  size  of  the  system  in  general:  §  Hub  height:  25.33  mt.  

§  Tower  with  hydraulic  scrubber    

§  Rotor  diameter:  14.4  mt.  

§  Chinese  manufacturing  with  German  (Siemens  PLC)  and  Swedish  /  Japanese  (SKF  /  NKS)  components    

§  Inverter  Power  One  of  the  latest  generation  

§  Annual  energy  production:  §  169MWh  at  6.0  m  /  s  

§  211MWh  at  6.5  m  /  s  

Page 14: Bizando - Minieolico 60KW - November 2013

Capex  &  Opex  Capex:  

§  Turnkey  Plant  Cost:    210K€  §  Enel  Connection:    5K€  §  Land  acquisition:    30K€  

Total:  ~245K€  

 

Opex  :  §  Maintenance  §  Insurance  §  General  and  administrative  expenses    

Total:  ~2K€/year  

 

Page 15: Bizando - Minieolico 60KW - November 2013

Annual  revenues*    

§  Value  of  annual  electricity  production:  169MWh  

§  Comprehensive  rate  as  incentive  system:  €  262,64€/  MWh**  

§  Value  of  annual  electricity  sales:  

 0,26264€  X  169MWh  =    44,4K€  

(*)    Conservative  assumptions,  with  average  wind  at  6m  /  s  (**)  Updated  with  2014  values  

Page 16: Bizando - Minieolico 60KW - November 2013

Costs  /  Revenue  Analysis  x  20  years*  §  Capital  employed:  €  245K  

§  Values  ��of  annual  electricity  sales:  €  44.4  K  

§  Annual  operating  costs:  €  2K  

§  Gross  income:  42.4K€    

§  ISTAT  adjustment:  2%  

§  PBP:  6  Years  

§  TIR:  ~  15%  

   (*)  Conservative  assumptions,  with  average  wind  at  6m  /  s  

Page 17: Bizando - Minieolico 60KW - November 2013

BP  (6m/s)    

Years   kWh  /  year   GSE  Revenues      

Costs  (Maintenance  and  Insurance)  

Net  Revenues  

Cumulated  flows  

Page 18: Bizando - Minieolico 60KW - November 2013

Costs  /  Revenue  Analysis  x  20  years  (wind:  6.5  m/s)  §  Capital  employed:  €  245K  

§  Values  ��of  annual  electricity  sales:  €  55.4K  

§  Annual  operating  costs:  €  2K  

§  Gross  income:  53.4K€    

§  ISTAT  adjustment:  2%  

§  PBP:  5  Years  

§  TIR:  ~  19%  

Page 19: Bizando - Minieolico 60KW - November 2013

BP  (6,5m/s)    

Years   kWh  /  year   GSE  Revenues      

Costs  (Maintenance  and  Insurance)  

Net  Revenues  

Cumulated  flows  

Page 20: Bizando - Minieolico 60KW - November 2013

Phases  of  work  (indicative)  

Site   Autorization   Project   Construction   Installation   GSE  

• Identification  of  the  site  • Letter  of  intent  by  the  owners  of  the  land  • Site  report  &  feasibility  study  • Business  plan  

• Technical  documentation  for  the  connection  • Application  on  the  portal  "Manufacturers  Enel"  • Quotation  for  the  connection  to  Enel  

• Preparation  of  project  documentation  

• Realization  of  the  plinth  support.  • Realization  of  the  related  works.  • Delivery  of  the  turbine  to  the  port.  

• Turbine  installation  at  the  site.  • Testing  • Documents  of  compliance.  

• Administrative  practice  with  the  GSE.  • Manual  for  operation  and  maintenance  of  the  turbine.  

Operations  &  

Maintenance  

Project  Development  

Constitution  of  vehicle  company  

Production  

Page 21: Bizando - Minieolico 60KW - November 2013

The  timing  of  completion  (indicative)  

 Month  1    Month  2    Month  3    Month  4    Month  5    Month  6  

Overall  

Site  

STMG  

Project  

Construction  

Installation  

GSE  

 about  180  days  

20  

35*  

45  

70  

5  

10  

(*)    Net  of  timing  for  contracting  between  Customer  and  Owner  of  the  land  

Page 22: Bizando - Minieolico 60KW - November 2013

Our  proposal  §  Bizando  proposes  a  program  development  framework  -­‐  focused  in  the  southern  regions  of  Italy  -­‐  which  includes:  

§  Systematic  search  for  suitable  sites  to  be  allocated  to  the  installation  of  small  wind  turbines  of  60KW.  

§  Support  for  all  administrative  practices  for  the  acquisition  of  sites  and  for  obtaining  all  necessary  approvals.    

§  Design  and  construction  of  turnkey  plants.  

§  Management  and  operation  of  the  plant  for  the  entire  period  of  its  useful  life.    

Page 23: Bizando - Minieolico 60KW - November 2013

Findings  The  project  proposed  by  Bizando  is  characterized  by  a  number  of  extremely  positive  factors:  

§  Turnkey  approach,  by  the  acquisition  of  sites  up  to  the  plant  in  operation.    

§  Very  streamlined  authorization  process.  

§  Rates  of  return  on  investment  of  high  interest.  

§  Ability  to  modulate  the  investment  based  on  the  needs  of  the  investor.  

Page 24: Bizando - Minieolico 60KW - November 2013

Contacts  [email protected]  

This  document  is  only  a  general  overview  of  the  subject  treated  in  it.  In  no  way  is  meant  complete,  especially  without  adequate  technical  explanation  and  necessary  deepening.