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European Energy and
Nordic Power Partners
Presentation 2014
200 kW, Johannesburg, South Africa
www.nordicpp.com Presentation 2014
Our development activities
Introduction to the European Energy Group
European Energy
European Energy A/S was founded in 2004 by Knud Erik
Andersen and Mikael Dystrup Pedersen. The Company is a
privately owned Danish company operating in the renewable
energy sector
Since 2004 until 30.9.2014 we have developed, constructed
or invested in:
56 onshore wind farms
19 solar farms
corresponding to a total investment of EUR 680M and
520 MW capacity
Equity has increased sharply over the last 10 years
Equity 2004: EUR 4M
Equity 2013: EUR 53M
Equity 2014E: EUR 59M
Operating asset portfolio:
Total capacity (partially owned): 364 MW
Owned by EE: 124 MW
Assets managed by EE: 404 MW
Extensive project pipeline exceeding 2,700 MW
Approx. 1,200 MW of the pipeline relates to near-shore
wind projects
Equity growth
4M
52M
59M
-
10.000
20.000
30.000
40.000
50.000
60.000
70.000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014E
Equity
520 MW
680 EURM
0
100
200
300
400
500
600
700
800
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
MW EURM
www.nordicpp.com Presentation 2014
Business model
DEVELOP
FINANCE
CONSTRUCT
Partial
sale of
turn-key
project
Sale of
electricity
ASSET
MANAGEMENT
European Energy’s business model is based on:
• sale of turn-key projects primarily developed by the use of in-house competencies
• sale of electricity generated by the renewable energy power plants and
• asset management of wind and solar farms
www.nordicpp.com Presentation 2014
4
Business Model
• Construct project
financing via various
ownership models
• Construct renewable
energy plants
• B2B power sales to
utility companies via
power purchase
agreements
• Administration of
power plant
operations
• Partial sell-off to third
parties, usually 50% -
80% of the assets
European Energy & Nordic Power Partners holistic value chain approach
Traditional focus
1 - 6 months 1 - 6 months 20 - 30 years
Politics / law
making Financing Farm
Project
development
Power sales
Partial sell-off
• Ensuring sound
judicial surroundings
for investments
• Designate
geographical areas
for renewable energy
Cooperation with
partners on:
• Land lease and
power purchase
agreements
• Turbines / Modules
• Operations
agreements
• Production estimates
by independent
verifiers
• Wind / solar studies
10 - 30 months
The business model extends the financial investment case with deep know-how in renewable energy project development,
construction, operation, and key local insight in buyers of projects. Continuous risk-evaluation activities are carried out
throughout the whole development period, particularly in the initial market access and initial project assessment stages.
Ongoing
P
h
a
s
e
s
D
e
t
a
i
l
s
Time
Frame
Risk
Mgmt.
Financing through non-
recourse loans
Full service O&M
against operative risk
Guaranteed tariffs or
PPAs
Project-specific risk
assessment
Preliminary country-
specific study
www.nordicpp.com Presentation 2014
Corporate structure and ownership
Board of directors Corporate structure
Knud Erik Andersen, CEO and founder
Education: Master of Science from DTU
Experience: Founder European Energy A/S in 2004. Co-
founder and CEO of Inside Technology A/S which was sold to
Kontron AG in 2003
Jens-Peter Zink, Executive VP
Education: Cand.merc.aud (accountant) from Copenhagen
Business School
Experience: Joined European Energy in 2005. Prior to joining
European Energy Jens-Peter worked ten years for KPMG
Denmark in various positions including Manager M&A
Mikael Dystrup Pedersen, CTO, Chairman and founder
Education: Master of Science in Electrical Engineering, DTU
Experience: Joined European Energy in 2004. Prior to joining
European Energy Mikael worked for Sentic A/S (CTO Wind
Turbine Controller) and Inside Technology (CTO Box Products
Inside). Mikael is also co-founder of Inside Technology A/S
and Xytel Systems A/S European Energy A/S is the parent company of the group
European Energy A/S owns several subsidiaries that in turn own
additional subsidiaries/associates
In addition, European Energy A/S owns several subsidiaries and
associates directly
European Energy A/S
Illustrative overview
European Energy A/S is fully owned by the board of directors
www.nordicpp.com Presentation 2014
Climate change has increased public awareness about
RES and strengthened support for expanded capacity
In line with the growth in population and increased global
wealth, electricity consumption is assumed to increase
significantly - Global energy demand is expected to grow by one third by 2035
Populations, notably in Europe, are critical towards nuclear
power production
Pension savers preoccupied with socially responsible
management of savings
Air pollution around major cities in China forces the
Chinese government to stimulate renewable investments
Market drivers – PEST analysis
Many governments wish to reduce dependency on
fragile states, eastern European countries wish to
reduce dependency on Russia
The recent nuclear accident in Japan has increased
political will to phase out nuclear power
Focus on job creation from new business segments
based on renewable energy
On the other hand
Governments are phasing out/reducing the levels of
subsidy for Renewable Energy Sources (“RES”)
Prices of CO2 quotas have been low due to lack of
political will
Overall implication
Long-term interest rates have been pushed down and
investors seek yield - While government bonds yield 2-3%, renewable energy
projects yield 5-6%
- Operational infrastructure alternative to high yield bonds can
provide inflation protection
Institutional investments in European renewable energy
projects have increased since 2008
Institutional investors are increasingly focused on
developing products appropriate for renewables, which
is assumed to ease project financing in the future
further
Overall implication
The reduction of
subsidy levels
reduces RES
investment
activity on the
short- and
medium term
New types of
investors with
appetite for RES
increases liquidity
and improves
financing
opportunity which
increase RES
investment
activity
Population
growth will
increase the
demand for
electricity, but not
necessarily RES.
Therefore no
direct positive
influence on RES
investment
activity
Decreasing
hardware prices
makes RES
increasingly
attractive as
sources of
electricity. This
influences RES
activity levels
positively
Electricity production from “tried and tested” technology
has become increasingly competitive throughout the
past 5-7 years
Some RES are expected to reach grid parity – i.e.
marginal production price becomes competitive with
fossil fuelled electricity production within the next 3-5
years
The competitiveness from onshore wind leads to an
expected CAGR of 10% till 2030 with a global installed
capacity of 1.6 TW
Overcapacity among hardware producers is driving
down prices
Phasing out conventional (old) power plants increases
demand for new sources of electricity
Overall implication Overall implication
Economic trends
Technological trends
Political trends
Social trends
www.nordicpp.com Presentation 2014
Technological development reduces subsidy dependence
Wind Solar
New investments will be fuelled by increasingly competitive investment costs –
30% and 40% reduction for onshore and offshore wind between 2012 and 2030
Analysts at Bloomberg and MAKE consult expect onshore wind turbines to reach
“grid parity” within the next 2-4 years
Price per installed capacity has decreased and efficiency increased
In some developing countries we already experience “diesel parity” from solar
PV electricity production
0
20
40
60
80
100
120
1990 1995 2000 2005 2010 2015 2020
Fossil fuel Renewable energy
Cost of energy (EUR/MWh)
Subsidy
element
Sources: Bloomberg New Energy Finance, GTM Research
MWh/MW Investment cost (EUR/MW) Investment cost (EUR/MW)
- 2 4
1998
2001
2004
2007
2012
2014
Grid
parity
0,80
0,90
1,00
1,10
1,20
1,30
1,40
1,50
2009 2010 2011 2012 2013 2014
EU
R /
W
Wind
0
1
2
3
4
5
6
2008 2009 2010 2011 2012 2013 2014
EU
R /
Wp
Year
Solar
www.nordicpp.com Presentation 2014
RES competitiveness in 2014
“The wholesale price for Futures is about EUR
0,04/kWh. This price mainly covers the short-term
operating costs of the power plants, but not the
investment costs. The full cost of a new coal-or gas-fired
power plant will be 7 to 11 eurocents / kWh.”
Sigmar Gabriel, Vice-Chancellor and Federal Minister of Economics and
Energy of Germany, January 17 2014
“The government will guarantee the nuclear
powerplant´a price of up to 92.50* pounds per
megawatt-hour of electricity for 35 years, more than
twice the current market rate, EDF and the British
government said on Monday”
Reuters, October 21 2013
Knud-Erik Andersen, CEO, European Energy, January 2014
* Corresponding to EUR 112.57 MWh (0,.125/kWh)
Prices for electricity by source (eurocent/kWh)
7
11,25
3,9
11
0,67
0
2
4
6
8
10
12
German fossil fuel basedelectricity production
UK nuclear 35-year PPA Denmark market + subsidy(25 yr. annual avg.)
“Onshore wind turbines in Denmark receive market price
(EUR 0,039/kWh) and a subsidy corresponding to EUR
0,0067/kWh per year if evenly distributed over the
lifetime of a turbine (25 years)”
www.nordicpp.com Presentation 2014
R
R
R R R
R R
R Solar PV projects in the EE
pipeline
Wind projects in the EE
pipeline
R R R R R R
Diversified pipeline onshore and near-shore > 2,700 MW
Wind projects
Total wind power 180
Solar PV projects
Total Solar PV 25
Total wind power and PV ~205
Wind projects
Total onshore wind capacity ~1,066
Total near-shore wind capacity ~1,200
TOTAL WIND CAPACITY ~2,266
Solar PV projects
Total Solar PV capacity 275
Total wind and SolarPV capcity ~2,541
Excluding the NPP pipeline (not to be disclosed)
www.nordicpp.com Presentation 2014
Danish near-shore project development – focus on the coastlines
Near-shore wind farms
(Jutland), Denmark
JAMMERBUGT NORD
JAMMERBUGTEN
HANSTHOLM ØST
In 2012, EE applied to the
Danish Energy Agency
under the ”open door”
legislation in order to get
permission to investigate
the business potential in 5
near shore locations in
Denmark
The total potential volume
of near-shore projects in
Denmark exceeds 1,200
MW
In 2013 the Danish
Energy Agency published
the tender process for six
near shore wind farms
EE has secured the best
locations with superior
wind resources in Omø
South and Jammerland
Bay
The two projects
represent a potential of
560+ MW new capacity
and a total construction
investment in the excess
of 1.2 billion euro.
JUTLAND
ZEALAND
Near-shore Wind farms (Zealand), Denmark
OMØ SOUTH
• 320 MW Capacity
• Orbicon selected as EIA
sub-contractor
• Geo-physic survey completed
• EIA report finalized in Q1 2015
JAMMERLAND BAY • 240 MW Capacity
• Orbicon A/S selected as EIA
sub-contractor
• Geo-physic survey completed
• EIA report finalized in Q2 2015
www.nordicpp.com Presentation 2014
Nordic Power Partners
OECD DAC Countries - countries and territories eligible to
receive official development assistance (ODA) – NPP focus
Joint Venture between European
Energy and the Danish Climate
Investment Fund
The value proposition is to
develop wind and solar
photovoltaic projects from green
field until ready-to-build stage
Geographical scope is emerging
markets and developing countries
The projects are developed
through the successful business
model of European Energy and
by utilizing IFU’s vast experience
in investments in such countries
www.nordicpp.com Presentation 2014
Climate change has increased public awareness about
RES and strengthened support for expanded capacity
In line with the growth in population and increased global
wealth, electricity consumption is assumed to increase
significantly - Global energy demand is expected to grow by one third by 2035
Air pollution around major cities in China forces the
Chinese government to stimulate renewable investments
Emerging markets often have more focus on development
than the visible impact of turbines or solarparks
On the other hand
Corruption
PEST analysis – Emerging Markets – all up from low level
Many emerging markets are suffering from the
consequences of lack of electricity
The cost of lacking or unstable electricity supply is
many times higher than RE generation cost.
Fast electrical expansion is only possible with Diesel or
with RE, of which RE is cheaper. In many countries RE
is even cheaper than the existing generation capacity
Distributed energy ensures energy and employment
outside the cities and serves as regional development
engine
On the other hand
Corruption and lack of government
Unstable political environment
Overall implication Long-term interest rates have been pushed down and
investors seek yield
Institutional investments in European renewable energy
projects have increased since 2008
Increased investments in emerging markets
Institutional investors are increasingly focused on
developing products appropriate for renewables, which
is assumed to ease project financing in the future
further
On the other hand
Unstable political environment
Closed markets
Overall implication
Lack of Energy.
RE is the
cheapest
technology for
quick fixes
Corruption and
unstable political
is not good for
long term
investment
New types of
investors with
appetite for RES
increases liquidity
and improves
financing
opportunity which
increase RES
investment
activity
Population
growth will
increase the
demand for
electricity, but not
necessarily RES.
Therefore no
direct positive
influence on RES
investment
activity
Decreasing
hardware prices
makes RES
increasingly
attractive as
sources of
electricity. This
influences RES
activity levels
positively
Electricity production from “tried and tested” technology
has become increasingly competitive throughout the
past 5-7 years
Some RES are expected to reach grid parity – i.e.
marginal production price becomes competitive with
fossil fuelled electricity production within the next 3-5
years
The competitiveness from onshore wind leads to an
expected CAGR of 10% till 2030 with a global installed
capacity of 1.6 TW
Overcapacity among hardware producers is driving
down prices
Phasing out conventional (old) power plants increases
demand for new sources of electricity
Overall implication Overall implication
Economic trends
Technological trends
Political trends
Social trends
www.nordicpp.com Presentation 2014 Presentation 2010
Why is EE and IFU/DCIF a good match?
European Energy
Long term project development
track record
Operational experience
Financing track record
Strong Engineering background
Deep technical insight in PV and
Wind
Legal experience
International network within RE
IFU & DCIF
International track record
Local offices
Danish State ownership
Financial strength
International network with
governments
Experience with public donor
financing institutions
Focus on investments in already
developed projects
www.nordicpp.com Presentation 2014
NPP Achievements
The first two solar PV projects on the Maldives are
solely awaiting administrative permits
The development of a 82 MW wind project in Jordan
has progressed
The development pipeline exceeds 200 MW
Construction of the first two projects on the Maldives
will be initiated
Further expansion of the pipeline on the Maldives
First three quarters of 2014
Expectations for the rest of 2014 / beginning of 2015
Thank You for Your attention!
Nordic Power Partners P/S
Gyngemose Parkvej 50
2860 Søborg
Denmark
Tel.: +45 88 70 82 16
Fax: +45 88 70 82 15
www.nordicpowerpartners.com