r enewable e nergy g eneration ltd overview developing the world’s renewables
TRANSCRIPT
Renewable
Energy
Generation Ltd
Overview
Developing the World’s Renewables
2Renewable Energy Generation
Introduction to REG
• Renewable Energy Generation is the largest publicly quoted renewable energy company in the UK dedicated to investing in operating plant
• Market capitalisation of €100m
• Listed on the London Stock Exchange’s AIM market with the symbol RWE
• REG’s mission is “to build the value of its shareholder equity by owning and operating renewable energy projects thereby contributing to national sustainable energy targets”
• REG has a vastly experienced development and operational team and already owns– The Cornwall Light & Power Company Ltd and through it;– The Goonhilly Downs wind farm in Cornwall – CLP Wind Projects – 24 UK wind projects, 5 consented
• In addition REG is the main equity investor in Poland’s largest wind farm at Tymien – 50MW
• REG has no debt and €55m of cash in hand
Goonhilly Downs
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REG shareholders
• REG’s shareholders include some of the largest financial institutions in Europe– Legal and General– Invesco Perpetual– Fidelity– New Star– Foreign and Colonial– Hendersons– Credit Suisse– UBS
• REG has recourse to its shareholders if further capital required
• But we must now build out what we have acquired
Goonhilly Downs
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REG’s current investments
Tymien 1 – Poland50MW – Fully Operational in Q1
2006Near Baltic Coast15 year PPA, partnered with EEZ
and Invenergy, IRR above REG portfolio average
Stable, attractive renewable energy incentive scheme provided by accession to EU
£7.9m
Goonhilly Downs – Cornwall, UK5.6MWExcellent 12 yr production record2.5 yr PPA signed at very high pricesFreedom to explore repowering
potential Freedom to play the green power
market£4.5m
Goonhilly Downs
CLP Wind Projects – UK75MW when developed24 sites across UK, 5 consented Developed by National Wind Power –
RWEGood wind regimes: cost competitive£4m
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Tymien, Poland
• Poland’s largest wind farm – 50MW
• Uses 25 Vestas V90 machines
• REG is main equity investor in project
• Working with Invenergy of the US and EEZ of Poland
• EU backed project
• 15 year PPA with 2 state owned distribution companies
• Two follow on stages taking total capacity to 150MW
• An excellent first project in Eastern Europe for REG
Tymien
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REG’s future plans:
Tymien 2 & 3, Cisowo – Poland118MWFirst right as principal investor in
Tymien 1 IRR similar to Tymien 1Tymien 1, 2 & 3 will total 150MWCisowo will total 18MWScheduled for 2006 and 2007
WindWorks – UK75MWHigh Sharpley, High Pow, Braich Ddu
close to constructionPipeline of projects
Goonhilly Downs – Cornwall, UKRepowering Programme – 15MWThe wind turbines currently in use are
0.4MW each, modern turbines are typically >1MW
Goonhilly Downs
Other CEE RegionGreece has existing projects
and infrastructureRomania anticipates EU entryBulgaria has excellent resources
Latin AmericaBrazil has strong renewables
programMexico stalled on regulatory
issuesChile — developed country
infrastructure
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Carbon Sales
• Carbon Sales important to emerging market projects– Value in range of €20 per tonne (long-term contracts are
lower)– Depending on carbon intensity, can mean €15 per MWH
• CDM is virtually useless in providing project support– Process highly uncertain — “additionality” makes
outcomes highly uncertain– Mechanism is “amateur” — CDM Executive Board is part-
time and underfunded– RESULT: Few trades and little interest
• JI offers better prospects– National basis– Not well understood in prospective markets– Need for support by EU
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Institutional Barriers
• LDCs often present substantial barriers to renewable energy development
• Transparency a concern — local utilities may have entrenched interests opposed to new equipment suppliers
• Land registration and title — massively important to renewables particularly wind
• Deregulation is not on national agendas — traditional western country PPA structure may not be viable
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Conclusion
• Increasing interest in private sector equity investment in renewables in emerging markets
• Need action to deal with barriers– Reform of Carbon Trading
> Begun at Montreal Conference, but needs momentum
– Deal with institutional barriers> Need to build on work of IFC/World Bank in electricity reform
• Renewables are economic, especially in high cost LDC power markets
• Renewed efforts needed to spearhead change