When is a wind farm financially feasible

1

• When is a wind farm financially feasible?
• Presentation by
• Helge Højkær Larsen
• Scan Energy A/S
• -a European player within Renewable Energy
• Strictly confidential

2
Agenda

• Scan Energy A/S Business Model
• Scan Energy A/S - Market Area
• Selected track records Germany, France, Spain,
  Italy and Polen
• Scan Energy A/S Goals for our Polish activities
• What makes a project feasible?
• Industry
• Country
• Position
• Operation
• Financing
• Conclusion
• Scan Energy Contact information

3
Scan Energy business model

• Business idea
• Develop, structure finance, implement and sell
• wind farms,
• solar projects
• hydro power plants
• Structured for giving access for further
  investment opportunities for professional
  investors as
• Companies
• Private persons
• Sales through network channels
• Scan Energy A/S co-invest with minimum a 10
  share

• Characteristics of projects
• Current markets are Germany, France, Spain,
  Poland and Italy
• Project size is typically over EUR 20m and take
  over as turnkey
• Single Purpose Vehicle for each project either in
  the form of limited liability companies or
  limited partnerships
• Scan Energy A/S secures management of operations
• Founded in 2003 by
• Karsten Olsen
• Helge Højkær Larsen

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The Strategic footprint for Scan Energy
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Scan Energy Germany current projects in
operation
Uelitz 29.5 MW
Bulack II 6.5 MW
Fuchsberg 22 MW
Bremervörde 9.0 MW
Freudenberg Beiersdorf 28.0 MW
Wagenfeld Ströhen 4.0 MW
Prötzl14.0 MW 4 MW
Süstedt 4.0 MW
Müncheberg8.0 MW
Werder 3.0 MW
Wulcow10.0 MW
Beppener Bruch Admin. only -18.0 MW
Klettwitz59.4 MW 4,0 MW
Ostercappeln 18.0 MW
Kostebrau9,9 MW
Meschede8.0 MW
Brieske6.0 MW
Waldfeucht Obspringen Bocket 25.2 MW
Rositz13.5 MW
Düngenheim 6.0 MW
Gross Welle 20.0 MW
Zernitz14.4 MW
Zodel II6,9 MW
Altmark 12.0 MW
Kemberg 15.0 MW
Puschwitz 20 MW
Niemegk Haseloff 26.0 MW 4 MW
Borna- Solar 3,447 MW
Total capacity in operation 401,1 MW (per
31.12.2006) Total capacity under construction
32,5 MW Total capacity after finalizing of
construction 430,8 MW
Shell
Kappal Grafenhausen Solar 1,611 MW
SOLON
Erlasee - Solar 1,8 MW
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Scan Energy Klettwitz Germanys largest Wind
Farm
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Scan Energy new projects
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Scan Energy France current projects in
operation or under construction
Callangeville Lilet 32,5 MW
Col de La Fajole I 12.0 MW
Col de La Fajole II 3.0 MW
In France Total capacity in operation 15,0 MW
(per 30.06.2006) Total capacity under
construction 32,5 MW Total capacity after
finalizing of construction 47,5 MW
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Scan Energy Spain current projects in operation
or under construction
Cuenca I 6.0 MW
Cuenca II 6.0 MW
Sa Pobla 20.0 MW
Ayoa40.0 MW
xxxxxxxx.0 MW
Moclinejo8.0 MW
Enguera I 10.0 MW
Alhonoz2,0 MW
Marzagan2.0 MW
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Scan Energy new projects
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Scan Energy current projects in operation or
under construction
Capo Rizutto (2008/09) 96.0 MW
Total capacity in operation 0,0 MW (per
31.12.2006) Total capacity under construction
96,0 MW Total capacity after finalizing of
construction 96,0 MW
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Scan Energy Polen projects in operation or
under construction
Goldap (2009) 72.0 MW
Sniatowo I (2008) 32.0 MW
Sniatowo II (2009) 20.0 MW
Dobrzyn (2010) 58.0 MW
Total capacity in operation 0,0 MW (per
31.12.2006) Total capacity under construction
182,0 MW Total capacity after finalizing of
construction 441,8 MW
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Scan Energy goals for the Polish activities
within 2010

• Establish a portfolio on minimum 500 MW capacity
  in wind parks end 2010
• Working together with Polish developers
• Establish a management company operating and
  servicing the wind parks
• A joint/venture with developers
• Selling service also to other wind parks
• Building knowledge about the Polish market

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When is a wind park financial feasible?

• The following parameters are of great important
• Industry
• Country
• Position
• Operation
• Financing

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It is a global industry with a global
competition, e.g. conditions are becoming more
alike

• Technology
• Fit for purpose and position
• Choice of turbine vendor
• Purchase Price / Maintenance Costs
• Cost of Ownership
• Securing of delivery
• Conditions and Schedules for delivery

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Even though within EU, huge differences between
countries

• Political risks Country risks
• Legal frameworks for securing rights
• Tax paradigm and double treaty agreements
• Frame work conditions for Renewable Energy
• Tariff system Type of regulation
• Power Purchase Agreement
• Culture
• Language
• Industrial Infrastructure

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Position the devil is in the details

• Wind resource
• Selection of turbine configuration (height,
  length, capacity)
• Micro Planning
• Accessibility
• Securing of rights for operation
• Grid connection power purchase agreements
• Neighbouring Issues
• Environmental issues

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The operation generates the cash flow!

• Cost structure Costs of Ownership
• Management and Supervision
• Maintenance Contracts
• Guarantees for certain availability
• Insurance coverage
• Distance to (applicable) service centre
• Land lease
• Decommissioning

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Feasible projects gets the best financing!

• Cost of Funds more or less country specific
• Project Financing
• Short term (Erection/Building period)
• Long term (Asset financing)
• General Loan Conditions a matter of fairness
• Risk assessment
• Reserve funds for serving debts also in bad wind
  years
• Bank is also friendly when troubles appear?
• Due diligence processes

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Conclusion the initial most important parameters

• Securing the cash flow
• Wind resource documentation
• Tariff system / Power Purchase Agreement
• Long term financing / bankable
• Securing the ownership of the assets
• Turbines fit for position
• Land lease agreements / Ownership of land
• Grid connection rights (Obligations)
• Operational expenses under control
• Long term maintenance contracts
• Long term land lease contracts
• Professional Management and Supervision

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Thanks for your attention!

• Contact information
• Partner
• Helge Højkær Larsen
• Mobile [phone]
• Scan Energy A/S
• Flauenskjoldvej 30 34
• DK-9352 Dybvad
• 45 45 57 20 57

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Scan Energy team in action

• The partners
• Scan Energy A/S
• Karsten Olsen
• Helge Højkær Larsen
• Birgitte Wagner Olsen
• Brøndum Energy A/S
• Esper Goul Jensen
• Our German market and developer partners
• Plambeck Neue Energien, Cuxhaven Germany
• UMaAG
• GHF / Ventotec
• Our Auditors
• Deloitte
• Leo Gilling Partner, Kolding - Denmark
• Deloitte Structured Finance Jens Hoeck og Lars
  Munk, Copenhagen - Denmark
• Deloitte Copenhagen German desk - Tim Kjær
  Hansen

• Our legal teams
• Bech Bruun og Dragsted - Legal advisor - Denmark
• Ole Nørgaard, Partner
• Elena Hillingsøe Associate
• Heike Milling - Associate
• Hengeler Müller Legal advisor - Germany
• Georg Seyfart, Partner
• Martin Rothfuchs, Associate
• Bang Regnarsen Legal advisor Germany
• Manfred Lipsky, Partner
• Axel Röpke, Associate
• Our financial team members
• Morsø Sparekasse
• Sparbank Vest
• Jyske Bank
• Nordea
• HSH (Project financing)
• Bremer Landesbank (Project Financing)

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Scan Energy owners profiles

• Karsten Olsen 51
• Professional background
• Chairman, Scan Energy A/S 2003-
• Partner, Scan Energy A/S 2003-
• Chairman of Scan Energy
• Wind Parks 2003-
• Board of directors,
• Industrigruppen A/S and
• other own companies 2003-
• Chairman, K/S Hamilton 1999-
• Chairman, K/S Leatherhead 2000-
• Board of directors,
• Salten Kraftsamband (N) 2002-2003
• Chairman of Energi E2
• Renewables A/S 2001-2003
• Chairman of Aioliki Parka
• Karistos E.P.E, Greece (E2) 2001-2003
• Chairman of Aioliki SA,
• Greece (E2) 2002-2003

• Helge Højkær Larsen 55
• Professional background
• Partner, Scan Energy A/S 2003-
• Technical Director, COWI A/S 2002-2006
• Director, Kampax A/S 2000-2002
• Sales Director, Carl Bro A/S 1998-2000
• Head of Sales, INTERGRAPH A/S 1996-1998
• Head of Department,
• Kort Matrikelstyrelsen(the National Survey
  and Cadastre) 1983-1996
• Educational background
• MBA Copenhagen Business School 1994-1995
• Chartered Surveyor, Royal Danish Veterinary and
  Agricultural University of Denmark 1971-1976
• Birgitte W. Olsen 48
• Professional background
• Director, Industrigruppen ApS 2003-
• Director, Scan Energy A/S 2003-
• Senior Consultant, Capgemini A/S 1995-2006

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A good standing and support from our project
financing banks form the basis for our business