Making the Right Wind Power Investment University of Toronto Wind Workshop October 12th, 2005 Mike Crawley, President/CEO AIM PowerGen Corporation - PowerPoint PPT Presentation

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Making the Right Wind Power Investment University of Toronto Wind Workshop October 12th, 2005 Mike Crawley, President/CEO AIM PowerGen Corporation

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99MW Erie Shores Wind Farm successful in Ont. 300MW RFP ... Insurance Co's. Some Finance Co's. Challenges. PPA terms. Wind data. WPPI. IRR hurdles ... – PowerPoint PPT presentation

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Title: Making the Right Wind Power Investment University of Toronto Wind Workshop October 12th, 2005 Mike Crawley, President/CEO AIM PowerGen Corporation


1
Making the RightWind Power Investment
University of Toronto Wind WorkshopOctober
12th, 2005Mike Crawley, President/CEOAIM
PowerGen Corporation
2
AIM Overview
  • Ontario based wind power development company
  • Over the past four years focused on
  • Establishing wind power market
  • Developing wind projects
  • Building strong wind power development team
  • Prominent in wind power energy sector with
    AIMs CEO appointed/elected to
  • Association of Power Producers of Ontario's Board
    of Directors
  • Ontario Government's Electricity Conservation
    Supply Task Force
  • Renewable Energy Task Team (Co-Chair)
  • 99MW Erie Shores Wind Farm successful in Ont.
    300MW RFP
  • Developing several projects across Canada and
    abroad

3
Erie Shores Wind Farm Status
  • 186MM 99MW Phase One under construction
  • 66 GE 1.5MW turbines along Lake Erie shoreline
  • 60 foundations complete
  • Tower delivery next month
  • Turbines in December / January
  • Commercial operation by late April 2005
  • Largest wind farm in Ontario
  • Power for 30,000 40,000 homes
  • 51MW Phase Two under development and planning

4
Why Invest in Wind Power?
  • Many jurisdictions need significant amounts of
    new power supply
  • Ontario needs to replace or refurbish almost 75
    of its power supply
  • Wind power is an increasingly attractive
    alternative
  • Concerns regarding air quality and climate change
  • Relatively rapid deployment
  • Large hydro and nuclear permitting challenges and
    time to construction
  • Good synergies with hydro power
  • Dramatic increase in natural gas prices
  • Public policy strongly encouraging wind power
  • Federal government very supportive
  • Ontario, Quebec, Manitoba and Atlantic provinces
    at the forefront
  • Tax incentives and government backed power
    purchase agreements
  • Significant opportunities in EU ascension
    countries and stable developing nations

5
Financing Stages
Exploration, Site Secure And Permitting Funding
Seed Capital
Construction Financing
6
Overall Challenges
  • Investor Risks
  • Technology
  • Market
  • Regulatory
  • Development
  • Permitting
  • Price Competitiveness
  • Construction
  • Operation
  • Response
  • Sell Wind Power
  • Build Team
  • Understand/Influence Market Regulatory
  • Sell Project(s)

7
(1) Seed Capital
  • Use of Funds
  • Research sector and market
  • Identify and assess potential project sites
  • Develop corporate structure
  • Establish supplier relationships
  • Lobby (maybe)
  • Source of Funds
  • Principals
  • Angel Investors
  • Government Programs (difficult)
  • Challenges
  • Return?
  • Valuation?
  • High Risk

Amount Required 0 - 250,000
8
(2) Exploration, Site Secure Permitting Funding
  • Use of Funds
  • Negotiate land option agreements
  • Test towers
  • Preliminary engineering
  • Grid connect studies
  • Municipal zoning
  • EA
  • Source of Funds
  • Institutional Flow Through Funds
  • High Income Individuals (Can. Renewable
    Conservation Expense CRCE)
  • Industrial Research Assistance Program
  • Fed. Of Can. Mun.
  • Ethical investors
  • Risk tolerant investors (hard dollars)
  • Challenges
  • Permitting risk
  • PPA risk
  • Liquidity
  • Restrictions/ timelines on govt programs

Amount Required Small Project 50K -
250K Large Project 500K - 2MM
9
(3) Construction Financing
  • Use of Funds
  • Turbine procurement
  • Balance of plant
  • Engineering
  • EPC contractor
  • Grid connect
  • Source of Funds
  • Equity
  • Flow Through Funds (diversified and project
    specific)
  • High Income Individuals (CRCE)
  • Environmentally challenged corporations
  • Corporations with depreciation appetite (class
    43.1)
  • Power generation corporations
  • Income Funds
  • Debt
  • Wind-wise Banks
  • Insurance Cos
  • Some Finance Cos
  • Challenges
  • PPA terms
  • Wind data
  • WPPI
  • IRR hurdles
  • Capital cost certainty

Amount Required 1.6MM - 2.1MM per MW
installed
10
Construction Financing Options
CRCE/Test Turbine Model CRCE Test Turbines
Turbine Infill (Debt)
Income Fund Construction
Traditional Construction Bridge 70
Debt/ 30Equity Income Fund?
11
Investor Options (for discussion purposes only)
Risk
Seed Capital (hard)
Seed Capital (Soft)
Site/ Permitting (Hard)
Return
Site/ Permitting (Soft)
Construction (Hard)
Construction (Soft)
12
  • Mike Crawley
  • President/CEO
  • AIM PowerGen Corporation
  • 416-502-0993 x224
  • mcrawley_at_aimpowergen.com
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