Title: Making the Right Wind Power Investment University of Toronto Wind Workshop October 12th, 2005 Mike Crawley, President/CEO AIM PowerGen Corporation
1Making the RightWind Power Investment
University of Toronto Wind WorkshopOctober
12th, 2005Mike Crawley, President/CEOAIM
PowerGen Corporation
2AIM 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
3Erie 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
4Why 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
5Financing Stages
Exploration, Site Secure And Permitting Funding
Seed Capital
Construction Financing
6Overall 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
10Construction Financing Options
CRCE/Test Turbine Model CRCE Test Turbines
Turbine Infill (Debt)
Income Fund Construction
Traditional Construction Bridge 70
Debt/ 30Equity Income Fund?
11Investor 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