Alterra Presentation - MAY 2012

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Transcript of Alterra Presentation - MAY 2012


2. Forward-Looking InformationThis Presentation contains certain forward-looking information within the meaning of Canadian securities laws, which may include, but is notlimited to, statements with respect to future events or future performance, managements expectations regarding Alterras production capacity,results of operations, cash flows, revenues and requirements for capital, future demand for and prices of electricity, and Alterras business prospectsand opportunities.These statements reflect the current views of Alterra with respect to future events and are necessarily based upon a number of assumptions andestimates that, while considered reasonable by Alterra, are inherently subject to significant business, economic, political and social uncertainties andcontingencies. Many factors, both known and unknown, could cause Alterras actual results, performance or achievements to be materially differentfrom the results, performance or achievements that are or may be expressed or implied by such forward-looking statements contained in thispresentation, and Alterra has made assumptions based on or related to many of these factors. Such factors include, without limitation: fluctuationsin currency markets (particularly with respect to the Icelandic krona, the U.S. dollar and Canadian dollar); risks related to the technological andoperational nature of Alterras business; changes in national or regional governments, legislation, regulation, permitting or taxation; political oreconomic developments in Canada, the United States, Iceland or other countries where Alterra may carry on business; risks and hazards associatedwith the business of renewable energy generation; risks relating to the creditworthiness and financial condition of suppliers and other parties whichAlterra will deal with; inadequate insurance or inability to obtain insurance to cover these risks and hazards; employee relations; relationships withand claims by local communities and First Nations; availability and costs of equipment and labour; litigation; the success and timely completion ofplanned expansion and development programs; the growth rate in net electricity consumption; support and demand for renewable energy;government initiatives to support the development of renewable energy generation; the reliability of technical data and capital expenditureestimates; and availability of capital to fund development and expansion programs. Forward-looking information and statements are also basedupon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking informationand statements will occur.Although Alterra has attempted to identify important factors that could cause actual results to differ materially, there may be other factors thatcause results not to be as anticipated, estimated, described or intended. There can be no assurance that the forward-looking information will proveto be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospectiveinvestors should not place undue reliance on forward-looking information. Other than as required by applicable securities laws, Alterra does notassume any obligation to update or revise such forward-looking information to reflect new events or circumstances.2 3. Alterra PowerAlterras mission: to be a leading global renewable energy company through Continued excellence in production and safety as premier asset operator / manager Successful origination and development of new utility-scale projects Opportunistic acquisitions of other renewable power projects and development assetsOur assets today:Managed OwnedAlterra totals:Managed:567 MWWind144 MW51%Owned:298 MWManaged Assets: $1.5 BillionHydro 235 MW40%Alterra Revenue: $110 MMAlterra EBITDA: $ 55 MM Geothermal 187 MW69%(a)2015E EBITDA: $105MM(a) Reflects 66.6% of HS Orka and 100% of Soda Lake assets.3 4. Alterra: Recent Growth and Performance Alterras recent growth ... Decrease reflects 2H 2011 Performance:partial sell-down of (net interest)HS Orka interest (net interest)CAPACITY (end of year)PRODUCTION350 1,800 $54.9 million revenue300 1,6002501,4001,200 $23.3 million EBITDA200GWhMW1,000150 800 778 GWh electricity produced100 600400 50 200- 102% of forecast0 02009 201020112012e 2009201020112012e 1Q 2012 Highlights: (net interest)REVENUE EBITDA $120 $60 $100 $50 Production to 99% of forecastMillions USD$40 Millions USD$80$30$60$20 Increase in cash from$40$10$32.0 million to $50.9 million$20 $- $- $(10)20092010 2011 2012e 20092010 20112012e4 5. Alterra: Planned Internal GrowthCurrent plan would almost double EBITDA by 2015Current Assets Operating by 2015GrowthManaged 567 MW 927 MW +64%Net Owned 298 MW 494 MW +66%Net1,380 GWh2,200 GWh+59%ProductionAXY Revenue$110 MM$180 MM +63%AXY EBITDA$55 MM$105 MM +91%ProjectsDokie 1 144 MW Dokie 1 144 MWToba Montrose 235 MW Toba Montrose 235 MWReykjanes 1+2 100 MW Reykjanes 1+2 100 MWSvartsengi 72 MW Svartsengi 72 MWSoda Lake15 MW Soda Lake15 MW Dokie 2 156 MW Upper Toba124 MW Reykjanes 3+480 MW ABW Solar50 MW 20%+ implied annual growth rate Mariposa, Eldvrp and other projects online post-20155 6. Assets and Pipeline Globally diversified across technology types and renewable power markets Wind and hydro: primarily concentrated in North America Geothermal: located in overlap of resource and strong markets / power demand CapacityProjectGross AXY Share Technology Operating (2012)Soda Lake 15 MW16 MWGeothermalSvartsengi72 MW48 MWGeothermalReykjanes 1 & 2100 MW67 MWGeothermalToba Montrose235 MW94 MWHydroDokie 1144 MW73 MWWindTotal Capacity567 MW298 MWAnnual Net Generation 1,380 GWh Operating Additions (2016) (a)Upper Toba 124 MW 62 MWHydroABW Solar 50 MW5 MWSolarReykjanes 3 & 4 80 MW 54 MWGeothermal (a)Dokie 2156 MW 80 MWWindMariposa50 MW 25 MWGeothermalEldvrp 50 MW 34 MWGeothermalOther (e.g. Chile, Iceland)200 MW 200 MW GeothermalPipeline Total 710 MW 460 MWTotal Capacity1,292 MW773 MW(a) Project design currently being optimized; final capacity amount may vary.6 7. BC OpportunityBritish Columbias demand for power is expected to grow significantly in the next 3-5 years LNG plants in Kitimat Mining growth General population growthClean renewable power sourced from IPPs is expectedto be a critical source of new supplyAlterra is uniquely positioned to benefitfrom this new demand Built and operate largest wind farm and run-of-river plants in British Columbia History of delivering on-time and on-budget Established reputation with First Nations Large portfolio of expansion and development projectsCurrently growing this portfolio Largest IPP in the province7 8. Outstanding Developer Track RecordSuccessful developer track record across renewable technologies Proven ability to develop and deliver large assets at greenfield locations Development teams from all these projects remain substantially intactRecent project successesWind Dokie 144 MW 2011 CODHydroToba Montrose 235 MW 2010 CODGeothermal Reykjanes 100 MW 2006 CODNear term organic growth - all near existing operationsWindDokie 2up to 156 MW COD 2014EHydro Upper Toba up to 124 MW COD 2015EGeothermalReykjanes 3/4 80 MW COD 2013-14E8 9. Geothermal Development: The Right Approach Early mover: moving into promising power markets with strong geothermal potential Strong development skills: resource assessment, community relations and project de-risking Utilize value-add partners: sharing capital outlays and further de-risking projectsCHILEPERU ITALY Negotiating definitive agreement Negotiating agreement with Early-stage discussionswith prospective partner prospective partner 48,000+ ha of concessions in 320 MW resource and 158,000+ 157,000+ ha of concessions,established geothermal fieldha of concessions1000+ MW potential Strong clean power tariffs Mid-stage development project Rapid growth in economy and in Easy year-round site access, power demand close to transmission, Emerging clean power marketwith world-class potential Established relationships with established contractor base government and communities9 10. Leading Growth ProfileAlterra has one of Canadas largest clean energy development pipelines700 3,000600 2,5005002032,000 Net MW153GWh400 1,500 153 156300 1,00073 73 15694200 50094 94243 165185131131100 02012e2013e2014e2015e2016e GEOTHERMAL HYDRO WIND SOLAR ExistingGeneration Capacity Additions Soda Lake MariposaHS Orka Reykjanes 3Reykjanes 4 Eldvrp Toba Montrose Upper TobaDokie 1 Dokie 2 ABW Solar10 11. Recent News Recent positive events: $37.5 MM infusion into HS Orka business per exercise of partner option, increasing partner stake to 33.4% Cash earmarked for Reykjanes expansion Toba Montrose back online after planned 1Q 2012 penstock warranty repairs Generation at 132% of plan for stub period in April $2.1 MM US treasury grant received at Soda Lake Dokie 1 bump in PPAs firm energy; 1.2% increase to annual revenue anticipated All projects for ABW solar farm received their permits11 12. Alterra: Headwinds / Tailwinds Headwinds Tailwinds Growth of natural gas reserves BC growth: move the gas Disappearance / uncertainty aroundcleanly programs that benefit renewable High supply of capital for energy power projects Gas acceptance by some as a Attractiveness of Canada cleaner thermal source of energy Technology prices driven down Current investment cycle attributes Tough times create opportunities no value to development pipeline Growth investors will return12 13. 2012: Next Milestones Looking ahead in 2012: Finalize partnership agreements Upper Toba hydro Chile geothermal Peru geothermal Finalize PPAs Dokie 2 Reykjanes 3+4 Opportunistic acquisitions: wind, geothermal and hydro Continue work in British Columbia and elsewhere for positive regulatory/political environment Move projects into