Alterra Presentation May 29 - 2012

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Alterra Presentation May 29-2012

Transcript of Alterra Presentation May 29 - 2012


2. Forward-Looking InformationThis Presentation contains certain forward-looking information within the meaning of Canadian securities laws, which may include, but is not limited 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 prospects and opportunities.These statements reflect the current views of Alterra with respect to future events and are necessarily based upon a number of assumptions and estimatesthat, while considered reasonable by Alterra, are inherently subject to significant business, economic, political and social uncertainties and contingencies.Many factors, both known and unknown, could cause Alterras actual results, performance or achievements to be materially different from the results,performance or achievements that are or may be expressed or implied by such forward-looking statements contained in this presentation, and Alterra hasmade assumptions based on or related to many of these factors. Such factors include, without limitation: fluctuations in currency markets (particularly withrespect to the Icelandic krona, the U.S. dollar and Canadian dollar); risks related to the technological and operational nature of Alterras business; changesin national or regional governments, legislation, regulation, permitting or taxation; political or economic developments in Canada, the United States, Icelandor other countries where Alterra may carry on business; risks and hazards associated with the business of renewable energy generation; risks relating to thecreditworthiness and financial condition of suppliers and other parties which Alterra will deal with; inadequate insurance or inability to obtain insurance tocover these risks and hazards; employee relations; relationships with and claims by local communities and First Nations; availability and costs of equipmentand labour; litigation; the success and timely completion of planned 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 technicaldata and capital expenditure estimates; and availability of capital to fund development and expansion programs. Forward-looking information andstatements are also based upon the assumption that none of the identified risk factors that could cause actual results to differ materially from the forward-looking information and statements will occur.Although Alterra has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that causeresults not to be as anticipated, estimated, described or intended. There can be no assurance that the forward-looking information will prove to beaccurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors shouldnot place undue reliance on forward-looking information. Other than as required by applicable securities laws, Alterra does not assume any obligation toupdate 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 developmentassetsOur assets today:Managed OwnedAlterra totals: Managed:567 MW Wind 144 MW 51% Owned:298 MW Managed Assets: $1.5 BillionHydro 235 MW 40% Alterra Revenue: $110 MM Alterra EBITDA: $ 55 MM (a)Geothermal187 MW 69% 2015E EBITDA: $105MM(a) Reflects 66.6% of HS Orka and 100% of Soda Lake assets.3 4. Alterra: Recent Growth and Performance Decrease reflectsAlterras recent growth ... partial sell-down of 2H 2011 Performance:(net interest) HS Orka interest (net interest)CAPACITY (end of year)PRODUCTION350 1,8001,600 $54.9 million revenue3001,4002502001,200 $23.3 million EBITDAGWhMW1,000150 800100 600 778 GWh electricity produced400 50 2000 - 102% of forecast02009 201020112012e 2009201020112012e 1Q 2012 Highlights: (net interest)REVENUE EBITDA $120 $60 $100 $50Millions USD$40 Production to 99% of forecast Millions USD $80$30 $60 $40$20$10 Increase in cash from $20$- $32.0 million to $50.9 million $- $(10)20092010 2011 2012e 20092010 20112012e 4 5. Alterra: Planned Internal GrowthCurrent plan would almost double EBITDA by 2015Current AssetsOperating by 2015GrowthManaged567 MW 927 MW +64%Net Owned298 MW 494 MW +66%Net 1,380 GWh2,200 GWh+59%ProductionAXY Revenue $110 MM$180 MM +63%AXY EBITDA $55 MM$105 MM +91%Projects Dokie 1 144 MW Dokie 1 144 MW Toba Montrose 235 MW Toba Montrose 235 MW Reykjanes 1+2 100 MW Reykjanes 1+2 100 MW Svartsengi 72 MW Svartsengi 72 MW Soda Lake15 MW Soda Lake15 MWDokie 2 156 MWUpper Toba124 MWReykjanes 3+480 MWABW Solar50 MW 20%+ implied annual growth rate Mariposa, Eldvrp and other projects online post-20155 6. Assets and PipelineGlobally 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 TechnologyOperating (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 GWhOperating 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 successesWindDokie144 MW2011 CODHydro Toba Montrose235 MW2010 CODGeothermalReykjanes100 MW2006 CODNear term organic growth - all near existing operationsWind Dokie 2 up to 156 MW COD 2014EHydroUpper Tobaup to 124 MW COD 2015EGeothermal Reykjanes 3/480 MW COD 2013-14E8 9. Geothermal Development: The Right ApproachEarly mover: moving into promising power markets with strong geothermal potentialStrong development skills: resource assessment, community relations and project de-riskingUtilize 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 Emerging clean power market close to transmission,with world-class potential Established relationships with established contractor base government and communities9 10. Leading Growth Profile Alterra has one of Canadas largest clean energy development pipelines 2,500600 2,000500 203 153 1,500 Net MW400 GWh1531563001,0007373 156 945002009494243 185165 13113110002012e 2013e2014e2015e2016eGEOTHERMAL HYDRO WIND SOLAR ExistingGenerationCapacity AdditionsSoda Lake Mariposa HS Orka Reykjanes 3Reykjanes 4 EldvrpToba Montrose Upper Toba Dokie 1 Dokie 2ABW 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 HeadwindsTailwinds Growth of natural gas reserves BC growth: move the gas Disappearance / uncertaintycleanly around programs that benefit High supply of capital for renewable powerenergy projects Gas acceptance by some as a Attractiveness of Canada cleaner thermal source of Technology prices driven down energy Tough times create Current investment cycle opportunities attributes no value to Growth investors will return development pipeline12 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 construction: U