Wind Power for medium sized industry

Agenda1. Summary Video

2. AutoProduction - The Facts

3. Case Studies - Munster Joinery• Project Stats & Performance• Why did Munster Joinery undertake this project?• Project phases• Video of turbine construction• Munster Joinery’s benefits

4. Benefits of AutoProduction5. Challenges facing Industry

6. Is your site suitable?

7. About Wind Energy Direct

RTE News Summary – 23/05/09

• Link to RTE News Clip

Wind Power for medium sized industry

Dominic Costello

Wind Energy Direct Limited

Ford Dagenham

Dundalk IT

Cork Lower Harbour Energy Group

What is Autoproduction?Definition

• Generation of electricity onsite

– CER/03/237: “a person who enters into a connection agreement…and generates and consumes electricity in a Single Premises, or on whose behalf another person generates electricity in the Single Premises, essentially for the first person’s own consumption in that Single Premises”

– Single Premises: “one or more buildings or structures, occupied and used by a person, where each building or structure is adjacent to, or contiguous with, the other building

or structure” – Electricity Regulation Act, 1999

• Generation always downstream of the meter

• Grid connection remains as primary source of power

• Not a standby scenario.

What is Autoproduction?

Demand

Customer

Autoproducer

MWh

€

What is Autoproduction? -Onsite

Gen Grid

Loads

MeterCustomer

Panel

AP in Industry: A New Concept?• No!• Energy, the ability to do work has been required onsite for millennia• Long before the industrial revolution renewable energy was being harnessed

onsite• Industry has a history of using the resources available locally and siting their

operations to suit• The wheel has turned full circle

AP: Investment Models • Owner Operator:

– Highest risk/reward model

– Capital investment required

– Total control

– Not core business / Time and resource consuming

• Build, Own, Operate:

– Energy service company (ESCo) builds, owns and operates the turbine on industrial premises

– Minimal risk, shared reward

– No capital required

– Wind Energy Direct Ltd operate in this space

• Joint Venture

– Combination of above

– Hybrid partnership possible also

Wind AP: Suitable site

• Suitable site for large scale wind turbine(s)

1. Large 24/7 base-load

• Size the turbine to the base-load on-site

2. Large site with no dwellings within approx. 300m

• OR Field contiguous to Site

3. Good wind resource

4. Space for construction

5. Access for cranage, maintenance

6. Non-sensitive planning area

7. Not close to Airport.

Planning Considerations

• Proximity to dwellings

– Noise

– Shadow Flicker

– Visual Impact

• Birds, environmentally designated areas, SAC/ NHA’s/ SPA’s

• Proximity to scenic areas, scenic routes

• Ecology

• Hydrology

• Archaeology

• Aeronautical, Telecommunications

• Compliance with proper planning and sustainable development of the area

• EIA generally not required. Env. Impact Report sufficient.

Planning Authorities Positive: Cork County Council on Autoproduction

“It is an objective to support existing

and established businesses andindustries who wish to use windenergy to serve their own needssubject to proper planning andsustainable development.”

County Development Plan

Section (b) of objective INF 7-4

Drivers of Auto productionElectricity Price, Volatility and Reduction of Carbon Footprint

Brown Field Electricity Volatility

1. Currently Low– Recession, excess gas supplies, Government rebates

2. On an Upward Trend– As European and UK economies recover

3. Ireland’s Electricity Price tracks the price of GAS– Subject to external Shocks

– Foreign Exchange Risk

– Demand

– Supply ( From Unstable Regimes)

Wind Autoproduction Enablers

• Priority Access to the Grid– Up to 5MW, non GPA Process (Gate queue)

– >5MW < 10MW, processed as non GPA if no interaction or public good criteria met.

• Wind Turbine Technology– Medium Wind Turbines

– Gearless Wind Turbines

– Programmable Wind Turbines

• Mitigate against noise

• Mitigate against shadow flicker

Wind Autoproduction Enablers

• Grid infrastructure in place on the sites of large energy users

• No need to run additional electrical lines to the nearest sub station

– No way leaves or planning for electrical infrastructure generally required

• Seeking planning on a Brown Field site

Munster Joinery – Case Study

Project Stats

• The installation of 2 x 2MW wind turbines

• Built, owned and operated by Wind Energy Direct Ltd

• First large scale wind Auto-Production project in Ireland

• SEI’s wind Auto-Production demonstration project

• €6M capital investment

• Projected 10 GWh produced by the turbines annually

• 71% consumed on-site – 30% of total client consumption

Project Performance

Note: Turbines curtailed to 2.8 MW from 5.30pm to 7.30am Mon – Fri and at weekends – until May 2010

2009 - 2010 (12 months)

Total Energy Generated by Wind (kWh)

Total Wind Consumed on site

Total Site Load (kWh)

% of on-site load Delivered by Wind

% Wind consumed on site

% Wind Exported

October 654,049 493,768 1,818,995 27% 75% 25%

November 1,291,982 922,741 1,792,556 51% 71% 29%

December 948,508 582,129 1,277,693 46% 61% 39%

January 655,399 468,367 1,237,603 38% 71% 29%

February 568,969 487,601 1,542,641 32% 86% 14%

March 752,361 611,637 1,806,474 34% 81% 19%

April 482,235 352,488 1,430,913 25% 73% 27%

May 523,696 474,416 1,815,161 26% 91% 9%

June 501,450 417,919 1,770,264 24% 83% 17%

July 661,290 463,647 1,242,477 37% 70% 30%

August 660,880 580,503 1,782,656 33% 88% 12%

September 811,953 665145 1,843,768 36% 82% 18%

October 844,628 634763 1,743,802 36% 75% 25%

Project Performance Summary

• Annual Yield: 9.34 GWh

• % Consumed On-site : 76%

• % Exported: 24%

• % Of MJ Load Displaced: 34%

Why ?

• Facing 20% / 25% increases in energy costs

• Key cost in the P&L

• Take control of energy costs – Wanted Certainty

• Hedge against future energy price increases

• Reduce their carbon emissions

• Minimise exposure to future carbon taxes

• Aligned to marketing message of

– ‘Energy saving Windows and Doors’

• Establish a competitive advantage based on long term reduced energy costs

Major Phases Milestones Dates

Feasibility Show Stopper Review June 2006

Detailed Feasibility Study

July/August 2006

Wind Data Analysis Sept ‘06 – Sept ‘07

Planning Environmental ImpactAssessment (EIA)

Sept ’06 – Nov ‘06

Planning Granted June 2007

Turbine Order Placed Order June 2007

Delivery Dec 2008

Project Phases

Major Phases Milestones Dates

Construction Foundation Works Nov/Dec 2008

Site Accommodation Works

Dec 2008

Turbine Installation Jan/Mar 2009

Commissioning April/May 2009

Project Phases cont’d

Typical TimelineTask Name 10 11 12 13

S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A

Feasibility Study Completed

Pre Planning

Generate Planning Submission

Submit Planning and Get Approval

Apply for Grid Connection / Receive Offer

Accept Offer

Grid Connected

Order and Install Wind Mast

Measure Wind

Soil Geotech

Supply Contract for Turbine

Order Turbine and take delivery

Civils and Electrical

Turbine Installation

Testing and Maintenance and Commissioning

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36

Video of Construction Phase

• Link to Wind Energy Direct’s video

Munster Joinery Benefits1. Defensive

2. Environmental

3. Financial

4. Other

Benefits

1. Defensive Strategy

• Wind electricity price is not connected to retail price

• Effective hedging strategy

• Low cost energy long term (savings increase versus Retail over medium/long term)

• Competitive advantage when Retail price increases

• Protects against Carbon tax increases

• …Cost of electricity production floor…no ceiling!

Benefits

2. Environmental

• Generate true environmentally friendly and sustainable and renewable energy on site

• Carbon footprint, carbon taxes, environmental impact all reduced. (6,500t CO2 displaced per annum)

• No transmission or distribution losses

• PR and marketing benefits

Benefits3. Financial

• No capital outlay

• MJ not getting involved in project with >6 yrs payback

• Certainty for price of wind energy long term

• 1/3 of energy hedged from retail market

• Downside risks for MJ were minimal and limited

Benefits4. Other

• EU Public Procurement policy likely to include carbon footprint when awarding tenders

• Planning permission not required to erect wind monitoring mast

• Guaranteed Grid connection (to export any excess)

Opportunity, Benefits & Challenges for Irish Industry

Opportunity & Benefits for Industry • Reduced emissions associated with operations per unit of

product

• New revenue stream

• Unproductive portion of land put to work

• Displaces imported energy– Insulation from power price increases

– Hedge energy costs into the future

– Insulation from carbon tax or carbon price fluctuations

– Less than ideal sites become viable

• Improved competitiveness

• Reduced network losses per unit of electricity consumed

Benefits to Local Economy• Employment

– Design and development

– Construction

– Operation & maintenance

• Local authority rates

• Sustainable income/diversification for land and business owners

– Renewable, secure, competitive resource

– Redistributed to local businesses

• RE is compatible with and beneficial for agriculture

• Improved infrastructure where needed

• Clean, green, competitive, locally produced energy.

ChallengesWind is generally not one of them! 1. Planning2. Cost of Brown Field Energy

– Currently low due to excess gas supplies, Global Recession, Government Rebates

3. No REFIT payment for energy consumed on-site– In Stark contrast to NI and the Britain – Britain pay 9p up to 1.5MW, and 4.5p above 1.5MW– Investment in Autoproduction flowing out of Ireland to NI and

UK as a result

4. 3rd Party Lands rule5. Single Wire Rule \ Private Networks6. PSO being based on MIC

Is your site suitable?

Show Stopper Review1. Wind Resource

2. Load Profile Analysis

3. Planning ConsiderationsScenic Routes, SPA, SAC, County Council Dev. Plan etc.

4. Grid Considerations

5. Ease of access / transport route / Space on site

6. Distance from Dwellings, Electricity lines, roads, railway etc.

7. Airports and radar stations

8. Archaeology, Forestry, Ecology, Hydrology

9. Distance to other turbines on the site

10.Telecommunications

11.Visual impact

Project Financial Drivers

1. Productivity of generator - Wind Yield

2. Capital Cost

3. Value of Displaced Energy

4. Scale of Development

5. Grants

6. Cost of funds

7. O & M costs

Wind Energy Direct Ltd.

Founded in 2006

Build, own and operate wind turbines on large energy users sites

Sell energy to clients at a discounted rate, not linked to retail rates; Can fix Price for 5, 10 or 15 years.

No capital outlay required from clients (will do JV’s)

Full turnkey service

Board of Directors includes:– Dr. Ed Walsh– Brendan Tuohy– Larry Staudt

Tel: 061 503 088

Email: dominic@windenergydirect.ie

Web: www.windenergydirect.ie

National Technology Park, Limerick

Contacting Wind Energy Direct

Thank YOU

Thank You

Dominic Costellodominic@windenergydirect.ie