Wind Farm Development from a Developer’s Perspective

1. Wind Farm Development from a Developer’s Perspective Nebraska Wind Power 2011

2. First private company to successfully develop a project in Nebraska Current project development portfolio - 5000 MWs Eight projects (730 MWs) currently on line or under construction Successfully developed 242 MWs in Nebraska (Elkhorn Ridge, Laredo Ridge & Broken Bow) Broken Bow (80 MWs) under construction and BBII (75 MWs) scheduled for spring 2012 MWE is responsible for all project development work from “concept to construction” Wind Farm Development from a Developer’s Perspective

3. Finding Suitable Sites • 1. Transmission and a PPA Opportunity • Proximity of existing transmission… with capacity • Factor in network upgrades and direct interconnection costs • Power Purchase Agreement ideal but at least the strong prospect of a PPA early in development • 2. Best Possible Wind Resource • Becoming less important regionally with new generation of turbines but still critical locally • “There are literally hundreds of great sites in Nebraska.” – Dave Rich, NPPD • ~8.50 m/s approx min wind speed in Nebraska Photo Credit: Alice Buschkamp

4. Finding Suitable Sites • 3. Sufficient Landowner Interest • Meet with landowners to gauge interest • Will the project be supported by the community? • Enough land to develop a project (approx 4000 acres for an 80 MW project) • 4. Permitting Issues • Can a project obtain approval at this location? • Federal, State, County/local regulations • Any environmental concerns? • Prairie Chickens, Bald Eagles, Whooping Cranes, etc. • How long will it take to obtain all permits? Photo Credit: Alice Buschkamp

5. Moving Forward • To begin development the site needs: • A project company and funding • ~$250k to start • At least $1 million to fully develop (all at risk) • Initial land control (Coop Agreement or lease option) • Establishes project area • On-site wind data (at least 2 met towers) • Need at least 1 year of wind data to be “financeable” • 4. Begin long lead permitting items (avian, bat, T&E, wetlands) Photo Credit: Alice Buschkamp

6. Turbine Layout Plan • Setbacks applied to project acreage to obtain buildable area. • Within buildable area, wind resource and constructability used to determine turbine sites. • Landowners approve locations of turbines and access roads. • Other factors include microwave beam paths, environmental issues, pipelines, airports, etc. • Final plan used to submit for permits.

7. Center Pivot Irrigators • You Can’t Always Avoid Center Pivots • Nebraska has more sprinkler irrigated land than any other state — 72% * • MWE looks to avoid pivots whenever possible. • Laredo Ridge had a handful of parcels where turbines ended up inside pivot. • Prior to signing lease, MWE works with landowners to find a win-win solution for turbines inside pivot. • * Source: http://cropwatch.unl.edu/web/cropswater/stategraph Photo Credit: Mark Grundmayer

8. Energy Production Estimate • Estimate of how much power a given wind turbine or farm will produce in a year • Used to generate power pricing for bidding on PPA’s • Most important value is the “Net Capacity Factor” or the % of power produced versus maximum rating • Larger blades and taller hub heights resulting in better NCF’s – 48% or higher now achievable • Individual turbine NCF and estimated construction costs used to make slight adjustments to increase production and decide which turbines become part of final array

9. Wind Turbine Lease • 20-25 year land lease for each turbine site and associated access roads and underground cables • 100’ diameter “Exclusive Use Area” centered on turbine base plus 16’ gravel access road is the only ground taken out of production • Rent paid annually per turbine either by MW or % of revenue of entire farm • All commercial terms mirror any power purchase agreement that is obtained • Contains provisions for crop damages, decommissioning, repowering, etc Photo Credit: Alice Buschkamp

10. Obtaining Permits • Obtaining all permits is the “critical path” for a project and can take two years or longer • Begin interaction with Federal and State agencies as soon as possible • Environmental protection is an important focus (Army Corps, USFWS, NGPC) • Local zoning process is the main forum for communities to discuss wind development • Also need approvals from the FAA, FCC and other agencies Photo Credit: Mark Grundmayer

11. Interconnection and PPA’s • Interconnection process takes at least a year and can cost big bucks • Involves working with transmission owner (NPPD), regional transmission operator (SPP) and power purchaser through complicated regulatory process • Available capacity dictates project size • Could add significant $$$ to the project depending on upgrades needed to the system • A common reason why projects stall is lack of affordable transmission – difficult to know early in process

12. Finishing Up • Finalize turbine layout plan • Obtain final FAA approvals • Finish entitlements (leases, easements, local permits, etc) • Finalize energy production estimate • Execute Power Purchase Agreement • Execute Interconnection Agreement • Commence construction Photo Credit: Alice Buschkamp

13. Construction and Benefits • An 80 MW windfarm costs $130-140 million to build and takes about a year • Construction of the project will employ approx 100 people at it’s peak • Approx 10 full-time permanent jobs for operation • A typical 80 MW windfarm generates enough energy to power 25,000 houses • Avg annual taxes of approx $900,000 and rent to landowners of approx $540,000 over 25 year life • State sale taxes of $5.6 million Photo Credit: Mark Grundmayer

14. Questions? Tom Swierczewski, AICP Director of Development Midwest Wind Energy 847-909-8579 tswierczewski@midwestwind.com