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Wind Power Plants: Factors of Success and Investment Opportunities

Learn about the development of wind power plants and factors that contribute to their success. Explore investment opportunities in wind power plants and the production and trading of electricity generated by wind power in Bulgaria.

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Wind Power Plants: Factors of Success and Investment Opportunities

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  1. Wind Power Plants development Factors of Success • Investment in Wind Power Plants and Hydroelectric Power Plants 2009Sheraton Hotel, Sofia • Production and Trading with Electricity Generated by Wind Power in Bulgaria Panel Carmen Neagu GE Energy April 14, 2009

  2. GE Wind • Experience … GE’s 100+ years of Energy Industry knowledge coupled with over 10,000 units operating worldwide, make the GE 1.5 & 2.5 WTG platforms • Technology… superior capacity factor and grid friendly Wind plants ensure maximum wind capture and financial performance for our customers • Reliability … GE’s continual investment in our product and customer support capabilities are designed to set the standard for reliability in the industry • Logistics … GE’s expertise in global fulfillment ensure our units will arrive on-time and can be sited where the customer needs them GE GE Energy WIND

  3. Evolution of Wind Power Technology Cost & Size Development GE Product Evolution Cost (€/kWh) Size (kW) 104m RDM €0.20 Cost of Electricity 3,000 14m RDM 2,500 2,000 1,500 1,000 Steel price shock 500 0 €0.00 1985 1990 1995 2000 2005 2010 • Trends • „size incr. has brought/brings down costs (steel price contradicts) • New materials (carbon fibre, etc.) & new control systems reduce weight and cost • In highly wind penetrated systems: Grid integration of large scale wind & with production forecasting Spain, 50 MW Arklow Bank, 25MW

  4. Meeting European RE Goals by 2020 • Western Europe Growth • Integrating Wind! 4 GW 3 GW 1 GW .5 GW 2 GW 21 GW • South Eastern Europe • Building a sustainable market 2 GW ->3 GW 3 GW ->3 GW 13 GW 2 GW ->12GW ->3 GW (10) Near Target Room for Growth SE Europe plays an critical role in achieving RE targets

  5. Wind Projects Economics

  6. Cornerstones for Wind Growth Investment Long Term project Financing available • Incentives • Long Term defined tariff • Currency fluctuations • Inflation Coverage • Decision National • Grid Access • Timely access with Priority Dispatch • Grid operability / Integration of large scale wind • Decision Regional/National • Permitting • One-stop-shop permitting process with deadlines • Reliable and Predictable • Decision Local/Regional All essential for a successful project environment

  7. Project Value Drivers DECREASED OPEX • Routine and Non-routine maintenance • Failure rate • # of on-site personnel required DECREASED CAPEX • Lower Equipment Price • Weight • Tower Design • Nacelle Design • Blade Material/Design • Foundation Design • Sourcing Locations • Transportation Efficiency INCREASED REVENUE • Tariff • PPA • Sale of VARs Capacity Factor • Hub Height/Shear Factor • Blade Length • Blade/Hub Geometry • Availability • Transmission Losses • Micrositing

  8. Operating Costs Capital Costs Other (4%) Other (3%) Developer Fee (3%) Land Royalties (7%) BOP (24%) Insurance (19%) Property Tax (33%) Turbine (69%) Operations (38%) Cost Drivers Construction (74%) Operations(26%) Total Project Costs All figures % NPV Major Assumptions: a) 38% Net Capacity Factor b) PPA=2.85 cents/kWh; escalates at 2%/year after year 3 c) Incentives: 10 year PTC @ 1.8 cents/kWh 2003; 50% Bonus depreciation and 5 year MACRS d) 90 MW project with $1.15 million/MW total cost e) $40K Warranty and O&M/WTG/year f) Discount rate = 10%

  9. Project Economics - Sensitivities Project NPV (M Euro) • Rank of Impacts • Wind Speed 1 m/s Increase • Currency 10% Decrease • GC - 1 cent Increase • Capacity Factor 1 Percent • Cost of Debt 1% Increase • Drop-off 1 year longer • Turbine Costs 1% Less • O&M 1% Less • BOP 1% Less • Base NPV – 21M Euros Revenue

  10. Wind Projects – Technical Aspects

  11. The GE 2.5xl wind turbine for Europe

  12. Full Power Conversion PPM PPM Machine head 2.5xl Turbine Controller Converter Controller • Benefits of full power conversion • Separation from the grid … reduced gearbox loading • Enables use of a permanent magnet generator … efficiency boost • Excellent power quality and grid stabilization capability Doubly-fed System Full Power Conversion • No direct connection between the generator and the grid • 100% of the power flows through the power converter • The stator of the generator is directly connected to the grid • Only ~30% of the power flows through the power converter

  13. What makes a Wind Plant “Grid Friendly”? • Does not trip during Faults and other System Disturbances … ride through capability • Regulates Plant Voltage and Power • Limits the Rate of Change of Power from Variations in Wind Speed … Ramp Rate Control • Reacts to Changes in Grid Frequency ….. Frequency Droop • Controls the Insertion and Removal of Large Power Blocks … Startup and Shutdown Control • Controls the Insertion and Removal of Large Power Blocks … Startup and Shutdown Control • Provides Reactive Power When Needed … Wind Free Reactive Power

  14. Plant Performance Solutions AEP Improvement Grid Friendly Capabilities Grid friendly products improve permitting likelihood

  15. Advanced Services Repairs, Parts, Replacements Training Offers Remote Monitoring,Inspection, Maintenance Tailored offerings to meet customers needs!

  16. GE Energy Power Generation Sofia Contact: Tatyana Kossekova Fax: +359 2 971 4384 Mobile: + 359 88 886 4737 E-mail: tayana.kossekova@ge.com

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