The CSP Project Life Cycle: An EPC Contractor s Insight

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1 The CSP Project Life Cycle: An EPC Contractor s Insight Presented by: Brad Friesen, Vice President Renewables Business Line Fluor Enterprises, Inc. San Francisco, California June 23-25, 2010

2 About Fluor One of the world s leading publicly traded engineering, procurement, construction, maintenance, and project management companies EPC services for all renewable energy projects, including solar (CSP and PV) #111 in the FORTUNE 500 in 2010 Over 1,000 projects annually, serving more than 600 clients in 66 different countries More than 36,000 global employees; offices in 28 countries on 6 continents Nearly 100 years of experience 2009 Revenue: $22.0 billion Investment Grade Credit A- Rated AV

3 An EPC Contractor s Insight Assessing the CSP Project Project Development Experience Site Control and Location Permitting Progress Power Purchase Agreement Interconnection agreement progress Project financing plan & ownership structure Labor availability and requirements Technology viability Cost expectations & overall project pro forma EPC selection process AV

4 An EPC Contractor s Insight Project Development and Finance Project Development EPC generally does not lead the development of the project EPC typical involvement in project development includes: Feasibility studies Site selection Permitting support Technology evaluation Cost estimates Schedule development Labor analysis AV

5 An EPC Contractor s Insight Project Development and Finance Financing Assessing the financing requirements (balance sheet vs. nonrecourse) Supporting DOE loan guarantee applications / ARRA Equity participation considerations Price certainty Lump-sum turnkey price Open book estimate process vs. lump sum bidding EPC Wrap Schedule guarantees Liquidated damages Performance guarantees AV

6 An EPC Contractor s Insight Cycle Optimization Understand power sales drivers Firming/backup power required? Premium for on-peak delivered power? Optimize solar field multiple Optimize solar field/power block layout Solar field configuration vs. HTF header pressure and heat loss Prevailing wind (cooling tower drift impacts) Major power block efficiency design parameters Main steam temperature and pressure Condenser pressure and approach Wet vs. dry cooling Solar steam exchangers temperature approaches Analyze rotating equipment redundancy requirements Main Pumps: HTF, BFW, cooling water VFD considerations Lowering capital cost & levelized cost of electricity AV

7 An EPC Contractor s Insight Detailed Design Technology integration Solar field Power block Energy storage Water treatment Utility interconnection Constructability Plant layout Construction sequencing Maintenance requirements Operability & Reliability Start-up and shut down Part load operations Reliability Availability Maintainability (RAM) analysis Sparing philosophy AV

8 An EPC Contractor s Insight Procurement Considerations Material control and planning Purchasing Expediting Inspection or supplier quality surveillance Traffic and logistics Field material control (including purchasing and warehousing) Economies of Scale Global supply chain Supplier agreements AV

9 An EPC Contractor s Insight Construction Labor posture Union, merit shop, or open shop Direct hire or subcontract Resource availability Area labor market analysis Prevailing wages Safety Establish Culture Planning Subcontractor safety Operations and Maintenance Maintaining output and profitability Operator training Contract operation or self perform Contract maintenance or self perform Lender requirements AV

10 An EPC Contractor s Insight Conclusions Project viability a key issue in today s market Project planning and development Working with the right EPC can help make those critical early decisions that have major impacts on cost and schedule Permitting, interconnection, financing game is constantly changing EPC experience in power project execution is key Logistics and material management EPC with global supply chain and procurement capabilities Understand the labor cannot be understated Execute with excellence! AV

11 Questions AV

12 Contacts Brad Friesen VP Renewables Business Line, Fluor Power Tel: Sarah McKay Sales Manager, Fluor Power Tel: AV

13 Additional Information Additional Information AV

14 Fluor Renewables Overview Project Management and Recognition Fluor is well recognized as an industry benchmark for the efficient processes and systems with which we manage complex projects. Fluor has won the Project Management Institute s prestigious Project of the Year award three times: Newmont TS Power Project 2009 Ferndale Cleanup Project 2007 Logan Expansion Project 1994 AV

15 Fluor Overview Services Pre-Design Design Construction Start-Up Operations & Maintenance Solutions Computer Modeling Conceptual Design Estimating Feasibility Studies Permitting Project Financing Scope Definition Siting Technology/ License Evaluation Front-end Engineering Detailed Engineering Cost Control Planning & Scheduling Sourcing & Supply Systems Integration Safety Planning Construction Management Craft Staffing & Training Equipment & Tools Supply Field Mobilization Material Control Quality Control Safety Programs Contractor Management Commissioning Engineering Support Precommissioning Systems Checkout Initial Production Plant Readiness Turnover Asset Performance Improvement Facility Management Plant Operations & Maintenance Small/Sustaining Capital Projects Turnaround, Outages & Shutdowns AV

16 Fluor Overview Worldwide Office Locations Americas Aliso Viejo, California Anchorage, Alaska Arlington, Virginia Austin, Texas Baton Rouge, Louisiana Buenos Aires, Argentina Calgary, Alberta, Canada Caracas, Venezuela Charlotte, North Carolina Clarksville, Tennessee Dallas, Texas Gardena, California Greenville, South Carolina Houston, Texas Lima, Peru Long Beach, California Mexico City, Mexico New York, New York Pittsburgh, Pennsylvania Port of Spain, Trinidad Richland, Washington San Francisco, California San Juan, Puerto Rico Santiago, Chile Vancouver, B.C., Canada Washington, D.C. Europe/Africa/Middle East Abu Dhabi, U.A.E. Ahmadi, Kuwait Al Khobar, Saudi Arabia Antwerp, Belgium Asturias, Spain Bergen-op-Zoom, The Netherlands Camberley, England Dublin, Ireland Gliwice, Poland Haarlem, The Netherlands Johannesburg, South Africa London, England Madrid, Spain Moscow, Russia Rotterdam, The Netherlands Tarragona, Spain North America 98 South America 65 Years of Experience in Region Europe 62 Africa 45 Middle East 63 Asia/Australia Beijing, China Brisbane, Australia Jakarta, Indonesia Manila, Philippines Melbourne, Australia New Delhi, India Perth, Australia Seoul, South Korea Shanghai, China Singapore Tokyo, Japan Asia 59 Australia 55 AV

17 Fluor Overview Outstanding Safety Performance Fluor s Total Case Incidence Rate is significantly better than the average rates reported by the CII. AV

18 Fluor Renewables Overview Solar Project Experience List Project Year Client/Location Technology Solar Thermal Project Preliminary Engineering EPC Later Ongoing Confidential Client Arizona Various PV Projects Engineering Services Ongoing SunPower Various Locations Astexol 2, 50 MW Solar Thermal Project Engineering Ongoing Elecnor Spain 125 MW Solar Thermal Project Technology Evaluation Ongoing Confidential Client Arizona LDK Polysilicon Project EPCM Ongoing Jiangxi LDK PV Silicon Technology Co., Ltd. Xinyu City, Jiangxi, China Solar Panel Manufacturing Facility EPCM Ongoing REC Group Tuas View, Singapore 46 MW Solar Thermal Reference Plant Preliminary Engineering 2009 esolar U.S. and International 280 MW Solar Thermal Project Constructability Study 2009 Confidential Client Arizona Chinese Procurement Services for Solar Projects 2009 Confidential Client China Moses Lake Expansion Project, Plant 3.0 EPC 2009 REC Solar Grade Silicon LLC Moses Lake, Washington Powder Upgrade Project FEED 2007 REC Solar Grade Silicon LLC Moses Lake, Washington 70 kw Rooftop PV Demonstration Program 1995 Southern California Edison Diamond Bar, California 5 MW Carissa Plain Photovoltaic Power Plant EPC 1985 ARCO Solar Power Production, Inc. Carrisa Plains, California CSP Solar Trough PV CSP Solar Trough CSP Solar Trough PV Solar Grade Silicon PV Panels CSP Solar Tower CSP Solar Trough CSP Solar Dish PV Solar Grade Silicon PV Solar Grade Silicon PV PV AV

Industrial Services. Life Cycle Design and Operational Readiness Support

Industrial Services. Life Cycle Design and Operational Readiness Support Industrial Services Life Cycle Design and Operational Readiness Support Where Will You Start? UpFRONT! An Opportunity to Build Competitive Advantage Starting a new facility is a unique opportunity to build