Presentation: Massive Wind Energy Project of a total of 387MW. Speaker: Ioannis Pantousis, General Manager of RF Energy S.A. Conference organized by

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1 Conference organized by Athens University of Economics and Business «Wind Energy: Development & Environment» 7-8 February 2009, Eretria - Evia Presentation: Massive Wind Energy Project of a total of 387MW Speaker: Ioannis Pantousis, General Manager of RF Energy S.A.

2 Disclaimer This presentation has been prepared for informative purposes only and depicts current views of RF Energy S.A. It is strictly meant for informational use and does not constitute under any circumstances an offer or invitation to purchase or sell of shares and should not be used as an economic indicator. All information contained in the presentation has been collected from sources which are considered to be credible, but nonetheless are not necessarily sufficient and the Company cannot and will not guarantee for their accuracy. Any future-looking statements contained in this presentation are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. None of the Company or any of its subsidiaries and representatives shall have any liability whatsoever for any loss arising from any use of this presentation s content, misuse or misinterpretation of its content or any other use. Addressees should conduct their own investigation and analysis of the Company and of the information contained herein and are advised to seek their own professional advice on the legal, financial, taxation and other consequences of acquiring shares in the company or other securities associated with RF Energy S.A. All statements contained herein are subject to change without warning. RF Energy S.A. undertakes no obligation to update publicly or revise any forward-looking statements as a result of events or circumstances after the date of this presentation, including, but not limited to changes in economic conditions, the company s business strategy or the occurrence of other unanticipated events. Dynamic Energy with Environmental Respect

3 Our Requirements SUSTAINABLE DEVELOPMENT RESPONSIBLE ENVIRONMENTAL MANAGEMENT GRID STABILITY AND SAFETY FINANCIAL COMPETITIVNESS OF POWER PLANTS These factors require that all policies on energy are based on actions which are: direct environmentally friendly innovative Dynamic Energy with Environmental Respect 2

4 Our Requirements Climate change is our primary concern when deciding our future actions Energy production is presently the main source of greenhouse gas emissions, but nonetheless is a field where we can apply today s technology and more importantly we have the ability for great innovation Fossil fuels reserves are shrinking and prices levels have reached historical highs while the number of suppliers has decreased and transportation faces geopolitical difficulties Discussion of the energy crisis has passed from if to when Greece needs uninterrupted supply of domestic, sustainable and secure energy sources, which can guarantee the country s financial growth and competitiveness of economy Even though the cost of Renewable Energy Sources is at the moment high, wind energy is the exception Dynamic Energy with Environmental Respect 3

5 Wind energy is of particularly high value due to the following reasons: Reduces the marginal production cost The high wind potential substitutes the expensive development of power plants and as a result marginal production cost of electricity is reduced to approximately half the initial cost Indirectly contributes to reduction of the price of the fossil fuels Wind energy has a stable production cost. Wind is a renewable, everlasting and free source while the production cost for wind energy production is pre-determined Wind energy results in virtually zero CO2 emissions Our Requirements Use of the HVDC technology in transmission of energy through great distance, makes wind energy cost competitive In development of wind farms great attention is paid to the transmission system s stability and reliability in accordance with international regulations The above factors promote wind energy as the cornerstone of our energy strategy Dynamic Energy with Environmental Respect 4

6 RF Energy RF Energy is an energy company operating in the energy sector, and with a remarkable autonomous development develops, manages and controls the operation of wind farms and small hydroelectric plants in Greece. The company is led by a group of high qualified managers, engineers and committed employees of proven expertise and growing experience in the RES sector RF Energy is planning development of a massive wind energy project in South Evia, which consists of 11 wind farms, forming an integrated cluster of wind farms, of a total of 387MW. The cluster of wind farms will be connected to the national grid in Attiki at 400kV, via a direct current cable Total investment is estimated at 0,6 million and COD is scheduled to be completed until 2012 This regional project becomes an energy project of high importance which would cover the national needs for energy Dynamic Energy with Environmental Respect 5

7 In brief Based on the business plan, the benefits from the development of the cluster of wind farms in South Evia will be of high importance for the economic development, the social well being as well as for the environment in the region of South Evia and in particular in the Municipalities of Kafireas, Karistos and Marmari The project will in the midterm effectively solve the energy problem using the wind energy The interconnection between Evia and Attiki, which will be done using high technology cables (underground and submarine) with a transmission capacity of 1100MW, is a great example of the much needed and sought innovation we were looking for With minimum interference or any obstruction (visual, environmental, electromagnetic etc) the proposed by RF Energy solution will provide the much needed boost in economical development in South Evia Dynamic Energy with Environmental Respect 6

8 Fragmented market since only 5 companies possess the 40% of the total licensed 7.446,6MW The European / National target of has been set, meaning that 20% of the total energy production should come from RES and gas emissions should be decreased by 20% until 2020 Energy production using RES is the primary concern of our country so as to meet Kyoto s Protocol commitments Development of renewable energy projects, combined with the shut-down of older power plants, has a lot of environmental benefits since the total power (kwh) coming from thermal plants connected to the grid will be decreased, resulting in: CO2 decrease of 25% SO2 decrease of 31% ΝΟx decrease of 39% and PM decrease of 56% RES Sector Dynamic Energy with Environmental Respect 7

9 RES Sector Investments in RES in Greece (power in MW) Technology Operating License Installation License Production License Application for a Production License Wind Energy , ,384.6 Biomass Geothermal Small Hydro ,042.6 PV ,063.3 Total power 1, , , ,336.0 Percentage (%) 13.9% 2.19% 15.8% 2.48% 100.0% 15.7% 100.0% Source: RAE Dynamic Energy with Environmental Respect 8

10 RES Sector Estimated European shares of RES in 2020 Ocean Energy 1% Biomass 26% Wind Energy 36% Geothermal Energy 1 Thermal Solar Energy 1% PV 3% Hydroelectric Energy 32% Source: DGTREN Dynamic Energy with Environmental Respect 9

11 Massive Wind Energy Project in South Evia, of a total of 387 MW Dynamic Energy with Environmental Respect 10

12 Massive Wind Energy Project in South Evia of a total of 387 MW

13 Massive Wind Energy Project in South Evia of a total of 387MW Location South Evia (Municipalities of Kafireas, Karistos and Marmari) Leased land for 25 years 11,500,000 m 2 Lessors 250 land-owners, local residents Area 80,000,000 m 2 (Kafireas Municipality 77,770,000 m 2 ) Altitude Wind Potential Basic development 350 m to 1000 m Very good ( 9-10 m/s) 11 wind farms ( from 6 to 14 WTGs each) Number of WTGs 129 Power WTG Model Estimated Production Production Supply 3MW- New technology Vestas V90/3MW IEC, Class IA, RAL , GWh / year National Grid. HTSO Agreement years COD 2011 and 2012 Dynamic Energy with Environmental Respect 12

14 Massive Wind Energy Project in South Evia of a total of 387 MW Zoning plan Distances from : residential areas areas of cultural / tourist interest Distances between : Wind Farms WTGs in the same Wind Farms Implementation of the new Law >1500m >3500m > 700m > 300m Internal interconnection Underground interconnection (>40,000 m) External interconnection Underground / Submarine (>82,000 m) Sub-Stations / Converter Stations Technology for the energy transmission - Capacity 3 Sub-Stations including 11 transformers 40/50 MVA and 2 Converter Stations, in private locations, very close to the wind farms Direct Current (DC). HVDC Light (High Voltage Direct Current) up to 1100 MW Dynamic Energy with Environmental Respect 13

15 Massive Wind Energy Project in South Evia of a total of 387 MW Tonnes of CO2 avoided Natural Gas Oil Coal 525, ,812 1,163,451 Avoided cars and trucks emissions Natural Gas Oil Coal Trees that need for the absorbance of the equivalent CO2 Homes powered Substitution of mazut Tons of fossil fuel avoid to be imported 106, , ,586 Each 3MW correspond to trees. In total 77,400,000 trees 242,000 homes annually 33,000 tn per year or save of 10 mil. exchange per year 270,900 tn per year Road network Infrastructure Aforestation Employment opportunities for 2-3 years Employment opportunities for permanent jobs, 50 years Annual economical benefits for 50 years > 200,000 m. They will be given for Public use > 30,000 trees 200 jobs for technical staff 30 electrical and mechanical engineers 40 administrative staff (10 accountants, 14 clerks, 6 economists, 10 guarders) Revenues for the Municipalities 3 million Revenues for the land owners 2.2 million Dynamic Energy with Environmental Respect 14

16 Massive Wind Energy Project in South Evia of a total of 387 MW Total Investment capital Foundations & Transmission Cables lifetime 1.10 mil. /MW 50 years Lifetime for the rest of the equipment Investment Capital for the interconnection, for the energy transmission, for the Sub-Stations and for the Converter Stations 25 years 180 million Cost of equity 20% Cost of dept 7% Gearing 75% WTG replacement cost after 25 years 0.7 mil. /MW Capacity factor 38% Production cost for the first 25 years Production cost for the next 25 years 42.4 / MWh 32.0 / MWh Dynamic Energy with Environmental Respect 15

17 Massive Wind Energy Project in South Evia of a total of 387 MW Total Budget Construction of 11 wind farms of a total power of 387 MW (129 WTGs, Vestas V90-3MW), 420 million Construction of 3 Sub-Stations, 15m Construction of 2 Converter Stations & Interconnection with direct current cables, 165m Project Financing RF Energy equity, 180 million (30% of total budget) 12 year loan from Greek and foreign Banks, 240m (40% of total budget) Subsidy, 180m (30% of total budget) Total Budget of 0.6m Dynamic Energy with Environmental Respect 16

18 Massive Wind Energy Project in South Evia of a total of 387 MW Required Acceptance By the local authorities By the Technical Chamber of Greece By the local community (local residents, local organizations). It should be noted that land use agreements have been signed between the Company and the land owners, thus there are mature conditions for the development of the project By environmental organizations Barriers & Difficulties Licensing from the Government Guarantee of the Subsidy for 30% of the total investment cost Licenses and approval by the competent authorities Resolution of environmental issues The Project has been approved by the Government, the Regulatory Authority of Energy and the competent authorities (Forest Authority, Tourism Authority, Archaeological Authority) Dynamic Energy with Environmental Respect 17

19 Massive Wind Energy Project in South Evia of a total of 387 MW

20 Massive Wind Energy Project in South Evia of a total of 387 MW In Conclusion development of the 387MW Project in South Evia: Contributes to development of Municipality Kafireas in particular as well as the neighboring Municipalities, benefits the local residents and does not contravene any party s interests or economic activities (farming, agricultural, tourist) Uses innovative technology for the energy transmission and cutting edge WTGs Is environmentally friendly, contributing to the decrease of gas emissions, and based on the sustainability of wind energy Contributes to accomplishment of the European / National targets (20:20:20) Provides the much needed stability to the national grid Dynamic Energy with Environmental Respect 19

21 Massive Wind Energy Project in South Evia of a total of 387 MW RF Energy, with the needed Governmental support, can develop the Project since : the Company has secured broad and strong support from the local community the Company is in excellent financial standing the Company possesses the necessary technical expertise Contact Info: 128 Vouliagmenis Avenue, , Glyfada Tel: Fax: info@rfenergy.gr Dynamic Energy with Environmental Respect 20