Reducing Uncertainity within Wind Resource Assessments to Improve Projected Profitability

Transcription

1 AL-PRO th Wind Energy Consulting Canada Inc. 7 Canadian German Wind Energy Conference 2011 Reducing Uncertainity within Wind Resource Assessments to Improve Projected Profitability Montreal February 8, 2011 Financing Strategies and Due Diligence, M.Sc.F.

2 Presentation Overview Introduction Due dilegence and the business plan Uncertainty A Case Study: Uncertainty and yield forecast Reduce uncertainty at the start of the project Conclusions

3 Al-Pro Established in 2001 More than 30 years experience in the wind industry Provided services to more than 550 wind farms International client base AL-PRO Wind Energy Consulting Canada Inc. Founded in 2009

4 Our Services Wind Resource Assessments Potential Studies Fluctuation Analyses Performance Analyses Turbulence Determination Evaluation of Wind Measurements Noise and Shadow Flicker Determination Risk Analyses Visualization Global Windmapping Service - GWS LIDAR Wind Measurements Global Microcasting Service - GMS

5 Financing Strategies and Due Diligence A key component of the due diligence process is the business plan. The main building block for the business plan is the wind resource assessment and projected yield.

6 Relative Impact on the Business Plan Due Diligence

7 Projected Yield Yield calculations are based on a number of factors: On site wind measurements Long term correlation Modeled wind flow Turbine locations Wake losses Turbine characteristics Each component has an inherent uncertainty

8 Main Uncertainty Components

9 A Case Study 10 x 2.0 MW turbines Expected annual yield in GWh: 60 Price per kwh: $0.10 Annual Income: $6,000,000 Income over 5 years: $30,000,000

10 Uncertainty and Yield P 50 Annual Yield GWh MWh P Uncertainty Level (%) P 99

11 The Cost of Uncertainty Debt financing is based on project valuation using a number of approaches. When evaluating cash flow, projected revenue at the P 99 level is often used as a benchmark. The total uncertainty has a direct impact on the P 99 revenue forecast. Uncertainty can be managed at the start of a project. Uncertainty = 10% Uncertainty = 20% Probability Annual Yield Deviation Annual Rev Annual Yield Deviation Annual Rev Level (%) (MWh) (MWh) % $ 4,604, % $ 3,208, % % % % % % % % % $ 5,595, % $ 5,190, % % % % % % % % $ 6,000, $ 6,000, % % % % % % % % % % % % % % % % % %

12 Worst Case Scenario Wind data basis 8.5 Measurement 3 Long term correlation 8 Wind flow modeling 35 Wind farm efficency modeling 5 WEC s input data 15.8 Powercurve 5 Powercurve valid for specific site 15 Total uncertainty 39.6

13 Uncertainty Scenarios Uncertainty components Worst case Improved measurement Improved flow modeling Load parameter study LIDAR Measurement Campaign Combination of all Wind Database Measurement Long term correlation Flow model Wake model WEC Powercurve Powercurve valid for specific site Total uncertainty

14 Uncertainty Scenarios vs. Financial Comparisons Item Worst case Improved measurement Improved flow modeling Load parameter study LIDAR Measurement Campaign Combination of all Total Uncertainty Confidence Level P Confidence Level P Initial Cost 0 $8,000 $7,000 $20,000 $80,000 $115,000 5 Year Income Diff* P 75 (x million) $0.020 $1.714 $0.462 $4.327 $ Year Income Diff* P 99 (x million) $0.070 $5.910 $1.594 $ $ Year Profit* P 75 (x million) $0.012 $1.706 $0.442 $4.247 $ Year Profit* P 99 (x million) $0.062 $5.903 $1.574 $ $ Comparison of projected revenue against worst case scenario

15 Minimize Uncertainty At the planning stages of a measurement campaign Upgraded anemometry. Increase met tower height. Utilize LIDAR to obtain a detailed wind profile up to 200 m agl, at multiple locations. When completing a wind resource assessment Wind flow modeling utilize CFD approaches when site conditions have the potential for flow separation. Detailed model area classification. Quality long term correlation Load Studies provided detailed wind parameters for each turbine location.

16 Conclusions A wind resource assessment is a key component of the overall project business plan. As such, it is subject to careful review during the due diligence process for financing. The methodologies and related inherent uncertainties used to quantify the wind resource have a direct impact on obtaining project financing. Careful consideration of measurement campaigns and modeling approaches reduce uncertainties. A small expense at the start of a project has direct benefits when it is time to negotiate debt financing. You can t always predict what may happen.. Thank You! Questions?