Download Enel Green Power In Canada

Enel Green Power in Canada
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
•
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Conclusions
Who We Are - Enel Group Worldwide
Presence in
40 countries
4 continents
Installed Capacity
98,700 MW
Customers
61 million
Annual Production
296 TWh
EBITDA
16.7 Bln USD
Employees
73,700
Capex 2013-17
36.6 Bln USD
Enel is the second largest utility company by installed capacity in Europe
leader in generation, distribution and sale of electricity and gas
Data as of December 31, 2012 (2012 consolidated results)
Installed Capacity as of June 30, 2013 (1H 2013 consolidated results)
Who We Are - Enel Green Power
Data as of June 30, 2013 (EGP 1H 2013 consolidated results, July 2013)
4
Who We Are - EGP North America
Diversified portfolio across the US and Canada
Technology
Hydro
Capacity
•
Presence in 21 U.S. States and 3 Canadian Province with more
than 90 plants in operation with a total installed capacity
exceeding 1.6 GW
•
Offices in Andover, Massachusetts
(Headquarters), Washington, D.C., San
Diego, California, Reno, Nevada, and Montreal, Canada.
313 MW
Wind
1,266 MW
Geothermal
47 MW
Biomass
21 MW
Solar
26 MW
Total
1,673 MW
•
•
Present in Canada since 1991 (CHI Energy inc.)
More than 350 people employed in North America
EGP has invested $350M in 4 projects in Canada; 2 of
which it still owns and operates
Balanced long-term presence across all main renewable
technologies in the United States and Canada
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
•
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Conclusions
Objectives of this Presentation
•
Brief Review of the Renewable Energy Market in Canada
•
Share some unusual aspects of Enel’s experience in developing and operating projects in Canada
through Case Studies of its Canadian projects
•
Audience:
•
Long term investors in infrastructure
•
Construction companies looking to build electricity generating projects
•
Equipment suppliers in the electrical and renewable sectors
•
Exporter of cleantech technologies
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Power Project, Alberta
•
Case Study #4 - St. Lawrence wind Power Project, Newfoundland
Renewables in Canada – Key Parameters
Key Data (2011)
Population (Mln)
36
GDP ($bn)
1,737
GDP growth rate
2.5%
Electricity demand (TWh)
519
Power Production Mix (TWh)
Electricity production (TWh)
Electricity demand pro-capita (MWh)
625
14.8
Nuclear
15%
Oil
2%
Gas
7%
Electricity Intensity (TWh/$bn)
Installed capacity
Electricity demand growth rate
(2012 - 2020)
Source: IMF Apr 2012, Enerdata, Market Estimates
Note: electricity demand includes network and distribution losses
0.29
95 GW
+0.9% p.a.
Coal
13%
Biomass
1%
Hydro
60%
Wind
2%
Total Production: 625 TWh
Renewable Energy in Canada
•
There is no federal legislation for renewables nor for carbon offsets
•
Each province has a different structures and incentives and must be studied individually for
opportunities and marketplace advantages/disadvantages
•
•
Major markets are in British Columbia, Ontario, Quebec.
•
All three have renewables policies under review or in public consultation and our view of
the markets is not optimistic
Some provinces have local content requirements to meet policy objectives
•
Quebec wind RFPs require local content
•
Ontario FIT (now cancelled) had a World Trade Organization (WTO) ruling against it in May
2013
Renewables in Canada – Rates per Province
Legend
W – Wind
PV – Photo voltaic
H – Hydro
Rates in $CAD
W&H – $94.86/MWh British
to $103.69/MWh Columbia
SOP
Alberta
W – ~ $45/MWh
RFP (political
competition vs. Large
Hydro)
W – ~$95.0/MWh
RFP
Quebec
Ontario
Merchant Market
W - $50/MWh to $80/MWh
CO2 pricing at $8.5-$8.75/MWh
W – $135/MWh
PV - $443/MWh
FIT Program
Discontinued and
competitive bidding
of rates being
discussed
W – $138/MWh
H - $140/MWh
ComFiT (Utility
Scale rates are
lower)
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Power Project, Alberta
•
Case Study #4 - St. Lawrence wind Power Project, Newfoundland
•
Conclusions
Case Study #1 – Star Lake Hydro, Newfoundland
Name: Star Lake Hydro
Location: Newfoundland, Canada
Capacity: 18 MW ($50M)
Technology: Hydro
Off-taker: Nalcor Energy
Energy Market: Power Purchase
Agreement
Start of Operations: 1998
Reservoir and main dam
Star Lake Hydro
Powerhouse
Case Study #1 – Star Lake Hydro, Newfoundland
Substation at Buchans
Penstock
•
Built in 1998 in response to a solicitation by the Gov. of NL for
renewable energy. Technically challenging project in a remote area of
the province- 35km of TL built by EGP
•
In partnership with a Canadian pulp and paper company
•
Built and operated by Enel between 1998 and 2011 under a long term
power purchase agreement with the provincially owned utility.
•
As a results of a dispute between the Gov. of NL and Enel’s partner,
the project and all its assets were expropriated in 2008. Enel lost all
its assets and was in default under its loans.
•
EGP was a collateral damage and the Gov. of NL and Federal Gov.
eventually confirmed EGP would be treated fairly.
•
However it took 2 years of negotiation to settle this dispute but
Enel was compensated fairly at the end.
Lesson Learned: While considered a politically safe environment, the unexpected can
happen and resolution can be very lengthy. Fairness, however, prevailed. Enel dealt
with this issue outside of the media but was firm on claiming its rights.
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
•
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Conclusions
Case Study #2 - St. Felicien Biomass Project, Quebec
Name: St. Felicien
Location: Québec, Canada
Capacity: 21.4 MW ($60M)
Technology: Biomass (Bark) to electricity
Off-taker: Hydro Quebec
Energy Market: Power Purchase Agreement
Start of Operations: October , 2001
St. Felicien Biomass Project
St. Felicien Biomass
Project
Bark Dryer
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Build in response to a solicitation from the Gov. of QC for
renewable energy and to reduce the amount of bark sent to
landfill
•
Built and operated between 2001 and 2013.
•
Biomass from landfill
Sold in October 2013 as Enel no longer considers the market
as favorable
•
The PPA granted by Hydro Quebec is at 6¢/kWh for 20 years plus
inflation.
•
The Gov. of QC, for the same generation technology, has signed
new PPA at 10¢/kWh in the same market therefore giving new
biomass projects the ability to buy bark at higher prices than
Enel, all other costs being the same
•
The forest industry has been in decline since 2007 and no plan for
recovery has been developed.
Lesson Learned: Beyond the acceptable business risks of a changing forestry market,
the Gov. of QC has undermined the survival of the project that it encouraged to build.
Other local companies might have more influence but if decisions are driven by politics,
are you able to have a say?
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
•
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Conclusions
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
Name: Castle Rock Ridge
Location: Alberta, Canada
Capacity: 76.23 MW ($160M)
Technology: Wind
Off-takers: Power Pool managed by Alberta
System Operator (AESO)
Energy Market: Merchant
Start of Operations: May 2012
Turbine Supplier: Enercon GmbH
Castle Rock Ridge Wind Project
Castle Rock Ridge Wind Project
Enercon E70 Turbines
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
Substation
Pouring of turbine foundation
•
Alberta is a market driven environment,
transmission and distribution system.
within
a
highly
regulated
•
As a generator of electricity you can build and in theory, the regulator has to
interconnect the project, but this is not happening.
•
This regulatory scheme fails to take into consideration business realities, such
as:
•
Required large cash deposits in non-interest bearing accounts for years to
preserve transmission rights; at our insistence, allowed letters of credit.
•
Permits required designation of turbines too early in the development
process resulting that, by the time permits are issued, turbine models are
no longer available or are no longer state of the art. This further gives
undue leverage with turbine suppliers once the turbine model is selected.
•
Extreme delays of 6 years in completing transmission infrastructure
resulting in fully built projects standing idle for months awaiting
interconnection.
•
Interconnection costs went form $4M to $25M over the development
period of 6 years.
Lesson Learned: Need to be conservative in expectations of government driven
markets; be prepared to invest time and effort to educate officials as to investment
implications of their programs. Change does occur, but slowly.
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
•
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Conclusions
Case Study #4 - St. Lawrence Wind Project, Newfoundland
Name: St. Lawrence
Location: Newfoundland, Canada
Capacity: 27 MW ($55 M)
Technology: Wind
Off-takers: Nalcor Energy
Energy Market: Power Purchase Agreement
Start of Operations: Jan 2009
Turbine Supplier: Vestas
St. Lawrence Wind Project
St. Lawrence Wind Project
View from Lawn Lookout
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Built in response to a solicitation from the Gov. of Newfoundland
for renewable energy.
•
Many lessons learned from the development of Star Lake were
applied to the development and design of St. Lawrence.
•
•
Working in remote location
•
Design for extreme maritime winter conditions
The Entire process went well from beginning to the end;
•
Low but acceptable power sale agreement
•
permitting regime was clear
•
excellent local support for the project
Vestas turbine erection
Lesson Learned: Things can go very well under the right circumstances
Enel Green Power - Outline
•
Who we are
•
Objectives of this presentation
•
Canadian Renewable Market
•
Case Study #1 – Star Lake Hydro, Newfoundland
•
Case Study #2 - St. Felicien Biomass Project, Quebec
•
Case Study #3 – Castle Rock Ridge Wind Project, Alberta
•
Case Study #4 - St. Lawrence Wind Project, Newfoundland
•
Conclusions
Conclusions
•
EGP is a market follower and all the markets we are in are competing for equity
allocation,
•
EGP is a very small player in Canada and cannot influence the market,
•
EGP had several challenges in the Canadian market, significantly more than in the
US market
•
Being next to a very large and dynamic US market with high financial incentives,
temptation is high to focus mostly south of the border
•
EGP is still planning more than $230M of investment in Canada over the next two
years,
•
However, as it can be seen by the sale of the St. Felicien biomass project this
month, EGP adapts and if necessary exits unfavorable markets
•
Canada is a good country to do business in, each business sector has to identify its
niche and if it has growth potential
•
We expect that Enel, in addition to the renewable energy market, will look at other
business opportunities in Canada, in line with its core businesses.
•
Being a long- term, patient player is essential!