6 designing for pv life cycle value

PROPRIETARY & CONFIDENTIAL

5/11/2016

DESIGNING FOR LIFECYCLE VALUE

PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM

OVERVIEW

• Recurrent energy intro

• Operating life challenges

• RFP standardization case study

• Where can we add project value

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BUSINESS OVERVIEWRECURRENT ENERGY

• Leading solar project developer helping our world sustainably meet its energy needs

• Over $7B in project finance secured to date from leading lenders and investors active in the energy sector

• Proven access to capital through a network of financial partners that enables us to deliver utility solar at any scale

• 4 GWp project pipeline, more than 1.9 GWp of contracts won, nearly 700 MWp developed and sold

• Seasoned leadership team with experience in conventional and renewable power businesses

• Strong technology and supply chain expertise enable delivery of solar projects at market‐leading cost

Recurrent Energy Has The Resources, Experience, Technical Expertise, and Access to Capital to Deliver Utility Solar at Any Scale

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RECURRENT DESIGN PROCESS

• Initial design for power marketing – In house

• Final design for construction ‐ EPC

• Design Selection

– Cost

• Upfront cost (Known)

• Lifetime costs (Estimate w/ long validation cycle)

– Financing

• “Bankability”

• Impacts our ability to implement new technologies/ approaches

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DESIGN CONSIDERATIONS – CHANGES OVER TIME

• While the general electrical design has remained fairly constant, design elements have changed over the past five years:

– Project size

– DC system voltage

– Module form factor

– Inverter size & voltages

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LIFECYCLE CHALLENGE 1 ‐ COMPATIBLE SPARES

• Challenge

– “Old” (7Yr) asset with higher than anticipated need for spare modules

– No off the shelf compatible modules available

• Form Factor

• Operational Specifications

• Solution

– Rip and replace entire string to restore spare stock

• Utilization of existing string inverter

• Reconfiguration of racking

• Timeline & Payback

– ~2 mo. to Implement, 6Yr. Payback (PPA Obligation)

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LIFECYCLE CHALLENGE 2 ‐ VENDOR EXITS

• Challenge

– Acquisition project with ~30MW of distributed electronics with known failure mechanism produced by a company that is no longer in business

– Only site where this exact technology was ever deployed

• Solution

– Identified baseline & novel solution

• High level evaluation prior to acquisition – Is it fixable?

• Detailed Engineering post Acquisition

– Pilot tested novel solution

– Implementation of retrofit ongoing

• Timeline & Payback

– ~1 Yr. Implementation, 1.5 Yr. Payback

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LIFECYCLE CHALLENGES SUMMARY

• Rapidly evolving industry resulting in changes in:

– Technology

– Equipment

– Companies

• Multiple iterations of solar will be present in the operating market for decades if not longer

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ARE WE MOVING TOWARDS STANDARDIZATION?

• Recurrent 2016 portfolio

– 7 Projects (6 CA, 1 TX)

– 1.2GW

– 5 EPCs

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Portfolio Level ‐ Similarities Project Level ‐ Differences

• SAT• Central Inverters

• ILR• DC Voltage• Major Equipment Suppliers• Combiner Box Placement• Inverter Placement and

Block Sizing• Road Layout


IMPACT OF THE PROJECT LEVEL DIFFERENCES

• Spread across initial bid responses of approximately 20% in pricing on a $/Wdc basis

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VALUE DRIVERS ‐ DESIGN

• Reduced DC side components

• Increase DC voltage (to a point)

• Design for Operations ‐ there has to be a feedback loop

• Hard to future proof designs due to cost pressures

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VALUE BEYOND DESIGN• Project documentation that allows an asset to transition between Owners & Operators throughout its lifetime

– Obligation Tracking (Contractual and Regulatory)

• 100MW facility ~ 10,000 lifetime obligations to track

– Operations & Maintenance records

• How do facility histories transition to new owners/ new operators?

– As‐Builts & Redlines

– Data Management

• ~1 billion lifetime data points

• Unknowns in a transaction result in a loss in value

– Increased cost of due diligence

– Increased returns required for perceived increase in risk

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QUESTIONS FOR DISCUSSION

• What is the correct balance between standardization and innovation for long term generating assets?

• At what volume do we de risk standardization and are we already there?

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PROPRIETARY & CONFIDENTIAL

CONTACTMartin Waters

[email protected]

www.recurrentenergy.com

6 designing for pv life cycle value

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