En

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En

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Weero KosterWeero Koster

29 June 201129 June 2011

Nor

ton

Ros

e

Nor

ton

Ros

e E

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y A

mst

erda

m

Ene

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Am

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Solar projects: Puglia, Devnia, Project

Solar projects: Puglia, Devnia, Project

Volta Volta Wind energy projects: Noordoostpolder,

Wind energy projects: Noordoostpolder,

Amalia, NoordzeeWind, Tromp Binnen

Amalia, NoordzeeWind, Tromp Binnen

Energy projects: Elsta, Eemshaven,

Energy projects: Elsta, Eemshaven,

BritNed Interconnector, Gate LNG, Sloe,

BritNed Interconnector, Gate LNG, Sloe,

BergermeerBergermeer M&A: Essent, Dong, Kema, Korean

M&A: Essent, Dong, Kema, Korean

wind farm development

wind farm development

Trading: CDM/JI credits and funds,

Trading: CDM/JI credits and funds,

commodity trading

commodity trading Regulatory: advise on re-powering,

Regulatory: advise on re-powering,

CCS, nuclear, re-powering, unbundling

CCS, nuclear, re-powering, unbundling

Dispute resolution

Dispute resolution

NR

Wind

NR

Wind

experience experience

Recent developments/ Recent developments/ IssueIssue

Utility unbundling/ independent grid managementUtility unbundling/ independent grid management

Utility sales (at high prices)Utility sales (at high prices)

““Het Lokale energiebedrijf”Het Lokale energiebedrijf”

Renewable targets & incentivesRenewable targets & incentives

Priority access for renewablesPriority access for renewables

Grid congestion area’sGrid congestion area’s

Smart metering/ gridsSmart metering/ grids

General Project General Project StructureStructure

CorporateCorporate

Corporate entity Establishment General features

V.o.f.Partnership

• no formal requirements• partnership agreement is advisable

• all partners can in principle represent the partnership• joint and several liability• separate capital

CVPartnership

• no formal requirements• Partnership agreement is advisable

• special form of V.o.f.• joint and several liability• but limited partners: only limited liability

BVPrivate limited company

• Notarial deed • Declaration of no objections (to be abolished)• Minimum capital requirements: EUR 18.000• Registration trade register

• separate legal entity and own capital• tradable shares• board members can in principle represent the company individually• limited liability• possibility or obligation to set up Supervisory board

NVPublic limited company

• Notarial deed • Declaration of no objections (to be abolished)• Minimum capital requirements: EUR 45.000• Registration trade register

• separate legal entity and own capital• tradable shares• board members can in principle represent the company individually• limited liability• possibility or obligation to set up Supervisory board

Location – land rightsLocation – land rightsTitle to land Title to

panels or turbines

Agreements Issues

Ownership SPV • Land purchase agreement• Notarial deed

Strongest title to land and installations.

Superficies(Opstal)

SPV • Agreement of superficies• Notarial deed • Agreements other users

Ownership of the land is not transferred. SPV is only granted title to the constructions build on the land

Land lease(Erfpacht)

Land owner • Agreement of Land Lease• Notarial deed• Agreements other users

Title to both the land and the turbines shall belong to the owner of the land. SPV is only granted an exclusive right to use the property

Servitude(erfdienstbaarheid)

• Agreement servitude• Notarial deed• Agreements other users

Servitudes can be vested to the benefit of another plot of land. For example right of access (overpad).

CongestiemanagementCongestiemanagement

Congestion on national grid

Congestion on national grid

New projects planned but it

New projects planned but it

shall take a few years to

shall take a few years to

increase capacity

increase capacity

adequatelyadequately

Market mechanism for

Market mechanism for

distribution of scarce grid

distribution of scarce grid

capacitycapacity

Current scheme:

Current scheme:

Producer in congested area

Producer in congested area

must produce less energy

must produce less energy

and pays to grid operator a

and pays to grid operator a

fee for unused fuel.

fee for unused fuel.

To comply with delivery

To comply with delivery

obligations, producers in non-

obligations, producers in non-

congested areas shall

congested areas shall

increase productions. Grid

increase productions. Grid

operator shall compensate

operator shall compensate

such operators for additional

such operators for additional

costscosts

Cost of congestion

Cost of congestion

management currently for

management currently for

grid operator.

grid operator.

Pro

pose

d re

gula

tions

Pro

pose

d re

gula

tions

on

con

gest

ion

on c

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anag

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man

agem

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Two main concerns

Two main concerns: : who should pay for costs congestion

who should pay for costs congestion

management?

management? Renewable energy should have priority

Renewable energy should have priority

access to grid in congested area

access to grid in congested area

New legislation adopted by parliament.

New legislation adopted by parliament.

Not yet entered into force.

Not yet entered into force.

Problem: competition law concerns on

Problem: competition law concerns on

distribution of costs.

distribution of costs. European Commission requested to

European Commission requested to

adviseadvise Verhagen: no longer wait with priority

Verhagen: no longer wait with priority

access for renewable energy

access for renewable energy

Currently: discussions on early

Currently: discussions on early

implementation of priority access

implementation of priority access

regulations. New regulations applicable in

regulations. New regulations applicable in

October 2011?

October 2011?

Proposed regulations on Proposed regulations on congestion management:congestion management:

Ranking production installations:• non-renewable• heat cogeneration facilities• renewables with electric storage capacity• renewable waste incineration installations• renewable energy installations

Grid connection and Grid connection and transport agreementtransport agreement

Installations, private and public gridsInstallations, private and public grids

Reactive power requirements & curtailmentReactive power requirements & curtailment

Data processing servicesData processing services

National or regional TSONational or regional TSO

Two separate agreementsTwo separate agreements

NO guaranteesNO guarantees

Grid connection and Grid connection and transport agreementtransport agreement

Inflexible contracting by ‘non-discrimination’ruleInflexible contracting by ‘non-discrimination’rule

Intransparent planning processIntransparent planning process

Investment approval through NmaInvestment approval through Nma

Congestion area’sCongestion area’s

Priority Renewables Priority Renewables

Unbundling rules limits possibilities regional TSO’sUnbundling rules limits possibilities regional TSO’s

Per

mitt

ing

Per

mitt

ing

proc

edur

espr

oced

ures

Main Main permits

permits:: Environmental licensing and general

Environmental licensing and general

provisions act (Wabo)

provisions act (Wabo) Builing permit

Builing permit Environmental permit

Environmental permit EIAEIA Nature protection act

Nature protection act Flaura and Fauna act

Flaura and Fauna act Water Act (drainage water)

Water Act (drainage water)

Perm

itting P

ermitting

procedureprocedure

Governmental coordination of permits:Governmental coordination of permits:

Ministry of EL&I responsible for the Ministry of EL&I responsible for the coordination of important permit coordination of important permit procedures. procedures.

Applicable to wind projects >100 MWApplicable to wind projects >100 MW

Applicable to solar projects > 50MWApplicable to solar projects > 50MW

No objections phaseNo objections phase

Direct appeal to the Council of StateDirect appeal to the Council of State

Applicability Crisis and Applicability Crisis and Recovery actRecovery act

Applicability:

Applicability: Projects that are specifically appointed

Projects that are specifically appointed

by the government

by the government Wind energy projects > 100 MW

Wind energy projects > 100 MW

Solar energy project > 50 MW

Solar energy project > 50 MW

For projects serving

For projects serving ‘‘national interests

national interests’’

the State or the Province can decide on

the State or the Province can decide on

spatial planning. The Crisis and

spatial planning. The Crisis and

Recovery act is also applicable to those

Recovery act is also applicable to those

projects for which this competence is

projects for which this competence is

used. (Povinciaal / Rijksinpassingsplan)

used. (Povinciaal / Rijksinpassingsplan)

Benefits Crisis and Benefits Crisis and Recovery actRecovery act

Benefits Crisis and Recovery Act: Benefits Crisis and Recovery Act:

Decision Council of State within 6 monthsDecision Council of State within 6 months

Beneficial permitting proceduresBeneficial permitting procedures

No No pro forma pro forma appealsappeals

Local governments no longer allowed to appealLocal governments no longer allowed to appeal

Principle of relativity: decisions are not annulled when appellant does not show Principle of relativity: decisions are not annulled when appellant does not show personal harm.personal harm.

Parts of the Crisis and Recovery act are not applicable:Parts of the Crisis and Recovery act are not applicable:

Regulations on simplified EIA procedureRegulations on simplified EIA procedure

SubsidiesSubsidies

SDE+ 2011:SDE+ 2011:

No feed-in tariff but a subsidized No feed-in tariff but a subsidized ‘‘sliding premiumsliding premium’’

Total SDE+ subsidies (all categories) in 2011: EUR 1,5 billionTotal SDE+ subsidies (all categories) in 2011: EUR 1,5 billion

New government: focus on cost effective technologiesNew government: focus on cost effective technologies

Phased application for subsidiesPhased application for subsidiesTechnology Application Basis electricity

price (EUR/kWh)

Strike price(EUR/kWh)

Onshore wind As of 31-08-2011 0,046 0.113 – 0.120

Solar > 15 kWp As of 1-7-2011 0.044 0.090 – 0.150

Subsidies: SDE how does Subsidies: SDE how does it work?it work?

Offt

ake

– P

PA

/

Offt

ake

– P

PA

/ M

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Mer

chan

t pro

ject

s/

AP

XA

PX

Contracting issues PPA:

Contracting issues PPA: Counterparty availability and

Counterparty availability and

creditworthiness

creditworthiness Conditions precedent & milestones

Conditions precedent & milestones

Price of ‘Price of ‘graygray’’ and and ‘‘green

green’’ Green Green

certificatescertificates Take-if-offered nature/ variability &

Take-if-offered nature/ variability &

curtailments: take-or-pay ?

curtailments: take-or-pay ?

Duration (15 to 20 yrs from COD;

Duration (15 to 20 yrs from COD;

extension options)

extension options) Commissioning process linkage to EPC;

Commissioning process linkage to EPC;

power during construction

power during construction

Metering ‘Metering ‘graygray’’ and and ‘‘green

green’’ power power

Change in law/regulation

Change in law/regulation

Offt

ake

- P

PA

Offt

ake

- P

PA

Set off (Set off (salderensalderen))

Tool for small producers of renewable energy (connection 3x80 A) Tool for small producers of renewable energy (connection 3x80 A)

New arrangements adopted by Parliament; not yet into forceNew arrangements adopted by Parliament; not yet into force

Right to set off 5000kWh produced renewable electricity against electricity taken Right to set off 5000kWh produced renewable electricity against electricity taken from the grid.from the grid.

Benefit: energy tax only due over final difference Benefit: energy tax only due over final difference

Above 5000kWh, right to deliver renewable energy to the grid against Above 5000kWh, right to deliver renewable energy to the grid against ‘‘reasonablereasonable’’ tariffs, to be paid by suppliers. tariffs, to be paid by suppliers.

Tariffs regulated by NMATariffs regulated by NMA

Large scale consumers/producers not covered. Special arrangements in PPA Large scale consumers/producers not covered. Special arrangements in PPA required.required.

Turb

ine

cont

ract

s/

Turb

ine

cont

ract

s/

Con

stru

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EP

C

Con

stru

ctio

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EP

C

Contracting variables:

Contracting variables: TSA’s/ construction contracts/EPC vs

TSA’s/ construction contracts/EPC vs

Multi-Contracting

Multi-Contracting The Fidic books: red, yellow and silver

The Fidic books: red, yellow and silver

Interface agreements contractors

Interface agreements contractors

Soil riskSoil risk Weather risk

Weather risk Transport risk: marine & roads

Transport risk: marine & roads

Turb

ine

cont

ract

s/

Turb

ine

cont

ract

s/

Con

stru

ctio

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EP

C

Con

stru

ctio

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EP

C

Contracting variables/ guarantees:

Contracting variables/ guarantees:

Compensation vs variable LD / Bonus

Compensation vs variable LD / Bonus

structure (Amalia/ C-Power):

structure (Amalia/ C-Power): ‘‘Smart Smart

warrantieswarranties’’ to to ‘‘Construction Guaranteed

Construction Guaranteed

EarningsEarnings’’ Defects warranties and notification

Defects warranties and notification

periodsperiods Output guarantee

Output guarantee Availability guarantee: time based

Availability guarantee: time based

Power curve guarantee: degradation ?

Power curve guarantee: degradation ?

Maximum noise level guarantee (wind)

Maximum noise level guarantee (wind)

Maintenance –

Maintenance –

O&

MO

&M

Contracting variables

Contracting variables

O&MO&M

Link with EPCLink with EPC

Wind riskWind risk

Availability Availability

guaranteeguarantee

‘‘scheduled scheduled

maintenancemaintenance’’ vs vs

‘‘unscheduled

unscheduled

maintenancemaintenance’’??

Spare part Spare part

availabilityavailability

Response time

Response time

CranesCranes

Remuneration:

Remuneration:

output related?

output related?

Ene

rgy

inve

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ent

Ene

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ent

dedu

ctio

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hem

e

dedu

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Energy investment deduction scheme (

Energy investment deduction scheme (EIAEIA):):

Tax benefit for realisation renewable

Tax benefit for realisation renewable

energy projects

energy projects Projects must comply with detailed

Projects must comply with detailed

energy reduction norms

energy reduction norms Benefit: 41,5% of investment costs

Benefit: 41,5% of investment costs

deducted from fiscal profit

deducted from fiscal profit

Total budget 2011 is EUR 151 million,

Total budget 2011 is EUR 151 million,

after which Ministry of finance can

after which Ministry of finance can

decide to continue or cancel the annual

decide to continue or cancel the annual

programmeprogramme

Onshore wind in the Onshore wind in the NetherlandsNetherlands

Onshore wind

Onshore wind

target: 6.000 MW in

target: 6.000 MW in

20202020

Major realised

Major realised

onshore wind

onshore wind

projects projects

Westereems

Westereems

Groningen Groningen

(156 MW)(156 MW)

Wieringermeer (100

Wieringermeer (100

MW)MW)

Major planned

Major planned

onshore wind

onshore wind

projectsprojects

- Noordoostpolder

Noordoostpolder

(450 MW)(450 MW)

- Zuidlob Flevoland

Zuidlob Flevoland

(120 MW)(120 MW)

Project ZuidlobProject Zuidlob

InitiatorZuidlob Wind B.V.

(Nuon Duurzame Energie and Windmolenvereniging De Zuidlob)

Planned capacity

Approximately 122 MW

Objective

The basis philosophy behind the project is: "less mills, more energy‘. The project shall replace existing wind turbines. There will not only be more MW installed, but due to the line position the energy yield per MW installed capacity will also be larger.

Timing

We understand that project initiators have commenced the permitting and EIA procedures. We can, however, not assess at when all permits shall be obtained. Construction works are expected to commence in 2012 or 2013.

Financing

A subsidy of up to 229 million euros was granted to the project under the SDE subsidy scheme. The subsidy will be disbursed within 15 years.

We are currently unaware of any further financing arrangements.

Project Drentse MondenProject Drentse Monden

Objective

Initiators intend to develop a wind park of around 70 wind turbines.

Other initiators are also interested to realise a wind park on the same location. These other initiators are united in the Stuurgroep Windenergie Oost Drenthe.

The authorities would like all interested parties to participate in the ‘Stuurgroep’ to develop the project.

Timing

The project is still in an early stage. We understand that the permit applications are currently prepared by Pondera Consult. The EIA procedure appears not to have been initiated.

A number of entities have already expressed their concerns about the realisation of the wind project. Such entities could cause delay during the permitting procedures.

FinancingWe are currently unfamiliar with any financing arrangements that have been made for the realisation of this project.

InitiatorA joint venture of Stichting Duurzame Energieproductie Exloërmond, consisting of several farmers, and developer Raedthuys

Planned capacity

The exact capacity of the wind park shall depend upon the outcome of environmental studies. It is expected that approximately 70 turbines could be realised on this location.

Project WieringermeerProject Wieringermeer

Objective

The Municipality has requested that any new turbines are constructed in single-line arrangements. Accordingly, the random placing of wind turbines is no longer allowed. The replacement of the old turbines shall add to this general objective and create additional generating capacity.

Timing

Currently, the draft spatial plan (Structuurplan) is published for consultation.

It is expected that more details surrounding the financial arrangements are made public in September.

Further timing unknown.

Financing

From the project’s website, we understand that residents are also to participate in the financial arrangements. However, we are currently unfamiliar with any specific financing arrangements that have been made for the realisation of this project.

Initiator

Stichting Windkracht Wieringermeer

A joint venture of Nuon, 27 farmers, Energy Research Centre Netherlands and the Association of Wind Turbine Owners in North Holland

Planned capacity

200 to 400 MW

The existing wind turbines shall be replaced.

Project Windpark Neeltje Project Windpark Neeltje JansJans

We are currently unfamiliar with any financing arrangements that have been made for the realisation of this project.

Financing

The project is still in an early phase of development. The project initiators are in the process of initiating the EIA procedure, after which the permitting procedures can be commenced.

Draft decisions on special planning have been taken by the authorities.

Construction works are expected to begin in 2013.

Timing

The project opts to construct 9 wind turbines on the famous island of Neeltje Jans.

Objective

50 MW Planned capacity

The project is being developed by E-connection project for the benefit of Windpark OSK BV.Initiator

Project Windpark N33Project Windpark N33Initiator

The project is being developed by Blaaswind BV, which unites a number of farmers, and project developer KDE-energy.

Planned capacity

100-120 MW

Objective

The Province of Groningen has decided to concentrate wind energy project on three locations: Eemshaven, Delfzijl and Veendam.

The objective is to realise a large wind farm on both sides of the N33 provincial road nearby Veendam.

Timing

The Ministry of Economic Affairs considers the project to be of national interest, by virtue of which the ‘Rijkscoordinatieregeling’ can be applied to the permitting procedures.

The project is still in an early phase of development. The project initiators are in the process of initiating the EIA procedure, after which the permitting procedures can be commenced.

Financing

We are currently unfamiliar with any financing arrangements that have been made for the realisation of this project.

Offshore windOffshore wind

Realised offshore wind projects (318 MW):Realised offshore wind projects (318 MW):

- Egmond aan Zee (36 turbines; 108 MW)Egmond aan Zee (36 turbines; 108 MW)

- Prinses Amalia (60 turbines; 210 MW)Prinses Amalia (60 turbines; 210 MW)

Permitted offshore wind projects (2600 MW):Permitted offshore wind projects (2600 MW):

- Breeveertien

- West Rijn

- Tromp Binnen

- Den Helder I

- Brown Ridge Oost

- Beaufort

- GWS Offshore

- EP Offshore

- BARD Offshore NL1

- Scheveningen Buiten

- Q10

- Q4

Original offshore wind target: 6.000 MW in 2020. New government: no target.

Offshore windOffshore wind

Completed projects NL:Completed projects NL:

Windpark Egmond aan ZeeWindpark Egmond aan Zee

Windpark Princes AmaliaWindpark Princes Amalia

Second phase: Second phase:

In total 12 Wbr permits granted to new initiativesIn total 12 Wbr permits granted to new initiatives

Legal proceedings; currently 9 irrevocable Legal proceedings; currently 9 irrevocable permitspermits

Two BARD projects received a total subsidy of Two BARD projects received a total subsidy of EUR 4.3 billion EUR 4.3 billion

Still EUR 900 million left for other projects: Still EUR 900 million left for other projects: Nuon/Eneco? Nuon/Eneco?

Project Offshore BARD Project Offshore BARD

ObjectiveRealisation of a large scale offshore wind park.

Timing

Permit pursuant to the State Waterworks Act has been obtained.

Cooperation agreement with dredging and construction company Van Oord has been signed.

Construction is scheduled to commence at the beginning of 2012.

Financing

Based upon the SDE tender scheme, a total subsidy of EUR 4.3 billion was awarded to BARD.

Eneco and NUON have objected to the subsidy decision and the case is currently pending in appeal before the administrative courts.

Initiator BARD

Planned capacity

Both permitted offshore projects have a combined capacity of 600 MW. The individual wind turbines shall have a capacity of 5 MW.

Project Offshore Q10 - Project Offshore Q10 - EninoEnino

Initiator Eneco en Nuon

Planned capacity

100-140 MW

Objective

Realisation of a large-scale 100 MW offshore wind park.

If funding can be obtained, the initiators suggest to expand the project and add an innovative offshore wind park consisting of the newest turbines that are build on innovative foundations.

Timing

Permit pursuant to the State Waterworks Act has been obtained.

Decision on the application for subsidy for the first part of the project is expected in 2011. The European Commission’s decision on the request for subsidy from the NER300 scheme is expected at the end of 2011.

Financing

Initiators intend to finance the 100 MW wind project on the basis of the SDE 2010 subsidy scheme. Under the scheme, a total of EUR 900 million is still available for distribution.

The innovative 40 MW extension shall only be realised if the European Commission awards a subsidy under the NER300 scheme. Project initiators applied for a total subsidy of EUR 84 million.