Jesper MichaelsenProject Developer

Jesper MichaelsenProject Developer

Midwestern Wind Energy PolicyPractical Siting Issues

Midwestern Wind Energy PolicyPractical Siting Issues

Overview of Presentation

Brief PPM Energy overview

Development Process

Practical Siting Issues

PPM Energy has Joined the IBERDROLA Group of Companies

IBERDROLA is the world’s largest renewable energy company

IBERDROLA is also the world’s largest wind energy company with 6,500 megawatts (MW) of wind in operation worldwide, and a 38,000 MW wind development pipeline

IBERDROLA has a strong financial profile. It currently has a combined enterprise value of approximately €70 billion. By pro forma 2006 figures, the group has €63.5 billion in assets, €20.3 billion in turnover, and combined net profit of €1.9 billion. ($1 = € 0.74 Euros)

IBERDROLA has 39,000 MW of existing generating capacity (all types) and 22 million customers worldwide

PPM Energy No. 2 in US Wind Market

More than 2,000 MWs in operation or under constructionWind assets throughout the U.S.Goal of 3,500 MWs by 201011,200 MW development pipelineBacked by the robust resources of the IBERDROLA group Successful equity investment products captures tax value and recycles capitalDeveloping innovative offerings: firmed and shaped, hedge products, build-to-sell, O&M services

0500

1000150020002500300035004000

FY02 FY03 FY04 FY05 FY06 FY07Outlook

FY10Outlook

Controlled Owned

Growth Outlook(Capacity in MWs)

PPM’s Diversified Customer Base

Alliant

Northern States

Merced

Avista

Puget Sound

Eugene Water & Electric Board

BPA

Seattle City Light

City of AnaheimPublic Service of

Colorado

UAMPS

Salt River Project

Platte River Power Authority

SMUD

LADWP

MID

NYSERDA

Portland General Electric

Empire Electric

Great River Energy

City of Palo Alto

City of Alameda

PacifiCorp

CDWR City of Santa Clara

City of Redding

SDG&E

Burbank Water & Power

City of Azusa

City of Colton

City of Glendale

PG&E

SCE City of Pasadena

NYPA

First Energy

PPM Energy Mid-Continent Wind Assets(with major electricity pricing points)

Updated May 2, 2007

Moraine51 MW Owned

Trimont100 MW Owned

Flying Cloud44 MW Owned

MinnDakota150 MW Owned

Elk River150 MW Owned

Major electricity pricing pointOperating wind projects Wind projects under construction

Minnesota Hub

NI HubSPP

ERCOT

PPM’s Integrated Business ModelIdeally Suited for Wind Development

Origination/Development

Prospecting/Pipeline

Procurement/Construction

Monetisation/Operations

Asset Mgmt./Maintenance

Key Competencies:Access to Capital, Origination, Policy, Meteorology, Land Management, Permitting, Engineering, Procurement, Logistics (Transmission & Interconnection)

In-House Services:Pricing & Structuring, Energy & Risk Management, Finance, Credit, Legal, IT, HR & Communications

Siting Considerations

1. Wind Resources2. Transmission lines/capacity3. Community and Landowner interest,

Land control4. Permitting (including project design)5. Power Purchase Agreements -----------------------------------------------------

With these key factors confirmed and in hand, project sponsor make:

Investment commitment Wind turbine commitment

Wind regimes, land uses, siting requirements differ

Maps available online at:

http://www.eere.energy.gov/windandhydro/windpoweringamerica/wind_maps.asp

Practical Siting Considerations

Wind ResourcesCollect on-site data for 1-3+ yearsCorrelate with relevant long term data

Transmission lines/capacityReview Interconnection QueueWhat is distance to existing high-voltage transmission lines?What is current/future capacity?Regional Transmission Network study queue cannot keep pace with study requests. Long lead-time item!!!

Community and Landowner interestParcel size. Bigger parcels make it easier to design projectObtain site controlEducate landowners & community about impacts of wind energyIntegrate wind project with current land use

Stages of Project Development

Initial DevelopmentSite Selection Final Development Construction Operation

Analyze Market FundamentalsPreliminary Wind Yield AssessmentInterconnection and Transmission AssessmentMarket AssessmentLandowner DiscussionsLand EasementsGrid CapacityConstruction Issues

Interconnection ApplicationEnvironmental AssessmentPermit Applications Preliminary Design/Layout

Interconnection AgreementPermit ApprovalsFinal Design/LayoutLandowner CoordinationConstruction ContractsDue Diligence

Project ManagementLandowner CoordinationPerformance Engineering/Geo-tecnical TestsProgram Milestones

Revenue CertaintyAvailability and ReliabilityService and MaintenanceAsset ManagementOngoing Wind Assessment

Wind Development Process

Marketing and Sales

Big $ - Equipment, construction, and deposits

2 – 5 years 6-12 months 20-25+yrs

Practical Siting ConsiderationsStarts in site selection process and continues through constructionPermitting and project design must take into account multiple issues:

Ordinance and/or State/Federal requirementsSetbacks

From public roadsFrom residencesFrom property line, non-participantsFrom biological resources

Microwave beam pathsFAA/RadarWetlands/streamsBridgesTransportationBiological (avian, bat, other)Soil conditionsNoise

Practical Siting Considerations

3 sections in a windy area in the Midwest

Practical Siting ConsiderationsNow with site control layer added

(purple/blue = under control)(green/white = no control)

Practical Siting ConsiderationsNow with site control + setbacks addedSetbacks (from public roads, homes,

streams, microwave)

Practical Siting Considerations

All layers added: site control, setbacks& potential turbine/road/cable locations

Practical Siting ConsiderationsWhat do wind energy developers look for to identify sites:

Established/Understood process for permittingEstablished County/State/Federal requirementsFinding the sites where key elements come together to give reasonable probability for success:

Wind resourceTransmissionPermittingEnvironmental issues manageable

Access to market for wind energyPermitting consistency/predictability and policy stability help attract wind energy development

Questions & Answers – Contact Information

Questions and Answers

Contact information:Jesper J. Michaelsen, Project DeveloperPPM Energy, IncP: (847) 656-4859E: jesper.michaelsen@ppmenergy.com