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Local Energy Solutions

Presentation to VireolPresentation to Vireol

October 2015

Contents

Introduction to FE

The Development Process

Drakelow Energy Centre Case Study Drakelow Energy Centre Case Study

Questions

Introduction to Future Earth Energy

Future Earth Energy Ltd (FE) combines technological and market insights projecttechnological and market insights, project development skills, corporate finance and private equity expertise to deliver solid returns.

FE’s team has experience of developing complex

Technical Analysis

FE s team has experience of developing complex projects, from inception, through planning and construction, to commissioning and operation.

We can bring strong reputable contractors and

Risk Assessment

Exit Strategy

We can bring strong, reputable contractors and funders

Combined, the management team has delivered over 500 MW of renewable power and closed

Future Earth Energy

over 500 MW of renewable power and closed financing and investment transactions of more than £3bn.

FE is currently progressing the development of a

Project Structuring

Project Delivery

FE is currently progressing the development of a Waste‐to‐Energy Energy Centre in the East Midlands Funding

Development Process

2‐4 months 6‐9 months 6‐12 months 24 months

Viability Planning Post Planning Construction

25 years

Operation

2 4 months

Site selection Feedstock Analysis Grid connectivity

6 9 months

Prepare and submit planning application

EIA

6 12 months

Select EPC and O&M contractors

Contract

24 months

Project Management

Milestone i i

25 years

Asset Management Monitoring of O&M Cotractor

fanalysis Planning feasibility Technology & Design

Public consultation and engagement

S.106 Agreement EA permit

Negotiations Identify Fuel Suppliers & Contract

Secure PPAs (& Heat Off t k )

monitoring Payment draw‐downs

Monitor Budget vs actuals

performance Advice on re‐financing

Identify and secure exit options EPC/O&M Costs &

Contractors Energy Sales Financial Analysis

Secure grid connection offer (CfD requirement)

Option on Site

Off‐take) Secure Incentive Secure Funding Agreement to A i L

actuals Reporting to Funding Partners

H&S

exit options

Acquire or Lease

Pl i Financial Pl T kPlanning Consent

Financial Close

Plant Take‐Over

Development Process



25 years

Operation

2 4 months


6 9 months


EIA

6 12 months


Contract

24 months

Project Management

Milestone i i

25 years

Asset Management Monitoring of O&M Contractor












Option on Site



H&S

exit options

Acquire or Lease

Viability

Site Selection:

Accessibility by Road

P i it t G id C ti d St t f L l G id Proximity to a Grid Connection and State of Local Grid

Proximity to Heat Off‐take

Proximity to a sufficient and multi‐source fuel supply Proximity to a sufficient and multi source fuel supply

Distance from Residential Areas and Sensitive Receptors

Land Use and Ground Conditions and Neighbouring Uses

Site Acquisition or Lease

Planning Feasibility

Local Planning Policies – adopted and pending

Attitude of the Local Planning Authority and Neighbouring Council’s

Local Community

Viability

Technology and Design

Operational Efficiency and Operating Track Record

CfD A dit ti C li ( i t ) CfD Accreditation Compliance (as appropriate)

Building Design Considerations

Technology Bankability Technology Bankability

EPC/O&M Costs & Contractors

Track Record and Level of Experience in the UK Track Record and Level of Experience in the UK

Covenant and Bankability

Energy Salesgy

PPA Strategy and Pricing

Heat Off‐take Potential and Pricing

Viability

Financial Analysis

Assumptions and Inputs Analysis

D l t d O ti P Development and Operation Programme

Funding Options and Cost of Project Finance

Financial Appraisal Financial Appraisal

Sensitivity Analysis

No substitute for knowledge and experience of the Renewable Energy Sector and Market CharacteristicsCharacteristics

Development Process



25 years

Operation

2 4 months


6 9 months


EIA

6 12 months


Contract

24 months

Project Management

Milestone i i

25 years













Option on Site



H&S

exit options

Acquire or Lease

Planning (and Permitting)

Planning Application

Understand the Local Planning Environment and Political Context

P li ti Di l ith LPA Offi Pre‐application Dialogue with LPA Officers

Establish a positive and collaborative relationship with Planning Officers

Employ an experienced Planning Consultant and Design Team Employ an experienced Planning Consultant and Design Team

Don’t scrimp on Design Input: technology and building

Take care with the Detail

Set a realistic, but challenging, programme to prepare the Planning Application

Environmental Impact Assessment

Employ experienced Specialist Consultants (Noise, Air Quality, Environmental, Site)

Identify LPA’s key considerations and undertake all surveys and analysis required

Looking at the detail at this stage provides greater comfort for the LPA

Planning (and Permitting)Planning (and Permitting)

Public Consultation and Engagement

Do not under‐estimate the importance of Community Engagement and positive PR

E l i li t M k ti & PR C lt t i d i th R bl S t Employ a specialist Marketing & PR Consultant experienced in the Renewable Sector

Set a clearly defined Community Engagement and PR Strategy – but be flexible

Hold Public Consultation Events – and listen to peoples views and concerns Hold Public Consultation Events and listen to peoples views and concerns

Regularly communicate with the local community and Parish’s

S.106 Agreementg

Enter into early discussions with LPA – shows positive intent

Be prepared and understand the Council’s considerations and objectives

Look to agree terms prior to the Planning Committee Meeting

Planning (and Permitting)Planning (and Permitting)

EA Permit

Twin track the EA permit with the Planning Application

R i l l f f t d d i d l t k t d t k Requires a level of front‐end design some developers are not keen to undertake

But it pays dividends with LPAs and for the EA Permit Application

Grid Connection Offer Grid Connection Offer

Twin tracking with Planning provides for greater clarity of costs

Employ a specialist GCO Consultant Employ a specialist GCO Consultant

A CfD Application requirement

Option to Acquire or Lease the Site p q

Ensure exclusivity and security of Site as soon as possible, and before Planning Consent

Ideally secured before any major Planning Costs are incurred

Development Process



25 years

Operation

2 4 months


6 9 months


EIA

6 12 months


Contract

24 months

Project Management

Milestone i i

25 years













Option on Site



H&S

exit options

Acquire or Lease

Post Planning

Bring together all elements of the project to enable raising of construction financeBring together all elements of the project to enable raising of construction finance.

Funders do not like technology risk:

Selection of EPC/O&M contractors: they need to be bankable and prepared to offer suitable Selection of EPC/O&M contractors: they need to be bankable and prepared to offer suitable

securities including plant guarantees. Contractors need to have suitable track record and

financial strength.

The technology needs proven operational experience.

Funders need certainty of revenue:

W2E projects receive income from gate fees. It is important to identify suitable fuel suppliers

and develop a ‘bankable’ fuel supply strategy.

Secure electricity (and heat) sales via suitable contracts.

Renewable incentives (CfDs) help mitigate electricity market risk by providing a floor to the price

of electricityof electricity.

Post Planning

Security of the Site

Concluding satisfactory terms for the Acquisition or Leasing of the Site

Cost of capital:

Different funders have different risk‐appetite which is reflected in the cost of capital and returns

expected from the project.

The Contractual Suite

All characteristics of the project need to be reflected in the contractual suite.

Development Process



25 years

Operation

2 4 months


6 9 months


EIA

6 12 months


Contract

24 months

Project Management

Milestone i i

25 years













Option on Site



H&S

exit options

Acquire or Lease

Drakelow Energy Centre Case Study


Viability – Key Considerations

An Appropriate Site

A derelict brownfield site the former home of the Drakelow C Coal Fired Power Station A derelict brownfield site, the former home of the Drakelow C Coal‐Fired Power Station


i h i iPutting Theory in to Practice Viability Assessment

Positive Planning Status

The re‐use of the Site for power generation was welcomed

f f f A Waste‐to‐Energy Plant using a form of pre‐treated Refuse Derived Fuel was supported

Positive support for the Project from the adjoining landowner (Drakelow Park)

Grid ConnectionGrid Connection

Initial Grid Connection Study Undertaken and results were positive

Feedstock

A Fuel Supply Study identified capacity and diversity of supply of local supply market


Viability

Technology Choice

C f l l ti f it bl G ifi ti T h l d Pl t P id Careful selection of suitable Gasification Technology and Plant Provider

Testing of bankability for funding of technology and identified Plant Provider

Testing of proposed Plant technology for suitability for potential EPC and O&M Contractors Testing of proposed Plant technology for suitability for potential EPC and O&M Contractors

EPC & O&M

Testing of interest in the project and chosen technology provider


Planning & Permitting (Planning Consent Granted October 2015)

Planning Application

TNEI i d Pl i d E i l C l TNEI appointed as Planning and Environmental Consultant

A strong working relationship developed with the County Council Planning Team

The benefit of follo ing a Pre application Process e en an informal one! The benefit of following a Pre‐application Process – even an informal one!

The importance of well‐planned and implemented Public Consultation & PR

Site SecuritySite Security

Exclusivity and Lock‐Out Agreement with Landowner

Positive pro‐active support from Landowner for the Project and FE Positive pro active support from Landowner for the Project and FE

Grid Connection

TNEI appointed as Specialist Consultant TNEI appointed as Specialist Consultant

Grid Connection Offer received

Questions

Contacts

Dr Isabela Boira-SegarraDr Isabela Boira SegarraChief Executive Officer e: [email protected]: 07875 713057m: 07875 713057

Ad i S ith MRICSAdrian Smith MRICSDirector e: [email protected]: 07714 222176m: 07714 222176

Disclaimer

h d d d f f l h d d h h f d h ll b d d lThis document is provided for information purposes only on the express understanding that the information contained herein will be regarded as strictly confidential. It is not to be delivered nor shall its contents be disclosed to anyone other than the entity to which it is being provided and its employees and shall not be reproduced or used, in whole or in part, for any purpose other than for the consideration of the financing or transaction described herein, without the prior written consent of a member of Future Earth Energy. The information contained in this document does not purport to be complete and is subject to change. This is a commercial communication. The document does not include a personal recommendation and does not constitute an offer, or th li it ti f ff f th l h f i i t t Whil t h b t k i i thi d t bthe solicitation of an offer for the sale or purchase of any service or investment. Whilst every care has been taken in preparing this document, no member of Future Earth Energy gives any representation, warranty or undertaking and accepts no responsibility or liability as to the accuracy, or completeness, of the information in this document. Past performance is not indicative of future results. For the avoidance of doubt, our duties and responsibilities shall not include tax advisory, legal, regulatory accounting or other specialist or technical advice or services. You are to rely on your own independent appraisal of and investigations into all matters and things contemplated by this document. By accepting this document, you agree to be bound by the foregoing limitations Kindly note that this presentation does not represent an offer since any offer to be granted in terms of this document would be subject tolimitations. Kindly note that this presentation does not represent an offer since any offer to be granted in terms of this document would be subject to Future Earth Energy obtaining the requisite internal and external approvals.

Presentation toPresentation to Vireol - tneigroup.com seminar - Future... · The technology needs proven operational ... CflCareful seltilection of suit blitable Gifi tiGasification

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