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Presentations on the main programme

We have two presentations on the event programme:

• Balancing mechanisms for integration of wind energy in the Netherlands
• Wind and power derivatives in project financing

Balancing mechanisms for integration of wind energy in the Netherlands by Geert Timmers
Time: Tuesday, 8 May, 16-17.30hrs (BB4.1)

In several European countries, the growth of wind power is constrained by grid limitations. In the Netherlands, several studies have been conducted to analyse technical bottlenecks related to the desired growth of off shore wind power to 6000 MW on a conventional portfolio of some 20.000 MW. Ecofys and TenneT TSO BV, the national grid operator, have conducted a study into the Dutch system of power balancing and made a field survey amongst traders and dispatchers, to conclude that the Dutch system of balance maintenance and Programme Responsibility is capable of accommodating a significant growth of wind power.

Wind and power derivatives in project financing by Jan Coelingh.
Time: Wednesday 9 May, 11-12.30hrs (CB2.1)

Wind farm developers secure financing from financiers, who tend to focus on risks before determining their conditions. Risks are the variability of the wind and the volatility of the sales price of power. Contracting derivatives alleviates these risks, while obtaining improved financing conditions. In cooperation with a Bank Oyens & Van Eeghen and Comco Partners, Ecofys has advised project developers on derivatives for wind and bio energy projects. Wind derivatives are based on long term climatologically datasets. Statistical analysis determines the specifications of the pay-out structure. Power derivative are based on the weighted average prices of the power exchange. Trend analysis and forecasting determines the terms of the contract.

Our 10 minute break out sessions:

At our stand we will daily give 10 minute presentations to update you on latest developments, issues etc. Our subjects:

• Due diligence audits for wind farms
• Long term variations in wind resources
• Non-recourse financing of projects
• The realisation of the Q7 offshore wind farm
• Poseidon
  

Due diligence audits for wind farms

Due Diligence service added value consists in delivering a deepened knowledge of the intrinsic value and relative risks of a project. This analysis is essential when purchasing or financing a wind farm. Different project variables need to be inspected to mitigate the financial risk of the investment: - wind data measurements; - annual energy output calculation; - wind turbine characteristics; - wind turbine and on site construction inspections; - permitting issues; - contracts; - legal and financial aspects.

Onshore wind farm

Long term variations in wind resources

In the practice of wind farm development the electricity production over the next 10 years needs to be predicted as accurately as possible. Analysis of the wind patterns in one of the most reliable weather forecast models shows that it is not possible to predict the strength and direction of the monthly-mean wind for periods longer than one month ahead. This implies that the downward trend in wind energy production should be attributed to natural variability. For future wind farms, project developers and financiers should use as long observational records as possible to minimize statistical uncertainty without taking trends into account. Jan Coeling, senior consultant at Ecofys will present the approach and results of a research.

Non-recourse financing of projects

A fully non-recourse financed offshore wind farm has been a long time coming, but never realized. Q7 appears to be the financial engineering template for getting the market funded until lenders become more comfortable with the relatively new offshore technology risk. Next to the sponsor’s equity, a large part of the project is financed by loans from a group of banks. The debt financing for the project includes a € 189 million, 11-year, long term facility as well as a €30 million contingent facility. Jaap Groenhof of Energy Investment Holding will explore the financing structure including a number of novel features to mitigate the risks associated with the construction and long term operation of wind turbines in the North Sea.

The realisation of the Q7 offshore wind farm

The development of the offshore wind farm brings together expertise in the areas of project development, marine construction, wind technology, renewable energy production and finance. Q7, owned and developed by ENECO Energy, Econcern and Energy Investment Holdings, is built by Vestas Wind Systems and Van Oord Dredging and Marine Contractors under separate construction contracts, and will initially be operated by Vestas Offshore, an affiliate of Vestas, under a 5-year warranty, operations and maintenance contract. Construction started this summer and is expected to be completed by 1 March 2008. Q7 is a distinctive off shore project. The farm is being built now about 23 kilometres offshore from IJmuiden, in block Q7 of the Dutch Continental Shelf. The sixty wind turbines, each with a capacity of 2 Megawatts, will be placed at a depth of 19 - 24 metres. Q7 is located furthest offshore and placed in the deepest water.

Jumping Jack with piles for Q7 wind farm

Poseidon

The oceans and seas offer a huge energy resource potential. The POSEIDON vision offers a seaway to harvest these energy resources and to create a sustainable electricity supply system. It links an off shore grid, connecting wind, wave and osmotic power projects with national grids and off shore carbon neutral power plants. It also links initiatives of several project developers, power markets and new technologies. David de Jager, senior Consultant at Ecofys will present this vision of Econcern, the holding company of Ecofys.

Poseidon vision

For more information, you can email us at windenergy@ecofys.com.