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R enewable E nergy G eneration Ltd

R enewable E nergy G eneration Ltd. Developing the World’s Renewables. Overview. Introduction to REG. Renewable Energy Generation is the largest publicly quoted renewable energy company in the UK dedicated to investing in operating plant Market capitalisation of €100m

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R enewable E nergy G eneration Ltd

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  1. RenewableEnergyGeneration Ltd Developing the World’s Renewables Overview

  2. Introduction to REG • Renewable Energy Generation is the largest publicly quoted renewable energy company in the UK dedicated to investing in operating plant • Market capitalisation of €100m • Listed on the London Stock Exchange’s AIM market with the symbol RWE • REG’s mission is “to build the value of its shareholder equity by owning and operating renewable energy projects thereby contributing to national sustainable energy targets” • REG has a vastly experienced development and operational team and already owns • The Cornwall Light & Power Company Ltd and through it; • The Goonhilly Downs wind farm in Cornwall • CLP Wind Projects – 24 UK wind projects, 5 consented • In addition REG is the main equity investor in Poland’s largest wind farm at Tymien – 50MW • REG has no debt and €55m of cash in hand Goonhilly Downs

  3. REG shareholders • REG’s shareholders include some of the largest financial institutions in Europe • Legal and General • Invesco Perpetual • Fidelity • New Star • Foreign and Colonial • Hendersons • Credit Suisse • UBS • REG has recourse to its shareholders if further capital required • But we must now build out what we have acquired Goonhilly Downs

  4. REG’s current investments • CLP Wind Projects – UK • 75MW when developed • 24 sites across UK, 5 consented • Developed by National Wind Power – RWE • Good wind regimes: cost competitive • £4m • Tymien 1 – Poland • 50MW – Fully Operational in Q1 2006 • Near Baltic Coast • 15 year PPA, partnered with EEZ and Invenergy, IRR above REG portfolio average • Stable, attractive renewable energy incentive scheme provided by accession to EU • £7.9m • Goonhilly Downs – Cornwall, UK • 5.6MW • Excellent 12 yr production record • 2.5 yr PPA signed at very high prices • Freedom to explore repowering potential • Freedom to play the green power market £4.5m Goonhilly Downs

  5. Tymien, Poland • Poland’s largest wind farm – 50MW • Uses 25 Vestas V90 machines • REG is main equity investor in project • Working with Invenergy of the US and EEZ of Poland • EU backed project • 15 year PPA with 2 state owned distribution companies • Two follow on stages taking total capacity to 150MW • An excellent first project in Eastern Europe for REG Tymien

  6. REG’s future plans: • WindWorks – UK • 75MW • High Sharpley, High Pow, Braich Ddu close to construction • Pipeline of projects • Tymien 2 & 3, Cisowo – Poland • 118MW • First right as principal investor in Tymien 1 • IRR similar to Tymien 1 • Tymien 1, 2 & 3 will total 150MW • Cisowo will total 18MW • Scheduled for 2006 and 2007 • Goonhilly Downs – Cornwall, UK • Repowering Programme – 15MW • The wind turbines currently in use are 0.4MW each, modern turbines are typically >1MW • Other CEE Region • Greece has existing projects and infrastructure • Romania anticipates EU entry • Bulgaria has excellent resources • Latin America • Brazil has strong renewables program • Mexico stalled on regulatory issues • Chile — developed country infrastructure Goonhilly Downs

  7. Carbon Sales • Carbon Sales important to emerging market projects • Value in range of €20 per tonne (long-term contracts are lower) • Depending on carbon intensity, can mean €15 per MWH • CDM is virtually useless in providing project support • Process highly uncertain — “additionality” makes outcomes highly uncertain • Mechanism is “amateur” — CDM Executive Board is part-time and underfunded • RESULT: Few trades and little interest • JI offers better prospects • National basis • Not well understood in prospective markets • Need for support by EU

  8. Institutional Barriers • LDCs often present substantial barriers to renewable energy development • Transparency a concern — local utilities may have entrenched interests opposed to new equipment suppliers • Land registration and title — massively important to renewables particularly wind • Deregulation is not on national agendas — traditional western country PPA structure may not be viable

  9. Conclusion • Increasing interest in private sector equity investment in renewables in emerging markets • Need action to deal with barriers • Reform of Carbon Trading • Begun at Montreal Conference, but needs momentum • Deal with institutional barriers • Need to build on work of IFC/World Bank in electricity reform • Renewables are economic, especially in high cost LDC power markets • Renewed efforts needed to spearhead change

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