cez wind project in romania fantanele & cogealac energy forum 2010 central & southeastern...

CEZ WIND PROJECT IN ROMANIAFantanele & Cogealac

ENERGY FORUM 2010Central & SouthEastern EuropeBucharest– May 14, 2010

ADRIAN BOROTEACORPORATE AFFAIRS DIRECTOR - CEZ ROMANIA

Date: 11.11.2009 Version: Presented

CONTENTS

CEZ Group in Romania

General information

Fantanele & Cogealac Wind Farm

Regulatory aspects

Technical aspects

Financial aspects

Photos from construction

2


CEZ GROUP IS STABLE INTERNATIONAL UTILITY ACTIVE IN MORE THAN 10 COUNTRIES OF CSEE

3GENERAL INFORMATION


Timisoara

Arad

Oradea

Satu Mare

Alba lulia

Bistrita

Tîrgu Jiu

Deva

Drobeta-Turnu

Severin

Suceava

Botosani

Iasi

Vaslui

Sibiu

Zalau

Miercurea Ciuc

Rîmnicu Vîlcea

Brasov

Pitesti

Sfîntu Gheorghe

Slatina

Focsani

Galati

Buzau

Ploiesti

Slobozia

Calarasi

Giurgiu Alexandria

Braila

Tirgoviste

Tulcea

Tîrgu Mures

Piatra Neamt

Bacau

Resita

Baia Mare

Cluj-Napoca

ConstantaCraiova

Bucuresti

Sales and distribution services

CEZ GROUP IN ROMANIA

Sales services

Electrocentrale Galati Powerplant majority shareholder

objectives: new CCGT (400 MW)

Fantanele & Cogealac wind farms

Fantanele and Cogealac Wind Park will be together the largest onshore wind park in Europe

The total capacity: 600 megawatts Total investment of CEZ Group

into the project will reach € 1.1 billion

Cernavoda 3 and 4 Units

CEZ is partner of joint venture with 9.15 % participation

4GENERAL INFORMATION


CONTENTS


General information


Regulatory aspects

Technical aspects

Financial aspects


5


Renewable Energy Sources (RES) supporting scheme – legislation

6

mandatory quota for suppliers combined with a system of green certificates (GC) trading

Eligible are producers generating energy from: Wind energy, Solar energy, Geothermal energy, Biomas, Waves energy, Hydro power plants less than 10 MW, commissioned or rehabilitated starting 2004

Each supplier has a given percentage (a mandatory quota) obligation for green certificates and can comply with its quota obligation by purchasing green certificates on the green certificates market (bilateral contracts at negotiated prices and/or monthly centralised market of green certificates).

Electricity can be sold via bilateral contracts at regulated prices (only for producers less than 1 MW), or free at negotiated price

The certificates are issued monthly by the TSO

OPCOM administrates trading and certificates ownership at the end of the period

The bids for GC are honoured once per month; the clearing price applies for all the participants.


Law no.220/2008

7

Some “clean” producers receive for each 1 MWh produced more than 1 GC: 2 GCs for wind energy for the electricity generated until 2015 and 1 GC starting 2016, 3 GCs for biomass and 4 GCs for solar energy

GC may be traded within increased price limits set-up by new law: from 27 EURO/CV to 55 EURO/CV

If supplier will not achieve mandatory quota at end year, it will pay 70 EURO/CV to TSO who will allocate the amounts for strengthening T&D networks to easier other renewable producers connection to grids

New quota values for 2008 – 2020 period were set:

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

5,26% 6,28% 8,30% 8,30% 8,30% 9,0% 10,0% 10,8% 12,0% 13,2% 14,4% 15,6% 16,8%


Law no.220/2008 increased no. of GC for 1MWh to incentive investors

8

RES Type of group power station IP(MW) Law 220 Duration (years)GC/MWh

- HYDRO energy -

Produced in plants with installed powers < 10 MW

Commissioned as of 1 January 2004 (new) <1MW 2 GC 15> 1MW 1 GC 15

Commissioned as of 1 January 2004 (refurbished) < 1MW 2 GC 3> 1MW 0.5 GC 3

Refurbished < 1MW 2 GC 10> 1MW 1 GC 10

WIND energy Commissioned as of 1 January 2004 (new) Without IP limit

2 GC until 2015 15

1 GC from 2016

From import, which have been used before for the production of electric power on other states territory (secod hand)

Without IP limit

2 GC until 2015 5

1 GC from 2016

- Biomass,- Biogass,- Waste fermentation gas,- Bioliquid

Commissioned as of 1 January 2004 Without IP limit

3 GC 15

GEOTERMAL Energy Commissioned as of 1 January 2004 Without IP limit

3 GC 15

SOLAR Energy Commissioned as of 1 January 2004 Without IP limit

4 GC 15

Date: 11.11.2009 Version: Presented 9

Technology to produce E/RES

GC granted Average reference price for electricity (€/Mwh) 51 34

Average price GC (€/GC)27 55 27 55

Average price E-RES (€/MWh)

1 2 3=col.2*27+51 4=col.2*55+51 5=col.2*55+34 6=col.2*27+34Wind electric stations 2M* 105/78 161/106 88/61 144/89Hydro electric stations new or refurbished with 1<IP< 10MW

1 78 106 61 89

Hydro electric stations not refurbished with 1<IP< 10MW

0.5 64.5 78.5 47.5 61.5

Hydro electric stations with IP < 10MW

2 105 161 88 144

Photovoltaic electric stations

4 159 271 142 254

Electric stations based on biomass, biogas, bioliquids, geothermal energy

3 132 216 115 199

*2GC until 2015, 1 GC beginning with 2016

Estimation of Min/Max price of the energy from RES


Law no.220/2008 was informally notified to European Commision – October 2009

Romania starts in October 2009 an informal consultation with EC on the support system in the light of communitarian legislation of State Aid

We consider that the supporting scheme settled by Law 220/2008 (mandatory quota combined with GC) is a market based system and does not constitute an not allowed State Aid

Law 220/2008 also stipulates a series of facilities to be granted to investors, susceptible to be State aid (art. 8 par. (2), art. 13 and art. 18). Such facilities are the object of a future Government Decision, will be applied only in compliance with the State aid legislation and will be notified separately.

Ro authorities based the argumentation on EC practice in the case of N 415/A/01- Belgia, N 504/2000 – Marea Britanie, cauza N 474/2005 – Marea Britanie

10


0 8 14

7,000

Water Wind

MW/ Fuel

6,000

8,000

0

2,000

3,000

5,000

4,000

Coal Hydro-carbons

Nuclear

1,000

CURRENTLY, WIND ENERGY SECTOR IS ALMOST NON EXISTENT IN ROMANIA

Overview of the installed capacity and annual electricity production

Installed capacity Annual Electricity Production

2007

2008

2009

1 7 11

24,000

28,000

GWh

NuclearHydro-carbons

Coal Wind

20,000

16,000

Water0

4,000

8,000

12,000

2006

2008

2007

Source: CEZ research


Two wind farms projects in Dobrogea county, between villages of Fantanele and Cogealac (north of Constanta, 17 km west of the Black Sea coast);

Total projected size: 240 WTGs(1) of 2.5MW– installed capacity of 600MW; The project will be the largest onshore wind farm in Europe; Once wind farms are operational, CEZ will have 10 % share on the Romanian market with renewable

energy, including big hydro.

WIND FARMS PROJECT IN FANTANELE AND COGEALAC WILL BE THE LARGEST ON-SHORE WIND FARM BUILT IN EUROPE

Basic information about wind farms CEZ project

Both wind farms

1st phase of the project – 139 wind turbines; To be finished in 2010; Construction has started in October 2008 Currently, we have erected 50 WTGs, build 100

km of roads, laid more than 140 km of cables 33 kV and 110 kV

4 Transformer Substations 110 / 33 kV One Transformer Substation 400 / 110 kV,

connected to Transmission Grid

Fantanele Project Cogealac Project

2nd phase of the project – 101 wind turbines; To be finished at beginning of 2011; Signed contract for with GE for supply of 101

WTGs (same as for Fantanele project) more than 130 km of cables 33 kV and 110 kV 4 Transformer Substations 110 / 33 kV

Note: (1) WTG – Wind Turbine GeneratorSource: CEZ

12TECHNICAL ASPECTS


TWO PROJECTS ARE LOCATED NEAR COMMUNITIES OF COGEALAC AND FANTANELE, IN DOBROGEA COUNTY, NORTH OF CONSTANTA CITY

Schematic plan of projects

Construction site of MTS 110/400kV

National road

N22 Tulcea-Contanta

Village of Fantanele

Village of Cogealac

Fantanele West 2

(35 WTG)

Fantanele West 1

(35 WTG)

Cogealac Project

(101 WTG)

Source.: CEZ, maps.google.com Constanta 45 km

Construction stopped/ not started Ready for construction In construction

FW3

FW2

FW1

FE

Cogealac

Fantanele West 3

(35 WTG)

Schematic borders of communes Fantanele and Cogealac

Fantanele East

(34 WTG)

13TECHNICAL ASPECTS


FANTANELE & COGEALAC PROJECT IS DESIGNED TO PROVIDE 600 MW CAPACITY OF THE ECOLOGICAL ENERGY

Overview of the key technical parameters of Fantanele & Cogealac project

Technical parameter Description

Total generation capacity 600 MW

Wind turbine generators composition

240 generators (generation capacity 2.5 MW each) – 100m hub height, 99m rotor diameter

Energy transformation

Generators are connected to seven 33 kV/110kV substations, which deliver on 110kV level to the Main Transformer Station which connects the Fantanele wind farm on the 400kV grid line Constanta -Tulcea operated by Transelectrica.

Selected technical information on Wind Turbine Generators (WTG)

Producer: General ElectricMaximum speed: 73.6 m/sBlades material: fiber glass – epoxy resin/polyesterCut-in wind speed: 3 m/sCut-out wind speed: 25 m/sRated power output: 2.5 MWTower: tubular steel, 100m

Source: CEZ; General Electric

14TECHNICAL ASPECTS


FANTANELE & COGEALAC PROJECT CONDITIONS FOR REACTIVE POWER COMPENSATION

WindFREE Reactive Power Technology is used

Source: CEZ; General Electric

15TECHNICAL ASPECTS

Wind turbines are GE 2.5xl – 50 Hz, cos 0.9 type;

Electric generator is a permanent magnet and in 4 –quadrant IGBT Converter;

By using GE technology with LVRT WindRIDE-THRU operating system is ensured uninterrupted operation in case of network perturbations;

By using WindCONTROL System the power and voltage adjusting is possible to operate the wind farm as a conventional electrical generator;

Through WindFREE Reactive Power Technology, the turbines can generate / absorb reactive power even with No wind;

40 turbines can operate with WindFREE Reactive Power system and can absorb up to 48 000 kVA with NO wind. Only 34 such turbines would be needed to compensate for reactive generated by the cable grid which is 40 719 kVA (about);

In Conclusion

The system is able to compensate reactive power from wind farm grid, regardless of wind speed.


CEZ IS DEDICATED TO KEEPING A CONSISTENT PUBLIC FRIENDLY POLICY TO THE COMMUNITIES

Selected public related activities of CEZ

Long-term partner for the communities

Acknowledging its role and supporting their development

Partnership with communities

CEZ is currently building its relationship and involvement as partner, discussions with both the authorities and citizens

The village's infrastructure and facilities for the people are just some of the focus subjects

Dedicated to improving the quality of life in the community

Supporting the local infrastructure

projects

Creating jobs for local citizens

Choosing local companies as partners (Eraos, Fantanele – construction works)

Supporting commerce (economical development) of the area

Sub-constructing work to local companies

16TECHNICAL ASPECTS


CONTENTS


General information


Technical aspects

Financial aspects


17

Date: 11.11.2009 Version: Presented 18

SUMMARY OF WIND PROJECT

18

Useful Life of wind farm - 25 years

Efficiency of Wind Turbines comparable with the most efficient Wind Farms

Positive trends in develpment of prices of energy and green certificates refflecting also inflation

2 Green certififcates till 2015

1 Green certificate till 2025

Repairs and maintenance costs comparable with European standards

Start of full operation of Fantanele part in 5/2010

Only 12 full time employees

Positive legal environment supporting investments into green technologies

KEY ASSUMPTIONS USED IN PROJECT

1

FINANCIAL ASPECTS


CEZ TRADE responsible for ELECTRICITY OFF-TAKE, IMBALANCES and BROKER FOR GREEN CERTIFICATES MARKET

TOMIS TEAM

MW INVEST

ČEZ, a.s. Trading OTC market

DAM

MWh MWh

Balancing Market

Power plant

Power plant

Power plant

CEZ Trading team

Advisory and/or brokerage

Mutual delivery

agreements

Green certificates CEZ Vanzare

Other suppliers – OTC

OPCOMManagment of agreements, deliveries

Trading model – green certificates

19FINANCIAL ASPECTS


CONTENTS


General information


Technical aspects

Financial aspects


20


Pouring of blinding concrete Mounting of ring for foundation

Pouring of blinding concrete Construction of adapter ring and steel installation

PICTURES FROM THE SITE (1)

21


Installation of cablesInstallation of adaptor ring


22


Installation of first WTG (FE8) Installation of first WTG (FE8)


23


Installation of blades


24



25



26



27

Thank you very much for your kind attention!

cez wind project in romania fantanele & cogealac energy forum 2010 central & southeastern...

Documents