Scandia Wind OffshoreOffshore Lake Michigan:

Feasibility Study for the Aegir Project

Scandia Wind Offshore’s consultant consortium

Proposed Wind Farm Services

• Development

• Technical expertise

• Construction Financing

Stoel Rives

Legal

Hoffman Brobst

Finance proformas, project audit

RnR Engineering

Grid consultant

EMD International A/S

Technical feasibility study

Havgul Clean Energy

Project development

Michigan publicagencies

Permitting, approvals, environmental data

Natural Resource Group

Environtmental and permitting consultant

Havgul’s experience

• Andmyran wind park, 160 MW

• The Havsul project, 1500 MW

• Kvitfjell, 200 MW

• Siragrunnen, 200 MW

• Havøygavlen, 40 MW

• Very good wind conditions

• Favorable water depths

• Favorable sea bed conditions

• Proximity to shore

• Proximity to existing grid

• Proximity to export cables to the continent

• Large hydro power facilities in the region

• Regional power deficit

Havgul’s Siragrunnen project, 200 MW

Key numbers:

Siragrunnen Wind farm

• 200 MW• 3 - 8 MW turbines• 25 - 67 number of turbines• 90 - 140 metres hub height• App 40 km2• Ca 670 GWh yearly production• Total cost estimate: $680 million• App 700 job – years in the

construction phase

Havsul I Havsul II Havsul IV Totalt

Km2 49 122 37 208Inst. Effekt in MW 350 800 350 1.500No of turbines 78 178 78 334Produkction in TWh per year 1.0 2.2 1.0 4,2

Havsul I Havsul II Havsul IV Totalt

Km2 49 122 37 208Inst. Effekt in MW 350 800 350 1.500No of turbines 78 178 78 334Produkction in TWh per year 1.0 2.2 1.0 4,2

*The Havsul project, 1500 MW

Havsul I, Gamlemsveten 8 MW

Havsul projects: Extensive studies performed

• 19 EIS subjects studied, including:– Bird studies– Under water biology studies– Wild life studies– Flora and fauna studies– Social economic studies– Cultural heritage studies– Ship navigation, drifting, search and rescue

• Extensive technical studies– Wind measurements– Water depth measurements– Sea bed analysis– Cost analysis– Grid analysis

Offshore turbine installation

Offshore foundations

Concrete Foundation History

Turbine Foundation Themes

Concrete Foundation Features

*A 1,000 Megawatt wind farm would require (approximately):o 1 million tons of

concreteo 200,000 tons of

steelo 2 million man-

hours of labor for foundations

o Foundation Production Cost: >$200 million

www.viciventus.no

Deepwater Jacket Foundation: the Owec Tower solution

www.owectower.no

Large Turbine Technology

REpower 5 MW

Clipper 7.5 MW

Clipper 10 MW

Germany: hard push for offshore wind power

Germany: successful business Hub, a case study

Support for Michigan’s offshore wind energy production is growing…an opportunity for Mason and Oceana counties?

Objective

To develop a 1,000 MW offshore wind farm in Lake Michigan

• Strong political drivers towards offshore• Many studies are being performed• Few developers active today in Lake Michigan• Possibly faster time-to-market vs. onshore due to fewer land lease issues• Other than land, more or less the same issues as onshore

Why

Table of Contents• Track record• Equipment• Feasibility study• Defined suitable areas• Wind conditions• Grid conditions• Compensation models•The Way Forward

Feasibility study• Grid study:

o Estimate interconnection and transmission capacities, i.e. define wind farm sizeo Define interconnection pointso Describe interconnection application processes

• Sea conditions:o Accurate electronic sea mapso Sea bed conditionso Wave heights

•Wind assessment study:o Micrositingo Production calculationso Preliminary visualizations

•Turbine foundationso Technical designo Production methods and facilitieso Site identifications for production and installationo Installation methodologyo Job creation

• EIS screening study:o List all studies to be conducted above watero List all studies to be conducted below watero Permit execution

•Secure area control, describe the process:o Where to applyo How to applyo All legal contracts and approvals: aviation, defense, ship traffic, etc

•First draft progress plan

Aegir land-based stakeholder area

The Aegir project sketch, approximately 1,000 MW

3.7 milesApp 100 sq miles

Ludington Pumped Storage Plant

Ludington Pump Storage Plant Diagram

Wind speeds on Lake Michigan

Wind Quality and LoadCenters in the U.S.

Michigan is situated near three large load centers

• Blue - high wind potential

• Brown - large demand centers

• Green - little wind and smaller demand centers.

MISO Transmission Capacity

Southwest ofLudington

Michigan Great Lakes Offshore Wind Council (GLOW) -- Suggestions for focus points

• Define how much wind power the State wants -- onshore and offshore -- based upon State goals for renewables and emissions reductions

• Legislation• Wind measurements, different procedure• Define standard EIS procedures based upon the 22 criteria• Set the criteria where possible• Create an overview outlining all agencies with wind farm approval impact• Create an overview detailing all stakeholders in Michigan, and advise regarding

“best practice” information collection and distribution• Grid

• how to influence the grid solutions• Financial models

• Support schemes for offshore wind farms

Compensation models

Direct Compensation:

• Deliver local revenue – an amount that is meaningful to the regional stakeholders via an annual payment; likely a per megawatt-based formula -- a fixed amount to a Community Trust; or a royalty payment based on production (or a combination thereof)

• A royalty payment to the State of Michigan – a lease payment and/or royalty payment based on production

• Target an amount that maximizes stakeholder participation while maintaining an attractive rate of return for the project’s institutional investors/owners

Indirect Compensation:

• Job creation during construction and after commissioned (operations and maintenance)

• OEM facilities/operations; maintain project size and scope – a large project could attract industry supply-chain, more jobs

• Regional power plant fleet is aging; replace and support growth in power consumption, while addressing Michigan’s Renewable Portfolio Standard

To-do list• Schedule additional Public Information meetings in Mason and Oceana counties• Continue to meet with stakeholders • Continue discussions with Consumers Energy and DTE Energy• Partner with riparian owner, submit joint lease application to the State• Documentation process – studies, permits and approvals• Technical engineering

The Way Forward

• Emphasis on Feasibility Study stage in process, no decisions yet• Local support is critical, no way forward without it• Wind Farm size and shape to be determined by gathering input from all

stakeholders as well as engineering considerations• “Give and Take” acknowledgement by all stakeholders