INVESTMENT PROJECT 4 MW PHOTOVOLTAIC POWERPLANT IN LOM
K DEVELOPMENT CONSTRUCTION JSC
LEGAL WARNING
This presentation contains forward-looking statements, that are based on management's belief, assumptions, current expectations, estimates and projections about the industry, the economy, and the Company itself. Words like "anticipates," "believes," "confident," "estimates," "expects," "forecast," "likely," "plans," "projects," and "should," and variations of such words and similar expressions identify forward-looking statements. These statements do not guarantee future performance and involve certain risks, uncertainties, and assumptions that are difficult to predict with regard to timing, expense, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what is expressed or forecasted. Furthermore, the Company undertakes no obligation to update, amend, or clarify forward-looking statements, whether as a result of new information, future events, or otherwise.
CONTENT
OBJECT K DEVELOPMENT CONSTRUCTION JSC VALUE DRIVERS WHERE TOTAL SOLAR RADIATION THE PROJECT THE TECHNOLOGY MILESTONES SO FAR … IN DETAILS APPX 1 : PARTNERS APPX 2 : SOME RELEVANT LAWS CONTACT
OBJECT This proposal is for setting up a 4 MW capacity photovoltaic solar power plant based on polycrystalline technology. This environmentally friendly project will be supported by the Bulgarian Government. The target for Bulgaria, as proposed by the European Community, is that by 2020 16% of the gross final consumption of energy in the country should come from Renewable Energy Sources (RES). Furthermore the national targets are even higher in terms of percentage of RES fed into the grid i.e. net of the energy consumed by the producers. In this regard the Cabinet issues annually Regulations setting PV energy prices based on the estimations of the State Committee of Energy and Water Regulation. These prices are the main incentive for the local solar energy producers together with the State-guaranteed 25-years contract for the PV energy buyout. This document is prepared in order to illustrate the main features of the project and introduce it to a possible potential co investor. The aim is to report the key issues as well as to illustrate what has already been done from the Bulgarian partner and main investor K Development Ltd. Once the project is completed there's an option to expand it for further 15MW. In this regard K Development Ltd had purchased adjacent plots of land (24ha+19,4ha) to secure further the project growth.
K DEVELOPMENT CONSTRUCTION JSC K Development Construction JSC develops Investment Energy projects on the EU territory. In 2008th the Main Contractor K Development Ltd obtained First Category Certificate released by the Bulgarian Construction Camber in accordance to the Bulgarian Construction Act. This Certificate licenses the company to execute all kinds of construction work - civil, road, electricity, public utilities networks etc. with unlimited scope regarding the volumes. The Certificate is based on the completed projects during the years, the heavy machinery park of the company, but most of all on our professional staff covering all construction areas. The scope of K Development Ltd activities include: •Assessment and preliminary development of investment projects •Projects design, engineering and management. •Construction upon turn-key completion. •Supervision, consultancy and property management.
VALUUE DRIVERS WHY BULGARIA? Competitive taxation system. Corporate tax - 10%; EU membership since Jan 2007. Currency board system (BGN is pegged to EUR at rate of 1.95583) Europe's lowest operational costs (average salary less than 350â‚Ź) National Energy strategy till 2020: (16% RES from total consumption in 2020) Feed in tariffs WHY THIS PROJECT?
Solid Investor - a leading and reputable Bulgarian Bank. The project is in an advanced phase, this will save time and administrative burden. Already acquired an own slot into the central NEK (National Electricity Company) collector. Option to develop further 15MW.
WHERE
The site lies in a favourable position, in fact there is an easy access to the road and railways, this is a great plus during the construction phase when large amount of equipment and materials will be transported to the site. Nearby there is also a National Electricity Company (NEK) collector station.
TOTAL SOLAR RADIATION
Source: ENERGY EFFICIENCY AGENCY, Bugaria
The average values of Solar radiation in the town of Lom: Global Horizontal Radiation-1370 kWh/m2 Global Radiation on an optimal tilt plane - 1520 kWh/m2 Effective Radiation on an optimal tilt plane taking into account the overshadow – 1470 kWh/m2
THE PROJECT The project is developed on a total area of 10ha in the region of Lom. The solar panels will generate a peak of 763 MWh in July and an
average power of 517 MWh respectively. The months with the least produce are December and January – respectively 224 and 270 MWh. The expected average annual production is 5176 MWh There are no losses of power on the external utility cable
(proportional to its length) due to the fact the energy sold is measured and paid on the site borders by the local power supplier CEZ. The 4MW project is completed and there is an option to expand it
with further 15MW. This will considerably reduce the clearances time for the next stages. Also some cost savings will occur due to the already executed external utility infrastructure. K Development Construction JSC purchased a slot inside a nearby
National Electricity Company (NEK) collector station, this will secure the opportunity to contract the energy buy-up directly with the NEK instead of contracting with the local supplier CEZ if the project is expanded up to 15 MW .
THE TECHNOLOGY Power capacity
kW
4000
Manufacturer modules
Yingli solar, CSUN
Model
Polycrystalline - YL 230 P-29b CEEG 240
Manufacturer inverter
SMA AG
Model inverter
STP 15000 TL-10
Exp. Losses combined
%
20.0
Electricity exported to grid
MWh
5176
Electricity export rate 2011
â‚Ź/MWh
357,45
17022 modules of 230 Wp each 260 inverters 5176 MWh annual output
MILESTONES
To do: Further 15 MW Optional
Completed:
Q1 2011 Q4 2010 Q3 2010 Q2 2010 Q1 2010 Q4 2009 Q4 2009 Q3 2009
Q3 2009 Q2 2009 Q2 2009 Q1 2009
Site completion. Putting into operation Site execution Commencing site landscaping and fencing Final Contract with CEZ for the energy buy-out Completing the technical design of the site Construction permit Signed Preliminary Contract with CEZ Signed preliminary contract with NEC. Obtained clearance permission from the National Electricity Company (NEC) Public utilities clearances Town planning design Greenfield Research and analysis
SO FAR ‌ IN DETAILS
(Q4 2009)
(Q3 2009)
(Q2 2009)
(Q1 2009)
Preliminary Contract with the local distributor CEZ CEZ takes the obligation to buy from power in the volume up to 4 MW.
Public utilities clearances 1. ) Water supply and sewerage departments 2. ) Fire department 3.) Ecology department etc.
Green field 1.) Land accumulation 2. ) Preliminary Design 3. ) Town-planning Permission 4.) Site-planning permission
Construction permit
Documentation for NEK, clearances 1.) Electro-technical design for connection with NEK network 2.) Analyses : voltage level; connection point; risk equipment; reserve power source; power production schedule; energy balance; main equipment info.
Town-planning design
Research & analyses 1.) Climate – fogs, hails, temperature extremes, rainfalls, soils 2.) Geology, hydro-geology and geo-morphological reports 3. ) Infrastructure analysis 4.) Economical analysis 5. ) Technological analysis 6.) Organizational analysis 7.) Technical research
SO FAR ‌ IN DETAILS
(Q1 2011) Putting into operation 72-hours trial works. Site completion. (Q4 2010) Site execution
(Q2,Q3 2010)
Commencing of landscaping and fencing. Final Contract with CEZ for the energy buy-out; (Q1 2010) Before commencing the technical design was performed diligent market research to establish reputable suppliers offering good value for money. Completing the technical design of the site.
APPENDIX 1
Partners Solar and Internal Electrical Installations Designer : Greentech Solution Engineering Sofia Legal Adviser : Arnaudov & Associates, Sofia Referent Bank : Bulgarian Development Bank, Sofia Auditors: Audit - Stoyanova Ltd, Sofia Designer of Architecture, Constructions, Water Supply, Sewerage, Safety : Rangelov Consult Ltd External Electrical (utility) Connection: Elmontproject Ltd, Montana Tender Procedures and Contracting: K Development Ltd, Sofia Independent Construction Supervisor: Interconsult Ltd, Montana
APPENDIX 2: SOME RELEVANT LAWS In accordance to the Bulgarian Renewable and Alternative Energy Sources and Biofuels Act (Act Prom. SG. 49/19.06.2007, additional SG. 98/14.11.2008, effective as from 14.11.2008): The RES energy
is subject of mandatory buy-up by the National Electricity Company (directly, in case of 5MW or more or trough the local electricity distributor in case of less than 5MW installations); The sale of energy is based on contracts with a duration of 25 years. For all new power plants producing electricity from RES with the exception of water power plants over 10 MW The energy sale period starts with the beginning of the electricity production, but not later than 31 December 2015. The Power generation from RES is encouraged with regard of the following issues: In order to determine the equal effort of initial investment costs the feed-in tariffs take into account the characteristics of the various RES and the various technologies for electricity generation; The State committee sets up preferential prices for purchasing energy generated through the use of RES (feed-in tariffs). The State takes the obligation to provide to the producers of electric power generated from RES at least equivalent effect of preferential treatment (in respect of their income per unit of electric power) in case of change of the current incentive mechanism. The State guarantees a mandatory joining of utilities generating electricity from RES and biofuels into the national grid;
APPENDIX 2: CONTINUE Investments Stimulation Law According to the Investments Stimulation Law, the State reduces administrative burdens for the RES energy producers and takes the obligation to provide the joining infrastructure for Projects at least meeting the minimal amounts of investment required for the particular region. Bulgarian Renewable and Alternative Energy Sources and Biofuels Act Each year and not later than 31 March, the State Energy and Water Regulatory Committee (SEWRC) determines the preferential prices (feed-in tariffs) for buy-up of electricity generated from RES, except for the electricity generated by hydroelectric power plants with installed capacity exceeding 10 MW. The preferential price of electricity generated from RES is determine as follow: A) 80% of the average sale price for end suppliers for the preceding calendar year plus B) An addition determined by the SEWRC depending on the type of the primary energy source and the financial burden of the investment. The addition for the next calendar year has to be not less than 95 percent of the addition for the current year. 80% of average sale price for end suppliers during previous year
Subsidy Not less than 95% of previous year
Preferential price (feed-in tariff)
APPENDIX 2: CONTINUE Resolution of the State Committee for Energy and Water Regulation (SCEWR) № С-4/31.03.2011 Preferential prices on which the producers sell the electricity to public power utility companies
6
Photovoltaic module power plants over 5 kWp
Subsid. Price 2010 Mwh Euro
372,37
Additional 80% incentive from the according to average Art.21, Par.2 sell price from the Law A B 38,78
318,67
Preferential prices for the year 2011 A+B 357,75
The Power generation from RES is encouraged with regard of: • the characteristics of the various RES and the various technologies for electricity generation; • providing equal preferential treatment to the producers of electric power (in respect of their income per unit of electricity produced) in case of change in the mechanisms promoting the energy generated from RES • mandatory inclusion of utilities generating electricity from RES and biofuels into the national grid; • setting up preferential prices for purchasing energy generated through the use of RES • reducing administrative burdens for the producers of energy from RES and on construction of relevant facilities.
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