srwf pr4

Project Teaser

Romanian 4 MW Wind Farm

Published October 2014 Copyright © 2012-2014

Project Description

The Project co-founders (2) are proposing to upgrade an existing wind-powered generating facility of 3 old turbines of 600 kW each (the first Wind farm ever constructed in Romania in the early 90’s) with 2 new turbines of 2.000 kW each with a capacity of approximately 4 MW. In addition to the wind turbines, the Project will involve digging of windmill foundations because of lack of knowledge and suitable technology at that time, construction of a permanent meteorological tower, a system of gravel access roads, an operation and maintenance building.

The Wind farm is localized on a small non-agricultural private village land of 2 hectares at 1382 m above sea level (well known area as best wind location in Romania) that makes part of an entire beautiful undeveloped touristic area in South-Banat region in western Romania which will have to be purchased by the new SPV to be founded yet, no construction modifications will be made in this existent Wind farm but upgrading its turbines by more powerful ones thus, reviving tourism and the economy of this area. The Project renewal is currently anticipated to commence in autumn 2014 and to finish in autumn 2015.

Once upgraded, the wind turbines and associated components operate in almost completely automated fashion. The Project will, however, employ administrative personnel. The wind turbine anticipated for the project (Enercon E-82 E2) begins to generate electricity at wind speed as low as 3 m/s. This turbine’s rotational speed varies between 6 and 15 rpm depending on the wind velocity. High-speed shutdown occurs when constant wind velocity exceeds roughly 28 m/s to avoid excessive wear and tear that may shorten the turbine’s useful life. Each wind turbine has a computer to control critical functions, monitor wind conditions, and report data.

Wind Performance

In 2009, a 60m Tubular Wind Mast had been installed. Unfortunately, the Wind Mast had broken up few months after its installation date because of the powerful wind and the unusual winter conditions on top of the mount at an altitude of 1382m (11 cm of ice had been stuck on the Wind Mast cables). The respective zone has considerable strong winds amongst the windiest places in Romania.

The total of 5.574 hours of fully functional wind indicates that the operational wind is about 7 months per year which exhibits significant seasonal characteristics being repetitive.

Business Opportunity

In terms of RES of gross electricity consumption, Romania is on target. The potential of Romania in wind energy is considered the highest in SEE. Even if the wind is free, wind energy producers receive incentives (Green Certificates) from the state besides the electricity retail price, because the investments are very high. Through its progressive legislation, the government is creating one of Europe’s friendliest environments for RE developers and is encouraging future investments in the wind sector and not only. So, since 2004 green energy producers receive 1 Green Certificate for each MWh of energy delivered into the system. In July 2010, the Romanian Parliament amended the law 139/2010 giving more incentives to RE producers. Finally, in July 2011, the European Commission had approved the law 139/2010. For instance, those in the wind sector get 2 Green Certificates for 1 MWh until 2017 after that just single. However, in December 2013, the Romanian Parliament amended the law GD 994/2013 reducing this time incentives to RE producers. For instance, those in the wind sector, starting from January 1, 2014 get 1,5 instead of 2 TGCs for 1 MWh until January 1, 2018 after that 1,75.

The Project Scenario

• The Project is to manufacture and build (upgrade) a 4 MWp Wind farm in a highly desirable location in Romania with proven wind velocity conditions (MAWS of 7,2 m/s in West-Banat Mountains).

• The amount of the deal is estimated to be in the region of €6,5 Million advanced over a 1-yr period to cover manufacturing and management costs and could be paid off in period of less than 10-yrs based on revenues.

� €5.200.000 – total cost of 2 wind turbines � €200.000 – turbines transportation � €200.000 – foundations & pedestals � €25.000 – turbines installing using a crane � €15.000 – guarantee for putting Wind farm in operation � €70.000 – land + O&M building purchasing � €6.000 – land + O&M building development � €414.000 – operational expenses � €370.000 – contingency

• Operational activity is at the end of the 1st year with current estimates showing yearly revenues (including incentives) of approx. €1,2 Million .

• AEP = 12,634 GWh, ROI = 12%, NPV = €5,1 Million, IR R = 19,2%.

• From that point on this would be a very profitable venture for all concerned.

• Opportunities to blue print this process and do more deals throughout Romania as demand continues to increase for alternative energy.

Action Plan

• Site Location – The proposed Wind farm will be upgraded on a private land of 2 hectares (co-founders will make a purchase contract with the land owner). The proposed Wind farm would be located 480 km West to Bucharest city (Capital of Romania). No agriculture is made in this zone. The plot location is nearby a County road and a very close unloaded existing substation and national grid line connection point.

• Company Formation – We as a Managing team are willing to incorporate the appropriate corporate structure that will best benefit both the project proponents and the investor. Considerations will include the need for a Romanian based entity that satisfies the requirements of the governing body.

• Administrative Process – The administrative process necessary for upgrading this special Wind farm is very fast, with a suggested time-frame of 5 to 6 months. Moreover, the co-founders have the Mayor’s commitment to support all official efforts in order to obtain all necessary permits establishing & operating of the Wind farm.

• Collateral – The group has neither liquidity nor collateral to offer.