wind project development & transactions · • review industry perspectives on the project ......

1

WIND PROJECT DEVELOPMENT & TRANSACTIONSCOST-EFFECTIVE PROJECTS, RISK MITIGATION & SUCCESSFUL TRANSACTIONS August 23-24, 2016Millennium Knickerbocker Hotel ChicagoChicago, IL

CONFERENCE

EUCI is authorized by IACET to offer 1.0 CEUs for the conference, 0.8 CEUs for the pre-conference workshop and 0.4 CEUs for the post-conference workshop.

Pre-Conference WorkshopLand Use, Environmental and Permitting Considerations for Wind Energy DevelopmentMonday, August 22, 2016

Post-Conference WorkshopEstimating Wind Project Interconnection Costs and RevenuesWednesday, August 24, 2016

WIND PROJECT DEVELOPMENT & TRANSACTIONS August 23-24, 2016Chicago, IL

2

OVERVIEW

The wind industry is booming in North America, with exceptionally strong growth in the U.S. Experts have said 2015 is one of the most successful years ever for the wind industry, with development and growth projected to continue at an aggressive pace with the extension of renewable tax credit incentives.

This program is designed to provide expert insight on the development market, and tips for creating a bankable project for utilities, developers, and investors to take advantage of the quickly maturing wind market. It will explore the financial and valuation aspects of developing a cost-effective wind farm, and relate those due diligence items to considerations for power and renewable energy credit purchase agreements, acquisitions, M&A and other transactions. Both industry veterans and those new to the business will benefit from this instructional symposium, reviewing critical items for due diligence at the various stages of wind project development and evaluating potential exposures to unknown costs. It will also explore what elements wind asset sellers must address to attract the attention of renewable energy asset buyers and financial entities, providing specific guidance, metrics, and case studies for establishing a common denominator between the buyers and sellers to transact wind projects under various stages of development.

LEARNING OUTCOMES

• Assess the state and future direction of the U.S. wind market, investment and acquisition trends• Evaluate key emerging trends and how they could impact the wind market• Review industry perspectives on the project development landscape• Discuss best practices for cost-effective management of wind farm development• Evaluate project risks and associated costs during wind project development • Analyze technical due diligence for wind energy assessment and asset valuation • Identify suitable methods to value wind assets for investment and M&A decisions • Analyze key tax equity and project financing considerations • Examine case-studies and best practices for negotiating power purchase agreements and M&A transactions• Review Fatal Flaw Analysis processes for determining whether an acquisition will be a profitable choice

http://events.constantcontact.com/register/event?llr=7esc4ioab&oeidk=a07ecs9j7mq7dbabcd1


3

AGENDATuesday, August 23, 20167:30 – 8:00 a.m. Registration and Continental Breakfast

I. Setting the Stage8:00 – 9:45 a.m. Update on U.S. Wind Market, Investment and Acquisition Trends

This opening session will feature a panel of experts with unique perspectives on what the industry saw in the past couple years to the present, and where it is headed for the rest of 2016 and beyond:• Overview of new wind project development in North America• Industry perspectives on acquisition and M&A trends for wind projects• Best practices and considerations for transactions—a Banker’s perspective on lessons learned o Monetizing big transactions o Assessing options at different stages of development• Natural gas cost projections and possible influences on wind development • YieldCos — Challenges and future opportunities Moderator: Ethan Schultz, Partner, Skadden, Arps, Slate, Meagher & Flom LLP- Ted Brandt, CEO, Marathon Capital - Terri Denning, Finance Manager, Suzlon Wind Energy Corporation

9:45 – 10:00 a.m. Morning Break

II. Wind Project Development 10:00 – 11:15 a.m. Perspectives and Update on the Project Development Landscape

• Tower and turbine technology developments• Offshore wind development—International market update and U.S. market potential • Update on the international wind market o Central and South America, South Africa, and Europe o How countries are structuring transactions without tax credits• Assessing opportunities to grow company expertise and evolve skills to be more encompassing o Dealing with specialization of expertise in the development process o Evaluating needs and costs of external consultants vs. utilizing internal resources o Progress towards improving and streamlining development processes- Patrick Bauer, Senior Associate- Global M&A and Corporate Development, InterGen- Cari VanAmburg, Project Developer, EDP Renewables

11:15 a.m. – 12:15 p.m. Logistics and Transportation - Strategies for Managing Costs Wind companies face substantial challenges with logistics and transportation of wind farm parts. The spend on logistics for wind farms is a higher percentage of costs than any other type of energy project, as transporting 250-foot-tall wind turbines is no easy feat. This session will discuss how to develop a logistics strategy for wind farm transportation and throughout its’ entire life-cycle, evaluating costs and considerations with regard to:• Determining pre-development price quotes• Key transportation issues and considerations• Determining—and contracting for—appropriate transport methods: o Railway o Roads o Ocean (barges)• Managing increasing size of components o Tall towers o Longer blades• Post-transportation logistics- Sally Chope, Director of Transportation and Logistics, Siemens Wind Power Americas (invited)


4

AGENDA

Tuesday, August 23, 2016 (Continued)12:15 – 1:15 p.m. Group Luncheon

1:15 – 2:45 p.m. Financial Quantification of Wind Resource Assessment & Independent Engineering (IE) Review for Wind Projects

This session will provide an overview of technical due diligence items required for a holistic independent engineering assessment. It will discuss how technical due diligence items relate to wind project development, operations, and considerations for project M&A.• Energy and resource estimation, wind energy assessment and financial quantification of assessment• Environmental and permitting review• Turbine technology review• Site assessment and project design review• Construction and turbine supply review• O&M review• Operating agreement review (O&M, PPA, interconnection)• Project performance and operational evaluation (for operating assets)• Portfolio review (as applicable)• Financial model review- Morgan Chrust, Associate Manager, Luminate LLC- Drew McMahan, Director, Luminate LLC

2:45 – 3:00 p.m. Afternoon Break

III. Taxes, Project Finance and Transactions3:00 – 4:15 p.m. U.S. Wind Market and Key Tax Considerations: M&A and Other Structured Transactions

Maximizing the benefits of tax incentives is vital in any renewable energy transaction. This session will provide an overview of key tax terms and issues involved in the development and structure of wind energy projects. It will then move into a more in-depth discussion on how tax equity financings get done and apply to project deals, drawing a banker’s experience managing transactions.• Wind tax equity update• Tax code overview• Understanding depreciation for project development timelines o Production Tax Credit (PTC) o Investment Tax Credit (ITC)• State, local, and transactional considerations• Diligence and tax equity structures• Tax equity trends in M&A• Tax equity transactions o Transaction and target type o Overall structure considerations o Diligence and tax equity structures o Transaction effect on tax equity structure o Debt equity and financing equity interactions• What investors are looking for in a deal o Surety of repayment o Credit worthiness of off taker o No problems on permits up front o Turbine liability- Joel Spenadel, Executive Director- Energy Investments, J.P. Morgan- Skadden, Arps, Slate, Meagher & Flom LLP, Representative


5

AGENDA.

Tuesday, August 23, 2016 (Continued)4:15 – 5:15 p.m. Mid-Stage Wind Project Acquisition: Fatal Flaw Analysis

This session will explore Lincoln Clean Energy’s (LCE) Fatal Flaw Analysis procedure, a process used by the developer to whether they should move forward with acquiring a mid-stage development wind project. Specifically, the session will identify: • Overview of fatal flaw analysis process• Status of permitting and environmental compliance obligations• Evaluation of Production Tax Credits (PTC)• Valuation of project assets and resource estimation• Real estate due diligence• Review of offsite easements• Transportation analysis • Analysis of fatal flaws and determining whether to acquire- Patrick Dalseth, Director of Development, Lincoln Clean Energy LLC (LCE)

5:15 – 6:15 p.m. Networking Reception

Wednesday, August 24, 20167:30 – 8:00 a.m. Continental Breakfast

8:00 – 10:00 a.m. Purchase Agreements for Power and RECs This session will provide an overview of key concepts and issues associated with the legal and contractual structure of power purchase agreements and renewable energy credit (REC) purchase agreements. It will then go into details on specific transactions conducted by Sacramento Municipal Utility District (SMUD) and Basin Electric Power Cooperative, including SMUD’s successful transaction with CitiCorp for the Solano Wind Project. Specifically, this session will address:• Key concepts and issues associated with drafting power purchase agreements/renewable energy credit

(REC) purchase agreements• How to minimize risks, avoid common pitfalls and ensure projects get built• Methods and practices for successful negotiation of the final power purchase agreement/REC purchase

agreement• Overcoming barriers and satisfying conditions to ensure effectiveness of definitive agreements• Contract management concepts and strategies• Tips for structuring REC power contracts, site lease terms and conditions• Taking advantage of tax credits/renewable carve-outs- Aaron Ramsdell, Power Supply Engineer III, Basin Electric Power Cooperative - William Westerfield, Senior Attorney, Sacramento Municipal Utility District (SMUD)

10:00 – 10:15 a.m. Morning Break


6

Wednesday, August 24, 2016 (Continued)10:15 – 11:45 a.m. Corporate PPAs and Procurement of Renewables—Wind Contracts

Commercial and industrial (C&I) businesses are large end-users of electricity that traditionally represent a significant portion of a utility’s revenue and earnings. These C&I businesses, pressed by public sentiment for cleaner energy sources, are increasingly entering into bi-lateral contracts to buy or invest in renewable energy generation. A number of corporations have already been successful in this space, and their transactions now account for an estimated 25 percent of the new wind and utility-scale solar builds in the U.S. However, these transactions can be very complex and difficult to navigate on legal, financial, and regulatory levels. This session will explore these complexities and the unique transactional structure involved with C&I renewable procurement, identifying best strategies for success for collaboration on wind contracts. Specifically, it will discuss:• Initiatives and lessons learned from The Business Renewables Center (BRC), an organization founded

by the Rocky Mountain Institute to streamline and accelerate corporate procurement of wind and utility-scale energy

• Trends in corporate renewable transactions• Impacts of state regulation and relevant grid region on corporate procurement and deal complexity• Accounting for variation in C&I experience, needs, and goals influence renewable procurement• Best practices in structuring C&I procurement deals o Project development considerations o key contractual considerations o optimizing Utility/C&I/Developer partnerships- Rob Threlkeld, Global Manger-Renewable Energy, General Motors- Ian Kelly, Manager, Rocky Mountain Institute (RMI)- Dominic Serpe, Vice President of Business Development, Tradewind Energy, Inc.

11:45 a.m. Conference Adjourns

AGENDA



7

PRE-CONFERENCE WORKSHOP: LAND USE, ENVIRONMENTAL AND PERMITTING CONSIDERATIONS FOR WIND ENERGY DEVELOPMENTMONDAY, AUGUST 22, 2016

OVERVIEWThis one-day workshop will explore key land use, environmental, and permitting due diligence items and considerations during the early-stages of wind project development. It will provide a current and in-depth review of key legal, contractual, and compliance due diligence items, describing common pitfalls to avoid to mitigate development risk.

AGENDAMonday, August 22, 20168:00 – 8:30 a.m. Registration and Continental Breakfast8:00—5:00 p.m. Workshop Timing12:00 – 1:00 p.m. Group Luncheon

LEARNING OUTCOMES• Review the general suite of land use and environmental permits and regulatory obligations required for wind project development• Evaluate due diligence processes for community, wildlife and avian issues• Discuss strategies to minimize environmental, land-use and permitting risk for wind development

I. Review of Permits, Report Authorizations, Studies and Approvals a. NEPA/CEQA b. Environmental site assessment reports c. Biological resource studies and risk assessments d. Environmental impacts assessment e. Operating within permitted limits II. Environmental and Wildlife Considerations—Deep Dive a. Avian issues and solutions b. Protected species issues and solutions c. Offsetting impacts d. Wildlife studies and government agency (local and federal) interactions e. Timelines for obtaining approvalsIII. Post-Construction Compliance MonitoringIV. Land Title Search and Insurance Issues a. Covering the basics b. Invalid contracts c. Gen-tie challenges d. Mineral rights and coverage e. Encroachment issues f. Time constraints g. Land use restrictions h. Uninsurable interests i. Mechanics lien coverage j. Unique landlords k. State law considerations

V. Understanding Common Issues, Exposures and Liabilities a. Environmental insurance polices b. Hazardous material considerations and due diligence c. Brownfield development considerationsVI. Compliance Costs a. Environmental remediation b. Investigative activities c. Expected and unexpected costs VII. Optimizing Development to Meet Regulatory and Compliance Standards a. Mitigation design and monitoring b. Developing strategies to avoid and minimize impacts on species c. Sustainable development practices


8

WORKSHOP INSTRUCTORS

John Agle / Energy Specialist / First American Title Insurance Co.John Agle has over 35 years of experience in the title insurance industry, almost all within the commercial submarket. He has been involved in underwriting renewable energy projects for about 20 years, and has a particular passion for these projects and their enhanced complexity. His experience extends to geothermal, wind, solar, hydro, storage, gas-fired, and biomass/biofuel projects. John is a CA attorney, and serves on the Advisory Board of the McMillin Real Estate Center at his alma mater, San Diego State University. In June 2011, he was instrumental in the creation of the First American Energy Group, and presently serves as an Energy Specialist for the corporation.

Eric Hansen / Director- Environmental Services / Westwood Eric Hansen is a Director Environmental Services at Westwood, where he leads environmental services for Westwood, managing environmental projects and staff for energy and land markets. Based in the Eden Prairie office, Eric Hansen is a shareholder and brings 28 years of experience in regulatory permitting, site assessment and environmental field studies to his projects. His current focus is on project management of Westwood’s larger projects in renewable energy. His experience includes regulatory analysis, environmental due diligence studies, field application of remediation technologies, geo-engineering design, public speaking and project management. Additional areas of expertise include expert testimony, site investigation, environmental remediation, wetland permitting, power line routing, and storm water permitting. Mr. Hansen has been involved in field studies and permitting at scores of wind and solar projects throughout the US. He is adept at interpreting regulatory issues in multiple jurisdictions and negotiating with agencies such as the US Fish and Wildlife Service and the US Army Corps of Engineers. He is a professional engineer and professional geologist with degrees from the University of Minnesota.

Mallory Lindgren / Director / WestwoodMallory is the market leader for Westwood’s national solar team. She is responsible for developing the strategy for Westwood’s pursuit of the commercial and utility-scale solar markets and overseeing the execution of the engineering, surveying and environmental services provided to our clients. Mallory Lindgren closely monitors renewable energy policies and trends to support Westwood’s strategic growth, including new client, service and geographic initiatives. She is a shareholder in the company and an experienced, client-focused senior project manager for renewable energy projects. Ms. Lindgren has expanded Westwood’s visibility in her eight years with the firm by championing community involvement, increasing media exposure, and being involved with numerous industry organizations. She actively volunteers her time at charitable events and participates in industry conferences and committees. She was recently co-chair of the Women of Wind Energy Twin Cities Chapter and co-chair of the Women of Wind Energy National Leadership Forum. Prior to joining Westwood, Mallory worked for Minnesota State Colleges and Universities (MnSCU) and interned with two National Weather Service offices.

Elizabeth Mitchell / Partner / Holland & Hart LLPElizabeth Mitchell is a Partner at Holland & Hart LLP. For over 20 years, Ms. Mitchell has helped major national and international companies to reduce environmental risks and enhance their environmental compliance. Her clients include manufacturing, pharmaceutical, agricultural, conventional and renewable energy, and mining companies. Ms. Mitchell regularly advises these and other entities on environmental and regulatory issues associated with mergers and acquisitions, project finance, environmental compliance, permitting, securities filings, and enforcement matters. Furthermore, she has extensive experience handling a variety of infrastructure, energy, and environmental projects. Elizabeth Mitchell works with domestic and foreign clients on the environmental aspects of energy and industrial projects in the U.S., from site selection and permitting, to financing, to environmental compliance requirements. She regularly advises developers and lenders regarding environmental aspects of financing commercial and industrial projects. Her work includes the assessment of environmental systems through environmental audits and investigations, as well as the development of environmental management systems.


9

POST-CONFERENCE WORKSHOP: ESTIMATING WIND PROJECT INTERCONNECTION COSTS AND REVENUESWEDNESDAY, AUGUST 24, 2016

LEARNING OUTCOMES• Evaluate economic and pricing impacts of wind project interconnection based on site• Identify economic hurdles and risks that can negatively impact prices for wind farms• Discuss how the design and interconnection aspects of an operating wind farm will impact its’ overall value and economics

AGENDAWednesday, April 27, 201612:30 – 1:00 p.m. Registration 1:00 – 4:30 p.m. Workshop Timing I. Design and Cost Considerations a. Design features and cost estimation i. Equipment failures due to electrical resonances ii. Interconnection requirements II. Transmission and Market Considerations a. Identifying an economically advantageous site area b. Estimating market prices in interconnection node c. Economic hurdles and risks i. Congestion ii. Transmission constraints iii. Curtailment III. Market Impacts and Project Value a. Understanding generation patterns in wind resource availability and performance b. The relationship of generation and operating performance to market price c. The role of extremes in distribution patterns d. Pricing impacts of wind generation availability and performance i. Seasonal ii. Hourly iii. Sub-hourly e. High priced hours impact on wind project revenue f. Capacity performance and capacity revenues (e.g., PJM/CPP, ERCOT/ORDC)

OVERVIEWInterconnecting a wind energy project is a complex and lengthy process. Essentially, it involves navigating the many rules and regulations of the given grid region, and assessing potential pricing impacts for different sites to try and evaluate the most economically advantageous area. Furthermore, once a wind project is successfully interconnected and under operation, there can be a number of different design and performance issues that materially affect the financial picture and valuation of the wind facility. This workshop will address the economics of wind interconnection both pre and post operation, focusing on key considerations to related to price impacts and overall value of a wind project.

WORKSHOP INSTRUCTORBill Babcock / Managing Consultant / PA Consulting GroupBill Babcock has over 30 years of experience in consulting and economic research for clients in the energy industry. He has conducted a wide variety of strategic planning studies, market and technology assessments, and financial analyses for both private and public sector clients in all segments of the energy industry, including electricity, oil, natural gas, coal, and renewable resources. For the last 20 years, he has used nodal electricity market models (e.g., GE MAPS, PROMOD IV and AURORAxmp) to value generation and transmission assets and conduct detailed cost-benefit analyses for a broad range of electric industry clients in North America -- including merchant generators, large investor-owned electric utilities, energy service companies, public power companies, ISO/RTOs, energy trade associations, and financial institutions. His recent work has focused on helping his clients successfully meet the business challenges created by the radical changes taking place in the electric power and fuels markets. During the past five years he has provided expert market support on generation asset transactions totaling over $15.0 billion.


10

INSTRUCTIONAL METHODS

Case Studies, PowerPoint presentations, and panel discussions will be used.

REQUIREMENTS FOR SUCCESSFUL COMPLETION OF PROGRAMParticipants must sign in/out each day and be in attendance for the entirety of the conference to be eligible for continuing education credit.

IACET CREDITSEUCI has been accredited as an Authorized Provider by the International Association for Continuing Education and Training (IACET). In obtaining this accreditation, EUCI has demonstrated that it complies with the ANSI/IACET Standard which is recognized internationally as a standard of good practice. As a result of their Authorized Provider status, EUCI is authorized to offer IACET CEUs for its programs that qualify under the ANSI/IACET Standard. EUCI is authorized by IACET to offer 1.0 CEUs for the conference, 0.8 CEUs for the pre-conference workshop and 0.4 CEUs for the post-conference workshop.

EVENT LOCATIONA room block has been reserved at the Millennium Knickerbocker Hotel Chicago, 163 E Walton Pl., Chicago, IL 60611, for the nights of August 21-23, 2016. Room rates are $179 plus applicable tax. Call 1-312-751-8100 for reservations and mention the EUCI - Phoenix 2016 Block to get the group rate. The cutoff date to receive the group rate is July 21, 2016 but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early.

Any organization wishing to send multiple attendees to these conferences may send 1 FREE for every 3 delegates registered. Please note that all registrations must be made at the same time to qualify.

REGISTER 3 SEND THE 4TH FREE

A copy of the conference proceedings will be distributed to attendees at the event. If you are unable to attend or would like to purchase additional copies, a downloadable link will available two weeks after the conference is complete. The cost per download is US $395. The link includes visual presentations only. Upon receipt of order and payment, the link will be sent to you via email.

NOTE: All presentation sales are final and are nonrefundable.

PROCEEDINGS


11

CREDIT CARD

List any dietary or accessibility needs here

Print Name Job Title

Name on Card Account Number

How did you hear about this event? (direct e-mail, colleague, speaker(s), etc.)

Telephone Email

Company

Billing Address Billing City Billing State

What name do you prefer on your name badge? Address

Billing Zip Code/Postal Code Exp. Date Security Code (last 3 digits on the back of Visa and MC or 4 digits on front of AmEx)

City State/Province Zip/Postal Code Country

All cancellations received on or before July 22, 2016, will be subject to a US $195 processing fee. Written cancellations received after this date will create a credit of the tuition (less processing fee) good toward any other EUCI event or publication. This credit will be good for six months. In case of event cancellation, EUCI’s liability is limited to refund of the event registration fee only. For more information regarding administrative policies, such as complaints and refunds, please contact our offices at 303-770-8800.EUCI reserves the right to alter this program without prior notice.

LOCATION INFO

OR Enclosed is a check for $ ___________________ to cover ______________ registrations.

WIND PROJECT DEVELOPMENT & TRANSACTIONS AND BOTH WORKSHOPS: AAUGUST 22-24, 2016: US $2595, EARLY BIRD ON OR BEFORE APRIL 8, 2016: US $2395

A room block has been reserved at the Millennium Knickerbocker Hotel Chicago, 163 E Walton Pl., Chicago, IL 60611, for the nights of August 21-23, 2016. Room rates are $179 plus applicable tax. Call 1-312-751-8100 for reservations and mention the EUCI - Phoenix 2016 Block to get the group rate. The cutoff date to receive the group rate is July 21, 2016 but as there are a limited number of rooms available at this rate, the room block may close sooner. Please make your reservations early.

WIND PROJECT DEVELOPMENT & TRANSACTIONS CONFERENCE ONLY, AUGUST 23-24, 2016: US $1395, EARLY BIRD ON OR BEFORE AUGUST 5, 2016: US $1195WORKSHOP ONLY (CHOOSE ONE),

PRE-CONFERENCE WORKSHOP, AUGUST 22, 2016 $995, BEFORE AUGUST 5, 2016 $895 POST-CONFERENCE WORKSHOP: AUGUST 24, 2016 $595, BEFORE AUGUST 5, 2016 $495I'M SORRY I CANNOT ATTEND, BUT PLEASE SEND ME THE CONFERENCE PROCEEDINGS FOR US $395. (PLEASE ADD $50 FOR INTERNATIONAL SHIPPING.)

DISCOUNTED PRICE FOR ATTENDING WIND PROJECT DEVELOPMENT & TRANSACTIONS AND ONE WORKSHOP (CHOOSE ONE) AUGUST 22-24, 2016:

PRE-CONFERENCE WORKSHOP, AUGUST 22, 2016 $2195, BEFORE AUGUST 5, 2016 $1995 POST-CONFERENCE WORKSHOP: AUGUST 24, 2016 $1795, BEFORE AUGUST 5, 2016 $1595

Please make checks payable to: “PMA"

contact our offices at (201) 871-0474.


wind project development & transactions · • review industry perspectives on the project ......

Documents