Vestas BeyondBRIC


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  • Wind energy is one of the only energy generation technologies that is available, cost‐effective and rapidly deployable  and  can help reduce emissions in the short term.  Other energy options are theoretically available – but either they take more than a decade to build, or they are not as commercially ready.   A wind farm can be built in less than two years, and provides immediate emission reductions and is cheaper than many other energy options.   Wind turbines have increased their power generation by a factor of more than 100 since the beginning of the 1980s.   Energy costs for wind have fallen by 80 percent in the past 20 years, making it competitive with coal and natural gas, on a level playing field.  With the right framework and incentives, it has been predicted that wind power could provide up to 10 percent of the world’s electricity by 2020, though if we have our way it will be far far more than this prediction.    Wind power is competitive  –it improved Vestas turbine technology is bringing down the cost of wind energy, making it a highly competitive energy source.   Wind power is predictable  ‐ wind energy is a sound and reliable business investment, creating a strong case for adding more wind to the energy mix.   Wind power is independent  ‐ wind knows no limits or national boundaries. And harnessing this natural resource can boost local jobs and local energy production.    Wind power is fast ‐ wind is abundant and readily accessible – and a wind power plant can generate a return on investment in just one year.   Wind power is clean  ‐ wind energy produces no CO2 and it doesn’t consume our precious fresh water resources in energy generation.  
  • Vestas BeyondBRIC

    1. 2. Africa Needs Power Vestas Market Entry Study South East Africa By Hans R. Vestergaard, Senior Vice President Sales, Vestas Central Europe Copenhagen, Beyond BRIC Conference -- 8 th December 2010
    2. 3. Topics <ul><li>Africa needs power </li></ul><ul><li>Why Africa? Why now? </li></ul><ul><li>Situation in brief </li></ul><ul><li>Potential in Africa </li></ul><ul><li>Emerging markets in Africa </li></ul><ul><li>Regional hub Strategy </li></ul><ul><li>Local commitment </li></ul><ul><li>Partner Network </li></ul><ul><li>Competition </li></ul><ul><li>Wind is… </li></ul><ul><li>Coega Turbine – Port Elizabeth </li></ul>
    3. 4. “ AFRICA NEEDS POWER” … and we are going to bring just that!
    4. 5. <ul><li>Until recently, the wind market in South-East Africa has been non-existent. This will soon change dramatically, as several governments in the region have publicly announced their renewable energy strategies and wind projects are gradually emerging. </li></ul><ul><li>This presentation summarizes the wind energy potential of South-East Africa and the need to support the development of these emerging markets. It has formed part of the decision-making basis for Vestas’ strategy to further develop its market presence in this part of the world. </li></ul>Ngong Hills Kenya, 5.1 MW, In operation since Aug 2009 Why Africa? Why now?
    5. 6. Vestas’ experience Zafarana wind farm, Egypt
    6. 7. Vestas’ experience Klipheuwel wind Farm, South Africa
    7. 8. <ul><li>Strong economic growth in the region </li></ul><ul><li>Prerequisite for social and economical growth is access to power </li></ul><ul><li>Eyes are on Africa (World Cup 2010, COP 17) </li></ul>The situation in brief Huge need for electricity: ≤ 25% of population has daily acces to power Local Political will to move forward International financial support is growing
    8. 9. <ul><li>Africa can – from a wind perspective – be looked at in two regions: </li></ul>Wind Resource map North Africa Western Sahara Mauritiania Morocco Algeria Tunesia Egypt Chad South-East Africa Namibia South Africa Botswana Mozambique Tanzania Kenya Ethiopia Africa has tremendous untapped wind potential
    9. 10. Emerging markets in Africa <ul><li>Pink - Vestas Mediterranen Green - Vestas Central Europe: </li></ul><ul><li>South Africa </li></ul><ul><li>Namibia </li></ul><ul><li>Uganda </li></ul><ul><li>Botswana </li></ul><ul><li>Tanzania </li></ul><ul><li>Madagascar </li></ul><ul><li>Zambia </li></ul><ul><li>Kenya </li></ul><ul><li>Rwanda </li></ul><ul><li>Burundi </li></ul><ul><li>Djibouti </li></ul><ul><li>Ethiopia </li></ul><ul><li>Malawi </li></ul>
    10. 11. Regional Hub Strategy for South East Africa <ul><li>Benefitting from distinct cultural heritage and ties </li></ul>Region 1: Ethiopia Kenya Tanzania Uganda Hub: Nairobi Region 2: Botswana Zambia Namibia Malawi South Africa Hub: Johannesburg <ul><li>Anglo-Saxon </li></ul><ul><li>Jurisdiction </li></ul><ul><li>Culture </li></ul><ul><li>Economic ties </li></ul><ul><li>Gov‘t interest </li></ul><ul><li>Dutch-German </li></ul><ul><li>Jurisdiction </li></ul><ul><li>Culture </li></ul><ul><li>Economic ties </li></ul><ul><li>Gov‘t interest </li></ul>Johannesburg Nairobi
    11. 12. Markets need time… and local commitment Screening 1 Project Development 2 Financial Strategy 3 Due Diligence 4 Contract Signed 5 <ul><li>Availability of: </li></ul><ul><li>Wind </li></ul><ul><li>Land </li></ul><ul><li>Grid </li></ul><ul><li>Discussing with: </li></ul><ul><li>Private Investors </li></ul><ul><li>Development Banks </li></ul><ul><li>Commercial Banks </li></ul><ul><li>Utilities </li></ul>Agreeing with the right partners Political Willingness Financial Feasibility Bankability <ul><li>Communicating with: </li></ul><ul><li>Nat. Governments </li></ul><ul><li>Reg. Governments </li></ul><ul><li>Communities </li></ul><ul><li>Other stakeholders </li></ul>Land Lease Subcontractors <ul><li>Involving: </li></ul><ul><li>Legal advisors </li></ul><ul><li>Technical advisors </li></ul><ul><li>Financial advisors </li></ul>Gradually increasing local presence… BUSINESS SENSE LOCAL SUPPORT LOCAL EXPERTISE LOCAL PROJECT SUPPORT LOCAL PARTNERS
    12. 13. Partner network in the region is crucial for success * politicians, regulators, grid operators and power off takers
    13. 14. Financial Challenges <ul><ul><li>Bankability </li></ul></ul><ul><ul><ul><li>Banks are not interested in project upside / dividends </li></ul></ul></ul><ul><ul><ul><li>Banks are focussed on down-side risks (stress tests) </li></ul></ul></ul><ul><ul><ul><li>For debt sizing banks use conservative assumptions; prefer to underestimated income stream and overestimate O&M expenses </li></ul></ul></ul><ul><ul><ul><li>Banks are willing to provide more debt in exchange for more dependable income. </li></ul></ul></ul><ul><ul><ul><li>Availability guarantee and warranties are essential for bankability – backed by financial penalties </li></ul></ul></ul>What is Business Case Certainty? Predictable costs and revenues over the project life time
    14. 15. <ul><li>Vestas’ approach </li></ul><ul><li>be ambitious </li></ul><ul><li>focus on key areas </li></ul><ul><li>focus on activities close to our core business </li></ul><ul><li>We walk the talk </li></ul>Competition Other renewable energy sources i.e. hydro, biomass, solar Other wind turbine manufactures Conventional Energy sources
    15. 16. Vestas’ High Five: Wind is…
    16. 17. Coega turbine had very short lead time V90 2MW. The biggest turbine in Africa Installed in Port Elizabeth, South Africa in June 2010 Supply about 2500 South African households with clean energy every year* * based on average 2005 data (Winkler et al. 2005).
    17. 18. Thank you for your attention Copyright Notice The documents are created by Vestas Wind Systems A/S and contain copyrighted material, trademarks, and other proprietary information. All rights reserved. No part of the documents may be reproduced or copied in any form or by any means—such as graphic, electronic, or mechanical, including photocopying, taping, or information storage and retrieval systems without the prior written permission of Vestas Wind Systems A/S. The use of these documents by you, or anyone else authorized by you, is prohibited unless specifically permitted by Vestas Wind Systems A/S. You may not alter or remove any trademark, copyright or other notice from the documents. The documents are provided “as is” and Vestas Wind Systems A/S shall not have any responsibility or liability whatsoever for the results of use of the documents by you.
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