1er FUNSEAM Symposium - FCC Project Alejandro Seco - FCC ENERGY IN LATIN AMERICA A DEVELOPMENT PROGRAM

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FCC ENERGY IN LATIN AMERICA A DEVELOPMENT PROGRAM.

FCC ENERGY IN LATIN AMERICA A DEVELOPMENT PROGRAM.

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  • Los colores del organigrama siguen siendo muy fuertes
  • Llamar a Anexos
  • Añadir llamada EstimadoOrdenar
  • Poner fuentes en pie de página. Cambiar formato. Utilizar títulos de los gráficos descriptivos de la evolución de cada magnitud. Los datos generales de cada `país ponerlos en la slide 27. Quitaría la parte de superficie. Población en millones
  • Poner fuentes en pie de página. Cambiar formato. Utilizar títulos de los gráficos descriptivos de la evolución de cada magnitud. Los datos generales de cada `país ponerlos en la slide 27. Quitaría la parte de superficie. Población en millones

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  • 1. FCC ENERGY IN LATIN AMERICAA DEVELOPMENT PROGRAM - Private and Confidential -
  • 2. - Private and Confidential - 2. FCC Energy Division FCC Energy Division (FCC ED) is the Group’s business unit responsible for Renewable Energy development and operation FCC Energy Division FCC Energy Division Corporate structure Founded in the summer of 2008, FCC Energy Division is the Business unit responsible for FCC Group promotion, development and operation of Renewable Energy assets FCC Power Generation FCC ED operates in Spain two solar thermal plants (CSP), two photovoltaic energy plants (PV) and fourteen wind farms, reaching a total FCC International FM Green Power power capacity of 541.8 MW Projects Investments Recently FCC ED has won public tenders: one FCC Energia wind farm in Galicia (48 MW) and three wind farms in Catalonia (99 MW) Outside Spain, the company aims to attract Wind Solar PV CSP CSP Wind Wind stable partners to support to continue its Olivento Helios Guzman Enerstar Galicia Cataluña international assets expansion in the Projects’ SPVs Renewable Energy sector Since mid 2008 FCC ED has developed an asset portfolio generating +€130 M of yearly recurrent EBITDA for the next 20 years plusSource: FCC 2
  • 3. - Private and Confidential - 2. FCC Energy Division FCC ED currently operates 541.8 MW of Renewable Energy in Spain producing annually 1.1 TWh of electricity Wind Assets PV Assets CSP Assets 14 wind farms in Galicia, Two plants in Two plants in Description Castilla y Leon, Castilla la Comunidad Valencia Andalusia Mancha and Andalusia and Andalusia Deal Asset acquisition from Proprietary Proprietary origination Babcock & Brown development development MW 421.8 20 100 GWh/year 900 31 208 Equivalent 2,134 1,544 2,086 hoursSource: FCC 3
  • 4. - Private and Confidential - 2. FCC Energy Division Current asset portfolio is dominated by wind in terms of capacity and production, while EBITDA contribution is similar for both sun and wind Characterization of current asset portfolio for a full year EBITDA ( as if 2016) 541.8 MW 1,140 TWh €130 M Solar PV Solar CSP Wind Breakdown by annual Breakdown by annual Breakdown by capacity energy produced EBITDA (Estimated) (Estimated) Balanced Portfolio with respect to EBITDA contribution for sun and wind technologiesSource: FCC 4
  • 5. - Private and Confidential - 3. Description of Operating Assets FCC ED operating assets compromises a portfolio of 17 projects in Spain El Redondal La Plata La Muela Norte Valdeconejos Location: León Location: Toledo Location: Zaragoza Location: Teruel Nº turbines: 36 Nº turbines: 25 Nº turbines: 35 Nº turbines: 38 Installed power: 30.6 MW Installed power: 21.3 MW Installed power: 29.8 MW Installed power: 32.3 MWSerra de LobaLocation: LugoNº turbines: 18Installed power: 36 MW CSP PV SolarMonte SeixoLocation: Pontevedra WindNº turbines: 53Installed power: 29.2 MWSerra do Cando Ernestar VillenaLocation: Pontevedra Location: AlicanteNº turbines: 44 Installed power: 50 MWInstalled power: 29.2 MWSierra Trigo La Cerradilla ILocation: Jaén Location: AlmeríaNº turbines: 23 Nº turbines: 25Installed power: 15.2 MW Installed power: 50MWEl Sardón La Cerradilla IILocation: Huelva Location: AlmeríaNº turbines: 30 Nº turbines: 11Installed power: 25.5 MW Installed power: 22MWSolúz Guzmán El Conjuro El Carrascal I El Carrascal II Helios 1 y 2Location: Córdoba Location: Granada Location: Almería Location: AlmeríaInstalled power: 50 MW Location: Córdoba Nº turbines: 20 Nº turbines: 14 Nº turbines: 25 Installed power: 20 MW Installed power: 17 MW Installed power: 28 MW Installed power: 50 MWSource: FCC 5
  • 6. - Private and Confidential - 3. Description of Operating Assets The asset-specific O&M strategies will be supported by an integrated IT mapFCC Corporate Business Applications Monitoring and Market Agents Systmes 1 central adquisition Web Acces / Global Asset Managment/ KPI’s / Reporting Eco/Fin of plant data Sistema Gestión Planta / Transaccional 2 Information CMS (Condition-Based Monitoring System) Management Maitnenance Enviroment Operations Market Operations Systme Fuels 3 Operations Management Purchases 4 Enviroment Phisical Asset Structure Management Maintenance and RT Platform / Data Adquisition 5 Logistics Managment DCS / SCADA Integration with FCC 6 Corporate systems Olivento Soluz-Guzmán 7 Reporting and KPIs Source: FCC 6
  • 7. - Private and Confidential - 4. Strategic Plan 2012 – 2016 overview Our First Investment Programme (2009-2012), focused in Spain, has been successfully completed and will support our next Strategic Plan Drivers Rationale Impact for FCC ED  The electricity regulation approved by the government (14/09/2012), eliminates the regulation uncertainty created during the 2011 and 2012 regarding taxation of renewable sources Stable cash flows Regulatory risk  It levies electricity production with a tax of 6% on revenues. with regulatory offset in Spain Additionally it cuts to some extent incentives for natural gas-fired risks stripped-off production for CSP units. We expect that final legislation will be softer than what it has been considered in projections Overcapacity in  The Spanish electricity system has a total installed generating Limited capacity of 100,168 MW versus a peak of demand of 44,107 MW Spanish Power investment Generation  Spain tops rankings of capacity installed for different renewable opportunities in source: Solar PV 4,300 M; Solar CSP 1,279 MW (forecasted to sector increase to 2,425 MW in the medium term); and wind 21,558 MW Spain  FCC ED has developed its portfolio in one of the most competitive Experience markets of renewable energies Financial and acquired in one  FCC Industrial has done full EPC for the two CSP plants and the PV technical of the most plant capabilities torelevant markets  World class financing and technical capabilities and strong leverage on relationships with technology/equipment providersSource: FCC, CNE, Protermosolar 7
  • 8. Internationalization to diversify risks (resource, regulatory, market Servicios Ciudadanos conditions)…. Select Markets  USA – Canada. Project adquisition in tramit(PPA)  Latam: Peru, Chile and Colombia. Project adquisition (PPA )  Europe: Poland and United Kingdom Project adquisition (Feed in Tariff)  GCC countries. Public international licitations(PPA)Select Technologies Hydraulic <80MW Solar ( PV as well as CSP) WindCapital structure objective Development cost limited to 500.000 € for project. No additional investment until partners and debt Maximize Project Finance without resource or limited resource Operative structure objective Maximize sinergies Industrial group FCC but defending our result account This will support the competitiveness of Industrial FCC. Management of risks of equity  Coverage risks "equity" with multilateral and bilateral  Financing obtained before the beginning of construction 8
  • 9. - Private and Confidential - FUTURE PROGRAM – STRATEGIC NEEDS Challenge Solution Strategic Actions  Geographical diversification to markets Greenfield development Regulatory with safety juridical or where the  Countries with low rate ofA Uncertainty renewable ones are competitive penetration of renewable without subsidy (Internationalization) Diversification Natural Resource  Technological diversification Nowadays 80 % EBITDA depends on the wind  To prioritize use of funds of the Group.  Solar Potential- Countries highB Financing Partners Inverstor to 50 % for the irradiation and Hydro Division. Geographical diversification. Balance the metheorology of the seasons  EPC capacity not to subsidize cross  Countries in the Southern Industrial businesses. hemisphereC Development  Association with technologists. Use of Regulation diversification. Limit the the balance sheet of a third party. dependence of the governmental subsidies. Resource  Geographical and technological  Countries with electric costsD volatility diversification(Internationalization) dominated by oil  Contracts PPA/ market. No FIT.  Solid and trustworthy organization in Financial diversification.E Organization the international area. FCC Power Generation
  • 10. - Private and Confidential - 4. Strategic Plan 2012 – 2016 overview Our Strategic Plan 2012-2016 targets to secure the best possible risk adjusted return for our shareholders Objective Rationale Target  Current Portfolio provides a sensible floor, although it is focused on a single market (Spain) where Renewable Energy retribution is Project Equity Returns Profitability fully regulated, leaving little room for an upside in the short term ≈15%  Internationalization can bring superior returns  Spain GDP prospect is depressed for the incoming years. Spanish Power Sector offers few growth possibilities due to its 2016 EBITDA in Spain < overcapacity and flat demand Growth 50%  Green electricity demand is a fact in other markets. A combination of high growth and stable markets can provide Total Capacity > 1GW good opportunities for our expansion  Macro trend, led by European countries, to reduce Renewable Energy regulated tariffs 2016 EBITDA in FiT  But still energy security is a priority for many countries withCompetitiveness limited or non fossil fuels. In several high growth countries dependable countries marginal electricity costs are dominated by oil and have < 50% exceptional renewable resource allowing renewable energies to be competitive without regulatory supportSource: FCC 10
  • 11. - Private and Confidential - 5. Strategic Plan details As of now we have been working applying a rigorous Investment Opportunity Procedure INVESTMENT OPPORTUNITY EXECUTIONCorporate & 2 3 BASIC FINAL EXECUTIONBusiness Devl. INVESTMENT 1 INVESTMENT INVESTMENT DRAFT BINDING BINDING PROPOSSAL PROPOSSAL AGREEMENTS OPPORTUNITY AGREEMENTS Open a Budget to carry out due Open a Budget to carry out the Resources diligence or further analysis of Investment and budget to (Controller) the Investment Opportunity finish the deal agreementsInvestment & REPORT / REPORT / REPORT / Strategy RECOMMENDATION RECOMMENDATION RECOMMENDATION Committe YES YES Executive YES Committe / DECISION DECISION DECISION DECISION SI Board of NO NO NO NO Directors END END END END Source: FCC 11
  • 12. - Private and Confidential - 5. Strategic Plan details Mexico: the electricity generation mix is characterised by a low penetration of renewable energies rather than hydropower Evolution of electricity production 52,826 MW installed capacity (2011) (TWh) 21% 242.0 255.0 223.0 230.0 234.0 233.0 35% 5% 34% 2% 3% 0% 2006 2007 2008 2009 2010 2011 Hydro Gas Wind Nuclear Coal Geothermal Termoeléctrica Average Prices (US $/MWh) 119,000 MW installed capacity (2026) 140 3% 2% 120 9% 100 US $ / Mwh 21% 80 60 Average weighted hourly price US$/MWh 40 20 65% 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Hydro Fossil Wind Nuclear Other renewableSources: CFE, BP 12
  • 13. - Private and Confidential - 5. Strategic Plan details Mexico: the regulatory framework offers an opportunity to sign PPAs with industrial clients through the self-supply regime Regulatory framework Scope The objective to develop a national strategy for the promotion of Renewable Energy and energy The Law for the efficiency. Main measures: Development of  Ps 3,000 million to support renewable energies and clean technologies Renewable Energy and  Fixed tariff for grid services the Financing of the Energy Transition (2008)  Net metering framework for auto-consumption  Bank of energy to store the rights due to previous production to compensate in the future The law establishes the requirements for the self-supply regime, whereby industrial clients can meet their electricity needs using PPAs, hence being excluded to turn to the Federal Electricity Commission (the government controlled utility that accounts for the vast majority of the generation capacity): The Public Electric  Less than 30 MW Services Law of 1992  Consumer must have ownership of the project (last reform 2012)  It could be compensated productions and consumption in different time scopes  Self-supply is not subjected to grid tariffs Growth in self-supply projects is driven by high time-of-day rates applied to power sector customers with demands above 100 kW, and in particular by peak-period rates Energy policy: POISE (“Programa de Obras e  It evaluates the incremental needs of power capacity for the period 2012-2026 in 43,992 MW Inversiones del Sector  2026 target: 35% penetration of renewable energies (6.6% non-hydro Renewable Energy) Eléctrico”) Resolution Discounts of between 50% and 70% for electricity transmission and grid connection for Renewable RES/140/2001 Energy plants with a capacity above 500kSource: FCC 13
  • 14. - Private and Confidential - 5. Strategic Plan details Mexico: accelerated depreciation of 100% of the investment within the first year of operation Regulatory framework Scope Ley del Impuesto sobre la Article 40.XII. Accelerated depreciation for investments in Renewable Energy: It allows to Renta depreciate 100% of the investments in machinery and equipment FONAGA Verde Fund Ps 200 millions in biofuels and renewable energies (Mexican Federal Maximum Ps 20 million per project Government)  The Clean Development Mechanism (CDM) is one of the flexibility mechanisms defined in the Kyoto Protocol (IPCC, 2007) that provides for emissions reduction projects which generate Clean Development Certified Emission Reduction (CERs) units which may be traded in emissions trading schemes Mechanism  Mexico can host these projects  Revenue from CERs is an additional revenue for Renewable Energy projects Tax regulation Tax exemption for imports of equipment (tax item: 9806.00.02)Source: FCC 14
  • 15. - Private and Confidential - 5. Strategic Plan details Chile: testimonial presence of wind and sun technologies with mining companies vulnerable to high peak-period rates Evolution of electricity production SIC electricity system: 12,365 MW (TWh) installed capacity (2011) 50 45 0% 2% 40 35 30 18% 25 20 47% 15 10% 10 5 0 2% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 21% SING SIC Average Prices 250 SING electricity system: 3,964 MW (US $/MWh) installed capacity (2011) 200 0% 3% US $ / MWh 150 6% 100 42% 50 00 49% mar-03 ago-95 dic-99 ago-08 sep-96 feb-02 sep-09 may-92 may-05 abr-91 abr-04 jul-94 nov-98 jul-07 nov-11 oct-97 oct-10 ene-01 jun-93 jun-06 Average Price (US $/MWh) - SING: Node Crucero 0% Average Price (US $/MWh) - SING: Node Antofagasta Average Price (US $/MWh) - SICSources: CNE, BP 15
  • 16. - Private and Confidential - 5. Strategic Plan details Chile: the legislation for Renewable Energy is the most transparent, decisive and stable amongst Latin American countries Regulatory framework Scope Amendment to Law  It states that 20% of generation should be from no-conventional renewable sources by 2020 20.257: 2011  Pending congress and senate approval  It establishes between 2010 and 2014 the obligation for electricity generation companies to source 5% of their electricity from Renewable Energy sources regardless of the grid system  Every MWh produced by an electricity company that has not been produced by Renewable Law on Non- sources is charged with a penalty fee Conventional  It translates into Renewable producers selling their ERNCs rights (Energía Renovable No Renewable Energy (Law Convencionales) through private agreements with electricity companies and receiving an 20,257) additional income stream to the spot prices  The compulsory percentage of Renewable electricity increases by annually 0.5% from 2015 onwards  It opens the spot market to Renewable Energy producers, and it establishes the right to connection to the grid systems for producers Law 19,940  Small producers, less than 9MW, have toll exemption for using the grid transmission system  Progressive toll grid charge exemptions are set up from 9MW to 20MW  It guarantees Renewable Energy producers the right to sell their energy to the electricity market at spot or nodal price  It allows Renewable Energy producers to sign long-term PPA contracts directly with distribution Law 20,018 companies  These generators also have the right to sell to distributors up to 5% of the total energy demand for regulated clients Clean Development  The sale of Certified Emission Reduction (CERs) is an additional revenue for Renewable projects in Mechanism ChileSource: FCC 16
  • 17. - Private and Confidential - 5. Strategic Plan details CONCLUSIONS  FCC has developed an energy branch in Spain that allows for a platform to support future developments.  Internationalization is necessary to consolidate the business capacity that has been developed  Latin America, specially Mexico and Chile present at this moment an important opportunity.  Other countries like Peru, Colombia, etc… will be analysed additionally.Source: FCC 17