The ROI of Community Power Speaker: Dr. Ingo Koenig, Managing Partner, Koenig & Consultants Part of the 2010 Community Power Finance Forum at MaRS: http://www.marsdd.com/communitypower

1. The Value Factory ™ Top ROI for community power Presented by Dr. Ingo Koenig Toronto, 10th of May 2010

3. Technology assessment and Investments

4. Stakeholder-Communicationwww.koenigconsultants.ca

5. AGENDA What is community power (in Europe)? Why does community power generate superior returns? Risks? Lessons for Ontario

7. Set-up technology

8. Procure relevant permits

9. Financing

10. Refund scheme/ buyers

11. Construction

12. Run

13. Maintain

14. Sell energy

15. Public support Community power makes a difference! 07/05/2010

16. Wind power is leading new power generation capacity in Europe

18. Management is done by local investors

19. Investment and participation of people living in the vicinity of the farm, but also from outside the community with max. participation (e.g. $50,000)

21. AGENDA What is community power (in Europe)? Why does community power generate superior returns? Risks? Lessons for Ontario

22. Community power in Europe is more profitable because... High personal involvement keeps “soft costs” low (5-10% of investment compared to 15-40% investment) High personal involvement improves information flow, and peer pressure lead to short repair reaction times and therefore higher availability and revenues Lower land leases as everybody is a community member (3% vs. 6%) Improved understanding in community leads to faster permitting process; from push to pull (They do not have to accept the park, they now want it!) Equity is relatively inexpensive, you do not deal with professional investors and very expensive due diligence processes

23. Community power has other benefits than an improved ROI Local multiplier effect benefits everyone Every local dollar invested results in a minimum of 3 times the benefit to the local community <--> If an external developer owns and controls the project these benefits are lost Re-Powering of machines becomes much easier in the future Municipal, provincial taxes stay locally Jobs ~ 110,000 new jobs have been created in Europe Potential construction jobs and training for local community Two local positions per project created to administer and maintain the project and coordinate owners and finances Service personnel is regionally based (accountant, lawyers, maintenance, etc.)

24. Community power in Nordfriesland After tourism and agriculture the third largest industry Community wind farms account for more than $ 170 mill. revenues 6.000 individual investors of 166.270 inhabitants (4%) 750+ MW installed capacity, still growing Local taxes paid: $ 13.5 mill. Leases to land owners: $ 8 mill.

25. AGENDA What is community power (in Europe)? Why does community power generate superior returns? Risks? Lessons for Ontario

27. No planning consent/permits

28. Grid access delayed or too costly if additional infrastructure is required

29. Unprofitable project, because

30. Analysis (e.g. wind forecast) was too optimistic

31. Operations and maintenance becomes too expensiveSpecific risks: Limits to financing e.g. for off-shore projects Depending on number of investors, decision making can be difficult and exit can be even more difficult Risks

32. …that can be mitigated Create a network of support and knowledge Learn from comparable projects Employ experts as required Ensure access to sufficient capital Make allowances for bad wind years Choose your partners carefully Make long term maintenance contracts with availability guarantees Get as much community involvement as possible (partners and owners)

33. AGENDA What is community power (in Europe)? Why does community power generate superior returns? Risks? Lessons for Ontario

34. Lessons for Ontario... Make wind power a grass-roots movement by including as many Ontarians as possible in the set-up of farms, funds, and their future. The GEA and its Feed-in-tariffs are very strong incentives to start the movement. Educate finance community, it is a profitable low-risk investment. Do it yourself , do not let big developers “shave” the profitability by including too many “soft costs”.

35. Actions When the wind of change blows... ...there are always some who start building walls... …others start building wind farms!

36. Thank you for your attention! Leader in Community-Power 15+yrs experience www.koenigconsultants.ca