designing for lifecycle value

1. PROPRIETARY & CONFIDENTIAL
5/11/2016
DESIGNING FOR
LIFECYCLE VALUE

2. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
OVERVIEW
• Recurrent energy intro
• Operating life challenges
• RFP standardization case study
• Where can we add project value
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3. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
BUSINESS OVERVIEW
RECURRENT ENERGY
• Leading solar project developer helping our world
sustainably meet its energy needs
• Over $7B in project finance secured to date from
leading lenders and investors active in the
energy sector
• Proven access to capital through a network of
financial partners that enables us to deliver utility
solar at any scale
• 4 GWp project pipeline, more than 1.9 GWp of
contracts won, nearly 700 MWp developed and
sold
• Seasoned leadership team with experience in
conventional and renewable power businesses
• Strong technology and supply chain expertise
enable delivery of solar projects at market‐
leading cost
Recurrent Energy Has The Resources, Experience, Technical Expertise, and Access to Capital to Deliver Utility Solar at Any Scale
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4. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
RECURRENT DESIGN PROCESS
• Initial design for power marketing – In house
• Final design for construction ‐ EPC
• Design Selection
– Cost
• Upfront cost (Known)
• Lifetime costs (Estimate w/ long validation cycle)
– Financing
• “Bankability”
• Impacts our ability to implement new technologies/ approaches
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5. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
DESIGN CONSIDERATIONS – CHANGES OVER TIME
• While the general electrical design has remained fairly constant, design
elements have changed over the past five years:
– Project size
– DC system voltage
– Module form factor
– Inverter size & voltages
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6. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
LIFECYCLE CHALLENGE 1 ‐ COMPATIBLE SPARES
• Challenge
– “Old” (7Yr) asset with higher than anticipated need for spare modules
– No off the shelf compatible modules available
• Form Factor
• Operational Specifications
• Solution
– Rip and replace entire string to restore spare stock
• Utilization of existing string inverter
• Reconfiguration of racking
• Timeline & Payback
– ~2 mo. to Implement, 6Yr. Payback (PPA Obligation)
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7. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
LIFECYCLE CHALLENGE 2 ‐ VENDOR EXITS
• Challenge
– Acquisition project with ~30MW of distributed electronics with known
failure mechanism produced by a company that is no longer in business
– Only site where this exact technology was ever deployed
• Solution
– Identified baseline & novel solution
• High level evaluation prior to acquisition – Is it fixable?
• Detailed Engineering post Acquisition
– Pilot tested novel solution
– Implementation of retrofit ongoing
• Timeline & Payback
– ~1 Yr. Implementation, 1.5 Yr. Payback
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8. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
LIFECYCLE CHALLENGES SUMMARY
• Rapidly evolving industry resulting in changes in:
– Technology
– Equipment
– Companies
• Multiple iterations of solar will be present in the operating market for
decades if not longer
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9. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
ARE WE MOVING TOWARDS STANDARDIZATION?
• Recurrent 2016 portfolio
– 7 Projects (6 CA, 1 TX)
– 1.2GW
– 5 EPCs
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Portfolio Level ‐ Similarities Project Level ‐ Differences
• SAT
• Central Inverters
• ILR
• DC Voltage
• Major Equipment Suppliers
• Combiner Box Placement
• Inverter Placement and
Block Sizing
• Road Layout

10. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
IMPACT OF THE PROJECT LEVEL DIFFERENCES
• Spread across initial bid responses of approximately 20% in pricing on a
$/Wdc basis
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11. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
VALUE DRIVERS ‐ DESIGN
• Reduced DC side components
• Increase DC voltage (to a point)
• Design for Operations ‐ there has to be a feedback loop
• Hard to future proof designs due to cost pressures
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12. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
VALUE BEYOND DESIGN
• Project documentation that allows an asset to transition between Owners
& Operators throughout its lifetime
– Obligation Tracking (Contractual and Regulatory)
• 100MW facility ~ 10,000 lifetime obligations to track
– Operations & Maintenance records
• How do facility histories transition to new owners/ new operators?
– As‐Builts & Redlines
– Data Management
• ~1 billion lifetime data points
• Unknowns in a transaction result in a loss in value
– Increased cost of due diligence
– Increased returns required for perceived increase in risk
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13. PROPRIETARY & CONFIDENTIALWWW.RECURRENTENERGY.COM
QUESTIONS FOR DISCUSSION
• What is the correct balance between standardization and innovation for
long term generating assets?
• At what volume do we de risk standardization and are we already there?
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14. PROPRIETARY & CONFIDENTIAL
CONTACT
Martin Waters
Martin.Waters@recurrentenergy.com
www.recurrentenergy.com