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Photo: Repower, Jan Oelcker

RENEWABLES |

INDUSTRIAL SERVICES

ment of wind energy projects is essential. Lenders and in- vestors require expertise from GL to ensure they have a sound and reliable financial model with realistic assump- tions on income and costs. The objective of GL’s Renew- ables Due Diligence (DD) Services is to support clients in their assessment of the technical and commercial risks in a potential investment or loan.

A Comprehensive Risk Assessment

The due diligence process can be required for a project in any of its phases of development. In a pre-construc- tion project or an operational project, one must identify the principle technical project risks, evaluate their prob- ability of occurrence and the client’s level of exposure thereto, as well as their potential impact on the project. This ultimately results in a proposal identifying appro- priate risk allocation and mitigation opportunities.

During the operation phase, one must inspect the condi- tion of the turbines, monitor the performance of the project, update budgets, and ensure adequate spare parts. During the construction phase, the work consists of ensuring that

the components are delivered to the site in an appropriate condition, approving the draw-down schedule, and perform- ing acceptance tests at the commissioning stage.

Aspects included in due diligence reviews contain all of the following: assessment of the structural integrity of the turbine for the site, evaluation of the reputation of the tur- bine technology, assessment of the foundation and electri- cal design, assessment of the project and O&M costs, as- sessment of the construction schedule and assessment of the terms and conditions of all project contracts, evalua- tion of whether all permits were obtained. The focus lies on the identification and assessment of specific risks from the lenders’, and investors’ perspective and a description of possible ways to limit possible risk factors.

Over the past ten years, GL has undertaken due diligence contracts for over 12,000 MW of wind power projects on- and offshore worldwide. Additionall , the company has acted as an independent technical advisor for the majority of compa- ny takeovers and investments in wind turbine manufacturers and important component suppliers. Overall, GL has complet- ed over 70 due diligence studies for investments and loans to wind farms. Customers include B , BC Partners, Nordic Capital, UBS Warburg, Candover, City Bank, GE Energy Financial Ser- vices, Yes Bank, NIBC Bank, FPL Energ , Energias de Portugal, Electricité de France, ENMAX Corporation, EPCOR Power De-

velopment, Enbridge Wind Energy and Kruger Energy.

  • SG

For further information: GL Renewables Consulting & Engineering, Phone (Europe): +49 40 36149-702, Phone (Americas): +1 514 272-2175; E-Mail: Peter Dalhoff: peter.dalhoff@gl-group.com; Marion Hill: hillm@helimax.com

EUROPE. Peter Dalhoff, Head of Consulting & Engineering Europe at GL Renewables. onshore and offshore projects between 9,460 MW onshore and 3,000 MW off- shore. nonstop: From your point of view: What regions will be most important for you in future? Hill: The countries with the largest expect- ed growth over the next five years are the United States, China and India. While we are already present in these regions, our objective is to increase our market pen- etration while providing services adapted to the local context. Dalhoff: For the Engineering & Consulting Services in Europe, I would attach special importance to Germany, the UK, France, Spain and Eastern Europe. Concerning off- shore wind energy, the British and German markets are of high relevance with both countries having huge project pipelines. nonstop: Could you give an example of one very successful project you trans- acted last year? NORTH AMERICA. Marion Hill, Head of Due Diligence and Independent Expertise Section. We assessed the wind conditions, the energy yield, the capital expenditures Hill: We com- pleted the tech- nical due dili- gence relating to ENMAX Corp’s successful pur- chase of Creststreet’s operating 63-MW Kettles Hill Wind Farm in Canada. In the context of this mandate, we assessed the risk profile with respect to the operation of the wind farm, site suit- ability of the Vestas V80 model and the reputation of this turbine in the market, condition monitoring systems, technical terms of the service, warranty and main- tenance agreement, and the future and potential revenue for the wind farm and its projected expansion. Dalhoff: In 2008, we were contracted for a technical due diligence project that consisted of a package of four offshore wind farms with a capacity of more than 1,500 MW in the German North Sea and Baltic Sea. Thanks to our large pool of resources, we were able to process all four projects in parallel and meet the client’s very ambitious deadlines.

(CAPEX) and the operational expenditures (OPEX), as well as the decommissioning costs. The building permit was reviewed for potential issues concerning technical parameters and their influence on a vari- ety of issues, such as the environment. The turbine, foundation and electrical technol- ogy, as well as the installation and service concepts were assessed in terms of track record and risk profile. This project was a highlight due to its sheer volume. At the same time, it fitted in nicely with our other technical due diligence projects for offshore wind farms. nonstop: What will you focus on in the upcoming twelve months? Dalhoff: Project due diligence is becom- ing more and more relevant, both onshore and offshore. We are continuously im- proving our CAPEX and OPEX database. Strategic investors are not only looking for project pipelines but also for opportunities to take over operational projects. Addi- tionally, we are increasing our inspection resources in due diligence for operational projects as this provides a direct view into the technical condition of the wind farm and as such brings real added value for the investor to assess the asset.

nonstop 02/2009

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