Future Jordan Virtual Power Plant

EEEMF Jordan 2015

Energy Economy & Energy Management Forum For Mena & Fourth Renewable Energy National Dialogue –Amman May 2015

By Eng. S.Mohamad ALAYA LEBANON

Agenda

EEEMF Jordan 2015

1. Introduction2. Jordan electricity market3. Jordan Virtual Power Plant4. Jordan financials

- VPP capacity- Profit and loss analysis- Scenario analysis- Cash flow from VPP- Total investment- Investment schedule - Investment schedule Local partners- Profit to local community

Introduction

Teaming up with is a leading technology owner company in the field of development and deployment Virtual Power Plants (VPP´s) having proven record in the VPP application and implementation

Why Virtual Power Plants ?

- Costly infrastructure with long lead times for new projects

- Public resistance against new projects (transmission and

distribution lines, nuclear, coal, etc.)

- Increasing share of RES

- Higher security of supply

- Increasing consumption

- Environmental issues

- Value chain optimization

- Increasing revenues

EEEMF Jordan 2015

Optimizing energy value chain

EEEMF Jordan 2015

© cyberGRID 2012

Current situation in energy market

Energy shortage:• Demand 2500 MW• Supply 1560 MW

Current cost of providing energy:• $5.5 million a day• $2 Billion yearly

Demand:• Increasing demand average

10% annually• $2,3 mio of peak demand in

February 2012• Power rationing 6-12 hours

Exist-ing62%

Neede

d38%

Current proposed solution: Power boats 270 MW

Cost of 0,33$ per kWh

Jordan VPP solution

Exist-ing 62%

LDRC 12%

Needed

26%Capacity:• 300 MW through 3 years

Demand response:• Emergency situations (tertiary reserve)• Requested response ( maintenance works)

Investors:• SUPERGRID, Local partners• Investment $14.1 million through 3 years

Timeline:• Technical investigation proposal 2nd half of 2015• Demonstrational project 2015/2016

EEEMF Jordan 2015

VPP financials

EEEMF Jordan 2015

- VPP capacity- Profit and loss analysis- Scenario analysis- Cash flow from VPP- Total investment- Investment schedule - Investment schedule Local partners- Profit to local community

FY0 FY1 FY2 FY3 FY4 FY50

50

100

150

200

250

300

350

Total Available Capacity MW offered on the market

VPP capacity

Risk limitation:Client availability 60%

VPP capacity through yearsIn MW

In MW FY0 FY1 FY2 FY3 FY4 FY5Total Available Capacity 0 100 200 300 300 300

MW offered on the market 0 60 120 180 180 180

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FY0 FY1 FY2 FY3 FY4 FY50

5000

10000

15000

20000

25000

Total revenues EBITDA EBIT

Profit and Loss analysis

Total sales: $6.7 mio (FY1) to $20.1 mio (FY3)(Revenue per kWh 19 $cents)

Gross margin:Approaching 50%

Depreciation: 10 years linear

EBIT$1,17 mio (FY1) to $9.16 mio (FY3)

Total sales and EBITDA In 000´ $

EEEMF Jordan 2015

In 000´ $ FY0 FY1 FY2 FY3 FY4 FY5Total revenues 0 6732 13465 20197 20197 20197Cost of Goods Sold Total 0 5077 8483 11575 10062 10062EBITDA 0 1656 4981 8622 10135 10135Depreciation 0 482 730 977 977 977EBIT 0 1173 4252 7645 9158 9158

Scenario analysis

Sales revenue in scenario analysisIn 000´ $

Scenario parameters (market risk):

Load size (0,2-0,3)

Client availability ( 50-70%)

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FY0 FY1 FY2 FY3 FY4 FY50

5000

10000

15000

20000

25000

Average Low High

In 000´ $ FY0 FY1 FY2 FY3 FY4 FY5

AverageSales Total 0 6732 13465 20197 20197 20197EBITDA 0 1655 4980 8622 10134 10134

LowSales Total 0 5610 11220 16831 16831 16831EBITDA 0 1248 4009 7033 8283 8283

HighSales Total 0 7854 15709 23563 23563 23563EBITDA 0 2062 5953 10210 11986 11986

CF and profit distribution

EEEMF Jordan 2015

Operating CF and profit distributionIn 000´ $

Income tax assumed:25%

Payout ratio:0.8

Assuming investments from partners

FY0 FY1 FY2 FY3 FY4 FY50

5000

10000

15000

20000

25000

30000

Operating Cashflow Cumulative Operating CashflowOwner draw - dividends

In 000´ $ FY0 FY1 FY2 FY3 FY4 FY5Operating Cashflow 0 1373 3949 6762 7906 7906Cumulative Operating Cashflow 0 1372 5321 12083 19989 27895Owner draw - dividends 0 1098 4257 9667 15991 22316

Total Investment with expansion: $14.1 million

Total investment

EEEMF Jordan 2015

Total investment and DividendsIn 000´ $

Project profitability:

NPV: $ 39 million

IRR: 78%

Payback: 2.8 years FY0 FY1 FY2 FY3 FY4 FY5

-10000

-5000

0

5000

10000

15000

20000

25000

30000

35000

Owner draw - dividends Total investment Cumulative CF

P.B.P.

In 000´ $ FY0 FY1 FY2 FY3 FY4 FY5Owner draw - dividends 0 1098 4257 10467 20447 34596Total Investment 2361 3766 6444 9702 7341 8166Cumulative CF -2361 -5029 -7216 -6451 6655 33084

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Investment schedule

FY0 FY1 FY2 FY3 FY4 FY5

-5000

0

5000

10000

15000

20000

Total investment Dividends Cumulative CF

In 000´ $ FY0 FY1 FY2 FY3 FY4 FY5Total investment -1180 -1666 -1984 -1984 0 0Dividends 0 523 2029 4608 7623 10639Cumulative CF -1180 -2323 -2278 347 7970 18609

Total investment and Dividends (In 000´ $)

P.B.P.Project profitability:

NPV: $ 18.6 million

IRR: 78%

Payback: 2.8 years

Local partners investment schedule

In 000´ $ FY0 FY1 FY2 FY3 FY4 FY5Total investment -1180 -2100 -2100 -2100 0 0Dividends 0 574 2227 5058 8368 11677Net CF -1180 -1525 128 2959 8368 11677Cumulative CF -1180 -2706 -2578 381 8749 20426

FY0 FY1 FY2 FY3 FY4 FY5

-5000

0

5000

10000

15000

20000

25000

Total investment Dividends Cumulative CF

Total investment and Dividends Local partners (In 000´ $)

P.B.P.

Project profitability:

NPV: $ 20.4 million

IRR: 78%

Payback: 2.8 years

EEEMF Jordan 2015

Profit distribution to community

Share of revenues to the industries:30% (COGS)

Excess capacity payment:50%

Payments to industries in LebanonIn 000´ $

EEEMF Jordan 2015

Profit distribution to local community (In 000' $) FY0 FY1 FY2 FY3 FY4 FY5Average 0 3030 6059 9089 9089 9089High 0 3534 7069 10603 10603 10603Low 0 2525 5049 7574 7574 7574

FY0 FY1 FY2 FY3 FY4 FY50

2000

4000

6000

8000

10000

12000

Average High Low

Lebanon Demand Response CentercyberGRID GmbH