Scandia Wind Southwest LLC Development of large scale windpower Presentation for landowners Bovina May 8th 2009

Presentation overview 1.Who are we 2.What we have done 3.Why the Panhandle 4.The challenges every developer face in the Panhandle 5.The project 6.The business model 7.The way forward 1.Organize negotiating team 2.Tentative time frame for negotiations 3.Cost coverage 8.Q&A www.havgul.no

The partners 82 years aggregate wind energy experience 44 years aggregate wind energy experience A member of the Havgul/ Alpha Wind/PWC alliance Strong local committment

Consultant Consortium Fredrikson & Byron Legal Hoffman & Brobst Finance proformas RNR Engineering Grid consultant Multiple financing sources Development financing Construction financing Permanent financing Alpha Wind Energy Technical support Havgul clean energy Project development

HAVGUL Clean Energy AS Wind power project development company, based in Oslo, Norway. The business concept is to develop wind power projects from greenfield or early phase development, to a stage where all required permits are in place, technical feasability studies are performed and the project can be realized on the international market. Financed by a large Swedish/US green investment fund Extend activities to include US, Poland and Sweden – and possibly other fast growing markets Ketil Reed Aasgaard Partner/Managing director Harald Dirdal Partner/Project director Kalle Hesstvedt Partner/Communication and PA Emil Thorkildsen Partner/Legal director

Track record Andmyran wind park, 160 MW The Havsul project, 1500 MW Kvitfjell, 200 MW Siragrunnen, 200 MW Havøygavlen, 40 MW

Andmyran Wind Park

The Havsul projects – Havsul I

Alpha Wind Energy Extensive experience from various parts of Wind Power Industry from –Project development –Wind measurements –WTG manufacturers technical support, group sales & marketing –Technical advisor to Danish Wind Turbine Owners Association. –Combined 82 years of Wind Power Experience –7 employees currently, but expanding –Extensive use of partnerships and consultants. 9

AWE Wind Farm development Land lease agreements Site feasibility study Wind metering & long term correlation of data Wind turbine micro siting and optimization –Includes complex terrain requiring CFD analysis EIS including noise, visual, shadow study etc. Site production estimations Full project analysis, design and installation Full bankable report in cooperation with a bank approved third party Turbine selection and EPC contracting Operational Management 10

AWE Wind Farm development 11

AWE, Current Wind metering locations 12

AWE, Current Wind metering locations 13

Why the Panhandle 1.Best wind conditions in Texas 2.Large areas of suitable land 3.General positive attitude among the land owners and the population in general 4.Perfectly located in the cross roads of the ERCOT, SPP and WECC grid areas 5.A region in need for new industries www.havgul.no

Why the Panhandle www.havgul.no

Transmission Expansion - Plans laid for specific transmission lines - Dovetails with Scandia’s Phase II & Phase III strategies

The challenges every developer faces The grid is a huge constraint in the ERCOT and SPP grid systems. Large consumption in the south Weak grid into the Panhandle The Panhandle loop will only cover the projects already under planning The strategy is as follows: Make the projects so large that they will attract new lines into the region State of the art project documentation for financial closing –Detailled wind assessment program –Very selective turbine choice –Bankable land lease agreements –Commercial business model where all owners have the same exit strategy www.havgul.no

The project www.havgul.no

Visualization of one site layout www.havgul.no19

The business model Ownership in the project company –Land owners put in an exclusive right for the company to develop their land –No payments to the land owner during the development phase –Payment at joint exit point –Estimate at least 10 times the payment for this model compared to a standard option fee per acre payment assuming a 5 years development phase Royalty payments for each turbine placed on your land normal for the region beginning when the project is being built Take over by large utility(ies) Development phaseOperational phase 10% ownership in the development Individual land lease agreement payments

The way forward We suggest the land owners form a group of 3-5 people given the power of attorney to negotiate on the land owners behalf The group select a lawyer representing them in the negotiations We are willing to cover the lawyer costs up to an amount agreed upon between the parties We hope the total process should not last longer than 3 months When the agreement are finished negotiated, the negotiating group will present the agreement to the remaining land owners for signature www.havgul.no

Q&A www.havgul.no