12/5/2003Global Energy Concepts, LLC1 of 11 Characteristics of Financeable Wind Energy Projects Northwest Power and Conservation Council Workshop on Wind Energy and Electric Power Systems December 5, 2003 Kevin J. Smith, PE Global Energy Concepts, LLC 5729 Lakeview Dr, Suite 100 Kirkland, WA

12/5/2003Global Energy Concepts, LLC2 of 11 Overview Wind Resource and Energy Projections Land Acquisition Permits and Approvals Transmission/Interconnect Power Purchase Agreement/Purchaser Turbine Equipment/Supplier O & M Approach

12/5/2003Global Energy Concepts, LLC3 of 11 Wind Resource and Energy Projections Reducing Uncertainty Increases Financeability –Long-term, high quality on-site data to characterize seasonal variations and terrain effects –10-minute turbulence and shear data –Hub-height? –Good correlation to long term reference –Well documented anemometry –Detailed and well documented analysis

12/5/2003Global Energy Concepts, LLC4 of 11 Uncertainty Analysis Net Annual Energy Production Probability of Occurrence Lenders focus on energy production estimate associated with 90% or greater confidence level of being exceeded. Less uncertainty increases the energy production estimate associated with 90%+ confidence level. Higher energy production level increases debt capacity

12/5/2003Global Energy Concepts, LLC5 of 11 Land Acquisition Long term access to the land must be secured Lease agreements are most common Agreements must be transferable in event of property sale. Carefully research land ownership Title due diligence Consider wind easement on surrounding land?

12/5/2003Global Energy Concepts, LLC6 of 11 Permit and Approvals Ensure all required local, state, and federal permits are in place and project is in compliance Complex review and approval process can adversely impact project’s ability to obtain financing Local project acceptance concerns Zoning, building permit, set back requirements

12/5/2003Global Energy Concepts, LLC7 of 11 Transmission/Interconnect Completed utility interconnection study Completed grid congestion study Interconnect agreement that provides long term and reliable access to the market

12/5/2003Global Energy Concepts, LLC8 of 11 Power Purchase Agreement Products –Energy, capacity, attributes, ancillary services –“Take All” when available Price –Fixed with annual escalation (inflation) preferred Term –Longer term, more likely to obtain financing –20 years (expected project life) Delivery –Scheduling requirements must accommodate intermittent non- dispatchable generation. Lender Step-in Rights –Allow lender ability to assume project control to corrected operating deficiencies before termination.

12/5/2003Global Energy Concepts, LLC9 of 11 Power Purchaser Purchaser must be credit worthy – B rating or better. Not on ‘watch list’ for potential downgrade Parent company guaranty Letter of Credit or 12 months of payments in escrow Reputation

12/5/2003Global Energy Concepts, LLC10 of 11 Turbine Equipment/Supplier Proven turbine models with multiple year operation history Site suitability analysis Turbine certified by IEC, DNV, or GL Warranty terms Financial health of supplier Experience and reputation of supplier in the industry

12/5/2003Global Energy Concepts, LLC11 of 11 O & M Approach Project Owner vs. O & M contractor Past O & M experience Financial health of O & M contractor Attainable performance goals with penalties Long term