1. VetroEnergo AS Wind Power at the Kola Peninsula Presentation at Bellona Conference 1-2. April 2008 Lars Helge Helvig, Norsk Vind Energi AS

2. Windpower at the Kola Peninsula Large potential in Coastal Areas Positive local and regional administration Funding dependant on Risk Management

3. Norsk Vind Energi AS Norwegian projects –80 MW at Høg-Jæren, construction start 2008 –4 other projects with filed application –2 other projects at earlier stage –Total around 500 MW if all installed, producing around 1,5 bln kWh VetroEnergo: Wind Power in Russia Gevt (Global Environmental Technologies) –CDM / JI project development

4. Høg-Jæren Wind Farm, 80MW

5. Egersund Wind Farm, 110MW

6. Kola Peninsula Excellent wind resources Infrastructure ok (roads / high voltage grid) Large land-areas available National RES scheme not yet in place Local and regional authorities positive Risk Management essential to enable project financing

7. Business idea VetroEnergo is a wind power producer Our business idea is to identify, develop and to participate in the building and operation of wind farms VetroEnergo will seek close contact /alliances with local utility companies, local authorities and others VetroEnergo will team up with an industrial partner before construction start

8. Early History Previous work by Kola Science Center, Gaia and Norwegian Society for Preservation of Nature (NGO) Request from Russian Border Forces about wind energy March 9-11, 1998. Meetings with Norwegian and Russian parties VetroEnergo: Letter of intent dated March 10th 98 April 98: VetroEnergo AS formerly funded with Russian and Norwegian owners May 1998: Official agreement about a pilot project Summer 98: Agreement between VetroEnergo as and County Governor of Finnmark (wind measurements)

9. Demonstration Plant Norwegian Foreign Ministry gave grant to a demonstration plant project to test in a small scale the challenges that also large wind farms would experience. –Establishment of a Russian company –Experience related to Russian accounting, auditing, tax, etc. –Getting necessary licenses to produce power to the grid –Land lease agreement –Necessary permits to construct and operate the turbine –Grid connection agreement –Power purchase agreement –Transportation challenges –Erection challenges –Operation and maintenance routines –Monitoring arrangement

10. Demonstration Plant cont. In order to stay within budget, a used overhauled turbine were purchased from Denmark Russian personnel were trained in Denmark A Finnish company were used to transport the turbine by trucks Local company were used to prepare the foundation and to drill holes for the rock anchors together with personnel from Finnmark Local company were used to erect the turbine together with supervisor from Wincon in Denmark Local personnel are used to maintain and operate the turbine The turbine was erected Sep/Oct 2001 Workable Power Purchase Agreement (PPA) still a challenge

11. Rock Anchoring the turbine

12. Prestressed Anchors

13. Cleaning the blades

14. Turning the towers for painting

15. Inst. the tower, bundling cables

16. Erection of demo turbine

17. Power cables to the turbine

18. High voltage and control box

19. Demo turbine erected Wincon 200 kW Erected autumn 01 Some minor technical challenges Main challenge is workable PPA Useful to illustrate challenges in Russia

20. Close to Hotel Ogny Murmanska

21. And close to city of Murmansk

22. Status today Basic conditions still valid Increased focus on energy shortage Cooperation agreement between –Government of Murmansk Oblast –Kolenergo –Kola Science Center –VetroEnergo Agreement give active role to VetroEnergo

23. Status today cont. Proposed new law for Renewable Energy Sources in validation process in the Duma If accepted, the realization of new projects move closer Major wind power development also depends on acceptable land-lease agreements, access to the grid and grid capacity, increase in regional consumption, CNP, etc

24. VetroEnergo is proud to present: That we have started project development work on 3 different sites with a planned total capacity of 200MW –Teriberka 1100 MW –Teriberka 2 50 MW –Tumanni 50 MW That VetroEnergo now initiate a major Wind Assessment Program to optimize the lay-out of our coming wind farms at Kola

25. Main areas of interest

26. Wind measurement at Teriberka

27. Challenges ahead More wind measurements Land-lease agreements Physical access to the best sites Building and other permits Grid connection agreements Power purchase agreements Risk assessment, back to back agreement Project financing

28. Involvement of European Union Very high renewable target in the EU In addition to on-shore wind farms, off- shore wind farms in needed to meet the goals Why not look at the Barents region as yet another area that can supply Europe with renewable EU already import many TWh from Russia that could be from renewable

29. Barents – a green energy lounge It is a win-win situation Russia will soon need more power Europe are looking for renewable Project implementation at Kola needs western involvement/guarantees/off-take to reduce investment risks Brings economic growth to the Barents region New strong transmission lines from North to South is cheaper than large offshore cables

30. Let’s all pull in the right direction Thank you for your attention