SRWF PR4

1. Project Teaser
Romanian 4 MW Wind Farm
Published October 2014
Copyright © 2012-2014

2. Project Description
The Project co-founders (2) are proposing to upgrade an existing wind-powered generating
facility of 3 old turbines of 600 kW each (the first Wind farm ever constructed in Romania in
the early 90’s) with 2 new turbines of 2.000 kW each with a capacity of approximately 4 MW.
In addition to the wind turbines, the Project will involve digging of windmill foundations
because of lack of knowledge and suitable technology at that time, construction of a
permanent meteorological tower, a system of gravel access roads, an operation and
maintenance building.
The Wind farm is localized on a small non-agricultural private village land of 2 hectares at
1382 m above sea level (well known area as best wind location in Romania) that makes part
of an entire beautiful undeveloped touristic area in South-Banat region in western Romania
which will have to be purchased by the new SPV to be founded yet, no construction
modifications will be made in this existent Wind farm but upgrading its turbines by more
powerful ones thus, reviving tourism and the economy of this area. The Project renewal is
currently anticipated to commence in autumn 2014 and to finish in autumn 2015.
Once upgraded, the wind turbines and associated components operate in almost completely
automated fashion. The Project will, however, employ administrative personnel. The wind
turbine anticipated for the project (Enercon E-82 E2) begins to generate electricity at wind
speed as low as 3 m/s. This turbine’s rotational speed varies between 6 and 15 rpm
depending on the wind velocity. High-speed shutdown occurs when constant wind velocity
exceeds roughly 28 m/s to avoid excessive wear and tear that may shorten the turbine’s
useful life. Each wind turbine has a computer to control critical functions, monitor wind
conditions, and report data.
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3. Wind Performance
In 2009, a 60m Tubular Wind Mast had been installed. Unfortunately, the Wind Mast had
broken up few months after its installation date because of the powerful wind and the
unusual winter conditions on top of the mount at an altitude of 1382m (11 cm of ice had been
stuck on the Wind Mast cables). The respective zone has considerable strong winds
amongst the windiest places in Romania.
The total of 5.574 hours of fully functional wind indicates that the operational wind is about 7
months per year which exhibits significant seasonal characteristics being repetitive.
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4. Business Opportunity
In terms of RES of gross electricity consumption, Romania is on target. The potential of
Romania in wind energy is considered the highest in SEE. Even if the wind is free, wind
energy producers receive incentives (Green Certificates) from the state besides the
electricity retail price, because the investments are very high. Through its progressive
legislation, the government is creating one of Europe’s friendliest environments for RE
developers and is encouraging future investments in the wind sector and not only. So, since
2004 green energy producers receive 1 Green Certificate for each MWh of energy delivered
into the system. In July 2010, the Romanian Parliament amended the law 139/2010 giving
more incentives to RE producers. Finally, in July 2011, the European Commission had
approved the law 139/2010. For instance, those in the wind sector get 2 Green Certificates
for 1 MWh until 2017 after that just single. However, in December 2013, the Romanian
Parliament amended the law GD 994/2013 reducing this time incentives to RE producers.
For instance, those in the wind sector, starting from January 1, 2014 get 1,5 instead of 2
TGCs for 1 MWh until January 1, 2018 after that 1,75.
The Project Scenario
· The Project is to manufacture and build (upgrade) a 4 MWp Wind farm in a highly
desirable location in Romania with proven wind velocity conditions (MAWS of 7,2 m/s
in West-Banat Mountains).
· The amount of the deal is estimated to be in the region of €6,5 Million advanced over
a 1-yr period to cover manufacturing and management costs and could be paid off in
period of less than 10-yrs based on revenues.
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5. Page 5
€5.200.000 – total cost of 2 wind turbines
€200.000 – turbines transportation
€200.000 – foundations pedestals
€25.000 – turbines installing using a crane
€15.000 – guarantee for putting Wind farm in operation
€70.000 – land + OM building purchasing
€6.000 – land + OM building development
€414.000 – operational expenses
€370.000 – contingency
· Operational activity is at the end of the 1st year with current estimates showing yearly
revenues (including incentives) of approx. €1,2 Million.
· AEP = 12,634 GWh, ROI = 12%, NPV = €5,1 Million, IRR = 19,2%.
· From that point on this would be a very profitable venture for all concerned.
· Opportunities to blue print this process and do more deals throughout Romania as
demand continues to increase for alternative energy.
Action Plan
· Site Location – The proposed Wind farm will be upgraded on a private land of 2
hectares (co-founders will make a purchase contract with the land owner). The
proposed Wind farm would be located 480 km West to Bucharest city (Capital of
Romania). No agriculture is made in this zone. The plot location is nearby a County
road and a very close unloaded existing substation and national grid line connection
point.
· Company Formation – We as a Managing team are willing to incorporate the
appropriate corporate structure that will best benefit both the project proponents and
the investor. Considerations will include the need for a Romanian based entity that
satisfies the requirements of the governing body.
· Administrative Process – The administrative process necessary for upgrading this
special Wind farm is very fast, with a suggested time-frame of 5 to 6 months.
Moreover, the co-founders have the Mayor’s commitment to support all official efforts
in order to obtain all necessary permits establishing operating of the Wind farm.
· Collateral – The group has neither liquidity nor collateral to offer.