NOMAC

2nd Annual Power & Desalination Summit – Riyadh

Case Study: Private Sector Participation in the Solar Power O&M Industry Riyadh – March 18, 2013

2nd Annual Power & Desalination Summit – Riyadh

NOMAC – An Independent Arabian O&M Company • • • •

• •

NOMAC is an ACWA Power subsidiary established in 2005. NOMAC is dedicated to the safe and efficient operation of power and desalinization plants in order to deliver exceptional performance and outstanding results. Currently NOMAC has full operational responsibility for seven mega projects: Rabigh IPP, Shuaibah IWPP, Shuaibah Expansion IWP, Shuqaiq IWPP, Qurayyah IPP, Barka 1 IWPP and participates in the Marafiq Jubail IWPP. Additionally, NOMAC is fully responsible for the operation and maintenance of two, barge-mounted, self-supporting desalination plants, which are currently located at Yanbu, Saudi Arabia. NOMAC also provides for the turnkey operation of renewable projects and is currently operating a 60 MW photovoltaic utility scale generation facility In total, NOMAC is responsible for the operation of a portfolio of 10,137 MW of power generation and 2.2 million cubic meters per day of desalinated water production.

2nd Annual Power & Desalination Summit – Riyadh

Consistent portfolio growth NOMAC formed in time with the launch of KSA’s privatisation program for water & power sector

Signed O&M agreement for 3927 MW -Qurayyah IPP

Succesfull offers for for O&M of Marafiq IWPP followed by Shuqaiq IWPP 2005

Bowarege achieves PCOD

2007 2006 Shuaibah Expansion IWP is added to the O&M portfolio

Successfully bid for O&M of Shuaibah IWPP in just the first 6 months of opérations

2009

2011 2010

2008 Successfully bid for O&M of Rabigh IPP

NOMAC Oman assumes operation of Barka 1 IWPP

2012

SunE NOMAC starts solar operation in Bulgaria

2nd Annual Power & Desalination Summit – Riyadh

NOMAC Today A formidable competitor in the Power and Water O&M Sector Project Cost (in MUSD)

Contracted Power (in MW)

Contracted Water (in 000’ m3/day)

Contract Type

PCOD

Shuaibah IWPP

2,450

900

880

20 YR

1Q 2010

Shuqaiq IWPP

1,831

850

212

20 YR

2Q 2011

Marafiq Jubail IWPP

3,359

2,744

800

20 YR

4Q 2010

Shuaibah Expansion IWP

233

-

150

20 YR

4Q 2009

Rabigh IPP

2,506

1,204

-

20 YR

2Q 2013

Bowarege

99

-

52

3 YR

2Q 2008

Barka 1 IWPP

415

442

91

15 YR

1Q 2003

Qurayyah IPP

2,846

3,927

-

20 YR

2Q 2014

180

60

-

20 YR

2Q 2014

13,919

10,127

2,216

Project Name

Karadzhalovo IPP Total

2nd Annual Power & Desalination Summit – Riyadh

A Saudi Arabian Company Expanding Overseas

2004

2017-2018

2nd Annual Power & Desalination Summit – Riyadh

Our Involvement in Renewable Energy The KSA solar opportunity constitutes a very large capacity commitment • 44,000 MW in 20 years • 18,000 MW photovoltaic • 26,000 MW concentrated solar Introduction of solar generation will permanently transform existing assumptions regarding the future composition of the generation fleet in the KSA • Participation of thermal generators is likely to flatten-out and remain constant in medium and long term Our approach to renewable energy is no different to that for fossil fuel based production • Relentless focus on achieving the lowest cost at that given time Using Photo Voltaic Technology: • We own and operate a 60MW PV plant in Bulgaria ;and • Have submitted a tender for a 100MW PV at Makkah Using Concentrated Solar Power (CSP ) technology: • We are in financing in South Africa on a 50MW plant (SolAfrica) • We are in financing in Morocco of a 160MW plant (Ouarzazate)

2nd Annual Power & Desalination Summit – Riyadh

Karadzhalovo PV IPP

•

•

•

The Solar PV Plant located in Karadzhalovo, Bulgaria is rated at a capacity of 60MWp and expected to produce 81,000 MWh per annum It has been operating since March 2012 and dispatching electricity to the Bulgarian power grid vide an off-take arrangement for a 20 year term on a Feed in Tariff framework with the state-owned Natsionalna Elektricheska Kompania The plant operation and maintenance activities by NOMAC and Sun Edison with equal shares of ownership. The plant is expected to avoid approximately 48,600 tonnes of CO2 emissions per annum

Location

Karadzhalovo, Bulgaria

Offtaker

Natsionalna Elektricheska Kompania (National Electric Company)

Power

60 MWp

Configuration

Solar Photo-Voltaic (PV)

Project Cost

SAR 652 Mn, USD 174 Mn

Commercial Operational Date

Q1 2012

Acquisition Date

July 2012

ACWA Power Share

42%

Contract Type & Term

PPA-BOO 20 years

Operator

SunE NOMAC

2nd Annual Power & Desalination Summit – Riyadh

Ouarzazate CSP IPP

8

•

•

•

The 160 MW Ouarzazate CSP Project is a greenfield Independent Power Project (IPP) developed for the Moroccan Agency for Solar Energy (MASEN) located approximately 200 KM south of Marrakesh. On 19 November 2012, the Moroccan Agency for Solar Energy (MASEN) and the consortium, led by ACWA Power, signed the Power Purchase Agreement for the value of USD 1 Billion, for the sale of the net electricity output of the Ouarzazate CSP Independent Power Project The project will be operated by NOMAC under a 25 year O&M agreement

Location

Ouarzazate, Agadir district, Morocco

Offtaker

Moroccan Agency for Solar Energy (“MASEN”)

Power

160 Mwe (and 3 hours of Thermal Energy Storage)

Configuration

Concentrated Solar Power using parabolic troughs and molten salt Thermal Energy Storage

Project Cost

SAR 3,083 Mn, USD 822 Mn

Commercial Operational Date

Q2 2015 (forecast)

Contract Type & Term

PPA-BOOT 25 years

Operator

NOMAC, with EPC Contractor oversight for the first 3 years after construction

2nd Annual Power & Desalination Summit – Riyadh

Bokpoort CSP IPP

• •

• •

The BOKPOORT CSP project in Northern Cape Province, 600 km west of Johannesburg in the Republic of South Africa is a CSP Greenfield Independent Power Project The project will be equipped with the largest thermal storage size ever adopted for a similar operational size and is among the most efficient solar plants in the world operating in this class of capacity and technology yielding a record high generation in excess of 200 GWh/year to support the power grid of South Africa. On May 21 2012, A consortium led by ACWA Power International (ACWA Power), was announced as preferred bidder NOMAC will operate the CSP project under a 20 year O&M Agreement

Location

Northern Cape Province, South Africa

Offtaker

Eskom Holdings SOC Ltd

Power

50 MW (net)

Configuration

CSP Parabolic trough with approx. 9 hours storage.

Project Cost

SAR 2,1303 Mn, USD 568 Mn

Commercial Operational Date

Q3 2015 (forecast)

Contract Type & Term

PPA-BOO 20 years

Operator

NOMAC (vide a management contract with the O&M Co.)

2nd Annual Power & Desalination Summit – Riyadh

Training of Saudi Arabian Solar power Operators • Development of national work force ensures long term sustainability. • NOMAC is a founder of the Higher institute for Water and Power Training in the KSA.

• Blessed by King Abdullah in January 2009. • A non-profit, industry focused, high-tech institute. • Training of Saudi Arabian staff starts 2 years ahead of PCOD date and continues on an annual basis for the life of the project. • NOMAC has started a 2 year associate program certified by TVTC to graduate Saudi Arabian photovoltaic and CSP operators • Student recruited from the area and are fully sponsored by NOMAC

2nd Annual Power & Desalination Summit – Riyadh

Sector Size & Growth Prospects • Solar will constitute 35% of the installed capacity in the KSA • Capacity expansion plans must be revised in order to properly asses system needs and effectively target business opportunities Power demand (GW)

Desal water demand (million cu M/Day) 12

140 120

Will double

120

100

10

9.0

8

85 80

11.0

Doubled

6

7.0 5.5

60 4

43 40 20

21

2 0

0 2000

2010

2020

2030

2000

2010

2020

2030

2nd Annual Power & Desalination Summit – Riyadh

Solar Project Technology Options • Current commercially concentrated solar

viable

technology

includes

12

photovoltaic

and

Technology

Based on the photo electric effect, using solar irradiation to generate a direct current

Based on the conventional Rankin steam cycle, thru heating a fluid by concentrating direct solar irradiation and then generating steam which is out thru a conventional steam turbine

Differences

As electrons are mainly produced, storage via battery only.

As steam is mainly produced, storage via media such as salt

2nd Annual Power & Desalination Summit – Riyadh

Solar Project Technology Considerations • Photovoltaic (PV) technology is well demonstrated and provides simplicity of operation • Utilization factors can reach 25% • 30MW per square kilometer • Cost of PV panels continues to drop making project economics very competitive

• Concentrated solar power (CSP) provides for energy storage capabilities to allow targeting the peak after sunset • Utilization factor can reach 40% with large storage • 40 MW per square kilometer • CSP present unique O&M requirements • Solar field management • High temperature oil collector systems • Salt storage systems • Maintenance requirements for steam turbines, and balance of plant

2nd Annual Power & Desalination Summit – Riyadh

PV installation, historical and forecast, 2007-2015 Historical

Forecast 51.5GW 44.3GW 35.7GW

28.7GW 30.4GW 18.2GW 6.6GW 7.7GW

2.8GW 2007 2008 2009 2010 2011 Western Europe Eastern Europe China India Source: Bloomberg New Energy Finance

2012 2013 Japan Rest of World

2014 USA

2015

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Global Solar PV Energy Trends

Source: K.A.CARE – 4th Saudi Solar Forum 2012

2nd Annual Power & Desalination Summit – Riyadh

Potential of PV in Saudi Arabia •

It must be noted that PV makes use of the Global Horizontal Irradiation (GHI) defined as: the total solar irradiance falling on a horizontal plane on Earth (which includes diffused and indirect irradiation)

•

Saudi Arabia has one of the highest potentials for PV in the world.

•

PV is highly economical across North Africa, South Africa and Turkey.

2nd Annual Power & Desalination Summit – Riyadh

Potential of CSP in Saudi Arabia •

CSP only makes use of the Direct Normal Irradiation which is: is the solar irradiance measured at a given location on Earth with a surface element perpendicular to the Sun's rays, excluding diffuse insolation (the solar radiation that is scattered or reflected by atmospheric components in the sky)

•

A DNI higher KWh/m2/year

•

High dust and humidity in the GCC region implies CSP is most economical in limited areas of the GCC specifically North West Saudi Arabia

than

2,400

2nd Annual Power & Desalination Summit – Riyadh

Annual Peak Load in the KSA - 2012 MW 2,500 MW used for less than 100 hours/ year!!!

50 % of maximum load

25,000 MW

2nd Annual Power & Desalination Summit – Riyadh

Solar and Load Curve Patters - Makkah • Daily Load Curve for Makkah – 2012 Load Pattern • Solar PV can fill 300 MW peak block

3100 3000

Production time - CSP

Production time - PV

2900 2800 2700 2600 2500 2400

0:30 1:00 1:30 2:00 2:30 3:00 3:30 4:00 4:30 5:00 5:30 6:00 6:30 7:00 7:30 8:00 8:30 9:00 9:30 10:00 10:30 11:00 11:30 12:00 12:30 13:00 13:30 14:00 14:30 15:00 15:30 16:00 16:30 17:00 17:30 18:00 18:30 19:00 19:30 20:00 20:30 21:00 21:30 22:00 22:30 23:00 23:30

2300

2nd Annual Power & Desalination Summit – Riyadh

First Utility Scale Solar Power in Saudi Arabia On 5th January, 2013, the First Utility Scale Solar Power IPP Tender in the Kingdom of Saudi Arabia was submitted The IPP tender – 100 MW PV to the Municipality of Makkah ACWA Power/NOMAC proposal: at 12 US cents/KWh 4500

1.6

4000

1.4

3500

2500 2000 1500 1000

Million Barrel / year

Barrel / day

3000

1.2 1 0.8 0.6 0.4

500

0.2

0

0

2nd Annual Power & Desalination Summit – Riyadh

Solar Project O&M Considerations • Over the life of the solar plant the O&M constitutes 30% of the cost • Our experience is that on the first project itself >40% of the EPC value and up to 90% of the O&M can be delivered more cost effectively from local content • Challenging availability requirements…PV asset owners require 99% performance versus expected electricity generation at inverter level • Robust Information Technology and Data Analysis capabilities are fundamental and provide clear competitive advantages • Performance monitoring and reporting system • Remote on-line data gathering, analysis and diagnostics provides for immediate identification of availability or efficiency losses on individual panel strings • Immediate dispatch of local maintenance crews

• Challenges include panel cleaning frequency and water consumption • Fully automated robotic cleaners and pressured water solutions provide alternatives for dry and dusty locations

2nd Annual Power & Desalination Summit – Riyadh

O&M Services Scope as Part of Turnkey Contract • O&M contractor assumes responsibility for all aspects of the operation and maintenance of the facility:

• Labor and third party contractors • Chemicals • All consumables including CSP high temperature fluid and salt • PV Spares including PV modules, inverters and transformers

• CSP spares such a mirrors, collectors, steam turbine parts • Cleaning robots and equipment • Preventive and predictive maintenance • Corrective maintenance

• Major overhauls • Services • Training • Environmental Health and safety

• Plant performance reviews and optimization • Compliance with the local requirements for localization and training

2nd Annual Power & Desalination Summit – Riyadh

Renewable Projects and Desalinization Options • Concentrated solar is well suited to be paired with desalinization

2nd Annual Power & Desalination Summit – Riyadh

The Way Forward – Solar Desalinztion • Concentrated solar is well suited to be paired with desalinization on an integrated basis • Solar boiler • Thermal desalination

• Improving RO efficiencies and likelihood for decreasing membrane costs provide compelling case for solar powered RO projects • Maximize solar plant utilization factor by choosing optimum sites based on solar intensity • Deliver power to RO site using transmission lines • Water tanks may serve as energy storage devices under certain scenarios

• Optimum solution is the one which delivers the lowest power and water tariff to the off taker • Introduction of solar power results in a parading shift in the power and water generation industry in the KSA

Thank You for Your Attention 25

Julio Torre Gutierrez Chief Executive Officer [email protected]