Daragh Duffy, Project Development Director, KBPP

1. Investor View on Auctions for
Large-scale Biomass Project
February 2019
Daragh Duffy – Project Development Director

2. KBPP Project Background
Site
ESIA
Fuel
Supply
Logistics
Grid
Connection
EPC /
O&M
Letters of
Intent
Final
Permitting
PPA
Financing

3. Technology Price per MwH
Biomass is
capital intensive
but offers:
• Baseload power
• Grid balancing
• Economic
multipliers
• Energy security
0,0
1,0
2,0
3,0
4,0
5,0
Solar Wind Biomass
€Millions

4. Background to the UK Auction Transition
• Quota based – Established / Less Established
• Auction triggered once quota reached
Technology
Clearing Price
(€c per KwH)
Saving Over
Strike (%)
Onshore Wind (>5MW) 10.24 (11.0%)
Solar PV (>5MW) 8.00 (37.5%)
Biomass 16.00 0.0%
Energy from Waste 10.30 0.0%
Biogas 18.00 0.0%
Offshore Wind 15.30 (15.0%)
Established
Less
Established

5. Lessons from the UK Auction Transition
Good parts
• Balanced mature and
immature technologies
• Reduced Government
spending
• Prioritised political intent
for offshore wind
• Competitive market prices
reduced
Bad parts
• Complex and
Cumbersome
• Slow uptake initially
• Resulted in
uncommercial bidding
• Favoured big players

6. Investor View on Proposed Ukraine Auctions
Positives
• Financial Certainty
• Transparency
• Technology Specific
allows immature to
develop
• Greater Regulatory
Certainty
• Reduced Collusion /
Corruption risk
Concerns
• Lowest Price wins
• Bidders ability not
assessed
• No transition for
immature sectors
• Grid Connection –
corruption risk

7. Why it makes sense for Ukraine?
Benefits
• Competitive Pricing
• Benefits Consumers
• Budgetary Control
• Better Renewable
Target forecasting
• Encourages FDI
Potential Issues
• Balancing of Competitive
markets
• Low Penalties for non–
development
• No incentives for
economically beneficial
projects
• Quota “locking” may occur

8. Comparison of Technologies in Current FIT
70
50
30
10
10
30
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21
€Millions
Years
Discounted Equity Cashflows by Technology on Current FIT
Wind Solar PV Biomass

9. 9
KBPP LLC
www.kbpp.com.uaKhemelnytsky Bio Power Plant LLC
10/1 Myru Str., Pechesky village Khmelnytskyi District,
Khmelnytskyi Region, 31320, Ukraine
© 2019 KBPP All Rights Reserved.
“Energy cannot be created or destroyed, it can
only be changed from one form to another.”
~ Albert Einstein