Energy Sector and Renewable Energy

Energy
Sector
Energy
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Wellness Tour
andRenewable
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Medi
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The Hungarian Investment and Trade Agency took part
in collecting and editing the projects appearing in the
brochure. If You would like to receive more detailed information on the projects, given sectors, or any industry
which is not included in this publication, or need assistance in organizing meetings with project owners, please
contact HITA on the contact details below.
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Hungary, 1055 Budapest, Honvéd street 20.
Phone: +36 1 872 6520 Fax: +36 1 872 6699
[email protected]
Editing closed: 24 Jan 2014
www.hita.hu
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Table of Contents
6 SECTORIAL OVERVIEW
PROJECTS
12 nes - Waste utilization with
thermoselect technology
18 3 bio - Bioethanol, Biogas
and Biomass plant
110 m EUR
22 Venterfor Windfarm Project
26 Visonta Eco Fuel - Bioethanol
production in Hungary
30 TESLA - UNDERWATER
HYDROELECTRIC POWER PLANT
8.5 M Eur
33.6 M EUR
18
12
6.8 M Eur
2M EUR
30
Why invest?
Energy Sector and Renewable Energy in Hungary
General overview
The liberalization of the Hungarian electricity and natural gas market was
completed in 2008. Today, the choice of supplier applies for every consumer,
although the prices for universal suppliers are still regulated.
As far as European Union legislation is concerned, the application of the 3rd Energy
Package has been carried out and market competition is constantly growing,
mainly with reference to the electricity market. The major part of Hungary’s energy
supply is imported, and it will remain so for a long time.
Natural gas plays the most important role in Hungary’s energy consumption and
accounts for 37.8%. Crude oil and petroleum products come second. The power
generation mix is dominated by nuclear energy (42%), gas-fired generation (31%)
and solid fuels (16.7%).
Renewable energy sources (RES) play an increasingly important role in the
consumption mix. The share of RES in energy consumption rose from 5.2% in 2005
to 8.7% in 2010.
According to 2010-2020 forecasts, overall energy consumption will increase by
around 1.6% / year on average. Electricity consumption, according to the forecasts
will increase by 2.2% / year.
Crude oil and
petroleum produ cts
1,3%
Other
0,4%
Renewables
7,7%
Renewables
8,1%
Fully liberalized energy market.
Competitive energy prices.
Competitive investment environment.
Favourable implementation costs.
Implementation of single energy market concept in process in the EU.
Constant dynamic development of the sector.
Government high priority focus sector.
Government commitment in the areas of sustainability and energy efficiency.
Ambitious renewable target (13% by 2020) – active area, regarding regulation.
State support, technological innovations and investment opportunity.
• Feed-in-tariff system for renewable energy sources.
• Constantly growing energy consumption.
Electricity Market
Hungary’s gross electricity consumption in 2011 reached 42,626 GWh. Consumption
has been showing continuous growth since the 2008 crisis downturn. Within
domestic electricity generation, nuclear power and natural gas represent the highest
ratio.
Biomass
Water 4,2%
0,6%
Wind
1,7%
Waste and
other REN
1,4%
Coal
8,1%
Other
2,1%
Liqui d
0,4%
Solid fuel s
10,5%
Solid fuels
16,7%
Natural ga s
37,8%
Nuclea r
42,2%
Nuclea r
15,7%
Natural ga s
31.3%
Total TWh: 37.37
Gross electricity generation (as % of TWH ) 2010
6
•
•
•
•
•
•
•
•
•
Crude oil and
petroleum produ cts
26,3%
Nuclear
15,7%
Natural ga s
37,8%
Total Mtoe: 25.98
Gross inland consumption (as of total Mtoe) 2010
Ratio of energy sources in electricity production in Hungary
7
Maximum of renewable energy potential
The installed total capacity of Hungarian power stations in 2012 was over 10,000
MW.
REN source
Solar photovoltaic
Biomass
Solar thermal
Geothermal
Water
Wind
TOTAL
The HUPX Hungarian Power Exchange Company Ltd started its operation in 2009,
and has achieved significant success alongside constantly improving liquidity.
HUPX activities include Day-ahead auction (DAM) and Physical Futures (PhF), the
aggregated turnover of which in 2012 has exceeded 13 TWh.
Natural Gas Market
Hungary’s natural gas consumption in 2012 reached 10.44 Billion m3, Gas
generation on the other hand was 2.46 Billion m3.
Hungarian gas consumption mix in 2011
Yearly gas consumption
10.659 bn m3
Domestic production
2.640 bn m3
Import
8.019 bn m3
East direction (Beregdaróc)
3.606 bn m3
West direction (Mosonmagyaróvár)
4.414 bn m3
In Hungary, the Government supports renewable energy production with a Feedin Tariff Obligation System and guaranteed price. According to this regulation, all
electricity produced by renewable energy must be purchased by the Transmission
System Operator at a fixed price, which is indexed annually by inflation.
Biofuel
Bioethanol has long established itself as the world’s No. 1 biofuel and the bioethanol
market has continued to grow rapidly in recent years. With the adoption of the
Renewable Energies Directive in 2009, which prescribes a mandatory blending
rate of 10% in the transport sector by 2020, market researchers predict a dynamic
growth of the European bioethanol market, of up to 15 million m³ for 2020.
The Hungarian natural gas grid is 5,783 km long.
16000
Renewable Energy Market (RES)
12000
Considering Hungary’s geographical conditions, of the renewable energy sources,
energy generation from biogenic sources (forestry and agricultural biomass, biogas
and biofuels), water, geothermal energy and, over the long term, solar energy, are
the most important.
Hungary’s 2020 RES target is 13%. However, in the Renewable Action Plan, the
government has set a target of 14.65%.
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EU biofuel use expectation, based on the Action Plans of the EU Member States
CEEGEX Central Eastern European Gas Exchange Company Ltd began operation in
January 2013.
14000
In 1000 m 3
The utilization and spreading of renewable energy sources could represent
one of the breakthrough points for Hungary’s economy. Hungary has excellent
comparative assets in certain areas of green energy resources.
Potential (PJ)
1750
300
102.5
63.5
14.4
532.8
2600-2700
10000
8000
6000
4000
2000
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
Hungary has significant potential in biofuel production, supported by agricultural
products. Based on an expert estimate, more than 10% of the estimated consumption
for 2020 can be fulfilled just from first generation biofuels, while at the same time
ensuring the fulfilment of food and feed provision objectives.
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Wind
The climate in Hungary is humid continental, and the ruling winds mainly blow
from the rim of the basin towards the central parts. The optimal regions for the
exploitation of wind energy can mainly be found in the country’s North, NorthWest, and some South-East areas.
The connection of wind energy to the Hungarian electricity system began in
2006, when the Hungarian Energy Office opened a 330 MW capacity quota for
wind energy. This amount has not been extended since, which means that today,
a wind turbine without a quota is not able to join the feed-in tariff system, but is
entitled to sell the produced electricity on the market.
Biomass and biogas
Hungary possesses excellent agro-ecological conditions for the competitive
production of biomass. Hungarian agriculture is capable of sustainably producing
biomass in excess of food and feed demands, and at the same time, there is
significant biogas production potential. The theoretical potential of energy sources
of biological origin (bioenergy) could exceed, by as much as 20%, the energy source
demand estimated for 2020, and bioenergy based electricity production, that can be
planned well in advance, is also controllable. The limitations of bioenergy production
mainly lie in competitiveness. Bioenergy can play a primary role in fulfilling local
heating demands in the future, but there is also an intent to place emphasis on
the spread of small and medium-capacity combined electricity and heat generating
systems, according to Hungary’s Renewable Energy Utilization Action Plan.
Solar
Even though there is notable solar potential in Hungary, to date only a small amount
of solar capacity has been added, which in total doesn’t reach 1 % of the total
usage of renewable energy. Additionally, most of this is through solar collectors.
Most of the pv-panels and collectors are bought by private individuals, not by public
institutions or establishments. EU competition laws, Operative Programmes, tenders
and other incentives are trying to change this tendency. State and Union-level
support plays a central role in the spread of solar energy systems.
10
The sectorial overview was prepared by:
GRID CEE Consulting Ltd.
+36 30 870 6414
[email protected]
www.grid.co.hu
Hungary, 1031 Budapest, Záhony street 7.Graphisoft Park C. building
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Basic Project Data
NES - Waste utilization with thermoselect technology
Sector
Project owner
Location
Implementation period
Overall budget of the project
I.
Short description
Implementation of a thermic waste recycling plant (100,000
tonnes/year) with the aim to treat local domestic and industrial waste.
110 M
Funding requirement
EUR
Renewable Energy
NES Recycling Ltd.
Gyöngyös, North Hungary
2014 - 2015
146 Million EUR
Project Background
Project owner
The project company, NES Recycling Ltd, registered in Hungary, was founded exclusively for the implementation of the waste management project in the city of Gyöngyös, (North Hungary).
The ownership of the project company is divided among three Hungarian individuals, according to
the main project tasks. Next to a lawyer guaranteeing the legal background, and a company and
project management expert, the professional knowledge and experience is supplied by the General
Manager Mr András Hajdu.
The experts of NES Ltd have been working on this project since 2000, with valued partners such as
Siemens Hungary, Transelectro (Hungary), Seghers (Belgium), Indaver (Belgium), Thermoselect (Switzerland) and CET Co. (England).
II. Project description
The purpose of the investment is to install a complex waste converter system that is able to treat
and utilize all kind of waste, and to utilize the produced energy and other by-products. The basis of
the chosen technology is a modern Swiss gasification method by Thermoselect , an experienced and
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recognised company with references in Germany, Switzerland, Italy and Japan.
By implementing the technology, the organic waste components are transformed into synthesis gas,
which can be used for power generation or as a raw material for chemical synthesis; the inorganic
waste components are converted into directly usable mineral substances and metals. The process
does not produce any ash, slag or filter dust.
The key elements of the project can be outlined as follows:
• Waste disposal, treatment and utilization
• Sale of the produced electric and heat energy
• Converting the by-products into saleable products
The main revenues of the project are generated from the waste disposal fee and the sale of electricity.
The main target groups of the plant include industrial manufacturers and local governments on
the waste input side, and electricity companies and the chemical industry regarding electricity and
by-product production.
An agreement with the local governments of Gyöngyös and nearby Salgótarján has been signed
regarding the community waste treatment.
The total capital requirement of the project is 146.7 Million EUR.
The current business plan calculates with 30% own capital and 70% investment capital.
According to the project owners’ plans, the own capital will include a bank loan, regarding which
negotiations with several banks are in progress. The Hungarian Investment Bank has already indicated
its interest in the project; the supporting documentation has been supplied and is under evaluation.
Background info
The Local Government of Gyöngyös passed a resolution in 1999, stating that the waste management
tasks of the region should be solved by adopting a thermal waste converter technology. NES Ltd has
been present from the early stages of the project idea, and has developed the business plan and obtained the necessary permits; it is the sole project owner. The project company is in constant contact
with the local government of Gyöngyös and the region.
Permits, access to location site, implementation
The planned development is situated on the territory of the industrial park of the city of Gyöngyös.
The building permit for the plant has been issued with the approval of the local government, for a 5
Ha size location within the industrial park.
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A feasibility study has been prepared. As far as the permitting process is concerned, the Environmental
Permit, Water Rights Permit and Building Permit are available.
As soon as the finance is in place, plant construction can start right away and has a 24 month schedule.
The plant will be implemented by leading multinationals and local engineering and construction companies with outstanding references. The Thermoselect technology complies with the strictest environmental standards of the EU.
The generated electricity will be sold within the framework of the Hungarian Feed-In-Tariff system (“
KÁT”), at a higher price than the prevailing market price.
Availability of input material
At present more than 250 thousand tons of special industrial waste is generated every year from the local industrial companies in the North-Hungarian statistical region. There is insufficient waste treatment
capacity in the region, which guarantees the input material for the plant.
At present, the project company has signed agreements with two cities, Gyöngyös and Salgótarján, for
the intake of their communal waste.
Risk factor
Mitigation / Solution
Level of Risk
Plant constructional
risk
can be mitigated by choosing experienced contractors
with sufficient references, construction supervisor, and
adequate contracting terms
medium
Availability of bank
loan
on-going arrangements with a number of banks, arrangement of foreign bank loan facility
medium
Sale of produced
electricity
Hungarian feed-in-tariff system guarantees the sale of
produced electricity
low
Sale of by-products
market monitoring, diversification of buyers
Outage of main
waste supplier
diversification of supply sources, Hungarian market
knowledge
Public opinion
level of acceptance can vary, but can be handled with PR medium
plan
low
III. Financial Indicators
Market background
Waste management in Hungary is traditionally done by landfilling. At present the fee of landfilling is
nearly 10 EUR / tonne, which according to Government indications will increase on a yearly basis until
2016, when it will reach 60 EUR / ton. This is expected to move the focus of industrial players toward
alternative waste management solutions.
The present market for alternative waste management in Hungary is rather small, with only a few
strong international companies, such as AVA and ASA.
The National Waste Management Agency (OHÜ) was established in early 2012. This Agency will act as
a single national coordinator between the collection companies and the treatment plants. In order to
meet the 2016 diversion target of the Landfill Directive, there is a need for additional waste treatment
capacity in the country.
Currently there is only one municipal waste incinerator with energy recovery. According to the waste
act, incineration or waste co-incineration shall be permitted only if the incineration or co-incineration
is directed to electrical and thermal energy production or cement, bricks, tiles and construction and
ceramic manufacturing.
The North-Hungarian statistical region, where the project will be located, used to be the centre of the
Hungarian chemical, steel and other heavy industry in recent decades. The companies, operating here,
also play a significant role in the current economic life of Hungary. These companies, which are profitable and solvent enterprises also produce a lot of industrial waste..
As a result of the state support for renewable energy, there is an option for the produced electricity to
be sold at a higher price (feed-in-tariff, higher than the market price) for a maximum period of 15 years.
Risk management
The main risk factors of the project have been identified and the methods to prevent and solve them
have been outlined by the project developers, as follows:
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Assumptions and main indicators
The Business Plan of the project calculates with reasonable estimations both regarding CAPEX and OPEX
costs, and uses realistic macroeconomic expectations; there are also several reserves built into the plan.
The Business Plan has been drawn up for a 14-year period.
Quantitative and Qualitative Indicators
Quantitative Indicators
Expected investment return
10 years
Average yearly EBIDTA
28 Million EUR
Average yearly revenue (100% efficiency)
41 Million EUR
Average yearly operational costs
8.1 Million EUR
Qualitative Indicators
poor
adequate
Elaboration level
Existing client relations
high
X
X
Reality of market ratio expectation
X
Owner’s background (market presence, experience)
X
Management background (knowledge, experience)
X
Level of innovation in the Project idea /Added value
X
Risk management plan
X
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IV. Investment offer
Why invest?
• Serious shortage of waste management facilities in the country.
• Low manufacturing costs, compared to Western Europe.
• High pressure on the development of the renewables market in the EU and
Hungary resulting from the EU goals for 2020. (3rd Energy Package).
• Highly elaborated, detailed project.
• EU legislation compatible technology.
• Expertise of the project developer team.
• Interest of the Hungarian Investment Bank.
• With sufficient financial background, the project will be selected among high.
priority investments by the Government.
Required amount of investment
110 Million EUR
Form of investment
50-70% share in the project company
(to be negotiated)
Investment return
10 years
FURTHER INFORMATION
For more information, business plans and contacts to the projects
owners, please get in touch with our team:
[email protected]
16
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Basic Project Data
3BIO - Bioethanol, Biogas and Biomass plant
Sector
Project owner
Location
Implementation period
Overall budget of the project
I.
Short description
Bioethanol-biogas-biomass plant project for the production of
fuel quality bioethanol and green energy.
33.6 M
Funding requirement
EUR
II. Project description
Renewable Energy
HBT Helvéciai Bioetanol Termelő és Kereskedő Kft.
Helvécia, South-East Hungary
2014 - 2015
112 Million EUR
Project Background
Project owner
The project company Helvéciai Bioüzemanyag Termelő és Kereskedő Kft. (Helvécia Biofuel Manufacturing and Trade company), registered in Hungary, was founded exclusively for the implementation of
the bioethanol-biogas-biomass plant in Helvécia (South-East Hungary).
The ownership of the project company consists of one Hungarian and two German companies, according to the following:
-ÉGT Kft., Hungary, share: 30.1%
-METZ GmbH, Germany, share: 35.0%
-STULZ-PLANAQUA GmbH, Germany, share: 34.9%
Project description
The main objective of the bioethanol, biogas and biomass plant project is to produce fuel quality
bioethanol and green electric power.
The aim of combining the three plants is to utilize synergies. Bioethanol is produced using maize as a
raw material. The by-product of ethanol production is the main feedstock of the biogas plant, meanwhile the biogas- and biomass plant provide heat and electric power for the bioethanol production.
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The Bioethanol will be sold in Western Europe, a contract has already been signed with one of the
biggest redistributors: Mitsui GmbH.
Electricity can be fed into the national system or later to an open market in Europe.
The main input is corn, and during the production phases most of it is used, so there is only a small
amount surplus material remaining.
With this setup, the Bioethanol Plant is able to produce biofuel with low energy costs and minimal waste.
Furthermore, the plants will save more than 100,000 CO2 quotas, which can be sold in the CO2 exchange system.
The total capital requirement of the project is 112 Million EUR.
The current business plan calculates with 30% own capital (33.6 Million EUR) and 70% bank loan
(78.4 Million EUR).
Currently, 17.4 Million EUR equity is required to receive a 78.5 Million EUR investment loan from the
Hungarian Investment Bank, where the negotiation phase has been closed. A 17.4 Million EUR bank
guarantee is required for the beginning of the financing process.
Technology and the EPC contractors have been selected and pre-contracted. A professional study
carried out by KPMG (www.kpmg.com) to evaluate the project is available.
Permits, access to location site, implementation
As far as the permitting process is concerned, the legally binding building permit is available (20th
June 2013) and IPPC is also available.
With the financing in place, plant construction can start immediately with a 22-24 months’ time frame.
The 21 ha site in the industrial park of Helvécia is owned by the project company.
The area is equipped with all the necessary public utilities (water, gas, electricity, waste water).
The bioethanol plant will be implemented by leading multinationals and local engineering and construction companies with outstanding references.
The bioethanol technology and know-how will be supplied by Desmet Ballestra Ethanol GmbH.
Availability of feedstock
The feedstock of the ethanol plant is guaranteed as Hungary being an agricultural country has a permanent oversupply of maize (5-10% surplus supply in each average year) for ethanol production.
The bioethanol plant’s required feedstock is available in the neighbourhood and produced within 30
km. Annually 2.2 million tonnes of corn is grown around the plant within 100 km. There are several
fields in the nearby district currently not in use and available for growing corn or sorghum.
Next to corn, there are other types of raw material available in Hungary. Even though the change of
raw material requires modifications to the technology, these can be carried out in a relatively short
period of time and with low investment costs.
Market background
The marketability and commercial viability of the produced bioethanol product is guaranteed by the
growing global energy demand, and sustainability oriented European Union regulation. The EU biofuel
market is highly regulated, thus relies on significant imports due to demand exceeding supply.
As far as market competition is concerned, the quantity of bioethanol produced by the present project
is not likely to face serious competition due to over demand in Europe. Moreover, the majority of
similar producers use raw material other than corn.
In Hungary there are two other operating bioethanol producers, namely Pannónia Ethanol Zrt. plant
(opened 2012), and the Hungrana Zrt. plant. Both are operating profitably with their product also
exported to the German market.
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As a result of state support for renewable energy, there is an option for the produced electricity to be
sold at a higher price (feed-in-tariff, higher than the market price) for a maximum period of 15 years.
Quantitative and Qualitative Indicators
Quantitative Indicators
Risk management
The main risk factors of the project have been identified and the methods to prevent and solve them
have been outlined by the project developers, as follows:
Risk factor
Mitigation / Solution
Level of Risk
Plant construction risk
can be mitigated by choosing experienced contractors with sufficient references, construction
supervisor and adequate contracting terms
medium
Availability of bank loan
on-going arrangements with more banks, arrangement of foreign bank loan facility
medium
Outage of main buyer
market monitoring, adequate contracting terms,
experience and market knowledge of German
owners, hedging the buy side by diversifying the
final product contract
medium
Outage of main corn supplier
diversification of supply sources, Hungarian market knowledge, change to other raw material,
low
Public opinion
level of acceptance can vary, but can be handled
with PR plan
medium
Expected investment return
3 years
Average yearly EBIDA
28.1 Million EUR
Average yearly revenue
90.9 Million EUR
Average yearly operational costs
69.4 Million EUR
Qualitative Indicators
poor
adequate
Elaboration level
high
X
Existing client relations
X
Reality of market ratio expectation
X
Owner’s background (market presence, experience)
X
Management background (knowledge, experience)
X
Level of innovation in the Project idea /Added value
X
Risk management plan
X
IV. Investment offer
Why invest?
• High surplus demand for the bioethanol in the EU and the target market.
• Low manufacturing costs, compared to Western Europe.
• High pressure on the development of renewables market in the EU
and Hungary resulting from the EU goals for 2020. (3rd Energy Package).
• Highly elaborated, detailed project, with all necessary permissions.
• Well-known and widely used technology.
• Expertise of the project development team.
• Realistic and stable business plan.
• Financing resolve from the Hungarian Investment Bank.
III. Financial Indicators
Financial Indicators
Assumptions and main indicators
The Business Plan of the project calculates with reasonable estimations both regarding CAPEX and
OPEX costs, and uses realistic macroeconomic expectations; there are also several reserves built into
the plan.
The Business Plan has been calculated for a 15-year period. The calculated NPV is based on the
estimates of energy and financial experts. The capital cost estimate takes into consideration the risk
factors, such as the official sectorial risk factor, risk free yield, and the total risk premium of the target
country.
The total capital requirement of the project is 112 Million EUR.
Currently, 17.4 Million EUR equity is required to receive a 78.5 Million EUR investment loan from the
Hungarian Investment Bank, where the negotiation phase has been closed, and a 17.4 Million EUR
bank guarantee is required for the beginning of the financing process.
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Required amount of investment
33.6 Million EUR (counted with 70% bank loan
and 100% share in the project company)
Form of investment
70-100% share in the project company
(to be negotiated)
Investment return
3 years
FURTHER INFORMATION
For more information, business plans and contacts to the projects
owners, please get in touch with our team:
[email protected]
21
Basic Project Data
Venterfor Windfarm Project
Sector
Project owner
Location
Implementation period
Overall budget of the project
I.
As a result, the project owner is planning to sell the electricity produced in the wind farm via the
Austrian electricity grid – either by joining the Austrian feed-in-tariff system, or by selling it on the
electricity market.
Short description
Installation of eight wind turbines (total capacity of 16 MW)
on an undeveloped area of 51.7 hectares in the administrative
district of Fertőd.
8.5 M
The technical background of the network connection has been planned and supported by valid offers
(Netz Burgenland ). The availability of the Austrian feed-in-tariff is under arrangement process, next
to which the project owner has obtained offers for the purchase of the produced electricity from
Austrian and German traders.
The installation of the wind energy plant is planned with Vestas V90 (2MWe) turbines. Vestas is
among the leading wind turbine manufacturers in the world; the only global energy company
dedicated exclusively to wind energy. The arrangements have reached the level of an informative
offer, preceded by a preliminary feasibility study of Vestas Hungary, focusing on the expected annual
production.
Funding requirement
EUR
Renewable Energy
VENTERFOR ENERGIE GAG.
Fertőd, West Hungary
2014 2Q - 2014 4Q
27.7 Million EUR
Project Background
Project owner
The project owner company, VENTERFOR ENERGIE GAG, registered in Hungary, was founded with
the main aim of renewable energy project development and implementation. The one-man company
is owned by Mr Csongor Veress, a local individual with special interest in green energy projects, with
biomass and windpark related references and project developments in the Central European region,
namely Hungary, Romania, Slovakia and Croatia.
II. Project description
The main objective of the Fertőd Wind Farm project is the installation of eight wind turbines with a
total capacity of 16 MW on an undeveloped area of 51.7 hectares in the administrative district of the
Hungarian city of Fertőd (county: Győr-Moson-Sopron) near Austria. The project involves the option
for an additional eight turbine (16 MW) extension.
The total capital requirement of the 16 MW wind farm is 27.7 Million EUR, whereas the extended
project (16 turbines) requires 52 Million EUR.
The current business plan for eight turbines (16 MW) calculates with 25% own capital (6.9 Million
EUR) and 75% bank loan (20.8 Million EUR). The project company is currently in the negotiation
process with more, Hungarian based and foreign banks, but no financing partner has been chosen yet.
Permits, access to location site, implementation
Wind measurements and necessary calculations have been carried out by the Central Institute for
Meteorology and Geodynamics, Vienna. The project area is situated near the Central European Alps
with average 7 m/s inflowing north-western air, and the number of windless days in the area is
insignificant (approx. 30-40 days/year).
As far as the permitting process is concerned, the project, to date, has obtained a valid Building
Permit and Small Power Plant Permit for eight wind turbines (16 MW capacity), both necessary for the
implementation of the project. The development area is owned by Venterfor company, excluding all
and any additional costs related to the project site.
With the availability of the financial background, the plant construction can start right away and has a
eight month target deadline.
Market background
Wind is a readily available source of energy, which has a high output even in colder winter times,
when hydropower and solar installations are at their lowest. Wind energy barely results in any
external costs. By exploiting a regenerative energy source, the reliance on other fuels and the resulting
environmental damage are avoided.
In 2012, Hungary had a total installed wind capacity of 330 MW. Higher capacity is distributed in the
north west of the country, with most of wind farms installed in the Kisalföld region.
Austria has a long tradition of wind energy use, it is ranked as the world’s seventeenth largest
producer of wind power with its 1400 MW installed capacity (2012). Today there is a target of 34%
renewable energy by 2020 and 100% self-sufficiency in energy by 2050. The Austrian wind power
supplier industry is globally leading in the fields of control units, wind power generators, design and
high tech materials. Moreover, public opinion regarding the use of wind energy in Austria is well
above the average, a recent survey found that 77% of Austrians are in favour of wind power.
The additional advantage of the project lies in its closeness to Austria, with regard to the fact that
in Hungary, at present, a wind turbine without a quota given by the highest energy authority, is not
able to join the feed-in tariff system; a new quota tender is not expected in the near future.
22
23
Risk management
The main risk factors of the project have been identified and the methods to prevent and solve them
have been outlined by the project developers, as follows:
IV. Investment offer
Why invest?
Risk factor
Mitigation / Solution
Level of Risk
Plant constructional risk
choice of experienced contractors
medium
with sufficient reference, construction
supervisor, and adequate contracting terms
Cable constructional risk
good knowledge of Hungarian and
Austrian legal background and permitting
process
medium
Availability of bank loan
on-going arrangements with more banks,
arrangement of foreign bank loan facility
medium
Sale of produced electricity (if not
as part of the Austrian feed-intariff system)
special reserves in the business plan,
market monitoring, adequate contracting
terms, experience and market knowledge
medium
Obtaining of permits for the 2nd
16 MW phase
precisely elaborated documentation,
choice of experienced contractors
low
Public opinion
level of acceptance can vary, but can be
handled with PR plan
medium
• Low manufacturing costs, compared to Western Europe.
• High pressure on the development of renewables market in the
EU and Hungary, resulting from the EU goals for 2020. (3rd Energy Package).
• Highly elaborated, detailed project.
• Well-known and widely used technology.
• Expertise of the project developer team.
• Reasonable and stable business plan.
Required amount of investment
8.5 Million EUR (6.9 Equity+1.6 project value)
(calculating with 75% bank loan)
Form of investment
up to 100% share in the project company
The investment value can be reduced by applying EU grants and achieving lower turbine purchase prices.
Assumptions and main indicators
The Business Plan of the project calculates with reasonable estimations both regarding CAPEX and
OPEX costs, and uses realistic macroeconomic expectations; there are several reserves built into the plan.
The Business Plan has been calculated for a 15 years period.
III. Financial Indicators
Quantitative and Qualitative Indicators
Quantitative Indicators
Average yearly EBITDA
2.5 Million EUR
Average yearly revenue
4.5 Million EUR
Average yearly operational costs
810,000 EUR
Qualitative Indicators
poor
adequate
Elaboration level
24
high
X
Existing client relations
X
Reality of market ratio expectation
X
FURTHER INFORMATION
Owner’s background (market presence, experience)
X
Management background (knowledge, experience)
X
Level of innovation in the Project idea /Added value
X
Risk management plan
X
For more information, business plans and contacts to the projects
owners, please get in touch with our team:
[email protected]
25
Basic Project Data
Visonta Eco Fuel - Bioethanol production in Hungary
Sector
Project owner
Location
Implementation period
Overall budget of the project
I.
Short description
Establishment of a bioethanol plant for the production of fuel
quality bioethanol. The plant is to be built on the industrial
site of Mátrai Power Plant with the aim of utilizing synergies
due to the cooperation between the two plants.
II. Project description
2014-2015
The main objective of the bioethanol plant project is to produce fuel quality bioethanol from maize.
The plant is to be built on the industrial site of Mátrai Power Plant with the aim of utilizing synergies
resulting from the cooperation between the two plants. The coal based power plant supplies the
steam and electrical energy to the bioethanol plant, and the by-product of the bioethanol plant is
utilized by the power plant as feedstock. Thanks to this cooperation, the bioethanol plant receives
electricity and steam at a lower price, while the power plant uses a renewable resource, saving CO2
quota by doing so. As a result of this setup, the bioethanol plant is able to produce biofuel at the
lowest energy costs and with minimal waste.
The pre-agreement regarding the sale of the entire quantity of the produced ethanol has already been
made with Mitsui & CO. Deutschland GmbH.
According to the signed supplier contract with the Mátrai Erőmű Plant, the by-product of the bioethanol production is regarded as a renewable fuel and is delivered to the plant for burning. The plant in
exchange sells the electricity produced from the renewable fuel at a reduced price to the bioethanol
plant.
The total capital requirement of the project is 34 Million EUR.
The current business plan calculates with 20% own capital (6.8 Million EUR) and 80% bank loan
(27.2 Million EUR). The project company is currently in the negotiation process with several Hungarian
based and foreign banks, although no financing partner has been chosen at this stage.
34 Million EUR
Permits, access to location site, implementation
6.8 M
Investment need
EUR
Renewable Energy
Visontai Bioetanol Development Co. Ltd
Visonta, North Hungary
Project Background
Project owner
The project company, the Visontai Bioetanol Development Ltd, registered in Hungary, was founded
exclusively for the implementation of the bioethanol plant in cooperation with the Mátrai Power Plant.
The ownership of the project company, with EUR 761,666 equity capital, consists of two Hungarian
companies, according to the following:
- Duna Development Co. Ltd, share: 67%
- F-Estate Ltd, share: 33%
The equity capital of the project company includes the technical plans, preparation works and fees of
the permitting procedure.
Duna Development Co Ltd was originally established as an independent Hungarian-Austrian state
owned enterprise with the aim of supporting the Hungarian Government before entering the EU in
the fields of environment and energy efficiency. Following Hungary’s admission to the EU, the company has been assigned by the Hungarian Government to find and evaluate the possibilities for domestic
bioethanol, biogas and biodiesel projects.
In 2008, the Hungarian Government sold its shares to private owners, who have since developed and
managed the company successfully.
Duna Development Ltd today is an acknowledged project development company with references
from various fields of the energy sector, such as heating plants, gas engines and turbines, and biomass projects.
26
Thus the members of the management are all experienced experts, having spent the last two decades
in the energy and agriculture sector.
F-Estate Ltd is an asset management company with a special focus on renewable energy projects. The
company has taken in part in the implementation of biomass and agricultural projects in the past, and
is acting as a capital investor in the project company.
The bioethanol plant’s project plan is in a highly developed state. The implementation plans and
permissions are available.
When the financial background is agreed, plant construction can start immediately and requires 12
months for completion.
The development area is situated on the site of the Mátra Plant, and a preliminary long term rental
agreement has been signed between the parties. The area is equipped with all the necessary public
utilities (water, gas, electricity, waste water).
The bioethanol technology and know-how will be supplied by Desmet Ballestra Ethanol GmbH.
Availability of feedstock
The feedstock of the ethanol plant is guaranteed as Hungary is an agricultural country where there is
a permanent oversupply of maize (5-10% surplus supply in an average year) for ethanol production.
As far as the present project is concerned, corn suppliers are available at any time for production.
Next to corn, there are other types of raw material available in Hungary. Even though the change of
raw material requires modifications in the technology, these can be carried out in a relatively short
period of time and with low investment costs.
Market background
The marketability and commercial viability of the produced bioethanol product is guaranteed by the
growing global energy demand, and sustainability oriented European Union regulation. The EU biofuel market is highly regulated, thus relies on significant imports due to demand exceeding supply.
As far as market competition is concerned, the quantity of bioethanol produced by the present project
is not likely to face serious competition due to over demand within Europe. Moreover, the majority of
similar producers use raw material other than corn.
27
In Hungary there are two other operating bioethanol producers, namely Pannónia Ethanol Zrt. plant
(opened 2012), and the Hungrana Zrt. plant. Both are operating profitably with their product also
exported to the German market.
The main risk factors of the project have been identified and the methods to prevent and solve them
have been outlined by the project developers, as follows:
Risk factor
Mitigation / Solution
Level of Risk
Plant constructional risk
can be mitigated by choosing experienced
contractors with sufficient references, construction supervisor, and adequate contracting terms
medium
on-going arrangements with a number of
banks, arrangement of foreign bank loan
facility
medium
Outage of main buyer
market monitoring, adequate contracting
terms, experience and market knowledge
of German owners, hedging the buy side by
diversifying the final product contract
medium
Outage of main corn supplier
diversification of supply sources, Hungarian
market knowledge
change to other raw material,
low
adequate
level of acceptance can vary, but can be handled with PR plan
high
X
Existing client relations
X
Reality of market ratio expectation
X
Owner’s background (market presence, experience)
X
Management background (knowledge, experience)
X
Level of innovation in the Project idea /Added value
X
Risk management plan
X
IV. Investment offer
Why invest?
Closing of the Matra Power Plant adequate rent terms for the bioethanol plant low
site, and change to other technology in order
to utilize the by-product as animal forage
(business plan ready for the scenario)
Public opinion
poor
Elaboration level
Risk management
Availability of bank loan
Qualitative Indicators
medium
III. Financial Indicators
• High surplus demand for the bioethanol in the EU and the target market.
• Low manufacturing costs, compared to Western Europe.
• High pressure on the development of renewables market in the EU and
Hungary resulting from the EU goals for 2020. (3rd Energy Package).
• Win-win setup between the Mátrai Power Plant and the Project.
• Highly elaborated, detailed project, with all necessary permissions.
• Well-known and widely used technology.
• Expertise of the project development team.
• Realistic and stable business plan.
Required amount of investment
6.8 Million EUR
(counting with 80% bank loan)
Form of investment
100% share in the project company
(5 Million EUR)
FURTHER INFORMATION
Assumptions and main indicators
The Business Plan of the project calculates with reasonable estimations both regarding CAPEX and
OPEX costs, and uses realistic macroeconomic expectations; there are also several reserves built into
the plan.
The Business Plan has been produced for a 15 year period. The calculated NPV is based on the
estimates of energy and financial experts. The capital cost estimate takes into consideration the risk
factors, such as the official sectorial risk factor, risk free yield, and the total risk premium of the target
country.
The ethanol sales provide 83 per cent of annual revenue, the average sale price of ethanol is calculated as 573 EUR/m3 in the first year, 2014.
For more information, business plans and contacts to the projects
owners, please get in touch with our team:
[email protected]
Quantitative and Qualitative Indicators
Quantitative Indicators
28
Expected investment return
3 years
Average yearly EBIDA
13.2 Million EUR
Average yearly revenue
52.2 Million EUR
Average yearly operational costs
38 Million EUR
29
Basic Project Data
Tesla - Underwater hydroelectric power plant
Sector
Project owner
Location
Implementation period
Overall budget of the project
Short description
Production and testing an innovative renewable energy hydro
power plant technology prototype with the aim of additional
power plant construction, and the sale of 1000 MW patent
right in Hungary.
2M
Funding requirement
EUR
(prototype and production of the first 1MW turbine)
Renewable Energy
Mr Tomislav Tesla, inventor, Mr Róbert Uracs patent rights
holder for Hungary and Slovakia
river (under discussion)
18-24 months
1st Phase-Prototype and production of a 1 MW capacity
working turbine: 2million EUR
Project Background
Project owner
Mr Tomislav Tesla, as an inventor, gained his experience in architecture and engineering. He began the
implementation of his idea eight years ago and finished the development of the technology in 2011.
The patent he received is a result of his work and that of other outstanding experts.
The head of the Hungarian project team is Mr Róbert Uracs, a designer with significant experience
and international connections. As a business partner of Mr Tesla, he is in charge of handling the
Hungarian and Slovakian patent rights of the innovation as well as the management of all tasks in
connection with the project.
II. Project description
The first phase of the TESLA Project involves the production and testing of the prototype of an innovative renewable energy hydroelectric power plant technology; the construction of the first 1 MW
working turbine, and as a result, the sale of patent rights (1000 MW in Hungary) and construction of
new hydro power plants using the technology.
30
The essence of the investment lies in the opportunity to take part in the implementation of a theoretically proven innovation, which – when constructed – will represent an outstanding business opportunity with special rights given to the investor.
Project background
2nd Phase
Construction of additional turbines: 1.25 million EUR/MW
I.
Milestones of the project can be identified as follows:
1. Production of the Prototype Turbine with the aim of proving the effectiveness of the power plant
(expert participation of the Physical Sciences Research Institute of Belgrade (Serbia) and Technical University of Novi Sad with other experts and engineers)
2. Construction of the First Full Size Power Plant with a 1MW capacity on a smaller river in Hungary
3. Start of patent right sales – the Hungarian project owner possesses the right for a 1000 MW patent
to be sold within Hungary
4. Construction of new hydroelectric power plants using the technology – In Hungary and abroad
The basis of the project idea, the “T1 Tesla type underwater hydroelectric power plant” technology is
owned by Mr Tomislav Tesla, a relative of the famous inventor, Nikola Tesla.
The innovation has a PCT (Patent Cooperation Treaty) certificate. The PCT makes it possible to seek
patent protection for an invention in 140 countries.
Mr Tomislav Tesla received the patent (an exclusive right granted for an invention) from the World
Intellectual Property Organization (WIPO ) on September 19, 2013.
A 1000 MW from the patent has been given to the Hungarian project owner to be sold within Hungary.
The regarding contract between Mr. Tomislav Tesla and Mr. Róbert Uracs was signed and certified on
October 03, 2013.
Main objectives of the project:
• Very favourable electricity production cost: approximately 0.02-0.03 EUR/kWh
• Constant electricity supply, no volatility
• Quick and low cost repair – operational costs count for less than 10% of the revenues
• No fuel needed for operation – low variable costs
• 100% environment friendly technology, creates no danger to flora or fauna whatsoever
• Does not interfere with the river traffic – the turbines can be automatically moved vertically in the
river watercourse
• No need for inundation – watercourse rent is required
• Only requires a small area of land and river territory
The total capital requirement of the first phase, such as the production
and testing of the prototype is 2 Million EUR.
The project owner guarantees a maximum of 20% share of the project company, and of the sale of
the 1000 MW patent right in Hungary. An additional maximum 70% share is optionally offered in the
new hydro plants to be built by the project company.
Permits, access to location site, implementation
The technology has a PCT certificate and the patent rights given by WIPO.
The exact location has not yet been chosen for the construction of the actual working hydro power
plant using the Tesla technology; this will be decided following financing. The necessary permits will
be obtained after the production and testing of the prototype turbine
The permitting procedure for renewable energy power plants is strongly supported by the Hungarian
Government and the European Union.
31
Market background
The energy consumption of the European Union and Hungary is constantly increasing. With current
policies, this virtually guarantees the demand for electricity generated from renewable energy sources,
using secure technologies with very favourable operational costs, both in Hungary and in the regional power markets.
Risk management
The main risk factors of the project have been identified and the methods to prevent and solve them
have been outlined by the project developers as follows:
Risk factor
Mitigation / Solution
Level of Risk
Prototype constructional risk
choice of experienced contractors with sufficient reference, construction monitoring and
supervision, adequate contracting terms
medium
Prototype test results
highly detailed plans audited by professionals
and experts
high
Delay in schedule due to prototype improvement
constant process monitoring
high
Permitting process for the first
turbine
detailed preliminary study on the necessary
permits and conditions, include adequate
reserves in the project timeline, preparation of
an environmental feasibility study
medium
Availability of location
detailed preliminary study on the ownership of
the planned river section and its surroundings
feasibility study of network connection
medium
level of acceptance can vary, but can be handled with PR plan
medium
Public opinion
when the financing is in place), the main input data of the business plan is based on professional
assumptions.
The preliminary Business Plan is for a four-year period.
Quantitative Indicators
Life span of one 1 MW turbine
20-25 years
Average yearly energy production of a 1 MW turbine
7,800,000 kWh
Expected investment return
4 years
Average yearly EBITDA
2.32 Million EUR
Average yearly revenue / 1 MW turbine
0.51 Million EUR
Average yearly operational costs
100,000 EUR / MW
Average yearly revenue – patent rights
1.8 Million EUR
Qualitative Indicators
poor
adequate
high
Elaboration level
X
Existing client relations
X
Reality of market ratio expectation
X
Owner’s background (market presence, experience)
X
Management background (knowledge, experience)
X
Level of innovation in the Project idea /Added value
Risk management plan
X
X
IV. Investment offer
Why invest?
• Being part of the implementation of an outstanding innovation.
• Option for a share of the patent rights for the European Union.
• High pressure on the development of renewables
market in the EU and Hungary resulting from the EU goals for 2020. (3rd Energy Package).
• Expertise of the project development team.
III. Financial Indicators
Assumptions and main indicators
As a result of the defined and fix energy prices and the low level of variable costs, the future cash
flow of the project is stable.
As the innovative turbine is currently in the development phase (the prototype will be constructed
32
Required amount of investment
2 Million EUR
Form of investment
maximum 20% share in the project company
Investment return
4 years
FURTHER INFORMATION
For more information, business plans and contacts to the projects
owners, please get in touch with our team:
[email protected]
33
NOTES
34
35