19 June 2014
Greg PritchardManaging Director
Leaders in Remote and Clean Energy
DisclaimerImportant Notice and Disclaimer
This presentation:
• Is not a recommendation to buy, sell, hold, borrow against, mortgage or deal in connection with Energy
Developments Limited ABN 84 053 410 263 (EDL) shares/securities in any way
• Is limited in scope and covers only part of EDL's operations
• May contain forward looking statements, all of which are predictions only, and are subject to inherent risks, changes and uncertainties, including factors and risks specific to the industry in which EDL operates, as well as Government policy, general economic conditions, prevailing exchange rates and interest rates and conditions in the financial markets. Actual events or results may differ materially from the events or results anticipated, expressed or implied in any forward looking statement
Some the views expressed in this presentation contain information that has been derived from publicly available sources that have not been independently verified. No representation or warranty is made as to the accuracy, completeness or reliability of the information. This presentation should not be relied upon as a recommendation or forecast by EDL.
EDL and its directors and employees disclaim any liability for any loss arising from the use of this presentation or any information in it for any purpose and in any context to the maximum extent permitted by law.
2
EDL - Market Leaders in <100MW Power >850MW distributed power generation
• Remote Energy 338MW
• Waste Coal Mine Gas 253MW
• Landfill Gas 262MW
Scale
Diversified
Long life assets
Long dated contracts
Blue chip counterparties
Capability
Growth
Strong profitability
3
Key Highlights1 Scale
2 Diversification
3 Incumbency
4 Counterparties
5 Capability
6 Growth
7 Profitability
- 853MW of distributed power generation
- #1 market positions in Australia
- 82 projects across 3 continents
- >80% contracted; >50% capacity based revenue
- Long life assets and contracts
- Track record of recontracting
- BHPB; Anglo American; AngloGold Ashanti; Glencore
- Horizon Power; Power & Water Corporation
- Commitment to Zero Harm
- Centralised, integrated O&M and asset management
- 101MW commissioned/acquired in FY14 YTD
- 39MW in commissioning/construction
- FY13: EBITDA $177m; NOCF $131m; ROE 18.9%
- FY14 EBITDA: $179m - $185m
- Progressive div. policy; FY14 at least 22cps fully franked
4
Long Dated Contracts with Blue Chip CounterpartiesAsset capacity (MW)
Weighted average contractual years and asset life
Blue Chip Counterparties
Remote Energy (338 MW)
2030+
Clean Energy (515 MW)
2030+
- | 5 10 | 15 |
Contracted years remaining | Asset life |
5
Our Capability - Safety and People Highly experienced team with a strong track record of safely managing and growing the businessSafety
Target Zero Harm
Industry-leading safety performance
Zero LTIs in past 16 months (in excess of 1.4 million hours worked)
One medically treated injury in last 16 months
(TRIFR: 1.00)
People
Strategies in place to attract and retain key talent
Improved MW/ FTE from 1.48 in
FY11 to 1.84 in FY13
6
Our Capability - Asset ManagementEDL Installed MW by Engine OEM 1
OTHER, 184
MW, 22%
CAT, 347 MW,
42%
DEUTZ, 128 MW,
15%
JEN, 174 MW,
21%
1 EDL estimate only, subject to various assumptions
Asset management planning and condition based monitoring reducing maintenance costs
In-house O&M, central control and adjacent operations reduces operational labour cost
Strong track record of consistent KPI improvements, including
Increased capacity factors
Cost savings programs
Potential for efficiency improvements in older units
7
Executing Growth - $350m successfully invested since FY12 McArthur River - in partnership with Glencore
• Supporting Glencore's McArthur River mine expansion
- Doubling capacity and increasing mine life to 2038
• 24MW gas power station since 1995
• 20 year Power Purchase Agreement for 68MW
- 53MW Wärtsilä expansion
- Continued utilisation of existing 24MW power station
• ENE's largest remote energy power station at COD in
January 2014
• Supporting Anglo's commitment to reducing carbon emissions and gas extraction costs
• 45MW WCMG power project since 2008
• 18MW expansion underpinned by:
- 25 year WCMG supply extension with Anglo
- Network support agreement with Powerlink
• At COD (expected July 2014) total installed capacity will increase to 63MW
8
Executing Growth - Envirogen Acquisition Rationale
• 43MW bolt on to existing 193MW WCMG business
• Adds Glencore and Vale as 3rd and 4th
WCMG customers
• Long dated mine lives at two major sites - Oaky Creek and Integra (Glennies Creek)
• Scope for significant synergies from
performance improvement
• ENE OHSE standards and SPIRIT
values; lifted operating performance
• Removed outsourced O&M and
corporate overhead
• Applying ENE experience and practices to drive higher capacity factors and asset returns
• Excess gas future potential expansion
• Potential consolidation benefits - German Creek and Oaky are 7km apart
Tahmoor
• Glencore Xstrata
• Expected mine life to 2028
• 7.3MW
Oaky Creek
• Glencore Xstrata managed mine
• Expected mine life to 2046
• 21MW
Integra (Glennies Creek)
• Vale operated mine
• 11.7MW
Teralba
• Glencore Xstrata; mine closed
2001
• 3.1MW
9
Executing Growth - Upstream LNG Key Terms
1. Purchase of 7 generator sets totaling 21MW for
~$21m in April 2014
- Initial 12-18 month rental agreement with Clarke
Energy Australia for upstream LNG electrification
- Options to acquire a further 12 generator sets totaling 36MW of contracted capacity on similar terms for ~$30m
2. Potential for
- Extension of initial lease agreement
- Subsequent utilisation in ENE WCMG or wider growth projects
• Attractive economics with accelerated EBITDA expected from initial sale/ leaseback
• Asset redeployment into ENE business post lease
- Reduces capital costs for future projects
- EPC relocation terms locked in at acquisition
• Extends clean energy footprint closely adjacent to
WCMG assets
Reedy Creek, QLD
10
Regulatory Update - RET Review• EDL has a long history of working with Governments to deliver GHG abatement and renewable energy targets around the world
• Private sector needs certainty that the regulatory framework under which it invests will be grandfathered in the event of policy change, so those investments are not stranded
• Although the energy industry is weary of ongoing regulatory change there is a degree of confidence this can be managed through grandfathering existing investments should any material policy changes be made
"This is a Government which is determined to keep faith with businesses which have made investment decisions honestly and fairly on the basis of government policy."
Prime Minister Hon Tony Abbott MP 27 Feb 2014
11
Summary 1. Market leaders in <100MW power 2. Differentiated and diversified business in a challenging market 3. Proven capability to deliver and operate bespoke distributed power solutions for ourcustomers, safely and on time/ budget
4. Long life assets and contracts with blue chip counterparties 5. Strong profitability and well capitalised12
distributed by |