Natural efficiency

Iberwind’s headquarters are in Oeiras, near to Lisbon, Portugal. Its core activity is the promotion, development and operation of wind energy projects. In November 2008, a consortium led by Magnum Capital Industrial Partners acquired through Iberwind the majority of the wind assets in Portugal, formerly owned by the Australian group Babcock & Brown, as well as the portfolio of service companies that guarantee the management, operation and supervision of those same assets. The Iberwind shareholder structure is mainly based on private equity funds and Portuguese individual shareholders.

Strategic objectives and guidelines
In general terms, Iberwind’s strategic objectives and guidelines are:
– To have an efficient, lean and flexible organisation adjusted to the scale of the assets under management.
– To ensure state-of-the-art management for the wind farms, seeking to maximise energy generation as well as ensuring the market’s highest availability rate and cost-effective operation and maintenance.
– To guarantee appropriate financial management to mitigate the risk and provide long-term access to low-cost funds, including attractive financing for all the wind farms of the portfolio.
– To create value-generating options in attractive European countries from a wind resource, financial and political perspective.

Mission and portfolio
Iberwind is currently the market leader of the wind energy sector in Portugal and one of the main players of the renewable sector in Europe. Iberwind has an excellent portfolio of wind farms located in the most attractive wind resource areas in Portugal, resulting in outstanding energy yields. The Iberwind mission remains to produce electricity using the wind as a clean and inexhaustible source and its goal is to achieve the maximum level of excellence and efficiency in managing and operating the 31 wind farms of its portfolio.

Portugal, with 3,900 GW, accounts for about five percent of the wind energy installed capacity of the EU. Iberwind has installed 680.75 MW of wind energy over the past 12 years, which represents about 18 percent of the Portuguese market in terms of installed capacity and about 21 percent in terms of energy produced. Those 680.75 MW are divided among 31 wind farms, equipped with 331 turbines of 16 different models, supplied by six different manufacturers. Two of the wind farms (Pampilhosa and Candeeiros) are considered internationally to be among the largest in terms of on-shore installed capacity, each with over 100 MW. Iberwind has registered high installed-capacity growth rates in recent years.

Social and environmental responsibility
Iberwind has a clear purpose of promoting the benefits of producing clean energy from a renewable energy source, based on technology to generate wind energy. Their wind farms extend from the north to the south of Portugal, contributing to the development of local economies and promoting the creation of decentralised skill centres. The wind farms are predominantly located in the central and northern regions of the country.

Iberwind’s intervention is not confined to social and economical aspects. Iberwind acknowledges that it has the responsibility to be proactive in its business in order to guarantee that its projects are designed, built and operated in an environmentally responsible way. The wind farms are designed to ensure project compatibility with environmental values present at every site (cultural heritage, geological and geomorphic heritage, fauna and flora, amongst others). Besides monitoring environmental parameters like noise, fauna and flora, the operation and maintenance procedures are planned in order to guarantee the continuous improvement of the environmental performance of projects. An additional environmental asset of Iberwind’s annual energy production is that it avoids the emission of one million tons of carbon dioxide as well as the consumption of one hundred and forty-seven thousand equivalent tons of petroleum.

HR structure and O&M model
Iberwind currently employs 66 people; nearly half of them spread throughout the country at the 31 wind farms of the Iberwind portfolio. To reach a high level of operation Iberwind uses a hybrid concept in terms of operation and maintenance. Basically there are operation and maintenance contracts in place with the turbine manufacturers. However Iberwind also has its own teams that have been trained and qualified by the suppliers to perform a certain level of operation and maintenance on the wind turbines to complement the suppliers’ duties, especially at nights and on weekends.
Iberwind implements close supervision and operations that maximise production. Iberwind has operations staff with training in all models of wind turbines and electric installations, as well as other areas such as meteorology, and health and safety. Iberwind has teams of field engineers and technicians working directly on the wind farms, operating the electrical infrastructure and wind turbines. These teams have fast reaction times, enabling the maximisation of production and assuring the lifetime of the equipment and compliance with all safety procedures. Iberwind uses a Supervision Control and Data Acquisition (SCADA) system to control the wind farms, which was specified and developed by its own staff and later outsourced to a software house that now supplies Iberwind with the service and respective updates.

2010 operational and financial performance
Iberwind’s consolidated EBITDA in 2010 was around 137m euro, with an annual turnover of ¤158m, generated by energy production of 1.7 TWh. The energy production achieved in 2010 accounts for around 21 percent of the wind energy produced in Portugal and approximately three percent of the electricity consumed in Portugal.

Iberwind produces around 21 percent of the wind energy in Portugal from 18 percent of the country’s wind energy installed capacity. This is down to several reasons, two of which deserve highlighting. The first reason is the fact that the Iberwind portfolio has a high load factor. The overall production of the 31 wind farms in 2010 was 2,511 equivalent hours (in terms of installed capacity), which is a very significant number of hours by European standards. The second reason is related to the fact that Iberwind is very availability oriented. Policies and procedures were implemented in order to improve the operation and maintenance efficiency of all Iberwind wind farms. A best practices centre has also been established in order to improve wind farm performance. The result of these policies and procedures is clearly visible in the significant and sustained improvement of the overall level of technical availability of the portfolio, which has improved from 94.9 percent in 2008 to 97.1 percent in 2010, measured as the number of hours the wind farms are really available over a year (8,760 hours) with no deductions at all. The 2010 percentage achieved is extremely high.

Business development
In 2010 Iberwind began the first repowering (full replacement) and overpowering process in Portugal of a 10 MW to a 12 MW wind farm. This 12m euro investment will provide a relevant set of benefits, notably:
– Halting the progressive and inevitable deterioration of the operability/productivity of the wind farm, removing the associated O&M risk and securing a long-term O&M contract, with a positive impact on future cash flows, particularly stability/predictability in the medium to long-term.
– Increasing the productivity level of the Iberwind Group portfolio, taking advantage of a site with excellent wind resources and turning one of the portfolio’s worst performing wind farms into one of the best (at all levels).
– Positively contributing to the rejuvenation, operational standardisation and market image of the Iberwind portfolio.
– Setting an example for other (expected) similar processes that may occur in the near future in the Iberwind Group and, most likely, among other players in Portugal.

In May 2010 a law was passed in Portugal approving these overpowering rules, encouraging the over-equipping of existing wind farms or those in the licensing phase and enhancing the implementation of new wind power in the country. This legislation provides for the possibility of installing up to 20 percent additional capacity in wind farms. Iberwind is currently evaluating the technical, operational, legal and economical feasibility of the overpowering of some of the wind farms of its portfolio.

McKinsey European Benchmarking
Iberwind was invited by McKinsey in 2010 to participate in a benchmark study that included seven other relevant European wind energy producers. This benchmark study was intended to cover the company’s business in 2008 and 2009 and to benchmark parameters such as availability, efficiency, investment, and operation and maintenance costs. The final output and conclusion turned out to be very favorable for Iberwind. McKinsey did not publish the ranking of the companies involved in this analysis; nevertheless, and based on those parameters, Iberwind was generally considered to be one of the best companies analysed by McKinsey.

For more information: Tel: (00351) 214876700; Email: iberwind@iberwind.pt; www.iberwind.pt