Generation projects continued

Repower's strategy in its key markets is an integrated business model: we generally ensure trading and sales activities with generation from our own facilities or shareholdings. With various power plant projects, Repower aims to gradually enlarge and diversify the generation portfolio. We have reached important milestones particularly in the following projects:

In autumn 2012 the wind farm in Lucera, Apulia, was commissioned on schedule following twelve months of construction. The farm consists of thirteen wind turbines with an installed capacity of 26 megawatts. Since starting regular operation, the wind turbines have already supplied 18.6 gigawatt hours of electricity. With Lucera, Repower's wind power portfolio now includes five farms. These are located in Italy and Germany and have a total capacity of 73 megawatts. The approval process for significant expansion of Lucera is also underway, likewise for the Corleto Perticara wind farm in the Basilicata.

Several important steps were also undertaken in the project to construct a highly efficient combined cycle gas turbine power plant in the CHEMPARK Leverkusen. CHEMPARK Leverkusen covers an area of 480 hectares and is home to 200 industrial companies which will be supplied with heat from the planned power plant in the form of process steam at two different pressure levels. In the year under review, the contract negotiations between Repower, Bayer Real Estate and CURRENTA, the operator of CHEMPARK, were successfully concluded. The call for tender for turnkey construction and commissioning of the plant has been launched. The approval procedure is progressing without any major objections thanks to open and public-oriented communication and the fact that the power plant is based on energy efficient and environmentally friendly technology. Repower is expecting the approval decision from the district government in Cologne in the first quarter of 2013, which should make it possible to decide about investments in the same year. Construction of the power plant with a capacity of 550 megawatts is estimated to take around two and a half years. The new generating capacities will be deployed in the German sales market as well as used to expand the portfolio of Repartner Produktions AG.

The Chlus hydropower project in the Lower Prättigau/Rhine Valley was realigned in 2012. The project itself is a perfect fit for the current energy policy environment: with an expected annual generation of over 200 gigawatt hours – this represents roughly the demand of 45,000 households – it can make a significant contribution to the expansion targets of the federal government and the Canton of Graubünden in the area of hydropower. However, the original variant proved unprofitable as work on the project progressed: particularly the planned construction of two powerhouses, underground structures in the Chlus and the environmental standards proved too costly. After a careful review of several options, we chose a variant that makes do with a single powerhouse in Trimmis. It is still planned to use the gradient between the existing Küblis power plant and the Rhine. The measures to ecologically upgrade the river of the Prättigau Valley are retained in the new project variant. In view of the very low electricity market prices, the project remains economically challenging. Repower is moving forward with work on the concession project and the environmental impact statement (EIS) and aims to complete these in 2013.

With the plans for the Lagobianco pumped storage power plant, Repower is pursuing yet another project that will be one more important piece of the puzzle in the future overall energy supply picture. The power plant will purchase excess electricity and use it to pump water to the higher level reservoir so that when demand increases, turbines can be used to generate hydropower. Storage and pumped storage power plants, because they can respond so quickly, play an important role in guaranteeing grid stability. In the year under review, the Lagobianco SA project company worked intensively on the construction project and on issues relating to the review of the request for concession approval by the Canton of Graubünden. This includes, for example, a land apportionment process in the Poschiavo municipality: revitalisation of the river of the Poschiavo Valley is planned as part of the environmental compensation measures. To acquire the land necessary to carry out these measures, Repower, together with the Poschiavo municipality and the local farmers' association, submitted an application to initiate land apportionment to the cantonal government. The selected procedure is designed to compensate the owners affected for the loss of land by apportioning new land to them. Work on the second stage of the environmental impact statement (EIS II) also continued. EIS II focuses on the environmental impact of, for example, noise and dust emissions during the construction phase. Finally, discussions with potential project partners are continuing – Repower intends to develop Lagobianco SA as a partner company.

In the southern Italian region of Saline Joniche, Repower is planning to construct a hard coal fired power plant. With this project, the Group aims to contribute to diversifying the power mix in Italy and reduce the heavy dependence on gas. By issuing the “Decreto VIA” in June 2012, the Italian Council of Ministers confirmed the environmental assessment of the project. The approval process is now continuing according to legal specifications. Between Repower and other project partners, it was contractually agreed that Repower would reduce its stake in the project company from 57.5 to 20 per cent no later than when the building permit for the power plant has been provided.