Red Sky Energy Limited · ASX:ROG

Red Sky Energy — Investor Presentation (March 2014)

16 slides from Red Sky Energy's investor presentation, Mar 24, 2014

  1. Slide 1: Making solar an attractive investment

    For personal use only “Making solar an attractive investment” 24th March 2014

  2. Slide 2: Key Messages

    Key Messages For personal use only ☼ Solar projects are expected to play a major role in power generation in Australia ☼ Soleir’s tax effective project financing reduces cost of capital by 25-30% ☼ Creates an attractive alternative investment for high networth individuals ☼ Delivers substantial deve

  3. Slide 3: Contents

    Contents For personal use only Corporate Structure Our team Our solar projects Solar’s role in the National Electricity Market Constraints on competitors Our funding approach Unique financing structure Developer/Manager role First mover advantage Potential developer margins Next steps 2

  4. Slide 4: Corporate Structure

    Corporate Structure For personal use only Issued Capital Share Registry ASX Code : ROG Energy Infrastructure and Resources Shares : 1,680 million 10.7% Unlisted Options : 200m ERM Power 8.9% (ex @ 4 cps by Sep 2014), St Baker Investments 5.9% 60m (for directors @ 2.25 Resolve Geo 4.8% cps by Mar 201

  5. Slide 5: Our team

    Our team Rohan Gillespie Managing Director, Red Sky Energy For personal use only Mr Gillespie has worked in the energy industry for 30 years in project Bill Fox Responsible Manager, RE management, finance and business development. Mr Gillespie’s career Mr Fox is the Co-Responsible Manager under the

  6. Slide 6: Our solar projects

    Our solar projects For personal use only  Low cost low risk approach  Initially small utility scale projects  1MW to 5MW each  sited on low value rural land  permitted at Council level  Fit within distribution grid  sited near sub-stations  minimal impact on grid  Long life low operating ri

  7. Slide 7: Solar's role in National Electricity Market

    Solar’s role in National Electricity Market  Valuable generation For personal use only  output closely correlated with demand  operates in intermediate to peaking range  Receives time-of-day premium  historical analysis shows solar operates during most high price periods  demonstrated during r

  8. Slide 8: Constraints on competitors

    Constraints on competitors For personal use only  Traditional funding approach not presently viable  based on fixed price, long term power purchase agreements (PPA)  allows for bank debt and geared equity returns  however retailers are not entering into PPAs  Solar needs to sell on spot basis 

  9. Slide 9: Our funding approach

    Our funding approach For personal use only  Utilises equity that takes price risk  closely aligned with operating and revenue model  allows selling on a spot basis to achieve time-of-day price premiums  does not require fixed price, long term PPA  Product Ruling granted  ATO has provided a rul

  10. Slide 10: Unique financing structure

    Unique financing structure For personal use only  subject to patent application  unitised to allow individuals to invest  directly own PV panels and inverters  investors come in at start of scheme  fully fund construction  depreciation occurs upon “installed ready for use”  can allow 100% dep

  11. Slide 11: Financing contractual relationships

    Financing contractual relationships For personal use only Generators (Investors) Rhythm Section Soleir Investment Dubbo Management Red Sky (RE) Energy Soleir (Head-Lessee) Balance-of-Plant Assets Soleir Systems Dubbo City Essential Soleir Energy Soleir Energy Council Energy Services Trading (Landhol

  12. Slide 12: Developer/manager role

    Developer/manager role For personal use only  Manages project through life cycle  secures rights to land, secures development consents – cost approx 4c/Watt  manages design, procurement and construction – most of cost is purchased items, simple construction  manages operations and sales  Low co

  13. Slide 13: First mover advantage

    First mover advantage  Funding structure allows projects to proceed For personal use only  negates uncertainty of current political climate  removes constraints holding back other developers  Dubbo Solar One Project is ready to go  regulatory approvals in place  suppliers short-listed  Next t

  14. Slide 14: Potential developer margins

    Potential developer margins For personal use only 2014 2015 2016 $20k per month cost of funding team and compliance $1m development cost for next tranche of 25MW IRR 92% $375k dev/man fee for Dubbo $5m dev/man fee for next tranche 13

  15. Slide 15: Next steps

    Next steps For personal use only  Secure funding for Dubbo Solar One Project  open applications in late April/early May  target financial close in late October  project operational in June 2015  Progress next tranche of 25MW  secure project sites via lease or purchase  progress development co

  16. Slide 16: Disclaimer

    Disclaimer For personal use only The information presented herein contains predictions, estimates and other forward looking statements that are subject to risk factors that are associated with the power project development business. Certain information in this presentation has been derived from thir

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