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survive relevant hurdle rate – if at all?? IRR No Yes Define WACC for each market Build into cashflow projections ProArc Definition of WACC/Hurdle rate The definition of WACC for each market includes : ?Impact of generic wind risk ?Impact of Offtake/market risk (ine) ?General/average Oamp。M risk (costs) ?Relation/sensitivity between fixed and variable costs ?General construction/pletion risk ?Average lending to investments (5080%) ?Long term interest risk impact ?Credit risk margin ProArc Stages of Project and relevance of risks Phase 1 Early Development Phase 3 Construction Phase 4 Operation Phase 2 Late Development Wind Technology Political O amp。 M Construction offshore Grid interconnection Construction onshore Offtake Wind Political Counterpart/Credit Grid interconnection Technology Counterpart/Credit Technology Offtake O amp。 M Photo by Gunnar Britse: Nysted Offshore Wind farm, Denmark ProArc Examples of WACC/Hurdle rates IRR/Return on relevant markets Risk assessment/WACC = CREATION OF VALUE on investment !! Country Project Phase IRR (Total investment) WACC Creation of Value ? (IRRWACC) UK Onshore II/III preconstruction % % +++ Offshore II/III preconstruction % 89% +++ Germany Onshore II/III preconstruction 89% % ++ Onshore IV in operation 78% 67% ++ Offshore II/III preconstruction 810% % ++ Norway Onshore II/III preconstruction % % + Sweden Onshore II/III preconstruction % % + ProArc Thank you for listening! ? Henrik Balle Senior Project Manager DONG Renewables Tel. +45 4517 1582 Mob. +45 2096 1065 Fax. +45 4517 1282