Feasibility Analysis Clean Energy Business - Wind Turbines and Hybrid Systems - Entrepreneurship Course

1. Executive summary

Ever-increasing global demand for electricity, serious concerns about fossil fuels’ role in climate change and the imposition of federal and state renewable energy standards have combined to create huge investment demand with excellent opportunities for future growth.

At the same time, investors are seeking new investments that provide competitive returns yet are not dependent on asset valuation bubbles, trading arbitrage, or opaque quantitative methodologies. Renewable energy project investments can meet these objectives.

2. Introduction

In order for a person to be able to start and manage a business one has to have motivation, desire and talent. Before you need to begin with your idea keep in mind that your product or service has to serve the needs of customers on the market. As an entrepreneur you do not focus on great ideas that have worked in the past, or on extravagant ideas that will definitely have success on the market because it is so new and for sure customers will use your product or service. As of a recent study, in the period before this current crisis 76% of all entrepreneurial ideas went bankrupt in the first year from establishment. Now in this crisis period entrepreneurial ideas have a failing proportion of up to 84%

In Romania this proportion is a bit higher but there is another problem, due to the tight bureaucracy and rigidity of the Romanian business environment it seems that entrepreneurs cannot change fast enough their business idea in order to keep afloat and thus once you go bankrupt from the beginning he state does not allow you to refocus on a different idea in time to salvage some of your investments. This is why there is a lack of entrepreneurs on the Romanian market.

2.1 The business idea

On the current Romanian market the social corporate responsibility is making “victims” on behalf of new businesses that want to stay alive on this market. From my point of view the best business idea right now comes from focusing on the tendency of the current market and seeing that people are now more than ever aware of the fact that salaries are low, a steady job is not a thing to come by and economy is the word of the day. In this case my business idea reflects in total this economic part. This paper focuses on the feasibility analysis of implementing a clean energy business idea, more exactly wind and hybrid systems.

3. Concept statement

THE COMPANY NAME AND ITS MISSION :

S.C. MAXEOL S.R.L. The mission of the company is to provide alternative clean energy for households through wind turbines and hybrid systems.

LOCATION OF THE COMPANY AND ITS OPERATIONS:

This company will have as headquarters the following address: Constanta, 49 Ioan Ursu Street, Bl. N2A, Sc. B, Ap. 24, Constanta. After a well conducted study it seems that the best place for a Wind turbines park is in Dobrogea The operations will take place on the site. The site will be located on field which is on a hill between Gălbiori and Ţepeş Vodă. This was my grandfather’s field, but it was donated to my mother and now I am in its possession. There are 10 square acres (10000 square meters). Enough space to be able to build 16 wind turbines of 20 MW but we will only build 6 turbines with a power of 7.5 MW, and a electrical plant of 400 / 110 KV, with a final investment cost of 3,75 million Euros.

PRODUCT OR SERVICE TO BE SOLD:

The products sold will also be the hybrid system, in order to better use and distribute the energy gathered. But as the main product the energy is the basis.

TECHNOLOGY AND RESOURCE TO BE USED:

As Romania has a potential wind energy of about 23.000 Gwh/year) and solar energy of about 1.200 Gwh/year) the business looks extremely profitable. The first resource is the land that I have on hand. The second resource to be used is wind turbines and hybrid systems, which will be bought with funds from the Romanian Environment Administration, which guarantees and allows entrepreneurs to use European Funds in a proportion of 85% of the total investment. The rest we can attract from foreign investors which are already interested in this business like the Portuguese group Martifer. And In the case the money is not enough we can take a loan guaranteed by FNGCIMM by mortgaging a part of the land.

CUSTOMERS:

As for customers the main customer is the company S.C. ENEL S.A. but at a smaller level we can easily trade with households in the area, which account for around 5000 families more than enough with some energy to spare.

4. Opportunity analysis

Due to the fact that the use of this type of energy is an attractive opportunity for investors and not only, has the implementation of such a business showed great potential if implemented correctly. Customers are represented by people living in the country side, and that will definitely receive a cheap essential product. But at the same time a product that definitely creates value for the end user. This opportunity is extremely durable and timely as long as the market does not get overflowed by such small companies. But at least the company has an advantage in the area and thus being the first mover. But for one to actually estimate a good price one must analyze the industry trends, in the area but also in the whole country.

A better understanding of the environmental trends is available after following the PESTLE analysis.