EDP Renováveis Presentation - September, 2013 www.edpr.com
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EDP Renováveis
Presentation
September, 2013
www.edpr.com
1
Disclaimer
This presentation has been prepared by EDP Renováveis, S.A. (the "Company") solely for use at the presentation to be made on September, 2013. By attending the meeting
where this presentation is made, or by reading the presentation slides, you acknowledge and agree to be bound by the following limitations and restrictions. Therefore, this
presentation may not be distributed to the press or any other person, and may not be reproduced in any form, in whole or in part for any other purpose without the express
consent in writing of the Company.
The information contained in this presentation has not been independently verified by any of the Company's advisors. No representation, warranty or undertaking, express or
implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither the
Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this
presentation or its contents or otherwise arising in connection with this presentation.
This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the
Company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor
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registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of U.S. securities laws and
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Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The
words “believe”, “expect”, “anticipate”, “intends”, “estimate”, “will”, “may”, "continue”, “should” and similar expressions usually identify forward-looking statements. Forward-
looking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future
growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company’s markets; the impact of regulatory
initiatives; and the strength of the Company’s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based,
in turn, upon further assumptions, including without limitation, management’s examination of historical operating trends, data contained in the Company’s records and other
data available from third parties. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant
known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks,
uncertainties, contingencies and other important factors could cause the actual results, performance or achievements of the Company or industry results to differ materially
from those results expressed or implied in this presentation by such forward-looking statements.
The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice
unless required by applicable law. The Company and its respective agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to,
make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this presentation to reflect
any change in events, conditions or circumstances.
2
EDP Renováveis
EDPR top quality and diversified portfolio
of 8.1 GW in 1H13
Canada
Building the
first wind
farm 30 MW
Belgium
UK
Offshore 57 MW Poland #1
#3 US
under dev.
up to 2.4 GW
320 MW
3,637 MW
France
314 MW
Romania #2
Italy 378 MW
Brazil #1 Portugal Spain #3 40 MW
1,010 MW 2,310 MW
84 MW
Notes: 1H13 Figures; Portugal installed capacity includes 391 MW from ENEOP (Equity Consolidated) 4EDPR a worldwide renewable
market leader
An outstanding growth rate over the last 5 years #3 worldwide wind energy producer
Electricity Production Evolution Top Wind Players
(TWh) (TWh, 2012)
+24% 31.0
CAGR
25.8
18.4 18.4
16.8 16.8
14.4 15.2
10.9
7.8
2008 2009 2010 2011 2012 Iberdrola Nextera EDPR Longyuan Acciona
Source: Companies‘ Reports 5Solid key metrics drivers…
1H13 Operating Metrics 1H13 Financial Metrics
Electricity Output 10.7 TWh EBITDA €560m
Ongoing growth +8% YoY Solid returns +11% YoY
Load Factor 33% Net Profit €129m
Quality assets +0.7bps YoY
Increased profitability +29% YoY
Selling Price €64.3/MWh Free Cash-Flow
Low risk portfolio Self funding strategy €298m
+5% YoY
…delivering stronger profitability and robust cash-flow generation
6Executing a clear strategy to enhance
shareholder returns
Quality assets delivering increased profitability
Ongoing premium performance on key operating metrics: Load Factor, Availability and Cost Control
Better visibility in the US: +250 MW PPA signed in the 1H13 for operating capacity
Selective and profitable growth
Targeting 0.5 GW of capacity additions for 2013: +163 MW YTD & remaining under or to start construction
Increased visibility on growth: +0.4 GW of PPA structured for new capacity to be installed in 2014/15 in US
Self-funding business model
€368m cashed-in through asset rotation in the 1H13: 1st transaction with CTG concluded (Portugal)
Self-funded growth to be enabled by additional transactions under negotiations with financial investors and CTG
7Quality assets delivering increased profitability
First-class assets with 4.4 average years of age
set to deliver premium returns
Assets’ Average Age and Residual Useful Life Asset Base Invested Capital
(Years; weighted average) (MW) (€ million)
EDPR Assets Age
Spain 5.8 2,310
Portugal 4.8 1,011 Property, Plant and Equipment
France 4.1 314
Belgium 4.3 57 (-) PP&E, assets under construction
Poland 1.4 320
(-) Cash grants received in the US
Romania 1.4 378
Italy 0.5 40 (=) Invested Capital in Existing Assets
US 4.1 3,637
Brazil 2.4 84 11,528 (gross) 10,371 (net)
EDPR 4.4 8,150
0 5 10 15 20 25
EDPR has €11.5bn invested in a very young asset base with 21 years of useful life
Notes: 1H13 Figures; Portugal installed capacity includes 391 MW from ENEOP (Equity Consolidated) 9Premium performance based on a distinctive
expertise
Spanish Load Factor: EDPR vs. Market Average
Energy Assessment & Engineering
28% 26% 27% 27%
25% 25%
Spanish
Market
Wind assessment is knowledge-based
and difficult to replicate
Provides site selection criteria 2007 2008 2009 2010 2011 2012
Load Factor: LT view on Current Assets
Optimises layout for superior performance
32% 32%
27% 27% 27%
24% 24% 23% 24%
Supports turbine selection
Key value drivers to maximize
load factors and revenues
Strong in-house wind energy assessment knowledge delivering a structural competitive advantage
10A diversified portfolio delivering balanced output
1H13 Electricity Output Breakdown
Electricity Output Breakdown
(GWh; %)
(GWh, %)
Brazil
6% 9% RoE US PPA
10%
8% Portugal 41%
Brazil
1%
30% 28% Spain
37% 40% US PPA Spain
US Spot 29%
11%
16% Portugal
14% US Spot Rest of
8%
Europe
2010 2011 2012 9%
Balanced generation portfolio with increased output in Eastern Europe and lower merchant exposure in US
11Diversified portfolio with 88% of PPA/Regulated
frameworks with a long-term maturity
Capacity under Long-Term Remuneration Frameworks
(MW; 1H13)
Spot
Maturity
Portfolio exposed to a
diversified set of
economic regimes
44% 49%
44%
45% 88% of PPA/Regulated
Frameworks with a long-term
maturity beyond 2020
12% 7%
2025 Jun-13 PPA/ FiT Green
LT Hedges Certificates
(floors/caps)
Notes: PPA/LT Hedges: US, Brazil, Specific Polish projects, Belgium 12Solid price performance supported by
low risk portfolio
EDPR Average Selling Price
Breakdown of Average Selling Price per MWh
(€/MWh)
2010 2011 2012 1H13 YoY%
€79 €83 €88 €85 -3%
+5% YoY
€94 €99 €102 €108 +1% 63 64
58 58
RoE €94 €96 €107 €111 +4%
PPA/
Hedge
$54 $51 $52 $52 +1%
Spot $31 $30 $31 $31 +24%
R$254 R$278 R$286 R$309 +11% 2010 2011 2012 1H13
1H13 average selling price of 64.3€ per MWh, meaning +5% YoY
13Operational excellence is at the core of EDPR
throughout the projects’ life cycle
1. Performance Optimisation
Innovative product
Continuous improvement enhancements
Remote control system and Power-enhancing retrofits
performance management Systematic review of
pioneered by EDPR to boost
underperformance, root cause
Data from over 2 million sensors annual production
analysis and implementing
in >5,000 WTG, monitored and
improvement initiatives to
controlled in real time
maximize availability, efficiency
Proprietary management and reduce costs
systems to analyse WTG
performance
2. Comprehensive O&M Strategy
Closely manage the initial Post initial warranty
End of warranty
warranty contracts O&M contract
1. Full Scope agreements
Proactive supervision with O&M contractors
Exhaustive end of warranty
through quality assurance
inspections before 2. Modular Maintenance
and control inspections to
launching competitive Model (M3), keeping high
identify serial/infancy
tenders value-added activities
defects
in-house
14EDPR’s O&M strategy is successfully implemented,
resulting in lower O&M costs
Breakdown by O&M Contracts Latest O&M Service Tenders
(GW; 2012) (€k per MW)
8.0 GW
M3 -20%
Contracts
Expiration Date
-15%
>2015
Full scope
contracts 68%
Adequate for
Initial wind farms with
6% very stable
warranty 16% 10%
2013 track-record
2015
2014
Dec-12 Initial Full Scope M3
Warranty Contracts Estimated
Cost Cost Cost
84% of O&M costs predictable/fixed Combination of O&M strategic options, competitive
for the medium/long-term tenders and market context yielding lower O&M costs
15Strong discipline of controllable operating costs
Operating costs breakdown(1) Opex/MW Evolution
(€ million, %) (€k)
10% 13% 14%
21% Levies
-3%
48.8 47.3
90% 87% 86%
79% Opex
O&M
represent
40% of opex
(2010-1H13)
2010 2011 2012 1H13 2010 2012
Operating costs have been mostly penalised by the …while on controllable costs EDPR has been
introduction of new levies (e.g. 7% tax in Spain)… demonstrating higher efficiency
Notes: (1) Excludes write-offs. 16Stronger business metrics resulting in
higher profitability since 2011
EBITDA per Average Installed Capacity
(€k)
2011
131 +5% YoY • Decreasing merchant exposure and
129
electricity price depressing EBITDA
120
2012…
• Increased exposure to the higher realised
prices in Eastern Europe
• PPAs signed in the US guaranteed lower
exposure to spot market, accretive to EBITDA
2010 2011 2012 1H13
Selective growth towards most attractive markets and
reduction of merchant exposure enabling increased returns
17Selective and profitable growth
EDPR to keep benefiting from a
diversified portfolio…
• Decree-Law published in Feb-13 respecting the agreement
reached between the wind sector and the government to extend
Win-win solution and
the remuneration framework
improved visibility
Portugal
• RDL 9/2013 changes the remuneration framework for the sector
with key details still pending to be published
Structurally changes
• Return conceptually defined as Spanish 10Y Bond Yield + 300bps
remuneration for regulatory life
Spain
• New law maintain number of GC per technology, although re-
profiles the projects’ cash-flows. Rights preserved and limited
• Draft proposal for new wind farms, reduction to 1.5 GC until 2017 impact on profitability
Romania and 3GC for solar PV
• Enactment of the new RES Law has been postponed, impacting the
Green Certificate market prices and new long-term contracts
New Law to potentially solve
negotiations
current price environment
Poland
• Italy: 2013 YTD renewable tenders successfully completed
(EDPR securing 60 MW with a 20-year PPA) Long-term visibility for
• Brazil: Upcoming tenders in the 4Q13 to award 20-year PPA new projects
Italy, Brazil, France • France: Stable regulatory framework
• PTC extension enabling a favourable environment in the US
triggering new RfP for PPAs (2013 YTD EDPR secured a total of 380
New growth opportunities on
MW PPA for operating projects)
the short-term
US
19…to execute a flexible growth model…
2014-15 Growth Breakdown
(MW)
New New
Markets Markets PPA based growth to provide
& Techs & Techs
very high visibility on future returns
Strong interest from institutional investors on US PPA
assets to enhance asset rotation program
US to be at the core of EDPR growth
0% - 30% EDPR global growth not to exceed 500 MW/year
Original Strategy Growth Shift
…enabling EDPR to capture opportunities in the most attractive countries
20US emerging after PTC extension and
improved fundamentals
PTC extension Increasing demand EDPR competitive projects
RFPs by Utilities for new PPA (GW)
2013YTD EDPR New PPAs
• 10-year PTC starting from COD 2.3
Operating
• Start of construction to begin 250 MW
before YE2013 projects
1.6 Wind
(no time limit for COD) competiti-
veness
2014 COD 280 MW
• Two options:
0.8
i) Demonstrate physical works
of continuous natures RPS
2015 COD 100 MW
based
ii) 5% capex spending “safe
harbour” 630 MW
1H12 2H12 1H13
Regulatory Clarity + Market Opportunity + Top Notch Projects
21EDPR is securing PPAs for 2014-15 projects at
attractive returns
EBITDA per MW - Portfolio vs New PPAs
2013: PPAs for new projects in US
($k)
Headwaters Rising Tree Arbuckle
+50%
MW 200 80 100
State Indiana California Oklahoma
c180
RPS Yes Yes No
COD 2014 2014 2015
PPA 117
Duration 20yr 20yr 20yr
New PPA vs. EDPR PPA US Installed Capacity (1H13)
Load
Factor ▲ ▲ ▲
1st year
PPA Price ▼ ▲ ▼
Price EDPR US installed capacity New PPAs
Escalator ▲ ▼ ▲ (including merchant)
PPA
duration ▲ ▲ ▲
EDPR continues to execute a flexible business, adding high quality projects to the portfolio
22Self-funding business model
Operating cash-flow and asset rotation as key
sources of funding of EDPR
Operating Cash-Flow Balance sheet discipline
to clearly cover Capex needs
EDPR to keep debt levels and cost of debt under
>120% control in a growth environment
Operating Cash-Flow as
% CAPEX (2012-15E)
Sources of funds to both cover capex levels and
allow for a reduction of Net Debt/EBITDA ratio
Asset Rotation target
€2bn Asset rotation program as key to support
Proceeds from Asset different capex scenarios
Rotation (2012-15E)
24EDPR’s high quality and low risk projects to be the
focus of asset rotation and value crystallisation
Cost of Capital throughout the life cycle of a wind farm
(WACC; %)
Operating Assets
Cumulative
value creation Accelerate value growth through
asset rotation:
1. Crystallise existing projects’ NPV
(capture value created)
2. Re-invest in new value accretive
projects
Assets to
target
Co-Development
High Risk Risk Reduction Low Risk As an option to expand to
other markets or technologies
Development Construction Operation
25EDPR has already executed two significant
asset rotation transactions
November 2012: China Three Gorges December 2012:
Borealis acquires a 49% Corporation CTG acquires a 49%
interest in US wind farms in equity shareholding and
Oregon, Minnesota, Texas 25% of the outstanding
and Illinois shareholder loans of
wind farms in Portugal
Transaction Scope: Total consideration: Transaction Scope: Total consideration:
599 MW $230m 615 MW €359m
Implied Transaction Average asset age: Implied Transaction Average asset age:
Value (EV/MW): Value (EV/MW):
$1.3m 4.5y €1.6m 6y
$2.4m(1) €2.4m(1)
Notes: (1) including all cash-flows generated by the projects since inception 26Asset rotation program to be enhanced by
Institutional Investors and US strategy
China Three Gorges Institutional Investors
• Looking for top quality projects with stable and visible • Looking for projects with electricity output contracted
cash flows mainly through PPA/LT Hedges schemes
• Partnering with CTG for the sale of minority stakes in • Ongoing negotiations for operating assets, specially in
wind farms and for a co-capex program through 2015 the US, but also in European FiT asset type
• US growth PPA based strategy to be an enabler of the
• 2nd transaction with CTG in progress
asset rotation strategy
Further news on asset rotation deals expected to be announced throughout 2013
27Spanish Regulation
New framework in Spain still to be implemented
structurally changes the remuneration scheme
Spanish Energy Reform consists of several events with impact on Renewable Energy
Royal-Decree Law Royal-Decree Ministerial Order
Approved Draft Published Pending
RDL 9/2013 Draft of RD sent to the Government to announce
Project of Electricity Sector Law Energy Regulator (CNE) remuneration components
• Changes the remuneration • Defines remuneration • Government will have 3
framework for Renewable methodology: based on past months after the RD approval
Energy Sector and future (Revenues-Costs) to develop a Ministerial Order
• Outlines principles: return of standard asset • Key parameters definition will
defined as Spanish • Sets 6 year regulatory periods determine renewable energy
10Y Bond Yield + 300 bps for • Efficient asset will continue to remuneration for each
the regulatory life receive above-average returns segment of assets
Details of new regulation expected to be published in the 4Q13
Only after the publication of key parameters and standards the economic impact can be assessed
29Ministerial Order will define key parameters for each
group of assets to yield an average 7.5% return
How to compute the 7.5% return
for a standard asset?
1 COD Today
1 Define the standard asset
standard
capex
• When was the asset installed? A
• What was the standard investment cost? (MW x average load factor x regulated price)
• Which cash-flows received a standard asset? -
( standard opex )
• What is today the Net Asset Value of a standard asset? B Net Asset
Value
Capitalised at
2 Define future key parameters 10Year Bond + 300bps A - B
• How many years of regulatory life?
What is the future pool price? End of
•
• What is average load factor for the standard asset?
2 Today Regulation
• What are the operating costs of a “well managed
company”? Net Asset
• What is the required capacity complement (on a per Value
MW basis) for a standard asset to obtain a 7.5% return? C + D
(MW x standard load factor x pool price(1) with cap & floor)
3 Regular regulatory revision C
-
( standard opex )
• Complement will be revisited every 6 years, following the capacity complement per MW
update of the Net Asset Value of the standard asset. D
• There will be interim revisions (every 3 years) to correct Discounted at
10Year Bond + 300bps
deviations from the expected pool price.
Notes: (1) Forecasted. 30EDPR has younger assets with
above market operating metrics
Installed Capacity in Spain
EDPR continuously delivering better load factors
(%, MW)
Spanish Load Factor: EDPR vs. Market Average Installed Capacity: EDPR vs. Market Average
%
Average annual premium of 230bps EDPR: 5.8 years; Market: 7.2 years
Spanish
100% Market
27% 27% 29% 29% 27% 28% 27%
25% 26% 25% 27%
Spanish
Market
50%
2002 2004 2006 2008 2010 2012 2002 2004 2006 2008 2010 2012
Higher load factor represents EDPR has younger assets, with
premium annual electricity sales (+c10% per MW) 19 years of remaining useful life
311H13 Results
Delivering a sound 1H13 performance
• 8.1 GW of installed capacity (+648 MW YoY and +163 MW YTD)
Premium assets and
• Top-notch load factors of 33% (wind index at 105%)
diversified portfolio
• +8% YoY on electricity output growth to 10.7 TWh
• Revenues up 12% YoY: Output (GWh) +8% and Avg. Price +5%
Strong financial
• EBITDA +11% YoY with performance more than offsetting new 7% tax in Spain
growth
• Net Profit up 29% YoY to €129m (or +17% adjusted)
• Operating cash-flow increased 31% YoY (€472m) largely…
Cash generation • …covering the €104m Capex in the period
capabilities • Net Debt of €3.0bn (-€0.3bn YTD) reflecting operating performance and
execution of asset rotation strategy
33Strong growth allied to top performing assets
Electricity Production
Load Factor and Technical Availability
(TWh)
1H12 1H13 1H3 vs.
+8% average
10.7 27% 31% 110%
9.9 +0.2
+0.6
38% 36% 101%
25% 27% 96%
32% 33% 105%
EDPR
Technical 97.6% 97.7%
1H12 Capacity Load Factor 1H13 Availability
Growth Performance
Assets delivering leading operating metrics
34Selling price increased +5% YoY to €64/MWh
supported on higher output from Europe
EDPR Price Evolution (€/MWh)
1H13 % YoY
+5%
Higher prices in RoE
EU €94 -0.4% hampered by the end of
the Transitory Regime (SP) 64.3
61.4
Mix impact:
+€2.4/MWh
Benefiting from higher
US $48 +5% Forex impact:
PPA prices and output -€0.4/MWh
Inflation + working hours
BR R$309 +11%
adjustment
1H12 1H13
Higher output in Europe and stronger prices in the US driving the +5% YoY avg. selling price
35Revenues increased 12% YoY to €756m...
Revenues
Main drivers for Revenues performance
(€ million)
+12%
Quality assets: +648 MW YoY
756
Top-notch load factor: 33%
High availability: 97.7% 673
Solid electricity output: +8% YoY
EU +19%; US +0.2%; BR +5%
Stronger average selling prices: +5% YoY
EU -0.4%; US +5%; BR +11%
1H12 1H13
...driving a continuous improvement in the portfolio’s metrics
36Strong discipline of operating costs with
performance penalised by new 7% tax in Spain
Opex (excluding Other Operating Income)
(€ million)
Opex/MW
+20% (€k)
+13%
221 7% Tax
184 19 in Spain
1H12 1H13
Opex/MW (ex-7% Tax in Spain & write-offs)
202 (€k)
+10%
+1%
1H12 1H13 1H12 1H13
Other
Operating 14 +€11m 25
Income (1)
Ongoing focus on efficiency and control over Opex
Notes: (1) 1H13 impacted by $18m (€14m) from the restructuring of the off-taking volumes of a long-term PPA in the US (200 MW). 37Solid financial growth from top to bottom
EBITDA to Net Profit
(€ million)
D% YoY
EBITDA 560 +11% Strong top-line growth and costs under control
D&A 233 +5% New capacity, impairments and grants amort.
EBIT 327 +16% Performance benefiting from operational leverage
Financial
121 -6% Lower interest costs (-4%) due to lower net debt
Results
Taxes 56 +18% Tax Rate of 27.3% (vs. 31.1% in 1H12)
Minorities 21 +282% Borealis transaction and performance in Iberia
Net Profit 129 +29% Net Profit benefits from top-line performance
38Operating Cash-Flow increased 31% YoY
Free Cash-Flow totalled €298m
1H13: Source and Use of Funds
(€ million)
Source of Funds Use of Funds
93 Free Cash-Flow
104 €298m
368
+31% 337
92
100
35
472
263
Operating Cash Asset Rotation Net Interest Capex PP&E Other Dividends Debt
Cash-Flow Grant (CTG) Costs(1) suppliers Payments Reduction
Net Debt decreased €263m YTD (€464m QoQ)
CTG-EDPR Portugal transaction concluded in 1H13 as expected (€368m)
Notes: (1) Net Interest cost (post capitalisation). 39Debt reduction and lower cost of debt leading to a
decrease of Net Interest Costs
1H13 Debt Breakdown
1H13 Operating Metrics
(%)
4% Bank =2018 -10bp YoY
Net Debt
€3,042m with EDP 81%
60%
77%
€101m
Net Interest Costs
-4% YoY
Debt Currency Type Maturity
40Annex
IFRS 11
IFRS 11 rules and impact in EDPR
IFRS 11 rules… …with impact in EDPR from 2014 onwards
Joint ventures previously consolidated EDPR his currently consolidating
using proportional method will be proportionally assets in the US and in Spain
consolidated by equity method from 50/50 partnerships
Capacity included in
reported EBITDA MW 277 MW
Proportional consolidation will only be allowed when from 50/50 partnerships
the partner has control over the assets and obligation
for the liabilities, as defined in the agreement
between the partners Estimated impact in
2014E EBITDA from c€30m
IFRS11 implementation
Estimated impact in
Implementation of IFRS in EDPR will happen in 2014 2014E Net Income from none
IFRS11 implementation
43Regulation Pack
Spain: New regulatory review yet to be fully
disclosed
7% General Tax over electricity sales generated in Spain was introduced in January, 2013
RD 2/2013 RD 9/2013
Compulsory for all the assets RD 2/2013 to lose its effect once
under the special regime full framework enters into force (reference date Jul-2013)
Feed-in Tariff Return
• Established as the Spanish 10-year Bond yields plus
• First 20 Years: €81.247/MWh (2013)
300bps (currently 7.5%)
• After Year 20: €67.902/MWh
• Remuneration method based on past and future returns
of a standard asset
Inflation Adjustments Visibility yet limited
• Annual inflation excluding energy products and food, and • Legislation still pending to be published and approved
any impact of tax changes, minus “x” (50 bps).
Further details expected in the 4Q13
45Portugal: Feed-in tariff according to wind
farms’ COD
All the capacity contributing to EDPR’s EBITDA is ENEOP’s capacity is remunerated
under the “old” regime under the “new” regime
Before DL 33A/2005 After DL 33A/2005
Applicable to wind farms Applicable to
licensed until February, 2006. ENEOP’s wind farms
Feed-in Tariff Feed-in Tariff
• Duration: 15 years + 7 years • Duration: 15 years (or the first 33 GWh (per MW).
• Initial duration (15 years): Feed-in tariff updated with • Price defined in a international competitive tender
inflation • €74 established tariff for first year. CPI monthly update
• Duration extension (7 years): market price with a for following years.
cap/floor system (€74/MWh - €98/MWh) • After the initial period wind farms are to receive the
• Tariff is indexed to operating hours and is inversely market electricity price and Green Certificate, if a GC
correlated with load factor. market exists.
46France and Belgium: Stable regulatory environment
France Belgium
Feed-in Tariff Market Price + Green Certificates
• First 10 years: Feed-in tariff is fixed at €82/MWh,
• National market for electricity or bilateral contracts
inflation-type adjusted.
• 1 GC /MWh for wind during 10 years, with 5-year validity
• Years 11-15: Tariff is revised in year 10, inversely
and tradable on established market.
correlated with historical load factor:
• Cap and floor for GC:
€82/MWh for an average 27% Load Factor
Wallonia (€65-110)
€28/MWh for an average 41% Load Factor
Flanders (€80-125)
47Italy: Remuneration with long-term profile
COD before 2013 COD equal to 2013 or later
Market Price + Green Certificates / Feed-in Premium PPA through competitive auctions
• Market price + GC until 2015. GCs are bankable for 3 • Competitive annual tenders awarding 20-year PPAs
years.
• GSE has obligation to buy GCs issued until 2015 at
0.78*(€180/MWh – “P-1”), where “P-1” is the previous
year average market price.
• GSE buying price for 2013 is €80.3.
• After 2015, remuneration is absorbed into a Feed-in
Premium scheme with premium defined as
0.78*(€180/MWh – “P-1”), where “P-1” is the previous
year average market price.
48Poland: Green Certificate system
Framework for Existing Assets Draft for New Assets
Market Price + Green Certificates Market Price + Green Certificates
• Price achieved in market, bilateral contracts or selling to • Enactment of the new RES Law has been suffering delays.
distributor at regulated price (PLN201.4/MWh in 2013) • New RES Law will define key parameters for new assets:
• Wind receive 1 GC/MWh which can be traded in the Number of Green Certificates per technology
market.
Quota of GCs for energy suppliers
• Electric suppliers have a substitution fee for non
compliance with GC obligation. In 2013, the substitution
fee was set at PLN297. Substitution fee is updated with
inflation..
49Romania: Green Certificate system
Framework for Existing Assets Draft for New Assets
Market Price + Green Certificates Market Price + Green Certificates
• Wind assets receive until 2017 2GC/MWh and after 2017 • Draft proposal for new wind farms: 1.5 GC until 2017 and
until completing 15 years receive 1GC/MWh. 1 out of the 0.75 GC from 2018 onwards until completing 15 years.
2 GC earned until Dec-2017 can only be sold from Jan- • Draft proposal for new solar power plants: 3CG for solar
2018 PV for 15 years.
• Solar assets receive 2GC/MWh for 15 years. 2 out of the
6 GC earned until Mar-2017 can only be sold after Apr-
2017.
• GC are tradable on market under a cap and floor system
(cap €58.8 / floor €28.9)
50US: Electricity Sales + Tax Incentives
Framework for Existing Assets Draft for New Assets
Market Price + Green Certificates Market Price + Green Certificates
• Sales can be agreed under PPAs, Hedges or Merchant • Sales can be agreed under PPAs, Hedges or Merchant
prices. prices, with region being a determinant
• Green Certificates (Renewable Energy Credits, REC • Green Certificates (Renewable Energy Credits, REC
subject to each state regulation subject to each state regulation
Tax Incentives Tax Incentives
• Depending on the COD, wind also collect Production Tax • Projects that start construction or have COD until Dec-
Credits (10-year period starting from COD) or Investment 2013 are ilegible for a 10-year PTC / 30% ITC.
Tax Credit (in the amount of 30%, which – dependind on
• Accelerated depreciations (MACRS) allows to fiscal
COD – could be monetised through the Cash Grant
depreciate wind farms (around 95%) over the first 5
option)
years
• Accelerated depreciations (MACRS) allows to fiscal
depreciate wind farms (95%) over the first 5 years
51Brasil: Long-term PPA
Framework for Existing Assets New Assets
PPA PPA through competitive auctions
• Electricity sold under 20-year PPA with price annualy • Competitive annual tenders awarding 20-year PPAs
updated according with inflation-type adjustment.
• Contracts established under incentive programs for
renewable energy
52IR Contacts
Rui Antunes, Head of IR
Francisco Beirão
Maria Fontes
Emanuel Sousa
E-mail: ir@edpr.com
Phone: +34 914 238 402
Fax: +34 914 238 429
Serrano Galvache 56, Edificio Olmo, 7th Floor
28033, Madrid - Spain
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