Edp S.a. · EURONEXT:EDP

Edp — Investor Presentation (February 2007)

15 slides from Edp's investor presentation, Feb 16, 2007

  1. Slide 1: PPAs/CMECs Legislation Package

    PPAs/CMECs Legislation Package Lisbon, February 16", 2007

  2. Slide 2: Economics of EDP's PPAs in Portugal

    Economics of edp’s PPAs in Portugal CAPACITY CHARGE + ENERGY CHARGE - FUEL COSTS ROA 8.5% real pre-tax Pass through of fuel costs + Annual Depreciation • Fuel procurement costs are + paid through the energy charge Contracted O&M in accordance to international fuel indexes Values updated to inflation

  3. Slide 3: Hydro and thermal plants under PPAs

    ! Plants MW GWh* Plant Type Large M. Started in End of PPA 26 large hydro plants: Total Hydro 4.095 9.412 26 plants Works Alto Lindoso 630 831 Reservoir 1992 2024 - Reservoir: 39% of capacity Miranda 369 846 Run of river 1960/95 1970 2013 45% of capacity - Run of river: Aguieira 336 219 Reservoir/Pu

  4. Slide 4: PPAs Contracted Gross Profit and after the end of PPAs

    " # $ % & $' & PPAs Contracted Gross Profit After the end of PPAs • Hydro Plants: 1,000 edp and REN should agree on the 800 economic framework for the plants’ 600 operation afterwards. If no agreement is achieved, PPAs grant to edp the 400 right to a contracted residual value. 200 0 • Thermal plants

  5. Slide 5: CMECs

    !( ! " Plants with PPAs satisfied 58% of Portuguese electricity demand in 2006 (edp’s PPA plants 41%) Single-buyer system restricts market liquidity and is not in line with EU liberalisation directives Portuguese and Spanish governments committed on the promotion of a liquid and efficient MIBEL CMEC

  6. Slide 6: Calculation of the Base CMEC

    !( ! ( ) Calculation of the Base CMEC1 Billion euros CMEC calculation assumptions: Cash Flows Discount Rate: Portuguese Reference Government Bond Yield (Maturity Jun-14) +25 b.p. wholesale price assumptions 8.3 7.5 revision €50/MWh (real) Avg. wholesale electricity price: €50/MWh (real)2 Oil price:

  7. Slide 7: Contracted Gross Profit: PPAs vs. Market + CMECs

    * & " # +,-. €m Contracted Gross Profit: PPAs vs. Market + CMECs 1,000 800 600 400 200 0 2012 2013 2010 2011 2014 2015 2016 2017 2018 2019 2020 2022 2023 2024 2021 2025 2026 2027 2007 2008 2009 CMEC Annual Cash Payment Market Gross Profit Forecast PPAs Contracted Gross Profit New Contracted Cash Gro

  8. Slide 8: Why is hydro so important

    ) / ) & • Zero marginal cost, no volume risk in merit order • Key to maintain a stable system, compensating wind power growth Why is hydro so important • CO2 emissions free: Currently the most efficient renewable energy • Flexible output timing: Sells in peak hours, above avg. market price • Hydro a

  9. Slide 9: PPA duration versus useful life of hydro plants

    & & ) $ +0 & & & Year 2007 09 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 2053 Alto Lindoso (630 MW) Touvedo (22 MW) Alto Rabagão (68 MW) PPA Venda Nova I/II (90 MW) Useful Life Paradela (54 MW) Salamonde (42 MW) V. Furnas (125 MW) Caniçada (62 MW) Miranda (369 MW) Picote (195 MW)

  10. Slide 10: Electricity prices continue above €50/MWh

    ) ) & ) & # +,,1 +,,.2 €/MWh 90 Average Wholesale Market Prices – Spain* OTC Baseload Market Prices** 80 Price OTC Markets Contracted 70 66.86 period €/MWh 62.42 On 27/Dec/2004: 60 Spain Dec-05 30.69 50 France 2005 33.01 40 35.65 Germany 2007 34.55 30 On 8/Feb/2007: 20 Spain 2008 50.63 10 49.28 Fran

  11. Slide 11: 2007 Adjustments on CMECs 2004 agreement

    & ) ) & CMECs agreement in 2004 2007 Adjustments on CMECs 2004 agreement • edp agreed to operate its hydro plants in • Stabilisation of wholesale market rules and new the market after the end of PPAs and until contracting formats (OMIP, regulated distribution the end of hydro concessions forward auc

  12. Slide 12: Undeveloped hydro capacity potential in Europe

    314 & ) $ ) Undeveloped hydro capacity potential in Europe 100% 97% 90% • PPA system did not 80% 86% 86% promote repowering 78% 70% 72% 72% projects 60% 65% • Low number of new 50% hydro projects after 46% 40% 42% 1995 30% 20% • one of the few European countries 10% with a significant hydro 0% poten

  13. Slide 13: Repowering and new hydro plant projects

    ) $ Repowering projects of existing hydro plants Expected Entry Power Plant MW Capex Status • Lower environmental restrictions (€ million) into service • Attractive IRRs Picote II 231 130 Waiting environmental compliance 2011 • Longer operation terms facilitate Bemposta II 178 130 Waiting environmen

  14. Slide 14: CMECs system and hydro plants in the market after PPAs

    !( ! ) / ! CMECs system + hydro plants in the market after end of PPAs should provide: • NPV of PPAs preserved Cash Flow Stability • Lower “Cash” Gross Profit until 2010 compensated by €800m securitisation until 2017 • No impact on P&L until 2017: Reported Gross Profit in line with PPAs profile • op

  15. Slide 15: feel our energy

    ©) edp feel our energy

EDP — Investor Presentation (February 2007) on 6ix