edprenovaveis

1. EDPR Presentation March 2011 Istanbul www.edprenovaveis.com

2. Agenda • EDPR • Designing an attractive renewable framework • Remuneration and processes • Lessons learnt • Application to Turkey

3. A balanced wind portfolio located in highly selective attractive markets Canada - - UK 120 US Poland - Belgium 2 859 - 120 99 57 1 300 60 19 246 Romania France 13 1 406 62 - 220 Italy 228 Spain 39 Portugal Brazil 613 1 138 - 2 278 680 14 - 308 53 1H10 EBITDA MW + Eólicas de Portugal 70 520 Installed 4 9676 571 1 439 Under construction Pipeline + prospects 8 European countries, 26 States in the US, Brazil and Canada 2

4. Consistent delivery of strong growth in installed capacity Historic Capacity Growth (Gross MW) CAGR >40% • Consistently delivering targets and a robust growth over the past 4 years • Back-end loaded installation profile driven by wind farm construction schedule • Capacity installed during 2009 to deliver stable cash-flows from 2010 onwards

5. 2010-12: Executing a flexible growth strategy and taking advantage of optionality to maintaining the risk profile EDPR’s average annual capacity additions (Gross GW) EDPR’s new additions geographic breakdown (% of EBITDA MW + ENEOP) Gross MW EBITDA MW BR EU US Flexible growth by adjusting the pace to current economic and market environment… …re-balancing the portfolio to maintain the low risk and high visibility profile of the company

6. Agenda • EDPR • Designing an attractive renewable framework • Remuneration and processes • Lessons learnt • Application to Turkey

7. What do stakeholders seek? Governments Develop local industry Pay exactly what is needed (avoid risk of over/under paying) Minimise system costs Renewables investors Low risk High return Low return High risk Feed-in tariffs Market systems

8. There are four general policy systems to promote wind energyAlthough hybrid systems are often put in place System description Feed- in tariff • Producers of green electricity receive a fixed price (normally set for a period of several years) • A variant of the feed-in tariff scheme is the fixed premium scheme in which a premium is paid above normal electricity spot price Main systems Market price + Green Certificate • Renewable energy has two revenue streams: • Conventional power prices from the conventional market • Revenues from the sales of green certificate in a secondary market • Secondary market is created when government forces a participant in the supply chain (generators, suppliers) to prove that part of its supply has GCs associated to them, thus creating demand for GCs • Renewable energy producers supply GCs • Price for GCs is set by market supply and demand Tenders • The State places a series of tenders for the supply of renewable electricity: • Selection based on price and other quantitative criteria (scoring system) • Electricity supplied on a contract basis at the price resulting from the tender • Additional cost typically passed on to end consumer through a specific levy Secondary systems Financial and tax incentives • Reduction or exemption of electricity taxes applied to all producers • Investment grants as a reduction of capital and/or total costs due to low interest loans

9. Each Government has to weigh up to pros and cons of every system before deciding the system to implement Advantages Disadvantages • Risk of over/under funding: • It can be partially compensated with market monitoring and adjustment • Need to adjust tariffs as targets are achieved or market conditions change • Simple and low cost: easy to implement and supervise • Reduces regulatory and market risk for investors and loan risk for financial companies • A stable investment environment promotes the development of manufacturing • Effective in promoting different technologies Feed- in tariff • If working well, they lead to the best cost solution because is a market instrument • If it works well, the targets are exactly met • Increased risk and required return for investors, thus increasing effective costs, due to volatility & uncertainty on future prices • Administrative costs • System may not create enough incentives to invest. • Since companies may avoid buying the GC by paying a penalty, GC price may not rise to a level to make investment profitable • Needs a banding to promote different technologies Market price + Green certificates • Easily linked with existing fiscal and financial structures • Does not create long-term certainty of investments • Risk of over/under funding Tax incentives • Long term captaincy about receiving support • Bidding price can fall so low that contracts cannot be fully implemented • Increases project preparation costs • The stop-and-go nature does not conduct to stable conditions Tenders

10. Most of the European successful countries have a feed- in tariff systems Capacity installed in 2009YE by regulatory system Germany MW Spain Feed- in tariff France Denmark Portugal Greece Austria Italy UK Market price plus Green Certificates Sweden Poland Belgium Netherlands Finland Switzerland Others

11. Two main issues to consider when designing a framework for wind energy Policy design (Financial support) • A regulatory framework that provides financial incentives for investors to participate in the development of wind energy market Permitting process • Wind developers need to fulfil different steps to obtain the necessary permits and the grid connection • Main steps are administrative processes (Environmental Impact Assessment permit, building permit, among others) but also includes the access to the grid

12. Policies on permitting and licensing, and grid issues are also critical to meet wind energy penetration Issue Typical barriers Possible solution Permitting and licensing • Complex and time consuming process • Many institutions involved • No clear authorization procedures • Set deadlines for the administrative process: if the authority is not able to meet the deadline, the project goes automatically to the next stage • Reduce the number of authorities involved • Provide a clear, streamlined and transparent procedure and decision-making process Grid related issues • Long time to obtain extensions or reinforcements in the grid • No transparent rules for bearing and sharing the necessary grid investment • Reduce the average grid connection lead time by setting deadlines for the administrative process, and training and allocating the necessary civil servants to handle the applications • Reinforce transmission system • Lower the connection cost by: • making the transmission operator contributing to the cost • adapting the cost to the project size

13. Overview of the regulation in the main geographies EDPR: 2009 Realized Price Remuneration Scheme Country Regulatory Update Agreement between Industry Ministry and wind sector • Pool + Premium • Feed-in Tariff € 84 Spain Ongoing discussion on Energy Bill • Power + REC • Tax Incentives Unchanged Feed-in Tariff $ 48 (1) € 95 Portugal US Unchanged Feed-in Tariff € 87 France Unchanged Green Certificate € 98 (2) Poland Legislative update for the renewable sector Green Certificate € 134 (2) Romania Notes: (1) excluding institutional partnership revenues; (2) based on 2009 market price + green certificates

14. Agenda • EDPR • Designing an attractive renewable framework • Remuneration and processes • Lessons learnt • Application to Turkey

15. Main lessons learnt from countries that have achieved large wind deployment 1 Long-term political targets • Successful countries in developing wind energy, have set long-term political targets and have drawn up structured action plans supported at the highest level to reach them 2 Predictable revenues • It´s essential to provide a stable framework with predictable revenues that assure the profitability of the project 3 Transparent and straightforward permitting • It´s necessary to create a process that will facilitate increase generation in a timely and simple manner • Transparent rules for bearing and sharing the necessary grid investment costs are necessary 4 Avoid fragmentation • Fragmentation can prevent wind development, specially in countries with low wind penetration 5 • The allocation of groups of capacity, together with the development of industrial projects can be an effective tool to avoid fragmentation and spur the economy Tenders

16. 5 Tenders are sometimes used to create a positive impact for the economyExample: Portugal - ENEOP Back-up Tender system for 1.200 MW capacity allocated • Allocated capacity committed operators to develop an Industrial Project • EDPR’s consortium, in which EDPR ‘s participation was 40%, won the tender for the 1.200 MW installed capacity together with TP, Finerge and Generg, and Enercon Turbine Supplier Tender Description Energy system • Minimum annual generation of 2.700 GWh (~4% of electricity in 2010-2012) • Electricity supply for more than 2,3 M inhabitants Investment • Direct investment of 1.700 M€ between 2006-2010 • Wind farm development: 1.476 M€, factory units and associated services: 161 M€ and founding for the National Scientific System: 35 M€ Benefits for the country Development of National economy • Increase on exports >60 % of generation will be exported • Decrease on generator component and raw material imports • More than 1MtonCO2 not emitted per year: 24 M€ annually saved and avoidance of ~80 M€ of external fuel payments Regional development & employment • Industrial project will represent 2,5% of the Regional Product (Minho-Lima) • Reduction of regional socio economic differences • Creation of 1.800 new long term jobs + 5.500 indirect jobs

17. Agenda • EDPR • Designing an attractive renewable framework • Remuneration and processes • Lessons learnt • Application to Turkey

18. With an adequate remuneration scheme, Turkey will be poised for growth Evaluation of current situation Issue Comments 1 • The Ministry of Energy announced its target to install 20 GW of wind energy by 2020 Long-term political targets 2 • Feed-in tariff is not enough by itself to make investment attractive and currently wind farms are selling energy in the wholesale market • New energy law Predictable revenues 3 Transparent and straightforward permitting • In November 2007, EMRA received wind farm applications for 78 GW • The first production licenses have been issued only after 3 years 4 Fragmentation • Nearly 58 GW of the 78 GW applications came from 20 companies