EDP Renováveis Investor Presentation September 2015 www.edpr.com
EDPR top quality and diversified portfolio totals 9.1 GW as of Jun-15 Canada 30 MW #3 US Belgium UK #1 Poland 4,083 MW 71 MW Offshore under development 392 MW France 180 MW under development 340 MW + Offshore under development #3 Romania Italy 521 MW #3 #1 Spain Portugal Brazil 90 MW 2,368 MW 1,163 MW 84 MW 2 Notes: 1H15 Figures; Includes 886 MW of Equity Consolidated MW: 533 MW in Portugal (ENEOP), 174 MW in Spain and 179 MW in US
EDPR: a market leader with a top quality portfolio… A worldwide renewable market leader… …with a solid 2014-17 strategic plan 10 >500 Diversified portfolio Investing in quality projects OPERATING MW/YEAR COUNTRIES 6 >90% Young assets with long Growth through projects with YEARS AVERAGE VISIBLE residual life LT contracts already awarded LIFE 30% -2% Increasing efficiency, Quality asset base LOAD FACTOR reducing OPEX/MW CAGR €0.7bn >15% Solid Cash-Flow Increasing Cash Available for generation OPERATING CF Growth and Distribution CAGR Visible growth plan based on long term contracts to enable a low risk growth strategy 3
…successfully executing its strategic agenda creating solid foundations for high performance Selective and Self-funding Quality assets profitable growth business model 1H2015 1H2015 1H2015 Output of 11 TWh EBITDA of €548m (+11% YoY) €404m of OCF mostly from 97.4% availability; 3% below P50 higher prices and efficiency assets with PPA/FIT regimes Avg. selling price up 11% YoY 661 MW under execution Ongoing execution of Asset FX translation and stable pricing ahead of target (~0.6 GW) Rotation ($378m received YTD) Adj. Opex/MW ex-FX -7% YoY 0.9 GW for ST growth (2016-17) Net Debt increased to €3.5bn supported by O&M strategy PPA/FiT in US, EU, BR & MX due to FX translation (+€0.2bn) Execution of 2017 strategic agenda allows for an improved 2015 Outlook 4
On track to deliver solid performance in 2015 1H15 Operational …in line with YE15 Outlook Performance… (presented in YE14 results) 1H15 generation decreased -1% YoY Electricity output expected growth of Electricity Output due to strong 1H14 and 3% below +10-13% YoY on the back of 2014 (GWh) expected load factor in 1H15 new MW and ENEOP consolidation Average Selling price improved Average Selling price with positive Average Selling Price +11% YoY on the back of evolution expected based on Spanish and US price recovery and (€/MWh) hedges in Spain and in US active hedging strategy EBITDA to grow at solid double digit EBITDA EBITDA is +11% YoY benefiting from high efficiency levels (€m) with a stable 71% EBITDA margin and USD strength 5
EDPR Strategic Agenda 6
Attractiveness of wind energy onshore based on technology competitiveness and visible drivers Wind competes with all technologies… …supported by identified growth drivers Levelised Cost of Energy (LCoE) (1) Electrification of the Economy (€/MWh, 2014) • OECD countries: (+) Transports’ electrification; (-) Energy EDF CfD for new nuclear plant in UK (2) : efficiency • 2012: £92.5/MWh 142-170 • 2058: £279/MWh • Emerging markets: (+) Economic growth and infrastructure need 106-137 94-124 83-115 77-106 87-104 Environmental Concerns 57-82 • New global agreement under preparation for the COP21 • CO 2 reduction targets in EU, US and China • Replacement of old/retiring capacity (namely Coal) CCGT Coal Nuclear Hydro Wind Solar PV Wind onshore offshore Energy Independence • Increasing energy imports on most of the developed countries Wind onshore is today among the cheapest technology • EU imports more than 50% of its demand, while US only 15% and is fully competitive • Recent events have stressed the need to reduce dependency Notes: (1) Source: EDPR Analysis for European Market, wind onshore @ 25%-36% load factor, Brent price @65$/barrel in 2015; : Solar Photovoltaic @ 17%-21% load factor; 7 (2) As stated in EC document, expected CoD at c.2023, CfD for 35 years and 60 years of operational life
Wind onshore is already a competitive technology set for even higher long-term competitiveness… …and is expected to show Wind Energy competes with the most efficient conventional technology… ongoing improvement Wind vs CCGT: LCoE 1 Wind LCoE 1 (€/MWh) LCoE Wind Recent oil €/MWh prices load factor -24% -15% 120 110 100 21% 90 23% 80 25% 29% 70 34% 60 50 40 30 Oil price 30 40 50 60 70 80 90 100 110 120 130 Today 2020E 2030E $/bbl CCGT load factor @ 23% CCGT load factor @ 57% Wind Energy Costs are unrelated to commodities, providing greater visibility Notes: (1) Source: EDPR Analysis, LCoE – Levelised Cost of Energy 8
…and perceived by the market as the largest growth driver in renewables 2014-2020 Worldwide Additions 2014-2020 Renewables Additions 2014-2020 Wind Onshore Additions (GW) (GW) (GW, ex-China) Wind onshore Renewables 594 265 Europe 36% Regions with Decentralised 454 143 Coal and oil EDPR presence solar PV 74% North 22% Centralised America 109 Gas 301 solar PV Latin 16% America Wind offshore 272 36 Hydro Africa & ME 5% Asia 2 & 21% Oceania Other (1) 40 Nuclear 88 Wind onshore c.3/4 of the growth is expected to come from regions where EDPR is already present Notes: Source: IHS Emerging Energy Research (2014); EPIA Global Market Outlook for PV; (1) Includes Biomass, waste and other; (2) Asia ex-China 9
US set to maintain strong growth, driven by wind competitiveness, RPS demand and Clean Power Plan Capacity currently “under execution” for 2015-2017 period 20 GW (with PTC scheme of Dec-13 and extended in Dec-14) + + Additional capacity based on wind Additional capacity based on Renewable competitiveness Portfolio Standards (RPS) Coal retirement officially announced for 2015-2020: 26 GW RPS demand through 2020: +16 GW (37 GW already retired since 2010) (+20 GW in 2020-2030 period) WA NE MT Existing Wind ND VT MN OR MA Demand Through 2020 NY WI ID SD RI MI WY NH CT IA PA NE NJ NV OH IL IN Wind Competitive with Gas DE UT CA +6 GW WV MD CO VA KS MO (no PTC extension) KY NC TN OK AZ AR NM SC Improved competitiveness +12 GW GA AL MS (new PTC extension) TX LA FL Clean Power Plan +24 GW 29 States (+ DC) have mandatory RPS (to further enhance coal retirement) 8 states have renewable energy goals 10
Europe continues to present visible opportunities, and is set to fuel further growth beyond 2020 2015-2020E Growth Beyond 2020, Europe is expected to be again (wind onshore) at the forefront of the renewable energy growth NREAP EU targets for 2030 1 … …defined under a common vision +49 GW National Renewable Energy Actions Plan • New governance based on national • 40% cut in greenhouse gas emissions plans and EU coordination compared to 1990 levels • Competitive and sustainable energy • ≥ 27% share of renewable energy (to replace retiring plants) consumption Forecast +39 GW • Strengthening interconnections and • ≥27% energy savings vs. the business- improve energy security as-usual scenario 0.1 – 0.5 GW Renewable Energy Souces in Energy Mix (% Gross Final Consuptiom) 0.5 – 1.0 GW ≥ 27% 20% 1.0 – 2.0 GW 15% 8.5% > 2.0 GW 2005 2013 2020E 2030E Regulation in Europe for renewables is evolving into ex-ante competition systems for long-term contracts (Belgium, Denmark, France, Germany, Ireland, Italy, Latvia, Netherlands, Norway, Poland, Portugal, Slovenia, Spain, UK) 11 Source: 1) European Commission
EDPR’s strategic plan through 2017 to distinctively create value supported by 3 pillars 1. Selective growth 2. Operational excellence 3. Self-funded business 2014-2017 2014-2017 2014-2017 > 500 Maintaining high Strong Operating > 97.5% Investing in quality projects € 3.5 bn availability levels Cash-Flow generation MW/year Growing through projects 31.5% Leveraging quality growth on Asset Rotation to enhance >90% € 0.7 bn with LT contracts already Load distinctive wind assessment value growth visible (ex-CTG) awarded Factor Developing offshore Net Investment supported post-2017 -2% Increasing efficiency, € 1.8 bn 1 GW awarded in France and by Asset Rotation Program growth reducing OPEX/MW CAGR projects in the UK (Capex + Investments - AR) 12
EDPR is executing a sound growth plan based on 1.5 GW of projects with long-term visibility… …with more 0.9 GW already On the road for 2017 objectives delivering 0.6 GW in 2015… awarded with LT contracts/FiT 2015 2016-17 Execution on-track High visibility LT contracts +400 MW | +155 MW ~+0.6 GW 15/20 years PPA; LT REC contracts +180 MW + 400 MW 25-year USD bilateral agreement with LT PPA US +117 MW + 120 MW BR 20-year PPA with LT PPA > 50 MW >70 MW EU FiT/PPA FR | PL | IT Already delivered +105 MW in the 1H15 Additional options secured post c.0.5 GW under construction and expected to be installed in 2015 Dec-14 PTC extension 13
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