2013-05-23 - sustentabilidadeedp

8/14/2019 2013-05-23 - SustentabilidadeEDP

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Sustainable DevelopmentMay 2013


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Business Portfolio

Note: Data as of Mar-13

EDP Brasil

SpainPortugal

14% of EBITDA

Listed subsidiary: EDP Brasil (EDP has 51%)

Presence since 1996

Power generation: 2.0 GW (from which 1.8GW is hydro)

2 electricity distribution concessions

36% of EBITDAPrivatisation in 1997 (IPO)

Single electricity distributor

Power generation: 8.9 GW (ex-wind)

(from which 5.4GW is hydro)

20% of EBITDAPresence since 2001

Power generation 3.9 GW (ex-wind)

# 2 in gas distribution

Wind Power

31% of EBITDAListed subsidiary: EDP Renovveis (EDP has 77.5%)

IPO in Jun-08

Wind & Solar Power: 7.7GW

# 3 wind operator worldwide (present in 11 countries)


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Clients

Customers view is important for the decision

making process

Listen to customers, providing simple/clear answers

Anticipate customers needs

Results

Fulfilment of commitments embraced with our

stakeholders; Ensure transparency and

trustful relationship

Focus on anticipation and implementation

Demand for excellence at all levels

People Professional conduct combining rigour, enthusiasm and

initiative to emphasizing team work

Development of individual skills, capture of talent;

Ensure safety and welfare at work

Balanced private/professional life is key for success

Sustainability as one of EDPs commitments

Environment and Society Assumption of social/environmental responsibilities

(Involvement/alignment with communities and their

representatives )

Sustainable reduction of greenhouse gas emissions

Energy efficiency

EDP is committed with

Sustainability indicators are part of EDPs management Key Performance Indicators (KPIs)

The Executive Board of Directors assesses internal sustainability indexes every 3 months


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Dow Jones Sustainability Indexes: EDP ranked with thesame score as the sector and supersector leaders

Results of Sustainability Assessment(Absolute points 0-100)

49

6568

74 7582

8486 87

7679

7781

83 84

2004 2005 2006 2007 2008 2009 2010 2011 2012

EDP Best Score (Electric Utilities Worldwide)

The most detailed/intense sustainability assessment process among the ones that evaluate EDP

EDPs Ranking in this index is part of EDPs management KPIs since 2006

Best score in the following categories:

Economic Dimension:

- Risk Management

- Supply Chain Management

- Scorecards/Measurement Systems

Environmental Dimension:

- Environmental Reporting

- Biodiversity

Social Dimension:

- Stakeholder Engagement

- Social Reporting

- Human Capital Development

- Corporate Citizenship/Philanthropy


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Sustainability Recognition Corporate until 2013

Since 2007

Since 2011 (EDP SA and EDP Renovveis)

Since September 2008

Since 2009: CDP and OEKOM

Since January 2010

Since 2008

Since 2006

1stTime in 2011

Corporate Environmental

Management System

Since 2012


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Sustainability within EDPs corporate governance

General and

Supervisory

Board

Companies/

Business Units

Corporate

Governance &

Sustainability

Committee(CGSC)

Executive Board

of Directors

Environment

& Sustainability

Board

Office/

Coordinator /

Environment

Responsible

Purpose: monitor and supervise

issues related with strategic

sustainability and internal codes of

ethics/conducts

Purpose: analyse, propose and

ensure proper implementation of

sustainability & environmentalstrategy

Purpose: ensure ethical procedures

are conducted within EDP, aiming

at maintaining confidentiality and

rights protection

Purpose: advise the Executive Board

of Directors in environment &

sustainability related matters

(namely on sustainability &

environmental strategy definition

and reports preparation)

Purpose: namely share information

upon and discuss major legislative

packages; share the development of

environmental performance

indicators; monitor the developmentof the action plans and activities of

the sustainability management

structures of EDP Group

Purpose: works with the CGSC;

propose regulatory guidelines on

issues for which it is responsible

for, promote their correct and

issue opinions in matters of the

code of conducts.

Approval of

Sustainability &

Environmental

projects/targets

Operational

responsibility

for the

execution of

approved

projects/targets

Corporate Area:SustainabilityDepartment

Sustainability

Committee

Corporate Area:Office of the

Ethics

Ombudsman

Ethics

Committee


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Shareholder structure after last privatisation stage

Dec-11: CTG was the winner of the privatization of a

21.35% stake in EDP (price offered of 3.45/share:

50% above market price on date of announcement).

Deal closed in May-12.

Commitment to a 4-year lock-up and standstill period

and limitation on voting rights of 25.0%; CTG

represented by 4 members in the General and

Supervisory Board

Feb-13: Parpblica (Portuguese State) sold its

remaining 4.14% through an accelerated book building

at 2.35 per share

Mar-13: Liberbank and Corporacin Masaveu

combined their stakes into a new company (Oppidum)

EDP Shareholder Structure(30-Apr-2013)

Shareholder stability and corporate governance, in the defense of best interests of all shareholders

CHINA THREE

GORGES, 21.35%

IBERDROLA,6.79%

OPPIDUM,6.18%

JOS DE MELLO,4.60%

SENFORA (ABUDHABI), 4.06%

BCP PensionFund, 3.35%

SONATRACH,2.38%

BES, 2.38%

QATAR, 2.27%

CAPITAL

INCOMEBUILDER, 2.06%

MFS, 2.02%

CAPITALRESEARCH,

2.01%

BLACKROCK,2.00%

TREASURYSTOCK, 0.84%

FREE FLOAT,37.70%


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Delivery: Clear outperformance with accumulated


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Delivery: Clear outperformance with accumulatedtotal return 51% above the Euro Utilities Index

No capital increase since 2004, no scrip dividend, 3.9bn in cash dividends paid in 2006-12 (1) (1.07/share)

Flat dividend of 0.185 per share fully in cash assumed in 2012-15 Business Plan

Total Shareholder Return EDP vs. SX6E (Jan-06/May-13)

(%)

-9%

+43%

(1) Including dividend from 2012 to be paid on May 23rd2013

1.00

2.00

3.00

4.00

5.00

6.00

J

an/06

Jul/06

J

an/07

Jul/07

J

an/08

Jul/08

J

an/09

Jul/09

J

an/10

Jul/10

J

an/11

Jul/11

J

an/12

Jul/12

J

an/13

EDP SX6E Index

11.0 12.5

14.015.5

17.018.5 18.5

42%

50%47%

55%58%

60%

67%

2006 2007 2008 2009 2010 2011 2012

Dividend per share ( cent)

Dividend Payout Ratio (%)

EDPs dividend performance 2006-2012

Sustainable Financial Gearing: consistent with low


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0.0

1.0

2.0

3.0

4.0

5.0

6.0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Weight of 2012 EBITDA from Regulated Networks + PPAs (%)

NetD

ebt/EBITDA2

012(x)

REN

Terna

Snam

REE

Enags

Nat Grid

Iberdrola

GDF Suez

SSE

RWE

A2A

EDF

FortumVerbund

Centrica

Enel

2015EGas Natural

Sustainable Financial Gearing: consistent with lowoperating risk and long asset maturity

(1)Source: Bloomberg and Company Reports (2) Excluding regulatory receivables

European Utilities: 2012 Net Debt/EBITDA vs. Business Mix (1)

(x;%)

High weight of regulated and long term contracted revenues, portfolio of assets with long residual useful life

Slight increase of exposure to energy markets as hydro plants under PPA/CMEC gradually move to market prices

Focus on free cash flow & strengthening of credit ratios in 2013E-2015E: Target Net Debt/EBITDA


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Major Strategic targets by Principles of SustainableDevelopment

Note: for more detail on defined targets see slide [ ] of Annexes.

PRINCIPLES OF SUSTAINABLE

DEVELOPMENTMajor Targets

2013-2020

Eco-efficiency &

environmental protection:

Reduce CO2 emissions by70% until 2020 (vs. 2008)

Access to Energy:

Ensure that ICEIT and EIDCare above the levels set by

Regulators

Innovation:

Keep the financing in20m/year

Integrity and Good

Governance: Keep therecognition of the World

Most Ethical Companies ofEthisphere Institute

Social Development and

Citizenship: Increase thenumber of Volunteering

partnershipsby 50%

Economic & Social value:

26 GW of clean capacity

by 2015 (>70% of totalcapacity)

Human Capital anddiversity: Keep the Global

Satisfaction level ofemployees above 80%

Transparency anddialogue: complete the

report of GHG emissions,scope 3

Cli t h EU h d t d th 20/20/20 d


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Objectives for 2020 Binding?

Reduce primary energy consumption by 20% against BaU projections

through increased energy efficiency

Generate 20% of final energy consumption from renewable sources

Reach a 10% share of renewables in transports

Cut greenhouse gas (GHG) emissions by 20% relative to 1990 levels

Climate change: EU has adopted the 20/20/20 energy andenvironmental policy package with objectives for 2020

Efficiency

Renewables

Emissions

1

2

3


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EDP strategy to respond to environmental challenges

Wind & hydro: 67% of installed capacity in 2012, more than 2/3 in 2015E

Reduce exposure to CO2+ nuclear

Invest in Energy efficiency, smart grids and R&D

Installed capacity: +83% in 7 Years driven by


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Installed capacity: +83% in 7 Years driven bygreenfield investments

More than 2/3 of capacity is now hydro & wind

EDP Group Capacity by Technology: 2005-2015E(GW; %)

2005 2012 2015E

Hydro Wind CCGT Other

22.6

26.4

+17%

34%

38%

14%

13%

33%

17%

16%

35%

73%

44%

13%

40%

12.3

3%

+83%

(1)

(1) Including Pecm 2ndgroup (180MW synchronized to the electric system in Feb-13); and excluding Setbal (946MW of fuel oil capacity decommissioned PPA ended Dec-12)

Installed capacity growth driven mostly by greenfield wind power capacity additions outside Iberia

EDP Group Capacity by Geography: 2005-2012(GW; %)

2005 2012

Portugal Spain

USA BrazilRest of Europe

72% 42%

23%

27%

16%

10%

4%

4%

22.6

12.3

(1)

EDP expanded its presence to 5 new geographiesUS, France, Belgium, Italy, Poland and Romania


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EDP portfolio of assets with a long average residual life

(1) Reference Date: Dec-12; Excluding: Special Regime (Mini-hydro, Cogeneration and Biomass), Tunes and Carregado (for systems backup), and Setbal (fuel oil which PPA ended in Dec-12);Including: Pecm 2ndgroup (180MW that started the synchronisation with the electric system in Feb-13); (2) Including ENEOP (390MW Equity Consolidated)

Hydro concession rights in Portugal extended up to 2047

Sustainable cash flow stream over the next 24 years on average, without need of replacement capex

Average Residual Useful Life of EDPs Generation Portfolio by Technology Dec-2012(1)

(Years)

610

16

20

21

37

0 10 20 30 40

ConcessionEnd Dates

25 years totalasset life

4 years avg. ageof portfolio (2)

7.5

7.6

2.4

0.2

3.7

(% weight on total GW)

Years

(34%)

(35%)

(17%)

(1%)(11%)

GW

Hydro Wind & Solar CCGT Nuclear Coal with DeSOx

Average Residual Useful Life of

EDPs Generation Portfolio (Years)

16

24

Dec-2005 Dec-2012

0.6 (2%)

Coal without DeSOx

ifi i i i


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CO2specific emissions: -52% in 2005-15E backed by higher weight of Wind & Hydro

CO2emissions(ton/MWh)

0.6

0.320.29

2005 2012 2015P

Accumulated growth

Wind & Hydro:

% of Total output 47% 60% 62%

Hydro factor Portugal (x) 0.4 0.5 1.0

CO2specific emissions: -52% in 2005-2015E

-52%

C i f l i h


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(1) Capex net of investment subsidies , namely cash grants received in USA

Avg. Capex 2014-15E: cap of ~2.0bn/year with significant downside flexibility namely at the level of EDPR

Capex: execution of selective growth

Consolidated Capex Breakdown(1)

( bn)

2013 Expansion Capex:

EDP Brasil:2 hydro plants under

construction to be commissioned in

2015/17: ~600MW

New hydro plants in Portugal:5

hydro plants under construction tobe commissioned in 2014-16:

~1,450MW

Wind: ~500MW to be installed in

2013 mostly in Poland and Romania.

3.6

1.5

2.12.0 ~2.0

2006 2008

0.8 0.7 0.7

0.80.6 0.6

0.4 0.4 0.4

0.20.3 0.2

2011 2012 2013E

Other - Expansion

Brazil - Expansion

Portugal Hydro - Expansion

Wind - Expansion

Maintenance

New Hydro Plants in Portugal: the largest hydro


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New Hydro Plants in Portugal: the largest hydroprogram in Europe

Hydro: 2.3bn of total capex in new capacity, of which ~55% was already incurred

EBITDA contribution: ~100m in 2015E or ~175m on the 1stfull year of operation of all plants

Plant Type MW

Total

output

(GWh)

Net of

pumping

(GWh)

Start-up

date

Picote II Repowering 246 239 239 Nov-11

Bemposta II Repowering 191 134 134 Dec-11

Alqueva II Repow., Pumping 256 381 30 Dec-12

Ribeiradio New plant 81 134 134 2H14

Baixo Sabor New pl., Pumping 172 405 230 2H14

Venda Nova III Repow., Pumping 756 1,337 18 2H15

Salamonde II Repow., Pumping 207 274 81 2H15

Foz Tua New pl., Pumping 252 585 275 2H16

Total 2,161 3,489 1,141

5.6

1.7

1.4

Inst. Capacity

in Iberia

Ongoing

Investments

Under

Development

+31%

EDPs Investment Plan in Hydro Portugal

(GW)

+56%

Dec-2011 2012/2016 Post 2016

Pumping profitability is mainly backed by


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Premium / (Discount) versus pool price

Pumping profitability is mainly backed byspreads between peak and off-peak prices

Pumping enhances hydros high value even in dry years

The increasing weight of wind in the system boosts

price volatility

Pumping has storage value: is paid for its ability to

close gap between supply and demand

EDP Pumping activity Spreads versus avg. Pool price

(/MWh ; avg. 2010/11)

SellingPrice

2836

PumpingCost

Spread SellingPrice

PumpingCost

Spread

2010 2011

+5% -70% +10% -60%

Margins on pumping depend on the spreads between

off-peak and peak prices, rather than absolute prices

Distribution of Hourly Pool Prices in Spain

(/MWh)

Hours

0

20

40

60

80

100

1

201

401

601

801

1001

1201

1401

1601

1801

2001

2201

2401

2601

2801

Jan/Apr 2013 Jan/Apr 2012

EDP has the 2ndhighest exposure to hydro in


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g p ySouthern Europe

Source: Companies reports

In 2016, EDP will have the largest exposure to hydro amongst Southern European Players

Hydro Capacity in the Conventional Mix in Southern Europe

Major Players in the region

52%

45%43%

29%

24%20%

15%

EDP 2016 Peer 1 EDP 2012 Peer 2 Peer 3 Peer 4 Peer 5

2016E 2012

Hydro Plants in Portugal: Starting point for long term


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y g g p gsustainable involvement with local communities

Guaranteed purchase of local products

by contractors workers canteens (for 8

years in average)

Enhance new models of agriculture

A multiple-purpose agriculture, basedon eco-system services provider

Develop new distribution channels to be

in place after the end of construction

works

Agriculture/ecosystem services Handcraft Entrepreneurship

Deploy design products

Develop adequate distribution channels

Promote higher proximity from large

consumption centres

Improve professional skills of local

communities

Training for entrepreneurship

Support to new businesses

brainstorming sessions

Support to new business analysis and

set-up

Reduce environmental and social impacts from new plants:

Achieve no net loss or net gain on biodiversity; Shared decision-making process

Creating new business opportunities and promoting local job creation

Environment & Agriculture, based on a local socio-economic dynamic as development factor

Minimisation and Compensation Measures

EDPR: Diversified portfolio and stable revenue stream


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EDPR: Diversified portfolio and stable revenue stream

Note: Data as of Mar-13 (1) Does not include EDPR 40% stake in ENEOP consortium (equity consolidated, 390MW)

% total installed capacity

~80% LT PPAs/Hedged

~20% Merchant price

Canada

-

-

US

-

3,637 47%

Long term PPAs (15 years)

Brazil

-

84 1%

MW Under construction

Installed Capacity (MW)

86

7,673

France

Belgium

Italy-

-

-

314

57

40

Fixed tariffs indexed to inflation: Spain: for 20 years Portugal: for 15 +7 years France: for 15 years

4%

1%

UK

-

-

60% stake in 2.4GWwind offshore project Other Europe:

Long Term PPAs or

market price + green certificates

Portugal Spain

4 -

615(1) 2,310

Romania

Poland

54

28

266

350

Includes solar (39MW

3%

5%

30%8% 1%

Wind & Solar: selectively executing the most attractive


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US, Poland and Romania

y gopportunities

EDPR Growth Breakdown by markets

(MW; %)

33%

5%

48%

20%12%

2008-2012 2013-2015E

Capturing short-term opportunities and adjusting

plan to regulatory and fiscal environment

Electing new markets with attractive wind/solar resources

and political and regulatory stability

Stronger focus, also in US: implementing dual teams for wind

and solar development

NewMarkets+

Pipeline of projects with high quality and diversified towards markets with potential allows

EDPR to flexibly manage its growth plan

Ability to capture opportunities and execute

growth in most attractive countries

New Markets

Solar PV23-45%

45-60%

Solar: intensify activities as a result of the fast technology


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Solar PVLevelised Cost of Energy (LCoE) reduction

(2011 vs. 2009; %)

STEG parabolic through

w/storage

C-Si PV

Thin film PV

-13%

-20%

-40%

Technology Cost

Solar PV is the technology with the fastest cost declineamong renewable energy sources

Levelised Cost of Energy (LCoE)

Capex has dropped strongly in the last years leading to

LCoE of c100/MWh in the sunniest regions

CTG PartnershipPreferred access to the main PV suppliers in China, thathave dominated the module market in the last years

Source: New Energy Finance

Currently tracking opportunities in the most attractive solar markets

improvements

R&D in wind offshore


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EDPR is leading the

development of up to 2.4

GW of wind offshore

projects with a 60%

stake

Wind Float Project

Innovative floating structure to support offshore turbines

with great stability at depths below 40 m

Phase I: Large scale demonstration prototype with a 2 MW

turbine connected to the grid which already generated

~5GWh (3.4GWh in 2012)

Phase II: Pre-commercial phase with ~27MW (5 Wind Float

units) is being prepared

First wind offshore project in the world without

any heavy load support

EDP installed a wind floating

turbine in northern Portugalcoast (Aguadoura Pvoa do

Varzim)

UK Wind Offshore Partnership

R&D in wind offshore

Joint development of wind offshore project in UK

Inch Cape

0.9 GW

Moray Firth

1.5 GW

Partnering with Repsol, 1st class company in Energy Sector

with strong commitment to wind offshore capacity

development

Sites to be developed in transitional waters (30-60m of

depth) , 15-25 km shore distance

Upon getting key consents, construction and operation

could begin between 2015 and 2020

EDPs Thermal Power Generation Fleet: Diversifiedf li ll i b l k h i k


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EDP benefits from short term weakness of CO2prices through higher load factors at coal plants

Merchant thermal output: CCGTs output focused in the best hours and ancillary services

Our portfolio of clients enhances the integrated management generation & supply activities in Iberia

EDP Conventional generation Installed capacity in Iberia

(MW in Mar-13)

45%

21%

29%

5%

Mar-13

Hydro

Coal

CCGT

Others (1)

55% of capacity is merchant; 45% remunerated at 8,5% RoA real pre-taxes

78% of capacity with DeSOx

Our coal fleet is the most efficient in Iberia: lower transportation costs and heat rates

Lower-cost blast-furnace gases partially meet our Aboo needs

Favourable location: Plants located close to heavy energy consumption areas

Spanish coal -Our Soto 3 plant operates under RDL 134/2010 (Spanish coal):remuneration is guaranteed until 2014

Highly competitive technical features in a context of low working hours:

- Minimum operating level of 20%-40%, allowing to concentrate in the best hours;

- Capable to move up/down by 100MW in 15 min, boding well with ancillary services;

- Start-up time from idle of 20 min., boding well with ancillary services.

By working fewer hours in a balanced manor, the useful lives of our CCGT fleet can beextended

portfolio allowing to balance markets short term risks

Brazil: Electricity demand expected to grow at a an averagel t f 4 2% i 2011 2021


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annual rate of 4.2% in 2011-2021

Hydro Power Plant Thermal power plant Distribution Concession Area

EDP Brasil: Geographical footprint

Bandeirante

(part of So Paulo state)

Escelsa

(Esprito Santo)

Peixe Angical

499 MWEnd of PPA: 2016Concession: 2036Mascarenhas + Suia

227 MWEnd of PPA: 2016 (avg.)Concession: 2025

Lajeado

903 MW

End of PPA: 2030 (avg.)Concession: 2033

Jari (under construction)374 MWEnd of PPA: 2044To start operations in 2015

Cachoeira Caldeiro (under construction)

219 MWEnd of PPA: 2047To start operations in 2017

Pecm

360 MW coal plantEnd of PPA: 2026Concession: 2043

Sustainable and sound regulatory framework: Return of RAB in Distribution, long term PPAs in generation

Key drivers for strong growth in volume of

electricity distributed:

New clients (better housing conditions,

population growth)

Increase in consumption per capita (home

appliances, etc.)

Better public infrastructures, industrial growth

Generation capacity Additions:

2015: +373MW of hydro capacity Jari

2016: +120MW of wind power

2017: +219MW of hydro capacity Cachoeira

Caldeiro

Energy Efficiency: A strong focus on DSM and energy


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Voluntary actions (Portugal): 2.2m

Projects to mobilize consumers in all sectors to

improve energy efficiency , supported by the

regulator. Ex: distribution of efficient light bulbs,ECO bills, ECO website Since 2007 until 2012:

9 million efficient light bulbs distributed

5,2 TWh cumulative savings, corresponding to

1.84 Mton of CO2emissions avoided.

Energy Services (Portugal and Spain):

more than 30m

Offering new DSM consulting services regarding

energy efficiency, load and tariff optimization, fuel

switching and distributed generation: energy

auditing and certification, energy efficiency

measures, management of assets to capture

savings in buildings, solar thermal and PV solutions,

micro and mini generation

services

Energy Efficiency Programme (Brazil): R$28,4m

In 2012, projects realized 25 GWh estimated savings

(corresponds to an average consumption of 14,714 houses

by year) and reduction of peak demand of 14,4MW:

Good Energy for the Community, Good Solar

Energy and Good Energy in Schools project

Efficient and safe-oriented use of Energy

Replacement of inefficient lamps and appliances

Solar heating systems installation

Consumption reduction in public buildings, traffic

lights, hospitals, etc.

Load shifting

Smart Grids: key to cope with challenges of increasedrenewables distributed generation and electric vehicles


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renewables, distributed generation and electric vehicles

Benefitting costumers and offering a technological leap forward in network service and capabilities

Operational Efficiency

Energy Efficiency

Service Quality

Renewable Energy

Electric Vehicles

inovgrid is aligned with the most important world technological trends and already a reference in Europe

Cutting-edge Smart Grid project (30.000 EDP Boxes that substituted the old meters) is being commercially tested

in the Portuguese city of vora, the 1st Iberian inovcity, with a total investment of 15m

In 2013/14, a broader pilot will be implemented, with the installation of 100 000 EDP Boxes in seven locationswith different grid characteristics

The municipality of Aparecida do Norte (state of So Paulo, Brazil) will be the first Brazilian city equipped with a

smart grid. The project, lead by EDP Brasil, will include the installation of 15,000 smart meters.

Electric mobility: EDPs on the frontline of innovationd t h l


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3

and technology

Electricity

Network

Electricity

Supply

Slow Charging

Posts

Fast Charging

Posts

Other Mobility

Services

ElectricVehicle

Growth potential in the medium/long-term

Strong rationale for development

(decarbonisation, storage, reduce imports)

EDPs Project for Electric Vehicle Chargers

Pilot project for electric vehicles: 1,030 charging

stations activated and currently around 500 users

Strengths

Know-how and expertise; Synergies within the group

Close relationship with relevant entities

Electric Vehicles to become relevant for the electric utilities business over the medium/long-term

Opportunities

Natural positioning within EDPs business / industry / market

Leverage on existing commercial relationships

New service: sale of equipments for home charging, etc.

Weaknesses

Project involves several entities outside of EDP Group

Threats

Uncertainty on potential interest from auto industry

Lack of rules and of technological definition;

Low acknowledgement from potential users/agents

EDP: Reinforcing corporate culture and motivation,k titi d t


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3

Labour indicators above the sectors average; stability of companys performance evaluation by

RobecoSAM.

Absenteeism down from 3.35% in 2011 to 3,16 in 2012.

Employment

seen as key competitive advantages

Training: EDP group universe books 503k hours of training 2012 (+5,5% YoY).

EDP University: seven schools, two of which are transversal in nature and 5 are business oriented(generation, distribution, gas, renewables and supply). Since mid-2012 UEDP has been responsible for

defining and monitoring the EDP Group Training Plan and Budget and coordinating the initiatives forprofessional development.

Mobility: Mobility involved 588 employees in the EDP Group in 2012 (EDPs mobility includes

intra-company, inter-comany and international mobility).

Assessment of potential and performance based on Key Performance Indicators(KPIs) benchmarks:

2005: no program implemented.

2011: applied to over 50% of employees in EDP group and to 86% of employees in Portugal.

2012: applied to 100% of employees.

HR

Development

Reduction of EDP and Contractors frequency rate (from 4,65 in 2012 to 4,17 in 2012); increase of the

number of death accidents involving service providers (4 in 2011 to 13 in 2012)

Increased installed certified power (from 58% in 2011 to 72% in 2012).

Health &

Safety

EDP is increasing its commitment with Energy Accessfor Development


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3

for Development

EDP A2E Projects around the world

Executed

To be implemented

Guine Bissau

Kakuma, Kenya

Mozambique

South Africa

East Timor

Venezuela

Brazil Angola

Kakuma: a pilot project intended to empowervulnerable people and to cover basic energy needs


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3

vulnerable people and to cover basic energy needs

2011-

Maintenance by LocalPartner

Yearly visits by FEDP(Technical Assistance)

2008-2009

Opportunity ID

Site survey

Intervention proposal by EDP

On-site Community Engagement

Contract between EDP andUNHCR (UN Refugee Agency)

2010

Execution start-up

UNHCR Highcomissionerand EDP CEO visit

Execution wrap-up

Non-refundable social investment of 1.3 million by EDP to implement a 50kWp project in a UNHCR camp with

75.000 refugees

Kakuma: a pioneer example of how energy canmakea nowhere land into a place to live


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3

a nowhere land into a place to live

SOLAR LANTERNS FOR STUDENTS

4500 units | School attendance; Study by night; School-home safety

SOLAR COOK STOVES, SOLAR WATER PURIFIERS & AGRO-FORESTRY

Women capacity in solar cooking; Potable water; Kitchen garden

SOLAR PV SYSTEMS FOR LIGHTING AND ICT

50 kWp | 11 public buildings; 31 street lights with 147 homes; Capacity building

Direct Impact6.000refugees

300families

Savings of 50.000l/year of diesel

700tCO2 emissions avoided

For the first time in 9 years, there are A and B students, and there were no E grades

48% of students had A, B or C grades, while the average of the previous 8 years was 25%

Conclusions


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3

Responding to climate change through a strong improvement of environmental performance

Energy efficiency: campaigns encouraging efficient behaviors, development of energy services, promotion of

installation and use of distributed energy resources and electric vehicles

Keep-on investing in innovation: wind offshore (wind float), smart grids, electric vehicles, etc.

EDP is listed for the 5thyear in a row in DJ Sustainability Indexes and being a top ranked utility worldwide

Commitment towards the protection of nature and biodiversity, social engagement, enhancement and

achievement of certain levels of responsibility and accountability

#3 player worldwide in wind ; #1 largest hydro program in Europe

EDP is present in 13 countries; 29 nationalities of employees


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Annex

EDP strategic agenda: follow up for 2012-15controlled risk, superior efficiency and focused growth


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3

controlled risk, superior efficiency and focused growth

1) For the complete Business Plan period 2) Excludes Regulatory Receivables 3) Based on recurrent net profit. Dividend per share from 2011 as floor.

Strategic Priorities

Proactive management of legal

and regulatory agenda

Competitive refinancing and

accelerated deleveraging

Focus on Opex and Capex

efficiency

Value creating growth

Successful partnership with CTG

Business Plan 2012-2015 highlights

Becoming greener: >70% clean installed capacity in 2015

Capex


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3

130 130

2011 2012

EDP Sustainability Index: Environmental Dimension

(points)

EDP Sustainability Index

(points)

~0%

146 143

2011 2012

-1,5%

EDP Sustainability Index: Social Dimension

(points)

EDP Sustainability Index: Economic Dimension

(points)

111 109

2011 2012

-1%

131 137

2011 2012

5%Weight: 33% Weight: 31%

Weight: 36%

(1) Developed by EDP based on 26 sustainability performance indicators

Summary of indicators: 2012


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3(1) Market Cap as of Dec-31, 2012(4) Based on the net generation following the new GRI guidelines sector specific

(2) In accordance with London Benchmarking Group (LBG) methodology (3) Large hydro; Small hydro and Wind

Generated Economic Value (GEV): Turnover + other operating income + gains/losses with the sale of financial assets + gains/losses from associated companies + financial income

* Distributed Economic Value (DEV): COGS + operating costs + other operating costs + current tax + financial costs + dividend payment; ** Accumulated Economic Value (AEV): GEV DEV

Environmental

Some major events

Economic

Installed Capacity 23,380 MWRevenues 16,340 million

Primary Energy Consumption 197,793 TJDistributed Economic Value* 17,488 million

Social

Employees(5) 12,275 nb.

Average age 46 years

Training hours 503,272 hours

Absentee Rate 3.16 %

DJSI-For the fifth consecutive year, EDP is distinguished in the

publication world, "Sustainability Yearbook 2012" SAM, obtaining the

rank of gold for the third time and EDP in the top of world

sustainability in the Dow Jones Index for the fifth year in a row,

obtaining the same absolute score of the utilities leader.

Brand- EDP awarded as the most valuable Portuguese brand

according to a study from the Brand Finance consultant, with a brandvalue of EUR 2.4 billion.

Wind farms - EDPR agrees with CTG on the first investment in minority

stakes in wind farms.

Net Income 1,012 million Renewable Installed Capacity(3) 15,247 MW

Market Capitalization(1) 8,373 million ISO 14001 Environ. Certification MW17,665

SO2 specific emissions(4) 0.29 g/KWhTotal Community Contribution(2) 21 million

NOxspecific emissions(4) 0.29 g/KWhCommunity Contribution (% of EBIT) 1 %

CO2 specific emissions(4) ton/MWh0.323Accumulated Economic Value** 2,124 million

R&D Spending 31 million

Collective Employment Agreements 83 %

Male / Female Ratio 3.54 nb.

EDP frequency rate 1,82 nb.

(5) Excluding Corporate Bodies

DJSI Index: Assessment method and weights


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4

IndexIndex

Weight

EDP Points

(Max. 100)Index

Index

Weight

EDP Points

(Max. 100)Index

Index

Weight

EDP Points

(Max. 100)

Market Opportunities 7% 84 Electricity Generation (IS) 7% 84 Labor Practice Indicators 5% 78

Risk & Crisis Management 6% 100 Operational Eco-Efficiency (IS) 7% 58 Human Capital Development 5% 100

Codes of Conduct /Compliance/

Corruption & Bribery6% 99 Climate Strategy (IS) 6% 100

Talent Attraction &

Retention5% 65

Customer Relationship Management (IS) 5% 81 Biodiversity (IS) 3% 100 Stakeholder Engagement (IS) 5% 100

Corporate Governance 5% 73 Transmission and Distribution (IS) 3% 60Occupational Health &

Safety (IS)

4% 89

Price Risk Management 3% 93 Water Related Risks (IS) 3% 66Corporate Citizenship /

Philanthropy3% 90

Scorecards / Measurement Systems (IS) 3% 98 Environmental Reporting 3% 93 Social Reporting 3% 100

Environmental Policy /

Management System (IS)3% 93

Economic Dimenson (35%) Enivironmental Dimenson (35%) Enivironmental Dimenson (30%)

Industry Specific

59%

General

41%

Social

Economic

Environmental


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Fostering Knowledge


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4

Scientific support for structural decisions: overall impact of new technologies, go/no go

implementation based on long term environmental risk management

Influence the prioritization of biodiversity knowledge: connection corridors between preserved

areas; stock evolution of endangered species

Development of specific monitoring and other applied studies requiring advanced knowledge:

integrated cumulative impact of wind farms on birds; design improvement of fish ladders or in stream

flow optimization.

BiodiversityChair

Volunteer five years program of 2.5m, under EU Business and Biodiversity Initiative (15 projects

implemented with partnership of more than 40 scientific entities and ONG )

Promoted concrete actions on biodiversity ,constituting guidance for future actions

Capitalizes the goodwill of volunteer regeneration as a way to get an overall positive balance in

company activities impacting the environment

BiodiversityFund

Influence of climate change on Iberian fauna (which conservation measure are worse on the longrun).

Test adaptation to new environments: Reintroduction of osprey nesting in Portugal.

Long termstudies

Adaptive Management


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Tight collaboration with Scientific Institutions

Follow up of implemented measures and adjustment of management to meet the best possible results, optimizing investment

Transform costs of mandatory actions into investment

Maximization of value added to environment and learning from the results of it implementation.

Measures primarily oriented to habitats and ecosystems

Restoration to maximize long term results.

Deep involvement of local stakeholders

Make them our long term partners to preserve environmental improvements, getting economic and social value from betterecosystems and consolidating a sustainable way of life and creating economic benefits to both parts

Promote local stakeholders participation since the very begin of projects

Get their main opinion through the use of LOAM (Landscape Outcomes Assessment Methodology), consultation.

Defining a communication program for every project with significant impact in environment or quality of life

Tailored after a detailed evaluation of local stakeholders identification. A specific methodology for this project communicationstrategy is in place at corporate level The ComPro project.

Long Term Vision


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4

To be able to implement in advance measures in a cost effective way and take advantage of being first mover.

Identify the environmental and social long term trends and regulation risks

Member of WBCSD World Business Council of Sustainable Development

Where sustainability issues are systematically analysed, and worldwide solutions are proposed to governments and regulators.

EDP as Core Team of ecosystems focus area of WBCSD

Pilot test of EVI (Ecosystem Valuation Initiative), which give EDP international visibility, showing willingness to find and stabilizecommon metrics to evaluate environmental risks.

World pilot project to determine overall impact/benefits during its entire life, compared with others technological solutions.

Partnership with MIT Portugal, for a LCA- Life Cycle Assessment of the Baixo Sabor hydropower project

Geo-referenced database with all the information produced of any site, impacts, measures and follow up. Any scientist in theworld can review, comment results, and learn from experience.

Having Baixo Sabor Project as LTER Long Term Evaluation Research site

Invest in creating management skills to improve their wellbeing is a guarantee that good environment performance in longterm is going to be maintained.

Promote acceptable life condition for local communities


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What does Environment means for our business?


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4

Strong experience on renewable energies

Environment integrated at strategic level

High technical competences of our HR

Transparency and trust , associated with EMS -Environmental Management System

High public exposure

Member of WBCSD

International lobby to involve private sector on findingsolutions

Competitive advantage from external recognition, ex: DJSI

Increase efficiency (more tools available to supportbusiness, anticipate risks)

Increase reputation (high awareness of society)

Ability to attract and retain employees

High negative impacts on environment

Operations on high sensitive ecological regions(Biodiversity Hotspots) and inside protected areas/highecological habitats.

Strong dependences on ecosystem services

Internal expertise increasingly externalized


Increase operational costs due to licensing delays

High level international agreements to reduce biodiversityloss

Increase regulations constrains

Increase lending requirements (access to capital)

Damage to brand (external stakeholder pressure)

Challenge to social license to operate

Strengths

Opportunities

Weaknesses

Threats

Environmental dimension: 2012 performance


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Corporate Environment Management System (SIGAC): Certification ISO 14 001 since 2008

Higher number of installations certified under ISO 14 001 (235 generation facilities in 2012 (1)(+70 vs.2011)135 of 607 electricity substations; gas sector fully certified)

Ongoing program for EMAS registration of generation facilities in Iberia (62 in 2012; +15 vs. 2011)

Environmental

Management

Electricity

Generation

Reduced of electricity generated from CO2Free Generation(2)(-9% vs. 2011): CO2

Free Generation represent ~61%(1)of EDP total generation in 2012

Climate Change Increase CO2emissions: emission factor increase 13% YoY to 0.323 ton CO2/MWh

in 2012

Atmospheric

Emissions ~13% YoY increase of NOX emissions per KWh (0,29g/kWh) and 80% for SO2emissions (0,29 g/kWh)

Biodiversity

EDP commitment is explicit in Biodiversity Policy(www.edp.pt/en/sustentabilidade/ambiente/biodiversidade)

EDP has been publishing a Biodiversity Report since 2009, were explicitly defines itsstrategy, targets and achievements with respect to those targets.

For all generation sites under construction, stakeholder engagement is a processconducted under Environmental Impact Assessment process and Biodiversity isconsidered.

(1) Excluding nuclear (minority participation in Spanish company without management control), representing 156 MW (c1% of total capacity) and 1,230 GWh (c2,3% of total generation) in 2012(2) Excluded Thermal Generation and nuclear

What does Social issues mean for our business?


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4

Electricity/energy considered a basic need of a modern

society

High technical competences of our HR, low turnover


Strategic approach to stakeholder engagement isbecoming more robust

Encourage more informed decision making, based on theexpectations of society

Enhance reputation fostering greater public trust

Demonstrate the total shared value with society beyondfinancial distribution

Recruit, motivate and retain its employees

Prevent or reduce potential conflicts with consumers

Promote innovation and benefit from partnerships

Health and Safety of suppliers

Multi geographic and cultural exposure


Different backgrounds of many business units regardingstakeholder management.

Becoming global raises new social issues

Sharing responsibility through value chain is increasinglybeing considered a core sustainability practice

External stakeholder pressure is increasing

Many EDPs initiatives seen as philanthropy if notinternalized into business practices

Strengths

Opportunities

Weaknesses

Threats

Social dimension: 2012 performance (1/3)


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4

Labour indicators above the sectors average; stability of companys performance evaluation by

RobecoSAM

Absenteeism down from 3.35 in 2011 to 3.16% in 2012.

Employment

EDP operates in 4 continents and does business in 13 countries. Has 12,275 employees.

Training: EDP group universe books 503k hours of training 2012(~+5% YoY).

EDP University: 7 Schools, 2 group wide (oriented towards EDPs culture and personality) e 5 functional(oriented towards business areas).

Diversity: EDP initiated its participation in an External Forum, energized by CITE , sharing good pratices ;

EDP approved its Diversity Policy.

Assessment of potential and performance based on Key Performance Indicators(KPIs) benchmarks:

2005: no program implemented

2011: applied to over 50% of employees in EDP group and to 86% of employees in Portugal

2012: applied to 100% of employees.

HR

Development

Reduction of EDP and Contractors frequency rate (from 4,65 in 2011 to 4,17 in 2012), as well thenumber of death accidents involving service providers (4 in 2011 to 13 in 2012).

Increased installed certified power (from 58% in 2011 to 72% in 2012).

Health &

Safety

(1) Comisso para a Igualdade no Trabalho e no Emprego



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5

EDP Group overall procurement reached 2,782M.

13% of total procurement are from foreign suppliers.

Most of fuels purchased was come from suppliers that have advanced Corporate Social Responsibility

policies and have also signed up to Bettercoal initiative. EDP plans to join this initiative in 2013. Develop a pilot program with Siemens More Sustainability in the Supply Chain in order to improve

performance in the supply chain, namely in the areas of health and safety.

Suppliers

Since 2008, EDP has a report that combines economic and financial aspects,with social and environmental performance. Since 3rdquarter semester reports

also sustainability information integrated with interim results of EDP Group.

Sustainability

Report

Implementation of a social accounting system (SAP) in Portugal; it will be extended to all geographiesduring the next 2 years.

Social investment on community represents about 1% of EBIT: more than 400 community projectssupported (total contribution amounted to 21M (1)in 2012 in accordance with the LBG (2) method) inthe area of social innovation, access to energy and education, cultural, sports and environmentalpromotion and entrepreneurship

Contribution to

the community

(1) Value of 2012 not yet validated by Corporate Citizenship; (2) London Benchmarking Group: for detailed please see: www.edp.pt/en/sustentabilidade/sociedadeecultura/avaliar/Pages

Social Report Publication of EDP Social Report for the 5thyear consecutive

http://www.edp.pt/en/sustentabilidade/sociedadeecultura/avaliar/Pageshttp://www.edp.pt/en/sustentabilidade/sociedadeecultura/avaliar/Pages


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5

Stakeholder

Engagement

Since 2009, EDP has implemented an internal process to assess the companys maturity levelagainst AA1000 APS(2008) standards.

Set up the institutional relations and stakeholder department and a Stakeholders ManagementCommittee. These new structures will enhance the communication of EDPs stakeholders,contributing to a more fluid and systematized information about EDPs activities.

To guarantee the total cover of stakeholders, EDP promote different channels to reinforce dialogwith all stakeholders, such as the Ethics Ombudsman. This is a channel managed at a corporatelevel by the Communication office and all issues around stakeholder engagement are forwarded tothe Stakeholder engagement office.

KPMG verified EDPs report in accordance to AA 1000 AS 2008, Type 2. This verification processincludes information disclosed in EDPs Annual Report and the alignment of EDPs practices with theprinciple of inclusion, materiality and response.

EDPs materiality issues were identified, in 2012, through the Accountabilitys methodology, whichensures a balanced and cleared assessment of data collected internally and throughout thedifferent channels opened for different stakeholders. For consult list of stakeholders see next slide.

Economic dimension: 2012 performance


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Consolidation of Internal Ethics Management System: review of the Code of Ethics Regulation and theInternal Regulations of the EDP Group Ethics Committee. Revision of Ethics of Code has begun and willbe completed in the first half of 2013.

EDP participates in the Gesto Transparente.org initiative.

Completed the training program integrated in the ticaedp Programe. This program was been object ofpublic analysis and debate in the program for the international MBA at the Catlica Porto BusinessSchool.

Mr. Jos Figueiredo Soares is the EDP Group Ethics Ombudsman, replacing Mr. Carlos Loureiro.

Ethics

9,900,394 customers of electricity and 1,059,436 customers of gas.

The levels of satisfaction with electricity improved in 2012 (+5pp than 2011)- 78% declare to besatisfied; the levels for gas didnt change from 2011- 85% declare to be satisfied.

EDP has as a ombudsman customer: Mr. Luis Valadares.

Customer

Relationship

Consolidated investments amounted to 2,010M in 2012, a ~7% decrease when compared to 2011. Thisdecrease was essentially explained by lower investments in wind operations (less 231M in USA,

explained by lower wind capacity targets).

EDP invested about ~32m in R&D projects (energy efficiency, renewable energy, clean generation,carbon capture and micro-generation).

Market

Opportunities& Energy

Efficiency

Research and Development: main strategic areasof innovation


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5

Offshore wind energy- EDP reconfirmed is commitment to

offshore/ocean energy as one of the areas of focus in its innovation

effort- Wind Float project;

Solar Photovoltaic energy- Sunlab project;

Search for long-term decarbonisation of the sector.

Renewable &

Generation

Technologies

Smart Grids InovGrid: smart electricity grids (transform existing distribution

system into intelligent system, based on telemanagement)

Inovation

ecosystem

Venture Capital- Risk Capital Fund- by the end of 2012, it had

invested about 7M in innovative companies and funds in the clean

tech area.

Electric Mobility

Mobi.E: implementation of a grid-integrated electric mobility

system; OpenCharge: Development of a low-cost electric vehicle

charging station using open-source hardware

Energy Efficiency

Home Energy Management services plataform

Implementation of new plataform (Upower) for testing different

technologies in the area of smart grids

Engaging stakeholders: identification of importantsustainability issues


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5

Climate Change

Energy Efficiency

Environmental Protection

Renewables Promotion

Good Governance

Supply chain empowerment

Free Market

Local Development

Security of facilities

Corporate strategy and New

Businesses/Markets

Human Rights

EDPs Important Issues shared with society:

List with the main stakeholder segments and mostrelevant topics (1/3)

S k h ld M i l i h l T i f l i 2012


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5

Stakeholder Main consultation channels Topics of most relevance in 2012

- Dedicated telephone line and e-mail

- External perception study - Macro-economic context

- Regulatory framework

- Financial debt / Dividend policy sustainability

- Investors Day - Liquidity and financing costs

- Strategic partnership with China Three Gorges

- EDP Group strategy

- Dialogue with DECO

- Market studies - Market liberalisation

- Complaint communication channel - Quality of supply

- Focus groups - Price policy

- Customer Ombudsman (Portugal) - Transparency and proximity

- Customer Managers - New services and technologies

- Energy efficiency barometer - Energy efficiency

- Satisfaction surveys

- Bi-annual survey on organizational

environment- Career evolution and qualification

- Chairman's direct line - Professional fulfillment

- Ethics Ombudsman

- Meetings with unions and worker's

committees

- Specific and thematic surveys - Occupational health and safety

- Channel for whistleblowing - Ethics at the workplace

- Chairman of EBD meets with employees - Balancing employment and family life

- Performance Evaluation Process

- Surveys sent by Socially Responsible

Investors (SRI)

- Periodical Confecence Calls and Roadshows

on spectific thematics

Customer / Consumer's Rights

Associations

Emplyees / Unions

- Appropriate remuneration, recognition and

equal opportunities

Investors



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5


projects - Environmental management and promotion

- COMPRO project / Local surveys - Infrastructure safety conditions

- Energy efficiency

- Promoting renewable energies

- Seminars and conferences - Climate change

- Co-creation innitiative - Innovation and new technologies

- Partnerships and collaboration agreements - Environmental and Biodiversity management

- Renewable energies

- EDP's intitutional image/Reputation


- Hydroelectric projects- Dedicated telephone line and e-mail - Tariffs and energy prices

- Market studies - Quality and security of electricity supply / Investment on grids

- Thematic meetings with members the EBD - Environmental and Social responsibility

- Press conferences - Innovation (smart grids; off-shore wind projects)

- Financial performance / Privatization process

- Liberalised market

Local communities

Academic world

- Environmental Management Systems with

EMAS registration

Media



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- Qualified workforce

- Health and Safety

- Price policy and quality of service

- Ethics Ombudsman - Strengthening communication channels

- Surveys on quality of service - Promoting renewable energy

- Internationalisation

- Periodical meetings - Market liberalisation

- Follow-up visits to new projects - Tariffs and prices

- Environmental Management


- Social responsibility- Climate change

- Collaboration agreements - Energy efficiency and new technologies

- Projects monitoring committees - Environmental management, particular focus on

- Consultation channel - Renewable energies

- Responsible marketing

- Ethics and transparency

- Regular meetings with ongoing

building/supply contracts

- Representation of the company in

various committees and sectoral

Suppliers

Regulators and Governmental

Institutions

NGO

China Three Gorges: profile and partnership with EDP


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5(1) As of Dec-2011.

Chinas largest clean energy group with an ambitious renewable energy expansion plan

One of the major Chinese Corporates: Sound financials and competitive access to long term capital

100% owned by Peoples Republic of China

(S&P & Fitch: AA- / Moodys: Aa3)

CTG credit rating: S&P: A / Moodys:A1;

Sound relationship with some of the worlds major

banks: ICBC, China Construction Bank, Bank of China,

China Development Bank, etc.

Generation Capacity (1): 25.2 GW installed + 49.6 GW

under construction, mostly large hydros

i) Three Gorges Hydro Power Plant: 22.5 GW(largest

hydro plant in the world).

ii) Other Renewable: 1GW of wind capacity in operation;

solar power development projects.

EDP-CTG strategic partnership agreed in Dec-11:

Committed credit facility of 2bn provided to EDP at corporate level by China Development Bank

2012-15: CTG to invest 2bn in minority stakes in renewable capacity (incl. co-investment)


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Securitisation options on EDPs regulatoryreceivables in Portugal

EDP Regulatory Receivables in Portugal: Amortisation Profile


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6

EDP Regulatory Receivables in Portugal: Amortisation Profile

(Mar-13 stock + Future 2013 Securitisable Tariff Receivables) ( bn)

2012 Securitisable Tariff Receivables

2013 Securitisable Tariff ReceivablesAvg. Receivables Maturity

Mar-13: 3.1 years

Securitisable deficits with relatively short maturities (3.1 years), low risk and adequate remuneration

In Apr/May-13 EDP securitized 291m of 2012 Tariff Receivables. Further deals to be considered in near term

Tariff deficit tranches available for

securitisation by EDP:

2012 Securitisable Tariff

Receivables: 973m to be collected

in 2013-16, 6.32% interest rate

(291m securitized in Apr/May-13)

2013 Securitisable Tariff

Receivables: 1,421m to be

collected in 2013-17 (1,275m in

debt by 2013YE); interest rate of

~5.85%0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

2013 2014 2015 2016 2017

0.7

1.4

0.6 0.6

0.3

Other

Wind: A competitive technology to meet electricitydemand


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6Notes: Analysis based on: Gas 7.0$/Mmbtu, Coal $80/ton, CO2 15/ton, /$ 1.35

Levelised Cost of Energy by Technology

(/MWh, European Case for new investments)Wind Levelised Cost of Energy (LCoE)

(/MWh on Load Factor scenarios)

20

40

60

80

100

120

20% 25% 30% 35% 40%

Dismantling

CO2Fuel

O&M

Investment

58

69 7278 79

Hydro Wind

Onshore

Nuclear CCGT Coal

Wind is becoming a cost-adequate alternative energy within national long-term electricity system plans

Lower capex cost

and higher useful life

Excludes

intermittency

costs

EU mandatory targets for 2020 indicate strongunderlying increase of the wind capacity...


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6Notes: Source: EWEA; NREAP

RES in Energy mix

(%)

EU Renewable capacity per technology in 2020

(GW)

8.5%

20%

2005 2020

+2.4x

Sector

(%)

Heating and

Cooling

Transport

47%

30%

82103

26 233

+90+32

+58

+21+38

172

135

84

44 41

7 4

Windonshore

Hydro Solar PV Biomass Windoffshore

Solar CSP Other

Wind onshore is expected to be the major contributor for renewables capacity growth

New Capacity

2010 Capacity

Electricity

23%

...on which the market has recurrently raised severalquestions about its sustainability


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6

Is wind the most cost competitive renewable technology today?

1

Is wind a cost adequate technology to meet increasing demand?

2

Is wind profitable at current electricity wholesale prices?3

Is wind tariff generating an over-cost in the electricity systems?

4

Is wind the most cost competitive renewabletechnology today? Yes

Weight of renewable generation and premium(1)Levelised Cost by technology


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6Notes: Source: EDPR Internal Analysis; (1) EDPR European Countries

Weight of renewable generation and premium

(%, by technology)Levelised Cost by technology

(/MWh)

69

96

125

225244

Wind

Onshore

Biomass Wind

Offshore

Solar PV Solar CSP

82%

53%

5%

6%

11%

34%

2% 7%

Generation Premium

Fuel

O&M

Investment

Wind

onshore

Wind

offshore

Solar

PV

Solar

CSP

61%

18%

19%

22%

14%

42%

6%18%

Generation Premium

Wind is the most efficient and mature renewable technology

2010 2020E


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Is wind profitable at current electricity wholesaleprices? No, but...

Market Price - Levelised CostIBERIAN MARKET


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6Notes: Source: EDPR Internal Analysis; Clean Spark Spread, assumptions: heat rate CCGT 51.4%, emissions factor 0.365 ton/MWh; Forex 1.35/$, C02 15/ton; Brent 102.5$/bbl

Electricity

market price

at market prices providing a sustainable CCGT operation, wind is competitive

CCGT

Clean Spark Spread CCGT Return Wind Return

Market Price - Levelised Cost

18

8

-2

-12

-22

80

70

60

50

40

11

1

-9

-19

-29

2

-8

-18

-28

-38

/MWh /MWh/MWh/MWh

Is wind tariff generating an over-cost in the electricitysystems? Yes, but...

Electricity System with Wind Capacity Electricity System without Wind Capacity


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6Notes: Source: EDPR Internal Analysis based on 2010 Iberian production figures from REE and REN

Electricity System with Wind Capacity

(Illustrative simulation, Iberian Market)Electricity System without Wind Capacity

(Illustrative simulation, Iberian Market)

excluding wind from the energy mix translates into higher market electricity prices,

mitigating the impact of wind over-cost

/MWh

Market(260 TWh)

47

90

Wind(52 TWh)

Total Consumption(312 TWh)

up to+7

/MWh

Wind over-cost ~2bn

(endogenous resource)

Increase in electricity cost ~2bn

(mainly imported)

EU ETS supply and demand balance

Mton 2008-2028E

The EU ETS should remain unbalanced in theshort-term...

Accumulated - 900Mton set-aside

Accumulated - 30% 2020 capAccumulated - Baseline

Annual - Baseline


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6

Mton, 2008 2028E

-277-232-151-110-71-44-14

305889117139

905

446248

-35

-475

-2.000

-1.500

-1.000

-500

0

500

1.000

1.500

2.000

2.500

282726

288

252422212019122008 09 10 11 13 14 15 2316 17 18

-435-382-319

Absence of backloading

leads to increasing

oversupply and lack of shortterm confidence in the

market

Supply/demand

equilibrium by 2018 should

sustain price

Increased demand from sectors such

as aviation and limitation of offsets

rebalances the market in Phase IV

Source: BNEF (Apr-2013); DPE analysis

Accumulated - 900Mton set-aside Annual - Baseline

but structural reform and market dynamics could restore equilibrium in Phase IV

Regulatory update: EDPR to keep benefiting from adiversified portfolio and flexible business model

Win-win solution and Decree-Law published in Feb-13 respecting the agreement reached between the


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6

Spain

EDPR still open to dialogueand find constructive solutions

Unilateral decision to eliminate the variable option regime; all assets in Spainunder fixed tariff regime from Jan-13 onwards

Romania

Rights preserved, but potential

impact on cash collection

Potential postponement of 1 Green Certificate cash collection (out of 2) for wind(2 GC out of 6 for Solar)

Potential reduction to 1.5 Green Certificates for new wind assets (clarification tolead to pipeline optimisation in the country)

28MW under construction as of Mar-13

Poland

New Law to potentially solve

current price environment

Enactment of the new RES Law has been suffering delays impacting the GreenCertificate market prices and new long-term contracts negotiations ;


US

New growth opportunities on

the short-term

PTC extension enabling a favourable environment in the US and new RfP forPPAs being setup; EDPR secured in Apr-13 a 250 MW PPA for operating projects

Long-term visibility for

new projects

Italy: 1strenewable tender successfully completed in the 1Q13; EDPR secured40 MW with a 20-year PPA

Brazil: Exclusive wind tender announced for Ago-13 with stricter rules benefiting

long-term players; EDPR secured 120MW with a 20year PPAItaly & Brazil

Portugal

Win-win solution and

improved visibilitywind sector and the government to extend the remuneration framework ;


Strategic targets by Principles of Sustainable Development(1/3)

P i i l f S t i bl


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2013

Principle of Sustainable

DevelopmentTarget

Economic & Social Value

Keep the SAM Gold Class

EBITDA CAGR 5% per year Net Profit CAGR : low single digit

Payout ratio between 55% and 65% of recurrent Net Profit (minimum

0.185 per share) Annual average Operational Investment: EUR 2,000m Total investment on renewable energies: 60% annual average

2011-2015

2012-2015

2015

Installed Capacity of 26 GW Clean installed capacity higher than 70% of total installed capacity OPEX savings of EUR 130 m in 2015 Ratio Adjusted Net Debt/EBITDA lower than 3.0x




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2013


DevelopmentGoals and Targets

Eco-efficiency and

environmental protection

Increase 426 MW of installed capacity certified by ISO 14 001

Join the Better Coal international Initiative

Reduce CO2 specific emissions by 70% until 2020, in comparison with 2008values

2020

Innovation Keep the financing in 20m per year 2013-2015

Integrity and Good

Governance

Keep the recognition of the World Most Ethical Companies of EthisphereInstitute

Revision of EDP's Code of Ethics in 2013 Preparation and launching of new training programmes in 2013/2014 Initiate monitoring the performance of EDP's ethics system (according to

Code of Ethics Regulations)

2013-2014




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2015


DevelopmentGoals and Targets

Transparency and dialogue Complete the report of GHG emissions, scope 3

Obtain and maintain a corporate certification of the Safety Management System Reduce the frequency of on-duty accidents with EDP employees and

service providers by 5%, compared to 2012 Keep the Global Satisfaction level of employees above 80%

Implement the action plan of the Diversity Policy between 10 and 15measures

2013Human Capital and

diversity

Acess to energy Ensure that ICEIT and EIDC are above the levels set by Regulators 2013-2015

Social Development and

Citizenship

Increase the number of Volunteering partnerships by 50% Budget allocated to Fundao EDP up to 0.1% of the Group's 2011 turnover 2013-2015

Models of external evaluation

EDP sustainability practice is evaluated by several external entities that create and maintain sustainability


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Corporate Indexes:

Dow Jones Sustainability Index World e Enlarged

Dow Jones Sustainability Index Europe

FTSE4Good Index Series

Bloomberg indexes ESG

ECPI Ethical Index Euro ECPI Ethical Index MEU

ECPI Ethical Index Global

Ethibel Sustainability Index

CDLI Carbon Disclosure Leadership Index

Storebrand (1)

Oekom (1)

Regional Indexes: Accountability Rating Iberia

ndice de Sustainability Empresarial (ISE) - Portugal ndice de Sustainability Empresarial (ISE)- Brasil

Databases:

Asset4 Bloomberg Fortune

GS Sustain (Goldman Sachs)

Recognitions:

Prmio Cidadania das Empresas e dasOrganizaes Portugal

Prmio Qualidade de Esprito Santo (PQRS)-Brasil

susta ab ty p act ce s e a uated by se e a e te a e t t es t at c eate a d a ta susta ab tyindexes, sustainability ratings and databases.

EDP has been evaluated and, as a result, integrates the following indexes/databases or received the

following recognitions (list not exhaustive):

(1) ) New evaluation during 2012. The last one dates were in 2009 and 2011, respectively. More details see www.edp.pt/en/sustentabilidade/abordagemasustentabilidade/

DJSI - EDP World Top in the Electricity Sector OEKOM - EDP is one of the best in the electricity sector

Sustainability Performance of EDP (Core Broad(1))

Top 2


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7(1) Core SRI - is composed of the following strategies (with possible combinations):Norms- and values/ethical- based exclusions (three or more criteria)Positive screening, including Best-in-Class and SRI thematic

funds (2) EDP does not integrate the CDP Global 500 index in 2011, but CDP Iberia

SRI: 8 bn USD

FTSE4Good Index Series

SRI: 8 bn Euros

SRI: 90 bn Euros

7590 85

96

0

2040

60

80

100

120

Absolute Score

2009

2010

2011

2012

Carbon Disclosure Project Global 500 and CDP Iberia (2)

Performance and Score: EDP member of CDLI

SRI: 78 bn USD

A- BBTop 4 Top 5: CDP Iberia

Top 3Top 2


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