on renew comum_21

DISTRIBUTION 2012 Program prepares

EDP for the future

RESULTSProfits up 5%

from 2009

SOCIAL NETWORKSEDP in the new

communication platform

SPOTLIGHTDirectors speak about

the challenges of Distribution

Energy without limits February/ March* 2011 Nº21

WHO IS WHOAntónio Sarmento speaks about the Windfloat project

EDP WAY Program takes stock of the last two years

IN DISCUSSION The advantages of outsourcing

in the different markets

RN_01_CAPA_PT_aprovada:Layout 1 11/04/26 12:24

RN_02_PUB :Layout 1 11/04/26 12:27

o n 3

editorial

t was inevitable. The impact of online social networks on so-ciety has led companies to rethink their paradigms and de-velop new connections. The image-building of a company andthe products/services it offers has become all-encompassing.It is a new world, one that is in development, and for whichwe must be prepared. Like it or not, the company is comment-ed on, either positively or negatively. And if it is not present inthe social networking universe, its capability to react is morelimited.

This is another challenge that calls for thinking “outsidethe box." Social networks are like doors that open to the whole

wide world, waiting to be explored and conquered. Several studies indicate thatthe number of Internet navigators interacting in social networking will exceed800 million by 2012, making it increasingly difficult for a company to monitorall the content entering and leaving its network.. Which means, it will be increas-ingly difficult for a company to monitor all content entering and leaving its network. And if consumers are strong enough to support or eliminate a brand,employees are also key to building its image: one must be aware of the dangersposed by social networks, which can originate from within the company itself.One simple comment can destroy what took so long to build.

Company rules for the use of social networks are, in this sense, an essentialtool for every employee of the EDP Group. This Best Practices manual, whichcan be viewed in full on the company Intranet, seeks above all to protect ourcorporate image, establish rules, set limits and guide employees in a new meansof communication, one that we are all still learning.

EDP Group, as a recognized international player, could not be excluded fromthis form of global communication. Businesses cannot be “social”, or they willbe left behind. We want to become always closer to our employees, customers,suppliers and investors, demonstrated the same policy of openness and trans-parency that has long characterized our company.

What are you waiting for to become our friend?

We want to become always closer to our employees, customers, suppliers and investors, demonstrated the same policy of openness and transparency that has longcharacterized our company

EDP and socialnetworking: Like!

on

Paulo Campos CostaBrand and Communications ManagerI

RN_03_EDITORIAL:Layout 1 11/04/26 12:27

‘On’ is a bimonthly publication

Property EDP – Energias de Portugal, SAPraça Marquês de Pombal, 12, 1250-162 Lisboa Tel: 210 012 680 Fax: 210 012 910 [email protected] Director Paulo Campos Costa

Publisher Península Press SLRua dos Correeiros 120, 4º esq , 1100-168 LisboaExecutive Director Stella Klauhs [email protected] Editors Eduardo Marino (editor), Joana Peres (staff writer), Art Marta Conceição, André Noivo Photography Hugo Gamboa, José Reis e Adelino Oliveira, iStockphoto, SXC Copydesk Ana Godinho EDP Coordination Margarida GlóriaComplimentary distribution Portugal – 23,000 copies; Spain – 2,000 copies; Brazil – 2,500 copies; Renew – 500 copiesLisgráfica - Impressão e Artes Gráficas, Rua Consiglieri Pedroso, nº90, Casal de Sta. Leopoldina, 2730-053 Barcarena - Portugal Telf. +351 21434 54 00; Fax. +351 21 436 01 83

Exempt from registration with the ERC, per decree 8/6, article 12, item 1-a

4 o n

index February | March

Implementation, commitment, simplicity and innovation —these are the main messages of the 2012 Program, the goal of which is to prepare EDP Distribuição for the majorchallenges of the coming years

Photo EssayThe photography groupfrom Central Térmicade Aboño shares someof its portfolio

56

RN_04_05_INDICE:Layout 1 11/04/26 12:28

index

o n 5

6 forumWe asked EDP employees which area theythought would most contribute in the nextfive years to the Group's sustainabledevelopment

7 stock

8/9 marketHighlights from the second vendor meeting in Gaia

10/17 edp cultureAn in-depth look at the EDP Way program,EDP social networking and the Group's 2010results are some of the topics not to miss!

22/25 innovationHC Energía is responsible for the first fullyoperational micro-cogeneration facility inAsturias

46/48 human capital Being an “EDP Leader” reinforces leadershipskills

50/51 our energyThe news that connects production centersto their surrounding communities

64 in focusJoaquín Suárez Saro, HC Energía’s Directorof Regulation and Institutional Relations

34

EDP Group staff made a deepcommitment to the Collecting Goods Campaign and managed to gather73 tons of donated goods! See the resultsin Portugal, Spain and Brazil

on cover EDP GroupDistribution Picture

Who’s Who? António Sarmento,president of the board of directors for WaveEnergy Center

42

Spotlight: Interview with MiguelStilwell D’Andrade,Ângelo Sarmentoand João Torres

18

26

RN_04_05_INDICE:Layout 1 11/04/26 12:28

forum*RESEARCH, DEVELOPMENT AND INNOVATION · An ‘On’ question

6 o n

At EDP, the area of Research, Development and Innovation (R&D+i) is aligned with its strategic pillars of growth-oriented development,superior efficiency and controlled risk. The R&D+i team is working to achieve these goals by implementing projects that contribute tothe Group's plans for sustained growth; seeking solutions to improve production processes; and developing initiatives that mitigateEDP’s exposure to risks, namely, regulatory, environmental and business risks.In your opinion, which area will contribute most in the next five years to the Group's sustainable development?

"Taking into account the newenvironmental philosophies and a moreefficient sustainability policy,considering the constant high burdenof oil prices, I think that electricmobility will most definitely moveforward.”

"It's very important that all the energythat is produced be managed properly(given some smart grids), and that itsdistribution is made in the same way."

"The focus should be on remodelingthe distribution grid to enable aprogressive start-up phase (withmeasurable results) for smart gridsand micro grids which potentiateinnovative value-added services forEDP customers."

"I think power distribution, with itsrelated losses, is the area where effortsshould be concentrated to provide amore sustainable development,although I have no doubt that withinthe next five years we will see itdevelop.”

"Certainly I think smart grids are thefuture, as the Internet was for thecommunications sector, as well as theglobalization of business andknowledge. Its large boom will, maybe,not happen within the next 5 years, butcertain steps will be taken for this tobecome a reality for many ‘prosumers’."

"There are more areas that couldcontribute to sustainable development,one of them – Human Resources –

since sustainable development impliesa good and efficient operation of thecompany and, to that effect, we have totake into account the employees whomake it possible.

"The socio-political instability of oil-producing Arab nations and the need tolower CO2 emissions to preserve theecological balance is essential toresorting to energy production throughrenewable sources, which will ensureglobal energy and economic businesssector sustainability."

"The production of energy, especiallyits water component, will certainlycontribute to the sustainability, in themedium and long term, of newpractices of energy consumption.

Over the next five years the effects atthis level may still be incipient, butthey will become noticeable with theintroduction of industrial servicepower reinforcements coming out ofPicote, Bemposta and Alqueva. Theoptimization of the generation system(namely at the level of its dichotomy:wind generation / hydric production(reversible system) will make itsmark."

"I believe given market liberalization,that it is desirable to suffer the lowestloss of customers, especially importantclients, and I think that the ‘Marketsand Value Added Services-marketingarea’ may have a great impact on thesustainable development of theCompany.”

• Renewable energy (offshore: wind and wave; solar):161 answers 28.6%

• Energy production (clean power generation and CO2 captureand containment): 112 answers 20%

• Energey efficiency: 96 answers 17%• New energy distribution technologies (“smart grids” and “micro grids”): 93 answers 16.5%

• Electric mobility: 65 answers 11.5%• Markets and value-added services – “marketing”: 21 answers 3.7%

• Information technologies – “webization” of the business: 15 answers 2.7%

0

5

10

15

20

25

30

TechnologiesMarketsEnergy Production

SmartGrids

EnergeyEfficiency

ElectricMobility

Renewable Energy

COMMENTS

WE ASKED OUR EMPLOYEES AND RECEIVED 563 ANSWERS

R&D+i

RN_06_FORUM:Layout 1 11/04/26 12:31

the strings of the market

o n 7

0.0

0.5

1.0

1.5

2.0

2.5

3.0

Mar/03/2011Feb/03/2011Jan/03/2011

EDP Portugal 2.90

Mar/03/2011Feb/03/2011Jan/03/2011

EDP Brazil

0

5

10

15

20

25

30

35

40

39.45

EDP Renewables

Mar/03/2011Feb/03/2011Jan/03/2011

0

1

2

3

4

54.55

Value in euros (from January 1 to March 3)

Value in Reals (from January 1 to March 3)

Amounts in Euros (from January 1 to March 3)

Analyst

USB

N+1

BoA - Merrill Lynch

JP Morgan

BPI

Goldman Sachs

BES

Fidentiis

Collins Stewarts

Société Generale

Date

Mar/09/2011

Mar/07/2011

Mar/07/2011

Fev/25/2011

Fev/25/2011

Fev/17/2011

Fev/17/2011

Fev/16/2011

Jan/21/2011

Jan/18/2011

Recommendation

Neutral

Neutral

Buy

Accumulate

Hold

Buy

Buy

Hold

Buy

Buy

Price

2.75

2.85

3.15

3.5

2.75

3.6

3.3

2.91

3.25

3.00

Stock market evolution betweenJanuary 18 and March 9

RN_07_CORDOES DA BOLSA:Layout 1 11/04/26 12:31

market

8 o n

EDP Business

F or the second year in a row, EDP Group sponsored “Vendor Day.”EDP’s investment plan was presented at this event, offering ven-dors the capability to prepare in advance for tenders to be

launched either in Portugal or abroad. For 2011 and 2012, the existinginvestment plan remains in place: valued at the equivalent of around 2billion euros per year, of which 1.5 billion are assigned to Portugal. And,in response to the planned investments, vendors have a key role to play.Nowadays, Portuguese companies already represent the largest seg-ment of EDP providers: in one year, this figure increased 10 percent(from 20 to 30 percent). “Portuguese companies are more prepared,more informed, so given this situation, they can plan their resourcesbetter,” said CEO António Mexia. Over the past three years, EDP hassupported the internationalization of more than 100 Portuguese com-panies, with a volume of inquiries approaching the level of 500 millioneuros.In Vila Nova de Gaia, about 200 vendors envisioned new business

opportunities — in the areas of distribution, production, renewables

and gas — not only in Portugal, but in other locations where the Groupis active. During the meeting, Nuno Alves, EDP’s chief financial offi-cer, explained that the Group's objective is also to encourage partnersin Portugal to become international. According to Luis Marques Fer-reira, of EDP Valor, between June 2009 and December 2010, 72 Por-tuguese companies were contacted by EDP regarding doing businessoutside of Portugal and have since accepted the internationalizationchallenge. But business deals must also be socially sustainable. As such, EDP

Group and its vendors have committed to involving the communitieswhere they do business to promote job creation and better living con-ditions. To that end, Sérgio Figueiredo, deputy director of the EDPFoundation, launched a challenge to the Group's vendors: "Let us sharea part of ourselves." Through this volunteer initiative, each person atEDP has the capacity to help improve conditions at designated healthfacilities, through the sharing of materials, technical support, teammanagement, and contribution of labor and monetary funds.

More productive relationshipsSecond vendor meeting in Gaia

With a retention rate of 94 percent, HC Ener-gía's customers are the most faithful in theSpanish energy sector. This is one of the con-clusions of the National Energy Commissio-n’s final report on the analysis of purveyanceto each of the major distribution groups inSpain.

Despite the ability of end-users to contracttheir energy supply with a company other thanthe distributor, the majority prefer to continuewith HC Energía. Moreover, HC has enteredthe market distribution competition: its mar-ket share is 23 percent in Spain. "On" holds 5percent in Iberdrola and has a 1 percent sha-

re in Gas Natural Fenosa. Data from this samereport indicate that no other electric utility en-joys such a high level of customer loyalty, withHC exceeding by 8 and 13 percentage pointsEndesa and Iberdrola, companies that retain86 percent and 81 percent, respectively, of cus-tomers in their natural environments.

HC Energía: Customers trust us!

RN_08_09_MERCADO:Layout 1 11/04/26 12:32

market

o n 9

Naturgas Energía recently surpassed the 100,000 number of "dual"home customers (gas and electricity), this time in Basque Country.In addition, the company has more than 116,000 “Funciona” main-tenance contracts for light and gas services. Naturgas was the firstoperator to offer the market dual supply services, i.e. an integra-ted offer of gas and electricity in the same bill, added to the “Fun-ciona” service, which covers maintenance and repair electric andgas installations.

The last National Energy Commission’s report, issued November2010, highlights Naturgas Energy’s and HC Energy’s services offe-ring as one of the best in the Spanish market. In another report, theMinority Electricity Market Supervision report, CNE notes that, "thecompany with the highest percentage of dual supplies is EDP Group(HC Energía and Naturgas Energía)." With this dual service, custo-mers earn points that can be exchanged for energy or gifts throughthe loyalty program.

Due to the acquisition of a newmachine for the production of VeryHigh Voltage (VHV) copper cables, as well as the creation of a new testing laboratory, Solidalcontracted the increase of EDP Serviços (EDPS) voltage level inorder to go from the Medium Voltage(MV) to the High Voltage (HV) level.EDP Services designed and built asubstation with a 6 MVA 60 KV/15 KVTP and a 60 KV mixed line with anaerial span of about 5,900 metersin iron and concrete posts with 160mm2 aluminum/steelconductors, and an underground linewith about 150m of 630mm2

mono-polarity LXHIOLE cable.Subsequent to the voltageincrease, Solidal saved theequivalent of about 250,000 eurosin annual tariffs. The substationstarted operations in December2009, and EDP Services is in chargeof maintenance and quality control,monitoring activitiesto identify solutions aimed at impro-ving energy quality. Solidal, which isbased in Esposende, produces andmarkets electrical conductors.

Solidal: EDPServices NewSuccess Case

Naturgas: + than 100,000 customers in the Basque Country

The renewed EDP Services kick-off meet-ing took place at the end of 2010. The goalof the meeting, which was attended by allEDP Services employees, the board of di-rectors, as well as the executive manage-ment team of EDP Commercial, was to ini-tiate a new stage for EDP Group’s energyservices exploration and business devel-opment arenas. As part of the day's discus-sion, EDP Services’ strategic and organi-zational model was introduced: in partic-ular, this model reflects the perspective ofmacro-processes along the value chain ofthis new Group business arena in order tosupport new priorities and the inherentchallenges associated with growth, as well

as any operational initiatives already un-der way. Subsequently, in January 2011,EDP Services presented its business planfor the 2011-2012 Biennium. All companypersonnel attended this event, throughwhich they were able to meet and explorethe main objectives and initiatives of EDPServices, as well as the respective busi-ness units for that same period.In recognition of everyone’s effort and com-mitment and in a spirit of celebration, giftswere handed out to all employees who con-tributed to the success and recent growthof EDP Services, which saw a tripling ofsales in energy services in the last threemonths of 2010 alone.These sessions led to greater alignmentwith, and commitment from, the employ-ees of EDP Services employees in relationto the company's strategy, which consistsof a set of ambitious objectives and isleveraged by the growing investment andcommitment of EDP Group in the area ofenergy services.

Learn more at: http://avs3.sl.pt

New impulse in EDP Services

HC Energía’s hydropower generation surpassed, for the first time, more than 1 million MWh.In 2010, the hydraulic station’s power generation totaled 1,053,553 MWh, which representsan increase in production of more than 10 percent over the previous record of 940,481 MWhachieved in 1996.The power generation station is the same, but the difference is that 2010 was a year with

lots of rainfall. However, the growth is due mainly to the excellent behavior of the productionstations and of the entire team in the Generation area.

More than 1 million MWh

RN_08_09_MERCADO:Layout 1 11/04/26 12:32

10 o n

culture edpRecord profits of € 1.079 billion

Profit: +5%(1.079 billion)

EBITDA: +7%(€3.613 billion in 2010)

Savings: +159million

Installd Capacity: +7%(21.990 MW)

These are EDP Group’s best results ever, ex-cluding extraordinary earnings! “These resultswere obtained within a very difficult marketframework," as underlined by António Mexia,EDP’s CEO, at the presentation of results onMarch 3, 2010.

More than half of the Group’s results, (55%)originated in the 12 countries where the com-pany operates, Brazil in particular, through acurrency appreciation of the Real vs. the Euro,and the resumption of electricity production in

this country - for the gas regulated market andthe United States, a country where EDP is thethird largest operator in the area of renewables.

In the presentation of results, António Mex-ia emphasized "a significant reduction in thecost of debt" which allowed the stabilizing ofthe Group’s financial results.

EDP closed 2010 with a gain of € 1.079 bil-lion (an increase of 5%) and an EBITDA of €3.61 billion, up 7% from previous referencepoint. António Mexia valued the savings

achieved by the group. "Our goals in terms ofefficiency have been achieved two years aheadof time,” said the CEO of EDP whose savingsreached € 159 million in 2010.

As to debt, EDP currently holds € 16.3 bil-lion of net debt estimated at a value "slightly be-low" that level, according to Chief Financial Of-ficer, Nuno Alves. The CEO’s outlook for thecurrent year is optimistic: "We took the neces-sary measures in advance, which allowed us tolook with confidence towards 2011."

the most efficient methods and the values that serve as example

EDP profits in 2010, increased 5% over the previous year upto € 1.079 billion, a result above the € 1.061 billion forecastedby several analysts

RN_10-13_CULTURA EDP:Layout 1 11/04/26 12:33

o n 11

Information technologiesmeet in Óbidos

Óbidos village was chosen to host ISM’s (Infor-mation Systems Management) Iberian Confer-ence held, on December 9 and 10, where 2010results and the new challenges for 2011 werepresented to the many employees of the Por-tuguese and Spanish operations. On the firstday, António Vidigal, EDP’s Innovation Director,provided the welcome address to the event’sparticipants by giving a lecture on innovation andtechnology, which was followed by a dinner. Thework sessions began early the next day with theintroductions of the various leaders and areamanagers, among them, ISM’s Corporate Di-rector, Vergílio Rocha, and Communications Di-rector, António Venâncio. During the mid-morn-ing session there was still time for a leisure ac-tivity focusing on social networks. The tablesdecorated with depictions of social networksand technology in reference to ISM’s contempo-rary and technological context were brought tolife when employees and management createda profile and imagined themselves occupying

different job positions, with the possibility ofchoosing a "like" and "comments" in the differ-ent responses. This meeting spawned newchallenges This year, ISM’s mission is, not onlyto reduce costs, but also to acquire value for theentire EDP family, always bearing in mind theuse of the Best IT Practices. The information,quality, safety, efficiency and the promotion of aunique group culture represent ISM’s values.Jorge Cruz Morais, ISM’s Portfolio Manager,closed the meeting with a special emphasis onthe strategic framework, revealing the concernsand expectations associated with the IT functionwithin the Group.

Formacãoindooratravessa oAtlântico

EDP embraced the challengeof building a thermoelectricproject in a new location—acoal plant in Pecém, Brazil,whose model was, of course,inspired by the SinesStation. The SinesThermoelectric PowerProduction ProduçãoTermoelétrica de Sines –PTSN unit was called uponto actively participate in thetraining of the Brazilianinterns, who will be gearedto performing two distinctfunctions: Room and Fieldoperators in the PecémThermoelectric Station inthe Brazilian state of Ceará.The training took placebetween August andOctober, by employees whoperform similar tasks andinvolving others who, giventheir characteristics andareas of activity provided aricher and multifacetedtransmission of knowledge.

o n 11

culture edp

Excellence Awards 2010

6 The Portuguese Association of Communications and Pu-blic Relations Consultancy Companies launched the firstedition of the Excellence Awards 2010, which rewards thebest works and best corporate communicators and publicrelations professionals. EDP took the stage six times. Seewhat categories were distinguished by APECOM:• António Mexia, EDP’s CEO: Communication Personali-

ty of the Year

• Project "Your energy": Energy, Environment and Ecolo-gy category;

• " EDP’s Annual Report": Financial Communications,Mergers and Acquisitions category;

• "The Alqueva Dam Concert": Events category;• "edpON, Corporate TV": Corporate TV & Video

category;• "ON Magazine": Business Publications category.

"The focus on improvingwhat has been done so faron an integrated Iberianplatform is one of ISM’sobjectives for 2011", JorgeCruz Morais


12 o n

culture edp

Quality evaluationAzucena Viñuela, corporate director of the IAD-InternalAudit Department was certified in Madrid at the timethat the Internal Audit Conference, organized by the In-ternal Auditors of Spain, took place.The Iberian IAD-Internal Audit Department received acertificate from The Institute of Internal Auditors (IIA), ofthe U.S., as a result of the quality evaluation of the In-ternal Audit Function for the EDP Group, HC Energía,Energía Naturgas and EDP Renováveis. The evaluationwas conducted by a team of independent experts usingdirect questionnaires and individual interviews withabout 140 EDP employees, most of which have respon-sibilities at the Senior Management level.The rating given for the category "Generally Complies"

(GC) corresponds to the highest rating awarded by theIIA. Regardless of the maximum classification obtained,it was possible to capture areas needing improvementthat will be implemented in the next business plan.This—a certificate that was only made possible thanksto the strategic choices implemented by the IAD, theadoption of international job performance standards,the unconditional support of supervisors and the com-mitment and determination of all employees.The future will be punctuated by the ongoing monito-ring and maintenance of the quality required in tandemwith the Group's evolution and function in order to con-tinue to provide appropriate comfort to supervising en-tities and customers.

Azucena Viñuela, diretora corporativa

da DAI recebeu o certificado em Madrid,

por ocasião das Jornadas de Auditoria

Interna promovido pelo Instituto

de Auditores Internos de Espanha.

Developing Value "We will not teach you how to wear the“jersey”, we will show you why you shouldfeel proud to wear it" was the messagedelivered to every EDP Valor young persontogether with a t-shirt, which left themthinking! "How do you explain an EDP bill?" or, "Whatare the differences between the varioustechnologies for producing electricity?"These are some of the questions asked of ouremployees and to which they sometimes donot have the best answer. The “DesenvolverValor” (Developing Value) Program seeks tointegrate and provide the participants withtools, which will enable them to betterunderstand the Group and put into practicenew attitudes and behaviors. On the first day,these young people attended a presentationof EDP Valor “seniors" who dispensedinformation about the Group and participatedin the "Techniques for State-of-the-ArtPresentations" workshop. At the end, withthe groups identified by the colors of the t-shirts distributed among them, thechallenges were drawn. Three weeks later,the Ribatejo Station was the venue picked forthe presentation of the works. The youngpeople answered the challenge questions putto them using the information and techniquesthey had received in the first session.

WHO?60 young people aged up to 36, employees andnon-employees, divided into10 heterogeneous groups

SHARE THE PRESENT,PREPARE THE FUTUREThe macrostructure of the EDP SoluçõesComerciais (EDPSC) met in Evora, on De-cember 3rd to take stock of 2010 and presentthe Operational Plan for 2011.

2010 - Challenge OvercomeJoão Matos Fernandes, an EDPSC Director,took stock of 2010 activities, highlighting thatthey met their targets—a result of everyone’scontribution and involvement. With the pres-entation of the 2011 Operational Plan heplaced the challenges and the followingstrategic commitments on the agenda:

1. Pursue operational costs efficiency2. Extend Contact Center operation to

Iberia 3. Drive forward a more efficient and effec-

tive Contact Management4. Develop the webization of the relation-

ship with the Customer5. Align, motivate and involve employees

"Solutions are in People”Manuela Silva, manager of EDPSC, present-ed the “People Plan”, a program outlining aset of measures organized by five aspirations:

1. Align employees in tandem with strategy2. Reinforce key skills3. Retain the best performers 4. Timely attract the right skills5. Increase the Organization’s efficiency

and flexibility

Which reflects the Company’s strong com-mitment to optimizing the management ofpeople, strengthening skills to ensure theachievement of the strategic objectives sus-tained by the conviction that "Solutions are inPeople

Congratulations to all Employees! The President of the Board of Directors,Martins da Costa, referred to the meetingas an excellent sharing opportunityenabling a better understanding of theorganization and its main axes of activity.As for 2010, he stated that EDPSC is to becongratulated in a year in which, despitesome economic difficulties, it was possibleto achieve the objectives set. For 2011, heconsiders essential to maintain andstrengthen team spirit, to continue the per-formance culture focused on exceeding thegoals, the required involvement of every-one, efforts to which having leadershipguidance is decisive.

Innovation in EvoraThe participants were welcomed by EDPDistribuição's shop Inovcity, providingspecialized information and close contactwith the bet on new intelligent manage-ment technology for power distributionthat will substantially change the Compa-ny’s relationship with customers, enhanc-ing their satisfaction and practicing a poli-cy focused on energy efficiency.


o n 13

Wall Everyone • EDP

What are you thinking about…

edp

edp

Is freedom of expression not a given right?Lisa Areias

Sure, but be aware that what is posted on a social network has consequences.edp

I agree. When we move beyond the private sphere, the information conveyed in social networkscan have repercussions at a national or even international level and serious consequences for the Company.Diana Costa

Each one of us must be responsible for the information we spread and take intoconsideration that what we publish can be (rightly or wrongly) used by others.Ricardo Torrado

edpEmployees must comply with the Code of Ethics and the requirement of confidentiality, not disclosing confidentialinformation. They cannot make any mention or reference to EDP.

These guidelines apply to all, regardless of the company they work for or of their jobtitle?Lisa Areias

Yes, the Code is applicable to all, without exception. Before disclosing information about the Company, including products and services, employees should make sure of its accuracy and confirm it withtheir superiors, to ensure alignment with the Group’s communication strategy.

edp

Who manages the information? Is there anyone responsible for the social networks?Diana Costa

There is a "spokesman" who must act in tandem with the principles of the Code of Ethics and protect allinformation considered as confidential in the EDP Group. By posting information in public arena, the Companyrepresentative must take care to identify him/herself properly. The information must be clear and current;therefore, before being published it must be confirmed with the individuals having the oversight for the subjectmatter in question.

edp

edpEDP does not intend to monitor its employees, but rather to point to the consequences of their comments, ideas anddissemination of information harmful to the Company.

What advice does the Company have as to the type of language used?Ricardo Torrado

There should, obviously, be no use of improper vocabulary (swearing, obscene or prejudice-based words), which gives EDP a bad image.edp

What do you think about the company employees who sign on to social networking sitesduring work hours?Lisa Areias

It is important that employees know how to manage their work time. The use of social networks should notinterfere with their professional commitments. Employees who are users of personal social networks must do sooutside of normal working hours.

edp

Employees cannot speak publicly on behalf of the company. The border between professional and personal information israther tenuous, so that a social networker should be careful to note that the information shared is his/her responsibilityand does not necessarily reflect EDP’s position on the matter. An explicit reference that the information shared is apersonal opinion and not the Company’s is imperative.

258.966People like this

EDP is preparing toburst into the socialnetworks scene.Accordingly, the Boardof Directors recentlyapproved theRegulations for the Useof Social Networks. Itseeks to determine therules of engagement inthese channels in orderto avoid disputes arisingfrom disparagingcomments made in asocial or even dynamicnetwork that do notpositively portrait theEDP Group. The existence of socialnetworking is,nowadays, anunquestioned reality.The phenomenon isingrained to such adegree in people thatcompanies cannotignore them.EDP recognizes thebenefits of its use, butis aware that, if notused properly, thesocial networks may bea threat to the securityof the information andthe credibility of theCompany.Get to know some of thebasic rules forcommunicating in thisnew medium.

Research Initial Page Profile Account


14 o n

edp culture edp way

Number of indicators per project:

The EDP Way program was launched in January 2009. Two years and eight quarterly reportslater, it is time to take stock of this program, which is responsible for five projects across theentire Group, by examining the results already achieved, the geographies involved and the mostsignificant facts

EDP Way taking stock

SharEDP

Opex

Lean

EDPro

Sou+EDP

27%

23% 17%

21%

12%

Start date: January 2009

EDP Way Prog ram: 5 Projects(Sou+Edp, EDPro, Lean, Opex, SharEDP)

Locations:

SharEDP Opex Lean number of indicators in the EDP Way prog ram: + 1280

• Portugal• Spain• U.S.A.• Brazil

• Romania• France•Belgium• United Kingdom

• Italy• Poland• Canada

• Sou+edp: + 340• EDPro: + 220• Lean: + 300

• Opex: +150• SharEDP: + 270

RN_14_17_CULTURA EDP_EDPro:Layout 1 11/04/26 12:35

o n 15

edp way culture edp

Significant facts

12 companies involved

16 projects9 ShareCorp / 7 ShareCom

11 locations involved

277 employees211 ShareCorp45 ShareCom21 Crisscrossings204 Portugal / 65 Spain / 3 U.S.A./ 5 Brazil

• Support for new programs: Lean Diagnostic atEDP Gas, EDPP-PTLR launch, New EDPSCteams, relaunching EDP Brazil, creation of a Lean office at EDPD, Lean workshop and launch at EDPR / Horizon

• Development and approval of a Lean corporatemanual

• Implementation of six Lean Days: Lisbon (2),Coimbra (2), Setúbal (1) and Porto (1) - EDPSC,EDPP, DSI, EDPD, EDPV

• Availability of cross-communication material • Implementation of an inter-company Lean forum(EDPP / EDPD) and preparation of an EDPP / HCforum

• Creation of a Lean training structure/catalog forthe entire EDP Group via the EDP Valor catalog

• Lean course given at the School of Production andLean theme included in the Challenges of Distri-bution in the School of Distribution

• Creation of a Lean information-sharing tool(lean.edp.pt)

• New wave of inter-company Lean Experts training• Lean corporate booklet• Implementation of a “Learn More About Lean EDPWay”

• Regular Lean activity in companies: Lean commit-tees, presentations and employee-trainings

• Startup team partnerships with the EDP Universi-ty, and meetings with three Universities on coop-eration within the Lean edpway

Significant facts• Start-up of the Iberian Contact Center• Implementation of Treasury tool – Target• Coordination of payroll processes in the various EDPGroup locations

• Start-up of the Commercial Services-only organizationin Spain

• Standardization of Business Negotiation Processesin Iberia

• Implementation of the Logos platform for the integratedmanagement of logistic and materials

• Integration of Treasury and Other Processes in Spainat EDP Valor

• Development of the Iberian Scorecard for CommercialManagement Information

• Implementation of the automatic data-capture system -CAFC at HC Energía and Naturgas Energía

• Selection of Iberian suppliers of firefighting equipment,rent-a-car, working and cleaning uniforms

• Completion of Phase I of EDP Commercial Solutions' information management system

• Start of the Lince SAP R/three multi-location rollouts

10 companies involvedEDPD, EDPP, EDPSC, EDP, SA (DSI andpilots in DCG and UNGE), EDPR, EDPBR,HC, Naturgas,EDP Valor, EDPGas

New programs 2009/2010EDP Gas / EDP Valor / EDPR-U.S. (pilot) /Relaunching EDP Distribution (included inthe “Distribuição 2012 program”) / EDPP-CP Lares / Re-launching EDP Brazil

3,100 initiatives900 created in 2010

2,000 employeesdirectly involved 750 in 2010

2,000 initiativesimplemented650 in 2010


• Implementation of a governance modelfor managing processes common to allbusinesses and locations of the Group

• Focus on regular measuring and opti-mizing management processes

• Valuation and accountability of the roles process owners

• Process owners appointment and for-malization

• Adoption of the BPMN (BusinessProcess Modeling Notation) symbologyas a benchmark for the design ofprocess flowcharts across the entireGroup

• Adoption of the APQC (American Pro-ductivity and Quality Center) processclassification framework as a referencefor process architectural design

• Definition and dissemination of specificguidelines for the management ofcross-Group processes

• Integration of SCIRF controls in themapping of processes

• Installation and provision of a framework program supporting the activities of process owners in the business units

• Annual launch of planning cycles for

process optimization in conjunctionwith the Group’s planning and budgeting process

• Implementation of the IT support tooladopted in the governance model(iBPMS)

• Establishment of a biannual survey thatassesses the maturity of processesmanagement within the Group

16 o n

edp culture edp way

Significant facts

• Brochure On Top• Recruitment brochure• Partnerships with schools in the areas ofinfluence of new power plants

• Development of the internal mobility policy• Placing mobility offers in EDP Pessoa• "Rotation Breakfast" with HR directors andmanagers

• Training of leaders to become mobilitymanagers

• Development of the HR Policy Manual• Preparation of the Welcoming Manual• Publication of the EDP Leader's Guide • HR processes brochures• New Opportunities Initiative: Cooperationand certification agreements for employees

holding different levels of schooling• HR 2010 Annual Meeting• Meeting on the integration of new 2009employees

• Executing Learning Maps "Sou + EDP:Portugal and Spain

• Volunteering in schools: lessons in entre-preneurship

Significant facts

In figures (Learning Maps)

1,750 Actions8 Countries8,711employees involved251 Energizers

89,4%Participation Rate26,133Hours of Training

320 maturity surveys on themanagement of analyzedprocesses (2010)

260 priority key processes raisedin the Group• 26 corporate processes

• 56 transversal processes • 178 processes local to business

12 companies / business unitsinvolved in all locations

1,800 KPIs defined in the iBPMStool


edp way culture edp

o n 17

Significant facts

• IT team: cost reduction in information technology — a savingsof € 25M.

• EDP Production: Lean Project — savings of €4M; reducing costswith Alstom materials — a savings of €1.5M, lower operatingcosts with the decommissioning of the Setubal and Carregadoproduction centers — saving more than €2M .

• EDP Distribution: cost reductions in network maintenance — asavings of €17M; renegotiation of the georeferenced SI explo-ration services provider contract — a €1.6M savings; reductionin communications costs — a savings of €1.6M; reduction andoptimization of the warehouses and depots operations — a sav-ings of € 1.1 million.

• EDP-SC: Reduction in the average cost of documents issued dueto the dematerialization of the business cycle — a savings of €1.3M; renegotiation of contracts with meter-reading serviceproviders — reducing the reading unit cost and achieving a savings of €1.2 M; renegotiation of the contract with the Con-tact Center’s telecommunications supplier for savings of €800K.

• HC: Renegotiation of the CCGT Castejon 1 maintenance con-tract — a savings of €2.6M; cost savings in network mainte-nance — a savings of €2M; reducing O&M costs in cogenera-tion plants — a savings of €1M; termination of lease contracts— savings of € 500K.

• EDP Gas: Reduction in marketing costs of €1M; cost reductionwith P&D post and delivery and mail (bimonthly billing) — a sav-ings of €600K; cost reduction with meter readings (smallerquantity) — a savings of €500K.

• EDP Valor: Reduced spending on land and mobile telephoneservices — savings of €3.3M.

• EDP SA: Reduced costs for EDP Group’s specialized work — asavings of about €15M.

• EDP Brazil: transformational program — a savings $R 18M; optimization of overtime spending — a savings of $R 8.1M; optimization of airfare costs — a savings of $R 3.6M.

Savings targets € 160M by 2012

Total annual savings target € 120M (2010)(€ 96M in Iberia and € 24M in Brazil)

€ 159M of savings generated due to theinitiatives implemented by the end of 2010

(132% of annual target), with € 135Min Iberia and € 24M in Brazil


Goods campaign collects 73 tons of donations

18 o n

edpcausesEconomic capacity and social commitment

F or next year we need to do more andbetter. "The challenge was launchedby the Chairman of the Executive

Board António Mexia, in the closing cere-mony of EDP’s 2010 Goods Collection Cam-paign. The ceremony, which took place Feb.1, 2011, gathered partners, institutions andvolunteers at the Museum of Electricity inLisbon to celebrate the initiative's success.Everyone was proud. "The demand is in-creasingly higher," said Mexi, in comment-ing on the need for donations.

This campaign has exceeded all expectations.The 10 tons collected in 2009 more than tripledthis year to 34 tons of goods, which include gar-ments, furniture, computer equipment and toys,among other items. These donations will nowbe channeled to 100 charities, benefiting a totalof 336,000 people in Portugal.

The numbers are even more impressivewhen you add up the results achieved by theGroup's companies in Spain and Brazil, whichwere also invited to participate this year.

Energias do Brasil gathered 37 tons of dona-tions, and Naturgas, in Spain, donated 2 tons,bringing the grand total of campaign collectionsto 73 tons of goods.

For now, the success of this year's Goods Co-llection Campaign - to which the Urbanos, Fun-dação Benfica, Activism and Mop have joinedas partners, as well as the Diário Económico, Lu-

“

"More and better." EDP employees committed themselves wholeheartedly to the Group'scampaign to collect goods for charity, managing to gather an impressive 73 tons of donations!Check out the results of the Goods Collection campaign in Portugal, Spain and Brazil.

"The demandis increasinglyhigher"considered Mexia

RN_18_21_CAUSAS:Layout 1 11/04/27 12:30

o n 19

causes

Smiles that generatesolidarity

sa news agency and TSF as media partners – al-so measured by the participation of 172 volun-teers. "At the end of the day, it is extremely mo-tivating to feel that we were able to improve theworld around us. EDP fully assumes its willing-ness to look more and more to the surrounding

communities and to mobilize employees to par-ticipate in social causes — this contributes to agreater sense of belonging and pride in workingfor a company with this social dimension," saysHuman Resources Director Maria João Martins,a volunteer herself in this campaign.

More than fulfilling their roles within theGroup, EDP employees in Brazil knowhow to do their duty by society.Through the “Goods Collection CampaignBrazil,” held throughout 2010 by the EDPInstitute, hundreds of company emplo-yees and volunteers in the most diverselocations in Brazil embraced the cam-paign with such initiatives as SOS Cida-des in Emergency States, the Book Cam-paign, the Sweater Campaign, ChristmasOutreach and EDP in Schools. All thecampaigns gathered donations of food,toiletries, cleaning products, clothes, toysand furniture, to name just a few of theitems. In December 2010, through theChristmas Outreach initiative, employe-es brought this positive energy to 27 mu-nicipal schools in seven Brazilian states:São Paulo, Espírito Santo, Santa Catari-na, Tocantins, Ceará, Rio Grande do Suland MatoGrosso do Sul. Through the hands of vo-lunteers, more than 1,000 children par-ticipated in the Christmas Movies ses-sion, and during the 2011 academic ye-ar, about 8,000 students will benefit fromthe EDP School Program, with eachschool receiving a DVD player, multime-dia projector and movies for children.

Fernando Bergasa, general director ofNaturgas Energía, delivered on Feb. 10,2011, to Mikel Ruiz, director of Caritas deVizcaya, 22 boxes of toys obtained byNaturgas employees. The toys werecollected during the company's Solidaritycampaign, "This Christmas give more tothose who have less," which ran fromDec. 20, 2010, to Jan. 14, 2011, andbenefited from the participation of all theGroup's companies.Naturgas also donated several sets ofschool supplies, which will come inparticularly useful for the work thatCaritas has been developing withchildren: after school hours, theinstitution helps these children do theirhomework, contributing to theireducation and general culture.

37 tons inPortugaland Spain

tons inBrazil

NATURGAS DELIVERS TOYS

36

RN_18_21_CAUSAS:Layout 1 11/04/27 12:30

20 o n

causes

Through March 3, the EDP Foundation accepted applications for the 2011 EDPSolidarity Program, which this year has again been reinforced by a 500,000 eurosprize. This reinforcement is justified by the increasing number of requests forsupport: in 2010 the program received 445 applications, from among which 19projects were selected. Any nonprofit organization, namely social solidarityinstitutions or nongovernmental organizations, may apply to this support program.The jury, which is once again headed by Francisco Sánchez, will announce the 2011winners on April 29 as part of a conference on social innovation, to be held at theMuseum of Electricity in Lisbon.

500,000EUROS for institutions

This past October, HC Energía,through Naturgas, signed a collabo-ration agreement with the citygovernment of Murcia, through itsLocal Energy Agency (ALEM),to fight against climate change.The mayor and chairman of ALEM,Miguel Ángel Cámara, initialed theagreement with Yolanda Etxauri,director-general of Naturgas inLevante. The main purpose of thisagreement is to promote localmeasures in energy savings andefficiency, tackle climate change,and promote renewable energies inMurcia. Through this agreement,HC Energía will participate in allactivities implemented by ALEM,including its sustainable energyplan. This plan, which will beframed within Murcia’s EuropeanUnion Covenant of Mayors, aimsto cut 20 percent of greenhousegas emissions by 2020.3

Against ClimateChange

This past October, HC Energía, throughNaturgas, signed a collaboration agree-ment with the city government of Mur-

cia, through its Local Energy Agency (ALEM),to fight against climate change. The mayor andchairman of ALEM, Miguel Ángel Cámara, ini-tialed the agreement with Yolanda Etxauri, di-rector-general of Naturgas in evante. The mainpurpose of this agreement is to promote localmeasures in energy savings and efficiency,tackle climate change, and promote renewableenergies in Murcia. Through this agreement,HC Energía will participate in all activities im-plemented by ALEM, including its sustainableenergy plan. This plan, which will be framedwithin Murcia’s European Union Covenant ofMayors, aims to cut 20 percent of greenhousegas emissions by 2020.

Time to dig in! After the donations, it's time to roll up your

sleeves and implement the project. Throughthe Outreach Project page on the intranet,you [employees] can follow all the stages ofimplementation to the final goal. HC En-ergía seeks to establish a general system ofelectrification for the health center by us-ing photovoltaic panels, a reliable and low-cost operational system to replace the cur-rent small power generators. The teams andthe materials that make up the photovolta-ic system will be purchased in Spain andtransported to Benin by sea.

SOLIDARY DAY: CHALLENGE OVERCOME!

Thanks to HC, a health center inWest Africa already has electri-city— all with the help of emplo-yee donations!

RN_18_21_CAUSAS:Layout 1 11/04/27 12:30

o n 21

causes

In December 2010, Naturgas Energy co-sponsored a very special gala, held by the Vicente FerrerFoundation in Bilbao, to raise funds for a health development project in Anantapur, India.For over an hour and a half, more than 200 people enjoyed the performances of Mikel Erentxun,dancers from the Igor Yebra School of Dance, El Mentón de Fogarty, Kirmen Uribe, Felix Arda-naz, Jon Allende and Kepa Junkera. The gala was attended by Anna Ferrer, Vincent Ferrer’s wi-dow and president of the foundation. Very aware of the situation of women in India, Anna has be-en and remains one of the strategic pillars of the foundation, raising her voice in the fight for wo-men's rights.

GALA AIDS PROJECT IN INDIA

This is one of the largestagreements to come outof the social philanthropyscene in Portugal. The EDPFoundation and BenficaFoundation will join forcesto combat absenteeism andimprove school attendanceand educational achievementamong at-risk children andyouth, between the agesof 6 and 16. This partnership,formed through the project"For You If You Are There,"is designed to use sportsto promote social inclusionand gender equality, developindividual and social skills,and provide guidance on thevalue of merit and hard workThe "For You If You Are

There" program, whose mainpatron is the EDPFoundation, will be developedthroughout Portugal intandem with school groupslocated in economically andsocially disadvantagedenvironments. The projectwill be developed in Porto,Portalegre and the regionof Tua, focusing on areaswhere EDP is making newhydroelectric investments.Along with numeroussporting activities, the "ForYou If You Are There" initiativewill also implementprograms in the areasof information technology andcommunication, Portuguese,and mathematics.

Foundations support YOUNG STUDENTSBy 2013, the EDP Foundation will have donated495,000 euros to this project, which couldbenefit 500,000 young people in Portugal.

On Jan. 8, "Live Our Energy" Day was held on the SanMames Promenade in Bilbao for the children of

employees, between the ages of 6 and 9 years. The activitydeveloped was a small example of what will take place in

schools in the Basque Country, during the first and secondcycles of the 2010-2011 school year. The primary goal is to

educate and raise children's awareness of renewableenergy and efficient use of natural resources. In this event,

multiple monitors explained serious matters to thechildren in a fun way. At the end of the activity came the

ultimate final test, in which the children, divided intoteams, answered all the questions correctly. Besides beinginformed, the young participants left with many memories

of a day full of energy: backpacks, pencils, paints, pencilsharpeners and more.

Hooray to Our Energyin Bilbao!

RN_18_21_CAUSAS:Layout 1 11/04/26 12:39

22 o n

innovation*The first fully operational micro-cogeneration (micro-CHP)facility in Asturias is already up and working. HC Energía canboast of having been a pioneer in implementing a project of thistype. Learn more about this new form of alternative energy

HC: pioneer inmicro-CHP

RN_22_25_INOVACAO:Layout 1 11/04/26 12:42

HC Energía achieved a new goal: hepioneering of the first fully operatio-nal micro-CHP facility in Asturias. The

plant is installed at the Asturian Foundationfor Attention and Protection of Persons withDisabilities and Dependence (FASAD), inclu-ding the operation of electricity export to thegrid. All this was accomplished in spite of theinherent difficulties of handling the technicaland administrative issues associated with im-plementing a new system of this magnitude.The FASAD project becomes, thus, the firstfully operational micro-CHP facility in Astu-rias, and HC the first company to execute a pro-ject of this type.

What is micro-cogeneration?Micro-CHP (which stands for combined

heat and power) is an alternative energy thatis materialized by the installation of small-scale equipment, normally engines or turbi-nes fired by natural gas, with the characteris-tic that it can generate, store and supplypower consumption at the same location ofconsumption. The generated power is injec-ted at a later time in the distribution grid. Thissystem allows consumers to convert their“home” or business in small power stations.Thus, energy is generated at the same loca-tion where it is consumed, avoiding the costof transportation and distribution.

In which places can you implement it?Micro-cogeneration systems can be imple-

mented successfully in hospitals, hotels, offi-ces, educational centers, residences, multi-sports areas, heated swimming pools or largesupermarkets. Some construction companies

have already started installing micro-coge-neration equipment in office buildings andhousing.

How would it work at my house?As follows: The micro-CHP equipment

begins to generate electricity and releasesheat.

The electricity generated is then sold tothe power plant or used to supply residentialenergy. The residual heat is redirected to astorage tank, where it's converted into use-ful heat. Micro-CHP is the most suitablesystem for users looking for excellence intheir buildings’ energy efficiency.

What are the advantages?Reduces primary energy consumptionand greenhouse gas emissions while savingmoney for the consumer;- Contributes to hot water needs and produ-ces income through selling of electricity tothe grid;- Assumes a savings of between 30 and 40percent;- Occupies less room and doesn't need to in-vade architectural spaces, such as facadesand roofs;- Prevents electrical system losses. In Spain,more than 10 percent of electricity produ-ced by the centralized system is lost in trans-port and distribution.

HC Energía can helpThe micro-CHP is a highly beneficial

system; however, it becomes complex for cus-tomers to manage all of its associated aspects:legalization, implementation, maintenance,supply of primary energy, energy sales to thegrid, among others. For this reason, HC Ener-gía’s Energy Efficiency Services Departmenthas launched a new service that offers com-prehensive energy management for such fa-cilities, including all aspects inherent to thesystem. Thus, the end-user can enjoy theenergy produced and take advantage of theeconomic and environmental benefits of mi-cro-CHP without having to worry about themanagement aspects associated with opera-ting such energy facilities.

Currently, the company is already workingon several management projects, which ma-kes it attractive to the customer, as well as ser-ving as an important tool for eliminating thebarriers that may exist in driving this type offacilities forward.

www.hcenergia.com

o n 23

innovat ion

To improve its customers' onlineservice experience, HC Energía haslaunched new features for Internetusers. The Lean team for the B2Ccommercial cycle has worked toincorporate these new features intoHC's portal, providing significantcost savings for the company. The initiative has also led to theoptimization of working time whileeasing customer management.

What's Involved: • Customers can consult theirpoint balances at any time anddownload the information into aPDF file, through the webpage's "Client Area."More than 50,000 customerswill stop receiving thisinformation by snail mail, thussaving paper and reducing theeffort and costs of printing andpostage.

• Ability to expedite the requestfor Account reconnectionrequests can be expedited afterdisconnections due tononpayment.

• Working time is optimizedthrough new features such asaccess to online billing andaccounting information,allowing staff to identifypending invoices, with prioritygiven to the oldest ones.

New features,Better service

www.hcenergia.com

Combustion Gases

Heat-70%

Electricity-30%

Fuel100%

Engine / Turbine Alternator


EDP Services provides its clients with the IWebReport system, an innovativeWeb platform that controls public lighting (PL). This multi-vendor systemsupports flow regulation equipment from different brands and models in

order to allow municipalities to install equipment that is best suitedtechnically and financially in every area.

Customers have access to the PL network by remote control andconfiguration — namely the creation of multiple operation profiles for

different days throughout the year, allowing the visualization of states andmeasures and enabling the troubleshooting of failures.

The service also provides data to support predictive and preventivemaintenance as well as determine the actual levels of energy savings.

The municipalities reduce their energy costs through the management ofoperational profiles that allow the lighting level to adapt to the intensity ofroad users' movement over the night hours, thus ensuring the minimum

recommended levels for each location.The system was installed for client EDP Distribution in Évora on 24 circuits,under Inovcity. It led to a 24 percent savings in the PL cost of those circuits,and EDP Distribution is currently executing an improvement program that

will increase the level of savings.

24 o n

innovat ion

IWebReport - EDP Services’Public lighting remote management system

EDP Innovation believes that "the bestideas do not, necessarily, have to be gen-erated from within the company." This isone of the reasons that led the companyrecently to launch the co-creation.pt plat-form to encourage the community andEDP stakeholders to participate in theinnovation process.In the sequence of recent successes, suchas Procter & Gamble and Nike, now con-sidered world references in this field, to beton open innovation and co-creation prac-tices not only allows one to add value to theinternal process of innovation, but alsocontributes further to the development ofthe respective sector. The start-up of the

co-creation.pt platform, which invites theparticipation of any citizen, university orcompany that wishes to contribute with agood idea to the area of energy, providesyet another bridge between the communi-ty and industry at a stage in which the lat-ter faces exciting challenges.In parallel with the reception and treat-ment of external idea contributions, theplatform provides users with a set of chal-lenges associated with major projects / is-sues relevant to the Group. Thus, the com-munity is invited to participate in findingsolutions to industry challenges. Here, theGroup’s business units find a tool that al-lows them not only to stimulate participa-

tion within the community through specif-ic challenges, but also to interact with itand, thereby, identify relevant contributionsto their activities.The new platform, accessible athttp://cocreation.pt, besides supportingco-creation activity within the Group, willboost the development of communities ofinterest around topics relevant to the en-ergy sector. In fact, when social network-ing components are included (an innova-tive element in sites of this type), the cocre-ation.pt platform encourages networkingand promotes the creation of thematic dis-cussion groups and the sharing of knowl-edge in areas relevant to the industry.

Co-creation: a community challenge OR a challenge to the community

Learn more here:http://www.wikiedp.edp.pt/index.php/Iwebreport


o n 25

innovat ion

EDP Innovation sponsored the BusinessCase Competition of the Lisbon MBAinternational program (Católica | Nova

― a collaboration with MIT). The objectiveof this competition of strategy, which has beenunder way for the last three years, is the reso-lution of a real case by students. The studentsmust apply all the concepts they've learnedduring their MBA program and, simultane-ously, provide solutions that add value to thesponsoring company.The initiative lasted for one week in December2010, culminating in a one two-day session atthe Hotel Sana, in Lisbon.The topic of discussion was smart grids andenergy efficiency. The challenge, launched byEDP Innovation’s John Maciel with the supportof EDP Distribution and Corporate Marketing

Management, was as follows: "Assuming thatthere will be an infrastructure of smart distri-bution grids, develop a strategy and a businessmodel that allows EDP to create a deeper rela-tionship with customers in their homes down-stream from that infrastructure."Behind this challenge, sponsors would getanswers to questions like, What can we / shouldwe sell? How should we position ourselves inrelation to new interfaces (mobile phones, tel-evision, iPads ...)? How can we leveragecommunities and extract value from co-cre-ation with our customers? What practices fromother industries would apply, and which poten-tial partnerships would make sense? Thecompetition went very well, and a series of ideasemerged that are being analyzed by the respec-tive business units.

Lisbon MBA Case Competition

Smart SolutionsIn Brazil, EDP took another important step toward the smart grids it launched, in part-nership with the National Institute for Space Research, the ClimaGrid project, which willadd to the technology of electrical grids the intelligence of scientific research. This pro-ject, one of the first in the world in this area of activity, and expected to be completed wi-thin three years, is designed so that data from wind, rain, vegetation, lightning and tem-perature become part of the electrical system in a simple and intuitive manner. Becauseof its broad scope, the project encompasses diverse areas, including sustainability, inno-vation, telecommunications, information technology, and the distribution and transmis-sion of electrical energy. The project will enable the creation of never published climatestudies in a way never before done as well as assist in the planning of EDP’s logistics ser-vices in Brazil.

Such initiatives grant us low-cost access tostudents’ ideas, with greatpotential for bringing afresh perspective to thechallengeswe are already workingon," António Vidigal,president of EDPInnovation

1. The audience during one of the

presentations

2. Antonio Vidigal awarding a symbolic prize

to the winning team

1 2


EDP DISTRIBUTIONFollow this light

26 o n

in focus

The 2012 Distribution program is EDP Distribution's responseto future challenges. Four strategic axes and a fifth, transversalto the program, are under the responsibility and direct involve-

ment of the members of the company's board of directors, whichcoordinates the monitoring committees of each of the initiatives.Board members João Torres, Ângelo Sarmento and Miguel Stilwelld'Andrade discuss the outline of this program for EDP Distribution,a company that is responsible for about 22 percent of the EDP Group’snet results. (See interview in the Spotlight section, page 34.)To communicate the results of the initiatives across the organization,to create a forum for discussions of issues with potential impact, tosimplify the reporting of projects, to anticipate needs and monitorthe company's results — these are some of the decisive issuesconnected to the construction and consolidation of a new organiza-tional culture at EDP Distribution.

EDP Distribution presented its strategyfor meeting the challenges ahead. The 2012Distribution program has four main messages:perform, engage, simplify and innovate.A profile of the company can be seenin the following pages.

Distribution Program 2012

RN_26_33_CAPA:Layout 1 11/04/26 13:40

o n 2 7

em focoin focus

(2009 data)

Kilometers of grid

Number of distributed

GWh customers

EDP around the world distributing electricity

Portugal

218.246

6,119.805

46.146

Spain

21.874

650.000

9.131

Brazil

82.164

2,700.000

23.749

RN_26_33_CAPA:Layout 1 11/04/26 13:40

2 8 o n

in focus

The Culture of ExampleA recent survey of EDP Distribution's

management revealed some aspects wherethe Company’s mode of operation offered op-portunities for potential improvement. "Let’sreflect on these issues and determine what islikely to become a behavior guide, because on-ly by practicing by example can we make thenecessary cultural adjustments", revealsboard member João Torres.

Established in February 2000 with about10,000 people from various companies withdifferent structures and sensibilities, EDPDistribution has learned over more than 10years to adjust its organization to marketdemands. The Company has modernized it-self, and has learned to redefine its approachto outsourcing, having, nowadays, achievedmuch higher levels of efficiency than it pos-sessed at the beginning of the decade. "ThisCompany has been transforming at all levels.Nowadays our pickets operate with PDAs,where they receive the orders, the reportingof failures. A few years ago, all they were giv-en was a sheet from the hands of the hierar-chy, or a telephone call. This is an examplethat illustrates how a lot of people in our Com-pany had to gain skills and adapt to the times",says Torres, president of EDP Distribution’sBoard of Directors.

"The challenge is growing. Just rememberthe development of intelligent networks,which can completely change the way thatelectricity distribution works — hence the im-portance of launching the 2012 DistributionProgram, in a moment so critical to the com-pany," noted João Torres. "I think the way weare able to change EDP Distribution andtimely identify the next steps is essential tothe company's future. And this can only beachieved with everyone’s participation."

How the Distribution worksWhen the energy reaches the customer,v

Evolution of the total number of customers(regulated market + free market)

Customers per employee (regulated market + free market)

6,200

6,100

6,000

5,900

5,800

5,700

5,600

5,500

5,4002002 2003

1.03% year

2004 2005 2006 2007 2008 2009 2010

1,8001,7001,6001,5001,4001,3001,2001,1001,000

900800700600

2002 2003

10.04% year

2004 2005 2006 2007 2008 2009 2010

Executive Management and Senior ManagementMiddle Management and Dept. HeadsHighly Skilled ProfessionalsQualified ProfessionalsSpecialized Professionals

TOTAL

620 64

1,131 1,641 68

3,524

2010 Structure

RN_26_33_CAPA:Layout 1 11/04/26 13:40

o n 2 9

em focoin focus

it has already come a long way. To bring theenergy from the producing centers to ourhouses, suppliers use transmission anddistribution grids.

In Portugal, EDP Distribution operates thedistribution grid. Apart from this territory,EDP Group develops the activity of electrici-ty distribution in Spain, mainly in Asturias,and to a lesser extent, in Madrid, Valencia,Alicante, Barcelona, Huesca and Zaragoza. InBrazil, EDP is present in the distribution ofelectricity through EDP Bandeirante, in thestate of São Paulo, and EDP Escelsa, in thestate of the Espírito Santo (see following pages).

The distribution of electric energy is aregulated activity consisting of transmitting,through the distribution grid, electricity be-tween substations of the national transporta-tion grid and end-consumer points. Underthis activity, EDP builds, operates and main-tains, the networks and facilities responsiblefor electricity distribution.

EDP Distribution holds about 99 percentof the distribution of electricity in continen-tal Portugal; it does not own self-producersor small cooperative networks. The distri-bution networks, in addition to undergroundcables and overhead lines of HV (60 kV), MV(mainly 30kV, 15 kV and 10 kV), and LV(400/230 V), consist of substations, trans-former posts and other accessories neededto operate them. The equipment connectedto public lighting areas is also part of thedistribution networks.

The number of electricity customers incontinental Portugal recorded an averageannual growth of around 2 percent over thepast five years. In late 2010, the number ofusers connected to EDP Distribution’s elec-trical grid exceeded 6 million. The EDPGroup has evolved to respond to a growingnumber of customers, increased levels ofconsumption and to requirements of mar-ket liberalization.

General Indicators of Service Quality - 2010

70

80

90

Budgets extension of BT(up to 20 business days)

Execution of extensions(up to 20 business days)

Links to BT network(up to 2 business days)

Call Centers(up to 20 minutes waiting time)

Centralized call centeres(up to 60 sec. waiting time)

Written request for informationup to 15 business days)

Customers with reconnectionservice up to 4 h

(subsequent to accidental supply interruptions )

Pattern (% 2010(%)

Technical Service Quality is measu-red by the TIEPI (Installed CapacityEquivalent Interruption Time) indi-cator. This indicator has registeredsignificant improvements in recentyears despite the negative effects ofthe devastating fires that are recu-rrent in the summer.This improvement in the quality ofservice is mainly due to:

• the high investment and mainte-nance effort made in recent yearsat the level of the distribution grid;

• the combined action of a broadrange of initiatives both technicaland organizational, including theLEAN Project, which aims to re-duce the recovery time after fai-lure in all Grid Areas;

• favorable weather conditions.

TECHNICAL SERVICE QUALITY

RN_26_33_CAPA:Layout 1 11/04/26 13:40

3 0 o n

in focus

Nº of substations

Nº of transformers

Installed capacity (MVA)

Substations

Aerial power linesHV (60/132 kV)MV (6/10/15/30 kV)

Underground cablesHV (60/132 kV)MV (6/10/15/30 kV)

Lines (including branching lines in kms) 82,455

404

712

16,538

66,4318,48557,945

16,024496

15,527

Aerial lines

Underground

LV networks (km) 137,864

105,751

32,113

Units

Installed capacity (MVA)

Transformer stations

63,223

19,040

Facilities and equipment in serviceDecember 31, 2010

HV

MV

LV

Networks

Systems and others

Investment (excluding financial charges)

54,084

78,098

120,212

252,394

30,847

2010

HV

MV

LV

Other

TOTAL

Conservation (total costs)

14,708

30.585

82,130

7,374

134,798

Investment and conservation

HV/MV distribution

LV distribution

Other

TOTAL

Investment in IFRS technical costs (current prices in M€)

132,2

120,2

30,8

283,2

RN_26_33_CAPA:Layout 1 11/04/26 13:40

o n 3 1

in focus

The Portuguese Energy ServicesRegulator (ERSE) is the entityresponsible for regulating thenation's gas and electricityindustries.ERSE is an independent organi-zation whose functions are toprotect consumer interests interms of prices, service quality,information access and securityof the supply; promote competi-

tion, particularly in the construc-tion of the internal energy mar-ket, ensuring regulated compa-nies the economic and financialbalance within an appropriateand efficient management; en-courage energy efficiency andenvironmental protection; aswell as arbitrate and resolvedisputes, encouraging extrajudi-cial settlement of disputes.

Who regulates the market?

2000

2500

3000

3500

4000

4500

5000

5500

2002 2003 2004 2005 2006 2007 2008 2009 2010

175

170

165

160

155

150

2002 2003 2004 2005 2006 2007 2008 2009 2010

HV, MV and LV overhead linesEvolution of ERP installed capacity

49

47

45

43

41

37

352002 2003 2004 2005 2006 2007 2008 2009 2010

HV, MV and LV underground cables

Service Quality The need for EDP Distribution to adapt to new

market conditions, which are a result of the liberal-ization of the electrical industry, has imposed thefollowing priority goals: increased customer satisfac-tion and retention, improved quality of service, andeffective promotion of EDP Distribution's image.

The electrical energy distribution networks,like the transport networks are in a continuousprocess of modernization and reinforcement. Theneed to respond to increased consumption, withdifferent evolutions in different locations, hasreceived an adequate response from EDP Distri-bution, which significantly improved the qualityof the required service and substantially reducedlosses in the network. Likewise, EDP Distributionhas promoted the adjustment of its network, inappropriate technical conditions, at the level ofoptimization of the connections, micro-produc-ers and new power plants, namely, SRP (specialregime producers).

Gross electricitymarginEBITDANet results

1,214

569212

EDP Distribution in figures2009 2010

1,215

558242

+0.1%

-1.9%+14.4%

Figures in million euros

RN_26_33_CAPA:Layout 1 11/04/26 13:40

3 2 o n3 2 o n

in focus

HC Energía Distribuicíon, whose newdirector is currently Luís Álvarez Arias deVelasco, operates in the regulated activitiesof distribution and marketing of electricity.The company, whose natural market isAsturias, has been expanding itsactivitiesto other parts of Spain and is currentlypresent in Madrid, Valencia, Alicante, Bar-celona, Huesca and Zaragoza. These boo-ming markets possess a strong industrialcomponent and a large number of liberali-zation- impacted customers, leading to noredundant distribution structures in thearea (which allows for the maintenance andupgrading of real servers without the needto make the service unavailable).

Main Challengesa) Amending the regulatory model• Return on investment and operating andmaintenance costs in accordance with anetwork model of reference: the modeladopted by the Ministry of Industry for allcompanies is very similar to HC Energía’sproposal, so that the payments to distribu-tion become more connected to networkextension and the difficulties associatedwith construction and maintenance, ratherthan to actual consumption, as has happe-ned up to now• Bonus for the quality of supply: the adop-ted subsidy model also has to do with thequality of supply that each distributorprovides in its networks. In this way, HCEnergía recorded a much higher quality of

supply than the national average, and itsTIEPI (installed capacity equivalent inter-ruption time) — an indicator that measu-res the quality of supply — has registeredsignificant improvements in recent years.

b) Improving efficiencyOPEX and Lean project cases.

InnovationHC Energía is collaborating with the EDPUniversity and other companies on someprojects. Of note is the assessment of thecondition of medium-voltage undergroundcables, in accordance with the partial on-line discharges and the storage of electri-cal energy systems through redox batteries.

Environment A task force was set up to obtain ISO 14001certification. Indicators: landscaping inte-gration, SF6 emissions to air, soil contami-nation, waste, by-products and noise.

Network Management Systems GIS (geographic information system): asystem that stores geographic data on all ofHC Energía Distribución's facilities, allowingfor faster reporting and locating of incidentsand more efficient recovery of supply. TheGIS possesses the properties of eachelement and all the detailed information onthe supply grid.NM (network manager): real-time operatingsystem used at the control center (distribu-

tion dispatch center). It includes SCADA andadvanced applications (failure management,brigades, calculation of qualityindicators, etc.).

HC Energía Distribución also has a controlcenter in the substation of La Corredoriaand a replica of the system in the La Gesta(Oviedo) shops, which shows the actualsituation of the network, and which, becau-se it is controlled remotely, minimizes thesupply delivery time.

SAP, RM/PM: provides management ofmaintenance orders and network extensionprojects. They possess a contractor com-munication module.DPLAN: network planning system, the sa-me as that used by EDP.

Sales EDP Distribution of Portugal does not sellin Spain. All the energy is sold by thegenerators to suppliers. EDP Distributionoperates only in the network. The energycirculating through the network is equiva-lent to 9,751 GWh.

Investments in service qualityIn the last business plan, investments inelectric power totaling 300 million euros.were budgeted. These included the exten-sion to new territories, the maintenance ofcurrent networks and the strengthening ofdistribution areas.

Network kms:High voltage = 50 e 132 kVMedium voltage = 22 kV

Low voltage = 400 V

High voltage = 1,416 kmMedium voltage = 5,931

Low voltage = 14,679

Age (years) Below 30 Between 30 and 40 Between 40 and 50 Between 50 and 60 Over 60

Job classificationExecutive management Senior managementMiddle management Intermediate managementQualified and highly skilled professionals

Training (hours)

Specific Corporate EDP University

Employees: 298

115410111319

5374414765

2,9513,924404

HC Energía Distribuicíon already reaches 650,000 customers!

Spain

RN_26_33_CAPA:Layout 1 11/04/26 13:40

o n 3 3o n 3 3

in focus

Distributionheaded by Miguel Setas since early2010, held a unique experience in the EDP Group.Strategic planning of the area was determinedjointly with employees through an Intranet surveyand from the results, a roadshow was organized topromote the strategy to the approximately 2,000employees. Economic growth in Brazil has influen-ced the increase in energy consumption. The capa-city sold and distributed also rose. It was a year ofmany achievements for EDP Bandeirante and EDPEscelsa distributors.• EDP Bandeirante exceeded 1.5 millioncustomers• Unjustified travel was reduced – from 30percent to 12.69 percent at EDP Escelsa, andfrom 30 percent to 14.56 percent at EDP Bandei-rante.• A new call center opened, integrating both distri-butors.• Employee accidents decreased by 25 percent andservice provider accidents by 10 percent. • Commercial losses were reduced whencompared with figures for December 2009 (0.38percent for EDP Bandeirante and 1.05 percent forEDP Escelsa).• The 2010 Organizational Climate Surveyrevealed improved employee motivation(motivation at EDP Distribution rose from 60 per-cent to 70 percent).• The Lean project implemented 245 ‘5S’actions and 117 actions for other activities withgood results (a 48 percent reduction in repositiondemand completion time, a 16 percent decreasein material replacement time, 10 tons of paperand six debris trucks). [NOTE: are the paper andtrucks actions too? i don't get how they relate tothe other two reductions.]

InnovationWorth highlighting is the launch of the first electricvehicle supply grid in Brazil, with 20 offices acrossseveral cities of São Paulo and Espírito Santostates, as well as the donation of 90 bicycles to mu-nicipal and public safety entities.

The distribution smart grids are another area of ac-tivity. Besides placing wireless control and meteringsystems for HV and MV customers, the ClimaGridproject was launched in partnership with the Natio-nal Institute for Space Research [NOTE: Is INPEused later in magazine? if not, pls delete (INPE).](INPE), which is expected to be carried out in threeyears and plans to collect wind, rainfall, vegetation,lightning and temperature data that will integratethe electrical system in a simple and intuitive way.EDP’s 2020 Awards, which aim to encourage andreward the development of innovative projects in theenergy sector, had its first winner, Gabriel Domin-gos, who was honored for his work on the bio-recy-cling of domestic organic waste. By 2020, EDP willinvest $ 1 million in ideas that value new paradigmsin the energy sector.

Service Quality IndicatorsVitória, in Espírito Santo, is among the best perfor-ming capitals of DEC (average interruption durationper customer) and FEC (frequency of interruptionsper customer). Over the past three years, it hasmaintained a rate of three interruptions per year(FEC), and in 2010 it was below three hours of inte-rruption (DEC). The average required by ANEEL (theNational Electric Energy Agency) for the region is fi-ve interruptions per year and a duration of six hoursper year.

Energy EfficiencyIn 2010, the EDP Group invested about R$ 25 mi-llion in energy efficiency the Efficient Traffic Lightsproject (featuring the use of high-efficiency LEDlighting in traffic lights systems), which in four yearshas led to a 90 percent reduction in energy costs. Ithas also invested in energy efficiency for low-inco-me communities: The "Boa Energia Solar” project,in partnership with the Urban Housing Develop-ment Company of São Paulo state, replaces incan-descent bulbs with compact fluorescent ones andinstalls solar water-heating systems; the "GoodEnergy in the Community" project, besides servingand identifying households with illegal connections,

delivers efficient lighting kits and implements ac-tions in the rational use of energy. EDP Escelsa alsoacts in the communities it serves. In the state of Ca-pixaba, 75,000 customers have received new bulbs,refrigerators and regularization of the electricalenergy patterns.Later this year, the program is expected to re-place more than 6,000 refrigerators. EDP Grouphas gained prominence in the industry in recentyears with the implementation of actions thathave reduced energy consumption. Various or-ganizations have recognized this effort, whichhas already led to the Group winning severalawards, including the FIESP State Award forConservation and Rational Use and the NationalProcel Award.

Social Investment: Distribution has investedabout R$ 2.4M in actions and programs focusingon education, culture, local development, sportsand social assistance, of which the EDP in Scho-ols, EDP Solidarity, EDP Child Friendly and Let-ters of Light initiatives merit mention.

InvestmentsEDP Bandeirante and EDP Escelsa, together,invested R$ 376.7M, demonstrating EDP’s com-mitment to the development of the regions inwhich it operates. EDP Bandeirante investmentstotaled R$ 188.9M — the highest since the com-pany was privatized in 1998, with funds going tothe expansion of the power grid, the improve-ment of lines and distribution grids, the comba-ting of non-technical losses, as well as the Lightfor All" program. In addition, the company inves-ted in the expansion of five substations, theconstruction of the Pedreira Substation in Ita-quaquecetuba, and the addition of approximately1,401 kilometers of networks.In Espírito Santo, 10 new substations and exten-sions to another 16 were built, with a reinforce-ment of 497.5 MWAs to the system in two years,representing a growth of 30 percent of installedcapacity.

Distributors serving 2.7 million customers

Net income EDP Bandeirante: R$ 278.24M EDP Escelsa R$ 178.6M

Energy sold EDP Bandeirante: 9,038 GWhEDP Escelsa: 5,211.89 GWh

Energy distributed free to customers EDP Bandeirante: + 12%EDP Escelsa: + 38.5%

Total energy distributedEDP Bandeirante: 14,310 GWhEDP Escelsa: 9,439.12 GWh

Main challenges for 2011

• Satisfy customers

• Maximize revenue

• Develop skills

• Surpass the reference company

• Plan investments

• Promote technological innovation

• Optimize management of suppliers

• Disseminate EDP culture

• Implement the management excel-

lence model

• Manage risks

Brazil

DISTRIBUTION IN 2010 FIGURES

RN_26_33_CAPA:Layout 1 11/04/26 13:40

JOÃO TORRES

ÂNGELO SARMENTO

MIGUEL STILWELL D’ ANDRADE

34 o n

spotlight Talking to ...

The 2012 Distribution program is the result of a strategic plan for the period between 2010and 2012, with four axes of action: controlled risk, superior profitability, excellent servicequality and constant innovation, as well as a transversal axis of the program, calledorganizational culture. The common feature is the high degree of monitoring, punctuated byregular monthly meetings, between promoters of different initiatives and the first echelons ofthe company. It is a forum for sharing information and defining the next steps. In thisinterview, EDP Distribution's Board of Directors traces a portrait of the company at a timeconsidered crucial for the sector

The challengesof Distribution

J oão Torres, chairman of the board ofdirectors, EDP Distribution, and mem-bers of his team, Ângelo Sarmento and

Miguel Stilwell d'Andrade, are the majorindividuals responsible for the 2012 Distribu-tion program. This ambitious initiative aimsto prepare the company for future challenges.

In general terms, how would you definethe 2012 Distribution program?João Torres (JT):This is a mobilization pro-

gram, structured around four axes, in order toachieve the goals we set for this business plan.It is a plan that calls for great involvement bythe board of directors and that, by its diversi-ty and scope, we want to mirror the involve-ment of the entire company.

That is why we mobilized a lot of people to

work on the various teams and initiatives. Itis a very dynamic program, and it has beenrunning quite well.

What are the main objectivesof the controlled risk axis?Miguel Stilwell d’Andrade (MSA): Within

the theme of risk management, there are fourmain objectives: the management of regula-tory challenges; management control —including the quality of information providedto third parties; the outsourcing model, whichis also associated with human capital manage-ment; and lastly, environmental managementand sustainability. The distribution is highlyregulated, and there is a constant dialoguewith ERSE, which is particularly relevant in2011 because the next regulatory period is

being defined. We created, in fact, workinggroups specifically related to this matter.

Under the theme of environment and sus-tainability, it is undisputed that society isbecoming increasingly more demanding ― afact that creates a series of new challenges thatEDP Distribution must overcome in order toimplement its business plan.

What key initiatives are planned withinthe superior profitability axis? MSA:It is an axis that is closely linked to the

one before. We aim to clearly improve EDPDistribution's profitability. To achieve it, wemust first control costs by promoting pro-grams such as OPEX, and second, by optimiz-ing investment and asset management —knowing where and how we invest. We must

RN_34_39-SPOTLIGHT_V3:Layout 1 11/04/26 13:42

o n 35


36 o n

also ensure this investment is allocated tothose projects that will have a greater impacton quality of service and reduction of lossesand costs.

EDP Distribution has a wide berth. By cre-ating a forum and clearly defining what ourpolicies, priorities and objectives are, we findhere a space for people to share their own bestpractices. An example is the OPEX theme. Itis very easy to have a top-down program, butwhat we have here is the opportunity to shareOPEX-specific initiatives from among differ-ent departments. On the theme of travel andcosts, we have adopted practical measures,such as introducing more videoconferences,starting training activities one hour later inthe morning and avoiding numerous trips,including overnight stays. We have quicklydisseminated and shared something thatmakes a significant contribution to the ques-tion of profitability.

How are you ensuring the transmissionof knowledge? MSA:This is a critical issue for Distribution.Ten years ago, the company employed

almost 10,000 people. Currently, we arearound 3,700, and 10 years from now, it isexpected that the number will be below 2,000.

There is a need to manage this knowledge andensure that it is maintained internally.

There is a work team, "In & Out," that isdelineating which type of skills we want andcan maintain internally and which we canoutsource to service providers.

JT: Understanding what EDP Distribu-tion's activities and skills will be in the futureis a decisive and strategic task, one alignedwith the company’s longer-term vision. In themeantime, we have launched a range of ini-tiatives, because we cannot stop the buildingof this new company.

We have recruited heavily in recent years,hiring about 100 new employees. Currently,about one-third of senior managers in posi-tions of leadership are less than 40 years old,thanks to a policy of rotation and placementof new challenges. Alongside the managementof wisdom, which involves using the skills ofour most experienced staff, we are downrightinnovative in our policies for monitoringthese young people — specifically, we offer in-ternally supported mentoring and coachingprograms, in which we challenge these sen-ior people to help the younger ones. More re-cently, we have all been very involved in EDPDistribution University.

Ângelo Sarmento (AS): One objective of

the school is precisely this: to retain internalcore knowledge of Distribution's business aswell as data on how it is transmitted from old-er to younger generations.

Another new reality is mobility.How have employees reactedto these changes within the company?JT:We strive to be a dynamic organization.

We believe that people have much more po-tential than they realize, and when they arefaced with new situations, they bring newideas. We have challenged a lot of people toperform other job functions, and what wehave seen exceeds our best expectations.

In the regular meetings that we hold, wedo take the opportunity to have open discus-sions. It is part of the process of cultural trans-formation. We feel we have evolved; we are amore efficient and approachable companywith a wider set of knowledge skills in whichpeople view change as a positive outcome. AtEDP Distribution we have a satisfaction in-dex, clearly unusal for what one would expectfrom a company of this size, because there isthis ongoing monitoring of people, which wedemand from all our leaders. The results, interms of employee satisfaction, reflect the factthat the action plans for each business unit

spotlight


are closely monitored, making motivation es-sential.

AS: We are stressing a set of values that arelining up well with the culture we want for thecompany, a development that is very evidentin each axis.

Returning to the rationalizationof costs, how can we bring togetherthis objective and the need to continuepursuing an investment policy?MSA: Rationalization of costs implies being

more efficient at what we do. The investmentfocus is to realize where we must apply the mo-ney. We can better optimize resources in orderto reach the target with the biggest impact.

These are not incompatible forces. A good in-vestment can, and should, allow a reduction incosts. Investment and service quality go handin hand in hand at EDP Distribution, withresults that reflect very careful management.

What are the main environmental risksof EDP Distribution's activities?JT: I feel like answering that they are less

and less, according to the measures we have

been adopting. But the environment and sus-tainability theme is, increasingly, on our agen-da.

MSA: The environmental risks associatedwith the distribution business have notchanged much; rather society’s demands aregrowing. There are risks from the distributionactivity itself, such as the treatment of waste,which must be managed carefully. There is al-so the need to bring together activities we de-velop and that are subject to various restric-tions. For example, we cannot lay networksthrough protected areas without certain li-censes; as we are everywhere, it is necessaryto work with various entities in order to min-imize the environmental impacts that mayarise in the field.

JT: The creation of airline protectionzones, for example, is a decisive issue — notonly because of the impact on the quality ofservice but also as a factor in fire preventionand protection, as well as biodiversity conser-vation. As we have about 220,000 kilometersof lines, EDP Distribution has a responsibili-ty to learn to do better. This must be a distinc-tive and constant feature in our work.

MSA: The subject is dear to Distribution.

We organized an "Environment and Sustain-ability meeting" in 2009, and another one in2010. The next month of June will see anoth-er new meeting. These are considered discus-sion opportunities in which EDP Distributionand other Group companies, as well as out-side parties that we invite, can gather to takestock of what has been achieved and to dis-cuss our priorities for the future.

May regulation somehow condition thegoals concerning the controlled riskand superior profitability axes?MSA: It is the aspect of business that may

have the most impact on Distribution. We arenow entering a time of discussion for the nextregulatory period, from 2012 to 2014. We haveto realize, along with the Regulator, how toalign Distribution's interests with those ofconsumers and of the industry as a whole.This is the work we do with ERSE, seekingthat the Regulator is in fact the balancing act.

JT: Achieving the balance between thebusiness sector and the end-user — the moreinformation we provide, the better and moreaccurately we convey what are our issues, the

more the decisions will be considered. Wehave used this approach, which seeks to ex-plain what is Distribution's day-to-day andthe challenges we face. We know that the Reg-ulator wants to regulate well, and that ourcontribution is essential.

Turning to another axis of the P2012,excellence in quality of service, can wesay that this same quality of servicehas improved substantially in recentyears?AS: Definitely. In terms of the main indi-

cator of quality of service, the TIE-PIMT, akaTIE (time equivalent interruption), I wouldsay that over the past 10 years, it has im-proved gradually and safely. From an initialvalue of 480 minutes, we are currently sta-bilized below 120 minutes, which means a re-duction of 75 percent. Of course, this reduc-tion is at the global level. There are alwayssome areas that are not as good as others. InDistribution’s 2012 Program for the Excel-lence in Quality of Service axis, we are empha-sizing the reduction of asymmetries, puttingeffort into leveling areas where our perform-ance is more positive.

This performance is essential to theGroup's image, since a large part of thecriticism made about EDP comes fromthis area ...AS:We must be prepared not only for those

days that we call "spring" in which, invariably, thenetwork performs very well, but also for the dayswhen there are strong disturbances to the atmos-pheric level that, in fact, cause us some problems,forcing us to be ever more vigilant and better pre-pared. But it is also necessary to improve in termsof customer communication in order to providethe information needed quickly and accurately.

However, even in our troubled network re-sponse has been more effective which has great-ly contributed to implementing the POAC (Op-erational Plan of Action in Crisis) which, withina short period of time, allows us to mobilize teamsfor such periods as may be necessary, operate andmanage the resources appropriate means to re-store normalcy, in a work involving civil protec-tion, municipalities and fire prevention.

Communication has been a recurringtheme in this conversation ...JT: We're all learning how to communicate

more effectively. In fact, this is an ongoing effortin determining the objectives of EDP Distribu-tion. Only through hard work, great profession-alism and a cohesive team capable of perform-ing better each time were we able to improve ourquality of service by 75 percent in 10 years. Thisorganizational culture has allowed us to makejudicious investments, which in this periodreached about 3 billion euros.

We always seem to take away very positive ex-periences, but we have a very high level of expo-sure and therefore it is much easier to be criti-cized than to be given credit for our performance.

The quality level of service we provide is al-ready internalized — it is normal, an acquiredquantity. We have done a good job, but people arebecoming ever more demanding about qualityof service, which undoubtedly a reflection of one'squality of life.

With regard to external serviceproviders, what measures are to beimplemented to sustain theimprovement in work performance?JT: It's hard to live without the service

providers. But we have a balanced level of out-sourcing, and we make decisions about what

o n 37

spotlight

v

We strive to be a dynamic organization. We believe that people have much more potential than theyrealize, and when they are faced with new situations, they bring new ideas. We have challenged a lot ofpeople to perform other job functions, and the results that they achieved have frankly been very positive


38 o n

they consider the appropriate level for thiscompany. In this area, one of the hallmarks ofrecent years is that we deal with our externalservice providers as our partners, assumingthey have an ever increasingly important role.

But we do not shy away from demandingtenders or from entering service levels alignedwith our own. Years ago, EDP Distribution of-fered a significant number of direct services,which we have since reduced, keeping themarket competitive. And we have a partner-ship idea for a long-term relationship, whichour PSEs need to improve in many respects.

We realize that the performance and qual-ifications of external service providers —which reveal themselves not only at the levelof the contract, but also in such important ar-eas as prevention and security, where we pro-mote joint actions — are strategic to Distribu-tion's performance. It is true that currentlywe treat our service providers as we do our em-ployees, and from this perspective, we wantthem to internalize the values of our code ofconduct when they present themselves beforethe customers.

In customer service, what initiativesexist to reduce connection times,complaint resolution and servicereconnection?AS: We are about to publish the "Connec-

tion Manual," an instrument that defines a setof procedures and recommendations to con-vey to customers and, which, internally willallow the standardization of these procedures,thus improving customer response time.

At the level of complaints, we are examin-ing the entire process, identifying bottlenecks,as the best internal practice for optimizing thiscycle. We have to be faster and more effectivein how we communicate with customers; re-spond in a clear, less technical manner thatbrings us closer to the customer — a commonbut equally rigorous language. At the level ofservice reconnection, one of the aspects thatcustomers value most is how long it takes usto repair a defect, especially one that affectsthem. One focus area for this team is the defi-nition of the most effective way of transmit-ting information to the contact-center level,specifically the support and type of commu-nication that needs to be established.

MSA: By the way, the business line was al-ready launched in late November. The largestcorporate customers in continental Portugalnow have direct and priority access to this in-formation. It has been a great success, and wehave received very positive feedback from cus-tomers. We started with a group of about 2,000customers, which we plan to triple.

Turning to a no less important area,public lighting (PL) ...JT:The issue of PL is also one that we have

worked on closely with municipalities at thedemand level, implementing the best and mostappropriate solutions, which are supportedby new technologies that contribute to greaterenergy efficiency and reduce associated costs.On the other hand, we've realized that abouta third of the communications we receive atthe contact center are related to PL. We are,at this point, experimenting with a dedicatedline for public lighting, with specialized serv-ices that we believe will enable us to take aqualitative leap.

The InovCity project also contributes toenergy efficiency. What has it done sofar?AS: Feedback for InovCity is very positive. It is a project that completely changes the

paradigm in the energy business, in distribu-

tion, and in the way we relate to and commu-nicate with customers. The network will bemodernized in order to attract and integratea set of new ways to produce energy, from mi-crogeneration to electric vehicles. We willraise customer awareness of energy efficien-cy and be able to show them their actual con-sumption within a short time period. We areundergoing a pilot phase to validate thiswhole concept, and it has been a very enrich-ing experience for everyone.

MSA: InovCity was released on April 6,2010, in Évora. We shall not fail to note its firstanniversary. We can then begin to take stockof this process, not only in operational terms,but also from the standpoint of the consumer,between 2011 and 2012, to understand if wedo a “roll-out,” what extending this project tothe Portuguese territory will look like.

JT: The InovGrid - InovCity project is the

materialization of the idea of innovation — weare very proud of this development project forintelligent networks, which places EDP andEDP Distribution at the forefront of what wedo, both in Europe and globally terms. Itrequired a massive mobilization of technolo-gy in the first phase, and more recently, themobilization has focused more attention onthe consumer, as well as what outcomes thistechnology might have.

Electric mobility is on the agenda. Arethe results meeting the expectations?AS: This ambitious program set by the

government is being fulfilled. It focuses onthe installation of charging points through-out the country. There are 25 district capi-tals that will constitute the pilot cities forthis project. By now, we have about 300charging points that are already beginningto be installed in certain fast-charging sta-tions. And until the end of the year we cal-culate that, within the scope of this program,we will have installed at least 1,300 slow-charging points and about 50 fast-chargingpoints. This will allow, for example, compa-nies with fleets of electric vehicles to have,in the short term, guarantees of chargingpoints for their vehicles.

JT: It's a very demanding national chal-lenge. You need to identify the places, have

interactions with the municipalities and theGAMEP (Office for Electric Mobility in Por-tugal), find the electric solutions, and liaisewith the various suppliers of equipment. Thispivotal role has been handed over to EDPDistribution, and as was previously said, wehave fulfilled it in a determined and alreadyrecognized way. In compliance with the le-gal requirements of electric mobility, EDPDistribution has created two companies:SGORME (Sociedade Gestora de Operaçõesda Rede de Mobilidade Elétrica), which en-sures equipment installation and mainte-nance. We had to take steps to mobilize evenin organizational terms, in order to respondmore effectively to the law’s requirements.

Is it fair to say that in this area we areat the forefront in Europe?JT:Definitely. The Portuguese project has

a number of innovative features that distin-

spotlight

v

The InovGrid - InovCity project is the materialization of the idea of innovation – we are very proud of thisdevelopment project for intelligent networks, which places EDP and EDP Distribution at the forefrontof what we do, both in Europe and globally.


o n 39

guish it from others. Moreover, equipmentalready is being exported. There are condi-tions that lead to electric mobility’s success.From the infrastructural point of view, let’shope that more vehicles appear in significantnumbers that will meet the correspondingavailability in this network.AS: In terms ofindividual consumers, I

admit that it might be more difficult to im-plement this system, but at the level of com-panies we already see positive signs begin-ning to emerge. They perform shorter cir-cuits, and it is more compatible at this time,with the charging point’s dimension andavailability.

EDP Distribution has a structure thattracks everything in relation to theconstant innovation axis. There is evenan innovation government ...AS: In fact, we created a structure in EDP

Distribution to monitor and streamline allinitiatives related to innovation. All these is-sues we have talked about – smart grids,electric vehicles and others — are clearly in-novative, but they do not end here in a com-

pany with our dimension. There are a num-ber of good ideas at various levels that mustbe channeled and handled in an organizedand systematic manner. To this end, we havecreated an innovation committee compris-ing macrostructure elements of the variousbusiness areas, and we have also formed the"Magnet Team" to energize the various op-erational units.

What are the key words of theorganizational culture axis?JT: The 2012 Distribution program is a

mobilization program. It contains four keywords that did not result only from a decisionof the board of directors; they also resultedfrom the work developed at several levels toenable us to structure the program. The busi-ness plan and the 2012 Distribution programhave been reflected on previously through asignificant mobilization of EDP Distribu-tion's management echelons. The four wordsreflect our way of living, the distinctive traitsof the company's organizational culture,which is a transversal axis of this program.

First, "Execution" -- because this compa-

ny executes. It is a company that is called onwhen things need to happen. And from thepoint of view of cost control and deadlines,it is a very disciplined company.

The second key word is “Involvement.” Ina previous program we had used the word“closeness,” but it was not enough to trans-late the reality, as proximity by itself does notmirror what is another hallmark of this or-ganization — the effective involvement.

Then, "Simplicity." Doing things in a sim-ple way, deciding in a simple manner, elimi-nating waste ― these are all examples of thecompany's simplicity in terms of operationand in its relationships with customers, mu-nicipalities and various other entities. Wewant these relationships to be as simple aspossible, and the other parties all felt that ac-cess to Distribution was easy to obtain.

And lastly, "Innovation" — not only tech-nological and processes innovation, but al-so innovation in how we relate to and man-age people and, moreover, in how we iden-tify that potential. These are the key ideasthat we desire to be defined by and trans-mit forward.

spotlight


Outsourcing Companies turn to contract services as a way to helpthem achieve the objectives set by management.What are the advantages of this practice for the EDP Group?

4 0 o n

in network control and monitoring and inthe execution of some maintenance works.

Our path in outsourcing has allowed us toachieve the following:

• Reduce costs, scale back investments interms of financial commitments and al-locate them more efficiently, and de-crease structural expenses;

• Improve performance and efficiency, en-suring specialization and optimizationof resources in routine and very high vol-ume tasks;

• Ensure greater availability of internal re-sources in identifying new areas ofgrowth, methods and work habits orient-ed toward service and flexibility;

• Comply with greater flexibility and speedto changes stemming from new regula-tory requirements.

We have thus been progressively aligningthe contractual model with the objectives andstrategy set by the business, using outsourc-ing as a management tool to align thecontractual model to the established strate-gy. This model seeks to foster lasting partner-ship and mutually beneficial relationships,guaranteeing a sharing of risk consistent withwhat each party does best.In the constant search for improvement — adecisive factor in business sustainability—the contract stipulates the commitments re-garding the level of service to achieve (SLA-Service Level Agreement), in addition tomeasuring the performance of technicalquality, environmental and security mark-ers. All these factors influence, in aggregate,the application of incentives and penaltiesresulting from the compliance, or non-com-pliance, with the value traded and negotiated.

JORGE VENTURA - V e n d o r Ma n a g e m e n t D e p a r t m e n t

in discussion

T he outsourcing onus for infrastructurecompanies, particularly in the utilitiessector, has been growing and now

represents about 48 percent of the totalworkload. Companies turn to outsourcedservices as a way to help them achieve theobjectives set by management, thus ensur-ing the greater adaptability and flexibilityneeded to respond to market changes.

Also at EDP Distribution, the demand forgreater flexibility and efficiency in responsehas led to a progressive increase in out-sourced services leveraging the know-howand expertise of outside firms in certain keyfunctions, enabling the company to focus itsenergies on the essential business compe-tencies. Strategically, EDP Distribution hasfocused on planning, defining Project-types,

RN_40-41_EM DEBATE:Layout 1 11/04/26 13:43

One of the main issues in thecurrent business scenario isthe need for organizations toact competitively. The mainadvantages of outsourcing arefinancial, technological,competitive and business-focused. The financial sphereis linked to reducing operatingcosts and the economic use ofcompany resources. Anotheradvantage is technological,i.e., the vendor delivers theinnovations that appear in themarket, as service providersare in general constantlylooking to new technologies toimprove processes and reducecosts. A company that adheresto outsourcing becomescompetitive by becoming moreagile, since its energy isconcentrated on the issuesand strategies of realimportance to the company.All these elements justifychoosing outsourcing.All theseelements justify choosingOutsourcing.

Márcio Franco · EDP Brazil’s Executive Procurement Manager

o n 4 1

Perspectives on Outsourcing

+ +

In the process of optimizingthe engineering of EDPProduction, its corecompetencies and definedstrategies for the realization ofnon-core activities weredefined. Among them, wehighlight the outsourcingpolicy that freed non-coreactivity resources, allowing usto focus on other coreactivities and better adjust tothe volatility of engineeringactivity. Later, the introductionof a significant number of newwater projects changed thescenario underlying theoutsourcing policy, which hadoriginally focused on thecompany's non-core needs byextending its core activities, forwhich it had the capability butnot the resources needed tomeet a demanding schedule.From a scenario whereoutsourcing already coveredalmost all aspects ofsupervision, coordination andsafety, topography, and landactivities, we went to aframework in which manyprojects were also awardedexternally, given the company’sinability to develop them inopposition to others executedwith internal means. In spite ofthe identified benefits,applying outsourcing to aspecific engineering area isnot done without difficulties,given the the inadequatemarket response both in termsof quality and deadlines.

The degree of outsourcing atHC Distribution has beenincreasing gradually, as apractice that allows greaterflexibility (fluctuations inworkload) and reduction incosts (less specialization ofcompanies and lessinvestment in equipment) forcertain jobs. These are eitherrepetitive and of littledifficulty, or more complexand can be performed byspecialized companiesfollowing HC Distribution’sgeneral criteria. Among them,carrying out projects, plantconstruction andmaintenance; remotecommand of the facilities;customer service center, aswell as activities wherespecialized companies exist inour industry.There are, however, othernon-outsourcing jobs thatrequire a keen knowledge ofour network and compriseactivities that can majorlyimpact our Company’s qualityand image indicators beforeour clients. In the lastcontracts executed inDecember 2010, a series ofcriteria was establishedplacing special importance onquality and safety. And thus,the deals were valued 70percent by price; 20 percent byquality and 10 percent bysafety.

José M.ª Rey Paredes· Head of HC Energía’s Technical Services

At EDP Distribution,the demand for greaterresponse flexibility and

efficiency has led to aprogressive increase in

the recruitment ofservices. This new

approach leverages theknow-how and

expertise of outsidefirms in certain key

functions, enabling thecompany to

concentrate itsactivities in the

essential businesscompetencies.

Clara Maia· EDP Production

i n d i s c u s s i o n

Jorge Ventura has beenan employee of the EDP

Group since 1978. Heworked as a project

manager in theconstruction and

maintenance of high-,medium- and low-voltage

substations in Portugaland was also employed

by the Electric Companyof Macau, where he was a

member of the“Technological ExchangeGroup" with the People's

Republic of China. In1999, he became part of

the "DistributionReorganization Team.”

With training in electricalengineering, he has

worked in several areaswithin the company.

Currently, he managesEDP Distribution's

Vendor ManagementDepartment.

RN_40-41_EM DEBATE:Layout 1 11/04/26 13:43

42 o n

What is the WindFloat project?It is an innovative project in the area of off-

shore wind energy, which is scheduled forinstallation in relatively deep waters. We havealready had great experience with offshorewind energy but in relatively low water depthsof 20-30 meters (65-98 feet). For such lowdepths, we roughly use technologies that areapplied on land and adapt them to the sea.That is, there is a tower with a turbine on top,and this tower has a foundation set into theseabed. As we move into deeper waters, this

type of structure requires more complexity.And of course, it is more expensive.

What are the main constraintsof the project?There is a compromise encompassing the

structure’s cost, reliability, safety, etc. The factthat it is subject to the impact of the waves ―which cause vibrations in the turbine and af-fect the structure — brings a whole set of tech-nical problems that are beginning to mount.And if there is something we know, it is thatall operations at sea are very expensive. Whilewe remain in the lower depths, the solutionsare close to what we already have. They areconsidered merely incremental advances. Butthe belief is that when those depths get to the50- to 60-meter mark, the solution will haveto be different. It is a disruptive innovation; itbreaks with our past experience. And thisbreaking point is when we stop having fixed

structures and instead replace them with float-ing structures. It is this step that EDP is nowtaking.

At what stage are you now?EDP knows this better than me, but it is in

progress. Most materials have been purchased.Construction is already under way. The firstphase needs to be finished by assembling allthe components that are being built. Theturbine comes from Germany. Larger piecesof the floating structures are being made in

Setúbal at Lisnave, and the entire assemblywill come together there. This stage marks theend of the production and assembly phase.

Then comes the installation phaseat sea ...However, before this phase we have to trans-

port it from Setúbal to Figueira da Foz. And thenwe have the installation. There is the placementof moorings in the seabed, then the connectionof those structures to the moorings. Before this,there is also a detailed characterization of thesite that has already been made but can still beimproved. And then we enter the testing phaseproper. It comprises several steps. The initialphase is more difficult because all the compo-nents must be checked. And it is very demand-ing in terms of the number of employees. As wegain experience and confidence with this typeof equipment, monitoring this whole processwill naturally diminish.

who’s who? Professor at the Inst i tuto Superior Técnico (Higher Technical Inst i tute)

To take advantage of the waves and the wind off our coasts is the goal of WindFloat — a projectdeveloped in a pioneer way by EDP, which intends to revolutionize the way we produce energy. In thisinterview, António Sarmento, president of the Wave Energy Center and a professor at the HigherTechnical Institute, in Lisbon, talks about the advantages and the risks of this technology

ANTÓNIO SARMENTO

Offshore wind energy: the next step

RN_42_45_QUEM E QUEM:Layout 1 11/04/26 13:44

o n 43

Professor at the Inst i tuto Superior Técnico (Higher Technical Inst i tute) who’s who?

v

And if things do not go as smoothlyas planned?

All teams work to prevent problems, but they canhappen, from the simplest to the most critical.And it is evident that some issues will appear.What I hope is that they are easily circumvented.And I say this because it is my experience that incertain types of projects, problems inevitably doarise. By insisting on this aspect, I am not prais-ing my abilities to guess, just reminding people:If we can be sure of something, it is that there willbe problems. And it's important that people arepsychologically and financially prepared to facethis situation. I think that EDP is. Any innovationprocess has an associated learning curve.

What would be a critical event?If there is the type of problem that causes

the project to end right there, it will be criti-cal, although no one expects or desires it. Ithink the likelihood of this type of problemoccurring is very small. But even if a 100 per-cent failure occurs, we cannot look at it with amind-set that is very typical for us ― that ofnot forgiving mistakes. I usually give this ex-ample: It is like putting a kid on a bike to gethim to learn how to ride it and hoping the kidnever falls. We all know that children fall frombikes, even if they know how to walk. Thisseems obvious, but not so obvious when it be-comes reality. If this happens, it means thatexpectations have been poorly managed.

In your opinion, how is EDP managingthese expectations?I think EDP is managing them well, from

the conversations and contacts I have had. Butobviously, the management of expectations isnot just EDP’s responsibility. It also belongsto the public bodies funding the project, to theentities that oversee the project, etc. Every-one has to realize that this is a project with acertain amount of risk, that it will have prob-lems, and that it can even go wrong. But thefact is that this path must be taken.

Is there a schedule in place for whenthis structure will be installed?We expect it to be installed in August. Now,

my experience tells me that it's difficult tokeep up with these schedules; these areinnovative systems and problems appearwhere least expected. So far I do not know ofany project that has not been delayed. I do


44 o n

Sarmento is an associate professor at the Higher Technical Institute (IST) and president ofthe Wave Energy Center, in Lisbon. He is a board member of the European Ocean EnergyAssociation and Directorate of the International Society of Offshore and Polar Engineering(U.S.A.), as well as an adviser to the Scottish government and the Energy Technology Insti-tute (U.K.). Sarmento began his work in the field of wave energy in 1978, in hydrodynamics,and in 1985 obtained his doctorate in the same subject matter from the IST. In 2003, he found-ed the Wave Energy Center, where he has played a role in the dissemination of wave energyuse and the development of inherent public policies. Within this framework, Sarmento hasalso carried out strategic studies for both domestic and foreign companies.

ANTÓNIO SARMENTO

not mean that there isn’t a plan and thatpeople will try not to follow it. No, I amreferring to some delays that may havenothing to do with people. In August, the seais calm, but the climate can change and cutthat operation short. It may also happen thatthere is a delay in the yard or in transport.And we see structures as trivial as buildingsor bridges that are constructed by the dozen,where a lot of them get delayed for years.Again, I repeat: Many of the difficulties haveto do with people’s expectations. Therefore,an effort must be made here to present theproject with all its qualities while also recog-nizing what the risks are and being preparedto accept them.

Why the need to move forward withsuch a project in Portugal? Our coast sinks relatively quickly. Wind

turbines make a relatively large visual impact,even more so those that generate more power,like the ones that will be operational at sea, andthat are therefore larger in size. Nobody, I think,would like to go to the beach and see the skylineawash with turbines. There is some concern thatthese turbines be put far enough from the coastthat they cannot be visible or at least be visiblein a way that is not distracting.

And what are the implications in termsof efficiency? In regards to long-term costs, there is an op-

portunity for these turbines to produce energythat is not more expensive, for two reasons: First,the wind strength is greater if we move slightlyaway from the coast. Second, a solution such asthe WindFloat can be entirely manufactured ata fabrication yard, so the cost of installing theturbine is relatively cheap when compared withthe cost of installing fixed turbines, becausethose types of turbine require the use of specif-ic vessels that are extremely expensive.

Do you think Portugal needs a projectlike this to take advantage of itscoastline?This project allows you to explore a resource

that otherwise would not be possible to explorein a meaningful way. If successful, it will allowexploration of this resource in Portugal and inother coastlines. EDP is now an internationalcompany and, therefore, has the opportunity todevelop a technology that allows it to explore thisresource before others. And that, I think, is oneof the company's goals. If it turns out to be, infact, a product of great industrial value, EDP willalso take some advantage of the industrial com-ponent.

who’s who? Professor at the Inst i tuto Superior Técnico (Higher Technical Inst i tute)


Any idea how much has been spenton this area of wave energy? Over the past 10 years, we will have spent

500 to 600 million euros across Europe. Butto give you an idea, we spend 1 billion euros peryear on the development of photovoltaic tech-nology. Today, all successes are built at the ex-pense of some failures, and people have tokeep that in perspective.

Is there an example of successin obtaining energy offshore?Take away oil and gas, and we cannot even

talk about it. In the non-fossil fuel arena, thewave and offshore wind farm technologies inPortugal are both potential industries. Else-where, there are other energy sources. Thereare tidal currents. There are gaps associatedwith the tides themselves, but in Europe theyare difficult to implement due to their envi-ronmental impact. There is the thermal gra-dient, which allows you to leverage power in

the equatorial tropics, using the temperaturedifference between the seabed and surface.There is the saline differential, a technologythat is being developed in Norway — if youhave a very voluminous river flowing into thesalty sea, this difference in salinity can be har-nessed to produce electricity. And then, in acompletely different area, we have the produc-tion of seaweed, among other things, for bio-fuels.

In how many years can we produceenergy from offshore wind resources? It will take a few decades. We are currently

testing a technology that is not unique. Thereare other companies exploring the sameconcept of floating turbines in different ways,but we need to show that this technology isreliable. This will require building a secondturbine group whose objective is not cost-ori-ented but is to be used to show that this tech-nology works. Then we must show that thereis a potential to reduce costs. It is necessary toconvince insurers and banks that the risk islimited. So when we're not talking about tech-nology, we get into the commercial aspect.

I think that in the next five years we could

be in a clearer situation as to which techno-logical path to follow: the one under develop-ment by EDP, or one being developed by acompetitor. Personally, I think this has greatpotential; however, we must then show that itis technically reliable, and later still, that it iscommercially feasible. In Portugal, dam con-struction began around 1940 and was complet-ed 30 years later. I think that if things go well,if no significant environmental impacts orconflicts of use occur, and if the cost of energycan be made attractive, it could take maybe 40-50 years to exhaust our resource.

What is the Wave Energy Center?It is a private, nonprofit organization. It

was established in 2003, and it is not just a re-search center. We have one, but our perspec-tive is somewhat different. Our goal is that off-shore renewable energy be a commercial re-ality. That one da, there is an industry that canproduce electric power from it. We have one,

but our perspective is somewhat different.Our goal is that offshore renewable energy be-come a commercial reality ― that one day,there be an industry that can produce elec-tric power from it. We are clearly intendingto create the prospect of commercial activityresulting from our efforts. With this mind-set,we must then identify the barriers before usand how they can be overcome or even re-moved. This compels us to work in almost allareas where we have the capacity. We havepeople working on more technological partsof the project; we have a group focusing on thenumerical modeling, which develops calcu-lation tools that allow us to study differentsystems of wave energy. We have a group thatdeals with the environmental aspects, and an-other that works on public policy, trying topromote legislation to facilitate all process-es. Yet another group works to disseminateinformation to society at large or to a specificsegment of the population. And, every yearwe have intern trainees here at the centerworking from three months to, in some cas-es, up to one or two years. And besides all this,we also want our work to contribute to the en-richment of the labor market.

o n 45

I would like to take my hat off to EDP for embarking on this project,which has great potential. It is to be congratulated for taking on thisinitiative. I wish them the best of luck. And, at the same time, I would liketo ask everyone involved that if things don’t go as well as expected, pleasenot to throw the first stone

WindFloatThe WindFloat is a simple and eco-nomical patented-design floatingstructure used to support offshorewind turbines. The innovative fea-tures of WindFloat, which mitigatethe motions induced by waves andwind generators / turbines, allowthe deployment of offshore windgenerators to places previouslyinaccessible, where the water ex-ceeds 15 meters (50 feet) in depthand the wind resources are greater.The system will be tested inAguçadoura, at an EDP park, andconnected to the network for a pe-riod of no less than 12 months. Itsgoal is to confirm the performanceintegration between the WindFloatand the turbine. Studies will also beundertaken regarding the commis-sioning / decommissioning, opera-tion and maintenance of thesestructures.

Professor at the Inst i tuto Superior Técnico (Higher Technical Inst i tute) who’s who?


46 o n

The training and awareness sessions on “Be-ing an EDP Leader,” which lasted throughMarch, involved all the leaders of the vari-

ous Group companies in Portugal. This initiative,which is directed at all positions of leadershipwithin the Group under the auspices of the EDPUniversity, seeks to strengthen the skills and lead-ership behaviors of employees with this profilewhile disseminating the “Leader's Guide"(seebox) more thoroughly.The three-hour training was based on an

interactive methodology. Participants were or-ganized into six-people teams, and each of the-se groups was accompanied by an "energizer"who was responsible for helping the team gothrough a set of exercises.

Group dynamicsIn the first phase of training, the participants

worked on a map with information on what it isto be a leader. We have included here some lea-dership examples and stories, along with the EDPleader skills and behaviors associated with them.

Once the map closed, each team was invitedto participate in a game of questions and answersrelated to HR processes. In the end, everyone re-ceived a certificate of participation and a CD withthe digital version of the “Leader's Guide."For “Being an EDP Leader,” 50 energizers

were prepared and about 700 employees weretrained in managerial tasks. It took a total of twosessions to prepare those energizers and morethan 30 sessions for the other oversight roles.

Exchange experiencesMaria Julieta Cuiça of EDP Production was

one of the energizers for this initiative: "I reallyenjoyed it, and I think it is a very interestinginitiative in terms of both the objective and thedynamics. It is very important to make peopleaware of the contents of the Leader's Guide, andI see the exchange of experiences that happenshere as a very important aspect of this exercise.For EDP Valor’s Luis Damião, this meeting

"was important for exchanging experiencesamong participants and visiting all the HR

processes in the 'Leader's Guide' — a goodworking tool.” The initiative began in Portugal,and at a later stage it will be shared and repli-cated in other locations where EDP exercisesits activities and has employees, with the neces-sary adaptations made in terms of language andcontent.

human capital“Leadership is a process ofinfluence that seeks tounleash the power andcapabilities of individualsand institutions" - António Mexia

“Being an EDP Leader”reinforces leadership skills

This document consolidates the mainhuman resources-related issues thathierarchies encounter in performingtheir activities while managing peopleand where the role of leader in each ofthe HR processes is reinforced.

Leader's Guide

RN_46_48_CAPITAL HUMANO:Layout 1 11/04/26 13:45

o n 47

human capital

For the third consecutive year, and withinthe program +Conciliation, EDP recogni-zed the children of employees who haveexcelled in academic performance andparticipation in civic affairs, be it volun-teer work, sports or cultural activities.EDP received a total of 107 applications forthe competition.According to Human Resources DirectorAntónio Pita de Abreu, the goal of thisaward is “to honor employees’s childrenwho early on display concern and interestin citizenship, interact well with othersaround them, and give a little of themsel-ves to society." Carlos Carvalho Samou-co (son of a retired EDP Distributionemployee) and Francisca Ribeiro Neves(daughter of an EDP Production emplo-yee) took first place in the ninth-gradegroup.In 2010, exceptionally and given theproximity in terms of score, EDP recog-nized three winners of the second eche-lon. Thus, Filipa Ribeiro Neves (daughterof an EDP Production employee) andFrederick Ladeira, Ana Dias and ReginaVieira de Castro (children of EDP Distri-

bution employees) were the top finishersin the 12th-grade category.The quality of the applications was alsoevident in the higher education group,in which three winners were chosen:Filipa Lopes Fernandes, Pedro MarinaBasil Sylvester and Sarah Smith (chil-dren of EDP Distribution, Productionand Valor employees), respectively, whotook home the first-place prize for thiscategory.Besides recognition for their performan-ce, the eight young people received giftcards valued between 500 and 1,500euros. The remaining candidates wereawarded participation prizes. These excellent students also scoredpoints for their participation in extracu-rricular activities in the fields of citizens-hip and solidarity, thus setting an exam-ple for their peers to follow. According toone of the winners, "It's good for otheryoung people, children of EDP employe-es, to see that it is worth paying atten-tion to the society in which we live andthat work can be recognized by a com-pany like EDP."

"Learn More About (LMA)," an in-itiative aimed at sharing knowled-ge that informs EDP employeesabout what is done best in eacharea, was held for the first timeoutside Portugal in collaborationwith the Group's various HumanResources departments. The the-me for this LMA was ‘Shopping inBrazil’ and included the presenceof EDP Brazil’s president, Pita deAbreu, and vice-presidents, Mi-guel Amaro and Miguel Setas.Two sessions were held, one atEDP Bandeirante (São Paulo) andthe other at EDP Escelsa (Vitória).Both counted a large number ofparticipants, with a very positivefinal assessment, which demons-trates a great acceptance on thepart of EDP Group's employees tothis type of session.Themes presented includedexamples of procurement proces-ses from EDP Brazil and an inter-active online trading (e-auction)event in which participants hadthe opportunity to make bids andcheck the progress of the event inreal time.Organized by EDP Brazil employe-es and directed by their mana-gers, Luis Gouveia and MárcioFranco, this event also had thepresence and support of the EDPGroup’s CPO, Luis Ferreira, andemployees from EDP Valor (JoãoMarques Almeida) and HC Ener-gía (Pablo García Menéndez).

"It's always very important to see that what we dohas value and is recognized," said one of the winnersof the Junior Citizenship Awards 2010.The awards ceremony took place Dec. 22 at theMuseum of Electricity.

Juniors distinguished for good performance

“Learn MoreAbout”transcendsfrontiers

+Conciliation

The themes presented in LMA

• Procurement in EDP Group• EDP Brazil’s PurchasesBalanced Scorecard

• Vendor Management• Maximizing Synergies• Evolution of the PurchaseModel

• Market Price Analysis• Market Trends• Internet Trading


48 o n

human capital

In order to impart to employees the impor-tance of reconciling the activities of theireveryday professional lives with theirpersonal lives, EDP Brazil’s Human CapitalManagement area organized, under thebanner of their Conciliation program, atraditional sports festival in their respectivelocalities. Employees from different areasin São Paulo, Espírito Santo, Mato Grosso

do Sul and Tocantins spent a day of physi-cal activity full of fun and sweat. The sportsfestival reinforces the Group's initiative topromote a collective culture of physicalactivity for employees. EDP's conciliationactions, such as the festival itself, werevrecently recognized by the energy sectorwith the 2010 Sodexo Professional LifeAward, in the Quality of Life category.

Sports Festival

A fter the awareness work-shops for the program’starget population, the em-

ployees submitted numerous ideasshowing a trend toward moreproposals for initiatives related totheir daily activities.Within the technical area and proj-ect management, for example, thethemes included "knowledge basedon logic / language SAP," "operationof thermal power plants," "operationof hydric projects," "safety andhealth at work: rules/securityprocedures related to the consign-ment of equipment," “integration ininternational projects," "planning ofcommunication actions," amongmany others. According to the participants, theseinitiatives should be aimed not onlyat the internal public, neweremployees, and/or employees withless experience and knowledge inthe specific areas, but also at theexternal universe, such as profes-sional schools, universities and serv-ice providers.Although in this edition of the pro-gram, and in the two phases total,approximately 300 employees havebeen involved, we recall that in the

Group's companies in Portugal, EDPhas almost 3,000 people with morethan 30 years of seniority and 50years of age who, over their longassociation with the company, haveaccumulated knowledge and expe-rience. With this program, we intendto give all our employees the oppor-tunity to find new ways of deliveringand enhancing that knowledge.The program "Valuing Experience"is part of EDP's strategy because itcontributes to the cultural changesdesired by the Group as it strength-ens execution capabilities and pro-motes greater efficiency throughoutthe organization.This initiative is based on the ideathat experience is of enormousvalue, provided that it serves as aspringboard to "new heights"andnot as a static comfort zone. In oth-er words, knowledge becomes all themore valuable the more it is shared.Share your knowledge!

Share our people’sknow-howThe pilot phase of the "Valuing Experience"program is coming to an end.This innovative project occurred in two phases,which resulted in many proposals for knowledge-sharing initiatives.

In late spring, thiscycle will close with ameeting to "CelebrateInitiatives"


edp is morethan energy,it’s life

www.edp.pt

EDP is part of people’s life. Over 20 million people in 12 countries make our energy their own,

at home, at work, at school, everywhere. This is why we continue to invest in development and technology,

in minimizing the environmental impact of our operations and, above all, in initiatives that preserve the

environment, that preserve life. For all this we can say that EDP is more than energy, it’s life.

RN_49_PUB GAS NATURAL:Layout 1 11/04/26 13:47

Our energy*

This past November, EDP Production promotedbiodiversity appreciation through projects with theEB 2 / 3 Sendim Community School, in themunicipality of Miranda do Douro, and theVisconde Vila Maior School, in Torre de Moncorvo.Both groups of project participants, consisting ofabout 40 students and teachers, wereaccompanied by EDP staff members VitorBatista, from DSA, and Anabela Peres, from DPI,as well as Anabela Amado, a biologist and projectcoordinator, who is mapping and characterizingthe region’s native plants.After a foray into the field to collect the respectiveseeds, the participants sent the specimens to alaboratory for germination, followed by a phase ofgrowth in greenhouses in central Setúbal. Thenthe seeds will be returned to their homeenvironment, where they will be planted andsponsored by the students who gathered them.

Biodiversity in schools

The "Water Resources - Management andValue" conference was held last October inPedrógão Grande, near the Cabril dam.The discussions sought to analyze the coun-try's efforts at sustainable water resourcemanagement. The newspaper Região deLeiria has launched an initiative to examinewhat is being done in the area in terms of cor-recting waste and destruction trajectories.The conference featured a panel of speakersconsisting of António Castro, EDP Productionmanager; Nuno Bravo, director of the ARHCInterior Water Resources Department;Pedro Teiga, a river and stream rehabilita-tion specialist; Amável Santos, managingdirector of Águas do Centro; and finally,António Martins, a representative of theTourism Center of Portugal.

Discussion on sustainablemanagement

5 0 o n

During vacation, there is time for everything: to play and to learn too. That ideaundoubtedly occurred to the children of HC employees who, during their lastschool holidays, participated in a series of sustainability workshops at the Mu-seum of La Eria, in Oviedo. This program is a replica of a similar initiative in Lis-bon, through which children are awakened to three fundamentals of sustainabi-lity and energy: the source of energy, energy efficiency and electrical safety. Crea-ted by the HC Energía Foundation, the initiative has involved more than 10,000children in Astúrias and the Basque Country. After school, from which the chil-

dren leave in a good mood, the program allows them to enter the various worlds ofenergy and sustainability and raise awareness of these issues among their families.

MORE SUSTAINABLE STUDENTS

RN_50_51_A NOSSA ENERGIA:Layout 1 11/04/27 12:44

Our energy

Portugal launched an expansion of theGeração Orchestra (Generation Orchestra)project for three years, with the support ofthe EDP Foundation, Ministry of Education,Calouste Gulbenkian Foundation, MusicSchool of the National Conservatory andmunicipal councils of the regions involved.In December this initiative came toMirandela, where the first 27 disadvantagedchildren from Trás-os-Montes receivedtheir musical instruments.The delivery of the stringed instruments (14violins, five violas, five cellos and threebasses) represented early Christmaspresents that, otherwise, hardly any ofthese young people might ever get.The expansion of this initiative is linked tothe hydropower investments made by EDP.Through a set of development initiatives andpromotions, the Group shares the benefitsof hydropower with the populations living inareas covered by new projects.

The Geração Orchestra plays music to Mirandela

o n 51

On Dec. 4, 2010, EDP hosted the latest celebra-tion of the Santa Barbara Feast at the site ofthe Picote Voltage Reinforcement project, inthe municipality of Miranda do Douro. The fe-ast, which included a mass and dinner, is heldevery year to celebrate St. Barbara's Day,which honors the patron saint of miners. It washeavily attended by workers, and everyonewas in good spirits. At the request of the Ba-rrocal do Douro Chapel community, it was de-cided that when the Voltage Reinforcementsworks are finished, St. Barbara's image will beshown ad aeternum in the chapel.

Party in Picote

The Foz Cobrão has a new outlook point, thePortas de Almourão Monument, which ope-ned on Dec. 14. Here you can enjoy the beautyof the surrounding landscape and the biodi-versity specific to the region. The monumentwas built by the Vila Velha de Ródão munici-pality with EDP’s support, and it will bringattention to the region of Portas de Almou-rão, located downstream from the futureAlvito dam. The ceremony, during which aplaque was unveiled symbolizing the work'scompletion, was followed by a tour of thelookout point by António Castro, director ofEDP Production; Sérgio Figueiredo, assistantdirector of the EDP Foundation; Maria do

Carmo Sequeira, mayor of Vila Velha doRódão; and Armindo Taborda, Castelo Bran-co's civil governor representative.

NEW LOOKOUT POINT IN FOZ DO COBRÃOMember of Parliament AgostinhoBranquinho, of the PCP party, visitedthe construction site of EDP's hydro-electric project in Baixo Sabor thispast November. He was accompa-nied by colleagues from his party onthis trip to Bragança and Torre deMoncorvo.Branquinho stressed the importanceto his work of seeing the construc-tion process firsthand and receivingexplanations on how it works fromEDP and other stakeholders (ACEBaixo Sabor, Consulgal and Tabique).

MP visitsBaixo Sabor

RN_50_51_A NOSSA ENERGIA:Layout 1 11/04/26 13:48

52 o n

sustentabilityResponsabil i ty for the environment

A s its global strategy, EDP in Brazilreinforces its growth with gains inthe environmental and manage-

ment certifications arena. In the field ofDistribution, EDP Bandeirante wentthrough the 2nd maintenance certificationaudit of substation operation and main-tenance activities for OHSA’s 1800:2007Standard, and the Vale do Sol ETD, ETDMaresias and EDT Dutra substationoperation and maintenance activities forthe ISO 1400:2004 Certification in Decem-

ber 2010, without any "non-compliances."The Generation area, Enerpeixe, whichoperates the Peixe Angical HydropowerProject in Tocantins State, took anotherstep in the quest for sustainability with theISO 9001 - Quality Management System -QMS Implementation and Certification.Enerpeixe was the first company in theTocantins River Basin to receive thesecertifications, which confirms the successof actions implemented to reduce risksand impacts of this project.

Both in Distribution and Generation areas EDP Brazil proved to be on track to reducethe risks and impacts of its projects

EDP in Brazil is well certified

RN_52_53_SUSTENTABILIDADE_v2:Layout 1 11/04/26 13:49

o n 53

sustentabil i ty

EDP fleet with more autonomyCombining innovation andsustainability, a project was designedto convert five Toyota Prius alreadyexisting at EDP Pools (Lisbon andCoimbra) into Plug-in vehicles. Theresult: the electrical autonomy almostdoubled. This project, led by EDPInnovation with support by EDP Valor,began in September 2010 andinvolved the installation of theHymotion L5-PCM system, which isnothing more than an additionalbattery. Although the vehicles remainunder the operating mode of a hybridvehicle, i.e., they keep the electricmotors and internal combustionengine automated management, thevehicle’s electrical autonomycomponent is higher. This lets you useit in a wider range of situations andfor longer periods of time, reducingfuel consumption and consequentCO2 emissions and (by about 2/3compared to the original Prius). Onceagain, EDP Group sets the exampleand takes another step forward in theconstant evolution of its responsibilityvis-a-vis our society in the pursuit ofexcellence in sustainability.Toyota seconded a hybrid vehicle toHC, which will be dedicated to thelong distance transportation of itsemployees

• Increase of the total distancestraveled in electric mode between50 and 65 km;

• Decrease of consumption(depending on driving / circulationconditions) by about 2.35L/100km;

• The total battery charging time isabout 3.5 hours;

• The battery pack weighs about85 kg.

HC Energía isalready travelingsustainably!

The president of Toyota Spain, KatsuhitoOhno, along with HC Energía’s CorporateGeneral Manager, Javier Sáenz de Jubera,signed the cooperation protocol betweenthe two companies to boost electric vehiclesales in Spain. Katsuhito Ohno announcedthat this is a plug-in hybrid vehicle, one ofthe first Toyota Prius in the world that canconnect to the network and that is alreadycirculating on the roads. Achieving the goaloutlined by the Government to push thesevehicles into the market depends on fourfactors: technological development ofbatteries, the vehicle cost, energy cost andthe development of the necessary infra-structure. The collaboration between Toy-ota and HC Energía allows end users to feelconfident that the four factors are ad-dressed by each agent according to theirspecialty: the development of batteries anda more cost-effective vehicle by Toyota onthe one hand, and the energy supply and

recharging infrastructures by HC Energía,on the other hand.HC Energía already possesses its own strat-egy. The aim is to install 2,700 private andpublic recharge points in Asturias by 2012.To this end, HC has launched a campaign onthis new model of sustainable transport andon how to recharge in four areas: single-family dwellings, parking lots and fleets,public roads and facilities.This past 25th of January, the Companyformalized a protocol that not only coveredthe temporary surrender of the vehicle, butalso supported its introduction into theSpanish market.

HC and Toyota partnersin the electric vehicle

Peter Sirgado, EDP Instituto’s Director, participated once again in the COP-16, the UNConference on Climate Change, held in Cancún, Mexico. Acting as EDP representative inthe Brazilian government mission, Sirgado met with business leaders and rulers ofdifferent countries to discuss climate change and increase the Copenhagen Agreement,which seeks to limit the temperature increase to no more than 2 º C above those record-ed in pre-industrial times.Today, the Instituto EDP manages a portfolio of around 100,000 tons of avoided CO2 peryear, which may represent revenue of about 2.9 billion Reais.

100TONSof CO2 avoided per year

Toyota seconded a hybridvehicle to HC, which will bededicated to the longdistance transportation of itsemployees

RN_52_53_SUSTENTABILIDADE_v2:Layout 1 11/04/26 13:49

5 4 o n

foundation*The Museum of Electricity is to be congratulated."Povo / People" was voted the best exhibition of 2010.Already on exhibit this year is another must-see show:"Opera" photos of the São Carlos National Theater, Lisbon

change to: The EDP Foundation "rendered ac-count to" society through a campaign dissemi-nated in the media from the end of Decemberthrough the beginning of January. "Lights" wasthe motto of this creative andinnovative work, which had as its main charac-ters a National Ballet Company dancer, a Youth

Symphony Orchestra cellist and a dr. OperationRed Nose Clown. The campaign highlighted thefoundation as a social, cultural, scientific and en-vironmental project that illuminated the lives of1.7 million people last year by promoting socialinclusion and giving visibility to the best practicesin Portugal.

The foundation illuminates

RN_54-55_FUNDACAO_v2:Layout 1 11/04/26 13:50

o n 5 5

edp foundation

Lookingfor Talent!Applications for the 2011EDP New Artists Prize wereaccepted until Feb. 25.A biennial initiative of theEDP Foundation, this eventrecognizes national talentsearly in their careers in thevisual arts.From among thecandidates, five to nine newartists will be chosen toreceive grants to developworks for an exhibition tobe held between June andSeptember 2011 at theMuseum of Electricity.During this period, anindependent jury, usuallycomposed of museumdirectors, art critics andother experts, will choosethe winner. The art ist willreceive a cash prize of10,500 euros, which is to beapplied to skilldevelopment or theimplementation of aproject.

Ending the year with energyEnd the year with great energy and pace. This isexactly what more than 3,000 participants did in theSão Silvestre road race, the long-distance runningcompetition that traditionally ends most athletes’year in Spain. The HC Energía Foundation sponsoredthis popular race, and T-shirts with the slogan "Longlive our energy" invaded the streets of the ancientcity of Oviedo, as did thousands of smiles.The route passed through the most emblematicareas of Oviedo, to finish, as is usual every year, atthe gothic cathedral in the city center. The noveltythis year was an electric HC Energía vehicle.Thus, the athletes and the organization moved bymeans of cleaner energy.

"Opera" at the Museum of ElectricityHow many faces, facets and secrets can one building hold? ThroughMarch , the Museum of Electricity hosted an exhibition of photographsby Augusto Alves da Silva, whose main subject was the exterior façadeof the São Carlos National Theater in Lisbon, a building classified as anational monument. The exhibition, titled "Opera" and produced bythe EDP Foundation, was the result of a partnership with the theater,which in 2006 asked several photographers to do a survey of the facili-ties of the building, which remains the only opera house in the country."Opera - The São Carlos National Theater inside and out” is the firststep in a series that, as of March 25, follows with a second photogra-phic exhibition — this time through the eyes of Paul Catrice, whosework will take us to the interior of the São Carlos.

“POVO / PEOPLE”THE BEST EXHIBITION OF 2010 The exhibition "Povo / People," with which the EDP Foundation joined the celebrations of the cente-nary of the Portuguese Republic, was voted the best show of the year by a panel of 40 experts invitedfrom the magazine "L+Arte." The exhibit's success also translated into numbers: Between June andSeptember 2010, "Povo/People" attracted 30,000 visitors to the Museum of Electricity.

Joana Bastos, "I'd rather bea cleaner."

RN_54-55_FUNDACAO_v2:Layout 1 11/04/27 12:47

photographic essay

56 o n

Annual Aboño Power Station Photography Award

Title: Tranquilidad (Tranquility) Author: Julio Cesar Areces

RN_56_63_ENSAIO FOTOGRAFIC_V2:Layout 1 11/04/26 13:51

y

o n 57

photographic essay

The Aboño power station awardswere inaugurated in 1992, and duringthese 18 years since, many colleagueshave participated in the annualcontest, sharing their passion for pho-tography. This show, published in the"Photographic Essay," showcasesmany of these artists’ savoir faire.Alberto Villar, Ramón Vina and JulioAreces are the three individualsresponsible for this project, which hasits own website at www.grupofotoc-

ta.com, where you can enjoy some ofthese works. The photo studio isequipped with all the necessarymeans to develop photographs, as wellas equipment for the development ofnew digital technologies. A calendarwith great pictures and various exhi-bitions constitutes the most visiblework of the group's members, who aregrateful for the cooperation of thosewho have supported them through-out all these years!

Objective: Photography


58 o n

photographic essay

Title: Despues de la tormenta (After the storm)Author: Óscar Álvarez Pérez


o n 59

photographic essay

Title: Caseria (Farmhouse)Author: Montse del Rio Rodriguez


photographic essay

60 o n

Titl

e: Luces (L

ights)

Aut

hor:

Marce Iglesias Leb

rato

Titl

e: Colores (C

olors)

Aut

hor:

Jua

n Quintan

a Alon

so


o n 61

photographic essay

Title: Noria (Ferris wheel)Author: Julio Cesar Areces Suárez


62 o n

photographic essay

Title: Se vende (For sale)Author: Óscar Álvarez Pérez

Titl

e: Atrap

ados en el cristal

(Trapp

ed in crystal OR Trapp

ed in th

e glass)

Aut

hor:

Carlos Lo

rite Martin

ez


photographic essay

o n 63

Titl

e: Por el arte ha

cia la posterida

d (For th

e art o

f the

past O

R Looking

back toward the art o

f the

past )

Aut

hor:

Jaine

Escob

ar Apa

ricio


6 4 o n

Which has been, until now, yourbiggest challenge?During all these years, I have had theopportunity to participate in severalbusiness initiatives, which wereimportant milestones in HC Energía’scurrent configuration and which havefulfilled me professionally. In thebusiness of distribution, I cannot forgetwhen we exceeded our traditionalterritory in Asturias. Supporting thelegal team which then led thisbusiness line (Santiago Bordiú, JoséManuel Vicente, Bautista Rodríguez,Jesús Fernández, ...) we were able toset up in the Valencian communityafter crossing an authentic "calvary" ofjudicial and administrative proceduresput up by frontal oppositionencountered at Iberdrola. It was withgreat satisfaction that we achievedunanimous support for our aspirationsfrom the regulatory bodies and thesubsequent confirmation by the courts.

And in the area of generation?In terms of generation, it was veryrewarding to give legal support to theso-called "Navarra Operation,” led byMarco Antuña with the invaluablecollaboration of Patricio Conesa, whichended with the start-up of the firstcombined cycle group in Castejón.With this project we had to promoteurban re-qualifications on the landwhere the facility was built, thusovercoming the initial restrictions ofwater usage imposed by theConfederación Hidrográfica del Ebro,maintaining the support we receivedfrom the city council and neutralizingthe opposition of some environmentalgroups ...

Until the regulation came …It was a real challenge to accept theoffer of Santiago Bordiú to cooperatewith him to implement amultidisciplinary format and impartsubstance to the current regulationscheme.HC’s regulation group is made up of agroup of young engineers with businessknowledge that enables them to aspireto positions of responsibility within the

Company, as well as by lawyers, myclosest colleagues who already aregenuine experts in Energy Law.A few years ago, the activities of ourCompany were given special attentionby the National Antitrust Commission,and thus they are also becomingexperts in competition law. In thisteam, it is only fair to mention Noelia,who with great efficiency manages filesand our very complex schedules.

How is your daily routine?Weekdays ensue smoothly, and thetime is divided mainly among trips,meetings and many hours of work.After work, the days are filled withreading, attending concerts or plays, ordrinking a few beers with my friends.

How do you reconcile your professionaland personal lives?At this stage of life, when our childrenare fairly grown (the oldest is living andworking in Germany, and the youngestis in second grade), my professionaland family lives are fairly easy toreconcile. In any case, I confess that itis my wife who, with a generosity forwhich I will never cease to be grateful,has been effectively addressing all thelogistical problems that have arisen inthe our family.

What is your life motto?After the years of experience that lifegives us, I prefer to get away from loftygoals and direct all my efforts to tryingto make life better for those around me.

in focus

I try to make lifebetter for thosearound me

JOAQUÍN SUÁREZ SARO, HC Energía’s Regulation Services Chief

RN_64_EM DESTAQUE:Layout 1 11/04/26 13:52

RN_65_PUB GAS NATURAL:Layout 1 11/04/26 13:54

European Week of SustainabilityThe month of April will be more sustainablein Europe. In Portugal, EDP will play animportant role in the various sustainabilityinitiatives that it will launch for the benefit ofthe general population.

08 04

6 6 o n

moveonPlanet EDP Portugal

Inauguration of ourheadquarters in OportoThe company’s new facilities opened itsdoors across from the Casa da Músicain Oporto’s center.

All EnergyEDP Renewables will be at thebiggest event in the U.K. dedicated torenewable energy, in Aberdeen,Scotland.

EDP WAY DayEmployees involved in EDP Way’s five projects(OPEX, Lean, Sou+EDP, EDPro and SharEDP)will meet with the objective of increasing theirintra-project knowledge, promoting synergiesand celebrating goals achieved.

EDP Day powered by EnergyINThe EDP Group will give a presentation of theactivities to be developed over the next yearto members of the PCTE (Energy TechnologyCompetitiveness Pole).

15 04

Arbor DayHC Energía celebrates Arbor Day ina very special way. More than 1,000people will be planting trees for abetter world

- 05

30 03

18 05 13 04

v

Port

Port

UKEsp Por

t

Port

RN_66_67_MOVE ON:Layout 1 11/04/26 13:54

o n 6 7

04

EDP´s Annual MeetingThis year, EDP's shareholders will meetin Porto, at the new EDP headquarters.The Group's board of directors willpresent several proposals.

Women's RaceThis year marks the sixth year of the"EDP - Lisbon, Women and Life"competition, a race exclusively forwomen. Sign up and run for your health.

Roman BlondeyEDP Renováveis inaugurates its wind farmin Roman Blondey, France.

Annual Shareholders MeetingThe shareholders meeting will be heldto approve different proposals, includingthose from the 2010 Annual Report.

LMA CommunicationThe subject of this year's “Learn MoreAbout” project is "communication." Theevent will pass through Mogi das Cruzes,Tocantins, São Paulo and Espírito Santo andtake place May 12, 13, 17 and 19.

Sou + EDP HR will initiate the third edition of theproject in Brazil. Employees will beinvited to participate in table and cardgames—a leisurely way to convey EDP'sculture.

04

050514 04

11 04 05

moveon Planet EDP ON Renew v

1215

27

Port

Fra

BraUSA

BraEsp

RN_66_67_MOVE ON:Layout 1 11/04/26 13:54

on renew comum_21

Documents

company rules

social networksedp

company intranet

use of social networks

social networking universe

edp group

guide employees

new world