Iberdrola, who we are? Assets worth: €93Bn Installed capacity nearly 45 GW Hydro 10 GW CCGT 13 GW Renewable 12 GW Thermal 5GW Nuclear 3 GW Cogen 1 GW Leading wind producer worldwide: 12.5 GW installed and a pipeline over 61GW Over 27 million customers Electricity 24 MM Gas 3 MM 32.000 employees in more than 40 countries worldwide R&D and innovation effort ~ 150 M€ / year
Iberdrola, who we are?... In the US today + + (RG&E, NYSEG, CMP) Installed capacity (MW) 5,598 Wind installed capacity (MW) 4,634 Wind projects pipeline (MW) 25,000 Electricity customers (M) 2.5 Gas customers (M) 1 Thermal Gas Storage Hydro Present in 23 U.S. States and Canada Wind Distribution
Iberdrola, who we are? Some History...More than a 100 Years ofExperience... Iberdrola started off hydro power plants… And hydro is still one important activity for RG&E… + Sustainable energy is in our DNA as a company!
Innovation, what are we talking about?Thousands of definitions... It´s not always about the product/service, but it´s always about the value and the sustainable results!
Innovation, in a commodity business? Iberdrola offers a mature product, which is electricity / gas… kWh is a commodity! The difference is not in the product • Image We are green, sustainable,… • Business Model Renewables, combined cycles,… • Vertical Integration Our own engineering, gas storage,… • Added Services Quality, maintenance,… Efficiency is the driver of innovation
Innovation, how we implement it? (I) Governing Model of Iberdrola Decentralized Resources are limited Open
Innovation, how we implement it? (II) Governing Model of Iberdrola Decentralized R&D&Innovation Projects are developed within the business units, close to business!
Innovation, how we implement it? (III)Resources are limited Open IBERDROLA is aware that this is an effort that we cannot undertake alone. Therefore, we have an open innovation model where it is essential that we collaborate with: Companies, universities, technological centres, industrial organizations and public institutions through programmes and agreements. There are agreements with more than 70 universities in Spain, Europe and the US to collaborate in research activities. Some initiatives that involve collaboration with research departments and universities: In the US: EPRI (Electric Power Research Institute), GTI (Gas Technology Institute),... European Industrial Initiatives (EEI), EIT_KIC Innoenergy CIGRE Iberdrola´s Innovation Network
Major ongoing R&D and Innovation Efforts (I) Networks Networks (O&M) Quality of service (QoS) SmartGrids Power generation and Retail Electric Vehicle Clean technologies Energy efficiency
Major ongoing R&D and Innovation Efforts (II) Renewables Windpower (O&M) Offshore New technologies
What about the long term?New Ventures within Iberdrola´s Innovation FrameworkWhy Iberdrola invests in disruptive technology?As we have seen… Innovating in a “commodity” involves • Improving efficiency on the existing processes • Mostly: Incremental and evolutionary innovationAs we have seen… Best approach: Open & De-centralized Innovation Model • Innovation within the business units, close to business • So… Why investing in disruptive technology? Technology to generate new sustainable core business 12
New Ventures Program: PERSEOProgram Description Goal Minority participations in early stage companies Program Size 6-9 M€ / year Geographical Areas Worldwide; special focus on IBE´s priority markets Deal Size 500 k€ to 3 M€ per deal (IBE´s first round) Technology Focus Disruptive Energy Technology (see detail on next slide) 13
New Ventures Program: PERSEOInvestment Focus: Technology Areas• Renewable Energy: Solar (PV & thermal), Wind (i.e. offshore), Marine (tidal & wave), Biomass, ...• Energy Efficiency: Energy Management Systems, Green Mobility, …• Other energy related technologies: Emissions Abatement, Energy Storage, … 14
New Ventures Program: PERSEOProcess (I): Engaging with the business units PERSEO Committee: formed by Directors from IBE´s business units Internal & External EvaluationManagement: dedicated team + key input from business unitsInvolving the business units is key for…• Iberdrola: Learning (Strategic and Technological Returns)• Portfolio Companies: Business opportunities; increasing their value 15
New Ventures Program: PERSEOProcess (II) – Deal-flow: Perseo AwardThe PERSEO Award, is an initiative designed to promote innovativetechnological applications in the clean energy sector, through the support forprojects carried out in this field. I Perseo Award (2010) • CCS and Clean Combustion • Energy Storage II Perseo Award (2011) • New Products for Energy Efficiency • Innovative Biomass Technologies Start-ups from the US 16
New Ventures Program: PERSEOCompany Portfolio Renewable Energy Prometeo Emissions Abatement 17
New Ventures Program: PERSEOSummary …We use venture capital as a tool to ensure the sustainability of our future core investments by building the technology value chain and positioning Iberdrola on firstname.lastname@example.org 18
Innovation in Utilities?Summary Innovation is not always about the products and services! Model for innovating in a utility business: de-centralized and open. Goal: improving your efficiency! Even if you do great… long term solutions can disrupt your business… Gain first hand access to them to ensure the sustainability of your business! 19
R&D & Innovation Figures & Benchmark 136 MM € of Investment in 2011. 450 MM€ in 2011-2013 486 Gasto en I+D - 2010 (M€) 222 170 149 130 86 61 EDF GDF-Suez Vattenfall RWE Iberdrola Enel E-on According to EU 1000 R&D Scoreboard - 1st Spanish Utility - 4th EU Utility - 7th Spanish Company - 220th EU Company
Knowledge Management KM MISSION IN IBERDROLA Identify Knowledge Retain Knowledge Make Knowledge available to everybody Create a Knowledge culture Create more value from the company’s IC Standardize process for knowledge capture and spread
Communication and Indexes Indexes• The world’s most innovative utility (2009), according to Boston Consulting Group• Spanish utility that invests the most in the electricity sector according to the European Commission’s R&D Scoreboard.• Contribution to other rankings: DJSI, MERCO, REDTRACK Awards• Edison, EPRI Technology Transfer Award, Prince Felipe Award for Quality and Industrial Innovation, Award by the British institute of Engineering Technology (IET),… Communication• Communicaton (tv, radio, internet, social networks)• Innovation report 2009-10• Articles and press releases
Iberdrola´s Innovation Network• Objective: – Establish a well defined structure for implementing open innovation – Share Iberdrola’s strategy with partners – Create a channel for idea management – Establish strong R&D groups for project development – Improve technology watch – Promote actions for joint knowledge management BRING EXTERNAL KNOWLEDGE TO IBERDROLA
DISCLAIMERThis document, which is property to Iberdrola, S.A., has been prepared, solely for informational purposes and cannot be divulged or made public orused by any other natural or legal person for any other purpose without the express and written consent of Iberdrola, S.A.The information, opinions and statements contained in this document have not been verified by independent third parties; therefore no express orimplied warranty is made as to the impartiality, accuracy, completeness or correctness of the information or the opinions and statements expressedherein.Neither Iberdrola, S.A., nor its subsidiaries or other companies of the Iberdrola Group or companies in which Iberdrola, S.A. holds an interest, shallassume liability of any kind, whether for negligence or any other reason, for any damage or loss arising from any use of this document or itscontents.Neither this document nor any part of it constitutes a contract, nor may it be used for incorporation into or interpretation of any contract or othertype of agreement.IMPORTANT INFORMATIONThis document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of the SpanishSecurities Market Act (Act 24/1988, of 28 July), Royal Decree Act 5/2005, of 11 March, and/or Royal Decree 1310/2005, of 4 November, and itsimplementing regulations.Moreover, this document does not constitute an offer of purchase, sale or exchange, or a request for an offer of purchase, sale or exchange ofsecurities, or a request for any vote or approval in any other jurisdiction.The shares of Iberdrola, S.A. may not be offered or sold in the United States of America, unless such an offer or sale is effected pursuant to aneffective registration statement under the Securities Act or pursuant to a valid exemption from registration.FORWARD-LOOKING STATEMENTSThis communication contains forward-looking information and statements about Iberdrola, S.A. and otherwise, including financial projections andestimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, capitalexpenditures, synergies, products and services, and statements regarding future performance. These forward-looking statements do not constitutehistorical facts and can generally be identified by the use of terms such as “expects,” “anticipates”, “believes”, “plans”, “estimates” and similarexpressions.Although Iberdrola, S.A. believes that the expectations reflected in such forward-looking statements are reasonable, investors and shareholders inIberdrola, S.A. are cautioned that forward-looking information and statements are subject to various risks and uncertainties, many of which aredifficult to predict and generally beyond the control of Iberdrola, S.A., that could cause actual results and developments to differ materially fromthose expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include thosediscussed or identified in the public documents sent by Iberdrola, S.A. to the Comisión Nacional del Mercado de Valores (the Spanish securitiesregulator, or the CNMV for its initials in Spanish).The forward-looking statements are no guarantee whatsoever of future results and have not been reviewed by the auditors of Iberdrola, S.A. You arecautioned not to place undue reliance on the forward-looking statements, which speak only as of the date they were made. All subsequent oral orwritten forward-looking statements attributable to Iberdrola, S.A. or any of its members, directors, officers, employees or any persons acting on itsbehalf are expressly qualified in their entirety by the cautionary statement above. All forward-looking statements included herein are based oninformation available to Iberdrola, S.A. on the date hereof. Except as required by applicable law, Iberdrola, S.A. does not undertake any obligation topublicly update or revise any forward-looking statements, even in the event of new information being published or new events occurring.
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