Enel Green Power Investor Day Rome, April 22 2009

3,427 views
3,286 views

Published on

http://www.enel.it/azienda/it/investor_relations/presentazioni/doc/2009_02/EnelGreenPower_InvestorDay.pdf

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
3,427
On SlideShare
0
From Embeds
0
Number of Embeds
23
Actions
Shares
0
Downloads
109
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Enel Green Power Investor Day Rome, April 22 2009

  1. 1. Investor Day Rome - April 22nd, 2009
  2. 2. Investor Day Rome - April 22nd, 2009 • Opening remarks F. Conti • Enel Green Power: a leading player in renewable energies F. Starace • Focus on technologies: • Geothermal T. Volpe • Hydro V. Vagliasindi • Focus on technologies: • Wind M. Bezzeccheri • Solar Photovoltaic I. Wilhelm • Business Development Model R. Deambrogio • Financial highlights A. De Paoli • Conclusions F. Starace 1
  3. 3. Global installed capacity GW Wind installed capacity 383 Global installed capacity1 CAGR 10% 6,264 120 4,640 +35% 2008 2020 Fossil + Nuclear Solar installed capacity 72 1,150 +58% 1,820 Renewables 2008 2020 CAGR 18% 10 2008 2020 (1) IEA Reference scenario 2
  4. 4. Enel Group renewable energy production 2008 By Company By Technology Enel 19.6 TWh1 Other 0.6TWh Enel Green Wind Power 3.4 TWh 17.2 TWh2 Geothermal 5.2 TWh Endesa 42.4 TWh3 Hydro4 70 TWh Total Enel Group production Total Enel Group production 79.2 TWh4 79.2 TWh4 (1) It includes Slovenske Elektrarne large hydro (2) Pro-forma 2008 (3) Endesa data consolidated at 100% and net of the agreed transfers to Acciona (4) Net of pumped storage production 3
  5. 5. Investor Day Rome - April 22nd, 2009 • Opening remarks F. Conti • Enel Green Power: a leading player in renewable energies F. Starace • Focus on technologies: • Geothermal T. Volpe • Hydro V. Vagliasindi • Focus on technologies: • Wind M. Bezzeccheri • Solar Photovoltaic I. Wilhelm • Business Development Model R. Deambrogio • Financial highlights A. De Paoli • Conclusions F. Starace 4
  6. 6. Enel Green Power: a leading player in renewable energies Francesco Starace Investor Day Rome - April 22nd, 2009 5
  7. 7. Renewable energies: strong fundamentals in all geographies Estimates of renewables installed capacity, 2008-2020 Europe 1,030 GW max North America 620 GW min 390 GW TOTAL WORLD 550 GW max 3,020 GW min max 230 GW 330 GW 2008 2020 1,820 GW min 1,150 GW 2008 2020 2008 2020 Latin America Africa Asia 1,000 GW max 600 GW min 330 GW max 110 GW max 350 GW 150 GW 200 GW min 70 GW min 30 GW 2008 2020 2008 2020 2008 2020 Up to 1,900 GW of renewable capacity additions Up to 1,900 GW of renewable capacity additions Source: Enel estimates based/WEO 2008/GWEC 2008 (2008); WEO 2008 Reference Scenario (2020 min); Industry reports/McKinsey (2020 max) 6
  8. 8. Renewable energies: strong fundamentals in all technologies Global installed Global installed Technology base base Δ capacity CAGR Technological maturity 2008 2020 2% Very high (large hydro) Hydro 960 GW 1,280 GW +320 GW 8% Very high (small hydro) Biomass 50 GW 470 GW +420 GW 20% Very high Geothermal 10 GW 30 GW +20 GW 10% High High (on-shore) Wind 120 GW 800 GW +680 GW 17% Low (off-shore) Medium (c-SI) Solar Low (Thin Film) PV Solar 10 GW 440 GW +430 GW 37% Concentrated Low solar power TOTAL 1,150 GW 3,020 GW +1,870 GW 8% All technologies have potential for major capacity additions All technologies have potential for major capacity additions Source: Enel estimates based/WEO 2008/GWEC 2008 (2008); Industry reports/McKinsey (2020) 7
  9. 9. Enel Green Power: large renewable player well positioned in growth geographies 2008* EGP presence Enel Green Power 4,464 MW 17.2 TWh North America 748 MW 1.8 TWh France Romania, 12 MW Bulgaria 0.01 TWh Pipeline Iberia Latin America 399 MW 667 MW 0.8 TWh 3.5 TWh Greece Italy 91 MW 2,547 MW 0.2 TWh 10.9 TWh * Proforma data Note: Endesa capacity not included (1,026 MW: 799 MW in Iberia and 227 MW in Latin America) 8
  10. 10. Enel Green Power: active in all four key technologies Enel Green Power Technology Net installed capacity Net production Key areas 2008 2008 Italy – Iberia – Europe – North America – Hydro 2,498 MW 9.6 TWh Latin America Geothermal 678 MW 5.2 TWh Italy – North America Wind Italy – Iberia – Europe – North America – 1,237 MW 2.1 TWh Latin America Solar 4 MW n.m. n.m. Italy (retail and module manufacturing) Biomass 48 MW 0.3 TWh Iberia – North America and other TOTAL 4,464 MW 17.2 TWh 9
  11. 11. Company structure Tot. 2,564 Employees 1,566 • Group holding • Italian geo, hydro Enel Green Power SpA Enel Green Power SpA and wind Italy activities 116 Italian solar PV Enel Green Power Enel Green Power Enel.Si srl activities Enel.Si srl International BV International BV Italy Italy Holding of all international activities 68 285 479 50* North North Europe Europe America Latin America Latin America Spain Spain America * Equivalent to 50% of EUFER 10
  12. 12. Organizational model Renewable Energies Renewable Energies F. Starace Regulatory Regulatory Corporate Corporate Human Human Legal Affairs Legal Affairs Affairs Affairs Affairs Affairs Resources Resources F. Egidi F. R. Napolitano G. Fazio G. Stratta Administration Administration Business Business Procurement Procurement Finance and Finance and Internal Audit Internal Audit Engineering Engineering Development Development Control Control D. Marcozzi A. De Paoli S. Fiori R. Deambrogio V. Vagliasindi (a.i.) North North Latin Latin Italy Italy Italy Italy Europe Europe America America America America Operations Operations Development Development Spain Spain Area Area Area Area Area Area Area Area Area Area M. Bezzeccheri T. Volpe V. Cecchi V. Vagliasindi R. P. I. Wilhelm M. Bezzeccheri 11
  13. 13. Enel Green Power: four pillars to build upon Balanced technology mix Balanced technology mix Diversified geographical presence Diversified geographical presence Low dependence on incentive schemes Low dependence on incentive schemes Growth flexibility Growth flexibility 12
  14. 14. Balanced technology mix 2008* Production Load factor Incentivized production** EBITDA/MW (TWh) (%) (%) (k€) 17.2 0.3 69% 99% n.m. n.m. Other Geo 5.2 88% 34% 686 Hydro 9.6 44% 7% 201 Wind 2.1 22% 95% 191 2008 Avg. 46% Avg. 27% Avg. 278 High load factor and High load factor and low dependence on incentive schemes low dependence on incentive schemes * Proforma data ** Includes production from plants entitled to PTCs (North America) 13
  15. 15. Diversified geographical presence 20081 Regulatory framework Country Capacity Incentivized production2 Avg. remuneration3 (affecting future projects) Italy 2,547 MW 24% 99 €/MWh Green Certificates, Feed-in Feed- Feed-in, Market Feed- Spain 399 MW 100% 104 €/MWh +Premium Europe France 12 MW 100% Feed-in Feed- 89 €/MWh Greece 91 MW 100% Feed-in, Grants Feed- North America 748 MW 59% 56 €/MWh PTC, ITC Green Certificates, Latin America4 667 MW 0% 76 €/MWh Fiscal Incentives Total 4,464 MW 27% 90 €/MWh Diversified geographies Diversified geographies with low dependence on incentive schemes with low dependence on incentive schemes (1) Proforma data (2) Includes production from plants entitled to PTCs (North America) (3) Does not include effects of hedging policy (4) Includes Panama 14
  16. 16. Growth flexibility 2008* A solid pipeline… …with projects in four technologies (GW) (GW) 0.6 0.1 16.7 10.7 16.7 0.6 0.5 14.9 3.8 1.6 0.6 Under Under Highly Highly confident Likely Likely (50%) Potential Potential (20%) Total Total Wind Hydro Geo Solar Other Total construction construction (90%) confident (50%) (20%) (100%) (100%) (90%) 6 GW 6 GW of solid pipeline plus 10.7 GW of additional opportunities 6 GW of solid pipeline plus 10.7 GW of additional opportunities * Proforma data; Endesa not included (accounting for 12.4 GW in terms of pipeline) 15
  17. 17. Development model Staff Functions: ICT, Communication, Corporate, AFC, Regulatory, Legal, HR, Audit, Procurement EPC Business O&M Development Integration M&A Project identification Realization of approved Plant operation Screening projects Production optimization Valuation Integration of acquisitions Continuous improvement Permitting CapEx expenditure EBITDA generation Approval process CapEx allocation Industrial approach to value creation Industrial approach to value creation 16
  18. 18. Leveraging on competencies Hydro Geothermal Wind Solar PV 2.5 GW installed globally 0.7 GW installed globally 1.2 GW installed globally Strong position in the fast growing Italian market • Long lasting • Skills in development, • Large pipeline, split • Leading retail network in competencies exploration, engineering among geographies to Italy (Enel.si) • Skills ranging from and construction, O&M maximize optionality and return on investment • Competence Centre development to operation • Development of new (within R&D Division) in and maintenance projects in Latin America • Flexibility in turbines Italy • Project pipeline in Italy and North America procurement, taking advantage of industry • Upstream integration into and Latin America cell/module shake-up (overcapacity, cost reduction) manufacturing (in progress) Established Well positioned to take Fully integrated Unique position in the competencies in advantage of sector geothermal operator solar PV value chain development and O&M shake-up Leveraging competencies across all geographies Leveraging competencies across all geographies 17
  19. 19. Balanced growth on multiple technologies Enel Green Power technologies Financial attractiveness… …and long-term sustainability Wind Geo Hydro Geo EGP competitive >12% on-shore High Solar EGP return* Biomass Hydro PV advantage Solar Wind 10-12% PV Medium on-shore CSP CSP Wind Biomass Wind 5-10% off-shore off-shore Low Low Medium High Low Medium High Potential capacity additions Potential energy cost (2008-2020, GW) abatement (2008-2020, %) Maximizing returns and enhancing long-term sustainability Maximizing returns and enhancing long-term sustainability * Unlevered project IRR after taxes 18
  20. 20. Investor Day Rome - April 22nd, 2009 • Opening remarks F. Conti • Enel Green Power: a leading player in renewable energies F. Starace • Focus on technologies: • Geothermal T. Volpe • Hydro V. Vagliasindi • Focus on technologies: • Wind M. Bezzeccheri • Solar Photovoltaic I. Wilhelm • Business Development Model R. Deambrogio • Financial highlights A. De Paoli • Conclusions F. Starace 19
  21. 21. 20
  22. 22. Worldwide installed capacity GW 4% CAGR 19 13 10 8 2000 2008 2015 2020 Slow but constant growth due to Slow but constant growth due to scattered resources and long development time scattered resources and long development time Source: IEA; IGA; Worldwatch Institute; United Nations; Enel analysis on WEO 2008, industry reports. 21
  23. 23. Resource availability Geothermal Ring of Fire Geothermal activity 22
  24. 24. Geothermal systems Type of reservoir Application/technology Heat pumps Heat pumps 0 - 500 m Dry Shallow reservoir Heat exchange Heat exchange Hydrothermal Depth 500 – 5,000 m Electricity generation - Electricity generation - Systems: shallow and Conventional technologies Conventional technologies deep reservoir > 5,000 m Hot deep dry rock Engineered geothermal Engineered geothermal reservoir systems - Future perspectives systems - Future perspectives Application and technology driven by reservoir characteristics Application and technology driven by reservoir characteristics 23
  25. 25. Conventional technologies Dry steam Flash steam Binary cycle power plants power plants power plants Water with temperatures higher Water at lower temperatures Dry Steam. than ~180ºC. between ~ 110-180ºC. 195 237 Units Units 58 Global Installed capacity 2008 2.6 5.6 0.8 Capacity Capacity (GW) (GW) Highly cost competitive Most dominant in terms of Useful alongside geothermal but geographically limited global capacity heating, hot springs, etc Aver. size Aver. size ~45 ~29 ~3 (MW) (MW) 24
  26. 26. Technological evolution Medium term Long-term Past 5-10 outlook 5-10 outlook 10+ years years years Today • Dry steam • Flash steam Conventional Conventional Binary cycle technologies technologies Binary cycle Break-through Break-through technologies EGS technologies Long term break-trough is expected Long term break-trough is expected with Engineered Geothermal Systems with Engineered Geothermal Systems 25
  27. 27. Typical development process Surface Deep exploration Feasibility Field Surface Deep exploration Feasibility Field exploration (Drilling) study Development exploration (Drilling) study Development Duration Duration 4-8 10-14 10-14 24-36 (months) (months) • Geological, • Permitting and • Permitting and • Permitting and geochemical and procurement procurement procurement geophysical • Production and • Well pads and roads • Well pads and roads prospecting design/construction design/construction reinjection wells • Integration of geo- (10-15 new wells) • Well design/planning • Drilling scientific data and (2-3 additional wells) • Steam separation Description Description resource modelling • Drilling and gathering (min. 2 wells) • Well testing system installation • Power plant and transmission line construction Key Key • Resource • Drilling • Project design • Project competencies competencies characterization • Resource • Project management characterization integration and integration 26
  28. 28. The industry is mostly local, with only a few players operating supra-regionally Installed capacity* - 2008, GW Sites: 4 Capacity: 1,341 MW Sites: 5 Sites: 6 Capacity: Capacity: 362 MW Sites: 6 1,930 MW Capacity: 353 MW Sites: 3 Capacity: 390 MW Sites: 13 Capacity: 1,200 MW Sites: 3 Sites: 2 Capacity: Capacity: 678 MW 953 MW Sites: 12 Capacity: 430 MW * Installed capacity indicated represents highest figure between field and plant capacity Source: Company Web sites, press releases, team analysis 27
  29. 29. Value chain Corporate activity Leading operators in terms of installed capacity Within top players Project Project Plant Plant Plant Plant R&D R&D Development/ Development/ Exploration Exploration Drilling Drilling design/ design/ operation operation Finance Finance construction construction Enel Green Power Geysir (Iceland) Ormat (Israel/U.S.) PNOC EDC (Philippines) CFE (Mexico) Pertamina (Indonesia) Caithness Energy (U.S.) Calpine (U.S.) CalEnergy (U.S.) The industry is highly fragmented along the value chain The industry is highly fragmented along the value chain 28
  30. 30. Typical project economics for a new entrant Key drivers Example Italy Drivers Values 2008 2020 • CapEx1 • EUR 4.00 million/MW • EUR 3.50 million/MW Investment Investment • OpEx • EUR 50,000/ MW • EUR 45,000/ MW • Load factor • 8,000 hours • 8,200 hours2 Operating Operating • Useful life • 30 years • 30 years (1) Highly variable and subject to site characteristics (2) At same natural conditions, higher load factor achieved thanks to improved plant operations from better plant components (e.g., separator) 29
  31. 31. Remuneration scheme by country Average remuneration Country Type of remuneration scheme EUR/MWh Italy • Green certificates1 171 France • Feed-in tariff2 128 Greece • Feed-in tariff3 85 • None; under discussion Chile 704 introduction of certificates USA • Choice between 30% capex subsidy (ITC) or tax deductible credit (PTC) 675 Turkey • None 604 (1) Assuming 0.9 green certificates (in addition to wholesale price) (2) In addition, accelerated depreciation allowed (3) In addition, 30% CapEx subsidy awarded (4) Wholesale price (5) Assuming wholesale price of 50 EUR/MWh + tax deductible credit equivalent to 17 EUR/MWh 30
  32. 32. Enel Green Power installed base and pipeline 2008 EGP presence Total N. plants 33 678 MW North America* 5,218 GWh N. plants 1 Pipeline 535 MW 7 MW 37 GWh Pipeline 127 MW Latin America Pipeline 299 MW Italy N. plants 32 810 MW (671 MW net) 5,181 GWh Pipeline 110 MW * As of 15/04/2009, an additional 65 MW of gross geothermal capacity have become operational 31
  33. 33. Focus on Italy geo plants Enel Green Power Key competencies GWh 6000 Geothermal generation 5000 from 1900 to today 4000 3000 2000 1000 0 19 4 19 9 19 4 19 9 19 4 19 9 19 4 19 9 19 4 19 9 19 4 19 9 19 4 19 9 19 4 19 9 19 4 20 9 04 1 1 2 2 3 3 4 4 5 5 6 6 7 7 8 8 9 9 19 Continuous growth of production for over 100 years Continuous growth of production for over 100 years thanks to our field cultivation expertise thanks to our field cultivation expertise 32
  34. 34. Enel Green Power’s strategy on geothermal • Leverage our unique • Leverage our unique competencies competencies • Selectively develop capacity in • Selectively develop capacity in North America and Latin America North America and Latin America CapEx (m€) Installed capacity (MW) Energy production (TWh) Total 09-13 = 652 m€ +16% +12% 807 35% 678 5.8 5.2 65% Growth Maintenance 2008 2013 2008 2013 33
  35. 35. Investor Day Rome - April 22nd, 2009 • Opening remarks F. Conti • Enel Green Power: a leading player in renewable energies F. Starace • Focus on technologies: • Geothermal T. Volpe • Hydro V. Vagliasindi • Focus on technologies: • Wind M. Bezzeccheri • Solar Photovoltaic I. Wilhelm • Business Development Model R. Deambrogio • Financial highlights A. De Paoli • Conclusions F. Starace 34
  36. 36. Hydroelectric Vittorio Vagliasindi Investor Day Rome - April 22nd, 2009 35
  37. 37. Worldwide installed capacity GW 2% CAGR 1,240 1,069 962 783 2000 2008 2015 2020 The most important “traditional” renewable energy The most important “traditional” renewable energy Source: REN21, UDI database; McKinsey; Enel analysis on WEO 2008, industry reports. 36
  38. 38. Resources availability Average Annual Precipitation (Millimeters) 0-100 100-200 200-400 400-600 600-1,000 1,000-1,500 1,500-2,000 2,000-3,000 More than 3,000 Source: IIASA 37
  39. 39. Hydropower technology can be classified according to usage and water head Enel Green Power technologies Water usage Reservoir Run of river • Power plants • Medium/small with high plants, with High head capacity production 15-1,000 m and flexible linked to water Head of water production flow availability • Medium/small • Medium/small Low head hydropower plants with <15 m plants with big production usage of water limited to water flow flow availability 38
  40. 40. Typical development process Preliminary Preliminary Engineering Permitting Construction assessment Engineering Permitting Construction assessment Duration Duration 1-2 1 1-2 1-7 (years) (years) • Site investigation • Planning of civil, • Water diversion • Civil works (dams, electromechanical license penstock, building) • Hydrological and electrical and hydrological studies • Environmental works works impact evaluation; Description Description • Head • Grid connection • Machinery and measurements • Construction turbines assembly authorization • Electrical works and connections • Resource • Design • Relationship • Project evaluation optimization management management Key Key with Local competencies • Project competencies integration Authorities 39
  41. 41. Typical project economics for a new entrant Key drivers Example Italy Drivers Values 2008 2020 • CapEx • EUR 2.20 million/MW • EUR 2.20 million/MW Investment Investment • OpEx • EUR 28,000/MW • EUR 25,000/MW • Load factor • 3,500 hours • 3,500 hours Operating Operating • Useful life • 30 years • 30 years 40
  42. 42. Remuneration scheme by country Average remuneration Country Type of remuneration scheme EUR/MWh Italy • Green certificates 180 Spain • Feed-in tariff or wholesale + 89 premium1 Greece • Feed-in tariff2 80 France • Feed-in tariff3 78 Portugal • Feed-in tariff 76 (1) Operator can choose preferred remuneration scheme. A cap is defined by the regulation (2) In addition, 30% CapEx subsidy awarded (3) In addition, accelerated depreciation allowed 41
  43. 43. Enel Green Power installed base and pipeline 2008 EGP presence Total N. plants 376 2,498 MW North America 9,653 GWh N. plants 62 Pipeline 600 MW 314 MW 964 GWh Latin America Spain N. plants 31 N. plants 5 643 MW 26 MW Greece 3,425 GWh Italy 27 GWh N. plants 1 Pipeline 541 MW N. plants 277 5 MW 1,510 MW 2 GWh 5,235 GWh Pipeline 10 MW Pipeline 50 MW * Endesa hydro assets (221 MW) and hydro pipeline (0.6 GW) not included 42
  44. 44. Focus on Italy hydroelectric power plants Domodossola Bergamo Business Unit Business Unit 70 Plants 124 Plants 493 MW 587 MW 1,971 GWh 2,943 GWh Rusià Castelnuovo Napoli Business Unit Garfagnana 83 Plants 430 MW 1,631 GWh Pettorano 43
  45. 45. Italy: re-powering of hydroelectric plants 94 New turbines 92 90 88 +5 % 86 Old turbines 84 82 Efficiency 80 +12 % (%) 78 76 74 72 70 68 66 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Power (MW) More energy with same water More energy with same water 44
  46. 46. Enel Green Power’s strategy on hydroelectric • Leverage EGP’s unique • Leverage EGP’s unique long-standing competencies long-standing competencies • Selectively develop capacity in • Selectively develop capacity in North America and Latin America North America and Latin America CapEx (m€) Installed capacity (MW) Energy production (TWh) Total 09-13 = 520 m€ +5% +3% 2,497 2,627 9.7 9.9 38% 62% Growth Maintenance 2008 2013 2008 2013 45
  47. 47. Investor Day Rome - April 22nd, 2009 • Opening remarks F. Conti • Enel Green Power: a leading player in renewable energies F. Starace • Focus on technologies: • Geothermal T. Volpe • Hydro V. Vagliasindi • Coffee break • Focus on technologies: • Wind M. Bezzeccheri • Solar Photovoltaic I. Wilhelm • Business Development Model R. Deambrogio • Financial highlights A. De Paoli • Conclusions F. Starace • Lunch (Q&A) 46
  48. 48. Wind Maurizio Bezzeccheri Investor Day Rome - April 22nd, 2009
  49. 49. Worldwide installed capacity GW 383 % 10 R C AG 196 121 56 2000 2008 2015 2020 Very strong growth expected worldwide Very strong growth expected worldwide Source: Enel analysis on WEO 2008, GWEC 2008, industry reports. 48
  50. 50. Resource availability Wind (Intensity) Wind speed over land 3 6 9 m/s 49
  51. 51. Technology overview Average turbine price*, m€/MW •• CapEx reduction has been CapEx reduction has been starting in early 80s starting in early 80s •• Debottlenecking of Debottlenecking of •• Technology evolution led to Technology evolution led to supply chain supply chain decrease in CapEx decrease in CapEx 3.2 •• Supply bottleneck Supply bottleneck •• Rise in commodities prices Rise in commodities prices -6% p.a. 1.8 +20% p.a. -7% -13% 1.4 1.2 1.3 1.3 1.2 1.0 0.9 0.8 1981 1990 1997 1999 2003 2004 2005 2006 2007 2008 Long-term technology evolution resulting Long-term technology evolution resulting in improved wind economics in improved wind economics * BoP (Balance of Plant) not included 50
  52. 52. Value chain dynamics Driving factors Description Stakeholder affected • New manufacturing capacity (key Easing out Easing out • OEMs: reduced margins components) of supply of supply • Internalization of components • Operators: increased negotiation constraints constraints manufacturing by OEMs power, improved project • Better planning/ management along the economics value chain • Decreased availability of attractive • Small developers: most projects More More financing are being postponed or difficult difficult • Difficulties in finding financial partners monetized financing financing in countries with tax-based incentives • Large operators: interesting (e.g. USA) opportunities for pipeline acquisition Learning • Wind-farm operators are moving • Industrial operators: value Learning effects in from contracted O&M to in-house creation thorough excellence in effects in O&M O&M O&M O&M “Power shift” along the value chain “Power shift” along the value chain will benefit large, integrated operators will benefit large, integrated operators 51
  53. 53. Typical development process Development Development Permitting Permitting Construction Construction Duration Duration 1-2 2-3 0.5 - 1 (years) (years) • Resource • Authorization • Integration, evaluation, by all relevant program Description Description land rights authorities management • Local presence • Robust technical • Well tuned Key Key & partnership support, project competencies competencies with local socioeconomic & management & players political supervision knowledge Full lifecycle management of project Full lifecycle management of project is key for success is key for success 52
  54. 54. Future landscape Key elements Key evidence • Wholesale grid parity already reached in some countries Wholesale grid Wholesale grid (e.g. Portugal, UK, Ireland) parity widely parity widely • Wholesale grid parity reached in the very short-term (by 2012) in reached reached several other countries (e.g. Morocco, Spain) • Europe expected to retain largest share of total installed capacity by 2020 (~40%), together with USA New geographies New geographies emerging emerging • New geographies emerging thanks to significant growth rate (e.g. China, India and Brazil) • Growth in mature markets (e.g. Germany) driven by Repowering of repowering of existing infrastructure Repowering of old assets old assets 53
  55. 55. Typical project economics for a new entrant Key drivers Example Italy Drivers Values 2008 2020 • CapEx • EUR 1.60 million/MW • EUR 0.80 million/MW Investment Investment • OpEx • EUR 30,600/MW • EUR 19,800/MW • Load factor • 2,000 hours • 2,480 hours1 Operating Operating • Useful life • 20 years • 20 years (1) At same natural conditions, higher load factor achieved due to more efficient turbines 54
  56. 56. Remuneration scheme by country Average remuneration Country Type of remuneration scheme EUR/MWh Italy • Green certificates 180 Romania • Green certificates (1.5x for wind) 125 • Feed-in tariff or wholesale + Spain 88 premium1 France • Feed-in tariff2 85 Greece • Feed-in tariff3 80 Portugal • Feed-in tariff 78 USA • Choice between 30% CapEx subsidy 4 67 (ITC) or tax deductible credit (PTC) (1) Operator can choose preferred remuneration scheme. A cap is defined by the regulation (2) In addition, accelerated depreciation allowed (3) In addition, 30% CapEx subsidy awarded (4) Assuming wholesale price of 50 EUR/MWh + tax deductible credit equivalent to 17 EUR/MWh 55
  57. 57. Enel Green Power installed base and pipeline 2008 EGP presence Total* N. plants 78 1,237 MW North America 2,061 GWh N. plants 7 Pipeline 14,897 MW 406 MW 696 GWh Pipeline 5,142 MW France N. plants 3 Romania and 12 MW Bulgaria 7 GWh Pipeline 521 MW Pipeline 508 MW Latin America N. plants 1 Spain 24 MW N. plants 30 Greece 47 GWh 346 MW Italy N. plants 8 Pipeline 1,930 MW 624 GWh N. plants 29 87 MW Pipeline 2,260 MW 362 MW 219 GWh 467 GWh Pipeline 1,165 MW Pipeline 3,371 MW * Endesa wind assets (731 MW) and wind pipeline (11.3 GW) not included 56
  58. 58. Enel Green Power positioning along the value chain Development Development Permitting Permitting Construction Construction O&M O&M • Large, high • Focused on • Leverage on Enel • Maximization of quality and building public skills and plant availability diversified acceptance experience • Sustainable cost pipeline • Proactive • Lean and reduction • Local presence cooperation effective • Implementation of to catch best with local organization data management opportunity authorities • Standardized systems improve • International • Capability to processes and effectiveness network manage a wide reports to meet • High-quality O&M pipeline budget and standards schedules Strongly positioned in O&M, Strongly positioned in O&M, key to maximizing value of wind investments key to maximizing value of wind investments 57
  59. 59. Centre of expertise to leverage on technological competencies SCADA (Supervisory Control And Data Acquisition) • • Real time and historical data collection Real time and historical data collection • • Supervision and telecontrol Supervision and telecontrol • • KPI tracking KPI tracking • Fast response to grid events • Fast response to grid events TCP/IP METERING (GPRS modem) • Hourly updated • Hourly updated • Reliability and fast communication. • Reliability and fast communication. • Improvement of short time forecasting models • Improvement of short time forecasting models TCP/IP METERING (GPRS modem) • • Data exchanged with different Market/Transport Operators Data exchanged with different Market/Transport Operators • • Systems upgraded to new standards Systems upgraded to new standards • • Centralized database Centralized database TCP/IP METERING (GPRS modem) • Meteorological models • Meteorological models • Short time real-data-based models • Short time real-data-based models 58
  60. 60. Enel Green Power’s strategy on wind • Develop growth options in core markets • Develop growth options in core markets • Maintain a diversified geographical presence • Maintain a diversified geographical presence • Mixed development model • Mixed development model • Capture opportunities in equipment procurement • Capture opportunities in equipment procurement CapEx (m€) Installed capacity (MW) Energy production (TWh) Total 09-13 = 2,194 m€ +124% +213% 1% 2,773 6.4 1,237 99% 2.1 Growth Maintenance 2008 2013 2008 2013 59
  61. 61. Investor Day Rome - April 22nd, 2009 • Opening remarks F. Conti • Enel Green Power: a leading player in renewable energies F. Starace • Focus on technologies: • Geothermal T. Volpe • Hydro V. Vagliasindi • Focus on technologies: • Wind M. Bezzeccheri • Solar Photovoltaic I. Wilhelm • Business Development Model R. Deambrogio • Financial highlights A. De Paoli • Conclusions F. Starace 60
  62. 62. Solar Photovoltaic Ingmar Wilhelm Investor Day Rome - April 22nd, 2009
  63. 63. The Market: solar energy world-wide Irradiation W/m2 • All major renewable energy sources such as hydro, wind, and obviously 350 photovoltaic power ultimately come 300 from the sun 250 • Total solar energy absorbed by the Earth 200 is 3,850,000 EJ (exajoules) per year 150 • Total Wind energy on Earth is 2,250 EJ 100 and total Biomass energy is 3,000 EJ per year 50 0 • Total Human Primary Energy use is some 500 EJ per year Source: NASA 2008 (of which electricity some 12%) The map shows average irradiation on Earth. The black spots represent the space necessary to replace the world’s primary energy supply with solar electricity. 18 TWe equals 568 EJ. 62
  64. 64. Worldwide installed Photovoltaic Capacity Cumulative Power in GW 210 x15 85 x15 15 1 2000 2008 2015 2020 • Capacity growth rates of photovoltaic power above 15% per year • Capacity growth rates of photovoltaic power above 15% per year • In 2008 worldwide capacity increased by over 5,000 MW • In 2008 worldwide capacity increased by over 5,000 MW Source: Enel analysis on WEO 2008, industry reports 63
  65. 65. The Market: Europe 75 Irradiation x8 1,600-1,750 kWh/m2* year 1,400-1,600 45 1,200-1,400 1,050-1,200 <1,050 x45 9 0.2 2000 2008 2015 2020 • Europe’s installed photovoltaic capacity today is over 9,000 MW • Europe’s installed photovoltaic capacity today is over 9,000 MW • Very high irradiation levels around the Mediterranean basin • Very high irradiation levels around the Mediterranean basin Source: EPIA Policy driven Scenario, Enel analysis 64
  66. 66. The Market: Italy Irradiation 1,000 18 x 45 1,200 1,400 8 x 200 1,600 0.4 1,800 0.002 2000 2008 2015 2020 Global horizontal irradiation kWh/m2 * year • In 2008 over 340 MW of new capacity: Italy is among global TOP 5 • In 2008 over 340 MW of new capacity: Italy is among global TOP 5 • High irradiation levels in the Southern parts of Italy • High irradiation levels in the Southern parts of Italy 65
  67. 67. Medium/long term technology evolution Short term Medium term Long term 1-5 years 5-10 years 10+ years Wave 1 – Crystal Silicon (c-Si) Solar PV Solar PV Wave 2b – Thin film: Wave 2a – Thin film: Copper, Indium, Gallium, amorphous Silicon (a-Si) Selenide (CIGS) Cadmium Telluride (CdTe) nano-technologies Solar Solar Wave 3 – Solar thermal thermal thermal • a-Si thin film evolves as a new competitive large-scale technology • a-Si thin film evolves as a new competitive large-scale technology • Still large potential for technological evolution • Still large potential for technological evolution 66
  68. 68. Key driver for market growth: grid parity Average power price for households c-Si cumulative installed EUR/KWh capacity in 2020 in GW 0.70 0.65 0.60 0.55 Cost to generate power Cost to generate power 0.50 with solar system @ ca. with solar system @ ca. EUR4.70/Wp EUR4.70/Wp 0.45 0.40 0.35 California Tier 5 2008 0.30 Germany 0.25 Japan Italy 0.20 France Portugal US Spain Australia 0.15 North East 2015 California other 0.10 South Korea 2020 Greece 0.05 China Southwest US India 0 Annual solar 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 energy hours • Grid parity to be reached in several countries within the next 5 years • Grid parity to be reached in several countries within the next 5 years • Italy will be the first “grid parity” market in Europe • Italy will be the first “grid parity” market in Europe 67
  69. 69. Enel Green Power positioning along the value chain Manufacturing Distribution Development Construction O&M Manufacturing Distribution Development Construction O&M •Building & •Supplying of •Land Scouting •Final design •Plant visual Production photovoltaic inspection Major •Due diligence •Modules, inverters, Major Equipment* components BOS integration •PV testing content content •Conceptual design •Plant certification •PV field measurement Long Term EGP EGP Partnership Enel.si EGP IPP Projects EGP / Enel.si •Flexible •Procurement •Dedicated •Specialized •Combined contracts development and engineering team: O&M with •Franchising engineering team Construction Project existing •Set of asset- network with over management renewables based and 450 entrepreneurs Activity commercial •Network of Activity •Over 50 MW of PV long-term PV installers installed in past supply options throughout three years under study Italy (*) Silicon Crystalline Production Plant 68
  70. 70. Typical development process: 9-12 months Due Project Project Permitting Land Scouting Due Project Project Permitting Land Scouting diligence Finance Engineering Authorization diligence Finance Engineering Authorization Duration 1 1 1-2 1 6-9 Duration (months) (months) • Solar energy • Feasibility study on • Project • Approval • Administrative potential production potential presentation design procedures and costs (material, (building • Cost • Discussion with BOS, grid, etc.) statement, grid Description (purchase/ banks Description connection, rental) • Conceptual design leases, etc.) • Data base local • Valuation • Network with • Project • Regulatory regulations • Due diligence credit institutes Management expertise • Relationship capabilities and design Key • Permitting & Key capabilities • Screening • Business authorization competencies competencies capabilities • Design tools modeling (CAD) 69
  71. 71. Typical project economics for a new entrant Key drivers Example Italy Drivers Values 2008 2020 • CapEx1 • EUR 4.30 million/MW • EUR 1.60 million/MW Investment Investment • OpEx2 • EUR 40,000/MW • EUR 35,000/MW • Load factor • 1,250 hours • 1,250 hours Operating Operating • Useful life • 20 years • 20 years • Productivity • 0.5%/year • 0.5%/year decay (1) Average of thin film technologies. Efficiency around 9%. (2) 10 MW power plant (insurance not included) 70

×