1. A NEW ENERGY ERA Renewable Energy and Energy Efficiency in Portugal A SUCCESS STORY Manuel Pinho

2. THE GROWTH OF CHINA AND INDIA (>1/3 OF THE WORLD POPULATION) CREATED A NEW ENERGY/CLIMATE ERA “THE TRAJECTORY OF A 45% GROWTH IN EMISSIONS PUTS THE WORLD ON TRACK FOR A GLOBAL TEMPERATURE INCREASE OF AROUND 6 DEGREES” NOBUO TANAKA A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

3. A GLOBAL CHALENGE THAT DEMANDS A GLOBAL SOLUTION “THE PROBLEM OF GLOBAL WARMING CANNOT BE ATTACKED WITHOUT THE PARTICIPATION OF ALL COUNTRIES ” STIGLITZ AND STERN ENERGY – RELATED CO2 EMISSIONS BY REGION % A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

4. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal MAJOR LANDMARKS Kyoto Protocol 1997, entered into force in 2005 Stern Report 2005 20-20-20 iniciative 2007 Peace Nobel Prize for Al Gore and the IPCC 2007 SET Plan 2008 President Obama inauguration 2009 Copenhagen Summit 2009

5. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal Denmark, Germany, Spain and Portugal have taken bold initiatives and are frontrunners

6. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal WHY PORTUGAL ? 1. Vision: ERA, technological change 2. Very high dependence on fossil fuels (a household of 4 imports more 1,400 € of fossil fuels in 2008 than in 2000) 3. Need to promote private investment (new projects amount to ~10% of GDP) 4. Constraints of EU energy policy: internal market, SET Plan, 20-20-20 5. Extremely complex situation inherited from previous governments Energy bill, % of GDP GDP %

7. AN OPORTUNITY FOR LEADERSHIP “THE NEW TECHNOLOGIES AND INVESTMENT OPORTUNITIES OF LOW CARBON GROWTH WILL BE THE MAIN DRIVERS OF SUSTAINABLE GROWTH IN THE COMING FEW DECADES” NICHOLAS STERN SET PLAN VISION The creation of a new energy /environment model represents an opportunity for frontrunners IEA SCENARIOS: - Reduce CO2 emissions by 50% - 40 € trillion investment “ By pushing renewable energy, Portugal became a MODEL of how to stimulate the economy and fight the climate change”. “ The Economist”,30 April 2009 A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

8. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal SET PLAN VISION European Strategic Technological Plan for Energy ERA= E fficiency, R enewable sources, A dvanced thermal generation 8 PRINCIPLES: 1.Time is of the essence - Cost of inaction - Frontrunner advantage 2. Market based approach 3. All sectors must participate (1/3, 1/3, 1/3) - Electricity production - Energy efficiency - Transportation 4. No silver bullet 5. No suit fits all, identify appropriate wedges 6. Centralized v. decentralized architecture 7.Investment in R&D 8. Focus on implementation

9. POLICY FOUNDATIONS A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal “ The best example of Portugal’s market-based approach to its economic problems is its big push toward RENEWABLE ENERGY ”. Steve Pearlstein, “The Washington Post”,6 May 2009 2. Competition is good - full ownership unbundling, privatization, licenses granted to new entrants 5. Need to create Scale - innovative business model for wind 3. Economic agents respond to incentives - feed-in tariffs 4. Investment in Infrastructure and solid institutional Infrastructure - independent regulator, Iberian market 6. Stability 1. Identify Comparative Advantage - water, wind, sun

10. PORTUGAL HAS ADOPTED ONE OF THE MOST AMBITIOUS TARGETS FOR RENEWABLE ENERGY AND CO2 EMISSIONS IN THE WORLD A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

11. 2020 ELECTRICITY PLAN CAPACITY X2 IN 2020 SHARE OF RENEWABLE ENERGIES TO INCREASE FROM 43 TO 60% FOCUS ON WIND AND HYDRO FOSSIL FUELS WILL REPRESENT 1/3 OF CAPACITY IMPROVE ENERGY EFFICIENCY BY 10% 14.390 2007 28.418 Hydro Wind Other renewables 1 Fuel Coal Natural gas Technology share 2020 MW ELECTRICITY PORTFOLIO A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal 20% 12% 15% 15% 34% 26% 6% 30% 30% XX% 8%

13. WIND POWER Production X5 Largest Wind Park In Europe Creation Of An Industrial Cluster Highly Competitive Prices (68 €/Mw/H)

14. IN LESS THAN 4 YEARS, WIND POWER CAPACITY INCREASED X5 TO 2.740MW Source: MEI, DGEG A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal 61% 26% 30% x5,1 95%

15. TWO MAJOR INDUSTRIAL AND R&D CLUSTERS WITH A STRONG ECONOMIC AND REGIONAL IMPACT A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

16. WATER Largest hydro program in Europe Capacity to increase by 75% Pumping storage capacity

17. PORTUGAL HAS ONE OF THE HIGHEST UNTAPPED HYDRO POTENTIALS UNTAPPED HYDRO POTENTIAL VS. EXTERNAL ENERGY DEPENDENCY 1. Total primary energy imposts/ total national demand; 2. Hydro power installed capacity/hydro power national potential Source: DGGE; REN; UDI Database External Energy Dependency 1 (%) Untapped Hydro Potential (%) 2 France Germany Italy Spain Sweden Austria Finland PORTUGAL Greece 0 10 20 30 40 50 60 70 80 90 100 0 10 20 30 40 50 60 70 55% UNTAPPED HYDRO POTENTIAL LOW UNTAPPED HYDRO POTENTIAL HIGH EXTERNAL DEPENDENCY WITH A LOW UNTAPPED HYDRO POTENTIAL HIGH EXTERNAL DEPENDENCY AND SIGNIFICANT UNTAPPED HYDRO POTENTIAL A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

18. 16 MAJOR HYDRO POWER PROJECTS LAUNCHED WITH AN INVESTMENT OF €3.5B A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

19. THE NEW HYDRO POWER PLANTS WILL RAISE BY MORE THAN 75% CURRENT HYDRO INSTALLED CAPACITY MW 1. Accumulated capacity 2. Installed hydro capacity/Theoretical national hydro potential for electricity generation Source: MEI; DGEG; REN HYDRO INSTALLED CAPACITY IN PORTUGAL 1 2015 2010 Today 2004 2000 1995 1990 1980 1970 1960 1950 A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal +75% SHARE OF TOTAL HYDRO NATIONAL POTENCIAL 2 15% 18% 26% 33% 42% 46% >70%

20. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

21. FULL UNBUNDLING OF ELECTRICITY AND GAS REGULATED ASSETS PARTIAL PRIVATIZATION OF THE TSO STRONG INVESTMENT IN THE GRID: INTERCONNECTION POWER CAPACITY WITH SPAIN WILL TRIPLE IN LESS THAN 6 YEARS A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal

22. 5 KEY PROJECTS FOR 2009 Source: MEI A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal PUBLIC FUNDS TO SUPPORT THE ADOPTION OF HOUSEHOLDS SOLAR PANELS • >200.000m2 installed during 2009 •“ Turn-key” solution proposed to the consumers (including bank loan with favorable credit conditions) SOLAR PANELS MICRO-GENERATION ENERGY EFFICIENCY IN PUBLIC BUILDINGS SMART GRIDS INNOVATIVE SIMPLIFIED MODEL TO LICENSING MICRO-GENERATION • 165 MW target by 2015 • Distributed generation for households • Renewable energy sources only • Mandatory complementary installation of thermal solar panels PUBLIC TENDER FOR ENERGY EFFICIENCY MEASURES IN MAJOR BUILDINGS • Top 100 highest consuming public buildings • Outsourcing the building’s energy bill to private Energy Service Co (ESCo) IMPLEMENT SMART GRIDS IN ELECTRIC DISTRIBUTION • 600.000 new “energy boxes” installed in 2009 • 10% of household consumers DEVELOPMENT OF A CHARGING NETWORK INFRASTRUCTURE TO STRONGLY PUSH ELECTRIC CARS SEGMENT • 180.000 electric cars in the market by 2020 • Initial network of more than 300 public charging spots by 2010 ( up 25.000 by 2020) ENERGY EFFICIENCY PROJECTS SMART GRIDS ENERGY EFFICIENCY IN PUBLIC BUILDINGS MICRO-GENERATION SOLAR PANELS ELECTRIC CAR ELECTRIC CAR

23. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal WIND POWER 2005-12 HYDRO POWER 2005-2020 CCGT 2005-2012 Others 2005-2010 (2) INVESTMENT IN ENERGY, ECONOMIC IMPACT 12.990 34.460 56.570 16.286 10% 23 459 1.273 1.732M€ Investment CO2 avoided Fuel Emissions Description Capac. MW Energy GWh/year Jobs M€ %GDP Mton/year M€ M€ New Wind Farms 4.650 11.600 2.500 6.000 3,7% 5,8 116 373 Industrial Cluster ---- ---- 6.200 1.750 O,1% ---- ---- ---- Capacity Upgrades 2.176 3.552 19.320 1.920 1,2% 6,9 138 426 New projects 2.061 2.911 25.000 2.619 1,6% 7,3 146 409 8 permits 3.200 14.400 1.400 2.000 1,2% 1,9 39 ---- 900 2.000 2.150 1.700 1,0% 1,0 20 65

24. A NEW ENERGY ERA Renewable Energy and Energy efficiency in Portugal RESULTS FIRST WAVE ENERGY PROJECT TO REACH THE MARKET LARGEST PV SOLAR PLANT IN THE WORLD, MOURA NATIONAL PLATFORM FOR ELECTRIC CARS TO BE LAUNCHED IN 2011 EDP IS THE 4TH COMPANY IN THE WORLD IN RENEWABLE ENERGY, Nº2 IN THE US 43% OF GROSS ELECTRICITY GENERATED FROM RENEWABLE SOURCES LARGEST WIND FARM IN OPERATION IN EUROPE, ALTO MINHO