Enel Green Power and the Renewable Energies Scenario Francesco Starace - CEO Enel Green Power

IEA Working Party on Renewable

Energy Technologies - “The Role of

Renewables in the Energy

Transformation: The Need for

Innovation in Technology, Business

Models and Policy”

Paris, March 25th 2014

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

1

Global Energy Demand

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

› Emerging countries contribute for over 60% of the world’s power generation increase until 2035

› Renewables foreseen to account for ~50% of new production

Source: IEA, WEO 2013 (2011 base-year)

Power Supply in TWh

-1,000 0 1,000 2,000 3,000 4,000 5,000 6,000

Coal Gas Nuclear Renewables

China

India

US

EU

Middle East

Africa

2

Changes in Power Production Mix Until 2035

Renewables Market Growth

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

55

80

116

167

195 196

262

318

286

254

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CAGR 2004-2013:+19%

+46%

+45%

+44%

+17% +1%

+34%

+21%

Global Annual investments in clean energy ($ bn) – Breakdown by Technology

-11%

› Increasing investment efficiency was mainly triggered by lower relative capex for

Wind and PV

› In particular, PV global capacity additions grew to 36GW in 2013 vs. 32GW in 2012

-10%

Solar

Small Hydro

Marine

Wind

Biomass

Geothermal

Smart

Technologies

3

Note: Clean Energy investments includes corporate and government R&D, investment in Smart Technologies (i.e. smart grid, storage, electric vehicles,

efficiency and digital energy projects) and investment in all renewable technologies

Source: Bloomberg New Energy Finance, “Global Trends in Clean Energy Investment”, Jan 2014

2004-2013 Investments by Technology

RES Energy Investments

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

Installed

base

~1,640

~138

~12

~319

~ 1,092

~80

Installed

base

~1,535

~102

~12

~283

~ 1,063

~76

5.4%

11% 22%

8% 9%

3% 10%

4% 11%

3% 9%

Expected

Growth

CAGR ‘13-’20

9.8%

2020

Max

110

1,111

1,030

579

330

~ 3,160

2020 Min

56

1,048

667

371

230

~2,371

Installed

base

27

+2%

624

+10%

529

+6%

276

+4%

185

+3%

~1,640

Investments

~84

~2

~59

~58

~9

~€212 bn

Additional

Capacity

2013

Source: EPIA, GWEC, BNEF, IEA Medium Term Market Outlook, EGP Estimate for 2013; WEO 2013 New Policies scenario (2020 min); industry reports/McKinsey, EPIA (2020

max). Note: Investments based on BNEF data except for hydro figures estimated assuming an average capex equal to 2.0 €/w; US$/€ fx rate assumed at 1.3.

TOTAL

Solar

Geothermal

Wind

Hydro

Biomass

Technology

TOTAL

Africa

Asia

Europe

North

America

Latin

America

Area

By technology By geography

Expected

Growth

CAGR 2013-20

Installed

base

6.9%

+35%

+6%

+13%

+3%

+6%

~105

+36

+1

+35

+29

+4

27

566

498

265

179

~1,535

› All renewable technologies and regions confirm their strong potential

› Investments in small-scale projects accounted for ~€46bn

› During 2013, total R&D investments amounted to ~€22bn

Expected Worldwide Growth

RES Energy Investments: a Growing Industry

2013 (GW) 2012 (GW) Min Max (GW) (GW) 2013 (GW)

5.4%

11%

7%

9%

3%

8%

9.8%

20%

13%

14%

3%

29%

Min Max 2013 (€bn) (GW) % 2012 (GW)

Additional

Capacity

2012

~109

+32

+1

+44

+28

+5

(GW)

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

5 1.Including co-generation

Italy&Europe

Capacity: 4,128 MW

Production: 15.3 TWh

Technologies:

North America

Capacity: 1,683 MW

Production: 5.4 TWh

Technologies:

Iberia&Latam

Capacity: 3,072 MW

Production: 8.8 TWh

Technologies:

Geo Hydro Wind Biomass Solar

1

Total = 8.9 GW

Capacity by technology

29%

9%

58%

3%

1% 2 2

Total = 29.5 TWh

Production by

technology

37%

19%

41%

1% 2%

2 1

Global Leadership in Renewables Development1

Enel Green Power - FY 2013 Results

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

* Calculation based on Herfindahl-Hirschman Index (“HHI”)

-

+

0.25

0.15

0.01

Highly

Concentrated

Moderately

Concentrated

Diversified

Highly Diversified

0

1

6

Moderately

concentrated

0.17 0.15

0.13 0.12

0.10 0.09

0.08 0.08

2010 2017 2013

Diversified

Current footprint New countries

35 29

N. Of Clusters

Country/Technology

(in 16 Countries)

2010 2013

Increasing geographical and

technological diversification… … lowering the concentration index*

Increasing Diversification to Mitigate Risk

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

7

~8.4 ~6.1

~1.5

~1.1

Cash-flow from operations

Capex Interests Dividends

Net debt/EBITDA 2.7x 1.9x

Solid and sustainable growth

1. 2013-2017 cumulated cash-flow

2. Calculated as net income + D&A - income from equity investments + interest charges – not recurrings

+ Δ net working capital

2

Self-funded Growth1 (€bn)

IEA Working Party on Renewable Energy Technologies

Paris, March 25th 2014

8

Self-funded growth and central capital allocation

Emerging markets as a focus of growth

Striving for operating excellence

Increasing diversification to mitigate risk

Stability of new projects IRRs

Enel Green Power’s Key Strategic Considerations