Strong output growth but steady load factor and prices

In the US, EDPR’s wind installed capacity as of December 2010 totaled 3,224 MW and spread throughout 6 different markets: PJM, MISO, SPP, ERCOT, NYISO and WECC. In 2010 were installed 600 MW in the country.

Following the increase in installed capacity and a steady load factor performance at 32%, the electricity output increased 30% in 2010, reaching a total of 7,689 GWh.

The average selling price in 2010 at €47.7/MWh showed stability vis-à-vis 2009. However, the average selling price continued to be affected by the increased production sold at electricity spot prices (below the prices achieved on the production under PPA contracts).

In order to limit its merchant capacity: EDPR has limited its growth in the US towards contracted capacity; and leveraged on the existing PPA demand to close contracts for the existing merchant projects. As a result, EDPR closed 841 MW of PPAs in 2010, of which 571 MW for the existing capacity and 270 MW for 2011/12 projects. Through it, EDPR expects to progressively improve its remuneration in the US once all the PPA contracts have begun contributing.

Gross Profit grew 27% to 506 million dollars in 2010, benefiting from I) the additional capacity contributing for the electricity generation and the continued monetization of tax credits through institutional partnership transactions; but hampered II) by the below-average load factor and low electricity spot prices along with a reduction of the demand for new PPAs in 2009 and 2010.

Operating costs increased by 25% year-on-year, mainly reflecting the strong business growth. Nevertheless, this evolution is also partly explained by the other “operating costs/revenues” variance, which in 2010 reflects a deal closed in Oct-10 with an off-taker to shorten the tenor of a 200 MW PPA contract to 2015 from 2022 (21 million dollars cashed-in, crystallizing the value of the last 7 years of the PPA).

All in all, 2010 EBITDA in the US increased 28% to 382 million dollars, mainly driven by higher capacity in operation.

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