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FINANCIAL PERFORMANCE

EDP RENOVÁVEIS NORTH AMERICA

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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  • “EDPR contributes to the adoption of new renewable technologies that allow decreasing CO2 emissions.” Energy assessment employee
  • “Ethics, impeccable conduct and responsibility are major concern areas in my field.” EDPR financial employee
  • “EDPR staff makes a concerted effort to understand stakeholder concerns and to minimize the impacts of the projects on neighboring facilities/residences.” EDPR supplier
  • “I believe that EDPR is outperforming in communication with investors.” EDPR employee
  • “EDPR respects the rights and privileges of local landowners to operate their ranching businesses.” EDPR landowner
  • “We are doing everything possible to reduce any impact to the environment. As a company we also take action based upon those studies to help reduce any impacts.” EDPR employee
  • “EDPR has become a welcomed member of our community and we look forward to having them here.” Public authority
  • “It is in our interest to reduce the waste generated in every project. I believe that we do and must continue to work even more closely with our suppliers to minimize labor and material waste.” EDPR Project Manager
  • “EDPR has always been a leader in terms of reputation with local and state level stakeholdersThis is something we can be proud of, as it directly reinforces our sustainable development and social responsibility goals.” EDPR employee
  • “Developing wind farms and educating communities, stakeholders, politicians and media about the benefits of renewable energy is a large part of our responsibility.” Development employee
  • “EDPR has been a great partner for the state of Oklahoma in helping the state to promote clean, sustainable energy.” Public authority
  • “The relationship between the company and its employees and the continuous initiatives used to acknowledge their needs is outstanding.” EDPR employee