EDPR’s asset diversifying strategy enabled reaching an average tariff for its portfolio of €58.4/MWh. This average price represents a year-on-year average portfolio price stability, in spite of the declining and volatile of global energy prices.
During 2010, EDPR sought to expand its portfolio to attractive and profitable markets, measured not only by their size but also for their regulatory framework and market exposure. this way, EDPR mix for 2010 consisted of 88% of its production generated either under regulatory schemes with feed-in tariff, regulated floor prices or long-term PPAs (49% of total annual generation) or with a long-term selling contract (39% of total annual generation). From the total clean energy production, only the 12% has spot market exposure, which represents an increase when compared to the 10% exposure held in 2009.
EDPR’s optimal diversification led to a 88% coverage ratio for the 14.4 TWh produced in 2010
In europe, EDPR performs under very different regulatory frameworks. In markets such as Portugal (€93.8/MWh) and France (€83.9/MWh) EDPR energy production is under a feed-in tariff, while in Spain (€79.1/mWh), Poland (€111.5/mWh) and Romania (€59.3/mWh) operates under a regulated floor scheme; Belgium generation is under a PPA selling contract. All this resulted in an average tariff for europe of €84.2/MWh.
During 2010, EDPR NA recorded growth in electricity sales of 29%, bringing it to a total of $366 million. This resulted in an average price of $47.7/MWh, driven by the combination of $53.9/MWh for the PPA/Hedged production and $31.1/MWh for production sold in the spot market. In addition to electricity sales, EDPR NA captured an additional $141 million of revenues that are related to institutional partnerships, which are composed of PTCs and other related revenues.
EDPR, anticipating the volatility observed during 2010, decided to execute the strategy of lowering its market risk exposure while generating value to its shareholders. Thus, EDPR closed PPAs for 1,088 MW of clean energy output, putting itself as one of the world leaders in long-term energy contract closed during 2010.
An active hedging strategy was executed for a part of the Spanish operating portfolio, which – on top of eliminating market volatility – provided additional revenues to the company of nearly €11.7 million. This – along with the power purchase agreements signed in Poland and Romania – shows EDPR’s capacity to palliate merchant exposure in the countries where it has presence.
In Romania, EDPR mitigated merchant exposure by signing power purchase agreements for the sale of electricity of the two wind farms projects – Pestera and Cernavoda – totaling 228 MW.
In poland, EDPR started the construction of its second wind farm, Korsze, with an estimated total capacity of 70 MW, for which it signed a power purchase agreement for the sale of the electricity and green certificates generated by the project.
Of the total operational capacity of EDPR NA, 77% is contracted under PPA or hedged, providing the fleet with stable pricing conditions over the long term. the existing structure of contracted sales provides an average of 13 years remaining of stable cash flows.
Overall, a vision of asset diversification among attractive markets, growth of a flexible pipeline, top notch operating indicators and a lower market-risk strategy all combine to support EDPR to continue shaping its future... today.
EDPR's 2010 CLOSED LONG TERM ENERGY SALE AGREEMENTS
EDPR, anticipating the spot tariff volatility observed due to the regulatory frameworks changes, and looking to create value to its shareholders, set as a goal in 2010 to mitigate the market risk observed by securing its merchant exposure to long term contracts.
In 2010, EDPR successfully signed 841 MW of long term contracts despite a difficult market. this represents a market share of 12.5% of the 6,739 M W of signed PPAs in 2010, the best performance of any developer in the country.
Similarly, EDPR signed 247 MW in the eastern europe region.