1. EDP and Innovation
2. Offshore wind market potential
3. The WindFloat Technology
4. The WindFloat Project
5. Economic perspective and value creation in Portugal
Agenda
2The WindFloat Project
6. Final Remarks
USA
Leading energy utility in Portugal and key player in Iberia present in Brazil and growing in wind power in USA and EU
6% of EBITDA in 9M09
Presence in USA since 2007
Wind Power: 2.3 GW
# 3 wind operator (present in 8 states)
1% of EBITDA in 9M09
Presence since 2006 (France)
Wind Power: 0.27 GW
Other EU
Wind Power
15% of EBITDA in 9M09
Brazil
SpainPortugal
Note: Data as of Sep-09
16% of EBITDA in 9M09
Listed subsidiary: Energias do Brasil (EDP has 72%)
Presence in Brazil since 1996
Hydro Power: 1.7 GW
2 electricity distribution concessions
51% of EBITDA in 9M09
Privatization in 1997 (IPO)
Single electricity distributor
Single electr. last resource supplier
Power generation: 9.7 GW
26% of EBITDA in 9M09
Presence in Spain since 2001
Power generation 5.2 GW
# 2 in gas distribution
Electricity distribution (Asturias)
3
15% of EBITDA in 9M09
Listed subsidiary: EDP Renováveis (EDP has 77.5%)
IPO in Jun-08
Wind Power: 4.9 GW
# 4 wind operator worldwide (present in 8 countries)
Leading energy utility in Portugal and key player in Iberia present in Brazil and growing in wind power in USA and EU
3rd wind power operator in the world (and 3rd in US)
~6,2 GW of Wind Power in operation, 1,3 GW under construction, 19 GW inpipeline e 9 GW in prospects
12.000 Workers
~19 GW of installed capacity
4
In 2008, 63% of the generation mix was based on renewable energy, and 76% of EDP’s investment was on Renewable Energy projects
10 million clients in Distribution
Company’s growth path is very much in line with Clean Energy andInnovation
7 GW of Hydro capacity
The global energy outlook is changing…
… making Renewables growth an unstoppable trend…
… in which EDP is uniquely positioned to create value
Global trends continue to support EDP’s clean energy focus
5
Global trend supports EDP’s Renewable Strategy
EDP’s strategic innovation areas range from clean energy to energy efficiency(including transports), having at its core a new, more intelligent electrical grid
Clean Energy Electric Mobility
•Offshore Energy•Floating Offshore Wind•Wave Energy
•Solar Energy•Photovoltaic•Thermal electric
•Infrastructure development•Low and High Power charge
•Electricity retail innovation• Mobile costumer b2c and
b2b offer
•Distributed storage (V2G)• Price arbitrage• Demand side managementSmart Grids
Other areas covered� CCS� Conventional wind� Micro-generation� Storage� Geothermal
6
Energy Efficiency
•Efficient lighting•Leds
•Solar Thermal energy•Domotics
Smart Grids
EDP is involved in a number of projects promoting na integrated development ofwave energy and deep offshore wind energy
WindFloat Ondas de Portugal Aguçadoura Offshore Energy Inst.
1 1 11
MagpowerSolarselInovgrid Wattdrive – ElectricMobility
Proj. EfficientLighting
1Projects contributing to the integrated development of wave and deep offshore wind energy technologies
7
1. EDP and Innovation
2. Offshore wind market potential
3. The WindFloat Technology
4. The WindFloat Project
5. Economic perspective and value creation in Portugal
Agenda
8The WindFloat Project
6. Final Remarks
Why offshore wind and why floating offshore wind?
Why Offshore Wind?
• Higher wind resource and less turbulence
• Large ocean areas available
• Best spots in wind onshore are becoming scarce
• Offshore wind, including deep offshore, has the capacity to deliver high quantities of energyenergy
Why Floating Offshore Wind?
• Limited spots with shallow waters (mostly in the North Sea)
• Most of the resource is in deep waters
• Huge scale ocean areas available
• Less restrictions for offshore deployments and reduced visual impacts
• Enormous potential around the world: PT, Spain, UK, France, Norway, Italy, USA, Canada …
9The WindFloat Project
Deep offshore wind provides a significant growth opportunity in the long term
Te
ch
no
log
y
De
ve
lop
me
nt
• Onshore wind continues
with high growth rate
• Shallow Offshore wind
increases significantly its
growth rate
Milestones Short/Medium Term
• First results of the
demonstration stage
• First successful demonstration
projects and technology cost
reduction
Milestones Medium/Long Term
• Technology consolidation and
cost reduction in deep offshore
wind
• Large scale deep offshore
commercial deployments
• Onshore wind reaches the
limit of its potential.
• Shallow Offshore wind
reduces its growth rate
• Deep offshore wind with high
growth rate
Technical solution
• Wind Energy conversion stabilized and well known
• Technological challenges:
- Wind turbine and maritime environment
- Adapt wind turbine to platform motion
- Adapt an O&G structure to energy production at a reasonable cost
10
• Onshore wind with high
growth rate
• Offshore wind in shallow
waters in expansion
• Deep offshore wind in
demonstration stage
Te
ch
no
log
y
De
ve
lop
me
nt
Short Term Medium Term Long Term
growth rate
• Deep offshore wind with
first commercial
deployments
energy production at a reasonable cost
- O&M operations
Time to market
• 5 – 10 years
Players in the market
• Market Leaders are involved:
- Statoil / Siemens
- …
• Two floating platforms already installed
Deep offshore is the only Wind Energy Source with growth capacity in the long term
The WindFloat Project
2010-2012 2020-2025
Market Potential – water depth economics
Co
st
Floating
Jackets
MonoPiles
Monopiles• Basic extension of turbine
tower w/ transition piece
• Economically feasible in shallow water depths (10-30m)
Jackets• Economically feasible in
transitional water depths (30-50m)
11
Water DepthSource: NREL
50m)
• Derivatives from Oil & Gas technology
• Beatrice successfully deployed (2 jackets x RePower 5M)
Floating• Economically feasible in
deep water (50-900m)
• Two prototypes have been deployed (Hywind and Blue H)
The WindFloat Project
Market Potential in Europe and Iberia is significant
EU15 Potential• Good offshore wind resource (load factor > 3.000h)
• Offshore wind potential is mostly in transitional and deep waters(1) (~65 %)
• Energy Potential >700 TWh (~220 GW)
• Ports and docks available along European coast
Depth (m) 0 - 30 40 – 200 +
Offshore potential EU15
77 GW >140 GW
Mean Wind speed (50m)
(1)Analysis limited to 100m water depths
12Source: DTI
0 105 km
Portuguese & Spanish Potential• Continental shelf ends near the coast
• Grid connection available near the coast
• Limited Potential for water depths < 40m
• Energy Potential in PT >40 TWh (~12 GW)
• Energy Potential in SP >290 TWh (~98 GW)
potential EU15
European Bathymetry
Depth (m) 0 - 30 40 – 200 +
Offshore potential
PT 2 GW >10 GW
SP 18 GW >80 GW
Source: Univ.de Zaragoza – Evaluación Potencial Energías Renovables (2007)
Source: Greenpeace & Garrad Hassan 2004; IEA; Global insight;
The WindFloat Project
Wind penetration in Portugal will reduce significantly beyond 2015 unless…
• Onshore wind energy limited to ~12 TWh
• Wind energy penetration will reduce to 17% by 2020(1)
- If new renewable energies are not introduced to energy mix production
• The deployment of commercial Offshore Wind farms in transitional waters (>40m, <
Source: INETI
13
(1)Considering a grow rate of ~3% in energy consumption
Wind farms in transitional waters (>40m, < 60m) will:
• Enable Portugal to keep the leading position in renewable energy
• Maintain the wind energy penetration of 20% by 2020 and 2030
• The deployment of offshore wind will guarantee an increased wind penetration
The WindFloat Project
…Floating offshore deployment will keep wind penetration steady rate beyond 2015
• Onshore wind energy limited to ~12 TWh
• Wind energy penetration will reduce to 17% by 2020(1)
- If new renewable energies are not introduced to energy mix production
• The deployment of commercial Offshore Wind farms in transitional waters (>40m, <
Source: INETI
14
Wind farms in transitional waters (>40m, < 60m) will:
• Enable Portugal to keep the leading position in renewable energy
• Maintain the wind energy penetration of 20% by 2020 and 2030
• The deployment of offshore wind will guarantee an increased wind penetration
(1)Considering a grow rate of ~3% in energy consumption
The WindFloat Project
1. EDP and Innovation
2. Offshore wind market potential
3. The WindFloat Technology
4. The WindFloat Project
5. Economic perspective and value creation in Portugal
Agenda
15The WindFloat Project
6. Final Remarks
The WindFloat Technology – Key Features
Turbine Agnostic• Conventional (3-blade, upwind)
• No major redesign
- Control system – software
- Tower – structural interface
High Stability Performance• Static Stability - Water Ballast
- ≈ ½ of hull displacement
• Dynamic Stability - Heave Plates• Dynamic Stability - Heave Plates
• Efficiency – Closed-loop Active Ballast System
Depth Flexibility (>40m)
Assembly & Installation
• Port assembly
• No specialized vessels required, conventional tugs
• Industry standard mooring equipment
Oil&Gas concept
• Platform developed for marginal O&G fields in 2003 with several pantents issued
• Concept tested in Wave Tank at different scales
16The WindFloat Project
67 m
53 m
38.1 m
22.2 m
Jun
e 2
009
WindFloat Technology – Development and Project History
EDP initiates the WindFloat Project with Phase-0, a full-scale WindFloat unit with a non-grid connected sub-megawatt wind turbine in the Algarve region
Sep
tem
be
r 2008 Wave tank
testing of 1:96th
scale WindFloat model at University of California, Berkeley tow tank
MI&T performs Minifloat proof of conceptmodel tests
Jan
ua
ry 2
003
Wave tank testing of Minifloat I & II concept
Jan
ua
ry 2
004
Minifloatpatent 1 issued US7086809, Minifloat patent 2 filed
Au
gu
st 2
006
Minifloat patent 2 isssued US7281881
Ma
rch
2007
Ap
ril 2
009 Principle Power
purchases outright all intellectual property for WindFloat from MI&T
Ma
y 2
009
Wave tank testing of 1:67th
scale WindFloat model at University of California, Berkeley tow tank
Jan
ua
ry 2
009
EDP and Principle Power sign MOA for phased development of WindFloat technology and commercial deployment of a wind farm up to 150MWJu
ne
2003
MI&T files Minifloat patent 1
Jun
e 2
004
Wave tank testing of 1:96th
scale MinifloatIV concept at University of California, Berkeley tow tank
Au
gu
st 2
006
Wave tank testing of 1:80th
scale Minifloat III concept at Oceanic
Jun
e 2
008
Principle Power exclusively licenses WindFloat intellectual property from MI&T
17The WindFloat Project
The Windfloat vis a vis other Floating Offshore Wind Technologies
Floating offshore wind timeline
2007
• Statoil Hydro and Siemens sign agreement for Hywindproject
• Sway raises €16.5M in private placement
Trade name WindFloat Hywind Blue H Sway
DeveloperPrinciple Power
(US)Statoil Hydro (NO) Blue H (NL)
Norwegian consortium (NO)
Foundation typeSemi-submersible (moored 4-6 lines)
Spar (moored 3 lines)
Tension Leg Platform
Hybrid Spar/TLP (single tendon)
Water Depths > 40 m >100 m > 40 m 100 m - 400 mprivate placement
2008
• Blue H half-scale prototype installation
• EDP and Principle Power partner to deploy WindFloat technology
2009
• Hywind full-scale prototype installation with 2.3MW turbine
18
Water Depths > 40 m >100 m > 40 m 100 m - 400 m
Turbine3-10MW
Existing technology!2.3 MW Siemens
2 bladed “Omega” under development
AREVA Downwind 5MW
InstallationTow out fully commissioned
Dedicated vessel-tow out and upending
Tow out on buoyancy modules until connection
Dedicated vessel-tow out and upending
Turbine installation
Onshore Offshore Onshore Offshore
StrengthsDynamic motions, installation, overall simplicity of design
Existing turbine and hull technology,
well funded
First sub-scale demo deployed
Low steel weight
Challenges Steel costDynamic motions,
installation
Mooring cost, turbine design, turbine coupling with tendons
Installation and maintenance,
downwind 3-blade turbine
Stage of Development
Ready for prototype testing
Full-scale prototype installed in 2009
Half-scale prototype installed in 2008
Development of the concept
The WindFloat Project
1. EDP and Innovation
2. Offshore wind market potential
3. The WindFloat Technology
4. The WindFloat Project
5. Economic perspective and value creation in Portugal
Agenda
19The WindFloat Project
6. Final Remarks
The Windfloat Project – Phases of Development
Phase 1 - 2MW PrototypeCapacity: 2MW WindFloat prototype
Location: Aguçadoura, grid connected
~5 km of coast, 40 - 50 m water depth
Turbine: 2MW offshore wind turbine
Test period: at least 12 months
Phase 2 - Pre-commercialCapacity: 15 - 25MW – 3 to 5 WindFloat units
Location: TBD, grid connected
Turbine: TBD, Multi MW
Transformer/support platform: Yes
Phase 3 - CommercialCapacity: 150MW, gradual build-out
Location: TBD, same as Phase 2
Turbine: TBD, same as Phase 2
20The WindFloat Project
The Windfloat Project - Phase 1 Project Schedule
Project Schedule
� Pre-FEED stage was concluded by December 2009
� The FEED phase was initiated and is expected to be concluded by July 2010
� Several decision points through out the project giving EDP total control over the project
� Every decision/contract shall be approved by EDP
21The WindFloat Project
Why do it in Aguçadoura?
Advantages of the Aguçadoura scenario:
Besides the pre-engineering of the Windfloat, the main outcome of Pre-FEED stage was the selection of Aguçadoura as the
preferred site for the deployment of the project (compared to, for example, testing in the Algarve)
Advantages of the Aguçadoura scenario:
� Allows the utilization of a more appropriate and representative turbine
� Platform is significantly closer to the market, allowing a faster development towards a (pre-)commercial phase
� Site has more representative sea and wind state conditions;
� Takes advantage of the clean power produced (physically and also financially);
� Provides for more relevant and effective testing as well as utilization of more in depth offshore skills;
� Promotional value for the country and project developers is much stronger
� If the project is successful a leadership claim in the deepwater offshore space is not questionable;
� Provides a direct comparison with the Hywind project in Norway (similar power ratings).
The WindFloat Project 22
1. EDP and Innovation
2. Offshore wind market potential
3. The WindFloat Technology
4. The WindFloat Project
5. Economic perspective and value creation in Portugal
Agenda
23The WindFloat Project
6. Final Remarks
Economics and Cost Reduction Potential – short term
Phase 1 costs breakdown
24
The Windfloat Platform
• The WindFloat platform is the main driver of the total cost
• Main drivers for cost reduction:
- Construction of the WindFloat platform
- WindFloat design and Fabrication tooling
- Alltogheter assuming a reduction of less than 10% in the platform cost
• Current development path should allow a competitive cost/MWh in commercial phase
The WindFloat Project
Cost Reduction Potential – Future Vision
Future Cost Reduction Potential
• Using cheaper materials
- Cost reduction (rough estimate):
· Using 10% of other materials (concrete, composites, etc) in the platform allows decrease of at least 6% in its cost
· Corresponding to at least 3% in total cost of the project
• Increase the Power of the turbine
- The size of the platform is driven by the metocean conditions - No - The size of the platform is driven by the metocean conditions - No significant impact in the size of the platform
- Turbines of 7 MW – 15 MW in development
- Cost reduction (rough estimate):
· 37% in the WindFloat platform(1) per MW
· 13% in total cost of the project per MW
• Improve the installation procedure and O&M strategy
25
(1) Assuming that the platform will increase 25% in material to double the size of the turbine
The WindFloat Project
Experinced Renewable Energy promotors
Stages adding more value
Exploration (promotor)
Installation and maintenace
Enginering work focusing on installation
Production of ancillary equipments (e.g., substaions, connections)
Components development and fabrication
Tower
PortugalCompetences
DegreeTurbine Transitional
depth(30-50m)
Deep waters (>50m)
Support structures
Already existing
Presence of National tower producers Existing know-
how in components fabrication for onshore use,
WindFloat and offshore energy provide a number of opportunities, for Portuguese companies, across the value chain
Significant opportunity for PT in offshore wind support structures
26
Technologies based in civil engineering achievable given Portuguese background
National experience only focusing site assembly
Good network of ports and shipyards, to be leveraged with service providing to these equipments
Civil engineering companies with strong experience in construction of maritime infra-structure
Attract to Portugal activities in the areas of research, development and demonstration in key offshore areas such as offshore turbines and support structures
Ambition
Become world experts in
engineering for offshore energy installations
Development Potential
Stronger Difficulties
Technology transfer from O&G sector.Incentive would stimulate O&G companies interests to pursue RE tech.
onshore use, provides base for the offshore development
Lead in installed capacity of offshore ancillary equipments
Adapt ports and shipyards to
service the offshore energy projects
Diversify RE portfolio by gradually
integrating offshore energy projects alongside with mature technologies
The WindFloat Project
1. EDP and Innovation
2. Offshore wind market potential
3. The WindFloat Technology
4. The WindFloat Project
5. Economic perspective and value creation in Portugal
Agenda
27The WindFloat Project
6. Final Remarks
• EDP believes that Offshore Energy, together with other emergingrenewables, will be an important growth vector for the company in thefuture
•Resource and a favourable surrounding context positions well Portugal in a race for leadership in the offshore energy sector
Final Remarks
Technology Development28
•EDP believes that the WindFloat project is presently one of the mostinteresting innovation projects being developed in Portugal and that it hasthe potential to become one of the key technologies in floating offshore wind
•Sinergies between wave energy and deep offshore wind, namelyinfrastructure, should be explored in articulation, fostering the creation of anocean energy cluster in Portugal
Thank You – Obrigado!
29The WindFloat Project