Offshore under develop ment. Offshore under develop ment 1,253 2,371 MW

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2 This presentation has been prepared by EDP Renováveis, S.A. (the "Company ; LEI MUFAH07Q1TAX06) solely for use at the presentation to be made on October, By attending the meeting where this presentation is made, or by reading the presentation slides, you acknowledge and agree to be bound by the following limitations and restrictions. Therefore, this presentation may not be distributed to the press or any other person, and may not be reproduced in any form, in whole or in part for any other purpose without the express consent in writing of the Company. The information contained in this presentation has not been independently verified by any of the Company's advisors. No representation, warranty or undertaking, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or the opinions contained herein. Neither the Company nor any of its affiliates, advisors or representatives shall have any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection with this presentation. This presentation does not constitute or form part of and should not be construed as, an offer to sell or issue or the solicitation of an offer to buy or acquire securities of the Company or any of its subsidiaries in any jurisdiction or an inducement to enter into investment activity in any jurisdiction. Neither this presentation nor any part thereof, nor the fact of its distribution, shall form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. Neither this presentation nor any copy of it, nor the information contained herein, in whole or in part, may be taken or transmitted into, or distributed, directly or indirectly to the United States. Any failure to comply with this restriction may constitute a violation of U.S. securities laws. This presentation does not constitute and should not be construed as an offer to sell or the solicitation of an offer to buy securities in the United States. No securities of the Company have been registered under U.S. securities laws, and unless so registered may not be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of U.S. securities laws and applicable state securities laws. Matters discussed in this presentation may constitute forward-looking statements. Forward-looking statements are statements other than in respect of historical facts. The words believe, expect, anticipate, intends, estimate, will, may, "continue, should and similar expressions usually identify forward-looking statements. Forwardlooking statements include statements regarding: objectives, goals, strategies, outlook and growth prospects; future plans, events or performance and potential for future growth; liquidity, capital resources and capital expenditures; economic outlook and industry trends; developments of the Company s markets; the impact of regulatory initiatives; and the strength of the Company s competitors. The forward-looking statements in this presentation are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, management s examination of historical operating trends, data contained in the Company s records and other data available from third parties. Although the Company believes that these assumptions were reasonable when made, these assumptions are inherently subject to significant known and unknown risks, uncertainties, contingencies and other important factors which are difficult or impossible to predict and are beyond its control. Such risks, uncertainties, contingencies and other important factors could cause the actual results, performance or achievements of the Company or industry results to differ materially from those results expressed or implied in this presentation by such forward-looking statements. The information, opinions and forward-looking statements contained in this presentation speak only as at the date of this presentation, and are subject to change without notice unless required by applicable law. The Company and its respective agents, employees or advisors do not intend to, and expressly disclaim any duty, undertaking or obligation to, make or disseminate any supplement, amendment, update or revision to any of the information, opinions or forward-looking statements contained in this presentation to reflect any change in events, conditions or circumstances. 2

3 30 MW #4 4,811 MW Offshore under develop ment 71 MW 418 MW #2 200 MW 204 MW 1,253 MW Offshore under develop ment #1 406 MW 2,371 MW #3 144 MW 521 MW #3 Notes: As of Jun-17: Installed capacity includes EDPR s Equity consolidated: 177 MW in Spain and 179 MW in the US; Includes 85 MW of Solar PV; 3

4 Ongoing renewable competitiveness improvement Renewables are a competitive and Quality cheap technology assets (wind LCoE -66% since ) to cope with the increasing energy demand and the need of a low carbon economy supporting increasing growth in main markets Solid specific market fundamentals, Quality namely assets in the US despite new macro landscape, based on clear bipartisan support along with state level targets, coal shut-down plans and C&I 2 increasing market with EDPR well positioned to benefit from its 2020 strategy A strong renewable sponsor exposed to attractive Quality markets, assets with clear competitive advantages supported by unique core competences on project development, PPAs origination & asset management (O&M strategy and low-risk profile) (1) Source: Lazard s Levelized Cost of Energy Analysis from Jan-2017; (2) Commercial & Industrial companies 4

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7 1. Selective growth 2. Operational excellence 3. Self-funded business Prioritize quality investments in our core markets c.700 MW/year Technical expertise to maximize production >97.5% availability Investing in visible growth opportunities 4.8bn investments High visibility on projects w/ LT contracts awarded >70% till 2020 Competitive projects leading to a superior load factor 33% in 2020 Profitable assets generating robust Retained Cash Flow 3.9bn RCF Technological mix initiatives Solar & Offshore Unique O&M strategy to keep lowering Core Opex/MW -1% CAGR Asset Rotation strategy to keep enhancing value growth up to 1.1bn 550m signed c. 600m new 7

8 Increasing Business Plan into a new with stronger capacity additions and technological mix Capacity Additions (MW; %) Capacity Additions (MW; %) Drivers Emerging Markets 20% Brazil Solar PV 10% 10% 65% North America 1 Wind Onshore: fully competitive technology 500 MW/year % Europe 60% United States Europe 15% 700 MW/year Solar PV: Increasing its competitiveness Total of 2 GW capacity additions Total of 3.5 GW capacity additions Projects with long-term visibility & low risk profile Notes: (1) North America includes: US, Canada and Mexico 8

9 Production Tax Credits scheme phase-down EDPR strategy under safe-harbour conditions to maximize projects returns Start of construction Full PTC ($23/MWh 1 ) 80% PTC 1 60% PTC 1 (until 2022) 40% PTC 1 (until 2023) 2021 end of construction 100% of PTCs value if installed until 2020 under safe-harbor conditions (5% capex invested in 2016) Capacity additions (GW) secured under negotiation/identified 1.8 GW >65% Secured 60% Option to grow 3.1 GW with safe harbor Project Name MW State CoD Built 429 TX; OH; NY 2016 Meadow Lake V 100 Indiana 2017 Quilt Block 98 Wisconsin 2017 Red Bed 99 Oklahoma 2017 Hog Creek 66 Ohio 2017 Arkwright 78 New York 2018 Turtle Creek 200 Iowa 2018 Meadow Lake VI 150 Indiana GW already secured >60% secured with non-utilities (1) PTC value in 2015 of $23/MWh 9

10 CANADA MEXICO 100 MW wind farm in Ontario 20-year supply contract Under development 2019 project 100 MW Nation Rise Wind Farm Completed 200 MW 1 wind farm with 25-year PPA In operation 2016 project 200 MW Eólica de Coahuila All projects with PPAs already awarded Platforms for future growth in promising markets (1) In partnership with Grupo Bal, owner of Industrias Peñoles 10

11 Europe to represent c.15% of EDPR growth plan Portugal Italy Capacity Additions (MW) Completion of Ventinveste projects 20-year feed-in tariff Auction based system with 0.2 GW of projects already awarded France Spain Portugal +0.2 GW +0.2 GW France Spain Italy Identified & pipeline projects feed-in tariff 1 Projects awarded in Jan-16 very high load factor and low capex +0.6 GW Target GW <0.1 GW (1) Projects which requested tariff in 2016 will be receiving a 15y CfD; projects that will request tariff in 2017 are expected to be granted a 20y CfD 11

12 BRAZIL 120 MW Baixa do Feijão project completed in 1Q16 awarded in MW projects awarded in New auctions opportunities 127 MW JAU & Aventura 137 MW Babilônia 120 MW Baixa do Feijão Projects with PPAs already awarded > 45 % load factor mid/high double digit IRR PPA price inflation linked Increased profitability due to higher production and increasing auction prices 12

13 EDPR additions breakdown Different markets dynamics By technology (MW) US: ITC scheme 1 Start of construction United States +3.5 GW % Solar PV Full ITC (30% capex) 2023 end of construction The core growth market boosted by ITC extension 26% ITC Wind Onshore 22% ITC Europe, Brazil & Mexico 10% ITC 60 MW already under construction in the US (qualified facility for 15 yrs) 2 ITC scheme in place to benefit Solar technology Developing options based on projects fundamentals (1) ITC - Investment Tax Credit; (2) Comprises 3 solar PV projects in South Carolina with qualified facilities for the entire production over 15 years period 13

14 UNITED KINGDOM CfD awarded FRANCE PPA awarded 950 MW Moray Firth 500 MW MW Iles d Yeu et de Noirmoutier Le Tréport CfD 1 awarded in Sep-17 auction EDP/Engie joint-venture (77%/23%) Completion expected until 2022 MoU signed with CTG for partnership (c. 20%) Partnership with Engie allows de-risking and complementary skills Selected in May-14 for the development, construction and operation Offshore projects to represent less than 10% of total investment needs through 2020 and to be developed through partnerships with expected CoD after 2020 (1) CfD Contract for Difference; awarded at GBP 57.5/MWh in 2012 real prices 14

15 Delivering second-to-none metrics based on unique wind assessment know-how to maximize asset value Load Factor (%) Technical Availability (%) Production (TWh) 30% +3pp +10% CAGR 97.6% > 97.5% (P50) 2020E E E Accretive contribution from US, Mexico, Canada and Brazil Predictive maintenance and O&M strategy key to reduce downtime Growth supported by distinctive competences and accretive projects 15

16 Ongoing implementation of innovative power enhancing products Keep high levels of availability Revenue Maximization retrofits add vortex cut-out max uprate power >97.5% Maximizing operating wind farms output Reduction of downtimes by managing warehousing of critical components Comprehensive O&M strategy to increase efficiency Discipline over G&A costs Cost Control MW ~30% IT Consulting Legal Travelling Successfully implementation of M3 (1) and Self-Perform (higher insourcing of services) Comprehensive cost control management (1) Proprietary model (M3 - Modular Maintenance Model). 16

17 Operating Costs breakdown ( ) Levies & Other Core Opex 1 per MW -1% CAGR Strong focus on efficiency and cost control benefiting from economies of scale and Core Opex ~80% 2020E E Core Opex 1 per MWh -3% CAGR E supported by a superior and higher efficient O&M strategy leading to improvements in efficiency ratios (1) Core Opex - Supplies & Services and Personnel Costs 17

18 Unique O&M strategy at the end of initial contract warranty Portfolio by O&M contract type Modular Maintenance Model (M3) Segregate & insource main maintenance activities lower costs (%; MW) EDPR ISP 1 OEM 2 Self-perform (SP) 100% 90%-70% Full scope ~70% ~50% Insource more activities: preventative, logistics & small correctives M3 & Self perform EDPR OEM 2 Full Scope M3 & SP E Segregating and keeping in-house high value-added activities, minimizing OEM dependency and increasing efficiency Higher exposure to M3 and Self perform driven by full scope contracts expiration (1) ISP - Independent Service Provider; (2) OEM Original Equipment Manufacturer 18

19 EBITDA growth supported by new and accretive capacity additions along with increased efficiency EBITDA growth (vs Adjusted; million) +8% CAGR Expected EBITDA growth drivers MW Addition Efficiency Other Items 1 +11% +0.5% -3.5% CAGR CAGR CAGR 1.07bn New MW in operation Ex-MW growth performance US 10-yr PTCs expiration 2015 adj. 2020E MW with higher profitability Opex efficiency O&M strategy Tariffs and GC expiration (1) Impact from PTCs (Production Tax Credits), GC (Green Certificates) and (FiT) Feed-in Tariffs expiration 19

20 Quality portfolio generating robust RCF 1 Rigorous investment plan to deliver solid returns Retained Cash Flow ( billion) Cumulative for Capex & Financial Investments Onshore + Solar PV Offshore 4.8bn > 90% < 10% 3.9 New Asset Rotation (based on projects with PPAs) Cumulative Asset Rotation (including already signed in 2016) up to 0.6bn 120m/year 1.1 bn EBITDA Interest & TEI costs Minorities Distributions Taxes & Other 2 RCF (1) Retained Cash Flow; (2) Other include Associates and Non-cash items 20

21 1 2 Self-funding Strategy (1) Accelerate value growth Asset Rotation Investment Crystallise projects NPV, capturing value created & Allowing the execution of additional market opportunities with superior returns Operating Cash-Flow Source of Funds Use of Funds Dividends Interests IRR double-digit Re-investing > IRR single-digit Selling and to maintain a self-funding strategy (1) Illustrative and non-exhaustive 21

22 Implied EV/MW Scope Proceeds are re-invested in the development of quality and value accretive projects, enhancing its growth and accelerating value creation 270 MW 49% 30 MW 49% 1,101 MW 36% 30 MW 49% 1,002 MW 34% 100 MW 2 49% 348 MW 191 MW 71 MW 49% of total 664 MW 54 MW 1.3m 1.9m 1 C$3.3m C$3.3m 1 $1.5m $2.3m 1 $3.1m n/a $1.7m $2.4m 1 2.1m n/a 1.7m n/a CTG In 2017 EDPR executed a minority sale transaction with CTG, related to certain assets in Portugal, at a multiple of 1.7/MW (1) Including all cash-flows generated by the projects since inception; (2) also considers an additional 30 MW under development 22

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25 Capacity additions +820 MW Higher than 700 MW target; +629 MW in NA; +120 MW in BR; +72 MW in EU Efficiency: Core opex/mw -5% YoY Backed by scale, O&M strategy and cost control 97.7% of availability Cash generation 698m RCF From young portfolio mostly exposed to PPA/FIT EBITDA (+12% adj. YoY) high cash conversion Asset Rotation 550m proceeds Executed 50% of target ( 1.1bn) Transactions executed at attractive multiples Debt optimization 4.0% Cost of Debt (Dec-2016) Benefitting from 2.3bn debt restructured/prepaid Net debt & TEI at 4.3bn EDPR distributed 0.05 dividend per share 25

26 EDPR additions breakdown with visible projects execution Name MW CoD By technology (MW) Built Capacity additions Wind Onshore Solar PV 8% +3.5 GW >70% Built in 2016/1H17 & Secured Spain Portugal RoE US Canada Auction projects Ventinveste & other Italian auction & other France & Belgium projects ML V, QB, RBP, HC, PG Solar TC, ML VI, ARS Nation Rise <2020E E E E 2017E 2018E 2019E Brazil JAU & Aventura Babilônia E 2018E Growth supported by 1.7 GW of secured projects to be built in , of which 633 MW under construction (1) As of June

27 2017 Outlook: Operational and Cash Generation targets Avg. MW in Operation Benefitting from 2016 new capacity additions; 820 MW instated in % YoY EBITDA ( million) ~+10% Load Factor Positive impact from new projects & wind resource recovery (P50) c.32% +5% YoY 1, E Selling price New competitive projects w/ higher load factor; 95% of 2017 revenues fixed not exposed to market prices c. 58 per MWh Retained Cash Flow ( million) % Opex per MW Keeping high efficiency levels; vs target -1% CAGR 15-20E flat YoY -3% CAGR 15-17E E EDPR strategy execution set to deliver solid and profitable growth 27

28 EDPR reiterates its key 2020 BP targets EBITDA CAGR Retained Cash Flow 2020E +8% 0.9bn Update on D&A leading to a positive impact on accounting Net Income from 2017 onwards Adjusted Net Income guidance EDPR s portfolio is composed by young assets across 11 countries 6.5 years of avg. life +16% D&A impact Higher assets useful life based on independent technical assessment 30 years vs. 25 years CAGR (@ 25 years) m per year (1) 2015 EBITDA and Net Profit adjusted by non-recurrent events; EBITDA 2015 Adjusted of 1.07bn; (2) Net Profit 2015 Adjusted of 108m 28

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30 Quality assets Selective and profitable growth Self-funding business 97.8% availability vs 97.9% in 1H16; benefitting from predictive maintenance and O&M strategy Quality assets 34% load factor vs 33% in 1H16 100% of long-term average (P50) Core Opex/Avg. MW -1% YoY 1 backed by O&M strategy and scale +707 MW installed YoY annual target of 0.7 GW; 633 MW already under construction Quality assets >70% of 2020 target secured target +3.5 GW of additions in Reported Net Profit 134m Adj. net profit 122m (+16% YoY) 16m Net Debt & TEI decrease growth financed from assets cash generation and minority sales (CTG) Quality assets 248m from minority sales strategic partnership with CTG (PT assets) Lower cost of debt at 3.9% 2.7bn restructured & prepaid since 1Q16 96% of Revenues fixed for /MWh avg. selling price in line with guidance 719m EBITDA (+11% YoY) EU 49% (-5% YoY); NA 49%; BR 2% 574m RCF 3 (+41% YoY; +21% adj.) from young assets exposed mostly to PPA/FiT (1) Ex-forex; (2) Based on status at Jun-2017; (3) RCF stands for Retained Cash Flow; +21% YoY if adjusted for 1H17 non-recurrent event 30

31 Installed Capacity 1 (EBITDA MW + Equity Consolidated) YoY Additions Under Construction Portugal 12% Rest of Europe 15% Brazil 2% +428 MW +502 MW +79 MW +4 MW Spain 23% 10.4 GW North America 48% +200 MW MW Average Installed Capacity increased +8% YoY +707 MW +633 MW 707 MW added YoY and 633 MW already under construction In the 1H17 where added 21 MW of which 18 MW of wind in France and 3 MW of solar PV in Portugal (1) Incl. equity consolidated: 177 MW in SP & 179 MW in the US 31

32 Load Factor and Technical Availability EDPR Quarterly Load Factor vs. long-term average (%) Q16 Q17 1H17 D% YoY 1H17 vs. Average (P50) +7% 28% -1.6pp 99% +1% % +2.7pp 100% -1% -3% 36% +6.5pp 108% -7% EDPR Availability 1 34% 97.8% +0.7pp -0.1pp 100% -11% 1Q 2Q 3Q 4Q Load factor at 34% (vs 33% in the 1H16) reflecting a normalized wind resource in the period (100% of P50) along with capacity additions with higher load factors, and avoiding 12 mt CO 2 emissions. (1) Technical Energy Availability (TEA) 32

33 TWh r% YoY Electricity Production (TWh) -5% Impacted by outstanding wind resource in the 1H16 vs 1H17 (P50: 107% vs 99%) % (0.0) % Impact from capacity additions with above average load factors +53% Reflecting mainly the capacity additions with higher wind resource 1H16 Capacity Growth D Load Factor 1H17 EDPR produced 14.5 TWh of clean energy in the 1H17 (+9% YoY), avoiding 12 mt of CO2 emissions Geographical output breakdown 1H17: 56% in North America, 42% in Europe and 2% in Brazil 33

34 1H17 r% YoY 1 EDPR Price Evolution ( /MWh) % Propelled by higher realized price in Spain (+12% YoY) Poland: lower pricing (-4% YoY) due to GC price evolution $ % US: PPA (-2% YoY; different mix profile); Non-PPA (-3% YoY) CA flat YoY & MX avg price at $56 R$224-16% Reflecting a different mix of a new wind farm in operation 1H16 1H17 Selling price stable YoY reflecting the higher price in Europe, which offset the mix effect (production vs price) of new capacity in Brazil (1) Evolution calculated in local currency 34

35 Main drivers for Revenues performance Revenues ( million) +1% Quality assets: +8% Avg. MW YoY High availability: 97.8% New MW in operation: + 73m YoY Higher output: +9% YoY Higher NCF (34% vs 33% 1H16) with new MW -5% EU, +21% NA and +53% Brazil Stable average selling price: 60/MWh Additions mix and higher Spanish price Positive forex translation (+ 16m YoY) 1H16 1H17 Increased YoY revenues supported by higher installed capacity, pricing and positive impact of forex translations, offsetting the negative impact from lower load factor of previously installed capacity 35

36 Opex (excludes Other Operating Income) ( million) +9% Core Opex/Avg. MW ( k) (Supplies & Services and Personnel Costs) Levies & Non-recurrent m YoY: +MWs & property taxes timing % -1% ex-fx Core Opex (1) +9% 1H16 1H17 1H16 1H17 Core Opex per average MW ex-forex decreased 1% YoY, reflecting costs control Core Opex per MWh unchanged YoY at 14 (-2% YoY if fx adjusted) (1) Includes Supplies and Services and Personnel Costs 36

37 EBITDA ( million) EBITDA per Region (1) (%) % 719 Portugal 16% Rest of Europe 15% Brazil 2% Spain 18% 719m North America 49% 1H16 1H17 In the 1H17, EBITDA increased +11% to 719m (73% margin) and unitary EBITDA per MW in operation totaled 72k (+3% YoY) (1) Includes hedges gains in Spain, Rest of Europe and US 37

38 Financial Results 1 145m -21% YoY Financial Debt Financial Debt ( 0.4bn) YoY Ongoing reduction in interests costs benefitting from: 3,405m 2.7bn restructured & prepaid 1Q 2016; Net Debt 3,130m Cost of Debt 3.9% (vs 4.4% Jun-16) Early amortization in Dec-16: $364m bearing 7.7% cost with maturity scheduled for 2018/19; Tax Equity 1,129m Cost of TEI 6.9% in 1H17 Fiscal benefits efficient utilization: +$0.4bn in 2H16; Benefitting from downward trend on TEI return; In July 2017 EDPR closed $370m of new Tax Equity structure (297 MW; US), representing the largest ever ticket closed with single investor (1) Includes Share of profit of associates 38

39 1H17 EBITDA to Net Profit ( million) r m YoY EBITDA m Reflecting higher YoY Revenues, positively impacted by new MW, higher selling price and fx D&A Assets life extension m Change in depreciation schedule from 25 to 30 years despite high capacity YoY EBIT m As a result of lower D&A costs (1) Financial Results m Lower cost of debt after negotiations; & YoY comparison impacted by 22m 1H16 one-off Taxes 71-28m Effective Tax Rate of 23% Minorities m Due to assets life extension to30 years and CTG (IT & PL) & Asset Rotation (EU) Net Profit m Net Profit totalled 134m (+16% adjusted YoY) (1) Includes Share of profit of associates 39

40 1H17: Retained Cash Flow (RCF) ( million) +11% +72 (27) Impacted by higher benefits realized in Tax Equity partnerships (141) (49) +41% Quality assets delivering cash-flow generation mostly from PPA and Feed-in Tariffs 719 Lower interests costs from 2.7bn restructured/prepaid since 1Q16 with cost of debt at 3.9% (vs 4.4% in Jun-16) EBITDA LT receivables & cash adjustments Current income taxes Interests, TEI, fees & derivatives Dividends & interests to Minorities RCF RCF of 574m (+41% YoY) propelled by a non-recurrent event (+ 83m; 1H17); RCF +21% YoY if adjusted by such event RCF YoY increase on the back of operational and financial performance enhancing EDPR growth (1) RCF +21% YoY increase if adjusted by a non-recurrent event in the 1H17; RCF is net cash-flow generated by operations and available to re-invest, distribute and pay debt principal 40

41 1H17 from RCF to Debt and TEI variance ( million) 1H17 Debt and TEI Breakdown (%) +41% +248 (728) TEI 1.1bn 60% Other & TEI 45% 574 (44) (34) 16 Gross Debt 3.4bn 32% Loans with EDP 55% RCF Asset Rotation & CTG Cash Invest. 1 Dividends to EDPR Shareholders Forex & Other r Net Debt and TEI (reduction) Debt and TEI Currency Type (1) Cash investments include Capex, Net financial investments and Changes in working capital related with PPE suppliers and Government Grants 41

42 Solid 1H17 with wind resource in line with expectations with +9% YoY GWh Top Line evolution benefitting from new MW, pricing and fx, along with O&M initiatives and cost control Solid cash generation from young assets with long-term contracts and delivering sound Net Profit Delivering growth targets, with 633 MW already under construction (incl. 60 MW of Solar PV in the US) BP execution on track with 1H17 performance in line with FY17 guidance 42

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44 Wind already competes with all sources of energy and Solar PV is set to increase its attractiveness Levelised Cost of Energy 1 (LCoE) ( /MWh, 2016) Indexed LCoE 2 ( /MWh) (10%) (22%) Wind Onshore Today Long-lasting technology with decreasing LCoE (17%) (37%) Solar PV CCGT Coal Nuclear Hydro Wind onshore Solar PV Wind onshore is today amongst the cheapest and most competitive technologies Wind offshore Today Set to be a highly competitive technology (1) EDPR Analysis for European Market, NCF: 27%-36% ; Solar PV-one axis 23%-27%; 45%-50%; (2) Analysis for an average LCoE 44

45 Solid growth drivers in addition to its competitiveness : Renewables Worldwide Additions 1 (GW) Environmental concerns New global agreement under COP21 CO 2 reduction targets in EU, US and China Replacement of old/retiring capacity (namely Coal) Wind Onshore Solar PV Utility Economy electrification Solar PV C&I 74 OECD countries: (+) Transports electrification; (-) Energy efficiency Emerging markets: (+) Economic growth and infrastructure need Energy independence Solar PV Residential Wind Offshore GW Renewables 2 Increasing energy imports in most of the developed countries EU imports more than 50% of its demand, while US only 15% Recent events have stressed the need to reduce dependency Regions with EDPR presence account for >65% of Wind and Solar PV (utility) additions (1) IHS Global Renewable Market Forecast (2016); ex-china; (2) Incl. 34 GW of Solar CSP, Biomass, Geothermal, Small hydro & Ocean, not included in the graph 45

46 Europe short term opportunities to escalate medium term, supported by: : Wind and Solar additions in Europe Expected additions in EDPR geographies EU 2030 targets 40% cut in greenhouse gas emissions compared to 1990 levels 27% share of renewable energy consumption 57% 27% Wind Onshore Wind Offshore +24 GW Demand recovery and a common vision in Europe New governance based on national plans and EU coordination Competitive and sustainable energy (to replace retiring plants) 16% Solar PV (utility) Strengthen interconnection and improve energy security Short-term specific growth opportunities Regulation in Europe for renewables is evolving into ex-ante competition systems with long-term contracts (including: France, Italy, Poland, Portugal, Spain, UK) Source: IHS Global Renewable Market Forecast (2016) 46

47 EDPR s strategy for growth in selective countries with strong fundamentals BRAZIL MEXICO Strong renewable electricity demand +10% CAGR Wind the main growth driver +15% CAGR Mainly from wind onshore Good natural resources (load factor) c.50% Load factor Top-notch wind resource 34%-45% Load factor Competitive renewable resources Long-term contracts awarded thru competitive processes Auctions Inflation linked with local funding Auction/PPAs Market recently re-designed Source: IHS Global Renewable Market Forecast (2016) and BNEF 47

48 Wind competes for PPAs mainly in two different segments Wind vs CCGT: Levelised Cost of Energy 1 RPS demand for new renewable builds LCoE $/MWh Wind Load factor 23% Several Sates need to comply with renewable quotas Market is based on REC systems and long-term PPA % 2 Demand for new energy Utilities need new long-term supply contracts In the windiest regions, wind and solar costs can beat the price of a new CCGT US shale gas price range 34% 40% 46% 51% Gas price $/MBtu CCGT load 40% CCGT load 70% EDPR analysis - Wind capex $2.0m/MW; No carbon tax considered; Gas prices are assumed flat in real terms 48

49 Wind Energy competes with the most efficient conventional technology LCoE /MWh Recent oil prices Wind vs CCGT: LCoE Wind load factor 21% 23% 25% 29% 34% Oil price $/bbl Wind Energy Costs are unrelated to commodities, providing greater visibility Legend: CCGT load 23% CCGT load 57% (1) Source: EDPR Analysis, LCoE Levelised Cost of Energy 49

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51 Main Drivers Bipartisan Support = PTC phase-out approved in 2015 by a congress dominated by Republicans; New Treasury secretary supported current scheme in Senate hearings New political landscape. Industry Fundamentals Technology Competitiveness Increasing Demand Wind is a competitive and cheap technology presenting an ongoing decrease of its LCoE (c.26% by ) Increasing demand drivers at State, Utility and C&I 2 ; likely negative impact on CPP rollout but only in the next decade Tax Production Reform Pro-economic growth sector Clear positive impacts on job creation, local economy, industry and infrastructure development Tax Reform pending final framework likely positive A key topic of the new Administration in functions (main consideration is the reduction of the current 35% federal tax rate) Business case for renewables remains strong Wind energy provided 4.7% of the nation s electricity during (1) LCoE source: IRENA Power to Change 2016; (2) Stands for Commercial and Industrial companies; (3) Source: AWEA 51

52 Levelized Cost of Energy Comparison 1 $/MWh Map of Lowest Cost Electricity Resource 2 (unsubsidized; by region) Wind Solar Utility Gas $136 $ $97 $60 $78 $61 $62 $48 $46 $ MW (CoD 2018) 99 MW (CoD 2017) 98 MW (CoD 2017) 175 MW 100 MW (CoD 2017/18) (CoD 2016) 157 MW (CoD 2016/17) 0 Nuclear Coal CCGT Solar PV Wind 250 MW (CoD 2016) EDPR projects (secured ) Expected reduction in wind LCoE of c.26% by 2025 Source: (1) Lazard s Levelized Cost of Energy Analysis from Jan-2017; (2) Based on University of Texas: The Full Cost of Electricity of December

53 29 states + DC 27 GW Coal Retirement until 2030E; 49 GW since 2010 RPS Utilities Renewable Portfolio Standards defined at state level RPS policies cover 55% of total US retail electricity sales 5 states increased quotas in 2016 (OR; IL; MI; NY; DC) Utilities Portfolio Demand officially announced: coal-fired plants being shuttered old & non-compliant w/ environmental constraints; independent of CO2 issues 23% of coal fleet retired or announced prior 2030 >50% PPAs signed 2015 C&I Commercial & Industrial Entities non-utilities companies incl. techs, industrials, cooperatives fixed-long-term price protected from fuel price fluctuations 80 companies have pledged to move to 100% renewable power Source: (1) AWEA 53

54 Job creation Industry >300,000 Jobs on the wind/solar industry; more than coal >500 wind manufacturing facilities in 43 states Wind and Solar jobs growing at a rate 12x faster vs the rest of the US >600 manufacturing plants producing goods for wind & solar across 45 states Local Economy Infrastructure Every state benefiting from wind w/ manufacturing facility, wind farm, or both Expected investments in transmission lines and wind/solar to fuel economic growth Rural areas: land renting income while enable agricultural and livestock farming Increases US energy independence Wind industry creates jobs, economic investment and clean energy across the country Source: AWEA; Business Insider; RTO Insider 54

55 Analyzing the impact at EDPR of a potential reduction of Federal Tax Rate from 35% to 20%-25% Asset Base New Projects P&L Tax Provision Reduction in the annual tax provision +$15m-$30m per year (Net Income) BS Tax Assets & Liabilities Liabilities (on future tax payments) higher than assets (related to tax losses carry forward) One-off positive impact in bottom-line Lower tax rate would reduce 5y-MACRS value and lead to a lower tax equity funding along with investors lower tax appetite However to be potentially offset by A B C 100% capex expensing given the incremental time value benefit Lower funding replaced by corporate debt at a lower cost (USD debt is issued in Spain no impact on changes in interest deductibility) Tax Equity market is attracting new investors every year and enlarging the supply base A tax reform could potentially be overall positive, specially for solid sponsors, but it is still too early to fully assess its impacts 55

56 EDPR target additions in the US (GW) Option could be executed through the new Build & Transfer strategy, enhancing pipeline development 1.2 GW secured >60% non-utility >5 GW under continuous commercial efforts to secure PPAs +1.3 Visibility over PTC tax scheme Industry fundamentals driving solid ongoing demand /18 secured To be secured 2020 target additions Additions SH 1 option (100% PTC) Safe Harbor secured EDPR is a strong sponsor with solid balance sheet and clear execution capabilities (1) Safe Harbor 56

57 IR Contacts Rui Antunes, Head of IR, P&C and Sustainability Maria Fontes Pia Domecq Paloma Bastos-Mendes Phone: Fax: Serrano Galvache 56, Edificio Olmo, 7 th Floor 28033, Madrid - Spain EDP Renováveis online Site: Link Results & Presentations: Next Events Oct 31 st : 9M 2017 Results

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