The selective growth strategic pillar is the key principle behind EDPR’s investment selection process, it ensures that the projects that are finally built have the best fit with the company’s low risk profile. This is achieved as new projects have long-term PPAs already secured or have been awarded long-term contracts under stable regulatory frameworks, as well as exhibiting above portfolio average load factor.
EDPR’s extensive pipeline has been an important contributing factor to the successful execution of this strategy as the availability of multiple projects coupled with strong development expertise guarantees that only the best, fully optimized projects are finally selected for investment.
SELECTIVE GROWTH TARGETS
EDPR is well on track to deliver on its business plan target growth of +3.5 GW cumulative from 2016 to 2020 (700 MW/year), with 86% of the capacity additions target already secured and 600 MW installed in 2017.
Efforts in new key areas like Solar and Offshore have already crystalized securing long-term growth.
65% GROWTH FROM NORTH AMERICA, DRIVEN BY PPAS ALREADY SECURED
The United States is EDPR’s main growth driver for the 2016-20 Business Plan timeframe. The visibility over Production Tax Credit (PTC) tax scheme, the strong demand from both utilities, and commercial and industrial companies for long-term PPAs from wind energy projects, combined with EDPR’s diversified portfolio of projects in this market support this solid growth opportunity.
The December 2015 extension of the PTC provides long-term visibility to US growth beyond 2016-20 for new wind energy projects, reinforces the strong fundamentals of the US wind market and supports EDPR’s choice to shift growth to the US.
The Business Plan for 2016-20 targets 1.8 GW of wind onshore additions in the US, of which 1.5 GW were already secured as of December 2017 and are entitled to receive 100% PTC value.
In addition, it is worth mentioning that EDPR secured turbine components in 2016 that grant the option to install up to 3.1 GW of wind projects until 2020, benefitting from 100% of the PTC value. In 2017, EDPR also secured turbine components to be installed after 2021, offering more visibility post Business Plan.
In 2017, EDPR was awarded two long-term energy sale agreements in North America. The first a PPA in the State of Indiana for 75 MW of onshore wind with start of operation expected in 2018 and the second, a 20-year RESA for the delivery of 248 MW onshore wind in Alberta, Canada, with commercial operation to occur in December 2019.
15% GROWTH FROM EUROPE, FOCUSING ON LOW RISK REGULATORY FRAMEWORKS
For the 2016-20 Business Plan, EDPR growth in Europe represents c.15% of the planned capacity additions, a growth supported by identified short-term opportunities and medium-term pipeline options. In terms of growth by country, EDPR has high visibility to additions. Firstly, in Portugal, 216 MW will be added with a 20-year feed-in tariff, of which 49 MW are under construction. On top of those additions EDPR already installed 7 MW (3 MW of which solar) by 2017 and has 6 MW extra under construction related with over equipments. In Italy, with c.200 MW target additions, 44 MW were installed by 2017 and 127 MW more will be added with a 20-year contract of which 77 MW are currently under construction. In France, EDPR targets additions of c.100 MW through pipeline development, of which 46 MW were already installed by 2017 while 11 MW are currently under construction. In Spain, 25 MW net were added related with the acquisition of a 50% participation in a wind farm previously accounted as equity and EDPR was awarded 93 MW in January 2016, 68 MW of which are currently under construction.
10% FROM BRAZIL, IN PROJECTS WITH LONG-TERM PPAS
In Brazil, EDPR already installed 331 MW, while 137 MW are currently under construction. EDPR has the objective to remain actively prospecting opportunities in Brazil, namely auction opportunities, given the strong fundamentals of the country, with high growth of electricity demand, robust renewable resources and availability of long-term energy supply agreements through an auction system.