4.OUR PERFORMANCE

Generation and Supply Iberia

generation and
supply iberia

EBITDA

555M
-48% VS 2016

EBITDA from Generation & Supply in Iberia fell 48% YoY mainly reflecting:

• more expensive generation mix due to the replacement of hydro production (22% weight in generation mix in 2017 vs. 46% in 2016) by coal and natural gas;
• due to the adverse impact of high-pool price context on energy management results;
• due to the increase in regulatory costs (higher generation taxes in Spain and higher costs with social tariff in Portugal), namely when compared with 2016.

OPERATIONAL PERFORMANCE

GENERATION ACTIVITY

• Following Portugal’s hydro investment plan, in 2017, the remaining 2 plants under construction came online, Venda Nova III (780MW) in 1017 and Foz-Tua (263MW) in 2017.

• Generation output was 8% lower YoY, mainly due to lower hydro output, since hydro resources in Portugal were 53% below the historical long-term average.

• In Portugal, EDP completed the process of decommissioning the Energin cogeneration plant and continue the deactivation of 3 other thermal generation facilities, namely Carregado, Setúbal and Tunes, respecting the plan submitted to the Portuguese Environmental Agency. During 2017, in addition to complete the works in Energin, stands out the works of dismantling Tunes equipments and removal of materials containing asbestos in Setúbal and Carregado.

• In Spain, during 2017 EDP concluded the environmental investments (denitrification) that were carried out since 2014 in the thermal power plants of Aboño 2 and Soto 3.

Installed capacity

(GW)

2016

50%
Hydro
29%
CCGT
19%
Coal
2%
Others

2017

53%
27%
18%
2%

Net Electricity Generation

(GW)

2016

2017

Hydro

16,691
7.420

CCGT

5,242
8,029

Coal

13,232
16,847

Others

1,494
1,482

SUPPLY ACTIVITY

• As of 31 December, 2017 EDP had a portfolio of 5.3 million electricity customers in Iberia, an increase of 4% over the previous year: +3% in Portugal and +6% in Spain;

• The volume of electricity traded in the liberalized market in 2017 was 32 TWh, a decrease of 8% over the previous year, reflecting a more careful commercial choice and greater weight of the residential and SME sectors in the total portfolio;

• In the gas sector the portfolio reached around 1.5 million customers at the end of 2017, an increase of 7% over the previous year, which was achieved by the 11% growth in the number of customers in Portugal;

• The volume of gas sold in Iberia in 2017 was 18,642 GWh, a decrease of 21% over the previous year, mainly due to the reduction in sales in the wholesale market;

• The customer relationship management is crucial for EDP, which has given strong relevance to the focus on clients and to improve the quality of services provided. EDP has been building up a position of brand awareness in the energy market, aiming to be an engaging company with which customers relate to. As a reflection of this commitment to customer relations, in 2017, EDP achieved a global customer satisfaction level of 75%, in line with the target;

• The energy services segment, focused on energy efficiency and microgeneration (photovoltaic panels), has also been contributing to build strong customer relations. In Iberia, EDP continues to construct its position based on a wide range of products and integrated electricity and gas services for both B2B and B2C customers.

2016

Electricity Customers

5,091,420

Portugal

4,023,911

Spain

1,067,509

electricity supplied (Gwh)

34,990

Portugal

18,291

Spain

16,699

Gas Customers

1,446,425

Portugal

595,535

Spain

850,890

Gas Supplied (Gwh)

23,508

Portugal

4,379

Spain

19,129
2017

Electricity Customers

5,286,804

Portugal

4,153,315

Spain

1,133,489

Electricity Supplied (Gwh)

32,249

Portugal

18,246

Spain

14,003

Gas Customers

1,540,819

Portugal

657,619

Spain

883,200

Gas supplied (Gwh)

18,642

Portugal

3,628

Spain

15,014