Growth options for the future
In the long-run EDPR relies on its quality pipeline of projects, as well as its market and technology prospecting activities to ensure valuable projects for the next decade.
DEVELOPMENT OF QUALITY PIPELINE
EDPR possesses a diverse global pipeline of 18.6 GW of projects distributed throughout is current geographies. These projects,
mainly constituted by wind onshore, vary in their level of development. To classify these projects a tiering system in used,
by which projects classified as Prospects are in the early stages of development, and projects in Tier 1 are close to construction. EDPR currently has circa 12.7 GW of projects in Tier 3 or Prospects providing a solid pool of options to fuel long-term growth. Additionally, 1.2 GW of tier 1 and 4.8 GW in Tier 2 are available to fuel our short-term ambitions.
EDPR has been growing by expanding to new countries, either by greenfield development or through strategic transactions of
projects in early stages of development. Leveraging on its in-house skills, EDPR has carefully picked its markets, considering a set of principles that have been applied in every entry into a new country.
When considering a new market, EDPR enrols a multi-year program contacting all relevant players, understanding the concerns of
the main stakeholders, identifying the main risks and constrains, discussing with potential partners, and also technically assessing in detail a handful of particular projects available in that market. An entry-decision in a new market usually brings with it several non-entry-decisions in other markets that have been thoroughly analyzed, but discarded for not reaching EDPR’s required standards or for not being competitive enough at that time.
EDPR places a strong focus not only on the reliability and sustainability of the country’s renewable tariff scheme, but also
on the market’s potential to allow a high value creation during the development phase of the projects. Therefore, extreme care and effort is put in place in every market to access top tier pipeline of projects as well as local skills to timely deliver them.
This ongoing meticulous selection of new markets for investment is expected to generated new opportunities that will enlarge
EDPRs portfolio in the long-run.
Consistent with its growth strategy, EDPR constantly analyzes the commercial outlook of a wide range of renewable energy
technologies that will contribute to a sustainable growth in the future.
The choice of technologies for investment is based on two main criteria. The first is the competitiveness of each technology as
measured through the levelized cost of energy (LCoE) throughout the useful life of the asset. EDPR only considers for investment,
technologies that present competitive LCoE metrics. Generally, this excludes technologies that are in their infancy as the effectiveness of the technology and the lack of a track record makes them both risky and uncompetitive. The second selection criterion is market growth potential. Only technologies that are expected to exhibit strong growth over a sustained period of time, hence providing ample opportunities, are considered.
According to Emerging Energy Research, wind offshore is expected to grow exponentially in Europe increasing from a mere
4% of additions in 2011 to approximately 31% in the 2012-2020 period. EDPR entered the Offshore wind technology in 2010 when
it was awarded the Moray Firth project in the third round of UK offshore development, with expectations this technology could
materialize into a growth option for the company. Currently EDPR is developing 1.5 GW net in two offshore wind projects in the UK in partnership with Repsol Nuevas Energias.
Renewable tech nology R&D
EDPR firmly recognizes the importance of research and development efforts in renewable energy technologies. Only following many years of tests, optimization and technological breakthroughs do early stage technologies evolve to a point in which large scale investment is sustainable. To this extent, EDPR is partnering on the innovative WindFloat project led by EDPInovação.
This project aims at developing a technology that will allow for the exploitation of the wind potential at sea, at depths of more than 40m. The project has already successfully installed a 2MW wind turbine on a floating semi-submersible foundation that is anchored off the coast of Portugal.