EDPR’s share price increased by 34% in 2015, significantly outperforming the DJ Eurostoxx Utilities SX6E and NYSE Euronext Lisbon PSI20. This increase makes a clear statement on the market outlook for the consistency of the company’s strategy, and its ability to deliver on its business plan. In 2015 total shareholder return was 35%, considering the dividend paid on May 8th of €0.04 per share.
Two transactions made in the U.S. in 2015 brought the total proceeds from asset rotation to €800 million - surpassing the €700 million target set out in the company’s business plan. EDPR sold 49% of its Lone Valley 30MW solar PV plant to an infrastructure fund, as well as 34% of a 1,002 MW wind farm portfolio, marketing the largest transaction to date. The early completion of this target at competitive multiples is a clear indicator of the quality of the company’s installed asset base that has attracted the interest of many institutional investors.
After nearly nine years after the formation of Eolicas de Portugal (ENEOP) consortium the 1,335 MW project was completed. The completion of the project is a significant accomplishment for EDPR, the 40% shareholder of the Consortium, as well as its partners. The ENEOP consortium has completed its mission to drastically expand Portugal’s wind energy production. A wind cluster was created in Portugal by Enercon, which not only supplied all of the equipment for the ENEOP wind projects, but also exported and continues to export wind turbines or components from its factories in the north of Portugal. Moreover, the project helped Portugal, that was a net importer of electricity, to shift to today fairly balanced position.
The December 2015 5- year extension of the Production Tax Credit provided further long-term growth prospects andan improved environment for the development of new windenergy projects. It includes a gradual phase down of the PTCvalue depending on the year when contruction works are initiated up to 2020. This extends the positive growth outlook for the U.S. market well beyond 2017, further strengthens the strong fundamentals of the U.S. wind market, and supports EDPR’s choice to shift growth to the U.S. Project economics on all of the new investments in the U.S. are strong, with strong average load factors, and an increasing demand for long-term PPA contracts.
As a company in the renewables business, the expectations from stakeholders in terms of sustainability are high. Therefore, the company is committed to excelling in its three pillars: economic, environmental and social sustainability, as defined in EDPR’s 2014-2017 Business Plan. The Sustainability Roadmap applies these three pillars in 10 different areas: 1) Operational growth, 2) Risk control, 3) Economic value creation, 4) Environment, 5) Value circle, 6) People, 7) Governance, 8) Stakeholder Engagement, 9) Innovation and 10) Society. As of today, EDPR is successfully executing its sustainability roadmap creating solid foundations to outperform its 2014-2017 goals.
The PTC tax benefit scheme, strong demand for long-term PPAs from wind energy projects, combined with EDPR’s deep portfolio of projects make the United States EDPR’s main growth driver. Since 2013 EDPR has signed 1.8 GW in long-term sale agreements providing full visibility to its growth target in US for 2014-17 and to the profitability of our existing fleet with 0.3 GW of new PPAs for operational projects. Additionally, self-funding is available through tax equity partnerships with the possibility of asset rotation transactions as well, given the strong interest from infrastructure and pension funds for equity stakes. In 2015, most of the company’s growth was in the U.S., where it added 398 MW of installed capacity under long-term power purchase contracts.
EDPR´s talented employees are the driving force of our company’s success. EDPR´s workforce grew by 11% this year, surpassing one thousand employees for the first time and closing the year with 1,018 employees. Our 2015 personnel increase was in line with our solid annual growth rate (CAGR) of 7% since 2008. Our employees are distributed globally, with 20% working for EDPR at the corporate level, 43% in Europe, 34% in North America and 3% in Brazil.
At EDPR, we are committed to the health and safety of our employees and contractors, and our goal is to become a zero-accident workplace. To help achieve this goal, EDPR has implemented health and safety management system based on OHSAS 18001 specifications, which are adapted to the needs of their particular locations. In 2015, 93% of installed capacity has been certified according to OHSAS 18001, and EDPR is working actively to have all installed capacity certified by 2017.
EDPR continues its growth in Brazil with the signing of a 20-year PPA for energy produced by a 140 MW wind farm in the Brazilian State of Bahia. With this new contract, EDPR has secured PPAs for a total of 377 MW in wind energy projects in Brazil that are currently under development and will begin operations between 2016 and 2018. The successful outcome from this auction reinforces EDPR presence in a market with a low risk profile through the establishment of long term PPAs, attractive wind resource and strong prospects for the wind sector in the medium and long term.
In 2015, the EDP Foundation in Spain invested more than 1.2 million euros to support more than 100 social, cultural, environmental and educational initiatives in the communities in which the company operates. EDP Solidaria is a new program launched by the EDP Foundation in 2015. The program focuses on providing grants to NGOs for projects to help in-need populations through social integration and employment initiatives.