António Coutinho, Executive Board Member, EDP Commercial, was one of the keynote speakers at the 9th Annual Global Energy Summit.

1. Innovation in Energy
For a sustainable future
London Business School
November 30th 2012
António Coutinho
EDP Comercial

2. Agenda
The case for innovation in energy
Pathways for the future
Innovation and Sustainable Development at EDP
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3. Agenda
The case for innovation in energy
Pathways for the future
Innovation and Sustainable Development at EDP
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4. Innovation needed to tackle the key energy challenges
KEY ENERGY CHALLENGES
Abundant
• Increased energy consumption
- Population growth
- Economic development
The world
• Limited availability of resources needs energy Affordable
and or more expensive that is:
• Global warming and the need to
reduce GHG emissions
Clean
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5. Population will grow 50% between 2000 and 2050

6. A case for energy hunger…
The wealthiest bilion is responsible for
50% of energy consumption…
While the poorest takes less than 4%

7. Economic development and human development highly correlated
with energy consumption
Source: www.gapminder.org
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8. We need more energy
The population will grow
50% between 2000 and 2050…
Energy consumption is projected to grow
100%

9. Fossil fuels allowed a huge jump in the human development
Pre Industrial Revolution Farming Current farming
ERoEI ~ 1 a 5 ERoEI ~ 40 a 60
Fonte: Kurt Cobb, The Net Energy Cliff, Energy Bulletin, 2008
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10. Oil ERoREI has been reducing dramatically
Oil exploration by early XX Deep water oil exploration
1900: ERoEI > 100 2010: ERoEI < 10
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11. It takes a lot of oil to raise cattle!
Source: National Geographic
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12. Energy prices highly correlated with food prices
Food price index vs. oil price
Index, $/bbl
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13. Known reserves of fossil fuels exceed what the atmosphere
can handle
IEA “the door to 2°C is closing”
Without further action, by 2017 all CO2
emissions permitted in the 450 Scenario will
be “locked-in” by existing power plants,
factories, buildings, etc

14. Agenda
The case for innovation in energy
Pathways for the future
Innovation and Sustainable Development at EDP
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15. Main trends: 1 Energy Efficiency
Breakdown of GHG abatement drivers
Gt of CO2, 2005-2030E Key characteristics of Energy Efficiency
Lowest-cost CO2 abatement technology
Greater security of supply
Key to economic recovery
• Job creation – labor intensive activity
• Value creation – avoids fossil fuel
imports
Source: IEA - World Energy Outlook
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16. Main trends: 2 Decarbonization
EU carbon-free power generation mix
%, 2000-2050
47% 49% 59% ~100%
• Renewable energy will need to keep
growing consistently
30% CCS
• Strong regional differences:
― Highest RES penetration in Iberia &
19% Nuclear Scandinavia
― Strong share of nuclear in France
25% ― CCS mostly located in Central &
Eastern Europe
29%
32%
51% RES
• Emissions only allowed for peaking units
34%
working few hours
20%
15%
2000 2010 2020E 2050E
Source: IEA - Key World Energy Statistics (2009); 2050 values calculated as average of 5 European studies’ forecasts (Eurelectric, PWC, ECF, New Energy Era)
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17. Main trends: 3 Electrification
Share of electricity in final energy demand
Major arguments for electrification %, Europe
43%
• Electric vehicles
• Electricity based end-use
• Heat pumps
Higher efficiency technologies are much more
efficient than fossil fuel based
21%
• Multiple zero carbon power
generation technologies already
exist at competitive costs 11%
Easier
decarbonization • Economies of scale: power emits
at generation plants, fuels emit
at consumption points (many
more) 1973 1 2007 1 2050E
1. Values for OECD
Source: IEA - Key World Energy Statistics (2009); 2050 values calculated as average of 5 European studies’ forecasts (Eurelectric, PWC, ECF, New Energy Era)
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18. Electric mobility: a powerful tool to increase efficiency and reduce
emissions
Global efficiency in the use of primary energy Specific emissions for different transportation techs
%, 2009 and 2010 for Portugal gCO2/km, 2009 and 2010 for Portugal
80%
Point equivalent to the 350
generation with CCGT FCEV -
electrolysis
70% BEV
300
60%
250
BEV with CCGT
50% more efficient
than CNG 200 BEV
40%
150 Gasoline
30% Diesel
FCEV - SMR FCEV - SMR
Diesel 100 CNG
20%
Gasoline
FCEV - and CNG
50
10% electrolysis
0% 0
0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1 0 0,1 0,2 0,3 0,4 0,5 0,6 0,7 0,8 0,9 1
Efficiency of the electricity
USA and China EU PT generation system PT EU USA China
Specific emissions in electricity generation
Source: ACAP, Eurelectric, DPE analysis
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19. Main trends: 4 Grids
Instruments What they allow
• Dilute local intermittency in a larger system
• Reduce need for backup capacity
Transport • Take advantage of countries’ comparative
grids advantages in regard to renewable resources
Large-scale
• Combine technologies with complementary
integration of seasonality (solar, wind)
intermittent • Mature and cost-efficient technology
renewables
• Facilitate adoption of energy efficiency
Distribution • Allow integration of micro-generation
smart grids • Enabler of electric mobility and distributed
storage
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20. Main trends: 5 Going Distributed
• Thermal storage
• Batteries
Distributed Distributed • Electric mobility
Generation Storage
Technology
• PV generation
• Micro CHP
• Micro wind turbines Distributed
Energy Management • Smart meters
Systems • Standby killers
• Heat pumps
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21. Grid parity is around the corner
Levelized cost1
Costs of a rooftop solar PV system <100 kW xx (€/MWh)
€/Wp, 2006-2012
380 143
5.0
4.4
4.3
3.6
-64%
2.9
2.4
1.8
2006 2007 2008 2009 2010 2011 2012
Innovation has and will continue to be key in cutting the cost of solar generation
1. Assuming FOM 20 €2010/kW; load factor 1.400 equivalent hours; WACC 9%
Source: BSW-Solar PV Price Index 5/2012
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22. Agenda
The case for innovation in energy
Pathways for the future
Innovation and Sustainable Development at EDP
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23. EDP’s strategy answering the main trends
Renewable Electric
Energy Mobility
Smart
grids
Energy
efficiency
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24. EDP’s research in deep wind offshore has been considered a leading example
worldwide, having attracted several leading entities in the field
UK Wind Offshore Partnership Wind Float Project
Moray Firth
1.5 GW
Inch Cape
0.9 GW
EDPR is leading the development of up to 2.4 GW of EDP recently installed a wind floating turbine in
wind offshore projects with a 60% stake northern Portugal coast
First wind offshore project in the world without
Joint development of wind offshore project in UK
any heavy load support
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25. InovGrid as the #1 project in Europe by the European Commission
Benefitting consumers and offering a technological leap forward in network service
and capabilities
Operational Efficiency
Energy Efficiency
Service Quality
Renewable Energy
Electric Vehicles
• 31,300 smart meters are being commercially tested in the Portuguese city of Évora
• Expansion to the 6 million Portuguese client base set to start soon...
• First pilot project in Brazil replicating the same technology with be concluded also in 2012
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26. SaveToCompete as an innovative program privately funded to
promote Energy Efficiency in B2B
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27. Kakuma: a pioneer example from a “nowhere land” to a place to live
• Project developed in Kenya in a partnership with the UNHCR (UN Refugee Agency)
• 10 projects with significant impacts in the community
• EDP invested 1.3 million euros invested
•Benefiting 77.000 refugees, 11 institutional buildings, 15 schools and 2 hospitals
Before
Now
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28. Main takeaways
• Technology and innovation are needed to meet energy consumption
growth in a sustainable way
• Going forward, the main trends in energy systems involve energy
efficiency, decarbonization, electrification and going distributed
• EDP is strongly committed in promoting innovation and sustainable
development pursuing opportunities aligned with the main trends
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