ENEF 2006 Strategy of Slovenské Elektrárne, a.s. on Free Energy Market November 7, 2006
Enel international portfolio Spain Viesgo: 2.366 MW coal, oil, hydro, over 600.000 customers 80% of Enel Uniòn Fenosa Renovables 445 MW Escatron CCGT realization started 800MW North America Latin America 410 MW Hydro, wind and other renewable in US and Canada More than 300 MW hydro, geo and wind in central America, Brazil and Chile El Salvador [Geo]: equity participation in LAGEO >100 MW geothermal Panama: equity participation in 300 MW of hydro capacity Italy UK FR PT ES 43.000 MW (16.000 MW of renewables) >30 mn customers NL BE France CH DK DE 5% Powernext MoU to develop EPR Erelis (wind developer) SE IT NO PL LT FI EE LV CK SK AT HU SIHR BA RO YU BG AL (1) MK GR BY UA MO TR RU Russia Operation NWPP, CCGT S. Petersburg 450 MW 49.5% Rusenergosbyt (10 TWh sold) Slovakia 66% of Slovenské Elektrárne 5.250 MW + 1.850 MW capacity under contract Romania 51% distribution company Banat & Dobrogea 1,4 mn customers, 7.7 TWh distributed Muntenia (1.1 mn customers under acquisition Bulgaria 73% di Maritsa East III 840 MW lignite power plant 1 /9 A significant focus on Central-Eastern Europe
Strong commitment to invest in target markets Investment Spain France Escatrón conversion from coal to CCGT Gross installed capacity: 780 MW Power prices: 6-7.5 [c /kwh] Development of 650 MW new renewable capacity 12.5% participation in EPR nuclear project Availability of existing nuclear capacity growing to 1,200 MW over time Wide know-how transfer in the nuclear field Development of 500 MW new wind capacity Bulgaria Americas Marizta East III Gross installed capacity: 840 MW Efficiency improvement, life extension, alignment to EU standards Power prices 5-8.5 c /kwh North America Invested over 180 Mn since 2000 Added over 200 MW capacity South America Invested over 380 Mn since 2001 Added over 450 MW capacity 2 /9 Enel buys companies and grows companies
Renewed Focus on Nuclear Energy Increased pressures on CO2 emission Increased geopolitical risks on fossil fuels Physical and technical constraints on development of wind, hydro and other renewables Continuous technological advancements in nuclear safety systems Acquisition of four nuclear units in Slovakia Bohunice & Mochovce Investment analysis for the completion of two additional reactors at Mochovce Negotiated participation with EDF in the Flamanville EPR project Actively pursuing other nuclear investment opportunities across Europe Investing in Nuclear expertise development in EPC and O&M Our aim is a balanced mix of energy sources, roughly equally split between coal, nuclear and renewables. Nuclear energy is cheap and environmentally friendly 3 /9 Fulvio Conti, CEO Enel, April 2006
Key challenges for Slovenské Elektrárne A new company Shareholders and governance People and organization Carve out A difficult environment Plant retirements Competition Regulatory pressure Historical burden High debt Onerous contracts Impact from carve out It is not just about the entry of a new investor 4 /9
Strategy Care for people "We aim at growing SE personnel into responsible, accountable and performing leaders, by providing opportunities for professional development and by rewarding performance" Focus on performance "We will be obsessive in identifying and capturing all value creation opportunities, focusing on nuclear safety, efficiency, productivity and right value of our energy" Invest in the community "We will pursue all profitable opportunities to reinforce our leadership position in the CENTREL through investments and acquisitions, maintaining a socially responsible and safety oriented attitude towards the country and our stakeholders" People, Performance, and Community 5 /9
Strategy 2 Bn (~ 78 Bn Skk) investments to restore SE as one of the most competitive generators in Eastern Europe Completion of EMO 3 4 Uprate of EMO 1 2 and EBO 3 4 Construction of Small Hydro Development of wind Reconstruction of NovakyFK2 Grow SE beyond Slovakia Hub for Central & Eastern Europe power trading Centre of excellence for nuclear within Enel Group Hub for future expansion in region A central role within Enel s expansion in Central and Eastern Europe 6 /9
SE investment plan Installed capacity MW 2005 2006 2007 2008 2009 2010 and beyond Nuclear ~1,000 EBO V2, EMO 1 and 2 uprates EMO 3 and 4 Hydro ~10 Small hydro Wind ~100 Wind farm Thermal ~20 ENO FK2 Cogen Potential for almost 1,200 MW of new clean, competitive capacity 7 /9
Conclusions Slovakia SE Acceptable level of autonomy in energy production through ambitious investment program Majority of energy generated from clean sources like nuclear and hydro Proactive and responsible collaboration with TSO and Regulator to ensure increasing system security to the Slovak market Increased efficiencies Access to the resources of a broader group Reinforced competitive position in Central and Eastern Europe with a domestic market share of 70% to 80% Employees Opportunities for personal growth in an international company Enhanced programs for professional development Access to international best practices and state-of-the-art of technologies Enel aspirations in Slovakia will benefit the country, the company, and its employees 8 /9