ACCIONA Energy draws up a new business strategy

• Financial partners will be allowed to enter its international renewable portfolio to boost growth
• Activity on behalf of clients will be strengthened through service contracts and wind turbine sales
• Investment will be limited in 2014 to wind power and photovoltaic projects already underway

ACCIONA ENERGY INSTALLATIONS WORLDWIDE

Investment in 2014 will be limited to completing projects already underway. The Company will pursue its strategy to reduce costs and debt, having achieved success in both these areas during 2013.

The effect of the regulatory changes in Spain signifi ed a hit of 257 million euros on ACCIONA Energy’s EBITDA in 2013, and asset and goodwill write-offs amounting to 1,675 million euros. The fi nal stage of these changes only takes effect only after 14 July of this year. The impact on a normalized year, with average production from assets at current prices, will oscillate between 360 and 370 million euros.

The division’s revenues in 2013 remained pretty steady at 2,120 million euros, thanks to greater wind and hydro generation in Spain, which compensated for the impact of the regulatory changes, but EBITDA fell by 12% - from 1,125 to 979 million euros - and pre-tax profi t (EBT) decreased by 95.9% to 6.7 million euros.

Investment was reduced by 54% compared to the year before, and assets (valued at 114m euros) in South Korea were sold. Investment worth 307 million euros is foreseen for 2014 and the fi rst quarter of 2015, in order to complete projects currently under construction, while wind power assets in Germany are to be sold (157m euros).

All this will help reduce debt, as it did in 2013, when the impact of the regulatory changes was felt heavily and ACCIONA Energy cut its debt by 871m euros from 6,086m to 5,215m euros (-14%).

Company has a very strong base

Despite the present situation, ACCIONA Energy maintains a broad and excellent portfolio of operational renewable energy assets, many of them with high load factors. This constitutes a very strong base with which to tackle the current diffi culties.

The production capacity of these assets will result in the generation of recurring revenues over a long period of time, in increasingly competitive technologies.

Incorporation of a fi nancial partner in its international portfolio will reduce the weight of the Company’s debt and facilitate growth, today made diffi cult by the strong decline in revenues as a result of the regulatory changes in Spain.

OWN INSTALLATION DEVELOPMENTS

Completing projects and incorporating partners

ACCIONA Energy will complete all its own projects under construction at the start of this year, during 2014 or in the fi rst quarter of 2015.

The fi rst half of this year will see the Company connect to the grid the Chiripa wind farm (49.5 MW) in Costa Rica, in which it has a 65% stake (32 MW attributable using the equity method).

In the second half of 2014, the solar photovoltaic plant at Sishen (94 MW) in South Africa, developed by a consortium in which the Company holds 51%, will start operating.

At the end of the year, the Punta Palmeras wind farm (45 MW) in Chile, 100%-owned by ACCIONA, will be completed. And between the fourth quarter of 2014 and first quarter of 2015, the Gouda wind farm (138 MW nominal/135.1 MW net) in South Africa, in which ACCIONA also holds 51%, will come on line.

All this activity will see the Company incorporate 324 MW into its own asset portfolio (194 MW attributable). As it stands, no new projects are expected to begin in 2015. Any new ones would depend largely on the participation of fi nancial partners in the international renewable portfolio.

ACCIONA is working on the integration of one or more partners to acquire up to 49% of a portfolio totaling 2,273 MW of attributable capacity (including projects currently under construction).

EPCs Wind and photovoltaic contracts for clients

ACCIONA Energy will combine the completion of its own installations with the strengthening of its activity providing services to clients.

The Company is to conclude the commissioning of the Royalla photovoltaic plant (24 MWp) in Australia, for the developer FRW, in the fi rst half of 2014. This is the first turnkey plant ACCIONA has built in Australia.

The Company is also due to begin the construction in 2014 of South Canoe wind farm in Nova Scotia, Canada. The plant of 102 MW, made up of 3 MW ACCIONA Windpower wind turbine generators, is being developed by local partners in the province.

ACCIONA Energy is also developing and building an ambitious 252 MW wind power project in Mexico, contracts for which are currently being finalized.

And the company is building two turnkey photovoltaic plants with a total capacity of 49 MWp for a power company in Chile. ACCIONA is also ready to take minority stakes in wind and photovoltaic projects by other developers, where they lead to the signature of engineering, construction and commissioning contracts at the installations.

TURBINE SALES

Commercial success of ACCIONA Windpower’s 3 MW wind turbine

ACCIONA Windpower, ACCIONA’s wind turbine subsidiary, signed contracts in 2013, and has others pending in the fi rst half of 2014, for the sale of 1,560 MW worth of 3 MW generators. This represents a commercial success mainly due to the reliability and competitiveness of this type of turbine and its broad range of options for different wind conditions.

ACCIONA Windpower implemented a program in 2013 to reduce the Cost of Energy (CoE) associated with each wind turbine -a concept that integrates the total cost of investment in each machine (acquisition of components, manufacturing process, transport, installation and commissioning) and the operation and maintenance cost of the machine during its useful life (average 25 years). In 2013 alone, the Company achieved a reduction of 13% of this cost, which it is hoped will reach 25% by the end of 2014.

Mature and emerging markets

Orders for the turbine, formalized in 2013 or at the fi nal negotiating stage in the fi rst quarter of 2014, comprise 43% for wind farms in Brazil and 25% for the US/Canada. Another 16% are heading to Mexico, 9% to South Africa, 4% to Turkey and 3% to Chile.

In terms of ownership of the installations, 88% of the capacity of these wind farms corresponds to external clients, while 12% is in ACCIONA Group hands, representing a very substantial change to the modus operandi of ACCIONA Windpower in previous years, where supply to ACCIONA Energy and its subsidiaries has been greater than the sale to third parties (64% compared to 36% for the AW 1500).

Wind turbine orders already signed or where contracts are being finalized mean that the manufacturing plants in Spain will be running at full capacity in 2014 and for a large part of 2015. The plant the company is currently building in Brazil, which will be operational in the fi nal quarter of this year, also has production guaranteed for 2015 and into 2016.

A turbine for all seasons

The AW 3000 wind turbine has four possible rotors, with towers of different heights and in steel or concrete. This gives the wind power developer different options depending on the site where the project is being built.

For rotors, ACCIONA has a 100m-diameter version for sites with strong wind power potential, and an additional 109-meter model for specifi c locations. But most demand is for the AW 116/3000, of 116m diameter, specially adapted for medium-strength winds, and the AW 125/3000 for wind with less force.

The wide variety of tower heights and types - 100 to 120m in concrete and 87.5, 92, 95.5 and 120m in steel -completes the highly adaptable range of AW 3000 wind turbine generators for the characteristics of different wind power sites.