North America


Top-line in the US went up 14% year-on-year to 577 million dollars benefiting from I) the capacity installed in 2011, the full 12 months of operations of the capacity installed in 2010 and the continued monetization of tax credits through institutional partnership transactions; but hampered II) by low merchant prices and different long-term contract’s pricing structures.

EDPR’s wind installed capacity as of December 2011 totalled 3.4 GW from 3.2 GW in 2010. Following the increase in installed capacity and the positive net capacity factor performance to 33% (+1pp year-on- year), the electricity output increased 21% in 2011, reaching a total of 9,330 GWh.

In 2011, the output under PPA/Hedge contracts was 6,716 GWh (72% of total output versus 70% in 2010), while the output exposed to merchant prices totalled 2,614 GWh (28% versus 30% in 2010).


The average selling price was $45.7/MWh in 2011, 4% lower vis-à-vis 2010. This performance reflects I) the low electricity spot prices affecting the merchant output sales; and II) lower average PPA/ hedge contracts’ final prices as a result of different pricing structures in some of the new contracts (with a lower starting point and higher escalators) and lower curtailment revenues (as a result of lower curtailment but mitigated by higher generation).

Operating Costs

Operating costs increased 62% YoY, mainly reflecting the evolution in the “other operating costs / (income)”, which was impacted by two non-recurrent items: I) in 2011 as a result of a write-off related to pipeline rationalization (-$15.6m); and II) in 2010 following a transaction closed in the 4Q10 to shorten a PPA maturity (+$21m cashed-in). It is important to highlight that the Opex on a per MW basis decreased by 6% (excluding other revenues and non-recurrent items), as a result of a strong cost control and efficiency.

Operating Income

All in all, the 2011 EBITDA in the US fell 2% to 376 million dollars, given the operating non-recurrent items in costs (included in “other operating costs / income”), which more than offset the higher capacity in operation along with a higher net capacity factor.

Revenues increased 14% YoY to 577 million dollars

In 2011, EDPR decelerated its growth in the US to 198 MW as a way to select only the best projects available, with the objective of guaranteeing the highest profitability possible at the minimum risk. Thus, the Timber Road II wind farm (99 MW) has a 20-year PPA which was signed in 2010; and the Blue Canyon VI wind farm (99 MW) is a project with very competitive characteristics, namely low capex per MW and strong wind resource (i.e. net capacity factor above 40%).

Institutional partnerships

Following the tax equity agreements closed in 2011 for the capacity installed in the same period in the US, by December EDPR had:

  • 2,123 MW under the Production Tax Credits (PTC) regime, enabling the monetization of the PTC plus the MACRs. EDPR had 2,024 MW under this regime by December 2011, having increased by 99 MW vs. 2010 given the latest tax equity structure closed for the Blue Canyon VI wind farm in Oklahoma in the last quarter of 2011;
  • 500 MW under the cash grant flip, enabling the monetizing of the cash grant plus the MACRs. In 2011 EDPR closed an additional agreement of this type of structure for its Timber Road II wind farm (99 MW) in the third quarter of 2011;
  • 799 MW which have received the upfront cash reimbursement. In 2011, EDPR did not apply for this type of tax incentive, as the company chose to benefit from the PTCs monetization and the cash grant flip given the higher NPV value achievable by these specific projects when using this type of structure tax equity structures in lieu of the cash reimbursement stand-alone.
  • The income from institutional partnerships totalled 155.4 million dollars in 2011 (+10% vs. 2010) reflecting the deals closed in the last 12 months. This revenue is incorporated in the Revenues line of the P&L and is the quarterly accounting recognition of the tax credits which the tax equity partner actually benefited in each period, therefore reducing the institutional partnership liability in the Balance Sheet.

    The projects that opted for the cash reimbursement benefit from lower depreciation charges, booked as compensation of subsidized assets’ depreciation (19 million dollars in 2011, +31% year-on-year).

    77% of total installed capacity in the US is under Institutional Partnership agreements