EDP Renewables, S.A. (EDPR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thanks for all that are attending the EDP Capital Markets Day 2023, either here in the room or via the webcast. We'll be presenting our EDP plans to contribute to the energy transition, and at the same time, creating value to all our stakeholders. In terms of the agenda of the events. So we'll have a first part of the presentation, in which our CEO, Miguel Stilwell d’Andrade, will be presenting our strategy and outlook in terms of business platforms for the business plan periods and vision for 2030. Then, we'll pass to our CFO, Rui Teixeira, which will go through the financials of the plan and how do they work. And finally, coming back again to Miguel Stilwell for the final remarks. We'll have a second part covering Q&A in which we'll be getting questions both here from the audience in the room, but also written questions that you can place right now at the webcast in the platform. So the event should last altogether, something between 2 and 2.5 hours. And without further ado, I'll pass now to our CEO to start the presentation. Thank you.

So good morning, everyone, and welcome, everyone in this room, but also those of you that are watching us online virtually. I think it's good to see a lot of familiar faces. I think last time we presented a strategic update was 2 years ago, and we're still in the middle of the COVID pandemic. And so it's all done virtually for those of you that remember that. So it's great to be here today. I wanted to thank, obviously, all the investors that are following us, also all the analysts that have been following us, the EDP journey over the last couple of years. I think we've been working hard not only to deliver, and we talked about the 2023 results earlier this morning, but we also wanted to talk about the prospects going forward. So how we take EDP along this journey. Also a special word to [indiscernible] Chairman, also to my colleagues on the Executive Board that are here and on the management team of EDPR. I think it's really a privilege to work with such talented people and such a talented team. And I think that's really one of the things that differentiate EDP from many of the other companies. So I'll start off by saying this is a great time to be in this sector. I truly believe that. I think we truly believe that, and I'd say that we see 2 key things. One, the world is changing. It's changing very fast. It's been very volatile, certainly over the last 2 years. We see inflation, we see higher interest rates. We see volatility. We see supply chain disruptions. So that's here to stay. I mean we believe that certainly over the foreseeable future, volatility will be here, and we need to cope with it. We need to have a resilient business plan, a resilient company. But our sector is also changing. And there is this need to drive the energy transition to have more energy independence in, for example, places like Europe, certainly in the U.S. to have affordable energy. And all of that is going to require a massive amount of investment. And that is, I think, where we come in, where we can add value by contributing to adding this investment, which is being done at a time when we are seeing much higher returns than we are seeing in the past. So I think we see substantial investment opportunities, certainly going forward over the next couple of years. And I think I'm personally both excited but also optimistic for what we'll have going forward. So if I had to summarize perhaps the business plan. And before I even get into the slides, and I haven't even started passing any slides, but I had to summarize and some of that information is out there. I'd say perhaps 5 key things. First, we're accelerating our commitment to renewables, to the energy transition also in networks and clients. We think it's a good time to invest. The returns that we will be locking in at this point in time with higher cost of capital will be good projects, good PPAs for the next couple of years. The second is that we're anticipating the financial targets that we set out in the previous business plan back in 2021 by more than a year. So in 2023, we will exceed the target that we had set back then. And we expect to exceed the '25 targets in 2024. So this shows a good acceleration of the business plan. And we are then extending the business plan out to 2026. As you know, that's -- not many companies are currently doing that, but we are projecting that a further year past 2025 to 2026. And so committing to improving the targets that we're setting out here versus the previous plan. The third point is that we're taking EDP Brasil private. I'll talk quite a bit more about that, but we believe there's a strong industrial rationale for that. It's earnings accretive, it's value creating. It's also -- we're putting an attractive price for minorities. At the end of the day, we think it will be a win-win operation, and we think it will be -- bring simplification also of our operations in Brazil. But I'll get to that also in a moment, but we see that clearly as making sense for the company. The fourth point I'd say, and that's particularly important in the times we're living is to have an absolute commitment to the BBB rating. So that's a red line for us. For those of you that are from the credit rating agencies, I can see some of you, that is a commitment for us, and we are absolutely set on doing that. So to finance this growth to finance taking EDP Brasil private, we're doing 2 equity raises, one at [indiscernible], which is already more than 60% subscribed by institutional investors and also one at EDP Renewables, which is already fully subscribed by GIC. You'll have already seen the announcement that came out earlier today. So both of those capital raisings, allowing us to support the growth, allowing us to support taking EDP Brasil private and ensuring we keep a solid balance sheet so that we can ride out these volatile times. The fifth is we will be increasing the dividend. So we are having the payout ratio of 60% to 70%, and we see that we will be able to have stronger dividend payments over the next couple of years. This is natural, which will follow the increase in the net profit. So we are expecting double-digit growth in net profit, and that [ certainly ] translates then into good dividend payouts. In a nutshell, and as I say, before I even get into the slides, but I think just to keep that in mind, I think EDP is a great investment opportunity. I mean, certainly, it's in a great sector, fast growing, a lot of good investment opportunities. And I think with the strong support of investors with the commitments that we've already seen, there's no doubt that we will be successful. And I think the team is highly motivated. It's really infused in executing and delivering on this business plan going forward. So I think that's one of the key messages you have. You didn't have to get the CEO doing the top down. We've got to reach these targets. This was a bottom-up approach. And I think the team here is absolutely committed to making sure that we get that done. All right. So getting into the presentation. So I'll talk a little bit about what we're seeing in the overall macro world, some of the key highlights. And I'll talk also about our platforms, different business units [indiscernible] already mentioned [indiscernible] our financials and then just some closing remarks. I'm just going to show this slide. I think you know it, but I think this is basically good to say that major push for driving the energy transition continues to be there. And it's very present when we think about, for example, Europe, where I think about the U.S. in terms of pushing that sort of green transition. But what I'd say is that apart from the need to battle climate change, and that's been a big push over the many, many years over the last couple of years, what we've seen is that certainly in the last 12 months, if not to say, for the last 18 months, we've seen a lot of changes in the global dynamics. We've seen gas flows into Europe decreased dramatically, as you know, because of the terrible war in Ukraine. So that's had a major impact on Europe. We've seen an increase in energy prices globally, whether it's gas, but whether it's oil, whether it's electricity prices. So that's been also something that's been very present. Inflation, higher interest rates, so from a macro perspective, that's also been a big disruption over the last 12 months. Supply chain challenges, that's also been something which has become more present of this period. Increasing CapEx costs, so we've incorporated obviously all of these dynamics, and we recognize that. I mean we are perfectly conscious about what's going on in the world, and that's why we've also designed this business plan to, on one hand, drive growth, but at the same time, make sure that we can navigate through these different challenging dynamics. I think the only thing I'd say is that all of this has just reinforced, and we believe that the need for energy independence, affordable energy and reliable supply chains. And that's something that has become very, very clear over the last 12 months. Now this is not just us that are seeing this. I mean, the whole sector is seeing this. I think governments are seeing this, certainly even sort of regions like Europe are seeing that. We can talk about the U.S. We can talk about the Inflation Reduction Act. I mean, I truly believe that's one of the most consequential pieces of legislation, tackling climate change that has come out probably ever. Very simple, very powerful, very clear, sending very specific messages in terms of driving the renewables, but also moving the supply chain to the U.S. I'm not going to get into detail on all the issues around the tax credits and the way it works, I'm sure most of you know that. But what we are seeing is that certainly impacts some of the profitability positively in the short, medium term. And then we think it will drive further growth from 2025 onwards. So as people like ourselves, ramp up the investments as they ramp up the development of the pipeline, those are projects that will start coming in towards the back end of the business plan. In Europe, REPowerEU, again, came out just shortly after the war in Ukraine, and we've seen additional measures being taken by the European government, whether it's the Green Deal Industrial Plan, whether it's a reflection on the market design, whether what we know so far, and we can talk about that as well. But it's basically that how do you accelerate, how do you create sort of an environment where you can have more PPAs, where you can have more penetration of renewables. Asia Pacific, again, huge, massive area of the world in terms of energy consumption and growth. We are seeing more and more renewable targets also being set up there. And so I think we've already positioned ourselves there as well. Now there are still challenges. So there are challenges certainly in terms of ensuring that we have predictable, stable regulatory frameworks. That's something that we've been certainly fighting for, I think, the whole sector has been challenging the European Commission and other places on making sure that's in place. Simplifying the permitting processes. That's true in Europe. It's true in the U.S. as well. So how can we accelerate projects can take 4, 5 or 6 years to be developed. They need to be done on a 2-, 3-year maximum. That is being tackled on a country-by-country basis. Europe has already given some guidelines. We are beginning to see specific countries also move on that aspect. And then the interconnections as well. That's an important part that also will be necessary to drive growth of renewables. On this point, I'll also talk a little bit in a little while about how we can take advantage of the fact we already have a large installed base to leverage on those interconnection points. But summarizing all of this, I think, are good structural tailwinds for investment in the renewable sector, and that's something that we will continue to bet on. This is an interesting graph just because 2 years ago, we showed some numbers about what was expected by the International Energy Agency in terms of growth of renewables, growth of DG, batteries, networks. And so on the left-hand side, you can see what was the targets 2 years ago. And now you can see the targets that are the most recent targets. In all cases, increases of 30%, 70%, 40% or doubling -- so 30%, 70%, 40% or even doubling in the case of the network investment. So we are clearly seeing increased targets just over these 2 years. And so for us, and just summarizing it, let's say, on one side, some of the key messages. We are expecting EUR 25 billion of growth investment over the next 4 years, around 4.5 gigawatts and per year. So this will ramp up. I'll show you in a little bit more detail, but we'll ramp up from about 4 to 4.8 sort of towards the back end. Overall, 50 gigawatts by 2030. That's something that we think is achievable if we continue to ramp up. We are reaffirming also some of our ESG credentials in terms of being coal-free by 2025 or green by 2030. An important point as well will be net zero by 2040. And this has already been certified by the science-based targets initiative, which, as you know, actually validates scientifically. So it's not just greenwashing. This is specific targets that have been validated by that organization. On the balance sheet, as I mentioned, the BBB rating, the 20%, 21% FFO net debt for '26, which is obviously a solid ratio, having a significant part of our EBITDA and investments in highly rated markets, whether it's Europe or in the U.S. And in terms of value creation, we're expecting to grow substantially our EBITDA and our net income. So our net income on a double-digit basis compounded over the next 4 years and with a revised dividend floor by 2026 of around EUR 0.20. So let's go into a little bit more specifics. You'll have seen the announcements earlier this morning or some of you may have seen that, which are just some of the key highlights, actually giving you some of the specifics. So in the previous business plan, we had around EUR 4.8 billion per year. We're increasing that by around 30%. One of the things I mentioned is that CapEx per megawatt has increased. So to do the megawatts, you need more CapEx. I think one of the interesting things, though, is that the returns is on euros. It's not on megawatts. And so that's something also to keep in mind. It's -- you're investing and you're getting the returns based on the overall investment. The total of EUR 25 billion, as I mentioned, a big chunk of it is in renewables, clients and energy management, around 15% in electricity networks. And then in terms of the mix, as you can see, a balanced mix between Europe and North America, South America, primarily Brazil, and then around 5% growing in Asia Pacific. This ramp-up, as I mentioned, so we've been doubling every couple of years. So we went from building around 700 megawatts per year between 2010 and 2020. That doubled to around 1.3 towards the back end of that decade, 2.4 over the last year. We now have 4 gigawatts under construction as we speak. And so that makes us confident in terms of the '23, '24 target, that '23 will get to 4 gigawatts, and we're working, obviously, on the '24 as well. So to get to the around 4.1 gigawatts. '25, '26, we're aiming for the around 4.8 gigawatts, and then '27 and beyond, we will obviously have to wait and see. But clearly, depending on market conditions, depending on how things are going, we see potential upside there. So on average, over the business plan period, the 4 years around 4.5 gigawatts. Of the total investment, around 50% is already secured and 50% is still in pipeline that we are developing, and we will obviously go on giving visibility to you as we go on securing that over time. We are keeping our asset rotation strategy. This was an important part of our previous -- of our various previous plans. We are keeping it around 30%. At one point, it used to be 50%. We brought it down to 40%. It's now around 30%, but obviously, on a much bigger volume. We continue to think that it's [Audio Gap] projects. We are keeping a big part of them, but we are selling some and we are cashing in. We are derisking some of those projects. We're getting basically all of that value creation upfront and then reinvesting it back into the business. I think we have a fantastic track record in this, I mean, 2023, for sure. But just over the last 10 years plus, we've done over EUR 20 billion of asset rotations. I'd like to highlight the 40% average asset rotation gains of our invested capital, good spreads. So I think that shows that we have been able to create value with these projects. In some cases, as I say, we'll keep them on the balance sheet. In other cases, we will sell them and just get that -- those proceeds so we can reinvest and continue to grow faster. A couple of words on digital and innovation. On digital, this is important for a company that is growing because one thing is to do 700 megawatts per year, you can almost do that on an Excel spreadsheet. It's a couple of projects. We're managing it, fewer people. It's relatively straightforward. When you start ramping up a company, you need to really get processes in place that are much more digital so that you can automate it, so you can get those efficiencies, so you can really scale things up on an operational basis. And so that's been a big part of the work that's being done invisible to the outside, but important on the inside in terms of making sure that we are able to scale up and get those efficiencies of that scale. Using all the typical tools, whether it's AI, whether it's using analytical -- analytics, whether it's just sometimes thinking digital by design when we're redesigning the processes internally. So that's been a big part, and we're spending and we're investing a lot of money on that, particularly on the networks, but also on the renewables business. On innovation. This continues to be an important part of the company because a lot of -- I mean, for those of you that have read International Energy Agency report, some of the technologies that are expected to contribute to the net zero by 2050 are considered to not yet have been invented or not yet commercially available. And so it's important that we keep up to speed with what is going on in the sector. And just a couple of examples. I mean, we started investing in floating offshore wind many years ago. We actually have I think 1 of the 2 operational floating wind projects off the coast of Portugal. We've already got 3 years of operating data based on that. We've actually seen it work. So when we start seeing auctions for offshore wind, whether it's in California, whether it's in Scotland, whether it's in other locations or South Korea, we're talking about the type of technology, and I'll talk about that in a bit, but type of technology we already began to familiar with. To start off as an innovation project, but then now it's becoming commercial scale. So it's important to keep up to speed on these different areas. Floating solar. Floating solar is actually now being deployed both on dams and also on, for example, in Singapore on the sea when you don't have a lot of waves. So that's another area. Distributed generation. This used to be something which is more or less considered innovation, that's also beginning to take off. We can talk about hydrogen. So many different areas really are beginning to scale up over time. Those used to be innovation projects we need to keep up to speed with that. And so we're continuing to invest on that also going forward. People. Typically, considered the most important asset of a company. Again, I think one of the statistics I'd like to say, it's actually not on the slide, but 90% of the people at EDP are proud to work at EDP. We have [ 92% ] response rates to surveys, but people genuinely feel they like to work for the company that they see themselves in the purpose of the company and that we are able to not just attract the best but also retain them over time. As we go on scaling the company, as we go on attracting people, that's incredibly important, making sure that people are good. And fortunately, I think we have an incredibly talented team throughout the company, 13,000 people. We'll be hiring around 3,000 people over the course of this business plan. We have a good diversity. This is very much an engineering company, typically low levels of female participation. That is increasing substantially. And so we've gone from around 25% in the past, and we're expecting to be over 30% by 2026. So talent is something that we continue to work on very, very much. We have lower attrition rates than the sector and many other companies in the sector. So I think that's also an important point to make. So this is something, again, invisible to the outside, but very, very important in terms of making sure we can then execute and deliver on the business plan. ESG. This is something that EDP has been known for in terms of being your reference. We were considered the most sustainable integrated utility in 2022 according to the Dow Jones Sustainability Index. As I mentioned earlier, the 2040 targets have now been validated by the science-based target initiative. We've committed to being coal-free. We've committed to being all green, net zero, so Scope 1, Scope 2 and Scope 3 by 2040, as I say, validated. For us, it is important to work with the local communities. It's not just a buzzword, but as you know, renewables and networks are very granular, very distributed infrastructure. We impact a lot the local communities and we need to have a conscious. This is not something that you say, okay, it's just to tick a box. It's because if you don't do it properly, you can't develop the projects, you can't operate properly. And so working with the local communities is an incredibly important part for us, going to the town hall meetings when we're developing a project, explaining to people why having wind turbines or solar project is not -- is a good thing for the community. And so that you reduce the backlog against that type of thing. Protecting the planet. Particularly in terms of biodiversity, that's becoming more and more important for governments and for the various sort of communities that we work with. Partners. Again, the whole value chain is incredibly important. So that's also something that we've been spending a lot of time in making sure that all of our partners, all the supply chain is also aligned with the ESG targets. And so if we want to get to net zero by 2040, we need to work along all of that. I give a good example, I think, of -- at least for me, when it was most -- when I really got the idea of the impact of value chains, I was in Singapore, and we're talking to some of the people there about, for example, Indonesia, saying it's not so important renewables targets there. And so people weren't investing that much in renewables. But then someone said, but actually, the companies that are operating there, which are integrated in the supply chain. A lot of them are having to buy renewable energy if they want to be a part of the supply chain into the U.S. or into Europe. And that is what is driving a lot of that change in that part of the world. It's not necessarily that you need to have a top-down government decree saying, "You're going to do renewables." Many times, it's just a value chain. People that are integrated along the value chain, saying, if I want to sell to Amazon, if I want to sell to GE or someone, then I'm going to need to be compliant with those -- if I want to sell to EDP, I mean you need to be compliant with certain requirements. And so that drives also the need, for example, for -- certainly for things like distributed generation in those type of countries. So for me, that was an eye opener in terms of the impact of the value chain and how that will drive growth even in areas which perhaps typically aren't expected. The balance sheet. I've talked about the commitment to the BBB, FFO net debt, and we will obviously give you a lot more detail on that. Keeping it above the 20% and EBIT -- net debt to EBITDA also sort of in the low 3x. I think one of the things that you know about us, and we've been around for a while is we have flexibility on the balance sheet, whether it's in terms of asset operations or disposals, we can make sure that we are committed to keeping that balance sheet independently of volatilities and bumps that we may have along the road. It's going to be a bumpy ride. We know that. But we need to make sure we have a solid balance sheet, and that's one of the things we're committed to doing. Now getting to 2 topics, which I'm sure you're very curious about, and you have read earlier. And partially related to balance sheet, but I think it's more about funding growth and funding some of the industrial logic of taking Brasil private. We are raising EUR 1 billion at EDP Renewables. We're also raising EUR 1 billion at EDP to finance the [indiscernible]. At EDP Renewables, as you know, and we've said this in the last presentation back in 2021, we're committing to have more than 70% of EDP Renewables. It's not just a tax consolidation issue, it's been our commitment. And you can go back and read the presentation and it's there, we wanted to keep more than 70%. And so this capital raise keeps us above that level, and it allows us to accelerate the growth within this requirement. As you know, and I just saw that we have a large investment program in EDP Renewables. We are financing around EUR 20 billion over the next couple of years. We have secured an investment commitment of around EUR 1 billion from GIC. You will have a lockup applicable to all its shares for 90 days after they come in. The issue price that has been agreed with them is in the range of 19.25 and 20.5, and we have the option at our discretion to curtail some of that up to 150 million to place it with selected long-term existing shareholders that believe in the company and at the same terms and conditions as GIC. So we will be doing an accelerated book build at an appropriate time. But basically, GIC has the EUR 1 billion secured. We can claw back part of it, but we will do it for long-term existing shareholders that we think will be there for this ride over the next couple of years. In Brazil, Brazil, I think it's important to say what we have in Brazil. Normally, people talk about EDP Brasil, and that's the listed company, where we have networks, we have generation, both hydro and we still have a coal plant there. Clients, a big trading platform, one of the biggest ones in -- sort of commercial platforms in Brazil. But we also have EDP Renewables Brasil where we are developing more than a gigawatt of renewables there. These are 2 -- so one is coming down through EDP Renewables, which is a listed company, the other one through EDP Brasil, which is also a listed company. This is not very efficient. We have basically 2 platforms operating in Brazil. And so the idea is that we will delist. Over time, our exposure will reduce in Brazil. This is not an increase in the exposure to Brazil. We have already said that in the past, we are selling [ Pecem ], the coal plant, and we are also selling hydro over the next couple of years. We sold 1 plant last year. We are committed to selling some additional ones. We see a lot of potential for growth in Brazil, but we want to make sure that we keep that exposure within the risk limits that we have defined for Brazil. So the focus going forward will be much more on networks, Solar DG, together with wind and solar. So getting rid of basically the coal and some of the hydro and so managing this overall group exposure. So you can see there, you've got resource contribution to EDP, 25%. It will actually go down by [indiscernible] as a percentage of the overall EDP, let's say, EBITDA. The transaction will be funded with a capital increase at EDP. So we're not going to take risk on balance sheet in doing that, particularly given these volatile times. So the rationale, as I mentioned, is industrial logic. It's got to do with balance sheet. It's got to do with synergies. It has to do just with the optimization of the portfolio. We think we can accelerate it. We think we can also optimize, let's say, the way we move or manage the cash flows. If I want to move cash from EDP Brasil, which is a cash flow positive business to the renewables business, I need to upstream it to EDP through dividends and with leakages and I need to downstream it to EDPR in Brazil. That's not very efficient. There are better ways of doing this. So we continue to believe in the company. We continue to think it makes sense. We just think EDP Brasil as a listed company no longer makes sense, and it's better to take it private. So we have announced the offer at BRL 24 per share. It's around a 20% premium to yesterday's closing price, has an implied [ PE of ] around 7%, implied [ EV ] for EBITDA of around 5x on the trailing multiple. We'll have a net profit contribution of around EUR 120 million. The next couple of years will be accretive even after the capital increase. And as I say, this EUR 1 billion of capital increase, we've already got 60% firm commitments from very credible institutions, ADIA, CTG, GIC. We're talking about 3 institutions that are already committed to taking 60%. The rest will be subject to market depending on market conditions, and so we have some time to do that. So we'll, again, launch this at an appropriate time. But the point is we're talking about essentially raising EUR 400 million of equity on the market, which given EDP's market cap should be relatively doable. So just technically, we are launching the offer for the remaining 40% of the total shares, slightly over 40%. The BRL 24, I mentioned there's no legal limitation to the management rights of EDP Brasil during this period. And in terms of getting success on the offers, so what is success on the offer, whether it flips, you need to get at least 2/3, I guess, of the free float shareholders registered for the auction. It's not overall free float. So it's people that show up for the auction, 2/3 need to vote in favor of the registry, you can then delist the company and then basically take it off the market. So that's something that will happen probably towards August, so beginning of the second half of the year. Obviously, the final offer and the timings are subject to the CVM, which is the local market regulator approval. So that's on Brazil. Where does it all leave us at the end of the day, the growth, capital raisings, the investments. We are expecting double-digit net income growth. So for 2024, we will be already overachieving versus the 25% target that we had previously. So we're anticipating the 2025 target to '24 and then some. And we are expecting to be at around EUR 1.4 billion to EUR 1.5 billion of net income by 2026. We think we have an attractive dividend policy. We're making it sustainable and aligned with our peers considering that there is a mix between dividends and growth. And so we're having a target payout ratio of around 60% to 70%. Obviously, as the earnings start increasing, we believe dividends also increased. And so we're projecting around the EUR 0.20 dividend in 2026. Okay. So I'll talk about the platforms. The platforms, basically, we're presenting it in a slightly different way. This is essentially previously -- in the previous business plan, we had renewables, which included both hydro, wind and solar, and then we had energy management and customers. And then we have electricity networks. The way we think about it is increasing that this is an integrated business, particularly in terms of renewables clients and energy management. We are generating energy. We're managing that and then either placing it with customers, with corporates or well, in Portugal, we have still B2C, but mostly corporates or in the market. And so that's, let's say, some of the way we'll be presenting this platform, and we'll also be presenting the electricity networks, which continues to represent a substantial amount of our EBITDA. So about 1/3 in renewables around 67% based on the 2022 numbers. If we talk about renewables. So we've been scaling up, let's say, the renewables, including hydro over the last couple of years. We currently have 22 gigawatts, including hydrogen in Portugal and in Brazil, but then wind and solar in many of the other geographies. So we've got 4 gigawatts already under construction. We also have Ocean Winds with already 1.5 gigawatts also operational. All of this, I think, positions us very strongly certainly in the U.S., also in Europe. We scaled up our European position. We bought Kronos, which gives us very good growth options and opportunities in Germany and also in the Netherlands, particularly in solar. We've established a position in Asia Pacific through Sunseap. We've tripled our offshore portfolio to 16.6 gigawatts, and we're also developing these new business models, whether it's DG, whether it's hybridization, storage or hydrogen, and I'll talk about that in just a couple of slides. So this shows a little bit of the growth perhaps since I already [ saw ] that a little behind, what I'll focus on is what's at the bottom of the slide. In terms of pipeline, so increasing the pipeline that we have available to deliver on the megawatts. In terms of technologies, so we went from being primarily a wind and hydro company to having also a large percentage of solar and also increasing the number of people to make sure that we can execute on this. So that's also what's going to drive, let's say, this growth going forward. And we have a good pipeline that will allow us to adjust this growth rate in the future. Speaking specifically about the pipeline, we have around 18 gigawatts projected over these 4 years, 8 of that is already secured. So it's a higher percentage than what we had in the previous business plan. And we have 10 gigawatts approximately still to be secured. As you can see, we substantially grow the pipeline over these years. So we've been investing over the last 2, 3 years in developing this pipeline to make sure that we can then deliver on these projects still to be secured. So I'd say both Asia Pacific, Kronos, but also our existing organic in-house development has really allowed us to build up this pipeline to make sure we can then deliver on that. In terms of the split of investment, so we talked about the EUR 20 billion, EUR 21 billion, specifically in this platform. The other EUR 4 billion is for networks, but the EUR 21 billion, it's broken down roughly 40% wind, 40% solar. Interesting to note the megawatts associated. So we're talking about 5 gigawatts in wind, 9.4 gigawatts in solar. So we can quickly do the math in terms of what is the average CapEx per megawatt for the different technologies. It shows it can do more megawatts -- or the CapEx per megawatt for solar continues to be lower than wind. We continue to develop Solar DG. I think this is an interesting platform. It's probably the fastest growing piece of our business individually, Solar DG. So we're expecting about [ half about ] 2 gigawatts built over the next couple of years, mostly corporate. And I'll talk a little bit more about that in just a couple of slides, but I think this is an interesting part of the business that we are beginning to get quite good visibility on. Offshore. A lot of the projects will be coming in post business plan, but we'll still be getting around 2 gigawatts of gross additions in this period. And then storage and hydrogen still coming in at about 500 megawatts over this period. Now talking about the different hubs. So where are we expecting these additions and this growth to come from. A big chunk of it coming from the U.S. We're talking about more than 7 gigawatts, 40% or slightly over 40%. As I say, we see great opportunities there. We have Sandhya, who's leading our U.S. operations here [indiscernible] if you want to talk to her about what we're seeing there. But very strong corporate market, a lot of PPAs, a lot of demand for these type of projects, and we will see this scaling up. So we're expecting this to grow probably 50% to -- and then doubling over the next 3 to 5 years. We also have a diversified geographical footprint even within the U.S. I mean, the U.S. is a continent. I mean you have East Coast, West Coast, Midwest, Texas, I mean, depending on where we are, we'll either use wind, solar, a combination. And I think having that geographic mix within the U.S. is very attractive. So we're doing offshore wind on the East Coast where there's not that much land, but they want green energy. Wind in the Midwest, where there's a lot of wind and farmers like to have the turbines there. They can continue to do their agriculture. Down in Texas, you can have both wind and solar. California, they like the green energy. They don't have winds. They have some solar, but it's -- they're now moving to offshore, and so they just ran an auction there. So really having these multiple technologies allows you to make sure that you can get the best technology and optimize the resources for the different areas of the country. Europe, I mean, a huge market as well around 6 gigawatts. As I say, a lot of tailwinds, obviously, also some regulatory issues that we are still working through in the sector. But generally, I'd say, very positive tailwinds pushing the growth there, reinforced with the Kronos acquisition, but just generally, I think we already had a strong base there. South America around 2.5 gigawatts, around 15% overall, a big chunk of that coming in Brazil, but also we have a project in Colombia and we're developing some in Chile. Stable market is actually the Brazilian market. And I said that a lot for those of you that have heard me, the Brazilian market has incredibly stable and predictable regulation. Then it's got issues around FX, and it's got issues around sort of macro interest rates and inflation, although everything is typically inflation linked. So that actually ends up not being a problem. At the actual regulatory level in electricity, it's one of the most sophisticated systems that we see in the various different markets that we operate in. So for example, for wind, it continues to have long-term PPAs with the system for renewable energy, but also increasingly, we're seeing more and more corporate PPAs being done in Brazil. And that's why I think also the fact that we have a trading platform Energias do Brasil or EDP Brasil allows us to then leverage that by combining the businesses. Asia Pacific, I already mentioned that in terms of Sunseap. So based out of Singapore, but present in a couple of markets in Southeast Asia. We've seen a lot of potential growth there. It will be primarily corporate DG but moving also into utility solar. So in Southeast Asia, it will be mostly solar, but potentially with some wind also coming online. So now 2 slides about distributed generation. Not only when we talk about renewables, we're thinking about utility scale, large projects. Certainly in the U.S., it'd be 100, 200-megawatt projects. DG is actually considered to be one of the highest growth markets globally in terms of renewables, in terms of putting panels, for example, for corporates. We're talking about 40% to 50% of the overall solar additions globally over the next couple of years. Very strong intrinsics, short time to cash, typically smaller projects with no issues on permitting as long as you have the corporate's okay for it, good savings for the customer, so you can lock them in, short payback periods, nice project cash yields. So it's a good business, and we've been scaling that up. We did it more than 1 gigawatt over the last couple of years, and we believe we have the capabilities to continue to scale that up going forward already with the global footprint, so not just in Europe, but also in the U.S., Brazil and also Southeast Asia. Competitive advantages. As I said, we've been doing this already. It was a smaller part of our business. As it scales up, becomes more visible. That's why I'm taking the time to also give you some additional information on it because I think it now begins to be more material, and I think it will become more material as time goes by. So we have that capability. We have the global footprint. I mean, just recently -- well, recently it was last year, but we won a project with [ Fiera Axium ] for 100 megawatts globally. That already becomes -- starts becoming sizable but in multiple different geographies and with attractive returns. So it also has some synergies in terms of procurement because you're essentially buying the same type of solar panels as utility scale. And as I said, we're expecting to do about 2 gigawatts over the next couple of years just on this model, which is not a transactional model. So this is on almost a PPA type model where you lock in with the customer, a PPA for 10, 15 years as well. And you get a good cash payback on that. As I say, split between the U.S., Asia Pacific, Europe, Brazil. We're also doing transactional DG, so where you just sell -- you set it up and you sell them and you get the cash, 1.4 gigawatts. That's what we're expecting. But I'd just like to differentiate the 2 business models. One is you're setting up -- it's more a utility-style PPA and business because it's more of an infrastructure business. And the other one is much more transactional business, can be very interesting margins. It's just a slightly different business because it's -- you're installing it, getting the cash and moving on, but still with nice margins. On offshore. Offshore, I think, has been a very pleasant surprise. We did a partnership with [ ENGIE,] Ocean Winds, 50-50. When we last presented 2 years ago, we had around 6.6 gigawatts of pipeline. We set some targets. We've already exceeded those targets in terms of pipeline. We're already at almost 17 gigawatts of secured. Part of that is already operating. So Moray East came into operation. We had a fantastic results based on that, given where energy prices was. Some of that is under construction and development. And the rest is still secured and being developed over the next couple of years. So on the right-hand side, you can see basically how this -- those 16 gigawatts come in over the next couple of years, we'll have around 9 gigawatts by 2030. And almost 17 gigawatts by 2035. Interesting to note also the bottom fixed versus the floating component. So you already begin to see scale also on the floating offshore, which will require significant CapEx deployment. Interesting to note also that we've been doing this with partners. So offshore projects are typically gigawatt-plus size projects. We don't want to have 100% of those projects. I don't think it's good risk management to have. We prefer to have smaller stakes of many more projects than to have just one project with 100%. So we partnered up with GIP in the New York Bight with Shell, then the Mayflower in Massachusetts with CPPIB in California on a 50-50 basis. And so we've been finding partners to essentially drive this offshore potential, limiting our risk but allowing us to do more projects and to scale up. You can see here the seabed tenders. So we're 8 gigawatts, but just the seabed tenders until 2026, we're talking about more than 50 gigawatts in Europe alone. Primarily places like Netherlands, Germany, Poland, I mean, even places like Spain and Portugal are talking about that. In Asia and in the U.S., around 17 gigawatts up to '26, but then 60 until 2030. So massive, massive potential. So I think we continue to see Ocean Winds has been very successful in securing projects so far. We continue to see a huge upside there. And on the right-hand side, just to show that some of this will be bottom fixed but some of it will also be floating. And again, what I mentioned a little bit earlier when I was talking about the innovation piece, where we have already some experience in floating, which I don't think many companies can say that. And I think that's something that we will continue to be investing in because we see that as an interesting business. Now I wanted to touch on an issue around infrastructure. And this is a slightly -- what I wanted to say is that if you have an installed base, you can leverage it to create much more additional value. If you actually have an installed base, you can do things like hybridization. If I have a wind project, and I already have the interconnection to the network, I can put a solar project as long as I get the permitting on that same interconnection point. I don't need another interconnection point. And as you know, in some places, that's scarce. I can get a better energy management because wind and solar many times are complementary. So I get a better shaped energy production. I reduce the cost on a per megawatt basis because I can manage it in a much more efficient way. So having that installed base, being able to do hybridization, we think is one of the easiest and fastest ways of scaling up renewables. That's what we've been pushing. That's what's being done in places like Portugal and Spain. We believe we will continue to expand even to places potentially like in the U.S., why wouldn't you do it? It's a much more efficient use of the interconnection point to have multiple different technologies on that same point. So if you have that point, that's an important, I think, value creation lever that we have, and that's something that we will continue to push going forward. So hybridization is something that we believe in very much. You can't do it everywhere. Obviously, it depends then on the geographic terrain, et cetera. But if you have that installed base, you can certainly leverage much more on it. Repowering. Repowering is also something that's very interesting. If you've got all the projects over this decade, you will be able to bring on newer models of turbines that are more efficient, and you will be able to scale that up. Storage. Again, putting storage co-located with solar, that's also very interesting, particularly in the U.S. [indiscernible] in Europe, at least for the moment. And hydrogen, just to [indiscernible] on hydrogen because hydrogen can also be an interesting way, and we -- some of you may have seen some announcements in terms of partnerships, an interesting way of scaling up the renewables business. At the end of the day, hydrogen is 70% green electricity. So you can think about it almost as hydrogen is electricity, green electricity, turn into gas. So I think having that ability to turn your renewable projects into hydrogen and partner up, whether with Cepsa [indiscernible] many others, I think that can be a very interesting value creation mechanism as well. Plus also on existing industrial sites or reconverting coal plants, for example, like we're doing together, getting EU support to convert those into renewables plus hydrogen sites. So I think there's a lot of buzz around hydrogen certainly in Europe and in the U.S. I think it will take time to scale up, but I think it can represent good opportunities for the growth also of the renewables business. Hydro. It's a renewables business. Not easy to build new hydro in most of the places where we're in. But if you have it, it's a good business, particularly in Iberia, where it's exposed to market. Obviously, you have volume risk. We suffered some of that last year, but it is a valuable technology. You can -- it has a realized price, which is much higher than the base load because you can decide exactly what hours you produce. We have a lot of pump in there as well, so we can take advantage of the arbitration between peak and off peak and long-term concessions. Brazil, we have good hydro plants, very high-quality, long-term contracted. We've announced -- we sold one last year. We've announced we may be selling some additional hydro plants over the course of this business plan. Good, strong cash flow generation, very good. I mean all the CapEx is done, so just generating cash. Long-term storage, it adds value, particularly where we have other renewable technologies, particularly, I think, in places like Iberia. Overall, just a quick note, I think on the overall procurements -- O&M, procurement and construction, that is an area where if you have scale, you can get additional advantages, certainly versus smaller developers, independent developers. Having that type of scale, whether it's for turbines, whether it's for solar panels, whether it's having the engineering expertise to do these projects at scale, that's something that we believe we have. We have a sizable portfolio already. We are developing many more megawatts. And so I think managing all of that value chain, whether from the development, the procurement, the construction, all the way to the O&M, that will bring us a competitive advantage in and of itself versus many other players. Overall, we've also got a big chunk of our solar panels and our turbines already locked in for the next, let's say, year or 2. We can go into more detail on that a little bit later. But basically, most of that is already isolated. On energy management, just a quick note here. This is something that we've also adjusted over time. We used to have energy management where we would balance basically our expected production. So for example, in hydro, and we would [ forward ] sell that. Currently, we are doing at around 80% to 90% of our [ forward ] production or 70% to 80% on hydro, so we don't take the volume risk. So that if the hydro reduces, we are not taking that exposure unlike what happened last year. So we've adjusted our hedging strategy to take that into consideration, 80% to 90% for wind and solar because wind and solar had much lower volatility than hydro. So hydro has a higher volatility. We have lower hedging in place. Wind and solar has a much lower standard deviation around the, let's say, the expected mean. And so we have a higher hedging position in place, reducing also the exposure to gas both in terms of sales to customers, but also [ CCGTs ] and just generally making sure we have, let's say, a good hedging strategy in place to actively manage on a risk-return basis. So that's what we're optimizing for. It doesn't mean we want 0 risk because if you have 0 risk, you have 0 return. We also don't want too much risk. So we're just trying to optimize on those typical risk-return curves where we want to be on an optimal basis. There will also be some outliers, but we try and do it in a very scientific way. In customers here, we talked about Solar DG. That's obviously a big part of it. Corporate PPAs, it's very important because more and more emphasis is being given, not just on auctions, but on doing actually corporate PPA. So having that relationship with corporate customers is very important. In the U.S., more than half of our projects are done with corporates. So at the end of the day, it is a B2B business. You may not typically consider it as such, but you are developing these relationships, whether it's with Amazon or Microsoft or Walmart or whether it's a steel company. Those are customer relationships where you're locking in long-term contracts. And so these corporate PPAs, we already have a big chunk of our B2B supply locked in under long-term contracts. Services as well, that's particularly relevant, I think, in Iberia, increasing the penetration of services to our retail customers to more than 35%. So finally, where will we end up? This is the overall photograph, I mean, in a simplified way in terms of our overall megawatts. We start off 2022 with 22 gigawatts, increased it by 18, sell 7 through the asset rotation program and end up with 33 by 2026. So a 50% increase over the next 4 years, split roughly between U.S. and Europe, 85% of it. The rest of it is South America and Asia. From a technological mix, as you know, we were primarily wind, that legacy continues there. We continue to have 50% in wind, solar increasing around 25%, Solar DG around 9%, 17% hydro. So a nice mix of the different technologies with solar beginning to take more space. I think if you ask me on the business plan, you'll see more solar, I think, in the next couple of years. Those are typically faster projects, time to market. You'll see more wind coming in around '25, '26 because permitting takes a little bit more time because you didn't have the IRA before, and so people were counting that wind would decrease. Now with the IRA people are beginning to ramp up wind again, that will start coming in towards the back end. And I think you'll see the same thing also in Europe. So wind, I think, went through a slump and you've seen that in the turbine manufacturers, they're all suffering quite a bit. I do believe that, that will ramp up as the permitting starts to get in place and you start sort of seeing those incentives come in both in Europe and in the U.S. So a nice balanced mix of technologies by 2026. So that's the first platform. Now just a couple of slides on networks because I think it is an important part of our business. It continues to have a lot of value. It is a portfolio stabilizer. It is very attractive in terms of cash flow generation. So the first thing to say is just recognizing what we have in terms of networks. We have a very strong base in Iberia, Portuguese networks and also the north of Spain, particularly post the Viesgo acquisition, we doubled our size in Spain. We've done a very successful integration of Viesgo. I think we more than achieved our synergies on that. So we're top 3 Iberian distribution company. We're a reference player also in Brazil, both in [indiscernible] state and in Sao Paulo state, top-tier operator. One thing to note is the operational efficiency. We've actually managed to bring down the OpEx per client by around 17% over the last 4 years. So I think it's quite an interesting number in terms of the efficiencies we've managed to get from the distribution networks. And continue to invest in digitalization over the next couple of years as well. How we expect this to evolve? Growing from around EUR 6 billion of RAB to EUR 6.6 billion of RAB. I think this is a realistic target, potentially could do more than that. It has a nice rate of return, 5% to 6%. It's indexed to bond yields in Portugal. So the rate of return goes up as the bond yields go up. 6% in Spain until 2026 and on a real basis, 7% to 8% in Brazil indexed to inflation. So again, immune to a lot of that macro volatility. And I think it makes it a very nice business in Brazil, overall, investing about EUR 3 billion over the period -- over the next 4 years. Networks are very much a question of efficiency. And that comes through digitalization, automation of processes, making sure that we can do things remotely automating it, repairing the grid without necessarily having to have people go out onto the field. So we are investing a lot in digital. We are investing a lot in improving the quality of service, investing in reducing the losses and continue to bring those efficiencies down and so reducing it by around 13% OpEx of a [ client ] reduction over the next 4 years. So continue to drive that efficiency over the next years. In transmission, just a word on transmission. Very nice business. We can't own transmission in Europe, but we can own it in Brazil. So we are expecting to see interesting transmission operations in Brazil, around EUR 1 billion of RAB by 2026. Overall investments of around EUR 800 million over this period, but then rotating it as well. I mean once you've built a transmission line, I mean you don't need to do very much with it. It's basically just there. You can sell it to people who want to have a lower cost of capital and we can redeploy that back into new transmission lines. So that's something that we believe makes sense and it creates value in the transmission business in Brazil. We've already done that. To a certain extent, we believe we can continue to do that going forward. So this is it on the platforms. Renewables, clients, energy management and electricity networks, growing substantially on the renewables front, including DG, large investment program, EUR 21 billion, doubling the installed capacity by 2026, more than 70 terawatt hours overall on a global basis. And on the electricity networks, EUR 4 billion of investment over the next 4 years and a RAB of about EUR 7.5 billion by the end of that period. So I'd say sort of some of the key numbers in a summarized way. But hopefully, I've walked you through these different platforms and allowed you to understand a little bit better the assets that are behind each of these. So I'll pause there, pass it over to Rui and then I'll come back for closing remarks. Thank you.

Thank you very much, Miguel. Good morning to all, once again. I would like to take you now through the financials of this business plan. So first of all, start by saying that we currently have, and we believe that we will have in this business plan, a very distinctive portfolio. 95% of our EBITDA will be at the core of the business in the energy transition. 80% of our EBITDA will be coming from core low-risk geographies like the U.S. and Europe. You may see that also on the slide, you have the LatAm or Brazil in effectively below the 15%, so effectively managing the exposure in Brazil until the end of the period. And the substantial part of our gross profit will come from either [ loan ] contracts with inflation-linked escalators even some [indiscernible]. And importantly, that component of the merchant exposure, the 45% will be hedged over time. As we look now to 2023, we have about 80% of our merchant exposure hedged and this is how we will be managing as also Miguel explained, our hedging strategy to the future. So I would say, distinctive portfolio, diversified and low-risk profile. The way we'll build this is, of course, by keeping a very selective investment approach. Looking at investments that not only target returns, the 1.4x WACC or the minimum 200 basis point spread IRR to WACC, but also the risk profile. With at least 60% of the NPV of the new projects being fully contracted or long-term contracted. But I think it's important also not looking at the metrics in itself, but the absolute returns because at the end of the day, yes, we'll have a higher CapEx involved in this business plan and the returns come from the CapEx. And what we are seeing right now is that our new projects are -- we are targeting around 8%, 9% IRRs, and this is coming from U.S. and Europe, both in wind and solar. And not only on the IRR level, but really on the cash yields because we need to manage, of course, for cash. And the cash yields that we are observing for the contracted period are also very strong in these very high single-digit numbers. So at the project level, we'll definitely keep on selecting investments that support this investment metrics. And this will, of course, be contributing positively to the financials of the company. Actually, this comes on the back of, on one hand, higher interest rates, but also higher CapEx. What we are seeing is that CapEx on a per megawatt basis is increasing by 20% to 30%. So the reflection of this is on the PPA pricing. The chart that you see here on the right of this slide is by a third party, an independent party that is showing that PPA pricing both in U.S. and Europe increased by 50% over the last year. We have actually been negotiating PPAs in the U.S. in the range of the $60 to $70 per megawatt hour, and that compares to the $20 to $30 per megawatt hour that we were negotiating about a year ago. So effectively, there is a reflection of this higher CapEx and higher cost of capital into the PPA pricing that ultimately translates into very solid absolute returns in the range of the 8%, 9% that I've shown before. In parallel, we'll, of course, keep on our asset rotation strategy. I think that we have been rather successful. What we consider in this business plan is pretty much the same volumes that we consider in the previous business plan. And in terms of the capital gains contribution around the same EUR 300 million per annum as we were considering previously, although the actuals, as we have been showing in our results are around the EUR 500 million per annum. But here, we prefer to be prudent and target a EUR 300 million per annum of capital gains contribution. As earnings are increasing, the relative contribution of the capital gains from the asset rotation will decrease over the business plan period. Now I would like also to give you some views about what we continue to have as a very sound, and I would say, prudent financial policy. We are fully committed to the BBB, and we'll repeat this over and over again because we are fully committed to that. We achieved that in 2021, and we want to keep it for the future as we see it as strategic for the balance sheet to be ready to capture this growth cycle that we have ahead. 80% of our financing will be managed from -- on a centralized basis at the holding level. But very importantly, we want to make sure that we keep a strong liquidity management, and therefore, we, at any one point -- at any point in time, we have financing -- our refinancing needs covered for the next 12 to 24 months. So managing cash in the company is absolutely key. And what we are seeing in terms of the cost of debt is that, on average, it will evolve around the 4.3% throughout the period of this business plan. Now I want to also just remind us all about what we did since 2021 in terms of issuance in the market. So in total was EUR 5.3 billion at around 3.2% and a 6.5 years average maturity. The reason why I want to highlight this is this was done so that we would be refinancing the future maturity bonds and effectively already working on the cost of capital for EDP well in advance. All of these issuances were green for the future, all of it will be green as well. So 100% of our previous and forthcoming issuance will be green. And therefore, we aim to get to 2026 with about 60% of our stock up debt and the green financing. And this led us to a very strong liquidity position. So by the end of 2022, we had more than EUR 11 billion of cash available. This is providing us visibility that we will be able to refinance all our needs beyond 2025. But more importantly, on the right-hand side of this slide, you can see that we worked through the recent past to actually take or mitigate -- take off or mitigate the repricing risk of the 2023 and 2024 maturities. So more than 70% of our refinancing needs are already covered in terms of cost, either because we pre-hedged the mid shops back in summer. So we did EUR 1 billion at 1.8% and $1 billion at 2.6%. Those pre-hedges will be used to for the refinancing of the '23, '24 maturities. And also, we issued senior bonds at the end of the period, at the end of the year, EUR 1 billion -- sorry, 1 billion in total, so $0.5 billion and EUR 0.5 billion. And this, again, was done so that we would be preparing ourselves for -- in taking away or mitigating that repricing risk of the, let's say, the 2 years ahead maturities. This, of course, is part of the overall risk profile of how we manage that. As you know, we have a target of about 75% of our debt being fixed rate. The 25% floating is primarily coming from Brazil, where, of course, the assets are linked to inflation, and therefore, we match the asset liability from a rate perspective. We keep the same FX policy and strategy than before matching assets and liabilities in the same currencies. So again, this works towards building a very strong and prudent balance sheet, which will evolve over time. So our net debt will grow to the EUR 17 billion that you see here, so it's an additional EUR 4 billion of net debt. But the FFO net debt will go from 20% to 21%. So again, working on the robustness of the balance sheet and making sure that we are reaching our commitments towards the shareholders, but also to the debt holders and to credit agencies, how committed we are with this BBB balance sheet. And of course, over time, we will always be flexible about portfolio optimization, asset rotation in a way that we will always be working to meet this important target. And of course, there is always a question when we present a business plan is how we fund the business plan, and I want to highlight that the business plan is fully funded. So all in all, we will be needing EUR 27 billion of cash, mostly, of course, for the expansion CapEx, but we'll have strong cash flow generation from our operating assets. So it's more than EUR 9 billion, as you can see on the slide. Naturally, we'll have some asset rotation and disposals totaling around EUR 8 billion. And raising tax equity in the U.S., as you know, to capture the full value of the tax credits in the U.S. of around EUR 4 billion. We'll have this additional EUR 4 billion in debt that I just mentioned before. And of course, the EUR 2 billion of equity raising that Miguel already explained, and that will be here to support effectively the growth that we have had in our business plan. Then how we look at the profitability, and how we look in terms of the value creation to the different stakeholders and definitely to shareholders. So we see a net profit increasing in this business plan around 12% to 14% per annum. We would get to 2026 with EUR 1.4 billion to EUR 1.5 billion of net profit. So it's definitely a significant growth from where we departed in 2022. EBITDA as well, reaching EUR 5.7 billion, at 6% growth on an annual basis from '22 to 2026. And also importantly, the platform that will be contributing significantly or mostly to this growth will be the wind solar, so effectively, the renewables clients and energy management. And this will grow soundly through the period. And I would like to end before I hand over to Miguel for final remarks. We just also a comparison to what we presented 2 years ago because I think it's important to highlight that we are actually anticipating some of the targets and stepping up some of the targets. So as we look to our deliveries, we said that we would be building around 4 gigas per annum. This plan, we are committing to deliver 4.5 gigas per annum. We said that we wanted to be a carbon or actually coal-free, and we are working to be the coal-free by 2025. We'll know that we'll have that view to be carbon neutral by 2030. But actually, we are now committed to have the NetZero by 2040 and that is already confirmed by SBTi as a credible target. Balance sheet, we are committing to become BBB. We became a BBB in 2021, and we are fully committed to maintain this BBB strong balance sheet into 2026. And on the financials, when we presented our business plan 2 years ago, we were targeting around EUR 4.7 billion EBITDA by 2025. If you look now our numbers for 2024, what we are showing is a EUR 5.3 billion EBITDA, so above already the 25% target. The same happening at the net profit too. So we were committing to EUR 1.2 billion in 2025. and already by 2024, we expect to reach EUR 1.2 billion to EUR 1.3 billion. So effectively here, anticipating what we committed to in the previous business plan. And last but not least, improving retribution to shareholders, not only we adjust the payout ratio, but also we -- consistent with the business plan commitments, we also have a steady increase on the dividend per share floor up to EUR 0.20 per share by 2026. So again, I'd just like to share that how committed we are with this business plan, and how we are seeing it actually anticipating some of the targets that we committed before in 2021. But with that, I would hand over to Miguel for the final remarks. Thank you. Okay.

So very quickly, just 2 slides, but I think they're important just to try and wrap up. So we are stepping up the green growth of the company. We'll have a strong balance sheet and a simplified future-proof organization. We're anticipating the targets from '25 to '24. I already mentioned that the '23 targets, we also expect to be clearly above what we had indicated 2 years ago. And this is done on the back of good positive market tailwinds. We're accelerating the growth, as I said, to around 4.5 gigawatts per year, and that will scale up over time. It will be around 4.8% towards the back end. We're consolidating a leading role in ESG. We already had already said coal-free by 2025, all green by 2030 -- 2040. We are now validated and certified by the science-based target initiative to be NetZero. We're driving the corporate simplification, deal list in to be Brazil. We're raising capital for that. It is an accretive transaction, both on a value basis and on a net income basis, even post the transaction. And that's going to drive the simplification and also synergies in the business. And so we think it has industrial rationale and it has financial rationale. We're keeping a solid balance sheet, committing to our BBB rating. We've reiterated that several times, but just so there's absolutely no misunderstanding. And we're ensuring that we have a solid and sustainable dividend policy with a 60% to 70% payout and the floor of around EUR 0.20 by 2026. We're doing the capital raising EDPR billion already fully subscribed on the terms that I already mentioned. So we think this is a fantastic package on the various different dimensions in terms of growth, in terms of balance sheet and in terms of dividend policy. And just in terms of general strategy, I think this has got a lot of future proof. I mean when we talk about will this company be around in 5, 10, 15, 20 years' time, yes, we continue to see that tailwinds going stretching into the future. We can't do a business plan for the next 10, 20 years. But I can tell you, I'm sure it will be a fantastic growth going forward. And so really just we're scaling up the business. We're stepping up the growth. We're committing to leading the energy transition, whether it's in renewables, whether it's in networks, whether it's in clients, making sure that we're getting to that 100% green by 2030. And I truly believe, and I think as a team, we truly believe that this will leverage the structural tailwinds to deliver the required green growth, and we will create value for shareholders and other stakeholders, but we're very clear that we'll be generating value for shareholders, and that's what we've designed this business plan to do. I just wanted to end the notes by thanking the teams that helped put not just the business plan together, but all the different transactions that we presented earlier today. As you can imagine a lot of sleepless nights, a lot of work, a lot of people that were -- have to sort of get together to make this happen. But what I can say is that I think it just shows the ability of the team to put together, not just the business plan, but all of these which are very complex transactions as all of you know, to put these together. And that's why I say, I have no doubt that the biggest asset this company has is its people, the ability to attract fantastic people to retain fantastic people. And for me, it's truly a privilege and an honor to be able to work with this team. So thank you very much to the team, and I hope you enjoyed it. And we'll be taking Q&A, I guess, in the next step. Thank you.

[Operator Instructions] Maybe we'll start with Javier Garrido from JPMorgan.

I will have three questions to start. The first one, I would like to insist if you could provide a bit more visibility near term. I mean, '22 was a strange year for many reasons. So you could provide some guidance on what you're expecting to see in 2023 as this is probably a more realistic basis of what we should see in the rest of the business plan period. The second question is on the tax equity instruments. You are looking at EUR 4 billion in the plan period. I wonder if you could comment on the cost that you are assuming for those instruments. And also you can make a more qualitative comment on how your view on these instruments has changed with the U.S. IRA, whether you have full visibility now or you are still expecting more clarification on the specific issues. And then the third question would be on the achieved prices in Iberia. You have in the appendix your assumptions for wholesale prices, but what really matters is the retail price. So I was wondering if you could give us some clarity of what is the trajectory of retail prices that you're assuming in the business plan.

Okay. So on 2023, I think what we're seeing is, as I mentioned, a good start to the year in terms of hydro. We're seeing a lot of the positions that we had, which impacted us. If you -- let me put it this way. If you took 2022, which we ended up with EUR 870 million. And you think that we had a terrible hydro year, absolutely dreadful. If you factor back that in, imagine what it would have been. So I'm not saying that, that's 2023. What I'm saying is that if we assume an average hydro year, you can certainly assume a pretty good basis for [ 2023 ]. Obviously, there are other things like the, let's say, on the gas side, the fact you have lower costs there because if you have a short position, then you're basically taking that as well. So that's also a hit that we had in '22, which we're not expecting that will happen [indiscernible] in '23. We ended up not expecting such a negative impact on places like Romania and Poland. So if you unwind some of those negatives that we had in '22 and even so, as I said, had a fantastic EBITDA for '22 and even the net income, we ended up being quite well in line with our guidance. So if you take out some of those negatives and look at '23 I think you can get a sense for that we'll have a pretty -- or we're expecting a pretty good year. On the second comment, John, you continue.

So Javier, on the tax equity. So first of all, what we are seeing in terms of pricing right now ranging 6.5%, 7%, maybe slightly above 7%. Typically, what we saw over the last 10, 15 years of experience there is that we -- the tax equity market never swings with the same amplitude as we see it on the swaps or the midswaps on the interest rates. It has its own different dynamics in terms of supply and demand. And I think right now, we'll be lending within this 6.5%, 7% numbers. What we are seeing in the market is actually very good dynamics and a couple of good dynamics. First, the introduction of PTC for solar enables some banks to actually manage better or manage differently their tax capacity instead of having to lock it in a single year as they have to do it for the ITC. So actually, we are seeing some banks very keen to work on PTC deals and looking on putting in that 10 years forward. As you know that there is some alternative and just also to your question, it's not yet 100% clarified some of the stuff from IRS, but we believe it will come through the next months. But one alternative, which is not to use tax equity structures we believe that will be available, maybe not so efficient because the accelerated depreciation component you would still have to monetize it. So it's likely that we will still prefer the full structure of the tax equity transactions, but we'll have to have that clarification going forward. One last comment about this is I think that over time, we have built a very, very good relationship with the main tax equity providers also tapped into new tax equity providers. They recognize the value of our plants of both wind and solar plants. We typically work with them 1 year in advance of actually having to lock in the transaction and typically on a portfolio basis. So I'm really confident that we'll be able to work well and capture or raise those EUR 4 billion through tax equity.

Maybe on the third point Javier, if I understood it. So achieved prices in Iberia, I mean, for the customers. So the way we normally do it is, let's say, when you're hedging or when you're forward selling, you'll take that and then you put a supply margin or a commercial margin on top of that. And so what I can say is on the let's say, on this energy, which is being sold, we're doing that close to the wholesale prices or sort of in, let's say, 100-plus prices. And then you have the retail margins on top of that. So I don't know if that helps you get to that. the trajectory. But we're expecting -- listen, we're locking in a lot of the B2B customers with longer-term contracts. So we've seen an increase substantially over the last year that my colleague takes sort of all the supply business, a lot of the [indiscernible] 5, 7, 10-year contracts sort of at the average wholesale price for the next couple of years. So that, in a certain way, you can expect that for a certain part of the energy going forward, 60%. But in terms of the trajectory, if you're taking it on a spot basis, let's say, on a yearly basis, you get whatever is the wholesale price that we're assuming for that particular year, in some cases, we'll level it out, and so we get an average price over that period.

We can go to the next question from Manuel Palomo from BNP.

I will stick to three questions as well. First of all, you mentioned the dreadful hydro year last year, and I could not agree more. And something that I understand that we learned is that the hydro resource is very volatile. So my question -- my first question is, what's your expectation about those factors for the coming period and whether there's any lever to offset potential volatility in the hydro as we saw last year, and we've seen in history. Second question is about distributed generation. If I recall well, this business is split in three; between EDP, EDPR, EDP Brasil. With the move of EDP buying now EDP Brasil, I understand [ now ] stays in too. But longer term, does it make sense to in two separate entities. Would it make sense to put it under only one company? Is there any plan to do so? And I guess that maybe EDPR would be the one only this, just guessing. And the third question is on returns. Used till target very, I would say, strong returns despite the visibility on the cash flows, I would argue it's a bit lower. I mean you continue to target the 1.4x historical WACC equal IRR. However, in this presentation, you said that above 60% of the NPV of the cash flows is already there versus 2 years ago, it was 70%. May I ask about what are the price assumptions beyond the duration of the PPAs given those cash flows now explain a higher percentage of the NPV.

Okay. So on the hydro, yes, I mean, we -- there is a higher volatility. Again, just to remind us all, 2022 was the worst of the years, not only we had the worst of the drought, but we also had the highest of the prices. So it was -- I'm not sure if I call it the black-swan event, but effectively, it was there. Going forward, what we are adjusting is the hedging policy so that we don't hedge more than around 80% of the hydro on the P50 basis. That should account for what we consider to be normal volatility on the hydro coefficient. I mean, naturally, it's impossible to predict. Unfortunately, it's impossible what to predict these extreme case scenarios as we experienced in 2022. But with that -- with this policy in place, with this hedging 80% of the P50, we expect to cover pretty much the bulk of the scenarios. What we consider going forward is around the 9 terawatt hours of baseload generation in Iberia, and that is our P50. So again, you could consider that 80% of that would be locked in through the period. I mean it's not immediately upfront, but through the period and then the remaining would be, of course, exposed to merchant.

On the [ DG ], so you're absolutely right. We do operate. But what we're interested in is value and making sure that you can keep local, what is local and global, what is global. And if we have, for example, an operationally the ones that are driving that. Similarly, for example, in the U.S., we have EDP Renewables operating in the U.S. We don't have anything else apart from EDP Renewables already in the U.S. We're not going to create a separate platform there. So we're going to leverage on the existing platform. So that was the, let's say, the philosophy, which has basically allowed it to grow up to now. I think we're already doing a lot in terms of coordination. So for example, I mentioned the [ fares ] example. That was actually coordinated across both EDP, EDP Brasil and EDP Renewables. So obviously, internally, we can then leverage on that and make sure that we're getting the synergies in terms of procurement, that we get in the synergies in terms of whether it's engineering and design. We don't have any plans to bring it under a single company. I mean that's something we can continue to go on analyzing. But only if it makes -- if it adds value, if it creates value. Otherwise, if it's just reorganization for reorganization, then it's better to keep the teams motivated and focused on delivering them to be too worried about what's changing sort of at the corporate sector. So local -- what is a local, global where you can get the synergies, maybe that's what I'd say there.

And maybe on the last question then. So the target that we commit is that we are looking to new projects, we look, of course, to the risk profile, and we want to make sure that at least 60% is under the long-term contracting nature of the project or the cash flows of the project. We have been achieving that in excess of the 60%. The power curves that we use for the uncontracted period, and we have [ two ] uncontracted periods. So the nose, let's say, the earlier cash flows because of the difference in timing of COD and PPA, COD, we may have some short term, but that's effectively it's sort of forward [ curves ] that you will see in the market, and that will account for a small percentage. But importantly, the later parts was beyond the contracted period. Of course, we have our own views, and we compare always with third-party views from the typical consultants that the market uses as a reference and make sure that we are never far apart from whatever those views are. And to build that, of course, what we consider is fundamentally what is a potential market design. And nowadays, we will be discussing about market is an evolution for Europe. Although I cannot [indiscernible] , we are not expecting a revolution. So I think that the dynamics may still hold, and definitely, it's what we're considering for those long-term curves. But basically, what we're seeing is sort of the type -- the current market design and very importantly, the renewables penetration and what we typically are, are very prudent as we consider that this renewables penetration will effectively have what we call the solar adjusted factor or the wind adjusted factor the [indiscernible] and WAF, with high percentages in solar, many markets, we reached more than 50%. That means that the assets -- the realized price of the asset will be 50% below the average price that comes out from the market. So it's a combination of both. But as I said, if you take the third-party views, our curves will not differ materially from those on the long term.

So now Alberto Gandolfi from Goldman.

Three questions on my side. Definitely, one of the three is very confusing even to meet lots of process today, so I apologize in advance. The first one is on returns. What are you seeing in terms of the competitive tension out there? We started to see a change in narrative but the big oils, talking about green molecule, U.S. are much less about green electrons. Do you see that is that helping? It doesn't look like it's in your guidance, if I'm right. And maybe if you can give us a bit of color on what EBITDA or CapEx, do you now expect given that the [ WACC ] is higher. So I expect the absolute ratio should be moving higher? And maybe any lights on work in progress. Your CapEx is going up vertical, so a lot of the '26 CapEx, I assume, has almost no contribution to 2026 EBITDA just to be clear on that because somebody out there might be thinking of returns that lies implied are quite bad, so just to dispel that. The second question is -- sorry, going back to, Javier, 2023, right? We understand you have Romania, Poland tax that is now more manageable because prices are down. The hydro production is already above average. Hedging prices are really good. So the question here is what are the chances you achieved your '24 target in '23, but what could go wrong for you not to achieve your '24 in '23? Consensus is close to 1.1, comfortable, very comfortable with that. The last one, sorry, I slow down because I see you're taking notes and apologies for the very long questions. But your CapEx plan is up 25%, which is essentially 100% cost inflation, if I'm not mistaken. That's your CapEx. So you have put how much of the U.S. IRA repowering of wind is in the plan, Europe by rate doesn't even exist yet. So in 2 years' time, '25 -- I know you just presented '23. But 2 years' time, you come here, let's say the CapEx cost equipment is the same, should we expect those curves hypothetically, if those plants get fully implemented, those curves move up again and clearly are not fully funded for the next 3 to 5 years. Is that how we should be thinking about where you're taking the business?

Sorry, but I didn't quite catch the end of the third question. So...

Yes, the question is, should we expect 2 years from now, those gigawatt curves to start to go up, not the [CapEx] [indiscernible], the gigawatt curves to go up because now you have a CapEx per gigawatt upgrade driven. And again, investments are driving EBITDA, so I'm very happy it comes from that. But I was wondering if on top of CapEx cost inflation, you also have more gigawatts 2 years from now.

Okay. Let me try and take it maybe backwards. So on the third point, clearly, we saw a very high increase in CapEx per megawatt. I mean that's the fact whether it's turbines, whether it's solar panels, there was a material jump at the end of 2021 and then throughout '22. We're actually beginning to see, for example, on the solar side, prices begin to come down outside of the U.S. The U.S. has got slightly different dynamics. So going straight to your point by -- I think, we have the flexibility, and that's why we try to sort of indicate that depending on where the, let's say, the CapEx per megawatt goes, we can flex the number of megawatts. So if it comes down materially over the next couple of years, then you can do more megawatts. I mean -- so we size it by euros and the new results, certain megawatts of keeping the same number of euros you get more megawatts that would be the flex they could have either up or down to be other, but obviously, it's gone up a lot, and now we're in to see it go down. So I would say the U.S. is a specific case, just particularly in terms of solar. So just also to be clear, the cost -- the CapEx per megawatt in the U.S. is materially higher than, for example, the rest of the world. I mean, I think there will be a transitional period where the manufacturing industry readjusts to producing either more in the U.S. or adjusting in terms of sort of importing plus tariffs. It will sort of end up leveling up, I think it will stay relatively high CapEx per megawatt in the U.S., but it could come down. The thing is that then you have the ITCs and the PTCs, which obviously, let's say, make the profitability work out even with the higher CapEx. So maybe -- I hope that answers that third question. I think on the second question, again, going to -- I mean, I'm not going to comment on '24 versus '23, but I'd say we're very comfortable with consensus. Again, you asked us or when you ask us that on a recurring basis, and it depends on how the year goes. So expect the unexpected, I mean, in terms of geopolitics and macro, et cetera. But what I'd say is we are comfortable with -- or we think we can even exceed the consensus out there for 2023. In relation to the first point, [indiscernible] if you want to take that.

So I mean, we see competition out there. We saw it in the past and we still see it. So I cannot -- I will not say that we are seeing reduced competition from other developers, regardless of being the typical ones in the sector or coming from the oil and gas in the past, where we saw oil and gas being a bit more aggressive is typically on the offshore, not so much on the onshore. Honestly, we haven't seen any dramatic change in terms of the competitiveness or the competitive dynamics within the sector over the last 3 to 6 months. Maybe those that are really the small developers at this point, we have seen them a bit more willing to actually come up and agree on selling their projects on a ready-to-build stage, which is normal because capital has been harder to find or at least for them at the appropriate cost. And that's why when we look now to this project and to the project returns, I mean, really, what we are seeing is we are able to meet our target returns, but at the higher absolute return value. So this 8% to 9% is something that, of course, we were not seeing maybe 6, 9 months or 12 months ago. And the reason why and also we said it's really important to actually now play the cycle because this is where the moment in time where we will be able to have higher CapEx, but higher absolute returns. At some point, we'll see a downturn in terms of the cost of capital. But by then, we have already locked in long-term contracts that fulfill this higher CapEx, so higher PPA prices, higher returns, and there will be in a very, I think, I would say, in a strong position. I'm sorry. Oh, the work in progress. For '26, we are estimating above EUR 1 billion, so maybe EUR 1 billion between EUR 1 billion and EUR 1.5 billion work in progress for 2026.

Javier Ruiz from Barclays.

I have only two questions. The first one is, I mean, you're relying very much on covering the cost inflation by passing through to the final consumers. Last year, we saw our total decoupling between PPA prices and marginal prices. And going forward, you seem to be relying on that decoupling, but the inverse way, power prices are coming down, and you are expecting PPA prices to increase. Can you please explain me from a client point of view, why would you pay a higher PPA price? And the second question is about the scrip dividend at EDP [ Renova base ]. I understand the scrip dividend, you want to keep the cash because you want to reinvest. But why increase the dividend payout? The only explanation I can find is that you're expecting minority shareholders to go for cash and therefore, increase your stake in EDPR, maybe I'm wrong, please give me an explanation -- thank you very much.

Okay. So on the cost inflation, I mean, that translates into higher PPA prices, as you say. But I think what we've seen certainly over the last year is that renewables continues to be materially cheaper than the alternatives, certainly then gas, oil, coal, and that's why you had this decoupling, but the PPA prices are done not based on what is the margin -- let's say, on the marginal pricing. That just makes it look more attractive or more competitive. It's done on, let's say, the levelized cost of energy of that specific project. So you get your typical Excel spreadsheet, you put in the CapEx, you put in your cost of capital, your assumptions for price of energy and your target returns, and that will be the PPA price that you ask for the customer. So I think energy prices would have to come down a lot before the PPA prices stop being competitive. And I think what we've seen in the past is that even before the crisis and before energy prices, the PPA prices were already competitive, now they've gone up, but still, as I say, significantly below on a relative basis, much below the alternatives. So even if the alternatives come down, I think -- and we're just talking about whether CapEx also starts coming down loss I mean, depending on whether it's pay is produced at such and maybe you have to complement it with other energy. But on the levelized cost of energy is undoubtedly the cheapest energy out there, certainly in Europe and in many other parts of the world. On the scrip dividend, I mean, we increased the payout because, quite frankly, it was very, very low. Having the peers, whether you talk about [ Acciona or Stead or] [indiscernible]. I mean, I can give you a list we had 13% payout. And so I think it's important that we'll be aligned with the market. I mean we wanted to be a responsible company, responsible to its shareholders, given the option. I think we don't know what percentage of minorities will take it up, but we've seen precedents in the market where 70% end up opting for shares, not cash. So that's a presence. I have no idea what the EDPR minorities will do, but the intention was not that they should get the cash or not. I mean they have the option. That's why we've given it to them. We will not be taking the cash. We will be reinvesting it back in the business. But what I'd say there's no let's say, hidden agenda there, it's simply saying, listen, EDPR is already -- it's a growing up company, it should have a dividend policy like a grown-up company with the payout ratio and then give the option to the shareholders.

Gonzalo from UBS.

Couple of follow-ups on what [indiscernible] mentioned on the Q&A. On the -- so basically, you said that you said the targets based on the CapEx and if then you can do more megawatts on the CapEx then you would do it. So my question here, I guess, is if we see a situation which you said you're not anticipating, but in a situation which basically power prices merchant -- power prices come down faster than the PPAs at some point, this is not as attractive for customers as you are seeing today. And then you have to do less megawatts. So what would you do? Basically, what is the priority, keeping the amount of CapEx you're doing in terms of megawatts that you're adding gross net? How does that play out in terms of asset rotation and the balance between the two? Second follow-up would be quite related with that is basically where do you see the risk for the deliveries of the growth that you are seeing in the plan? I would assume it's maybe risky at the moment in Europe because of the permitting [ issue ] you've been mentioning then the rest of regions, but I appreciate your views on that. And then if I may, a question on the status of the coal plants and the commissioning or sales, if you could update us on the situation in [indiscernible]. You've done quite a few impairments there, but also assuming on the Iberian plans. So what is the status, and what do you expect to happen with those?

Okay. So as you said, the targets are based on the CapEx. So that's what we're sizing given the balance sheet, given the, let's say, the expectations. So depending on how that CapEx evolves, you get the different megawatts. I mean that was, I think, Alberto's question. In terms of -- if I understood, if the merchant comes down, and the question was, is it still competitive? Like I think if you look at the forward, let's say, TTFs, et cetera, or even for 2026, we're still talking about EUR 80 per megawatt hour implied power prices. So I think with the current levelized cost of energy that we're getting for solar and wind. Those will continue to be competitive -- renewables will continue to be competitive versus those gas prices and implied pool prices. So am I answering your question?

Sorry, I will repeat. So the question it's a bit unclear if -- what I was meaning is that is your base case. But if that happens earlier than you're expecting, so basically you get a situation in which you cannot invest as much as you would like because is no longer competitive for your customers to some PPA. So basically, what is the decision whether you just invest less, do less asset rotation and [indiscernible].

It's a good question. I think there, what you've seen, and you've seen that in the past, I mean, this is also a question about greening the economy and about the decarbonization. And so what you've seen, whether it's the [IR] rate, whether it's the repower, you will see governments kicking in particularly in the key hubs where we are at key regions to make sure that they are driving that, whether it's through specific auctions that you've seen in the past, where you do an auction for renewables, wind or solar, and you get the price that you get and you'll be selling to the system. So I don't -- you could -- I think there are three reasons why people are investing in renewables. One of them is because they want to go green, and that's one of the issues that's been sort of one of the key reasons why Europe has done it in the past, getting to NetZero by 2050. The other is energy independence. And so they want to force more renewable energy, particularly in countries that don't have their own endogenous sources. Europe, again, is an example, particularly given the crisis we just had with gas coming from Russia. So I think they will want to drive renewables in Europe because it's really the only thing that's available at the moment. And the third is in terms of costs. So the costs are lower. But these first two will continue our political and they're very like ingrained, I think, in society and a political level. So even if the prices are not there, let's say, take a stress test and you bring the merchant prices there. I mean renewables were more expensive than in fossil fuels in the past at some point. And still there was a drive to implement that. So I continue to see that there will be that push, whether it's here, whether it's in the U.S. to make that happen. In terms of delivery, listen, obviously, I mean, all business plans have risks, but risks, which can be on the upside or on the downside. In terms of delivery of actual megawatts, I say that in Europe, it's more a question of continue to drive the corporate PPAs and making sure that's happening. But in terms of permitting, we're actually expecting things to be relatively start. I'm here looking at [indiscernible] runs Europe for EPR. And I think he'll tell you or he told me, it's quite comfortable with getting those type of targets. I'd say in the U.S., it's not so much -- the U.S. is probably more about supply chain. So there, it's -- as you move, so the demand will be there. The question is, will the supply change be there in the short term? On the solar side, I think on the wind side, that will be much easier to manage because a big part of the supply chain is already there in the U.S. On the solar side, we're seeing sort of the disruption that we're currently living, I think that will sort itself out because I think otherwise, the U.S., if they don't have panels, they won't be able to drive that, but it is something which is obviously a risk. I'd say maybe those are the two [ refuel facility ], but I'd say those are probably sort of some -- maybe some of the key risks we're seeing there. On the status of the coal plants, the [indiscernible], the process is ongoing. We will provide news as soon as possible. In Iberia, it's more a question about, well, actually, because of just even security of supply, some of those coal plants have to come back online last year. But I'd say that those will be reconverted, and we have already been awarded specific support and subsidies by the European Union to be able to reconvert them using what they call the just transition funds and others innovation funds to convert them into renewables plus hydrogen projects. And so there is a big push by Europe to make this I mean using a little bit to catch phrases, but leave no one behind, right? You don't want to just shut down a coal plant and the national governments are committed, and Europe is committed to making sure that they are let's say, we can reconvert these, and we can transition these into sort of hubs that can create employment and that are, let's say, more aligned with the energy transition. So that, I would say, is the Iberian case, and that's what we're assuming for the next couple of years.

Jorge Guimaraes from JB Capital.

I have two questions. One is a follow-up from Gonzalo's one. Firstly, how do you see your strategy in an environment where the price mechanism in Europe changes from [ marginalistic ] markets to everything every other alternative, namely for your either exposure. So this would be the first one. And the second one -- sorry, I would just stick with the first one -- the second one has already been answered.

Interesting question. I can give you a very long answer or very sort of shorter answer. The marginal pricing system is not going to change in Europe. But I can elaborate on that. I think given the consultation that the European Union is doing now, and they've set out those questions to everyone. They're not questioning the marginal pricing system, certainly for the short-term dispatching. It's an efficient method, it's proven. They spent 20 years developing it. And I think Europe and the various many European countries are committed to that and to keeping that as a core part of the energy market to make sure that it's an integrated market because if you don't have something like that, you get a total fragmentation and a reregulation of the sector. And I don't think that, that's the point. Maybe there are some scenarios, there are some non papers out there. But I don't think that's where consensus is. And I don't think that's where the European Union is at. And we spent a lot of time in Brussels talking to them. So that doesn't mean that they are not going to want to incentivate more -- there's a lot of improvements that can be done there. We, as a company, have defended for many years that we should have longer-term contracts. And for renewables, as we contract typically 10, 15-plus years of PPAs or in the auctions. So we actually like that type of mechanism. But I don't think you have a whole market based on that. You have the complement of the short-term marginal pricing system to dispatch on a daily basis or sort of day ahead a couple of weeks ahead. And then you have complemented that with the forward sales of PPAs directly to customers or with the centralized systems to do that. That's how we're seeing sort of the conversation evolve. I think I know the Spanish government has a slightly more radical approach, but I mean I think they've gone one extreme. I think there will be improvements you've seen sort of a bunch of different Central and Northern European countries coming out quite strongly with, let's say, it's an evolution is basically the bottom line.

And just to complement one thing, when you asked about how, for example, our hydro would be head for the numbers of the business plan, what we are considering is that having a mechanism or not in '24 would -- it could not be active because we are considering a declining in the power prices. So it's not that we are expecting that some sort of mechanism will disappear and then we get exposed to very or too much higher power prices than perhaps actually even if it was to hold for a longer period of time, it would not be active, it would be already about the power price. So in that sense, I think it's a more [Audio Gap].

Jenny Ping from Citi.

Three questions, please. Just following up your comments earlier around going upstream and some of the supply chain restrictions in the U.S. Can you talk a little bit about whether you've thought about going upstream yourself, given the incentives there is available? So that would be my first question. Secondly, just looking at your portfolio. Sunseap obviously was one gap that was left in APAC that you effectively filled. I just wondered whether there is any fiscal benefits in terms of taxes with the restructuring of EDPR Brasil because, obviously, you're no longer repatriating dividends and reinjecting it, whether we should see benefits coming through the tax line.

So just upstream supply chain and who you take procurement, so I can also give a view on that, but if your question is in the sense of would we take equity or would we sort of actually move physically, can we give visibility on offtaking, which gives them more certainty to actually implement those plans, and as, I would say, the reversals that we then get guaranteed offtake and sort of preferential rights on those less solar panels will exist. Going upstream in the sense of actually buying or become -- I don't think that's necessarily a good philosophy or a good strategy because you've become and dependent on the technology or dependent on a particular supplier. That's not our business. We haven't done that in the past, and I don't think we're a different global regions, and we now have the 4 hubs, Europe, U.S., South America, Asia Pacific. We're very comfortable with that. We don't see any gaps. The countries that we are in cover 80% of all the renewables growth that is expected over the next couple of years. And for me, that's the 80-20 [indiscernible] rule. If you're in 20% of the countries that represent 80% of the growth, that's good enough. You don't need to go into additional countries or into additional areas. I think it will bring marginal additional growth and greater complexity. So I think we are at the right place, if anything, it's more about going deeper, now solar DG. We have to keep our eyes open, as I mentioned, sort of maybe there are new technologies out there that will come up over time. So we'll keep our eyes open to make sure that if that happens, we are a part of that. But we haven't identified anything. Nothing is on the agenda. I think we're covering all of the key technologies that we want to be in. So I think in terms of gaps, I think we filled out our portfolio. Germany was an area which was missing for us. I think we did that with the corona and so we're very comfortable with that as well. In terms of fiscal benefits, I mean, nothing in particular that I will comment on. I just say that just general not specifically just tax, but -- which will drive, let's say, the earnings accretion -- apart from the intrinsic earnings accretion of the transaction, just given the relative multiples. Also there will be, I think, additional value that we can release, but I won't comment much more on that, just given that's an offer over [Audio Gap].

[Audio Gap] from Jefferies.

A few from me. Firstly, on offshore wind, you gave some really good color around the growth profile there. But in terms of returns, CapEx has been going up East Coast and U.K. [indiscernible] on the revenue side in order to protect project returns. Secondly, again, on offshore wind, what percentage of the 2026 EBITDA is from offshore wind. And then thirdly, more generally, on renewables, I think last time around the [ 2020 ], what's the assumptions in the new 2023 to 2026 plan?

So in terms of ocean or the offshore and returns, what we are expecting to see is similar to what we saw in the onshore, the PPA prices or the CFD prices in going up. And I think we have started already seeing some of the dynamics in U.S. When you're bidding for the PPA. So as you know, in U.S. actually have bids where you typically bid to different things or different moments in time. One is to bid for the [indiscernible] and the other one is to bid for the long-term contracting for the PPA or the CFD. I think just several movements. So the last auction where we participated in California, and it was versus what some people in the market were expecting in terms of very high bids upfront. Actually, it came below. And actually, I think 7 bidders only show up for 6 zones. So it shows that people are, of course, the sector as a whole being conscious about what does it mean to commit itself upfront for the [indiscernible]. Let's see how the U.K. will evolve on the U.S. side as well? On the PPA side, we are seeing prices going up and effectively compensating for that higher CapEx. Also to be clear in terms of what we have already contracted our PPAs only 20% is for that project in the U.S., and it's actually for half of the project in U.S. And I think we shared that information a couple of days ago at the EDPR year-end conference call because that is the project that, as of now, we would say fabricate the project as a whole, the returns are still there for that half the returns are bid charger, but then we are competitive for the second half. And as we go forward, I think that we'll see that improvement in terms of or increase in terms of the PPAs, reflecting the capital -- higher capital and cost of debt. I mean, on the NPV per megawatt or per CapEx, I think there we are not showing the number. I'll follow up. We are seeing a slightly higher number, of course, because as the overall CapEx you increased the CapEx, but also have better returns. So overall, the NPV is improving on a percentage base, I think it's slightly happy. We'll follow up exactly on that number. And I will -- I believe that from the offshore the contribution to EBITDA on the percentage. I think I'll need -- because I don't have that number here, but I will definitely follow up before we end the meeting.

Sorry, just a quick one on [ IRR ]. It was very useful to see the slide with 9%, 8%, 7%. But those numbers, if I understand correctly, for solar applied for utility scale solar. So if we put together Solar DG plus the investments outside the U.S. and the European Union, we get to a decent amount of your CapEx, probably around 30%. If we put together Asia, South America and Solar DG, and I'm right in thinking that in those areas, you are targeting a double-digit IRR, just given the comments you made on solar DG cash returns and the risk profile of the other geographies. Is it fair to say that you would be targeting more than 9% IRR in those -- in that portion of CapEx?

For DG and what was the other part for?

DG, Sunseap, Asia and South America.

South America, for sure. DG in some cases, are very high single digits, and Sunseap, I think, as well, depending on the markets. So Vietnam, China, Taiwan, Japan, I mean, they have slightly different profiles. So they have different, but high single digit, low double digit, that would be sort of the range we would look for.

We have one more here from the room from [indiscernible].

Sorry, just a follow-up. I'm going back to the beginning of the presentation. Is it possible to clarify the capital increase on the parent company or [ EDP ] , namely on the part of the capital that is not open, that is not closed yet. And what type of pricing approach will be utilized?

Pricing will be a typical accelerated book build. And so it will be based on volumes, prices and what is an appropriate discount, if any, on -- for new investors to come in, knowing that 60% of the book is already filled up. So it will be based under what is left over.

One more here in the room from Alberto.

If Europe approves the utilization of tax credits, how is this going to change your business in Europe? Can you step up investments without having to do further equity?

I think we'll need to see the specifics. I think in general ends up flowing through to the customer like in the U.S., right? So the U.S., the PTCs is basically a subsidy to the consumer at the end of the day. I mean you incorporate it in your calculations, it makes it cheaper for the consumer, which ends up then incentivizing more demand, if you will. So in Europe, it would be another way of incentivizing demand for renewals. So potentially, would accelerate that demand on the corporate side. I think we need to see the specifics in terms of how that's actually implemented on a country-to-country basis. I mean, I think it will still take some time, maybe over the course of this business plan, we'll see that, but I think we need to see it in more detail.

If we don't have more questions in the room, maybe we move to -- we have a couple of questions in the net. Some of them have been already answered also by the questions in the room, but starting here from Enrico Bartoli from Mediobanca. The question is regarding distributor generation is a significant part of the investment in the new capacity in the business plan, which are the most attractive markets, which returns you expect from these segments.

The returns parts, I think we already touched on, which are the most attractive markets. I mean Europe is very attractive at the moment. Brazil is very attractive at the moment. Southeast Asia is very attractive at the moment, the U.S. is very attractive. So it's vary a little bit on the dynamics on a country-by-country basis. But basically, it is, I think, a very nice business. Obviously, to us some slightly different dynamics, much more customer facing, obviously, but there is a lot of demand there. And I think it's a question of how you scale it up in terms of operations, setting up that sort of, let's say, implementation model. But still, there are some synergies with the utility scale. And I think once you've got that in place once you've got that machine set up, then it becomes, I think, quite interesting.

[indiscernible] from Mediabank and also from Bernstein, on -- just a second. On U.S. offshore, given in terms of what is in terms of growth potential. And how do we see the evolution of the market in the U.S.?

Sorry, I didn't understand the question.

Evolution of the market in -- how do we see the evolution of [ W ] in terms of U.S. in terms of prospects?

Future. So apart from the three projects that we have I mean, I think there'll be a lot of tenders there, still coming up over the next couple of years, we pointed to that. We tried to do this on a -- so [ OW ], I think, is also evolving in terms of strategy. We would prioritize participating in processes which don't have upfront auctions. And so to the extent that they are a beauty contest or have lower option payments upfront. I think we've already managed to develop a large portfolio over this last 12, 24 months. And so we don't need -- or depending on the countries, but to go in for those fantastic great auctions upfront for the government where we aren't necessarily fantastic for the consumer. So we prioritize those, but in some cases, we will go for those. So in the U.S., typically, you'll have that. The California example is actually a great example for us in which we did go for one of these auction type processes, but it worked out very well because there are 7 bidders for 6 sites. I think -- I mean, we got a lot of calls after saying for people that we're very surprised because there have been 40 bidders originally signed up, actually, only 7 showed up. And so we -- I think we've got a very attractive concession sort of a very low option price. So on a case-by-case basis, we'll consider otherwise will try and prioritize more sort of open processes. So the U.S. we might -- I mean, it will depend on the processes. But if they keep this current, we might not increase it that much more.

I would just take the opportunity to go back to the question about [ Ws ] weight into the financials. So it's less than 5% of the net income over the period because it's equity consolidation, and its development stage. So the only operational capacity is the one that we have here. So it will be less than 5% of the [indiscernible].

Okay. I think we -- I was just running through the questions. I think most of them have already been covered in the previous questions that we have here last one also from Enrico Bartoli from Mediobanca. Could you please provide details on how you think you'll allocate new renewable capacity in Europe to different countries, in particular, what level of potential capacity growth is offered by entering the German market?

I think the fact that we are already present in 12 European markets means we can take advantage of the different dynamics in each market as auctions come up, whereas the corporates develop that. We have obviously a strong presence already in Spain. We have in Portugal. I think corona specifically, we're expecting around year-on-year, if I'm not mistaken, just looking at the numbers here, I think, around 0.5 gigawatt per year, [indiscernible] you correct me? So that leaves us some optionality. One of the things we're also doing with [indiscernible] is mostly solar is, but we're also developing the wind pipe. So that's what I think we bring to the table, a little bit like Sunseap as well. We have quite a lot of wind expertise. These are mostly solar companies. So we continue developing the solar, but we bring on top of that platform also the ability to do onshore wind. And I think in Germany, that will also have an interesting upside there, depending on permitting.

Well, if we don't have any final question, I will pass to Miguel for closing remarks.

All I have to say is thank you very much for the time that you've taken to be here today. I know it's been perhaps a long session, but hopefully, useful and interesting. We really wanted to share with you. And I think the excitement that we have about the prospects because we truly believe in the sector, we believe in the company, and I think in that sense, be able to share with you what our views about the sector and about what we can do over the next couple of years. So as I mentioned, I think on a previous call, it might be a bumpy ride, but I have no doubt that it will be a very successful one. And I'm sure we'll keep in touch over the next coming quarters and let you know how things are going. So thank you very much.