Earnings call transcript: EDP Renovaveis sees steady growth in Q2 2025

EDP Renováveis (EDPR) reported its second-quarter 2025 earnings, showcasing stable financial performance and strategic growth initiatives. The company maintained its recurring EBITDA at €960 million, while underlying EBITDA saw a 20% year-on-year increase, excluding asset rotation gains. Currently trading at $11.84, with a market capitalization of $12.5 billion, EDPR shows mixed signals according to InvestingPro analysis. Despite a challenging market with a 9% drop in average selling prices, the stock’s recent performance reflects ongoing investor interest, though current valuations suggest the stock is slightly overvalued based on InvestingPro’s Fair Value calculations.

Key Takeaways

• Recurring EBITDA remained flat at €960 million, but underlying EBITDA increased by 20%.
• Installed capacity expanded by 18%, reaching nearly 20 GW.
• EDPR’s stock price increased by 1.1%, indicating positive market sentiment.
• The company plans to add 2 GW of capacity by the end of 2025.
• Strong focus on AI-driven operational efficiency and renewable energy demand.

Company Performance

EDP Renováveis demonstrated resilience in Q2 2025, maintaining stable financial metrics despite a decline in average selling prices. The company increased its installed capacity by 18% and improved generation by 12%, aligning with industry trends favoring renewable energy. InvestingPro data reveals impressive gross profit margins of 79.44% and revenue growth of 9.33% over the last twelve months, though cash flow metrics indicate rapid cash burn. EDPR’s strategic focus on solar and wind energy, along with storage projects, positions it well against competitors in the renewable energy sector.

Financial Highlights

• Revenue: Not specified in the earnings call summary.
• Recurring EBITDA: €960 million (flat year-on-year)
• Underlying EBITDA growth: 20% (excluding asset rotation gains)
• Recurring net profit: €137 million (€132 million excluding asset rotation gains)
• Installed capacity: 18% increase to nearly 20 GW
• Generation: 12% increase to over 21 TWh

Outlook & Guidance

EDPR remains committed to its 2025 targets, including 2 GW of capacity additions and a recurring EBITDA of around €1.9 billion. The company projects generation between 41 and 43 TWh and expects net debt to reach €8 billion by year-end. According to InvestingPro analysis, which offers 12 additional key insights about EDPR, analysts maintain a positive outlook with a consensus recommendation of 1.96 (Buy). With a robust project pipeline, EDPR anticipates adding 1.5 GW of capacity in 2026, supported by its asset rotation program, though InvestingPro data flags concerns about the company’s ability to meet short-term obligations.

Executive Commentary

Miguel de Andrade, CEO of EDPR, emphasized the competitiveness of renewable energy, stating, "Renewables remain the most competitive source of power and the only technology ready to connect at scale today." He also highlighted the profitability of storage projects, particularly in the U.S., with "typically double-digit IRRs."

Risks and Challenges

• Market volatility affecting average selling prices.
• Potential regulatory changes in key markets like North America and Europe.
• Execution risks associated with large-scale capacity additions.
• Dependence on technological advancements for operational efficiency.
• Fluctuations in demand due to macroeconomic factors.

Q&A

During the earnings call, analysts inquired about the U.S. safe harbor strategies and the asset rotation approach. EDPR addressed concerns about PPA pricing trends and market dynamics, emphasizing the strong demand for renewable energy and the company’s strategic positioning in key markets.

Full transcript - EDP Renovaveis (EDPR) Q2 2025:

Conference Moderator, EDPR: Welcome, everyone. Thank you for joining EDPR’s first half 2025 results conference call. We are pleased to have you with us today, our CEO, Miguel de Andrade, and our CFO, Rui da Silva Teixeira. They will walk us through the key financial highlights from the period and share insights into the full year outlook. After the presentation, we’ll open the floor for questions. You are welcome to submit them via the conference chat or ask them directly over the phone. The session is scheduled to last approximately 60 minutes. With that, I will now hand over to Miguel de Andrade to begin the presentation.

Miguel de Andrade, CEO, EDPR: Thank you, Miguel. Good afternoon, everyone. It’s good to catch up with you before many of you head off to some well-deserved holidays. I’d start off by moving to slide four and talking about the first half’s key highlights and numbers. I think the first half was marked by a really solid evolution of the underlying EBITDA and net profit. We’re also on track to deliver the 2 GW of capacity that we’d committed to, and the asset rotation plan is also proceeding as expected. In fact, we just announced a couple of hours ago an asset rotation in Greece, another one, and we expect a couple more over the next couple of days and weeks. This is all aligned with our 2025 year-end targets. Overall, installed capacity grew to almost 20 GW, up 18% year-on-year. That’s thanks to the net additions of 3 GW.

We got a 12% increase in generation, a 12% year-on-year increase in generation, reaching over 21 TWh. Here we’ve done a lot of work on our volume projections and modeling, and I think just increased confidence in the ability to estimate the projections. I think we’re feeling good about this. In terms of average selling price, it’s standing at €55 per MWh, down 9% year-on-year. That’s mainly due to lower prices in Europe and South America, but partially offset by stronger pricing in North America. One point I really wanted to highlight is the fact that our adjusted core OPEX per average megawatt in operation improved by 11% year to date, reflecting an ongoing focus on operational efficiency. Here you can see the economies of scale really beginning to kick in.

The solar, the fact that we have obviously more megawatts and keeping the cost on a nominal basis really under strict control. On the financials, recurring EBITDA at around €960 million, so flat year-on-year. However, excluding asset rotation gains, the underlying EBITDA grew by around 20% year-on-year. Recurring net profit coming in at around €137 million, which includes, well, our €132 million excluding asset rotation gains, and that’s an €80 million increase year-on-year. Strong operational results, good execution, good financial discipline, and I think positioning us well to meet our 2025 objectives. Let’s talk about some of our key markets and highlights on what’s happened over the last couple of months. If we turn to slide five, let’s talk about the US. First, we see a robust demand outlook for power and renewables. I think this is undeniable. You’ll see it everywhere.

I mean, a lot has been written about it. I mean, just to give you sort of a couple of data points, it’s projected around a 70% increase in the U.S. power demand by 2050. The other thing, apart from this increased demand that we expect over the next couple of years and even decades, is that we now have much more clarity on the market conditions following the one big beautiful bill that’s been approved by Congress and Senate and signed into law by President Trump. At the end of all of this process, we continue to see strong fundamentals to capitalize on the opportunities ahead.

I think we continue to believe strongly that renewables remain the most competitive source of power and that it’s the only technology that is really ready to connect at scale today, certainly over the next couple of years as well, to meet this demand. I’m sure we can then go into more debate about nuclear and coal and gas, but the truth is, as of today and over the next couple of years, renewables is really what can provide or supply a lot of power to this market. This market demand is coming through in pricing dynamics. We are seeing high demand for near-term connection projects and also for longer-term contracts, with a trend towards increasing the appetite for 20-year contracts, indicating market views on long-term energy pricing. In terms of prices, high prices are on the back of this increased demand and lack of short-term and near-term supply.

Just one data point, for example, here we saw the PJM capacity auction prices be cleared at the cap of $329 per megawatt day for the 2026-2027 period, and that compares to $270 for the previous period, 2025-2026. On the bill, the one big beautiful bill, it’s brought clarity to the tax credit structure. I think that most of you will be familiar with that. Now the new framework is in place. There’s no change to the adders, no changes to the storage tax credits. We have coverage for tax credits until December 2027 without further startups construction or safe harbor limitations. We are expecting some revised guidance on startup construction under the new law now in mid-August following the executive order from July 7, but hopefully we’ll be able to get some more information on that over the next couple of weeks.

All in all, we are well positioned in this landscape with 2026 and 2027 capacity, basically, or the ability to have this capacity secured under the bill and with existing safe harbor capacity. We have about 1.5 GW of solar and wind capacity under the old legislation as of December 2024, and that can be placed in service until December 2028. Post-2028, we are currently working to secure additional safe harbor capacity, potentially all the way through to 2030. Clearly, things have moved on since we last spoke at the last call, and we now have pretty good visibility, I’d say, until 2030, and we expect to firm that up over the next couple of weeks. This is something we’ll come back to in the third quarter numbers and in Capital Markets Day, but I’d say the next couple of years we have this visibility on growth.

On storage, no need for safe harboring. Tax credits are protected well through 2030 and beyond. This will continue to play a significant role in our growth in the U.S. As you know, with very good, typically double-digit returns, we think that the utilities will have to fulfill the capacity needs with storage in the near term. We are in a good position to capitalize on this with our robust pipeline. Finally, but not at all unimportant, we have limited impact from import duties and tariffs because, as you know, we have a mostly U.S.-based supply chain set up since 2022-2023. We had issues back with laundry panels in that period. We redirected our supply chain basically into the U.S.

In terms of solar panels and trackers, inverters, and all of that, we really have mitigated significantly our supply chain risk from tariffs now with this, from these most recent tariffs. That’s on the U.S. On slide six, we can talk about Europe. Here are a couple of points. First, the European Commission is actively promoting grid reforms and looking also at industrial resilience and competitiveness. I’ve had the opportunity to spend some time in Brussels talking to some of the key people there, and it’s very clear the drive for energy security and competitiveness, and that comes through in this continued promotion and defense of grids and renewables. Two public consultations were recently launched to address these challenges, aiming to ease bottlenecks, accelerate permitting processes, and enhance cross-border planning. We’ve also seen the publication of the Net Zero Industry Act to boost competitiveness and resilience across Europe.

One of the measures in this act refers to having at least 30% of the renewable energy auctioned annually in each member state, meeting non-price criteria. All of this is designed to strengthen Europe’s industrial base and economic security. Still on this point, it is interesting to see the European Commission is also monitoring the actual implementation of a lot of the measures that they’ve defined over the last couple of years. For example, they launched infringement procedures against all member states except Denmark because most countries hadn’t transposed the revised renewable energy directive by the deadline. You’ve now seen the European Commission really putting pressure on the member states to actually transpose and get moving with a lot of the stuff that had been defined at the Brussels level. Regarding batteries in Europe, as you know, we’ve definitely seen a big push for batteries in the U.S.

We’ve seen them in the UK. In Europe, we hadn’t seen so far. What I’d say is that certainly now in 2025, we are seeing unprecedented daily price spreads. These spreads are a sustained increase in relation to the power prices, and we’re seeing renewables putting a significant downward pressure on the central hours of the day with solar driving prices sometimes to zero or even negative prices. At the same time, we’re seeing higher prices during the evening hours, driven typically by the marginal price of gas. This is a great situation for assets with flexible capabilities and a strong signal for the energy arbitrage business case. We’ve been holding back from investments on batteries over the last couple of years. I think we believe that over the next months and years, there will be an increased focus on promoting batteries in several countries.

We’ve seen, for example, in Poland recently, and also we expect some auctions in Spain, that there will be further opportunities, for example, in batteries. Just as a sort of interesting data point, you can see there on the slide, capacity awarded 15 GW expected in 2025 versus 13 GW in 2024. We’re already talking about quite relevant numbers. Overall, you’re taking important steps to have a more resilient and sustainable energy system. Slide seven, I’ll go quickly through the next couple of slides. On slide seven, it’s basically talking about our capacity expansion plans for 2025 and beyond, essentially 2026. We’re on track for the 2 GW, as I mentioned. Around 70% of that capacity is expected in the fourth quarter. The additions are progressing on time and on budget, so we have a good line of sight to them.

Looking to 2026, we have good visibility on up to 1.5 GW of capacity additions. Around 65% is already secured, and we have additional capacity under advanced negotiations with good opportunities in both the U.S. and Europe. We’re talking about megawatts that are really in the final, final stages of negotiations. We hope to give you some visibility on that soon. The secured projects are expected to deliver returns above our target risk return threshold, so around 270 basis points above WACC. I think that just confirms the strength of our pipeline and also our capital allocation discipline. Overall, 85% of the 2026 pipeline is concentrated in the U.S. and in Europe. As I’ve said before, this really reinforces our focus on our core markets. If you look at slide eight, asset rotations, I think here relatively positive news.

We’re advancing this plan with around €0.7 billion of the targeted proceeds already signed or closed at good multiples. We had one transaction in Spain already closed, three more signed, including the transaction signed today in Greece, and three additional deals that are currently under binding bids. We expect those will come out over the next couple of weeks. The enterprise value per megawatt across these transactions averages values of around €1.5 million per megawatt, showing good, strong market demand. As you know, typically, I’ve talked about it’s important to have demand and then it’s important to have good prices. I think we’re seeing both of those processes with a robust number of parties participating in non-binding and binding offers. I think that’s holding up quite well in 2025. Overall, we’re expecting the 2025 transactions to generate around €100 million of gains and thereabouts.

Half of the volume of the asset rotation will be executed at a 49% stake. Most of these proceeds are expected to be recognized in the second half of 2025, obviously. We’ll see that coming through and impacting the net debt also towards the end of the year. On slide nine, talking about investments. We have been very disciplined on our investments. They’re about €1.1 billion, around a 25% decrease versus the €1.5 billion invested in 2024, but obviously also doing fewer megawatts this year versus last year. Despite the reduction, the investments are highly focused, as I mentioned earlier, 90% in this case allocated to core markets in North America and Europe. If we break this down by technologies, we have around a third of the investments going towards solar utility scale. Of that, 47% in the U.S., 38% in Europe, primarily Spain, Italy, and Germany.

We have around 31% on wind onshore projects across the U.S., Europe, mostly Italy, Spain, and Greece, and also some Brazil. 20% of the investment towards storage, mostly in the U.S., around 300 megawatts of storage capacity under construction, around 9% for offshore wind, mostly the frontier projects, which are under advanced construction, and around 6% of just targeted solar DG with investments concentrated mostly in the U.S. and in Singapore. This investment profile really reflects our commitment to the core geographies, but also having a diversified technology portfolio, but of mature technologies. Let’s talk about efficiency. I think this is also one of the positives that we can really highlight here in this first half. We’re continuing our trend of improved operational efficiency. We’d already showed that in previous quarters, and I think this quarter is not an exception.

We’re delivering an 11% reduction in adjusted core OPEX per average megawatt. This is driven by essentially three things. One is just general cost discipline and very targeted efficiency measures and improving streamlined processes across the organization. I think the whole organization has responded very well towards this. The second point is also a much leaner workforce model. As I mentioned last year, we did a very deep internal reorganization aligned with our revised growth outlook, but also trying to really eliminate a lot of, well, any areas that could have either duplications or redundancies. We have a much leaner workforce model, and we’ll continue to work on that. I think we still see some additional potential for efficiency. The third point is on the AI-driven initiatives.

Obviously, as we go on optimizing operations and digitalizing a lot of the processes, we are also managing to just become more productive and get those economies of scale in terms of headcount. It’s obviously optimized down to around 2,880 people. We are obviously ensuring we retain our top talent and best performers, and that’s been a key driver for us and certainly a key priority for us. Overall, I think we just, I just wanted to really highlight this commitment to operational excellence and cost efficiency and productivity and making sure we stay competitive and agile in this fast-changing energy landscape. In terms of guidance, just before I turn it over to Rui, we are targeting, as I said, the 2 GW for the full year.

We had about 0.4 GW in the first half, but I think I’d already guided earlier in previous quarters that most of this would then be coming in the fourth quarter. The full year recurring EBITDA is expected to be around €1.9 billion, including the €0.1 billion in asset rotation gains, and having generation in the range of 41 to 43 TWh. I think we’re quite comfortable this year with this. Last year, I think we were a little bit off, but I’d say this year we’ve really gone deep on this topic of the volumes and feel much more confident. By mid-year, we’ve also already achieved €1 billion of asset rotations. Net debt projected to be about €8 billion by year-end, including €2 billion of asset rotation proceeds and €1 billion in tax equity proceeds.

As of the first half, the net debt was at €9 billion, but as I mentioned earlier, proceeds are expected to come in mostly in the second half of the year. We should see that convergence, the €9 billion down to the €8 billion of net debt. Overall, EDP Renováveis is firmly on track to meet its 2025 guidance and very much supported by a very disciplined execution on both the investments and on the operational side. With that, I’d stop there and turn it over to Rui. Thank you.

Rui da Silva Teixeira, CFO, EDPR: Thank you very much, Miguel. Good afternoon. Let’s move into the first half results and start with page 13. Really solid operational performance. In the first six months, it was driven significantly by improvement across all the generation metrics. Installed capacity increased by 18% year-on-year, reaching 19.6 GW from 16.6 GW in the first half of 2024. This growth was supported by good contributions from North America, Brazil, Italy, and Spain. Asset rotation activities and decommissioning contributed to the portfolio as it ends by the end of June. As of June 2025, 2.3 GW of capacity is under construction for projects in 2025, but also in 2026. Electricity generation rose by 12% year-on-year from 18.9 TWh in the first half of 2024 to 21.2 TWh in the first half of 2025.

Operational efficiency has also improved, as Miguel highlighted, with lower electricity losses and the renewable resource at 99%, just slightly below the 100% recorded in the first half of 2024, with North America performing above average, helping to offset lower resource levels in Europe. If we move now to slide 14, EDPR recorded a 2% year-on-year increase in electricity sales in the first half of 2025, driven by strong growth in generation, partially offset by lower average selling prices. The average realized selling price declined by 9% year-on-year from about €60 per megawatt hour to around €55 per megawatt hour, but this was fully compensated by the 12% increase in clean power generation. This average price evolution was mainly due to Europe and South America, while North America saw a slight price increase from new projects in operation as well as merchant exposure.

Overall, a positive sales performance and showcasing the strength of our diversified portfolio. If we move now to slide 15, underlying recurring EBITDA increased by €159 million year-on-year, representing a 20% growth excluding asset rotation gains and a 1% year-on-year excluding FX impacts. This is driven by around €219 million of tax equity revenues for North America. That’s an 18% increase in generation and new capacity additions that is driving this addition in revenues. €12 million of capital gains from the asset rotation closed in Spain as planned, with the remaining gains concentrated in the second half of this year. Around €384 million core OPEX in line with last year’s number on the back of strong efforts in constant efficiency improvements.

About €50 million of less net other costs improved around €60 million year-on-year on the back of no material impacts this year from Colombia nor Romania versus last year’s additional costs. These results highlight the improvement in the underlying business from both operational growth as well as enhanced efficiency. If we now go to slide 16, in the first half of this year, the financial results rose by €21 million year-on-year, reaching €244 million. This is primarily due to a €1.7 billion increase in nominal financial debt and also lower capitalized interest or financial expenses, partially offset by FX and derivatives. A key strength of the financial structure is that 74% of EDPR’s debt is at the fixed rate, therefore protecting against interest rate volatility. We also maintain a robust debt maturity profile with 57% of our debt mainly or effectively maturing beyond 2028. This reinforces long-term financial stability.

Finally, our currency exposure remains well diversified with 47% of debt in euro and 35% in U.S. dollar, and therefore we have a natural hedge against Forex fluctuations. On slide 17, looking to the cash flow evolution, I think it’s definitely a very positive one. In the first half of 2025, organic cash flow reached €195 million, marking a €0.2 billion year-on-year increase. It’s a solid performance of the operating portfolio, as well as changes in working capital and distributions to minority interests and tax equity partnerships. Please note that organic cash flow excludes tax equity cash proceeds. These are typically received when the project is commissioned and have an immediate impact on net debt. In the first half, we received €132 million of the tax equity cash proceeds, and we remain on track to reach €1 billion for the full year.

We are aiming to have this cash in towards the end of the year. As of June 2025, net debt stood at €9 billion. This is about €0.7 billion up since December of last year. The increase is mainly driven by €1.3 billion in net expansion investments supporting our growth. This was partly offset by asset rotation proceeds, primarily from the transactions that were already closed, as I explained. Looking ahead, we expect net debt to converge to around €8 billion by year-end. Again, as Miguel said, timing of asset rotation proceeds, what I just mentioned about tax equity cash proceeds, which are or will be concentrated in the second half of the year. If we now move to slide 18, as mentioned earlier, our recurring underlying EBITDA rose by €159 million year-on-year, and this is reflected immediately into the net profit.

Depreciation increased driven by the new capacity additions and the one-off impact from accelerated depreciation of repowering wind farming in the U.S., something that we already explained in the first quarter. The effective tax rate normalized at 29%, slightly above the previous quarters, and this is because given the absence of tax benefits coming from asset rotation gains, effectively the tax rate is applied to the operational results from EBITDA. Minorities contributed positively year-on-year following the completion of the CDG Minorities Buyback in late 2024. As you know, this is an important step in optimizing the portfolio and reinforcing the long-term value creation for all the shareholders.

Regarding the one-off impacts at the net profit level, just to mention, there are about €30 million that we recognized this quarter, approximately €11 million coming from Ocean Wind in the U.S., given a contract or some contract cancellations that happened at the South Coast Wind Project. This relates to equipment supplier that were and the contract was canceled. €15 million related to a portion of outdated equipment that we have in the U.S. and will not be using in future projects. All in all, recurring net profit reached €137 million, excluding capital gains. This represents a threefold increase versus last year. Really a very good performance on the underlying asset base. Now, Miguel, back to you for closing remarks. Thank you.

Miguel de Andrade, CEO, EDPR: Thank you, Hui. Just a couple of points. First, strong first half of 2025, as I mentioned, delivering on the strategy. Confident in our 2 GW capacity additions target for the year, on time and on budget, and already with the gigawatt of capacity secured for 2026 and looking to close some additional megawatts over the next couple of weeks. Financial foundation is solid. Recurring EBITDA, excluding asset rotation gains, up 20% year-on-year. Recurring net profit almost tripling year-on-year. Strong organic cash flow. Clearly on track to meet full-year guidance. U.S. energy market accelerating, driven by rising demand and need for new capacity. Renewables are an important part of this, no matter what people might say, and EDP Renováveis is well positioned in this market context. The asset rotation program is progressing with high visibility.

One transaction closed, several signed, others under binding bids, all at attractive valuations, and we expect around €2 billion in proceeds during the second half of the year, supporting our €8 billion net debt guidance. As we enter the second part of the year, I think we are, as I mentioned, on track to deliver the 2025 targets. Good visibility, good execution, resilient growth strategy, and overall a good set of numbers. I would also like to thank the teams for contributing to these numbers this first half. Let’s stop there and pass it over to Q&A. Thank you.

Jenny Ping, Analyst, Citigroup: Thank you, ladies and gentlemen. The Q&A session starts now. As a reminder, if you wish to ask a question, please press star followed by five on your telephone keypad.

Conference Moderator, EDPR: Thank you. The first question that we have comes from the line of Pedro Alves from CaixaBank BP. Pedro, please go ahead.

Alberto Gandolfi, Analyst, Goldman Sachs: Hi. Thank you for the presentation. Two questions, please. The first one on the U.S. You have rated above 1.5 gigawatts of safe harbor, but this is as of December 2024. Can you give us some comfort here in terms of a minimum reasonable figure on top of this 1.5 gigawatts that could be a safe harbor? If you have any idea of what could be the additional restrictions for the safe harbor criteria required by the executive order that was signed after the bill. The second question on the capacity additions for 2026. Roughly two-thirds already secured. How much do you expect to have secured by the next results presentation or the Capital Markets Day? If you can tell us the average or a range of the power purchase agreement prices by geographies that you have been able to sign and the ones that you are negotiating. Thank you.

Miguel de Andrade, CEO, EDPR: Thank you, Pierre. Let me just try and break it down. Until 2027, essentially, if we start construction on new projects for 2025, obviously, there’s no issues. For 2026, as long as we start construction and finish it before 2027, there’s not a problem. The same thing for projects that we start that we can complete in 2027. The 1.5 gigawatts, basically, we can pretty much use up either in 2027 if we wanted to, but in 2028 mostly. For additional safe harbor beyond 2028, that’s obviously something we’ll come back to in the Capital Markets Day. I think we can talk about that. I think it’s, let’s say, we have already quite a few options which would give us comfort on 2029 and 2030. We obviously want to make sure we want to see the safe harbor criteria that comes out in August.

We believe there are years and years of precedent about what it takes to safe harbor projects. There are essentially two different ways of doing that. One is just by having 5% already committed of CAPEX for specific projects, and the other is by having sort of bespoke equipment already ordered for specific projects. Let’s just wait and see. I’d say that we have a couple of gigawatts beyond 2028 that we believe will be eligible, but obviously, we want to see the final regulation that comes out before we comment publicly on that. On the capacity additions, for 2026, we’ve got one gigawatt already secured for 2026. As we say here, we think we can go up to 1.5 gigawatts in 2026. We’ve got about half a gigawatt still, I’d say, in the final, final stages of negotiation.

Obviously, I don’t want to commit to that before we actually close. I’d say good confidence on that. Certainly, by the next quarter, we would give you full visibility on the 2026 capacity because by then, we would have to have it not just secured, but we’d probably be already beginning construction at that point. In terms of PPA prices, listen, I don’t have it broken down by all the different geographies, but I think in the U.S., we’re typically sort of in the 70s, that type of range, dollars per megawatt hour. In Europe, it’ll depend what geography you’re in. If you’re in Poland, it’ll be obviously higher. If you’re in Spain, it’ll be lower. This is certainly a lot of information, detailed information we can get to then in the Capital Markets Day, and we’ll put a pack together that we can share with you.

Maybe for the moment, I’d leave it at that.

Conference Moderator, EDPR: Thank you, Pedro. Next question comes from the line of Fernando Garcia from RBC Capital Markets. Fernando, please go ahead.

Analyst: Good afternoon, and thank you for taking my questions. I have as well, too. The first question, clearly, there was a worsening recovery in the stock price, but EDPR is still trading below book value. In a scenario of EDPR meeting asset rotation and tax equity targets, and as well your rated net debt of around €8 billion for year 2025, I would like to know your thoughts in terms of growth going forward versus other capital allocation options such as share buybacks. That was the first question. The second question about asset rotation, I would appreciate any indication about how you see valuations at the moment and when you expect to finish the disposal of assets, let’s say, affected by higher CAPEX costs and devolution that you expect in terms of enterprise value invested capital multiple going forward. Thank you.

Miguel de Andrade, CEO, EDPR: Okay. In relation to your first point, I’d say two things. First, we continue to see good organic opportunities for growth or projects with high single-digit or even double-digit returns. I think those are good areas to allocate capital, but obviously, we’re also focused on deleveraging. We want to make sure that we get the EDPR balance sheet with the ratios that we would like before we then think about additional areas of capital allocation, like you mentioned, of share buybacks or anything else. I’d say deleverage is a key priority. Continue to execute on our growth plan is another priority. I think we think about whether they’re, depending on what the share price is at the time, whether it makes sense to think about share buybacks, but it’s not something that is imminent. In terms of asset rotations, if your question is, are we seeing in terms of multiples?

Normally what we aim for is NPV over CAPEX sort of targets to be around 20% of value creation. Certainly, we had many years where that was true. I think we’re now in an area where we are rotating some vintage projects with slightly higher CAPEX numbers, so slightly smaller capital gains, but the multiples are actually quite good. If you look at the multiples that are coming through, whether it’s the Greek projects or if it’s, as I say, we’ll talk about some of the other projects in our portfolios, hopefully, that we’ll be communicating in the next couple of weeks, but all with, I think, strong multiples that if you do the read across, whether it’s in the U.S. or in Europe, Spain, Italy, France, Greece, you’ll see that those are all very attractive multiples.

I think we’ll have an important impact on the read across to the remaining portfolio. I don’t know if Rui or Miguel, if you want to complement anything else.

Rui da Silva Teixeira, CFO, EDPR: I would say this. The 2025 transactions, as we have been highlighting, are likely to only give around $100 million of capital gains, also bearing in mind that some of the transactions, namely U.S., will probably be minority sales, so no capital gains on that. Yes, within those portfolios, we are including projects from 2021, 2022 FIDs that in the meantime were caught up by CAPEX overruns. That’s why we are expecting low contribution from capital gains, while the multiples are actually good. It’s a fair value transaction.

Conference Moderator, EDPR: Thank you, Fernando. The next question comes from the line of Arthur Sitbon from Morgan Stanley. Arthur, please go ahead.

Arthur Sitbon, Analyst, Morgan Stanley: Hello. Thank you for taking my questions. They are both on the U.S. and on your growth base, basically. The first one is just that the U.S., I think, accounts historically for 30% to 50% of your growth additions every year. When I look at your quantity of gigawatts safe harbored for the coming three years, 1.5 gigawatts, I was wondering if that means that essentially, if we gross that out with the ratio, the 30% to 50% ratio, does that mean that it’s going to be a bit difficult to grow for those three years by more than three to four, maybe maximum five gigawatts of growth addition over those three years? If that’s not the case, then where else would the growth come from? That’s the first question. The second one is just on the executive order on renewables and what you expect around mid-August.

I was just wondering if you could describe a bit the scenarios here. I imagine the best outcome would be that nothing changes, and then you can safe harbor as much as possible. What would be quite a tough scenario for you, and what could that mean for your growth? Could it be to an extreme where you cannot safe harbor anything? I’d be interested to have some thoughts around that. Thank you very much.

Miguel de Andrade, CEO, EDPR: Sure. Arthur, good questions. Just taking a step back and making sure I’m clear. If we build projects, if we place them into service before the end of 2027, we don’t need to safe harbor. Effectively, they will get the tax credits. 2025, 2026, and 2027 are safe. We can build as many megawatts as we want. As long as we place them into service, they will be eligible for the tax credit. The 1.5 gigawatts, essentially, in the limit, we could use them just for 2028 because that’s when they expire. We’re working on the safe harboring for projects beyond 2028. That’s important when we think about the number of megawatts that we could potentially do in the U.S. and about the overall number of megawatts. I think we have more than enough buffer to basically do a relevant number of megawatts in the U.S., certainly in line.

I don’t want to anticipate myself in terms of what we’re going to then be communicating in the Capital Markets Day, but let’s just put it that certainly you can’t do that math that you just did. It can be certainly much more than just the 1.5 growth stuff. The second point is that storage doesn’t require safe harboring because the tax credits run all the way past 2030. That’s also a significant percentage of growth that we’ve seen, not just in the past currently, but also going forward. I think that’s on top of the safe harboring numbers that we would have for solar and wind. On your second point, which is the executive order in August and what we expect, I think here it’s really a question about the cost of the safe harboring.

As I mentioned, if you do it, let’s say, a very low-cost option, which is just ordering, let’s say, a transformer, a main power transformer, the cost per megawatt can be very limited. You just place an order for a transformer, and that’s enough to get you the safe harboring. In other cases, and that’s typically what we’ve done, you safe harbor, let’s say, you start a construction of 5% of the value, whether it’s in panels or some other equipment, and that is enough to get you the safe harbor. This is a more prudent approach than many of the peers. I’d say it’s significantly more prudent than many of the peers. It’s been the precedent for many years that this has been enough to safe harbor. If we keep with precedent of previous years, we should be fine.

If there is any change to that, then we just need to look at it, see what the cost of additional safe harboring is, and then take a position on whether we want to take on that cost of options or not. I don’t want to speculate too much on that at this point.

Arthur Sitbon, Analyst, Morgan Stanley: Thank you. Just to be clear on the definition of the 1.5 gigawatt that are safe harbored, based on your comment, should I understand that this is just wind and solar, 1.5 gigawatt just of wind and solar? On top of that, does that include any of the capacity that you intend to add in 2026?

Miguel de Andrade, CEO, EDPR: No, that’s the point. Anything that we add in 2026, we don’t need to use up that 1.5 gigawatts, which, by the way, is just for wind and solar. Batteries don’t require safe harboring, so we have flexibility. Basically, any capacity we place into service in 2025, 2026, and 2027 won’t consume, won’t use up that 1.5 gigawatts of safe harbor that we already have. Is that clear?

Arthur Sitbon, Analyst, Morgan Stanley: Thank you. Thank you very much. Yeah.

Miguel de Andrade, CEO, EDPR: Okay, thanks.

Arthur Sitbon, Analyst, Morgan Stanley: Thank you.

Conference Moderator, EDPR: The next question comes from the line of Alberto Gandolfi from Goldman Sachs. Alberto, please go ahead.

Alberto Gandolfi, Analyst, Goldman Sachs: Hi, good afternoon. Thank you for taking my question. The first one is long and a bit elaborate, hopefully clear. I noticed three things, in my opinion, seem to be happening here. Asset rotation gains are really plummeting. I mean, you’re selling €2 billion, but you’re guiding for €100 million. I wonder how central this strategy might be going forward. The second thing, Miguel, you just mentioned that you’re seeing high single-digit and in some cases, low double-digit returns on projects, which seems to be an upgrade versus history. The balance sheet is indeed deleveraging once you reach your €8 billion year-end net debt target.

On this basis, do you contemplate, so is your, I’m not asking you to announce it now, but in your mindset, over 2026-2028, is your philosophy going to include a return of capital to shareholders as well as organic growth, or will you just focus on organic growth and asset rotation? I’m trying to understand, if I buy the stock now, am I going to expect a dividend coming back? Most of all, am I going to expect you to come in and put a floor on the shares with a buyback, which has been extremely successful in many cases in the sector in other instances? The second question is on guidance. You talk about €1.9 billion EBITDA with €100 million gains. Can you tell us, please, in the second half, how much EBITDA growth you expect from additions and how much EBITDA deconsolidation from disposals?

It seems to me that you’re kind of guiding for a slowdown in H2 versus H1, which I don’t quite fully understand. I’m trying to understand if it’s a prudent guidance or if there’s maybe more deconsolidation versus what I thought. If you could, maybe last, last, last comment, we’ve seen three very important data center deals, you know, Solaria, in the press today, Iberdrola, Echelon, RWE, AWS. Can I ask you if there’s something EDPR is doing, or perhaps it’s more for the EDP call, this question? Thank you so much.

Miguel de Andrade, CEO, EDPR: Thank you, Alberto. On your first point, just a couple of clarifications. You talk about the €2 billion of asset rotation and the €100 million of capital gains, but bear in mind that about half of that, we’re only selling 49% of the significant portfolio. The capital gains on that would never flow through the P&L in any case. You can’t just do the €0.1 billion over the €2 billion. The more appropriate would be the €0.1 billion over €1 billion in terms of the capital gains per megawatt or per euros of investment. The second is that we are focusing on also selling projects that had higher CAPEX numbers, and getting those, let’s call them vintage projects, out the door so that we can really focus on good assets that have strong recurring growth of earnings going forward.

Finally, on this point, our objective is to create value, long-term value. That means making good investments in good projects, and that’s our focus. I’m not going to comment or speculate on share buybacks. You have to see that in the context of what are you comparing it against. What is the opportunity cost of continuing to develop our business and developing new projects? That’s what we’ll be looking at. At any point in time, we will be allocating capital in the most efficient way possible. Obviously, we are focused on taking these long-term investment decisions on projects that we think create substantial value. On guidance, I wouldn’t expect any EBITDA growth coming from new additions. Most of the additions will come through towards the end of the year, so I wouldn’t factor that in as a driver.

A lot of the divestments will also come towards the end of the year, so you should assume a relatively steady state in the second half. I’m not going to comment whether it’s conservative or not, but I would just say that the new additions or the divestments are not going to have a material impact on the EBITDA estimate that we have for the second part of the year. Finally, on the data centers, our main clients are the big tech, and they are the data centers. We sign contracts with them on a very, very regular basis. Maybe we can talk to our marketing team to see if we give even more visibility to our, let’s say, the customers that we interact with.

By definition, a lot of the corporates that we are signing contracts with and that we are signing these power purchase agreements with are using it for AI. They’re using it for the data centers. I think that’s a huge source of demand for the market in general and for us in particular. I certainly think that we’re very much on top of that. We have, I think, good, strong relationships with whether it’s the Amazons, the Microsofts, the Googles, the Apples, and all of these guys, and a lot of the others. In some cases, we’ll do it as utility scale. In other cases, we’ll do it as distributed generation, sort of behind the meter. It’s definitely something that we are taking advantage of.

Alberto Gandolfi, Analyst, Goldman Sachs: Thank you.

Conference Moderator, EDPR: Thank you, Alberto. The next question comes from the line of Depa from Sanford C. Bernstein & Co. Depa, please go ahead.

Depa Venkateshwar, Analyst, Sanford C. Bernstein & Co.: Hi. This is Depa Venkateshwar from Sanford C. Bernstein & Co. I had three questions. The first one is on U.S. PPA trends. Would you be able to elaborate what you’re seeing in the past three months or so? I mean, it’s more the trend. Do you see some of those PJM auction prices kind of also being reflected in higher PPA offtake prices for renewables? Is there a willingness in these PPA contracts to take any kind of tariff risk or maybe any place in service date risk or anything? That’s the first question. Second one on the asset rotation market. Could you give us some color on how you’re seeing the market now versus three months back or six months back, both in terms of number of buyers and the valuation? Is it improving?

Lastly, would there be any specific points you would want to highlight about the Capital Markets Day in November? Any key areas of focus? I believe you already mentioned that you want to give more granularity on PPA pricing, but anything else just as a sneak preview? Thank you.

Miguel de Andrade, CEO, EDPR: Okay, thanks. On the first point, what I’d say is we’re seeing still strong demand, and the PPA prices are staying fairly stable in the markets that we’re in. That’s positive. We’ve seen people reaching out to us and us being able to have pretty strong negotiating positions on these PPA conditions in general. Not just price, but as you mentioned, taking on tariff risk, taking on place in service risk, having buffers between COD and PPA starting prices. In general, people want short-term projects. Utilities are definitely also looking, for example, for batteries and capacity. I’d just reinforce that we are seeing strong demand, and that is driving, obviously, the dynamics of the rest of the market. On the asset rotation, again, strong demand.

I can tell you that in Europe, in the various different markets, whether it’s Spain, Italy, France, Greece, or even in the U.S., we’ve seen a very robust number of participants. We’ve been positively surprised by the competitiveness of the proposals that they’ve made, both at the non-binding and at the binding level. I’ll leave it at that. You’ll see the multiples that are coming out of those transactions as we go on announcing them. Every year we have the discussion at the beginning of the year where the market is skeptical about the asset rotations and whether the demand will be there or not. I think 2025 will again demonstrate that we are able to rotate assets successfully and have good counterparts and good multiples, on both sides of the Atlantic in this case.

In relation to the Capital Markets Day, I don’t want to anticipate a lot of things, but what you can expect is delivering the current plan. That’s for sure. Looking out beyond 2026 at these dynamics, now that we have visibility on the U.S., and as soon as we get this additional data point in August, I think we’ll really be able in a good position to give you guidance on what we’ve managed to safe harbor, what we think is our capacity growth for the next couple of years in the U.S. That’s also true in Europe. It’s true in APAC and Brazil. We’ll be able to give you much more comfort and, I think, confidence on the growth past 2026, rather.

Talking about efficiency and the productivity and the economies of scale that we’re seeing, I think you’ve seen a flavor of that in this presentation and some of the previous presentations. I think we can continue to go deeper there and see how we can tell you about how we see that evolving. That’s really sort of the key issues. Ultimately, at the end of the day, it is how we can continue to grow the business profitably and create value. I think that’s what we’ll show you at the Capital Markets Day.

Depa Venkateshwar, Analyst, Sanford C. Bernstein & Co.: Thank you.

Conference Moderator, EDPR: Thank you. The next question comes from the line of Manuel Palomo from BNP Paribas Exane. Manuel, please go ahead.

Analyst: Hello. Good afternoon, everyone. I have still a couple of questions. The first one is on the asset rotation plans in the short term. One of the things that you plan is to do the rotation of a minority stake in a large portfolio of assets. I wonder whether you could provide a bit with a rationale for selling a minority stake instead of 100% of assets as before. That would be the first one. Secondly, I’d like to ask you a bit about the detail on the one-offs in this first half. If I’m not wrong, it’s a $44 million impact that comes both from ocean winds and repowering. I wonder whether you could give us the split. Secondly, whether you could tell us what is left for that repowering.

Also, following with the repowering, I wanted to ask you, would you have any view, any idea about the run rate of assets to be repowered on a daily basis in the coming years? Thank you very much.

Miguel de Andrade, CEO, EDPR: Thank you, Manuel. On the first question, the rationale is the structure is what optimizes our balance sheet. By selling a minority stake in the U.S., because we have a very healthy FFO in the first couple of years, by selling a 49% stake, and certainly for purposes of ratios and credit rating agencies, it’s better to sell a minority stake and keep consolidating 100% of the EBITDA and the FFO rather than selling the full portfolio. That’s certainly one of the key considerations there. The second is it was an attractive, let’s say, structure that the investors, these are typically financial investors that are looking at this, that they feel comfortable with. I’d say certainly we looked at a majority stake and this structure, so selling a 49% stake ends up optimizing the balance sheet ratios. We thought that was the best option.

On the second point, maybe we can then elaborate a little bit more here. On the repairing, I don’t have the exact split. I can take it, Hui?

Rui da Silva Teixeira, CFO, EDPR: I can take this one. Thank you, Miguel. Hi, Manuel. Step by step. At net profit in Q1, we had already recorded $14 million of this repair activity in the U.S., just to be precise. As we move to repairing, the components that we are replacing that are not yet fully depreciated, we basically have to write it off according to a calendar. That calendar typically follows a sort of a construction period of the new plant being built effectively. I would say that we expect this to slightly increase throughout the year for this specific asset because the COD is for 2026. Therefore, this quarter should have been about, I mean, a little bit, but you should expect some small increase. Maybe it’s around $2 million or so, but that’s it. The bulk has already been done in Q1.

Now, on what was addition this year, or this quarter, $30 million has also to do with Ocean Winds. It’s about $11 million from Ocean Winds because there were some contracts in place for the South Coast Wind. Even beyond the four-year delay impairment that we did last year, at some point, we decided that the cost of delaying those contracts probably wouldn’t make sense. Therefore, we decided to cancel. There were some cancellation fees. That’s basically the $11 million. Then there is a minor impact from HR restructuring as well at the U.S. offshore. Last but not least, we have about $15 million of impact. We had some outdated equipment in warehouses. Basically, we are just taking a view that this will not be used, or if we sell it, it will be sold at a discount. That’s about $15 million. This is how we break it down.

Miguel de Andrade, CEO, EDPR: On the run rate repairing, I think we can probably get that to you in the Capital Markets Day, maybe, because I think I’m not sure we have that information with us today.

Analyst: Okay, thank you.

Miguel de Andrade, CEO, EDPR: Thanks.

Conference Moderator, EDPR: Thank you. The next question comes from the line of Sky London from Rothschild. Sky, please go ahead.

Analyst: Hi. Thanks for the presentation. Firstly, on battery storage, now that you’re doing more and more large-scale projects, both in the U.S. and Europe, and since I saw a fairly large project in Spain on social media just the other day, I was just wondering if you could elaborate on the typical return profile that you’re seeing in this market. If possible, it would be interesting to hear what you see as a typical kind of CAPEX figure for storage projects, both in the U.S. and Europe separately, and maybe how this is evolving. Secondly, just on asset rotation, I know it’s been touched on already, but with the Greek asset sale today, it looks to me like at least kind of 50% of the $0.1 billion gain guidance is kind of locked in from the first 0.7 gigawatts.

With 1.3 gigawatts yet to sign, in theory, the $0.1 billion is quite achievable. Just wondering if you can elaborate on this a little bit more and what it potentially means for gains from the remaining 1.3. Thanks.

Miguel de Andrade, CEO, EDPR: Sorry, the line wasn’t super clear, so I’m not sure I totally got the question. I think the first one you were talking about, the storage and the CAPEX for storage projects, is that right?

Analyst: That’s right. Sorry if the line’s not clear. Returns and CAPEX for storage projects.

Miguel de Andrade, CEO, EDPR: Okay. The storage projects are some of the most profitable projects that we are seeing at the moment, particularly in the U.S., with typically double-digit IRRs. On top of it, on a risk-adjusted basis, even better, because most of these are tolling agreements that we have for the storage projects. It’s good returns with low risk. Very positive. In terms of CAPEX, the data point I have here, but we can then double-check it and get back to you, it’s around €0.3 thousand per megawatt hour, all-in CAPEX. Just the blocks, €80,000 per megawatt. We can get that information in more detail offline. On the asset rotation, again, I didn’t quite catch the question.

Analyst: Yeah, just wondering, I mean, with the Greek asset sale today, it looks to me like at least 50% of the $0.1 billion guidance is kind of locked in. With another 1.3 gigawatts yet to go, in theory, the $0.1 billion guidance is pretty achievable. Just wondering if you could elaborate on how we should think about the remaining 1.3 gigawatts.

Miguel de Andrade, CEO, EDPR: Yeah. A big part of that additional gigawatts is the 49% sale. Those gains would not flow through the P&L. I’d say that the €0.1 billion of capital gains is achievable. I wouldn’t want to guide you much above that because I’d say a big part of the volume still to be done is in the U.S., a 49% stake, and that won’t be contributing anything to the bottom line.

Analyst: Great. Thank you.

Miguel de Andrade, CEO, EDPR: Is that clear? Okay, thanks.

Conference Moderator, EDPR: Thank you. The next question comes from the line of Jorge Guimarães from Deutsche Bank AG. Jorge, please go ahead.

Analyst: Good afternoon. I have two questions. The first one is related with the U.S., and is if you are seeing any type of abnormal CAPEX inflation, as I assume there will be a run to install projects to benefit from the to have them operating by the end of 2027. The first one is on U.S. CAPEX. The second one is related to storage. You were mentioning just answering to a question on storage. What is your view about the lack of legislation on storage in Spain? Is it preventing you from deploying opportunities, or is it simply a matter that the spreads are not there, and you, on a group basis, prefer to work with hydro pumping? Thank you very much.

Miguel de Andrade, CEO, EDPR: Okay. Thank you. On the CAPEX, we’re not seeing a lot of CAPEX inflation. We’ve been locking in the EPCs and the equipment, and I think at the moment, it’s been relatively stable. We haven’t seen any type of inflation coming through in the numbers or in the context that we’ve been having with the suppliers. That’s obviously something to monitor. On the second one, yes, there is not a lot of investment going into batteries in either Spain or Portugal because of a lack of regulation. We’ve been advocating for quite a long time now that there should be capacity payments. There should be additional ancillary services which would remunerate, for example, batteries for fast frequency response or other types of ancillary services. So far, that legislation and the regulation has still not come through.

What you’re seeing is basically most players or very few players are actually moving forward with investment decisions in batteries. That’s what I’d say. I think if the governments want to see additional batteries in Portugal.

Conference Moderator, EDPR: Spain, they need to put in place the regulation and framework and incentives so that that actually gets done. I think Portugal and Spain have a very high penetration of renewables compared to other countries, but very low penetration and investments in batteries. It’s true we have some storage on the EDP side. It’s not obviously on the EDPR side, but in any case, when we look at storage, the business case is still not coming out under the current conditions.

Miguel de Andrade, CEO, EDPR: Next question comes from the line of Olly Jeffery from Deutsche Bank. Olly, please go ahead.

Rui da Silva Teixeira, CFO, EDPR: Thanks. Just one question from me, again, regarding the US, just to get your thoughts on potentially the outlook for the return spreads, IRR over WACC, that you think might be achievable when you think about what was in the table right after the one big beautiful bill came out and then after the news around the executive order came. I’m wondering if the, say, safe harboring becomes more onerous, that’s more likely to impact smaller developers, which would, the upshot of that could be you have less supply from the renewable side in the market, the same demand, and that would make me think that there would be a better opportunity for you to potentially make even higher returns in that eventuality if you were not impacted as nearly as much as the small developers. Is that the right way of thinking about it?

Have you got any way you can, anything you can share on that? That would be great. Thank you.

Conference Moderator, EDPR: Hi, Olly. I mean, yes, I think obviously a lot of players have taken out or put in place safe harbor, and they’re now waiting like us to see what the outcome is or, you know, that comes out in August, those clarifications. I think certainly if it becomes a lot more onerous, as you’re saying, I think a lot of people will drop a lot of those projects or a lot of those options. You might have that type of dynamic that you’re talking about. There are a lot of options of safe harbor that people have put in. I think a little bit of cleaning up would definitely be a good thing. We’re actually not super negative. I mean, if it’s, I think we’ve typically been more prudent than the market.

If it cleans up part of the rest of the market, I think that could be net positive for us. Let’s wait and see what comes out.

Miguel de Andrade, CEO, EDPR: Thanks, everyone. Thank you, Olly. Going on to the last question from the line of Jenny Ping from Citigroup. Jenny, please go ahead.

Jenny Ping, Analyst, Citigroup: Thanks very much. Two questions on the U.S. for me, please. Firstly, you talk about the potential upside on PPA prices in the U.S. If I look back, your PPA prices in the U.S. in the early parts of 2022 are in the low $40s. It has sort of got to the high $40s where we are today. Can you just talk a little bit about the dynamics of the contracts that are coming up for renewal? Obviously, there is the unhedged piece that will naturally benefit from the volatility of commodity prices. In terms of the hedged piece, is it right to think about similar trajectories in terms of how we should think about PPA prices as we go forward, assuming the $70 that you referred to earlier is sustainable?

Secondly, talking about IRR over WACC spreads, obviously the U.S., and given IRA, given OBA, given tariffs, and given everything else that’s going on, are you guys thinking about the cost of capital for U.S. projects, i.e., to do business, is generally higher? Is that how you’re thinking about it, or is it status quo as it was and hence the 270, 300 bps that you can still achieve? Thank you.

Conference Moderator, EDPR: Hi there. In relation to your first question, if I got it, in the past, there were lower priced PPAs, obviously, sort of pre-increase in cost of debt and sort of the inflation. Those PPA prices have now gone up and we’re doing sort of PPAs and we’re seeing them relatively stable, in the high 60s, low 70s in the key markets. For the PPAs that are rolling off and where they’re moving to merchants and where we are having to hedge in the market, we are seeing those market or those merchant prices and capacity payments moving up. I gave you that data point, for example, on PJM. Those are for slightly older projects that typically will have a higher merchant component or the PPA will have run out. There you are seeing the higher prices flowing through and higher hedged prices.

For the new projects that we do, we also do them with PPAs and those are the PPA reference prices that we’re seeing. In relation to the second question, the way we look at our cost of capital on our WACC, it’s a very traditional CAPM type. We’ll look at the cost of debt, where is the cost of debt 10 years in the U.S., we’ll look at the cost of tax equity, we’ll look at the cost of equity that we’re assuming for the U.S., and we’ll just build up our cost of capital based on that. We will be factoring obviously where interest rates are and where we think the risk premiums are, the market risk premiums, but we don’t take into account other types of factors like whether IRA or one big beautiful bill or other factors.

We assume that those are incorporated into these numbers that I just talked about. Does that make sense? Maybe, I don’t know, if you want to complement here on... I don’t know. Jenny, was that relatively clear or was there something you wanted me to elaborate on?

Jenny Ping, Analyst, Citigroup: Yeah, I was just more thinking about the risk premium element. Has that expanded given the volatile nature of announcements that come through and the unpredictability of the U.S., whether you’ve built some tolerance into your spreads effectively?

Conference Moderator, EDPR: No. What we do, a couple of points. First, when we are pricing the power purchase agreements, we’re also obviously looking at where is the CAPEX, what are our long-term energy price curves assuming, and that’s how we’re pricing it. We’re not looking at the short-term volatility and taking a position on that. We’re just figuring out where we think the returns versus our cost of capital is. The unpredictability, I think, gets factored out by the fact that if we are locking in the power purchase agreement and the CAPEX and all these different variables, you can essentially eliminate that unpredictability going forward. I mean, once the project is locked in and built, we assume no retroactive effects, etc.

For new projects, as they come along, we’re obviously constantly repricing them to take into account whatever is the latest information that we have from the market and from any decrees that come along or any executive orders, etc.

Jenny Ping, Analyst, Citigroup: Okay, thank you.

Miguel de Andrade, CEO, EDPR: The only thing I would add, Jen, is bear in mind that for the current power purchase agreement negotiations and tariff, you know, the reciprocal tariffs and tariffs have been a topic in the U.S. What we have been doing is either including a wording that protects us against tariff changes in the power purchase agreements, or else we locked it in through the supply chain. Therefore, this type of more short-term uncertainty in the U.S., we also, you know, don’t get it. I mean, that’s why we don’t include it into WACC because we, you know, protect it through the contracts.

Jenny Ping, Analyst, Citigroup: Okay. Perfect. Thank you.

Miguel de Andrade, CEO, EDPR: Thank you, Jenny. This concludes the Q&A session. Any final words?

Conference Moderator, EDPR: I mean, just first, I think, as I mentioned, good, solid first half, but also very importantly, I think we’re looking forward to a solid second half as well. Good line of sight to the capacity, good line of sight to the asset rotation, good line of sight also to the 2026 numbers. I think we’ve cleaned up a lot of issues that we had in previous years or even in previous quarters. I think you’re seeing much cleaner, more stable recurring numbers. Obviously, the additional stability in the market and the visibility that we have now in the U.S. and in Europe is obviously helping towards that.

Looking forward to coming back in the third quarter to talk about the third quarter numbers, to look at the overall guidance then for the rest of the year, and obviously to then talk about also the prospects going forward for 2026 and beyond, you know, at the Capital Markets Day. Looking forward to that. I hope if you get some holidays now in the next couple of weeks, enjoy it. I’m sure we’ll be talking again in September. Thank you.

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