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Will the Electricity Act promote investment and efficiency? Anthony Bird, Managing Director

The Electricity Act 2003 July 22-23, 2003 - New Delhi. Will the Electricity Act promote investment and efficiency? Anthony Bird, Managing Director. July 2003. Outperformance by regulated utilities. Performance relative to MSCI Europe Utilities index (from January 2002). Unregulated.

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Will the Electricity Act promote investment and efficiency? Anthony Bird, Managing Director

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  1. The Electricity Act 2003July 22-23, 2003 - New Delhi Will the Electricity Act promote investment and efficiency?Anthony Bird, Managing Director July 2003

  2. Outperformance by regulated utilities Performance relative to MSCI Europe Utilities index (from January 2002) Unregulated Regulated Partly regulated Defensive Moderately defensive Non defensive Source Datastream

  3. The Electricity Act 2003July 22-23, 2003 - New Delhi

  4. UK structure Before After • 3 gencos (National Power, PowerGen, British Energy), gridco. (despatch), and 12 RECs • Competitive generation • Wholesale spot market (pool) • Competition in supply (gradual introduction) • Independent regulator • CEGB monopoly of generation and transmission • 12 regional electricity boards • Distorted tariffs

  5. The Electricity Act 2003July 22-23, 2003 - New Delhi

  6. Wholesale price vs. acquisition prices UK electricity prices and M&A activity NETA introduced BE / TXU Source ABN AMRO Rothschild

  7. The Electricity Act 2003July 22-23, 2003 - New Delhi

  8. EDP - Portugal Generation Transmission grid Distribution + supply(x4) Capacity charge and energy charge Bulk supply tariff Universal tariff EDP generation Tejo IPP Turbogás IPP 8.0% pre-tax RoR on assets RPI - x% 8.5% pre-tax Phased opening of supply Competition for new build Monopoly

  9. The Electricity Act 2003July 22-23, 2003 - New Delhi

  10. EDP share price 1997 1998 1999 2000 2001 2002 2003 Source Datastream

  11. The Electricity Act 2003July 22-23, 2003 - New Delhi

  12. Portugal regulatory framework (1) Turbogas begins operations in 1998 (2) At March 1997 none existed Portuguese Electricity Market National Electricity System Public Electricity System Independent Electricity System Other Independent Producers Non-Binding Sector Binding Sector Binding Generation(CPPE + Tejo EnergiaTurbogás (1) • Cogeneration • Renewables • Small Hydro • Other autoproducers Other Non-BindingGeneration (2) EmbeddedGeneration Interconnectors PPAs Open access Transmission Concession (REN) Open access Bulk supply tariff Open access Binding Distribution (EN, CENEL, LTE, SLE) Non-Binding Distribution (2) Open access Regulated tariff Non-binding contracts • Binding Customers • Franchise Customers • Qualifying Customers (>100 Gwh) • Non-Binding Customers (2) • Qualifying Customers (>100GWh)

  13. The Electricity Act 2003July 22-23, 2003 - New Delhi

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