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Davos, 18 February 2011 “World Forum for Communication” Enel SpA Vittorio Amedeo Alessio

“Nuclear renaissance and financial stability in the age of crisis” The return of Italy to nuclear power. Davos, 18 February 2011 “World Forum for Communication” Enel SpA Vittorio Amedeo Alessio. Part 1. …What we are saying….

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Davos, 18 February 2011 “World Forum for Communication” Enel SpA Vittorio Amedeo Alessio

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  1. “Nuclear renaissance and financial stability in the age of crisis”The return of Italy to nuclear power • Davos, 18 February 2011 • “World Forum for Communication” • Enel SpA • Vittorio Amedeo Alessio

  2. Part 1 • …What we are saying…

  3. Enel: a major European nuclear player”Our assets and projects speak for us” Italian Nuclear Program: agreement with EDF for the joint development of at least 4 EPR units • Potential development of new capacity: • Russia: Kaliningrad, two 1,117MW VVERs. Agreement with Rosatom • Romania: consortium led by Nuclearelectrica to build “Cernavoda 3&4” (1,500 MW) 5.5 GW of installed capacity and additional 1 GW under construction

  4. COAL * NATURAL GAS OIL NUCLEAR RENEWABLES European Generation Mix “Italians buck the trend..Could they be wrong about energy strategy?” 5% 5% 14% 13% 1% 27% 32% 28% 46% 36% 22% 22% 51% 23% 75% 3% 6% 13% 7% 4% 1% 12% 18% 28% 10% 23% 41% 32% 26% 26% 19% 14% 17% Italy Germany Spain France EU27 Enel Worldwide Enel Italy 12% of Enel global power production comes from nuclear fuel. Italy is the only large industrialized country without nuclear assets * Coal, lignite Source: Enerdata; Terna; Enel; Year 2009

  5. Nuclear power plants in the world”Italy is surrouned by nuclear power plants but can’t rely on cheap nuclear energy” 200 km 441 reactors in 29 countries with total capacity of 374,000 MWe – or 14% of global power production Within 200 km from Italian border, there are 26 reactors with 24,000 MWe Nuclear is safe: power plants have reached 14,000 reactor years of operating experience Source: International Nuclear Safety Center (INSC) - U.S. Department of Energy (DOE)

  6. Nuclear power plants under construction“Fast-growing economies go for it” MWe 26.230 26 China 9.153 11 Russia 3.786 6 India • 65power plants are being built in 16 countries • 62,000 MWe additional capacity • Several countries have started specific programmes to revamp nuclear energy, including the U.S., UK, France, China. 5.560 5 Korea 1.906 2 Bulgaria 782 2 Slovak Rep 1.900 2 Ukraine 2 2.600 Taiwan 2 2.650 Japan 1 Argentina 692 1 Finland 1.600 1 France 1.600 1 Iran 915 300 1 Pakistan 1.165 1 USA 1.245 1 Brazil Enel developed or co-developed projects Source: International Atomic Energy Agency

  7. Enel goes nuclear in Slovakia”25 years after Italy banned nuclear, Enel is back to nuclear” Lay-out of the plant Description of the project • In Slovakia Enel’s Slovenske Elektrarne is in the construction phase of two VVER 440 MW units in Mochovce plant • Investment: around 3 Bln EUR • The site was opened on Nov 2008; construction works are on-time: • Sep 2010: reactor vessel has been put in place in EMO3 next milestones will be: • Ott 2012: first fuel charge in EMO3 • Dec 2012: first synchronization of EMO3 Under development Operating units In Slovakia Enel is constructing two units with Russian VVER technology

  8. Building first III Generation Unit in France”Enel joins forces with EdF and builds Flamanville EPR reactor” Flamanville lay-out (render and actual) Plant under construction • Enel is participating in the construction of a III Generation EPR Unit (1630 MW) in Flamanville with EdF • Flamanville3 is based on the same EPR technology chosen by Enel for Italian Program Agreement with EdF • Enel is participating in the investment with a 12,5% share • Enel’s engineers are integrated in the EdF project structure, in order to participate to the design, realization and operation activities of the EPR series reactors • Enel has also an option for other EPR in France, and in particular will participate in Penly project Flamanville project is a training experience for Enel, in sight of the Italian Nuclear Program development

  9. The EPR technologyThe origin of the European technology for 3rd generation NPP French and German experience … … the most advanced technologies … … III+ generation reactor EPR • Germany: 17 operational units • N4 • (Chooz B) • France: 58 operational units • Konvoi (Emsland) EPR benefits of the decennial experience of realization and operation of PWR reactors in France and Germany: it is an evolutionary project based on French technology N4 and German technology Konvoi 9

  10. The EPR technologySafety features Containment 4 redundant systems Containment for core melt EPR projects integrates the most advanced safety systems to reduce accident probability to not significant values and to eliminate any possible consequence for external environment

  11. Part 2 ...What is happening…

  12. The Italian Nuclear ProgramItalian Government strategic guidelines Nuclear Others Italian consumptions1) [TWh/y] Required nuclear power3)[MWe] Target [TWh/y; %] CAGR: +1.2%  400 100 (25%) 300 (75%) 13,000 MWe 350 2) 8 units 1,600 MWeeach Covered by national production and import with import decrease by 2020 with respect to 2008 17 years required to complete the program (2025) – 2020 used as reference point Load factor equal to 90%

  13. The Italian Nuclear ProgramEnel/EdF cooperation agreement Program details Development and ownership Program First development phase • Development of a series of at least 4 Nuclear Units in Italy • Definition of at least 2-3 suitable sites for the Program • Enel-EdF Joint Venture on equal basis (50/50) for the Feasibility study  Sviluppo Nucleare Italia S.r.l. has been established on the 31st of July 2009 Technology Plants ownership • Dedicated Special Purpose Company for the Ownership and Operation: • Enel to be the majority shareholder for the Plant ownership • Enel Leadership for Plant operation • Investment will be open to the participation of third parties • EPR technology is thebase for the whole Program • Flamanville3 is the reference project Construction model • Enel and EDF are the Architect-engineers for the project • A multi-contract approach will be utilized Development of at least 4 Nuclear Units based on the EPR technology and Flamanville 3 model

  14. The Italian Nuclear Program Costs and timing Costs • Realization of one EPR Unit will require an investment of about – 4.5 Bln EUR worth (actual cost base is Flamanville3, this estimate should be better defined in consideration to site characteristics, materials and construction costs) • The construction of the NPP units will require an overall investment of about 18 Mld EUR Timing • Site selection process will end by 2011 • Final investment decision will be taken in 2013, after the assignment of the Construction and Operating License • Qualification activities for engineering, supplies and erection already started, in the next year first Requests for Offer will be issued, in three years first contracts with suppliers will be signed • 60 years of commercial operation It is an infrastructural program with few precedents in Italy for investments extent

  15. The Italian Nuclear ProgramHow Enel is structuring to cope with the program Nuclear skilled resources [n.] Actions • Strong increase of skilled personnel dedicated to the Nuclear Program • Participation in Flamanville3 and Mochovce3&4 projects as training experiences (60 resources in France, 400 involved in Slovakia, 10 in Spain) • Technical training program dedicated to operations and engineering profiles • Reinforcement of the network with european “nuclear” universities: masters and scholarships Beginning of the program Today Early works at site Start of operations

  16. The Italian Nuclear Program Legislative framework • Implementing Decree approved in March 2010, it provides rules for localization, licensing and operations of new NPPs: • Nuclear Energy Strategy • Licensing procedures for localization and authorization of NPPs, nuclear fuel fabrication plants, spent fuel and radioactive waste storages, final disposal for radioactive waste • Decommissioning fund • Compensative measures • Information campaign • Appointment of Nuclear Safety Agency (pending parliamentary approval) Steps achieved • Decrees to be approved for: • Technical parameters for site selection • Accepted technologies • Operators requirements • Criteria for Consortium composition • Financial coverage Next steps Our program is progressing but can be affected by delays in regulatory framework definition 16

  17. Part 3 • …What people think…

  18. Nuclear power and the ItaliansPolls show the NIMBY syndrome is spreading, but… Somewhat Not so much Yes Not at all Fonte: GPF Monitor 3SC November 2010 “I am in favour of nuclear power production” 61% We are telling them: “Nuclear energy is cheap, competitive and it can be produced at stable costs”; “Nuclear energy isn’t dependent on oil volatility and it’s key to the security of supply by allowing diversification”; “Italian consumers need a balanced mix of energy sources, split between coal, nuclear, natural gas, renewables”; “Nuclear energy is key to cut CO2 emissions, is well-established and safe, after 14,000 reactor years of operating experience”. Highilghts: • 30% of those polled is a strong opponent • Strong supporters reach only 9% of total • A large number of people is still undecided or hasn’t yet reached a firm decision on whether nuclear is good or bad for them. 61% of Italians haven’t made up their mind

  19. We are teaming up with industry, university, groups. “We have a 20 bln euro plan to jump-start the economy” INDUSTRY “Hundreds of Italian companies have a unique chance to access nuclear know-how and join the global nuclear reinassance” INSTITUTIONS “We want to set up a strategic alliance to help Italy reduce oil dependency and secure an independent energy supply” ENVIRONMENTAL GROUPS “A balanced energy mix will cut CO2 emissions. Nuclear waste can be stored safely” UNIVERSITY, RESEARCH “Enrico Fermi invented the reactor before Italy quit nuclear. Today you have another chance to help mankind to a better living”

  20. Going public…

  21. Italian Nuclear Forum ad campaign: “And You?”BLACK: “I am against nuclear because I am worried by the past”; WHITE: “I am in favour of nuclear because I am worried by future”; WHITE: “I am in favour of nuclear because I care about the environment”; BLACK: “I am against nuclear because I care about the environment”. On air on tv, cinema, billboards, newspapers, Internet, since 19 December 2010

  22. I guarantee it won't be easy. Suggestion box: vittorioamedeo.alessio@enel.com

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