The European Energy Market and beyond: is green growth still an option? 1 October 5th,2012

2 Gas Natural Fenosa Group Gas distribution 2,000 MW CCC Mexico Telecommunications Guatemala Electricity Distribution Nicaragua 50 MW hydro Costa Rica Electricity distribution and 30 MW hydro and fuel Panama Gas and electricity distribution Colombia Gas distribution Argentina Gas distribution Brazil 200 MW fuel-gas Dominican Republic 250 MW c.cycle + regasification Puerto Rico Spain Gas and electricity sales Portugal Gas Sales France Gas sales and distribution, regasification projects Italy Electricity distribution Moldova Gas liquefaction Egypt Participation in liquefaction plant Oman 110 MW (fueloil+gas) Kenya Integrated project Angola Coal mining South Africa Wind power projects Australia Gas transport Morocco Gas Sales Luxembourg Gas Sales Belgium Gas and electricity distribution and sales, 7,000 MW CCC, 1,900 MW hydro, 600 MW nuclear, 2,000 MW coal, 150 MW fuel-gas, 1,100 MW special regime, regasification, upstream. Energy sales Holland

3 EU Energy Policy: Three pillars Are the three pillars balanced? ?

4 EU Energy Policy: What has been achieved in the EU? Efforts are concentrated in the electricity sector Source: CEER Report on Renewable Energy Support in Europe, May 2011

Economic Impact of RES in the EU

6 Economic Impact of RES: The Spanish case (I) Renewable support schemes

Increase%Incr. Spanish RES support (M€) M473% Economic Impact of RES : The Spanish case (II) Electricity system costs evolution 2020 ForecastSystem costs M€

8 More than an economic impact: Integration of RES in the system  The intermittency and lack of firmness of renewable production requires high flexibility like the provided by the CCGTs  The progressive penetration of RES in the generation mix increases the need for this support or back-up 27 August November 2010 Combined Cycles (CCGTs) Wind Power MW h

More than an economic impact (II): Integration of RES in the system 9 By taking the 50 cases with higher and lower wind coverage is confirmed that the combined cycle is the technology that supports the major variability

10 Competiviness is a global thing. What about RES? Source: IFIEC Europe 11/2012

11 Competiviness is a global thing. What about RES? The EU contributes so little... Source: Ignacio Perez Arriaga. Economic for Energy Workshop 2012

12 Natural gas can be a reliable alternative USA: Henry hub. Shale gas influence Fuente: EC – JRC Jul 2012 Shale gas production has a growing impact on electricity generation

13 Conclusions 1.Climate Change is a big challenge. The electricity sector leads the transformation 2.RES have a strong impact on costs & to be integrated 3.A competitive energy sector is key for the growth of the economy 4.Gas is a secure, environment-friendly and reliable alternative