1 © PPC RENEWABLES S.A. The Promise of Renewable Energy Sources & their Impact on Security of Supply Manthos Kallios Director, Corporate Strategy & Business Development “Energy Without Frontiers” Conference Athens, 22 May 2008

2 ©  Global Market Overview  Greek RES Market

3 © KEY GROWTH DRIVERS International organizations predict drastic growth of RES in order to combat climate change…  Global decisions to promote a cleaner environment  Environmental conscience and acknowledgment of need to tackle climate change  Oil independence policies  Reduction in initial investment cost  More productive technology  Global decisions to promote a cleaner environment  Environmental conscience and acknowledgment of need to tackle climate change  Oil independence policies  Reduction in initial investment cost  More productive technology 1 Source: WGBU 2 1 EJ = GWh 1 Source: WGBU 2 1 EJ = GWh Global Energy Production 1 [EJ 2 ] …however dominance by RES is still far in the future

4 © The total costs of electricity production from RES exceed those from conventional sources… *Includes levelized CapEx and OpEx Sources: OECD/IEA Initial Investment Cost per MWProduction Cost* per MWh € MM€ … but the evolution of technology and economies of scale are progressively reducing the cost differences between methods

5 © Demand for solar is accelerating although forecasts differ

6 © This has resulted in a dramatic market capitalization of the solar sector

7 © The RES sector is evolving with utilities entering the sector aggressively…

8 © …leveraging also M&A initiatives

9 © M&A Map for Wind

10 © IPO Analysis – Recent Transactions

11 © Financial performance differs across RES sectors

12 © Solar sector stock performance is strong, despite the recent correction

13 © Currently, offshore plays a minor role in wind energy production; however revamped interests indicates that substantial growth will take place

14 © Key Uncertainties Continuous growth for the solar industry or boom-bust cycles? Tightness or abundance of supply from wind turbine manufacturers? The government dilemma: What incentives, how much and when? How can Network absorption impede or facilitate RES expansion? Will RES expansion be used actively by governments as a lever to secure supply?

15 ©  Global Market Overview  Greek RES Market

16 © Greece has significant natural wealth for RES… Wind potential for some MW Geothermal fields with production potential of ~350 MW (equivalent to MW of wind power) Many springs and rivers for hydroelectric power Some of the highest solar irradiation rates in Europe …but exploiting it fully will involve overcoming serious obstacles

17 © The EU has set environmental improvement targets based on RES use which as a rule are not yet being met Source:State of renewable energies in Europe, EurObserv’ER 2006 [%] Electricity produced from RES in Europe, by country [% consumption] Status 2005 Gap to 2010 target EU Target 2007: EU member states decide to increase total energy produced from RES to 20% by : All EU member states adopt national targets for the proportion of electricity consumption that should come from RES (Directive 2001/77/ΕU) For 2020, the European Commission proposed the binding targets known as « » —20% of the European energy production portfolio to be RES —20% reduction in Greenhouse Gas emissions, compared to 1990 —20% energy savings —10% of fuel used in transport to be biofuel Greece’s target for total energy consumed to come from RES has been set at 18%; hence RES have to account for 30-35% of electricity generation (this means some 10,000 MW of RES production by 2020)

18 © Implementation of RES projects must be accelerated in order to achieve the 20,1 % target following the 77/2001/EC directive Sources: DOE/EIA, ΥΠ.ΑΝ. Target (20,1%) Wind will be the main driver for Greece to meet her RES targets

19 © We hope that the 20,1% target will be achieved by 2012 The 20,1% target will not be achieved by 2010 * Includes 4,5 TWh from large HPP Sources: Dept. of Energy/EIA, MinDev, RΑΕ, PPCR estimates Drivers Financially attractive environment for investments Annulment of production permits that show no progress after 2 years Passage of a Land Use Plan for RES

20 © The interest for RES projects in Greece is significant… Technology With Operation Licenses (1) [MW] With Installation Permits [MW] With Production Permits (2) [MW] Applications for Production Permits (3) [MW] Wind 773,8916,46.492, ,5 Biomass 32,1 23,5 94,8 451,6 Geothermic 0,0 8,0 335,5 Small Hydroelectric 101,9 103,9 514, ,5 Solar P/V 0,8 2,2 80, ,9 Total Capacity [MW]908,61.046,07.189, ,0 1)The above mentioned Operation Licenses include RES projects from the Combined Production Permits of PPC 2)These include the projects with Operation Licenses, Installation Permits and do not include Revoked Licenses 3)These include the projects with Production Permits as well as Revoked Licenses Source: RAE

21 © …driven, in part, by attractive Feed-in Tariffs Renewable Energy Source Feed-in Tariff* (€/MWh) Mainland Grid & Connected Islands Non-Connected Islands Onshore Wind75,8287,42 Offshore Wind92,82 Small Hydro <15 MWe75,8287,42 Photovoltaic <100 kWp452,82502,82 Photovoltaic >100 kWp402,82452,82 Other Solar Technologies <5MW252,82272,42 Other Solar Technologies >5MW232,82252,42 Geothermy75,8287,42 Other RES75,8287,42 * According to RES Law 3468/06, increased by €2,82 in July 2007 These prices may be altered by the Ministry of Development following a proposal from RAE

22 © Some key steps to accelerate RES expansion in Greece Review of Installation and Production Permits (and Grid connection terms) for wind parks that haven’t yet begun construction Different regulatory regime for PV installations <150 kWp Broader scope for subsidizing RES projects, without allowing excess profits Further improvement of the Permit Issuance process and the Land Use Plan

23 © In Conclusion There is already potential for RES to play a role in electricity supply both globally and in Greece in the short term However, dominance of RES to the extent that we can talk about a real contribution to security of energy supply is still a distant prospect and should only be viewed in the medium to long term —In the short term, RES can only have limited role in security of supply —In the medium term RES should be able to play a more significant role in the security of supply of the electricity supply market if national targets are met (e.g. 29% by 2020 for Greece) —In the long term and as RES’ share in the electricity supply market increases with the development of new RES technologies and the efficient operation of a fast growing RES market, RES can play an even greater role in the security of supply of the electricity supply market; In the even longer term, with the greater development of new RES technologies and the efficient operation of the RES market, RES could play the role of the catalyst that will drive the development of new consumer and industrial products that until today traditionally are “fueled” on petroleum or natural gas. This effective transition from petroleum “fueled” products would also have to be supported by the necessary State incentives both for industry and consumers in order to drive for this new technology and thus decrease even further countries’ dependence on these two fuels.

24 © Manthos Kallios Thank you for your attention!