EDP Renováveis

Annual / Quarterly Financial Statement • Feb 28, 2011

Annual Accounts and Directors' Report

31 December 2010

(With Auditors' Report Thereon)

KPMG Auditores S.L. Ventura Rodríguez, 2 33004 Oviedo

Auditors' Report on the Annual Accounts

To the Shareholders of EDP Renováveis, S.A.

We have audited the annual accounts of EDP Renováveis, S.A. (the "Company") which comprise the balance sheet at 31 December 2010, the income statement of changes in equity, the statement of cash flows for the year then ended and the notes thereto. In accordance with legislation governing financial information applicable to the entity (specified in note 2 to the accompanying annual accounts) and, in particular, with the accounting principles and criteria set forth therein, preparation of the annual accounts is the responsibility of the Company's directors. Our responsibility is to express an opinion on the annual accounts taken as a whole, based on our audit, which was conducted in accordance with prevailing legislation regulating the audit of accounts in Spain, which requires examining, on a test basis, evidence supporting the amounts and disclosures in the annual accounts and evaluating whether their overall presentation, the accounting principles and criteria used and the accounting estimates made comply with the applicable legislation governing financial information.

In our opinion, the accompanying annual accounts for 2010 present fairly, in all material respects, the equity and financial position of the Company at 31 December 2010, and the results of its operations and its cash flows for the year then ended, in accordance with applicable legislation governing financial information and, in particular, with the accounting principles and criteria set forth therein.

The accompanying directors' report for 2010 contains such explanations as the directors the Company consider relevant to the situation of the Company, the evolution of its business and other matters, but is not an integral part of the annual accounts. We have verified that the accounting information contained therein is consistent with that disclosed in the annual accounts for 2010. Our work as auditors is limited to the verification of the directors' report within the scope described in this paragraph and does not include a review of information other than that obtained from the accounting records of the Company.

KPMG Auditores S.

Ana Fernández Poderós Partner

24 February 2011

KPMG Auditores S.L., a limited liability Spanish company the KPMG network of independent member firms attlinted with KPMG International Cooperative !' KPMG International" ! a Swiss entity

Rea Mei Madrid T. 11.961. F.90 Pog 11. M -168.007 Inscrip. 9
Sec. 8, H. M -168.007 Inscrip. 9
N I.F B-78510153

Annual Accounts and Directors' Report

31 December 2010

Balance Sheets at 31 December 2010 and 2009

(Expressed in thousands of Euros)

Assets	Note	2010	2009
Intangible assets	5	9,025	3,889
Property, plant and equipment	6	1,833	527
Non-current investments in group companies and associates Equity instruments Loans to group companies	8 10.a	8,126,176 4,004,389 4,121,787	7,382,998 3,724,936 3,658,062
Non-current investments		110	117
Deferred tax assets	18	4,579	1,349
Total non-current assets		8,141,723	7,388,880
Trade and other receivables Trade receivables from group companies and associates - current Other receivables Personnel Public entities, other	9 9 ರ 18	7,288 6.074 225 1 988	3,294 2,158 146 2 988
Current investments in group companies and associates Debt securities Derivatives Other investments	10.a 11	483,081 302,813 1,368 178,900	239,353 202,546 612 36,195
Prepayments for current assets		79	202
Cash and cash equivalents Cash Cash equivalents	12	182,767 134 182,633	257,552 246 257,306
Total current assets		673,215	500,401
Total assets		8,814,938	7,889,281

Balance Sheets at 31 December 2010 and 2009

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(Expressed in thousands of Euros)

Equity and Liabilities	Note	2010	2009
Capital and reserves without valuation adjustments Capital Share premium	13.a	4,361,541 1,228,451	4,361,541 1,228,451
Reserves Profit for the year		108,280 44,091	40,268 68,012
Total equity		5,742,363	5,698,272
Non-current provisions Long-term employee benefits			384 384
Non-current payables Derivatives	11	144,049 144,049	1,268 1,268
Group companies and associates, non-curreut	16.a	2,799,548	2,131,042
Deferred tax liabilities	18	30,621	21,872
Total non-current liabilities		2,974,218	2,154,566
Current provisions	14	13,766
Current payables	16.b	1,324	580
Group companies and associates, current	16.a	60,964	14,691
Trade and other payables	16.c	22,303	21,172
Current suppliers	16.c	1.689	2,726
Suppliers, group companies and associates, current	16.e	16,579	16,695
Personnel (salaries payable) Public entities, other	18	3.838 197	1,357 394
Total current liabilities		98,357	36,443
Total equity and liabilities		8,814,938	7,889,281

Income Statements for the years ended 31 December 2010 and 2009

(Expressed in thousands of Euros)

	Note	2010	2009
CONTINUING OPERATIONS
Revenues	9 y 21.a	246,509	196,697
Work carried out by the company for assets		390	66
Other operating income		2,059	803
Non-trading and other operating income		2,059	803
Personnel expenses		(9,834)	(7,544)
Salaries and wages		(8,782)	(6,773)
Employee benefits expense	21.c	(1,052)	(771)
Other operating expenses		(29,692)	(14,809)
External services	21.d	(15,878)	(14,681)
Taxes		(35)	(1)
Other administrative expenses		(13,779)	(127)
Amortisation and depreciation	5 and 6	(રેટર)	(269)
Impairment and gains on disposal of fixed assets		12
Results from operating activities		208,891	174,944
Finance income	9	46	13
Other investment income		46	13
Other		46	13
Finance expenses	ોર્સ	(143,344)	(79,312)
Group companies and associates		(143,297)	(79,299)
Other		(47)	(13)
Change in fair value of financial instruments	15	(1,164)
	10.d and
Exchange gains	16.[	476	1,504
Net finance expense		(143,986)	(77,795)
Profit before income tax		64,905	97,149
Income tax expense	18	(20,814)	(29,137)
Profit from continuing operations		44,091	68,012
DISCONTINUED OPERATIONS
Profit for the year		44,091	68,012

The accompanying notes form an integral part of the annual accounts for 2010.

Statements of Changes in Equity for the years ended 31 December 2010 and 2009

A) Statements of Recognised Income and Expense for the years ended 31 December 2010 and 2009

(Expressed in thousands of Euros)

	Note	2010	2009
Profit for the year		44,091	68,012
Total income and expense recognised directly in equity
Total amounts transferred to the income statement
Total non-financial assets and non-financial liabilities
Total recognised income and expense		44,091	68,012

Statements of Changes in Equity for the years ended 31 December 2010 and 2009

B) Statements of Total Changes in Equity for the years ended 31 December 2010 and 2009

(Expressed in thousands of Euros)

Entity	Capital	Share premium	Reserves	Share capital increase costs	Profit for the year	l otal
Balance at 31 December 2009	4,361,541	1.228.451	74.838	(34,570)	68.012	5.698,272
Recognised income and expense Other changes in equity		L	68,012		44.091 (68,012)	44,091
Balance at 31 December 2010	4,361,541	1,228,451	142,850	(34,570)	44.091	5.742.363

Entity	Capital	Share premium	Reserves	Share capital increase costs	Profit for the year	l'otal
Balance at 31 December 2008	4,361,541	1,228,451	44	(34,570)	74.794	5,630,260
Recognised incomc and expense Other changes in equity			74,794		68.012 (74,794)	68.012
Balance at 31 December 2009	4,361,541	1,228.451	74,838	(34,570)	68,012	5,698,272

Statements of Cash Flow for the years ended 31 December 2010 and 2009

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(Expressed in thousands of Euros)

	Note	2010	2009
Cash flows used in operating activities
Profit for the year before tax		64,905	97,149
Adjustments for:		(88,216)	(118,633)
Amortisation and depreciation (+)	5 and 6	રેરેન્ડે	269
Change in provisions (+/-)	14	13,766
Proceeds from disposals of fixed assets (+/-)		(12)
Finance income (-)	9	(246,555)	(196,710)
Finance expenses (+)	ો રે	143,344	79,312
	10.d and
Exchange gains/losses (+/-)	16.f	(476)	(1,504)
Change in fair value of financial instruments (+/-)	ો રે	1,164
Cbanges in opcrating assets and liabilities		(970)	6,378
Trade and other receivables (+/-)		(284)	(220)
Other current assets		123	(11)
Trade and other payables (+/-)		1,328	6,535
Other current liabilities (+/-)		(197)	174
Other cash flows used in operating activities		(533,793)	(1,227,245)
Interest paid (-)		(72,225)	(29,468)
Interest received (+)		229,991	94,747
Payments (proceeds) for loans extended to subsidiaries (-)		(676,313)	(1,304,945)
Income tax paid (received) (-/+)	18	(15.246)	12,421
Cash flows used in operating activities		(556,134)	(1,242,351)
Cash flows used in investing activities
Payments for investments (-)		(75,608)	(198,741)
Group companies and associates		(65,530)	(194,738)
Intangible assets		(8,585)	(3,671)
Property, plant and equipment		(1,493)	(332)
Proceeds from sale of investments (+)		97
Property, plant and equipment	6	07
Cash flows used in investing aetivities		(75,511)	(198,741)
Cash flows from financing aetivities
Proceeds from and payments for financial liability instruments		529,731	1,682,939
Issue
Group companies and associates (+) Redemption and repayment of		529,731	1,682,939
Group companies and associates (-)
Cash flows from financing activities		529,731	1,682,939
Effect of exchange rate fluctuations		27,129	(તેળર)
Net increase/decrease in cash and cash equivalents	12	(74,785)	240,942
Cash and cash equivalents at beginning of year	12	257,552	16,610
Casb and cash equivalents at year end		182,767	257,552

The aceompanying notes form an integral part of the annual aecounts for 2010.

Notes to the Annual Accounts

31 December 2010

(1) Nature and Activities of the Company

• EDP Renovaveis, S.A. (hereinafter, "the Company") was incorporated by public deed on 4 December 2007 and commenced operations on the same date. Its registered offices are at Plaza de la Gesta, 2, Oviedo.
• On 18 March 2008, the shareholders agreed to change the name of the Company from EDP Renováveis, S.L. to EDP Renováveis, S.A.
• According to the Company's articles of association, the statutory activity of EDP Renováveis S.A., comprises activities related to the electrical sector, specifically the projection, construction, maintenance and management of electricity production facilities, in particular those eligible for the special arrangements for electricity generation. The Company promotes and develops projects relating to energy resources and electricity production activities as well as managing and administering other companies' equity securities.
• The Company can engage in its statutory activities directly or indirectly through ownership of shares or investments in companies or entities with identical or similar statutory activities.
• On 28 January 2008, EDP Energías de Portugal, S.A. informed the market and the general public that its directors had decided to launch a public share offering in EDP Renováveis, S.L. The Company completed its initial flotation in June 2008, with 22.5% of shares in the Company quoted on the Lisbon stock exchange.
• As explained in note 8 the Company holds investments in subsidiaries. Consequently, in accordance with prevailing legislation, the Company is the parent of a group of companies. In accordance with generally accepted accounting principles in Spain, consolidated annual accounts must be prepared to present fairly the financial position of the Group, the results of operations and changes in its equity and cash flows. Details of investments in group companies are provided in Appendix I.
• The operating activity of the Group headed by the Company is carried out in Europe, the USA and Brazil through three subgroups headed by EDP Renewables Europe, S.L. (EDPR EU) in Europe, Horizon Wind Energy, LLC (HWE) in the USA and EDP Renováveis in Brazil. In 2010 the Group incorporated the subsidiary EDP Renewables Canada, Ltd. to provide a base for carrying out projects in Canada.
• The Company belongs to the EDP Group, of which the parent company is EDP Energias de Portugal, S.A., with registered offices at Praça Marquês de Pombal, 12-4, Lisbon.
• On 23 February 2011 the directors prepared the consolidated annual accounts of EDP Renovaveis, S.A. and subsidiaries for 2010 (24 February 2010 in 2009), which show consolidated profit of Euros 80,203 thousand and consolidated equity of Euros 5,393,511 thousand (Euros 114,349 thousand and Euros 5,327,555 thousand in 2009).

Notes to the Annual Accounts

(2) Basis of Presentation

Fair presentation (a)

The accompanying annual accounts have been prepared on the basis of the accounting records of EDP Renováveis, S.A. The annual accounts for 2010 and 2009 have been prepared in accordance with prevailing legislation and the Spanish General Chart of Accounts to present fairly the equity and financial position at 31 December 2010 and 2009 and results of operations and changes in equity for the years then ended.

The directors consider that the individual annual accounts for 2010 prepared on 23 February 2011 will be approved without significant changes.

(b) Comparative information

• The balance sheet, income statement, statement of changes in equity, statement of cash flows and the notes thereto for 2010 include comparative figures for 2009, which formed part of the annual accounts approved by shareholders at the annual general meeting held on 13 April 2010.
• (c) Functional and presentation currency

The figures disclosed in the annual accounts are expressed in thousands of Euros, the Company's funetional and presentation currency.

• (d) Critical issues regarding the valuation and estimation of relevant uncertainties and judgements used when applying accounting principles
  • Relevant accounting estimates and judgements and other estimates and assumptions have to be made when applying the Company's accounting principles to prepare the annual accounts. A summary of the items requiring a greater degree of judgement or which are more complex, or where the assumptions and estimates made are significant to the preparation of the annual accounts is as follows:

Notes to the Annual Accounts

· Relevant accounting estimates and assumptions

• The Company tests investments in group companies for impairment on an annual basis. An asset is impaired when its carrying amount exceeds its recoverable amount, the latter of which is understood as the higher of the asset's value in use or fair value less costs to sell. The recoverable amount is the higher of fair value less costs to sell and value in use. The Company generally uses cash flow discounting methods to calculate these values. Cash flow discounting calculations are based on the projections of the budgets approved by management. The flows take into consideration past experience and represent management's best estimate of future market performance. The key assumptions employed to calculate the fair value less costs to sell and value in use include growth rates in accordance with best estimates of rises in electricity prices in each country, the weighted average cost of capital and tax rates. The estimates, including the methodology employed, could have a significant impact on the values and the impairment loss.
• Due to the nature of its activity, the Company is subject to regulatory and legal processes. The Company recognises a provision if it is probable that an obligation will exist at year end which will give rise to an outflow of resources embodying economic benefits and the outflow can be reliably measured. Legal processes usually involve complex legal issues and are subject to substantial uncertainties. As a result, the Directors use significant judgement when determining whether it is probable that the process will result in an outflow of resources embodying economic benefits and estimating the amount.
• The fair value of financial instruments is based on market quotations when available. Otherwise, fair value is based on prices applied in recent, similar transactions in market conditions or on evaluation methodologies using discounted future cash flow techniques, considering market conditions, time value, profitability curve and volatility factors. These methods may require assumptions or judgements in estimating fair value.
• Although estimates are calculated by the Company's directors based on the best information available at 31 December 2010, future events may require changes to these estimates in subsequent years. Any effect on the annual accounts of adjustments to be made in subsequent years would be recognised prospectively.

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Notes to the Annual Accounts

Distribution of Profit (3)

C

The proposed distribution of 2010 profit to be submitted to the shareholders for approval at their annual general meeting is as follows:

	Euros
Basis of allocation Profit for the year	44.091.046.97
Distribution
Legal reserve	4.409.104.70
Voluntary reserve	39.681.942.27
Total	44.091.046.97

The distribution of profit of the Company for the year ended 31 December 2009, approved by the shareholders at their annual general meeting held on 31 April 2010, is as follows:

	Euros
Basis of allocation Profit for the year	68,012,381.59
Distribution
Legal reserve	6,801,238.16
Voluntary reserve	61,211,143.43
Total	68,012,381.59

At 31 December non-distributable reserves are as follows:

		Thousands of Euros
	2010	2009
Non-distributable reserves
Legal reserve	14,280	7.479
	14,280	7.479

Profit recognised directly in equity cannot be distributed, either directly or indirectly.

Notes to the Annual Accounts

(4) Significant Accounting Policies

• (a) Foreign currency transactions, balances and cash flows
  • Foreign currency transactions have been translated into Euros using the exchange rate prevailing at the transaction date.
  • Monetary assets and liabilities denominated in foreign currencies have been translated into Euros at the closing rate, while non-monetary assets and liabilities measured at historical cost have been translated at the exchange rate prevailing at the transaction date.
  • Non-monetary assets measured at fair value have been translated into Euros at the exchange rate at the date that the fair value was determined.
  • Exchange gains and losses arising on the settlement of foreign currency transactions and the translation into Euros of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
• (b) Intangible assets
  • Computer software is measured at cost of acquisition and carried at cost, less any accumulated amortisation and accumulated impairment valuation allowances. Computer software is amortised by allocating the depreciable amount on a systematic basis over its useful life, which has been estimated at four years from the asset entering normal use.
  • Capitalised personnel costs of employees who implement computer software are recognised as work carried out by the company for assets in the income statement.

Computer software maintenance costs are charged as expenses when incurred.

• (c) Property, plant and equipment
  • Property, plant and equipment are measured at cost of acquisition. Property, plant and equipment are carried at cost less any accumulated depreciation and any accumulated impairment.
  • Property, plant and equipment are depreciated by allocating the depreciable amount of an asset on a systematic basis over its useful life. The depreciable amount is the cost of an asset, less its residual value. The Company determines the depreciation charge separately for each component of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the asset and with a useful life that differs from the remainder of the asset.

Notes to the Annual Accounts

Property, plant and equipment are depreciated using the following criteria:

	Depreciation method	Estimated years of useful life
Other installations	Straight-line	10
Information technology equipment	Straight-line	4

(d) Financial instruments

(i) Classification and separation of financial instruments

Financial instruments are classified on initial recognition as a financial asset, a financial liability or an equity instrument in accordance with the economic substance of the contractual arrangement and the definitions of a financial liability, a financial asset and an equity instrument.

The Company classifies financial instruments into different categories based on the nature of the instruments and management's intentions on initial recognition.

Offsetting principles (ii)

A financial asset and a financial liability are offset only when the Company currently has the legally enforceable right to offset the recognised amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

(iii) Financial assets and financial liabilities at fair value through profit or loss

• Upon initial recognition the Company designates financial assets and financial liabilities at fair value through profit or loss in the income statement only if:
  • · it eliminates or significantly reduces the measurement or recognition inconsistency between financial assets and financial liabilities or
  • · the performance of a group of financial assets, financial liabilities or both is managed and evaluated on a fair value basis, in accordance with the Company's documented risk management or investment strategy. Information on these financial assets and financial liabilities provided internally to the Company's key management personnel is evaluated on that basis.

This category also includes the derivative financial instruments described in note 11.

Financial assets and financial liabilities at fair value through profit or loss are initially recognised at fair value. Transaction costs directly attributable to the acquisition or issue are recognised as an expense when incurred.

7

Notes to the Annual Accounts

After initial recognition, they are recognised at fair value through profit or loss. Fair value is reduced by transaction costs incurred on sale or disposal. Accrual interest and dividends are recognised separately.

(iv) Loans and receivables

Loans and receivables comprise trade and non-trade receivables with fixed or determinable payments that are not quoted in an active market other than those classified in other financial asset categories. These assets are recognised initially at fair value, including transaction costs, and subsequently measured at amortised cost using the effcctive interest method.

(v) Investments in group companies

Investments in group companies are initially recognised at cost, which is equivalent to the fair value of the consideration given, excluding transaction costs, and are subsequently measured at cost net of any accumulated impairment. The cost of investments in group companies acquired prior to 1 January 2010 includes transaction costs.

(vi) Interest

Interest is recognised using the effective interest method.

Based on consultations with the Spanish Institute of Accountants and Auditors Note 2 published in its Official Gazette number 78, for entities whose ordinary activity is the holding of shares in group companies, as well as the financing of subsidiaries, dividends and other income - coupons, interest - earned on financing extended to subsidiaries, as well as profits obtained from the disposal of investments, except those deriving from the disposal of subsidiaries, jointly-controlled entities and associates, constitute revenue in the income statement.

(vii) Derecognition of financial assets

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire or have been transferred and the Company has transferred substantially all the risks and rewards of ownership.

Notes to the Annual Accounts

(viii) Impairment of financial assets

• · Impairment of financial assets carried at amortised cost
  • In the case of financial assets carried at amortised cost, the amount of the impairment loss is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset's original effective interest rate. For variable income financial assets, the effective interest rate corresponding to the measurement date under the contractual conditions is used.
  • The impairment loss is recognised in profit and loss and may be reversed in subsequent periods if the decrease can be objectively related to an event occurring after the impairment has been recognised. The loss can only be reversed to the limit of the amortised cost of the assets had the impairment loss not been recorded.
• · Investments in group companies
  • An asset is impaired when its carrying amount exceeds its recoverable amount, the latter of which is understood as the higher of the asset's value in use or fair value less costs to sell.
  • Value in use is calculated based on the Company's share of the present value of future cash flows expected to be derived from ordinary activities and from the disposal of the asset.
  • The carrying amount of the investment includes any receivable or payable monetary item, the settlement of which is not contemplated nor is it likely to occur in the foreseeable future, excluding items which are commercial in nature.
  • In subsequent years, reversals of impairment losses in the form of increases in the recoverable amount are recognised, up to the limit of the carrying amount that would have been determined for the investment if no impairment loss had been recognised.

Impairment losses are recognised and reversed in the income statement.

Impairment of an investment is limited to the amount of the investment, except when contractual, legal or constructive obligations have been assumed by the Company or payments have been made on behalf of the companies.

Notes to the Annual Accounts

(ix) Financial liabilities

Financial liabilities, including trade and other payables, that are not classified as held for trading or as financial liabilities at fair value through profit or loss are initially recognised at fair value less any transaction costs directly attributable to the issue of the financial liability. After initial recognition, liabilities classified under this category are measured at amortised cost using the effective interest method.

(x) Derecognition of financial liabilities

• A financial liability, or part thereof, is derecognised when the Company either discharges the liability by paying the creditor, or is legally released from primary responsibility for the liability either by process of law or by the creditor.
• (xi) Fair value
• The fair value is the amount for which an asset can be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction. If available, quoted prices in an active market are used to determine fair value. Otherwise, the Company calculates fair value using recent transaction prices or, if insufficient information is available, generally accepted valuation techniques such as discounting expected cash flows.

Cash and cash equivalents (e)

• Cash and cash equivalents include cash on hand and demand deposits in financial institutions. They also include other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. An investment normally qualifies as a cash equivalent when it has a maturity of less than three months from the date of acquisition.
• The Company recognises cash payments and receipts for financial assets and financial liabilities in which turnover is quick on a net basis in the statement of cash flows. Turnover is considered to be quick when the period between the date of acquisition and maturity does not exceed six months.
• (f) Provisions
  • Provisions are recognised when the Company has a present obligation (legal, contractual, constructive or tacit) as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

Notes to the Annual Accounts

• The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account all risks and uncertainties surrounding the amount to be recognised as a provision and, where the time value of money is material, the financial effect of discounting provided that the expenditure to be made each period can be reliably estimated. The discount rate is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The discount rate does not reflect risks for which future cash flow estimates have been adjusted at the end of the reporting period.
• The financial effect of provisions is recognised as a finance expense in the income statement.
• If it is no longer probable that an outflow of resources embodying economic resources will be required to settle an obligation, the provision is reversed.
• Income taxes (g)
  • The income tax expense and tax income for the year comprises current tax and deferred tax.
  • Current tax assets or liabilities are measured at the amount expected to be paid to or recovered from the taxation authorities, using the tax rates and tax laws that have been enacted or substantially enacted at the balance sheet date.
  • Current and deferred tax are recognised as income or an expense and included in profit or Ioss for the year, except to the extent that the tax arises from a transaction or event which is recognised, in the same or a different year, directly in equity, or from a business combination.
  • The Company files consolidated tax returns as part of the 385/08 Group headed by EDP Energías de Portugal, S.A. Sucursal en España.
  • In addition to the factors to be considered for individual taxation, set out previously, the following factors are taken into account when determining the accrued income tax expense for the companies forming the consolidated tax group:
    • · Temporary and permanent differences arising from the elimination of profits and losses on transactions between group companies, derived from the process of determining consolidated taxable income.
    • · Deductions and credits corresponding to each company forming the consolidated tax group. For these purposes, deductions and credits are allocated to the eompany that carried out the activity or obtained the profit necessary to obtain the right to the deduction or tax credit.

Notes to the Annual Accounts

• A reciprocal credit and debit arises between the companies that contribute tax losses to the consolidated Group and the rest of the companies that offset those losses. Where a tax loss cannot be offset by the other consolidated group companies, these tax credits for loss carryforwards are recognised as deferred tax assets using the applicable recognition criteria, considering the tax group as a taxable entity.
• The parent company of the Group records the total consolidated income tax payable (recoverable) with a debit (credit) to receivables) from/to group companies and associates.
• The amount of the debt (credit) relating to the subsidiaries is recognised with a credit (debit) to payables (reccivables) to/from group companies and associates.
• (i) Taxable temporary differences
• Taxable temporary differences are recognised in all cases except where they arise from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable income.

(ii) Deductible temporary differences

• Deductible temporary differences are recognised that it is probable that sufficient taxable income will be available against which the deductible temporary difference can be utilised, unless the differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither accounting profit nor taxable income.
• Tax planning opportunities are only considered on evaluation of the recoverability of deferred tax assets and if the Company intends to use these opportunities or it is probable that they will be utilised.
• (iii) Measurement
• Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the years when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantially enacted. The tax consequences that would follow from the manner in which the Company expects to recover or settle the carrying amount of its assets or liabilities are also reflected in the measurement of deferred tax assets and liabilities.

(iv) Offset and classification

Deferred tax assets and liabilities are recognised in the balance sheet under non-current assets or liabilities, irrespective of the expected date of recovery or settlement.

Notes to the Annual Accounts

(h) Classification of assets and liabilities as current and non-current

• The Company classifies assets and liabilities in the balance sheet as current and noncurrent. Current assets and liabilities are determined as follows:
  • · Assets are classified as current when they are expected to be realised or are intended for sale or consumption in the Company's normal operating cycle, they are held primarily for the purpose of trading, they are expected to be realised within twelve months of the balance sheet date or are cash or a cash equivalent, unless the assets may not be exchanged or used to settle a liability for at least twelve months from the balance sheet date.
  • · Liabilities are classified as current when they are expected to be settled in the Company's normal operating cycle, they are held primarily for the purpose of trading, they are due to be settled within twelve months after the balance sheet date or the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the balance sheet date.
  • · Financial liabilities are classified as current when they are due to be settled within twelve months after the balance sheet date, even if the original term was for a period longer than twelve months, and an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the balance sheet date and before the annual accounts are authorised for issue.
• Environmental issues (i)

Environmental assets

Assets acquired by the Company to minimise the environmental impact of its activity and protect and improve the environment, including the reduction and elimination of future pollution from the Company's activities, are capitalised as property, plant and equipment in the balance sheet at cost of purchase or production and depreciated over their estimated useful lives.

Environmental expenses

• Environmental expenses are the costs derived from managing the environmental effects of the Company's operations and existing environmental commitments. These include expenses relating to the prevention of pollution caused by ordinary activities, waste treatment and disposal, decontamination, restoration, environmental management or environmental audit.
• Expenses derived from environmental activities are recognised as operating expenses in the period in which they are incurred.

Notes to the Annual Accounts

Environmental provisions

The Company makes an environmental provision when expenses are probable or certain to arise but the amount or timing is unknown. Where necessary, provision is also made for environmental work arising from any legal or contractual commitments and for those commitments acquired for the prevention and repair of environmental damage.

Related-party transactions (i)

Transactions between group companies are recognised at the fair value of the consideration given or received. The difference between this value and the amount agreed is recognised in line with the underlying economic substance of the transaction.

(k) Hedge accounting

• Derivative financial instruments which qualify for hedge accounting arc initially measured at fair value, plus any transaction costs that are directly attributable to the acquisition, or less any transaction costs directly attributable to the issue of the financial instruments.
• The Company undertakes fair value hedges, cash flow hedges and hedges of net investments in foreign operations. The Company has also opted to record hedges of foreign currency risk of a firm commitment as a cash flow hedge.
• At the inception of the hedge the Company formally designates and documents the hedging relationships and the objective and strategy for undertaking the hedges. Hedge accounting is only applicable when the hedge is expected to be highly effective at the inception of the hedge and in subsequent years in achieving offsetting changes in fair value or cash flows attributable to the hedged risk, throughout the period for which the hedge was designated (prospective analysis) and the actual effectiveness, which can be reliably measured, is within a range of 80%-125% (retrospective analysis).
• For cash flow hedges of forecast transactions, the Company assesses whether these transactions are highly probable and if they present an exposure to variations in cash flows that could ultimately affect profit or loss.
• The Company hedges net investments in foreign operations in relation to its investment in the group company Horizon Wind Energy, LLC.

Notes to the Annual Accounts

(i) Hedges of a net investment in a foreign operation

The Company hedges the risk of changes in foreign currency exchange rates derived from investments in group companies denominated in foreign currency. Investments include the monetary items that are accounted for as part of the net investment in accordance with section 4(a). The hedges are classified as fair value hedges. The portion of gains or losses on the hedging instrument or on the changes in the exchange of the monetary item used as the hedging instrument are recognised as exchange gains or losses. Gains or Iosses on investments related with the foreign currency amount of the underlying in the annual accounts are recognised as exchange gains or losses in profit and loss with a valuation adjustment for the effective part of the hedge.

(1) Long- and short-term employee benefits

The Company recognises the expected cost of profit-sharing and bonus plans when it has a present legal or constructive obligation to make such payments as a result of past events and a reliable estimate of the obligation can be made.

Intangible Assets (5)

Details of intangible assets and movement are as follows:

	Thousands of Euros
	Balance at 31.12.09	Additions	Disposals	Balance at 31.12.10
Cost
Computer software	2,253	6		2,259
Computer software under development	1,861	9,321	(3,739)	7,443
	4,114	9,327	(3,739)	9,702
Amortisation
Computer software	(225)	(452)		(677)
	(225)	(452)		(677)
Carrying amount	3,889	8,875	(3,739)	9,025

Notes to the Annual Accounts

	Thousands of Euros
	Balance at 31.12.08	Additions	Disposals	Balance at 31.12.09
Cost
Computer software		2.253		2,253
Computer software under development	58	1.803		1,861
	58	4,056		4,114
Amortisation
Computer software	-	(225)		(225)
		(225)		(225)
Carrying amount	રેક	3.831		3,889

Additions to computer software mainly comprise wind farm management software acquired during the year. Disposals reflect various wind farm management applications invoiced to the Company's subsidiary HWE.

At year end the Company has no fully amortised intangible assets.

At 31 December 2010, the Company has commitments to purchase intangible assets, namely computer software, amounting to Euros 10,598 thousand (Euros 7,230 thousand within one year, Euros 2,352 thousand in one to three years and Euros 1,016 thousand in three to five years).

(6) Property, Plant and Equipment

Details of property, plant and equipment and movement are as follows:

		Thousands of Euros
	Balance at			Balance at
	31.12.09	Additions	Disposals	31.12.10
Cost
Other installations	363	994		1,357
Information technology
equipment	208	32	(97)	143
Under construction		466		466
	રતા	1,492	(97)	1,966
Depreciation
Other installations	(18)	(୧୯)		(87)
Information technology
equipment	(26)	(32)	12	(46)
	(44)	(101)	12	(133)
Carrying amount	527	1,391	(82)	1,833

(Continued)

Notes to the Annual Accounts

	Thousands of Euros
	Balance at 31.12.08	Additions	Transfers	Balance at 31.12.09
Cost
Other installations		210	। ਦੇ ਤੋ	363
Information technology equipment		123	8 €	208
Under construction	238		(238)
	238	333		571
Depreciation
Other installations		(18)		(18)
Information technology equipment		(26)		(26)
		(44)		(44)
Carrying amount	238	289		527

The Company has contracted insurance policies to cover the risk of damage to its property, plant and equipment. The coverage of these policies is considered sufficient.

At year end the Company has no fully depreciated property, plant and equipment.

Risk Management Policy (7)

Financial risk factors (a)

• The Company's activities are exposed to various financial risks: market risk (including currency risk, interest rate risk in fair value), credit risk, liquidity risk and interest rate risk in cash flows. The Company's global risk management programme focuses on uncertainty in the financial markets and aims to minimise potential adverse effects on the Company's profits. The Company uses derivatives to mitigate certain risks.
• The directors of the Company are responsible for defining general risk management principles and establishing exposure limits. The Company's financial risk management is subcontracted to the Finance Department of EDP Energias de Portugal, S.A. in accordance with the policies approved by the directors. The subcontracted service includes the identification and evaluation of hedging instruments.
• All operations involving derivative financial instruments are subject to prior approval from the board of directors, which sets the parameters of each operation and approves the formal documents describing the objectives of the operation.

Notes to the Annual Accounts

(i) Currency risk

• The Company operates internationally and is therefore exposed to currency risk when operating with foreign currencies, especially with regard to the US Dollar. Currency risk is associated with recognised assets and liabilities, and net investments in foreign operations.
• The Company holds investments in group companies denominated in a foreign currency, which are exposed to currency risk. Currency risk affecting net assets of these investments in US Dollars is mitigated primarily through borrowings in the corresponding foreign currencies.
• Details of the hedged financial assets and the derivative financial instruments obtained to hedge them are provided in notes 8 and 11.
• Details of financial assets and liabilities in foreign currencies and transactions in foreign eurreneies are provided in notes 8, 10, 16 and 21.
• At 31 December 2010, had the Euro strengthened by 10% against the US Dollar, with the other variables remaining constant, post-tax profit would have been Euros 15.6 million higher (Euros 6.7 million in 2009), mainly as a result of translating foreign currency payables.
• (ii) Credit risk
• The Company is not significantly exposed to credit risk as the majority of its balances and transactions are with group companies. As the counterparties of derivative financial instruments are group companies, and the counterparties of their derivative financial instruments are highly solvent banks, the Company is not subject to significant counterparty default risk. Guarantees or other derivatives are therefore not requested in this type of operation.
• The Company has documented its financial operations in accordance with international standards. The majority of its operations with derivative financial instruments are therefore contracted under "ISDA Master Agreements", which facilitate the transfer of instruments in the market.

Details of financial assets exposed to credit risk are provided in note 10.

• (iii) Liquidity risk
• Liquidity risk is the risk that the Company will be unable to comply with its financial commitments on maturity. The Company's approach in managing liquidity risk is to guarantee as far as possible that liquidity will always be available to pay its debts before they mature, in normal conditions and during financial difficulties, without incurring unacceptable losses or compromising the Company's reputation.

Notes to the Annual Accounts

• Compliance with the liquidity policy ensures that contracted commitments are paid, maintaining sufficient credit facilities. EDP Renovaveis Group, manage the liquidity risk by the hiring and maintenance of credit facilities with the parent company, or with national and international financial entities in the market, in the best conditions, assuring the access to the necessary funds to the continuity of the activities.
• Details of financial assets and financial liabilities by contractual maturity date are provided in notes 10 and 16.
• (iv) Cash flow and fair value interest rate risks
• Given the nature of its activity, the Company has a considerable amount of remunerated assets. Income and cash flows from operating activities are therefore significantly affected by fluctuations in market interest rates.
• Interest rate risk arises from loans extended to group companies and non-current borrowings from group companies. The loans have fixed interest rates, exposing the Company to fair value risks.

Details of the hedged financial assets and the derivative financial instruments obtained to hedge them are provided in notes 8 and 11.

(8) Investments in Equity Instruments of Group Companies

Details of equity instruments of group companies are as follows:

	Thousands of Euros
	2010	2009
EDP Renováveis Brasil	12,383	9,383
EDP Renewables Europe, S.L.U.	884,352	884,352
Horizon Wind Energy, LLC	3,107,654	2,831,201
EDP Renewables Canada, Ltd.	ನ
Uncalled equity holdings in EDP Renewables Canada, Ltd.	(3)
	4,004,389	3,724,936
		(Nota 10 a) (Nota 10 a)

No impairment losses have been recognised as a result of the tests performed.

Notes to the Annual Accounts

(a) Investments in group companies

Details of direct and indirect investments in group companies are provided in Appendix I.

• On 16 February 2009 and 27 July 2009, EDP Renováveis Brasil carried out two share capital increases of Euros 8,383 thousand (BRL 44,620 thousand) and Euros 1,000 thousand (BRL 4,839 thousand), respectively, subscribed by the shareholders in proportion to their respective interest holding.
• The Company subscribed two share capital increases by its subsidiary EDP Renováveis Brasil on 28 October and14 December 2010 totalling Euros 3,000 thousand (BRL 12,760 thousand).
• In 2009 and 2010 the Company financed its subsidiary HWE by subscribing successive share capital increases amounting to Euros 62,530 thousand and Euros 185,355 thousand, respectively (USD 75,147 thousand and USD 231,355 thousand, respectively).
• EDP Renewables Canada, Ltd., a solely owned subsidiary of the Company, was incorporated in 2010 with uncalled share capital of Euros 3 thousand.
• (i) Foreign currency
• The functional currencies of foreign operations are the currencies of the countries in which they are domiciled. The net investment in these operations coincides with the carrying amount of the investment.
• (ii) Hedged investments
• Details of investments, the fair value of which is hedged against currency risk at 31 December 2010 and 2009, are as follows:

	Thousands of Euros
	2010	2009
Horizon Wind Energy, LLC. (HWE)	3,107,654	2,831,201
	3,107,654	2,831,201

Notes to the Annual Accounts

• To hedge the currency risk arising from the exposure of this investment denominated in a foreign currency, in 2008 Company management contracted a hedging instrument comprising three swaps for a total notional amount of US Dollars 2,632,613 thousand, equivalent to Euros 1,826,175 thousand applying the exchange rate at that date. In 2010 the change in fair value of the investment in Horizon Wind Encrgy, LLC totals Euros 142,782 thousand and the change in fair value of the hedging instrument amounts to Euros 142,782 thousand (Euros 64,211 thousand and Euros 64,211 thousand, respectively, in 2009). These amounts have been recognised as exchange gains or losses in the accompanying income statement (see note 11). The fair value of the hedging instrument at 31 December 2010 totals Euros 144.049 thousand (Euros 1,268 thousand at 31 December 2009), which has been recognised in non-current payables under non-current liabilities in the accompanying balance sheet (see note 11). At 31 December 2010, the balance relating to the aforementioned net investment hedging operation totalled Euros 2,347 thousand (Euros 9,108 thousand at 31 December 2009). These amounts are pending settlement at 31 December 2010 and are included in the current account with group companies presented in note 10.
• The remaining amount of this investment which is not hedged by the aforementioned operation is covered by hedging operations securing loans of the same currency (see note 16), resulting in an exchange gain of Euros 71,141 thousand in 2010 and an exchange loss of Euros 53,937 thousand in 2009.

21

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

(9) Financial Assets by Category

The classification of financial assets by category and class, as well as a comparison of the fair value and the carrying amount is as follows:

	2010
	Thousands of Euros
		Non-current			Current
		At amortised cost or cost		At amortised eost or cost
	Carrying amount	Fair value	Total	Carrying amount	Fair value	At fair value	Total
Assets held for trading
Derivative financial instruments						1 368	1,368
Total						1,368	1,368
Loans and receivables
Loans, fixed rate	4,110,684	3,805,591	4,110,684	200,963	200,963	-	200,963
Loans, floating rate	1,103	11,103	11,103	101 830	101,850	-	101,850
Deposits and guarantees	9	9	9
Other finaneial assets	101	101	101	178.900	178,900	-	178,900
Trade receivables				6,300	6,300		6,300
Total	4.121,897	3,816,804	4,121,897	488,013	488,013		488,013
Total financial assets	4,121,897	3.816,804	4,121,897	488,013	488,013	1,368	489,381

.

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●

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Notes to the Annual Accounts

				2009
				Thousands of Euros
		Non-current		Current
		At amortised cost or cost		At amortised cost or cost
	Carrying amount	Fair value	Total	Carrying amount	Fair value	At fair value	Total
Assets held for trading
Derivative financial instruments						612	612
Total						612	612
Loans and receivables
Loans, fixed rate	3,658,062	3,843,920	3,658.062	188,216	188,216		188,216
Loans, floating rate				14,330	14,330		14,330
Deposits and guarantees	9	9	9				-
Other finaneial assets	108	108	108	36,195	36.195		36,195
Trade receivables				2,304	2,304		2,304
Total	3,658,179	3,844,037	3,658,179	241,045	241,045		241,045
Total financial assets	3,658,179	3,844,037	3,658,179	241,045	241,045		241,657

Net losses and gains by category of financial asset are as follows:

		2010
		Thousands of Euros
	Loans and receivables, group companies	Loans and receivables, third parties	Total
Finance income at amortised cost	246,509	46	246,555
Net gains in profit and loss	246,509	46	246,555

Notes to the Annual Accounts

	2009
	Thousands of Euros
	Loans and receivables, group companies	Loans and receivables, third parties	Total
Finance income at amortised cost	196,697	। ਤੇ	196,710
Net gains in profit and loss	196,697	। ਤੇ	196,710

(10) Investments and Trade Receivables

(a) Investments in group companies

Details of investments in group companies are as follows:

	Thousands of Euros
	2010		2009
	Non-current	Current	Non-current	Current
Group
Equity instruments (note 8)	4.004.389		3,724,936
Loans	4.121.787	282,745	3,658,062	195,214
Interest		20,068		7.332
Derivative financial instruments (note 11)		1,368		612
Other financial assets		178,900		36.195
	8,126,176	483,081	7,382,998	239.353

Other financial assets comprise current accounts with the group, which earn daily interest that is settled on a monthly basis. The rate applicable to interest receivable is the one-month Euribor plus 0.5% and the rate applicable to interest payable is the one-month Euribor.

Notes to the Annual Accounts

(b)

Details of the main characteristics of loans are as follows.

					2010
					Thousands of Euros
					Carrying amount
	Currenc	Effectiv	Nomina		Nominal		No
Type	y	e rate	l rate	Maturity	amount	Current	Current
Group	EUR	2.74%	2.74%	2011	71,600	71,600
Group	EUR	5.11%	5.11%	2018	886,691		886,691
Group	EUR	5.00%	5.00%	2022	229,876	19,989	209,887
Group	EUR	4.81%	4.81%	2022	178,665	15,536	163,129
Group	EUR	5.14%	5.14%	2023	503,328	40.266	463,062
Group	EUR	5.56%	5.56%	2023	299,692	23,975	275,717
Group	EUR	4.80%	4.80%	2016	24,796	4,133	20,663
Group	EUR	6.98%	6.98%	2019	69,178		69,178
Group	EUR	6.93%	6.93%	2019	297,663		297,663
Group	EUR	6.80%	6.80%	2019	184,332		184,332
Group	EUR	5.04%	5.04%	2020	136,093		136,093
Group	EUR	4.63%	4.63%	2020	158,481		158,481
Group	EUR	5.56%	5.56%	2020	76,771		76,771
Group	EUR	6.33%	6.33%	2023	241,390	18,568	22,822
Group	EUR	5.78%	5.78%	2023	121,400		121,400
Group	EUR	4.78%	4.78%	2021	370,372	33,670	336,702
Group	EUR	5.67%	5.67%	2023	44,460	3,420	41,040
Group	EUR	5.45%	5.45%	2027	362,739	21,338	341,401
Group	EUR	5.67%	5.67%	2012	17,203	6.100	11,103
Group	EUR	2.77%	2.77%	2011	24,150	24,150
Group	EUR	5.64%	5.64%	2014	570		570
Group	EUR	6.71%	6.71%	2014	2,892		2,892
Group	EUR	6.31%	6.31%	2014	408		408
Group	EUR	6.36%	6.36%	2014	107		107
Group	PLN	5.74%	5.74%	2024	23,899		23,899
Group	PLN	6.91%	6.91%	2015	17,436		17,436
Group	PLN	8.41%	8.41%	2014	10		10
Group	PLN	8.44%	8.44%	2014	29,217		29,217
Group	PLN	8.79%	8.79%	2014	1,098		1.098
Group	PLN	9.47%	9.47%	2014	13,251		13,251
Group	PLN	9.76%	9.76%	2014	3,472		3,472
Group	PLN	9.93%	9.93%	2014	1,182		1,182
Group	PLN	10.23%	10.23%	2014	428		428
Group	PLN	10.26%	10.26%	2014	1,321		1,321
Group	PLN	10.58%	10.58%	2014	225		225
Group	PLN	10.65%	10.65%	2014	10.136		10.136
Total group					4,404,532	282,745	4,121,787
Total					4,404,532	282,745	4,121,787

(Continued)

Notes to the Annual Accounts

All of these loans have been extended to EDP Renewables Europe, S.L.U. and subsidiaries at fixed interest rates, except for three floating-rate loans with a total nominal amount of Euros 112,953 thousand at year end.

				2009
						Thousands of Euros
							Carrying amount
		Effectiv	Nomina		Nominal		Non-
Type	Currency	e rate	l rate	Maturity	amount	Current	current
Group	EUR	5.11%	5.11%	2018	886.691		886.691
Group	EUR	5.15%	રો નિર્જ	2023	543,594	40,266	503,328
Group	EUR	10.22%	10.22%	2014	97		97
Group	EUR	5.56%	રે રેલને	2023	323,668	23,975	299,693
Group	EUR	5.46%	5.46%	2027	283,277	15.738	267,539
Group	EUR	6.81%	6.81%	2019	184,332		184,332
Group	ET JR	5.01%	5.01%	2022	249,865	19,989	229,876
Group	EUR	6.34%	6.34%	2023	259,958	18,568	241,390
Group	FI JR	4.78%	4.78%	2021	22,857	18,571	204,286
Group	EUR	4.81%	4.81%	2022	194,201	15,536	178,665
Group	EUR	4.78%	4.78%	2021	181.185	15,099	166,086
Group	El IR	5.78%	5.78%	2023	105,400		105,400
Group	EUR	5.46%	5.46%	2027	100,799	5,600	95.199
Group	EUR	4.80%	4.80%	2016	28,929	4,110	24,819
Group	EUR	5.68%	5.68%	2023	47,880	3,432	44,448
Group	EUR	4.07%	4.07%	2010	14,330	14,330
Group	EUR	5.65%	ર રહેરાજ	2014	2,892		2,892
Group	ET JR	6.72%	6.72%	2014	408		408
Group	EUR	5.65%	5.65%	2014	500		રે00
Group	EUR	5.29%	5.29%	2014	460		460
Group	EUR	5.30%	5.30%	2014	1.785		1,785
Group	EUR	8.44%	8.44%	2014	33,978		33,978
Group	PLN	8.79%	8.79%	2014	2,682		2,682
Group	PLN	9 47%	9.47%	2014	8.673		8.673
Group	PLN	10.26%	10.26%	2014	914		914
Group	PI N	10.23%	10.23%	2014	365		365
Group	PLN	9.00%	9.00%	2014	171		171
Group	PI N	10.58%	10 58%	2014	207		207
Group	PLN	6.99%	6.99%	2019	173,178		173,178
Total group					3,853,276	195,214	3,658,062
Total					3,853,276	195,214	3,658,062

All of these loans had been extended to EDP Renewables Europe, S.L.U. and subsidiaries at fixed interest rates, with the exception of one floating-interest loan with a nominal amount of Euros 14,330 thousand at year end.

(Continued)

Notes to the Annual Accounts

(c) Classification by maturity

●

The classification of financial assets by maturity is as follows:

					2010
	Thousands of Euros
	2011	2012	2013	2014	2015	Subsequent years	Less current portion	Total non- current
Loans and receivables
Loans
Fixed rate		160,125 147,226 147,226		228,887	182,004	3.068.640	(147,226)	3,773,983
Floating rate	142,688	44.773	33,670	33,670	33,670	202,021	(135,519)	347,804
Deposits and guarantees						9		9
Other financial assets	178,900					101	(178,900)	101
Derivative financial instruments	1,368						(1,368)
Trade receivables	6,299						(6,295)
Total						489,380 191,999 180,896 262,557 215,674 3,270,771 (290,509) 4,121,897

	2009
	Thousands of Euros
	2010	2011	2012	2013	2014	Subsequent years	Less current portion	Total non- current
Loans and receivables
Loans
Fixed rate		180,884 180,896		180,896 189,003 250,244		2,857,023	(180,884)	3,658,062
Floating rate	14,330						(14,330)
Deposits and guarantees						9		0
Other financial assets	36,195					108	(36,195)	108
Derivative financial
instruments	612						(612)
Trade receivables	2,304						(2,304)
Total						234,325 180,896 180,896 189,003 250,244 2,857,140 (234,325) 3,658,179

27

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

(d) Exchange differences recognised in profit or loss of financial assets

Details of exchange differences recognised in profit or loss in relation to financial instruments, distinguishing between settled and outstanding transactions, are as follows:

	Thousands of Euros
	2010		2009
	Settled	Outstanding	Settled	Outstanding
Non-current investments in group companies and associates	805	(142,499)	(363)	66,355
Loans to companies Hedges of net investments in	805	283	(363)	2,144
foreign operations		(142,782)		64.211
Cash and cash equivalents	29 454	(2,325)		(905)
Cash equivalents	29.454			(905)
Total financial assets	30,259	(144,824)	(363)	65,450

(11) Derivative financial instruments

Details of derivative financial instruments are as follows:

	2010 Thousands of Euros
	Assets		Liabilities
	Non-current	Current	Non-current	Current
Hedging derivatives
a) Fair value hedges
Net investment hedging swaps (note 8)			144,049
Total			144,049
Derivatives held for trading and at fair value through profit or loss
b) Foreign currency derivatives
Forward exchange contracts		1,368		2,540
Total		1,368		2,540
Total hedging derivatives		1.368	144,049	2,540
		(nota 10 a)		(note 15)

Notes to the Annual Accounts

	2009
	Thousands of Euros
	Assets		Liabilities
	Non-current	Current	Non-current	Current
Hedging derivatives
a) Fair value hedges
Net investment hedging swaps (note 8)			1,268
Tota			1,268
Derivatives held for trading and at fair value through profit or loss
b) Foreign currency derivatives
Forward exchange contracts		612		612
Total		612		612
Total hedging derivatives		612	1.268	612
		(nota 10 a)		(note 15)

Fair value hedges (a)

C

The total amount of gains and losses on hedging instruments and on items hedged under fair value hedges of net investments in group companies is as follows:

	Thousands of Euros
	Gains/(losses)	Gains/(losses)
	2010	2009
Forward foreign currency contracts
- Swap hedging instruments for net investments (note 8)	(142,782)	64,211
Investments in group companies (note 8)	142,782	(64,211

Notes to the Annual Accounts

(b) Forward exchange contracts and swaps

• To eliminate the currency risk of a Group subsidiary. in 2010 and 2009 the Company contracted a cross deal whereby it forward sells Polish Zloty to Neo Polska at a fixed price in Euros and simultaneously forward purchases Polish Zloty from EDP-Energías de Portugal, S.A. Sucursal en España. The nominal amount of these forward contraets is Euros 39 million (Euros 88 million in 2009). The Company contracted this cross deal to hedge the exchange rate risk in the purchases of wind turbines payable in Polish Zloty by its subsidiary Neolica Polska SP Z.O.O. The fair value of these instruments, which amounts to Euros 1,368 thousand, is recognised as an asset under current investments in group companies and associates and as a liability under current payables to group companies and associates, as presented in notes 10.a and 16.a, respectively.
• In 2010 the Company contracted two CIRSs (cross interest-rate swaps) for a total nominal amount of PLN 309,307 thousand, equivalent to Euros 77,008 thousand. The fair value of these instruments, which amounts to Euros 1,172 thousand, is recognised as a liability under current payables to group companies and associates, as shown in note 16.a.

(12) Cash and Cash Equivalents

Details of cash and cash equivalents are as follows:

	Thousands of Euros
	2010	2009
Cash in hand and at banks	34	246
Current bank deposits	182.633	257,306
	182.767	257.552

Current bank deposits reflect US Dollar deposits extended to the group company EDP Finance BV, which fall due in less than three months and carn interest at a rate of between 5% and 5.5% (between 0.2% and 0.3% in 2009).

(13) Capital and Reserves without Valuation Adjustments

Details of equity and movement during 2010 and 2009 are shown in the statement of changes in equity.

• (a) Subscribed share capital
  • At 31 December 2010 and 2009, the share capital of the Company is represented by 872,308,162 ordinary bearer shares of Euros 5 par value each, all fully paid. These shares have the same voting and profit-sharing rights. These shares are freely transferable.

Notes to the Annual Accounts

Companies which hold a direct or indirect interest of at least 10% in the share capital of
the Company at 31 December 2010 and 2009 are as follows:

	2010 and 2009
Company	Number of shares	Percentage ownership
EDP - Energías de Portugal, S.A. Sucursal en España Hidroeléctrica del Cantábrico. S.A. Others (*)	541,027.156 135,256,700 196.024.306	62.02% 15.51% 22.47%
	872,308,162	100.00%

(*) Shares quoted on the Lisbon stock exchange

• In 2007 and 2008 the Company carried out various share capital increases, which were subscribed through non-monetary contributions comprising 100% of the shares in HWE and EDP Renewables Europe, S.L.U.
• The contributions are applicable to the special tax treatment for mergers, spin-offs, transfers of assets and conversion of securities foreseen in Chapter VIII of Section VII of Royal Decree 4 dated 5 March 2004 which approved the revised Spanish tax law. The disclosures required by prevailing legislation were included in the annual accounts for 2007 and 2008.

(b) Share premium

This reserve is freely distributable.

Reserves (c)

Details of reserves and movement during the year reflect the proposed distribution of profit approved by the shareholders (see note 3).

(i) Legal reserve

The legal reserve has been appropriated in compliance with the revised Spanish Companies Act, in force since 1 September 2010, which requires that companies transfer 10% of profits for the year to a legal reserve until this reserve reaches an amount equal to 20% of share capital. Although the legal reserve can be used to increase share capital, until it reaches an amount equal to 20% of share capital, it can only be used to offset losses if no other reserves are available and cannot be used for any other purpose. At 31 December 2010 and 2009, the Company has not appropriated to this reserve the minimum amount required by law.

31

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

(ii) Voluntary reserve

These reserves are freely distributable.

(iii) Negative reserve for costs of the public share offering

As a result of the public share offering, the Company has incurred a number of expenses associated with the share capital increase, which have been recognised in this caption net of the tax effect.

(14) Provisions

Movements in provisions in 2010 are as follows:

		Thousands of Euros
	Balance at		Balance at
	31.12.09	Charge	31.12.10
Current provisions
Provisions		13,766	13.766

Provisions are recognised with a charge to other administrative expenses. The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period.

Notes to the Annual Accounts

(15) Financial Liabilities by Category

The classification of financial liabilities by category and class and a comparison of the fair value with the carrying amount are as follows:

		2010
				Thousands of Euros
		Non-current				Current
		At amortised cost or			At amortised cost or cost
		cost
	Carrying amount	Fair value	At fair value	Total	Carrying amount	Fair value	At fair value	Total
Liabilities held for trading
Derivative financial instruments							2,540	2,540
Total							2.540	2,540
Debts and payables
Fixed-rate payables to group companies	2,799,548	2,652,417		2,799,548	806	806		806
Other liabilities Financial liabilities					58,942	58,942		58,942
Trade and other payables					22,106	22,106		22,106
Total	2,799,548	2,652,417		2,799,548	81,854	81,854		81,854
Hedging derivatives Traded on OTC markets		-	144,049	144,049
Total			144,049	144,049
Total financial liabilities	2,799,548	2,652,417	144,049	2,943,597	81,854	81,854	2,540	84,394

Notes to the Annual Accounts

		2009
	Thousands of Euros
		Non-current				Current
	At amortised cost or				At amortised cost or
		cost		cost
	Carrying amount	Fair value	At fair value	Total	Carrying amount	Fair value	At fair value	Total
Liabilities held for trading
Derivative financial instruments							612	612
Total							612	612
Debts and payables
Fixed-rate payables to group companies	2,131,042	2,100,868		2,131,042	રેતેર	રતેર		રતેર
Other financial liabilities					14,064	14,064		14,064
Trade and other payables					20.778	20,778	-	20,778
Total	2,131,042	2,100,868		2,131,042	34.842	34,842		34,842
Hedging derivatives Traded on OTC markets			1,268	1,268
Total			1,268	1,268
Total financial liabilities	2,131,042	2,100,868	1,268	2,132,310	35,437	35,437	612	36,049

Net gains and losses by financial liability category are as follows:

	2010
	Thousands of Euros
	Debts and payables, group companies	Debts and payables, third parties	Liabilities held for trading	Total
Finance expenses at amortised cost Change in fair value	143.297	47	1,164	143,344 1,164
Total	143,297	47	1,164	144,508

Notes to the Annual Accounts

		2009
		Thousands of Euros
	Debts and payables, group companies	Debts and payables, third parties	Total
Finance expenses at amortised cost	79,299	13	79,312
Total	79,299	13	79,312

(16) Payables and Trade Payables

(a) Group companies

Details of payables to group companies are as follows:

	Thousands of Euros
	2010		2009
	Non-current Current		Non-current	Current
Group
Group companies	2,799,548		2,131,042
Interest		806		રેતેર
Suppliers of fixed assets, group
companies		ા રા ત
Derivative financial instruments (note 11)		2,540		612
Current account with group companies		57,467		13,484
Total	2,799,548	60,964	2,131,042	14,691

The current account with group companies accrues daily interest which is settled or collected on a monthly basis. The rate applicable to interest receivable is the onemonth Euribor plus 0.5% and the rate applicable to interest payable is the one-month Euribor.

At 31 December 2010, payables to group companies reflect ten fixed-interest loans (six at 31 December 2009) obtained from EDP Finance BV.

35

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

(b) Payables

Details of payables are as follows:

		Thousands of Euros
	2010		2009
	Non-current		Current Non-current	Current
Unrelated parties
Suppliers of fixed assets		1.324		580
l'otal		1,324		280

At 31 December 2010 and 2009, payables to suppliers of fixed assets reflect invoices payable to suppliers of computer software.

(c) Main characteristics of payables

The terms and conditions of loans and payables are as follows:

					2010
					Thousands of Euros
							Carrying amount
l ype	Currency	Effectiv e rate	Nomin al rate	Maturity	Nominal amount	Current	Non- current
Group	EUR	4.66%	4.66%	2018	890,275		890,275
	EUR	6.93%	6.93%	2019	186,644		186.644
	EUR	5.04%	5.04%	2020	160,776		160,776
	EUR	4.63%	4.63%	2020	79,000		79,000
	EUR	5.56%	5.56%	2020	35.000		35.000
	USD	4.57%	4.57%	2018	1,102,218		1,102,218
	USD	7.86%	7.86%	2019	170,749		170,749
	USD	7.30%	7.30%	2019	101,603		101,603
	USD	7.40%	7.40%	2020	37,524		37,524
	OSD	8.35%	8.35%	2019	35,759		35,759
Total					2,799,548		2,799,548

Notes to the Annual Accounts

					2009
					Thousands of Euros
							Carrying amount
Type	Currency	Effectiv e rate	Nomin al rate	Maturity	Nominal amount	Current	Non- current
Group
	EUR	4.66%	4.66%	2018	807,767		807,767
	EUR	6 93%	6.93%	2019	15,152		15,152
	USD	4.57%	4.57%	2018	1,022,340		1.022,340
	USD	7.86%	7.86%	2019	158,375		158,375
	USD	7 30%	7 30%	2019	94,240		94,240
	USD	8.36%	8.36%	2019	33.168		33,168
Total					2,131,042		2,131.042

(d) Trade and other payables

Details of trade and other payables are as follows:

	Thousands of Euros
	2010			2009
	Non-current	Current	Non-current	Current
Group
Suppliers		15,019		14,955
		15,019		14,955
Related companies
Trade payables		1,560		1,740
		1,560		1,740
Unrelated parties
Trade payables		1,689		2,726
Salaries payable		3,838		1,357
Public entities, other (note 16)		197		394
		5,724		4,477
Total		22,303		21,172

Payables to group companies and associates mainly relate to expenses invoiced by EDP Energías de Portugal, S.A. and EDP Energías de Portugal, S.A. (Sucursal en España) primarily for management and IT services and use of the trademark.

37

EDP RENOVÁVEIS, S.A.

Notes to the AnnuaI Accounts

(e) Classification by maturity

The classification of financial liabilities by maturity is as follows:

					2010
		Thousands of Euros
	2011	2012	2013	2014	2015	Subsequen t years	Less current portion	Total non- current
Payables to group companies						2,799.548		2,799,548
Derivative financial instruments Group companies and	2.540	89.332				54.717	(2,540)	144,049
associates	58,424						(58,424)
Current payables	1,324						(1,324)
Trade and other payables	22,303						(22,303)
Total financial liabilities	84,591	89,332				2,854,265	(84,591)	2,943.597

					2009
		Thousands of Euros
	2010	2011	2012	2013	2014	Subsequen t years	Less current portion	Total non- current
Payables to group companies Derivative financial instruments	612	304	482			2,131.042 482	(612)	2,131,042 1,268
Group companies and associates	14,079					-	(14,079)
Trade and other payables	21,358						(21,358)
Total financial liabilities	36,049	304	482			2,131,524		(36,049) 2,132,310

Notes to the Annual Accounts

(f) Exchange differences recognised in profit or loss in relation to financial liabilities

Details of exchange differences recognised in profit or loss in relation to financial instruments, distinguishing between settled and outstanding transactions, are as follows:

	Thousands of Euros
	2010		2009
	Settled	Outstanding	Settled	Outstanding
Group companies and associates, non- current		(98,870)	48,104	6.461
Trade and other payables	(1)	(112)
Total financial liabilities	(1)	(98.982)	48,104	6,461

(17) Information on Deferred Payments to Suppliers. Third Additional Provision of Law 15/2010 of 5 July 2010: "Reporting Obligation"

Details of deferred payments to suppliers and creditors are as follows:

	Thousands of Euros
	Amounts payable at
	balance sheet
	date
	2010
Deferred payments exceeding legal maximum payment period
at balance sheet date	8,101
Total financial liabilities	8,101

Euros 7,752 thousand of the past-due suppliers balance at year end is payable to group companies.

39

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

(18) Taxation

Details of balances with public entities are as follows:

	Thousands of Euros
	2010		2009
	Non- current	Current	Non- current	Current
Assets
Deferred tax assets	4.579		1,349
Non-current tax assets		988		988
	4,579	988	1,349	988
Liabilities
Deferred tax liabilities	30,621		21,872
Value added tax and similar taxes		197		394
	30,621	197	21.872	394

The Company files consolidated income tax and value added tax returns. The parent of this consolidated tax group is EDP-Energías de Portugal, S.A. Sucursal en España. At 31 December 2010 the Company has recognised income tax payable of Euros 15,246 thousand (Euros 21,405 thousand in 2009) and recoverable VAT of Euros 696 thousand (Euros 821 thousand in 2009). These balances are recognised in the current account with the Parent company (note 20.a).

The Company has the following main applicable taxes open to inspection by the Spanish taxation authorities:

Tax	r ears open to inspection
Income tax Value added tax Personal income tax Capital gains tax Business activities tax Social Security	2006 to 2009 2007 to 2010 2007to2010 2007 to 2010 2007 to 2010 2007 to 2010
Non-residents	2007 to 2010

Notes to the Annual Accounts

The company is in a tax inspection process of exercises 2007 and 2008.

• Due to the treatment permitted by fiscal legislation of certain transactions, additional tax liabilities could arise in the event of inspection. In any case, the Parent company's directors do not consider that any such liabilities that could arise would have a significant effect on the annual accounts.
• (a) Income tax
  • The Company files consolidated tax returns as part of the tax group headed by EDP Energías de Portugal, S.A. Sucursal en España and which includes Hidroeléctrica del Cantábrico, S.A., Hidrocantábrico Distribución Eléctrica, S.A., Solanar Distribuidora Eléctrica, S.L., Instalaciones Eléctricas Río Isabena, S.L., Hidrocantábrico Energía, S.A., Hidrocantábrico Soluciones Comerciales, S.A., Hidrocantábrico Servicios, S.A., Hidrocantábrico Explotación de Redes, S.A., Hidrocantábrico Explotación de Centrales, S.A., Hidrocantábrico Gestión de Energía, S.L., Hidrocantábrico Cogeneración, S.L., Fuerzas Eléctricas de Valencia. S.A., Fuerzas Eléctricas de Castellón, S.A., Energía e Industria de Toledo, S.A., Mazarrón Cogeneración, S.A., Cerámica Técnica de Illescas Cogeneración, S.A., Tratamientos Ambientales Sierra de la Tercia, S.A., Sinova Medioambiental, S.A., Iniciativas Tecnológicas de Valoración Energética de Residuos, S.A., EDP Renewables Europe, S.L.U., NEO Energía Aragón, S.L., NEO Catalunya, S.L., CEASA Promociones Eólicas, S.L., Agrupación Eólica, S.L., P.E. Plana de Artajona, S.L., P.E. Montes de Castejón, S.L., P.E. Los Cantales, S.L., Iberia Aprovechamientos Eólicos, S.A., Corporación Empresarial de Renovables Alternativas, S.L., Compañía Eléctrica de Energías Renovables Alternativas, S.L., Acampo Arias, S.L., Bont Vent de Corbera, S.L., Bont Vent de Vilalba, S.L., HC Energia Gas, S.L., Parc Eólic Serra Voltorera, S.L., Parc Eólic Coll de la Garganta, S.L., Bont Vent de L'Ebre, S.L., and Iberenergia, S.A.
  • A reconciliation of net income and expenses for the year and taxable income is as follows:

	2010
	Thousands of Euros Income statement
	Increases	Decreases	Net
Profit for the year	44,091		44.091
Income tax	20,814		20,814
Profit before income tax	64,905		64,905
Permanent differences	4,325		4.325
Temporary differences:	10,767	(29,163)	(18,396)
originating in current year	10.767	(29,163)	(18,396)
Taxable income			50,834

Notes to the Annual Accounts

		2009
		Thousands of Euros
		Income statement
	Increases	Decreases	Net
Profit for the year	68.012		68,012
Income tax	29,137		29,137
Profit before income tax	97,149		97,149
Permanent differences
Temporary differences:	3.394	(29,163)	(25,769)
originating in current year	3.394	(29,163)	(25,769)
Taxable income			71,380

• Increases in permanent differences in 2010 reflect costs relating to the recognition of the provision mentioned in note 14, which are considered to be non-deductible expenses.
• Increases under temporary differences in 2010 reflect salaries payable and other nondeductible items, as well as costs relating to the recognition of the provision mentioned in note 14, which are considered to be non-deductible expenses. Additions in this category in 2009 relate to salaries payable and other non-deductible items.
• Decreases in temporary differences in 2010 and 2009 relate to the tax amortisation of the financial goodwill of HWE.

Details of the income tax expense related to profit for the year are as follows:

	2010
	Thousands of Euros
	Profit and loss	Equity	Total
Profit for the year	64,905		64,905
Tax at 30%	19,471		19,471
Non-deductible expenses Provisions	1,298		1,298
Prior year adjustments	47		47
Deductions and credits for the current year	(2)		(2)
Income tax expense	20,814		20,814

(Continued)

Notes to the Annual Accounts

	2009
	Thousands of Euros
	Profit and loss	Equity	Total
Profit for the year	97.149		97,149
Tax at 30%	29.145		29,145
Deductions and credits for the current year	(8)		(8)
Income tax expense	29,137		29,137

Details of the income tax expense are as follows:

C

C

.

	Thousands of Euros
	2010	2009
Current income tax
Present year	15,248	21.406
Other	47
	15,295	21,406
Deferred tax liabilities
Source and reversal of temporary differences
Provisions	(2,832)
Tax amortisation of HWE goodwill	8.749	8,749
Salaries payable and other items	(398)	(1,018)
	5,519	7,731
	20,814	29,137

Details of deferred tax assets and liabilities by type of asset and liability are as follows:

	Thousands of Euros
	Assets		Liabilities		Net
	2010	2009	2010	2009	2010	2009
Tax amortisation of HWE
goodwill			(30,621) (21,872) (30,621) (21,872)
Salaries payable and other items		4,579 1,349			4,579	1,349
Total assets/liabilities	4,579	1,349	(30,621) (21,872) (26,042) (20,523)

43

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

Details of deferred tax assets and liabilities that are expected to be realised or reversed in periods exceeding 12 months are as follows:

		Thousands of Euros
	2010	2009
Tax amortisation of HWE goodwill	(30,621)	(21,872)
Net	(30,621)	(21,872)

(19) Environmental Information

Given the nature of its activity, the Company does not consider it necessary to make investments to prevent or correct environmental effects of that activity or to make any environmental provisions. However, a number of required environmental studies have been carried out in accordance with prevailing legislation to obtain authorisation for wind farms developed on behalf of group companies. These studies have been recognised as an increase in property, plant and equipment in progress.

The present annual accounts do not include any environmental costs.

The directors consider that no significant environmental contingencies exist.

(20) Balances and Transactions with Related Parties

• (a) Balances with related parties
• Details of balances receivable from and payable to group companies, associates, jointly controlled entities and related parties, including key management personnel and directors, and the main characteristics are disclosed in notes 10 and 16.

Notes to the Annual Accounts

Details of balances by category are as follows:

C

0

C

œ

œ

C

C

C

.

●

	2010 Thousands of Euros
	Parent	Group
	company	companies	Directors	Total
Non-current investments in group
companies		4,004,392		4,004,392
Non-current investments		4,121,787		4,121,787
Total non-current assets		8,126,176		8,126,176
Trade and other receivables		6,074		6,074
Current investments	171,081	312,000		483,081
Cash and cash equivalents		182,633		182,633
Total current assets	171,081	500.707		671,788
Total assets	171,081	8,625,515		8,796,596
Payables to group companies, non-current		2,799,548		2,799,548
Total non-current liabilities		2,799,548		2,799,548
Current accounts with group companies		57.467		57,467
Current payables		3,497		3,497
Trade and other payables	1,476	5,103		16,579
Total current liabilities	11,476	66,067		77,543
Total liabilities	11,476	2,865,615		2,877,091

Notes to the Annual Accounts

	2009
	Thousands of Euros
	Parent company	Group companies	Directors	Total
Non-current investments in group
companies Non-current investments		3.724.936 3,658,062	l	3,724,936 3,658,062
Total non-current assets	-	7,382,998		7,382,998
Trade and other receivables		2,158		2,158
Current investments	35.852	202,980		238,832
Cash and cash equivalents		257,306		257,306
Total current assets	35,852	462.444		498.296
Total assets	35.852	7,845,242		7,881,094
Payables to group companies, non-current		2,131,042		2,131,042
Total non-current liabilities	-	2,131,042	l	2,131,042
Current accounts with group companies		13,485		13,485
Current payables	10,708	6,581		17,289
Total current liabilities	10,708	20,066		30,774
Total liabilities	10,708	2,151,108		2,161,816

Notes to the Annual Accounts

(b) Transactions with related parties

The Company's transactions with related parties are as follows:

	2010
	Thousands of Euros
	Group companies	Directors	Total
Income
Other services rendered	1,712		1,712
Finance income	246,509		246,509
	248,221		248,221
Expenses
Operating lease expenses and royalties	(1,837)		(1,837)
Other services received	(7,861)		(7,861)
Personnel expenses
Salaries		(1,158)	(1,158)
Finance expenses	(143,297)		(143,297)
	(152,995)	(1,158)	(144,455)
	95,226	(1,158)	103,766

		2009
		Thousands of Euros
	Group
	companies	Directors	Total
Income
Other services rendered	803		803
Finance income	196,697		196,697
	197,500		197,500
Expenses
Operating lease expenses and royalties	(1,969)		(1,969)
Other services received	(5,732)		(5,732)
Personnel expenses
Salaries		(756)	(756)
Finance expenses	(79,299)		(79,299)
	(87,000)	(756)	(87,756)
	110,500	(756)	109,744

Other services rendered mainly reflect management support services and various costs passed on to subsidiaries.

Notes to the Annual Accounts

(c) Information on the Company's directors and key management personnel

• In 2010 the directors of the Company have accrued remuneration of Euros 1,158 thousand (Euros 756 thousand in 2009) in respect of their position as directors and executive functions performed in the Company.
• On 4 November 2008, EDP Energias de Portugal, S.A. and the Company signed a contract whereby EDP Energias de Portugal, S.A. renders executive management services to the Company, including matters relating to its day-to-day administration. By virtue of this contract, EDP Energías de Portugal, S.A. appoints four members of the Company's executive committee, to whom Company pays an amount determined by the board of directors. Until 30 April 2009 the remuneration received by the managing director was also included in this contract.
• Pursuant to this contract, the Company has recognised expenses of Euros 836 thousand in 2010 and Euros 1,453 thousand in 2009 as other services under external services in the income statement for management services provided. The expense for 2009 includes remuneration of Euros 569 thousand paid to the managing director prior to 30 April 2009 by EDP Energías de Portugal, S.A. on behalf of EDP Renováveis, S.A.
• The Company's key management personnel have also earned remuneration of Euros 925 thousand in 2010 (Euros 1,263 thousand in 2009).
• The directors and key management pcrsonnel have not received any loans or advances and the Company has not extended any guarantees on their behalf. The Company has no pension or life insurance obligations with its former or current directors in 2010 or 2009
• (d) Transactions other than ordinary business or under terms differing from market conditions carried out by the directors of the Company
  • In 2010 and 2009 the directors have not carried out any transactions other than ordinary business with the Company or applying terms that differ from market conditions.
• (e) Investments and positions held by directors
  • Details of investments held by the directors and parties related to them in companies with identical, similar or complementary statutory activities to those of the Company and positions held as well as functions and activities performed in these companies are shown in Appendix II, which forms an integral part of this note to the annual accounts.

48

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

(21) Revenue and Expenses

Revenues (a)

Details of revenues by category of activity and geographical market are as follows:

	Thousands of Euros
	Domestic		Rest of Europe				Total
	2010	2009				2010	2010	2009
Finance income 236,070 193,709 10,439 2,988							- 246,509 196,697

(b) Foreign currency transactions

Details of income and expenses denominated in foreign currencies are as follows:

		Thousands of Euros
	2010	2009
Income
Financial instruments	6,628	2,200
Finance income	6,628	2,200
Expenses
Financial instruments	(80,295)	(57,664)
Finance expenses	(80,295)	(57,664)
Net	(73,667)	(55,464)

The Company's main foreign currency transactions are carried out in US Dollars and Polish Zlotys.

Employee benefits expense (c)

Details of employee benefits expense are as follows:

	Thousands of Euros
	2010	2009
Employee benefits expense
Social Security payable by the Company	રેતે રહે જિલ્લાના એક એવા દિવેલા દિવેલી તાલુકામાં આવેલું એક ગામનાં લોકોનો મુખ્ય વ્યવસાય ખેતી ખેતી કરવામાં આવેલું એક ગામનાં મુખ્યત્વે ખાતે ખાતે ખેતી કરવામાં આવેલું એક ગામન	356
Other employee benefits expenses	461	415
	1,052	771

Notes to the Annual Accounts

External services (d)

Details of external services are as follows:

		Thousands of Euros
	2010	2009
Leases	464	ਦੇ ਤੇ ਤੇ
Royalties	1,500	1,500
Independent professional services	2,963	3,548
Advertising and publicity	1.457	1.145
Other services	9.494	7,955
	15.878	14,681

Leases mainly include the rental of the Company's offices. There are no noncancellable payments at 31 December 2010 and 2009.

• Other services primarily include management support, communications and maintenance expenses, as well as travel costs.
• At 31 December 2010 the Company has commitments to purchase external services amounting to Euros 4,979 thousand (Euros 3,191 thousand within one year, Euros 1,103 thousand in one to three years and Euros 685 thousand in three to five years).

(22) Employee Information

The average headcount of the Company in 2010 and 2009, distributed by category, is as follows.

		Number
	2010	2009
Management	ો ર	12
Senior technicians	37	24
Technicians	2
Administrative staff	4
	ડેવે	38

Notes to the Annual Accounts

At year end the distribution by gender of Company personnel and the members of the board of directors is as follows:

	Number		Number
	2010		2009
	Male	Female	Male	Female
Management	14	2	11	-
Senior technicians	31	] ୧	17	12
Technicians	1
Administrative staff	2	2
	48	21	30	ો ર

In 2010 and 2009, one of the sixteen members of the board of directors is female.

(23) Audit Fees

KPMG Auditores, S.L., the auditors of the annual accounts of the Company, and other individuals and companies related to the auditors as defined by Audit Law 19/1988 of 12 July 1988, have invoiced the Company the following net fees for professional services during the years ended 31 December 2010 and 2009:

			Thousands of Euros
			2010	2009
Audit services, individual and consolidated annual
accounts			141	141
			141	141

Audit services detailed in the above table include the total fees for services rendered in 2010 and 2009.

રો

EDP RENOVÁVEIS, S.A.

Notes to the Annual Accounts

Other companies related to KPMG International have invoiced the Company as follows:

	Thousands of Euros
	2010	2009
Audit-related services Audit services, consolidated annual accounts	235 તેર	30
	331	30

(24) Commitments

• At 31 December 2010 the Company has extended guarantees to suppliers of wind turbines on behalf of group companies totalling US Dollars 11 million (US Dollars 1.5 million in 2009).
• The Company has also deposited guarantees to financial institutions on behalf of group companies amounting to Euros 454 million (Euros 267 million in 2009), US Dollars 158 million (US Dollars 115 million in 2009).

The Directors of the Company do not expect any significant liabilities to arise from these guarantees.

(25) Events After the Balance Sheet Date

No events have occurred subsequent to year end that could affect these annual accounts.

Information Relating to Investments in Group Companies 31 December 2010

Appendix I
Page 1 of 22

								Miles de euros
									Beneficio neto
Subsidiaries Companies	Head Office	0/0 Direct	% Indirect	Auditor	Activity	Share Capital	Reserves	Other Accounts from Equity	Continued	Total	Total Equity
EDP RENEWABLES EUROPE, S.L.	Oviedo, Spain	100.00%		KPMG	Holding	30.000	135,111		(20,674)	(20,674)	144,437
					Wind farm installation
Generaciones Especiales I, S.L.	Spain		80.00%	KPMG	and assembly	28.562	168,524		740	740	197.826
Edpr Polska Sp.z.o.o.	Poland		100.00%	KPMG	Wind	109,395	3,796	(1,889)	(4.168)	(4,168)	109.023
Tarcan, B.V	Nether ands		00.00%	KPMG	Other Activities	20	4.630		2,008	2,008	6.658
Greenwind, S.A.	Belgium		70.00%	KPMG	Wind energy production	24.924	(81)		1,947	1,947	26,790
Neo Energia Aragón, S.L.	Spain		100.00%	Nol audited	Wind energy production	10	(1)				9
Neo Energias de Occidente Catalunya, S.L.	Spain		100.00%	Not andiled	Wind energy production	10	(910)		(406)	(406)	(1,306)
Agrupación Eólica, S L U	Spain		100.00%	K PMG	Other Activities	650	32,726		1,209	1,209	34,585
EDP Renovaveis Portugal. S.A.	Spain		100 00%	KPMG	Wind energy production	7,500	4,120		33,908	33,908	45,528
Ceasa Promociones Eólicos	Spain		100.00%	KPMG	Wind energy production	1,205	3.866		812	812	5,883
EDP Renewables France. S.A.S.	France		100.00%	KPMG	Holding	48.527	(6,062)		(4,507)	(4,507)	37,958
EDP Renewables Romania, S R.L.	Rumaria		85.00%	KPMG	Wind energy production	6.722	(905)		(1,088)	(1.088)	4,729
Cernavoda Power, S.R.L.	Rumania		85.00%	KPMG	Wind energy production	9,460	(799)		(2,193)	(2.193)	6.468
EDP Renewables Italia, S.R.L.	Italy		85,00%	Not audited	Wind energy production	19,555			(1,180)	(1,180)	18,375
EDPR Uk Lid	UK		100.00%	Not audited	Wind energy production	116			(743)	(743)	(627)
Desarrollos Eólicos de Galicia, S.A.	Coruña, Spain		80.00%	KPMG	Wind energy production	6. 130	3,608		1,044	1,044	10.782
Desarrollos Eolicos de Tarifa, S.A U	Scyilla, Spain		80.00%	KPMG	Wind energy production	5.800	2,201		1 953	1,953	9.954
Desarrollos Eólicos de Conne. S.A.	Sevilla, Spain		80.00%	KPMG	Wind energy production	3.666	3,784		1.329	1,329	8.779
Desarrollos Eólicos Buenavista, S.A.U	Sevilla, Spain		80.00%	KPMG	Wind energy production	1.712	1,527		803	803	4,042
Desarrollos Eólicos de Lugo, S.A.U.	Coruña, Spain		80.00%	KPMG	Wind energy production	7.761	5,022	(1,246)	4,834	4,834	17,617
Desarrollos Eólicos de Raboscra, S.A.	Zaragoza, Spain		76.00%	KPMG	Wind energy production	7,561	2,032	(542)	2,569	2,569	12,162
Desarrollos Eólicos Almarchal S.A.U.	Sevilla, Spain		80.00%	KPMG	Wind energy production	2,061	1.667	(399)	686	686	4,414
Desarrollos Eólicos Dumbría S.A.U.	Coruña, Spain		80.00%	KPMG	Wind energy production	61	10.375		4.257	4,257	14,693
Parque Eolico Santa Quiteria, S.L.	Zaragoza. Spain		46.66%	KPMG	Wind energy production	63	1.263	(292)	2.567	2.567	13.893
Folica La Janda, SL	Madrid, Spain		80.00%	KPMG	Wind energy production	2,050	1,108		1,441	1,441	4.599
Eólica Guadalteba, S.L.	Sevilla, Spain		80.00%	KPMG	Wind energy production	1.460	790		5,162	5,162	7.412
Eólica Muxia. S.L.U.	Scvilla, Spain		80.00%	KPMG	Wind energy production	10	(1)		(2)	(2)	7

This appendix forms an integral part of note 8.

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Information Relating to Investments in Group Companies

Appendix I Pagc 2 of 22 C

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31 December 2010

						IY LIGH UC CUILUS
									Beneficio neto
		0/0	0/0			Share		Other Accounts from			Total
Subsidiaries Companies	Head Office	Direct	Indirect	Auditor	Activity	Capital	Reserves	Equity	Continued	l'otal	Equity
Eolica Fontesilva, S.L.U.	Sevilla, Spain		80 00%	KPMG	Wind energy production	470	(1)		(1,643)	(1.643)	(1,174)
Eneroliva, S.A.U.	Sevilla. Spain		80.00%	Not audited	Wind energy production	301	(7)				294
Eclica Curiscao Pumar, S.A.U.	Madrid. Spain		80.00%	KPMG	Wind energy production	60	14		718	718	793
Parque Eólico Altos del Voltoya S.A.	Madrid. Spain		48 80%	KPMG	Wind energy production	7.813	4,552	(550)	2.114	2.114	14.479
Sierra de la Peña, S.A.	Madrid. Spain		6792%	KPMG	Wind energy production	3.294	4,028	(1,266)	1.726	1.726	9,048
Eolica Arlanzon S.A.	Madrid, Spain		62.00%	KPMG	Wind energy production	4,509	3,547	(438)	1,878	1.878	diala
Eolica Campollano S.A.	Madrid, Spain		60.00%	KPMG	Wind energy production	6,560	15,115	(1.015)	4,737	4.737	26,412
Parque Eolico Belchite S.L.U.	Zaragoza, Spain		80.00%	KPMG	Wind energy production	3.600	3,220		2.228	2,228	તે તે તે તે તે પાન કે તે તે તે જે તે તે જે તે તે જે તે તે જે તે તે તે તે પા
Parque Eólico La Sotonera S.L.	Zaragoza, Spain Las Palmas.		51.88%	KPMG	Wind energy production Wind energy production	2.000	2,027	(302)	1,503	1,503	5,530
Siesa Renovables Cannrias S.L.	Spain		80 00%	Not audited		3	(3)
Parque Eólico Belmonte, S.A.	Madrid. Spain		23.92%	KPMG	Wind energy production	120	4,322		(69)	(69)	4,373
Eólica Don Quijoto, S.L.	Madrid, Spain		80 00%	KPMG	Wind energy production	3			1,802	1,802	1,806
Eólica Dulcinca, S.L.	Madrıd, Spain		80.00%	KPMG	Wind energy production	10	172		692	લ્તેડ	874
Eólica Sierra de Avila, S.L.	Madrid, Spain		71.99%	KPMG	Wind energy production	10			(1.656)	(1,656)	(1,646)
Eólica de Radona, S.L.U.	Madrid, Spain		80.00%	KPMG	Wind energy production	6.888	(104)		(1,114)	(1.114)	5.670
Eolica Alfoz, S.L.	Madrid, Spain		67 98%	KPMG	Wind chergy production	10			(1.185)	(1.185)	(1.175)
Eolica La Navica, SL	Madrid, Spain		80.00%	KPMG	Wind energy production	10	1.311		996	તેત્વર	2.317
Investigación y desarrollo de Energías Renovables (Ider), S.L.	León, Spain		47.67%	KPMG	Wiud cnergy production	15,718	(4.990)		(2,424)	(2.424)	8.304
Rasacal Cogeneración. S.A.	Madríd. Spain		48.00%	Not audited	Cogencration	60	(476)
Hidroelectrica Fuenteliermosa, S.L.	Oviedo, Spain		80.00%	Not audited	Minihydraulic	77	184		13	13	(416) 274
Hidroclócinca Gormaz S.A.	Salamanca, Spain		60.00%	Not audited	Minilydraulic	el	(116)		(30)	(30)	(85
Hidroclócinea del Rumblar, S.L.	Madrid. Spain		64.00%	Not andited	Minilydraulic	277	(202)		170	170	245
SINAE Inversiones Eólicas, S.A.	Madrid. Spain		80.00%	KPMG	Wind energy production	6.010	25,540		10.193	10.193	41.743
Parques Eólicos del Cantábrico, S.A.	Oviedo, Span		80.00%	KPMG	Wind energy production	9,080	15,736	(634)	1,352	1.352	26.168
Industrius Medioambicntales Rio Carrión,S.A.	Madrid, Spain		72.00%	Not andited	Waste	(ਮੇ	(610)				(250)
Tratamientos Mediambientasles del Norte, S.A	Madrid, Spain		64.00%	Not audited	Waste	60			(1)	(1)	16
Sotromal, S.A.	Soria, Spain		72.00%	Not audited	Wastc	451	(43) (289)				162
Renovables Castilla La Mancha, S.A.	Madrid, Spain		72.00%	KPMG	Wind energy production	60	1,163		726	726	1. તેનતે

This appendix forms an integral part of note 8.

Information Relating to Investments in Group Companies

Appendix I Pagc 3 of 22

31 December 2010

						اراليج de euros
									Beneficio neto
Subsidiaries Companies	Head Office	0/0 Direct	0/0 Indireet	Auditor	Activity	Share Capital	Reserves	Other Accounts Irom Equity	Continued	lotal	Tota Equity
Eólica La Manchucla, S.A.	Albaccte, Spain		80.00%	KPMG	Wind chergy production	1,142	1.16		958	વેરેક	3,261
Desarrollos Eolicos, S.A.	Sevilla, Spain		80.00%	KPMG	Wind energy production	1.056	17.069		(1.152)	(1.152)	16.973
Desarrollos Eolicos Promoción. S.A.	Sevilla, Spain		80.00%	KPMG	Wind energy production	8.061	46.894		11.688	11,688	66.643
Ceprastir, A.I.E.	Oviedo, Spain		45.41%	Not audited	Minihydraulic	361	રેર		(4)	(4)	412
Vernco del ebro energía S.L.	Spain		80.00%	Not audited		188	3,918		740	740	4,846
Acampo Arias, SL	Spain		98.19%	KPMG	Wind energy production	3,314	(326)		(270)	(270)	2,718
SOCPE Sauvagcons, SARL	France		49.00%	KPMG	Wind energy production	-	(33)		(9)	(a)	(41)
SOCPE Lc Mcc, SARL	France		49.00%	KPMG	Wind energy production	1	(43)		23	23	(19)
SOCPE Potite Piccc. SARL	France		49.00%	KPMG Jean-Yves	Wind energy production Wind energy production	-	(76)		(33)	(33)	(108)
Plouvien S.A.S.	France		100.00%	Morissel		40	(1,613)		(188)	(188)	(1,761)
CE Patay, SAS	France		100.00%	KPMG	Wind energy production	1.640	1,410	(452)	770	770	3,820
Relax Wind Park III, Sp.z.o.o.	Poland		100.00%	Not audited	Wind energy production	100	(77)		(66)	(66)	(37)
Relax Wind Park 1, Sp.z.o.o.	Poland		96.40%	KPMG	Wind energy production	538	(652)	198	4,786	4,786	4.672
Relax Wind Park IV, Sp.z.o.o	Poland		21.00%	Not audited	Wind energy production	98	(116)		2	2	(16)
Relax Wind Park II, Sp.z.o.o.	Poland		51.00%	Not audited	Wind energy production	=	(40)		(17)	(17)	ਟੇ ਕੇ
C.E.Renovables alternativa su	Spain		100.00%	Not audited	Wind energy production	86	(2)				84
CIA.E d enrgias renov alternativas sau.2	Spain		100.00%	Not audited	Wind energy production	69	(14)				રે રે
Eolica. Garcimunoz SL	Spain		80.00%	Not audited	Wind energy prodaction	10					12
Compañía Eólica Campo de Borja, SA	Spain		75.83%	KPMG	Wind energy production	858	691		158	158	1,707
Desarrollos Catalanes del Viento, SL	Spain		60.00%	KPMG	Wind energy production	5,993	15.517		256	256	21.766
Iberia Aprovechamientos Eólicos, SAU	Spain		100.00%	KPMG	Wind energy production	1.919	22		153	153	2,094
Molino de Caragüelles, S.L.	Spain		80.00%	KPMG	Wind energy production	180	182		હત	64	426
Neomai Inversiones SICAV. S.A.	Spain		100.00%	PwC	Other Activities	33.358	6,499		591	રેતા	40.448
Parque Eolico Plana de Artajona, SLU	Spain		100.00%	KPMG	Wind energy production	12	(3)				ல்
Parque Eólico Los Cantalcs, SLU	Spain		100.00%	KPMG	Wind energy production	1.963	1,130		1,585	ા રંજર્સર	4.678
Parque Eólico Montes de Castejóu, S.L.	Spain		100.00%	KPMG	Wind energy production	12	(3)				ਰੇ
Parques de Generación Eólica, SL	Spain		60.00%	KPMG	Wind energy production	1,924	3.133	(565)	ર્ભ્ડરે	653	5.710
CE Saint Bemabe, SAS	France		100.00%	KPMG	Wind energy production	1.600	રેણા	(501)	534	534	2,695
CE Segur, SAS	France		100.00%	KPMG	Wind energy production	1.615	632	(507)	658	658	2,905

This appendix forms an integral part of note 8.

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Information Relating to Investments in Group Companies

Appendix l Page 4 of 22 .

0

31 December 2010

						Miles de eurus
									Beneficio neto
Subsidiaries Companies	Head Office	0/0 Direet	% Indirect	Auditor	Activity	Share Capital	Reserves	Other Accounts from Equity	Continued	Total	Total Equity
Eolienne D'Etalondes, SARI	France		100.00%	Not audited	Wind energy production	]	(28)		(4)	(4)	(31)
Eolienne de Saugucuse, SARL	France		100.00%	Not audited	Wind energy production		(27)		(7)	(7)	(33)
Parc Eolien D'Ardennes	France		100.00%	Not audited	Wind energy production		(123)		(19)	(19)	(141)
Eolienne des Bocages, SARL	France		100.00%	Not audited	Wind energy production		(28)				(27)
Pare Eolien des Longs Champs, SARL	France		100.00%	Not audited	Wind energy production	1	(રેઝ)		(2)	(2)	(70)
Parc Eolien de Mancheville, SARL	France		100.00%	Not audited	Wind energy production	1	(40)		(2)	(2)	(41)
Parc Eolien de Roman, SARL	France		100.00%	Not audited	Wind energy production	1	(102)		(13)	(13)	(114)
Parc Eolien des Vatines, SAS	France		100.00%	Not and ted	Wind energy production	37	(1,181)	(600)	(36)	(36)	(1,180)
Parc Eolien de La Hetroye, SAS	France		100.00%	Not audited	Wind energy production	37	(28)		(4)	(4)	5
Eolienne de Callengeville, SAS	France		100.00%	Not audited	Wind energy production	37	(20)		(5)	(5)	12
Parc Eolien de Varimpre, SAS	France		100,00%	Not audited	Wind energy production	37	(983)	(678)	ਕ ਦੇ	45	901
Parc Eolien du Clos Bataille, SAS	France		100.00%	Not audited	Wind energy production	37	(704)	(527)	(92)	(92)	759
Eólica de Serra das Alturas.S.A	Portugal		50.1 (19%	KPMG	Wind energy production	50	1,842		664	664	2,556
Malhadizes- Energía Eólica, SA	Portugal		100.00%	KPMG	Wind energy production	50	100		399	3 ਰੇਰੇ	248
Eólica de Montenegrelo, LDA	Portugal		50. 0%	KPMG	Wind energy production	50	3,532		। '२।उ	1,513	5,095
Eólica da Alagoa SA	Portugal		રેતે જેવે જેવી જ	PuC	Wind energy production	50	1,729		1,026	1,026	2,805
Aplica. Indust de Energias limpias S.L. Cia Productora de energia para consumo	Spain		36.40%	Not audited	Wind energy production Wind energy production	131	9(12		334	334	1,367
interno S.I	Spam		12.00%	Not audited		468	4,600		2,411	2,411	7,479
Desarrollo Eólico del Valle del Ebro	Spam		12.00%	Not audited	Wind energy production	(0	(89)		(23)	(23)	(52)
Energi E2 Renovalbles Aragon S.1	Spain		12,00%	Not auditod	Wind energy production	240	1.708		2,429	2,429	4,377
Sincrgia Aragouesa S.L. Aprofitament D'Energies Renovables de la	Spain		32.00%	Not audited	Wind energy production Wind energy production	6	(34)		(6)	(6)	(34)
Tierra Alta S.A	Spain		48 69%	Not audited		1,994	(546)		(232)	(232)	1,216
Bon Vent de L Ebre S.L.U	Spain		100.00%	Not audited	Wind energy production	90	(ਤੇ)				ર રે
Parc Eólic Coll de la Garganta S.L	Spain		100.00%	Not audited	Wind energy production	1.693					1,693
Parc Eólic Serra Voltorera S.I	Spain		100.00%	Not audited	Wind energy production	1,283			(534)	(534)	749
Elektrownia Wiatrowa Kresy I sp zoo	Poland		100.00%	Not andiled	Wind energy production	18	(12)		(22)	(52)	(46)
Moray Offshore renewables limited Contrale Eolienne Canct-Pont de Salaras	UK		75.00%	Not audited	Wind energy production Wind energy production				158	158	158
S.A S	rance		00.00%	KPMG		125	(164)	(486)	317	317	27

This appendix forms an integral part of note 8.

edp renovaveis, s.a.

Information Relating to Investments in Group Companies

Appendix I Page 5 of 22

31 December 2010

								Miles de curos
									Beneficio nelo
Subsidiaries Companies	Head Office	0/0 Direct	0/0 Indirect	Auditor	Activity	Share Capital	Rescrics	Other Accounts Trom Equity	Continued	Total	Total Equity
Centrale Eolienne de Gueltas Noyal -Pontiv					Wind energy production
v S.A.S	France		100.00%	KPMG		2.261	1.353	16	494	404	4.108
Centrale Eolienne Neo Truc de L'Homme					Wind energy production
S.A.S	France		100.00%	Not audited		38	(ਰੇ)		(2)	(2)	27
Vallec de Moulin SARL	France		100.00%	Not audited	Wind energy production	-	(17)		(269)	(269)	(285)
Mardelle SARL	France		100.00%	Not audited	Wind energy production	1	(5)		(199)	(199)	(203)
Quinze Mines SARL	France		100.00%	Not audited	Wind energy production	-	(19)		(330)	(330)	(348)
Desarrollos Eólicos de Teruel SL	Spain		40.80%	Not audited	Wind energy production	60	(79)		79	79	60
Par Eólic de Coll de Moro S.L.	Spain		60.00%	Nol. audited	Wind energy production	ﺗﺮ	5				8
Par Eólic de Torre Madrina S.L.	Spain		60.00%	Nol audited	Wind energy production	3	5				8
Parc Eolic de Vila ba dels Ares S.L.	Spain		60.00%	Not audited	Wind energy production	3			682	685	685
Parc Eolic Molinars S.L.	Spain		54.00%	Not audited	Wind energy production	3					3
Bon Vent de Vilalba, SL	Spain		100.00%	Not audited	Wind energy production	3,600	(719)		(224)	(224)	2,657
Bon Vent de Corbera, SL	Spain		100.00%	Not audited	Wind energy production	3,330	(4)		(2,617)	(2,617)	709
Farma wiatrowa Bodzanow Sp.z.o.o	Poland		100.00%	Not audited	Wind energy production	65	(4)		(40)	(40)	21
Farma wiatrowa Starozbery Sp.z.o.o	Poland		100.00%	Not audited	Wind energy production	117	(5)		(। 2)	(12)	97
Farma wiatrowa Wyszogrod Sp.2.0.0	Poland		100.00%	Not audited	Wind energy production	। ୧୧	(4)		(16)	(16)	145
Rowy-Karpacka mala Energetyka,sp.z.o.o	Poland		85.00%	Not audited	Wind energy production	13	(8)		(7)	(7)	(2)
Repano wind S.R.L.	taly		85.00%	Not audited	Wind energy production	162	(8)		(9)	(a)	145
Re plus - Societu a Responsabilita 'limitadu	Italy		68.0000	Not audited	Wind energy production	100	1,073		(60)	(60)	1,113
Telfford Offsorc Windfarm limited	UK		75.00%	Not audited	Wind energy production	1
Maccoll offshore windfarm limited	UK		75.009%	Not audited	Wind energy production	l
Stevenson offshore windfarma limited	UK		75.00%	Not audited	Wind energy production	1
Parc Eolien des Bocages Sarl	France		100.00%	Not audited	Wind energy production	1	(162)				(18))
Santa quilcria Energia S.L.U	Spain		80.00%	Not audited	Wind energy productiun	3	398		91	ਰੇ।	492
HORIZON WIND ENERGY LLC	Texas	100.00%		KPMG	Holding	3,094,936	(100,529)		22,350	22,350	2,949,706
Wind Turbine Prometheus, LP	California		100.00%	KPMG	Wind energy production	4	(4)
Lost Lakes Wind Farm LLC	Miunesota		100,00%	KPMG	Wind energy production	151,317	(149)		6.579	6,579	138,010
Quilt Block Wind Farm, LLC	Minnesota		100,00%	KPMG	Wind energy production	3,085	(14)				3.072

This appendix forms an integral part of note 8.

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						Miles de euros
									Beneficio neto
								Other
								Accounts
	Head Office	%	0/0			Share		from			Total
Subsidiaries Companies		Direct	Indirect	Auditor	Activity	Capital	Reserves	Equity	Continued	lotal	Equity
Cloud County Wind Fann. LLC	Kansas	-	100.00%	KPMG	Wind energy production	242.81 I	2,099		1.208	1.208	242,494
Whitestone Wind Porchasing, LLC	Texas		100,00%	KPMG	Wind energy production	1,824	(775)		41	41	668
Blue Canyon Windpower II LLC	Oklahoma		100,00%	KPMG	Wind energy production	125.109	7.929		708	708	134,453
Blue Canyon Windpower V. LLC	Oklahoma		100.00%	KPMG	Wind energy production	138,567	રેરે I		3.671	3.671	146.460
Horizon Wind Energy International	Texas		100.00%	KPMG	Wind energy production	4,465	192		4	4	4.664
Pioneer Prairic Wind Farm I, LLC	lowa		100,00%	KPMG	Wind energy production	447,222	(11.318)	8.396	5,133	5.133	434.03
Sagebrush Power Partners, LLC	Washiugton		100.00%	KPMG	Wind energy production	152,574	(28)		779	779	150.988
Tolocasel Wind Power Partners, LLC	Oregon		100,00%	KPMG	Wind energy production	101,635	9,285	345.000	4.188	4.188	119.641
High Trail Wind Farm, LLC	Illionois		100.00%	KPMG	Wind energy production	292,612	6.132		2,602	2.602	293,540
Marble River, LLC	New York		100,00%	KPMG	Wind energy production	45.621	(123)		=	-	45.476
Rail Splitter	Illionois		100.00%	KPMG	Wind energy production	177,974	(1,605)		6.036	6.036	164,297
Blackstone Wind Farm, LLC	llionois		100.00%	KPMG	Wind energy production	116,763	(1.025)		3,047	3.047	109,644
Aroostook Wind Energy LLC	Maine		100,00%	KPMG	Wind energy production	8.974	(79)			3	8.889
Jericho Rise Wind Farm LLC	New York		100.00%	KPMG	Wind cuergy production	4.058	(32)		2	2	4.022
Madison Wiudpower LLC	New York		1 00.00%	KPMG	Wind energy production	7.958	(1.197)		1.049	1.049	4,664
Mesquite Wind, LLC	Texas		100,00%	KPMG	Wind energy production	194,125	14.909		2,298	2,298	213,631
Martinsdale Wind Farm LLC	Colorado		100.00%	KPMG	Wind energy production	3,257	(5)		2,000	2,000	3,248
Post Oak Wind、LLC	Texas		100.00%	KPMG	Wind energy production	219,690	11,236		16,234	16,234	263,394
BC2 Maple Ridge Wind LLC	Texas		100.00%	KPMG	Wind energy production	295,123	1,600	8,130	1,024	1.024	306,901
High Prairic Wind Farm II, LLC	Minnesota		100.00%	KPMG	Wind energy production	115,020	(81)	475,000	1,154	1,154	113,106
Arlington Wind Power Project LLC	Oregon		100,00%	KPMG	Wind energy production	136,660	2.451		235	235	138,641
Signal Hil! Wind Power Project LI.C.	Colorado		100,00%	KPMG	Wind energy production	1	(2)				2,000
Tumbleweed Wind Power Project LLC	Colorado		100.00%	KPMG	Wind energy production	3	(3)				0,000
Old Trail Wind Farm, LLC	Illionois		100,00%	KPMG	Wind energy production	308,103	(5,821)	2,724	3.101	3.101	298,804
Stinson Mills Wind Farm, LLC	Colorado		100,00%	KPMG	Wind energy production	2,291	(73)		2	2	2,214
OPQ Property LLC	Illionois		100,00%	KPMG	Wind energy production		да		5	5	108,000
Meadow Lake Wind Farm, LLC	Indiana		100,00%	KPMG	Wind energy production	221,086	(1,478)		4,072	4,072	211,464
Wheatfield Wind Power Project, LLC	Oregon		100,00%	KPMG	Wind energy production	76,248	3,257		4,142	4,142	87,789
2007 Vento I, LLC	Texas		100,00%	KPMG	Wind energy production	858,893	2,572		134	134	861,734
2007 Vento II, LLC	Texas		100,00%	KPMG	Wind energy production	754,698	(1,468)		800	800	751,611

This appendix forms an integral part of note 8.

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Appendix l Page 7 of 22

							Miles de euros
									Beneficio neto
		0/0	0/0			Share		Other Accounts from			Total
Subsidiaries Companies	Head Office	Direct	Indirect	Auditor	Activity	Capital	Reserves	Equity	Continued	Total	Equity
2008 Vento III. LLC	Texas		100,00%	KPMG	Wind energy production	835,067	(670)		570	570	833,258
Horizon Wind Ventures I LLC	Texas		100,00%	KPMG	Wind energy production	1,092,113	27,304		18.113	18.113	1.155.642
Houzon Wind Ventures II, LLC	Texas		100.00%	KPMG	Wind energy production	11:15:404	(610)		1.490	1.490	108.275
Horizon Wind Ventures III, LLC	Texas		100,00%	KPMG	Wind cuergy production	58,686	(10)		રેરેમ	556	57.563
Clinton County Wind Farm, LLC	New York		100,00%	KPMG	Wind energy production	45,664	(5)				45.658
BC2 Maple Ridge Holdings LLC	Texas		100,000	Not audited	Wind energy production	295.123	1,600	8.130	1,024	1.024	306,901
Cloud West Wind Project, LLC	Texas		100,00%	Not audited	Wind energy production	242,811	2,099		1,208	1,208	242,494
Five-Spot, LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Chocolate Bayou I LLC	Texas		100,00%	Not audited	Wind energy production
Alabamu Ledge Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
Antolope Ridge Wind Power Project LLC	Texas		100,00%	Not audited	Wind energy production	7,901				1	7,900
Arkwright Summit Wind Farm LLC	Texas		100.00%	Not audited	Wind energy production
Ashford Wind Fann LLC	Texas		100.00%	Not audited	Wind energy production
Athena-Weston Wind Power Project LLC	Texas		100.00%	Not audited	Wind energy production
Black Prairie Wind Farm LLC	Texas		100,00%	KPMG	Wind energy production	3,803					3.802
Binckstone Wind Farm II LLC	Texas		100,00%	KPMG	Wind energy production	87,404	(1)		261,000	261,000	86,880
Blackstone Wind Farm III LLC	Texas		100,00%	Not audited	Wind energy production	2,756			7	7	2.741
Blackstone Wind Farm IV LLC	Texas		100.00%	Not audited	Wind energy production
Blackstone Wind Farm V LLC	Texas		100.00%	Not audited	Wind energy production
Bluc Canyon Windpower III LLC	Texas		100.00%	Not audited	Wind energy production
Bluc Canyon Windpower IV LLC	Texas		100.00%	Not andited	Wind energy production
Bluc Canyon Windpower VI LLC	Texas		100.00%	Not andred	Wind energy production	1,732					1,732
Broudlands Wind Farm II LLC	Texas		100.00%	Not audited	Wind energy production
Broadlands Wind Farm III LLC	Texas		100,00%	Not uudited	Wind energy production
Broadlands Wind Farm LLC	Texas		100.00%	Not audited	Wind energy production
Chateaugay River Wind Fann LLC	Texas		100,00%	Not audited	Wind energy production
Cropscy Ridge Wind Farm LLC	Texas		100,000%	Not andited	Wind energy production
Crossing Trails Wind, Power Project LLC	Texas		100,00%	Not audited	Wind energy production
Dairy Hills Wind Farm LLC	Texns		100,00%	Not audited	Wind energy production
Dinmond Power Partners LLC	Texas		100,00%	Not audited	Wind energy production

This appendix forms an integral part of note 8.

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						ATICS CE CULOS
									Beneficio neto
		0/0	0/0			Share		Other Accounts from			Total
Subsidiaries Companies	Head Office	Direct	Indirect	Auditor	Activity	Capital	Reserves	Equity	Continued	Total	Equity
Ford Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
Gulf Coast Windpower Management	Texas				Wind energy production
Company, LLC Rising Tree Wind Farm LLC	Texas		100,00%	Not audited Not audited	Wind energy production
Horizon Wind Energy Northwest VII LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Northwest X LLC	Texas		100,00% 100,00%	Not audited	Wind energy production
Horizon Wind Energy Northwest XI LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Panhandle I LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Southwest I LLC	lexas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Southwest II LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Southwest III LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Southwest IV LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Valley I LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind MREC lowa Parmers LLC	lexas		100.00%	Not auducd	Wind cucrgy production
Horizon Wind, Freeport Windpower I LLC	Texas		100,00%	Not nudited	Wind cuergy production
Juniper Wind Power Partners, LLC	lexas		100,00%	Not audited	Wind energy production
Lexington Chenoa Wind Farm LLC	Texas		100.00%	Not audited	Wind energy production	5,506					5.505
Machias Wiud Farm LLC	Texas		100.00%	Not audited	Wind energy prodaction
Meadow Lake Wind Farm II LLC	Texas		100.00%	KPMG	Wind energy production	152,363	(1)		1,254	1.254	149.854
New Trail Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
North Slope Wind Farm LLC	licxas		100,00%	Not audited	Wind energy production
Number Nine Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
Pacific Southwest Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
Pioncer Prairie Wind Farm II LI.C.	Texas		100,00%	Not audited	Wind energy production
Baffalo Bluff Wind Farm LLC	Texas		100,00%	Not nudited	Wind cnergy production
Saddleback Wind Power Project LLC	lexas		100,00%	KPMG	Wind energy production	1,020	(4)				1,016
Sardinia Windpower LLC	Texas		100,00%	Not audited	Wind energy production
Turtle Creck Wind Farm LLC	Texas		100.00%	Not audited	Wind energy production
Western Trail Wind Project I LLC	lexas		100.00%	Not audited	Wind energy production
Whistling Wind WJ Energy Center. LLC	Texas		100.00%	Not audited	Wind energy production

This appendix forms an integral part of note 8.

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Appendix l Page 9 of 22

31 December 2010

							Miles de euros
			0/0 Indirect	Auditor	Activity				Beneficio neto
Subsidiaries Companies	Head Office	0/0 Direct				Share Capital	Reserves	Other Accounts from Equity	Continued	Total	Total Equity
Simpson Ridge Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
Coos Curry Wind Power Project LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Midwest IX LLC	Texas		100,00%	Not audited	Wind energy production
Horizon Wind Energy Northwest I LLC	Texas		100,00%	Not audited	Wind energy production
Peterson Power Partners LLC	Texas		100,00%	Not audited	Wind energy production
Pioneer Prairie Interconnection LLC	Texas		100.00%	Not audited	Wind energy production
The Nook Wind Power Project LLC	Texas		100,00%	Not audited	Wind energy production
Tug Hill Windpower LLC	Texas		100,00%	Not andited	Wind energy production
Whiskey Ridge Power Partners LLC	Texas		100,00%	Not andited	Wind energy production
Wilson Creek Power Partners LLC	Texas		100,00%	Not andited	Wind energy production
WTP Management Company LLC	Texas		100.00%	Not audited	Wind energy production
Meadow Lake Wind Farm IV LLC	Indiana		100.00%	KPMG	Wind energy production	39,941			78	78	40.096
Meadow Lake Windfarm III LLC	Indiana		100.00%	KPMG	Wind energy production	49,311			40	40	49 231
2009 Vento IV, LLC	Texas		100.00%	KPMG	Wind energy production	178.160	(75)		80	80	177.926
2009 Vento V, LLC	Texas		100.00%	KPMG	Wind energy production	138.653	(6)		113	113	138.421
2009 Vento VI, LLC	Texas		100.00%	KPMG	Wind energy production	151.402	(75)		152	152	121.022
Horizon Wind Ventures VI, LLC	Texas		100.00%	KPMG	Wind energy production	84.892	(1)		1,716	1,716	81,458
Lexington Chenoa Wind Farm II LLC	Illinois		100,000%	KPMG	Wind energy production	210					210
Lexington Chenoa Wind Farm III LLC	Illinois		100,00%	KPMG	Wind energy production
East Klickitat Wind Power Project LLC	Washington		100.00%	KPMG	Wind energy production
Horizon Wind Energy Northwest IV LLC	Oregon		100,00%	KPMG	Wind energy production
Blue Canyon Wiud Power VII LLC	Oklahoma		100,00%	KPMG	Willd energy production
Horizon Wyoming Transmission LLC	Wyoming		100,00%	KPMG	Whad coergy production
AZ Solar LLC	Arizona		100.00%	KPMG	Wind energy production
Black Prairie Wind Farm II LLC	llınoıs		100,00%	KPMG	Wind energy production
Black Prairie Wind Farm III LLC	Illinois		100,00%	KPMG	Wind energy production
Paulding Wind Farm LLC	Ohio		100,00%	KPMG	Wind energy production	4,062					4,061
Paulding Wind Farm II LLC	Ohio		100,00%	KPMG	Wind energy production	8,242			5	5	8,233
Paulding Wind Farm III LLC	Ohio		100,00%	KPMG	Wind energy production
Simpson Ridge Wind Farm II LLC	Wyoming		100,00%	KPMG	Wind cnergy production

This appendix forms an integral part of note 8.

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						Miles de euros
	Head Office									Beneficio neto
Subsidiaries Companies		0/0 Direct	0/0 Indirect	Auditor	Activity	Share Capital	Reserves	Other Accounts Irom Equity	Continued	Total	Total Equilty
Simpson Ridge Wind Farm III LLC	Wyoming		100.00%	KPMG	Wind energy production
Simpson Ridge Wind Farm IV LLC	Wyoming		100,00%	KPMG	Wind energy production
Simpson Ridge Wind Farm V LLC	Wyoming		100,00%	KPMG	Wind cnergy production
Athena-Weston Wind Power Project II, LLC	Orcgon		100,00%	KPMG	Wind energy production
Mcadow Lake Wind Farm V. LLC	Indiana		100,00%	KPMG	Wind energy production	િતેર					696
Horizon Wind Ventures IB, LLC	Texas		100,00%	Not andited	Wind cnergy production	9,602	19.752		15,798	15.798	60,949
Horizon Wind Ventures IC, LLC	Texas		100,00%	Not audited	Wind energy production	5.016	(455)		6,385	6,385	17,331
Headwalers Wind Farm LLC	Indiana		100.00%	Not andited	Wind energy production
17th Star Wind Farm LLC	Ohio		100,00%	Not andited	Wind energy production
Rio Blanco Wind Fairn LLC	Texas		100,00%	Not andited	Wind energy production
Hidalgo Wind Farm LLC	Texas		100,00%	Not audited	Wind energy production
Stone Wind Power LLC	New York		100,00%	Not audited	Wind energy production
Franklin Wind Farm LLC	New York		100,00%	Not audited	Wind energy production
Waverly Wind Farm LLC	Kansas		100,00%	Not audited	Wind energy production	1,265					1,268
2010 Vento VII, LLC	Texas		100,00%	KPMG	Wind energy production	152,384			ા રેણ	156	152,073
2010 Vento VIII, LLC	Texas		100,00%	KPMG	Wind energy production	153,322			12	12	153.299
2010 Vento IX, LLC	Texas		100,00%	Not audited	Wind cnergy production
Horizon Wind Ventures VII, LLC	Texas		100,00%	Not audited	Wind cucrey production	89,808			ર્સા	રેશ	88,686
Horizon Wind Ventures VIII, LLC	Texas		100,00%	Not audited	Wind energy production	83,514			373	373	82,768
Horizon Wind Ventures IX. LLC	Texas		100,00%	Not audited	Wind energy production
EDP RENOVAVEIS BRASIL, S.A. Central Nacional de Energia Eólica. S.A.	Sao Paulo	55,00%		KPMG	Wind energy production	28,056	(407)		1,841	1.841	23,966
(Ccnacel)	Sao Paulo		55,00%	KPMG	Wind energy production	6.329	(79)		818	818	7.886-
Elebrás Projectos, Ltda	Sao Paulo		55,00%	Not audited	Wind energy production	733	(540)		292	297	390
EDP RENEWABLES CANADA, LTD	Canada	100,00%		Not audited	Wind energy production				101	101	202

This appendix forms an integral part of nute 8.

Information Relating to Investments in Group Companies 31 December 2010

Appendıx l Page 1 1 of 22

								Miles de euros
			0/1 Indireet	Auditor					Beueficio neto
Associate Companies	Head Office	0/0 Direct			Activity	Share Capital	Reserves	Other Accounts from Equity	Continued	Total	Total Equity
Aprofitament D'Energies Renovables de
I Ebrc S.l	Spain		18.97%	Not audited	Wind energy production	3,869	(366)				3,503
Hidroastur, S.A.	Oviedo, Spain		20.00%	Centum	Minihydraulic	4,808	2,091				6,899
Sodccoan, S.L.	Scvilla, Spain		40.00%	Not andited	Wind	6	(9)				(3
Biomasas del Pirinco, S.A.	Huesca, Spain		24.00%	Nut audited	Waste	455	(217)				238
Culityos Energéticos de Castilla. S.A.	Burgos, Spain		24.00%	Nut audited	Waste	300	(48)				252
Parque Eólico Sierra del Madero, S.A.	Soria, Spain Las Palmas de			33.60% Ernst & Young	Wind energy production Wind energy production	7.194	5,434		ે રેડિકેટ	3.23 રે	16,163
Desarrollos Encrgeticos Cananos, S.A.	Gran Canaria, Spain		39.92%	No1 auditor		4.29	5,836		,242	1.242	11,369
Solar Siglo XXI, S.A.	Ciudad Real, Spain		20.00%	Not auditod	Solar	80	(18)				63
Naturneo Energía, S.L.	Spain		49,00%	Not audited	Holding	3	(1)
Eólicas de Portugal,SA	Portugal		35.96%	Not audited	Wind energy production	25.248	18.836	(14,215)	5.917	5,917	50,001
Parque Eolico Belmonte. S.A.	Madrid, Spain		23.92%	KPMG	Wind energy production	120	4,322		(ed)	(69)	4,373

This appendix forms an integral part of note 8.

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Appendix 1 Page 12 of 22

31 December 2010

						Thousands of Euros
									Net profit/(loss)
Jointly controlled entities	Registered offices	direct	0/0 indirect	Auditor	Activity	Share capital	Reserves	Other equity itenis	Continued	Total	Total equity
Tebar Eolica, S.A.	Tebar Cuenca.				Wind energy production
	Spain		40.00%	Not audited		4,720	4.502	(4(H)	1.222	1,222	10.444
Evolución 2000, S.L.	Madrid, Spain		39 32%	KPMG	Wind energy production	118	12,779	(1,354)	3.048	3,048	15.945
Desarrollos Eolicos de Canarias, S.A.	Las Palmas,Spain		35.80%	KPMG	Wind energy production	4.291	5,836		1,242	1,242	11 369
Compañia Eolica Aragonesa S.A.	Spain		50.00%	De oitte	Wind energy production	6.701	68.188	(1,168)	12.722	12,722	87 61 1
Flat Rock Windpower LLC	New York		50.00%	E&Y	Wind energy production	195.636	(27,218)		(3.736)	(3,736)	(160,946)
Flat Rock Windpower II LLC	New York		50.00%	E&Y	Wind energy production	77.626	(10,017)		(2,207)	(2,207)	63,195

This appendix forms an integral part of note 8.

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Appendix I

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Information Relating to Investments in Group Companies

31 December 2009

						1 1 1 1 3 2 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
									Net profit/(loss)
	Registered offices	0% direct interes t	0/0 indirect interest	Auditor	Activity	Share capital	Reserves	Other equity items	Continuing operations	lotal	Total equity
Group companies		100,00%		KPMG	Holding company	0.000	166,521		(20.008)	(20.008)	176,513
NUEVAS ENERGIAS DE OCCIDENTE, S,L Ovicdo, Spain					Wind farm installation
Generaciones Especiales I, S,L.	Spain		80,00%	KPMG	and assembly	28.562	165,256		8.600	8,600	202,418
Neolica Polska, Sp.z,o,o,	Poland	-	100,00%	Unaudited	Wind energy production	121.228	(3,367)	1.097	6.229	6,229	125, 86
					Other economic
Tarcan, B.V	Holland	-	100,00%	KPMG	activities	20	(653)		5.283	5,283	4.650
Greenwind, S.A.,	Belgium		70.00%	Unandited	Wind energy production	24,924	(1,248)		1,166	1.166	24,843
Noo Energia Arugón, S.L.	Spain		100.00%	Unaudited	Wind energy production	10	(2)				9
Noo Energías de Occidente Catalunya.S,L,	Spain		100.00%	Unaudited	Wind energy production	10	(314)		(296)	(596)	(900)
Agrupacion Eólica, S.L.U	Spain		100,00%	KPMG	Other business acnvilles	650	32,769		1,682	1.682	35,101
Enemova, S,A,	Spain		100.00%	KPMG	Wind energy production	7.500	43,574	4.870	35,438	35,438	91,382
Ceasa Promociones Eólicos, S.L.U	Spain		100,00%	KPMG	Wind energy production	1,205	(1,152)		5,018	2,018	5,071
NEO Galia SAS	Frunce		100.00%	Unaudi1cd	Holding company	48,527	(1.476)		(4.587)	(4,587)	42,464
Renovatio Power	Romania		85.00%	Unaudited	Wind energy production		(412)	20	(217)	(217)	(910)
Cernavodu Power	Romania		85.00%	Unaudited	Wind energy production		(550)	27	(281)	(381)	(803)
Agrupación colica,S.L.	France		100,00%	KPMG	Holding company	900	42.328		18	18	43,246
	United				Holding company
Epr uk limited	Kingdom		100.00%	Unaudited		113					113
Desarrollos Eólicos de Galicia, S.A.	Coniña. Spain		80.00%	KPMG	Wind energy production	6.130	3.493	564	1,153	1.153	11.340
Desarrollos Eólicos de Tarifa, S.A.U	Scville, Spain		80.00%	KPMG	Wind energy production	5,800	2,023		1.778	1,778	9,600
Desarrollos Eólicos de Corme, S.A.	Seville. Spain		80.00%	KPMG	Wind energy production	3,666	3,107		1.677	1.677	8,450
Desarrollos Eólicos Buenavista, S,A,U	Seville, Spain		80.00%	KPMG	Wind energy production	1,712	1,527	રેકે I	687	687	4,457
Desarrollos Eólicos de Lugo. S.A.,U.	Coruña, Spain		80,00%	KPMG	Wind energy production	7.761	3,338	(1.293)	5,683	5,683	15,490
Desarrollos Eólicos de Raboscra, S.A.	Zaragoza, Spain		76,00%	KPMG	Wind energy production	7.561	1,787	(541)	2.455	2,455	11,261
Desarrollos Eólicos Almarchal S, A, U.	Seville, Spain		80,00%	KPMG	Wind energy production	2.061	1,178	(322)	490	490	3,406
Desarrollos Eclicos Dumbria S.A.U.	Coruña, Spain		80,00%	KPMG	Wind energy production	61	7.461		2.914	2.914	10,436
Parque Eólico Santa Quiteria, S,L,	Zaragoza, Spain		46,66%	KPMG	Wind energy production	63	9,968	(328)	2,051	2,051	1 1 ,7 54
Eólica La Janda, SL	Madrid, Spain		80,00%	Unauditod	Wind energy production	2.050	13		1,095	ા 092	3,158
Eólica Guadaltcba, S.L.	Seville, Spain		80,00%	Unaudited	Wind energy production	10	(1)		791	791	800
Edlica Muxia, S.L.U.	Seville, Spain		80,00%	KPMG	Wind energy production	10			(1)	(1)	ਹੈ
Eólica Fontcsilva, S.I.U.	Seville, Spain		80,00%	KPMG	Wind energy production	10			(1)	(1)	0
Encroliva, S.A.U.	Seville, Spain		80,00%	Unaudited	Wind energy production	301	(7)				294
Eólica Curiscao Pumar, S.A.U.	Madrid, Spain		80,00%a	KPMG	Wind energy production	60	13		2,271	2,271	2.345
Fólica La Bruula S.A.	Madrid. Spain		67.92%	KPMG	Wind energy production	3.294	3.098	(1.350)	2,429	2,429	7.471

This appendix forms an integral part of note 8.

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Information Relating to Investments in Group Companies

31 December 2009

Thousands of Euros Net profit/(loss) 0/0 direct 0/0 Other Registered interes indirect Share equity Continuing Total Group companies offices t interest Auditor Activity capital Reserves items operations Total equity Eólíca Arlanzón S,A, Madrid, Spain 62,00% KPMG Wind encrgy production 4,509 2,225 (527) 1.322 1.322 7,528 Eolicii Campollano S.A Madrid, Spain ፉስ ስለሚ KPMG Wind energy production ર રહ્યા 0 440 (1.799) 5.675 5 675 19.876 Parque Eólico Belchite S.L.U. Zaragoza, Spain 80,00% KPMG Wind energy production 3.600 3.220 1.532 1.532 8.352 Parque Eólico La Sotonera S,L. Zaragoza 51,88% KPMG 2,000 1.566 (247) 1.210 1,210 4,530 Wind energy production Sicsa Renovables Canarias S.L. Las Palma 80,00% Unaudıtod Wind cnorgy production 3 (3) Parque Eólico Belmonte, S.A. Madrid 23,92% KPMG Wind energy production 120 3,810 576 576 4.506 Eólica Don Quilotc. S.L. Madrid 80.00% KPMG Wind cnergy production 3 1 2.525 2.525 2,529 Eólica Dulcincu, S.L. Madríd 80,00% KPMG Wind energy production 10 171 1.002 1.002 1.183 Eòlica Sierra de Avila, S.L, Madrid KPMG 71,99% Wind energy production 10 10 Eólica de Radona, S.L.U, Madríd 80,00% KPMG Wind cnergy production 10 (104) (104) (94) Eolica Alfoz S.L. Madrid 67,98% KPMG Wind energy production 10 10 Eólica La Navica, SL Madríd 80.00% KPMG Wind energy production 10 1.170 852 852 2.033 Investigaci'on y desarrollo de Energias Wind energy production (2,476) Renovables (Ider), S.L., Loón, Spain 47,67% KPMG 15,718 (2,513) 10,728 (2,513) Unaudited Cogeneration: Rasacal Cogeneración, S.A. 48.00% Madrid Electricity production 60 (476) (416) Unaudited Mini-hydraulic cnergy Hidrocléctrica Fuentelierinosa, S,L, Ovicdo, Spain 80,00% production 77 184 2 8 8 271 Salamanca, Unaudi1cd Mini-hydraulic energy Hidrocléctrica Gormaz, S.A. 60.00% Spain nmdnetian 61 (96) (20) (20) (55) Madrid, Spain Unaudited Mini-hydraulic cnergy Hidroclóctrica del Rumblar, S.L., 64,00% production 276 (234) 33 33 75 Madrid, Spain Wind power: Wind farm SINAE Inversiones Eólicas, S.A. 80.00% KPMG development 6-010 7-826 17,871 17.871 31,707 Parques Eólicos del Cantábrico, S.A. Wind energy production Ovicdo, Spain 80,00% (839) KPMG 9.080 14.837 899 899 23.977 Industrias Medioambicntales Río Carrión.SA Madrıd, Spain 72,00% Unaudíted Wind energy production (550) 60 (610) Mndrid, Spain Tratamicatos Mediambientasles Unaodited del Norte, S.A. 64.00% Wastc 60 (43) 17 Unaudited Waste treatment and Sotromal, S.A. Soria, Spain 72,00% 451 (289) recycling 162 Ronovables Castilla La Mancha, S.A. Madrid, Spain 72,00% KPMG Wind encrgy production 60 761 402, ا 402, ا 2,223 Eólica La Manchueia, S.A. Albaccte, Spain 80.00% KPMG Wind energy production 1.142 944 1,217 1,217 3,303 Seville, Spain Wind power: Project Desanollos Eólicoas. S.A. 80.00% KPMG 1.056 18,125 development 16,550 519 519 Scrille, Spain Wind power: Project Deaarrollos Eólicos Promoción. S.A. 80.00% KPMG development 8 061 30.341 16.555 16.555 54,956

This appendix forms an integral part of note 8.

Appendix 1 Page 14 of 22

Appendix I
Page I S of 22

Informatiun Relating to Investments in Group Companies

31 December 2009

						Thousands of Euros
Group companies									Net profit/(loss)
	Registered offices	0/10 direct interes t	% indirect interest	Auditor	Activity	Share capital	Reserves	Other equity items	Continuing operations	Total	Total equity
				Unaudited	Mini-hydraulic energy
Ceprastur, A.I,E.	Ovicdo. Spain		45,40%		production	361	57		(3)	(3)	415
Valle del ebro Ingenieria y consultoria SL	Spain		80,00%	Unaudited	Wind energy production	188	3,799		833	833	4,821
Veinco energia Limpia S.L.	Spain		80,00%	Unaudited	Wind energy production	3	405		157	157	565
Acampo Arias, SL	Spain		98.19%	KPMG	Wind energy production	3,314			(326)	(326)	2,989
SOCPE Sauvagcons, SARL	France		49.00%	Unaudited	Wind energy production	1	(19)		(13)	(13)	(32)
SOCPE Le Moc, SARL	France		49.00%	KPMG	Wind energy production	1	(34)		(9)	(9)	(42)
SOCPE Petite Piece, SARL	France		49.00%	Unaudited	Wind energy production		(4)		(72)	(72)	(75)
Plouvien, S.A.S	France		100.00%	Unaudited	Wind energy production	40	(1,231)		(382)	(382)	(1,573)
CE Patay. SAS	France		100,00%	KPMG	Wind energy production	1,640	963	(405)	447	447	2,645
Relax Wind Park 111, Sp,z,0,0,	Poland		100,00%	Unaudited	Wind energy production	117	(20)	(16)	(54)	(54)	27
Relax Wind Park 1, Sp,z.o.o.	Poland		96.40%	KPMG	Wind energy production	રુજર	(406)	(40)	(260)	(260)	(110)
Relax Wind Park IV, Sp.z,0.0,	Po and		51,00%	Unaudited	Wind energy production	109	(188)	13	49	49	(18)
Relax Wind Park II, Sp,z,o,o,	Poland		51,00%	Unaudited	Wind energy production	123	(42)	(10)	(2)	(2)	લ્તે
C,E,Renovables alternativa slu	Spain		100,000%	Unaudited	Wind energy production	ક્ષ્ણ	(2)				84
CIA,E d enrgias renov alternativas sau,2	Spain		100,00%	Deloitte	Wind energy production	69	(14)				રેર
Eolica Garcinunoz SL	Spain		80.00%	Unaudited	Wind energy production	10					10
Compañia Eólica Campo de Borja, SA	Spain		75.83%	KPMG	Wind energy production	858	127		157	157	1.142
Desarrollos Catalancs del	Spain		60,00%	KPMG	Wind energy production	5,993	15.490		26	26	21,509
Iberia Aprovechamientos	Spain		100,00%	KPMG	Wind energy production	1,919	164		(142)	(142)	1,940
Molino de Caragüclles, S.L.	Spain Spain		80,00%	KPMG Price	Wind energy production	180	(33)		30	30	176
Neornai Inversiones			100,00%	Watcrliouse	Other business activities	33,358	5.144		1,355	1.355	39,857
Parque Eólico Plana de	Spain		100.00%	KPMG	Wind energy production	12	(3)				್ತಿ
Parque Eólico Los Cantales, SLU	Spain		100.00%	KPMG	Wind energy production	1,963	988		1,700	1,700	4.650
Parque Eólico Montes de Castejon, S,L,	Spain		100.00%	KPMG	Wind energy production	12	(3)				್ತಿ
Parques de Generación Eólica. SL	Spain		60.00%	KPMG	Wind energy production	1,924	763	(38)	411	411	3.059
CE Saint Bernabe, SAS	France		100.00%	KPMG	Wind energy production	1,600	417	(437)	144	144	1,724
CE Segur, SAS	France		100,00%	KPMG	Wind energy production	1,615	394	(442)	238	238	1,805
Eolienne des Bocages, SARI	France		100,00%	Unaudited	Wind energy production		(161)		(1)	(1)	(161)
Eolienne D'Etalondes, SARI	France		100,00%	Unaudited	Wind energy production	1	(26)		(2)	(2)	(27)
Eolienne de Saugueuse, SARL	France		100,00%	Unaudited	Wind energy production	-	(25)		(2)	(2)	(26)
Parc Eolicu D'Ardennes	France		100,00%	Unaudited	Wind energy production	1	(122)		(1)	(1)	(122)
Eolienne des Bocages, SARL	France		100,000%	Unaudited	Wind energy production	-	(27)		(1)	(1)	(27)
Parc Eolien des Longs Champs, SARL	France		100,00%	Unaudited	Wind energy production	-	(67)		(3)	(3)	(68)
Parc Eolien de Mancheville, SARL	France		100,00%	Unaudited	Wind energy production		(36)		(4)	(4)	(39)

This appendix forms an integral part uf note 8.

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Appendix 1 Page 16 of 22

1

Infonnation Relating to Investments in Group Companies

31 December 2009

						Thousands of Euros
									Net profit/(loss)
Group companies	Registered offices	0/0 direct interes t	0/0 indirect interest	Auditor	Activity	Share capital	Reserves	Other equity items	Continuiug operations	Total	Total equity
Parc Eolien de Roman, SARL	France		100.00%	Onaudited	Wind energy production		(તેર)		(7)	(7)	(101)
Parc Eolien des Vatines, SAS	France		100,00%	Unaudited	Wind energy production	37	(1,377)	(538)	196	ાં તેણ	(1.144)
Parc Eolien de La Helroye, SAS	France		100,00%	Unaudited	Wind energy production	37	(23)		(5)	(5)	9
Eolienne de Callengeville, SAS	France		100.00%	Unaudited	Wind energy production	37	(23)		3	3	17
Parc Eolien de Varimpre, SAS	France		ﺎ 00,00%	Unaudited	Wind energy production	37	(1,510)	(607)	527	527	(946)
Parc Eolien du Clos Batnille, SAS	France		100,00%	Unaudited	Wind energy production	37	(990)	(472)	286	286	(667)
Eòlica de Serra dus Alturas,S.A	Portugal		50,10%	KPMG	Wind energy production	50	1,176		668	668	1,894
Encraltius-Producao de Energia Elóctrica SA	Portugal		100,0000	KPMG	Wind energy production	] ,505	2,315	1.098	2.187	2.187	7.602
Malhadizes- Energia Eólica, SA	Portugal		100,00%	KPMG	Wind energy production	રે()	100		ા તેર	ાં જેર	345
Eólica de Montenegrelo. LDA	Portugal		50.10%	KPMG	Wind energy production	રે0	2,090		1.442	1.442	3.582
Eólica da Alagoa,SA	Portugal		રવે તેત્વજ	PRICE	Wind encrgy production	20	1,729	884	784	784	3,447
Aprofitament D'Energies Renovables de la					Wind energy production
Ticrra Alta S,A	Spain		48.69%	KPMG		1,994	(332)		(214)	(214)	1,448
Bon Vent de L'Ebre S., L.L.	Spain		100,00%	KPMG	Wind energy production	ರಿಗಿ	(32)				રે રે
Parc Eólic Coll de la Garganta S,L	Spain		100,00%	KPMG	Wind energy production	3					ﺮﺳﻪ
Pare Eólic Serra Voltorera S.l	Spain		100.00%	KPMG	Wind energy production	ﺴﺎ					3
Elektrownia Wiatrowa Kresy I sp zoo	Poland		100.00%	Unaudited	Wind energy production	20	(1)	(3)	(10)	( ( ( ( )	6
	Uniled			Onaudited	Wind energy production
Moray Offshore renewables limited	Kingdom		75.00%			113					113
Centrale Eolienae Canet -Pont de Salaras	France				Wind energy production
S,A,S			100.00%	KPMG		125	(157)	(397)	(7)	(7)	(435)
Centrale Eolienne de Gneltas Noyal -Pontiv	Frince				Wind energy production
y S.A.S			1 00%	KPMG		2.26	1,009	ਰ।	344	344	3.645
Centrale Eolienne Neo True de	France				Wind energy production
L Homine .S.A.S			1 (x) 00%	KPMG		38	(6)		(3)	(3)	24
Vallee de Moulin SARL	France		00.00%	Unaudited	Wind energy production	-	(3)		(13)	(13)	( 6)
Mardelle SARL	France		1 (x).00%	Unaudited	Wind energy production	-	(3)		(1)	(1)	(3)
Quinze Mines SARL	France		49.00%	Unaudited	Wind energy production		(3)		(15)	(। 2)	(17)
Desarrollos Eólicos de Teruel SL	Spain		40,80%	Unaudited	Wind energy production	60			(79)	(၂၈)	(19)
Par Eòlic de Coll de Moro S,L,	Spain		60.00%	KPMG	Wind energy production	3	5				8
Par Folic de Torre Madrina S,L,	Spain		60,00%	KPMG		3	4				7
Parc Eolic de Vilalba dels Arcs S.L.	Spain		60,00%	KPMG	Wind energy production Wind energy production	3					3
				KPMG		ﺮ ﺳ					3
Parc Eolic Molinars S,L,	Spain		54,00%		Wind energy production	90					(629)
Bon Vent de Vilalba, SL	Spam		100,00%	KPMG	Wind energy production	90	(4)		(715)	(715)
Bon Vent de Corbera, SL	Spain		00.0000	KPMG	Wind energy production		(4)				કેર
HORIZON WIND ENERGY LLC	l exas	100,00000		KPMG	Holding company	2,818,483	(61,306)	(42)	(31,938) (31,938)		2,693.259

This appendix forms an integral part of note 8.

1

Information Relating to Investments in Group Companies

31 December 2009

						Thousands of Euros
Group companies		0/0							Net profit/(loss)
	Registered offices	direct interes t	0/0 indirect interest	Auditor	Activity	Share capital	Reserves	Other equity itenıs	Continuing operations	Total	Tota equity
Wind Turbine Prometheus, LP	California	-	100,00%	KPMG	Wind energy production	(394)	(4)				(398)
Lost Lakes Wind Farm, LLC	Minnesota		100.00%	KPMG	Wind energy production	141,384	(67)		(71)	(71)	141,175
Durlington Wind Farm. LLC	Minnesola		100,00%	KPMG	Wind energy production		(ર)		(8)	(8)	(21)
Cloud County Wind Farm	Kansas		100,00%	KPMG	Wind energy production	242.459	97		1,850	ા 'જરેળ	246,256
Whitestone Wind Purchasing, LLC	Texas		100,00%	KPMG	Wind energy production		10.371		(1,090)	(11,090)	(11,809)
Blue Canyon Windpower II LLC	Oklahoma		100,00%	KPMG	Wind cucrgy production	123,259	5,524		1,831	1,831	132,445
Blue Canyon Windpower V. LLC	Oklahoma		100.00%	KPMG	Wind energy production	138.315	(18)		229	529	139,355
Horizon Wind Energy International	Texas		100,00%	KPMG	Wind energy production	3.951	180		(2)	(2)	4,127
Pioneer Prairie Wind Farm 1, LLC	lowa		100,00%	KPMG	Wind energy production	434.078	294	8.581	(11.092)	(11,092)	421,069
Sngebrush Power Partners, LLC	Washington	-	100,00%	KPMG	Wind energy production		(13)		(13)	(13)	(39)
Telocaset Wind Power Partners, LLC	Oregon		100,00%	KPMG	Wind energy production	102.383	4,756	338	3.856	3,856	115,189
High Trail Wind Farm, LLC	Illionois		100,00%	KPMG	Wind energy production	286,778	3,987		1,701	1,701	294 167
Marble River, LLC	New York		100,000%	KPMG	Wind energy production	12,961	(74)		(40)	(40)	12,807
Rail Splitter	Illionois		100,00%	KPMG	Wind energy production	175,031	(166)		(1,323)	(1.323)	172.219
Blackstone Wind Frim, LLC	Illionois		100,00%	KPMG	While cuergy production		(3)		(947)	(947)	(1.897)
Aroostook Wind Encrgy LLC	Mine		100,00%	KPMG	Wind energy production	873	(56)		(17)	(17)	783
Jericho Rise Wind Farm LLC	New York		100,00%	KPMG	Wind energy production	1.111	(24)		(6)	(6)	1.075
Madison Windpower LLC	New York		100.00%	KPMG	Wind energy production	7.057	(147)		(963)	(963)	4.984
Mesquite Wind, LLC	Texas		100,00%	KPMG	Wind energy production	187,692	7,105		6,724	6,724	208.245
Mnrtinsdalc Wind Farm LLC	Colorado		100.00%	KPMG	Wind energy production	2,219	(2)		(2)	(2)	2.213
Post Oak Wind, LLC	Texas		100.00%	KPMG	Wind energy production	214,542	5,044		5,377	5,377	230.340
BC Maple Ridge Wind LLC	Texas		100.00%	KPMG	Wind energy production
High Prairic Wind Farm II, LLC	Minnesola		100.00%	KPMG	Wind energy production	112,733	1,067	467	(1.142)	(1,142)	111,983
Arlington Wind Power Project LLC	Orcgon		100.00%	KPMG	Wind energy production	137.921	274		1.999	1	142,193
Signal Hill Wind Power Project LLC	Colorado		100,00%	KPMG	Wind energy production	(17)	(2)				(19)
Tumbleweed Wind Power Project LLC	Colorado		100,00%	KPMG	Wind cuergy production	(1)	(2)				(3)
Old Trail Wind Farm, LLC	Illinois		100,00%	KPMG	Wiud energy production	299,989	(2,431)	2.675	(2.969)	(2.969)	294,295
Stinson Mills Wind Farm, LLC	Colorado		100,00%	KPMG	Wind cnergy production	208	(66)		(2)	(2)	528
OPQ Property LLC	Illinois		100,00%	KPMG	Wind energy production	12	20		72	72	176
Mcadow Lake Wind Farm, LLC	Indiann		100,00%	KPMG	Wind energy production		(213)		(1,158)	(1.158)	(2,529)
Wheatfield Wind Power Project, LLC	Orcgon		100,00%	KPMG	Wind energy production		ર્ણ		3,956	2.956	5.977
007 Vento LLC	Icxas		100,00%	KPMG	Wind energy production	839,116	1.213		1,173	1.173	842,675
007 Vento II	Texas		1 (x0,00%	KPMG	Wind energy production	737,373	(631)		(731)	(731)	735,280
008 Vento III	Texas		100,00%	KPMG	Wind energy production	819,743			(623)	(622)	818.499
Horizon Wind Ventures I LLC	Texas	-	100.00%	KPMG	Wind energy production	1,224,616	10.049		15,276	15.276	1,265,217
Horizon Wind Ventures II, LLC	Texas		100,00%	KPMG	Wind energy production	2,294	7.260		11,060	11.060	31.674

This appendix forms an integral part of note 8.

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Appendix I
Page 17 of 22

Appendix l Page 18 of 22

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Information Relating to Investments in Group Companies

31 December 2009

						Thousands of Euros
									Net profit/(loss)
Group companies	Registered offices	1/2 direct interes t	0/ indireet interest	Auditor	Aetivity	Share capital	Reserves	Other equity ilems	Continuing operations	Total	Total equity
Horizon Wind Ventures III. LLC	Texas		100.00%	KPMG	Wind energy production	3,816			(422)	(422)	2,972
Clinton County Wind Farm, LLC	New York		100,00%	KPMG	Wind energy production	10,419	(5)				10.414
BC2 Maple Ridge Holdings LLC	Texas		100,00%	Unaudited	Wind energy production
Clond West Wind Project. LLC	Texas		100,00%	Unaudited	Wind energy production
Fivc-Spot, LLC	Texas		100,00%	Unaudited	Wind energy production
Horizon Wind Chocolate Bayou I LLC	lexas		100,00%	Unaudited	Wind energy production
Alabama Ledge Wind Farm LLC	1 cxas		100,00%	Unaudited	Wind energy production
Antelope Ridge Wind Power Project LLC	Texas		100,00%	Unaudined	Wind energy production
Arkwright Summit Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
Ashford Wind Farm LLC	Texas		100,000%	Unuvdited	Wind energy production
Athena-Weston Wind Power Project LLC	Texas		00.00%	Unaudiicd	Wind energy production
Black Prairie Wind Farm LLC	Texas		100.0000	KPMG	Wind energy production
Blackstouc Wind Farm II LLC	lexas		100.00%	KPMG	Wind energy production				(1)	(1)	(21
Blackstouc Wind Farn III LLC	Texas		100.00%	Unaudited	Wind energy production
Blackstone Wind Farm IV LLC	Texas		100.00%	Unaudited	Wind energy production
Blackstone Wind Farm V LLC	Icxas		100.00%	Unaudited	Wind energy production
Blue Cunyun Windpower III LLC	Texas		100.00%	Unaudited	Wind energy production
Blue Canyon Windpower IV LLC	Texas		100.00%	Unaudited	Wind energy production
Blue Canyon Windpower VI LLC	Texas		100.00%	Unaudited	Wind energy production
Broadlands Wind Farm II LLC	lexas		100.00%	Unaudited	Wind chergy production
Broadlands Wind Farm III LLC	Texas		100.00%	Unaudited	Wind energy production
Broadlands Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
Chateangay River Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
Cropscy Ridge Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
Crossing Trails Wind. Power Project LLC	lexas		100.00%	Unaudited	Wind chergy production
Dairy Hills Wind Farm LLC	SEXOF		100.00%	Unaudited	Wind energy production
Diamond Power Partners LLC	lexas		100,00%	Unaudited	Wind energy production
Ford Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
Freeport Windpower 1, LP	Texas		100.00%	Unaudited	Wind energy production
Gulf Coast Windpower Management				Unaudited	Wind energy production
Company, LLC	lexns		100.00%
Homestead Wind Farm LLC	I cxas		100,00%	Unaudited	Wind energy production
Horizon Wind Energy Northwest VII LLC	lexas		100.00%	Unaudited	Wind energy production
Horizon Wind Energy Northwest X LLC	lexas		100.00%	Unaudited	Wind energy production
Horizon Wind Energy Northwest XI LLC	l cxas		100,00%	Unaudited	Wind energy production
Horizon Wind Energy Panhandle I LLC	lexas		100.00%	Unaudited	Wind energy production

This appendix forms an integral part of note 8.

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Information Relating to Investments in Group Companies

31 December 2009

Appendix I Page 19 of 22

Thousands of Euros

									Net profit/(loss)
		0/0 direct	0/0					Other
	Registered	interes	indirect			Share		equity	Continuing		lota
Group companies	offices	1	interest	Auditor	Activity	capital	Reserves	items	operations	l otal	equity
Horizon Wind Energy Southwest I LLC	Texas		100,00%	Unaudited	Wind energy production
Horizon Wind Energy Southwest II LLC	Texas		100.00%	Unaudited	Wind energy production
Horizon Wind Energy Southwest III LLC	Texas		1 00,00%	Unaudited	Wind energy production
Honzon Wind Energy Southwest IV LLC	Texas		100.00%	Unaudited	Wind energy production
Horizon Wind Energy Valley I LLC	Texas		100,00%	Unaudited	Wind energy production
Horizon Wind MREC Towa Partners LLC	Texas		100.00%	Unaudited	Wind energy production
Horizon Wind, Freeport Windpower ] LLC	Texas		100.00%	Unaudited	Wind energy production
Juniper Wind Power Partners, LLC	Texas		100,00%	Unaudited	Wind energy production
Lexington Chenoa Wiud Fartn LLC	Texas		100,00%	Unaudited	Wind energy production
Machias Wind Frim LLC	Texas		100.00%	Unaudited	Wind energy production
Mcadow Lake Wind Farm II LLC	Texas		100,00%	KPMG	Wind energy production				(1)	(1)	(2)
New Trail Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
North Slope Wind Farm LLC	Texas		100,00%	Unaudited	Wind energy production
Number Nine Wind Farm LLC	Texas		100.00%	Unaudited	Wind energy production
Pacific Southwest Wind Farm LUC	Texas		100,00%	Unaudited	Wind energy production
Pioneer Prairie Wind Farm II LLC	Texas		100.00%	Unaudited	Wind energy production
Rim Rock Power Partners LLC	Texas		100,00%	Unaudited	Wind energy production
Saddleback Wind Power Project LLC	Texas		100,00%	KPMG	Wind energy production				(3)	(3)	(6)
Sardinja Windpower LLC	Texas		100,00%	Unnudited	Wind energy production
Turle Crock Wind Farm LLC	1 cxas		100,00%	Unaudited	Wind energy production
Western Trail Wind Project I LLC	Texas		100,00%	Unaudited	Wind energy production
Whistling Wind WI Energy Center, LLC	Texas		100,00%	Unaudited	Wind energy production
Sunpson Ridge Wind Farm LLC	Texas		100,00%	ا	Wind energy production
Coos Curry Wind Power Project LLC	SEXS S		[ 00], 00%	Unandited	Wind energy production
Horizon Wind Energy Midwest IX LLC	Texas			100,00% Unaudited	Wind energy production
Horizon Wind Energy Northwest I LLC	Texas		100,00%	Unaudited	Wind energy production
Peterson Power Partners LLC	Texas		1 00.00%	Unaudited	Wind energy production
Proneer Prairie Interconnection LLC	Icxas		100.00%	Unaudited	Wind energy production
The Nook Wind Power Project LLC	Texas		1 (x), 00%	L naudited	Wind energy production
Tug Hill Windpower LLC	Icxas		100.00%	Unaudited	Wind energy production
Whiskey Ridge Power Partners LLC	Texas		100.00%	Unaudited	Wind energy production
Wilson Creek Power Partners LLC	Texas		100.00%	Unaudited	Wind energy production
WTP Management Company LLC	Texas		100,00%	Unaudited	Wind energy production
Mcadow Lake Wind Farm IV LLC	Indiana		100,00%	KPMG	Wind energy production
Mcadow Lake Windfartn III LLC	Indiana		100.00%	KPMG	Wind energy production
2009 Vento IV, LLC	Texas		100.00%	KPMG	Wind energy production	175,054			(69)	(69)	174,916

This appendix forms an integral part of note 8.

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Information Relating to Investments in Group Companies

31 December 2009

						Thousands of Euros
							Net profit/(loss)
Group companies	Registered offices	0/0 direct interes	0/0 indirect interest	Auditor	Activity	Shore capital	Reserves	Other equity items	Continuing operations	Total	Total equity
2009 Vento V. LLC	Texas		100.00%	KPMG	Wind energy production	138,315			(2)	(5)	138,305
2009 Vento VI. LLC	Texas		100,00%	KPMG	Wind energy production	140,892			(୧୨)	(୧୬)	140,754
Horizon Wind Ventures II LLC	CX35		100.00%	KPMG	Wind energy production
Horizon Wind Ventures III, LLC	Texas		100.00%	KPMG	Wind energy production	3,816			(422)	(422)	2,972
Horizon Wind Ventures VI. LLC	lexas		100,00%	KPMG	Wind energy production	78,345			(1)	( ( )	78,343
Lexington Chenoa Wind Farm II LLC	Illinois		100.00%	KPMG	Wind energy production
Lexington Chenoa Wind Farm III LLC	111110015		100,00%	KPMG	Wind energy production
East Klickitat Wind Power Project LLC	Washington		100,00%	KPMG	Wind energy production
Horizon Wind Enorgy Northwest IV LLC	Oregon		100,00%	KPMG	Wind energy production
Blue Canyon Wind Power VII LLC	Oklahoma		100,00%	KPMG	Wind energy production
Horizon Wyoming Transmission Ll.C	Wyoming		100,00%	KPMG	Wind energy production
AZ Solar LLC	Arizona		100.00%	KPMG	Wind energy production
Black Prairie Wind Farm II LLC	Illinois		100,00%	KPMG	Wind energy production
Black Prairie Wind Farm III LLC	Illinois		100,00%	KPMG	Wind energy production
Paulding Wind Farm LLC	Qhio		100,00%	KPMG	Wind energy production
Paulding Wind Farm II LLC	Ohio		100,00%	KPMG	Wind energy production
Paulding Wind Farm III LLC	Ohio		100,00%	KPMG	Wind energy production
Sunpson Ridge Wind Farm II LLC	Wyoming		100.00%	KPMG	Wind energy production
Simpson Ridge Wind Farm III LLC	Wyoming		100,00%	KPMG	Wind energy production
Simpson Ridge Wind Farm IV LLC	Wyoming		100,00%	KPMG	Wind energy production
Simpson Ridge Wiud Farm V LLC	Wyoming		100.00%	KPMG	Wind energy production
Athena-Weston Wind Power Project II, LLC	Oregon		100,00%	KPMG	Wind energy production
Meadow Lake Wind Farm V, LLC	Indiana		100,00%	KPMG	Wind energy production
					Wind energy production
EDP RENOVAVEIS BRASIL, S.A.	Sao Paulo	55.00%		KPMG	Wind energy production	8.774	(રેડર)		647	647	8.896
Central Nacional de Energia Edlica, S.A.,					Wind energy production
(Conacel)	Sao Paulo		55,00%	KPMG		19,694			(1,541)	(1.541)	18,153
Elebras Projectos, Ltda	Sao Paulo		55,00%	Unandited	Wind energy production	528	(352)		(b)	(6)	171

This appendix forms an integral part of note 8.

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Appendix I Page 21 of 22

Information Relating to Investments in Group Companies

31 December 2009

Thousands of Euros Net profit/(loss) C % Registered % direct indirect Share Other equity Continuing Activity Associates offices interest interest Auditor capital Reserves items operations Tòtal Total equity Wind energy Aprofitament D'Encrgies Renovables 18.97% Uuaudited production 4 (366) de l'Ebre S.l 3.865 (366) 3,503 Spain Mini-bydraulic cncrg Hidroastur, S.A. Ovicodo 20,00% Centium production 4,808 2,941 7,749 Unaudited Promotion of encrgy Seville 40.00% 6 Sodccoan, S,L, development (9) (3) Biomasas del Pirinco, S,A, 24,00% Unaudited 455 (217) Huesca Biomass 238 Culitvos Energóticos de Castilla, S,A, Burgos 24,00% Unaudited Biomass 300 (48) 252 . Wind energy Parque Eólico Sierra del Madcro. S,A. Soria 33.60% Ernst & Young 7.194 2.022 3.843 3.843 13.059 . production Wind power: Project Unaudited Desarrollos Energéticos Canarios, S,A, Las Palmns 39,92% development 30 (12) 18 ﺪ Solar Siglo XXI. S.A. Crudad Rcal 20,00% Unaudited Solar power 80 (18) 62 -Naturneo Energia, S,L, Spain . 49.00% Unauditod Holding company 3 (1) 2 Wind cncrgy Fólicas de Portugal,SA 19,60% KPMG 5,000 28,090 production 2,151 2.151 35.241 Portugal Wind energy Parque Eólico Altos del Voltoya S,A, Madrid 39,20% KPMG production 6,445 3,486 1.066 1,066 10,997 .

This appendix forms an integral part of note 8.

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Information Relating to Investments in Group Companies

31 December 2009

									Thousands of Euros
										Net profit/(loss)
Jointly controlled entities	Registered ollices	% direct interest	% indirect interest	Auditor	Activity		Share capital	Reserves	Other equity items	Continuing operations	Total	Equity
Tebar Eolica, S,A,	Сислса		40,00%	Unaudited Unaudited	Wind production Wind	cnergy cacrgy	2,360	2, 145	(1 (1 (0)	(4){	606	4,961
Murciasol Solar	Almería		40,00%		production Wind	cnergy	2					2
Evolución 2000, S,L,	Madrid		39.32%	KPMG	production Wind	cnergy	58	4,774	(62 l )	1 "208	1,508	5.718
Desarrollos Eólicos de Canarias. S.A.	Las Palmas		35.80%0	Unauditod	production Wind	Chergy	4,291	5,222		1,115	1,115	10.628
Compañia Eólica Aragonesa S.A.	Zaragoza		20,000%	Deloitte	production Wind	cncrgy	3,351	13,695	(812)	4,465	4,465	20,699
Flat Rock Windpower LLC	New York		50,00%	E&Y	production Wind	cnergy	365	(15,413)		(2.033)	(2.033)	(17,081)
Flat Rock Windpower II LLC	New York		50,00%	E& Y	production		44	(5,979)		(1,644)	(1,644)	(7.479)

This appendix forms an integral part of note 8.

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Appendix II

Details of Investments and Positions Held by Company Directors in Other Companies Page 1 of 3 at 31 Deeember 2010

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EDP Energías de Portugal, S.A. Chairman of the board Energías do Brasil, S.A. Chairman of the board EDP Energías de Portugal, Sociedad Anónima, Sucursal en España Representative EDP Finance, B.V. Representative EDP Energías de Portugal, S.A. Board member EDP Energías de Portugal, Sociedad Anónima, Representative Sucursal en España EDP - Energías do Brasil, S.A. Board member Hidroeléctrica del Cantábrico, S.A. Board member Horizon Wind Energy, LLC Chairman of the board EDP Renewables Europe, S.L. Chairman of the board ENEOP - Eólicas de Portugal, S.A. Chairman of the board EDP Renováveis Brasil, S.A. Chairman of the board EDP Finance, B.V. Representative Antonio Fernando Melo Martins da Costa EDP Energías de Portugal, S.A. Board member EDP Internacional, S.A. Chairman of the company Hidroeléctrica del Cantábrico, S.A. Board member EDP Asia Invest e Consultoria Lda Chairman of the company EDP Asia Soluçoes Energéticas Chairman of the company EDP Soluçoes Comerciais, S.A. Chairman of the company EDP Energías de Portugal, Sociedad Anónima, Sucursal en España Representative EDP Finance, B.V. Representative EDP Projectos, SGPS, S.A. Board member EDP - Encrgias de Portugal, S.A. EDP Energias do Brasil, S.A. Board member Hidroeléctrica del Cantábrico, S.A. Board member Balwerk - Consultadoria Económiea e Board member Participações, S.U., Lda. Electricidade de Portugal Finance Company Board member Ircland, Lt. EDP Imobiliária e Participações, S.A. Chairman of the board EDP Valor - Gestão Integrada de Serviços S.A. Chairman of the board Energia RE, S.A. Chairman of the board EDP Finance, B.V. Representative Sãvida - Medicina Apoiada, S.A. Chairman of the board SCS-Serviços Complementares de Saúde, S.A. Chairman of the board EDP Estudos e Consultoria, S.A. Chairman of the board EDP Energías de Portugal, Sociedad Anónima, Representative Sucursal en España Naturgas Energía Grupo, S.A. Vice-chairman of the board Eléctriea de la Ribera del Ebro, S.A. Chairman of the board HidroCantábrico Encrgía, S.A.U. Chairman of the board HidroCantábrico Gestión de Energía, S.A.U.* Sole director EDP Energías de Portugal, S.A. Board member	Name or registered name of board member	Registered name of the entity	Position
	Antonio Luis Guerra Nunes Mexia
	Ana María Machado Fernandes
	Nuno María Pestana de Almeida Alves		Board member and Finance controller
	João Manuel Manso Neto

Appendix II Page 2 of 3

Details of Investments and Positions Held by Company Directors in Other Companies at 31 December 2010

EDP Gestao da Produçaco de Energía, S.A. Hidroeléctrica del Cantábrico, S.A.

EDP Energia Iberica, S.A. EDP Gás.Com Comércio de Gás Natural, S.A. Empresa Hidroelectrica do Guadiana, S.A. EDP Gás, S.G.P.S., S.A. EDP Gás II, S.G.P.S., S.A. EDP Gás III, S.G.P.S., S.A. EDP Investimentos S.G.P.S., S.A. EDP Finance, B.V. EDP Energías de Portugal, Sociedad Anónima, Representative Sucursal en España EDP Projectos,SGPS,S.A.

Manuel Menéndez Menéndez

Naturgas Energía Grupo, S.A. EDP Renewables Europe, S.L. Hidroeléctrica del Cantábrico, S.A. Enagas, S.A.

Chairman of the board Managing director and vice-chairman of the board Board member Board member Chairman of the board Chairman of the board Chairman of the board Chairman of the board Chairman of the board Representative

Board member

Chairman of the board Board member Chairman of the board Individual representing the legal entity on the board of directors

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Appendix II Page 3 of 3

Details of Investments and Positions Held by Company Directors in Other Companies at 31 December 2010

Name or registered name of director or board member	Registered name of the entity	Number of shares
Antonio Luís Guerra Nunes Mexía	EDP Energias de Portugal, S.A. EDP Energias do Brasil, S.A.	31,000
Antonio Fernando Melo Martins da Costa	EDP Energías de Portugal, S.A.	13, 299
João Manuel Manso Neto	EDP Energías de Portugal, S.A.	1, 268
Nuno María Pestana de Almeida Alves	EDP Energías de Portugal, S.A. EDP Energias do Brasil, S.A.	80, 000
Jorge Manuel Azevedo Henriques dos Santos	EDP Energías de Portugal, S.A.	2, 379
loão Manuel de Mello Franco	EDP Energías de Portugal, S.A. REN - Redes Energéticas Nacionais, SGPS, S.A.	4, 550 980
Ana Maria Machado Fernandes	EDP Energias do Brasil, S.A.	1

This appendix forms an integral part of note 18e.

edprenováveis

EDP Renováveis, S.A.

Management Report

December 2010

MANAGEMENT REPORT for EDP Renováveis S.A. (Holding)

Table of Contents

0.	INTRODUCTION
1 .	MAIN EVENTS OF THE PERIOD
2.	PERFORMANCE OF 2010
3.	REGULATORY ENVIRONMENT
র্ব	RISK MANAGEMENT
5.	FINANCIAL HEDGING DERIVATIVE INSTRUMENTS
6.	TREASURY STOCK (OWN SHARES)
7.	ENVIRONMENTAL PERFORMANCE
8.	HUMAN CAPITAL
o	RESEARCH AND DEVELOPMENT (R&D)
10.	RELEVANT EVENTS AFTER CLOSING OF THE PERIOD
	11. CORPORATE GOVERNANCE OVERVIEW
	12. DISCLAIMER

ATTACHED - EDP RENOVÁVEIS 2010 NET INCOME APPLICATION PROPOSAL

• EDP RENOVÁVEIS CONSOLIDATED FINANCIAL STATEMENTS AS OF 31/DEC/2010

MANAGEMENT REPORT for EDP Renováveis, S.A (Holding)

0. INTRODUCTION

EDP Renováveis S.A. individual accounts refer to the Holding of EDP Renováveis Group (EDPR), which includes (apart from EDPR Holding) its subsidiaries EDPR Europe (EDP Renewables Europe, S.L.), EDPR North America (Horizon Wind Energy, LLC) and EDPR South America (EDP Renovóveis Brasil). This management report will focus on financials and 2010 activity of "EDPR Holding" as well as its subsidiaries in each of the supra-mentioned platforms. Therefore, the report describes both the Holding and EDPR Group' business and activity during the year of 2010. Financial accounts for EDPR Holding are presented according to Spanish local GAAP ("Plan General de Contabilidad", in all material aspects similar to IFRS), while EDPR Group consolidated financial info were prepared according to IFRS. The current management report addresses bath EDPR Holding and EDPR Group.

1. MAIN EVENTS OF THE PERIOD

151 QUARTER

JANUARY

Jan 8th - EDP Renováveis is awarded 1.3 GW of wind offshore capacity in the UK

EDPR and SeaEnergy Renewable Limited ("SERL"), through a joint-venture designated Moray Offshore Renewables Limited ("MORL"), have been awarded exclusive rights to develop offshore wind farm sites in Zone 1 with an approximated target capacity of 1.3 GW. This partnership, in which EDPR holds a 75% shareholding and SERL the remaining 25%, enabled to leverage the complementary expertise of EDPR in wind and SERL's know-how on offshore construction, thereby enhancing the result obtained in the UK Round 3.

Zone 1 is located on the Smith Bank in the Moray Firth in the North East of Scotland and covers an area of 520 square km. It is approximately 25 km southeast of the Caithness coast and has water depths between 30m and 60m.

MORL will firstly proceed with the study and development of the offshore wind farm projects in Zone 1 for the purpose of obtaining the relevant key consents. Upon successful completion, MORL will be authorized and will hold the option to begin construction and operation of the offshore wind farm project, which is expected to take place between 2015 and 2020.

Jan 25th - EDP Renováveis signs a long-term agreement to sell green certificates in Poland

EDP Renováveis has entered into a 15-year agreement with Energa to sell the green certificates generated from its 120 MW Margonin wind farm in Poland.

Jan 27th - EDP Renováveis enters the Italian market through the acquisition of 520 MW to be developed

EDP Renováveis S.A. acquired 85% of Italian Wind srl, from Co-Ver group (an industrial conglomerate from the north of Italy], adding to its portfolio several wind projects in Italy totalling 520 MW in different stages of maturity and in prime locations: i) 4 wind projects totalling 108 MW classified as Tier 2; ii) 98 MW of projects classified as Tier 3; and iii) 314 MW classified as prospects.

edprenováveis

The amount paid for the above mentioned stake is €12 million (Enterprise Value) and additional success fees will be paid as the wind projects reach certain predefined milestones.

FEBRUARY

Feb 3d - EDP Renováveis discloses YE2009 provisional operating data

In 2009, EDP Renováveis added 1.2 GW to its base of installed capacity, representing a 23% increase vis-à-vis 2008. In the US, EDPR successfully installed 700 MW during the period, while in Europe added 461 MW and in Brazil 14 MW.

The wind output for the full 2009 increased a sound 40% vs. 2008. The US assets continued to be the major contributor to the output increase, while European assets managed to deliver a strong recovery on the last quarter of the year, on the back of a high quality of wind resource.

EDPR's total average load factor in 2009 was 29%, with Europe's strong performance compensating the lower wind resource achieved in the US. Such stability on the total average load factor is the result of a balanced portfolio and a selective geographical diversification in terms of countries and regions.

Feb 17th - EDP Renováveis signs a Power Purchase Agreement (PPA) with Tennessee Valley Authority in the United States

EDP Renováveis has entered into a 20-year Power Purchase Agreement with Tennessee Valley Authority (TVA) to sell 115 MW of renewable wind energy from the first phase of its Pioneer Prairie Wind Farm located in Mitchell and Howard counties in lowa.

The Pioneer Prairie Wind Farm, which is located in lowa along the Minnesota state line in Howard and Mitchell counties, has an installed capacity of 300 MW - enough to power more than 90,000 American homes annually.

Feb 25th - EDP Renováveis announces YE2009 results

Gross Profit reached €725 million (+25% YoY) and EBITDA €543 million (+24% YoY), with an EBITDA margin of 75%. Net income increased 10% YoY to €114 million.

2ND QUARTER

APRIL

Apr 12th - EDP Renováveis is awarded a contract by NYSERDA

EDP Renováveis has been awarded a contract by the New York State Energy Research and Development Authority (NYSERDA) in conjunction with the Public Service Commission (PSC) to sell renewable energy credits, the clean environmental attributes of wind power, for a volume equivalent to 171 MW of capacity for ten years from its Marble River Wind Farm, currently under development and located in Clinton county, New York.

The contract award is from NYSERDA's fifth competitive solicitation and will be funded through the New York Renewable Portfolio Standard (RPS), which supports and finances the development of renewable energy resources that will help reduce harmful emissions, increase energy security, and build a clean energy economy.

Apr 13th - EDP Renováveis holds its Annual General Shareholder Meeting

EDP Renováveis Annual General Shareholder Meeting was held on April 13th and approved the following resolutions:

• Approval of the 2009 fiscal year individual and consolidated accounts;
• Approval of the application of results generated in 2009;
• Approval of the individual and consolidated Management Report, and the Corporate Governance Report for 2009;
• Approval of the management conducted by the Board of Directors during 2009;
• Approval of the remuneration policies for the managers of EDP Renováveis:
• Approval of the amendment of the paragraphs 1 and 2 of Article 17 of the Articles of Association of EDP Renováveis, S.A .;
• Authorization to the Board of Directors for the derivative acquisition and sale of own shares by the Company and/or other affiliate companies to the maximum limit established by the Law and in accordance with its terms;
• Reappointment, as Auditors of EDP Renováveis S.A., of KPMG Auditores, S.L.;
• Option for the Consolidated Tax Regime regulated in Articles 64 et seq of Real Decreto-Legislativo 4/2004 of 5 March.

Apr 22th - EDP Renováveis discloses 1Q2010 provisional operating data

EDP Renováveis managed a portfolio of 6.3 GW at the 1Q10, having increased its installed capacity by 21%, or 1,094 MW, vis-à-vis 1Q09. From this, 492 MW were installed in Europe and 602 MW in the US. In the first quarter of 2010, EDPR total additions amounted to 32 MW, of which 16 MW were installed in Portugal and the remaining were installed in France. EDPR's construction cycle typically follows a back-end loaded profile on the annual new capacity additions.

In line with the capacity increase (+21% YoY), electricity output was up 28% vs. the 1Q09, with Europe being the main contributor to this increase. EDP Renováveis total average load factor in the 1Q09 was 33%, with Europe delivering a 34% figure and the US 31%.

Apr 26th - EDP Renováveis awarded Vestas a procurement contract to deliver 1.5 GW of wind capacity to be installed until the end of 2012

EDP Renováveis S.A. and Vestas Wind Systems A/S signed a global master supply agreement for the delivery 1,500 MW of wind turbines.

A successful combination of its short-term pipeline optionalities together with a flexible procurement position post-2010 and scale within the industry, were key factors to achieve an agreement of utmost strategic importance reinforcing EDPR's worldwide leadership in the sector.

MAY

May 5th - EDP Renováveis announces 1Q2010 results

Gross Profit increased a solid 22% YoY to €242 million resulting in a 20% YoY EBITDA increase to €185 million, with an EBITDA margin of 76%. Net income reached €43 millions (-15% YoY).

3RD QUARTER

JUNE

Jun 28th - EDP Renováveis fully closes Vento III institutional partnership structure through the sale of the remaining stake amounting to \$141 million

EDP Renováveis has secured \$141 million of institutional equity financing from Wells Fargo Wind Holdings LLC in exchange for an interest in the Vento III portfolio.

Vento III is a 604 MW portfolio of wind farms structured in December 2008 and consists af Rattlesnake Road (103 MW), Pioneer Prairie (300 MW), and Meridian Way (201 MW). \$376 million was previously funded by JPM Capital Corporation, New York Life Insurance Co., New York Life Insurance & Annuity Corp. and GE Energy Financial Services.

With this new investment by Wells Fargo Wind Holdings LLC, EDPR has raised a total of \$517 million through Vento III and closed all its funding needs. The transaction accelerates the monetization of tax benefits generated by the wind farms and improves the projects' economics.

JULY

Jul 6th - Government of Cantabria awards 220 MW to EDP Renováveis

The Spanish regional Government of Cantabria has announced the granting of a total of 1,336 MW in its tender to award electricity production licenses through wind energy.

EDP Renováveis was awarded with 220 MW in the region of Cantabria, corresponding to 16% of the total assigned capacity.

The execution of this wind projects are now subjected to the regular process of developing and licensing, in accordance to the law and regulation applicable in Spain.

EDPR expects the awarded projects to reach the ready-to-build phase from 2013 onwards.

Jul 12th - Romania approves new wind regulation

The Romanian Parliament's proposal that regulates renewable energy sources was published "today".

edprenováveis

The legal framework in place since 2004 comprises a system where renewable generators in addition to the electricity price receive tradable green certificates. The proposal now signed into law reinforces the framework in place and the country's commitment with renewable energy, by:

• Increasing the mandatory quotas for electricity produced from renewable sources which benefit from the green certificate's promotion system. 2012 quota increases from 8.3% to 12% of the electricity production, escalating by 1%/year to reach 20% by 2020.
• • Extending until 2017 (previously until 2015) the right to collect two green certificates per each MWh generated by wind farms (one certificate per MWh from 2018 onwards).
• Reaffirming the current green certificate's floor and cap prices at €27/MWh and €55/MWh and increasing the penalty by non-compliance to €1 10 (from €70) for each missing green certificate. Current cap, floor and penalty prices are set in euros and indexed to euro-inflation.

EDP Renováveis currently has 228 MW under construction (to be commissioned by 2010-year end) and 613 MW of projects in different stages of development. The Romanian commitment regarding renewable energy improves the company's investment visibility and enhances the projects' value creation

Jul 14th - EDP Renováveis announces 1H2010 provisional operating data:

Capacity increased 155 MW (63 MW in Europe and 92 MW in US) and electricity output totalled 6,940 GWh, meaning a 32% increase comparing with the 1st half of 2009. Load factor in Europe was 23% and in the US 33%.

Jul 29th - EDP Renováveis announces 1H2010 results

Gross Profit was €462.4 million (+30% YoY) and EBITDA €342.9 million (+27% YoY), with an EBITDA margin of 74.2%. Net income reached €42.9 million, having decreased 35% YoY.

SEPTEMBER

Sep 27th - EDP Renováveis establishes new institutional partnership the cash grant in lieu on PTC for 99 MW in the US

EDPR has signed an agreement to secure \$84 million of institutional equity financing from JPM Capital Corporation in exchange for a partial interest in its 99 MW Meadow Lake II wind farm.

Sep 30th - EDP Renováveis executes project finance for 120 MW in Poland

EDPR has executed a project finance stucture agreement with a consortium of banks for its fully operating 120 MW Margonin wind farm in Poland. The contracted debt facility amounts to €135 million.

4th QUARTER

NOVEMBER

Nov 3rd - EDP Renováveis announces 9M2010 results

Gross Profit was €662.3 million (+34% YoY) and EBITDA €473.1 million (+28% YoY), with an EBITDA margin of 71.4%. Net income reached €22.2 million, having decreased 68% YoY.

Nov 15th - EDP Renováveis signs a new Power Purchase Agreement (PPA) for 99 MW in the US

EDPR has signed a 20-year PPA for a 99 MW wind farm in the PJM interconnection area, expected to be fully commissioned in 2011.

Nov 30th - EDP Renováveis signs a new Power Purchase Agreement (PPA) for 83 MW in the US

EDPR signed a 20-year PPA with Tennessee Valley Authority to sell renewable energy from 83 MW of the Pioneer Prairie wind farm (lowa), at full operation.

DECEMBER

Dec 8th - Spanish Government publishes new Royal Decree providing regulatory stability to the wind energy sector

The Spanish Government published the Royal Decree 1614/2010, which increases the visibility of the existing assets' returns for its full useful life and provides stability to the investments in the country.

Dec 9th - EDP Renováveis establishes new institutional partners incorporating the cash grant in lieu of PTC for 101 MW in the US

EDPR has signed an agreement to secure \$99 million of financing through Bank of America Public Capital Corp in exchange for a partial interest in its 101 MW Kittitas Valley wind farm.

Dec 13th - EDP Renováveis signs new Power Purchase Agreement (PPA) for 198 MW in the US

EDPR signed a 5-year PPA with Constellation Energy Commodities Group, Inc. to sell the renewable energy from its 198 MW Top Crop II, already in operation in the PJM market.

Dec 16h - EDP Renováveis secures new Power Purchase Agreement (PPA) for 175 MW in the US

EDPR has secured a 20-year PPA to sell to Ameren Illinois Utilities and Commonwealth Edison Company the equivalent renewable energy produced by 175 MW of wind installed capacity in the US.

Dec 20th - Extension of the US Investment Tax Credit (ITC) cash reimbursement

The President of the United States of America signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which includes a one-year extension of the ITC cash reimbursement under the Department of Treasury's Section 1603 program, applicable to EDPR's wind projects in the US.

PERFORMANCE OF 2010 2.

2.1 Financial Results - EDPR Holding

EDPR Holding closed the year of 2010 with €8.8 billion in assets, mainly due to investments in its associates of €4.0 billion and loans to affiliated and group companies of €4.1 billion.

Total equity reached €5.7 billion providing evidence of the robust EDPR Holding capital structure with Equity over Total Assets surpassing 64.7%.

Total Liabilities amounted, by year-end, to €3.1 billion (for the great part a result of €2.8 billion in group companies (EDP Finance BV).

The Financial income totalled €247 millions driven by €246 millions in interest income from financial assets resulting from loans to group companies.

Financial Expenses totalled (€143) million, leading to a EBT (Earnings before Taxes) of €65 millions. Effective tax rate was 32%, resulting in (€21) million in Taxes and a 2010 full year Net Income of €44 million.

2.2 Operational and Financial1 Performance

During 2010, EDPR added 1,101 EBITDA MW (incl. ENEOP?) of installed capacity, of which 600 MW in North America and 501 MW in Europe.

Prepored according to IFRS occounting standards. EDPR consolidated for the purpose of this Management Report. EDPR S.A. individual accounts are therefore reflected as part of consolidation and by isself in isolotion do not contain substanial additional infarmotion considered af relevance.

edprenováveis

On top of the 1,101 EBITDA MW (including ENEOP) of new installed capacity, EDPR ended 2010 with 649 MW under construction (of which 480 MW in Europe, 99 MW in North America and 70 MW in Brazil), providing confidence and credibility on the organization's ability to execute 2011 growth targets.

By the end of 2010, EDPR had 6.7 GW of (EBITDA + ENEOP) installed capacity in Spain, Portugal, France, Belgium, Poland, Romania, a variety of US states and Brazil.

Installed Capacity (EBITDA MW + ENEOP)	2010	2009	A MW
Spain	2.050	1.891	+ 189
Portugal	838	୧୫୦	+ 158
of which ENEOP	239	85	+154
France	284	220	+64
Belgium	57	57	+0
Poland	120	120	+0
Romania	90	0	+90
Europe	3.439	2.938	+501
પાર	3.224	2.624	+600
Brazil	14	14
Total	6.676	1.75 - 1.7	+1.101

In terms of total output, EDPR recorded a significant growth in electricity generation, with 14.4 TWh generated in 2010 (32% increase vs. 10.9 TWh in 2009). This year EDPR reached once again load factors above market average, underlining the quality of its wind farms.

Overall EDPR load factor was in line with 2009. In Europe the load factor reached 27% and in the US 32%. Excellence in operational performance is best reflected in the sustainable and high availability levels and consistent load factor premiums in major markets.

		Electricity Generated (GWh)	Load Factor (%)
Region	2010	A 10/09	2010	A 10/09
Europe	6.632	+33%	27%	+1 pp
EE.UU	7.689	+30%	32%	(0 pp)
Brazil	31	+17%	26%	+4 pp
Total Generation	14.352	+32%	29%	+0 pp

Total balance sheet assets reached by the end of the 2010 were €12,835 million with c. 14% increase (or €1,541 million) when compared to prior year. Of this, €9,982 million relate to net Tangible Fixed Assets (PPE) which year-on-year increased by €1,347 million.

Total Equity amounted to €5,394 million by year end, driven by the €82 million increase in Reserves and Retained Earnings leading to a solid Equity / Total Assets ratio of 42.0%. Total Equity and Liabilities summed by the end of 2010 to €7,442 million, with an increase of c. 24.7% (or €1,475 million) used to fuel growth business.

Total revenues reached €845 million driven by higher installed capacity and represented a 30.4% growth comparing to 2009. This growth is of particularly relevance given the current unfavourable pricing environment in the global power markets. EDPR benefited from an active risk management practice, namely by hedging c. 1.8 TWh of output in Spain and therefore reducing its exposure to the variability of the Spanish pool price. This hedging coverage had a positive impact of €12 million in 2010 revenues.

During 2010 EDP Renováveis signed a 15-year agreement with Energa to sell the green certificates generated from its 120 MW Margonin wind farm in Poland, reached Power Purchose Agreements for the sale of electricity of the two wind farms projects in Romania and successfully executed 841MW of PPA (Power Purchase Agreement) contracts in NA:

• · In February, EDP Renováveis has entered into a 20-year Power Purchase Agreement with Tennessee Valley Authority (TVA) to sell 115 MW of renewable wind energy from the first phase of its Pioneer Prairie Wind Farm located in Mitchell and Howard Counties in lowa.
• · In April, signed a PPA for a volume equivalent to 171 MW of capacity for ten years from its Marble River Wind Farm, currently under development and located in Clinton County, New York.
• · In November, the company signed a 20-year PPA for a 99 MW wind farm in the PJM interconnection area, expected to be fully commissioned in 2011. Also, signed a 20-year PPA with Tennessee Valley Authority to sell renewable energy from 83 MW of the Pioneer Prairie wind farm (lowa), at full operation. In December, EDPR signed a 5-year PPA with Constellation Energy Commodities Group, Inc. to sell the renewable energy from its 198 MW Top Crop II, already in operation in the PJM market.
• · Additionally, EDPR has secured a 20-year PPA to sell to Ameren Illinois Utilities and Commonwealth Edison Company the equivalent renewable energy produced by 175 MW of wind installed capacity in the US by the end of the year.

All in all, 841 MW of PPA's were successfully secured in North America, which summed with the 120 MW of long-term agreement for green certificates in Poland and the signing of Power Purchase Agreements for the sale of electricity of the two wind farms projects in Romania (228 MW) provide a significant source of secure cash flow stream going forward.

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Financial Indicators (€ m)	2010	2009	A %
Gross Margin (incl. Tax Equity Revenue)	948	725	31%
Opex & Other Operating Income	235	182	29%
EBITDA	713	543	31%
EBITDA Margin %	75.2%	74,9%
EBIT	290	231	26%
Financial Results	(174)	(72)	140%
Net Income (EDPR Equity holders)	80	114	-30%
Capex	1.401	1.846	-24%
Total Assets (book value)	12.835	11.294	14%
Equity (market value)	3.783	5.784	-35%
Net Debt (book value)	2.848	2.134	34%
Enterprise Value	7.706	9.126
Debt / EV %	37,0%	23.4%
Net Debt / EBITDA	4,0	3,9

Focus on operational efficiency, with Opex3 amounting to €235 million, lead to an EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) YoY growth of 31.3% of €713 million and an EBITDA Margin (EBITDA / Gross Margin4) to 75.2%.

Gross Margin at 2010YE grew 30.8% YoY to €948 million as a result of the electricity output increase (+32% YoY) and the reduced exposure of EDPR's portfolio to market price volatility, which along with the diversification effect enabled a stable YoY average selling price.

EBITDA (€ M) & EBITDA Margin (%)

3 Defined as Operating Costs + Revenues from Tax Equity Parlners - Other Operating Results

4 Defined as Revenues + Revenues fram Tax Equity Partners - Cost of Used Gaods

Provisions and net Depreciation & Amortization in 2010 were of (€423) million and net Financial Results of (€169) million (including €5 million in gains from associates) resulting in a Earnings before Taxes of €121 million and a Income Tax Expense of €38 million, corresponding to an effective income tax rate of 31.3%.

Net Income totalled €83.0 million, of which €2.8 million belong to minority interest and €80.2 million is attributable to EDPR equity holders. This represents a reduction vs. the €114 million of Net Income attributable to EDPR equity holders in 2009.

EDP Renováveis decided to propose to the general meeting of Shareholders the allocation of the Net Income for the period of 2010 into reserves as follows:

Net Income Application Proposal
Distribution basis:	Values in Euros:
Net Income of the Period	44.091.046.97
Total to be allocated	44,091,046.97
Allocation:
Legal Reserve (10%)	4,409.104.70
Free Reserve	39.681.942.27
Total Distributed	44,091,046.97

Capex in 2010 was €1,401 million, reflecting the MW added in the period and the under construction capacity. 2010 capex decreased by 24% mainly explained by the capacity growth deceleration seen in 2010. Out of the €1,401 million capex for 2010, €895 million were related to the building of new installed MW, while €406 million assigned to under construction capacity.

Capex (€ m)	2010	2009
Spain	111	રેરો
Portugal	8	102
ROE	420	351
Europe	539	1.014
USA	768	ક ટ્રેર
Brazil	72	2
Other	22	4
Total Capex	1.401	1.846

In 2010, EDPR's operations generated a cash-flow of €567 million, delivering a solid 45% growth YoY, clearly demonstrating the increased cash generation capabilities of the existing assets. Given the grawth cycle of the company, capex levels remained above the cash-flow generation, leading ta a Net Debt increase of €715 million in the period. But it's important to highlight that the operating cash-flow already covers more than 40% of the growth capex vs. 20% in 2009.

EDP Renováveis' gross financial debt was €3.5 billion in 2010, of which 79% corresponds to loans with EDP Group, while debt with financial institutions is mostly related to project finance with a long-term profile. In 2010, debt with financial institutions increased €191 million related to the Polish and Brazilian projects.

Net debt as of December 2010 amounted to €2.8 billion, increasing from the €2.1 billion at the end of 2009, mainly reflecting the capital expenditures in the period. Net debt related to assets in operation amounted to €2,450 million based on 2010 capacity.

Net Debt (€ m)	2010	2009
Financial Debt	3.534	2 674
Financial Receivables	-226	-59
Cash & Equivalents	-459	-481
Net Debt	2.848	2.134

2.3 Competitive Landscape and Business Plan

Currently, we are a world leader energy company. Our growth has been the result of an extraordinary capacity to implement projects and to smoothly integrate new companies, people and cultures during the period from 2005 to 2010. Our markets provide attractive growth potential, mainly due to their growth prospects and the fact that they possess a stable regulatory structure that allows profitable returns.

EDPR continues to look to the renewable energy sector with a long-term outlook, believing that the environmental, economic and technological trends that have underpinned the currently favourable renewable energy market conditions will continue to drive further support for growth in the markets we are active in.

EDPR is a leading 'pure-play' renewable energy company, having derived the revenue stream from renewable energy activity. EDPR has leading position and "early mover" advantages in attractive high-growth markets, and continues to analyze new markets as well as new opportunities within the markets we currently operate within. This strategy continues to provide the company with a unique combination of size, focus and experience in the sector.

EDPR has a solid history of executing projects and delivering targets. We consistently increased installed capacity through the successful development of pipeline. The company success results from a unique combination of factors: strong track record in execution, first class assets with above average quality wind resources, a well balanced portfolio in terms of geography, stage of development and revenue sources, and a competitive turbine supply strategy.

The combination of diversified operations with a stable revenue base spread across countries with favourable regulatory regimes limits the exposure to market prices of electricity and provides a significant visibility and stability.

Furthermore, EDPR has proven its ability to selectively identify new markets, to enter such markets and successfully integrate new countries.

For that, by the end of 2010, EDPR hos crafted a robust, visible and geographically diverse pipeline of nearly 32 GW worldwide (varying from projects in eight European countries, several US states, Canada and Brazil).

MW	Under	Pipeline
	Construction	Ther 1	Tier 2	Tier 3	Total	Prospects	Total
Spain	201	300	436	2.089	2.825	2.121	5.146
Portugal	ട്ക	199	23	74	297	200	555
France		71	સ્વ	1 49	280	351	631
Belgium	13						13
Poland	70		442	738	1.180	୧୧୦	1.910
Romania	138	57		556	୧। ଓ		751
ltaly		20	186		206	785	991
UK				1.300	1.300		1.300
Europe	480	647	1.147	4.906	6.700	4.116	11.296
NA (incl. Canada)	99	1.075	6.508	7.245	14.828	4.237	19.164
Brazil	70	81	153	456	690	491	1.251
Total	649	1.802	7.808	12.607	22 218	8.844	31.711

This pipeline reinforces EDPR's position as a leading player in the renewable energy industry and underlines management's commitment to create shareholder value through selecting the best projects to fuel future growth.

On the core of EDPR's confidence on achieving these targets, is a dynamic, highly qualified and experienced team of world-wide employees with the track record and ambition to deliver upon the superior targets.

C

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3. REGULATORY ENVIRONMENT

WIND MARKET REGULATION

The following tables show a brief summary of the main regulatory events at a worldwide and European level. The information below will be developed in following sections.

	Event	Main implications
Global		· Recognition, in a formal UN decision, of the emission- reduction targets that Developed countries listed under the Copenhagen Accord
	United Nations Climate Change Conference, in Cancun (Mexico) Nov-Dec 2010	· Agreement for the monitoring, reporting and verification of the emissions processes
		· Establishment of a Green Climate Fund to support policies and activities in developing countries
		· Support to the Clean Development Mechanisms ("CDM") scheme after the expiration of the Kyoto Protocol
		· A post-Kyoto binding treaty is still to be agreed
	Presentation by States Member of its National Renewoble	· Renewable Energy Directive 2009/28/EC requires State Members to submit it National Renewable Energy Action Plan by June 30th, 2010
Europe Energy Action Plans (NREAP) Summer 2010		· States have presented their strategies to reach their 2020 target
	· NREAP reflect targets by sector (share of energy from renewable sources consumed in transport, electricity, heating and cooling), as well as the chosen trajectory to achieve them
North America	Tax relief bill	· One-year extension of the cash grant
	December 2010	· An increase of the bonus depreciation
Brazil	2 tenders held in 2010	· Both tenders allocated 2,05 GW of wind capacity

GLOBAL REGULATION EVENTS

The 2010 United Nations Climate Change Conference was held in Cancun, Mexico, from November 29th to December 10th. Last year's talks in Copenhagen only delivered a weak array of voluntary mitigation and financing pledges that were not endorsed as a COP (Conference of the Parties) decisions. However, in Cancun, the Parties adopted formal decisions in key fields as climate finance, technological transfer and adaptation.

A major achievement was the establishment of a new climate fund under the UN Convention. This new Green Fund will be managed by the World Bank with an aim to allocate funds to developing countries for climate aid.

Another important step forward was the recognition, in a formal UN decision, of the mitigation pledges agreed in Copenhagen (this is, the confirmation of the target of limiting temperature rises to less than 2°C compared to pre-industrial levels). The parties have also agreed to the "Monitoring, Reporting and Verification", which is necessary step to verify the progression of the emission reductions under a transparent process. This is very significant as a global emissions deal has always been stalled by the lack of understanding this topic between US and China. With this agreement, there is groundwork for future negotiations.

The parties also supported the continuation of the Clean Development Mechanism (CDM) after the expiration of the Kyoto Protocol (December 31st 2012) and included for the first time Carbon Capture Storage (CCS) under its reach. Additionally, the agreement includes the framework for REDD+, a mechanism for forestry protection. However, a post-Kyoto agreement has still to be reached, as Japan, Russio and Canada firmly opposed to a second commitment period. Negotiations however will continue in Durban, South Africa, in 2011.

REGULATION EVENTS IN EUROPE

At the European level, following the approval of the Renewable Energy Directive 2009/28/EC, all the Member States were requested to present a "National Renewable Energy Action Plan" (NREAP) by June 30th, 2010. The NREAP are documents in which European Member States present how they intend to reach their binding renewable targets for the year 2020 and the paths towards them. Member States have also been required to provide their sectoral targets (electricity, transport and heating and cooling), the technology mix they expect to use, the transfers between Member States and the specific measures they intend to implement in order to reach the forecasted trajectory. As the Directive indicates, NREAP must conform to the National Action Plan template adopted by the European Commission in June 2009.

GOVERNMENT SUPPORT OF RENEWABLE ENERGY FOR EDPR RELEVANT COUNTRIES

SPAIN

Regulatory change	Description
Royal Decree 1614/2010 of 7 December	· Sets a temporary cut of the renewable premium applicable to wind governed by Royal Decree 661/2007
	· Provides regulatory stability and visibility to the full useful life of the wind farms to be installed until 2012
	· Fixes a cap to the annual equivalent hours entitled to receive the premium
Royal Decree 1565/2010 of 19 November	· Modifies the reactive power regime
Decree-Law 14/2010 of 23 December	· Imposes a generation levy of €0,5/MWh applicable to ordinary and special regime generators

The Spanish government has long struggled to deal with a rising tariff deficit and since mid 2009 has shown concern about the cost of the renewable sector.

Following the agreement reached in July 2010 by the Industry Ministry with two key renewable energy associations (the Spanish Wind Energy Association and Protermosolar), the Royal Decree 1614/2010 of 7 December was approved.

The recently approved regulatory scheme on wind is summarized as follows:

• A temporary 35% cut of the reference premium applicable to the wind capacity ruled by RD 661/2007, only during 2011 and 2012. Cap and floor have not been revised and still remain indexed to CPI-"X":

• An amendment ta the article 44.3 of the RD 661/2007 clarifying that eventual future revision to the value of the reference premium would anly be applied to the capacity that comes on line after 2012;

• A cap to the annual equivalent working hours entitled to receive the premium value set at 2,589 hours (would only be active if the average of the Spanish wind sector equivalent working haurs surpasses the 2,350 in each year). The reference hours are not revisable for the full useful life of the existing and pre-registered wind farms);

Wind capacity pre 2008 (ruled by the RD 436/2004) remains untouched, and will transit to the Royal Decree 661/2007 regime in 2013. The bulk of the Spanish wind assets (those ruled by RD 436/2004) is unaffected by the new regulation.

Apart from Royal Decree 1614/2010, wind energy regime was amended by two other decrees. The first one is Royal Decree 1565/2010 of November 19th that modifies the reactive power regime. With this new decree, reactive premiums are lowered but the requirements to receive the bonus are less restrictive, thus more easily achievable. The second decree is Royal Decreelaw 14/2010 of December 23th that brings in several measures to reduce the tariff deficit. Among the measures, the decree includes a generation levy of €0.5/MWh applicable to ordinary and special regime generators.

PORTUGAL

Regulatory change	Description
Decree Law 51/2010	· Simplifies procedure for installing additional equipment in wind farms
	· Obliges wind generators to have equipment installed in each turbine to aftenuate voltage drops and supply reactive energy
End of reactive energy premiums	· Wind generators are not entitled to receive reactive energy premiums · The impact on total remuneration will not be meaningful

On May 20th, Decree Law 51/2010 was approved. This new regulation simplifies the procedure for installing additional equipment in wind farms (overpowering). The decree also obliges wind generators to have equipment installed in each turbine to attenuate voltage drops (fault ride through) and supply reactive energy. Concerning the latter obligation, there is no longer a premium for supplying reactive power, and there will be a penalty if the wind farm does not operate within certain parameters in terms of reactive power.

Regulatory change Description
"Grenelle 2" in June 2010	· Introduces new restrictions and requirements in the permitting process that could hinder the future development of wind farms

After months of debate, the "Grenelle 2" was finally approved on June 29th, 2010. The origins of this bill date back to 2007, when the "Grenelle de l'Environnement", a national summit to formulate environmental policy was launched. Three years later, the "Grenelle 2" is a toolbox of the "Grenelle de l'Environnement" and establishes a new framework for wind energy.

In order to qualify for the guaranteed purchase price, the "Grenelle 2" introduces a minimum threshold of five turbines for wind energy plants. This measure aims at avoiding wind scattered development. The law also requires wind farms to be erected at least 500 meters from habitation.

Another requirement to benefit from the guaranteed electricity purchase price is, since 2007, to be built in predefined zones: in "ZDEs" (wind development areas) being these specific areas designated by the municipalities hosting the projects. In articulation with the ZDEs, the "Grenelle 2" introduces a new layer requiring wind forms to be also included in the "Regional Development Areas" to be approved by the Regions and currently under preparation.

In addition, wind farms will be subject to "ICPE" (Industries Classified for the Protection of the Environment") regulation which add new permitting requirements, and put wind farms on the same level than industries with a proven potential risk for the environment.

Finally, the "Grenelle 2" stipulates that at least 500 turbines must be installed each year with a review after 3 years, but does not include specific mechanisms to achieve this goal. This requirement aims to achieve the onshore wind energy target of 19 GW in 2020.

BELGIUM

Regulatory change

Description

Increase of the quotas of electricity from renewable sources expected to spur renewables

New quotas of renewable generation have been approved in Wallonia. New quotas are considerably higher than previous ones and are: 13.50% in 2011 and 15.75% in 2012. Quotas from 2013 onwards are yet to be decided, although the CWAPE (The Energy Regulator in Wallonia) has recommended the Government to increase them by 2.25 pp a year, up to 33.75% in 2020.

Currently, the Green Certificate Scheme is being reviewed by the Government but no formal documents have been published yet.

POLAND

Regulatory change	Description
Amendment of the energy law in January 2010	· Aims to limit speculative action in the reservation of interconnection rights for wind farms by charging developers with a fee
	· A local master plan or a planning permit for the real property is also required to obtain grid connection

The Energy law was amended in January 2010. The main aim was to limit speculative action in the reservation of interconnection rights for wind farms. Pursuant to the new provisions, the obligation to prepare an assessment of the impact of the installations being interconnected on the grid lies with the grid company. Within this new regulation, the entity applying for the conditions of interconnection must pay in advance the grid interconnection fee of PLN 30 per kW of interconnection capacity. This fee is considered as an advanced payment for the connection costs and can be returned if there are no technical possibilities for connection. Moreover, the grid company has an obligation to issue grid connection conditions (or to reject such conditions due to technical constraints) within 150 days from the day of submission of the complete grid connection application.

Another measure aimed at reinforcing the credibility of the obligation to attach to the application for interconnection conditions an excerpt from the local master plan or, if there is no such plan, the planning permit for the real property to which the application relates.

Regulatory change	Description
Amendment of the energy law in July 2010	· Extends the period in which developers are granted with 2 Green Cerificates
	· Increases renewable quotas
	· Increases the penalty for missing certificate
	· Extends the period in which the green certificate scheme is guaranteed

The Romanian Government amended its renewable energy law in order to extend its renewable support. Following the general delays in bringing projects into operation, the Government has decided to extend until 2017 (instead of 2015) the period in which wind generators are entitled to receive two green certificates per MWh. In addition, the 2012 green certificate quota has increased from 8.3% to 12% and will rise by 1 pp every year (except in 2019, in which it will only increase 0.5 pp) up to 20% by 2020.

The amendment also confirmed the minimum trading value per green certificate at €27/MWh and the maximum at €55/MWh and increases the penalty for suppliers who do not comply with their obligation to fulfill the quota from €70 to €110 per missing green certificate.

Lastly, in order to instill more confidence in investors and more visibility to the wind morket, the green certificate scheme has been guaranteed until 2025, far beyond the previous 2014 deadline.

The double green certificate support had been established by law 220/2008 (formally enacted and published) but, as a matter of practice, the law is still not applied, as the new system hos still not been formally notified to the European Commission.

UNITED KINGDOM

Regulatory change	Description
	· The current RO scheme could be replaced by a Feed-in tanff system
process	: Energy market reform package under consultation of capacity payments have been proposed
	· Introduction of floor price for carbon emissions · Approval of Emission Performance Standard for new coal-fired power plants

Following the general election of May, 6th 2010, the new government expressed its willingness to establish a system of feed-in tariffs for electricity produced from renewable sources, while maintaining the renewable obligation certificates (ROCs) at least until 2017. The Government has included this issue in its energy market reform package that was presented in December 2010 and is currently under a consultation process. Under the proposal, the Renewable Obligation (RO) system could be phased out in 2017. The RO scheme will be then replaced by a contract for difference, where the support would be calculated on the difference between the wholesale market price and a "strike price" set under the contract. This system is designed to lower a generator's price risk allowing a steady flow of incomes. Other measures presented in this package are the introduction of capacity payments aimed at fostering the construction of reserve plants and the pledge to approve emission performance standards for new coalfired power plants. To achieve the climate change targets, the Government also announced a floor price for carbon emissions.

The Government has also allocated £ 1 billion for the Green Investment Bank and appointed an independent commission that is working to launch the new institution in the next months. The Green Investment bank was set to form the cornerstone of the energy policy of the Conservative party, outlined in its Manifesto in the general election. The aim of this new institution is to foster renewable projects investment by granting funds to lowcarbon initiatives.

Regulatory change	Description
A new decree regulating the promotion of renewable energies is under approval process	· Green certificate system could be phased out
	· A feed-in tariff system for facilities up to 10 MW could be introduced
	· Larger facilities would be bound to participate in

competitive processes to obtain a tariff

The Bersani Decree of 1999 ushered in a Green Certificate scheme aimed at promoting the production of electricity from renewable energy sources. The scheme is based on the issue of green certificates to producers, who also receive a revenue stream selling the underlying electricity. Since its introduction, the scheme has been modified several times, the last major amendment being the one introduced by the 2008 Budget Law.

The key features of the new green certificate scheme set by the Budget Law were the following:

• Renewable energy generators are eligible for the green certificate system for the first 15 years of operation (extending on the former 12-year period)

• Increases the mandatory quota from 0.35% to 0.75% per year until 2012

• Strengthens the stabilizing role of the GSE ("Gestore dei Servizi Elettrici"), a state energy agency that operates in the Green Certificate market absorbing any imbalances in the market. If there is a deficit, the GSE can sell the Green Certificates in its price equal to €180 minus the average price of electricity sold in the previous year. Alternatively, the GSE can also act os a last resort buyer and acquire green certificates when there is a surplus in the market. When this occurs, the GSE can buy green certificates at a price equal to the average price registered the previous year by the GME ("Gestore dei Mercati Energetici") in its trade platform.

• Introduces differentiation by renewable energy source with the use of coefficients applied to net production.

Currently a new renewable energy decree is in a latter phase of approval (it has preliminarily been approved by the Italian Government). If this new regulation is passed, it would represent a massive overhaul of the renewable energy promotion system as the green certificate system

would be phased out. The draft of the regulation envisages a feed-in tariff system for facilities up to 10 MW, and commissioned from the January 1st, 2013 onwards. Larger plants would participate in binding process, in which the incentive would be given to winning projects through a competitive process, though with a floor tariff.

IIS Regulatory change Description One-year extension of the cash grant Tax relief bill · An increase of the bonus depreciation

At the Federal level, climate legislation stalled in 2010. Three prominent proposals for a Federal Renewable Electricity Standard (RES) emerged over the past year but did not garner enough bipartisan support to be submitted for a vote. Additionally, two new proposals to establish climate change legislation through CO2 cap and trade emerged in July but also failed to come to a vote.

The main agent of climate and environmental regulation was the Environmental Profection Agency. The EPA issued a plan for establishing greenhouse gas pollution standards under the Clean Air Act. Additionally, existing coal fired generators are increasingly likely to leave the market due to new and tightened air quality standards through the Clean Air Act. The EPA's tightening of existing clean air pollutant caps (SOx, NOx) is expected to drive retirement of up to 60GW of coal capacity. The agency also announced new strategies to curb mercury emissions from power plants and to curb the use of water for cooling in power plants. EPA also proposed the first-ever national rules to ensure the safe disposal and management of coal ash from coal-fired power plants.

In December 2010 President Obama signed off the "Tax Relief Bill" that includes the extension of many clean energy policies. This regulation is part of a broader tax bill that zeroes in on the extension of expiring tox cuts put in place by the President George W. Bush Administration. In order to spur renewable energies development the law includes:

• A one-year extension of the 1603 Treasury grant program, thus entitling projects to receive cash grant equivalent to 30% of the eligible project costs. This regulation had been approved in 2009 as part of the economic stimulus bill. In order to benefit from this extension, projects will need to prove that they started construction in 2011 and will come on line pror to December, 31st 2012.

• An increase in the bonus depreciation allowing projects to deduct 100% of the project value in one year (if operations start in 2011). For projects that start operations in 2012, the deduction will be at 50%.

States' governments continue to be the primary driver of implementing legislation to support renewable energy. In 2010, twelve states proposed either creating a new Renewable Porffolio Standard (RPS) or increasing their RPS; these proposals passed successfully in five states. Only one state proposed a reduction in the RPS, a proposal which was ultimately unsuccessful.

The California PUC (Public Utilities Commission) ruled that the state's investor-owned utilities can use tradable renewable energy credits to comply with California's RPS. However, there are short term delays in implementation to legislation and regulatory uncertainty around the enforcement of the ruling.

CANADA

Regulatory change

Ontario's long-term energy plan

Description

· Increases renewable targets

Canada's decentralized governance gives a leading role to the provinces for the implementation of renewable energy policies.

At a Federal level, in 2007 the ecoEnergy for Renewable Power Program was introduced, replacing the former Wind Power Production Incentive (WPPI). This program provided an incentive on one cent per kilowatt hour to renewable projects starting operations between 2007 and 2011. Although this program was designed to remunerate projects for the first ten years of operation, the ecoEnergy ran out of funds in 2009. The lack of federal policy instilled low confidence in investors and incentivized Canadian provinces to put in place their own renewable energies schemes. At a Federal level, wind farms moy also benefit from tax policies as the accelerated capital depreciation that allows 50% depreciation per year.

Ontario is far and away Canada's wind power leader, being the first to cross the 1 GW of installed capacity mark. The Green Energy Act (GEA) passed by Ontario's Liberal Government in May 2009 put the province at the forefront of wind development.

First and foremost, the GEA introduced a lucrative feed-in tariff system. A wide range of renewable technologies are awarded 20-year contracts with guaranteed electricity prices. The guaranteed price for onshore wind is C\$135/MWh, with an extra cent added on for smallscale community projects. For offshore wind, the tariff rises to C\$190/MWh.

The GEA, apart from being the first feed-in tariff in North America, streamlines the approval process for renewable energy facilities.

In November 2010, the Ontario Ministry of Energy presented its long-term energy plan for the period 2010-2030. Among other measures, the Plan rises Ontario's renewable target from 5,3 GW in 2025 to 10,7 GW by 2018.

Regulatory change 2 tenders held in 2010 Description

· Both tenders allocated 2,05 GW of wind capacity

Brazil since 2009 has had a tendering system to regulate the allocation of wind capacity, leaving behind a feed-in tariff system (PROINFA program) that fostered wind energy in its early days. Tenders allow the government to secure the energy supply at the least cost for consumers, which is paramount for economic development.

In recent years there has been a strong tendency towards developing wind energy in Brazil, mainly because of the complementary seasonal behavior of wind and hydro energies: on average, during the dry season the highest wind speeds are measured. Fostering renewable energy can also strengthen energy supply, mainly avoiding fuel generation. At an industrial level, the development of wind industry is seen as an opportunity to attract infernational turbine manufacturers. Although the local content is not explicitly included in tenders, it is yet a requirement for developers to be eligible to subsidized financing from development banks as BNDES (Banco Nacional do Desenvolvimento) or BNB "(Banco do Nordeste do Brasil").

The tender system has some particularities in Brazil. First of all, the amount to be tendered is decided by the Government, which removes the risk of over capacity. Once the auction is held, the contracts offer 20-year power purchase agreements. There are two types of fenders:

• I- Reserve tender: designed to provide back-up power to guarantee the security of the energy supply, allowing an additional "reserve" to the national interconnection system. The reserve tenders are managed by the Electric Energy Commercialization Agency (CCEE) and the energy is bought by the Government. In the reserve tenders, a fixed amount of generation is set in each contract and penalties are triggered when power generation is below 90%. There is an associated extra-revenue, at 70% of contract price, to ony generation exceeding 130% of the contracted energy. The output level is reviewed every 4 year-period.
• ll companies. Contracts refer to baseload capacity and winning bidders are granted a

20-year power purchase agreement. The contracts refer to a generation level and any annual unbalance below 90% must be settled at selling price in favor of buyers. Through a real-time generation escrow account, the excess of generation of one year can compensate any lack of generation, since not lower than 90%, within the 4 yearperiod. Any excess of generation leading to a 4-year period balance over 100% is settled in the wholesale market.

In 2010, Brazil conducted two tender processes in August, a reserve and an alternative energy tender, totaling 2.05 GW. The reserve tender allocated 528 MW of wind capacity at an average price of R\$122,7/MWh (\$70.4) and the alternative energy tender 1,519 MW at R\$134,1/MWh (\$76.6). The fierce competition lowered the average prices, which has caused concern among developers and suppliers.

In December 2010 Brazil's Ministry of Mines and Energy approved a new Decennial Plan for Energy Expansion to 2019. The plan calls for a big boost in renewables as no new fossil fuel power plants are expected to be build after 2014. Under this strategy, more than 6 GW of wind installed capacity are expected by 2019 (from its current level of approximately 1.5 GW), although the industry expects a larger figure.

Wind sources will have the opportunity to secure PPAs in 2011 as new tenders will be conducted in the second quarter of 2011 according to Ordinance nº 113 of February 1st. One tender will be an "A-3" (baseload capacity to be delivered in three years time) and the other one a "reserve tender" (reserve capacity). The energy to be auctioned and the celling price have still not being revealed.

RISK MANAGEMENT বার বা

This chapter is also included in Corporate Governance Report (attached)

We believe that risk management should not only protect value but also create value.

Therefore, EDPR's risk framework was designed to be not a stand-alone activity separated from the main activities and processes of the company, but to be part of the responsibilities of management and an integrating all organizational processes, including strategic planning.

1. RISK FRAMEWORK AND PROCESS

In EDPR's risk framework, risk process aims to link company general strategy into manager's day-to-day decisions, enabling the company to increase the likelihood of achieving the strategic objectives.

EDPR's general strategy is translated into major strategic questions that are grouped by risk area and then subject to EDPR's risk process. The outcome of the risk process is a set of specific guidelines per risk area that will guide managers in their decisions according to the company's risk profile.

Each strategic question is subject to a core risk process which is composed of four major steps:

· Make sense - the aim of this step is to generate an understanding of all the dynamics behind the issue under analysis in order to assess the severity of the risk and also to

anticipate all possible mitigating actions in the case its exposure is above acceptable limits.

• · Make choices after an understanding of the risk, the next step is to discuss whether the risk needs to be treated or not. If it does there is a need to discuss on the most appropriate risk treatment strategies and methods, and the outcome of this discussion is a proposed action plan that is later subject to approval by the Executive Committee,
• · Make happen following the Executive Committee decision, guidelines are written and then sent to the risk manager.
• · Make revision after the implementation of the mitigation strategies there is a follow-up of their impact to assess any adjustments are needed. This risk reporting and control step has two major functions: (1) to follow EDPR's risk position and comparing its alignment with both the company's risk profile and the risk policy approved by the Executive Committee for each risk, and (2) to control as possible the mitigation actions by defining and implementing all the mechanisms necessary to check if these actions are being implemented according to plan.

2. RISK FUNCTIONS AND RISK COMMITTEE

Risk management in EDPR is supported by three distinct organizational functions:

During 2010, EDPR created a Risk Committee to integrate and coordinate all the risk functions and to assure the link between risk strategy and the company's operations.

EDPR's Risk Committee intends to be the forum to discuss how EDPR can optimize its risk-return position according to its risk profile. The key responsibilities of this committee are:

• · To analyze EDPR overall exposures and propose actions;
• · To follow-up the impact of the mitigation actions;
• · To review transactional limits, risk policies and macro-strategies;
• · To review reports and significant findings of the Global Risk Strategy analysis and the risk control areas;
• · To review the scope of the work of the Global Risk Strategy area and its planned activities.

3 RISK AREAS AND RISK RELATED STRATEGIC QUESTIONS

The following table summarizes the main risk areas of EDPR's business and also shows the risk related strategic question. The full description of each risk and how they are managed can be found in the Corporate Governance chapter.

Risk areas	Risks descriptions	Risk related strategic questions (not
		exhaustive)
	1 . Countries - Changes in regulations may impact	· What is EDPR's current regulatory
	& regulations EDPR's business in a given country ;	risk
		· How much should EDPR grow in current markets?
		· Where should EDPR focus entering new markets?
	2. Revenues - Revenues received by EDPR's projects	· What is the exposure of our
	may diverge from what is expected;	revenue stream both in prices and wind variations?
		· What is the impact on EDPR's EBITDA?
		· What should the market strategy
		be to cover market volatility?
	(3. Financing - EDPR may not be able to raise enough · · What should be the risk profile from cash to finance ali its planned capex;	an investor's point of view?
	- EDPR may not be able to fulfil its financial · What is the synthefic rating of the

obligations;

• Projects' leverage may be lower than planned impacting their profitability;

• Wind - Changes in turbine prices may impact turbine projects' profitability;

icontracts - Contracts should take into account the pipeline development risk;

1. Pipeline development different from its targets or suffers delays and/or anticipations in its installation

company and what measures could be done to improve it?

· What is the probability of a cash flow stress due to market conditions?

· Whot should be the hedging strategy for turbine prices in terms of price structure and quantities?

· What is the trade-off between supplier diversification and rappel discount?

· How many MW can EDPR expect to put in operation with its current pipeline?

· How many projects may die or be delayed over permitting issues?

· What is the actual risk of not achieving the installed capacity targets?

· What is the appropriate buffer to ensure that EDPR delivers the target capacity?

· How should EDPR's pipeline look like in 2012?

significant impact in EDPR?

1. Operations - Projects may deliver a volume different · · Is there any operating risk with from expected.

4 IDENTIFIED RISK AND EDPR'S RESPONSE

4.1.1 Regulatory risks

The development and profitability of renewable energy projects are dependent on policies and regulatory frameworks. The jurisdictions in which EDP Renováveis operates provide numerous types of incentives that support the sale of energy generated from renewable sources.

Support for renewable energy sources has been strong in previous years, and both the European Union and various US federal and state bodies have regularly reaffirmed their wish to continue and strengthen such support.

In Europe, this support has been steady and has to be strengthened as EU countries have renewable and mandatory targets. The new EU directive on renewable energies, published in December 2008, requires each member state to increase its share of renewable energy in the group's energy mix in order to raise the overall share from 5.5% level in 2005 to 20% in 2020. To ensure this goal EU countries have interim periodic targets to ensure a steady progress towards its 2020 target. For this reason they have presented in 2010 their Renewable National Energy Action Plans (RNEAPs). These plans provide detailed information about how each Member State expects to comply with its 2020 binding target, including the technology mix and the forecasted trajectory to reach it.

Regarding US, they do not have mandatory energy targets at a federal level. However, under the Obama Administration, renewable energies have found strong political support. The Stimulus package (American Recovery & Reinvestment Act) approved in February 2009 included a wide range of measures addressed to boost renewable energies. However, in 2010 the Congress failed to pass a national renewable electricity standard, which would have estoblished a mondatory proportion of electricity to be delivered from renewable resources. The result of the mid-term elections on November 2nd threatens to undermine efforts to pass the law, as Democrats, whom traditionally have been supporting wind promotion, have now lost the majority of the House of Representatives, and by that its control in passing laws.

Additionally, it connot be guaranteed that the current support will be maintained or that the electricity produced by future renewable energy projects will benefit from state purchase obligations, tax incentives, or other support measures for the electricity generation from renewable energy sources. This is particularly true in an economic downturn context, as Governments struggle to achieve their budgets and cannot always guarantee a steady support for renewable energies.

Management of regulatory risks

EDPR is managing its exposure to regulatory risks in two different ways. The first one is trough diversification (being present in several countries) and the second one is by being an active member in several wind associations. EDP Renováveis belongs to the most prestigious wind energy ossociations, both at national and international level. EDP Renováveis is an active member of the following renewable [specially wind energy] associations.

EUROPE	EWEA (EUROPEAN WIND ENERGY ASSOCIATION)
SPAIN	AEE (ASOCIACION EMPRESARIAL EQLICA)
PORTUGAL	APREN (ASSOCIAÇÃO PORTUGUESA DE PRODUTORES DE ENERGIA
	ELÉCTRICA DE FONTES RENOVAVEIS]
FRANCE	SER (SYNDICAT DES ÉNERGIES RENOUVELABLES)
BELGIUM	(ASSOCIATION POUR LA PROMOTION DES ENERGIES APERE
	RENOUVELABLES)
	EDORA (FÉDÈRATION DE L'ENERGIE D'ORIGINE RENOUVELABLE ET
	ALTERNATIVE)
POLAND	PIGEO (POLSKA IZBA GOSPODARCZA ENERGII ODNAWIALNEJ)
	PSEW (POLSKIE STOWARZYSZENIE ENERGETYKI WIATROWEJ)
	PTEW (POLSKIE TOWARZYSTWO ENERGETYKI WIATROWEJ)
ROMANIA	RWEA (ROMANIAN WIND ENERGY ASSOCIATION)
UNITED KINGDOM	BWEA (BRITISH WIND ENERGY ASSOCIATION)
	RENEWABLE UK
	SCOTTISH RENEWABLES
ITALY	ANEV (ASSOCIAZIONE NAZIONALE ENERGIA DEL VENTO)
	APER (ASSOCIAZIONE PROMOTORI ENERGIE RINNOVABILI)
UNITED STATES	AMERICAN WIND ENERGY ASSOCIATION (AWEA)
	IOWA WIND ENERGY ASSOCIATION RENEW WISCONSIN
	RENEW, INC.
	THE WIND COALITION
	AMERICAN WIND WILDLIFE
	CEERT
	COLORADO INDEPENDENT ENERGY ASSOCIATION
	INTERWEST ENERGY ALLIANCE
	WESTERN POWER TRADING FORUM
	SMART GRID OREGON
	TEXAS RENEWABLE ENERGY
	WEST TEXAS WIND ENERGY
	RENEWABLE NORTHWEST PROJECT
CANADA	CANWEA (CANADIAN WIND ENERGY ASSOCIATION)
BRAZIL	ABEEOLICA (ASSOCIAÇÃO BRASILEIRA DE ENERGIA EOLICA)
	CERNE (CENTRO DE ESTRATÉGIAS EM RECURSOS NATURAIS E ENERGIAS)

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Being an active member in all these associations allows EDP Renováveis to be aware of any regulatory change, and represent wind energy sector's interests when required by the governments.

4 2 Revenues

4.2.1 Exposure to market electricity prices

Remuneration for electricity sold by EDP Renováveis wind farms depends, on the regulatory system. In some of the markets this creates an exposure to market prices for electricity. Market prices may be volatile as they are affected by various factors, including the cost of fuels, average rainfall levels, the cost of power plant construction, technological mix of installed generation capacity and demand. Therefore, a decline in market prices to unexpected levels could have a material adverse effect on EDP Renováveis' business, financial condition or operating income. EDP Renováveis currently uses various financial and commodity hedging instruments in order to reduce the exposure to fluctuating electricity prices. However, it may not be possible to successfully hedge the exposures or it may face other difficulties in executing the hedging strategy.

Management of electricity prices exposure

As of December 31* 2010, EDP Renováveis faced limited market price risk. In the case of EDPR NA, most of its installed capacity has fixed prices determined by long-term purchase agreements.

In most countries where EDPR is present, prices are mainly determined through regulated tariffs (France and Portugal) or managed through long-lerm power purchase agreements (Brazil, Poland -although only for Green Certificates - and Belgium). In Romania EDPR has full market exposure.

In the case of Spain, electricity is sold directly on the daily market at spot prices plus a predefined regulated premium. EDP Renováveis also has an option for selling this electricity through regulated tariffs at fixed prices. In 2010 the company closed a hedge in order to mitigate the effect of pool price fluctuations and as a result, only 38% of the production was market exposed. Considering all of EDPR's production in 2010, 79% of the EBITDA had no market exposure.

4.2.2 Risk related to volatility of energy production

EDP Renováveis business is focused on the production of electricity from renewable energy sources. The amount of generated electricity and therefore the profitability of wind farms are dependent on climatic conditions, which vary across the locations of the wind farms, and from season to season and year to year. Because turbines will only operate when wind speeds are within certain specific ranges that vary by turbine type and manufacturer, if wind speeds fall outside of these ranges, energy output at wind farms may decline.

Variations and fluctuations in wind conditions at wind farms may result in seasonal and other fluctuations in the amount of electricity that is generated and consequently the operating results and efficiency.

Management of risks related to volatility of energy production

Variations in wind conditions are due to seasonal fluctuations, and these fluctuations have an impact in the amount of the electricity generated. EDP Renováveis mitigates this risk by the geographical diversification of its wind farms in each country and in different countries. This "portfolio effect" enables to offset wind variations in each area and to keep the total energy generation relatively steady. Currently EDP Renováveis is present in 11 countries: Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil.

4.3 Financing

4.3.1 Risks related to the exposure to financial markets

EDP Renováveis is exposed to fluctuations in interest rates through financing, particularly by shareholder loans from the EDP Group and from institutional investors in connection with its Partnership Structures in the case of the US operations, as well as, project financing and third party loans from entities outside the EDP Group. This risk can be mitigated using hedging instruments, including interest rate swaps, but there is no full guarantee that the hedging efforts will turn out successfully.

Finally, because of its presence in several countries, currency fluctuations may also have a

material adverse effect on the financial condition and results of operations. EDP Renováveis may attempt to hedge against currency fluctuations risks by matching revenue and costs in the same currency, as well as by using various hedging instruments, including forward foreign exchange contracts. However, there can be no assurance that the company efforts to mitigate the effects of currency exchange rate fluctuations will be successful.

Management of financial risks

The evolution of the financial markets is analyzed on an on-going basis in accordance to EDP Group's risk management policy. Financial instruments are used to minimize potential adverse effects resulting from the interest rate and foreign exchange rate risks on its financial performance.

The execution of financial risks management of EDP Group is undertaken by the Financial Department of EDP, in accordance with the policies approved by the Board of Directors. The Financial Department identifies, evaluates and submits for approval by the Board the hedging mechanisms appropriate to each exposure. The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits following the recommendation of the risk committee.

4.3.1.1 Interest rate risk

EDPR's operating and financial cash flows are substantially independent from the fluctuation in interest rate markets.

The purpose of the interest rate risk management policies is to reduce the financial charges and the exposure of debt cash flows from market fluctuations through the settlement of derivative financial instruments to fix the debt interest rates. In the floating-rate financing context which represents approx. 5% of EDPR's gross debt, EDPR may contract interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating interest rate loans into fixed interest rate loans.

EDPR has a portfolio of interest-rate derivatives with maturities between approximately 1 and 10 years. Sensitivity analyses are performed of the fair value of financial instruments to interestrate fluctuations.

4.3.1.2 Exchange rate risk

EDPR operates internationally and is exposed to the exchange-rate risk resulting from investments in subsidiaries. As a general policy, EDP Renováveis matches costs and revenues of its wind farms in the same currency, reducing the effect of currency fluctuations while preserving value. Currently, main currency exposure is the U.S. dollar/euro currency fluctuation risk that results principally from the shareholding in EDPR NA but, with the increasing capacity in others non-euro regions, EDPR will become also exposed to other local currencies (Brazil, Poland and Romania).

EDP Group's Financial Department is responsible for monitoring the evolution of the U.S. dollar, seeking to mitigate the impact of currency fluctuations on the financial results of the Group companies and consequently, on consolidated net profit, using exchange-rate derivatives and/or other hedging structures. The policy implemented by EDP consists on undertaking denvative financial instruments with symmetrical characteristics to those of the hedged item for the purpose of hedging foreign exchange risks. The operations are reassessed and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that driven them is also evaluated.

4.3.2 Counterparty credit risk

Counterparty risk is the default risk of the other party in an agreement, either due to temporary liquidity issues or long term systemic issues.

Management of counterparty credit risk

EDP Renováveis policy in terms of the counterparty credit risk on financial transactions is managed by an analysis of the technical capacity, competitiveness, credit notation and exposure to each counterparty. Counterparties in derivatives and financial transactions are restricted to high-quality credit institutions, there cannot be considered any significant risk of counterparty non-compliance and no collateral is demanded for these transactions.

In the specific case of EDPR EU, credit risk is not significant due to the reduced average payment period for customer balances and the quality of its debtors. In Europe, main customers are operators and distributors in the energy market of their respective countries.

In the case of EDPR NA, counterparty risk analysis is more relevant given typical price structure and the contracting terms of PPA contracts. In the light of this, counterparty risk is carefully evaluated taking into account the offtakers' credit rating. In many cases, additional credit support is required in line with the exposure of the contract.

4.3.3 Liquidity risk

Liquidity risk is the risk that EDPR will not be able to meet its financial obligations as they fall due.

Management of liquidity risk

EDPR's strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring in unacceptable losses or risking damage to EDPR's reputation.

Given the current condition of the debt market, it can be harder to cover the financial requirements needed to carry out EDPR's activities.

The liquidity policy followed ensures compliance with payment obligations acquired, through maintaining sufficient credit facilities and having access to the EDP Group credit facilities.

4.4 Wind turbine contracts

4.4.1 Wind turbine supply risk

Wind turbine is a significant part of a wind farm's CAPEX (around 80%). The main risks associated to wind turbines are:

• Price risk: this occurs when the supply of wind turbines cannot meet the growing demand, and prices rise sharply, impacting profitability of new wind farms;

• Quantity risk: this occurs when no wind turbines are available for the construction of new wind farms.

Management of wind turbine supply risk

The last couple of years were marked by the difficulties of the wind turbine industry to catch up with the booming demand. In this high growth environment, wind generators endured difficulties to secure the supply of wind turbines. This trend, however, was reversed in 2008 and 2009 as furbine demand slowed down and new players appeared creating a more favorable scenario for EDP Renováveis. This new scenario is driven by the economic crisis, the reduced power demand, the regulatory uncertainties and the increasing competition, particularly fierce regarding Chinese manufacturers. The company has taken advantage of the possibility of contracting part of its expected turbine supply needs in this favorable situation, by signing a wind turbine procurement contract for the supply of up to 2.100 MW with Vestas. The contract is a Master Supply Agreement that consists of a firm order for supply, installation and commissioning of wind turbines with a total capacity of 1.500 MW to be delivered to North America, South America and Europe in 2011 and 2012 and with the possibility to be extended by an additional 600 MW. Contracting large volumes enables EDP Renováveis to obtain better prices and conditions that mitigate the effect of general increases in asset prices.

Nevertheless, EDP Renováveis uses a large mix of turbines suppliers in order to reduce its dependency on any one supplier. Currently, EDP Renováveis is one of the generators with a more diversified portfolio. The large range of EDP Renováveis suppliers allows the company fo avoid technological risk of each turbine supplier. Additionally, EDP Renováveis has the required size to contract with a large range of suppliers.

4.5 Pipeline development

4.5.1 Permitting risks

Wind farms are subject to strict international, state, regional and local regulations relating to the development, construction, licensing and operation of power plants. Among other things, these laws regulate: land acquisitions, leasing and use; building, transportation and distribution permits; landscape and environmental permits; and regulations on energy transmission and distribution network congestions. Development process of wind farms is subject to the probability of obtaining such permits. If authorities do not grant these permits or they do so with delays or with other restrictions, such actions could have a material adverse effect on the business.

Management of permitting risk

Permitting risk is mitigated by the fact that EDP Renováveis in present is 11 different countries: Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil. Additionally, the company has a large pipeline of provide a "buffer" to overcome potential problems in the development of new projects, ensuring growth targets.

Finally, EDP Renováveis mitigates development risk by creating partnerships with local developers.

4.6 Operations

4.6.1 Wind turbine performance risk

Wind turbine performance risk is the risk that the performance of the turbine does not reach its optimum, and therefore, the energy output is not as expected.

Management of wind turbine performance risk

EDP Renováveis miligates the wind furbine performance risk by implementing the following measures. Firstly, EDP Renováveis mitigates this risk by using a mix of turbine suppliers which minimizes technological risk. Secondly, wind turbine performance risk is reduced by signing strict and thorough O&M contracts with suppliers, usually for a 5-year period (full-scope maintenance agreement], being the 2 first year-period of full warranty. Additionally, technical warranties are signed with the turbine suppliers, in order to guarantee that the performance of the turbine will be optimum. The availability and the power curve of each turbine is adequately guaranteed with "liquidated damages" clauses that set up penalties to be paid by the supplier when the availability is not met (usually 96 or 97%) or the power curve is not reached. Wind turbine performance risk is also miligated with an adequote preventive and scheduled maintenance and predictive maintenance is being also brought in.

After the first 5-year period, O&M is usually contracted with an external company, but a technical assistance agreement is also signed with the turbine supplier.

Most recently, and following the general trend in the wind sector, EDPR is externalizing the O&M activities in some of its wind farms. This procedure may increase the wind turbine performance risk but reduces turbine manufacturer dependence and enables to decrease O&M costs.

Finally, EDP Renováveis has in place a LEAN Project. LEAN is a continuous improvement program that aims to:

• Maximize Availability of Turbines
• · Improve Efficiency

C

· Manage Reactive Energy

In order to achieve the objectives listed above, the LEAN team effectively collaborates with all technical areas such os O&M, Wind Assessment, Technology and Dispatch Center.

5. FINANCIAL HEDGING DERIVATIVE INSTRUMENTS

Topic 4 provides a description of the key financial risks faced by EDPR. According to EDPR risk policy, and in order to manage, control or minimize impact of some of those risks, in liaise with a discipline risk management practice, EDPR uses financial derivatives and enters hedging transactions with the sole intent to protect against risks and as a consequence miligate fluctuations of earnings.

These derivative instruments are explained in detail as part of the financial statements.

6. TREASURY STOCK (OWN SHARES)

On the General Shareholder's meeting of the April 13th, it was approved to authorize the Board of Directors for the acquisition and transmission of own shares by the Company and/or the affiliate companies through their management bodies for a term of five years from the date of the General Shareholders Meeting. Up to date of this report the Company has not executed any acquisition and consequently transmission of own shares.

Terms and requirements are detailed in the Corporate Governance (attached)

7. ENVIRONMENTAL PERFORMANCE

Energy is important for life, but the way it is produced is also relevant. EDPR is a leading company in the renewable energy sector - the energy of today.

We produce clean energy, green energy. Energy without limits, without emissions.

At EDPR we strongly believe that sustainable development is possible. Environmental compliance and continual improvement are major concerns of EDPR, believing that prevention is the key to avoid impacts.

Wind farms are environmentally respectful sites. Only a small percentage of the land leased is taken out of permanent use when the wind farms are in operation and the activity is compatible with existing land use.

Although the location of wind farms in protected areas is not a common issue, potential impacts on biodiversity, such as fauna disturbance, vegetation loss, visual intrusion, waste generation... may occur. Even so, the vast majority of the impacts which might take place during the operation of wind farms are temporary and reversible.

Monitoring plans are carried out in order to make sure no significant impacts happen. In this sense, EDPR actively protects all the areas with operating wind farms.

ldentifying potential impacts as soon as possible is imperative in order to obtain satisfactory results, as it is committed in the EDPR Biodiversity and Environmental Policies.

It is clear that, in comparison with other energy generation sources, wind farms' impacts on the environment are much less significant. Renewable energy doesn't cause greenhouse gases emissions and any other emissions. Moreover, it plays a central role in reducing CO2 emissions, and that's a global positive impact itself, because of its influence on all kinds of life.

ECO-EFFICIENCY

The main impact of EDPR activity is clean energy, green energy, renewable energy.

EDPR indirect emissions are much reduced and they're limited to the administrative buildings consumption and wind farms' auxiliary consumptions (when self-consumption is not possible).

However, as we acknowledge that this information is requested by some of our stakeholders, we are implementing some initiatives that will allow us to better inform on our performance in this field and its report.

Usually, the energy needed for wind farms' auxiliary consumptions (lights, wind turbine orientation, etc) comes from the energy produced by itself, but if there isn't any operative wind turbine, this energy must be purchased.

EDPR also takes efforts to reduce and eliminate unnecessary indirect emissions very seriously. A number of initiatives regarding reduction of energy consumption and emissions have been developed during 2010.

ENVIRONMENTAL MANAGEMENT SYSTEM

Wind farms in operation also contribute to the internal commitment of respect for environment implementing measures with the objective of a wise use of resources and waste reduction.

One of the best examples of the environmental performance of the EDPR Environmental Management System (EMS).

The EMS which is being implemented in EDPR according to ISO 14001 standard, turned out to be an excellent tool for several reasons:

• · Exhaustive control of applicable legal requirements and their compliance.
• · Environmental performance monitoring.
• · Definition of environmental objectives.
• · Reduction of environmental risks.
• · Promotion of new initiatives looking for continual improvement.
• · Staff involvement and commitment of the organization.
• · Resources management improvement ond optimization of investments and costs.
• · Operational control established which allows detailed monitoring of environmental features such as waste generation.

WASTE & SPILLS

Waste generation is one of the main environmental aspects to control at wind farms in operation. In EDPR we pay special attention to enhance monitoring of hazardous and nonhazardous waste. As part of our training plan, EDPR employees as those working on their behalf, are aware of its importance. The training helped increase awareness on waste management requirements, challenges and solutions, and addressed issues such as material storage, labeling, transport and recycling.

EDPR has defined a systematic of environmentol emergency response as part of EMS implementation process. This procedure sets out the guidelines regarding environment for action in case of fire, flood or spill at wind farms. These guidelines are annyally checked through questionnaires, simulacrum, etc. Also, under the EMS, employees at wind farms attend training sessions in which, apart from other things, is explained how to deal with an environmental emergency and what to do once overcome. Any environmental incident is recorded in the Emergency Register which collects information about the event date, location, emergency situation occurred, causes, impacts and corrective measures taken.

BIODIVERSITY

The United Nations General Assembly declared 2010 as the International Year of Biodiversity to increose the awareness about the importance of biodiversity conservation throughout the world by highlighting the importance that biodiversity has on our quality of life, to reflect the efforts already undertaken to safeguard biodiversity and to promote and foster initiatives to reduce the loss of biodiversity.

2010 saw the hosting of two significant meetings - the Convention on Biological Diversity in Nagoya, Japan, and the United Nations Climate Change Conference in Cancyn, Mexico, which have both lead to historic decisions on addressing biodiversity loss, deforestation avoidance and climate change.

EDPR wants to contribute their bit in biodiversity conservation and respect for environment, because preserving biological diversity requires action at all levels: government, business and the individual.

EDPR is committed to assess the impact of its activities on biadiversity in all phases of its business. Although we have pledged to apply EDP's Group Environment and Biodiversity Policy, to reinforce this commitment EDPR Executive Committee approved the Environment and Biodiversity Policies in the beginning of 2011. Both are available on EDPR website. EDPR considers these commitments a cornerstone of its business, integrating them into the

decision making process of the company.

8. HUMAN CAPITAL

We have achieved a top tier position in the renewable energy market thanks to our people commitment and effort. To guarantee the excellence at work of our employees, human capital management plays a key role to support EDPR growth targets maintaining the current operations excellence. Therefore, EDPR is committed to create the most adequate environment to secure employee commitment, empowerment and accountability, while offering them an attractive career development plan with opportunities to grow professionally at the same high pace as the company.

To create the most adequate environment for our employees, the company has developed a Human Resources Policy, approved in 2009, based on the following principles

Ensure internal fairness and evenhandedness through a professional develapment and rewards madel based on criteria ore transporent that and transversal within the group.

Attract, retain and develop talent and skills through a competitive remuneration palicy throughout all geographies for EDPR Group that are in line with specific requirements of each business. considering the importance of the different functions and employee potential

Appraise merit ond performonce in professionol development ond reward employees, ensuring commitment ond responsibility in obtoining both individual ond team results within the organization or the Group.

Our global compensation strategy policy has been implemented to address the needs of every local market, with enough flexibility to adapt to each region where the company is present. The developed system ensures that all positions are evaluated and graded according to a methodology designed to ensure fairness, through an approved salary band for each position within the organization's matrix. The defined salary bands are based on market benchmarks

business strotegy

COMPANY PROFILE

EDPR workforce has grown at a high pace, to guarantee the staff availability to support the growth of the organization. At the end of 2010 EDPR had a total headcount of 833, corresponding to a 14% increase compared to that of 2009. EDPR EU accounts for 49% of the total workforce, EDPR NA 40%, EDPR BR 2% and Holding the remaining 9%.

Headcount at year-end	2010	2009	Var (%)
EDPR EU	398	365	9%
.EDPR NA (1)	332	303	10%
EDPR BR	17	ದ	113%
Holding (2)	75	45	67%
Total	822	721	14%

Note: figures include the Board of Directors

(1) EDPR NA headcount includes Executive Committee

(2) In 2010, 8 holding employees were based in North America; 67 in Europe, whereas in 2009, every holding employee was based in Europe. The high increase of holding's headcount resulted from internal transfers.

Throughout the year, 171 new employees joined the company while 70 left, resulting a furnover ratio of 15%, in line with the previous year.

Employees' Turnover	2010	2009
Chart Variation
Number of hires	171	ા રેર
Number of dismissals	70	65
Total Turnover	15%	15%
Turnover by Gender
Male	16%	16%
Female	12%	1 4%
Turnover by Age Range
Less than 30 years ald	14%	20%
Between 30 and 39 years old	1 4%	14%
Over 40 years old	17%	13%
Turnover by Platform
TEDPR EU	11%	12%
EDPR NA	18%	18%
EDPR BR	41%	50%
Holding	13%	17%

EVALUATION & PERFORMANCE

As announced in 2009 Annual Report, the company was committed to progress in 2010 towards a 360 degree evaluation model and during the last quarter of the year, o global evaluation model of this type has been implemented.

All our employees are covered by our performance evaluation system. This system collects information from seven data sources to evaluate employee performance: oneself, 2 peers, 3 subordinates and the manager.

To guarantee the success of the implementation of the new evaluotion tool, in 2010 the Human Resources department created "The Guide to the Potential and Performance Appraisal" to help our employees to have easy access to all the information they needed as they worked through the appraisal process, and could master the tools, timeframes and procedures that go along with the appraisal of their activity. In order to communicate this guide to all employees, videos were designed and put on our intranet. EDPR launched a contest for all employees in the compony, and the winners were the employees who answered correctly to the questions and did his/her evaluation on time.

Performance and potential evaluations are based on the company strategic competencies, key performance indicators and a Global Assessment. By defining and evaluating gaps, continuous feedback interviews are encouraged and employees are also asked to build up an Individual Development Plan. In EDPR we encourage all the employees to create its own Individual Development Plan as one of the most relevant support tools in all EDPR employees' development.

In 2010, EDPR decided to separate the performance evaluation from the potential evaluation processes. The processes take place at different times, but the period they appraise is the same.

TRAINING AND CARRER DEVELOPMENT

EDPR is committed to offer its employees an attractive career development plan, and olso offers continuous education and training activities.

Moreover, the development of our employees is a strategic objective for EDPR in order to align current and future demands of the organization with employees' capabilities, while fulfilling their professional development expectations and support their continued employability.

In 2010, EDPR almost doubled the number of training hours from 2009 to 26.697. The total investment was increased by 122%, reaching €669,074.

9. RESEARCH AND DEVELOPMENT (R&D)

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Beyond the commercial activities, EDP Renováveis supports EDP Inovaçao (EDPI) in developing a pilot project in order to deploy a wind turbine installed on floating structure off the Portuguese coast. Such floating structure is a patented technology named Windfloat owned by Principle Power, whom EDPI has a memorandum of understanding, providing privilege access to the technology.

10. RELEVANT EVENTS AFTER CLOSING OF THE PERIOD

No relevant subsequent events occurred until 24th February 2011

11. CORPORATE GOVERNANCE OVERVIEW

11.1 Model of Management and Supervision

EDP Renováveis, has adopted the governance structure in effect in Spain. It comprises a General Meeting of Shareholders, that is the sovereign body , and a Board of Directors that represents and manages the company.

The Company's Board of Directors has set up four committees. These are the Executive Committee, the Audit and Control Committee, the Nomination and Remuneration Committee and the Committee on Related-Party Transactions.

The Company's governance structure is shown in the chart below.

The governance model of EDPR is designed to ensure the transparent, meticulous separation of duties and the specialisation of supervision.

The purpose of the choice of this model by EDPR is to adapt the Company's corporate governance structure to the Portuguese legislation. The governance model adopted by EDPR therefore seeks, insofar as it is compatible with its personal law, to correspond to the so-called "Anglo-Saxon" model set forth in the Portuguese Commercial Companies Code, in which the management body is a Board of Directors, and the supervision and control duties are of the responsibility of an Audit and Control Committee.

The choice of this model is essentially an attempt to establish compatibility between two different systems of company law, which can be considered applicable to the model.

The experience of institutional operating indicates that the governance model adopted by the shareholders is appropriate to the corporate organisation of EDP Renováveis activity, especially because it affords a healthy balance between the management functions of the Executive Committee, the supervisory functions of the Audit and Control Committee and oversight by different specialised Board of Directors committees.

The institutional and functional relationship between the Executive Committee, Audit and Control Committee and the other non-executive members of the Board of Directors has been proved very positive and has fostered internal harmony conducive to the development of the company's businesses.

In order to ensure a better understanding by its shareholders of EDP Renováveis corporate governance, the Company posts its updated Articles of Association on www.edprenovaveis.com.

11.2 Corporate Bodies

General Meeting of Shareholders

The General Meeting when properly convened, has the power to decide and adopt majority decisions on matters that the Articles of Association set forth that it should be decided and be submitted for its approval.

The Board of the General Meeting is responsible for organising its proceedings. It is made up of the Chairperson of the Meeting, the Chairperson of Directors, or his/her substitute, the other Board members and the Secretary of the Board of Directors.

Board of Directors

The Board of Directors has the broadest powers for the management and governance of the Company, with no limitations other than the competences expressly allocated exclusively to the General Meeting of Shareholders by law or the Articles of Association.

Name	Position	Date of Appointment	End of Term
António Mexia	Chairman and Director	18/03/2008	18/03/2011
Ana Maria Fernandes	Vice- Chairman, CEO	18/03/2008	18/03/2011
António Martins da Costa	Director	18/03/2008	18/03/2011
João Manso Neto	Director	18/03/2008	18/03/2011
Nuno Alves	Director	18/03/2008	18/03/2011
António Nogueira Leite	Director Independent}	04/06/2008	04/06/2011
Daniel M. Kammen	Director (Independent)	04/06/2008	04/06/2011
Francisco José Queiroz de Barros de Lacerda	Director (Independent)	04/06/2008	04/06/2011
Gilles August	Director (Independent)	14/04/2009	14/04/2012
João Lopes Raimundo	Director (Independent)	04/06/2008	04/06/2011
João Manuel de Mello Franco	Director (Independent)	04/06/2008	04/06/2011
Jorge Santos	Director {Independent)	04/06/2008	04/06/2011
José Araújo e Silva	Director (Independent)	04/06/2008	04/06/2011
José Silva Lopes	Director (Independent)	04/06/2008	04/06/2011
Manuel Menéndez Menéndez	Director	04/06/2008	04/06/2011
Rafael Caldeira Valverde	Director (Independent)	04/06/2008	04/06/2011

11.3 Summarized Organization Chart

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11.4 Capital Structure

The EDPR share capital of EUR 4,361,540,810 is represented by 872,308,162 shares with a face value of EUR 5 each. All shares integrate a single class and are fully issued and paid. There are no holders of special rights.

Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDPR shares.

As far as the Board of Directors of EDPR is aware, there are currently no shareholders' agreements regarding the Company.

11.5 Shareholder Structure

The breakdown of the EDPR structure by region and investor type at 31 December 2010 was as follows:

EDPR Shareholder Structure (%)

At the end of 2010, EDPR's free float comprises more than 120,000 institutional and private investors in over 50 countries with special focus on Portugal, United Kingdom, United States and Rest of Europe. Institutional investors represented 79% of the free float, with private investors standing for the remaining with 21%.

Geographic Breakdown of Free Float

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Investor Type of Free Float

Shareholder Structure – 31 December 2010

EDP—Energias de Portugal Sucursal en España, S.A.	541.027.156
Hidroeléctrica del Cantábrico, S. A.	135.256.700
Free Float	196.024.306

a EDP - Energias de Portugal, S.A. � Hidroeléctrica del Cantábrico, S.A. W Free Float

11.6 Qualifying shareholding

Qualifying shareholdings in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholders' holdings. As of December 31, 2010, no qualifying Shareholdings in EDPR with the exception of EDP - Energias de Portugal, S.A were identified.

11.7 Holder of special rights

EDP Renováveis share are of a single class and series and have been fully paid up. There are no holders of special rights.

11.8 Restrictions on the transfer of shares

Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDP Renováveis shares,

11.9 Acquisition and transmission of own shares by the Company and/or other affiliate companies

On the General Shareholder's meeting of April 13th, it was approved to authorize the Board of Directors for the acquisition and transmission of own shares by the Company and/or the affiliate companies through their management bodies for a term of five years from the date of the General Shareholders Meeting, in accordance with the terms approved in the meetling that are available on the companies website. Up to date of this report the Company has not executed any acquisition and consequently transmission of own shares.

11.10 Shareholders' agreements

As far as the Board of Directors of EDP Renováveis knows, there are currently no shareholders' agreements regarding the Company.

11.11 EDP Renováveis in the Capital Markets

The shares representing 100% of the EDPR share capital were initially admitted to trading in the official stock exchange NYSE Euronext Lisbon on June 4th 2008. The then the free float level is unchanged at 22.5%.

EDP Renóvaveis, S.A.
Shares Share Capital	€4,361,540,810
Nominal Share Value	€5.00
N.º of Shares	872,308,162
Date of IPO	June 4th, 2008
NYSE Euronext Lisbon Reuters RIC Bloomberg ાડાંષ	EDPRIS EDPR PL ES0127797019

11.12 EDP Renováveis share price

EDPR's equity market value at December 31* 2010 was EUR 3.8 billion. In 2010 the share price depreciated by 35% to EUR 4.34 per share, underperforming the PSI-20 (the NYSE Euronext Lisbon reference index), the Euronext 100 and the Dow Jones Eurostoxx Utilities ("SX6E"). The year's low was recorded on November 30th (EUR 3.72) and the year's high was reached on January 8th (EUR 7.01).

In 2010 were traded more than 311 million EDPR shares, representing a 21% year-on-year increase in its liquidity, and corresponding to a turnover of approximately EUR 1.5 billian. On average, 1.2 million shares were traded per day. The total number of shares traded represented 36% of the total shares admitted to trading and to 159% of the company's free float, translating in the higher liquidity level since the IPO.

2010 EDP Renováveis share price and transactions

12. DISCLAIMER

This report has been prepared by EDP Renováveis, S.A. (the "Company") to support the presentation 2010 financial and operational performances. Therefore, the disclosure or publish of this document for any other purpose without the express and prior written consent of the Company is not allowed. EDP Renováveis does not assume any responsibility for this report if it is used for different purposes.

This document has not been audited by any independent third party. Therefore, the information contained in the report was not verified for its impartiality, accuracy, completeness or correctness.

Neither the Company -including any of its subsidiaries, any company of EDP Renováveis Group and any of the companies in which they have a shareholding-, nor their advisors or representatives assume any responsibility whatsoever, including negligence or any other concept, in relation with the damages or losses that may be derived from the use of the present document and its attachments.

Any information regarding the performance of EDP Renováveis share price cannot be used as a guide for future performance.

Neither this document nor any of its parts have a contractual nature, and it can not be used to complement or interpret any contract or any other kind of commitment.

The present document does not constitute an offer or invitation to acquire, subscribe, sell or exchange shares or securities.

The 2010 management report contains forward-looking information and statements about the Company that are not historical facts. Although EDP Renováveis is confident these expectations are reasonable, they are subject to several risks and uncertainties that are not predictable or quantifiable in advance. Therefore, future results and developments may differ from these forward-looking statements. Given this, forward-looking statements are not guarantees of future performance.

The forward-looking information and statements herein contained are based on the information available at the date of the present document. Except when required by applicable law, the Company does not assume any obligation to publicly update or revise said forward-looking information or statements.

edprenováveis

Corporate Governance Report

December 2010

Table of Contents

• 1. Statement of compliance
• 1. Corporate governance structure
• 1. Shareholder structure
• 1. Management and control system
• 1. Exercise of shareholders' rights
• 1. Remuneration
• 1. Capital markets

ANNEXES:

I. Main positions held by members of Board of Directors over the last five years

II. Current positions of the members of the Board of Directors in companies not belonging to the same group as EDP Renovaveis, S.A.

III. Current positions of the members of the Board of Directors in companies belonging to the same group as EDP Renováveis, S.A.

IV. Board of Directors and Secretary of the Board

V. Shares of EDP Renováveis owned by members of the Board of Directors as at 31.12.2010

EXTRACT OF MINUTES OF GENERAL MEETING OF SHAREHOLDERS

EDP Renováveis - 2010 Corporate Governance Report

0. STATEMENT OF COMPLIANCE

EDP Renováveis, S.A. (hereinatter referred to as EDP Renováveis, EDPR or the Company) is a Spanish company listed on a regulated market in Portugal. EDP Renaváveis' corporate organization is subject to the recommendations contained in the Portuguese Corporate Governance Code ("Código de Governo das Sociedades") approved by the CMVM (Portuguese Securities Market Commission) in January 2010. This governance code is available to the public at the CMVM website (www.cmvm.pt).

EDPR states that it has adopted in full the CMVM recommendations on the governance of listed companies provided in the Portuguese Corporate Governance Code, with the exception of Recommendation 11.2.2 of the code, which has not been adopted for the reasons indicated below.

The following table shows the CMVM recommendations set forth in the code and indicates whether or not they have been fully adopted by EDPR and the place in this report in which they are described in more detail.

Recommendation	Adoption information	Description in Report
I. GENERAL MEETING OF SHAREHOLDERS
1.1 GENERAL MEETING BOARD
1.1.1 The Presiding Board of the General Meeting shall be equipped with the necessary and adequate humon resaurces and logistic support, taking the financial positian af the company into consideration.	Adopted	4.6
1.1.2 The remuneration of the Presiding Boord af the General Meeting shall be disclosed in the Annual Repart on Corporate Governance. 1.2 PARTICIPATION AT THE MEETING	Adopted	4.6
1.2.1 The requirement for the Board to receive statements for share deposit or blocking for participation of the general meeting shall not exceed 5 working days.	Adopted	4.2
1.2.2 Should the General Meeting be suspended. the campany shall nat compel share blacking during that period until the meeting is resumed and shall then prepare itself in advance as required for the first session.	Adapted	4.2

EDP Renováveis - 2010 Corporote Governance Report

Recommendation	Adoption information	Description in Report
1.3 Voting and Exercising Voling rights
1.3.1 Componies sholl not impose any statutory restriction on postal voting ond whenever adopted or odmissible, on electronic voting.	Adopled	4.4
1.3.2 The statutory deadline for receiving early voting ballots by mail, may not exceed three working days.	Adopted	4.4
1.3.3 Companies shall ensure the level of voting rights ond the shareholder's participation is proportional, ideally through the statutary provision that obliges the one share-one vote principal. The companies that: i) hold shares that do not confer voting right; ii) establish non-costing of voting rights above a certain number, when issued solely by a shareholder or by shareholders related ta former, da not camply with the proportionality principle.	Adapted	4.3
1.4 Resolution Fixing-Quorum
1.4.1 Componies shall not set a resolution-fixing quorum that outnumbers what is prescribed by Igw.	Adopted	4.5
1.5 Minutes and Intormation on Resolutions Passed
1.5.1 Extracts from the minutes of the general meetings ar dacuments with corresponding content must be made available to shareholders on the company's website within five days period after the General Meeting has been held, irrespective of the fact that such informotion may nat be classified as material informotion. The information disclosed shall caver the resolutions possed, the represented capital and the voling results. Said information shall be kept on file on the company's website for no less than 3 year periad.	Adapted	4.7
1.6 Measures on Corporate Control
1.6.1 Measures oimed at preventing successful tokeover bids, shall respect both compony's and the shareholders' interests. The company's articles of associatian that by complying with said principal provide for the restriction af the number of votes that may be held or exercised by a sole shoreholder, either individually ar in concert with other sharehalders, shall also foresee for a resolution by the General Assembly	Adopted	4.8

and the comments of the comments of

.. ... ............

and the comments of the comments of the comments of

Recommendation	Adoption information	Description in Report
(5 yeor intervals). on whether that statutory provision is to be amended ar prevoils - without super guorum requirements as ta the one legally in force - and that in said resolution, all votes issued be counted, withaut applying said restriction.
1.6.2 In cases such os change of control or changes to the composition of the Board of Directors, defensive measures sholl not be adopted that instigate immediate and serious asset erosian in the company, ond further disturb the free tronsmission of shares and voluntary pertormance assessment by the shoreholders of the members of the Board of Directors.	Not applicoble
II. BOARD OF DIRECTORS AND SUPERVISORY BOARD
1.1 General Points
II.1.1 Structure and Duties II.1.1.1 The Board of Directors shall assess the adopted model in its Annual Report on Corporate Governance and pin-point possible hold-ups to its functioning and shall propose meosures that it deems fit far surpassing such obstacles.	Adopted	1.1/1.5
11.1.1.2 Companies sholl set up intemal contral and risk management systems in order to safeguard the company's worth and which will identify and monage the risk. Said systems shall include of least the fallowing camponents: il setting af the campany's strategic objectives as regards risk assumption; ii] identifying the main risks associated to the company's activity ond any events that might generate risks; iii) analyze and determine the extent af the	Adopted	3.7
impoct and the likelihood thot each of said potential risks will occur; iv) risk management aimed at oligning those actual incurred risks with the campany's strategic options for risk assumption; v] control mechonisms for executing measures for adopted risk monagement and its

vi) adoption of internal mechanisms for informotion ond communication on severol

effectiveness;

Recommendation	Adoption information	Description In Report
components of the system and of risk waming; vii) periodic assessment of the implemented system and the adoption of the omendments that are deemed necessary. 11.1.1.3 The Board of Directors sholl ensure the establishment and functioning of the internal control ond risk management systems. The
Supervisory Boord shall be responsible for ossessing the functioning of said systems and proposing the relevant adjustment to the compony's needs.	Adopted	3.3.2/3.7
II, 1.4 The companies sholl: i) identify the main economic, finoncial ond legol risk that the company is expased ta during the exercise of its activity; ii) describe the performance and efficiency of the risk monagement system, in its Annual Report on Corporate Governonce.	Adopted	3.7.2
II.1.1.5 The Board of Directors and the Supervisory Board shall establish internal regulatians and shall have these disclosed on the company's website.	Adopted	3.1
11.1 .2 Governance Incompatibility and Independence
11.1.2.1 The Boord of Directors shall include o number of non-executive members that ensure the efficient supervision, auditing ond assessment of the executive members' octivity.	Adopted	1.2.2 /3.1 .3/0.1
II.1.2.2 Non-executive members must include an odequote number of independent members. The size af the campany and its shoreholder structure must be token into account when devising this number and may never be less than a fourth of the totol number of Boord of Directors.	Adopted	1.2.2/0.1
II.1.2.3 The independency assessment of its nan- executive members carried out by the Baard of Directors sholl toke into account the legal ond regulatary rules in force concerning the requirements and independency the incompatibility fromework opplicoble to members of other carporate baards, which	Adopted	0. I
ensure orderly ond sequentiol coherence in applying independency criterio to oll the company. An independent executive member sholl not be cansidered as such, if in anather corporate baard and by force of applicable

Recommendation	Adoption information	Description in Report
rules, may not be an independent executive member
II.1.3 Eligibility and Appointment Criteria
II.1.3.1 Depending on the applicable madel, the Chair of the Supervisory Boord and of the Auditing and Financial Matters Committees shall be independent and adequately competent to cory out his/her dufies.	Adopted	3.3.1
11.1.3.2 The selection process of candidates for non-executive members shall be conjured so as prevent interference by executive members.	Adopted	3.5
II. 1.4 Pollcy on the Reporting of Iregularities
II.1.4.1 The compony shall odopt a policy whereby irregularities occurring within the company are reported. Such reports sholl contain the following informotion: i) the means by which such irregularities may be reported internally, including the persons that are entitled to receive the reports; ii) haw the report is to be handled, including confidential treatment, should it be required by the reporter.	Adopted	3.9
II.1.4.2 The generol guidelines on this policy shall be disclosed in the Annual Repart af Corporate Governance.	Adopted	3.9
II.1.5 Remuneration
II.1.5.1 The remuneration of the members of the Board of Directars shall be structured so that the farmers' interests are capoble of being oligned with the long-term interests af the company. Furthermare, the remuneration shall be base on performance assessment and shall discourage taking an extreme risk. Thus, remunerations shall be structured as follows: i) The remunerotion of the Board of Directors carrying out executive duties shall include a variable element which is determined by a performance assessment camed out by the compony's competent bodies occording ta pre- established quantifiable criteria. Said criteria shall take into consideration the company's real growth and the actual growth generated for the sharehalders, its long-ferm sustainability ond the risks taken on, as well as compliance with the rules applicable to the campony's octivity.	Adopted	5.1/5.2/5.3

ii) The varioble companent of the remunerotian

Recommendation

Adoption Information

Description in Report

shall be reasonoble overall as regard the fixed component of the remuneration and maximum limits shall be set for all components.

iii) A significant part of the variable remuneration shall be deferred for a period not less than three years and its payment shall depend of the compony's steady positive performance during said period;

iv) Members of the Boord of Directors shall nat enter into contracts with the campany or third parties that will have the effect af mitigating the risk inherent in the variability af the remuneration established by the company;

v) The Executive Directors shall hold, up to twice the value of the totol annual remuneration, the company shores thot were allotted by virtue of the variable remuneration schemes, with the exceptian of those shares that are required to be sold for the payment of taxes on the gains of soid shares:

vi) When the variable remuneration includes stack optians, the period for exercising some shall be deferred for a period of not less than three vears:

vii} The appropriate legal instruments shall be established so thot in the event of a Director's dismissal without due cause, the envisaged compensation sholl not be poid out if the dismissal or termination by ogreement is due to the Director's inadequote pertormance;

viii) The remuneration of Non-Executive Directors shall not include ony component the volue of which is subject to the performance or the value of the company.

11.1.5.2 A statement on the remunerotion policy of the Board of Directors and Supervisory Boord referred to in Article 2 of Low No. 28/2009 of June 19th, shall contain, in addition to the content therein stated, odequate information on:

i) which groups of companies the remuneration policy and proctices of which were taken as a baseline for setting the remunerotion;

ii) the payments for the dismissal or termination by agreement of the Director's duties.

II.1.5.3 The remuneration policy stotement referred to in Article 2 of Low No. 28/2009 shall also include the Director's remunerations which contain an important variable component,

Adopted

Adopted

5.4/5.2

8 / 100

5.4

Recommendation	Adoption information	Description in Report
within the meaning af Article 248-B/3 of the Securities Code. The statement shall be detailed and the policy presented shall particularly fake the long-term performance of the company, compliance with the rules applicable to its business and restraint in taking risks into account.
II.1.5.4 A proposol shall be submitted at the General Meeting on the opproval of plans for the allotment of shares and/or options for share purchase or further yet on the variotions in share process, to members of the Baord of Directors and Supervisory Board and other managers within the context of Article 24B/3/B of the Securities Code. The proposal sholl contoin the regulation plan or in its absence, the plan's conditions. The main characteristics of the retirement benefit plans estoblished for members of the Boord of Directors and Supervisory Board ond other managers within the context of Article 248/3/8 of the Securities Code, sholl also be opproved at the General Meeting.	Not applicable	5.1/5.7
11.1 .5.5 Doesn't exist
11.1.5.6 At leost one of the Remuneration Committee's representatives shall be present at the Annuol General Meeting for Shareholders.	Adopted	5.6
II.1.5.7 The omount of remuneration received, as a whole and individually, in other companies of the group and the pensian rights acquired during the financial year in question shall be disclosed in the Annual Report on Corporate Governonce.	Adopted	ર્સ્ડ
11.2 Board of Directors
11.2.1 Within the limits established by low for each management and supervisory structure, and unless the company is of a reduced size, the Board of Directors sholl delegate the day-to-day running ond the delegoted dulies shall be identified in the Annual Corporole Governonce Report.	Adopted	3.2.1.2
11.2.2 The Board of Directors must ensure that the company acts in accordance with its goals and	Not Adopted
concerns:	shall not delegate its duties, nomely in what ("Under Sponish Law, the matters referred to in this recommendation con be delegated by the

strategy ond policies;

this recommendation con be delegated by the i) the definition of the compony's general Board of Directors to the Executive Committee. It is common practice in Spanish listed componies ii) the definition of the group's corporate for the delegation of powers to be far-reaching,

Recommendation	Adoption information	Description in
		Report
stucture: ilijaecisions taken that are considered to be preparatian of accaunts"). strategic due to the amaunts, risk and particular characteristics involved.	with the exceptian of matters related ta the
11.2.3 Shauld the Chair af the Board of Directors carry out executive duties, the Baard af Directors set up efficient mechanisms for shall coordinating non-executive members that can ensure that these may decide upan, in an independent and infarmed manner, and furthermore shall explain these mechanisms ta the shareholders in the Carporate Governonce Report.	Adapted	3.1.3
11.2.4 The annual management repart shall include a descriptian of the activity carried out by the Nan-Executive Directars and shall mentian any restraints encountered.	Adapted	3.1.3
II.2.5 The company sholl expound its palicy af portfolio rotation on the Board of Directors, including the persan respansible far the financial partfolia, and repart an same in the Annual Corporate Governance Report.	Adapted	3.5
II.3 CEO, Executive Committee and Executive Board of Directors
11.3.1 When manoging Directors that carry aut executive duties are requested by other Directors to supply information, the former must do so in a timely manner and the infarmation supplied must adequately suffice the request made.	Adopted	3.2.1.3/3.1.3
11.3.2 The Chair of the Executive Committee shall send the convening notice and minutes of the meetings to the Chair of the Board of Directars and, as applicoble, to the Chair of the Supervisory Board or the Audifing Committee, respectively.	Adopted	3.2.1.3
11.3.3 The Chair of the Board af Directors sholl send the convening notices and minutes of the meetings to the Choir of the Generol ond Supervisory Board and the Chair of the Financial Matters Committee.	Not applicable
II.4 General and Supervisory Board, Financial Matters Committee, Audit Committee and Supervisory Board
II.4.1 Besides carrying out its supervisory dufies,	Not applicable

Recommendation	Adoption information	Description in Report
the General and Supervisary Baord sholl odvise, follow-up and carry aut an on-going assessment on the management of the company by the Executive Boord of Directors. Besides other subject matters, the Generol and Supervisory Board sholl decide on: i) the definition of the strategy and general policies of the company; ii) the corporate structure of the group; and iii) decisions taken that are considered to be strategic due to the omounts, risk and particular characteristics involved.
11.4.2 The annual reparts and financial information on the octivity corried out by the Generol and Supervisory Committee, the Financial Matters Committee, the Auditing and Supervisory Committee must be disclosed on the company's website.	Adopted	3.3.4/6.2.5
11.4.3 The onnual reports on the octivity corried out by the Generol and Supervisory Board, the Finoncial Matters Committee, the Audit Committee and the Supervisory Board must include a description on the supervisory activity and sholl mention ony restraints that they moy hove come up agoinst.	Adapted	3.3.4
11.4.4 The General and Supervisory Board, the Auditing Committee and the Supervisory Board (depending on the applicable model) sholl represent the company for all purposes at the externol auditor, ond sholl propose the services supplier, the respective remuneration, ensure that adequate conditions for the supply of these services are in ploce within the company, as well os being liaison offer between the company ond the first recipient of the reports.	Adopted	3.3.2
11.4.5 According to the applicoble model, the General ond Supervisory Board, Audit Committee ond Supervisory Board shall assess the external auditor on an annual basis and advise the Generol Meeting thot he/she be discharged whenever justifioble grounds ore present.	Adopted	3.3.2/3.8
II.4.6 The internal audit services and those that ensure complionce with the rules opplicable to the compony (complionce services) shall functionally report to the Audit Committee, the Generol and Supervisory Boord or in the cose of	Adopted	3.3.2
EDP Renováveis - 2010 Corporate Governonce Report		11 / 100

Recommendation	Adoption information	Description in Report
companies adopting the Latin model, an independent Director or Supervisory Boord, regardless of the hierorchicol relotionship thot these services have with the executive monagement of the compony.
11.5 Special Committees
II.5.1 Unless the company is of reduced size and depending on the odapted model, the Board of Directors ond the General ond Supervisory Committees, shall set up the necessary Committees in order to: i) ensure thot o competent and independent ossessment of the Executive Director's performance is corried out, os well os its own overall performance and further yet, the performance af all existing committees; ii) study the adopted governance system and verily its efficiency and propose to the competent bodies, meosures to be comed out with a view to its improvements; iii) in due time identify potential condidates with the high profile required for the performance of Director's duties.	Adopted	1.1/1.5/3.3.2/3.2.2.2
11.5.2 Members of the Remunerotion Committee or equivalent shall be independent from the	Not applicable

members of the Board of Directors ond include ("The members of the Nominations ond at leost one member with knowledge and Remunerations Committee are members of the experience in matters of remunerolion policy.

11.5.3 Any natural or legal person which provides or has provided, over the post three years, services to any structure subject ta the Board of Directors, to the Boord of Directors of the campany or that has to do with the current cansultant to the compony shall not be recruited to assist the Remuneration Committee. This recommendation also applies to any natural or

Boord of Directors. However, its members are considered independent members and do not therefore belong to the Executive Committee. In accordance with Articles 23 and 217 of the Spanish Componies Law, the remuneration scheme far Directors should be fixed in the articles of association. It is normal practice in Sponish componies for this remunerotion to be decided upan by the General Meeting of Shoreholders and for its allocation to the different members of the Boord of Directors to be decided on by the Boord itself."].

Adopted

3.2.2

1.2.6.2/3.2.2.1

Recommendation	Adoption information	Description in Report
legal person who hos an emplayment contract or provides services.
11.5.4 All the Committees shall draw up minutes of the meetings held.	Adopted	3.2.1.3/3.2.2.3/ 3.2.3.3/3.3.3
JII. INFORMATION AND AUDITING
III.1 General Disclosure Obligations
III.1.1 Companies shall maintain permanent contact with the market thus upholding the principle of equality for shoreholders and ensure that investors are able to access infarmation in a uniform fashion. To this end, the company shall create an Investor Assistance Unit.	Adapted	6.2.1 / 6.2.2
III.1.2 The following information that is made available on the company's Internet website shall be disclosed in the English language: a) The company, public compony status, headquarters ond remaining data provided for in Article 171 af the Portuguese Commercial Companies Code;
b) Articles of Association; c) Credentials of the Members of the Baard af Directors and the Morket Liaison Officer; d) Investor Relations Office, its functians and contact information; e) Financial statements: f ) Half-yearly calendar of campany events; g) Proposals submitted far discussion and voting at general meetings;	Adopted	6.2.5
h) Invitation to general meetings. III.1.3. Campanies shall advocate the rotation of auditors after two ar three terms in occordance with four or three years respectively. Their confinuance beyond this period must be based an a specific opinion for the Supervisory Baard to formally consider the canditions of ouditor independence ond the benefits and costs of replacement.	Adopted	3.8
III.1.4. The external auditor must, within its powers, verify the implementotion af remuneration policies and systems, the efficiency and functioning of internal control mechanisms and report any shortcamings to the company's Supervisary Baard.	Adapted	3.8
III.1.5. The company shall not recruit the external	Adapted	5.8

Recommendation	Adoption information		Description in Report
auditor for services other than audit services, nor
any entily with which same takes part or
incarparates the some network. Where recruiting
such services is called for, said services should
not be greater than 30% of the value of services
rendered to the company. The hiring of these
services must be approved by the Supervisory
Board and must be expounded in the Annual
Carporate Governance Report.
IV. CONFLICTS OF INTEREST
[V.1 Shareholder Relationship
IV.1.1 Where deals ore concluded between the
company and shareholders with qualifying
holdings, ar entities with which same are linked in
accordance with Article 20 of the Securities		Adopted	3.6

IV.1.2 Where deals of significant importance ore undertaken with halders of qualifying holdings, ar entities, with which same ore linked in occordance with Article 20 of the Securities Cade, such deals shall be subject to a preliminary opinion from the Supervisory Board. The procedures and criteria required to define the relevant level of significance of these deals and ather conditions shall be established by the Supervisory Board.

Code, such deals shall be carried aut in normal

market conditions.

Adopted

(According to the Sponish law and the governance structure, these functions were 3.2.3.2 / 3.3.2 delegated by the Baard of Directors to the Related-Party Transactions Committee and the Audit and Control Committee)

0.1. STATEMENT ON COMPLIANCE WITH INDEPENDENCE CRITERIA

Article 20.2 of the EDPR's Articles of Assaciation defines as independent members of the Board of Directors that are able to perform their offices without being limited by relations with the company, its shareholders with significant holdings or its Directors and meet the other legal requirements.

For the purpose of this statement of compliance with independence criteria and for the sake of comparison between EDPR and the other companies listed on Eurolist by Euronext Lisbon in matters of compliance with corporate governonce recommendations, we have also considered the criteria for appraising independence and incompatibilities set forth in Articles 414-A (1), (save for paragraph b)), 414 (5) and 423-B nº 4 both of the Portuguese Commercial Companies Code ("Código das Sociedades Comerciais"), and so the Board of Directors of EDPR considers that the following Directors meet cumulatively (i) these criteria of independence required by law and the Articles of Association and (ii) if they were to apply those criteria of incompatibilities as legally defined:

	Position	Date	of End	of
Name		Appointment Term
António Nogueiro Leite	Director (Independent) Chairperson of the Related-Party Tronsoctions 04-06-2008 Committee		04-06-2011
Doniel M. Kammen	Director (Independent)	04-06-2008	04-06-2011
Froncisca José Queiroz de Borros de Director (Independent) Lacerda	Member of Audit and Control Committee	04-06-2008	04-06-2011
Gilles August	Director (Independent)	14-04-2009	14-04-2012
João Lopes Roimundo	Director (Independent) Member of the Nominotions and Remunerotions 04-06-2008 Committee		04-06-2011
João Mello Fronco	Director (Independent) Chairperson of Audit and Control Committee And Member of the Related-Party Transactions Committee	04-06-2008	04-06-2011
Jorge Santos	Director (Independent) Chairperson of the Nominations and Remunerations 04-06-2008 Committee		04-06-2011
José Aroújo e Silva	Director (Independent)	04-06-200B	04-06-2011
José Silva Lopes	Director (independent) Member of the Audit ond Control Committee	04-06-2008	04-06-2011
Rafael Caldeiro Valverde	Director (Independent) Member of the Nominotions and Remunerations 04-06-2008 Committee		04-06-2011

1. CORPORATE GOVERNANCE STRUCTURE

1.1. MODEL OF MANAGEMENT AND SUPERVISION

EDPR hos adopted the governance structure in effect in Spain, It comprises a General Meeting of Shareholders, which expresses corporate wishes, and a Board of Directors that represents and manages the company.

As required by law and the Articles of Association, the Company's Board of Directors has set up four committees. These are the Executive Committee, the Audit and Control Committee, the Nominations and Remunerations Committee and the Committee on Related-Party Transactions. The Company's governance structure is shown in the chart below.

The governance model of EDPR is designed to ensure the transparent, meticulous separation of duties and the specialization of supervision. The most important bodies in the management and supervision model at EDPR are the following:

• · General Meeting of Shareholders
• Board of Directors;
• Executive Committee;
• Audit and Control Committee;
• External auditor.

The purpose of the choice of this model by EDPR is to adapt the Company's corporate governance structure to the Portuguese legislation, The governance model adopted by EDPR therefore seeks, insofar as it is compatible with its personal law, to correspond to the so-called "Anglo-Saxon" madel set forth in the Portuguese Commercial Companies Cade, in which the management body is a Board of Directors, and the supervision and control duties are of the responsibility of an Audit and Control Committee.

The choice of this model is essentially an attempt to establish compatibility between two different systems of company law, which can be considered applicable to this model.

The experience of institutional operating indicates that the governance model adopted by the shareholders is appropriate to the corporate organization of EDPR activity, especially because it affords transparency and an healthy batance between the management functions of the Executive Committee, the supervisory functions of the Audit and Control Committee and oversight by different specialized Board of Directors committees.

The institutional and functional relationship between the Executive Committee, the Audit and Control Committee and the other non-executive members of the Board of Directors has been of internal harmony conducive to the development of the company's business.

In order to ensure a better understanding of EDPR corporate governance by its shareholders, the Company posts its updated Articles of Association at www.edprenovaveis.com.

1.2. CORPORATE BODIES

1.2.1. GENERAL MEETING OF SHARFHOLDERS

The General Meeting of Shareholders, when properly convened, has the power to decide and adopt majority decisions on matters that the law and the Articles of Association set forth that it should be decided and be submitted for its approval.

The Board of the General Meeting of Shareholders', through the Chairperson of the General Meeting, is responsible for organizing its proceedings. It is made up of the Chairperson of the Meeting, the Chairperson of the Board of Directors, or his substitute, the other Directors and the Secretary of the Board of Directors.

The Ordinary General Meeting shall meet annually within the first six (6) months of the year and shall include the following matters:

· Evaluation of the Company's management and approval of the annual accounts from the previous financial year, management report and decision on the application of the previous fiscal year's income or loss;

• · Appointment and renewal of the Board of Directors in occordance with these Articles and the legal provisions in force, covering or eliminating vacancies that may occur or, as appropriate, ratifying the appointments of Directors made on a provisional basis by the Board of Directors:
• Appointment of auditors;
• · Decision on the matters proposed by the Board of Directors;
• · All other matters provided in the law in force.

The Chairperson of the General Meeting shall:

• · Verify whether the meeting was properly constituted, as well as the sufficiency of the proxies granted by the Shareholders;
• · Chair the meeting in order to decide the subjects contained in the Agenda;
• · Give the floor to the Shareholders who request it but it may take back the flaar should he cansider that the matter has been sufficiently discussed;
• · Organize the votes and announce the results; and
• · Have, in general, all the powers required to duly conduct the meeting or recognized in the law in force.

The Chairperson of the General Meeting was appointed on June 4th 2008.

Chairperson of the General Meeting

Rui Chancerelle de Machete

1.2.2. BOARD OF DIRECTORS

The Board of Directors has the broadest powers for the management and governance of the Company, with no limitations other than the competences expressly allocated exclusively by the General Meeting of Shareholders, by law or the Articles of Association.

The structure, competences and functioning of the Board of Directors are described in more detail in point 3.1. The Board of Directors currently consists of the following sixteen (16) members:

Name	Position	Date of Appointment	End of Term
António Mexio	Chairpersan and Director	18/03/2008	18/03/2011
Ana Mario Fernondes	Vice-Chairperson, CEO	18/03/2008	18/03/2011
Antónia Martins da Casta	Director	18/03/2008	18/03/2011
João Manso Neto	Director	18/03/2008	18/03/2011
Nuno Alves	Director	18/03/2008	18/03/2011
António Nogueira Leite	Director (Independent)	04/06/2008	04/06/2011
Daniel M. Kammen	Director (Independent)	04/06/2008	04/06/201
Francisco Jasé Queiraz de Barros de Lacerda	Director (Independent)	04/06/2008	04/06/2011
Gilles August	Director (Independent)	14/04/2009	14/04/2012
João Lopes Raimundo	Director (independent)	04/06/2008	04/06/2011
João Manuel de Mello Franco	Director (Independent)	04/06/2008	04/06/2011
Jorge Santos	Director (Independent)	04/06/2008	04/06/2011
José Araújo e Silva	Director (Independent)	04/06/2008	04/06/2011
José Silva Lopes	Director (Independent)	04/06/2008	04/06/2011
Manuel Menéndez Menéndez	Directar	04/06/2008	04/06/2011
Rafoel Caldeira Valverde	Directar (Independent)	04/06/2008	04/06/2011

The positions held by the members of the Board in the last five (5) years, those that they currently hold and positions in Group and non-Group componies are listed in Annexes I, II and III, respectively. Annex IV also gives a brief description of the Directors' professional and academic careers.

Finally, the shares of EDPR owned by each Director are described in the table in Annex V.

1.2.3. CHAIRPERSON AND VICE-CHAIRPERSON OF THE BOARD OF DIRECTORS

The Chairperson of the Boord is the Chairperson of the Company and fully represents it, using the company name, implementing decisions of the General Meeting, Board of Directors and the Executive Committee.

Without prejudice to the powers of the Chairperson under the law and Articles of Association, he also has the following powers:

• · Convening and presiding over the meetings of the Board of Directors, establishing their agenda and directing discussions and decisions;
• · Acting as the Company's highest representative dealing with public bodies and any sectorial or employers bodies.

The Chairperson of the Board is appointed by the members of the Board of Directors, unless this is done by the General Meeting, The current Chairperson was appointed on March 18th 2008.

Chairperson of the Board

António Mexia

It is the Vice-Chairperson who replaces the Chairperson when he is unable to attend the meetings. The Board may also delegate executive powers to the Vice-Chairperson.

The Vice-Chairperson is appointed by the Board of Directors on the proposal of the Chairperson. The Vice-Chairperson was appointed on March 18th 2008.

Vice-Chairperson of the Board

Ana Maria Fernandes

1.2.4. CHIEF EXECUTIVE OFFICER

The Board of Directors may appoint one or more Chief Executive Officers. Chief Executive Officers are appointed by a proposal of the Chairperson or two-thirds of the Directors. Chief Executive Officers are appointed with a vote in favor of two-thirds of the Directors and must be chosen from among the Directors.

The competences of each Chief Executive Officer are those deemed appropriate in each case by the Board, with the only requirement being that they are delegable under the law and Articles of Association.

The Chief Executive Officer was appointed on June 4th competences including coordination of the implementation of Board and Executive Committee decisions, monitoring, leading and coordinating the management team appointed by the Executive Committee, representing the company in dealings with third parties and other related duties.

Ana Maria Fernandes

1.2.5. COMPANY SECRETARY

The duties of the Company Secretary are those set forth in current laws, the Articles of Association and Board Regulations. In particular, in accordance with the Board Regulations and in addition to those set forth in the Articles of Association, his competences are:

• · Assisting the Chairperson in her duties;
• · Ensuring the smooth operation of the Board, assisting and informing it and its members;
• · Safeguarding company documents;
• · Describing in the minutes books the proceedings of Board meetings and bearing withess to its decisions;
• · Ensuring at all times the formal and material legality of the Board's actions so that they comply with the Articles of Association and Board Regulations;
• · Monitoring and guaranteeing compliance with provisions imposed by regulatory bodies and consideration of their recommendations:
• · Acting as secretary to the committees.

The Company Secretary, who is also the General Secretary and Director of the Legal Department at EDPR, was appointed on December 4th 2007.

Company Secretary

Emilio Gorcío-Conde Noriega

126 COMMITTFES

The structure, competences and operation of the Executive Committee, Nominations and Remunerations Committee and the Committee on Related-Party Transactions are described in point 3.2. Nonetheless, the nature of the committees and the names of their members are detailed below.

1.2.6.1. EXECUTIVE COMMITTEE

The Executive Committee is a permanent body to which all competences of the Board of Directors that are delegable under the law and the Articles of Association can be delegated, with the exception of:

• · election of the Chairperson of the Board of Directors,
• · appointment of Directors by cooption,
• · requests to convene or convening of General Meetings,
• · preparation and drafting of the Annual Report and Accounts and submission to the General Meeting,
• · change of registered office and
• · drafting and approval of mergers, spin off or transformation of the company.

The committee currently consists of five (5) members, who were appointed on June 4th 2008, plus the Secretary.

Executive Committee
Chairperson	Antónia Mexia
CEO	Ana Mario Fernandes
	António Mortins da Costa
	João Manso Neto
	Nuno Alves
Secretory	Emilio García-Conde Noriega

The members of the Executive Committee shall maintoin their positions for as long as they are Company Directors. Nonetheless, the Boord may decide to discharge members of the Executive Committee at any time and the members may resign said positions while still remaining Company Directors.

The structure, competences and functioning of the Executive Committee are described in point 3.2.1.

1.2.6.2. NOMINATIONS AND REMUNERATIONS COMMITTEE

The Nominations and Remunerations Committee is a permanent body with consultive and advisory nature and its recommendations and reports are not binding.

The Nominations and Remunerations Committee currently consists of three (3) independent members, who were appointed on June 4th 2008, plus the Secretary.

Nominations and Remunerations Committee
Chairperson	Jorge Santas
	João Lopes Raimundo
	Rofael Caldeira Valverde
Secretory	Emilio García-Cande Noriega

None of the committee members are spouses or up to third-degree relatives in direct line of the other members of the Board of Directors.

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

The structure, competences and functioning of the Nominations and Remunerations Committee are described in point 3.2.2.

1.2.6.3. COMMITTEE ON RELATED-PARTY TRANSACTIONS

The Committee on Related-Party Transactions is a body of the Board of Directors.

The committee currently consists of three (3) members, who were appointed on June 41º 2008, plus the Secretary.

Committee on Related-Party Transactions
Chairperson	António Nogueira Leite
	João Monso Neto
	João Manuel de Mello Fronco
Secretory	Emilio Garcia-Conde Noriego

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign soid positions while still remaining Company Directors.

The structure, competences and functioning of the Committee on Related-Party Transactions are described in point 3.2.3.

1.3. AUDIT AND CONTROL COMMITTEE

The Audit and Control Committee is a permanent body and pertorms supervisory tasks independently from the Board of Directors.

The committee currently consists of three (3) members who are independent Directors and were appointed on June 4th 2008, plus the Secretory.

Audit and Control Committee
Choirnerson	João Manuel de Mello Fronco
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	Joōo Silva Lopes
Secretary	TOT IN 199 (BE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/RE/ To To To Top Species Comic Lemell Emericanes and MELLE FINEER E ENDIES FINNER SAMILLS FINEER REMEILE FINNER E BREINE LINE SA BREA Emilio García-Conde Noriega

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members moy resign soid positions while still remaining Company Directors.

The structure, competences and functioning of the Audit and Control Committee are described in point 3.3.

1.4. ORGANIZATION CHART

EDPR has adopted the following organization chart for its management:

The EDPR' Management Team was appointed by the Executive Committee on October 14th 2008 to manage the day-to-day running of the company. The Management Team is coordinated by the Chief Executive Officer, comprising four main areas of responsibility assigned to four officers (the Chief Financial Officer, the Chief Business Development Officer, the Chief Operating Officer for Europe and the Chief Operating Officer for North America) and a Company Secretary and Legal Counsel. The functions and competences of the management team are as follows:

1.4.1. CHIEF FINANCIAL OFFICER

The job of the Chief Financial Officer is to propose and ensure the implementation of the Group's financial policy and management, including (i) negotiating, managing and controlling financing, (ii) optimizing cash management and (iii) proposing financial risk management policy; to coordinate and prepare budget and business plan of the Group, with the Group's business platforms; to manage the Group's monthly closing of accounts and financial statements, and to analyze the financial and operational performance of the Group; to manage relations with the Group's shareholders, potential investors and morket analysts to promote the value of its shares on the capital market; and to coordinate the Group's procurement and its relations with main suppliers and ensuring the implementation of the Group's procurement strategy and policy.

CFO

Rui Teixeira

1.4.2. CHIEF BUSINESS DEVELOPMENT OFFICER

The job of the Chief Business Development Officer is to assess investments, promote the development of EDPR business and set out the strategic risk guidelines for the company. In line

with the strategic plan and in coordination with the other members of the management team, he must optimize the value and risk profile of the group's business portfolio, while watching the evolution of markets and new technologies. His teams coordinate and implement new business development initiatives in new countries and are responsible for monitoring and assessing investments in the consolidated business platforms. Additionally he is now responsible within the Management Team for the renewable business in Brazil, a recent upstart within the EDPR portfolia.

CBDO

Luis Adão da Fonseca

1.4.3. CHIEF OPERATING OFFICER FOR EUROPE

It is the job of the Chief Operating Officer for Europe to coordinate the EDPR European platform in establishing, developing and implementing the EDPR Group's strategic plan for the renewable energies business, drafting ond implementing the strategic plan for Europe in accordance with the guidelines set by the Board of Directors of EDPR, planning, organizing and managing resources, controlling, measuring and improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDPR a leader in the renewable energy sector in Europe.

COO - Europe

João Paulo Casteira

1.4.4. CHIEF OPERATING OFFICER FOR NORTH AMERICA

The Chief Operoting Officer for North America is responsible for coordinating the North American platform of EDPR in establishing, developing and implementing the EDPR Group's strategic plan for the renewable energies business, drafting and implementing the strategic plan for North America, in accordance with the guidelines set by the Board of Directors of EDPR, planning, organizing and managing resources, controlling, measuring and improving the monagement of projects and subsidiary companies and achieving the results expected by the Group to make EDPR a leader in the renewable energy sector in North America.

COO - NA

Gabriel Alonso Imoz

1.4.5. COMPANY SECRETARY AND LEGAL COUNSEL

He assists the Management Teom in its legal, administrative ond logistics activities to ensure that it functions effectively, provides legal advice to the group in order to guarantee compliance with applicable legislation, and provides legal support at Management meetings, including the circulation of its decisions.

Company Secretary and Legal Counsel

Emilio García-Conde Noriega

1.5. STATEMENT ON THE GOVERNANCE STRUCTURE

In order to comply with the Recommendation II.1.1.1 of the Portuguese Corporate Governance Code and according to the results of the reflection made by the Audit and Control Committee (point 3.3.2) regarding the terms of the Recommendation 11.5.1 part ii), the governance model adopted has been ensuring an effective performance and articulation of EDPR Social Bodies, and proved to be adequate to the company's governance structure without any constraints to the performance of its checks and balances system adopted to justify the changes made in the Governance practices of EDPR.

2. SHAREHOLDER STRUCTURE

2.1 CAPITAL STRUCTURE

The EDPR share capital of EUR 4,361,540,810 is represented by 872,308,162 shares with a face value of EUR 5 each. All shares integrate a single class and are fully issued and paid. There are na holders of special rights.

Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDPR shares.

As far as the Board of Directors of EDPR is aware, there are currently no shareholders' agreements regarding the Company.

2.2 SHAREHOLDER STRUCTURE

The breakdown of the EDPR structure by region and investor type at 31 December 2010 was as follows:

EDPR Shareholder Structure (%)

At the end of 2010, EDPR's free float comprises more than 120,000 institutional and private investors in over 50 countries with special focus on Portugal, United Kingdom, United States and Rest of Europe. Institutional investors represented 79% of the free float, with private investors standing for the remaining with 21%.

Geographic Breakdown of Free Float

C

C

C

C

.

Investor Type of Free Float

2.3. QUALIFYING SHAREHOLDING

Qualifying shareholdings in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholders' holdings. As of December 31, 2010, no qualifying Shareholdings in EDPR with the exception of EDP - Energias de Portugal, S.A were identified.

Shareholder	Number of shares	ಳ್ಳಿ Capital Vote	76
EDP - Energias de Portugal, SA
EDP - Energias de Portugal, S.A. Sucursal
en Espoña	541.027.156	62.0%	62.0%
Hidroeléctrica del Cantábrico, S.A.	135.256.700	15.5%	15.5%
Total	676,283,856	77.5%	77.5%

3. MANAGEMENT AND CONTROL SYSTEM

Pursuant to Articles 10 and 19 ef seq of the Articles of Association of EDPR, the Company's managing body is the Board of Directors, and there are four committees stemming from it. They are the Executive Committee, the Audit and Control Committee, the Nominations and Remunerations Committee and the Committee on Related-Party Transactions.

3.1. STRUCTURE, COMPETENCES AND FUNCTIONING OF THE BOARD OF DIRECTORS

3.1.1. STRUCTURE

Pursuant to Articles 20 and 21 of the Company's Articles of Association, the Board of Directors shall consist of no less than five (5) and no more than seventeen (17) Directors. Their term of office shall be three (3) years, and they may be re-elected once or more times for equal periods. The Board of Directors currently consists of sixteen (16) members, whose particulars were indicated in point 1.2.2 above.

3.1.2. COMPETENCES

Pursuant to Article 19 of the Company's Articles of Association, the Board of Directors has the broadest powers for the administration, management and governance of the Company, with no limitations other than the responsibilities expressly and exclusively invested in General Meefing of Shareholders in the Company's Articles of Association or in the applicable law. The Board is therefore expressly empowered to:

• · Acquire on a lucrative or onerous title basis personal and real property, rights, shares and interests that may suit the Company;
• · Sell and mortgage or charge personal and real property, rights, shares and interests of the Company and cancel mortgages and other rights in rem;
• · Negotiate and conclude as many loans and credit operations that it may deem appropriate;
• · Enter and formalize all sorts of acts or contracts with public entities or private persons;
• · Exercise civil and criminal actions and all further actions to be undertaken by the Company, representing it before governmental officers, authorities, corporations, governing, administrative, administrative-economic, administration and judicial courts, labor courts and the labor sections ("Juzgados de lo Social") of the Supreme Court and of the High Courts of the Autonomous Communities, with no limitations whatsoever, including before the European Court of Justice, and in general before the Government, in all its levels and hierarchies; to intervene or promote, follow and terminate, through all procedures and instances, the processes, court sections or proceedings; to accept decisions, to file any kind of appeal, including the cassation one and other

extraordinary appeals, to discontinue or confess, to agree an early termination of a proceeding, to submit lifigious questions to arbitration judges, and to carry out all sorts of notices and requirements and to grant a power of attorney to Court Representatives and other representatives, with the case-related powers which are usually granted to litigation cases and all the special powers applicable, and to revoke such powers;

• · Agree the allotment of dividends;
• Call and convene General Meetings and submit to them the proposals that it deem appropriate;
• · Direct the Company and organize its operations and exploitations by acknowledging the course of the company businesses and operations, managing the investment of funds, making extraordinary depreciations of bonds in circulation and realizing anything that it is considered appropriate to obtain maximum gains towards the object af the Company;
• · Freely appoint and dismiss Directors and all the Company's technical and administrative personnel, defining their office and their retribution;
• · Agree any changes of the registered office's address within the same borough;
• · Incorporate under the law all sorts of legal persons; contribute and assign all sorts of assets and rights, as well as entering merger and cooperation agreements, association, grouping and temporary union agreements between companies or businesses and joint property agreements and agreeing their alteration, transformation and termination;
• · All further powers expressly granted to the Board in these Articles or in the applicable law. This list is without limitations and has a mere indicative nature.

Regarding the decisions to increase the share capital, the Board of Directors, by delegation from the General Meeting, may decide to increase the share capital once or several times. This delegation, which may be the subject of replacement, can include the power to demand a pre-emptive right in the issue of shares that are the subject of delegation and with the requirements established by law.

On the other hand, the General Meeting may also delegate to the Board of Directors the power to implement an adopted decision to increase the share capital, indicating the date of its implementation and establishing any other conditions that have not been specified by the General Meeting. This delegation may be the subject of replacement. The Board of Directors may use this delegation wholly or in part and may also decide not to perform it in consideration of the conditions of the Company, the market or any particularly relevant events or circumstances that justify said decision, of which the General Meeting must be informed at the end of the time limit or limits for performing it.

3.1.3 FIINCTIONING

In addition to the Articles of Association and the law, the Board of Directors is governed by the regulations approved on May 3th 2008. The regulations on the functioning of the Board are available to Company shareholders at the website www.edprenovaveis.com.

The Board of Directors must meet at least four (4) times a year, preferably once a quarter. Nonetheless, the Chairperson, on his own initiative or that of three (3) Directors, shall convene a Board meeting whenever he deems it necessary for the Company's interest. The Board of Directors held five [5) meetings during the year ended at December 31st 2010.

Meetings are convened by the Chairperson, who may order the Secretary to send the invitations. Invitations shall be sent at least five (5) days prior to the date of the meeting. Exceptionally, when the circumstances so require, the Chairperson may call a meeting of the Board without respecting the required advance notice.

The meetings of the Board are valid if half of the Directors plus one are present or represented. Directors shall attend Board meetings personally and, on exception, if they are unable to do so, they shall delegate their representation in witting to another Director. Without prejudice to the obove, the Board of Directors shall be deemed to have been validly convened, with no need for an invitation, if all the Directors present or represented agree unanimously to hold the meeting as universal and accept the agenda to be dealt with at it.

Decisions are adopted by absolute majority among those present. Each Director present or represented has one vote and the Chairperson has the casting vote in the event of a tie.

In order for the non-executive Directors to be able to decide independently and be informed, Articles 22, 24 and 25 of the Board regulations established the following mechanisms:

• · Invitations to meetings shall include the agenda, although provisional, of the meeting and be accompanied by relevant available information or documentation;
• · The Directors have the broadest powers to obtain information on any aspect of the Company, to examine its books, records, documents and other registers of the Company's operations. In order to prevent distorions in the Company management, the exercise of the powers to obtain information shall be channeled through the Chairperson or Secretary of the Board of Directors;
• Any Director may request the hiring, on the Company's account, of legal advisers, accountants, financial or commercial specialists or other experts. The performance of the job must necessarily related to concrete problems of a certain importance and complexity. Requests to hire experts shall be channeled through the Chairperson or Secretary of the Board of Directors, who shall be subject to the approval of the Board of Directors.

With the mechanisms set forth in the regulations, non-executive Directors have encountered no difficulties in performing their duties.

In 2010, the non-executive Directors were involved in the governance of EDPR not only by participating in meetings of the Board of Directors, where they gave their opinions on different company matters, made any suggestions they saw fit and took decisions on matters submitted to them, but also by working on the Nominations Committee, Committee, Committee on Related-Party Transactions and Audit and Control Committee, where all the members are nonexecutive, with the exception of the Committee on Related-Party Transactions, which has one executive Director, João Manuel Manso Neto.

3.2. STRUCTURE, COMPETENCES AND FUNCTIONING OF COMMITTEES

3.2.1. EXECUTIVE COMMITTEE

3.2.1.1. STRUCTURE

Pursuant to Article 27 of the Company's Articles of Association, the Executive Committee shall consist of no less than three (3) and no more than six (6) Directors. The committee currently consists of the members indicated in point 1.2.6.1.

Its constitution, the oppointment of its members and the extension of the powers delegated must be approved by two-thirds (2/3) of the members of the Board of Directors.

3.2.1.2. COMPETENCES

The Executive Committee is a permanent body that has received all of the Board of Directors' delegable powers under the law and the articles of association, with the exception of: i] election of the Chairperson of the Board of Directors, ii) appointment of Directors by cooption, iii) request to convene or convening of General Meetings, iv) preparation and drafting of the Annual Report and Accounts and submission to the General Meeting, v) change of registered office and vi) drafting and approval of mergers, spin off or transformation of the company.

The Executive Committee members have been delegated all the powers of representation of the Company so that any of its members can act jointly in the name and on behalf of the Company.

3.2.1.3. FUNCTIONING

In addition to the Articles of Association, this committee is also governed by the regulations approved on June 4th 2008 and also by the Board Regulations. The committee's regulations are available to the shareholders at www.edprenovaveis.com.

The Executive Committee shall meet at least once a month and whenever is deemed appropriate by its Chairperson, who may also suspend or postpone meetings when he sees fit. The Executive Committee shall also meet when requested by at least two (2) of its members. The Executive Committee held thirty-three (33) meetings during the year ended on December 318 2010.

The Executive Committee shall dratt minutes for each of the meetings held and shall inform the Board of Directors of its decisions at the first Board meeting held after each committee meeting.

The Chairperson of the Executive Committee, who is currently also the Chairperson of the Board of Directors, shall send the Chairperson of the Audit and Control Committee invitations to the Executive Committee meetings and the minutes of those meetings.

Meetings of the Executive Committee are valid if half of its members plus one are present or represented. Decisions shall be adopted by simple majority. In the event of a tie, the Chairperson shall have the casting vote.

Executive Directors shall provide any clarifications needed by the other corporate bodies whenever requested to do so.

3.2.2. NOMINATIONS AND REMUNERATIONS COMMITTEE

3.2.2.1. STRUCTURE

Pursuant to Article 29 of the Company's Articles of Association, the Nominations and Remunerations Committee shall consist of no less than three (3) and no more than six (6) Directors. At least one of its members must be independent and shall be the Chairperson of the committee.

The members of the committee should also not be members of the Executive Committee. The committee currently consists of the members indicated in point 1.2.6.2 which are all independent Directors.

The Nominations and Remunerations Committee is made up of independent members of the Board of Directors, in compliance with Recommendation 44 of the Unitied Code of Good Governance approved by decision of the Board of the Spanish Securities Committee (hereinafter the CNMV), as amended by CNMV Circular 4/2007 of December 27th, which lays down that the Nominations and Remunerations Committee must be entirely made up of

external Directors numbering no fewer than three (3). As it is made up of independent Directors (in Spain the committee may only be comprised of Directors) it complies as completely as possible with the recommendation indicated in point 11.5.2 of the Portuguese Code of Corporate Governance.

3.2.2.2. COMPETENCES

• The Nominations ond Remunerations Committee is a permanent body with an informative and advisory nature and its recommendations and reports are not binding.
• As such, the Nominations and Remunerations Cammittee has no executive functions. The main functions of the Nominations and Remunerations Committee are to assist and report to the Board of Directors about appointments (including by cooption), re-elections, dismissals and remunerations of the Board and its positions, about the composition of the Board and the appointment, remuneration and dismissal of senior management personnel. The Nominations and Remunerations Committee shall also inform the Board of Directors on general remuneration policy and incentives to them and senior management. These functions include the following:
• · Defining the standards and principles governing the composition of the Board of Directors and the selection and appointment of its members.
• · Proposing the appointment and re-election of Directors in cases of appointment of co-option and in other cases for submission to the General Meeting by the Board.
• · Proposing to the Board of Directors who the members of the different committees should be.
• · Proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method and amounts payable to Directors. Making proposals to the Baard on the conditions of the contracts signed with Directors.
• · Informing and making propasals ta the Board of Directors regarding the appointment and/or removal of executives, and the conditions of their contracts and generally defining the hiring and remuneratian policies of executive staff.

Reviewing and reporting on incentive plans, pension plans and compensation packages. Any other functions assigned to it in the Articles of Association or by the Board of Directors.

3.2.2.3. FUNCTIONING

In addition to the articles of association, the Nominations and Remunerations Committee is governed by the Regulations approved on June 4th 2008 and also by the Board regulations. The committee's regulations are available at www.edprenovaveis.com.

This committee shall meet at least once every quarter and also whenever its Chairperson sees fit. This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.

The meetings of this committee shall be valid if at least half of the Directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the deciding vote in the event of a tie.

3.2.2.4. ACTIVITY IN 2010

In 2010 the main proposals made by the Naminations and Remunerations Committee were:

• · Propose an annual fixed remuneration for the Chairperson of the General Meeting;
• · The Annual Report on the Fixed remuneration and annual and multi-annual variable remuneration for the year 2009 and 2010;
• · Performance evaluation of the Board of Directors and the Executive Committee.

A report on the activities of the Nominations and Remunerations Committee in the year ended on December 31st 2010 is available to shareholders at www.edprenovaveis.com.

3.2.3. RELATED PARTY TRANSACTIONS COMMITTEE

3.2.3.1. STRUCTURE

Pursuant to Article 30 of the Articles of Association, the Board may set up other committees, such as the Related Party Transactions Committee. This committee shall consist of no fewer than three (3) members. The majority of the members of the Related Party Transactions Committee shall be independent, although in the case of this committee it has one non-independent Member, João Manuel Manso Neto.

Members of the Related Party Transactions Committee shall be considered independent if they can perform their duties without being conditioned by relations with EDPR, its majority shareholders or its Directors and, if this is the case, meet the other requirements of applicable legislation.

The committee currently consists of the members indicated in point 1.2.6.3.

3.2.3.2. COMPETENCES

The Related Party Transactions Committee is a body belonging to the Board of Directors and performs the following duties, without prejudice to others that the Board may assign to it:

· Periodically reporting to the Board of Directors on the commercial and legal relations

between EDP or related entities and EDPR or related entities.

• · In connection with the approval of the Company's annual results, reporting on the commercial and legal relations between the EDP Group and the EDPR Group, and the transactions between related entities during the fiscal year in question.
• · Ratifying transactions between EDP and/or reloted entities with EDPR and/or related entities by the stipulated deadline in each case, provided that the value of the transaction exceeds EUR 5,000,000 or represents 0.3% of the consolidated annual income of the EDPR Group for the fiscol year before.
• · Ratifying ony modification of the Framework Agreement signed by EDP and EDPR on May 7th 2008
• · Making recommendations to the Board of Directors of the Company or its Executive Committee regarding the tronsoctions between EDPR and related entities with EDP and related entities.
• · Asking EDP for access to the information needed to perform its duties.

Should the Related Party Transactions Committee not ratify business or legal relations between EDP or its reloted parties and EDPR and its related parties, said relations shall require the approval of two-thirds (2/3) of the members of the Board of Directors, whenever at least half of the members proposed by entities other than EDP, including independent Directors, vote in favor, unless, before submission for ratification by the Related Party Transoctions Committee, this majority of members has voiced it approval.

The previous paragraphs shall not apply to operations between EDP or its related parties and EDPR or its related parties that have standard conditions and these conditions are applied in the same way in transactions with parties not related to EDP and EDPR or their respective related parties.

3.2.3.3. FUNCTIONING

In addition to the Articles of Association, the Related Party Transactions Committee is governed by the regulations approved on June 4* 2008 and by the Boord Regulations. The committee's regulations are available at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit.

This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.

The meetings of this committee shall be valid if at least half of the Directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.

3.2.3.4. ACTIVITY IN 2010

In 2010, the Related Party Transactions Committee revised, approved and proposed to the Board of Directors the approval of all agreements and contracts between related porties submitted to its consideration.

Point 3.6 of this report includes a description of the fundamental aspects of the agreements and contracts between related parties, the object of which does not pertain to the ordinary course of EDPR business.

The Related-Party Transactions Committee wos informed that in 2010, the overage value and the maximum value regarding the transactions analyzed by the Committee was EUR 1.617.274,26 and EUR 3.106.692M, respectively.

The total value of the transactions with the EDP Group in 2010 was EUR 14.2M which corresponds to a 5.3% of the total value of S&S, and EUR270M for total operational costs.

A report on the activities of the Related Parly Transactions Committee in the year ended on December 31st 2010 is available to shareholders at www.edprenovaveis.com.

3.3. AUDIT AND CONTROL COMMITTEE

3.3.1. STRUCTURE

Pursuant to Article 28 of the Articles of Association, the Audit and Control Committee consists of no fewer than three (3) and no more than five (5) Directors. The majority of the members shall be independent Directors. The committee currently consists of the members indicated in point 1.3, the majority of which, as well as the Chairperson, are independent.

3.3.2. COMPETENCES

The Audit and Control Committee is a permanent body and performs independent supervision of the work of the Board of Directors. The competences of the Audit and Control Committee are mentioned below.

Concerning the new recommendations introduced in 2010 by the Portuguese Code of

Corporate Governance the referred competences were reinforced as mentioned below, with the following changes introduced on the Audit and Control Committee Regulations, to guarantee the compliance of the referred code:

• · Reporting, through the Chairperson, at General Meeting son questions falling under its jurisdiction.
• · Proposing the appointment of the Company's auditors to the Board of Directors for subsequent approval by the General Meeting, as well as the contractual conditions, scope of the work - specially concerning audit services, "audit related" and "non audit" - annual activity evaluation and revocation or renovation of auditor appointments. (to comply with Recommendation III. 1.5 of the Portuguese Corporate Governance Code of 2010)
• · Supervising the financing reporting and the functioning of the internal risk management and control systems, as well as, evaluate those systems and propose the adequate adjustments according to the Company necessities. {to comply with Recommendation 11.1.1.3 of the Portuguese Corporate Govemance Code of 2010]
• · Supervising internal audits and compliance. (to comply with Recommendation II.4.6 of the Portuguese Corporate Governance Cade of 2010]
• · Establish a permanent contact with the external auditors, to assure the conditions, including the independence, adequate to the services provided by them, acting as a the Company speaker for these subjects related to the auditing process and receiving and maintaining information on any other questions regarding accounting subjects. (to comply with Recommendation II.4.4 of the Portuguese Corporate Govemance Code of 2010]
• · Preparing an annual report on its supervisory activities, including eventual constraints, and expressing an opinion on the Management Report, the accounts and the proposals presented by the Board of Directors. (to comply with Recommendation 11.4.3 of the Portuguese Corporate Governance Code of 2010}
• · Receiving notices of financial and accounting iregularities presented by the Company's employees, shareholders or entity that has a direct interest and judicially protected, related with the Company social activity. [to comply with Recommendation II.1.4.1 of the Portuguese Corporate Governance Code of 2010}
• · Engaging the services of experts to collaborate with Committee members in the performance of their functions. When engaging the services of such experts and determining their remuneration, the importance of the matters entrusted to them and the economic situation of the company must be taken into account.
• · Drafting reports at the request of the Board and its committees.
• Reflecting on the governance system adopted by EDPR in order to identify areas for improvement;
• · Any other powers entrusted to it by the Board of Directors or the Articles of Association.

3.3.3. FUNCTIONING

In addition to the Articles of Association and the law, this committee is governed by the regulations approved on June 4th 2008 and also by the Board regulations. The committee's regulations are at the shareholders' disposal at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit. In 2010, the Audit and Control Committee met eleven (11) times not only to monitor the closure of quarterly accounts in the first half-year but olso to familiarize itself with the preparation and disclosure of financial information, internal audit, internol control and risk management activities.

This committee shall droft minutes of every meeting held and inform the Board of its decisions at the first Board meeting held after each committee meeting.

The meetings of the Audit ond Control Committee shall be valid if at least half of the Directors on it plus one are present or represented. Decisions sholl be adopted by simple majority. The Chairperson shall hove the casting vote in the event of a tie.

3.3.4. ACTIVITY IN 2010

In 2010, the Audit and Control Committee's activities included the following: [i] analysis of relevant rules to which the committee is subject in Portugal and Spain, (ii) assessment of the external auditor's work, especially concerning with the scope of work in 2010, and approval of all "audit related" and "non audit" services, (iii) supervision of the quality and integrity of the financial information in the financial statements and participation in the Executive Committee meeting at which these documents were analyzed and discussed, (iv) drafting of an opinion in the individual and consolidated annual reports and accounts, in a quarterly and yearly basis (v) pre-approval of the 2010 Internal Audit Action Plon, (VI) supervision of the quality, integrity and efficiency of the internol control system, risk management and internal auditing, (vii) reflection on the corporate governance system adopted by EDPR, (viii) analysis of the evolution of the SCIRF project, (ix) information about the whistle-blowing.

Apart fram its regulor octivity in 2010, the Audit and Control Committee were also involved in the following activities:

• Analysis of the acquisition process of turbines for the 2010/2012 period;

• Analysis of the competences delegation process of the EDPR Group;

• Analysis to the new regulations of the Internal Audit Department of the EDPR Group.

The Audit and Control Committee found no constraints during its control and supervision activities.

A report on the activities of the Audit and Control Committee in the year ended on December 31st 2010 is avoiloble to shareholders at www.edprenovaveis.com.

3 4 INCOMPATIBILITY AND INDEPENDENCE

Following the recommendotions of the CMVM, Article 12 of the Board regulations requires ot least twenty-five percent (25%) of the Directors to be independent Directors, who are considered to be those who can perform their duties without being conditioned by relations with the Company, its significant shareholders or Directors and, if applicable, meet the requirements of applicable laws.

In addition, pursuant to Article 23 of the Articles of Association, the following may not be Directors:

• · People who are Directors of or are associated with any competitor of EDPR and those who are related to the above. A company shall be considered to be a competitor of EDPR if it is directly or indirectly involved in the generation, storage, transmission, distribution, sale or supply of electricity or combustible gases and also those interests opposed to those of EDPR, a competitor or any of the companies in its Group, and Directors, employees, lawyers, consultants or representatives of any of them. Under no circumstances shall companies belonging to the same group as EDPR, including abroad, be considered competitors;
• · People who are in any other situation of incompatibility or prohibition under the law or Articles of Association. Under Spanish law, people, among others, who are i) aged under eighteen (18) years, (ii) disqualified, iii) competitors; (iv) convicted of certain offences or (v) hold certain management positions are not allowed to be Directors.

3.5. RULES OF APPOINTMENT AND DISCHARGE OF MEMBERS OF THE BOARD OF DIRECTORS AND OF THE AUDIT AND CONTROL COMMITTEE

The policy of portfolio rotation in the company comprehends that each Member of the Board of Directors is appointed by majority of the General Meeting for an initial period of three (3) years and may be re-elected once or more times for further periods of three (3) years. Nonetheless, pursuant to Article 23 of the Articles of Association and 243 of the Spanish Companies Law, shareholders so wishing may group their shares until they constitute an amount of capital equal

to or higher than the result of dividing it by the number of Directors and appoint those that, using only whole fractions, are deducted from the corresponding proportion. Those making use of this power cannot intervene in the appointment of the other members of the Board of Directors.

Given that the Directors do nat have to be elected on the same date, if there is a vacancy, pursuant to Article 23 of the Articles of Association and 243 of the Spanish Companies Law, the Board of Directors may co-opt people from the shareholders, who will occupy the position until the next General Meeting, which shall ratify the co-opted Director. Pursuant to Article 247 of the Spanish Companies Law, the co-option of Directors, as for other Board decisions, must be approved by absolute majority of the Directors at the meeting.

Pursuant to Article 28 of the Articles of Association, the members of the Audit and Control Committee are appointed by the Board af Directors. The term of office of the members of the Audit and Control Committee is the same as their term as Directors. The committee members, the majority of whom must be independent, can be reelected and discharged by the Board of Directors at any time. The term of office of the Chairperson of the Audit and Control Committee is three (3) years, after which he may only be re-elected for a new term of three (3) years. Nonetheless, chairpersons leaving the committee may continue as members of the Audit and Control Committee.

3.6. BUSINESS BETWEEN THE COMPANY AND MEMBERS OF THE COMPANY'S GOVERNING BODIES OR GROUP COMPANIES

EDPR has nat signed any contracts with the members of the corporate bodies during the year 2010.

Regarding related party transactions, EDPR and/or its subsidiaries have signed the contracts detoiled below with EDP - Energias de Portugal, S.A. (hereinafter, EDP) or other members of its group not belonging to the EDPR subgroup.

3.6.1. FRAMEWORK AGREEMENT

The framework agreement was signed by EDP and EDPR on May 7th 2008 and came into effect when the latter was admitted to trading. The purpose of the framework agreement is to set aut the principles and rules governing the legal and business relations existing when it came info eftect and those entered into subsequently.

The framework agreement establishes that neither EDP, nor the EDP Group companies other

than EDPR and its subsidiaries can engage in activities in the field of renewable energies without the consent of EDPR. EDPR shall have worldwide exclusivity, with the exception of Brazil, where it shall engage its activities through a joint venture with EDP - Energias do Brasil, S.A., for the development, construction, operation and maintenance of facilities related to wind, solar, wave and/or tidal power and other renewable energy generation technologies that may be developed in the future. Nonetheless, the agreement excludes technologies being developed in hydroelectric power, biomass, cogeneration and waste in Portugal and Spain.

Finally, it lays down the obligation to provide EDP with any information that it may request from EDPR to fulfill its legal obligations and prepare the EDP Group's consolidated accounts.

The framework agreement shall remain in effect for as long as EDP directly owns mare than 50% of the share capital of EDPR or appoints more than 50% of its Directors.

3.6.2. EXECUTIVE MANAGEMENT SERVICES AGREEMENT

On November 41» 2008 EDP and EDPR signed an Executive Management Services Agreement. Through this contract, EDP provides management services to EDPR, including matters related to the Company. Under this agreement EDP appoints four people to form EDPR's Executive Committee, for which EDPR pays EDP an amount for the services rendered.

Under this contract, EDPR is due to pay an amount of EUR 836,400 for management services rendered by EDP in 2010.

The initial term of the contract is March 18th 2011 .

3.6.3. FINANCE AGREEMENTS AND GUARANTEES

The finance agreements between EDP Group companies and EDPR Group companies were established under the above described Framework Agreement and currently include the following:

3.6.3.1. LOAN AGREEMENTS

EDPR (os the borrower) has loan agreements with EDP Finance BV (os the lender), a company 100% owned by EDP - Energias de Portugal, S.A.. Such loan agreements can be established both in EUR and USD, usually have a 10-year tenor and are remunerated at rates set on arm's length basis. As at December 31st 2010, such loan agreements totaled EUR 1,351,695,248 and USD 1,934,621,254.

3.6.3.2. COUNTER-GUARANTEE AGREEMENT

A counter-guarantee agreement was signed, under which EDP or EDP Energias de Portugal Sociedade Anónima, sucursol en España (hereinafter guarantor or EDP Sucursal) undertakes on behalf of EDPR, EDP Renewables Europe SL (hereinafter EDPR EU) and Horizon Wind Energy LLC (hereinafter EDPR NA) to provide corporate guarantees or request the issue of any guarantees, on the terms and conditions requested by the subsidiaries, which have been approved on a case by case basis by the EDP executive board.

EDPR will be jointly liable for compliance by EDPR EU and EDPR NA. The subsidiaries of EDPR undertake to indemnify the guarantor for any losses or liabilities resulting from the guarantees pravided under the agreement and to pay a fee established in arm's length bosis. Nonetheless, certain guarantees issued prior to the date of approval of these agreements may have different conditions.

The agreement may be terminated (i) by any party at any time, whenever there are no guarantees in effect, or if (ii) any of the subsidiaries ceases to be controlled by the guarantor with regard to the guarantees provided to said subsidiary.

3.6.3.3. CURRENT ACCOUNT AGREEMENT

EDP Sucursal and EDPR signed an agreement through which EDP Sucursal manages EDPR' cash accounts. The agreement also regulates a current account between both companies, remunerated on arm's length basis. As at December 31st 2010, the current account had a bolance of EUR 170,111,807 in favor of EDPR,

The agreement is valid for one year as of date af signing and is outamatically renewable for equal periods.

3.6.3.4. FINANCING AGREEMENTS

In order to manage its USD cash surplus, at December 31st 2010 EDPR had two short term deposits placed with EDP Finance BV in the total amount of USD 244,033,835.

The two short term deposits mature on January 2010.

3.6.3.5 CROSS CURRENCY INTEREST RATE SWAPS

Due to the net investment in EDPR NA, the company and Group accounts of EDPR and the accounts of EDP Sucursal España, were exposed to the foreign exchange risk. With the purpose of hedging this foreign exchange risk, EDP Group settled a cross currency interest rate swap (CIRS) in USD and EUR, between EDP Sucursal and EDPR for a total amount of USD 2,632,613. Also a CIRS in PLN and EUR, between EDP Energias de Portugal Sociedade Anánima, sucursal en España and EDPR, S.A. was settled for a total amount of PLN 309,307,188, related with the net investment in polish companies.

3.6.3.6. HEDGE AGREEMENTS - EXCHANGE RATE

EDP Sucursal and EDPR entered into several hedge agreements with the purpose of managing the transaction exposure related with the investment payments to be done in Poland, fixing the exchange rate for EUR/PLN in accordance to the prices in the forward market in each contract date. At December 31st 2010, a total amount of EUR 38,803,000 remained outstanding,

3.6.4. HEDGE AGREEMENTS - COMMODITIES

EDP and EDP Renewables Europe SL entered into hedge agreements for a total volume of 1,826 MWh for 2010 at the forward market price at the time of execution related with the expected sales of energy in the Spanish market.

3.6.5. TRADEMARK LICENSING AGREEMENT

On May 14th 2008, EDP and EDPR signed an agreement under which the former granted to the latter a non-exclusive license for the trademark "EDP Renováveis" for use in the renewable energy market and related activities.

In return for the granting of the trademark license, EDPR will pay to EDP fees calculated on the basis of the proportion of the costs pertaining to the former in the Group's annual budget for image and trademark services, which are subject to annual review. The fee established for 2010 was EUR 1,500,000.

The license is granted indefinitely and shall remain in effect until the expiry of EDP's legal ownership of the trademark or until EDP ceases to hold the majarity of the capital or does not appoint the majority of Directors of EDPR. EDP may also terminate the agreement in case of nonpayment or breach of contract.

The licensing agreement is restricted by the terms of the framework agreement.

3.6.6. CONSULTANCY SERVICE AGREEMENT

On June 4th 2008, EDP and EDPR signed a consultancy service agreement. Through this agreement, and upon request by EDPR, EDP (or through EDP Sucursal) shall provide consultancy

services in the areas of legal services, internal control systems, financial reporting, taxation, sustainability, regulation, ond competition, risk management, human resources, informotion technology, brand and communication, energy planning, accounting and consolidation, corporate marketing and organizational develapment.

The price of the agreement is calculated as the cost incurred by EDP plus a margin. For the first year, it was fixed at 8% based on an independent expert on the basis of morket research. For 2010 the estimated cost of these services is EUR 3,106,692.

The duration of the agreement is one (1) year tacitly renewable for equal periods.

3.6.7. RESEARCH AND DEVELOPMENT AGREEMENT

On May 13th 2008, EDP Inovação, S.A. (hereinafter EDP Inovação), an EDP Group company, and EDPR signed on agreement regulating relations between the two companies regarding projects in the field of renewoble energies (hereinafter the R&D Agreement).

The object of the R&D Agreement is to prevent conflicts of interest and foster the exchange of knowledge between companies and the estoblishment of legal and business relationships. The agreement forbids EDP Group companies other than EDP Inovação to undertake or invest in companies that undertake the renewable energy projects described in the agreement.

The R&D Agreement establishes an exclusive right on the part of EDP Inovação to project and develop new renewable energy technologies that are already in the pilot or economic and/or commercial feasibility study phase, whenever EDPR exercises its option to undertake them.

The agreement sholl remain in effect for as long as EDP directly mointains control of more than 50% of both companies or appoints the majority of the members of the Boord and Executive Committee of the parties to the agreement.

3.6.8. MANAGEMENT SUPPORT SERVICE AGREEMENT BETWEEN EDP RENOVÁVEIS PORTUGAL S.A., AND EDP VALOR - GESTÃO INTEGRADA DE RECURSOS, S.A.

On January 1st 2003, EDP Renováveis Portugal, S.A., holding company of the EDPR subgroup in Portugal, and EDP Valor - Gestão Integrada de Recursos, S.A. (hereinafter EDP Valor), an EDP Group company, signed a management support service agreement.

The object of the agreement is the provision to EDP Renováveis Portugal by EDP Valor of services

in the areas of procurement, economic and financial management, fleet management, property management and maintenance, insurance, occupational health and safety and human resource management and training.

The remuneration paid to EDP Valor by EDP Renováveis Portugal S.A. and its subsidiaries for the services provided in 2010 totaled EUR 691,445.

The initial duration of the agreement was five (5) years from date of signing and it was tacitly renewed for a new period of five (5) years on January 1st 2008.

Either party may renounce the contract with one (1) year's notice.

3.6.9. INFORMATION TECHONOLOGY MANAGEMENT SERVICES AGREEMENT BETWEEN EDP RENOVÁVEIS S.A. AND EDP - ENERGIAS DE PORTUGAL, S.A.

On January 1st 2010, EDP Renováveis Portugal, S.A., and EDP - Energias de Portugal S.A. (hereinafter EDP), signed an IT management services agreement.

The object of the agreement is to provide to EDPR the information technology services described on the contract and its attachments by EDP - Energias de Portugal S.A.

The amount to be paid to EDP - Energias de Portugal S.A. for the services provided in 2010 totaled EUR 1,146,251.

The initial duration of the agreement is one (1) year from date of signing and it is tacitly renewed for a new period of one (1) year.

Either party may renounce the contract with one (1) month notice.

3.7. INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

3.7.1. INTERNAL CONTROL SYSTEM OVER FINANCIAL REPORTING

EDP Renováveis (EDPR) has an Intemal Control System over Financial Reporting (SCIRF) structured using as a reference in terms of control objectives fulfillment, and controls implementation the COSO framework (Committee of Sponsoring Organizations of the Treadway Commission) with regard to business processes and entity level controls, and the COBIT framework (Control Objectives for Information and related Technologies) with regard to controls of information technology systems.

In accordance with EDPR's strategic orientation, SCIRF activities are aimed at strengthening the quality of financial information provided to shareholders and to the markets and at promoting the effectiveness and efficiency of operations, in complicable regulations at all times

The COSO framework emphasizes the aspects related with the risk assessment activities, since there is a growing interest in organizations of all sizes to enhance Enterprise Risk Management. This approach is present throughout SCIRF's methodology and documentation (SCIRF Manual, Responsibilities Model, processes and controls), by means of a set of control and risk objectives, that cover concepts like financial information risk, fraud or unauthorized use.

During the year 2010, SCIRF has been performed through (i) the maintenance and monitoring of the Internal Control Cycle and (ii) the independent review of SCIRF by KPMG.

Under the model adopted at EDPR, the following activities for the maintenance and monitoring of the Internal Control Cycle have been performed:

· Update of the scope: review and identification of relevont risks, accounts and processes, based on materiality and risk criteria, with a top-down and bottom-up methadology, and a coverage level analysis.

· The necessary actions for the consolidation and/or incorporation of new geographies in the scope.

· Maintenance, adaptation and management of the system in line with (i) the implementation of identified improvement opportunities, (ii) the changing structure and (iii) business requirements.

SCIRF presence in different geographies, according to the scope applied in 2010, includes 380 controls in the European platform (including country-specific and transversal controls in some geographies) in Spain, Portugal, France, Belgium and Poland, 384 controls in the North American platform, and 110 controls at group level, as illustrated in the figure below. These controls include entity level controls, process controls and information technology controls).

In order to assess the reliability and strength of the SCIRF (already implemented in the European and American platforms), and in line with the strategic objectives of EDPR, it was decided to undertake an independent review, to be conducted by a prestigious international institution (KPMG). The goal was materialized in 2010, following the International Standard on Assurance Engagements (ISAE) 3000 methodology. In this review no material weakness were identified. The work of the review consisted of:

(i) obtaining an understanding of SCIRF in terms of the consolidated financial reporting;

(ii) evaluation of the risk of material weaknesses;

(iii)test and evaluation of the operational effectiveness of controls based on the evaluation of risk;

(iv) execution of other procedures which were considered as necessary.

It is also important to highlight the following developments that took place in 2010:

• · the creation of SCIRF logo;
• · the launch of the implementation of a new internet based tool to support SCIRF;

· the significant participation of EDPR for the consecution of the Quality Assessment certification of EDP's group internal Audit department by the Institute of Internal Auditors.

The SCIRF activities and their progress have been quarterly reported to the Audit and Control Committee, complying with its supervision and follow-up missions regarding the company's internal control systems and risk management.

At the year-end in accordance with CMVM Recommendation III. 1.4 the external auditors, within the scope of their powers, verified the efficiency and functioning of the Internal Control Systems and reported their conclusions to the Audit and Control Committee. Additionally, KPMG reported the result of their review of SCIRF to the Audit and Control Committee.

With this report and the teamwork of the Internal Audit and Control Committee in accordance with CMVM Recommendation II.1.1.3 made its final assessment report and presented to the Board.

3.7.2 RISK MANAGEMENT

The basic principle behind EDPR's risk management approach is that risk management should not only profect value but also create value. This value creation is obtained by optimizing company's risk-return taking into consideration shareholders risk appelite.

Therefore, EDPR's risk framework was designed to be not a stand-dlone activity separated from the main activities and processes of the company, but to be part of the responsibilities of management as an integrating element of all organizational processes, including strategic planning.

3.7.2.1. RISK FRAMEWORK AND PROCESS

In EDPR's risk framework, risk process aims to link the company's overall strategy into manager's day-to-day decisions, enabling the company to increase the likelihood of achieving its strategic objectives.

EDPR's general strategy is translated into major strategic questions that are grouped by risk area and then subject to EDPR's risk process. The outcome of the risk process is a set of specific guidelines per risk area that will guide managers in their decisions according to the company's risk profile.

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Each strategic question is subject to a core risk process which is composed of four major steps:

• · Make sense starts with the identification of the risks that may affect the accomplishment of the strategic goals and is followed by the respective measurement both in terms of likelihood of occurrence and potential impact; the aim of this step is to generate an understanding of all the dynamics behind the issue under analysis in order to assess the severity of the risk as well as to anticipate all possible mitigating actions in the case the exposure to the risk is above acceptable limits.
• · Make choices after an understanding of the risk, the next step is to discuss whether the risk needs to be treated or not. If it does there is a need to discuss on the most appropriate risk treatment strategies and methods, and the outcome of this discussion is a proposed action plan that is later subject to approval by the Executive Committee.
• · Make happen following the approval of the action plan, guidelines are written and then sent to the risk manager that will take them into consideration in its day-to-day decisions.
• · Make revision after the implementation of the mitigation strategies there is a follow-up of their effectiveness to assess if any adjustments are needed; this risk reporting and control step has two major functions: (1) to track EDPR's risk position comparing its alignment with both the company's risk profile and risk policy approved by the Executive Committee for each risk, and (2) to control the mitigation actions by defining and implementing all the mechanisms necessary to check if these actions are being implemented according to plan.

3.7.2.2. RISK FUNCTIONS AND RISK COMMITTEE

Risk management in EDPR is supported by three distinct organizational functions:

edprenováveis

During 2010, EDPR created a Risk Committee to integrate and coordinate all the risk functions and to assure the link between risk strategy and the company's operations.

EDPR's Risk Committee intends to be the forum to discuss how EDPR can optimize its risk-return position according to its risk profile. The key responsibilities of this committee are:

• · To analyze EDPR overall exposures and propose actions;
• · To follow-up the effectiveness of the mitigation actions;
• · To review transactional limits, risk policies and macro-strategies;
• · To review reports and significant findings of the risk profiler analysis and the risk control areas;
• · To review the scope of the work of the risk profiler and its planned activities.

This committee meets on a quarterly basis and is composed by all Management Team members, representative directors from corporate functions and from the operational platforms and, depending on the issues under discussion, the respective risk managers.

In 2010 this committee, created in July, met twice to discuss and propose EDPR's general risk management framework and to discuss and recommend energy management risk policies.

In order to assure the alignment of EDPR's risk management decisions with EDP's risk-return profile, representatives from EDP will be part of EDPR's risk committee in 2011.

3.7.2.3 RISK AREAS AND RISK RELATED STRATEGIC QUESTIONS

The following table summarizes the main risk areas of EDPR's business and also describes the risk related strategic questions. The full description of each risk and how they are managed by EDPR can be found in next chapter.

Risk areas	Risks descriptions	Risk related (not strategic questions
		exhaustive)
regulations	1. Countries & - Chonges in regulations may impoct EDPR's business in · What is EDPR's current regulator risk? o given country ;	· How much should EDPR grow in current markets? · Where should EDPR focus entering new markets?
2. Revenues	- Revenues received by EDPR's projects may diverge · What is the expasure of our revenue stream fram what is expected;	bath in prices and wind variations? · What is the impact an EDPR's EBITDA? · What should the market strotegy be ta caver market valatility?
3. Financing	- EDPR may not be able to raise enough cash to · What should be the risk prafile from an finonce all its planned capex; - EDPR may not be able to fulfi its financial abligatians; · What is the syntheric rating of the campany	investor's point af view? and what measures cauld be done to improve itz · What is the probability af a cash flow stress due ta market conditians?
contracts	4. Wind turbine - Changes in turbine prices may impact projects · What should be the hedging strategy for profitability; - Controcts should take into account the pipeline quantities? development risk;	turbine prices in terms of price structure and · What is the trade-aff between supplier diversificotian ond rappel discount?
5.	Pipeline - EDPR may deliver an installed copacity different fram · How mony MW can EDPR expect ta pur in development its targets or suffers delays and/ar anticipations in its operation with its current pipeline? installation	· How many prajects may be canceled or be delayed over permitting issues? · What is the octual risk af not achieving the installed capacity targets? · What is the apprapriate buffer to ensure that EDPR delivers the farget capacity? · Haw should EDPR's pipeline laak like in 2012?
	6. Operations - Projects may deliver a volume different from · Is there any operating risk with significant expected.	impact in EDPR?

3.7.2.4.1 Countries and regulation

3.7.2.4.1.1 Regulatory risks

The development and profitability of renewable energy projects are subject to policies and regulatory frameworks. The jurisdictions in which EDPR operates provide numerous types of incentives that support the energy generated from renewable sources.

Support for renewable energy sources has been strong in previous years, and both the European Union and various US federal and state bodies have regularly reaffirmed their wish to continue and strengthen such support.

In Europe, each country presented in 2010 their Renewable National Energy Action Plans (RNEAPs). These plans provide detailed information about how each Member State expects to comply with its 2020 binding target, including the technology mix and the forecasted trajectory to reach it.

Regarding US, variaus State Governments have taken an active role in the development af energy generated from renewable saurces through the implementation of RPS (Renewable Portfolio Standard) program.

It cannot be guaranteed that the current support will be maintained or that the electricity produced by future renewable energy projects will benefit from state purchase obligations, tax incentives, or other support measures for the electricity generation from renewable energy sources. This is particularly true in an economic downturn context.

Management of regulatory risks

EDPR is managing its expasure to regulatory risks in two different ways. The first one is trough a geographic diversification strategy based on a methodology comprising a positive correlation between country defined targets and gap from current level, technological mix af installed generation, energy demand and supply, regulatory track record stability and incentives mechanism. EDPR also analyses the country wind resource, land and site availability, permitting complexity and interconnection availability.

The second one is by being an active member in several wind associations. EDPR belongs to the most prestigiaus wind energy associations, bath at national and international level. EDPR is an active member of the following renewable (specially wind energy) associations. Being an active member in all these associations allows EDPR to be aware of any regulatory change, and represent wind energy sector's interests when required by the governments.

edprenováveis

EUROPE	EWEA (EUROPEAN WIND ENERGY ASSOCIATION)
SPAIN	AEE (ASOCIACIÓN EMPRESARIAL EQUICA)
PORTUGAL	APREN (ASSOCIAÇÃO PORTUGUESA DE PRODUTORES DE ENERGIA ELÉCTRICA DE FONTES RENOVAVEIS)
FRANCE	SER [SYNDICAT DES ÉNERGIES RENOUVELABLES]
BE_GIUM	APERE (ASSOCIATION POUR LA PROMOTION DES ENERGIES RENOUVELABLES)
	EDORA (FEDERATION DE L'ENERGIE D'ORIGINE RENOUVELABLE ET ALTERNATIVE)
POLAND	PIGEO (POLSKA IZBA GOSPODARCZA ENERGII ODNAWIALNEJ)
	PSEW (PO_SKIE STOWARZYSZENIE ENERGETYKI WIATROWEJ)
	PTEW (POLSKIE TOWARZYSTWO ENERGETYKI WATROWEJ)
ROMANIA	RWEA (ROMANIAN WIND ENERGY ASSOCIATION)
UNITED KINGDOM	BWEA [BRITISH WIND ENERGY ASSOCIATION]
	RENEWABLE UK
	SCOTTISH RENEWABLES
ITALY	ANEV (ASSOCIAZIONE NAZIONALE ENERGIA DEL VENTO)
	APER (ASSOCIAZIONE PROMOTORI ENERGIE RINNOVABILI)
UNITED STATES	· AMERICAN WIND ENERGY ASSOCIATION [AWEA)
	IOWA WIND ENERGY ASSOCIATION
	JRENEW MISCONSIN
	RENEW, INC.
	THE WIND COALITION
	AMERICAN WIND WILDLIFE
	CEERT
	COLORADO INDEPENDENT ENERGY ASSOCIATION
	INTERWEST ENERGY ALLIANCE
	WESTERN POWER TRADING FORUM
	SMART GRID OREGON
	TEXAS RENEWABLE ENERGY
	WEST TEXAS WIND ENERGY
	RENEWABLE NORTHWEST PROJECT
CANADA	CANWEA (CANADIAN WIND ENERGY ASSOCIATION)
BRAZIL	ABEEOLICA (ASSOCIAÇÃO BRASILEIRA DE ENERGIA EQUICA)
	CERNE (CENTRO DE ESTRATEGIAS EM RECURSOS NATURAIS E ENERGIAS)

3.7.2.4.2 Revenues

3.7.2.4.2.1 Exposure to market electricity prices

The electricity sold by EDPR depends in some extent on the incentives schemes for renewable energy in place in each of the countries where EDPR operates. In some of the markets this creates an exposure to market prices for electricity. Market prices may be volatile as they are affected by various factors, including the cost of fuels, average rainfall levels, the cost of power plant construction, technological mix of installed generation capacity and demand. Therefore, a decline in market prices to unexpected levels could have a material adverse effect on EDPR's business, financial condition or operating income.

Management of electricity prices exposure

EDPR faces limited market price risk as it pursues a strategy of being present in countries or regions with long term visibility on revenues. In most countries where EDPR is present, prices are determined through regulated framework mechanisms. On the markets where there is expected short term volotility on market prices, EDPR uses various financial and commodity hedging instruments in order to optimize the exposure to fluctuating electricity prices. However, it may not be possible to successfully hedge the exposures or it may face other difficulties in executing the

hedging strategy.

In Europe, EDPR operates in countries where the selling price is defined by a feed-in-tariff (Spain, Portugal and France) or in markets where on top of the electricity price EDPR receives either a pre-defined regulated premium or a green certificate, whose price is achieved on a regulated market (Spain, Belgium, Poland, Romania). Additionally, EDPR is developing activity in Italy and UK where the mechanism is also through green certificates.

In the case of North America, EDPR focus is developing strategy on the States which by having a RPS pragram in place provides higher revenues visibility, through the REC (Renewable Energy Credit) system and by non-compliance penaties. The North America market does not provide any regulated framework system for the electricity price although it may exist for the RECs in some States. Most of EDPR's copacity in the US has predefined prices determined by long-term contracts with local utilities in line with the Company's policy of signing long-term contracts for the output of its wind farms.

In Brazilian operations, selling price is defined through a public auction which is later transloted into a long-term contract.

Under EDPR's global approach to optimize the exposure to market electricity prices, the Company evaluates on a permanent basis if there are any deviations to the defined limits, assessing in which markets financial hedges may be more effective to correct it. In 2010, to manage this exposure EDPR financially hedged a significant part of its generation in Spain and, in the US closed for the long-term a significant portion of its exposure through several physical and financial deals.

3.7.2.4.2.2 Risk related to volatility of energy production

The amount of electricity generated by EDPR on its wind farms, and therefore EDPR's profitability, are dependent on climatic conditions, which vary across the locations of the wind farms, ond from season to season and year to year. Energy output at wind farms may decline if wind speeds falls outside specific ranges, as turbines will only operate when wind speeds are within those ranges.

Variations and fluctuations in wind conditions at wind farms may result in seasonal and other fluctuations in the amount of electricity that is generated and consequently the operating results and efficiency.

Management of risks related to volatility of energy production

EDPR mitigates wind resource volatility and seasonality by having a strong knowledge in the design of its wind farms, and by the geographical diversification - in each country and in different countries - of its asset base. This "portfolio effect" enables to offset wind variations in each area and to keep the total energy generation relatively steady. Currently EDPR is present in 11 countries: Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil.

3.7.2.4.3 Financing

3.7.2.4.3.1 Risks related to the exposure to financial markets

EDPR is exposed to fluctuations in interest rates through financing. This risk can be miligated using fixed rates and hedging instruments, including interest rate swaps.

Also because of its presence in several countries, currency fluctuations may have a material adverse effect on the financial condition and results of operations. EDPR may attempt to hedge against currency fluctuations risks by natural hedging strategies, as well as by using hedging instruments, including forward foreign exchange contracts and Cross Interest Rate Swops.

EDPR hedging efforts will minimize but not eliminate the impact of interest rate and exchange rate volatility.

Management of financial risks

The evolution of the financial markets is anolyzed on an on-going basis in accordance to EDP Group's risk management policy approved by the EDPR's Board of Directors.

The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits following the recommendation of the risk committee.

Taking into account the risk management policy and exposure limits previously approved, the Financial Department identifies, evaluates and submits for approval by the Board the financial strategy appropriate to each project/location.

The execution of the approved strategies is also undertaken by the Financial Department, in accordance with the policies previous defined and approved.

Fixed rate, Natural hedging and Financial instruments are used to minimize potential adverse effects resulting from the interest rate and foreign exchange rate risks on its financial performance.

3.7.2.4.3.1.1 Interest rate risk

The purpose of the interest rate risk management policies is to reduce the exposure of long term debt cash flows from market fluctuations, mainly by issuing long term debt with a fixed rate, but also through the settlement of derivative financial instruments to swap from floating rate to fixed rate when long term debt is issued with floating rates.

The main potential exposure comes from shareholder loans from the EDP Group and from institutional investors in connection with its Partnership Structures in the US operations, as well as, project financing and third party loans from entities outside the EDP Group.

In the floating-rate financing context which represents approx. 5% of EDPR's gross debt, EDPR may contract interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of exchange floating interest rate.

EDPR has a portfolio of interest-rate derivatives with maturities between approximately 1 ond 10 years. Sensitivity analyses are performed of the fair value of financial instruments to interest-rate fluctuations.

Given the policies adopted by EDPR Group its financial cosh flows ore substantially independent from the fluctuation in interest rate markets.

3.7.2.4.3.1.2 Exchange rate risk

EDPR operates internationally and is exposed to the exchange-rate risk resulting from investments in foreign subsidiaries. Currently, main currency exposure is the U.S. dollar/euro currency fluctuation risk that results principally from the shareholding in EDPR NA. With the ongoing increasing capacity in others non-euro regions, EDPR will become also exposed to other local currencies (Brazil, Poland and Romania).

EDPR general policy is the Natural Hedging in order to match currency cash flows, minimizing the impact of exchange rates changes while value is preserved. The essence of this approach is to create financial foreign currency outflows to match equivalent foreign currency inflows. Often the debt is raised in the same foreign currency in which operating cash flows are received. The Financial Department is responsible for monitoring the exchange rates changes, seeking to mitigate the impact of currency fluctuations on the net assets and net profit of the aroup, using natural hedging strategies, as well as, exchange-rate derivatives and/or other hedging structures with symmetrical characteristics to those of the hedged item. The effectiveness of these hedges is reassessed and monitored throughout their lives.

3.7.2.4.3.2 Counterparty credit risk

Counterparty risk is the default risk of the other party in an agreement, either due to temporary liquidity issues or long term systemic issues.

Management of counterparty credit risk

EDPR policy in terms of the counterparty credit risk on financial transactions is managed by an analysis of the technical capacity, competitiveness, credit notation and exposure to each counterparty. Counterparties in derivatives and financial transoctions are restricted to highquality credit institutions, there cannot be considered any significant risk of counterparty non-compliance and no collateral is demanded for these transactions.

In the specific case of EDPR EU, credit risk is not significant due to the reduced average payment period for customer balances and the quality of its debtors. In Europe, main customers are operators and distributors in the energy market of their respective countries.

In the case of EDPR NA, counterparty risk analysis is more relevant given typical price structure and the contracting terms of PPA contracts. In the light of this, counterparty risk is corefully evaluated taking into account the offtakers' credit rating. In many cases, additional credit support is required in line with the exposure of the contract.

3.7.2.4.3.3 Liquidity risk

Liquidity risk is the risk that EDPR will not be able to meet its financial obligations as they fall due.

Management of liquidity risk

EDPR's strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liguidity to meet its liabilities when due, under both normal and stressed conditions, without incurring in unacceptable losses or risking damage to EDPR's reputation.

The liquidity policy followed by EDPR ensures compliance with the planned payment commitments/obligations, through maintaining sufficient credit facilities and having access to the EDP Group liquidity facilities.

3.7.2.4.4 Wind turbine contracts

3.7.2.4.4.1 Wind turbine supply risk

Wind turbine generators (WTG) is a key element in the development of EDPR's wind-related energy projects, as the shortfall or an unexpected sharp increase in WTG prices can create a question mark on new project's development and its profitability. WTG represents the majority of a wind farm capital expenditure (on average, between 70% and 80%).

Management of wind turbine supply risk

EDPR faces limited risk to the availability and prices' increase of WTG due to its framework agreements with the major global wind turbines suppliers. The Compony uses a large mix of turbines suppliers in order to reduce its dependency on any one supplier being one of the worldwide wind energy developers with a more diversified and balanced portfolio.

When signing framework agreements with one or more WTG suppliers, EDPR balances the cost, best fit with Company's pipeline and flexibility on time, geography and model/technology.

Pursuing this medium-term framework agreements strategy, EDPR reduces the risk of contracting large amounts of new WTG exposed to the spot market while having long term visibility on the total cost of ownership due to the fix cost structure of the frameworks signed. On the other way, by not contracting all the WTG needed for its growth plan, EDPR increases its short term flexibility pipeline development. Finally, EDPR in these framework agreements ensure additional geographic flexibility to best fit its pipeline development with changes in future conditions in a given market.

3.7.2.4.5 Pipeline development

3.7.2.4.5.1 Permitting risks

Wind farms are subject to strict international, state, regional and local regulations relating to the development, construction, licensing, grid interconnection and operation of power plants. Among other things, these laws regulate: land acquisitions, leasing and use; building, transportation and distribution permits; landscape and environmental permits; and regulations on energy transmission and distribution network congestions. Development process of wind farms is subject to the obtoining such permits. If authorities do not grant these permits or they do so with delays or with other restrictions, such actions could have a material adverse effect on the development of further business.

Management of permitting rlsk

EDPR mitigates this risk by having development activities in 11 different countries (Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil) with a portfolio of projects in several maturity stages. EDPR has a large pipeline located in the most attractive regions providing a "buffer" to overcome potential delays in the development of new projects, ensuring growth targets. For this high quality pipeline is worth to highlight EDPR's early mover status in the majority of its markets and the partnerships created with strong local expertise in the develapment and constructian of wind farms.

3.7.2.4.6 Operations

3.7.2.4.6.1 Wind turbine performance risk

Wind farms output depend upon the availability and operating performance of the equipment necessary to operate it, mainly the components of wind turbines and transformers. Therefore the risk is that the performance of the turbine does not reach its optimum implies that the energy output is not the expected. The best indicator to measure the WTG performance is the availability level - the period of time it was actually available to operate within that period and delivering the agreed power curve.

Management of wind turbine performance risk

EDPR mitigates this risk by using a mix of turbine suppliers which minimizes technological risk, by signing a medium-tem full-scope maintenance agreement with the turbine supplier and by an adequate preventive and scheduled maintenance. Additionally, technical waranties are signed with the turbine suppliers, in order to guarantee that the performance of the turbine will be optimum. After this period, O&M is usually contracted with an external company, but a technical assistance agreement is also signed with the turbine supplier.

Most recently, and following the generol trend in the wind sector, EDPR is externalizing some pure technical O&M activities of its wind farms. Through EDPR Dispatch Center, the Company remotely controls all its wind farms reacting on real time to grid requirements and by gathering all the 24-day operating data it is increasing its know-how in managing core O&M activities.

3 8 EXTERNAL AUDITOR

The Audit and Control Committee is responsible for proposing to the Board of Directors for submission to the General Meeting the appointment of the Company auditors and the terms of their contracts, scope of their duties and revocation and renewal of their contracts.

In order to protect the External Auditor independence, the following competences of the Audit and Control Committee were exercised during 2010:

• · Direct and exclusive supervision from the Audit and Control Committee;
• · Evaluation of the qualifications, independence and performance of the External Auditor and the annual report from the External Auditor regarding the information of all existing relations between the Company and the Auditors or people related to them, including all the services rendered and all the services in course. The Audit and Control Committee, in order to evaluate its independence, obtained from the External Auditor information regarding their independence according to Decree-Law n.º 224/2008, November 20m, that changes the bylaws of the External Auditors Association;
• · Revision of the transparency report signed by the External Auditor and published on their website. This report is about a group of subjects regulated on article 62°-A from the Decree-Law n.º 224/2008, mainly related to the Internal Control System and to the process of quality control realized by the competent entities;
• · Analysis with the External Auditor of the scope, planning and resources to use on the services provided.

EDPR's External Auditor is, since the year 2007, KPMG Auditores S.L., therefore there is still no need to rotate the auditor according to Recommendation III.1.3 af the Portuguese Corporate Gavernance Code.

In 2010, according to the Audit and Control Cammittee's competences and in line with Recommendations II.4.4 and II.4.5, it was the corporate body in charge of the permanent contact with the external auditor an matters that may pose a risk to their independence and any other matters related to the auditing of accounts. It also receives and stores information on any other matters provided for in legislation on auditing standards in effect at any time.

The Audit and Control Committee assessed the performance of the external auditor in providing the services hired by the Company and made a pasitive evaluation of their quality, considering that they meet applicable standards and that it is advisable to maintain the same auditor.

The work of the external auditor, including reports and audits of its accounts, was supervised and evaluated in accordance with applicable rules and standards, in particular international auditing standards. The external auditor in coordination with the Audit and Control Committee verifies the implementation of remuneration policies and the efficiency and functioning of internal control mechanisms. The external auditor reports to the Audit and Control Committee all the shortcomings.

3.9. WHISTLE-BLOWING POLICY

Since the beginning of trading on the Eurolist by Euronext Lisbon, it has sought to introduce measures to ensure its good governance and that of its companies, including the prevention of improper practices, especially in the fields of accounting and finance.

The Board of Directors of EDPR therefore decided to provide its employees with a direct, confidential communication channel for them to report any presumed unlawful practices or alleged accounting or financial irregularities occurring in their company. These communications go directly to the Audit and Control Committee,

EDPR creation of this channel for whistle-blowing on irregularities in financial and accounting practices is essentially intended:

· To enable any employee to freely report his/her concerns in these areas to the Audit and Control Committee;

· To facilitate early detection of irregularities that, if they occurred, might cause serious losses to the EDPR Group and its employees, customers and shareholders.

Contact with the Company's Audit and Control Committee is only possible by email and post, and access to information received is restricted.

Any complaint addressed to the Audit and Control Committee will be kept strictly confidential and the whistle-blower will remain anonymous, provided that this does not prevent the investigation of the complaint. \$/he will be assured that the Company will not take any retaliatory or disciplinary action as a result of exercising his/her right to blow the whistle on irregularities, provide information or assist in an investigation.

The Secretary of the Audit and Control Committee receives all the communications and presents a quarterly report to the members of the Committee.

In 2010 there were no communications regarding any irregularity at EDPR.

3.10 ETHICS

EDPR is governed by a strong sense of ethics, whose principles are embodied in the day-to-day activities of its employees, occording to ethical proctices generally considered to be consensual but which, for reasons of appropriote disclosure, tronsparency and impartiality, the compony decided to provide details on.

For that purpose, EDPR developed and approved a global Code of Ethics, to be adopted by all company's employees, without prejudice to other legal or regulating provisions. EDPR Employees' must comply with the Code of Ethics and with the approved corporate policies, which provide those practices ond should follow main principles such as:

• · Transparency, honesty and integrity
• Working environment
• · Development of human capital
• Human rights .
• · Non-discriminotion and equal opportunities
• . Integrity
• � Environment and sustoinability
• Disciplinary action .

The Code of Ethics has been disseminated to oll employees.

A "whistle-blowing" e-mail channel is avoilable at the Company's Intronet. It allows a direct and confidential communicotion of any presumably illegol practice and/or of ony alleged accounting or finoncial iregularity occuring within the compony. A "Code of Ethics" e-mail channel is olso ovailoble for the communication of any breach to the Code articles.

4. EXERCISE OF SHAREHOLDER'S RIGHTS

4.1. DESCRIPTION AND COMPETENCES OF THE GENERAL MEETING OF SHAREHOLDERS

The General Meeting of Shareholders is a meeting of shareholders that, that when properly convened, has the power to deliberate and adopt, by majority, decisions on matters that the law and Articles of Association reserve for its decision and are submitted for its approval. In particular, it is responsible for:

• · Evaluation of the Company's management and approval of the annual accounts from the previous financial year, management report and decision on the application of the previous fiscal year's income or loss;
• · Appointment and renewal of the Board of Directors in accordance with these Articles and the legal provisions in force, covering or eliminating vacancies that may occur or, as appropriate, ratifying the appointments of Directors made on a provisional basis by the Board of Directors;
• Appointment of auditors;
• · Decision on the matters proposed by the Board of Directors;
• · All other matters provided in the law in force.
• · Increasing and reducing the share capital and delegating to the Board of Directors, if applicable, within the legal time limits, the power to set the date or dates, who may use said delegation wholly or in part, or refraining from increasing or reducing the capital in view of the conditions of the market or the Company or any particularly relevant fact or event justifying such a decision in their opinion, reporting it at the first General Meeting of Shareholders held after the end of the time limit for its execution;
• · Delegating to the Board of Directors the power to increase the share capital pursuant to Article 297 of Royal Legislative Decree 1/2010 of July 2nd 2010, which approves the Revised Text of the Law on Public Limited Companies (Spanish Companies Law);
• Issuing bonds; .
• · Amending the Articles of Association;
• · Dissolving, merging, spin off and transtormation the Company;
• · Deciding on any matter submitted to it for decision by the Board of Directors, which shall be obliged to call a General Meeting of Shareholders as soon as possible to deliberate and decide on concrete decisions included in this article submitted to it, in the event of relevant facts or circumstances that affect the Company, shareholders or corporate bodies.

The decisions of the General Meeting are binding on all shareholders, including those voting against and thase who did not participate in the meeting.

A General Meeting may be ordinary or extraordinary. In either case, it is governed by the law and Articles of Association.

An Ordinary General Meeting must be held in the first six (6) months of each year to review of the performance the company management, approve the annual report and accounts for the previous year and the proposal for appropriation of profits and approve the consolidated accounts, if appropriate. The General Meeting also decides on any other matters falling within its powers and included on the agenda;

An Extraordinary General Meeting is any meeting other than that mentioned above.

4.2. RIGHT TO ATTEND

All shareholders, irrespective of the number of shares that they own, may attend a General Meeting and take part in its deliberations with right to speak and vote.

In order to exercise their right to attend, shareholders must have their shares registered in their name in the Book Entry Account at least five (5) days in advance of the date of the General Meeting.

Moreover, although there is no express provision on the matter in the Articles of Association, in the event of the suspension of a General Meeting, EDPR plans to adopt Recommendation 1.2.2 of the Portuguese Corporate Governance Cade and not require the blocking of shares more than five days in advance.

Any shareholder with the right to attend may send a representative to a General Meeting, even if this person is not a shareholder. Power of attorney is revocable. The Board of Directors may require shareholders' power of attorney to be in the Company's possession at least two (2) days in advance, indicating the name of the representative.

Power of attorney shall be specific to each General Meeting, in writing or by remote means of communication, such as post.

4.3. VOTING AND VOTING RIGHTS

Each share entitles its holder to one vote.

Shares issued without this right do not have voting rights, with the exception of cases set forth by curent legislatian.

There is no employee share-owning system at EDPR and so no relevant control mechanisms on the exercise of voting rights by employees or their representatives have been set up.

4.4. MAIL AND ELECTRONIC COMMUNICATION VOTES

Shareholders may vote on points on the agenda, relating to any matters of the Shareholder's competence, by mail or electronic communication. It is essential for their validity that they be received by the company by midnight of the day before the date scheduled for the first calling to order of the General Meeting.

Votes by mail shall be sent in writing to the place indicated on the invitation to the meeting accompanied by the documentation indicated in the Shareholder's Guide.

In order to vote by electronic communication, shareholders must express this intention to the Chairperson of the General Meeting of the in the form indicated in the invitation to the meeting, sufficient time in advance to permit the vote within the established time limit. They will then receive a letter containing a password for voting by electronic communication within the time limit and in the form established in the call of the General Meeting.

Remote votes can be revoked subsequently by the same means used to cast them within the time limit estoblished for the purpose or by personal attendance of the General Meeting by the shareholder who cast the vote or his/her representative.

The Board of Directors has approved a Shareholder's Guide for the first General Meeting, detailing mail and electronic communication voting forms among other matters. It is at shareholders' disposal at www.edprenovaveis.com.

4.5. QUORUM FOR CONSTITUTING AND ADAPTING DECISIONS OF THE GENERAL MEETING

Both ordinary and extraordinary General Meetings are validly constituted when first called if the Sharehalders, either present or represented by proxy, represent at least twenty five percent (25%) of the subscribed voting capital. On the second call the General Meeting will be validly constituted regardless of the amount of the capital present in order to comply with the minimum established under the Spanish Companies Law.

Nonetheless, to validly approve the issuance of bonds, the increase or reduction of capital, the transformation, merger or spin-off of the Company, and in general any necessary amendment to the Articles of Association, the Ordinary or Extraordinary Shareholders' Meeting will need: on the first call, that the Shareholders, either present or represent at least fifty percent (50%) subscribed voting capital and on the second call, that the Shareholders, either present or represented by proxy, represent at least twenty five percent (25%) of the subscribed voting capital.

In the event the shareholders attending represent less than fifty percent (50%) of the subscribed voting capital, the resolutions referred to in the previous paragraph will only be validly adopted with the favourable vote of two-thirds(2/3) of the present or represented capital in the General Meeting.

4.6. BOARD OF THE GENERAL MEETING

The Chairperson of the General Meeting is appointed by the meeting itself and must be a person who meets the same requirements of independence as for independent Directors. The appointment is for three years and may be re-elected once only.

Since June 4th 2008, the position of Chairperson of the General Meeting has been held by Rui Chancerelle de Machete, whose work address is PLMJ, A.M. Pereira, Sáragga Leal, Oliveira Martins, Júdice e Associados, RL, Av. da Liberdade, 224, Editício Eurolex, 1250-148 Lisboa, Portugal.

In addition to the Chairperson, the Boord of the General Meeting is made up of the Chairperson of the Board of Directors, or his replacement, the other Directors and the Secretary of the Board of Directors.

The position of Secretary of the General Meeting is occupied by the non-member Secretary of the Board of Directors, Emilio García-Conde Noriega, whose work address is that of the Company.

The Chairperson of the General Meeting of EDPR has the appropriate human and logistical resources for his needs, considering the economic situation of EDPR, in that, in addition to the resources from the Company Secretary and the legal support provided for the purpose, the Company hires a specialized entity to collect, process and count votes.

In 2010, the remuneration of the Chairperson of the General Meeting of EDPR was EUR 15,000.

4.7. MINUTES AND INFORMATION ON DECISIONS

Given that EDPR is a listed company on Eurolist by Euronext Lisbon, shareholders have access to corporate governance information at www.edprenovaveis.com. Extracts of General Meeting minutes and the invitation, agenda, motions submitted to the General Meeting and forms of participation shall be placed at shareholders' disposal five (5) days after they are held.

Given the personal nature of the information involved, the history does not include attendance lists at general meetings, although, in accordance with CMVM Circular nr. 156/EMIT/DMEI/2009/515, when General Meetings are held, EDPR plans to replace them by statistical information indicating the number of shareholders present and distinguishing between the number of physical presences by mail.

EDPR therefore publishes on its website an extract of the minutes of General Meetings with all information on the constitution of the General Meeting and decisions made by it, including motions submitted and any explanations of votes.

The website also provides EDPR shareholders with information on: i) requirements for participating in the General Meeting, ii) mail and electronic communication votes iii) information available at the registered office.

4.8. MEASURES REGARDING CONTROL AND CHANGES OF CONTROL OF THE COMPANY

The Company has taken no defensive measures that might seriously affect its assets in any of the cases of a change in control in its shareholder structure or the Board of Directors.

The Articles of Association contain no limitations on the transferability of shares or voting rights in any type of decision and no limitations on membership of the governing bodies of EDPR. Neither are there any decisions that come into effect as a result of a takeover bid.

The fact that the Company has not adopted any measures designed to prevent successful takeover bids is therefore in line with Recommendation 1.6.1 of the CMVM Code of Corporate Governance

On the ather hand, EDPR has not entered into any agreements (current or future) subject to the condition of a change in control of the Company, other than in accordance with normal practice in case of financing of certain wind farm projects by some of its group companies.

Finally, there are no agreements between the Company and members of its Board of Directars or managers providing for compensation in the event of resignation of discharge of Directors or in the event of resignation, dismissal without just cause or cessation of the working relationship following a change in control of the Company.

4.9. GENERAL MEETING OF SHAREHOLDERS IN 2010

On April 13th 2010, taok place in Oviedo the Ordinary General Meeting of Shareholders of the company "EDP Renováveis, S.A.".

The Meeting's validity was ascertained by the meetings' President, and the definitive quorum of members was:

• 56 shareholders were present, holding 4,116,370 shares making up for 0,472% of the share capital, and

• 62 shareholders were represented, holding 695,343,366 shares making up for 79.713% of the share capital.

A total of 118 shareholders attended the General Meeting, including those present and those represented, holding a total of 699,459,736 shares which consitiutes a nominal amount of EUR 3,497,298,680 of the share capital, that is, 80.185% of the mentioned share capital.

The ten proposals submitted to approval at the General Meeting were all approved. Extracts of the 2010 General Meeting minutes and the invitation, agenda, motions submitted to the General Meeting and forms of participation are available at the company's website www.edprenovaveis.com.

5. REMUNERATION

5.1. REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND ITS AUDIT AND CONTROL COMMITTEE

Pursuant to Article 26 of the Company's Articles of Association, the remuneration of the members of the Board of Directors shall consist of a fixed amount to be determined by the General Meeting for the whole Directors and expenses for attending Board meetings.

The above article also establishes the possibility of the Directors being remunerated with Company shares, share options or other securities granting the right to obtain shares, or by means of share-indexed remuneration systems. In any case, the system chosen must be approved by the General Meeting and comply with current legal provisions.

The Nominations and Remunerations Committee is responsible for proposing to the Board of Directors, although not bindingly, the system, distribution and amount of remuneration of the Directors on the basis of the overall amount of remuneration authorized by the General Meeting, It can also propose to the Board the terms of contracts with the Directors. The distribution and exact amount paid to each Director and the frequency and other details of the remuneration shall be determined by the Board on the basis of a proposal from the Nominations and Remunerations Committee.

The maximum remuneration approved by the General Meeting of Shareholders for 2010 for all the members of the Board of Directors is EUR 2,500,000.

5.2. PERFORMANCE-BASED COMPONENTS, VARIABLE COMPONENT AND FIXED AMOUNT

The remuneration of the Executive Committee is built in three blocks: fixed remuneration, annual and multi-annual bonus.

The annual bonus is defined as a maximum of 80% of the annual salary and is calculated based on the following indicators in each year of their term: {i} relative performance of total shareholder return of EDPR vs. capital market indexes and peer performance; (ii) return on invested capital; (iii) additional installed capacity (MW); (iv) net profits and EBITDA growth in 2010.

edprenováveis

The multi-annual bonus is defined as a maximum of 120% of the annual salary and is calculated based on the same drivers as for annual bonus but measured on a multi-year timefrome to be paid at the end of the period ond with additionol environmental and social perspectives including, (i) the performance of the Sustainobility Index applied to EDPR (DJSI method), (ii) EDPR Group's image in the national and international markets (through brand audit and surveys), (lil) its copacity to change and adapt to new market requirements (through surveys), (iv) fulfillment of strategic national and internatianal targets.

The remuneration to the CEO was paid directly by EDPR while for the other members of the Executive Committee there was no direct payment to its members.

Although the remuneration for all the members of the Board of Directors is provided for, the members of the Executive Committee, with the exception of the CEO (who devotes most of his/her work to the octivity of EDPR) are not remuneroted.

This corporate governance practice of remuneration is in line with the model adopted by the EDP Group, in which the executive Directors of EDP do not receive any remuneration directly from the group companies on whose governing bodies they serve, but rother through EDP.

Nonetheless, in line with the above corporate governance practice, EDPR has signed an Executive Management Services Agreement with EDP, under which the Company bears the cost for the render of those services corresponding to the remuneration defined for the executive members of the Board of Directors.

The non-executive Directors only receive a fixed remuneration, which is calculated on the basis of their work exclusively as Directors or cumulatively with their membership on the Nominations ond Remunerations Committee, Related Party Tronsactions Committee and the Audit and Control Committee.

EDPR has not incorporated any share remuneration or share purchase options plans as components of the remuneration of its Directors. No Director has entered into any contract with the company or third parties that have the effect of miligating the risk inherent in the variability of the remuneration established by the company

5.3. ANNUAL REMUNERATION OF THE BOARD OF DIRECTORS INCLUDING THE AUDIT AND CONTROL COMMITTEE

The remuneration of the members of the Board of Directors for the year ended on December 31st 2010 was as follows:

	Euros
Remuneration		Variable
	Fixed		Annual Multi-annual	Total
Executive Directors
António Mexio *
Ana Maria Fernondes (CEO)*		384.000 208.939 -		592.939
Antonio Morrins 00 Costa*
João Manso Neto*
Nuno Alves*
Non-Executive Directors
António Nagueira Leite 60.000				20.000
Daniel M. Kammen	45.000			45.000
Francisco José Queiroz
de Barros de Lacerda	60.000			60.000
Gilles August	45.000			45.000
Joãa Lopes Raimunda 55.000				55.000
Jaão Manuel de Mella
Franco	80.000			80.000
Jorge Santos	60.000			60.000
José Araúja e Silva	0			0
José Silva Lopes	60.000			80.000
Menéndez Manuel Menéndez	45.000			45.000
Caldeira Rafael Valverde	55.000			55.000
Total	949.000 208.939			1.157.939

* With exception of the CEO, the members of the Executive Committee have not received any remuneration from EDPR. EDPR has entered in an Executive Management Services Agreement with EDP pursuant to which EDPR is due to pay to EDP an amount of EUR 836,400 for the management services rendered by EDP in 2010.

The retirement savings plan for the members of the Executive Committee acts as an effective retirement supplement and corresponds to 5% of their annual salary.

The Directors do not receive any relevant non-monetary benefits as remuneration.

Additionally the remuneration of the members of the Management Team, excluding the Chief Executive Officer, was as follows:

	Euros
uneration	Fixed	Variable
		Annua	Multi-annual	Total
Management Team	954.662	297.000		1.251.662

5.4. STATEMENT ON REMUNERATION POLICY

The Nomination and Remunerations Committee assists and reports to the Board of Directors about the remunerations of the Board and the Management Team, proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method and amounts payable to the Directors that must be submitted to the approval of the General Meeting of Shareholders. This committee defines the remuneration and is sought to ensure that it reflects the performance of all members in each year (variable annual remuneration) and their performance throughout the term of their office by means of a variable component consistent with the maximization of the Company's long-term performance (multiannual variable remuneration). This is intended to ensure the alignment of the Board of Directors' performance with the shareholders' interests. A statement on remuneration policy will be submitted to the next General Meeting of Shareholders, for approval.

5.5. GENERAL MEETING'S ASSESSMENT OF COMPANY REMUNERATION POLICY AND PERFORMANCE EVALUATION OF ITS GOVERNING BODIES

The General Meeting is responsible for appointing the Board of Directors, which appoints the Nominations and Remunerations Committee, who is part of the Board and responsible for submitting the statement on remuneration policy for the Company's corporate bodies.

One of the General Meeting's duties includes appraising the above mentioned statement.

Pursuant to Article 164 of the Spanish Companies Law, the General Meeting evaluates the performance of the company's management and makes an annual decision on whether to maintain confidence, or not, in their members.

5.6. ATTENDANCE AT THE ORDINARY GENERAL MEETING OF SHAREHOLDERS OF A REPRESENTATIVE OF THE NOMINATIONS AND REMUNERATIONS COMMITTEE

At least one of the members of the Nominations and Remunerations Committee will be present or represented at the General Meeting of Shareholders of EDPR.

5.7. PROPOSAL ON THE APPROVAL OF PLANS ON SHARE REMUNERATION AND/OR SHARE PURCHASE OPTIONS OR ON THE BASIS OF SHARE PRICE FLUCTUATIONS

The Company has not approved any plans for share remuneration or share purchase options or plans based on share price fluctuations.

5.8. AUDITOR'S REMUNERATION

For the year ended on December 31st 2010, the fees paid to KPMG Auditores, S.L. for the audit and statutory audit of accounts and financial statements, other assurance and reliability services, tax consultancy services and other services unrelated to statutory auditing are as follows:

Values in €		Portugal Spain	Brazil USA USA		Other	Total
	193.000	689,856			69,479 727,908 221,211 1,901,454
	209,500	51.790	-	174,196	12,950	448,436
Sub-tatal audit related services	402,500	741,646	69.479	902,104		234,161 2,349,890
		17,000		481.402		498,402
	800					800
Sub-total nan-audit related services	800	17.000		481.402		499,202
Total

(*) the fees regarding the inspection of the Internal Control System (SCIRF) of EDPR EU (EUR 100.000) and of EDPR NA (EUR 100.000) are allocated to Portugal, as their invoices were issued in this country.

In EDPR there is a policy of pre-approval by the Audit and Control Committee for the selection of the External Auditor and any related entity for non-audit services, according to Recommendation III.1.5 of the Portuguese Corporate Governance Code. This policy was stictly followed during 2010.

6. CAPITAL MARKETS

6.1. SHARE PERFORMANCE AND DIVIDEND POLICY

6.1.1. SHARE DESCRIPTION

The shares representing 100% of the EDPR share capital were initially admitted to trading in the official stock exchange NYSE Euronext Lisbon on June 4th 2008. The then the free float level is unchanged at 22.5%.

EDP Renováveis, S.A.
Shares
Share Capital	€ 4,361,540,810
Nominol Share Value	€ 5 00
Number of Shares	872,308,162
Date of IPO	June 4*, 2008
NYSE Euronext Usban
Reulers RIC	EDPR.LS
Blaomberg	EDPR PL
ורואל	E50127797019

6.1.2 SHARE PRICE PERFORMANCE

EDPR's equity market value at December 31st 2010 was EUR 3.8 billion. In 2010 the share price deprecioted by 35% to EUR 4.34 per share, underperforming the PSI-20 (the NYSE Euronext Lisbon reference index), the Euronext 100 and the Dow Jones Eurostoxx Utilities ("SX6E"). The year's low was recorded on November 30″ (EUR 3.72) and the year's high was reached on January 8″ (EUR 7.01).

edprenováveis

In 2010 were traded more than 311 million EDPR shares, representing a 21% year-on-year increase in its liquidity, and corresponding to a turnover of approximately EUR 1.5 billion. On average, 1.2 million shares were traded per day. The total number of shores traded represented 36% of the total shares admitted to trading and to 159% of the company's free float, translating in the higher liquidity level since the IPO.

2010: EDPR Share Price and Transactions

Capital Market Indicators	2010	2009	2008
EDPR shares In NYSE Euronext Usbon
Opening price" (€)	6.63	5.00	8.00
Closing price (€)	4.34	୧ ୧୧3	ર 00
Peak price (€)	7.01	775	8.00
Minimum pnce (€)	3.72	5.00	3.45
Variation in share price and reference Indices
EDP Renovoveis (%)	-35%	33%	-37%
PS120 (%)	-10%	33%	-51%
Dow Janes Eurastoxx Ulilities [%]	-15%	-1%	-38%
Euronext 100 (%)	1%	25%	-45%
Liquidity of EDPR shares on the morket
Valume in NYSE Euronex- (€ million)	1.539	1.676	1.646
Daily average volume (€ million)	6.0	6.4	110
Number of shores traded (millian)	311	257	216
Average number of shores traded (thausand)	1.211	885	1.459
Tatal shares issued (million)	1872	872	872
Number of own shares	0	0	C
Free flaot	196	- 196	196
Annual rototion of capital (% of fotal shores)	36%	29%	25%
Annual rotation of copital (% of Iree-float)	159%	131%	110%
EDPR market value
Market capitalization at end of period (€ million)	3.783	5,783	4.364
(*) January 181, 2009 and June 4th, 2008, respectively

edprenováveis

The graph below shows the evolution in EDPR prices over the year and all announcements and relevant events that may hod impact on them.

	Date	Description	Share Price
	8/100	EDPR awarded 1.3 GW of wind offshare copocity in the LK	7.01
		2 25/Jan EDPR signed a long-term agreement to sell green certificates in Paland	6.38
		3 27/Jan EDPR entered the Ilalian market through the acquisition af 520 MW to be developed	6.44
য	3/Feb	EDPR disclosed 2009 provisional dota	6.18
		5 17/Feb EDPR signs a Pawer Purchase Agreement (PPA) with Tennessee Valley Authority in the United States	5.76
ર્દ		25/Feb EDPR announced 2009 results	5,97
7		12/Apr EDPR was awarded a REC contract by NYSERDA	5.96
ಹ		13/Apr EDPR Annual Shareholder Meeting	5.90
		9 22/Apr EDPR disclosed 1Q2010 provisionol data	5,37
		10 26/Apr EDPR awarded Vestas a procurement cantract la deliver up to 2.1 GW of wind capacily	5.12
		11 5/May EDPR announced 1Q2010 results	5.10
		12 19/May EDPR holds its first Investar Day in Lisbon	4,65
		13 28/5/1 - EDPR luly clased Ventall institutional partnership structure Inrough the sate anounting to \$14 imilian	4.98
	14 2/Jul	Spanish Gavernment and Spanish wind association reach a long term agreement	4.80
	15 6/Jul	Government of Cantabria awards 220 MW Ta EDPR	5.09
	16 8/Jul	Romania approves new wind regulation	5 13
	17 13/Jul	EDPR discloses relevant short position	5.02
	18 14/Jul	EDPR disclosed its IH2010 provisianal data	5.05
		19 28/Jul EDPR disclosed its 1H2010 financial results	4,70
		20 27/Sep EDPR establishes new institutional partnership structure incorporating the cash gront in lieu of PC for 9 mw in the US	4,10
		21 30/Sep EDPR executes 535 million Zlotys project finance for 120 MW in Poland	4,15
		22 14/Oct EDPR disclosed its 9M2010 previsional data	4.06
		23 3/Nov EDPR disclosed its 9M2010 financial results	4.12
		24 15/Nov EDPR signs new PPA for 99 MW in the US	3,97
		25 30/Nov EDPR signs new PPA for 83 MW in the Us	3.72
		26 8/Dec Spanish Government publishes new Royal Decree providing regulative to the wind energy sector	4.24
		27 9/Dec EDPR establishes new institutional partners structure incarporating the cash gram in lieu of PC for IDI NW in the US	4 25
		28 13/Dec EDPR signs new PPA tor 198 MW in the US	4,44
	29 16-dic	EDPR secures new PPA for 175 MW in the US	4.39
		30 20-dic US approves the extension of the ITC cash reimbursement	4,43

6.1.3. DIVIDEND POLICY

The distribution of dividends must be proposed by EDPR's Board of Directors and authorized by a resolution approved in the Company's Shareholders Meeting.

In keeping with the legal provisions in force, namely the Spanish Companies Law, the EDPR Articles of Association require that profits for a business year consider:

· The amount required to serve legal reserves;

· The amount agreed by the same General Meeting to allocate to dividends of the outstanding shares;

· The amount agreed by the General Meeting to constitute or increase reserve funds or free reserves;

· The remaining amount shall be booked as surplus.

The expected dividend policy of EDPR, as announced in the IPO, is to propose dividends' distribution each year representing at least 20% of EDPR's distributable profit. Also as announced in the IPO, EDPR Board of Directors can adjust this dividend policy as required to reflect, among other things, changes to our business plan and our capital requirements, and there can be no assurance that in any given year a dividend will be proposed or declared.

In view of the current economic and regulatory environment in the countries in which EDPR holds investments, of the net results obtained in fiscal year 2010 and of the revised business plan and capital requirements associated to it in a harder financial environment, the Board of Directors will propose at the Shareholder's Meeting, to be held in 2011, to retain the 2010 results as voluntary reserves.

6.2. COMMUNICATION WITH CAPITAL MARKETS

6.2.1. COMMUNICATION POLICY

The Communicotion Policy of EDPR seeks to provide to shareholders, potential investors and stakeholders all the relevant information about the Company and its business environment. The promotion of transparent, consistent, rigorous, easily occessible and high-quality information is of fundamental importance to an accurate perception of the company's strategy, financial situation, accounts, assets, prospects, risks and significant events.

EDPR therefore look for to provide investors with information that can support them make informed, clear, concrete investment decisions.

An Investor Relations Office was created to ensure a direct and permanent contact with all market related agents and stakeholders, to guarantee the equality between shareholders and to prevent imbalances in the information access.

EDPR make use of its corporate website as a major channel to publish all the material information and ensures that all the relevant information on its activities and results is always upto-date and available.

6.2.2. INVESTOR RELATIONS DEPARTMENT

The EDPR Investor Relations Department (IRD) acts as an intermediary between the EDPR management team and a vast universe of shareholders, financial analysts, investors and the market in general. Its main purposes are to guarantee the principle of equality among shareholders, prevent asymmetries in access to information by investors and reduce the gap in the perception of the company's strategy and intrinsic value. This department is responsible for developing and implementing the company's communication strategy and maintaining an appropriate institutional and informative relationship with the financial market, the stock exchange at which EDPR shares are traded and their regulatory and supervisory bodies (CMVM – Comissão do Mercado de Valores Mobiliários in Portugal and CNMV – Comissión Nacional del Mercado de Valores in Spain).

The Investor Relations Department is coordinated by Mr. Rui Antunes and is located at the company's Madrid office. Its contact details are as follows:

6.2.3. ACTIVITY IN 2010

In 2010, EDPR has promoted and participated in several events, namely roadshows, presentations, conferences, meetings and conference calls, where apart from reinforcing its relationship with investors had the opportunity to introduce the Company and to answer queries about its strategy, pertormance and business environment. More than 400 meetings were held

with institutional investors in the main financial cities of Europe and of the US as well as in the Company's Offices, being it a strong evidence of investor's high interest in the company and its business environment.

It is also worth highlight the completion of the company's first Investor Day, which was held on May 21st 2010 in Cascais, Portugal, where the company Management Team took the opportunity to update investors and analysts about its strategy, outlook and follow-up of its business areas.

EDPR usually publishes its price sensitive information before the opening of the NYSE Euronext Lisbon stock exchange through CMVM's information system, makes it available on the website investors' section and sends it by e-mail for the department mailing list.

On each earnings announcement, a conference call with webcast access was promoted, at which the Company's management updated on EDPR's activities. On each of these events, shareholders, investors and analysts had the opportunity to directly submit their questions and to discuss EDPR's results as well the company's outlook.

The Department remained in permanent contact with the finoncial andlysts who evaluate the company and with all shareholders and investors by e-mail, phone or face-to-face meetings. In 2010, os far as the company is aware of, were issued by sell-side analysts more than 200 reports evaluating its performance.

6.2.4. ANALYSTS

As a world leoder in renewable energy and being one of the biggest listed companies in the sector, EDPR is permanently under analysis and valuation.

At the end of the 2010, as far as the company is aware of, there were 29 institutions elaborating research reports and following actively the Company's activity. As of December 315 2010, the average price target of those analysts was of € 6.03 per share with most of them reporting positive recommendations on EDPR's share: 21 Buys, 7 Neutrals and only 1 Sell.

Dedprenováveis

Analysts' recommendation on EDPR's share at 31-Dec-2010

Company	Analysl		Price Target Recommendation . Date
Goldman Sachs	Mariano Alarco	રે છે. કે છે	BUY	16/Dec/10
Margan Stanley	Allen Wells	6.10	Overweighl	15/Dec/10
Caxa BI	Helena Barbasa	ર રેડ	Buy	14/Dec/10
Société Générole Didier Laurens		5.80	Buy	13/Dec/10
Fidentiis	Daniel Rodríguez	600	Buy	10/Dec/10
UBS	Alberto Gandolfi	5.00	Buy	7/Dec/10
Deutsche Bank	Virginia Sanz de Madrid	6.50	Hold	26/Nov/10
BP	Bruna Almeida da Silva	6.35	Buy	19/Nov/10
Citigraup	Manuei Palomo	5.40	Buy	18/Nov!10
BCP	Vanda Mesquila	675	Buy	16/Nov/10
RBS	Chris Rogers	5.90	Buy	11/Nov/10
Redbum Partners	Archie Fraser	7 46	BUY	10/Nav/10
Arkean Finance	Alexandre Koller	4.20	Sell	9/Nov/10
JP Morgan	Sarah Laituna	5.90	Overweight	5/Nov/10
BES	Fernando García	6.30	Arra	5/Nov/10
BNP Panbas	José Femandez	4.90	Neutral	4/Nov/10
Berenberg	Benita Barretlo	5.50	By	4/Nov/10
Barclays Capital	Rupesh Madlani	6.50	Equalweight	4/Nov/10
BOAML	Matthew Yales	6.40	BJY	3/Nov/10
Natious	Céline Chérubin	4.00	Neutral	29/Oct/10
Credit Sursse	Mario Eulália Izquierda	5.30	Outperform	29/Oct/10
HSBC	James Magness	7.25	Overweight	18/Oct/10
Santonder	Jaaquin Ferrer	7.00	By	24/Sep/10
Nomura	Roímundo Femandez-Cuesto 5.75		Neutrol	6/Sep/10
Sabadel	Jarge Ganzalez	6.77	BUY	30/Jul/10
Unicredit	Javier Suárez	5.50	Hold	28/Jul/10
Banesta	José Brilo Correig	6.61	Overweight	22/Jun/10
BBVA	Daniel Oriea	7.90	Outperform	10/Jun/10
Mocquarie	Shoi Hill	5.40	Neutral	7/May/10

6.2.5. ONLINE INFORMATION: WEBSITE AND E-MAIL

EDPR considers online information a powerful tool in the dissemination of material information updating its website with all the relevant documents. Apart from all the required information by CMVM regulations, the Company website also carries financial and operational updates of EDPR's activities ensuring all an easy access to information.

	Portuguese English Spanish
Identificolion of the compony	2		V
Financial statements	1
Requlations of the management and supervisory bodies	1	2
Audit ond Control Commiliee Annual report
Investor Relations Deportment - functians ond cantact details	1
Arlicles of association		11	1
Colendar of company events	1	1
Invitation to General Meeting
Proposal submitted for discussion and voling at General Meetings i		V	1
Minutes of the Generol Meeting af Shareholders	V	V

ANNEX I

MAIN POSITIONS HELD BY MEMBERS OF BOARD OF DIRECTORS IN LAST FIVE YEARS

Name	Position
ANTONIO MEXIA
	CEO af EDP - Energias de Partugal, S.A.
ANA MARIA FERNANDES
	Director of EDP - Energias de Portugal, SA
ANTONIO MARTINS DA COSTA
	CEO and Vice-Chairperson of EDP Energias do Brasil, SA
	CEO and Chairpersan of Harizon Wind Energy LLC
	Director of EDP - Energias de Portugal, SA
JOAO MANSO NETO
	Chairperson of the Executive Committee of EDP Produção
	CEO and Vice-Chairperson of Hidroeléctrico del Cantábrico, SA
	Member of the Executive Board of Directors of EDP - Energias de Portugal, SA
NUNO ALVES
	Executive Director of Millennium BCP Investimento, responsible for BCP Group
	Treasury and Copitol Markets
	Member of the Executive Board of Directors of EDP - Energias de Portugal, SA (CFO)
ANTONIO NOGUEIRA LEITE
	Director of the Instituto Português de Relações Internacionais, UNL
	Director of Reditus, SGPS, SA
	Monoging Director José de Mello, SGPS, SA
	Director of Companhia União Fabril CUF, SGPS, SA
	Director of Quimigol, SA
	Director of CUF - Químicos Industriais,SA
	Director of ADP, SA-CUF Adubos
	Director of Sociedades de Explosivos Civic, SEC, SA
	Director of Brisa, SA
	Director of Efacec Copital, SGPS, SA
	Director of Comitur, SGPS, SA
	Director of Comitur Imobiliária, SA
	Director af Expocamitur - Pramoções e Gestão Imobiliaria, SA
	Director of Herdade do Vale da Fante - Sociedade Agricola, Turística e Imobiliária,
	SA
	Director of Sociedade Imobiliária e Turística do Cojo, SA
	Director af Sociedade Imobiliária da Rua das Flores, nº 59. SA
	Director of José de Mello Soude, SGPS, SA
	Vice-Chairperson of the Advisory Board of Banif Banco de Investimentas
	Chairpersan of the General Supervisory Board of Opex, SA
	Member af the Advisory Board af IGCP
	Vice-Chairperson of Fórum paro a Competitividade

Dedprenováveis

lame	Position
	Director of José de Mello Investimentos, SGPS, SA
	Director of Fundaçãa de Aljubarrota
	Chairperson of Associação Oceano XXI (cluster da Mor)
DANIEL M. KAMMEN
	Faunding Director of Renewable and Appropriate Energy Loboratory (RAEL) of
	University of Colifarnia, Berkeley
	Lecturer in Nuclear Energy at the University of California, Berkeley
	Lecturer in the Energy ond Resources Group at University of California, Berkeley
	Lecturer in public policy at Galdman School of Public Policy at University of
	Californio, Berkeley
	Co-Director of the Berkeley Institute of the Environment
	Member of the Executive Committee of Energy Biosciences Institute
FRANCISCO JOSE QUEIROZ DE
BARROS DE LACERDA
	Director of Banco Comercial Português, SA and several subsidiories
	Director of Mogue - SPGS, SA
GILLES AUGUST
	Co-founder of August & Debouzy. He naw manages the firm's carporate
	department.
JOAO LOPES RAIMUNDO
	Choirperson of the Board af Banque BCP Luxembourg
	Chairperson of the Boord of Directars of Banque BCP France
	Director of Banque Orive BCP Switzerland
	Managing Director of Banca Camercial Português
	Vice-Chairpersan af the Board of Millenniun Angala
	Director af Banco Millennium BCP de Investimento
	Vice-Chairperson of the Board of Millennium Bank, NA (USA)
JOÃO MANUEL DE MELLO FRANCO
	Director of Partugal Telecam SGPS, SA
	Choirperson of the Audil Committee of Portugol Telecom SGPS, SA
	Member of the Remunerations Committee of Portugal Telecom SGPS, SA
	Member of the Evaluation Committee of Partugal Telecom SGPS, S.A.
	Member of the Corporate Governance Committee of Portugal Telecam SGPS, SA
JORGE SANTOS
	Full Professor of Economics at Instituto Superiar de Economia e Gestão, da
	Universidade Técnica de Lisbaa
	Member of the Assembly of Representatives of Instituta Superior de Econamio e
	Gestão da Universidade Técnica de Lisboa
	Coordinatar of the PhD course in Economics at ISEG
JOSÉ ARAÚJO E SILVA
	Director of Corticeira Amorim, SGPS, SA
	Member of the Executive Committee af Corticeira, SGPS, SA
	Director of Caixa Geral de Depósitas
JOSÉ SILVA LOPES

EDP Renováveis – 2010 Corporate Governonce Report

edprenováveis

Name	Position
	Chairperson af the Board of Directors Montepio Geral
MANUEL MENÉNDEZ MENÉNDEZ
	Director of EDP - Energios de Portugal, SA
	Chairperson of Cajastur
	Chairperson of Hidroeléctrica del Cantábrico, SA
	Chairperson of Naturgas Energia, SA
	Director of EDP Renewables Europe, SL
	Representative of Peña Rueda, SL in the Board of Directors of Enagas, SA
	Member of the Board of Confederación Española de Cojas de Ahorro
	Member of the Board of UNESA
RAFAEL CALDEIRA VALVERDE
	Vice-Chairperson of the Board af Directars Bonco Espirito Santo de Investimento. SA
	Member of the Execulive Committee of Banco Espirito Santo de Investimento. SA

ANNEX II

CURRENT POSITIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS

IN COMPANIES NOT BELONGING TO THE SAME GROUP AS EDP RENOVÁVEIS, S.A.

Name	Position
ANTÓNIO MEXIA
	N/A
ANA MARIA FERNANDES
	N/A
ANTONIO MARTINS DA COSTA
	N/A
JOÃO MANSO NETO
	N/A
NUNO ALVES
	N/A
ANTÓNIO NOGUEIRA LEITE
	Director of the Instituto Português de Relações internocionois, UNL
	Director of Reditus, SGPS, SA
	Monaging Director José de Mello, SGPS, SA
	Director of Companhia União Fabril CUF, SGPS, SA
	Director of Quimigal, SA
	Director of CUF-Químicos Industriais,SA
	Director of ADP, SA-CUF Adubos
	Director of Sociedades de Explosivos Civic, SEC, SA
	Directar of Briso, SA
	Director of Efacec Capital, SGPS, SA
	Director af Comitur, SGPS, SA
	Director of Comitur Imaboiliária, SA
	Director of Expocomitur - Promoções e Gestão Imobiliária, SA
	Director of Herdode do Vole do Fonte-Sociedade Agricolo, Turístico e Imobiliária, SA
	Director of Sociedade Imobiliária e Turística da Cojo, SA
	Directar of Sociedade Imobiliária da Rua dos Flores, nº 59, SA
	Directar of José de Mello Saúde, SGPS, SA
	Vice-Chairperson of the Advisory Baard of Banif Banco de Investimentos
	Chairperson of the General Supervisory Baord of Opex, SA
	Member of the Advisory Board af IGCP
	Vice-Chairperson of Fórum para a Competitividode
	Director of José de Mello Investimentos, SGPS, SA
	Director of Fundaçõo de Aljubarrota
	Chairperson of Associoção Oceono XXI (cluster do Mar)
DANIEL M. KAMMEN

edprenováveis

Name	Position
	Founding Director of Renewable and Appropriate Energy Loboratory (RAEL) at
	University of Colifornia, Berkeley
	Lecturer in Nucleor Energy at the University of Colifornia, Berkeley
	Lecturer in the Energy ond Resources Group at University of Colifornia, Berkeley
	Lecturer in public policy of Goldman School of Public Policy at University of
	Colifornia, Berkeley
	Co-Director of the Berkeley Institute of the Environment
	Member of the Executive Committee of Energy Biosciences Institute
	Chief Technicol Specialist, Renewoble Energy and Energy Efficiency, The World Bonk
FRANCISCO JOSE QUEIROZ DE BARROS DE LACERDA
	CEO of Cimpor - Cimentos de Portugal, SGPS, SA
	Chairperson of Cimpor Inversiones, SA
	Chairperson of Sociedode de Investimento Cimpor Macau. SA
	Manager of Deal Winds - Sociedade Unipessool. Lda
GILLES AUGUST
	Co-lounder of August & Debouzy. He now monoges the firm's corporate department.
JOAO LOPES RAIMUNDO
	Director of CIMPOR - Cimentos de Portugal SGPS, S.A.
	Chairperson of the Board of BCP Holdings USA, Inc
	Managing Director of Banco Comercial Português
JOAO MANUEL DE MELLO FRANCO
	Director of Portugol Telecom SGPS, SA
	Choirperson of the Audit Committee of Portugal Telecom SGPS, SA
	Member of the Remunerotions Committee of Portugal Telecom SGPS, SA
	Member of the Evaluation Committee of Portugal Telecom SGPS, S.A.
	Member of the Corporate Governonce Committee of Portugol Telecom SGPS, SA
	Full Professor of Ecanomics at Instituta Superior de Economia e Gestão, da
	Universidade Técnica de Lisboa
	Member of the Assembly of Representatives af Instituto Superior de Econamia e
	Gestão da Universidade Técnica de Lisbaa
	Coordinator of the PhD caurse in Economics of ISEG
JOSÉ ARAUJO E SILVA
	Director af Corticeiro Amorim, SGPS, SA
	Member of the Executive Committee of Corticeira, SGPS, SA
	Director of Caixa Geral de Depósitos
JOSÉ SILVA LOPES
	Chairperson of the Board of Directors of Mantepio Geral
MANUEL MENÉNDEZ MENÉNDEZ
	Chairperson of Cajastur
	Representative of Peña Rueda, SL in the Board of Directors of Enagas, SA

edprenováveis

	Position
	Member of the Board of Confederación Españolo de Cajas de Ahorro
	Member of the Baard of UNESA
RAFAEL CALDEIRA VALVERDE
	Vice-Choirperson of the Baard of Directors Banca Espirito Santa de Investimento. SA
	Member of the Executive Cammittee of Bonco Espirito Santo de Investimento. SA
CHARLERS MARKETERS MALERSELLERS IN REVERTIES IN RESERVENCIAL SU BE BELAR IN BOLLER IN SELLECT IS SULLED IN SELLECT CONSULTER

ANNEX III

CURRENT POSITIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS

IN COMPANIES BELONGING TO THE SAME GROUP AS EDP RENOVÁVEIS, S.A.

	António Mexia	Ana Maria Fernandes	António Martins da Costa	João Manso Neto	Nuno Alves	Manuel Menendez Menendez
EDP - Energias de Portugal, S.A.	Chairperson of the Executive Boord of Directors	Director	Director	Director	Director
EDP - Gestão da Produção de Energia, S.A.				Choirperson of the Board of Directors
EDP - Energias do Brasil, S.A.	Choirperson of the Boord of Directors	Director			Director
EDP - Estudos e Consultoria, S.A.					Chairperson of the Boord of Directors
EDP · Soluções Comerciais, S.A.			Choirperson of the Boord of Directors
EDP - Imobiliária e Participações, S.A.					Chairperson of the Boord of Directors
EDP Valor . Gestão Integrada de Serviços, S.A.					Chairperson of the Boord of Directors
Sāvida - Medicina Apoioda, S.A.					Chairperson of the Boord of Directors
SCS - Serviços Complementares de Saúde, S.A.					Chairperson of the Boord of Directors
Energia RE, S.A.					Chairperson of the Board of Directors
Hidroeléctrica del Cantábrico. S.A.		Director	Director	Vice- Chairperson of the Boord of Directors	Director	Chairperson of the Board of Directors
Naturgás Energia, S.A.				Vice- Chairperson of the Boord af Directors		Chairperson of the Boord af Directors
EDP Investimentos, SGPS, S.A.				Chairperson of the Boord of Directors
EDP Gás III, SGPS, S.A.				Chairperson of the Boord of Directors
EDP Gás II, SGPS, S.A. (ex-NQF Gás, SGPS, S.A.)				Chairperson of the Boord of Directors
EDP Gás - SGPS, S.A.				Chairperson of the Boord of Directors
EDP Internacional, S.A.			Chairperson of the Boord of Directors
Horizan Wind		Chairperson of

	António Mexia	Ana Maria Fernandes	António Martins da Costa	João Manso Neto	Nuno Alves	Manuel Menéndez Menéndez
Energy, LLC		the Board of Directors
EDP Renewables Europe, SL		Chairperson of the Board of Directors				Director
Balwerk - Consultadoria Económica e Participações, Sociedade Unipessoal, Lda.					Monager
EDP Ásla - Investimentos e Consultoria Lda.			Chairperson of the Board of Directors
EDP - Energias de Portugal Sociedade Anónima, Sucursal en España	Permonent Representotive	Permanent Representotive	Permonent Representative	Permanent Representative	Permanent Representotive
EDP Gás.com - Comércio de Gas Natural, S.A.				Director
EDP Finance BV	Representotive		Representative ; Representative	Representotive	Representotive
Electricidade de Portugal Finance Company Ireland Lt.					Director
ENEOP - Eólicas de Portugal, S.A.		Chairperson of the Board of Directors
EDP Renovávels Brasil, S.A.		Chairperson of the Board of Directors
EDP - Ásla Soluções Energéticas Limitada			Choirperson of the Board of Directors
Empresa Hidroeléctrica do Guadiana, S.A.				Chairperson of the Board of Directors
EDP Projectos, SGPS, S.A.			Director	Director
EDP Energla Ibérica S.A.				Director
Enagás, S.A.						Permanent Representative

ANNEX IV

BOARD OF DIRECTORS

António Luís Guerra Nunes Mexia (Chairperson)

Received a degree in Economics from Université de Genève (Switzerland) in 1980, where he was also Assistant Lecturer in the Department of Economics. He was a postgroduate lecturer in European Studies at Universidade Católica. He was also a member of the governing boards of Universidade Nova de Lisboa and of Universidade Catolica, where he was Director from 1982 to 1995. He served as Assistant to the Secretory of Stote for Foreign Trade from 1986 until 1988. From 1988 to 1990 he served as Vice-Chairperson of the Board of Directors of ICEP (Portuguese Institute for Foreign Trade). From 1990 to 1998 he was Director of Bonco Espírito Santo de Investimentos and in 1998 he was appointed Chairperson of the Board of Directors of Gas de Portugal and Transgás. In 2000 he joined Galp Energia as Vice-Chairperson of the Board of Directors. From 2001 to 2004, he was the Executive Chairperson of Galp Energia and Chairperson of the Board of Directors of Petrogal, Gós de Portugal, Transgás and Transgás-Atlântico. In 2004, he was appointed Minister of Public Works, Tronsport and Communication for Portugal's 16th Constitutional Government. He also served as Chairperson of the Portuguese Energy Association (APE) from 1999 to 2002, member of the Trilateral Commission from 1992 to 1998, Vice-Chairperson of the Portuguese Industrial Association (AIP) and Chairperson of the General Supervisory Board of Ambelis. He was olso a Government representative to the EU working group for the trans-European network development. Since March 31%, 2006 Mr. Mexia is the Chief Executive Officer of EDP - Energias de Portugal, S.A.

Ana Marla Machado Fernandes (Vice-Chairperson and Chief Executive Officer)

Graduated in Economics from the Faculty of Economics at Oporto (1986). She received a postgraduate degree in Finance from the Faculty of Economics of Universidade do Porto and an MBA from the Escola de Gestão do Porto (1989). She lectured at the Faculty of Economics of Universidade do Porto from 1989 until 1991. She began her professional career in 1986 at Conselho - Gestão e Investimentos, a company of the Banco Português do Atlântico Group, in the capital markets, investments and business restructuring field. In 1989 she began working at Efisa, Sociedade de Investimentos, in the area of corporate finance, and was later made a Director of Banco Efisa. In 1992 she joined the Grupo Banco de Fomento e Exterior as Director in the areo of investment banking and was Head "Corporate Finance" at BPI between 1996 and 1998. In 1998 she joined Gás de Portugal as Director of Strategic Planning and M&A and in 2000 became Director of Strategy and Portfolio Management of Galp Business. She later became president of Galp Power and Director of Transgás. In 2004 she was appointed a Director of the

Board of Galp Energia. Since March 318, 2006 Mrs. Femandes is a Director of EDP - Energias de Portugal, S.A.

António Fernando Melo Martins da Costa

Holds a degree in Civil Engineering and an MBA from the University of Oporto, and has completed executive education studies at INSEAD (Fontainebleau), AESE (Lisbon) and the AMP of the Whatton School (University of Pennsylvania). Mr. António Martins da Costa was the Chairperson and CEO of Horizon Wind Energy and is a Director of EDP Renováveis. From 2003 to 2007, António Martins da Costa was the CEO and Vice-Chairperson of the Board of Directors of Energias do Brasil and Chairperson of the Board of Directors of the Company's subsidiaries in Brazil. He started his professional career in 1976 as a lecturer at the Superior Engineering Institute of Porto, joined EDP in 1981 and In 1989 he moved to the financial sector, assuming the positions of General Manager of banking and Executive Director on the insurance companies, pension funds and asset management operations of Millenium BCP and Director of Eureko BV (Netherlands). Since 1999 he was also Deputy CEO and Vice-President of the Executive Board of PZU (Poland), the biggest insurance company and asset manager in Central and Eastern Europe. Since March 314, 2006 Mr. Martins da Costa is a Director of EDP - Energias de Portugal, SA

João Manuel Manso Neto

Graduated in Economics from Instituto Superior de Economia (1981) and received a postgraduate degree in European Economics from Universidade Católica Portuguesa (1982). He also completed a professional education course through the American Bankers Association (1982), the academic component of the master's degree programme in Economics at the Faculty of Economics, Universidade Nova de Lisboa and, in 1985, the "Advanced Management Program for Overseas Bankers" at the Wharton School in Philadelphia. From 1988 to 1995 he worked at Banco Português do Atlântico, occupying the positions of Supervisor for the International Credit Division, Head of the International Credit Division, Department Director, Deputy Central Director for International Management and Central Director of Finoncial Management ond Retail Commerce South. From 1995 to 2002 he worked at the Banco Comercial Português, where he held the posts of General Director of Financial Management, General Manager of Lorge Institutional Businesses, General Manager of the Treasury, Director of BCP Banco de Investimento and Vice-Chairperson of BIG Bank Gdansk. From 2002 to 2003, in Banco Português de Negócios, he was the Chairperson of BPN Serviços ACE, Director of BPN SGPS, Director of Sociedade Lusa de Negócios and Director of Banco Efisa. He is still a voting Member of the OMEL Board of Directors. From 2003 to 2005 he worked at EDP as Director-General and Administrator of EDP

Produção. In 2005 he was named Appointed Adviser at HC Energía, Chairperson of Genesa and Director of Naturgas Energia and OMEL, Since March 317, 2006 Mr. Manso Neto is a Director of EDP - Energias de Portugal, S.A.

Nuno Maria Pestana de Almeida Alves

Mr. Nuno Alves holds a degree in Naval Architecture and Marine Engineering (1980) and a Master in Business Administration (1985) by the University of Michigan. In 1988, he joins the Planning and Strategy Department of Millennium BCP and in 1990 becomes an associate Director of the bank's Financial Investments Division. In 1991, Mr. Nuno Alves is appointed as the Investor Relatians Officer for the group and in 1994 he joins the Retail network as Coordinating Manager. In 1996, he becomes Head of the Capital Markets Division of Banco CISF, currently Millennium BCP Investimento, and, in 1997, Co Head of the bank's Investment Banking Division. In 1999, Mr. Nuno Alves is appointed as Chairperson and CEO of CISF Dealer, the brokerage arm of Banco CISF. Since 2000, before his appointment as EDP's Chief Financial Officer in March 2006, Mr. Nuno Alves acted as an Executive Director of Millennium BCP Investimento, responsible for BCP Group Treasury and Capital Markets

António Nogueira Leite

Born in 1962. Between 1988 and 1996, he held the position of consultant to several national and international institutions, including the Bank of Portugal, the OECD and the EC. Between 1995 and 1998, was general secretary of APRITEL, and between 2000 and 2002 was a Director of APRITEL. From 1997 to 1999, was a Director of Soporcel, S.A., between 1998 and 1999, was a Director of Papercel, S.A., and in 1999, was a Director of MC Corretagem, S.A. Also in 1999, he was appointed chairperson of the board of directors of Bolsa de Valores de Lisboa and became a member of the executive committee of Associação de Bolsas Ibero Americanas. Since 2000, Mr. Nogueira Leite has been a member of the consultative council of Associação Portuguesa para o Desenvolvimento das Comunicações. Between 2000 and 2002, was a consultant for Vodafone- Telecomunicações Pessoais,\$.A., between 2001 and 2002, he was a consultant of GE Capital, and in 2002 was a member of the consultative council of IGCP. Since 2002, he has held various positions within the José de Mello group and has held Directorships with numerous other entities including Reditus, SGPS, S.A., Quimigal, S.A., ADP, S.A., Comitur, SGPS, S.A., Comitur Imobiliária, S.A., Expocomitur-Promoções e Gestão Imobiliária, S.A., Herdade do Vale da Fonte-Sociedade Agrícola, Turística e Imobiliária, S.A., e SGPS, S.A., Efacec Capital, SGPS, S.A., and Cuf-Químicos Industriais, S.A. He held a further Directorship with Sociedade de Explosivos Civis, SEC, S.A. from 2007 to March 2008. Between Octaber 1999 and August 2000, was Secretary of State for Treasury and Finance and Governor Substitute of the Europeon Bank of Investments. Additionally held positions with the European Bank for Reconstruction and

edprenováveis

Development, the International Monetary Fund and was a member of the Financial and Economic Council of the European Union. He was vice-chairperson of the consultative council of Banif Banco de Investimento, S.A., and chairperson of the general and supervision council of OPEX, S.A. He is Chairperson of Associação Oceano XXI (cluster do Mar).

Has an undergraduate degree in economics from the Universidade Católica Portuguesa, a master of science degree in economics, and a Ph.D. in economics from the University of Illinois.

Daniel M. Kammen

Born in 1962. Between 1988 and 1991, he was a research fellow in the division of engineering and applied science and the division of biology at the California Institute of Technology and a postdoctorate researcher of Weizmann & Bantrell in the engineering and applied science and biology department at California Institute of Technology. Between 1991 and 1993, he was a research collaborator for science and international affairs at the John F. Kennedy School of Government, Harvard University. Between 1991 and 1993, he was a research associate for the northeast regional centre for global environmental change and the department of physics, Harvard University. In 1993, he was appointed a permanent fellow at the African Academy of Sciences. Between 1993 and 1999, he was a member of the research faculty at the Centre for Eneray and Environmental Studies at the School of Engineering and Applied Science at Princeton University. Between 1997 and 1999, he was Class of 1934 Preceptor at the Woodrow Wilson School of Public and International Affairs at Princeton University, and between 1998 and 1999 he was chair of the science, technology and environmental policy program (STEP) of the same institution. Between 1998 and 2001, he was an associate professor of the energy and resource group and between 1999 and 2001 was an associate professor of nuclear engineering at the University of California, Berkeley. In 1999, he was a founding Director of the renewable and appropriate energy laboratory (RAEL) of the University of California, Berkeley, From 2000 to 2001, he jained the core management team of the Commission of Power of California Public Interest Environmental Research-Environmental Area. Between 2004 and 2009, he was the Director of the University of California, Berkeley, and Industrial Technology Research Institute of Taiwan. In 2005, he was appointed co-Director of the Berkeley Institute of the Environment. In 2006, he was appointed a member of the Energy and Resources Group and in 2007 held the position of coordinator of the science and impact sector in the Energy Biosciences Institute. In addition, since 2001, he has been a professor of public policy of the Goldman School of Public Policy, University of California, 8erkeley. He is also an author of several studies and has received several awards in the energy sector. Since 2010 he is the Chief Technical Specialist, Renewable Energy and Energy Efficiency at The World Bank.

He has an undergraduate degree, a masters degree and a Ph.D. each in physics.

Francisco José Queiroz de Barros de Lacerda

Born in 1960. From 1984 to 1985, he was an assistant professor at Universidade Católica Portuguesa. Between 1982 and 1990, he held the position of analyst, manager and Director of Locapor (Leasing), CISF and Hispano Americano Sociedade de Investimentos. Between 1990 and 2000 he developed his main activity at Banco Mello, as managing director since 1990 and as CEO between 1993 and 2000, being after 1997 also vice-chairperson of the Board of Directors, and, over that period, Chairperson or Director of several banks and financial companies' part of the Banco Mello group. He was simultaneously member of the top management team of the José de Mello group as Director of UIF, SGPS, and a non-executive Director of Insurance Company Império. Between 2000 and 2008, he was a member of the Executive Board of Directors of Banco Comercial Português, S.A., and in this capacity was responsible for the activities of the banking group in Central, Eastern & South-eastern Europe and in investment banking. He is a Director of Mague-SPGS, S.A. and business consultant to several companies. He has an undergraduate degree in company administration and management from Universidade Católica Portuguesa.

Gilles August

Born in 1957, between 1984 and 1986, he was a Lawyer at Finley, Kumble, Wagner, Heine, Underberg, Manley & Casey Law Office in Washington DC. Between 1986 and 1991he was an Associate and later became partner at Baudel, Salès, Vincent & Georges Law Firm in Paris. In 1995 he co-founded August & Debouzy Law firm where he is presently working as the manager of the firm's corporate department. He has been a Lecturer at École Supérieur des Sciences Economiqueset Commerciales and at Collège de Polytechnique and is currently giving lecturers at CNAM (Conservatoite National des Arts et Métiers). He is Knight of the Lègion d'Honneur.

He has a Master in Laws from Georgetown University Law Center in Washington DC (1986); a Post-graduate degree in Corporate Law from University of Paris II Phantéon, DEA (1984) and a Master in Private Law from the same University (1981). He graduated from the Ecole Supérieure des Sciences.

João José Belard da Fonseca Lopes Raimundo

Born in 1960. Between 1982 and 1985, he was senior auditor of BDO-Binder Dijker Otte Co. Between 1987 and 1990, he was director of Banco Manufactures Hanover (Portugal), S.A. and between 1990 and 1993 was a member of the board of TOTTAFactor, S.A. (Grupo Banco Totta e Açores) and Valores Ibéricos, SGPS, S.A. In 1993, he held Directorships with Nacional Factoring, da CISF-Imóveis and CISF Equipamentos. Between 1995 and 1997 he was a Director of CISF-

edprenováveis

Banco de Investimento and a Director of Nacional Factoring. In 1998, he was appointed to the board of several companies, including Leasing Atlântico, Comercial Leasing, Factoring Atlântico, Nacional Leasing and Nacional Factoring. From 1999 to 2000, he was a Director of BCP Leasing, BCP Factoring and Leasefactor SGPS. From 2000 to 2003, He was appointed Chairperson of the Board of Directors of Banque BCP (Luxemburg) and Chairperson of the Executive Committee of Banque BCP (France). Between 2003 and 2006 he was a member of management of Banque Prive BCP (Switzerland) and was general director of private banking of BCP. Since 2006, he has been a Director of Banco Millennium BCP de Investimento, and general Director of Banco Comercial Português and Vice-Chairperson and CEO of Millenniumbop bank, NA. Mr. Lopes Raimundo is presently Director of CIMPOR - Cimentos de Portugal SGPS, S.A., Chairperson of the Board of BCP Holdings USA, Inc.

Has an undergraduate degree in company management and administration from Universidade Católica Portuguesa de Lisboa, and a master of business administration degree from INSEAD.

João Manuel de Mello Franco

Born in 1946. Between 1986 and 1989, he was a member of the management council of Tecnologia das Comunicações, Lda. Between 1989 and 1994, he was chairperson of the board of Directors of Telefones de Lisboa e Porto, S.A., and between 1993 and 1995 he was chairperson of Associação Portuguesa para o Desenvolvimento das Comunicações. From 1994 to 1995, he was chairperson of the board of Directors of Companhia Portuguesa Rádio Marconi and additionally was chairperson of the board of Directors of Companhia Santomense de Telecomunicações e da Guiné Telecom. From 1995 to 1997, he was vice-chairperson of the board of Directors and chairperson of the executive committee of Lisnave (Estaleiros Navais) S.A. Between 1997 and 2001, he was choirperson of the board of Directors of Soponata and was a Director and member of the audit committee of International Shipowners Reinsurance, Co S.A. Between 2001 and 2004, he was vice-chairperson of José de Mello Imobiliária SGPS, S.A., ond was choirperson of the boords of Directors of IMOPOLIS, S.A., José de Mello Residenciais & Serviços, S.A. and Engimais, S.A. Since 1998, he has been a Director of Portugal Telecom SGPS, S.A., choirperson of the audit committee since 2004, and member of the corporate governance committee since 2006.

Has an undergraduate degree in mechanical engineering from Instituto Superior Técnico. He additionally holds a certificate in strategic monagement and company boards and is the holder of a grant of Junta de Energia Nuclear.

Jorge Santos

Born in 1951. From 1997 to 1998, he coordinated the committee for evaluation of the EC Support Framework II and was a member of the committee for the elaboration of the ex-ante EC Support Framework III. From 1998 to 2000, he was chairperson of the Unidade de Estudos sobre a Complexidade na Economia and from 1998 to 2002 was chairperson of the scientific council of Instituto Superior de Economia e Gestão of the Universidade Técnica de Lisboa. From 2001 to 2002, he coordinated the committee for the elaboration of the Strategic Programme of Economic and Social Development for the Peninsula of Setúbal. Since 2007, he has been coordinator of the masters program in economics, and since 2008, he has been a member of the representatives' assembly of Instituto Superior de Gestão of the Universidade Técnica de Lisboa (ISEG).

Has an undergraduate degree in economics from Instituto Superior de Economia e Gestão, a master degree in economics from the University of Bristol and a Ph.D. in economics from the University of Kent. He additionally has a doctorate degree in economics from the Instituto Superior de Economia e Gestão of Universidade Técnica de Lisboa, and has consequently held the positions of Professor Auxiliar and Professor Associado with Universidade Técnica de Lisboa. He has been appointed as university professor (catedrático) of Universidade Técnica de Libboa and is the President of the Department of Economics at ISEG.

José Fernando Maia de Araújo e Silva

Born in 1951. He began his professional career as an assistant lecturer at Faculdade de Economia do Porto. From 1991 he was invited to be a lecturer at Universidade Católica do Porto and additionally held a part-time position as technician for Comissão de Coordenação da Região Norte. He has since held the position of Director of several companies, including of Banco Espírito Santo e Comercial de Lisboa and Sosefin-----------------------------------------------------------------------------------------------------------------------Financeiros-Oporto group. He has been involved in the finance and management coordination of Sonae Investimentos SGPS, was executive Director of Sonae Participações Financeiras, SGPS, S.A. and was vice-chairperson of Sanae Indústria, SGPS, S.A. He has additionally held Directorships with Tafisa, S.A., Spread SGPS, S.A. and Corticeira Amorim, SGPS. He presently serves on the board of Directors of Caixa Geral de Depósitos, S.A.

Has an undergraduate degree in economics from the Faculdade de Economia do Porto and has obtained certificates from Universidade de Paris IX, Dauphine and the Midland Bank International banker's course in London.

José Silva Lopes

Born in 1932. From 1969 to 1974, he was a Director of Caixa Geral de Depósitos and Director of the Cabinet of Studies and Planning of the Ministry of Finance. In 1972, he held the position of deputy chief of negotiations for the free market agreement of the EC. Between 1974 and 1978, he was Minister of Finance, additionally holding the position of External Markets Minister between 1974 and 1975. Between 1975 and 1980, he held the position of Governor of the Bank of Portugal. From January 2004 till 2010, he was chairperson of the board of Directors of Montepio Geral.

In 2003, he was awarded the Order of Gra Cruz by the President of Portugal for his 48 years of service as an economist predominantly for the Portuguese state. In 2004, he was awarded a degree of doutor honoris causa by Instituto Superior de Gestão. Also has a degree in finance from the Instituto Superior de Ciências Económicas e Financeiras.

Manuel Menéndez Menéndez

Born in 1960. He has been a Director and a member of the executive committee of each of Cajastur and Hidrocantábrico. He has been a member of the board of directors, executive committee and audit and control committee of AIRTEL. He has also been a Director of LICO Corporación and ENCE, vice-chairperson of the board of SEDES, S.A. and executive chairperson of Sociedad de Garantía Recíproca de Asturias. Currently, he is chairperson of Cajastur, Hidrocantábrico and Naturgas Energia, a Director of EDP Renewables Europe, S.L. and Confederación Española de Cajas de Ahorros, a member of the Junta Directiva de UNESA and a member of Registro Oficial de Auditores de Cuentas. He also represents Peña Rueda, S.L. (a subsidiary of Cajastur) on the board of Directors of Enagas.

Has an undergraduate degree in economics and company management and a Ph.D. in economic sciences, each from the University of Oviedo. He has been appointed university professor (catedrático) of company management and accounts at the University of Oviedo.

Rafael Caldeira Valverde

Born in 1953. In 1987, he joined Banco Espírito Santo de Investimento, S.A. and was the Director responsible for financial services management, client management, structured financing management, capital markets management, and for the department for origination and information; between 1991 and 2005 he was also Director and Member of the Executive Committee. In March 2005, he was appointed as vice-chairperson of the board of Directors of Banco Espírito Santo de Investimento, S.A. and formed part of the executive committee of the

edprenováveis

company. He is Vice-Chairperson of the Board of Directors and Member of the Executive Committee of Banco Espírito Santo de Investimento, S.A. Director of BES Investimento do Brasil, S.A.; ESSI, SGPS, S.A.; ESSI COMUNICAÇÕES, SGPS, S.A.; ESSI INVESTIMENTOS, S.A. and Espírito Santo Investment Holdings Limited.

Has an undergraduate degree in economics from the Instituto de Economia da Faculdode Técnica de Lisboa.

SECRETARY OF THE BOARD

Emilio García-Conde Norlega

Born in 1955. In 1981, he joined Soto de Ribera Power Plant, which was owned by a cansortium comprising Electra de Viesgo, Iberdrola and Hidrocantábrico, as legal counsel. In 1995, he was appointed general counsel of Soto de Ribera Power Plant, and alsa chief of administration and human resources of the consortium. In 1999, he was appointed as legal caunsel at Hidrocantábrico, and in 2003 was appointed general counsel of Hidrocantábrico and also a member of its management committee. Presently serves as general counsel af the Company, as secretary of the Board, and is alsa Director and/or secretary on Boards of Directors af a number the Company's subsidiaries in Europe.

Holds a master's degree in law from the University af Oviedo.

ANNEX V

.

SHARES OF EDP RENOVÁVEIS OWNED BY MEMBERS OF THE BOARD OF DIRECTORS AS AT 31.12.2010

Direct	Indirect	Total
3,880	320	4.200
1,510	0	1,510
0	0	0
5,000	0	5,000
1,330	150	1,480
310	310	620
380	0	380
200	0	200
760	0	760
80	0	80
0	0	0
0	0	0
170	670	840
0	0	0
0	0	0
0	0	0

l. | edprenováveis

The Members of the Board of Directors of the Company EDP Renováveis, S.A.

DECLARE

To the extent of our knowledge, the information referred to in sub-paragraph a) of paragraph 1 of Arlicle 245 of Decree-Law no. 357-A/2007 of October 31 and other documents relating to the submission of annual accounts required by current regulations have been prepared in accordance with applicable accounting standards, reflecting a true and fair view of the assels, liabilities, financial position and results of EDP Renovaveis, S.A. and the management report falrly presents the evolullon of business performance and position of EDP Renováveis, S.A., contalning a description of the principal risks and uncertainties that it faces.

Mr. Antóhio Luís Comerra Nunes Mexic	Mrs. Ana María Fernandes Machaido
	Mr. Antonio Fernando Melo Martins da Costa Mr. Nuno Maria Pestana de Almeida Alves
Mr. João Manuel Manso Neto	Mr. José Silva Lopes
Mr. António do Pranto Nogueira Lelte	Mr. Rafael Caldeira de Castel-Branco Valverde
Mr. José Fernando Mala de Araújo e Silva Mr. Manuel Menéndez Monéndez
Mír./João Manuel de Mello Franco	Mr. Jorge Manuel Azevedo Henriciues dos Santos
Mr. Daniel M. Kammen	Mr. Francisco José Queiroz de Banges de Lacerda
Mr. Gilles August	Mr. João José Belard da Fonseca Lopes Raimundo

C N M V Registro de Auditorias No = Emisores

EDP RENOVÁVEIS, S.A.

Consolidated Annual Accounts and Directors' Report

31 December 2010

(With Auditors' Report Thereon)

KPMG Auditores S.L. Ventura Rodriguez, 2 33004 Oviedo

Auditors' Report on the Consolidated Annual Accounts

To the Shareholders of EDP Renováveis, S.A.

We have audited the consolidated annual accounts of EDP Renováveis, S.A. (the "Company") and subsidiaries (the "Group"), which comprise the consolidated balance sheet at 31 December 2010, the consolidated income statement, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows for the year then ended and the notes thereto. As mentioned in note 2 to the accompanying consolidated annual accounts, in accordance with International Financial Reporting Standards as adopted by the European Union, and other provisions of financial reporting legislation applicable to the Group, preparation of the Group's annual accounts is the responsibility of the Company's directors. Our responsibility is to express an opinion on the consolidated annual accounts taken as a whole, based on our audit, which was conducted in accordance with prevailing legislation regulating the audit of accounts in Spain, which requires examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated annual accounts and evaluating whether their overall presentation, the accounting principles and criteria used and the accounting estimates made comply with the applicable legislation governing financial information.

In our opinion, the accompanying consolidated annual accounts for 2010 present fairly, in all material respects, the consolidated equity and consolidated financial position of the Company and subsidiaries at 31 December 2010 and the consolidated results of their operations and consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union, and other provisions of applicable legislation governing financial reporting.

The accompanying consolidated directors' report for 2010 contains such explanations as the Directors of EDP Renováveis, S.A. consider relevant to the Group, the evolution of its business and other matters, and is not an integral part of the consolidated annual accounts. We have verified that the accounting information contained therein is consistent with that disclosed in the consolidated annual accounts for 2010. Our work as auditors is limited to the verification of the consolidated directors' report within the scope described in this paragraph and does not include a review of information other than that obtained from the accounting records of EDP Renováveis, S.A. and subsidiaries.

KPMG Auditores S.L.

Ana Fernández Poderós Parther

24 February 2011

KPMG Auditores S.L., a limited liability Spansh company,
is an affiliate of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated ath KPMG International Cooperative ("KPMG Internations") a Swiss antity

Reg Moi Madne, T 11961, F. 90 Sex, 8, 11 M -188.007, Inscrip 9
N.I.F. B-7B510153

EDP RENOVÁVEIS, S.A.

Consolidated Annual Accounts and Directors' Report

31 December 2010

Consolidated Income Statement

for the years ended 31 December 2010 and 31 December 2009

	Notes	2010	2009
		Thausands Euros)	(Thousonds Euros)
Revenue	6	845,056	648,242
Cost of consumed electricity	6	-2,917	-1,522
Changes in inventories and cost af raw materials
and consumables used	ó	-1,497	-4,713
		840,642	642,007
Other operating income / (expenses)
Other operating income	7	180,030	125,231
Supplies and services	B	-196,211	-148,304
Personnel costs and employee benefits expenses	9	-54,846	-42,547
Other aperating expenses	10	-28,866	-33 838
		-127,893	-99,458
		712,749	542,549
Provisions		155	183
Oepreciation and amortisation expense	II	-434,403	-314,350
Amortisation of deferred incame / Gavernment grants	ה	11,406	2,403
		289,907	230,785
Gains / Ilosses from the sole of
finoncial assels Other financial income	12		268
Other financial expenses	13 13	44,305 -218,451	35,717 -108.151
Share of profit of assaciates		5,036	3,922
Profil before tax		120,797	162,541
Income lox expense	14	-37,759	-44.754
Profit atter lax		83,038	117,787
Profit for the period		83,038	117,787
Attributable to:
Equity holders of EDP Renovovers	27	80,203	114,349
Non controlling interest	29	2,835	3,438
Profil far the period		83,038	117,787
Earnings per share basic and divied - Euros	27	0.09	0.13

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The following notes form an Integrat part of these Consolidated Annual Accounts

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Consolidated Balance Sheet

as at 31 December 2010 and 31 December 2009

	Nates	2010	2009
		Thousands Euros]	Thousands Eurosi
Assets
Property, plant and equipment	15	9,981,771	8,635,011
Intangible assets	16	22,727	17,340
Gaadwill	17	1,344,006	1,318,356
Investments in associates	18	45,871	47,609
Available for sale financial assets	19	18,380	12,630
Deferred tax assets	20	38,519	28,066
Debtars and other assets	23	123,311	129,447
Total Non-Current Assets		11,574,585	10,188,459
Inventories	21	24,162	11,344
Trode receivables	22	143,650	106,148
Debtars and other assels	23	552,259	337,458
Tox receivable	24	81,050	169,670
Financial assets at fair value through profit or loss	25	35,744	37,103
Cash and cash equivalents	26	423,700	443,633
Tatal Current Assets		1,260,565	1,105,356
Total Assets		12,835,150	11,293,815
Equity
	27		4,361,541
Share capital	27	4,361,541 552,035	552,035
Share premium	28
Reserves	28	-9,249 283,440	25,964 166,173
Other reserves and Retained earnings Consolidated net profit attributable ta equily holders of the parent		80,203	114,349
Total equity attributable ta equity holders of the parent		5,267,970	5.220,062
Non cantralling interest	29	125,541	107.493
Total Equily		5,393,511	5,327,555
Liabilities
Medium / Lang term financıal debt	30	3,325,943	2,563,171
Employee benefits	31	વેટ	ટેવે
Pravisians	32	53,787	67.085
Deferred 1ax liabilities	20	371,600	342,924
Institutional partnerships in US wind farms	33	1,644,048	1,353,612
Trade and ather payables	34	753,991	393,899
Tatal Nan-Current Liabilities		6,149,464	4,720,750
Shart term financial debt	30	207,647	110,268
Trade and other payables	34	1,035,782	1,098,105
Tax payable	35	48,746	37,137
Total Current Liabilities		1,292,175	1,245,510
Tatal Liabilihes		7,441,639	5,966,260
Total Equity and Liabilities		12,835,150	11,293,815

Consollidated statement of comprehensive income for the years ended at 31 December 2010 and 2009

			(Thousand Euros)
	2010		2009
	Equity holders of the parent	Non controlling Interests	Equity holders of the parent	Non controlling Interests
Profil for the period	80,203	2,835	114,349	3,438
Exchange differences arising on consalidation	-15,886	-500	-609	ક્ષર જિ
Fair value reserve (cash flow hedgel	-27,727	115	-2 433	-530
Tax effect from the fair value reserve (cash flow hedge)	6.079	-33	499	159
Foir value reserve lavailable for sale investments!	2.321	2,082	912
Actuarial gains / (losses)			-24
Other comprehensive income for the period, net of Income lax	-35, 213	1 ୧୧୫	-1,655	487
Total comprehensive income for the period	44.990	4,493	112,694	3,925

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4

The following noles form arı integral part of these Consolidated Annual Accounts

Statement of Changes In Consultatied Equity
for the year ended at 31 December 2010 and 2009

{Thousond Euros|

	Total Equity	Shore Capital	Share Presmum	Reserves and relained eamings	Exchange Differences	Hedging reserve	Fair value reserve	Equity atifibulable to equilty holders of EDP Renovovels	Minorty Interests
Balance as at 31 December 2008	5,198,873	4,361,541	રકડી 03 ર	166,188	1,179	18,669	7,747	5,107,359	91,514
Recognised income and expense for the period
For volue reserve (available for sale finoncial assets) nel of laxes	912						912	912
Fair value reserve (cash flow hedge) net of faxes	-2,305					-1,934		-1,934	-371
Actuarial gains / (losses)	-24			-24				-24
Exchange differences arising on consolidation	249				-200			-609	858
Profit for the period	117,787			114.349				114,349	3,438
Tatal recognised income and expense for the period	116,619			114,325	-609	-1,934	912	112,694	3,925
Dividends attributable lo minority interests	-3,491								-3,491
Shore copital increase in EDP Renavavers Brazil	7,997								7.997
Share copitol increase in EDPR Europe Group companies	9,200								9,200
Nan controlling interests decrease resulting from ocquisitions	-1,625								-1,625
Other	-18			9				9	-27
Balance as at 31 December 2009	5,327,555	4,361,541	552,035	280,522	570	16,735	8,659	5,220,062	107,493
Recognised income and expense for the period
For value reserve (available for sale financial assets) net of loxes	4,403						2.321	2,321	2,082
For value reserve (cash flow hedge) nel of faxes	-21,566					-21,648		-21,648	82
Exchange differences orising an consolidation	-16,392				-12 886			-15,886	-206
Profit for the periad	83,038			80,203				80,203	2,835
Tatal recagnised income and expense for the period	49,483			80,203	-12,886	-21,648	2,321	44,990	4,493
Dividends attributable la minority interests	-1,363								-1,363
Shore capital increase in EDP Renavaveis Brazil	2,463								2,463
Shore copital increase in EDPR EU campanies	2,749								2,749
Nan controlling interests orising from Porque Eolico Allos del Voltaya business combination	9,706								9,706
Other	2,918			2,918				2,918
Balance as at 31 December 2010	5,393,511	4,361,541	552,035	363,643	-15,316	-4,913	10,980	5,267,970	125,541

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The following nates form an integral part of these Consolidated Annual Accaunts

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0

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Consolidated Cash Flow Statement

for the years ended 31 December 2010 and 2009

	(Thousand Euros)
	Group
	2010	2009
Cash flows from operating adtvilles
Cash receipts from customers	812,999	646,621
Cash paid to suppliers	-230,612	-154,183
Cash paid to employees	-59.203	-49,366
Concession rents paid	-979	-4,153
Other receipts / payments relating to operating activities	95,887	-20,812
	618,092	418,107
income tax received / baid)	-50,645	-25,682
Net cash flows from operating activities	567,447	392,425
Continuing octivities	567,447	392,425
Cash flows from investing adivilles
Cash receipts resulting from
Proceeds from sate of financial assets	21,671	1,795
Proceeds from sale of property, plant and equipment	1,996	2,047
Other proceeds related to fixed ossets	128
Interest received	7,209	5.965
Dividends received	1,799	4,122
Cash payments resulting from	32,803	13,929
Acquisition of subsidianes (nel of cash ocquired) and other investments	-59,575	-118,822
Acquisition of property, plant and equipment	-1,421,493	-1,729,837
	-1,481,068	-1,848,659
Net cash flows from Investing activities	-1,448,265	-1,834,730
Continuing activities	-1,448,265	-1,834,730
Cash flows from financing octivities
Receipts/ payments) of loans	537,136	1,199,634
Interest and similar costs	-111,560	-49,613
Governmentol cash grants received	169,304	155,946
Increases in capital and share premium	4,977	20,743
Receipts/ (payments) from derivative financial instruments	487	-6,390
Dividends paid	-1,361	-3,197
Receipts / (Payments) from inslilutional partnership (Horizon)	228,359	33,526
Net cash flows from financing activities	827,342	1.650,651
Continuing activities	827,342	1,650,651
Net Increase / [decrease] in cash and cash equiwalents	-53,476	208,346
Effect of exchange rate fluctuotions on cosh held	33,543	5,607
Cash and cash equivalents at the beginning of the period (")	443,633	229,680
Cash and cash equivalents at the end of the period (")	423,700	443,633

l*) See Note 26 to the financial statements for a detailed breakdown of Cash and cosh equivalents

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

1. The business operations of the EDP Renovávels Group

EDP Renovares, Sciedad Antina (hereinates) was incorporated on 4 December 2007. Ils main corporated on 4 December in the in engage in achivites relation the election section, construction, operation and mointenonce of electricity penerating power stations, especially hydroelectic, mini-hydroelectic, wind, solar, hermol solor, photoste plants, among others The realstered offices of the company ge located in Dvied. Spain On 18 March 2008 EDP Renaváveis was canverted into o company incorporated by shares Sociedad Anérimal

As at 31 December 2010 the shore capital is held de Espon ("EDP Branch"), 15.5% by Hidroelectico del Cantibirico, 5.A and 22.47% at the share copital is tree-float in the Euranext Lisbon

As at 31 December 2010, EDP Renovices hold of EDP Renewobles Europe, S.L. (EDPR EU) o 100% state in the share capid of Horizon Wind Energy, LC ('EDPR NA') and a 5.5% stake in the share capital of EDP Renovávels Brasil (EDPR BR)

The Company belongs to the EDP Group, at which he parent campany is EDP Energist de Partyage, S.A., with registered offices of Proco Marguês de Parthal. 12 -- 4,

EDPR EU operates thraugh its subsidiaries located in Portugol, Spain, Polonio and Italy. EDPR EU's main subsclibries are EDP Rencyales Parlugal, SA (wind forms in Partygli, Cenesa renewation in Spoin, Agrupación Efica pind froms in Spain and France), Greenwind (Mind larns in Belgium - ogtnership with lacal investars. SP200 tyrns in Polond. EDP Reneyables Romania. SM (wind forms in Romania and EDP Renewables Italy, SRL (wind farms in Italy).

EDPR NA's main octivilies cansist on the development and aperation af wind farms in the United States of America

The purpose of EDP Renováveis Brasil is to establish a new business in the invesments in the renewable energy market of South America

As at 31 December 200, EDP Renavives and its subsidences ("he "EDP Renovers Group") had a hilly consainted institled copcally of 6,437 MN (5,491 MW as at 31 December 2009, operating in Span 2,050 MW as al 31 December 2009, in Porlugal 599 MW (595 MW os at 31 Becember 2009), in France 204 MW (220 MW as at 3) December 2009), in Belgium 57 MW as at 31 December 2009, in Polond 120 MW (120 MW as al 3) December 2009, in Romania 90 MW ho installed copcity of December 2009, in the United Sches 3,24 MW (2,624 MW as at 3) December 2009 (2017) 14 MW as at 31 December 2009) Additionally, through is interest in Editas de Portugal cansolidated - 239 MW (85 MN as at 3) December 2009

Regulatory framework for the activities in Spain

The Electrical Sector in 5pain is regulated by Low 54 of 27 Navember 1997 and subsequent omendments to legislation

Royal Decree 4.36 of 12 March 2004 was published on 24 March 2004 and sel and the methodology to be legal and economic regime relating to electical power production which included the generation at electricity using renewable sources of energy, cageneralian, biomass and waste. This Ryd Decree replaced the familied recolicial to special recome energies. The Royal Decree disc defined a system whereby he owners al the election arvere entitled to sell the production or surplos electrical power to distibutirs. A reguled price was fived for this sale, or production ond surplus cased directly on the daily morked or through a bilderal agreement, in which case a markel-negalided price wauld be received, plus an incentive for porticipation in the market and a premium if the installation was entitled to receive it

Royal Decree 661 of 25 May 2007 was published on 26 May 2007 and regulated under the special regime This Rayal Decree replaces Royal Decree 436 of 12 March 2004 and updates regulation under the special regime, whilst mantaining the basic structure of the regulation The economic tramewark set ou in this Royal Decree mainting the same system of oper the special rearne, wherely the owner of the instruling con op to sell its cover al a reculpted price, for all the poster clired your career on the daily market. Mures market or through p bilaterol agreement, in this case receiving the negationed price plus a premium

The man changes to the Royal Decree nclude a modification to the readated price and premiums and the introduction of a variable premium system for cerial lechnologes, such as wind power The owner instellations officially entering in b 1 January 2008 con op to odhere to the transiony regime estoblished in the first transition which sipulates that the owners of this instilations may maintain the prices and premiums (with some exceptions) estobilished in the oforementioned Royal Decree until 31 December 2012

RO 6/2009 of May 2 yas approved and is armed at electifications 2013 Among other measures it intoduces a pre-allacation register for nev regende energy copacity for renewable-energy notallations to at in RD 661/2007 Instillions will be registered in chronological oder unfil the government's target is met (20,155 MW) and new remuneralian scheme should be appraved for following prajects.

The decision on 19 November 2009 ollowed in the regists and 2.4 GW in solar themal pererolian copacity in one ag. The entire 8 4 GW in propects registed will receive the remuneralion set in RD 66/2007 Under this decision, oround 1,700 MW in solor thernol generation will be ollowed each year unil 2012 The 15th of December 2009 the Sportsh Government releosed the list of wind boilities included in the 6,389 MW of wind capority assigned by the Spanish Government, EDPR abrained a 31 wird farms which represents 13% of the Ital diled capacily.

On July 2010, the Industry Will the ley renewable energy associations the Spanish Wind Energy Association ond Prolermosolor to amend the exciting regulation. This agreement means the RD 1614/2010 of 7 December, that defines (i) a cut, for the years 201 ond 2012, at 35% of the renewable premium applicable to the wind capacity ruled by RD 661/2007, (1) an omendreen to the art.cle (1) by revisions to the pernum volue would only be oppied to the copcity that cater 2012 and liji the delintion of o imit of 2,589 hours of instilled copediy gerarion, from which the wind farm has no right to receive any premium

The Decree-Low 14/2010, of 23 December, estobished several neduce the toif delicit, among other, o generation rote af 0.5 €/Wh opplicoble to addinay ond special regime generotors

Notes to the Consolidated Annual Accounts for the vears ended 31 December 2010 ond 31 December 2009

Regulatory framework for the activities in Portugal

The Partyguese legal provisions applicable to the gener based on renewable resources are currently established by Decree-Low No. 19918 dated 27 May 199, as amended by Decree Low No. 108/99 dated 18 May 1999, Decree-Law No. 312/2001 dated 10 December 2001, and Decree Low No 339-C/2001 dated 29 Occember 2001. Also relevani is Oecree Jow No. 33-4/2005. Which esphishes the current amounts used in the remover ligh formula applicable to energy produced by means of renewable resources and the deadlines for the application of such remuler formulo

The main teature of the legal fromework for renervior in Portugal is hat the national grd operator or the regional distribution operator musi purchase all electicily produced by renewable production license The construction and operation of a wnd tarm depends on the offection of a gid connection pain) issued by the Slate Ceral de Geologia e Energia (DGGC) The issue of the point of connection by the OGGE accurs upon the request of the promoters during limited on the OGG ar by means of opplic ender procedure Award by direct negations is exceptions is exceptions is exceptions is exc

Decree-Low No 225/2007 dated 31 May establishes a set at registed to renewable energies, predicted in National Straley for Energy and hos reveal the formula used n estimating the remuneraline of enewable power stofions, ond delivered to the grid of Notonol Electric System, as well as the definition of attribution procedures of arthe some ond and deadlines to about the establishment license to renewable pawers stations

Since July 1, 2007, the Iberion electricity Inor been fully operational, with daily transactions from both Portugal and Spain, including a fowards market that has operated since July 2006

Regulatory fromework for the activities in the United States of America

Federal, state and local energy lows and regulate the development, ownership, business organization and he sole of electrich in the United States All project componise within the Group in the United States operations ("WG") or qualliying focillies (CIFS 1 under federal bow or are dudly certified in oddition, most of the Uniled States are regulded by the Federal Crengy Regulator Commisson ("FERC") and hove morket-based rates on file with FERC.

The federal government readoles he wholes in interstission business in interstate commerce through the Federal Commission (FERC"), which draws its juisdiction from the Federal legishing such as the Public Uilly Regulation such as the Public Uilling Regulation of 1976 (PURPA 1976"), the Energy Policy Act of 1992 (EPACT 1992") and the Energy Policy Act of 2005", which, among other hings, repeded ond replaced the Public Utility Holding Compony Act of 1935 with the Public Utility Holding Company Act of 2005 (PUHCA 2005 1

All of our orgied companies in the United Sigles perglars (EWGs) under PUHCA 2005 or quality of cliffies under PURPA 1978 In oddition, most of the project companies are regulated by FERC under Porl II of the FPA and have morket-based rates on file with FERC.

ENGs are owners ar operation including producers of renewoble energy, such as wind projects) that are engaged exclusively in the business of awning and/or operating generating focilites and selling election of EWG cannal mate retal sales of electic energy and may only own on operate the limited interconnection facilities necessary to cannect its generating lacility to the grid.

The Energy Policy Act at 2005 amended the PPA to gradicition aver all users, owners, ond aperators of he bulk power system for proving on entoring compliance with centin relability stordards ore requrements to provide for the reliable peration of the bull power system Pursuant to its authants under the FPA FERC certified the Nath Aneralian (NERC) as the entity responsible for developing relibility standards, submiting them to FBC for approval, and procina complonce with relobility stardards, subject to FERC review FERC also authorized NERC In delegate erfor finctions to eight regional entiles. All users, and operaturs of the billy power system that meet certain materially threshells one required to regiser with NEC ond camply with numerous FERC-opproved relebility standary relibility statords may result in the imposition of civil pendlies of up to 51 milian per doy per vialon. All at our project companies in the relevon materially threshals have registered with NEC and ore required to camply with applicable FERC-oppraved reliability standords.

In certain stokes, approval of the castruction of new elections forlilites, including renewable energy focilities such as wind from a slote agency, with only limited ministeriol opprovals required to and local governments. However, in mony sides the permit process to power plants lincluding wind fams) olso remains subject to lond-use and similar se county ond aly governments. State-level outhorizations may involve o more extensive opprovl process, possibly including an environmental impact evoluation and opposition by interested porties or uitilities.

Both the United States federal governments have implemented policies designed to promote the grown of renewoble energy, including wind power The primary federal renewable energy incentive program is the Production Tox Credit PTC), which was established by the U.S. Congress os port of PACT As part of the American Recovery and Reinvestment of 2009, which was enated this spiring, the federal government will also encoyed 1007 development through intestment tox credits toon 2009 firough 2003. Many states have possed legislation, pincipally in the form of renewable portbit stondords (RPS)", which require utilities to purchase of ther energy supply from renewable sources, similar to the Renewable Energy Directive in the

American Recovery and Reinestrent Act of 2009 was approved and includes a number of englicy provisions to benefit the development of wind energy generallion, omeh ill a three vear extension of the PC unit 2012 and ill an cation to clied (11C") that could replace the PTC though the duration of the extension This ITC allows the companies to receive 30% of the cash in sente or with the beganning of consinution in 2009 ond 2010 In December 2010, the Tox Relief, Unemployment, Inc. Job. Creation Ad of 2010 was approved and includes on one vear extension al the ITC, which ollow the companies to received in projects with beggining of construction unil December 2011 os long os placed in service unli December 2012

It was also approved a 100% depection bonus an new equoment placed in service after 8 September 2011, allowing businesses to depreciate the entire cost of the project fless 50% of the ITC) in the year that it is placed in service.

8

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Regulatory framework for the activities in France

The electricity in France is gaverned primarily by Act 2004-03 and 2006-1537 (14ct 2001), passed on 10 Februory 2000, which governs he modernzation and development of publices on is the general legislative framework tor he aperation of wind facilities in France. The operation of wind dacilities in France is also subject to the French environments and canstruction cade Article 10 of Act 2000-108 requires non-aditionalized electric power distributars to entrino purchase abligation contracts to buy electricity produced by ill instilations that extract exercy from household or similar worse of that use such sources to provide head to a district heather shot use renewable energy sources including mechanical energy from wind, for which special provisions apply)

Installitions that use renewable energy sources, with the energy tot one localed in areas connected to the continental mempolitan grid ar that implement energy-eficient technology such as nat qualify for he power purchase obligation unless they comply with defined installed capacity imits These limits on sel by a decree 2000-11% of 6 December 2000 for each category of instillation eligible to benefit tom the power purchase obligation With the new recoling within o ZDE trane de déelappenent édien) con benefit he power purchase obligation and may exceed the former 12 NW cap. The pawer purchase cantracts with non-nationalized distributors of electricity are premised on the rates set by ministerial order far each source of renewable energy and according to a model controcl approved by the energy minister

Ad 2000 provides that, concalor of wind tacilities may enter into long-term agreements for the purchase ond sale of energy with Electricité de France EDP. The tarifts and sel by Drder of July 10, 2006 wich was repealed in August 2008 due lo larmal defect in is aproval, and then republished withour any amerament in December 2008. The torifs are the first in our of the EDF Agreenent, EDF pos a fied annual toill, which is 602 per MWh for applications made during 2006 first li amended annualy based, in part, on o inforion-related in 15 of the EOF Agreement, the toif is based on the annual averge percentage of energy praduced during the wind tacilly s first len years These asso amenended annually, based, in part, on a infation-related index. ii) Beginning in the year 16, there is no specific support structure and the wind energy generators will sell their electricity of market price.

New Decess approved on December 15h, 2009 set the fallowing wind torge: 11,500 MW in 2020. These tagels include also wove and tidd enemy

Regulatory framework for the activities in Poland

The legisidion opplicable to renewable energy in Polained in on Energy Act passed on 10 April 1997, which has been amended by the Act of 24 July 2002 and the Energy Act of 2 April 2004, which in Januny 2005 (hggher, the "Energy Act"). The Energy Act implemented provisions () of Directive 2003/54/EC. of the Europeon Parliament and of the 2003 concerning common rules for the intention, II of Directive 2003/55/E of the European Partioment and of he Cauncil of 26 June 2003 concerning common rules for notural gas, and jiji of Directive 200177FE at the European Partament and of the Council of 27 September of electicity produced trom renewable energy sources in the nhemal electrichy madel Detailed regulations regarding the scape of the energy secondary reguldnians adopled under the Energy Act On the basis of the Energy Act, he national energy requlatory autharity-the Energy Requiatary Authan'y the "ERA President" - was established

Pursuan to the Energy Act, power generation from enewable sources is suppor introduced in Polond: in Polond: in A system of obligatory purchose of centificates of argin by the generaling companes selling electicity to the end user intercanneded to a grain Palma. These power componies are chilied to al abliance or picting and submit it to the FRA President for correligion, or blookny for colorial in accordance with the Energy Act. ijl f the payer company does not purchase or orgin or does not pay a subsitive fee, the ERA President will pencice such company by the financid penalty calculated in accordance with the Energy Act

The minimun limit of electicity generated from renewable sources in the end users is specified in the end users is specified in the ordinance of Ministy of Economy odopled under the Energy Act In 2008, this minum linit was 7% and will increase each year up to 12,9% in 2017 These quotos were originaly fixed unili 2014 but a new regulation appraved in August 2008 fixed the quotas for years 2015-2017 and increased the quota for 2013 and 2014

The Energy low has been anned on January 2010. The main was to limit speculative action of inlerconnection power for wind forms in the energy system Pursual to the new prosisions, the obligation of he installations being mercannected on the grod lies with the grid company. Within the new reguldion, the enditions al intercannection must poy in odvance towards he gird interconnection fee of 30 PU per KW of inlercannection capacity

Another measure almed at rehloring the project is the obligation to chach a the application for interconnection conditions an except from the local master plan ar, it there is no such planning permit for the red property to which the new legistation also introduces new obligators far wind generators, among which, the obligation to prepare a forecast for '5 years when the installed capacity is of at least 50 MW.

Regulatory framework for the activities in Belgium

The regulatory framewark for electioned by the the chision of powers between the lederal ond the hree regaral entitles Wollonia, Flanders and Brussels Capital The lederal regulatory from strission (of from smission (of fronsmisson levels above 70 kW, generation, laiffs, planning on nuclear energy. The relevant folention is fre Electrich Act 29 April 1991 as modified the "fecticity Act", The regional required on also be ristibly the responsible for distribution, renewable energy and copeneration with the except and energy efficiency The relevant resimal lectisting respectively is In Inc. First of the Renders the Electricity Decree of 7 July 2000; by for Walknig, the Regional Electricity Market Decree of 12 April 2010 the Order of 19 July 2001 on the Organization of the Electricity Market.

In view of the allocalon of responsibilies between the regions, there currently exist bur energy requiritions. In the federal Campission for Election and Gos Regulation ("CRG"); Ib) the Femish and Gos Regulator Body ("VEG"); ic) the Walloon Enegulation ("CMPE"), and Id he Regulaty Commission for Energy in the Brussels-Copital Region ("BRUGEL")

The Belgian regulation system pranotes the generalion of election from renewable sources (and copeneration) by a system of great of GC"), as described below The Balgian leded government is respansible for of the imposing obligations on the transmission system operators. The vorious GC systems ore very similar cross the hree similiar to the GC system for lederally-regulated offshore power phonts There are currently differences in terms of quoras, thes and thresholds for graning G.s issued in one realon or by the Federal government in respect of offshare plants are not recognized automatically in the ather regions

g

Notes to the Consolidated Annual Accounts for the vears ended 31 December 2010 and 31 December 2009

The GC ystem aims at creating a market for GC parallel in the makel of stee of electricity in March 2009 on exchange market for GC shas been launched. Besides the GC market, here is a minmum guaranteed price system at the fransmission system operation system operator or at a regoral level the producion oid regime in Flanders and Wallonial

New guolas of renewable oenerging are in a latest of approval in Wallania, New guotos traces and the Covernment are: 11 25% in 2012 and 15 75% in 2013 New quotas to be approved are cansiderably higher than presious anes (1%, 12% and 13% for 2011, 2012 and 2013)

Regulatory frameworks for the activities in Romania

The promotion of electicity generated from renewable energy sources in Ramania was set with the Electricity Low 318/2003 In 2005 a Green Centificate mechanism was intraduced with mandatory quatas for suppliers, in art it it it it in enewable requirements Romania must comply with is target of 33% of gross electricity consumplian for renewable energy in 2010 The regulatory authority praduced hom RS which supplers are obligas to buy, and annually reviews applications form green general green cerfficates. Low 220/2008 of November, 3 introduced some charges in the green cenfitcates system Today producers of wind energy rech but low 220 that is iker to come into force in Jarvan 200 price the European Cammission opproves it will allow wind generators to receive 2GC/MM until 2015. GC can be sold separately from the physically delivered electricity, Fram 2016 anwards generators receive I green certiticale for ecch MWh The electricity is delemined in the price of green centificates is determined on o porallet market

The todan value of area certificales has a flag of 55€, both indexed a Ramorion inflation. Law 200/2008 drsq guarantes the access to the National Grid to the election produced from renewable sources. In 2007 a new Energy Low 13/2007, This new regulation sets July 1st 2007 as deadline for he legal unbundling in Ramanio and defines the role af Implicit Supplier and af the Supplier af Last Resort

The Ramanian Parlionents proposal that regulated an July 12, 2000. The proposal that hos been signed inlo low and includes the following: II increases the nandatary quated tom renewable sources which benefit from the green centrates promotion system 2012 quote increases trom 8,3% to 12% of the election praduction by 1% year to reach 20% by 2020 ill extends unil 2017 tpreviously unil 2015 the right to callert two green centicates per NWh genered by wind forms (one 2018 onwards) and fill reaffirms he current green centicale's floar and cap prices at 27€/Wh and 55.6 MM and increases the per-campion to 100 for each musing area centitiatle Current cap, foor ond period on ever in & and moved to evoinflation.

Regulatory frameworks for the activities in Brazil

The Election in Brasil is reading by of 8.987 d 13 february 1995, which generally plast he concession and permssion regires of oubles serves; Low n° 9,074 df 7 July 1995, which rules the gran and public services concession ar permission controcts, Federal Law r° 10,438 of 26 April 2002, which govens the increase in Emergency Electic Power Supply and creatives for Atternatives for Atternative Electricity Sources PRONEA; Federal Low of 10,762 di 11 November 2003 and Low nº 10,848 of 15 March 2004, cancerning commerciol rules for the trade of Electric Power and Subsequent omendments to the legislation.

The Decree nº 5,025 of 30 March 2004, readeral Low nº 10,438 and states the "Altemative Energy Sources" economical and legal FranchFA participants have granted o PA with ELETROKAS, and are regulator (ANEE) culturily However, he first stoge of PRONFA has ended and the second sloge is highly uncertain

The Decree nº 5.163 al 30 July 2004 requires the Federal Low nº 10.762, establishing the possiblity of distibution companies and outhorized agents in buy "Distribuled Energy " Local Generitari, by abserving of 10% of the total demand of each distribution agent in addition, the law nº 10,762 establity of an Allemothe Source Electricity Producer to sell directly laggregaed demand > 500WM, al any voltage level As part of the regulatory incentive fromework, Renewable Energy produces (or buyers) are granted a discustion and Transmisson System Use Taril (TUSD and TLST) Public Eectricity Auctions are technically lead by the state "Eneral Planning and Research Company" (EPE). who reasters, and ollows potential portlicipants

In addition, the law nº 10,438 has also requid sectar fund, the Fossil Fuel Consumption Quato (CCC), to low cost financing all Renewable ventures that are able ta replace fossil fuel based energy production

2. Accounfing policies

a) Basis of preparation

The occarpanying conscilated annual accounts have been prepared an the basis of EDP Renavises, S.A and constilated enfifes. The constituted annual accounts for 2010 and 2009 have been present foily the consoldoted financial passion of EDP Renovives, SA ond subsidiaries at 3 December 2010 and 2009, the consolided cash flows and changes in consolidated equily for the years her ended.

In accordance with Requirience in Jobly 2002, from the European Council and Parkament, the Graup's consolidied financial statements are prepared In accordance with International Reporting Standards (FRS), as endorsed by the European Union (EU) IFS comprise accounty standards ssued by the International Accounting Stordards Board (1458) and is interpretations issued by the Inlemational Finoncial Reporting Interpetitions Committee (IFRIC) and its predecessor bodies

The Board of Directors approved these consoled on 24 February 2011 The onvol accounts are presented in housand Euros, rounded on the neaves thousand.

The onvol occounts have been prepared under in the application of foir volve basis for derivalive financal instruments, financal assets and liabilities held for trading and avoluble-far-sole, except those for which a reliable measure of foir value is not available

Notes to the Consolidated Annual Accounts for the vears ended 31 December 2010 and 31 December 2009

The orearation of the consoliation on your accordance with the EU-RS requires the Board of Directors in make industry of the affect he application of the accounting polices and of the reported amounts of assets, The estimates and related ossumplions are based on hidorical experience and other forbrain and one in accordance. They form the bosis for making judgments regarding the values of the assets and lichilites whose valuation is not oppores. Actual results may differ from these estimales. The areas involving the highest tagres of judgment or complexly, or for which the assumplicant, are disclosed in Note 3 (Critical accounting estimates and wagments in applying accaunting policies)

b) Basis of cansolidation

Subsidiaries

Subsidiaries are entilies controlled by the Group The Included in the consaldored finacial strements from the dre that contra cammences until the date that control ceases

The accounting policies of subsitionies have been necessary o align hem with the policies adopted by the Group Lases applicable the nan-controlling interests in a subsidiary are allacated to the non-controlling so causes the non-controlling interests to have a deficit balance

Associoles

Associates are thase entilies in which the Group has son to ton to, aver the financial and aperting policies. Significan infrast is presumed to exis when the Group halds between 20 and 50 percent of the valing pawer of anather entity

kwestments in associates are accounted for using the equity method inlinely at cast The cost of the investment notudes iransaction costs

The consolidated financal statements include the profit at lass and other comprehensive income, after adjustments to alga the accounting polcies with those of the Group, from the date that significant influence commences unil the date that signitians influence ceoses

When the Graup's share of losses exceeds is interest in an equity-accounted intested, including any long-term investments, s reduced to zero, and the recognition of further losses is discon to the extent hat the Group has an obligation ar has made payments on behalf of the invested

Jointly controlled entitres

Joinly controlled entiles, cansolidation method, are enfites over whose activities the Group has joint control and with anather company, under a controctud agreement The cansaliated fine Group's proprimate share of the jont ventures' asses, licitilities, revenue ond expenses, from the date the joint contral begins until it ceases

Business combination

from 1 Jonury 2010 the Group has applied IFES 3 Business Combinations. The chong in accounting . The chonge in accounting policy has been applied prospectively ond has had no malerial impact on earnings per share

Business combinations are accounted for using the acquisition dote, which is the date on which cantol is ransfered to the Group. Control is the power to govern the finoncial and operating polities of an entity so as to abities In ossessing control, the Group Intes into consideration potential voting rights that currently are exercisoble

Acquisitions on or ofter 1 January 2010

For acquistions on ar after 1 Jonuary 2010, the Graup measures goodwill at the acquisition dote as:

• · The foir value af the consideration transferred, plus
• · The recognised amount of any non-contralling interests in the acquires; plus
• · If the business combindion is achieved in stages, the fair value of the existing equity interest in the acquiree, less
• · The net recognised amount (generally foir value) of the identifiable asses acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recagnised immediately in profit ar loss.

The consideration fronsterred does not include to the settement al presisting relationships Such anounts are generally recognised in paril a rass.

Casts related to the acquisition, ther has e associated with the issue of deb or equity securities, that the Group incurs in cannection with a business combingtion are expensed as incurred

Any cantingent cansideration payable is recagristion date if the contingent consideration is classified as equity, it is not remeasured and settlement is accounted br within equity. Other ware to the tair value of the contingent consideration are recognised in profil or lass

Same business combinations in the periad have and is croup is currently in the process of measuring the for volue of the net assets ocquired. The identificale net asses have there provised at heir provisional value Adjustments during the measurement period have been recorded as f they had been known al the combination and comprove infarmation for the pior year has been restricable. Adustreels lo provisional whees only include information relating a exerts and the acquistion dote ond which, had they been known, would have affected be amounts recognised at that date

After that period, adjustments lo milial measurement ore only made to correct an error

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

In business combinghans ocheved in stoges, any exception given, plus the interest previously held in the ocquire, and the net ossels ocquired and nel littles assumed is recognised as goodwill. Any shartoll, after measuring the previously held interest and identlying and messuing the nel assets acquired in profit and loss. The Group recognises the difference between the lair volve of he interest previously hed in the ocquiree and its carving ornount in cansiliation of the classification of the interest. The Group also reclossiles anounts defered in ather comprehensive income in relation lo the previously held interest to profit and loss ar consolidated reserves, bosed on their nature.

Acquisitions between I January 2004 and 1 January 2010

For acquisitions between I January 200, goodwill represents the excess of the cost of the acquisition over the Group's interest in the recognised anount (generally for value) of the identifies ond contrgent libblilies of the ocquire. When the excess was negative, o borgoin purchase gain was recognised immediately in profit or loss

Transacion costs, other hon those associated with the Group incurred in connection with business cambindions were copitalised os part of the cast of the acquisilian

Accounting for acquisitions of non-cantrolling interests

From 1 Jonuory 2010 the Group has opplied WS 27 Consulting to Separate Francial Statements (2008) in accounting for acquisitions of nen-catrialing interests The change in accounting policy has been opplied prospectively and has had no impact on earnings per shore

Under the new accounting policy, ccquisition interests ore accounted for os transactions with owners and therelor no goodwill is recognised as a result of such transcontalling interests are bosed an a proportionale only of the nel asses of the subsidiory

Previously, goodwill was recognised on the ocquisition interests in a subsidiary, which represented the excess of the cost of the cost of the cost of the cost of the cost of over the carrying omount of the interest in the net assets acquired at the transaction

Investments in foreign operations

The assels and liobilities of foreign operations for value adjustments orising on acquisitor, or transided to Euro al exchange rates of he reparting date. The income ond expenses of fareign aperations, are transisted to euro at exchange rotes at the transactions

Forego currency differences are recognised in the lranslation reserve When a fareign operation is disposed of, in par a in full, he relevant amount in the translation reserve is transferred to profit or loss as part of the profit or loss on disposal

When the settement of a manetay tem receivable to foreign operation is neither planed non likely n the foreseable jube, foreign exchange gains ond lasses arisha from such a monetary item part of a ne' investment in a forego operation and are recognised in other comprehensive in come and presented in the Iranslation reserve in equity

Balances and transactions eliminated an consolidation

Inter-company balances and transactions, including ony unresitions between group componies, are eliminated in preporing the condensed conscipled financial strements. Unrealised and boses arising from tronsociates and joinly controlled in the extent of the Group's interest in those entitlies

Common control transactions

The occounting for honsocions ander common control s excluded trom IRS 3 Cansequently, in the absence of specific guidonce, within FRSs, he CP Renovéleis Group has developed on ccountry or such tronschons, os considered oppropriot. According to the Group's policy, busness combinding among entifies under common contral or in the constilided annual occounts using the EDP consolidated book values of the ocquired compony bulgavous). The difference between the corrying amount of the net ossets received and the consideration poid, is recognised in equity

Put options related to non cantrolling interests

Unil 31 December 2009 EU-FRS did not establish specific a commitments related to written put applions related with mestments in subsidiories held by non contralling interests of the date at acqualition Neverheless, the EDP Renoveis Group records these written pul qohans al the dole of occuisiin of o business combination or at a subsequent date as an advance ocquisition of these intercol libility for the present value of the best esimote of the amount poyable, irespective of the options will be exercised. The difference between his omounl and the announl corresponding to the percentage of the interests held in the identifioble net assets acquired is recorded as goodwill

Unil 31 December 2009, in years subsequent to intential, the changes in the lindicility due to the financial discount or recognised as a financel expense in the consolidated income stremaining changes are recognised os on odjustnent to the business combination Where opplicate, dwidends pold to minority shoreholders yo to the option are exercised as adjustments to the cost of the business combination, in the even that the aplians are not exercised, the transaction would be recarded as a sale of interests to minarity shareholders

As from January 2010, the Group applies IAS 27 (2008) to new put contraling interest and there subsequent changes in the corping annount of he pul liability are recognised in profit or loss

c) Foreign currency transactions

Tronsocions in foreign currencies on transional currences of Group entiles of exchange rates of the forsections. Noneloy osses and libilities denaminaled in farean currences at the functions corrency at the exchange rater at hat date The beign currency on or loss an monelor items is he diffeence between amoritied corrency of the beginning of the period, adjusted for effective interest and poyments during the period, and the amarlised cost in foreign currency ronslated at the exchange role of the reporting period

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Nan-monetay assess and liablifies denominaties that are measured of thir volve are reronsitied to the funcianal currency of the exchange pleat the date that he fair value was deternined. Foreign currency differences arising on retransidion are recogned in profit or loss, except for differences anising on the retanslation at are call instruments, a financial including designated as a hedge af the net meetment in o toreign operation, ar quotlifying cash flow hedges, which are recognised in other camprehens hal ore measured in terms at historical cost in a foreign currency are transided using he exchange rate at the date of the transactian

d) Derivative financial instruments and hedge accaunting

Denvative Inancal instruments are recognised on the fair value. Subsequently, the fair value of denvative financid instruments is re-neasured on a regular basis, being the agins or losses on re-measurement, except by deright, except for derivatives designated as hedong instruments The recagnifion of the resulting goins or lasses on re-mession or helging instruments desends on the nature of the risk being hedged and of the hedge model used

The fol value of deivalies corespond to ther quoted markel price, it analich, or in the obsence of a market, are other through the use of valuatian techniques, including discaynted cash flows models and oplian pricing models, as appropriate

Hedge accounting

The Group uses financial instruments to helgn exchange risks resulting from its aperational and financing octwiles. The deriver, the decise increation that da nat quality far hedge accaunling are recarded as for trading

The derivalies that are designated os helging in a recorded at for value, being the gains and losses recovnised in accordance with the hedge accounting model adopted by the Graup Hedge accounting is used when

II At the inceptian of the hedge, the hedge relationship is identified and dacumented;

fil The hedge is expected to be highly effective;

fiii) The effectiveness of the hedge can be reliably measured,

fivi The hedge is revalued on a an-going basis and is considered lo be highly effective over the reporting period, and

M The forecast Iransactions hedged are highly probable and represent a risk to chonges in cash flows that could aftect the income statement.

Berivaties are recognised inficily at toir value ransaction costs are recapised in profit ar lass as incurred Subsequent to injilat recognion, develop, develop, develop, deve measured at fair value, ond changes therein are accaunted for as described below.

Fair value hedge

Changes in the fair value af he deivative inch are desonated as hedging instruments are recorded in the income statement. Ioaether with any changes in the fair volve of the hedged asset or list being hedged It the hedge no longer meets the criteria for hedge occounting, he occumulated gains or losses concerning the fair value al the risk being hedged are amortised over the period to meturity

Cash flow hedal

The effective oorlon of the changes in the designing instruments that are designated as hedging instruments in a cash flow hedge model is recognised in equity The gains or losses relging of the hedging relobionship are recognised in the ncame statement n the noone the occur

The cumulative gains ar lasses recognised in the incame statement over the periods in which the hedged item will after the ncome strement. When the forecast transaction in the recaglion of a nan-fhoncial assel, the goins or lasses recorded in eagling of the coulskon cast of the asset

When a hedging instrument expires or s sold, or when a hedge accounting, any cumulative gain or loss recognised in equily of that time stors recognised in equity unit the hearne statement. When the forecasted fransation is no longer expected to occur the cumulative goins ar lasses recognized in equily are recorded in the income statement.

Net investment hedge

The net investment hedge is applied an a consolidaries in subsidiaries in foreign currences The exchange differences recroded agains exchange differences anising on conscilidation are offeences orising from the foreign currency barrowings used for the acquisition of health of the hedging instrument is a denvalies the gains than for value changes are also recrosed gaginst exchange differences grismo on consolidation The ineffective portion af the hedging relation is recognised in the incame statement

e) Non derivative financial assets

The Group classifies its ather financial assets at acquisitian date in the fallowing calegories

Accounts receivable and loans

Accaunts receivable are intially recognised at their for value and subsequently are measured at amortsed cast less impairment losses

imporment lasses are recarded based an the valuation of estimated in of accounts receivote of the bolonce sheet dollar in any and recognised in the incame statement, and can be reversed if the estimated losses decrease in o later period.

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 ond 31 December 2009

Financial assets at fair value through profit or loss

This calegary includes: (j) inancial assets held for those ocquired principally to the purpose of being sold in the shart lern and fiji financiol assets hol ore designated at fair value through prafit or loss al inception.

Available for sale investments

Available-for-sale francial assess are non-designated or grailible-or-spee ond find are not classfied in any of the other cated in any of the other cated in the Graup's investments in equity securities are classified as available-for-sale financial assets

Initial recognition, measurement and derecognition

Purchoses and sales of if Inancal osses at for valiable for sale mesments, are recognised on frode date, the date on which he Group commits to purchase or sell the assets

Financial osses are initely recognised at for volve ols except or financal assels al loir vale through profit a less, in which asse transaction costs are directly recognised in the income statement

Financial asses are dencognised when (i) the corractived fithe cost flows hove expled, fit the Group hos transfered subscribility all risks ond rewards of ownership or fiji) athough rehining some, but not substantily all of the risks ond rewords of ownership, the Group hos the assets

Subsequent measurement

After initial recognition, hinnicial assets at for volse are subsequently carned al tair value and gains and losses ansing from chonges in their 'air value are included in the income statement in the periad in which they arise.

Available for sole froncial asses are olso subsequently caried and losses arising from changes in their for value ore recognsed direct) in equity, unlil the financial asses are derecognised or ine cumulative gains or losses previously recognised in the income statement Forego exchange differences arising for equiled as available for sole are also recognised in equty interest rote method and dividends, are recognised in the income statement

The for ralves on aucted nyestments in actived by current bid orices for unisied securities the for valuation techniques, including the use of recent arm's length transactions or discounted cosh flow and hij valuation assumptions bosed on markel nformation.

Financial instruments whase fair value cannot be reliably measured are carried at casl

Reclassifications between categories

The Group does not reclassify, after intial recognition, o financial instrument into or oul of the foir or lass category

Impairment

At each balance sheel dole, an assessment is perfective evdence that ofinance that of inancal osset or group of financial osets is impaired, namely when losses may occur in future estimated cash-tiows of the financial asses, and it can be relably measured.

If there is objective exidence of inpairment the financial assess is determined, the impairned the impairned through the income slatement

A financial asset or a group of financial assels is imported it here is objective endence of loss as a result of oncurred atter hills lecognillar, such as (i) for listed securites, a significant or prolee of the security below its cost, ond (i) to unlisted securites, when that even' (ar even' hot on impact on the estimated tuture cash flows of the tinancial assets, that cal assets, that can be reliably estimated

If here is objective exclose that an inancial assess has been incurred, the cumulative loss recognised in equily, measured as the diference between the ocquisiion cast and the current hass on the financial asses previously ecognised in the income stoment, is trken to the incame statement.

f) financial llabilites

An instrument is classilied as of finance a cantractual obligator to transler cost or another financal asset, independenty from is legal form These financial liabilities are recognised (i) initially at has and (i) subsequently at amorised cost, using the effective interest role method.

The Group derecagnises the whole or part of a finalins included in the contoct have been satisfed a the Group is legally released of the fundamental obligation related to this liobility either through o legat process or by the creditor

The Graup considers that the terms ore substantialy of cash hows dacounted under the new terms, including any comrission poild net of are commission received, and using he original efters inde in also on, differs by al least 10% of the current discounted volved of cosh hows remaining trom the original financial hability.

If he exchange is recognised as a concellation of the arcol libility, costs or commissions are toten to the rest, chemise, costs or commissions adjust the book volve of the liobility and are amortsed cost nethod over the remaining term of the modified libility

The Group recognises the difference between the cannount of a financial libbilly which has been carcelled or trassered to a hird porty ond the consideration paid, which includes any asses transfered other than cash or the lability ossumed, with a debit or credit to the cansaliated income statement

Notes to the Consollidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

a) Borrowing costs

Borrowing costs that ore diectly attibutable to he acquoilian ar cansibilitied as part of the cost of the costs A qualifing asset is ar assel that necessarily totas a substantiol period of line in and to the extent that funds are bornwed generally, the amount of bornwar costs eligible lar copidison are determined by applicition rote to the expenditures on these ossets. The copicalisotion rote corresponds to the weighted averge of the borrowing casts applicable to the enterprise that are outstanding during the period, other han borrowings made specifically for the purpose of obtaining a gualifying asset. The amount of borrowing casts capital doring a period does not exceed the amount of borrowing casis nourred during the period.

The copilation af borrowing costs commences when expenditions for the asset on the been incurred and activited and activites necessory to prepare of or parl of the cssels for their intended use ar sole ore in progress Copitalisotion collection in the activities recessor in prepore the qualitying assels for their intended use or sale are completed. Copitoliation of bornewing costs shall be suspended periods in which active development is interrunted

h) Property, plant and equipment

Property, plant and equipment are stated at acquisition cost less accumulated depreciation and impoirment lasses

Cast includes expendition is directly atributable to the asset The cast of self-constructed asses includes the cast of malerials and direct labour, any other costs directly of this bringing the osset to o warking condition for its intended use, and he casts of dismonting the items and restorne the site an which hey are locoled Cast also may include to main an loss on qualifying cash flow hedges of foreign currency purchases of propenty, plant ond equipment Purchased software that is integral to the related equipment is capitalised as part of that equipment

The cost of acquisition includes interest on external costs and other internal expenses diectly or indirectly reloted to work in progess accued soley during the period of cansinon The cost of production by charging costs chilbulable to the assel os awn wark copialing ıncame and personnel costs and employee benefit expense in the consolidoled income slatement.

When parts of an item of proper); plant and equipment hives, Ihey are accounted for as separated for as separate in properly, properly, piont and equipment

Subsequent costs are recognised as separate assess only when it is proboble that hult the item will flow to the Group. All repoir and mointenance casts are charged to the income statement during the financial period in which they are incurred

The Group assesses asses impoirment, whenever even sinces may ndicale that he book vole of the useds is recordide armount, the impairment being recognised in the income statement

The recoverable amount is deternined by the highes whe net selling pice and its for value in use, this beng colculated by the present volue of estimated future cash-flows obtoined from the asset and after its disposal of the end of its economic useful life.

lond is not depreciation an the other assess is calculated using the straight-line methad over their estimated useful lives, as follows:

	Number of
	years
uldings and other constructions on and machinery	20 to 33
Wind form generation	20
Hydraelectric generation	20 to 30
Other plant ond mochinery	15 to 40
tansport equipment	3 to 10
ffice equipment ond taols	3 In 10
ther longible fixed assets	4 In 10

i) Intangible assets

The other into gible ossets of the Grup are booked anarisation and impoirment lasses The Group does not own inlongible osses with indelinite lives

The Group ossesses for imparment, whenever events or crumstore that the book value of the ossel exceeds is recoverable ground, the incorment being recognised in the income statement. The recoverable value is determined by the highest is net selling price and its volue in use, this being colculated by the present volue of the estimated future cash-flows obtoined from the asset ond sale proce at the end of its economic useful lite

Acquisition and development of software

B P

Ti 0 C

Acquired computer softwore icenses ore costs of the costs ncurred to acquire and bring to use he specific software. These costs ore annartised on he bosis of their expected useful Irves.

Casts that are directly ossociated with the develle software opplications by the Group, and that will probobly generale economic benefits beyond one year, are recagnised as intrase casts include employee costs directly associaled with the development of the refered softwore and ore amortised using the stroight-line methad during their expected useful lives

Maintenance costs of software are charged to the income statement when incurred

Notes to the Consolidated Annual Accounts for the vears ended 31 December 2010 and 31 December 2009

Industrial property and other rights

The amortisation of industrial property and other the straight-ine methad for an expected useful live expected of less han 6 years

i) Impairment of non financial assets

The carying anounts of the Group's non-inventories and deferred tox assets, are revealed al each reporting ade to deterning when here is any indication of indication exis, the assets recoverable annum is then estimated For goodwill the recoverable announ's estimated a econ reporting date.

The recoverable anount of an osset or cash-gener of its value in use and its far value less costs to sell In assessing volve in use, he estimated future cash flows are discounted to their present aliscount rate that reflects current market assessments of the ime volve of money and the risk specific to the osset for the purpose of incoment to the snollest in the snollest group at assess that generates cash intraves from continuing use that are largely independent of the costs or groups af assels the "cosh-generating unil") The goodwill acquired in a business combinding for the purpase of impairment testing, is allacaled to cash-generating units which are expected to benefit from the synerges of the cambination

An imparment lass is recognised if the carrying an assel or its cash-generaling unit exceeds its estimated recoverded ancount impoiment losses are recaptised in profit or losses recognised in respect of cash-generaling unis are carving amount at any godwill allocted to the units and then to reduce the carrying amaunt of the other assets in the unil (graup of units) an a pro rala bossis.

An imporment loss in respect of goodwill is not teves and other asses, imporment losses recognised in prior periods are assessed of each reporting dole lor any indications that he loss becessed or no longer exists. An impairnent loss is reversed if there has coursed the imporment An impairnent loss is reversed any to the assets carrying amount does not exceed the carrying amount that would have been determined, nel of depreciation or amortisotion, if no impairment lass had been recognised

k) Leases

The Group dassifies its lease careements as final into consideration the substance of the ransaction rather than its lead lorn. A lease is classified as o finance lease i it transfers to the risks and rewards incidents lo ownership. All other leases are classified as operaling leases

Operating leases

Lease payments are recognised as on expense and charged to the income statement in the period to which they relate

I) Inventories

Inventories are stated at the lower of the redischle valve The cost of inentories includes purchases, conversion and ather costs nroved in bringing the nyentores to heir present localion. The nel realisable value is the estimated selling pice in the ordinated to the estimated selling costs.

The cost of inventories is assigned by using the weighted average method.

m) Classification of assets and liabilities as current and non-current

The Group classifies assets and labilities in the consolution of early and non-current Current asses ond liabilities are delermined as lollows

Assels ore classified as current when they are expectived or are ntended to sole or consumption in the Group's normal aperating cree, they are held pinorily for the purpose of trading, they are expected to be realised within twelve months of the balance sheet date or are assess may not be exchanged or used to settle a liability for at least twelve months from the balance sheet date.

lidelites are classified as current when the Group's narmal perating cycle, they are held primarily to the purpose of trading, hey ore due to be setted within twelve manths of the Group does not have an unconditions ight to deter settement of the lobility for al least twelve months after the reparting period

Financiol licelines are clossified as current when thin twelve morths after he reparting period, even if the ariginal term was for o period longer than twelve months, and an agreement to reschede payments, an a long-term basis is completed after the constilated finoncial statements are authorised for issue,

n) Employee benefits

Penslans

EDP Renoviveis Partygel, and the partigues of EDP Renoriveis Group attibute post-reliement plans to their employees under defined beeth plans and defined contibutor plans , ramely personalementary old-age, disability ond surviva-reditie pension complements, as well as early refrement pensions

Defined benefit plans

In Portugal, the defined benefits plan is financed Pension Fund complemented by a specific provision This Pension This Pension Fund covers libilities for etirement pension complements as well as liabilities for early retirement.

The pension plans of the Group componies in Portugal as defined benefit plans, since the citeria to delemine the pension benefit to be received by employees on relirement is predelined ond usually depend on lactors such as age, years of service and level of seller ment

Notes to the Consolldated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The lightly of the Group with persions is calculate sheel date for each plan individually, by quollified actuaries using the projected with credit method. The discount rate used in this colculation is delemined by releves of high-quality corporate bonds that ore currency in which the benefits will be paid and that have terms to maturity approximoting to the related persion libbilities

Actuarial gains and losses deternined annuolly on ill the differences between financial assumplions used and real values obtained and (il changes in the actuaral assumptions are recognised against equilty, in accordonce with the chemative method delined by MS 19, revised an 16 December 2004

The increase in past service casts arising from ents before the normal age of relirement) is recognised in the incorned

Annugly the Graup recagnises os cost in the increat the net omagn of it the current sence cost, fill the estmoned return of the find opsets and (iv) the cost orising from early relirements.

Defined contribution plans

In Spain, Partugal and U.S., same Group Componis has of defined contribution frat campement those granted by the social welfor system to he companies employees, under which these plans each year, calculated in occordonce with the ryes established in each plan The cost edged to defined contribution plans is recognised in the results in the period in which the cantribution is made.

Other benefits

Medical care and ather plans

In Parlugal some Group companies provide medical relirement and edry etirement, through complementary beneils in these provided by the Social Wellare System These medicol or defined benefit plans The present value of the defined benefit obligation at the bolonce sheet date is recognised as a defined benefi lioblify Messurenen and recognition of the liobility with heathcore benefits is similar of the persion liability far the defined benefit plons, described abave

Variable remuneration to employees

In occordonce with the by-lows of certain Group entities, annual generol meeting a percentrage of profits in be pail In the employees (ariable remuneration), bellowing a propasal mode by the Board of Directors Pyrnents to employees are recagnised in the period to which they relate.

o) Provisions

Provisions ore recagnised when: iji the Group has a present legal or canstructive obligoton, (ii) it is proboble thot settlement will be required in the tuture and (ii) o rel estimate of the abligation can be mode.

Dismonting and decommissioning provisions

The Group recognises dismonthing provisions for propent, plant and equipment when o leggl or contraction obligging is settled a disringhing and decommissioning thase assets of the end of the Consequently, the Group has booked provisions for propent, plant ond equipment related with wind tutines, for the expected cost of restaring sites and landlion. The provisions carrespond to the expenditure expected to be required to settle the drigotian and are recognised as par of the initial to the cast of the respective asse; being deprecided on o straight-ine bass over the assel useful lite

The assumptions used are

	EDPR EU	EDPR NA
Avercoge cost per MW (Euros)	14.000	17.961
Salvage value per MW (Euras)	25,000	17.213
Discaunt rate	6.07%	6.73%
Inflafian rate	2 00%	2.50%
Copilalization rate (number of years)	20	20

Decommissioning and dismanting provisions are remeasured on the best estimate of the settlement anraunt The unwinding of the dacount al each balance sheet date is charged to the incame statement.

p) Recognition of costs and revenue

Costs and revenues are recorded in the year regardless al when poid ar receited, n accordance with the occuol concept Differences between omounts received and paid ond the carresponding revenue ond expenditure are recorded under other liobilities

Revenue comprises the emounts involved on the services rendeed, net of volve odded tox, rebotes and discounts, after elimination of inte-aroup soles

Revenue tram electricity sales is recognised in the period that electricity is generated and tronsterred to customers.

Engineering revenue includes the infral anount agreed in the contract work, claims and incentive poyments to the extent that it is probable that they will result in revenue and con be measured in construction cantract can be estmated relight, contract revenue ond expenses are recognised in prafit ar loss in prapartian to the stage of camplelian of the contract.

Differences between estimated ond actual anounts, which ore normally nat significant, are recorded during the subsequent periods

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 ond 31 December 2009

q) Financial results

Financial results interest payable on borrowings, interest receivable on funds income, unwinding of the discount of povisions ond witten pub options to non controlling interest, foreign exchonge gains and lasses on financial instruments,

Interest income is recognised in the income stative interest note method Dividend income is ecognised in the income statement on the date he entity's right to receive payments is established.

r) Income tax

home lox expense comprises current and defered tox are recognised in profit or loss except to the extent that it relotes to o business cambination, or thems recognised directly in equity or in other comprehensive income

Curent tox is the expected tox payable on the taxoble income or loss for the year, using tax rates enacted ar substantively enacted at the reporting date, and any odjustment to tax payable in respect af previous years.

Deferred laxis recognised in respect af lemparary of anying arrounts of assels and labilities for finoncial reporting purposes and the amounts used for taxation purposes. Deferred lar is not recognised for the lolled recognition of asses or rabilites in a transaction that is nat a business combination and that dfects relher accounting loss, and differences rebing to mestments in subscription in the for the extent hat it is proboble that hey will not reseable trius in addition, deferred to is not recogneed for taxable on the infile recognition of goodwill. Defered to is measured of the lox rates hat ore expected to temporary differences when the Investination in the Indi have been enoced or substantively enoted by the reporting doe Orleal it there is ofted it there is o legally entreadly right to offeel current lox licbilities and assets, ond they relote to income loxes on the some tox outhority on the some toxable entity, or an different love entilies, but they mend la selle current tox liabilities ond ossets on a net basis ar their tax assets and liabilities will be realised smultaneously.

A defered tox assel is recognised for unused tox credits and deductible lemparary differences, to the extent hat it is proble not be ovalable ogains! which they can be uillised Deleved at each reporting date and are reduced to the extent that it is no longer proboble that the related tax benefit will be realised

s) Earnings per share

Bosic earnings per share are calculated by dritibutable to equity holders of the porent company by the weighted overage number of ordnay shores oulslonding during the year, excluding the average number of ordinary shores purchased by the Group and held as treasury slock

t| Non-current assets held for sale and discontinued operations

Non-curent assets or dasposal groups of assels and related liabilities that include at least a non-current asset, are classified as held har sale when heir carrying amaunts will be recovered principally thraugh sale and the asses ar disposal groups are avoilable for immediate sale ond its sale is hghy probable

The Group dro classifies as non-current assets held to see non-curent assets or disposal groups acquired exclusively with a vew to it subsequent disposal, that are avoilable for immediate sale and its sale is highly probable.

Immediately before clossfilicolion as held for sole, the non-current ossels or all assels god liabilities in a disposal group, is adjusted n accordance wh the opplicable IFRS Subsequently, these ossets or dispass are measured of the lower of their corrying amount at bir volue less casts to sell.

u) Cash and cash equivalents

Cash ond cash equivdents nclude cost an hancial instruiors. They also includes ather short-erm, highly liguid investments that are readli canvertible to brown anounts of cash and which are stope in volve An investment normally quolifies as a cash equvalent when it has a maturity of less than three months from the date af acquisition.

v) Government grants

Goverment arguits or recognised income under non-current lictilities when there is resomment of the will be received one that he Group will camply with the condition of Grants that compensate the Group for expenses incured are recognised in profil ar lass on a systemati basis in the same periods in which the expenses are recognised.

w) Environmental Issues

The Graup tokes measures lo prevent, reduce or repair the domage caused to the enwronment by its activites

Expenses derived from environmental activities are recognised os other operating expenses in the period in which they are incurred

x) Institutianal partnerships In US wind forms

The Group has entered in several partifical in the United Sides, firough limited licbility comparies operating operating operiors he cash flows generaled by the wind to ravestors and the Company and dlocates the tax benefits, which nolve Production Tox Creating Tox Credils IITC) ond occelerated depreciation, lorgely ta the investor

The institutional intestors purchase he interests for an upfrant ash poyment with an ogreed triemal rate al return over the periad that he tor credits are generaled. This antipated relyn is compred based on the hold anticipated beneill that he value of PTC's / ITC's, allacated taxable income or loss and cash distributions received

Notes to the Consolidated Annuol Accounts for the years ended 31 December 2010 and 31 December 2009

The cantral and management of these wind farms are a respansibility of EDPR Graup and they are fully cansalidated in these Annual Accounts

The upfrant cash poyment received is recognised under "Lichilities artsing from institutional partnerships" and subsequently measured at amortised cast

This idbility is reduced by the benetts provided and assh distributions mode to the restludional investors during the cantracted The value of the back benefits delivered, primarily accelected depecifical incomed as nan-current deferred income and is recagnized as Revenue an a pracrabasis we the 20 year useful life of the underling projects (see nate 6).Additionally is increased by the estmand interest based on the interest and he expected relurn rate of the instifutianal investars.

The lightly with msthping in enessed by on interest accual that is based an the outstanding lightly balonce and he argest internal rated frelyn oneed

3. Critical accounting estimates and judgments In applying accounting policies

The HRSs sel forth a range of accure the Board of Directors to apply indoment and make estinctes in deciding which treatment is mast appropriate

The man accounting estimates and in applying the accounting polices are discussed in this note in improve the undershilling of how heir application offects the Group's reported results and discription of the accounting policies employed by the Group is disclosed in Nole 2 to the Cansolidated Annual Accounts

Although esimples are calculated by the Company's directure and the best information world 2010 and 2009, hittee events may reguire changes to hese estimales in subsequent years Any effect on the af adjustments to be made in subsequent yeors would be recognized prospectively.

Considering that in many cases there are other a the accounting treatment adopted by EDP Renovisis, the Grown's reported results could differ it a different Irentment was chosen EDP Renovavire believes that the annual accounts and that the annual accounts are presented toily, in all material respect, the Groups than and results The ollern the outcomes discussed below are presertied solely to assist the reoder in understonding the annual occounts and are not intended to suggest that atternalives ar estimates would be more appropriate

Impairment of available for sale investments

The Group deternines that ovaloble for sole inpared when there has been a significan ar prolonged decine in the toir value below its cast.

This deternincian at what is significant or problem in molong his judgment, the Group evaluets arnong other factors, the normal voldility in stare price In addition, valuations are generally obtained pices or voluation models that may require ossumplions or judgment in making estimates of bir value.

Aternative nethodagies and the use of different assumpling a higher level of imporiment losses recognised with a cansequent inpact in the incame statement of the Graup.

Fair volue of derivatives

For volues are based on listed matel prices, if ordiable is determined either by deder prices (bath for that transaction or for similar instruments rroded or by proing madels, bosed on nel present volue costs flows which loke mto occount market canditors for the underlying instruments, time volue, yeld curves and valatility foctors These pricing madels may require assumptions or judgments in estimating foir volues

Consequently, the use of a different assumptions ar udgments in applying o particulor model may have produced different finoncial results to a particular period

Review of the useful life of assets related fa productian

The Group requirity revews the useful life of its election in arder to bring it into ine with the technical ond economic measurements of the instollations, taking into consideration their technological capacity and prevailing regulatory restrictions

Impairment of nan financial assets

Impoiment test are performed where is an indication that the recoverable anoval of propent, plant, equipment and inlangible ossess is less hon the correspanding net boak value of ossets

Considering that estimated recovery, plant ond equipment, intongible osses ond goodwill ore bosed on the best information valiable, changes in the estimates and isdaments could change the imparment test results which could affects the Group's reported results.

Income taxes

The Group is subject to income loves in numerations and estimales and estimales are required in determing the global amount for income loxes

There ore mony tronsactions and cakulding to: determinalion is uncertain during the ardinary course of business and estimates would result in a different level of incame taxes, current and deferred, recognised in the period

Tox Authorilies are entilled to reveas, and its subsidines 'deterningtion of its annual toxoble earnings, for a delemined period that moy be exlended in case here are losses caried forward Therefore, it is passible that some additional toxes may be ossessed, mainly os o result of the tox low However EDP Renovovers and hase of its subsidiares, are canfident that there will be no material on the annual occounts.

Notes to the Consollidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Dismantling and decommissioning provisions

The Boord of Directors considers that Group has contracting and decommissioning of propent, plant and equipment relded to wind electicity generolion For these responsibilities the Group hos recorded cast of restring stes and land to is original condition. The pravisons correspond to the present value af the expenditure expected to be required to settle the abligation

The use of different ossumptions in eslimates and judgments results from those that have been considered

4. Anancial-risk management policies

The businesses of EDP Renovices Group are exposed to a variety of financial risks, including the ellers of change ond meres) roles The man finonial isks lie essentialy in is debt parting from interest-de ond the exchange-rate exposures. The unpedicted is andysed on on-going bass in accordance with the EDP Group's rsk monogenent policy. Financed instruments are used to minimize orenial adverse efects resulting from the interest rates ond foreign exchonge rotes risks on EDP Renaváveis financial performance

The Board of Directors of EDP Renoveis is responsible for the establishment principles and the establishment of exposure linits The operational management of financial risks of EDP Renovation the Finance Department of EDP - Energios de Portugal, SA, in accadance with the policies appraved by the Board of Directors The outserification and evoluation of hedging mechanisms aparopriate to ecch expsure.

All fransocians undertaken using derivative the prar approval of the Boord of Directors, which defines the prometers af each fransaction and approves the formal documents describing their objectives.

Exchange-rate risk management

EDP Group's Financial Department is responsible for nathinge exposure af the Group, seeking to miligate the import of exchange rele Ruchans on the net asses and ne profits of the Group, using foreign exchange debt ond or other hedging structures with symment cl exposure characleristics Io those of the hedged tem. The effectiveness at these hedges is reassessed and monitored their lives

EDPR operales internationally and is exchange-role risk resulting from inrestments in foreign subsidiaries With the objective of minnzing the mpoci al exchonge rates flucturions, EDP Renovaveis general policy is to fund each praject in the currency of the popiect

Currently, the main curency exposure is the U.S dollar from the shareholding in EDPR NA. With the increasing capcity in other geographies, EPP. Is also becoming expased to other currencies (Brozilian Real, Polish Zloty and Romanian Leu),

Sensivity analysis - Foreign exchange rate

As a consequence a depectation al 10% in the facinge rate, with reference to 31 December 2010 and 2009, would originate an increase/decrease) in EDP Renavaveis Graup income stotement and equity, as follows (aros)

	31 Dec 2010
	Profil ar loss	Equilty
	+10%	-10%	+10%	-10%
USD / EUR	9,527	-11,644
PLN / EUR			3,584	-4.3B1
	9,527	-11,644	3,584	-4.381
		31 Dec 2009
	Profit or loss	Equity
	+10%	-10%	+10%	-10%
USD / EUR	6,415	-7,841
PLN / EUR			7,984	-9.759
	6,415	-7,841	7,984	-9,759

This analysis assumes that all other variables, namely interest rates, remoin unchangeable

As at 31 December 2010 ond 2009, EDP Renovineis Group has no significont expasses rekated essentially with the EDPR NA activity. To hedge these nisks, EDP Renováveis Group entered into a CIRS in USD ond EUR with EDP Branch |see note 36)

Interest rate risk management

The Group's operating and financial cosh flows are substanlıally independent from the fluctuation in interest-rate morkets

The purpose of the nheres)-rate is management pakins to reduce the expasses of debt to market fluctuations As such, whenever cansidered necessary and in occordance to the Group's policy, the Group contracts denvotive financiol instruments to hedge interest rate risks

In he flocing-role inancing carters, the Group cantracting instruments to hedge cash flows ossociated with future nlerest poyments, which have the effect af converting floating-interest rate loons into tixed-interest rate loans

All hese operations are underloken on lightilio ond are mainly pefect hedges with a high correlation between changes in inir value of the hedging instrument ond changes in foir valve of the inlerest-rate risk or upcoming cash flows.

Notes to the Consolidated Annual Accounts for the yeors ended 31 December 2010 and 31 December 2009

The EDP Renovivels Group has a partiblics with maturities between i and 15 years. The Financial bepartment of EDP Graup undertales sensility analyses of the fair value of financial instruments to interest-rate fluctuations or upcoming cash flows

About 91% at EDP Renováveis Graup financial debt bear interest at fixed rates

Sensivity analysis - Interest rates

The management of nisk associated to activities developed by the Group is outsurced to the Financial Department of EDP Group, can'racting deivative financial instruments to mitigate this risk.

Bosed on the debt portible of the EDPR EU Group and the relative inancial instruments used to heage associated interest rates interest and interest and interest and interest loans received by EDP Renaviseis, a change of 100 basis prily reterence to 31 December 2010 and 2009 wauld increase / decreasel equity and results of EDP Renovavers Group in the fallowing amounts (in thousand Euros):

	31 Dec 2010
	Profit or loss			Equity
	100 bp	100 bp	100 bp	100 bp
	increase	decrease	Increase	decrease
Cash flow hedge derivatives			28,154	-30,933
Unhedged debt (varioble interest rates)	-2,168	2,168
	-2,148	2,168	26,154	-30,933
	31 Dec 2009
	Profit or loss			Equity
	100 bp	100 bp	100 bp	100 bp
	Increase	decrease	Increase	decrease
Cash flow hedge derivatives			9,822	-10,455
Unhedged debt (variable interest rates)	-985	985
	- વેજરી	ਹੈ ਉਦੇ	9,822	-10,455

This analysis assumes that all ather voriables, namely foreign exchange rates, remain unchongeoble.

As at 31 December 2010 and 2009, EDPR NA has no significant exposure to interest rate nsks.

Counter-party credit-rate risk management in financial transactions

The EDP Renovation in tems of the counterparty risk on thonced transactions with campanies autside EDP Group is managed by an anglysis of the technical capotity, compelitieness, credit raine on each counterparites in deivoiles ond finoncial transactions are restricted to high-qually credit institutions or to the EDP Graup.

The EDP Renovels Group documents internotional stording to international instruments contracted with creditions or engaged under ISDA Moster Agreements, to assure a greater flexibility in the instruments in the market

In he specific cose of he EPR EJ Group, credit is is not signited areage collection period for customer balances and the quolity of its debtos The Groups main customers are operators on the energy market of their respective counties (DMEL and MEFF in the cose of the Spanish morkel

In he specific case of EDPR NA Group, credit is inted averge collection period for customer balances and the quality of its debts. The Group's main customers are regulated utility companies and regional morkel ogents in the U.S

EDP Renovineis believes that the amount the Group's exposure to credit risk corresponds to the carring anount of Trade receivobes and Cher deblors, ne' of he impoiment losses recognised The credit quotily of these receivables is dequote and hat no significan imporied credits exisl that have not been recognised as such and provided for

Liquidity-risk

iquidity isk is he possibility hat he Group will no be innoncal obligotions as they foll due. The Group strolegy to moroge liquidity is a ensure, os for as possible, that it will always have significan in a loblifies when due, under both normal ond stressed conditions, without incuring unceptable lasses or risking damage to the Group's reputation

The Iroudly policy followed ensures compling with poyment obligations acquired, through maintaining sufficient and hanny access in the EDP Group tocillies.

The EDP Renovines Group undertakes management of ligiddly risk through the engagement ond montenance of credit its main shareholder as well os drectly in the norternational financial institutions, with the best conditions, assuring the necessary funds to perform is activities.

Notes to the Consolldated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Market price risk

As at 31 December 2010, market price risk affection is not significant in the case of EDPR NA, prices are fixed and mainly delemined by power purchase agreements In the case of EDPR EU the spoin directly on the daily markel at spot prices plus a pre-defined premium lregulated Nevertheless, EDPR EU has an opian of selling the power through exces. In the remaining countes, prices are mainly determined through regulated tariffs

EDPR EU and EDPR NA have electrity soles swaps that qualify for hedge) hat are relded to electricity soles for the year 2010 and 2009 (see note 36) The purpose of EDP Renovaveis Group is to hedge a valume of energy generated to reduce its exposure to the energy price volutility.

Capital manage

The Group's gad in managing equity, in accordaned by its main shareholder, is to salegund the Group's copcity to canline operating as a gaing concern, grow steadly to meet eslablished growth largets and maining equity shuchure to reduce equity cost

In conformity with other sector groups, the Group chucture based on the leverage ratio This ralculated as ne l'incricid berowings sinided by total equily and net borrowings . Net inancial borrowings are sum of finoncol deb, institutional equily libilities corrected for nor-current defered revenues, less cash and cash equivalents

5. Changes in consolidation perimeter: Business combinations, Sole of affiliates and Merge of affiliates

During the year ended in 31 December 2010, the consolidation permeler of the EDP Renovavels Group were

Campanies acquired:

EDP Renewables Evrope acquired 85% of the shore copitol of Repord Wind S.r.). Mormely named as Intilion wind S.r.) The EDPR Group consaldates 100% of these subsidiaries because there is a put option over the remain 15% (see notes 17 and 37),

• EDP Renewobles Europe acqured 100% of the polish companies Farma Widrowo Bodzanow SP ZOO, Farma Watrowo Starozreby SP ZOO, Farno Widirowo Wyszagod SP ZOO and Karpoetyka SP ZOO, through its subsidiary EP Renewables Polsko SP ZOO (previously Nealca Polska SP ZOOI (see note 17);
• EDP Renewables Evrope acquired 60% of the share capital of Responsabilitá Limitata (see note 17)
• Campanies sald and liguldated:
• · Freeport Windpower I, LP,
• Murciosol-1 Solar Térmico, S.L.

Companies merged

• · Agrupación Eólico Froncio S.L. was merged into EDP Renewables Europe;
• · Eneroffius-Produção de Energio Electrica, S.A. into EDP Renováveis Portugal, S.A

Campanies incamorated:

• Headwaters Wind Form LL.C *,
• · 17th Star Wind Farm LLC*;
• Woverly Wind Farm LL.C *;
• · EDP Renewables Canada;
• · 2010 Vento VII, LLC*
• · 2010 Vento VIII, LLC *;
• · 2010 Vento IX, LLC*
• · Horizan Wind Ventures VII, LLC *
• · Horizon Wind Ventures VIII, LLC *;
• · Horizon Wind Ventures IX LLC *:
• · Rio Blanca Wind Farm L.L.C. *.
• · Hidalgo Wind Form L.L.C *,
• MacColl Offshore Windfarm Umited,
• · Stevenson Offshore Windfarm Limited;
• · Telford Offshore Windfarm Limited,
• · Stone Wind Power I i ^*.
• · Franklin Wind Farm LLC

* EDP Group holds, through EDP Renovision in the United States of America legally incorporated without shore capitol and that as at 31 December 2010 do not have any assets, liabilities, or any operating activity

Other changes

• The Group EOPR increased its inding from 19 6% to 35 96% in the share capital of ENEOP Édicas de Portugal, 5.A. Mrough the subsidary EDP Renewables Europe, S.L. (see note 18);
• The Group EDPR increased its indirect holding from 49% in the shore copial of Parque Edica Albs del Volloyo, 5.A. *rough the subsidions Eolicas, S. L. (see note 17 and 18)

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

During the year ended in 31 December 2009, the changes in the cansolidation perimeter of the EDP Renovivels Group weres

Companies acquired:

· EDPR Group, firough its subsidiary EDPR Brasil, S.A. acquired 100% of CENAEEL - Central Nacional de Energia Edica, Lda "CBNAEE", Jose note 171:

• · EDPR Group, frough its subsidiary EDP Renewables Europe, S.L. acquired 100% of the share capital of the companies Mardelle, SARL and Valle do Movin, SARL and 49% of the share capital of Quinze Mines, SARL Isee note 171;
• · EDPR Group, through its sylssidary Neo Catolied 100% of the share capitol of the componies Parc Edic Coll de la Garganto, SL, Parc Edit Service Voltorera, SL y Bon Vent de L'Ebre, SL. (see note 17);
• · EDPR Group acquired 100% af the share capilal of Elektrawnia Wictrowa Kresy I, S.P. through its subsidiory Neo Polska (see nobe 17)
• · EDPR Group acquired 100% of the share copital of Elebras Projectes, Ltda through its subsidiary EDP Renovaves Brasil (see note 17); EDPR Group acquired 60.63% of the share copitol of Aprofitoment D'Energies Renvrables de lo Terro Alta, S.A. frough its subsidiaries Porc Eòlic de Coll de Moo, S.L. (12.24%), Parc Eòic de Tarre Madóna, S.L. (10.68%, Bon Vent de Vildbo, S.L. (10.42%), 80n Vent de Vildiba, S.L. (10.42%), 80n Vent de L'Ebre, S.L. (9.70%) mod Parc Eòlic de Vilalba dels Arcs, S.L. IS.35%) (see note 17);
• EDPR Group ocquired 38 96% of the share capital of Spraines de L'Ebre, S.A. thrugh Is subsidiary Aprofitament O'Energies Renovable de la Terra Alta, S.A. (see note 18).

Companies sold and liquidated:

• Generaciones Especiales I, S.L, sold its S0% interest in the subsidiary thersol E. Solar Ibérica, S.A.,
• Generaciones Especiales I, S.L, dissolved ond liquidated the subsidiary Horra Medioombiente, S.A.;
• · Generaciones Especiales I, S.L., dissolved and liquidated the subsidiory E6lico More Nostrum S.A.,
• Horizon Wind Energy LLC, dissolved the subsidiary Chocolate Bayou Windpower I, LP;
• · EDP Renewables Europe, S.L. dissolved the Hollywell Investments Limited, SARL,
• · EDP Renewables Europe, S.L., dissolved ond liguidated the subsidiary Ridgeside Investments Limiled, SARL

Companies merged:

• · Horizon Wind Energy Company LC was merged into Horizon Wind Energy LC;
• · Levonte Energia Eôlica, Ldo was merged into Enernova Navos Energias, S.A.,

Companies Incarporated:

• · Agrupocion Edlica Francia, S.L. was incorporated being 100% held by EDP Renewables Europe, S.L.;
• · Desarrallos Edicas de Teruel, S.L. wos incoporated being 51% held by Sinae, S.A.;
• · Eálico Garcımuñoz, S.L. wos incoporated being 100% held by Desa, S.A.
• · Meadow Lake Windfarm III LLC;
• · Meodow Loke Windtorm IV LLC;
• · Meodow Lake Wind Form V, LLC;
• · Black Prairie Wind Form II LLC;
• · Black Prairie Wind Form III LLC,
• · Horizon Wind Energy Northwest N LLC,
• · Horizon Wyoming Tronsmission LLC:
• · 2009 Vento N. LLC. 2009 Vento V, ШС;
• 2009 Vento VI, UC
• · Horizon Wind Ventures II, LLC,
• · Paulding Wind Form, LLC;
• · Paulding Wind Form II, LLC;
• · Paulding Wind Farm III. LLC:
• · Simpson Ridge Wind Form II, LLC,
• · Simpson Ridge Wind Farm III. LLC:
• · Simpson Ridge Wind Farm IV, LLC;
• · Simpson Ridge Wind Farm V, LLC;
• · Horizon Wind Ventures VI, LLC,
• · Lexington Chenoa Wind Form II, LLC;
• · Lexington Chenoa Wind Form III, LLC; · Atheno-Westnn Wind Power Project II 11 C.
• · Blue Conyon Wind Power VII, LLC,
• · EDPR UK Limited was incoparated being 100% held by EOP Renewables Europe, S.L.;
• Moray Offshore Renewables Limited was incoporoted being 75% held by EDPR UK Limited

The following companies were merged In Neogalla, 5.A.S.:

• · C.E Ayssenes-Le Truel, S.A.S .;
• · CE Beauresour SAS
• · CF Bourbriac SAS
• · C.E Colonhel Lahuec, S.A.S.,
• · Eole Service, S.A.R.L.;
• · Eole 76 Developpement, S.A.R.L.,
• · Le Gollot, S.A.S.,
• · Kerontouler, S.A.S.
• · Parc Eolien Les Bles D'Or, S.A.R.L.,
• · CF Ies Vielles SAS.
• · Eole Futur Montloue 1, SAS;
• · SOCPE Pieces de Vigne, S.A.R.L .;
• · CE Pont d Yeu, SAS,
• · C.E NEO Prouville, S.A.S.,
• · Recherches et Dével Éoliennes, S.A.R.L.

Notes to the Consollidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The following companies were merged in Neogália, S.A.S.(cont.):

• · C.E Sainl Alban-Henansal, 5.A.S.;
• · SOCPE Saint Jacques, S.A.R.L.

The following companies were merged In Neolica Polska:

• · Zulawy Wind Park II, Sp.z.o o.;
• · Kip Wind Park II, Sp z.o.o.;
• · Relax Wind Park V, Sp z.o.o .;
• · Relax Wind Park V1, Sp z o.o .; ● Chodow Wind Park, Sp z a.a.;
• Sk Wind Park, Sp z o o,
• · Kip Wind Pork I, Sp. z.o.o.;
• · Sakolowo Wind Pork, Sp z o.o.

Other changes

• · Genesa I S.L. acquired the remaining 10% of the share capilol of Hidroeléctrica Fuentermosa, S.L.;
• Neolıco Polsko acquired 3,14% af the share copital af Relax Wind Park I SP Z.O O.;
• · Sinae Inversiones Eólicos S.A. acquired 18% of the share capitol of Parque Eólico del Voltoya, S.A. (see note 18),
• · Desarrollos Eólicos Promoción S.A.U. acquired 3,33% of the shore capital of Desarrollos Edicos de Galicio, S.A.

ó. Revenue

Revenue is analysed by sector as follows:

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro1000
Revenue by sector of activity/business:
Electricity	838,573	632,726
Other	1,841	10,791
	840,414	643,517
Services rendered by sector of activity:
Other	4,642	4,725
	845,056	648,242
Total Revenue:
Electricity	838,573	632,726
Other	6.483	15,516
	845,056	648,242

Cost of consumed alectrictly and Chonges in inventorial ond consumables used is onalysed os follows

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Cost of consumed electricity	2,917	1,522
Changes in inventories and cost of raw material and consumobiles used:
Cost of consumables used	12.684	2.803
Changes in inventories	-11,187	.910
	4 414	6,235

7, Other operating Income

Other operating income is onalysed as follows.

	Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Supplementary incame	1.468	1,303
Gains an fixed assets	283	51
Turbine availability income	962	12,692
Income from sale of interests in institutional portnerships - EDPR NA	107,005	82.671
Amortization of deferred incame related to power purchase agreements	25,776	17,654
Operating indemnities	2.515	3.319
Gain related with business cambination de Parque Edico Altos del Valtoya, 5.A	3,170
Contract termination indemnily	15,840
EDPR Palska	15,000
Other income	8,011	7,541
	180 030	125 231

Income from institutional porherships - EDPR NA, ncluded to production lax credits PTC and tax depreciations, related to projects Vent I, II, II, IV, V, VI, VII ond VIII (see note 33).

Notes to the Consollated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Turbine ovalidatity nome relers to compensation turbines suppliers when the measured availability of turbines in activity is less han 9% in he first six months and/or less than 97% in any of the subsequent periods of six months during the warranty period.

The power purchase agreements between EDPR NA and its customers were valued, at the discouned cash flow lechniques. At had date, hese agreements were ralued based on market assumpley 120 million Euros (USD 190 4 million) and recorded as o non-current libility (note 34, This libility is amortised aver the period of the agreements against other aperating income. As at 31 December 2010, the period arnounls to 25,776 thousand Euros (31 December 2009: 17,654 thausand Euros)

Operating ndemnities refer to amounts received from in relams for longible liked assels and or losses an the apertiland activity

During 2001, the EDP Renovises Group ocquired on 12% in the share copted of Parque Eélico Allos del Volfyy, S.A., obtaining the control of his company Based on the lind purchase arce allocation has originated a gain of 3.70 thousand Euras Isee nate 5 and 17

Contract lernination indermily in the amount of 15,840 thousand between the subsidiary Post Ook Wind LLC JEDPR NA subgroup) and its dient J Aron to an eorly retease fram the tast seven years of the power purchase agreement

The amount included in EDPR Polsk from the business combinations of Farno Widrowa Badzonow SP ZOO, Farno Watrowo Strozzeby SP ZOO, Farno Withowa Wyszogrod 5P ZOO and reloved purchase price allocation of the operating asses and liobilities and he recognition of ther operating income omauning to 15,000 thousand Euros (see note 5 related with a purchase opparturity that results from the Group financel capacity

8. Supplies and services

This balance is analysed as follows.

		Group
	31 Dec 2010	31 Dec 2009
	Euro'000	Euro'000
Supplies and services:
Water, electricity and tuel	2,751	1,876
Taols and office material	2,132	1,692
Leases and rents	29,728	22,310
Communications	3.168	2,679
Insurance	11,346	8,244
Transportation, fravelling and representation	7.651	7,499
Cammissians and fees	1,045	813
Maintenance and repairs	101,677	70,823
Advertising	2,230	1,848
Specialised works
- IT services	3,487	3,457
- Legol fees	4,371	3.411
- Advisary fees	7.964	8,707
- Shared services	ર્બને વિવેટ	5,931
- Other services	5,198	4,319
Royallies	1,500	1,500
Other supplies and services	5,468	3,195
	196,211	148,304

9. Personnel costs and emplayee benefits expense

Personnel costs is onalysed as follows:

		orpup
	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000
Management remuneration	1,158	722
Remunerations	49.052	40.413
Social charges on remunerations	6,874	5,718
Emplayee's varioble remuneration	14.241	11,563
Emplayee's benefits	2,292	1,773
Pension, medical care and other plans expenses	2,240	633
Indernnities	793	555
Other costs	2.314	5,025
Own work capitalised	-24,118	-23 855
	54.846	42.547

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 ond 31 December 2009

The overage breakdawn by management positions and professional category of the permanent staff as of 31 December 2010 and 2009 is as follows:

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Baard members	16	16
Senior monagement / Senior officers	60	52
Middle management	442	381
Highly-skilled and skilled employees	220	180
Semi-skilled workers	100	108
	838	737

The companes of EDPR Group consolidation method have contributed with 15 employees included in the semi-skilled in

The number of employees includes Monagement and all the subsidiaries and ossociates

10. Other operating expenses

Other operating expenses ore anolysed as lollows:

	Oroup
	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000
Direct operaling taxes	15,984	11,958
Indirect taxes	7.668	6,466
Losses on fixed assets	1,845	1,970
Lease casts related to the electricity generating centres	7,770	4,995
Donations	451	285
Amorlizalions of deferred O&M cast	1,222	872
Turbine availability banus	1.229	661
Other casts and losses	20,697	6.631
	56,866	33,838

Other cass ond losses includive expenses of 1,766 thousand Euros The omounl recognised is the best estimate of the experied to sate the present obligation of the end of 2010.

11. Depreciation and arnorfisation expense

This balance is analysed as follows.

		Group
	31 Dec 2010	31 Dec 2009
	Euro 000	Euro'000
Property, plant and equipment:
Buildings and other constructions	1,473	594
Plant ond machinery
Hydroelectric generation	86	83
Thermoelectric generation		192
Wind generation	422,140	306,733
Other	15	349
Tronspari equipment	234	142
Office equipment	6.451	3,180
Other	1,764	ଚିତ୍ର
	432,163	312,133
Other Intangible assets:
Industrial praperty, other rights and other intangibles	2,240	2,217
	2,240	2,217
	434,403	314,350
Amartisation of deferred Income (Government grants):
Investment gronts	-11,406	-2,403
	-11,406	-2,403
	422,997	311,947

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

72. Gains / Bosses) from the sale of financial assets

Gains / Bosses) from the sale of financial assels, for the Group, are analysed as follaws

		31 Dec 2010		31 Dec 2009
	Disposat S	Value Euro 000	Disposal P	Value Euro'000
rwestments in subsidiarles and associates
Ibersol Solar Bérica, S.A			50%	268
				268

In 2009 Generaciones Especiales I, SL, sald to 50% shares SA to Solar Millennium AG, for 300 hausonds of Evas, generating on accounting gain of 268 thousands of Euros

13. Other financial Income and financial expenses

Other financial Income and financial expenses are analysed as follows:

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Other financial Income:
Interest income	7,355	7,865
Derivative financial instruments
Interest	2,576	9,108
Fair value	8,376	5,983
Foreign exchange gains	25,984	12,747
Other tinancial Income	14	14
	44,305	35,717
Other financial expenses:
Interest expense	176,792	103,745
Oerivative financıal instruments
Fair volue	ર્દ ,356	4,579
Bonking services	3,874	732
Foreign exchange losses	26,142	5,629
Own work capitalised (financial interests)	-68,401	-74,691
Unwinding	71,317	65,901
Other financial expenses	3,371	2,256
	218,451	108,151
Finoncial income / (expenses)	-174,146	-72,434

Derwatve financial instruments - Interest liquidotions on the denvative finoncial instrument estoblished belveen EDP Rench (see notes 34 and 36).

In cccrdance with the accaunting policy described on note 2g), of the 31 December the borrowing costs interests copialsed in tangible fixed assets in progress as at 31 December 10,691 thousand Euros (74,691 thousand Euros as at 31 December 2009 ond are included under Own work copialised linerest, The implici interest rates used for this coptaliation vary n accordance with the related hanns, between 1.725% and 13 09% (31 December 2009: 1.839% and 10 250%].

Interest expense refers ta interest an loans bearing interest at market rates

Unwinding experses relers essentially to the incovisors for dismanling and decommissioning of wind farms 2,872 thousand Euros (1) December 2009 : 3,134 thousand Euros) (see nate 32), to the finability reloted with put option of EOPR Italia 1,889 thousand Euros (31 December 2009 - 8,20 thousand Euros reloted with put option of Genesa Grup) (see nate 34) and the implied return in institutional parters (4,830 thousand Euros (31 December 2009 54,147 thousand Euros) (see note 33)

14. Income tox expense

in accardance with prevaling legisten to revear and correction by the lax authorities during subsequent years. In Partygliand Span his period is four years and in 8 razli li is five year considered to be defirlinely reveal by the lox authorities In the United Sides of America, generaly, he statute to the issuance by tox additional iiquidation is three years from the date of sellement of the annual tox declargion of a company

Tox losses generated in each vear, and adjustment, may be deductible from toxable prafis during subsequent years in Portugal since 200, 15 years in 5pan, 20 years in the USA, without an Belgium, France and Brazil, but lintied by 30% of the taxable income of each period, The breakdown af losses caried loward and the respective expiration date are presented in Note 20 The CDP Renoviveis Group are taxed, wherever possible, on a cansolidated basis allawed by the tax law of the respective countnes.

EDP Renewables Europe, S.L. and its subsidial tox decarating in accardance with prevaling tox legistation Nevertheless, the main Goup componies poy income to tollowing the special Tox Consolidition Regime, canloned in articles of and 82 of Royal Legistaries Decree 4/2004 whereby the revised caparate income to low was appraved The Tox Consaldation the Tox consaldation permeler of Genesa Group and EDP, S.A - Sucursal en España (EDP Branch).

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

This balance is analysed as follaws·

		Group
	31 Dec 2010	31 Dec 2009
	Euro'000	Euro'000
Current tox	-28.763	-34,112
Deferred tox	-8.996	-10.642
	-37.759	-44,754
a personale le name for and 13 m ---------------------------------------------------------------------------------------------------------------------------------------------

The effective incame tax rate as at 3 ? December 2010 and 2009 is analysed as follaws:

	Group
	31 Dec 2010 31 Dec 2009
	Euro'000	Euro 000
Profil before tax	120,797	162,541
Income tax	-37,759	-44,754
Effective Income Tax Rate	31.26%	27 53%

The reconcliation between the nominal and the effective income tox rate for the years ended 31 December 2010 ond 2009 is analyed as fallows:

	Group	Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Profit before trixes	120.797	162,541
Naminal income tox rate	30 00%	30.00%
Expected income taxes	-36,239	-48.762
Incame taxes for the period	-37,759	-44,754
Oifference	-1,520	4,008
Tax effect af operations with institutional partnerships	-1,812	22,013
Depreciation, amortization and provisians	-3.727	-4,656
Unrecognised deferred tax assets related to tox losses generated in the period	3,206	-31 447
Production tax credits	-5,330	14.702
Fair value of financiol instruments and financial investments	87	-2,587
Financial investments in assaciates	1.426	1,263
Difference between gains and accounting gains and lasses	5,114	727
Tox differencial	-558
Tax benefits		2,666
Effect af tox rates in foreign jurisdictions		1.674
Other	74	-347
	-1,520	4,008

The income tax rates in the countries in which the EDP Renovaveis Group operates are as follows:

		Tax rate
Country	Subgroup	2010 and 2009	Subsequent Asalt
Spain	FDPR FU	30.00%	30.00%
Portugol	EDPR EU	26.50%	26 50%
France	EOPR EU	33.33%	33 33%
Polond	EDPR EU	19 00%	19 00%
Belgium	FDPR FU	33.99%	33 99%
Romania	EDPR EU	16.00%	16 00%
United States	EDDE NA	37.63%	3763%
Arazil	EDPR BR	34.00%	34 00%

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

---

15. Property, plant and equipment

This balance is analysed as follows:

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro1000
Cost:
Land and natural resources	18,867	13,119
Buildings and other constructions	13.886	11,041
Planl and machinery:
Hydroelectric generation	2,619	2,619
Thermaelectric cageneration	6,008	6,008
Wind generation	9,536,702	7,354,463
Other plant and machinery	290	255
Transport equipment	1,641	1,063
Office equipment and tools	29,186	21,492
Other tangible fixed assets	12,205	8,829
Assets under construction	1,666,957	2,038,064
	11,288,371	9,456,953
Accumulated depreciation:
Depreciation and omortisation expense for the period	-432,163	-312,133
Accumulated depreciation	-874,437	-509,809
	-1,306,600	-821,942
Carrying amount	9,981,771	8,635,011

The mavement in Property, plant and equipment fram 31 December 2010, is analysed os fallows

	Balance 1 January Euro'D00	Acquisitions / Increases Euro 000	Disposals Euro'000	Tronsfers Euro'000	Exchange Differences Euro'000	Penmeter Varlations / Regularisations Euro'000	Balance at 31 December Euro 000
Cost:
Lond ond natural resources	13.119	5,610	-39	74	103		18,867
Buildings ond other constructions Plant and machinery	11,041	2,556			297		13,896
Hydroeledric generation	2.619						2,619
Thermoelectric cogeneration	6,008						6.008
Wind generation	7,354,463	21,928	-1,869	1,820,606	297,451	44,123	9,536,702
Dither plant and machinery	255	21	- ]			15	290
Tronsport equipment	1,063	468		34	76		1,641
Office equipment and tools Other	21,492	5,018	-98 -13	1,621 ddy	741 18	412 ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------	29,186
	8,829	2,376					12,205
Assets under construction	2,038,064	1,432,658	-1,703	-1,823,329	24,718	-3.45	1,666,957
	9,456,953	1,470,637	-3 823		323,504	41,100	11,288,371
			Impalrment			Penmeter
	Balance	Chorge	Losses /		Exchange	Variations /	Balance at
	1 January	for the period	Reverses	Disposals	Differences	Regularisations	31 December
	Euro 000	Euro 000	Euro 000	Euro'000	Euro 000	Euro 000	Euro 000
Accumulated depreciation and
Impairment losses
Buildings ond other constructions Plant ond machinery:	2,287	1,473			27		3,787
Hydroelectric generation	1,526	8 ୧					1,612
Thermoelective cogeneration	6,009						6,009
Wind generatian	799,376	422,140		-961	20,040	33,529	1,274,124
Other plont and mochinery	227	15				7	249
Transport equipment	367	234			20		621
Office equipment and tools	7,050	6.451		-12	-119	84	13,454
Other	5,100	1,764		-100	-20		6.744
	821,942	432.163		-1.073	19.948	33,620	1,306,600

Plant and Machinery includes the cost of the wind farms under operation.

Notes to the Consolliated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The caption Perimeter Variations / Regulations mode by EDPR EU, dunny the period ended at 31 December 2010, namely EP Renewrobes Italy, S.r.). and Reportion of the integration of the assess (and licbilities) of the subscions Parque Following the ocquisition of an additional 12% interest (see note 5).

In 2009, Perineter vandtons/regularisations in effect of the occusion of the wird power companies CENAEEL and Elebras, Brazilan subsidians, and other companies of NEO Group, many Mardelle, Quinze Mulin, Bon Vent de L'Ebre, Elektrownia Widrowa Kresy and Aprofilment D'Energes Renovables de lo Terra Alta, totalling 40,032 thousonds of Euras.

Aquisitions / hcreases of ossels under cansivition neloted to the purchase pree allocation performed in 2001 for the companies ocquired during the year Isee note 17).

The movement in Property, plant and equipment from 31 December 2009, is analysed as follows

	Balance 1 January Euro'000	Acquisitions Euro 000	Disposals Euro 000	Transfers Euro'000	Exchange	Perimeter Variations /	Balance at
					Differences Euro 000	Regularisations Euro 000	31 December Euro 000
Cast:
Land ond natural resources	11,739	1,591	-4	128	-423	ਉੱਚ	13.119
Buildings ond other constructions Plant and mochinery:	10 855	2,802			-147	-2,469	11,041
Hydraelectric generation	2,619						2,619
Thermoelectric cogeneration	୧ ୦୦୫						6,000
Wind generation	5,227,721	49,155	-974	2,189,644	-130,206	19,123	7,354,463
Qther plont and machinery	247			8			255
Transport equipment	୧୫୧	527	-84		-32	-34	1.063
Office equipment and tools	9,378	9,354	-23	3,391	-356	-252	21,492
Other	7,334	478	-34	1,111	-60		8,829
Assels under construction	2,382,901	1,831,2BO	-3,580	-2,195,668	-3,618	26,749	2,038,064
	7,659,488	1,895,187	-4.699	-1,386	-134,842	43,205	9,456,953
	Balance 1 January Euro'000	Charge for the period Euro 000	impalrment losses / Reverses Euro 000	Disposals Euro '000	Exchange Differences Euro 000	Perimeter Variations / Regularisations Euro'000	Balance at 31 December Euro'000
Accumulated depreciation ond Impairment losses:
	1,736	ਟਰੇਬ			-16	-27	2,287
Plant ond mochinery.
Hydroelectric generation	1,443	83					1,526
Thermaelectric cogeneration	5,817	192					6,009
Wind generation	499,925	306,733		-180	-8,893	1,791	799,376
Other plant and machinery	214	349				-336	227
	266	142		-34	-9	2	367
	4,256	3,180		-25	-90	-27	7,050
	4,026	860		-28	-28	270	5,100

Assets under construction as at 31 December 2010 and 31 December 2009 ore onalysed os follows

517,683

	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Electricity business:
EDPR NA Group	288.285	438.274
EDPR EU Group	1,293,304	1,595,787
EDP Renováveis	7.909	1 861
EDPR BR	77.459	2,142
	1.666.957	2,038,064

312,133

-267_

-9,036 - - - -

1,429 - 1,429 821,942

Assets under construction as at 31 December 2010 and EDPR NA Group are essenibly related to wird farms under construction and development

Finonciol interests capilalised amount to 68,401 thousand Euros as at 31 December 2010 and 74,691 housand Euros as at 31 December 2009 (see nole 13).

Personnel costs capitalised ansunt to 24,118 thousand Euros as at 31 December 2009 23,855 thousand Euros) (see note 9)

The EDP Renaváveis Group has lease ond purchose obligotions as disclosed in Note 37 - Commitments

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

16. Intangible assets

This balance is analysed as follows-

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000
Cost:
Industrial property, ather rights and other intangible assets	41.069	30,378
intangible assets under develapment		2,844
	41,069	33,222
Accumulated amortisation:
Depreciation and amortisatian expense for the period	-2,240	-2.217
Accumulated depreciation	-16,102	-13.665
	-18.342	-15,882
Carrying amount	22,727	17,340

Industral propent, other intergible osses include 14,035 thousond Euros and 24,693 thousand Euros reldted to wnrld generalien icenses af Portuguese companies (3) December 2009- 14,035 thousand Euros) and EDPR NA Graup (3) December 2009- 13,920 thousand Euras), respectively,

Intangible assess under development are essentially related to advances for the acquisition of electricity wind generation licenses

The movement in Inlangible assels from 31 December 2009 to 31 December 2010, is analysed as follows

	Balance at 1 January Eura 000	Acquisitions Euro 000	Disposals Euro'000	Transfers Euro 000	Exchange differences Euro 000	Perimeter Varlations / Regularisations Euro'000	Balance at 31 December Euro 000
Cost:
Industrial property, other rights and other inlangible assets Intangible assets under develapment	30,378 2,844	2,186 314	-2	2 -2	1.062	7,441 -3,154	41,069
	33,222	2,500	-2		1.062	4,287	41,069
	Balonce at 1 January Euro 000	Charge for the year Euro 000	Impalment Euro 000	Disposals Euro 000	Exchange differences Euro'000	Perimeter Variations / Regularisations Euro 000	Balance at 31 December Euro'000
Accumulated amortisation:
Industrial praperty, other rights and ather intangible assets	15,882 15,882	2,240 2,240			220 220		18,342 18.342

The Peimete Varalians / Regularistians of the caption India rights and other mangble assess mainty ncludes 7,57 thusand Euros reloted with a contractual right of EDPR NA ta move power through the 2009, prar a the signalure al this new contract, EDPR NA was supposed b be efenned far the amaunt of the interconnection upgrades in cash, and has classified this amount as Other deblars.

The Perimeter Variations of the copital intragible asses under development mainly includes 2,400 thousand Euros related with the annulinent of the advanced payments from intongible assets suppliers of EDPR EU subgroup

The movement in Intangible assets from 31 December 2009, is analysed as follows

	Balance at 1 January Euro 000	Acquisitions Eura 000	Disposals EUro'000	Transfers Euro 000	Exchange differences Euro 000	Perimeter Variations / Regularisations Euro'000	Balance at 31 December Euro'000
Cost:
Industrial praperty, other rights and
other intangible assets	33,521	39		-2.773	-409		30,378
Intangible assets under development	2,840	ব					2,844
	36,361	43		-2,773	-409		33,222

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

	Balance at 1 January Euro'000	Charge for the year Euro1000	Disposals Euro 000	Tronsfers Euro DOO	Exchange differences Euro 000	Perimeter Vanations / Regularisations Euro'000	Balance at 31 December Euro'000
Accumulated amartisation:
Industrial praperty, other rights and other intangible assets	13.953	2,217			-105	-183	15,882
	13.953	2.217			-105	-183	15,882

17. Goodwill

For the Group, the breakdown of Goodwill resuling the cast of the investments and the corresponding share of the fair value of the net ossess ocquired, is analysed as follows:

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Electricity business:
Goodwill booked in EDPR EU Group	749 392	765.987
Goodwill booked in EDPR NA Group	597 915	ટ ૨૦ ૪૨૪
Goodwill booked in EDPR BR Group	1 499	1,501
	1.344.006	1,318,356

EDP Renewables Group goodwill os at 31 December 2010 and 31 December 2009 is analysed as follows:

		Group
	Functional Currency	31 Dec 2010 Euro 000	31 Dec 2009 Euro 000
EDPR NA group	U5 Dalkar	592.915	550 868
Geneso group	Euro	408,554	477,522
Ceosa group	Euro	117,637	117.513
EDPR Polska	Zlaty	23,266	26.410
EDPR Portugal group	Euro	42,588	42,588
NEO Galia SAS group	Euro	79,958	83.160
Romania group	ല	9.421	10,931
NEO Catalunya	Euro	7.013	4.689
EDPR BR Group	Brosilion Real	1.699	1,501
EDPR Italia Group	Euro	57,781
Other	Euro	3.174	3,174
		1.344.006	1.318.356

During the year 2010, the movements in Goodwill, by subgroup, are anolysed as fallows:

	Balance at 1 Januory Euro 000	Increases Euro 000	Decreases Eura 000	Impalrment Euro 000	Exhange Differences Euro 000	Perimeter Vorlations/ Requiansations Euro 000	Balance at 31 December Euro 000
Electricity Business
EDPR NA group	550,868				42,047		592,915
Genesa group	477,522		-୧୫ ବୃଷ୍ଟି ବିବିଷ				408,554
Ceasa group	117,513	124					117,637
EDPR Polska	26.410				-3,144		23,266
EOP Renovóveis Porlugol group	42,588						42,588
NEO Galia SAS group	83.160	-	-3,202				79.958
Romanio graup	10.931			-	-1,510		9,421
Neo Cotalunyo	4,689	2,324					7,013
EOPR BR Graup	1,501				198		1,699
EDPR Italia Graup		57,781					57.781
Other	3,174						3,174
	1,318,356	60.229	-72,170		37,591		1,344,006

œ

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The movements in Goadwill, by subgroup, from 31 December 2009, are analysed as fallaws

					Perimeter
	Balance at				Exhange	Varlatians/	Balance at
	1 January	Increases	Decreases	Impalment	Differences	Regularisations	30 June
	Euro 000	Euro 000	Euro'000	Euro 000	Euro'000	Euro'000	Euro 000
Electricity Business
EDPR NA Group	569,777				-18,909		550,868
Genesa Group	441.356	36,166					477,522
Ceasa Group	146,469	76	-3,502			-25,530	117,513
EDPR Polska	25,424	736			250		26,410
EDP Renováveis Portugal Group	43,011		-423				42,588
NEO Galia SAS Group	45,104	113				37,943	83,160
Hallywell Group	8,007					-8.007
Ridgeside Group	4,317					-4,317
Romania Group	14,803	216	-4,088				10.931
NEO Catolunya	4,187	502					4,689
EDPR BR Group		1,246			255		1,501
Other	3.263					-89	3,174
	1,305,718	39,055	-8,013		-18,404		1,318,356

EDPR NA Group

Goodwill arising Iram the coupisition of the EDPR NA Group was determined in USD as al 31 December 2010 and announts of USD, coresponding to 592,915 housand Euros (31 December 2009 550,666 thousand Euros), including the enount of 12,723 housand Euros The incease n EDPR NA Group goodwill is relot tron exchange differences of EUR CSD of 42,047 housond Euros (decrease of 10,900 thousand Euros as al I December 2009)

Genesa Group

The variation in Genesa Group goodwill is readyction in proportion of 20% of the publication of the pul ophons of Capo Madrid over Geness omounting oproximately negative 68,968 thousand Euras (31 December 2009: pasitive 36,139 thousand Euros) (see note 37)

During 2001 the EDPR Group increased its indirect hom 4% in the shore copital of Parque E6lico Albs del Voltoyd, S.A. lsee note 5) ond has corried out he purchase price allocation that originates the recognition of an operating income of 3, 170 thousand Euros (see nate 7),

	Boak value	Provisory PPA	Assets and at fair value
	Euro 000	Euro'000	Euro 000
Property, plant ond equipment	32.257	21.671	53.928
Other assets (including licenses)	7,138		7.138
Total assets	39,395	21,671	61,066
Non controlling interest	10.507	1,459	11,966
Deferred tox lightines		3.966	3.966
Financial debt	27,344		27,344
Curent liabilities	3,040		3.040
Total liabilities	30,384	3.966	34,350
Net assets acquired	9,011	17.705	14,750
Consideration transferred	11,580		11,580
Goodwill	2,569		-3,170

Ceaso Group

in 2009 the increase in Ceaso Group goodwill (76 thousand Euros) is related with the acquisiion of 48.7% of Allo, S.A, with on acquisition cast of 1,083 thousands of Euros

in 2009 the decrease in Cesso Group godwill results of the ocquisition price of Parce of Parce of Coll de Maro, S.L. (1,555 thousonds of Euros), Porcedic Tore Madrina, S.I. (1,555 housands of Euros) ond Parc, S. (392 thousands of Euros) ond from the estructuring process that organaled the transter of French subsidiaries from Ceasa subgroup to Neo Golia subgroup (25,530 thousonds of Euros).

in 2010 the increase in Ceoso Group is related with on the contingent prce 124 thousand Euros) of Aprolitement D'Energies Renovables de l Terro Allo, S.A

EDPR Polska Group

In 2010, the increase in EDPR Polsond Euros) is relevel with the crauisition of 100% of the shore capital of subsidiary Karpacka SP 200 Additionolly the goodwill has decreased 3,144 thousand Euros related with exchange differences.

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

In 2010 EDPR Plaska Grup acquired 100% of the shore copial of the campanies farma Watrawa Sarazeby SP ZOO and Frama Withrowd Wyszogrod SP ZOO ond carried aul the lind it a recognifian of an operating income at 15,000 thousand Euros, analysed as follows:

	Bodzanow	Starozreby	Wyszogrod	Book value	Final PPA	Assets and liabilities at fair value
	Euro'000	Euro 000	Euro 000	Euro'000	Euro 000	Euro'000
Property, plant and equipment	39	54	134	227	38,533	38,760
Non current assets	39	ਦੇ ਹੋ	134	227	38.533	38,760
Current assets	445	442	375	1,262		1,262
Tatal assels	484	496	500	1.489	38,533	40,022
Deferred tax lightlies	421	383	332	1,136	7,348	8,484
Current ligbilities			14	14		14
Tatal liabilites	422	382	346	1,150	7,348	8,498
Nel assels acquired	62	114	163	339	31,185	31,524
Consideration fransferred	6.132	5,513	4,879	16,524		16,524
Goodwill	6,070	5,399	4.716	16,185		-15,000

Neo Galla SAS Group

in 2009, the ncease in Neo Golia SAS Group of 113 thousand Euros results for the share copiral al subsidiants Mardelle, SAR on d Valle du Mouin, SARL and 49% of Quinze Mines, SARL and fram the restructuring process hat originated the transper of Fench subsidiaries trom Ceasa, Hollywell, Ridgeside and Other subgroups to Nea Galia group (37,943 thausand Euros)

In 2010 the decrease in Nea Golia Group (3,202 thousand Euros) is related with a reduction of the acquisition of Ede 76

Romanio Group

In 2009, the increase in Ramano Group goodwill is relect in acquisition confingent price (216 thousand Euros) of the compony Renovary The decrease of Ramonia group goodwill 4,088 thousand Europ of poyoble success tes. os pre-stablished controched assumplions were not achieved

In 2010 the decrease of 1,510 thousand Euros is related with the effect from exchange differences of EUR/LEJ

Neo Catalunya

In 2009, he increase in Nea Cotalina Group goodwill (2,826 housond Euros) is related with the shore copial of subsidiary 801 (en the l Éber, including the effect of the final PPA corned aut in 2010, analysed as fallows.

	2009			2010
			Assets and		Assets and
	Book Value	Provisory PPA	Uobillies at fair value	Final PPA	Liabilities at fair value
	Euro 000	Euro'000	Euro'000	Euro 000	Euro'000
Property, plant and equipment	4,113	8,993	13,106	4,042	17,148
Other assets (including licenses)	1,012		1,012		1,012
Total assets	5,125	8,993	14,118	4,042	18,160
Deferred tax liabilities		1,864	1,864	2,045	3.909
Current liabilities	5,070		5,070		5,070
Total liabilities	5,070	1,864	6.934	2,045	8,979
Net assels ocquired	રેર	7,129	7.184	1,997	9,181
Consideration transferred	1.686		/ ୧୫୧		12,007
Goodwill	7,631		502		2,826

During the year 2010 the find purchose price allor al subsition al subsidiary Bon Vert de Lifere was caried out and the goodwill of Neo Catalunyo subgroup has increased by 2,324 thousand Euros

EDPR BR Graup

In 2009, the increase in EDPR Brazil Group goodwill is relation of 10% of shore copild of CENAEEL in the omound of C.J246 thous ond with the effect from exchange of the EUR/BR of 255 housands of Euros In 2009 EDPR Brazil Group olso ccquired 100% at share capital of Elebris but he no godwill wos generaled in the acqusition The ocqusition price of these two companies was opproximately 15,000 thousands of Euros

In 2010, the increase in EDPR BR Group gocdwill is related with the effect ham exchange differences of EUR/BRL of 198 thousand Euros

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

ttatia subgroup

In 2010, EDPR Group his subsidiary EDPR EU acquired 85% of the shore capital of EDP Rerewables that,S.r.). Additionally, EDPR EU has a call aplian ond Enego n Natura, Sr I has a pul aption aver the compony's share capital (see nde 37), as a cansequence, as at 31 December 200, the EDPR Group has cansolidated 100% af EDP Renewables Italia, I | , taking cansidering the put aplicition of non cantralling interests.

The talla subgraup goodwill results from the ocuisition Wind, S.r.), Repord, S.r. During 200, the find PPA for the trainin Wird, S.r.), Reparo, S.r.l. acquisitions was carried aut and the tinal gaadwill generated is analysed as fallows:

		Assets and
Book value	PDV	at fair value
Euro 000	Euro 000	Euro'000
4,841	3.964	8,805
123		123
15.149		15,149
20, 113	3,964	24,077
20,113	3,964	24,077
	1.090	1.090
405		405
405	1.090	1,495
19.708	2,874	22,582
65,072		65,072
45,364		42.490

The tata subgroup goathill (57,78) thousand Eural he acquisition of thich includes the goodwill generated from the acquisition (12,444 thousand Euros), the ornail of the gaodwill oready included in the find, S.r. (15,149 thousond Euros) and from the goodwill generated in the acquisition of Report, S. I | 46 thousand Euros) and RePlus, S. I | (42 housand Euros) and RePlus, S. I | (42 housand Euros with an ocquisition price of 1.080 thousond Euros)

Ouring 2010 the EDPR Group has paid an amount of 54,23 thousand Euros) for busness combinations and success fees,which induces an amount of \$,220 thousands af Euros of cash and cash equired (3) December 2009: 6,250 thousand Euros)

Other information for business combinations and purchase price allocation included in 2009

During 2009, the accounting value of cantingent liabilities recognised or the date of acquisition for the business combinations corried out [Elektrownio Wigtraya Kesy J. Vallée du Moulin, Mardelle, Quine la Garagnio, Serra Valtorera, Bon Vent de Villba, Bon Vent de Villba, Bon Vent de Carbera, Cancel and Elebrási were as fallows:

	Book Value
Property, plant ond equipment	105.210
Other assets	9,734
Non-current ossets	114,944
Total assets	114.944
Other non-current term liabilities	13,454
Current lightlites	45,896
Total liabilities	59,350
Nel assets acquired	55,594

Notes to the Consolidated Annuol Accounts for the years ended 31 December 2010 ond 31 December 2009

EDPR Polska Group

In 2009, EDPR Polska Group has acquired 100% of the stare capital at subscription in Watrowa Kresy (, S.P. (Kesy) (736 housands of Euros) and has caried ad the pravisory PPA analysed as follows:

	Book value Kresy	Assets and Fair value adjustments Kresy	Assets and Llablittes at fair value Kresy
Property, plant and equipment	382	9,066	9,448
Other assets (including licenses)	88		88
Total assets	470	9,066	ઠે રૂડિકે
Deferred tax liabilities		1,660	1,660
Other liabilities	452		452
Total non controlling interests and liabilities	452	1.660	2.112
Net assets at fair value			7,424
Acquisition cast			8,160
Goadwill			736

Romania Group

In 2009, the ncrease in Romoria Group goodwill is receisition cortingent price (26 housands of Euros) of the company Ronovalle Power

In 2009, the decreose in Romonia Group godwill (4,088 thousands of the popule success fees as pre-established contraction assumptians were not achieved.

During 2009 Romania Group has carried aut the finol PPA onotysed as fallows

11,222 67,823 Praperty, plant and equipment Other assets (including licenses) 296 11,518 Total assets 67,823 8,763 Non cantrolling interests 9,402 Deferred tax liabilities Other ligbilities 11,551 Tatal non cantrolling interests and liabilities 11,551 18,165 Net ossets at fair value Acquisitian cast	Book value Romania Group	Assels and Fair value adjustments Romania Group	Assets and Lightlies at fair value Ramanla Group
			79,045
			296
			79,341
			8,763
			9,402
			11,551
			29,716
			49,625
			୧୦`25Q
Goodwill			10.931

EDPR Portugal Graup

The decrease in EDPR Portugal Group goadwill is related with an adjustment to the subsidiary Bolores - Energia eólica, S.A.

EDPR Brozil Group

The increase in EDPR 8razl Group godwill is relation af 100% of share capital of CENAEEL The effects at the final PPA carred and in 2009 are onalsed as follaws·

	Book value Neo Galia Group	Assets and Fair value adjustments Neo Galla Group	Assets and Uablitties at fair value Neo Galla Group
Property, plant and equipment	15,790	18,186	33,976
Other assets Including licenses)	4,362		4,362
Tatal assets	20,152	18,186	38,338
Deferred tox liabilities		5,742	5.742
Other liabilities	10,458		10,458
Total liabilities	10,458	5,742	16,200
Net assets of foir value			22,138
Acquisition cast			23,384
Goadwill			1,246

36

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Goodwill impairment tests - EDPR Group

The goodwill of the EDPR Group is tesled for importional wind forms, it is perbirned by determing the recoverable value through he volve in use of the different cash general in each al the countries where EDPR Group performs its octivity Each county coincide with subgrays disclassed above with the exception of Spain with thee diferent subgroup, Cesso Group and Nea Catalunya Grap) Goodwill of hese three Spansh subgroups is tested at cauntry level.

To perform this andysis, a Discounted Cash Pow (DCF) method is based on the priviciple that he estimated volue of an entity or business is defined by its copactly to general financial resources in the lusiness and distibuted among the conomy shareholders, without campromising the mainlenance of the octivity

Therefore, for the businesses developed by EDPK : CGUs, the valuation was bosed on free cash flows person of the Weighted Averge Cost of Capital (WACC) rate, that reflects the risk associated to subtracting the net debt associated with such ossers operation

The cash flow projections refect current portblio of included copcity and parements as well os monggenet perspective on business growth, matel and regulatory evolutions.

The cash flows period is the useful life af the assels (20 years) with inflolion growth until year 20 ond discounted to present day

The discount rates (after tox) used range between 5 25% and 9 1%, depending on specific risk foctors of the different countries

18. Investments in associates

This balance is onalysed as follows

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Investments in associates:
Equity holdings in associotes	45.87	47.609
Carrying amount	45,871	47.609

For the purpose of annuol accuunts presentation of association of associated componies is presented in this capter, included in the trail oncurn of Equity holdings in assaciates.

Group

The breakdown of Investments in associates as at 31 December 2010, is onalysed as follows

		31 Dec 2010
	Investment	Impalrment
	Euro'000	Euro 000
Associated companies:
ENEOP - Ealicos de Portugal, S.A.	12.869
Desarrollas Eálicas de Canárias, S.A.	11,566
Parque Eálico Sierra del Madero S.A.	6,788	-
Veinco Energia Limpio 5.L. subgroup	4,790
Porque Eólico Belmonte, S.A	3.033
Assaciates of Valle del Ebro Ingenieria y Consultoria, S.L.	1,756
Hidroostur S.A.	1,725
Blue Canyon Windpower, LLC	1,817
Other	1,527
	45.87

The breakdown of Investments in associates as at 31 December 2009, is andysed as follows

		છાપ્રધ
		31 Dec 2009
	Investment Euro 000	Impairment Euro'000
Associated companies:
Desarrollos Eólicos de Canárias, 5.A	11,235
Parque Eólico altas del Voltayo, 5.A	9,593
ENEOP - Eolicas de Portugal, 5.A.	6.907
Parque Edlico Sierro del Madero S.A.	રે નંદર્ભ ર
Veinco Energio Limpia subgraup	4,154
Parque Eotica Belmante, S.A	3.073
Assaciates of Valle del Ebro Ingenieria y Consultario, S.L.	2,014
Hidrogstur S.A.	1.937
Blue Conyan Windpower, LLC	1 ୧୫୧
Other	1,525
	47 609

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The movement in Investments in associates, is analysed as follows:

	Group	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Balance as at 1 January	47,609	40,782
Acquisitions	3,834	7,207
Disposols		-137
Share af prafits of assaciates	5,036	3.939
Dividends received	-1.784	-4,107
Exchange differences	131	-75
Chonges in consolidation method	-8,955
Balance as at 31 December	45,871	47.609

Acquisitians af investments in ossociates are mainly related to increase of ENEOP - Editicas de Parlugal, S.A. additional paid in capital (see note S)

Changes in cansolidotan method are relation of an additional interest of 2% in the share copial of Parque Edico Allos del Voltays, S.A., obtaing the cantral at this campany and starting to cansolidate under the full consalidation method isee note 5 and 171

19. Available for sale financiat assets

This balance is anolysed as tollows.

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Sociedad Eólica de Andalucia, S.A.	10.832	11,766
Parque Eólico Montes de las Navas, 5.L	6.684
Wind Expert	500	500
Other	364	364
	18,380	12,630

Guring 2001 EDP Renovines Group has started to conselled to be the fill carsolidiin method. As a consequence, has recognised as an available for sale financial osset the shareholding of its subsidiary in Parque Eálica Mantes de las Navas, 5.L.

The assumplions used in the valuation madels of available far sale finoncial assets are os the imporment lesl

The interest in share capital, votng rights, net assess and nei incare of the inestments of the investments classified as available for sole financid assets are analysed as follows

	Head office	% of share capital	Voting rights	Net assets	Net income
Sociedad Eálica de Andalucia, S.A.	Sevilla	16 67%	16.67%	11.320	1.650
Parque Eálica Mantes de las Navas, S L	Madrid	17 00%	17.00%	9.976	2.128

20. Deferred tax assets and liabilities

The EDP Renavers Group recards the tax effect arism the assets and loblifies determined an accounting bass ond on accounting bass ond on a lox basis, which are analysed as fallows

	Deferred tox assets		Deferred tax liabilities		Net deferred tax
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000	31 Der 2010 Euro'000	31 Dec 2009 Euro 000
Tax losses braught farward	4.487	3,593			4,487	3 593
Provisions	6.591	2.136			6,591	2.136
Derivative finoncial instruments	8,401	5,543	52	2.743	8,349	2,800
Praperty, plant and equipment	18,563	16,082	13.038	8.052	5.525	8.030
Allacation of foir value to assets and liabilities			357,200	330.911	-357,200	-330.911
Accounting revaluations			146	21	-146	-21
Other	477	712	1,164	1,197	-687	-485
	38.519	28,066	371.600	342,924	-333,081	-314.858

Alboction of for value to assets and liabilities in 2009 includes the effect of the final purchase price of Born Vent de L'Ébre (1,045 housand Euros) ond Kresy (54) 1hausand Euros), perfamed during 2010

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The movements in deterred tax assets and liobilities during the year are analysed as follows:

		31 Dec 2010 Euro 000		31 Dec 2009 Euro 000
	Tox Assets	Tax Liabilities	Tox Assets	Tox Unblifies
Opening balance	28,066	-342,924	21,834	-316,920
Increases charged ta the profit and loss account	9.741	-31.582	7.548	-24,886
Decreases chorged to the profit and loss account	-2,622	14.841	-3.489	10.106
Increases chorged to reserves	3.221	-1.457	1.969	-1.692
Decreoses charged to reserves	-514	4.002		-63
Change in the applicable lax rate
Other movements	627	-14.480	204	-9.469
	38.519	-371.600	28,066	-342,924

As refered above, the opering balonce of Tox lighting on the effect of the final purchase price allocation of Bon Vent de L'Ébre (2,045 hausand Euros) and Kresy (-54) thousand Euras), performed during 2010

Other mavements of defered tox liobilities relates maily to the effect of purchase price allacations ocuring in 2010 reloted to Neo Colounio, Inth, Perque Editor Altos del Voltaya (12,404 thounsand Euros)

In 2009, other novements of deferred tox liabilites related of purchase price allocations couring in 2009 relded to Polond, Catalunia and France (3,944 thounsands of Euros) and Elebros and Cenaeel ( 6,452 thousands of Euros)

Details of deferred lox assets and liabilities that will be realised ar reversed in over 12 months are as fallows

	Tox Assets	Tax Liabilities 31 Dec 2010 Euro'000
	31 Dec 2010
	Euro ODD
Tax lasses brought forward	3.567
Provisions	3,182
Derivative financial instruments	8.401	52
Allocotion of ocquired assets and liabilities fair valves		345.001
Property, plant and equipement	17.228	254
Accounting revaluations
Others	455	232
	32,833	345,539

The Group Iax lasses and tox credits carried forward are analysed as follows

		Group
	31 Dec 2010 Euro'DOO	31 Dec 2009 Euro 000
Expiration dale
2010		11
2011	229	232
2012	197	224
2013	164	214
2014	193	151
2015	7,633	4,509
2016	2,822	2,822
2017 to 2029	985,906	640,833
Wilhoul expiration date	155,987	149,304
	1.153.131	798.300

The Group has nat recorded defered to assess for howard of 1,153,31 thousand Euros (2009 79,300 thousand Europ doe to uncenting he foture reditablion of the net defered to these lasses relate to EPPR NA (963,360 housand Euros and 31 December 2009 622,113 thousand Euros)

21. Inventories

This balance is analysed as follows

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro 000
Advances an accaunt of purchases	3.549	2,795
Finished and intermediate products	18 ୧୧୪	8,163
Raw and subsidiory malerials and consumables:
Other cansumables	1944	386
	24.162	11344

The Finished and intermediate products ore essentially related with wind farms construction in progress.

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

22. Trade receivables

Trade receivables are analysed as follows

	31 Dec 2010 Euro1000	31 Dec 2009 Euro'000
Short lerm trade receivables - Current:
Spain	81,619	47,914
United States of America	27,945	27,434
Portugal	13.664	17,918
France	6,262	7.072
Belgium	3,693	5.301
Brazil	349	452
Romania	1,148	57
Polond	8,967	-
United Kingdam	3	-
	143,650	106,148
Ooubful debts	2.339	2,345
impairment losses	-2,339	-2,345
	143,650	106,148

Group

23. Debtors and other assets

Debtors and other assets are analysed as follows:

	ப்படு
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Debtors - Current:
Loans to related parties	358,795	178,028
Derivative financial instruments	5,402	13.765
Guarantee depasits	12,496	11,962
Tied deposits	80.121	90,505
Other debtors:
- Amounts related to staff	48	32
- Insurance	2,440	1,979
- Production 10x credits (PTC)	864	213
- EDPR NA warranty cloim	682	2,678
- Prepaid furbine maintenance	3,651	1,450
- Turbine Availability	1,376	6,680
- Services rendered	8,103	9,110
- Advances to suppliers	55,917	100
- Sundry debtors and other operations	22,364	20,956
	552,259	337,458
Debtors - Non-current:
Loans lo related parties	ર તેરે ર	8.406
Notes receivable (EOPR NA)	908	9,397
Guarantees and lied depasits	35,957	34,961
Derivalive financial instruments	4,068	5,443
Other debtors
- Deferred costs (EDP Renovâveis Partugal Group)	46,588	46,770
- Deferred PPA casts (High Trail)	5,275	5,388
- D&M contract valuation - Mapple Ridge I (EDPR NA)	6,317	7,405
- Deferred Tax Equity Costs	11,631	6,384
- Sundry deblars and alher operations	5,612	5,291
	123,311	129,447
	675,570	466,905

Loons to related paries - Current mainly 171,081 thousand Euros of loons granted by EDP Renovines, S.A. Io EDP, S.A - Sucursol er Espara (81 December 2009: 37,678 thousand Euros) related to the net interests liquidalion, 129,648 thousand Euras al laans granted by EDP Renoviveis Portugol, S.A. to ENEOP Group (31 December 2009 106,800 thausand Evos relded to loons granted by EDPR EU 10 EDP, SA - Sucursal en Espona (31 December 2009: 21,554 thousand Euros).

Ted deposits - Current maily includes financing agreements required to be held in the amount sufficient in the led costs

Guarantees and fied deposits - Non Current are related to project finance agreements, which of EDPR EU hold these anaums in bank accounts in order to ensure ils capacity of comply with respansabilities

Defered costs (EDP Renováveis Portugal group) - non current rents and suftace rights poid to lond owners and up-front nework rents poid b EDP Dislribuição These casts are deferred on the bolance sheet and are recagnised an a straight line basis over the estimaled useful life of the assess

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

24. Tax receivable

Tax receivable is analysed as follaws:

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
State and ather public entities.
- Incame tax	19.131	19,132
- Value added tax NATI	53.109	146,464
- Other laxes	8.810	4.074
	81,050	169.670

25. Financial assets at fair value through profit or loss

Financial assets at fair value through profit or lass are analysed as follaws:

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Equity securities.
İnvesiment funds	35,335	33,012
Debt securities:
Bands	409	4.091
	35,744	37,103

The fair value al the investment funds is calculated based an the quoled market price of the funds

The effect in income stolement of operations with insteal ardil or loss was 674 thousand Euros (31 December 2009: 1,146 thousand Euros)

26. Cash and cash equivalents

Cash and cash equivalents are analysed as fallaws:

31 Dec 2010 31 Dec 2009
Euro 000 Euro'000
Cash·
- Cash in hand 1	57
Bank depasits-
- Current deposits 234.231	158.411
- Other deposils 189.465	285,165
423,696	443,576
Cash and cash equivalents 423,700	443,633

The other includes 182,633 thousand Euros (31,396 thousond Evras) of depasts mode in EDP Finance 8V in USD, with a mont, which earn interests from 5% to 5.5%

27. Capital

At 31 December 2010 and 2009, the share capital of the Campany is epresented by 872,306,162 ordinary bearer shores of Euros 5 por value each, all billy poid These shares have the same voting and profil-sharing rights These shares are freely transferable

Camponies which hold a direct or indirect of at least 10% in the share capital of the Company at 31 December 2010 and 2009 are as follaws:

Main shareholders and shares held by company afficers:

EDP Renováveis, S.A.: s sharehalder structure as at 31 December 2010 is analysed as fallaws

	N.º of Shares	% Capital	% Voting rights
EDP - Energias de Partugal, S.A. Sucursal en España (EDP 8ranch)	541,027,156	62.02%	62 02%
Hidraelécirica del Cantabrico, S.A.	135,256,700	15 51%	15.51%
Other(*)	196.024.306	22.47%	22.47%
	872,308,162	100.00%	100.00%

(*) Shares quoted on the Lisbon stock exchange

In 2007 and 2008 the Company conied and increases, which were subscribed through non-monetary contibutions comprising 100% of he shares in EDPR NA and EDPR EU

The contibulians are applicoble the special lox treatment for marsers on assess and converson at securities freseen in Chaple VII di Section VII di Secton VII di Royol Decree 4 dated 5 March 2004 which approved the review by previling legisting legisting legisting legislation were included in the annual occounts for 2007 and 2008

Notes to the Consollated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Earning per share attributable to the shareholders of EDPR are analysed as follows

		Group
	31 Dec 2010	31 Dec 2009
Profit attributable to the equity holders of the parent in thousand Euros	80,203	114,349
Profit from continuing operations attributable to the equily holders of the parent in thousond Euros	80,203	114,349
Weighled averoge number of ordinory shares outstanding	872,308,162	872,308,162
Weighted averoge number of dilited ordinary shares outstanding	872,308,162	872,308,162
Earnings per share (basic) attributable to equity holders of the parent in Euros	0.09	0 13
Eamings per share (diluted) attributable to equity holders of the parent in Euros	0.09	0 13
Eamings per share (basic) from continuing operations attributable ta the equity holders of the parent in Euros	0.09	0 13
Eamings per share (diluted) from continuing operations attributable to the equily holders of the parent in Furas	0.09	0.13

The EPP Group calculates its bosic and divied earlings per share of the parent using the weighted averge number of ordinory shores outstanding during the period.

Group

The company does not hold ony treasury stack as at 31 December 2010

The average number of shares was determined as follows.

	31 Dec 2010	31 Dec 2009
Ordinary shares issued at the beginning of the period	872,308,162	872,308,162
Effect of shares issued during the six monts period
Average number of realised shares	872.308.162	872,308,162
Averoge number of shores during the period	872,308,162	872,308,162
Diluted average number of shares during the period	872,308,162	872,308,162

28. Reserves and retained earnings

This balonce is onalysed as follows.

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Reserves
Fair value reserve (cash flow hedge)	-4,913	16,735
For value reserve (ovailoble for sole finoncial assets)	10,980	8.659
Exchange differences orising on consolidation	-15,316	570
	-9,249	25,964
Other reserves and retained eamings:
Retained earnings	208,493	98,028
Additional paid in capital	୧୦ ୧୧୧	୧୦,୧୧୧
Legol reserve	14,281	7 479
	283,440	166,173
	274,191	192,137

Additional part in capital

The accounting for tonscrions annon control is excluded from IFRS 3 Consequently, in the obserce of specific guidance, within iPSs, the Group EDPR hos odopled on accounting policy for such to sunsidered appropriate. According to the Group's policy, business combinations anong enflies under common can'ral are accounted to in the consolidated financial stree ocquired compony subgroup) in the EPR cansalided Innncial storements The difference between the carrying amount of the net assets received and the consideration paid is recognised in equity

Legal reserve

The legal reserve has been appropriated in accarded in the Sponish Componies are obligad to transier 10% of the profils for the year lo o legal resene unil such reserve reches on and in 20% of the share capial This reserve is not distributable to stareholders and may only on your be used to offsel losses if no other reserves are availoble or lo increase the share capital

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Profit distribution (parent company)

The EDP Renavaveis, S.A. praposal for 2010 profils distribution to be presented in the Annual General Meeting is as follows

	Euros
Prafit for the periad	44,091,046 97
Distribution
Legal reserve	4,409,104.70
Free reserve	39.681,942,27
	44.091.046.97

The EDP Renováveis, S.A. 2009 profils distribution approved in the Annual General Meeting an 15 April 2010 was os follows:

	Euros
Profil for the period	68,012,381.59
Distribution
Legal reserve	6.801.238 16
Free reserve	61, 211, 143.43
	68,012,381.59

Fair value reserve (cash flow hedge)

The Fair value reserve kash flow hedge) campises the effective partian of the fair volve af cash flow hedging instruments

Far volue reserve (avoitable-for-sale financial assets)

This reserve includes the occumulated net change in the foir volue af avoilable-for-sole finonciol ossels as at the balance sheet dale.

	Group
	Euro'000
Balance as at 1 Januory 2009	7,747
5ociedad Eâlica de Andalucia	912
Balance as at 31 December 2009	8,659
Sociedad Eálico de Andalucia	-034
Parque Eálica Montes de las Navas, 5.L.	3,255
Balance as at 31 December 2010	10,980

Exchonge differences arising on consolidation

This capion refects the amount arising of the financial statements of subsidiaries and ossociated componies from the Euros The exchange roles used in the preparation of the condensed consolidated financial stotements ore as follows

Currency			Exchange rotes as at 31 December 2010		Exchange rates as at 31 December 2009
		Closing Rota	Average Rate	Clasing Rate	Average Rate
Dollar	ાધ્ય	1 336	1.326	1 441	1.390
Zloty	PIN	3.975	3 995	4 105	4 362
Real	ક્ષ્ઠા	7 718	7 331	7 511	2.783
lei	RON	4 262	4 212	4 236	4 245
Paund Sterling	GBP	0.861	0.858	0 888	0 890
Canadion Dollar	CAD	1332	) 365		1

29. Nan cantrolling interest

This balance is analysed as follows:

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Non cantrolling interest in incame statement	2,835	3.438
Non cantralling interest in share capital and reserves	122.706	104.055
	125,541	107.493

Notes to the Cansolidated Annual Accaunts for the years ended 31 December 2010 and 31 December 2009

Non controlling Interest, by subgroup, are analysed as follows:

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000
EDPR EU Group	114.216	98,759
EDPR BR	11,325	8,734
	125,541	107,493

The movement in nan-cantraling interest of EDP Renoveller opents attributable lo non-controlling interest of 2,835 housand Euros, to voridions resulting from shore capital increases of that interest (EPR 8R ond EDPR EU subsidiaries) inlelling 5,2?2 thoused Eves and the ocquisition of on additional interest in the share capital of Parque Editor Allas del Vallaya, S.A. (9,706 thousand Euras) (see nate S)

30. Financial debt

This balance is analysed as follows

	Croup
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Financial debt - Current
Bank laans
- EDPR EU Graup	125,408	102,500
- EDPR BR Graup	72,485	539
Other laans.
- EDPR EU Group	3,634	2,982
- EDPR NA Group	935	1,114
Interest payable	5,185	3.133
	207,647	110,268
Financial debt - Non-current
Bank loans
- EDPR EU Graup	491,588	394,895
- EDPR BR Group	8,052	7,704
Loans from sharehalders af graup entities:
- EDP Renaváveis S.A	2,799,548	2,131,042
Other loans
- EDPR EU Graup	23,423	25,823
- EDPR NA Group	3,332	3,707
	3,325,943	2,563,171
	3,533,590	2,673,439

Financial debt Nan - Current for EDP Renavated of set al bons gronted by EDP Finance BV (2,799,548 thousand Euros), These loans hove on overage maturity of 8.8 years and bear interest at fixed market rates.

The Group has project finance financings that include the usual guarantees on this type of frontangs, namely the planks and assets of the related projects, and the complines As of 31 December 200, these financings anount to 624,878 housand Euros as at 31 December 2009), which are already included in the talal debl al the Graup.

The breakdown of Financial debt by motunty, is as follows

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000
Bank loans:
Up to 1 year	202,184	106,172
1 to 5 years	215,135	186,423
Over 5 years	284,505	216,176
	701,824	508,771
Loans from shareholders of group enlifies:
Up to 1 year	894	-
1 to 5 years		-
Over 5 years	2,799,548	2,131,042
	2,800,442	2,131,042
Other loans:
Up to 1 year	4,569	4,096
] to 5 years	16,545	17,558
Over 5 years	10,210	11,972
	31,324	33,626
	3,533,590	2,673,439

Notes to the Consollidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The fair valve of EDP Renováveis Group's debt is analysed as follows·

		31 Dec 2010		31 Dec 2009
	Carrying Value Euro 000	Markel Yalue Euro 000	Carrying Value Euro'000	Market Value Euro'000
Short term financial debt - Current	207.647	207,647	110.268	110.268
Medium/long financial debt - Non current	3.325.943	3,178,811	2,563,171	2,532,998
	3,533,590	3,366,458	2.673.439	2.643.266

The maket value of the medium long-term hon-current debt and beer a fixed interest rate is calculded based on the discovned cosh flows at the rates nling of the balance sheet date The market value of deal a floating interest on to differ from is book value as these loast bear nterest at a rate indexed to Euribor. The book value of the short-term (current) debt and borrowings is considered to be the market value

As at 31 December 2010, the scheduted repayments of Group's debt are as follaws

	Total Euro 000	2011 Euro 000	2012 Euro 000	2013 Euro'000	2014 Euro'000	2015 Euro 000	Subsequent vegrs Euro'000
Short term debt and borrowings	207,647	207.647
Medium/long-term debt ond borrowings	3.325.943		57.755	60.025	67.003	46.897	3,094,263
	3.533.590	207,647	57.755	60.025	67,003	46.897	3.094.263

The breakdown of guarantees is presented in Nate 37 to the condensed consolidated financial statements.

The breakdawn af Finance debt, by currency, is as fallows:

	ا ماڻها واري واري
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Loans denominated in Euros	1,844,113	1,352,252
Loons denominated in U5D	1,452,120	1,312,944
Loans denominated in other currencies	237.357	8,243
	3,533,590	2,673,439

31. Employee benefits

Employee benefits balance are analysed os follows.

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Provisions for social liabilities and benefits	36	0
Provisions for heolthcare liabilities	ਟੇਰੇ	ટેરે
	ઇ રે	ને તે

As al 31 December 2010 ond 2009, Provisians for liabilitles and social benefits relers exclusively to defined benefit plans

The liobilities arising from pension ond healthcare plons ore fully covered, either by plan assets or provisions.

The respansabilities and the assets from pension and healthcore pension plons hove no significant amounts.

Employee benefit plans

Some EDP Renovivis Graup companies grant posts to employees, under defined beneili plons, namely pension plans that ensure refrement complements to age, dischilly and surving pensions in some coses hediticale care is provided during retrement and enty relievent, through mechanisms camplementary to those provided by the National Health Service

The exsing plans are presented hereunder, with a brithe componies covered by them, as well as of the ecanomic and financial and financial data:

I. Defined benefit pension plans

The EDP Renoveis Group companes in Portugal have a restricted Pension Fund, complemented by o specific provision. The EDP Penson Fund is managed by Pensöesgere being the management of the assets subcantracted to external assel management entillies.

This Pension Fund covers the lability for retrements lage, disability and surivor pension) as well as the liobility for enty etrement.

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The follawing financial and actuarial assumplions were used to colculate the liobility of the EDP Renovaveis Group pension plans:

		Group
	31 Dec 2010	31 Dec 2009
Assumptions
Expected return of plan assets	6.00%	6.34%
Discount rote	5.00%	5.20%
Salary increase rate	3.70%	3.70%
Pension increose rate	2.70%	2.70%
Social Security salary appreciation	1.90%	190%
inflation rale	2.00%	2.00%
	Age >60 - 1488/90	Age >60 - TV8B/9D
Mortality table	/ Age <= 60 years -1999/01	/ Age <= 60 years -TV99/01
Disability lable	50%EKV 80	50%EKV 80
Expected % of eligible employees accepting early retirement	40	40

II. Pension Plans - Defined Contribution Type

EDPR EU in Social benefit plans of delined contribution hat complement hose gronted by the Social Welliare System to he conpories ' employees, under which they pay a contribution to these plans each year, calculated in accordance with the rules established in each case.

III. Liability for Medical Care and Other Benefits Plans - Defined Benefit Type

The Group companies in Partygal resulting from the spin-off of EDP in 1994 have a Medical Care Plan which is fully covered by a provision.

The actuarial assumptions used ta cakulate the liability for Medical Care Plans are as follows

	orgup
	31 Dec 2010	31 Dec 2009
Assumptions
Discount rate	5.00%	5.20%
Annual increase rate of medical service casts	4 00%	4.00%
Estimated administrative expenses per beneficiary per year (Euros)	175	150
	Age >60 -	Age >60 -
	TV86/90	TV88/90
Mortality lable	/ Age <= 60	/ Age <= 60
	years - TV99/01	years - TV99/01
Disabılıly lable	50%EKV 80	50%EKV 80
Expected % of subscription of early retrement by employees eligible	40	40

The Medical Plan liability is recognised in the Group's accounts through provisions that totally cover the liability.

32. Provisions

Provisions are analysed as fallows:

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'ODO
Dismantling and decammission provisions	53.156	୧3 ବୃତ୍ତି ବୃହତ୍ତି ।
Provisian for other liabilities and charges	631	3,129
	53.787	67.085

Disnanting and decommission provisions relect to be neured with dismanting wind forms and restorng af sites ond land to their argins cardien, in accordance with he accounting palcy described in the des essentially 28,03 housand Euros for wind lorms no he United States of Americ (3) December 2009 4),609 thousand Euros for wind farms in Spain (3) December 2009. IS 053 thousand Euros by wind forms in Partycal (3) December 2009 5,348 thousand Euros for wind hyms in France (3) December 2009: 1738 thousand Euros) 639 thousand Euros for wind fams in Brazil (3) December 2009; 399 thousand Euros in Belgim (3) December 2009; 25 thussnd Euros) and 781 thousand Euros for wind farms in Poland

EDP Renovations beleves that the provisions backed balance sheel odequately caver the risks described in this note. Therefore, it is not expected that they will give rise to liabililies in addition to those recarded.

As of 31 December 2010 and 2009, the EDP Renovation tox-reded conlingen libalities ar contingent libalities ar contrigent ossets related to unresched disputes with the tox authorifies

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Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The movements in Provisions for dismantling and decommission provisions are onalysed os follows:

	Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Balance of the beginning of the year	63,956	47,311
Capitalised amount far the year and ather Unwinding	3.771 2,872	14.951 3.134
Other and exchange differences 8alance at the end of the year	-17.443 53.156	-1.440 63.956

Capitalised amount for the year and ather includes the impact of dismantling provisions assumptans

The movements in Provision for ather liabilities and charges are analysed as follows:

		Graup
	31 Dec 2010 Euro'ODO	31 Dec 2009 Euro'ODO
Balance at the beginning of the year	3,129	2.387
Charge for the year		1,140
Write back for the year	-155	-420
Other and exchange differences	-2.343	22
Balance at the end of the year	631	3.129

33. Institutional partnerships In US wind farms

This balance is analysed os follows:

		Group
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Deferred income related to benefits pravided	635.271	433,763
Liabilities arising fram institutianal partnerships in US wind farms	1.008.777	919 849
	1.644.048	1.353 612

The maverner in institutianal partnerships in US wind farms are analysed as follows:

		Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
Balance at the beginning af the year	1,353,612	1,096,668
Proceeds received from institutional investors	245,252	334,007
Cash paid to institutianal invesfors	-16.893	-479
Other aperaling incame	-107.005	-82,728
Univinding	64,830	54.147
Exchange differences	104,252	-48,003
Balance at the end of the year	1,644,048	1.353,612

The Group has entered in several partnerships with in the United States, thraugh limited kidslily campanies sperating agailing the cosh flows generaled by the wind larns between the Company and ollocates the tax benefits, which include Production Tox Creating includion Tox Creating inc Credits (ITC) and accelerated depreciation, largely to the investor

Dunng 2010 EDPR Group, through its subsidian Wird Energy U.C., has secured 141 million of USD (spoximolely 106 million Euros) institutional equily financing from Wells Forgo Wind Haldings LLC (Wells Fargo') n exchange for on interest in the Ventoll portbill, 99 million of USD (approximately 75 million Euros) for an interest in Vento VIII portfoliaand 85 millian USD (appraximately 64 millian Euros) for an interest in Venta VII portfolia.

During 2009 EDPR Group, through its subsidian Wird Energy LLC, has secured 154 million of USD lopproximated 117 million Eurosi institutional equity financing tran in exchange for an interest in the Vento di USD koproximdely 73 million Euros) for an interest in Vento (1 17 million of USD lopproximely 8 million

Notes to the Consolldated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

34. Trade and other payables

This balance is analysed as follows:

	Croup
	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Irade and other payables - Current:
Derivative financial instruments	10.673	854
Liabilities arising fram aptians with non contralling interests	234,754	303,722
Amaunts poyable for the acquisitian of subsidiaries		10,356
Success fees poyoble for the acquisition of subsidianes	3,630	7,327
Other payables
- Suppliers	40,453	42,765
- Other operotions with related parties	16,257	15,425
- Property and equipment suppliers	୧15 ୧୧୫	652,236
- Advances from customers	83	ર્ડ
- Variable remuneration ta employees	16,881	11,128
- Other supplies and services	52,775	22,641
- Other creditors and sundry operations	47,608	31,396
	1,035,782	1,098, 105
	Group
	31 Dec 2010	31 Dec 2009
	Euro 000	Euro 000
Trade and other payables - Non-current:
Payables - Group companies Derivalive financial instruments	61,806	40,009
	162,042	18,848 61
Liabilities ansing from options with non controlling inlerests	36,584
Amounts payable for the acquisition at subsidiaries		21,230
Success fees payable for the acquisition of subsidiaries	76,621	53,034
Government gronts / subsidies for investments in fixed assels	341,842	162,486
Other payobles
- Praperty and equipment suppliers	1,673
- Electricity sole contracts - EDPR NA	71.991	97.951
- Other creditars and sundry operations	1,432	280
	753.991	393,899

As of 31 December 200 the Liddlilies arising from with non controlling interests - Current includes the libblilly for the pur option controcled with Crip Modrid for a 20% interest in the Ceneso Grup in the sequivolent to 20% of Genescf bill equity raluation (31 December 2009-303,722 thousand Euros). - see note 37 The option was exercised by Caja Madrid within the exercise perrod.

· The timeframe is from 1 January 2010 to 2011, inclusive

• The contract is for the total shares in Neo Group companies held by Coja Madrid, 20% in Genesa Group

• The strike price will be reflected to the market value determined according to the shareholders agreement

As al 31 December 2010 the Libblitties orising from with non controlling interests - Non curent includes essentibly the Idelity for the pur option contracted in 2010 with Energia in Naturo for a 15% inlio group in the omaunt of 36,494 thousand Euros (see note 5 ond 37).

According to Sparish law 15/2010 at 5 July the Group disclose that he bolonce of Spansh suppliers with a maturity dole at 31 December 2010 over 85 doys is 15,66 thousand Euros, from which 1,024 thousand Euras are related with group companies.

Success bees payable for the acquisition of subsidiones Current includes the amounts relded to the contingent prices of the CPP Incess of the CDPR Indy, Relax Wind Group , EDPR Rumania, Greenwind, Bodzanow, Starozreby, Wyszarod, Elektrownia Wiatrowa Kresy and Elebris.

Derivation in the maint (Hedging) - Non Current mainly includes 14,049 housend Euros (1) December 2009 1,266 thousond Euros) releved to a hedge instrument of USD ond Euros with EDP Bronch, which was formalised in order to he oreign exchange risk of the net investment hald in EDPR NA, expressed in USD bee Nob 36) In the Group occounts, EDP Renovávels Group has applied the net investment hedge model to signe lhis Iransaction.

Government grants in fixed assels one essention rebled by Horizon subgroup under the American Recovery and Reinesment ACI promoted by the Unted States of America Government (see not it he recept of 169,004 thousand Euros of Government grants during 2010 (3) December 2009- 148,901 thousond Euros)

Election soles contracts - EDPR NA relate of the contracts entered into by EDPR NA with its customers, delemined under the Power purchase agreement lsee note 7)

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

35. Tax payable

This balance is analysed as fallows:

	Group
	31 Dec 2010 Euro 000	31 Dec 2009 Euro'000
State and other public entities:
- Income tax	10.122	15,930
- Withholding tax	22,474	15,743
- Value added tax (VAT)	14.169	4.021
- Other taxes	1.981	1.443
	48.746	37.137

36. Derivative financial instruments

In accardance with IAS 39, the Group classifies the deine in assel of assel or libbilly recognised, as a cash flow hedge of recarded liabilities and farecast transactians considered highly probable or net investment hedged in fareign operations

As of 31 December 2010, the tair value and maturity af derivatives is analysed as follows:

		Fair Value		Notlonal
	Assets Euro'000	Liabilities Euro 000	Unfil 1 year Euro'000	From 1 to 5 years Euro'000	More than 5 years Euro 000	Tota Euro'000
Net investment hedge
Currency swops		-145,123		59,627	1,826,174	1,885,801
		-145,123		59,627	1,826,174	1,885,801
Cash flow hedge
Power price swaps	7,438	-7,725	74,039	3,940		77.979
Interest rate swaps	268	-17.994	106,101	159,221	179,075	444,397
Currency forwards		-1,368	38,803			38,803
	7,706	-27,087	218,943	163,161	179,075	561,179
Trading
Power price swaps	1,764	-407	2,032	269		2,301
Interest rate swaps		-98		17,381		17,381
	1,764	-202	2,032	17.650		19,682
	9,470	-172,715	220,975	240,438	2,005,249	2,466,662

As of 31 December 2009, the fair value and maturity of derivatives is anolysed as follows:

	Fair Yalue			National
				From 1	More than
	Assets	Udbilities	Until 1 year	to 5 years	5 years	Total
	Euro 000	Euro'000	Euro 000	Euro 000	Euro'000	Euro 000
Net Investment hedge
Currency swaps		-1,268			1,826,174	1,826,174
		-1,268			1,826,174	1,826,174
Cash flow hødge
Power price swaps	17,667	-176	63,294	6,120		69.414
Interest rate swaps	47	-17,540	35,354	199,395	101,123	335,872
Currency forwards		-612	87,661			87,661
	17,714	-18,328	186,309	205,515	101,123	492,947
Trading
Power price swaps	1,494	-106	926	426		1,352
	1,494	-106	926	426		1,352
	19,208	-19.702	187,235	205,941	1,927,297	2,320,473

The fair value of deixative linancal instruments is recorded under assets inde 23, or Trade and other poyobles hote 34, it the for volue is positive or negative, respectively

The net investment deinatives are rebed to the Group CRS in USD ond EUR with EDP Bronch os refered in the notes 36 and 39. The foir value is based on internol valuolian models, as described in note 39

Cash foo hedge currency forwords over risk in Neálica Polska, denied from the supplyng contracts defined in Euros, lor which will be necessary finoncings in Polish Zlotis.

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 ond 31 December 2009

Cosh flow hedge power pice swops are related to the sdes price, congestion and line loss EDPR NA has entered into a gover price swop to hedge he varidatility in the spat norter prices received for a project and EDPR EU for the problem at same of its world by and forms in certain US power markels, EDPR NA is exposed to cargestion and line a negative import on the price received for power generated in these markets. To hedge these risk expasures, EDPR NA entered into FFTP) and a three year bed for flaating Lacaliand Margind Price LMP/swap

Interest rate swaps are related to the project finances and intend to canvert varioble to fixed interest rates

For volve of derivatives is based an quotes intities (investment bonks). These entilies use discunt cash flows lectingues usually accepted and data fram public markets

The trading derivative financial instruments are derivatives contrated for ecanomic hegding that are not eligible for hedge accounting

The changes in the fair value of hedging instruments and risks being hedged ore as follows:

			2010		2009
	Hedging Instrument	Hedged Hem	Changes In tair value		Changes In fair value
Type of heage			Instrument Euro'000	Risk Euro'000	Instrument Euro'000	Risk Euro 000
- Net Investment hedge	Currency swaps	Subsidiary accounts denaminated in USD and PLN	-143,855	143,855	64,211	-64,211
- Cashflow hedge	Interest rate swap	Interest rate	-233		-7,013
- Cashflow hedge	Interest rate caps and floars	İnleresi rate			961	-
- Cash How hedge	Power price swaps	Power price	-17,778		9,684
- Cashflow hedge	Currency forward	Exchange rate	-756		-2,139
			-162,622	143,855	65,704	-64,211

The mavements in cash flow hedge reserve have been as follows

	31 Dec 2010	31 Dec 2009
	Euro'000	Euro 000
Balonce al the beginning of the year	14,094	16,526
Fair value changes
Interest rate swaps	-5,186	-7,013
Interest rate caps and floars		961
Power price swaps	-18,448	ે જેવી રે
Currency forward	-756	-2.139
Transfers la results	-3,222	-4,562
Inefectiveness	-32	-35
Non cantralling interests included in fair value changes	-87	371
Balance at the end of the year	-13,632	14,094

The gains and lasses on the financial instruments portblio boaked in the income slotement are as fallows:

	31 Dec 2010 Euro'000	31 Dec 2009 Euro'000
Cash-flow hedge
Transfers la results	3,222	4,562
Inefectiveness	32	35
Nan efegible for hedge accaunting derivatives	-234	-3.193
	3,020	1.404

The effective interest rates financial instruments assaciated with financing operations during 2010, were as fallows

	Group
	Currency	EDP Renováveis Polys	EDP Renovaveis Receives
Interest rate contracts:
interest rate swops	EUR	(2,52% - 5,01%)	[0.72% - 1.11% 1
Interest rate swaps	PIN	5 41%	1 00%

ട്രാ

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The effective interest rates for derivative instruments associated with financing aperations during 2009, were as follows:

		Group
	Currency	EDP Renovávels Pays	EDP Renovávels Receives
interest rate contracts:
Interest rate swaps	EUR	[3,00% - 5,01%]	(0,71% - 3,00%)

37. Commitments

As at 31 December 200 and 2009, the financial connect in the balance sheel in respect af financial and real guarageed as follaws:

		Group
Type	31 Dec 2010 Euro'000	31 Dec 2009 Euro 000
Guarantees of a financial nature
- EDP Renaváveis	19.453
- EDPR EU Group	2,178	6,341
- EDPR NA Group	3,368	3,124
	24,999	9.465
Guarontees of an operational nature
- EOP Renováveis	538.122	330.227
- EOPR EU Group	20 008	190,322
- EDPR NA Group	1.304.742	1.093.336
	1,893,862	1,613,865
Total	1.918.861	1.623.350
Real guarantees	12,718	6,284

The EDPR Graup tinancial deb), lease and purchose obligations by maturity date are as fallows:

		31 Dec 2010
		Debt capital by period
	Total Euro 000	Up to 1 year Euro'000	10 3 years Eura 000	3 to 5 years Euro 000	More than 5 years Euro'000
Financial debt (including interests) Operating lease rents not yet due Purchase obligations	4.896.942 769,109 2,676,437 8,342,488	377,159 42,363 1.063.288 1,482,810	442,334 85,458 1,180,820 1,708,612	437.899 84.370 429,303 951,572	3,639,550 556,918 3,026 4,199,494

		31 Dec 2009
		Debi capital by period
	Total Euro 000	Up to 1 year Euro'000	to 3 18013 Euro 000	3 10 5 18012 Euro 000	More than 5 years Euro 000
Financial debt (including interests)	3,715,943	225,378	335,045	336,306	2,819,214
Operating lease rents nal yet due	460,432	28,498	56.165	53.713	322,056
Purchase abligations	1,480,277	1,100,036	376,902	3.339
	5,656,652	1,353,912	768,112	393,358	3,141,270

Purchose abligations include debts related with long-term of praduct and serices supply related to the Group operational activity When prices ore defined under "forward" cantracts, these are used in estimating the amounts of the contractual cammitments

The Operating lease rents not yet due are essentially reload where the wind forms are but Usually the leasing period cover the useful life of he wind forms

Notes to the Consolldated Annual Accounts tor the years ended 31 December 2010 and 31 December 2009

The Graup has purchase commitments for the occusive plont ond for maintenance contracts obligotians anouning to 3,055,587 housad Euros reloted to the acquisition of wind turbines for projects currently in the carstruction and development with different suppliers of this type of installations. The breakdown per years is as follows:

	EDPR EU	EDPR NA	Group	EDPR EU	EDPR NA	Group
	31 Dec 2010	31 Dec 2010	31 Dec 2010	31 Dec 2009	31 Dec 2009	31 Dec 2009
	Euro 000	Euro'000	Euro 000	Eura 000	Euro'000	Euro '000
Up to 1 year	746.606	321,694	1,068,300	694,776	405,790	1,100,566
1 ta 5 years	820,678	846.680	1.667.358	228,602	180,133	408,735
Over 5 years	3,026	316.903	319.929		156,732	156,732
	1 570 310	1 485 277	3.055 587	023 378	747 655	1666 033

As at 31 December 2010 the Group has the follawing contingent liobilities/rights related with coll ond put options on investments

• EDP Renavives, through its subsidiary EDPR EU, halds o call opton over Cajo Madrid on componies of the EDPR U sub-group (20%) of Cenesa). Caja Madrid holds on equivalent pul oplan on the strike price will be referenced to markel value deternined accarding to the sharehalders agreement The option was exercised by Caja Madrid within the exercise periad (see note 34)

• EDP Renovision, through its subsition over Cajaster for all the shares held by Cojastur on company "Quinze Nines" (51% of shore capital) Cajastur holds an equivalent put oplian on these shares over EDPR EU The price of exercising these on inesment book valuation process The optians can be exercised between 1 January 2012 and 1 January 2013, inclusively.

• EDP Renovation its subsidiary EDPR EU, holds a call opinn over Copstur for 51% of nterest held by Criastur in the companies Souvageons, Le Mee and Pette Piece Cajastur holds an equivalent put aplies oner EPR EU The price al exercising these oplicas will be determined under an messment bank valuation process The options can be exercised between 1 January 2014 and 31 December 2014

• EDP Renovaves, Ihraugh its subsidian Venco S.L, holds a call option over Jorge, S.L. for 8.5% of interest held by Jorge, S.L. on company "Apinel Aplicaciones industrioles de energins lines of exercising hese options is 900 thousond Euros. The option can be exercised when Jorge, S.L abruin the licenses to amplify the windbirms "Dehesa del Cascola" and 130 days after he natification of the suscensive condition with o limil date of 8 April 2014

• EDP Renavises, hrough its subsidiary EDR EU, holds a call oplion over Capciso on companes Carbera and Villbo' 149% of share capital).

• EDP Renaviseis holds, hrough its subsidian at remoning 15% af the share captal of EDPR Italia, with an exercise price bossed on an independent process evaluation conducted by an independent expert in Nature, Sr.I. hads a put option for 15% of the share capital of EPPR Malla, whose exerces arice over 85% of market value of participation (see nale 34) The exercise period of the options is 2 years after occurence of ane af the following events:

• Fifth onniversary of the execution of the shareholders agreement (27 January 2015);

• When EDP Renavaveis ttaly able to build, develap and operate 3.50 MW in Italy.

• EDP Renovéreis, thraugh is subsition aver the renain stareholders of Re Plus MPG. Gallieg and Gan Partners) for 10% of its share capital The price of exercising these aptions is 7,500 thousand be execcied (i) it a chonge acur in the sharehading stucture of he remain sharehaders of Re Plus and fil always before the last praject starts in operation

• EDP Renovéveis, through its subsidiary EDPR EU, halds o pur apital of Row, aver the cher shoreholders The exercuse price is 80% of equily volve with a cap of 5,000 thausond Euros The earlier of il two years tollowing the beggining at construction date or ii) 31 December 2019

38. Related parties

The number of shares held by company officers as at 31 December 2010 are as fallows:

	31 Dec ZVIV	31 Dec ZUUY
	N.º of shares	N.º of shores
Executive Board of Directors
António Luis Guerra Nunes Mexia	4.200	4,200
Ana Maria Machado Femandes	1.510	1,510
Nuno Maria Pestana de Almeida Alves	5.000	5.000
António Fernanda Melo Martins da Casta	1.480	1,480
Francisco José Queiraz de Barros de Lacerda	620	620
Joãa Manuel de Mello Franco	380	380
Jorge Manuel Azevedo Henrigues das Sanlos	200	200
José Silva Lopes	760	760
Jasé Fernando Maia de Araujo e Silva	80	80
Joãa Jasé Belard do Fanseca Lopes Raimundo	840	840
	15.070	15.070

The members of Board of Drechrs of EDP Renovated or the parent company has knowledge of any confici all nieresly included in the article 22° of "Ley de Sociedades Anonimas" (Spanish Public Companies" Law)

The boord members of the parent company, compling with the sparish Companes Act, declared that they and reloted porfes to them have nat exercised positions of respansability in complementary octivity of EDP Renovises Group porent company, and they do not hove ever ced by their own ar through hird entitles any active or complementary of EDP Renoventory of EDP Renovivels Group porent company, with the following exceptions:

Name of Board member	Company	Position
Antónia Luis Guerra Nunes Mexia	EDP - Energias de Portugal, S.A	Chairpersan af the Executive Baard af Directors
	EDP - Energias da Brasil, S.A.	Chairperson of the Board af Directors
	EDP Energias de Portugal, S.A. Sucursal en España	Permanent Representative
	EDP Finonce BV	Representative
Ana Maria Mochado Femandes	EDP - Energias de Portugal, S.A.	Director
	Energias do Brasil, S.A	Director
	EDP Renewables Europe, S.L.	Chairperson af the Board of Directors
	Horizon Wind Energy, LLC	Chairpersan of the Board of Directors
	EDP Energías de Portugal, S.A. Sucursal en España	Permanent Representative
	EDP Finance BV	Representative
	HidroelécInco del Cantábrico, S.A.	Director
	ENEOP - Eálicas de Portugal, S.A.	Chairperson of the Board of Directors
	EDP Renováveis Brasil, 5.A	Charperson of the Board of Directars
António Fernando Mela Martins da Costa	EDP - Energias de Portugal, S.A.	Directar
	EDP · Soluções Comerciais, S.A	Chairpersan of the Board of Directars
	EDP Internacional, S.A.	Chairpersan af the Board of Directors
	Hidroeléctrica del Cantóbrica, S.A	Directar
	EDP Energias de Partugal, S.A. Sucursal en España	Permanent Representolive
	EDP Finance BV	Representative
	EDP Ásio - Investimentas e Consultoria, S.A.	Choirperson of the Boord of Directors
	EDP- Asia Soluções Energélicas Limitada	Chairpersan af the Baard af Directors
	EDP Projectos, SGPS, S.A	Directar
Jaão Monuel Mansa Neto	Naturgās Energia, S.A.	Vive-Chairperson of the Board of
	EDP - Energios de Portugal, S.A.	Director
	EDP - Gestão da Produção de Energia, S.A.	Choirperson of the Board of
	EDP Gás, S.G.P.S., S.A	Chairperson of the Board of
	EDP Gos II, S.G.P S., S.A	Chairperson of the Boord af
	EDP Gás II), S.G.P.S , S.A.	Chairperson of the Board of
	EDP Investimentos S.G.P S., S.A.	Choirperson of the Boord of
	EDP Gás GPL - Comércio de Petróleo Liquefeito, S.A.	Chairman of Board of Directors
	EDP Gás com - Comércio de Gás Natural SA	Director

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Name of Board member Position Company EDP Finance, B.V. Representative Hidroeléctrica del Contábrico, S.A. Vive-Chairperson of the Board of Hɨdrocantábrɨca Energia , S.A.U Chairmon of Boord of Directors Eléctrica de la Ribera de Ebra, S.i. (Elebro) Chairperson of the Board of Sole Director Hidrocontábrico Gestión de Energia , S.A.U. Charman af Board of Directors Enagás SGPS, S.A EDP Internocional, S.A Choirman of Board of Directors Chairperson of the Board of Empresa Hidraeléctrica do Guadiana, S.A. EDP Energia Ibérica S.A. Director EDP - Energíos de Portugal, S.A. Sucursol en España Permanent Representative EDP Projectos,SGPS,S.A Director Balwerk - Consultadorio Económica e Participações, Nuna Maria Pestona de Almeida Alves Manager S.U., Lda Electricidade de Portugal Finance Company Ireland, Lt Director EDP - Energias de Portugof, S.A Director Director Energias do Brasil, S.A. Chairperson of the Baord of EDP Imabiliária e Participações, S.A Directors Chairperson af the Board af EDP Volor - Gestão Integrado de Serviços S.A. Directors Charperson of the Board of Directors Energia RE, S.A Representative EDP Finance BV Charperson of the Board of Sõvida - Medicina Apoiada, S.A Directors Choirperson of the Board of Directors SCS-Serviços Complementares de Soúde S.A Hidroeléctrica del Contàbrico, S.A. Director

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

100

1

100

100

Name of Board member	Company	Position
		Chairperson of the Baard of Directors
	EDP Estudos e Consultaria. S.A.
	EDP Energías de Portugal, S.A. Sucursal en España	Permanent Representative
Manuel Menéndez Menéndez		Chairperson at the Board of
	Naturgás Energía, S.A	Directors
	Enagas, S.A.	Permanent Representative
	EDP Renewables Europe, S.L.	Director
		Chairpersan of the Board of
	Hidroeléctrica del Contábrico, S.A.	Directors

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Additionally the board members have camunicated hit the share apital any other company with the some, sinilar a complementay activity af EDP Renaváveis Graup, with the following exceptions

Name of Board member	Company	Number of shares
António Luis Guerra Nunes Mexia	EDP - Energias de Portugal, S.A	31,000
	EDP - Energias do Brasil, S.A	1
Ana Maria Machado Fernandes	EDP - Energias do Brasil, S.A.	1
Antonia Femando Mela Martins da Costo	EDP - Energias de Portugal, S.A.	13,299
Jaão Manuel Mansa Neto	EDP - Energias de Portugal, S.A.	1.268
Nuna Maria Pestona de Almeida Alves	EDP - Energias de Portugal, S.A.	80,000
	EDP - Energias do Brasil, S.A	1
Antánio Fernando Mela Martins da Costa	EDP - Energias de Portugal, S.A.	13.299
Jaãa Manuel de Mella Franco	EDP - Energias de Portugal, S.A	4,550
	REN - Redes Energéticas Nacionais, SGPS, S.A	980
Jorge Manuel Azevedo Henriques dos Santos	EDP - Energias de Portugal, S.A.	2,379

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Remuneration of company officers

In occordance with the Company's by-laws, the members of the Board of Directors is proposed by the Normindion ond Remuneroion Committee to he Board of Directors on the basis of the averall of remeration culturized by the General Meeting. The Boord of Distibution and exacl amount paid to each director on the basis af this proposal

The remuneration attributed to the Executive Board of Directors in 2010 and 2009 were as follows:

	31 Dec 2010	31 Dec 2009
	Euros	FUTOS
CED:	592,939	246.857 *
Board members	565,000	508.750
	1.157.939	755.607

(*) Fram May to December (only tixed component)

On 4 November 2008 EDP and EDP Renovaveis signed an Executive Management Services Agreement

Through his controct, EDP provides management services including matters related to the day-to-day running of the Company Under this agreement EDP appaints four people to form EDPKs Executive Corporais pays EPP an amount defined by the Board of Directors Unit Agril 30th of 2009 the CEO remuneration was also cavered by this contract

Under his cantract, EDP Renavis is due lo pay an amount of 836 thausond Euros for management sences rendered by EDP thousand Euros in 2009)

Additionally, the remulers of the Management Team, delined as Key Management and excluding the Chief Steer, was in 2010 1,252 thausand Euras (2009- 1,642 thousand Euras)

As at 31 December 2010 and 2009 there are na autstonding loans and advances with campany afficers and key management

Balances and transactions with related parties

As at 31 December 2010, assets ond liabilities with related parties, are analysed as follows

	Assets Euro Odo	Uahllittes Euro 000	Nel Euro'000
EDP Energias de Partugal, 5.A	ব	15.079	-15.075
EDP Energias de Portugal, 5.A Sucursal en España (EDP Branch)	226.106	156.902	69,204
EDP Group companies	45.169	2.803.263	-2.758.094
Hidrocantábrico Group campanies	48.498	2.017	46.481
Associated companies	132,535	2 266	130,269
Jointly controlled entifies	7.239	840	6.399
Other	757	2,733	-1,976
	460.308	2,983,100	-2,522,792

Lightities includes essemially laans ablained by EDP Renavaveis from EDP Finance BV in the amount of 2,799,548 thausand Euras

As at 31 December 2009, assets and liabilites with related parties, are anolysed as fallows

	Assets Euro'000	Uabliftes Euro'000	Net Euro 000
EDP Energias de Porlugal, S.A.	11,375	5,475	5,900
EDP - Energias de Portugal, S.A. Sucursol en España (EDP Bronch);	59,294	13.662	45.632
Graup EDP companies	47.872	2.137.046	-2,089,174
Hidrocantabrico Group companies	18.894	1.493	17,401
Associated companies	111.277		11,277
Jaintly contralled entilies	7.742	840	6.902
Other		239	-239
	256,454	2,158,755	-1.902.301

Transactions with related parties for the year ended 31 December 2010 are analysed as follaws

	Operating income Euro'000	Financial Income Euro'000	Operating expenses Euro'000	Anancial expenses Eura'000
EDP Energias de Portugal, S.A.	11.664	2,332	-2,929	-3.053
EOP Energias de Parlugal, S.A. Sucursal en España (EDP Branch)		3.015	-୧ ବିବିନ୍ଧି	-1,438
EDP Group companies	138,124	756	-3.217	-140,074
Hidrocantábrico Graup campanies	249,062		-4.336
Associated companies	1,226	2.971
Jointly contralled entities	644	4,710
Omer	5,702	୧୧3	-99
	406.422	14,447	-17.550	-144.565

Notes to the Consolldated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Transactians with related parties for the year ended 31 December 2009 are analysed as fallows.

	Operating Income Euro 000	Anandal income Euro 000	Operaling expenses Euro'000	Financial expenses Euro 000
EDP Energias de Partugal, 5.A	23.292		-3.500	-700
EDP Energias de Partugal, S.A. Sucursal en España (EDP Branch)		11.503	-9,233	-37,558
EDP Group companies	120.449	101	-3.853	-43.592
Hidrocantábrico Group campanies	158.148		-4,804	-51
Assaciated companies	1.094	2.191	-449
Jaintly controlled entifies	615	3.898
	303 598	17.693	-21.839	-81.901

With the pyrose of hedging the foreign exchange in the company and Group accounts of EDP Renovéws and in the company accounts of EDP Borch, he EP Group settled a CRS in USD and EDP Renavives, At each reporting date, his CRS is readyed to is market volue which caresponds to a spat toreign exchange revaluation , resultion of the investment in EPDR NA and at the USD external financing. As a 131 December 200, the amount payoble by EDP Renaveis to CDP Branch related to 144,049 thousand Euros (3) December 2009: (268 thousand Euros) (see note 34 and 36)

As par of its operational activities, the EPP Rentyeis in forur at cerain suppliers and in connection with renewable energy contracts Usudly, hese guarantees are aranted by EDP, S.A., hrough EDP 31 December 2010, EDP, S.A. and Harocanbibrio graned financial (57,95) housand Euros, 31 December 2009: 31.14 thausand Eural ond apply 1 thousand Evas, 31 December 2009: 588,660 thousand Euros purcares in tavau of EDR EU ond EDPR NA The operational gurantees are issued by EDPR EU and EDPR NA in relator to the occuisition of propenty, planl and equipment, supply agreements, turbines and energy contracts (Power purchase agreements) (see note 37)

In the narmal course of its acking to business transactions and aperations and aperations based an narmal market conditions with related parlies

The Company has no pension or life insurance obligations with its tormer ar current directors in 2010 or 2009

39. Foir value of financial assets and liabilities

For value of financiol instruments is based, whenever ories Otherwise, for value is delemined through internal models, which are based on generally accepted cosh flow discounting techniques and option valuation models ar through quations supplied by third parties

Non-stondard natuments may requre aller consider ther characters and the generally accepted mattel procices applicable lo such nshuments. These models are developed consides that affect the underlying instrument, namely jield curves, exchange rates ond volofility to tors.

Market data is obtained tram generally accepled suppliers of financial dato (Blaamberg and Reulers)

As at 31 December 2000 and 2009, the following toble presents the interest and which the Graup is expased These intess were used as the base for the fair value calculations made through internal models referred above

		31 Dec 2010 Currencies
	EUR	USD	હર્શ	EUR	USD	BRL
3 months	1 01%	0.30%	10 90%	0 70%	0 25%	8 74%
6 manths	1 23%	0.46%	11.61%	0 99%	0.43%	9 22%
9 months	1 37%	0 61%	11 90%	1.13%	0.77%	9.87%
l yegr	1 51%	0 78%	12 04%	1.25%	0 98%	10 50%
2 years	1.56%	0 79%	12.27%	1.88%	1.35%	11 86%
3 years	189%	1.26%	12.15%	2.28%	2.00%	12 43%
5 years	2 49%	2.17%	11 95%	2,81%	2.97%	12.79%
7 years	2.93%	2.83%	11 85%	3.22%	3.48%	13.10%
10 years	3.32%	3 41%	11 90%	3.59%	3 93%	13.31%

Non-lished equity instruments, far which a relieves is not available elfter by intend models or extend providers, are ecognized of heir historical cost.

Avalloble for sale financial instruments and financial assets at foir value through profit or loss

Listed financial instruments are recognized at fin value prices. The financial instruments for which relioble for value estinates are not valiable, are recorded in the balance sheet at their fair value inote 191.

Cash and cash equivalents, trade receivables and suppliers

These Institutions include mainly shart the mail asses and lightines. Given the reporting dote. Heir bock values are not significantly different from their foir values

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Anancial debt

The fair value of the financial through intend models, which are bosed on generally occepted cosh flow discounting techniques. At the eparing date, the carying anount of floating rate lanns is approximated to really the intercompany loans granted by EP Group, their in vale is obtained through internal models bosed on generally accepted discount rates ond forward interest rotes were based on the narket interest rate curves and on the exchange rates disclosed on note 28.

Derivative financial instruments

All derivatives are accounted of their ralee. For those which argarized morkers, the respective market process used for over, bri value is estimated through the use of internal most flow discounting techniques and opfion madels generally accepted by the markel, or by deater price quatations.

CIRS with EDP Branch (note 37)

With the pupose of hedging the foreign exchange in the ne' investment in EDPR N4, the Group entered mto a CRS in USD and I This finonciol deivalie is presented on the balon, which is estimaled by discunling the prajected USD and EUR cash flows The discount rotes ond forward interest rates were bosed on the interest a above ond the USD/EUR exchange rate is disclosed an note 28 See also notes 13, 23 and 27.

The fair values of ossets ond liabilities as at 31 December 2010 and 2009 are analysed as follows

	31 December 2010			31 December 2009
	Carrying amount	Fair walue	Oifference	Carrying amount	Fair value	Difference
	Euro 000	Euro'DOO	Euro DOO	Euro 000	Euro 000	Euro 000
Financial assets
Available for sale investments	18,380	18.380		12,630	12,630	-
Trade receivables	143,650	143,650	-	106.148	106,148
Debtor and ather assets	666.100	666,100	-	447,697	447,697	-
Derivative financial instruments	9,470	9,470		19,208	19,208	-
Financial assets at fair value through profit ar loss	35,744	35,744		37,103	37,103	-
Cash and cash equivalents (assets)	423,700	423,700		443,633	443,633
	1,297,044	1,297,044		1,066,419	1,066,419
Financial liabilities
Financial debt	3,533,590	3,386,458	-147,132	2,673,439	2,643,266	-30,173
Suppliers	654,794	654,794		695,001	695,001
Institutianal partnerships in US wind larms	1,644,048	1,644,048		1.353,612	1,353,612	-
Trade and ather payables	962,264	962,264		1,032,808	1,032,808	-
Derivative financial instruments	172,715	172,715		19,702	19,702
	6,967,411	6,820,279	-147,132	5,774,562	5,744,389	-30.173

The fair value levels used to valuate EDP Renovávers Group tinancial assets and liabilities are delined as follows

• Level 1 - Quoted prices (unaudiusted) in active morket for identical assets and Irabilities;

• tevel ? - Inputs ofter that quoted prices ncluded with the assel ar fibelity, either directly i.e as prices) or indirectly (i.e., deried from prices);

• Level 3 - Inputs for the ossets or liability that are not based an observable morket doto (unabservable inputs)

	31 December 2010		31 December 2009
	Level 1	Level 2	Level 3	level 1	level 2	Level 3
Financial assets
Available far sale investments			18,380			12,630
Trade receivables		143,650			106,148
Debtor and other assets		666,100			447,697
Derivative financial instruments		9,470			19,208
Financial assets at fair value through profit or loss	35,335	409		33,012	4,091	-
Cash and cash equivalents (assets)		423,700			443,633
	35,335	1,243,329	18.380	33,012	1,020,777	12,630
Anancial Ilablitties
Financial debt		3,386,458			2,643,266
Institutional partnerships in US wind farms		1,644,048			1,353,612	-
Trade and other payables		690,926	271,338		729,025	303,783
Suppliers		654,794			695,001
Denvalive financial instruments		172,715			19,702
		6,548,941	27,33B		5,440,606	303,783

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The movement in 2010 and 2009 of the financial assets and liabilities within tevel 3 are anolyzed was as follows:

	Available
		for sale Investments		Trade and other payables
	31 Dec 2010	31 Dec 2009	31 Dec 2010	31 Dec 2009
Balance at the beggining of the year	12,630	12,501	303,783	258,925
Gains / (Lasses) in other comprehensive income	-034	912
Purchases	6.684		36.584
Fair value changes			-69.029	44.858
Tronsters inta / out af Level 3		-783
Balance at the end of the year	18.380	12.630	271,338	303,783

The trode and other payables with liabilities arising from aplians with non cantolling interests (see nate 34)

40. Relevant subsequent events

No relevant subsequent events occurred until 24 February 2011.

41. Recent accaunting standards and Interpretations used

The new standards and interpretion that are alleddy effective and that the EPP Renovers Group has applied an its Cansalidated Financial Statements can be anolyzed as follows.

IAS 39 [amendment] - Recognition and Measurement: Eligible Hedged Nems"

The Group did not ablain ony significant impact from the adoption of this amendment.

IFFS 1 (amendment) - "First fire adoption of the International Reporting Standards" and JAS 27 (amerations) - "Consolidated and Separate Financial Statements"

The Group did not obtain ony significont impact trom the adoption of this amendment.

IPRS 2 {amendment} - "Share-based Payments"

The Group does not have any share based payments

IFRS 3 (revised) - "Business combinations" and IAS 27 (amendment) - "Consolidated and Separate Financial Statements"

The Intending Standards Board (ASB) issued, in January 2008, the revised (PSS 3 - "Business combinations", with on effective does of manufaction for the exercises beagining on or after 1 July 2009, being its early adoption allowed

The moin imports of these stardards correspond if the portial acquisitions, in which the ron controling interests previously denominated by minatiy nteest could be messured at fair relue twhich of the googlill althibutable to the nap controlling interests ar as a garlion athiburable to he non contaling interests of acquired easyly required; fit the step acquisitions the new ples ablice, when the appyll is calculed, to he revolualion popinst newls, of the fair your controlling interest hed are yously in the acquisition that he familian control. (if book the costs directived to to the acquisition of a subsidion in the charges of the shareholdings in subsidiaries that do not result in loss of control. Inch bearns to be recognised as equity movements

Additionally, from the amendment to AS 27 esults the accumulated losses on a suppliary began to be anything interests (regariling of neadie non controlling marests) and in a subsidiary discover is messured at for volved at fair volve delemined in the date of the disposal.

The Group has adopted the revised IAS 27 for the acquisitions mode from 1 January 2010 anwards

IFRIC 12 - "Service Concession Arrangements"

The Group did not obtoin any significant impact from the odoption of this amendment

IFRIC 15 - "Agreements for the Canstruction of Real Estate"

The Group did not ablain any significant impocl from the adoption of this amendment

IFRIC 16 - "Hedges of a Net Investment in a Forelan Operation"

The Group did not obtain any significant impact from the adoption of this amendment

IFRIC 17 - "Distributions of Non-Cash Assets to Owners"

The Group did not obtain ony significant impoct from the adaption of this amendment

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

IFRIC 18 - "Transfers of Assets from Customers"

The Group did not obtain any significant impact from the adoptian of this amendment

Annual Improvement Project

The IASB publicated the Annual Improvernent Project that changed the following standards

• · Changes to IAS 7 "Presentation of Financial Statements ":
• · Changes to IAS 7 "Statement of Cash Flows ":
• · Changes to IAS 17 "Leases":
• · Changes to IAS 36 "Impairment of Assels",
• · Changes to IAS 38 "Intangible Assels";
• · Changes to IAS 39 "Financial Instruments Recagnitian and Measurement"
• · Changes to IFRS 2 "Share based payment";
• · Changes to IFRS 5 "Non-current Assets Held for Sale and Discontinued Operations"
• Changes to IFRS 8 "Operating segments";
• · Changes to IFRIC 9 "Reassessment al Embedded Derivatives";
• · Changes to IFRIC 16 "Hedges of a Net Investment in a Fareign Operation"

The Group has alsa decided against the early application af the following standards and interpretations

• · IAS 24 Revised] "Related Party Disclosures"; (For exercises beggining after 1 January 2010)
• · IAS 32 Revised) "Financial Instruments Presentation"; (Far exercises beggining after 1 January 2011)
• · FRS 1 JAmended) "Limited Exemption from Camparative FPS 7 Disclosures for First-lime Adopters"; for exercuses begginng after 30 June 2000/
• · IFRS 8 (Revised) "Operating Segments"; (For exercises beggining after 1 January 2011)
• · IFRIC 14 (Amended) "Prepayments of a Minimun Funding Requirement", Far exercises beggining ofter 1 January 2011)
• · IFRIC 19 JAmended) "Extinguishing Financial Liabilities With Equity Instruments" (For exercises beggining after I July 2010)

The following stondords and internet his been vel endating he mac of the adaption of the adaption of these standards and interestrans and did not expect any significant impact

· IFRS 9 - "Financial Instruments", [Far exercises beggining after 1 January 2013)

• · IFRS 7 (Amended) "Financial Instruments: Disclosures", (Far exercises beggining after 1 July 2011)
• · Annual Improvement Praject (issued in May 2010);
• · IAS 12 IAmended) "Deferred tax: Recovery of Underlying Assels", (For exercises beggining after 1 January 2012)
• IFRS i (Amended) "Severe Hyperinfotion and Removal of Fixed Dates for First-Time Adapters". (For exercises beggning after ) July 2011)

The Group is evaluating the impact from the adoption of these standards and interpretations

42. Enviranment Issues

Expenses of enviranmental nature are he expensed to avoid, reduce or repair damages of on environmental nature had result from the Graup's normal activity

These expenses are booked in the income stolement of they qualify to be recognised as an asset, as according to US 16

During the period, the environmental expensed in the income statement refer to casts with the environmental management plan are onclused as follows

	Group 31 Dec 2010 Eura'000	Group 31 Dec 2009 Eura'ODO
Environmental Investment	1,802	4.500
	1.802	4.500

The development of an Environment System (EMS) was stated in 2008 The pupose of the EMS is to simulate good entronmental procities focused on pratecting natural resources and spill management, with a commilinent to cantinuous impravement of environmental performance

In Europe, EDP Renavavis renewed certification obloined for thirty three at its wind forms (958 MW) in operation under the ISO 1400)

As releried in occaunting policy 20), the Group has for dismanling and decommissioning of property, plant ond egal ar contractual abligation exists to decommsion those assets at the end of their useful lifes Cansequently, he Group has boxed provisions for propenty, plor ond equipment related to election for the responsibilities of respring sites ond lond to its original condition, in the amount of 53,156 Inausands of Euras as at 31 December 2010 163.956 thousands of Euros on 31 December 2009) Isee nate 321

43. Segmental reporting

The Group generates energy from renewoble segments which are the Graup's strategic business units, Portugol, Spain, Res of Europe and USA. The strategy business units have conspit zanes, and are monged separately because heir charcchisits are quie different mainy as a consequence of differen regulations in each of the strategic business units, the Group's CEO reviews internal management eports on of least a quarterly basis

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Other operations include the EPR 8R subgroup companies and remain activites (Bomass and mini-hydric generation plants) nat included in the repartable segments. Nane of these segments meets any of the quantitutive thresholds for determining reparable segments in 2010 ar 2009

The accurities of the rearrable seaments are the same as described in note 3 Information the results of each readed in Annex 2 Performance is neasured based an seamer or of the intend management reages that are reviewed by the Gray is crop is croll is used to measure performance as management believes that is the mast relevant in evaluating the results of certing segments relative to ther entiles hat aperate within these industries Inter-segment pricing is defermined on an arm's length basis

A business seppent is an identifiable component of the Group, aimed of service, or a group of elected products or services, one I l s sublect to risks and relurns that con be distinguished from thase of other business seaments

A geogrophical segment is an identifiable component of the Group, aimed at a senice, or a group of related products ar services, whitin a specific ecanomic envronment, and it is subject to risks and returns that operate in other economic environments

The Group generates energy from renewoble sources in several locations and its activity is managed based on the following business segments:

• Portugal Includes essentially the EOP Renovoveis Portugol Group companies; .
• Spain Includes the EDPR EU Group componies that aperate in Spain, �
• Rest of Europe Includes the EDPR EU Group campanies that aperate in France, Poland, Belgium, Romania and Italia; �
• United States of America includes the EDPR NA Group componies
• Other Includes the EDPR BR Group companis ond remoin activites (Bamoss and min-hydne generation plans) not included in the business segments.

The segment "Adjustments" carespords to the onulation of financial investments in subsitiaries of EDPR Group ond to the consolidation and intra-segment adjustments.

Segment definition

The amounts reported in each business segment result has absidiaries and business units defined in each segment permeter and the elimination at the intro-segment transactions

The statement af firancial position of each subsitions unit is delemined based in the amounls booked directly in the subsidiories that compass the segment, including the intra-segment anullations, withaul any inter-segment allacation adjustment.

The income storent for each segment is determined booked directly in the subsidaties financial strements and business units, adjusted by the intra-seaments anullatians

44. Audit and non audit fees

KPMG has audiled the consaldoted onnual accounts of EDP for 2010 and 2009. This campany and the other related entitles and persons in occadones with Law 19/988 of 12 July, have invoced by the year ended in 31 December 2010 and 2009, fees and expenses for arabesting to the fillewing detal lamounts in thousand Euros)

31 December 2010
Portugal	Spoin	Brasil	United States of America	Other	Total
193	600	સ્તે	728	221	1,901
210			174		449
403	742		જેવી	234	2,350
	17	-	481		498
					1
1	17		481		499
404	759	રત	1,383	234	2,849
Portugal	Spain	Brosil	United States of America	Other	Total
74	780	36	694	218	1,802
	100		202		316
74	880	રૂર	866	232	2,118
12	337		666	6	1,021
-				-
	337		୧୧୧		1,021
80	1,217	રે રેણ	1,562	238	3,139
	12	52	69	31 December 2009	13 14 6

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

ANNEX 1

The Subsidiary Companies consolidated under the full consolidated method, as of 31 December 2010, are as follows

Subsidiaries Companies	Head Office	ಳ Cantributed	ಕ Vollng rights	Auditor
Group's parent holding company:
EDP Renovoveis, S.A	Ovedo	100.00%	100.00%	KPMG
Parent Company:
EDP Renewables Eurape, S.L.	Ovieda	100 00%	100.00%	KPMG
Electricity business Portugal
EDP Renaváveis Portugal, S.A.	Parto	100.00%	100 00%	KPMG
Eblica da Alagoa, S.A.	Arcas Valdevez	ెర్లి రిదిళ	చెరి రెత్తిశ	KPMG
Eòlica de Monlenegrela. Lda	Vila Pouca de Aguiar	50 10%	50. 10%	KPMG
Eálica da Serra das Alturas, S.A.	Boticas	50 10%	50.10%	KPMG
Malhadizes - Energia Ealıca, 5.A	Parta	100.00%	100 00%	KPWG
Electricity business Spain
Acompo Arias, 5.L	Zaragoza	98 19%	98.19%	KPMG
Agrupación Eölica SLU	Zaragoza	100.00%	100 00%	KPMG
Parque Eólico Plana de Artajona, SLU	Zaragoza	100.00% 75 83%	100.00%	Nol oudited
Compañío Eólica Campo de Borja, S.A	Zoragoza		75.83%	KPMG
Cio Eléctrica de Energios Renovables Alternativas, SAL Ceprastur AJE ·	Zorogoza Oviedo	100.00% 56.76%	100 00% 56 76%	Deloitte Nol oudited
Corporacian Empresarial de Renavables Altemativas, SLU	Zorogoza	700.00%	100.00%	Nol oudited
Parc Eòlic de Coll de Maro, 5.L	Barcelona	60.00%	100.00%	KPMG
D.E. Almarchol. SAL .	Códiz	100.00%	100.00%	KPMG
D E. Buenavista, SAL "	Códiz	100.00%	100 00%	KPMG
Desarrollos Catalanes Del Viento, S.L.	Barcelona	6000%	60.00%	KPMG
D E. de Corme, S.A *	La Coruño	100.00%	100.00%	KPMG
D.E. Dumbria, SAL *	Lo Coruño	100.00%	100 00%	KPMG
Desartollos Eblicos de Galicia, S.A *	Lo Coruña	100.00%	100.00%	KPMG
D E. de Luga, SAL ·	lugo	100.00%	100 00%	KPMG
Desarrollos Eólicas Promoción S.A.U *	Sevilla	100.00%	100 00%	KPMG
D.E. Rabosera, S.A * Desarrallos Eólicos, S.A. 4	Huesco Sevilla	95.00% 100.00%	95.00% 100 00%	KPMG KPMG
DE de Tarifa, SAL *	Codiz	100.00%	100 00%	KPMG
Ealica Don Quiple, 5.1 ·	Albacete	100.00%	100.00%	KPMG
Ealica Dulcinea, S.L. *	Albacete	100.00%	100.00%	KPMG
Eolica Alfoz, S.L.	Modrid	84 98%	84.98%	KPMG
Eälica Arlonzón, S.A. *	Modrid	77.50%	77 50%	KPMG
Eólica Compollono, S.A. *	Modrid	75.00%	75.00%	KPMG
Eneralivo, S.A. *	Sevilla	100.00%	100 00%	Nol oudiled
Ealica Fantesilva, S.L *	Coruña	100.00%	100 00%	KPMG
Hidroeléctrica Fuentermasa S.L. *	Oviedo	100.00%	100 00%	Nol oudited
Porques de Generoción Eólica, S.L.	Burgos	60 00%	60.00%	KPMG KPMG
Generociones Especioles 1. S.L Ceasa Promociones Eólicos, SLU	Modrid	100.00% 100.00%	80.00% 100.00%	KPMG
Subgrupo Veinco	Zaragoza Zaragoza	100.00%	100 00%	Nol oudited
Eolica Guadollebo, S.L	Sevilla	100.00%	100 00%	KPMG
Hidroeléctrica Gormoz S.A *	Salamanca	75.00%	75 00%	Nol oudited
lberio Aprovechamientos Eolicos, SAL	Zoragoza	100.00%	100.00%	KPMG
Investigación y Desarrallo de Energios Renavobles, S L.	Leán	ನಿಕೆ ನಿರ್ವಿಸಿ	ನ್ನಾಕಿಕ	KPMG
Industrios Medioambientales Rio Cornon, S.A. *	Madrıd	90.00%	90.00%	Nol audited
Eolica La Jonda. S L *	Modrid	100.00%	100 00%	KPMG
Eolico La Novica, S.L	Madrid	100.00%	100 00%	KPMG
Porque Eólico Los Confoles. SLU	Zarogoza	100.00%	100 00%	KPMG
Porc Eglic Molinors S.L.	Girona	54.00% 80.00%	90 00% 80.00%	Nat audited KPMG
Molino de Coragueyes, S.L. Porque Eólico Moniles de Costejón, 5.L	Zaragozo	100.00%	100 00%	Not audited
Musia I e Il "	Zaragazo Caruño	100.00%	100.00%	Not audited
NEO Energia Aragón 5 L	Madrid	100 00%	100.00%	KPMG
NEO Catolunyo. S L	Barcelona	100.00%	100.00%	KPMG
Neomoi Inversiones SICAV, S.A.	Madrıd	100 00%	100.00%	PWC
Parque Eblica Sonta Quiterio, S.L. *	Huesca	28.33%	58.33%	KPMG
Parque Eblica Belchite, S.L. *	Zorogoza	100 00%	100.00%	KPMG
Parques Eólicas del Cantábrico, S.A *	Quedo	100.00%	100.00%	KPMG
Parque Eblica La Sotonero, S.L. *	Zorogoza	64.84%	64 84%	KPMG
Parque Eòlica Altos del Valloya, 5.A	Madrid	୧। ୦୦%	6100%	KPMG

●

●

œ

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Subsidianes Companies	Head Office	8 Contributed	રે	Auditor
			Voling rights
Bectrictly business Spain
Ealica de Radana S.L *	Madrid	100.00%	100.00%	KPMG
Rasacal Cageneracian S.A *	Madrid	60.00%	60.00%	Nat audited
Siesa Renavables Cananas, 5.L. *	Gran Canaria	100 00%	100.00%	Nol qudited
Renovables Castilla La Mancha S.A *	Albacete	90.00%	90.00%	KPMG
Hidraeléctrica del Rumblar S.L *	Madrid	80.00%	80.00%	Nat audited
Eolica Sierra Avila, S.L. *	Madrid	89.99%	89 99%	KPMG
Sinae Inversiones Eólicas S.A *	Modrid	100.00%	100.00%	KPMG
Sotromal, S.A *	Soria	90.00%	90.00%	Not audited
Parc Eòlic de Torre Modrino, S.L.	Barcelana	୧୦ ୦୦%	100.00%	KPMG
Trolamientos Medioambientales del Narte, 5.A.	Modrid	80.00%	80 00%	Not audited
Sonla Quitena Energio, S.L.U. *	Zaragaza	100.00%	100.00%	Not audited
Bon Vent de Corbero, S.L	Barcelono	100.00%	100 00%	KPMG
Bon Vent de Vilalba, 5.1	Borcelono	100.00%	100.00%	KPMG
Porc Eòlic de Vilalba dels Arcs, S.L	Barcelono	60.00%	100.00%	KPMG
Aprofitoment D'Energies Renovobles de la Terra Alta, S.A.	Barcelona	48.70%	60.63%	KPMG
Porc Eolic Coll de la Garganta, 5.L	Borcelona	100.00%	100 00%	KPMG
Eólica Curiscao Pumor, S.A.	Modrid	100.00%	100 00%	KPMG
Desarrallas Eólicos de Teruel, S L	Zaragozo	21.00%	51.00%	Not oudited
Eólica Garcimuñoz, S.L.	Modrid	100 00%	100.00%	Nat audited
Energías Eólicas Lo Monchuelo, S.L.U. *	Madrıd	100 00%	100 00%	KPMG
Sierra de la Peña, S.A	Madrid Barcelona	84 90% 100.00%	84.90%	KPMG
Bon Veni de L'Ebre, S.L.	Barcelono	100.00%	100 00% 100.00%	KPMG KPMG
Parc Eolic Serra Valtorero, S.L.
Electrictly business France
Parc Eolien D'Ardennes, SARL	Elbeuf	100 00%	100.00%	Not oudited
Parc Eolien du Clas Botaille, SAS	albeul	100.00%	100.00%	Nol oudiled
Eolienne des Bocoges, SARL	Elbeuf	100.00%	100.00%	Nol oudited
Ealienne de Callengeville, SAS	Elbeuf	100.00%	100.00%	EXCO
CE Canel-Pant de Salars, SAS	Paris	100,00%	100.00%	KPMG
Parc Eolien des Langs Champs, SARL	Elbeul	100 00%	100.00%	Nal oudited
Ealienne D'Etolondes, SARL	Elbeul	100.00%	100.00%	Nol oudited
CE Gueltas Nayal-Pontivy, SAS	Polis	100.00%	100.00%	KPMG
Porc Ealien de Lo Helroye, SAS	Elbeul	100,00%	100.00%	EXCO
SOCPE Le Mee, SARL	Taulouse	100 00%	49 00%	KPMG
Porc Eolien de Mancheville, SARL	Elbeul	100.00%	100.00%	Nal audited
EDP Renewables France, SAS	Parıs	100.00%	100.00%	KPMG
C.E. Potoy, SAS	Paris	100.00%	100.00%	KPMG
Porc Eolien des Bocages, SAR	Elbeut	100.00%	100.00%	Not audited
50CPE Pelite Piece, SARL	Toulouse	100.00%	49 00%	KPMG
Plouvien Breiz, SAS	Camore	100.00%	100.00%	Deloitte
Porc Ealien de Roman, SARL	Elbeut Paris	100.00%	100.00%	Not audited KPMG
C.E. Sainl Barnobe, SAS	Elbeut	100.00% 100.00%	100.00% 100.00%	Not audited
Eolienne de Sougueuse, SARL	Toulouse	100.00%	49 00%	KPMG
50CPE Sauvageons, SARL	Paris	100.00%	100.00%	KPMG
C.E. Segur, SAS Centrale Eolienne Neo Truc L'Homme, SAS	Paris	100.00%	100.00%	KPMG
Porc Ealien de Varimpre, SAS	Elbeut	100.00%	100.00%	EXCO
Porc Eolien des Volines, SAS	Elbeut	100.00%	100.00%	EXCO
Mardelle, SARL	Toulouse	100.00%	100.00%	Not audited
Quinze Mines, SARL	Toulouse	100.00%	4900%	Not audiled
Vallée du Moulin, SARL	Toulause	100.00%	100.00%	Not audited
Electrictly business Poland
Elektrawnia Wiatrowo Kresy I SP ZOO	Warsow	100.00%	100.00%	Not audited
EDP Renewables Polsko SP ZOO	Warsow	100.00%	100.00%	KPMG
Relax Wind Park ! 5P ZOO	Warsow	96.43%	96 43%	KPMG
Relax Wind Park II SP ZOO	Warsow	51.00%	51 00%	Not audiled
Relax Wind Park III SP ZOO	Warsow	100.00%	100.00%	KPMG
Relax Wind Park IV SP ZOO	Warsow	51.00%	21 00%	Not audited
Farma Wiatrowa Bodzanow SP ZOO	Warsow	100.00%	100.00%	Nal audited
Karpacka Malo Energelyko SP ZOO	Warsow	100.00%	100.00%	Not ondiled
Forma Włotrowa Starozreby SP ZOO	Worsow	100.00%	100.00%	Not audited
Forma Motrowa Wyszagrod SP ZOO	Warsow	100.00%	100.00%	Not oudiled
Electricity business Beiglum
	Louvain-la-Neuve	70.00%	70.00%	KPMG
Greenwind S.A.

ээ

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Subsidiaries Companies	Haad Office	8 Contributed	శా Volling rights	Auditor
Electricity business Bruzil
EDP Renováveis Brasil, S.A	São Paulo	55 00%	55.00%	KPMG
Central Nacional de Energia Eólica, S.A (Cenaeel)	São Paula	55.00%	100.00%	KPMG
Elebrás Prajectos, Urda	São Paulo	55 00%	100.00%	Not audited
Electricity business Romania
Cemavoda Power SRL	Bucharest	85.00%	85.00%	KAMG
EDP Renewables Romania, S.R.L.	Bucharest	85.00%	85.00%	KPMG
Electricity business - Holland
Tarcan, B V	Amsterdam	100.00%	100.00%	KPMG
Electricity business - Great Britain
EDPR UK Limited	Carditt	100.00%	100.00%	KPMG
Moray Offshare Renewables Limited	Carditt	75.00%	75.00%	KPMG
MacColl Offshore Windfarm Umited	Cardiff	7500%	100 00%	KPMG
Stevenson Offshore Windform Limited	Carditt	75.00%	100.00%	KPMG
Telford Offshare Windform Limited	Carditt	7500%	100 00%	KPMG
Electricity business - Haly
EDP Renewables Halia, S.R.U.	Varese	100.00%	100 00%	KPMG
Repano Wind S.R.L.	Varese	100.00%	100 00%	KPMG
Re Plus - S.R.L.	Varese	80.00%	80.00%	KPMG
Electricity business - Canada
EDP Renewables Canada, Ltd	Ontoria	100.00%	100 00%	Nal audited
Parent Company:
				KPMG
Horizan Wind Energy LLC	Texas	100.00%	100.00%
Electrictly business USA
Wind Turbine Prometheus, LP	Califamia	100.00%	100.00%	Nal audited
Cloud Caunty Wind Farm, LLC	Kansas	100.00%	100.00%	KPMG
Whitestone Wind Purchasing, LLC	Texas	100.00%	100 00%	Nol audited
Blue Canyon Windpawer II, LLC	Oklahama	100.00%	100.00%	KPMG
Blue Canyon Windpower V, LLC	Oklahama	100.00%	100 00%	KPMG
Horizan Wind Energy Internotianal, LLC	Texas	100.00%	100 00%	Nat audited
Proneer Praine Wind Form I, LLC	lowo	100.00%	100.00%	KPMG
Sagebrush Pawer Partners, LLC	Washington	100.00%	100.00%	KPMG
Telocase) Wind Power Partners, LLC	Oregan	100.00%	100 00%	KPMG
High Troil Wind Farm, LLC Morble River, LLC	Alionois	100.00% 100.00%	100.00% 100 00%	KPMG
Rail Splitter, LLC	New York Allianois	100.00%	100 00%	Nol oudified KPMG
Blackstone Wind Form, LLC	Alionois	100.00%	100.00%	Nal audited
Araostoak Wind Energy LLC	Moine	100.00%	100 00%	Nol audited
Jericho Rise Wind Form, LLC	New York	100.00%	100 00%	Nal audited
Modison Windpower, LLC	New York	100.00%	100000%	KPMG
Mesquite Wind, II.C.	Texas	100.00%	100.00%	KPMG
Martinsdole Wind Farm, LLC	Calorado	100.00%	100 00%	Nol oudited
Post Oak Wind, ILC	Texas	100.00%	100.00%	KPMG
BC Maple Ridge Wind, LLC	Texas	100.00%	100 00%	KPMG
High Proirie Wind Farm II, LLC	Minnesala	100.00%	100.00%	KPMG
Arlinglan Wind Pawer Project, LLC	Oregon	100.00%	100 00%	KPMG
Signal Hill Wind Power Project, ILC	Calorada	100.00%	100 00%	Nal audited
Tumbleweed Wind Pawer Project, LLC	Calorado	100.00%	100 00%	Nal audited
Old Troil Wind Form, LLC	Illionais	100.00%	100 00%	KPMG
OPQ Property, LLC	Illionars	100.00%	100.00%	Nat audited
Meadow Lake Wind Farm, LLC	İndiana	100.00%	100.00%	Nat audiked
Wheatlield Wind Power Project, U.C.	Oregon	100 00%	100 00%	Not oudiled
2007 Venta , LLC	Texas	100 00%	100 00%	KPMG
2007 Vento II, LLC	Texas	100.00%	100.00%	KPMG
2008 Vento III, LLC 2009 Vento IV, LLC	Texas Texas	100.00% 100 00%	100.00% 100 00%	KPMG KPMG
2009 Vento V. LLC	Texns	100 00%	100 00%	KPMG

64

C

C

●

C

●

œ

œ

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Subsidiaries Companies	Head Office	ಳಿ Contributed	ಕ್ಕೆ Voling rights	Auditor
Electrictly business USA
2009 Venla VI, U.C.	Texas	100.00%	100.00%	KPMG
2010 Vento VII, LLC	exas	100.00%	100.00%	KPMG
2010 Vento VIII, LLC	Texas	100.00%	100.00%	KPMG
2010 Venla DX, LUC	Texas	100.00%	100 00%	Nal audiled
Horizan Wind Ventures I, LLC	Texas	100.00%	100.00%	Not audited
Harizan Wind Ventures II, LLC	Texas	100.00%	100 00%	Nat audiled
Horizon Wind Ventures III, LC	Texas	100.00%	100 00%	Not oudited
Horizon Wind Ventures VI, LC	exas	100 00%	100.00%	Not audiled
Horizan Wind Ventures VII, LLC	Texas	100.00%	100.00%	Not audited
Horizon Wind Ventures VIII, LLC Horizon Wind Ventures IX, ILC	Texas Texas	100.00% 100.00%	100.00% 100.00%	Not audited Not oudited
Horizon Wind Ventures IB, LLC	Texas	100.00%	100.00%	Not oudited
Horizon Wind Ventures IC, LC	Texas	100.00%	100.00%	Nal audited
Clinton County Wind Farm, LC	New York	100.00%	100.00%	Nal audited
BC2 Maple Ridge Haldings, LLC	lexas	700.00%	100.00%	Not audited
Cloud West Wind Project, LLC	lexas	100.00%	100.00%	Not audited
Five-Spot, LLC	Texas	100.00%	100.00%	Not audited
Alabama Ledge Wind Farm, LLC	Texas	100.00%	100.00%	Not audited
Antelape Ridge Wind Power Praject, LLC	Texas	100.00%	100.00%	Not audited
Arkwright Summit Wind Fam U.C.	Texas	100.00%	100.00%	Not audited
Ashford Wind Farm, WC	Texas	100.00%	100 00%	Nol audited
Alhena-Weslan Wind Power Praject, LLC	Texas	100.00%	100.00%	Not audited
Black Prairie Wind Farm, LLC	Texas	100.00%	100 00%	Not audited
Blackslane Wind Farm II, LLC	Texas	100.00%	100 00%	Not audited
Blackstone Wind Farm III, LLC	Texas	100.00%	100 00%	Nat audited
Blacksfone Wind Farm N, LLC	lexas	100.00%	100.00%	Not oudited
Blackstone Wind Farm V, LLC	Texas	100 00%	100.00%	Not oudited
Blue Canyon Windpower III, LLC	Texas	100 00%	100.00%	Nat audiled
Blue Canyon Windpower IV, LC	Texas Texas	100 00% 100.00%	100 00% 100.00%	Nat audiled Nol audited
Blue Canyan Windpawer VI, LLC Broadlonds Wind Form II, LLC	Texas	100 00%	100 00%	Nol oudited
Broadlands Wind Form III, LLC	Texas	100 00%	100.00%	Nol audited
Braadlonds Wind Form, UC	Texas	100 00%	100.00%	Not oudited
Chaleougoy River Wind Farm, LLC	Texas	100 00%	100.00%	Nal oudited
Crapsey Ridge Wind Farm, LLC	Texas	100 00%	100.00%	Nal audited
Crossing Trails Wind, Power Praject, LLC	Texas	100 00%	100.00%	Not oudited
Dairy Hills Wind Form, LLC	exas	100 00%	100.00%	Nal audited
Diamand Power Partners, LLC	Texas	100.00%	100.00%	Nol audited
Ford Wind Form, WC	Texas	100 00%	100.00%	Not audited
Gulf Coast Windpower Monagement Company, LC	Texas	100.00%	100.00%	Not audited
Rising Tree Wind Form, LLC	California	100 00%	100.00%	Not audited
Horizon Wind Energy Northwest VII, LLC	Texas	100.00%	100.00%	Not audited
Horizon Wind Energy Northwest X, LLC	Texas	100 00%	100.00%	Not audiled
Horizon Wind Energy Northwest XI, LLC	Texos	100.00%	100.00%	Not audited
Harizon Wind Energy Panhandle I, LC	Texas Texas	100.00%	100.00%	Not audited
Horizon Wind Energy Southwest , LLC	Texas	100.00% 100.00%	100 00% 100 00%	Nol audiled Nol audiled
Horizon Wind Energy Southwest II, LLC Horizon Wind Energy Southwest III, LLC	Texas	100 00%	100 00%	Not audited
Harizan Wind Energy Southwest IV, LLC	Texas	100.00%	100.00%	Not audiled
Horizan Wind Energy Valley I, LLC	Texas	100.00%	100.00%	Not audited
Horizan Wind MREC lowa Partners, LLC	Texas	100.00%	100 00%	Nat audiled
Horizon Wind, Freeport Windpower I, LLC	Texos	100.00%	100 00%	Not audited
Juniper Wind Power Partners, LLC	Texas	100.00%	100.00%	Not oudited
Lexington Chenoa Wind Farm, LLC	Texos	100.00%	100 00%	Nat audited
Mochias Wind Farm, LLC	Texos	100.00%	100.00%	Nat audited
Meadow Lake Wind Farm II, LLC	Texos	100.00%	100 00%	KPMG
New Trail Wind Farm, LLC	Texas	100.00%	100.00%	Not audited
North Slope Wind Farm, LLC	Texas	100.00%	100.00%	Not audited
Number Nine Wind Farm, LLC	Texas	100.00%	100.00%	Not audited
Pacific Saufhwest Wind Farm, LLC	Texas	100.00%	100 00%	Nol oudited
Pioneer Prairie Wind Form II, LLC	Texas	100.00%	100 00%	Nol audited
Buttalo Bluff Wind Farm, LLC	Wyoming	100.00%	100.00%	Not audited
Soddleback Wind Power Praject, U.C.	Texas Texas	100 00% 100.00%	100 00% 100.00%	Nol oudited Nol oudited
Sordinia Windpower, LLC Turtle Creek Wind Farm, LLC	Texas	100.00%	100.00%	Nol audited
Western Trail Wind Project I, U.C.	Texas	100 00%	100.00%	Nal oudiled
Whistling Wind WI Energy Center, LLC	Texas	100 00%	100.00%	Nal oudiled
Simpson Ridge Wind Farm, LLC	Texas	100.00%	100.00%	Nal audited
Caos Curry Wind Pawer Praject, LLC	Texas	100 00%	100.00%	Nol audited
Horizan Wind Energy Midwest IX, LC	Texas	100 00%	100.00%	Nol oudited

65

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

	Head	1	1
Subsidiaries Companies	Опсв	Contributed	Vollng rigits	Auditor
Electricity business USA
Horizon Wind Energy Northwest I, LLC	Texas	100.00%	100.009	Not audited
Pelerson Pawer Partners, LC	Texos	100 00%	100.00%	Not audited
Pioneer Prairie Interconnection, LC	Texos	100.00%	100.00%	Not audited
The Nook Wind Power Project, LLC	Texos	100,00%	100.00%	Not audiled
Tug Hill Windpower, LLC	Texas	100.00%	100.00%	Not audiled
Whiskey Ridge Power Partners, LLC	Texas	100,00%	100.00%	Not audited
Wilson Creek Power Portners, LLC	Texos	100.00%	100.00%	Nol audiled
WTP Manogement Company, LC	Texas	100 00%	100.00%	Not audiled
Meadow Lake Wind Form, IV LLC	indjana	100.00%	100.00%	Nol audited
Meadow Lake Windfarm III, LLC	Indiano	100.00%	100.00%	Not audited
Lexington Chenoa Wind Farm II, LLC	Hingis	100 00%	100.00%	Not audited
Lexington Chenoa Wind Form III, LLC	Illinois	100 00%	100.00%	Not audited
East Klickitat Wind Power Project, LLC	Woshington	100.00%	100.00%	Not audiled
Harizon Wind Energy Northwest IV, LC	Oregon	100.00%	100.00%	Not audiled
Blue Canyan Wind Pawer VII, LLC	Oklahoma	100.00%	100.00%	Not audiled
Horizon Wyoming Transmission, LC	Wyoming	100.00%	100 00%	Not audited
AZ Solar, LLC	Arızano	100 00%	100 00%	Not audiled
Black Praine Wind Farm , ЩС	IIInois	100 00%	100.00%	Nol audiled
Black Proirie Wind Farm LLC	lingis	100 00%	100 00%	Not oudiled
Paulding Wind Farm, LLC	Ohio	100.00%	100.00%	Nol audiled
Poulding Wind Form II, LLC	Ohlo	100 00%	100.00%	Not audited
Paulding Wind Farm III, LLC	Ohio	100.00%	100 00%	Nol audiled
Simpson Ridge Wind Farm II, LLC	Wyoming	100 00%	100.00%	Not audited
Simpsan Ridge Wind Farm III, LLC	Wyoming	100.00%	100.00%	Nol audiled
Simpson Ridge Wind Farm IV, LLC	Wyoming	100.00%	100.00%	Nol audiled
Simpson Ridge Wind Farm V, LLC	Wyoming	100.00%	100 00%	Not audiled
Alhena-Weston Wind Power Project II, LLC	Oregon	100.00%	100 00%	Not audited
Meodow Loke Wind Form V, LLC	ndiana	100.00%	100 00%	Not audiled
Headwolers Wind Form, LLC	ndiano	100 00%	100.00%	Nol oudiled
17th Stor Wind Farm, LLC	Ohio	100.00%	100 00%	Not audiled
Rio Blanco Wind Farm, LLC	Texas	100,00%	100.00%	Not audifed
Hidalgo Wind Form, LLC	Texas	100.00%	100.00%	Not audiled
Stone Wind Power, IIC	New York	100.00%	100.00%	Not audiled
Fronklin Wind Farm, LLC	New York	100 00%	100.00%	Not audited
Waverly Wind Farm, LLC	Kansas	100.00%	100.00%	Not audiled
Lost Lakes Wind Farm, LLC	OWO	100.00%	100.00%	KPMG
Quill Block Wind Farm, UC	Wisconsin	100,00%	100.00%	Nol qualted
Stinson Mills Wind Form IIC	Colorado	100.00%	100.00%	Not audited

The main financial indicators of the pintry controlled in the consolidation under the proportionate consolidation method as at 31 December 2010, are as fallows:

	Head	Shore Copital		Hon Current ASSETS	Curren ASSETT	Nos Current Current LiabHiller	Liabilies	Tatal Equity	Total Incomes	Total COSTS	Not Results		ﺎﺕ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟﻤﺘﺤﺪﺓ ﺍﻟ
Jaintly Controlled Companies	Office	/ Currency		31-06-10								1-Dec-10 31-Dec-10 31-Dec-10 31-Dec-10 31-Dac-10 31-Dac-10 Contributed Volfing Agrim		Auditor
				EUR DOO		Euro 000 Euro 000 Euro 000 Euro 000 Euro 000 Euro 000 Euro 000
Elactricity business
Hal Rock Wirdpower LLC	Now York	522 819 1150		162 186	3.686	1146	ਸੰਦੀ	164.682	11 813	15 578	-3 765	50.009	50,00% E&Y
Rial Rock Windpower II LLC	New York	207 447 USD		64 968	1 226	437	ટે રે	65 402	2 908	-5.132	2 224	50,00%	50,00% E&Y
Campañía Ealica Argoanesa, 5.A	Zaragoso	8701 EUR		49 736	8 604	36 168	6 993	25 180	16.308	10.103	6.705	રેણે ઉત્તર	50.001% Delome
Desorralos Energelicos Canamos 54	l ns Polmos	15	EUR	0	0	0	0		0	0	0	49 604	49.903. KPMG
Evolucion 2000, 5 L	Aborete		118 FUR	24 435	7 102	20 203	4 073	7 172	4 988	-3.490	1 498	49 15%	49.15%	KPMG
Tebar Ealica, 5.A	Cuenca	4 720 EUR		16 135	5 398	14.6 1	00% Il	5.022	4.044	-3 433	611	50,00%	50,00%	Abonie Audil a se secondor SI

1

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

The Associated Companies included in the consolidation under the equity method as at 31 December 2010, are as follows:

	Hood	ಕ್ಕೆ	ಕ್ಕೆ
Associates	Office	Contributed	Voling rights	AUCHOR
Aprofitament D'Energies Renovables de L'Ebre, S.A	Barcelona	48 70%	60 63%	Not audited
Biomasas del Pirineo S.A.	Huesca	30.00%	30 00%	PMC
Cultivos Energélicas de Castilla S.A.	Burgos	30 በበ%	30.00%	Not audited
DE DE CANARIAS, S.A.	Gran Canaria	44.75%	44 75%	Not audiled
Hidraastur S.A	Ovieda	25.00%	25.00%	KPMG
Notumeo Energia, S.L.	Bilbau	49 01%	49.01%	Mazars
Parque Eólico Belmanle, S.A.	Aslunas	29 90%	29 90%	KPMG
Parque Eólico Sierra del Modera 5.A	Saria	42 00%	42.00%	Not audilad
Sodecoon, S.L.	Sevilla	50 00%	50.00%	Ernst & Young
Solar Siglo XXI, 5.A.	Ciudad Real	2500%	25.00%	KPMG
ENEOP - Eolicas de Parlugal, 5.A.	Dodsi	35 96%	35.96%	Mazars

The Subsidiary Companies consalidated under the full consolidated method, as at 31 December 2009, are as follows:

	Head	S	S
Subsidiaries Companies	Office	Contributed	Voling rights	Auditor
Group's parent holding company:
EDP Renovavels, S.A.	Ovieda	100.00%	100.00%	KPMG
Parent Company.
EDP Renewables Europe, 5.L	Ovieda	100 00%	100.00%	KPMG
Bectrictly business Portugal
Eneraltius- Produção de Energio Eléctrico, 5.A.	ljsboa	100.00%	100.00%	KPMG
EDP Renováveis Partugal, S A.	Lisbag	100.00%	100.00%	KAMG
Edica do Alogon, S.A.	Arcos Valdevez	59 99%	59 99%	KPMG
Eólica de Montenegrela, Loa	Vila Pouca de Aguiar	50 10%	50.10%	KPMG
Eólica da Serra das Alturos, S.A.	Baticos	50 10%	50 10%	KPMG
Malhodizes - Energia Eolico, S.A.	Porla	100.00%	100.00%	KPMG
Electrictly business Spain
Acompo Arios, S.L.	Zaragoza	98 19%	98 19%	KPMG
Agrupación Eólica 5LU	Zaragozo	100.00%	100 00%	KPMG
Parque Eálica Plana de Artajona, SLU	Zaragozo	100.00%	100.00%	Not oudited
Compañía Eólica Campa de Barja, S.A.	Zaragozo	75 63%	75,83%	KPMG
Cía Eléctrica de Energias Renovables Alternalivas, SAL	Zoragoza	100.00%	100 00%	Delgifte
Ceprasiur AIE *	Oviedo	56.76%	56 76%	Not audited
Corparacián Empresarial de Renavables Allernotivos, SLU	Zaragaza	100.00%	100 00%	Not oudiled
Porc Eòlic de Call de Moro, 5.L	Barcelona	60 00%	100 00%	KPMG
D E. Almarchal, SAL *	Cádiz	100.00%	100 00%	KPMG
D.E. Buenovista, SAL *	Cádiz	100.00%	100.00%	KPMG
Desarrallos Calalones Del Viento, 5.L	Barcelona	60.00%	60 00%	KPMG
D E. de Corme, 5.A *	La Caroño	100.00%	100 00%	KPMG
D.E. Dumbrio, SAL *	10 รัตนทิด	100.00%	100.00%	KPMG
Desarrallos Eólicos de Galicio, 5.A. *	La Coruño	100.00%	100.00%	KPMG
D E. de Lugo, SAL *	luga	100 00%	100.00%	KPMG
Desorrallos Eólicos Promoción S.A.U. *	Sevilla	100 00%	100 00%	KPMG
D E. Rabosero, S.A *	Huesco	95.00%	95.00%	KPMG
Desarrallos Edicos, S.A. *	Sevilla	100.00%	100.00%	KPMG
D.E. de Tarifa, SAL 4	Cadiz	100.00%	100 00%	KPMG
Eálica Don Quijate, S.L. "	Albacele	100.00%	100.00%	KPMG
Eólica Dulcinea, S.L "	Albareto	100.00%	100.00%	KPMG
Edlico Alfaz S.l. "	Modrid	84 98%	84 98%	KPMG
Eólica Arlonzón, S.A. *	Madrıd	77 50%	77 50%	KPMG
Eólica Campollano, 5.A. *	Madrıd	75.00%	75.00%	KPMG
Eneroliva, 5.A *	Sevilla	100 00%	100 00%	Nat audited
Eolica Fonlesilvo, S.L *	Сагийа	100.00%	100.00%	KPMG
Hidroeléctrica Fuentermasa S.L.	Oviedo	100 00%	100 00%	Not audited
Porques de Generoción Eólica, S.L	Anraas	20.00%	60.00%	KPMG
Generacianes Especioles I, S.L.	Madrid	100 00%	80.00%	KPMG
Ceasa Promociones Edlicas, SLU	Zorogazo	100.00%	100.00%	KPMG
Subgrupo Veinco	Zorogaza	100.00%	100.00%	Nol audited
Eolica Guadalteba, S.L.	Sevillo	100.00%	100.00%	KPMG
Hidroeléctrica Gamaz 5.A *	Salomonca	75.00%	75.00%	Nol audited
lberia Aprovechamientos Eálicas, SAL	Zaragaza	100 00%	100000%	KPMG

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Subsidiaries Companies	Hood Office	8 Contributed	8 Voling rigitis	Auditor
Electrictly business Spain
Investigación y Desarrollo de Energías Renovables, S. L	león	રેત્વે રેત્વે સ	ਦੇਖੋ ਦੇਖੇ ਦੇਖੇ ਦੇ ਮੈਡ ਦੇ ਮੈਡ ਦੇ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿੱਚ ਇੱਕ ਵਿ	KPMG
Industrias Medioambientales Río Carrión, S.A *	Madrid	90.00%	90.00%	Not audited
Eolíca La Jondo, S.L. *	Madrid	100.00%	100.00%	KPMG
Eolica La Novica, S.L.	Modrid	100.00%	100.00%	KPMG
Parque Eálico Los Cantales, SLU	Zoragoza	100.00%	100.00%	KPMG
Parc Eolic Molinars, S.L.	Girono	54.00%	90 00%	Not audited
Molino de Caragueyes, S.L.	Zoragoza	80.00%	80.00%	KPMG
Parque Eálica Monies de Castejón, S L	Zoragoza	100.00%	100.00%	Nol audited
Muxio I e II *	Coruño	100 00%	100.00%	Not audiled
NEO Energia Aragán S L	Madrid	100.00%	100.00%	KPMG
NEO Calalunyo, S.L.	Barcelona	100.00%	100 00%	KPMG
Neomai Inversiones SICAV, S.A. Parque Eólico Santa Ouiterio, S L *	Madrid	100.00%	100.00%	PAC KPMG
Porque Edlico Belchite, S.L "	Huesca Zorogozo	58.33% 100 00%	58.33% 100 00%	KPMG
Porques Eólicos del Cantóbrica, S.A. *	Oveda	100.00%	100 00%	KPMG
Parque Edlico Lo Salonero, S L *	Zaragozo	84 84%	64.84%	KPMG
Ealica de Radona S.L. *	Madrid	100.00%	100 00%	KPMG
Rosocal Cogeneración S.A *	Madrıd	లు అంతర్జా	60.00%	Nol audited
Siesa Renovables Canonas, S.L *	Gran Canano	100.00%	100.00%	Nol audited
Renovables Castillo Lo Moncha S A *	Albocete	90.00%	90.00%	KPMG
Hidroeléctrico del Rumblor S.L. *	Modrid	80.00%	80.00%	Nal oudited
Ealica Sierro Avila, S.L. *	Madrid	89 99%	89.99%	KPMG
Sinae Inversiones Eólicos S.A. *	Madrid	100.00%	100 00%	KPMG
Satromal, S.A. *	Soria	90.00%	90.00%	Not oudlied
Porc Eòlic de Torre Modrina, S.L.	Borcelono	60.00%	100 00%	KPMG
Tratamientos Medioombientales del Norte, S.A.	Madrid	80.00%	80.00%	Nol oudited
Santo Quiteria Energia, S.L.U	Zaragoza	80 00%	100 00%	Nol oudlied
Bon Venl de Corbera, S.U.	Barcelana	100.00%	100.00%	KPMG
Bon Vent de Vilolba, S.L.	Barcelona	100.00%	100.00%	KPMG
Porc Eòlic de Vilalba dels Arcs, S L	Barcelano	60 00%	100 00%	KPMG
Aprofitornent D'Energies Renovables de la Terra Alla, S.A	Barcelona	48.70%	60.63%	KPMG
Agrupocián Eólica Froncio, S.L.	Madrid	100.00%	100 00%	KPMG
Parc Eolic Coll de la Gargoma, S.L.	Barcelona	100.00%	100 00%	KPMG KPMG
Eblica Curiscao Pumar, S.A. Desorrollos Edicas de Teruel, S.L.	Madrid Zarogoza	100.00% \$1.00%	100 00% \$1.00%	Nol oudited
Eólica Garcimuñoz, S.L.	Madrid	100.00%	100.00%	Not oudited
Energias Eólicos Lo Manchuelo, S.L.U. *	Madrid	100.00%	100 00%	KPMG
Sierra de la Peña, S.A	Madrid	84 90%	84 90%	KPMG
Bon Veni de L'Ebre, S.U.	Barcelona	100.00%	100 00%	KPMG
Parc Eolic Serra Voltonero, S L	Barcelona	100.00%	100.00%	KPMG
Electrictly business france
Porc Eolien D'Ardennes, SARL	Abeuf	100.00%	100.00%	Nal oudited
Porc Ealien du Clos Botaille, SAS	Elbeut	100.00%	100 00%	Nol oudited
Eolienne des Bocages, SARL	Elbeut	100.00%	100 00%	Nol oudited
Eolienne de Callengeville, SAS	Elbeut	100.00%	100.00%	Nol oudited
CE Canel-Pont de Salors, SAS	Poris	100.00%	100.00%	KPMG
Porc Eolien des Longs Champs, SARL	albeut	100.00%	100 00%	Nol oudited
Eolienne D'Etolondes, SARL	Elbeut	100.00%	100.00%	Nol oudiled
CE Guellos Noyal-Pontivy, SAS	Poris	100.00%	100.00%	KPMG
Porc Ealien de La Hetroye, SAS	Elbeut	100.00%	100.00%	Nol oudited
SOCPE Le Mee, SARL	Toulouse	49 00%	49.00%	KPMG
Porc Ealien de Mancheville, SARI	albeul	100.00%	100.00%	Nol oudited
EDP Renewables Fronce, SAS	Poris	100.00%	100 00%	KPMG
C.E. Palay, SAS	Poris	100.00%	100 00%	KPMG
Parc Ealien des Bocages, SARL	Elbeul	100.00%	100 00%	Nol oudiled
SOCPE Petite Piece, SARL	Taulouse	49.00%	49 00%	KPMG
Plouvien Breiz, SAS	Corhoix	100.00%	100.00%	Jeon-Yves Morisset
Porc Eollen de Roman, SARL	Elbeul	100.00%	100 00%	Not audited
C.E Saint Bornabe, SAS Eolienne de Saugueuse, SARL	Paris Elbeul	100.00% 100 00%	100.00%	KPMG Not oudited
SOCPE Sauvageons SARL	Toulause	49.00%	100 00% 49 00%	KPMG
C.E. Segur, SAS	Poris	100 00%	100 00%	KPMG
Centrale Eolienne Nea Truc 17 Homme, SAS	Paris	100 00%	100.00%	KPMG
Parc Ealien de Vonmpre, SAS	Elbeuf	100 00%	100.00%	Not oudited
Parc Eolien des Vahnes, SAS	Elbeuf	100 00%	100.00%	Not audiled
Mordelle, SARL	Toulouse	100.00%	100.00%	Nol audiled
Quinze Mines, SARI	Toulouse	49 00%	49 00%	Nol audiled
Vollee du Moulin, SARI	Toulouse	100.00%	100.00%	Nol audiled

вя

.

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C

●

.

œ

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Subsidiates Companies	Head Office	ಕ್ಕೆ Contributed	8 Voling righs	Auditor
Electricity business Poland
Elektrownia Wiatrowa Kresy I SP ZOO	Warsaw	100.00%	100 00%	Not oudited
EDP Renewables Polska SP ZOO	Warsaw	100.00%	100 00%	KPMG
Relax Wind Park I SP ZOO	Warsaw	96 43%	96.43%	KPMG
Relax Wind Park II SP ZOO	Warsaw	51 00%	51 00%	Not audited
Relax Wind Park III SP ZOO	Worsaw	100 00%	100000%	Not audited
Relax Wind Park N SP ZOO	Warsaw	51.00%	51.00%	Nol audited
Electricity business Beiglum
Greenwind S.A.	Louvain-la-Neuve	70.00%	70 00%	Nol oudited
Electrictly business Brazil
EDP Renovávels Brasil, S.A.	São Paula	55.00%	રેરે 00%	KPMG
Central Nacional de Energia Eólica, 5.A (Cenaeel)	São Paula	55.00%	100.00%	KPMG
Elebras Projectos, Ltda	São Paulo	55.00%	100.00%	Not audited
Electricity business Romania
Cernavodo Power SRL	Bucharest	85.00%	85.00%	KPMG
EDP Renewables Romania, S R L	Bucharest	85 00%	કરે ૦૦%	KPMG
Electricity business - Holland:
Tarcon. B.V	Amsterdam	100 00%	100.00%	Not oudiled
Electrictly business - Great Britain:
EDPR UK Limited Moray Offshare Renewables Limited	Cordiff Cordiff	100 00% 75.00%	100.00% 75 00%	Nol audited Nol audited
Parent Company.
Horizon Wind Energy, LLC	Texas	100 00%	100.00%	KPMG
Electrictly business USA
Wind Turbine Prometheus, LP	Colifornia	100 00%	100.00%	KPMG
Dickinson County Wind Farm, LLC	Minnesola	100 00%	100.00%	KPMG
Dorlinglon Wind Farm, LLC	Minnesoto	700 00%	100.00%	KPMG
Cloud County Wind Farm, LLC	Kansas	100 00%	100.00%	KPMG
Whitestone Wind Purchasing LLC	Texas	100.00%	100.00%	KPMG
Blue Canyon Windpower II, LLC	Oklahoma	100.00%	100.00%	KPMG
Blue Canyon Windpower V, LLC	Oldahama Texas	100 00% 100.00%	100.00% 100.00%	KPMG KPMG
Horizon Wind Energy International, LLC Pioneer Prairie Wind Form I, LLC	OWO	100.00%	100.00%	KPMG
Sagebrush Power Portners, LLC	Woshington	100.00%	100.00%	KPMG
Telocosel Wind Power Partners, LLC	Oregon	100.00%	100.00%	KPMG
High Trail Wind Farm, LLC	Illionois	100.00%	100.00%	KPMG
Marble River, LLC	New York	100.00%	100.00%	KPMG
Roil Splitter, LLC	Illionois	100.00%	100.00%	KPMG
Blockstone Wind Form, LLC	lijonois	100.00%	100.00%	KPMG
Aroaslook Wind Energy LLC Jericha Rise Wind Form, LLC	Maine New York	100.00% 100.00%	100 00% 100.00%	KPMG KPMG
Madisan Windpower, II.C	New York	100.00%	100 00%	KPMG
Mesquite Wind, LLC	Texas	100.00%	100.00%	KPMG
Martinsdale Wind Farm, LLC	Colorada	100.00%	100.00%	KPMG
Post Ook Wind, LIC	Texas	100.00%	100.00%	KPMG
BC Maple Ridge Wind, LLC	Texas	100.00%	100 00%	KPMG
High Proirie Wind Farm II, LLC	Minnesoto	100.00%	100 00%	KPMG
Arlington Wind Power Project, LLC	Oregon	100.00%	100.00%	KPMG
Signal Hill Wind Power Project, LLC	Colorado Colorado	100.00% 100.00%	100 00% 100 00%	KPMG KPMG
Tumbleweed Wind Power Project, LLC Old Trail Wind Form, LLC	Ilhonois	100.00%	100 00%	KPMG
Viento Grande Wind Power Project LLC	Colorado	100.00%	100 00%	KPMG
OPO Property LLC	Illionois	100.00%	100.00%	KPMG
Meodow Loke Wind Form, LLC	Indiana	100.00%	100.00%	KPMG
Wheatfield Wind Power Project, LLC	Oregon	100.00%	100 00%	KPMG
2007 Vento I, LLC	Texos	100.00%	100.00%	KANG
2007 Vento II, U.C.	Texas	100.00%	100 00%	KPMG
2008 Vento III, LLC 2009 Venlo V. LLC	Texas Texas	100.00% 100.00%	100.00% 100.00%	KPMG KPMG

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

Subsidiates Companies	Head Office	કર Contributed	ಳಿ Voling rights	Auditor
Electrictly business USA
2009 Venta V, LLC	Texas	100 00%	100.00%	KPMG
2009 Vento VI, U.C.	SOXOS	100.00%	100.00%	KPMG
Horizon Wind Ventures I, U.C.	Texas	100.00%	100.00%	KPMG
Horizon Wind Ventures II, LLC	Texas	100 00%	100.00%	KPMG
Horizon Wind Ventures III, U.C.	Texos	100,00%	100,00%	KPMG
Horizon Wind Ventures M, ILC	Texas	100 00%	100.00%	KPMG
Horizon Wind Ventures IB, U.C.	Texos	100.00%	100.00%	KPMG
Horizon Wind Ventures IC, LCC	Texas	100 00%	100.00%	KPMG
Clinton County Wind Form, LLC	New York	100.00%	100.00%	KPMG
BC2 Maple Ridge Holdings LLC	Texos	100.00%	100.00%	Nol oudited
Cloud West Wind Project, LLC	Texas	100.00%	100.00%	Nol oudited
Five-Spot, LLC	Texas	100.00%	100.00%	Nol audiled
Horizon Wind Chocolate Bayou I, LLC	Texas	100.00%	100.00%	Nol oudited
Alaborna Ledge Wind Form, LLC	Texas	100 00%	100.00%	Not oudiled
Antelope Ridge Wind Power Project, LLC	Texas	100 00%	100.00%	Not oudited
Arkwright Summit Wind Farm LLC	Texas	100.00%	100.00%	Not audited
Ashford Wind Form, U.C.	Texas	100 00%	100.00%	Not oudiled
Atheno-Weston Wind Power Praject, LLC	Texas	100.00%	100.00%	Not oudiled
Block Praine Wind Farm, U.C.	Texas	100.00%	100.00%	KPMG
Blockstone Wind Form II, LLC	Texas	100 00%	100.00%	KPMG
Blackstone Wind Form III, U.C.	Texas	100.00%	100.00%	Not audited
Blackstone Wind Form N, LLC	Texas	100.00%	100.00%	Not audiled
Blackstone Wind Form V, LLC	Texas	100.00%	100 00%	Not oudiled
Blue Canyon Windpower III, LLC	Texas	100 00%	100.00%	Not oudiled
Blue Canyon Windpower IV, LLC	Texas	100 00%	100.00%	Not oudited
Blue Canyon Windpower VI, LLC	Texas	100 00%	100.00%	Not oudiled
Broodlands Wind Farm II, LLC	Texas	100.00%	100.00%	Not oudiled
Broodlonds Wind Form III, U.C.	Texas	100.00%	100 00%	Not oudiled
Braodlands Wind Form, LLC	Texas	100 00%	100.00%	Not oudited
Choteaugay River Wind Form, LLC	Texas	100 00%	100.00%	Not oudiled
Cropsey Ridge Wind Farm, LLC	Texas	100.00%	100 00%	Nat oudiled
Crossing Trails Wind, Power Project, LLC	Texas	100 00%	100.00%	Not oudiled
Dairy Hills Wind Farm, U.C.	Texas	100.00%	100.00%	Nat audiled
Diamond Power Portners, LLC	Texas	100 00%	100.00%	Not oudiled
Ford Wind Farm, LLC	Texas	100.00%	100.00%	Not oudiled
Freeport Windpower I, LP	Texas	100 00%	100 00%	Not oudiled
Gulf Caasl Windpower Monagement Company, LC	Texas	100.00%	100.00%	Not oudiled
Homesteod Wind Form, LLC	SDXBS	100 00%	100 00%	Not oudiled
Honzon Wind Energy Northwest VII, LLC	Texas	100 00%	100 00%	Not oudified
Honzan Wind Energy Northwest X, LLC	Texos	100.00%	100.00%	Not oudiled
Horizon Wind Energy Northwest XI, LLC	Texas	100.00%	100 00%	Not oudiled
Honzon Wind Energy Ponhandle I, U.C.	Texas	100.00%	100.00%	Not audiled
Honzon Wind Energy Southwest I, LLC	Texas	100.00%	100.00%	Not oudiled
Horizon Wind Energy Southwest II, LLC	Texas	100 00%	100.00%	Not oudited
Honzon Wind Energy Sauthwest III, LLC	Texos	100 00%	100.00%	Not oudiled
Honzon Wind Energy Southwest IV, LLC	Texos	100.00%	100.00%	Not oudiled
Horizon Wind Energy Valley I, LLC	Texas	100.00%	100.00%	Not oudiled
Horizon Wind MREC lowa Partners, LLC	Texos	100.00%	100.00%	Not oudited
Honzon Wind, Freeport Windpawer I, LC Juniper Wind Pawer Portners, LLC	Texas Texas	100 00% 100 00%	100.00% 100.00%	Nol audiled Not oudiled
Lexington Chenoo Wind Farm, U.C.	Texas	100 00%	100.00%	Nol audiled
Machias Wind Farm, WC	Texas	100.00%	100.00%	Nol oudiled
Meadow Lake Wind Form II, LLC	Texas	100 00%	100.00%	KPMG
New Trail Wind Form, LLC	Texas	100 00%	100.00%	Not oudited
North Slape Wind Farm, LLC	Texas	100.00%	100.00%	Not audited
Number Nine Wind Farm, LLC	Texas	100.00%	100.00%	Not audited
Pacific Southwest Wind Farm, LLC	Texas	100 00%	100.00%	Not oudited
Proneer Prairie Wind Farm II, LLC	Texas	100.00%	100.00%	Not audited
Buffalo Bluff Wind Farm, LLC	Wyoming	100.00%	100.00%	Not audited
Saddleback Wind Power Project, LLC	Texas	100 00%	100.00%	KPMG
Sardinia Windpower, LLC	Texos	100.00%	100 00%	Not audited
Turile Creek Wind Farm, U.C.	Texas	100.00%	100.00%	Not audited
Western Troil Wind Project I, LLC	Texas	100.00%	100.00%	Nol oudited
Whistling Wind WI Energy Center, U.C.	lexas	100.00%	100 00%	Nol oudited
Simpson Ridge Wind Form, LLC	lexas	100.00%	100 00%	Not oudited
Coos Curry Wind Power Project, LLC	Texas	100.00%	100 00%	Nol audiled
Horizon Wind Energy Midwest (X, LLC	Texas	100.00%	100 00%	Nol oudited
Horizon Wind Energy Northwest I, LLC	SUMBER	100.00%	100.00%	Nol audited
Peterson Power Partners, LLC	Texas	100.00%	100 00%	Nol oudited
Pioneer Prairie Interconnection, LLC	Texas	100.00%	100 00%	Nol oudiled

70

œ

1

1

Notes to the Consolidated Annual Accounts for the years ended 31 December 2010 and 31 December 2009

	Head	8	ಕ್ಕೆ
Subsidiaries Companies	Office	Contributed	Voling rights	Auditor
Electrictly business USA
The Nack Wind Power Project, LLC	Texas	100.00%	100 00%	Not audiled
Tug Hill Windpower, LC	lexas	100.00%	100 00%	Not oudited
Whiskey Ridge Pawer Partmers, LLC	Texas	100.00%	100.00%	Nat oudited
Wilson Creek Power Partners, LLC	Texas	100 00%	100.00%	Nat audited
WTP Management Campany, LLC	SDXBI	100.00%	100 00%	Nol oudited
Meadow Lake Wind Form, IV LLC	Indiana	100 00%	100.00%	KPMG
Meadow Loke Windform III. LLC	Indiano	100.00%	100.009	KPMG
Lexinglon Chenaa Wind Farm II, LLC	Ilinois	100.00%	100.00%	KPMG
Lexinglan Chenao Wind Farm III, LLC	sipull	100 00%	100.00%	KPMG
East Klicknat Wind Power Praject, LLC	Washinglon	100.00%	100.00%	KPMG
Horizan Wind Energy Northwest IV, LC	Oregon	100.00%	100.00%	KPMG
Blue Canyon Wind Power VII, LLC	Oklahoma	100.00%	100.00%	KPMG
Harizon Wyoming Transmission, LC	Wyoming	100.00%	100.00%	KPMG
AZ Solar, LLC	Arizona	100.00%	100.00%	KPMG
Black Proirie Wind Farm II, LLC	llinois	100.00%	100 00%	KPMG
Black Proine Wind Farm III, LLC	llinois	100.00%	100.00%	KPMG
Poulding Wind Farm, ILC	Ohio	100.00%	100 00%	KPMG
Poulding Wind Form II, LLC	Ohio	100.00%	100 00%	KPMG
Poulding Wind Farm :II, LLC	Ohio	100.00%	100.00%	KPMG
Simpson Ridge Wind Farm I, LLC	byoming	100.00%	100.00%	KPMG
Simpson Ridge Wind Form III, LLC	Wyoming	100 00%	100 00%	KPMG
Simpson Ridge Wind Form IV, LLC	Wyoming	100.00%	100 00%	KPMG
Simpson Ridge Wind Form V, LLC	Wyoming	100.00%	100 00%	KPMG
Atheno-Weston Wind Power Project II, LLC	Oregon	100.00%	100.00%	KPMG
Meadow Loke Wind Farm V, LC	Dogona	100 00%	100.00%	KPMG
Lost Lokes Wind Farm, WC	DAYO	100 00%	100.00%	KPMG
Quilt Block Wind Form, LLC	Wisconsin	100 00%	100.00%	Not oudited
Stinson Mills Wind Form, LLC	Calorodo	100 00%	100.00%	Not oudited

The main financial indicolors of the joinly controlled in the consolidation under the proportionate consolvation method as at 31 December 2009, are as follows:

	Head	Share Capilal		Kan Currant ASSESS	AREA IS	Current Non Current Current Liobellias Llabellias		Tatal EQUITY	Total Incomes	Fotal Costs	મદા CASURE
olnity Controlled Companias	Of Ch	/ Currancy											31-Dec-OP 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 Contribured Vallag Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha Kotha K	And for
				Furd 000	Euro'O-DO	Euro'000 Euro'000 Euro'000 Euro'000 Euro'000 Euro'000
Electricity business
Flat Rock Windower LLC.	New York	525 480 USD		ાર જિલ્લાન	3.694	1049	ર્સ્	16. 542	11 353	-13.386	-2 033	50.00%	50 00% EBY
Flor Rock Windpower II LC	New York	207 447	USD	63.394	849	387	43	63 874	2 743	4387	- 644	50.00%	50.00% EBY
Compania Epilica Aragonesia S.A.	10800000	6.70	EUR	50 482	880 6	31 094	7787	50 497	14 804	-10 340	વ વર્ષદર્	50,000		50,00% Delome
Desarrollos Energelicos Canarios SA	las Pamos	15	FUR	0	0	0	0	0	6	0	0	49.90%	49 90% KPMG
Evolumion 2000 5.1.	Aborele		18 815	25 840	ર્ટ રિક્વે	21 921	1895	5716	5.27.	-3 765	1500	49.15%	49.15% KPMG
Mungasol-1 Salar Térmaca S.L.	గ్రామం గ్రామం	3	HUR	85	16	41	58		0	0	ਹੈ	રેટ વિભ્તર		50.00% Not auctified
Tebor Follog, S.A.	Cuanco	4.720 EUR		17 796	4,997	16.582	1.744	4 961	4044	-3449	RDG	50 00%	50,000	Abonie Audi Alaman Cl

The Associated Companies included in the consolidation under the equity method as at 31 December 2009, are as fallows

	Head	ಕ್ಕೆ	ಕ್ಕೆ
Associates	Office	Contributed	Voling rights	Auditor
Aprofitament D'Energies Renovables de L'Ebre, S.A.	Barcelana	48.70%	80,63%	Not oudited
Biomosos del Pirineo S.A	Huesco	30 00%	30.00%	PWC
Cultros Energéticos de Castillo S.A	Burgos	3000%	30.00%	Not oudited
O.E. DE CANARIAS, S.A.	Gran Congrig	44 75%	44 75%	Not audited
Hidroastur 5.A	Chredo	25 00%	75.00%	KPMG
Natumeo Energia, S.L.	Bilbau	49 01%	49 01%	Mazars
Parque Edico Belmante, S.A.	Ashurios	29 90%	29 90%	KPMG
Parque Eálica Sierra del Modero S.A.	Sario	42 00%	47.00%	Not nudiled
Parque Eólico Altos del Volloya, S.A	Modrid	42 00%	42.00%	KPMG
Sodecoan, S.L	Sevillo	50 00%	50,00%	Erns! & Young
Solar Siglo XXI, 5.A	Ciudod Real	25.00%	25.00%	KPMG
ENEOP - Ealicas de Portugol, 5.A.	00051	19 60%	19 60%	Mazors

* These compones hove been considering that EDP Renovives, ihrugh is subsidiory EDPR EL, hold 100% of Geneso shore coped, loking in consideration
the pul phon over Cop Modrid

ANNEX II

EDP Renovávels, S.A. and substallaries

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C

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0

72

Group Activity by Qiperaling Segment

andling Segment information for the year ended 31 December 2010 0

Mhausand Eurosi

	WIND ENERGY OFFERATIONS
			ELROPE					Other and Adlustments	EDP Renovävels Group
	Partugal	Spain	Rest of Europe	Others	Adjustments	Tatal	U. S.A.
Prevenue	140,452	337,444	75,447	19.970	-8,080	સ્વર ૧૦ર	276,494	3,559	BAS 050
Edernal customers	140 482	330 672	75,260	12.175		258 286	276,494	3.359	838,442
Other operating segments		6,772	137	7735	-8.080	6,674			6.6.4
Cost of consumed electrically	-245	·RS3	-478	-	115	-1.262	-1,525	-130	-2,917
Changes in inventaries and cost of raw moterials and
consumples used	14	-2 280	3,489	-173	રુજી	-1 709		212	-1,497
	140,251	331,202	78,458	19,736	-7,415	562,232	274,969	3,441	840,642
Other operating income / lexpenses					-991			12	180,030
Other operating Income	1,657	7,165	16,376	2,655	20,094	26,882	153,027	-15,776	-196,211
Supplies and services Personnel costs	-18.234	-PD PBR	-17,851	-10.732		-87 409	-93.026		54,846
Other operating expenses	-2,702 -5.296	-5,568 -6 880	-3,120 -2492	-8.736 -2.213	-23	-20,126 -19 013	-24,333 22,300	-10,387 -14.650	56,866
	-24,575	-RB del	-7.087	-19,026	19,080	-100,566	-3.365	40.692	-127,893
	1.5.676	262,244	71,371	719	11,665	461 666	288,334	-37,251	712,749
Provisions		147				155			155
Depredation and omorksation expense	-34.964	-138.27	-30 708	-5,242		-209,185	-222,265	-2.955	-434,403
Amartisation of deferred income / Government grants	-100	214	222			1.536	റ്റ് ആറ്റുക		11,406
	81,820	124,334	40,885	-4,532	11.665	254,172	75,940	-40.205	289,907
Gains / Josses) from the sale of linencial assets
Oner linandai incame	290	୧୫୫	17,144	46 B65	-46 B65	18,122	6,131	10,121	34,374
Interest income	3,160	1,949	4 ���	170,012	-167,321	8,268	308	1,355	9,931
Omer linanca expenses	-306	-1.680	-21.546	-19 960	14.969	-28,523	-73,355	-8.082	110,060
Interest expense	-32,711	-98,159	-30.190	.233,849	167 474	-227,435	3,400	115,644	108,391
Share of profit of associates	2,126	2,908				5.036			5.034
Pratil before tax	54,381	30,040	6.761	-41 464	-20,078	29,640	12.424	78,733	120 797
Income lax expense	15, 116	-8,306	429	10,210		-12.785		24,974	-37 759
Profit floss for the period	34,263	21,724	7,190	-37,254	-20,078	16,855	12,424	53,759	83,038
Althuinitie to.
Equity holoers of EDP Renovavas	37 766	14,015	7,092	25,875	-20.078	12,920	12.424	ನ್ನಡ ಕಾರ್ವಹ	80,203
Minonly interest	1497	7.719	ବିସ	-5,379		3.935		-1,100	2,835
Profit floss for the period	39,263	ય ત્યારેન	7,190	-31,254	-20,078	16,855	12,424	53,769	83,039
Associa
Property plant ond equipment	544,126	3,105,798	1,300,198	50,159		5,000,260	4 814 548	166,943	9,981,771
Intengible assels and Goodwill	43,167	106,656	93,194	72	500 886	751,975	600,317	14,44	1,366,733
Investments in associates		15.015		12	28,127	44.054	1,817		45,871
Current assels	161,590	410,772	148.131	1,223,267	-1 84,134	759,626	199,503	301,436	1,260,565
Equity and Liabilities
Equily and Minority Interest	74,258	660,197	253,527	48,850	-794 532	442,303	3,146,741	1,604,467	5 393,511
Current Laoilings	151,655	930,649	409,258	393,605	-813,227	1 071 940	428,332	-208,097	1,292,175
Other Information
Increase of the period
Property, plant and equipment	7.859	128 435	467018	4.370		607 682	783,436	79,510	1470 637
Intangible assers and Goodwall		124	60.106			60.230	2.165	314	62,729

t

(Thousand Euros)

	WIND ENERGY OF SPATIONS
	EUROPE
	Portugal	Spain	Ress of Europe	Off and s	Actualiana	Total	U. 5. A	Oher and Adjustments	EDP Renovdwals Group
Revenue	123,334	260,534	38,355	છે હતું કે તે ર	12,567	41,437	204,649	2,158	648,242
External customers	121,336	258,590	રેકે રહેરા	207	19,270	439,839	200,649	2,286	646,773
Other operating segments income from sale of interests in institutional partnerships · EDPR NA		1,944		6,358	-6,703	. Sad		-130	469
Cost of consumed electricity	-236	-10				-246	-1.198	-78	-1,522
Changes in inventanes and cas of raw materials and cansumables used	19	-6.493	745	-18	943	-4,804		9	-4,713
	123,119	254,031	30,100	6,627	13,510	436,387	203,451	2,169	642,007
Other operating Income / lemberses!
Other aperating income	2,632	ર 38 ટ	756	1,026	-946	9,853	115,318	હ્વ	125,231
Supplies and services	-17,633	-41295	7.573	-8 દિવ્હર	6,648	-68.699	-65,418	-14.187	148,304
Personnel costs	-1,264	-7,050	-1,550	-3 688		-13,852	-20,987	-7,708	-42,547
Other operaling expenses	-5,204	6,334	-3.761	-80	61	-15,322	-17,926	-590	11,838
	-21,460	-48,294	-12,128	-11 892	5,769	·88.020	10,967	22,425	.99.458
	101,650	205,737	26,972	-5,265	19.273	346,367	214,408	-50 256	542 549
Provisions	170	12				132			183
Decredition and ornortisation expense	-31,151	· · 06,745	508 bl.	-1,387		154,092	-158,982	- 276	-114.350
Amorisation of defense income / Government granis	રે રેજિ	। ਨੇ ਕ				BIJ	· 289		2 400
	71,327	99 158	2,163	-6,65	19,273	195,270	57,045	-21 530	230,785
Gams / (losses) from the sale of financial assets		268				268			268
Other financial income		-44	10,370	10,256	-10,200	19,382	6.218	2,144	18,744
Interest income	2,846	4,923	54	130,161	130,145	7,839	692	8 442	16,973
Other (inancial expenses	-32	. 5,631	-4,524	-273	-8,655	-19,115	રક રહ્યા	302	-79,097
	-25.711	-୧୫'351	-17,370	-165,737	130 180	-165,989	2,477	135 456	-29,054
Interest expense Share of profit of associates	421	1,788				4,200	267		3,922
Profil before lox			693	-52, 244	453		ર રહેર		162,541
Incame lax expense	28,851 ార్యశాల సంఖ	34,777 -7,802	033	11,298		31,664 -7,324		124,122 -37,430	44,754
Profit floast for the partad	18,060	26,307	-145	40,946	453	24,540	રે રહર	86,497	117,757
Altributable to:		19 931	-319		453		6,555	86,775	114 349
Equity holders of EDP Renovavers Minonly inforest	37,499 1,367	6,376	179	-36,545 -4 401		21,019 3.521		-83	3,436
Profit likes) for the partod	32 222	26,307	-146	40,946	459	હ્વ્યુક્તિ ક્વિંત્ક નિર્માન કર્યું ક્લેત ક્વિક સિંહ ક્લિક સિંહ ક્લિક સિંહ કર્યું ક્લેત કર્યું ક્લેત કર્યું ક્લે ક્લેત કર્યું કર્યુ કર્યુ કર્યુ ક્લેત કર્યું ક્લેત કર્યું ક્લે	ਉਂ ਵੱਟਵ	86,682	117,767
Assets	574,592	3,081,900	877,979	55,810		4,590,281	3,978,845	65,885	6,635,011
Property, plant and equipment		107.048	49,550	75	571,75	772,344	549,122	14,230	1,335,696
intangiale assels and Goodwill	43,920							-
surestments in associates Current assets	159,152	20,238 442,570	57,273	2 702,842	25,674 -839 530	45,924 612,267	1 688 2018 281	284,508	47,609 1,05,356
Equity and Liabilities
Equity and Minarily Infarest Current Lobilities	61,582 దేర్ జిల్ 2	862 882 953 159	190,378 259,080	6,079 379,776	·697,366 -545,615	જ્વર્સ રહેર 1.146, 265	2,858,681 274,160	2,023,319 -174 915	5,327,555 1,245,510
Other information:
Increase of the period
Property, plant and equipment	105,400	535,294	381,463	19,973		042,130	828,519	24,538	1,895 187
mrangible assets and Goodwill		36,717	1,106	24		37,847		1,251	39,098

73

Management Report

December 2010

MANAGEMENT REPORT for EDP Renováveis Group (EDPR)

Table of Contents

	0. ORGANZATIÓNAL CHART
1.	MAIN EVENTS OF THE PERIOD
2.	PERFORMANCE OF 2010 ----------------------------------------------------------------------------------------------------------------------------------------------------------
3.	REGULATORY ENVIRÓNMENT
4.	RISK MANAGEMENT
5.	FINANCIAL HEDGING DERIVATIVE INSTRUMENTS
6.	TREASURY STOCK (OWN SHARES)
7.	ENVIRONMENTAL PERFORMANCE ----------------------------------------------------------------------------------------------------------------------------------------------------
8.	HUMAN CAPITAL
9.	RESEARCH AND DEVELOPMENT (R&D)
	10. RELEVANT EVENTS AFTER CLOSING OF THE PERIOD
	11. CORPORATE GOVERNANCE OVERVIEW
	12. DISCLAIMES

ATTACHED - EDP RENOVÁVEIS 2010 NET INCOME APPLICATION PROPOSAL

-- EDP RENOVÁVEIS CONSOLIDATED FINANCIAL STATEMENTS AS OF 31/DEC/2010

' Non-exhaustive Organization Chort, illustrating disaggregated by geography of presence rather than comprehensive list of legal entities. For simplification purpass, country holdings are shown in annex i in the notes to the consolidated financial statements representing in dividuol wind farm entities).

² 100% owned by EDPR, operationally integrated in EDPR NA

MANAGEMENT REPORT for EDP Renováveis Group (EDPR)

MAIN EVENTS OF THE PERIOD

15T QUARTER

JANUARY

Jan 8th - EDP Renováveis is awarded 1.3 GW of wind offshore capacity in the UK

EDPR and SeaEnergy Renewable Limited ("SERL"), through a joint-venture designated Moray Offshore Renewables Limited ("MORL"), have been awarded exclusive rights to develop offshore wind farm sites in Zone 1 with an approximated target capacity of 1.3 GW. This partnership, in which EDPR holds a 75% shareholding and SERL the remaining 25%, enabled to leverage the complementary expertise of EDPR in wind and SERL's know-how on offshore construction, thereby enhancing the result obtained in the UK Round 3.

Zone 1 is located on the Smith Bank in the Moray Firth in the North East of Scotland and covers an area of 520 square km. It is approximately 25 km southeast of the Caithness coast and has water depths between 30m and 60m.

MORL will firstly proceed with the study and development of the offshore wind farm projects in Zone 1 for the purpose of obtaining the relevant key consents. Upon successful completion, MORL will be authorized and will hold the option to begin construction and operation of the offshore wind farm project, which is expected to take place between 2015 and 2020.

Jan 25th - EDP Renováveis signs a long-term agreement to sell green certificates in Poland

EDP Renováveis has entered into a 15-year agreement with Energa to sell the green certificates generated from its 120 MW Margonin wind farm in Poland.

Jan 27th - EDP Renováveis enters the Italian market through the acquisition of 520 MW to be developed

EDP Renováveis S.A. acquired 85% of Italian Wind srl, from Co-Ver group (an industrial conglomerate from the north of Italy], adding to its portfolio several wind projects in Italy totalling 520 MW in different stages of maturity and in prime locations: i) 4 wind projects totalling 108 MW classified as Tier 2; ii) 98 MW of projects classified as Tier 3; and iii) 314 MW classified as prospects.

The amount paid for the above mentioned stake is €12 million (Enterprise Value) and additional success fees will be paid as the wind projects reach certain predefined milestones.

FEBRUARY

Feb 3rd - EDP Renováveis discloses YE2009 provisional operating data

In 2009, EDP Renováveis added 1.2 GW to its base of installed capacity, representing a 23% increase vis-à-vis 2008. In the US, EDPR successfully installed 700 MW during the period, while in Europe added 461 MW and in Brazil 14 MW.

The wind output for the full 2009 increased a sound 40% vs. 2008. The US assets continued to be the major contributor to the output increase, while European assets managed to deliver a strong recovery on the last quarter of the year, on the back of a high quality of wind resource.

EDPR's total average load factor in 2009 was 29%, with Europe's strong performance compensating the lower wind resource achieved in the US. Such stability on the total overage load factor is the result of a balanced portfolio and a selective geographical diversification in terms of countries and regions.

Feb 17th - EDP Renováveis signs a Power Purchase Agreement (PPA) with Tennessee Valley Authority in the United States

EDP Renováveis has entered into a 20-year Power Purchase Agreement with Tennessee Valley Authority (TVA) to sell 115 MW of renewable wind energy from the first phase of its Pioneer Prairie Wind Farm located in Mitchell and Howard counties in lowa.

The Pioneer Prairie Wind Farm, which is located in lowa along the Minnesota state line in Howard and Mitchell counties, has an installed capacity of 300 MW - enough to power more than 90,000 American homes annually.

Feb 25th - EDP Renováveis announces YE2009 results

Gross Profit reached €725 million (+25% YoY) and EBITDA €543 million (+24% YoY), with an EBITDA margin of 75%. Net income increased 10% YoY to €1 14 million.

2ND QUARTER

APRIL

Apr 12th - EDP Renováveis is awarded a contract by NYSERDA

EDP Renováveis has been awarded a contract by the New York State Energy Research and Development Authority (NYSERDA) in conjunction with the Public Service Commission (PSC) to sell renewable energy credits, the clean environmental attributes of wind power, for a volume equivalent to 171 MW of capacity for ten years from its Marble River Wind Farm, currently under development and located in Clinton county, New York.

The contract award is from NYSERDA's fifth competitive solicitation and will be funded through the New York Renewable Portfolio Standard (RPS), which supports and finances the development of renewable energy resources that will help reduce harmful emissions, increase energy security, and build a clean energy economy.

Apr 13th - EDP Renováveis holds its Annual General Shareholder Meeting

EDP Renováveis Annual General Shareholder Meeting was held on April 13th and approved the following resolutions:

• Approval of the 2009 fiscal year individual and consolidated accounts;
• Approval of the application of results generated in 2009;
• Approval of the individual and consolidated Management Report, and the Corporate Governance Report for 2009;
• Approval of the management conducted by the Board of Directors during 2009;
• Approval of the remuneration policies for the managers of EDP Renováveis:
• Approval of the amendment of the paragraphs 1 and 2 of Article 17 of the Articles of Association of EDP Renováveis, S.A.;
• Authorization to the Board of Directors for the derivative acquisition and sale of own shares by the Company and/or other affiliate companies to the maximum limit established by the Law and in accordance with its terms;
• Reappointment, as Auditors of EDP Renováveis S.A., of KPMG Auditores, S.L.;
• Option for the Consolidated Tax Regime regulated in Articles 64 et seq of Real Decreto-Legislativo 4/2004 of 5 March.

Apr 22th - EDP Renováveis discloses 1Q2010 provisional operating data

EDP Renováveis managed a portfolio of 6.3 GW at the 1Q10, having increased its installed capacity by 21%, or 1,094 MW, vis-à-vis 1Q09. From this, 492 MW were installed in Europe and 602 MW in the US. In the first quarter of 2010, EDPR total additions amounted to 32 MW, of which 16 MW were installed in Portugal and the remaining were installed in France. EDPR's construction cycle typically follows a back-end loaded profile on the annual new capacity additions.

In line with the capacity increase (+21% YoY), electricity output was up 28% vs. the 1Q09, with Europe being the main contributor to this increase. EDP Renováveis total average load factor in the 1Q09 was 33%, with Europe delivering a 34% figure and the US 31%.

Apr 26th - EDP Renováveis awarded Vestas a procurement contract to deliver 1.5 GW of wind capacity to be installed until the end of 2012

EDP Renováveis S.A. and Vestas Wind Systems A/S signed a global master supply agreement for the delivery 1,500 MW of wind turbines.

A successful combination of its short-term pipeline optionalities together with a flexible procurement position post-2010 and scale within the industry, were key factors to achieve an agreement of utmost strategic importance reinforcing EDPR's worldwide leadership in the sector.

MAY

May 5th - EDP Renováveis announces 1Q2010 results

Gross Profit increased a solid 22% YoY to €242 million resulting in a 20% YoY EBITDA increase to €185 million, with an EBITDA margin of 76%. Net income reached €43 millions (-15% YoY).

3RD QUARTER

JUNE

Jun 28th - EDP Renováveis fully closes Vento III institutional partnership structure through the sale of the remaining stake amounting to \$141 million

EDP Renováveis has secured \$141 million of institutional equity financing from Wells Fargo Wind Holdings LLC in exchange for an interest in the Vento III portfolio.

Vento III is a 604 MW portfolio of wind farms structured in December 2008 and consists of Rattlesnake Road (103 MW), Pioneer Prairie (300 MW), and Meridian Way (201 MW). \$376 million was previously funded by JPM Capital Corporation, New York Life Insurance Co., New York Life Insurance & Annuity Corp. and GE Energy Financial Services.

With this new investment by Wells Fargo Wind Holdings LLC, EDPR has raised a total of \$517 million through Vento III and closed all its funding needs. The transaction accelerates the monetization of tax benefits generated by the wind farms and improves the projects' economics.

JULY

Jul 6th - Government of Cantabria awards 220 MW to EDP Renováveis

The Spanish regional Government of Cantabria has announced the granting of a total of 1,336 MW in its tender to award electricity production licenses through wind energy.

EDP Renováveis was awarded with 220 MW in the region of Cantabria, corresponding to 16% of the total assigned capacity.

The execution of this wind projects are now subjected to the regular process of developing ond licensing, in accordance to the law and regulation applicable in Spain.

EDPR expects the awarded projects to reach the ready-to-build phase from 2013 onwards.

Jul 12th - Romania approves new wind regulation

The Romanian Parliament's proposal that regulates renewable energy sources was published "today".

The legal framework in place since 2004 comprises a system where renewable generators in addition to the electricity price receive tradable green certificates. The proposal now signed into law reinforces the framework in place and the country's commitment with renewable energy, by:

• Increasing the mandatory quotas for electricity produced from renewable sources which benefit from the green certificate's promotion system. 2012 quota increases from 8.3% to 12% of the electricity production, escalating by 1%/year to reach 20% by 2020.
• Extending until 2017 (previously until 2015) the right to collect two green certificates per each MWh generated by wind farms (one certificate per MWh from 2018 onwards).
• Reaffirming the current green certificate's floor and cap prices at €27/MWh and €55/MWh and increasing the penalty by non-compliance to €110 (from €70) for each missing green certificate. Current cap, floor and penalty prices are set in euros and indexed to euro-inflation.

EDP Renováveis currently has 228 MW under construction (to be commissioned by 2010-year end) and 613 MW of projects in different stages of development. The Romanian commitment regarding renewable energy improves the company's investment visibility and enhances the projects' value creation.

Jul 14th - EDP Renováveis announces 1H2010 provisional operating data:

Capacity increased 155 MW (63 MW in Europe and 92 MW in US) and electricity output totalled 6,940 GWh, meaning a 32% increase comparing with the 1st half of 2009. Load factor in Europe was 23% and in the US 33%.

Jul 29th - EDP Renováveis announces 1H2010 results

Gross Profit was €462.4 million (+30% YoY) and EBITDA €342.9 million (+27% YoY), with an EBITDA margin of 74.2%. Net income reached €42.9 million, having decreased 35% YoY.

SEPTEMBER

Sep 27th - EDP Renováveis establishes new institutional partnership the cash grant in lieu on PTC for 99 MW in the US

EDPR has signed an agreement to secure \$84 million of institutional equity financing from JPM Capital Corporation in exchange for a partial interest in its 99 MW Meadow Lake II wind farm.

Sep 30th - EDP Renováveis executes project finance for 120 MW in Poland

EDPR has executed a project finance stucture agreement with a consortium of banks for its fully operating 120 MW Margonin wind farm in Poland. The contracted debt facility amounts to €135 million.

4TH QUARTER

NOVEMBER

Nov 3ª - EDP Renováveis announces 9M2010 results

Gross Profit was €662.3 million (+34% YoY) and EBITDA €473.1 million (+28% YoY), with an EBITDA margin of 71.4%. Net income reached €22.2 million, having decreased 68% YoY.

Nov 15th - EDP Renováveis signs a new Power Purchase Agreement (PPA) for 99 MW in the US

EDPR has signed a 20-year PPA for a 99 MW wind farm in the PJM interconnection area, expected to be fully commissioned in 2011.

Nov 30th - EDP Renováveis signs a new Power Purchase Agreement (PPA) for 83 MW in the US

EDPR signed a 20-year PPA with Tennessee Valley Authority to sell renewable energy from 83 MW of the Pioneer Prairie wind farm (lowa), at full operation.

DECEMBER

Dec 8th - Spanish Government publishes new Royal Decree providing regulatory stability to the wind energy sector

The Spanish Government published the Royal Decree 1614/2010, which increases the visibility of the existing assets' returns for its full useful life and provides stability to the investments in the country.

Dec 9th - EDP Renováveis establishes new institutional partnership the cash grant in lieu of PTC for 101 MW in the US

EDPR has signed an agreement to secure \$99 million of financing through Bank of America Public Capital Corp in exchange for a partial interest in its 101 MW Kittitas Valley wind farm.

Dec 13th - EDP Renováveis signs new Power Purchase Agreement (PPA) for 198 MW in the US

EDPR signed a 5-year PPA with Constellation Energy Commodities Group, Inc. to sell the renewable energy from its 198 MW Top Crop II, already in operation in the PJM market.

Dec 16th - EDP Renováveis secures new Power Purchase Agreement (PPA) for 175 MW in the US

EDPR has secured a 20-year PPA to sell to Ameren Illinois Utilities and Commonwealth Edison Company the equivalent renewable energy produced by 175 MW of wind installed capacity in the US.

Dec 20th - Extension of the US Investment Tax Credit (ITC) cash reimbursement

The President of the United States of America signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, which includes an one-year extension of the ITC cash reimbursement under the Department of Treasury's Section 1603 program, applicable to EDPR's wind projects in the US.

2. PERFORMANCE OF 2010

2.1 Operational and Financial1 Performance

During 2010, EDPR added 1,101 EBITDA MW (incl. ENEOP2) of installed capacity, of which 600 MW in North America and 501 MW in Europe.

On top of the 1,101 EBITDA MW (including ENEOP) of new installed capacity, EDPR ended 2010 with 649 MW under construction (of which 480 MW in Europe, 99 MW in North America and 70 MW in Brazil), providing confidence and credibility on the arganization's ability to execute 2011 growth targets.

By the end of 2010, EDPR had 6.7 GW of (EBITDA + ENEOP) installed capacity in Spain, Portugal, France, Belgium, Poland, Romania, a variety of US states and Brazil.

Prepared according to IFRS occounting standards. EDPR consolidoted for the purpose of this Management Report.

² ENEOP - Eálicas de Portugal, S.A.

Installed Capacity (EBITDA MW + ENEOP)	2010	2009	A MW
Spain	2.050	1.891	+ 189
Portugal	838	680	+ 158
of which ENEOP	239	જરૂ	+154
France	284	220	+64
Belgium	57	57	+0
Poland	120	120	+0
Romania	90	0	+90
Europe	3.439	2.938	+501
ાદ	3.224	2.624	+600
Brazil	14	14
Total	6.676	5.576	+1.101

In terms of total output, EDPR recorded a significant growth in electricity generation, with 14.4 TWh generated in 2010 (32% increase vs. 10.9 TWh in 2009). This year EDPR reached once again load factors above market average, underlining the quality of its wind farms.

Overall EDPR load factor was in line with 2009. In Europe the load factor reached 27% and in the US 32%. Excellence in operational performance is best reflected in the sustainable and high availability levels and consistent load factor premiums in major markets.

Region	Electricity Generated (GWh)		Load Factor (%)
	2010	A 10/09	2010	A 10/09
Europe	6.632	+33%	27%	+ pp
EE.UU	7.689	+30%	32%	(0 pp)
Brazil	31	+ 17%	26%	+4 pp
Total Generation	14.352	+32%	29%	+0 pp

Total balance sheet assets reached by the end of the 2010 were €12,835 million with c. 14% increase (or €1,541 million) when compared to prior year. Of this, €9,982 million relate to net Tangible Fixed Assets (PPE) which year-on-year increased by €1,347 million,

Total Equity amounted to €5,394 million by year end, driven by the €82 million increase in Reserves and Retained Earnings leading to a solid Equity / Total Assets ratio of 42.0%. Total Equity and Liabilities summed by the end of 2010 to €7,442 million, with an increase of c. 24.7% (or €1,475 million) used to fuel growth business.

Total revenues reached €845 million driven by higher installed capacity and represented a 30.4% growth comparing to 2009. This growth is of particularly relevance given the current unfavourable pricing environment in the global power markets. EDPR benefited from an active risk management practice, namely by hedging c. 1.8 TWh of output in Spain and therefore reducing its exposure to the variability of the Spanish pool price. This hedging coverage had a positive impact of €12 million in 2010 revenues.

During 2010 EDP Renováveis signed a 15-year agreement with Energa to sell the green certificates generated from its 120 MW Margonin wind farm in Poland, reached Power Purchase Agreements for the sale of electricity of the two wind farms projects in Romania and successfully executed 841MW of PPA (Power Purchase Agreement) contracts in NA:

• o In February, EDP Renováveis has entered into a 20-year Power Purchase Agreement with Tennessee Valley Authority (TVA) to sell 115 MW of renewable wind energy from the first phase of its Pioneer Prairie Wind Farm located in Mitchell and Howard Counties in lowa.
• o In April, signed a PPA for a volume equivalent to 171 MW of capacity for ten years from its Marble River Wind Farm, currently under development and located in Clinton County, New York.
• o In November, the compony signed a 20-year PPA for a 99 MW wind farm in the PJM interconnection area, expected to be fully commissioned in 2011. Also, signed a 20-year PPA with Tennessee Valley Authority to sell renewable energy from 83 MW of the Pioneer Prairie wind farm (lowa), at full operation. In December, EDPR signed a 5-year PPA with Constellation Energy Commodities Group, Inc. to sell the renewable energy from its 198 MW Top Crop II, already in operation in the PJM market.
• o Additionally, EDPR has secured a 20-year PPA to sell to Ameren Illinois Utilities and Commonwealth Edison Company the equivalent renewable energy produced by 175 MW of wind installed capacity in the US by the end of the year.

All in all, 841 MW of PPA's were successfully secured in North America, which summed with the 120 MW of long-term agreement for green certificates in Poland and the signing of Power Purchase Agreements for the sale of electricity of the two wind farms projects in Romania (228 MW) provide a significant source of secure cash flow stream going forward.

Financial Indicators (€ m)	2010	2009	A %
Gross Margin (incl. Tax Equity Revenue)	948	725	31%
Opex & Other Operating Income	235	182	29%
EBITDA	713	543	31%
EBITDA Morgin %	75.2%	74,9%
EBIT	290	231	26%
Financial Results	(174)	(72)	140%
Net Income (EDPR Equity holders)	80	114	-30%
Capex	1.401	1.846	-24%
Total Assets (book value)	12.835	11.294	14%
Equity (market value)	3.783	5.784	-35%
Net Debt (book value)	2.848	2.134	34%
Enterprise Value	7.706	9.126
Debt / EV %	37.0%	23,4%
Net Debt / EBITDA	4.0	3,9

Focus on operational efficiency, with Opex3 amounting to €235 million, lead to an EBITDA (Earnings before Interest, Taxes, Depreciation and Amortization) YoY growth of 31.3% of €713 million and an EBITDA Margin (EBITDA / Gross Margin4) of 75.2%.

Gross Margin at 2010YE grew 30.8% YoY to €948 million as a result of the electricity output increase (+32% YoY) and the reduced exposure of EDPR's portfolio to market price volatility, which along with the diversification effect enabled a stable YoY average selling price.

³ Defined as Operating Costs + Revenues from Tax Equity Partners - Other Operating Results

⁴ Defined as Revenues + Revenues from Tax Equity Portners - Cost of Used Goods

EBITDA (€ M) & EBITDA Margin (%)

Provisions and net Depreciation & Amortization in 2010 were of (€423) million and net Financial Results of (€169) million (including €5 million in gains from associates) resulting in a Earnings before Taxes of €121 million and a Income Tax Expense of €38 million, corresponding to an effective income tax rate of 31.3%.

Net Income totalled €83.0 million, of which €2.8 million belong to minority interest and €80.2 million is attributable to EDPR equity holders. This represents a reduction vs. the €114 million of Net Income attributable to EDPR equity holders in 2009.

EDP Renováveis decided to propose to the general meeting of Shareholders the allocation of the Net Income for the period of 2010 into reserves as follows:

Net Income Application Proposal
Distribution basis:	Values in Euros:
Net Income of the Period	44.091.046.97
Total to be allocated	44,091,046.97
Allocation:
Legal Reserve (10%)	4.409.104.70
Free Reserve	39.681.942.27
Total Distributed	44,091,046.97

Capex in 2010 was €1,401 million, reflecting the MW added in the under construction capacity. 2010 capex decreased by 24% mainly explained by the capacity growth deceleration seen in 2010. Out of the €1,401 million capex for 2010, €895 million were related to the building of new installed MW, while €406 million assigned to under construction capacity.

Capex (€ m)	2010	2009
Spain	111	રેશ
Portugal	8	102
ROE	420	351
Europe	539	1.014
USA	768	826
Brazil	72	2
Other	માં આવેલું એક ગામના લોકોનો મુખ્ય વ્યવસાય ખેતી, ખેતમજૂરી તેમ જ પશુપા	ব
Total Capex	1.401	1.846

In 2010, EDPR's operations generated a cash-flow of €567 million, delivering a solid 45% growth YoY, clearly demonstrating the increased cash generation capabilities of the existing assets. Given the growth cycle of the company, capex levels remained above the cash-flow generation, leading to a Net Debt increase of €715 million in the period. But it's important to highlight that the operating cash-flow already covers more than 40% of the growth capex vs. 20% in 2009.

EDP Renováveis' gross financial debt was €3.5 billion in 2010, of which 79% corresponds to loans with EDP Group, while debt with financial institutions is mostly related to project finance with a long-term profile. In 2010, debt with financial institutions increased €191 million related to the Polish and Brazilian projects.

Net debt as of December 2010 amounted to €2.8 billion, increasing from the €2.1 billion at the end of 2009, mainly reflecting the capital expenditures in the period. Net debtrelated to assets in operation amounted to €2,450 million based on 2010 capacity.

Net Debt (€ m)	2010	2009
Financial Debt	3.534	2.674
Financial Receivables	-226	-59
Cash & Equivalents	-459	-481
Net Debt	2.848	2.134

2.2 Competitive Landscape and Business Plan

Currently, we are a world leader energy company. Our growth has been the result of an extraordinary capacity to implement projects and to smoothly integrate new companies, people and cultures during the period from 2005 to 2010. Our markets provide attractive growth potential, mainly due to their growth prospects and the fact that they possess a stable regulatory structure that allows profitable returns.

EDPR continues to look to the renewable energy sector with a long-term outlook, believing that the environmental, economic and technological trends that have underpinned the currently favourable renewable energy market conditions will continue to drive futher support for growth in the markets we are active in.

EDPR is a leading 'pure-play' renewable energy company, having derived the revenue stream from renewable energy activity. EDPR has leading position and "early mover" advantages in attractive high-growth markets, and continues to analyze new markets as well as new opportunities within the markets we currently operate within. This strategy continues to provide the company with a unique combination of size, focus and experience in the sector.

⁵ Excludes Institutional Partnership Liability (TEI)

EDPR has a solid history of executing projects and delivering targets. We consistently increased installed capacity through the successful development of pipeline. The company success results from a unique combination of factors: strong track record in execution, first class assets with above average quality wind resources, a well balanced portfolio in terms of geography, stage of development and revenue sources, and a competitive turbine supply strategy.

The combination of diversified operations with a stable revenue base spread across countries with favourable regulatory regimes limits the exposure to market prices of electricity and provides a significant visibility and stability.

Furthermore, EDPR has proven its ability to selectively identify new markets, to enter such markets and successfully integrate new countries.

For that, by the end of 2010, EDPR has crafted a robust, visible and geographically diverse pipeline of nearly 32 GW worldwide (varying from projects in eight European countries, several US states, Canada and Brazil).

WW		Under	Pipeline
		Construction	Tier 1		Tier 2	fier 3	Total	Prospects	Total
Spain		201	300		436	2.089	2.825	2.121	5.146
Portugal		ਦਿੱਤੇ	199		23	74	297	200	રેરિક
France			71		୧୦	149	280	રૂટ	631
Belgium		13							13
Poland		70			442	738	1.180	୧୧୦	1.910
Ramania		138	57			રેરિસ	୧ । 3		751
ltaly			20		186		206	785	991
nk						1 .300	1.300		1.300
Europe		480	647		1.147	4.906	6.700	4.116	11.296
NA (incl. Canada)		99	1.075		6.508	7.245	14.828	4.237	19.164
Brazil		70	81		153	456	690	491	1.251
Total		649	1.802		7.808	12.607	22.218	8.844	31.711

This pipeline reinforces EDPR's position as a leading player in the renewable energy industry and underlines management's commitment to create shareholder value through selecting the best projects to fuel future growth.

On the core of EDPR's confidence on achieving these targets, is a dynamic, highly qualified and experienced team of world-wide employees with the track record and ambition to deliver upon the superior targets.

3. REGULATORY ENVIRONMENT

WIND MARKET REGULATION

The following tables show a brief summary of the main regulatory events at a worldwide and European level. The information below will be developed in following sections.

	Event	Main implications
		· Recognition, in a formal UN decision, of the emission- reduction targets that Developed countries listed under the Copenhagen Accord
Global	United Nations Climate Change Conference, in Cancun (Mexico) Nov-Dec 2010	· Agreement for the monitoring, reporting and verification of the emissions processes
		· Establishment of a Green Climate Fund to support policies and activities in developing countries
		· Support to the Clean Development Mechanisms ("CDM") scheme after the expiration of the Kyoto Protocol
		· A post-Kyoto binding treaty is still to be agreed
Europe	Presentation by States Member	· Renewable Energy Directive 2009/28/EC requires State Members to submit it National Renewable Energy Action Plan by June 30th, 2010
	of its National Renewable Energy Action Plans (NREAP)	· States have presented their strategies to reach their 2020 target
	Summer 2010	· NREAP reflect targets by sector (share of energy from renewable sources consumed in fransport, electricity, heating and cooling), as well as the chosen trajectory to achieve them
	Tax relief bill	· One-year extension of the cash grant
North America	December 2010	· An increase of the bonus depreciation
Brazi	2 tenders held in 2010	· Both tenders allocated 2,05 GW of wind capacity

GLOBAL REGULATION EVENTS

The 2010 United Nations Climate Change Conference was held in Cancun, Mexico, from November 29th to December 10th. Last year's talks in Copenhagen only delivered a weak array of voluntary mitigation and financing pledges that were not endorsed as a COP (Conference of the Parties) decisions, However, in Cancun, the Parties adopted formal decisions in key fields as climate finance, technological transfer and adaptation.

A major achievement was the establishment of a new climate fund under the UN Convention. This new Green Fund will be managed by the World Bank with an aim to allocate funds to developing countries for climate aid.

Another important step forward was the recognition, in a formal UN decision, of the mitigation pledges agreed in Copenhagen (this is, the confirmation of the target of limiting temperature rises to less than 2°C compored to pre-industrial levels). The parties have also agreed to the "Monitoring, Reporting and Verification", which is necessary step to verify the progression of the emission reductions under a transparent process. This is very significant as a global emissions deal has always been stalled by the lack of understanding regarding this topic between US and China. With this agreement, there is groundwork for future negotiations.

The parties also supported the continuation of the Clean Development Mechanism (CDM) after the expiration of the Kyoto Protocol (December 31st 2012) and included for the first time Carbon Capture Storage (CCS) under its reach. Additionally, the agreement includes the framework for REDD+, a mechanism for forestry protection. However, a post-Kyoto agreement has still to be reached, as Japan, Russia and Canada firmly opposed to a second commitment period. Negotiations however will continue in Durban, South Africa, in 2011.

REGIILATION EVENTS IN FUROPE

At the European level, following the approval of the Renewable Energy Directive 2009/28/EC, all the Member States were requested to present a "National Renewable Energy Action Plan" (NREAP) by June 30th, 2010. The NREAP are documents in which European Member States present how they intend to reach their binding renewable fargets for the year 2020 and the paths towards them. Member States have also been required to provide their sectoral targets (electricity, fransport and heating and cooling), the technology mix they expect to use, the transfers between Member States and the specific measures they intend to implement in order to reach the forecasted trajectory. As the Directive indicates, NREAP must conform to the National Action Plan template adopted by the European Commission in June 2009.

GOVERNMENT SUPPORT OF RENEWABLE ENERGY FOR EDPR RELEVANT COUNTRIES

SPAIN

Description
· Sets a temporary cut of the renewable premium applicable to wind governed by Royal Decree 661/2007
· Provides regulatory stability and visibility to the full useful life of the wind farms ta be installed until 2012
: · Fixes a cap to the annual equivalent hours entitled to receive the i premium
· Modifies the reactive power regime
· Imposes a generation levy of €0,5/MWh applicable to ordinary and special regime generators

The Spanish government has long stuggled to deal with a rising tariff deficit and since mid 2009 has shown concern about the cost of the renewable sector.

Following the agreement reached in July 2010 by the Industry Ministry with two key renewable energy associations (the Spanish Wind Energy Association and Profermosolar), the Royal Decree 1614/2010 of 7 December was approved.

The recently approved regulatory scheme on wind is summarized as follows:

• A temporary 35% cut of the reference premium applicable to the wind capacity ruled by RD 661/2007, only during 2011 and 2012. Cap and floor have not been revised and still remain indexed to CPI-"X":

• An amendment to the article 44.3 of the RD 661/2007 clarifying that eventual future revision to the value of the reference premium would only be applied to the capacity that comes on line after 2012;

• A cap to the annual equivalent working hours entitled to receive the premium value set at 2,589 hours (would only be active if the average of the Spanish wind sector equivalent working hours surpasses the 2,350 in each year). The reference hours are not revisable for the full useful life of the existing and pre-registered wind farms);

Wind capacity pre 2008 (ruled by the RD 436/2004) remains untouched, and will transit to the Royal Decree 661/2007 regime in 2013. The bulk of the Spanish wind assets (those ruled by RD 436/2004) is unaffected by the new regulation.

Apart from Royal Decree 1614/2010, wind energy regime was amended by two other decrees. The first one is Royal Decree 1565/2010 of November 19th that modifies the reactive power regime. With this new decree, reactive premiums are lowered but the requirements to receive the bonus are less restrictive, thus more easily achievable. The second decree is Royal Decreelaw 14/2010 of December 23th that brings in several measures to reduce the tariff deficit. Among the measures, the decree includes a generation levy of €0.5/MWh applicable to ordinary and special regime generators.

PORTUGAL

Regulatory change	Description
	· Simplifies procedure for installing additional equipment in wind farms
Decree Law 51/2010	· Obliges wind generators to have equipment installed in each turbine to attenuate voltage drops and supply reactive energy
End of reactive energy premiums	· Wind generators are not entitled to receive reactive energy premiums
	· The impact on total remunerotion will not be meaningful

On May 20th, Decree Law 51/2010 was approved. This new regulation simplifies the procedure for installing additional equipment in wind farms (overpowering). The decree also obliges wind generators to have equipment installed in eoch turbine to attenuate voltage drops (fault ride through) and supply reactive energy. Concerning the latter obligation, there is no longer a premium for supplying reactive power, and there will be a penalty if the wind farm does not operate within certain parameters in terms of reactive power.

Regulatory change	Description
"Grenelle 2" in June 2010	· Introduces new restrictions and requirements in the permitting process that could hinder the future development of wind farms

After months of debate, the "Grenelle 2" was finally approved on June 29th, 2010. The origins of this bill date back to 2007, when the "Grenelle de l'Environnement", a national summit to formulate environmental policy was launched. Three years later, the "Grenelle 2" is a toolbox of the "Grenelle de l'Environnement" and establishes a new framework for wind energy.

In order to qualify for the guaranteed purchase price, the "Grenelle 2" introduces a minimum threshold of five turbines for wind energy plants. This measure aims at avoiding wind scattered development. The law also requires wind farms to be erected at least 500 meters from habitation.

Another requirement to benefit from the guaranteed electricity purchase price is, since 2007, to be built in predefined zones: in "ZDEs" (wind development areas) being these specific areas designated by the municipalities hosting the projects. In articulation with the ZDEs, the "Grenelle 2" introduces a new layer requiring wind farms to be also included in the "Regional Development Areas" to be approved by the Regions and currently under preparation.

In addition, wind farms will be subject to "ICPE" (Industries Classified for the Protection of the Environment") regulation which add new permitting requirements, and put wind farms on the same level than industries with a proven potential risk for the environment.

Finally, the "Grenelle 2" stipulates that at least 500 turbines must be installed each year with a review after 3 years, but does not include specific mechanisms to achieve this goal. This requirement aims to achieve the onshore wind energy target of 19 GW in 2020.

Regulatory change

BELGIUM

Description

Increase of the quotas of electricity from renewable · Introduces higher quotas of electricity produced from renewable sources which is sources expected to sour renewables

New quotas of renewable generation have been approved in Wallonia. New quotas are considerably higher than previous ones and are: 13.50% in 2011 and 15.75% in 2012. Quotas from 2013 onwards are yet to be decided, although the CWAPE (The Energy Regulator in

Wallonia) has recommended the Government to increase them by 2.25 pp a year, up to 33.75% in 2020.

Currently, the Green Certificate Scheme is being reviewed by the Government but no formal documents have been published yet.

POLAND

Regulatory change	Description
Amendment of the energy law in January 2010	· Aims to limit speculative action in the reservation of interconnection rights for wind farms by charging developers with o fee
	· A local master plan or a planning permit for the real property is also required to obtain grid connection

The Energy law was amended in January 2010. The main aim was to limit speculative action in the reservation of interconnection rights for wind farms. Pursuant to the new provisions, the obligation to prepare an assessment of the impact of the installations being interconnected on the grid lies with the grid company. Within this new regulation, the entity applying for the conditions of interconnection must pay in advance the grid interconnection fee of PLN 30 per kW of interconnection capacity. This fee is considered as an advanced payment for the connection costs and can be returned if there are no technical possibilities for connection. Moreover, the grid company has an obligation to issue grid connection conditions (or to reject such conditions due to technical constroints) within 150 days from the day of submission of the complete grid connection application.

Another measure aimed at reinforcing the credibility of the obligation to attach to the application for interconnection conditions an excerpt from the local master plan or, if there is no such plan, the planning permit for the real property to which the application relates.

ROMANIA

Regulatory change	Description
Amendment of the energy law in July 2010	· Extends the period in which developers are granted with 2 Green Certificates
	· Increases renewable quotas
	· Increases the penalty for missing certificate
	· Extends the period in which the green certificate scheme is : guaranteed

The Romanian Government amended its renewable energy law in order to extend its renewable support. Fallowing the general delays in bringing projects into operation, the Government has decided to extend until 2017 (instead of 2015) the period in which wind generators are entitled to receive two green certificates per MWh. In addition, the 2012 green certificate quota has increased from 8.3% to 12% and will rise by 1 pp every year (except in 2019, in which it will only increase 0.5 pp) up to 20% by 2020.

The amendment also confirmed the minimum trading value per green certificate at €27/MWh and the maximum at €55/MWh and increases the penalty for suppliers who do not comply with their obligation to fulfill the quota from €70 to €110 per missing green certificate.

Lastly, in order to instill more confidence in investors and more visibility to the wind market, the green certificate scheme has been guaranteed until 2025, far beyond the previous 2014 deadline.

The double green certificate support had been established by law 220/2008 (formally enacted and published) but, as a matter of practice, the law is still not applied, as the new system has still not been formally notified to the European Commission.

IINITED KINGDOM

Regulatory change	Description
process	· The current RO scheme could be replaced by a Feed-in tariff system
	Energy market reform package under consultation · Introduction of capacity payments have been proposed
	· Introduction of floor price for carbon emissions
	· Approval of Emission Performance Standard for new coal-fired power plants

Following the general election of May, 6th 2010, the new government expressed its willingness to establish a system of feed-in tariffs for electricity produced from renewable sources, while maintaining the renewable obligation certificates (ROCs) at least until 2017. The Government has included this issue in its energy market reform package that was presented in December 2010 and is currently under a consultation process. Under the proposal, the Renewable Obligation (RO) system could be phased out in 2017. The RO scheme will be then replaced by a contract for difference, where the support would be calculated on the difference between the wholesale market price and a "strike price" set under the contract. This system is designed to lower a generator's price risk allowing a steady flow of incomes. Other measures presented in this package are the introduction of capacity payments aimed at fostering the construction of reserve plants and the pledge to approve emission performance standards for new coalfired power plants. To achieve the climate change targets, the Government also announced a floor price for carbon emissions.

The Government has also allocated £ 1 billion for the Green Investment Bank and appointed an independent commission that is working to launch the new institution in the next months. The Green Investment bank was set to form the comerstone of the energy policy of the Conservative party, outlined in its Manifesto in the general election. The aim of this new institution is to foster renewable projects investment by granting funds to lowcarbon initiatives.

ITALY

Regulatory change	Description
A new decree regulating the promotion of renewable energies is under approval process	· Green certificate system could be phased out
	· A feed-in tariff system for facilities up to 10 MW could be introduced
	· Larger facilities would be bound to participate in competitive processes to obtain a tariff

The Bersani Decree of 1999 ushered in a Green Certificate scheme aimed at promoting the production of electricity from renewable energy sources. The scheme is based on the issue of green certificates to producers, who also receive a revenue stream selling the underlying electricity. Since its introduction, the scheme has been modified several times, the last major amendment being the one introduced by the 2008 Budget Law.

The key features of the new green certificate scheme set by the Budget Law were the following:

• Renewable energy generators are eligible for the green certificate system for the first 15 years of operation (extending on the former 12-year period)

• Increases the mandatory quota from 0.35% to 0.75% per year until 2012

• Strengthens the stabilizing role of the GSE ("Gestore dei Servizi Elettrici"), a state energy agency that operates in the Green Certificate market absorbing any imbalances in the market. If there is a deficit, the GSE can sell the Green Certificates in its possession at a price equal to €180 minus the average price of electricity sold in the previous year. Alternatively, the GSE can also act as a last resort buyer and acquire green certificates when there is a surplus in the market. When this occurs, the GSE can buy green certificates at a price equal to the average price registered the previous year by the GME ("Gestore dei Mercati Energetici") in its trade platform.

• Introduces differentiation by renewable energy source with the use of coefficients applied to net production.

Currently a new renewable energy decree is in a latter phase of approval (it has preliminarily been approved by the Italian Government), If this new regulation is passed, it would represent a massive overhaul of the renewable energy promotion system as the green certificate system

would be phased out. The draft of the regulation envisages a feed-in tariff system for facilities up to 10 MW, and commissioned from the January 1st, 2013 onwards. Larger plants would participate in binding process, in which the incentive would be given to winning projects through a competitive process, though with a floor tariff.

115

Regulatory change	Description
Tax relief bill	· One-year extension of the cash grant
	· An increase of the bonus depreciation

At the Federal level, climate legislation stalled in 2010. Three prominent proposals for a Federal Renewable Electricity Standard (RES) emerged over the past year but did not garner enough bipartisan support to be submitted for a vote. Additionally, two new proposals to establish climate change legislation through CO2 cap and trade emerged in July but also failed to come to a vote.

The main agent of climate and environmental regulation was the Environmental Protection Agency. The EPA issued a plan for establishing greenhouse gas pollution standards under the Clean Air Act. Additionally, existing coal fired generators are increasingly likely to leave the market due to new and tightened air quality standards through the Clean Air Act. The EPA's tightening of existing clean air pollutant caps (SOx, NOx) is expected to drive retirement of up to 60GW of coal capacity. The agency also announced new strategies to curb mercury emissions from power plants and to curb the use of water for cooling in power plants. EPA also proposed the first-ever national rules to ensure the safe disposal and management of coal ash from coal-fired power plants.

In December 2010 President Obama signed off the "Tax Relief Bill" that includes the extension of many clean energy policies. This regulation is part of a broader tax bill that zeroes in on the extension of expiring tax cuts put in place by the President George W. Bush Administration. In order to spur renewable energies development the law includes:

• A one-year extension of the 1603 Treasury grant program, thus entitling projects to receive cash grant equivalent to 30% of the eligible project costs. This regulation had been approved in 2009 as part of the economic stimulus bill. In order to benefit from this extension, projects will need to prove that they started construction in 2011 and will come on line prior to December, 31st 2012.

• An increase in the bonus depreciation allowing projects to deduct 100% of the project value in one year (if operations start in 2011). For projects that start operations in 2012, the deduction will be at 50%.

States' governments continue to be the primary driver of implementing legislation to support renewable energy. In 2010, twelve states proposed either creating a new Renewable Porfolio Standard (RPS) or increasing their RPS; these proposals passed successfully in five states. Only one state proposed a reduction in the RPS, a proposal which was ultimately unsuccessful.

The California PUC (Public Utilities Commission) ruled that the state's investor-owned utilities can use tradable renewable energy credits to comply with California's RPS. However, there are short term delays in implementation to legislation and regulatory uncertainly around the enforcement of the ruling.

CANADA

Regulatory change Ontario's long-term energy plan Description

· Increases renewable torgets

Canada's decentralized governance gives a leading role to the provinces for the implementation of renewable energy policies.

At a Federal level, in 2007 the ecoEnergy for Renewable Power Program was introduced, replacing the former Wind Power Production Incentive (WPPI). This program provided an incentive on one cent per kilowatt hour to renewable projects starting operations between 2007 and 2011. Although this program was designed to remunerate projects for the first ten years of operation, the ecoEnergy ran out of funds in 2009. The lack of federal policy instilled low confidence in investors and incentivized Canadian provinces to put in place their own renewable energies schemes. At a Federal level, wind farms may also benefit from tax policies as the accelerated capital depreciation that allows 50% depreciation per year.

Ontario is far and away Canada's wind power leader, being the first to cross the 1 GW of installed capacity mark. The Green Energy Act (GEA) passed by Ontario's Liberal Government in May 2009 put the province at the forefront of wind development.

First and foremost, the GEA introduced a lucrative feed-in tariff system. A wide range of renewable technologies are awarded 20-year contracts with guaranteed electricity prices. The guaranteed price for onshore wind is C\$135/MWh, with an extra cent added on for smallscale community projects. For offshore wind, the tariff rises to C\$190/MWh.

The GEA, apart from being the first feed-in tariff in North America, streamlines the approval process for renewable energy facilities.

In November 2010, the Ontario Ministry of Energy presented its long-term energy plan for the period 2010-2030. Among other measures, the Plan rises Ontario's renewable target from 5,3 GW in 2025 to 10,7 GW by 2018.

RRA 711

Regulatory change	Description
: 2 tenders held in 2010	Both tenders allocated 2,05 GW of wind capacity

Brazil since 2009 has had a tendering system to regulate the allocation of wind capacity, leaving behind a feed-in tariff system (PROINFA program) that fostered wind energy in its early days. Tenders allow the government to secure the energy supply at the least cost for consumers, which is paramount for economic development.

In recent years there has been a strong tendency fowards developing wind energy in Brazil, mainly because of the complementory seasonal behavior of wind and hydro energies: on average, during the dry season the highest wind speeds are measured. Fostering renewable energy can also strengthen energy supply, mainly avoiding fuel generation. At an industrial level, the development of wind industry is seen as an opportunity to attract international turbine manufacturers. Although the local content is not explicitly included in tenders, it is yet a requirement for developers to be eligible to subsidized financing from development banks as BNDES (Banco Nacional do Desenvolvimento) or BNB "(Banco do Nordeste do Brasil").

The tender system has some particularities in Brazil. First of all, the amount to be tendered is decided by the Government, which removes the risk of over capacity. Once the auction is held, the contracts offer 20-year power purchase agreements. There are two types of tenders:

• I- Reserve tender: designed to provide back-up power to guarantee the security of the energy supply, allowing an additional "reserve" to the national interconnection system. The reserve tenders are managed by the Electric Energy Commercialization Agency (CCEE) and the energy is bought by the Government. In the reserve tenders, a fixed amount of generation is set in each contract and penalties are triggered when power generation is below 90%. There is an associated extra-revenue, at 70% of contract price, to ony generation exceeding 130% of the contracted energy. The output level is reviewed every 4 year-period.
• Il- Alternative energy tender; in this type of tender, the buyers are national distribution companies. Contracts refer to baseload capacity and winning bidders are granted a

20-year power purchase agreement. The contracts refer to a generation level and any annual unbalance below 90% must be settled at selling price in favor of buyers. Through a real-time generation escrow account, the excess of generation of one year can compensate any lack of generation, since not lower than 90%, within the 4 yearperiod. Any excess of generation leading to a 4-year period balance over 100% is settled in the wholesale market.

In 2010, Brazil conducted two tender processes in August, a reserve and an alternative energy tender, totaling 2.05 GW. The reserve tender allocated 528 MW of wind capacity at an average price of R\$122,7/MWh (\$70.4) and the alternative energy tender 1,519 MW at R\$134,1/MWh (\$76.6). The fierce competition lowered the average prices, which has caused concern among developers and suppliers.

In December 2010 Brazil's Ministry of Mines and Energy approved a new Decennial Plan for Energy Expansion to 2019. The plan calls for a big boost in renewables as no new fossil fuel power plants are expected to be build after 2014. Under this strategy, more than 6 GW of wind installed capacity are expected by 2019 (from its current level of approximately 1.5 GW1), although the industry expects a larger figure.

Wind sources will have the opportunity to secure PPAs in 2011 as new tenders will be conducted in the second quarter of 2011 according to Ordinance nº 113 of February Ist. One tender will be an "A-3" (baseload capacity to be delivered in three years time) and the other one a "reserve tender" [reserve capacity]. The energy to be auctioned and the ceiling price have still not being revealed.

4. RISK MANAGEMENT

This chapter is also included in Corporate Governance Report (attached)

We believe that risk management should not only protect value but also create value.

Therefore, EDPR's risk framework was designed to be not a stand-alone activity separated from the main activities and processes of the company, but to be part of the responsibilities of management and an integrating all organizational processes, including strategic planning.

1. RISK FRAMEWORK AND PROCESS

In EDPR's risk framework, risk process aims to link company general strategy into manager's day-to-day decisions, enabling the company to increase the likelihood of achieving the strategic objectives.

EDPR's general strategy is translated into major strategic questions that are grouped by risk area and then subject to EDPR's risk process. The outcome of the risk process is a set of specific guidelines per risk area that will guide managers in their decisions according to the company's risk profile.

Each strategic question is subject to a core risk process which is composed of four major steps:

· Make sense - the aim of this step is to generate an understanding of all the dynamics behind the issue under analysis in order to assess the severity of the risk and also to

anticipate all possible mitigating actions in the case its exposure is above acceptable limits.

• · Make choices after an understanding of the risk, the next step is to discuss whether the risk needs to be treated or not. If it does there is a need to discuss on the most appropriate risk treatment strategies and methods, and the outcome of this discussion is a proposed action plan that is later subject to approval by the Executive Committee.
• · Make happen following the Executive Committee decision, guidelines are written and then sent to the risk manager.
• · Make revision after the implementation of the mitigation strategies there is a follow-up of their impact to assess any adjustments are needed. This risk reporting and control step has two major functions: (1) to follow EDPR's risk position and comparing its alignment with both the company's risk profile and the risk policy approved by the Executive Committee for each risk, and (2) to control as possible the mitigation actions by defining and implementing all the mechanisms necessary to check if these actions are being implemented according to plan.

2. RISK FUNCTIONS AND RISK COMMITTEE

Risk management in EDPR is supported by three distinct organizational functions:

During 2010, EDPR created a Risk Committee ta integrate and coordinate all the risk functions and to assure the link between risk strategy and the company's aperations.

EDPR's Risk Committee intends to be the forum to discuss how EDPR can optimize its risk-return position according to its risk profile. The key responsibilities of this committee are:

• · To analyze EDPR overall exposures and propose actions;
• · To follow-up the impact of the mitigation actions;
• · To review transactional limits, risk policies and macro-strategies;
• To review reports and significant findings of the Global Risk Strategy analysis and the risk control areas;
• · To review the scope of the work of the Global Risk Strategy area and its planned activities.

3 RISK AREAS AND RISK RELATED STRATEGIC QUESTIONS

The following table summarizes the main risk areas of EDPR's business and also shows the risk related strategic question. The full description of each risk and how they are managed can be found in the Corporate Governance chapter.

Risk areas	Risks descriptions	Risk related strategic questions (not
		exhaustive)
	1. Countries - Changes in regulations may impact	· What is EDPR's current regulatory
	& regulations EDPR's business in a given country ;	risk ?
		· How much should EDPR grow in
		current markets?
		· Where should EDPR focus entering
		new markets?
	2. Revenues - Revenues received by EDPR's projects	. What is the exposure of our
	may diverge from what is expected;	revenue stream both in prices and
		wind variations?
		· What is the impact on EDPR's
		EBITDA?
		· What should the market strategy
		be to cover market volatility?
	3. Financing - EDPR may not be able to raise enough · · What should be the risk profile from ;
	cash to finance all its planned capex;	an investor's point of view?
	- EDPR may not be able to fulfil its financial · What is the synthetic rating of the

	obligations; - Projects' leverage may be lower than planned impacting their profitability;	company and what measures could be done to improve it? · What is the probability of a cash flow stress due to market conditions?
4. Wind turbine contracts	- Changes in turbine prices may impact projects' profitability; - Contracts should take into account the pipeline development risk;	· What should be the hedging strategy for turbine prices in terms of price structure and quantities? · What is the trade-off between supplier diversification and rappel discount?
5. Pipeline	- EDPR may deliver an installed capacity development different from its targets or suffers delays and/or anticipations in its installation	· How many MW can EDPR expect to put in operation with its current pipeline? · How many projects may die or be delayed over permitting issues? · What is the actual risk of not achieving the installed capacity targets? · What is the appropriate buffer to ensure that EDPR delivers the target capacity? · How should EDPR's pipeline look
	6. Operations !- Projects may deliver a volume different Is there any operating risk with from expected.	like in 2012? significant impact in EDPR?

4 IDENTIFIED RISK AND EDPR'S RESPONSE

4.1.1 Regulatory risks

The development and profitability of renewable energy projects are dependent on policies and regulatory frameworks. The jurisdictions in which EDP Renováveis operates provide numerous types of incentives that support the sale of energy generated from renewable sources.

Support for renewable energy sources has been strong in previous years, and both the European Union and various US federal and state bodies have regularly reaffirmed their wish to continue and strengthen such support.

In Europe, this support has been steady and has to be strengthened as EU countries have renewable and mandatory targets. The new EU directive on renewable energies, published in December 2008, requires each member state to increase its share of renewable energy in the group's energy mix in order to raise the overall share from 5.5% level in 2005 to 20% in 2020. To ensure this goal EU countries have interim periodic targets to ensure a steady progress towards its 2020 target. For this reason they have presented in 2010 their Renewable National Energy Action Plans (RNEAPs). These plans provide detailed information about how each Member State expects to comply with its 2020 binding target, including the technology mix and the forecasted trajectory to reach it.

Regarding US, they do not have mandatory energy targets at a federal level. However, under the Obama Administration, renewable energies have found strong political support. The Stimulus package (American Recovery & Reinvestment Act) approved in February 2009 included a wide range of measures addressed to boost renewable energies. However, in 2010 the Congress failed to pass a national renewable electricity standard, which would have established a mandatory proportion of electricity to be delivered from renewable resources. The result of the mid-term elections on November 2nd threatens to undermine efforts to pass the law, as Democrats, whom traditionally have been supporting wind promotion, have now lost the majority of the House of Representatives, and by that its control in passing laws.

Additionally, it cannot be guaranteed that the current support will be maintained or that the electricity produced by future renewable energy projects will benefit from state purchase obligations, tax incentives, or other support measures for the electricity generation from renewable energy sources. This is particularly true in an economic downturn context, as Governments struggle to achieve their budgets and cannot alwoys guarantee a steady support for renewable energies.

Management of regulatory risks

EDPR is managing its exposure to regulatory risks in two different ways. The first one is trough diversification (being present in several countries) and the second one is by being an active member in several wind associations. EDP Renováveis belongs to the most prestigious wind energy associations, both at national and international level. EDP Renováveis is an active member of the following renewable [specially wind energy] associations.

EUROPE	EWEA [EUROPEAN WIND ENERGY ASSOCIATION]
SPAIN	AEE (ASOCIACION EMPRESARIAL EQLICA)
PORTUGAL	APREN (ASSOCIAÇÃO PORTUGUESA DE PRODUTORES DE ENERGIA
	ELECTRICA DE FONTES RENOVAVEIS)
FRANCE	SER (SYNDICAT DES ENERGIES RENOUVELABLES)
BELGIUM	JASSOCIATION POUR LA PROMOTION DES ENERGIES APERE
	RENOUVELABLES)
	EDORA (FEDERATION DE L'ENERGIE D'ORIGINE RENOUVELABLE と
	ALTERNATIVE)
POLAND	PIGEO (POLSKA IZBA GOSPODARCZA ENERGII ODNAWIALNEJ)
	PSEW (POLSKIE STOWARZYSZENIE ENERGETYKI WIATROWEJ)
	PTEW (POLSKIE TOWARZYSTWO ENERGETYKI WIATROWEJ)
ROMANIA	RWEA (ROMANIAN WIND ENERGY ASSOCIATION)
UNITED KINGDOM	BWEA (BRITISH WIND ENERGY ASSOCIATION)
	RENEWABLE UK
	SCOTTISH RENEWABLES
ITALY	ANEV (ASSOCIAZIONE NAZIONALE ENERGIA DEL VENTO)
	APER (ASSOCIAZIONE PROMOTORI ENERGIE RINNOVABILI)
UNITED STATES	AMERICAN WIND ENERGY ASSOCIATION (AWEA)
	IOWA WIND ENERGY ASSOCIATION
	RENEW WISCONSIN
	RENEW, INC.
	THE WIND COALITION
	AMERICAN WIND WILDLIFE
	CEERT
	COLORADO INDEPENDENT ENERGY ASSOCIATION
	INTERWEST ENERGY ALLIANCE
	WESTERN POWER TRADING FORUM
	SMART GRID OREGON
	TEXAS RENEWABLE ENERGY
	WEST TEXAS WIND ENERGY
	RENEWABLE NORTHWEST PROJECT
CANADA	CANWEA (CANADIAN WIND ENERGY ASSOCIATION)
BRAZIL	ABEEOLICA (ASSOCIAÇÃO BRASILEIRA DE ENERGIA EQLICA)
	CERNE (CENTRO DE ESTRATEGIAS EM RECURSOS NATURAIS E ENERGIAS)

Being an active member in all these associations allows EDP Renováveis to be aware of any regulatory change, and represent wind energy sector's interests when required by the governments.

42 Revenues

4.2.1 Exposure to market electricity prices

Remuneration for electricity sold by EDP Renováveis wind farms depends, on the regulatory system. In some of the markets this creates an exposure to market prices for electricity. Market prices may be volatile as they are affected by various factors, including the cost of fuels, average rainfall levels, the cost of power plant construction, technological mix of installed generation capacity and demand. Therefore, a decline in market prices to unexpected levels could have a material adverse effect on EDP Renováveis' business, financial condition or operating income. EDP Renováveis currently uses various financial and commodity hedging instruments in order ta reduce the exposure to fluctuating electricity prices. However, it may not be possible to successfully hedge the exposures or it may face other difficulties in executing the hedging strategy.

Management of electricity prices exposure

As of December 31* 2010, EDP Renováveis faced limited market price risk. In the case of EDPR NA, most of its installed capacity has fixed prices determined by long-term purchase agreements.

In most countries where EDPR is present, prices are mainly determined through regulated tariffs (France and Portugal) or managed through long-term power purchase agreements (Brazil, Poland -although only for Green Certificates - and Belgium). In Romania EDPR has full market exposure.

In the case of Spain, electricity is sold directly on the daily market at spot prices plus a predefined regulated premium. EDP Renováveis also has an option for selling this electricity through regulated tariffs at fixed prices. In 2010 the company closed a hedge in order to mitigate the effect of pool price fluctuations and as a result, only 38% of the production was market exposed. Considering all of EDPR's production in 2010, 79% of the EBITDA had no

market exposure.

4.2.2 Risk related to volatility of energy production

EDP Renováveis business is focused on the production of electricity from renewable energy sources. The amount of generated electricity and therefore the profitability of wind farms are dependent on climatic conditions, which vary across the locations of the wind farms, and from season to season and year to year. Because turbines will only operate when wind speeds are within certain specific ranges that vary by turbine type and manufacturer, if wind speeds fall outside of these ranges, energy output at wind farms may decline.

Variations and fluctuations in wind conditions at wind farms may result in seasonal and other fluctuations in the amount of electricity that is generated and consequently the operating results and efficiency.

Management of risks related to volatility of energy production

Variations in wind conditions are due to seasonal fluctuations, and these fluctuations have an impact in the amount of the electricity generated. EDP Renováveis miligates this risk by the geographical diversification of its wind farms in each country and in different countries. This "portfolio effect" enables to offset wind variations in each area and to keep the total energy generation relatively steady. Currently EDP Renováveis is present in 11 countries: Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil,

4.3 Financing

4.3.1 Risks related to the exposure to financial markets

EDP Renováveis is exposed to fluctuations in interest rates through financing, particularly by shareholder loans from the EDP Group and from institutional investors in connection with its Partnership Structures in the US operations, as well as, project financing and third party loans from entities outside the EDP Group. This risk can be mitigated using hedging instruments, including interest rate swaps, but there is no full guarantee that the hedging efforts will turn out successfully.

Finally, because of its presence in several countries, currency fluctuations moy also have a

material adverse effect on the financial condition and results of operations. EDP Renováveis may attempt to hedge against currency fluctuations risks by matching revenue and costs in the same currency, as well as by using various hedging instruments, including forward foreign exchange contracts. However, there can be no assurance that the company efforts to mitigate the effects of currency exchange rate fluctuations will be successful.

Management of financial risks

The evolution of the financial markets is analyzed on an on-going basis in accordance to EDP Group's risk management policy. Financial instruments are used to minimize potential adverse effects resulting from the interest rate and foreign exchange rate risks on its financial performance.

The execution of financial risks management of EDP Group is undertaken by the Financial Department of EDP, in accordance with the policies approved by the Board of Directors. The Financial Department identifies, evaluates and submits for approval by the Board the hedging mechanisms appropriate to each exposure. The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits following the recommendation of the risk committee.

4.3.1.1 Interest rate risk

EDPR's operating and financial cash flows are substantially independent from the fluctuation in interest rate markets.

The purpose of the interest rate risk management policies is to reduce the financial charges and the exposure of debt cash flows from market fluctuations through the settlement of derivative financial instruments to fix the debt interest rates. In the floating-rate financing context which represents approx. 5% of EDPR's gross debt, EDPR may contract interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of converting floating interest rate loans into fixed interest rate loans.

EDPR has a portfolio of interest-rate derivatives with maturities between approximately 1 and 10 years. Sensitivity analyses are performed of the fair value of financial instruments to interestrate fluctuations.

4.3.1.2 Exchange rate risk

EDPR operates internationally and is exposed to the exchange-rate risk resulting from investments in subsidiaries. As a general policy, EDP Renováveis matches costs and revenues of its wind farms in the same currency, reducing the effect of currency fluctuations while preserving value. Currently, main currency exposure is the U.S. dollar/euro currency fluctuation risk that results principally from the shareholding in EDPR NA but, with the increasing capacity in others non-euro regions, EDPR will become also exposed to other local currencies [Brazil, Poland and Romania).

EDP Group's Financial Department is responsible for monitoring the evolution of the U.S. dollar, seeking to miligate the impact of currency fluctuations on the financial results of the Group companies and consequently, on consolidated net profit, using exchange-rate derivatives and/or other hedging structures. The policy implemented by EDP consists on undertaking derivative financial instruments with symmetrical characteristics to those of the hedged item for the purpose of hedging foreign exchange risks. The operations are reassessed and monitored throughout their useful lives and, periodically, their effectiveness in controlling and hedging the risk that driven them is also evaluated.

4.3.2 Counterparty credit risk

Counterparty risk is the default risk of the other party in an agreement, either due to temporary liquidity issues or long term systemic issues.

Management of counterparty credit risk

EDP Renováveis policy in terms of the counterparty credit risk on financial transactions is managed by an analysis of the technical capacity, competitiveness, credit notation and exposure to each counterparty. Counterparties in derivatives and financial transactions are restricted to high-quality credit institutions, there cannot be considered any significant risk of counterparty non-compliance and no collateral is demanded for these transactions.

In the specific case of EDPR EU, credit risk is not significant due to the reduced average payment period for customer balances and the quality of its debtors. In Europe, main customers are operators and distributors in the energy market of their respective countries.

In the case of EDPR NA, counterparty risk analysis is more relevant given typical price structure and the contracting terms of PPA contracts. In the light of this, counterparty risk is carefully evaluated taking into account the offtakers' credit rating. In many cases, additional credit support is required in line with the exposure of the contract.

4.3.3 Liquidity risk

Liquidity risk is the risk that EDPR will not be able to meet its financial obligations as they fall due.

Management of liquidity risk

EDPR's strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring in unacceptable losses or risking damage to EDPR's reputation.

Given the current condition of the debt market, it can be harder to cover the financial requirements needed to carry out EDPR's activities.

The liquidity policy followed ensures compliance with payment obligations acquired, through maintaining sufficient credit facilities and having access to the EDP Group credit facilities.

4.4 Wind turbine contracts

4.4.1 Wind turbine supply risk

Wind turbine is a significant part of a wind farm's CAPEX (around 80%). The main risks associated to wind turbines are:

• · Price risk: this occurs when the supply of wind turbines cannot meet the growing demand, and prices rise sharply, impacting profitability of new wind farms;
• · Quantity risk: this occurs when no wind turbines are available for the construction of new wind farms.

Management of wind turbine supply risk

The last couple of years were marked by the difficulties of the wind turbine industry to catch up with the booming demand. In this high growth environment, wind generators endured difficulties to secure the supply of wind turbines. This trend, however, was reversed in 2008 and 2009 as turbine demand slowed down and new players appeared creating a more favorable scenario for EDP Renováveis. This new scenario is driven by the economic crisis, the reduced power demand, the regulatory uncertainties and the increasing competition, particularly fierce regarding Chinese manufacturers. The company has taken advantage of the possibility of contracting part of its expected turbine supply needs in this favorable situation, by signing a wind turbine procurement contract for the supply of up to 2.100 MW with Vestas. The contract is a Master Supply Agreement that consists of a firm order for supply, installation and commissioning of wind turbines with a total capacity of 1.500 MW to be delivered to North America, South America and Europe in 2011 and 2012 and with the possibility to be extended by an additional 600 MW. Contracting large volumes enables EDP Renováveis to obtain better prices and conditions that mitigate the effect of general increases in asset prices.

Nevertheless, EDP Renováveis uses a large mix of turbines suppliers in order to reduce its dependency on any one supplier. Currently, EDP Renováveis is one of the generators with a more diversified portfolio. The large range of EDP Renováveis suppliers allows the company to avoid technological risk of each turbine supplier. Additionally, EDP Renováveis has the required size to contract with a large range of suppliers.

4.5 Pipeline development

4.5.1 Permitting risks

Wind farms are subject to strict international, state, regional and local regulations relating to the development, construction, licensing and operation of power plants. Among other things, these laws regulate: land acquisitions, leasing and use; building, transportation and distribution permits; landscape and environmental permits; and regulations on energy transmission and distribution network congestions. Development process of wind farms is subject to the probability of obtaining such permits. If authorities do not grant these permits or they do so with delays or with other restrictions, such actions could have a material adverse effect on the business.

Management of permitting risk

Permitting risk is mitigated by the fact that EDP Renováveis in present is 11 different countries: Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil. Additionally, the company has a large pipeline of projects that provide a "buffer" to overcome potential problems in the development of new projects, ensuring growth targets.

Finally, EDP Renováveis mitigates development risk by creating partnerships with local developers.

4.6 Operations

4.6.1 Wind furbine performance risk

Wind turbine performance risk is the risk that the performance of the turbine does not reach its optimum, and therefore, the energy output is not as expected.

Management of wind turbine performance risk

EDP Renováveis mitigates the wind turbine performance risk by implementing the following measures. Firstly, EDP Renováveis mitigates this risk by using a mix of turbine suppliers which minimizes technological risk. Secondly, wind turbine performonce risk is reduced by signing strict and thorough O&M contracts with suppliers, usually for a 5-year period (full-scope maintenance agreement), being the 2 first year-period of full warranty. Additionally, technical warranties are signed with the turbine suppliers, in order to guarantee that the performance of the turbine will be optimum. The availability and the power curve of each turbine is adequately guaranteed with "liquidated damages" clauses that set up penalties to be paid by the supplier when the availability is not met (usually 96 or 97%) or the power curve is not reached. Wind turbine performance risk is also miligated with an adequate preventive and scheduled maintenance and predictive maintenance is being also brought in.

After the first 5-year period, O&M is usuolly contracted with an external company, but a technical assistance agreement is also signed with the turbine supplier.

Most recently, and following the general trend in the wind sector, EDPR is externalizing the O&M activities in some of its wind farms. This procedure may increase the wind turbine performance risk but reduces turbine manufacturer dependence and enables to decrease O&M costs.

Finally, EDP Renováveis has in place a LEAN Project. LEAN is a continuous improvement program that aims to:

• Maximize Availability of Turbines
• · Improve Efficiency
• · Manage Reactive Energy

In order to achieve the objectives listed above, the LEAN team effectively collaborates with all technical areas such as O&M, Wind Assessment, Technology and Dispatch Center.

5. FINANCIAL HEDGING DERIVATIVE INSTRUMENTS

Topic 4 provides a description of the key financial risks faced by EDPR. According to EDPR risk policy, and in order to manage, control or minimize impact of some of those risks, in liaise with a discipline risk management practice, EDPR uses financial denvatives and enters hedging transactions with the sole intent to protect against risks and as a consequence miligate fluctuations of earnings.

These derivative instruments are explained in detail as part of the note 36 to the financial statements.

6. TREASURY STOCK (OWN SHARES)

On the General Shareholder's meeting of the April 13th, it was approved to authorize the Board of Directors for the acquisition and transmission of own shares by the Company and/or the affiliate companies through their management bodies for a term of five years from the date of the General Shareholders Meeting. Up to date of this report the Company has not executed any acquisition and consequently transmission of own shares.

Terms ond requirements are detailed in the Corporate Governance (aftached)

7. ENVIRONMENTAL PERFORMANCE

Energy is important for life, but the way it is produced is also relevant. EDPR is a leading company in the renewable energy sector - the energy of today.

We produce clean energy, green energy. Energy without limits, without emissions.

At EDPR we strongly believe that sustainable development is possible. Environmental compliance and continual improvement are major concerns of EDPR, believing that prevention is the key to avoid impacts.

Wind farms are environmentally respectful sites. Only a small percentage of the land leased is taken out of permanent use when the wind farms are in operation and the activity is compatible with existing land use.

Although the location of wind farms in protected areas is not a common issue, potential impacts on biodiversity, such as fauna disturbance, vegetation loss, visual intrusion, waste generation ... may occur. Even so, the vast majority of the impacts which might take place during the operation of wind farms are temporary and reversible.

Monitoring plans are carried out in order to make sure no significant impacts happen. In this sense, EDPR actively protects all the areas with operating wind farms.

ldentifying potential impacts as soon as possible is imperative in order to obtain satisfactory results, as it is committed in the EDPR Biodiversity and Environmental Policies.

It is clear that, in comparison with other energy generation sources, wind farms' impacts on the environment are much less significant. Renewable energy doesn't cause greenhouse gases emissions and any other emissions. Moreover, it plays a central role in reducing CO2 emissions, and that's a global positive impact itself, because of its influence on all kinds of life.

ECO-EFFICIENCY

The main impact of EDPR activity is clean energy, green energy, renewable energy

EDPR indirect emissions are much reduced and they're limited to the administrative buildings consumption and wind farms' auxiliary consumptions (when self-consumption is not possible).

However, as we acknowledge that this information is requested by some of our stakeholders, we are implementing some initiatives that will allow us to better inform on our performance in this field and its report.

Usually, the energy needed for wind farms' auxiliary consumptions (lights, wind turbine orientation, etc) comes from the energy produced by itself, but if there isn't any operative wind turbine, this energy must be purchased.

EDPR also takes efforts to reduce and eliminate unnecessary indirect emissions very seriously. A number of initiatives regarding reduction of energy consumption and emissions have been developed during 2010.

ENVIRONMENTAL MANAGEMENT SYSTEM

Wind farms in operation also contribute to the internal commitment of respect for environment implementing measures with the objective of a wise use of resources and waste reduction.

One of the best examples of the environmental performance of the company is the EDPR Environmental Management System (EMS).

The EMS which is being implemented in EDPR according to ISO 14001 standard, turned out to be an excellent tool for several reasons:

• · Exhaustive control of applicable legal requirements and their compliance.
• · Environmental performance monitoring.
• · Definition of environmental objectives.
• · Reduction of environmental risks.
• · Promotion of new initiatives looking for continual improvement.
• · Staff involvement and commitment of the organization.
• · Resources management improvement and optimization of investments and costs.
• · Operational control established which allows detailed monitoring of environmental features such as waste generation.

WASTE & SPILLS

Waste generation is one of the main environmental aspects to control at wind farms in operation. In EDPR we pay special attention to enhance monitoring of hazardous and nonhazardous waste. As part of our training plan, EDPR employees as those working on their behalf, are aware of its importance. The training helped increase awareness on waste management requirements, challenges and solutions, and addressed issues such as material storage, labeling, transport and recycling.

EDPR has defined a systematic of environmental emergency response as part of EMS implementation process. This procedure sets out the guidelines regarding environment for action in case of fire, flood or spill at wind farms. These guidelines are annually checked through questionnaires, simulacrum, etc. Also, under the EMS, employees at wind farms attend training sessions in which, apart from other things, is explained how to deal with an environmental emergency and what to do once overcome. Any environmental incident is recorded in the Emergency Register which collects information about the event date, location, emergency situation occurred, causes, impacts and corrective measures taken.

BIODIVERSITY

The United Nations General Assembly declared 2010 as the International Year of Biodiversity fo increase the awareness about the importance of biodiversity conservation throughout the world by highlighting the importance that biodiversity has on our quality of life, to reflect the efforts already underlaken to safeguard biodiversity and to promote and foster initiatives to reduce the loss of biodiversity.

2010 saw the hasting of two significant meetings - the Convention on Biological Diversity in Nagoya, Japan, and the United Nations Climote Change Conference in Cancun, Mexico, which have both lead to historic decisions on oddressing biodiversity loss, deforestation avoidance and climate change.

EDPR wants to contribute their bit in biodiversity conservation and respect for environment, because preserving biologicol diversity requires action at all levels: government, business and the individual.

EDPR is committed to assess the impact of its activities on biodiversity in all phases of its business. Although we have pledged to apply EDP's Group Environment and Biodiversity Policy, to reinforce this commitment EDPR Executive Committee approved the Environment and Biodiversity Policies in the beginning of 2011. Both are available on EDPR website. EDPR considers these commitments a cornerstone of its business, integroting them into the decision making process of the company.

8. HUMAN CAPITAL

We have achieved a top tier position in the renewable energy market thanks to our people commitment and effort. To guarantee the excellence at work of our employees, human capital management plays a key role to support EDPR growth targets maintaining the current operations excellence. Therefore, EDPR is committed to create the most adequate environment to secure employee commitment, empowerment and accountability, while offering them an attractive career development plan with opportunities to grow professionally at the same high pace as the company.

To create the most adequate environment for our employees, the company has developed a Human Resources Policy, approved in 2009, based on the following principles

Ensure internal fairness and evenhandedness through 0 professional development and rewards model based on criteria that are transparent and Iransversal within the group.

Attract, retain and develop tolent and skills through a compelitive remuneration palicy thraughout all geographies for EDPR Graup that are in line with specific requirements of each business: considering the importance of the different functions and employee patential.

Appraise merit ond pertormance in prafessional development ond reward employees, ensuring commitment ond responsibility in obtoining both indívíduol and team results within the argonization or the Group

Our global compensation strategy policy has been implemented to address the needs of every local market, with enough flexibility to adapt to each region where the company is present. The developed system ensures that all positions are evaluated and graded accoraing to a methodology designed to ensure fairness, through an approved salary band for each position within the organization's matrix. The defined salary bands are based on market benchmarks.

COMPANY PROFILE

EDPR workforce has grown at a high pace, to guarantee the staff availability to support the growth of the organization. At the end of 2010 EDPR had a total headcount of 833, corresponding to a 14% increase compared to that of 2009. EDPR EU accounts for 49% of the total workforce, EDPR NA 40%, EDPR BR 2% and Holding the remaining 9%.

Headcount at year-end	2010	2009	Var (%)
EDPR EU	398	રૂરિટ	9%
EDPR NA (1)	332	303	10%
EDPR BR	17	8	113%
Holding 121	75	45	40%
Total	822	721	14%

Note: figures don't include the Board of Directors

[1] EDPR NA headcount includes Executive Committee

(2) In 2010, 8 holding employees were based in North America; 67 in Europe, whereas in 2009, every holding employee was based in Europe. The high increase of holding's headcount resulted from internal transfers.

Throughout the year, 171 new employees joined the company while 70 left, resulting a furnover ratio of 15%, in line with the previous year,

Employees' Tumover	2010	2009
Chart Variation
Number of hires	171	ોર્ટર્
Number of dismissals	70	ર્સ્ટ
Total Turnover	15%	15%
Turnover by Gender
Male	16%	16%
Female	12%	14%
Turnover by Age Range
Less than 30 years old	1 4%	20%
Between 30 and 39 years old	14%	14%
Over 40 years old	17%	13%
Turnover by Platform
EDPR EU	11%	12%
EDPR NA	18%	18%
EDPR BR	41%	50%
Holding	13%	17%

EVALUATION & PERFORMANCE

As announced in 2009 Annual Report, the company was committed to progress in 2010 towards a 360 degree evaluation model and during the last quarter of the year, a global evaluation model of this type has been implemented.

All our employees are covered by our performance evaluation system. This system collects information from seven data sources to evaluate employee performance: oneself, 2 peers, 3 subordinates and the manager.

To guarantee the success of the implementation of the new evaluation tool, in 2010 the Human Resources department created "The Guide to the Potential and Performance Appraisal" to help our employees to have easy access to all the information they needed as they worked through the appraisal process, and could master the tools, timeframes and procedures that go along with the appraisal of their activity. In order to communicate this guide to all employees, videos were designed and put on our intranet. EDPR launched a contest for all employees in the company, and the winners were the employees who answered correctly to the questions and did his/her evaluation on time.

Performance and potential evaluations are based on the company strategic competencies, key performance indicators and a Global Assessment. By defining and evaluating gaps, continuous feedback interviews are encouraged and employees are also asked to build up an Individual Development Plan. In EDPR we encourage all the employees to create its own Individual Development Plan as one of the most relevant support tools in all EDPR employees' development.

In 2010, EDPR decided to separate the performance evaluation from the potential evaluation processes. The processes take place at different times, but the period they appraise is the same.

TRAINING AND CARRER DEVELOPMENT

EDPR is committed to offer its employees an attractive career development plan, and also offers continuous education and training activities.

Moreover, the development of our employees is a strategic objective for EDPR in order to align current and future demands of the organization with employees' capabilities, while fulfilling their professional development expectations and support their continued employability.

In 2010, EDPR almost doubled the number of training hours from 2009 to 26.697, The total investment was increased by 122%, reaching €669,074.

9. RESEARCH AND DEVELOPMENT (R&D)

Beyond the commercial activities, EDP Renováveis supports EDP Inovação (EDPI) in developing a pilot project in order to deploy a wind turbine installed on floating structure off the Portuguese coast. Such floating structure is a patented technology named Windfloat owned by Principle Power, whom EDPI has a memorandum of understanding, providing privilege access to the technology.

10. RELEVANT EVENTS AFTER CLOSING OF THE PERIOD

No relevant subsequent events occurred until 24th February 2011

11. CORPORATE GOVERNANCE OVERVIEW

11.1 Model of Management and Supervision

EDP Renováveis, has adopted the governance structure in effect in Spain. It comprises a General Meeting of Shareholders, that is the sovereign body , and a Board of Directors that represents and manages the company.

The Company's Board of Directors has set up four committees. These are the Executive Committee, the Audit and Control Committee, the Nomination and Remuneration Committee and the Committee on Related-Party Transactions.

The governance model of EDPR is designed to ensure the transparent, meticulous separation of duties and the specialisation of supervision.

The purpose of the choice of this model by EDPR is to adapt the Company's corporate governance structure to the Portuguese legislation. The governance model adopted by EDPR therefore seeks, insofar as it is compatible with its personal law, to correspond to the so-called "Anglo-Saxon" model set forth in the Portuguese Commercial Companies Code, in which the management body is a Board of Directors, and the supervision and control duties are of the responsibility of an Audit and Control Committee.

The choice of this model is essentially an attempt to establish compatibility between two different systems of company law, which can be considered applicable to the model.

The experience of institutional operating indicates that the governance model adopted by the shareholders is appropriote to the corporate organisation of EDP Renováveis activity, especially because it affords a healthy balance between the management functions of the Executive Committee, the supervisory functions of the Audit and Control Committee and oversight by different specialised Board of Directors committees.

The institutional and functional relationship between the Executive Committee, Audit and Control Committee and the other non-executive members of the Board of Directors has been proved very positive and has fostered internal harmony conducive to the development of the company's businesses.

In order to ensure a better understanding by its shareholders of EDP Renováveis corporate governance, the Company posts its updated Articles of Association on www.edprenovaveis.com.

11.2 Corporate Bodies

General Meeting of Shareholders

The General Meeting when properly convened, has the power to decide and adopt majority decisions on matters that the Articles of Association set forth that it should be decided and be submitted for its approval.

The Board of the General Meeting is responsible for organising its proceedings. It is made up of the Chairperson of the Meeting, the Chairperson of Directors, or his/her subsitivte, the other Board members and the Secretary of the Board of Directors.

Board of Directors

The Board of Directors has the broadest powers for the management and governance of the Company, with no limitations other than the competences expressly allocated exclusively to the General Meeting of Shareholders by law or the Articles of Association.

Position	Date of Appointment	End of Term
Chairman and Director	18/03/2008	18/03/2011
Vice- Chairman. CFO	18/03/2008	18/03/2011
Director	18/03/2008	18/03/2011
Director	18/03/2008	18/03/2011
Director	18/03/2008	18/03/2011
Director António Nogueira Leite (Independent)	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011
Director (Independent)	14/04/2009	14/04/2012
Director (Independent)	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011
Director	04/06/2008	04/06/2011
Director (Independent)	04/06/2008	04/06/2011

11.3 Summarized Organization Chart

11.4 Capital Structure

The EDPR share capital of EUR 4,361,540,810 is represented by 872,308,162 shares with a face value of EUR 5 each. All shares integrate a single class and are fully issued and paid. There are no holders of special rights.

Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDPR shares.

As far as the Board of Directors of EDPR is aware, there are currently no shareholders' agreements regarding the Company.

11.5 Shareholder Structure

The breakdown of the EDPR structure by region and investor type at 31 December 2010 was as follows:

EDPR Shareholder Structure (%)

At the end of 2010, EDPR's free float comprises more than 120,000 institutional and private investors in over 50 countries with special focus on Portugal, United Kingdom, United States and Rest of Europe. Institutional investors represented 79% of the free float, with private investors standing for the remaining with 21%.

Geographic Breakdown of Free Float

Investor Type of Free Float

�EDP - Energias de Portugal, S.A. a Hidroeléctrica del Cantábrico, S.A. 14 Free Float

11.6 Qualifying shareholding

Qualifying shareholdings in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholders' holdings. As of December 31, 2010, no qualifying Shareholdings in EDPR with the exception of EDP – Energias de Portugal, S.A were identified.

Shareholder		No Shares % Capital % Vote
EDP - Energias de Portugal, S.A.
EDP—Energias de Portugal Sucursal en España, S.A.	541.027.156	62.0%	62.0%
Hidroeléctrica del Cantábrico. S. A.	135.256.700	15.5%	15,5%
Total	676.283.856	77,5%	77.5%

11.7 Holder of special rights

EDP Renováveis share are of a single class and series and have been fully paid up. There are no holders of special rights.

11.8 Restrictions on the transfer of shares

Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDP Renováveis shares.

11.9 Acquisition and transmission of own shares by the Company and/or other affiliate companies

On the General Shareholder's meeting of April 13th, it was approved to authorize the Board of Directors for the acquisition and transmission of own shares by the Company and/or the affiliate companies through their management bodies for a term of five years from the date of the General Shareholders Meeting, in accordance with the terms approved in the meetting that are available on the companies website. Up to date of this report the Company has not executed any acquisition and consequently transmission of own shares.

11.10 Shareholders' agreements

As far as the Board of Directors of EDP Renováveis knows, there are currently no shareholders' agreements regarding the Company.

11.11 EDP Renováveis in the Capital Markets

The shares representing 100% of the EDPR share capital were initially admitted to trading in the official stock exchange NYSE Euronext Lisbon on June 4th 2008. The then the free float level is unchanged at 22.5%.

EDP Renóvaveis, S.A.
Shares Share Capital	€4.361.540,810
Nominal Share Value	€5.00
N.º of Shares	872,308.162
Date of IPO	June 4th 2008
NYSE Euronext Lisbon Reuters RIC Bloomberg ાડામ	EDPR.LS EDPR PL FS0127797019

11.12 EDP Renováveis share price

EDPR's equity market value at December 31* 2010 was EUR 3.8 billion. In 2010 the share price depreciated by 35% to EUR 4.34 per share, underperforming the PSI-20 {the NYSE Euronext Lisbon reference index), the Euronext 100 and the Dow Jones Eurostoxx Utilities ("SX6E"). The year's low was recorded on November 30™ (EUR 3.72) and the year's high was reached on January 8th (EUR 7.01).

In 2010 were traded more than 311 million EDPR shares, representing a 21% year-on-year increase in its liquidity, and corresponding to a turnover of approximately EUR 1.5 billion. On average, 1.2 million shares were traded per day. The total number of shares traded represented 36% of the total shares admitted to trading and to 159% of the company's free float, translating in the higher liquidity level since the IPO.

2010 EDP Renováveis share price and transactions

12. DISCLAIMER

This report has been prepared by EDP Renováveis, S.A. (the "Company") to support the presentation 2010 financial and operational performances. Therefore, the disclosure or publish of this document for any other purpose without the express and prior written consent of the Company is not allowed. EDP Renováveis does not assume any responsibility for this report if it is used for different purposes.

This document has not been audited by any independent third porty. Therefore, the information contained in the report was not verified for its impartiality, accuracy, completeness or correctness.

Neither the Company -including any of its subsidiaries, any company of EDP Renováveis Group and any of the companies in which they have a shareholding-, nor their advisors or representatives assume any responsibility whatsoever, including negligence or any other concept, in relation with the damages or losses that may be derived from the use of the present document and its attachments.

Any information regarding the performance of EDP Renováveis share price cannot be used as a guide for future performance.

Neither this document nor any of its parts have a contractual nature, and it can not be used to complement or interpret any contract or any other kind of commitment.

The present document does not constitute an offer or invitation to acquire, subscribe, sell or exchange shares or securities.

The 2010 management report contains forward-looking information and statements about the Company that are not historical facts. Although EDP Renováveis is confident these expectations are reasonable, they are subject to several risks and uncertainties that are not predictable or quantifiable in advance. Therefore, future results and developments may differ from these forward-looking statements. Given this, forward-looking statements are not guarantees of future performance.

The forward-looking information and statements herein contained are based on the information available at the date of the present document. Except when required by applicable law, the Company does not assume any obligation to publicly update or revise said forward-looking information or statements.

Corporate Governance Report December 2010

Table of Contents

• 1. Statement of compliance
• 1. Corporate governance structure
• 1. Sharehalder structure
• 1. Management and cantrol system
• 1. Exercise of shareholders' rights
• 1. Remuneration
• 1. Capital markets

ANNEXES:

I. Main positions held by members of Board of Directors over the last five years

II. Current positions of the members of the Board of Directors in companies not belonging to the same group as EDP Renováveis, S.A.

III. Current positions of the members of the Board of Directors in companies belonging to the same group as EDP Renováveis, S.A.

IV. Board of Directors and Secretary of the Board

V. Shares of EDP Renováveis owned by members of the Board of Directors as at 31.12.2010

EXTRACT OF MINUTES OF GENERAL MEETING OF SHAREHOLDERS

EDP Renovaveis - 2010 Corporate Governance Report

0. STATEMENT OF COMPLIANCE

EDP Renováveis, S.A. (hereinafter referred to as EDP Renováveis, EDPR or the Company) is a Spanish company listed on a regulated market in Portugal. EDP Renováveis' corporate organization is subject to the recommendations contained in the Portuguese Corporate Governance Code ("Código de Governo das Sociedades") approved by the CMVM (Portuguese Securities Market Commission) in January 2010. This governance code is available to the public at the CMVM website (www.cmvm.pt).

EDPR states that it has adopted in full the CMVM recommendations on the governance of listed companies provided in the Portuguese Corporate Governance Code, with the exception of Recommendation 11.2.2 of the code, which has not been adopted for the reasons indicated below.

The following table shows the CMVM recommendations set forth in the code and indicates whether or not they have been fully adopted by EDPR and the place in this report in which they are described in more detoil.

Recommendation	Adoption information	Description in Report
I. GENERAL MEETING OF SHAREHOLDERS 1.1 GENERAL MEETING BOARD
1.1.1 The Presiding Board af the General Meeting shall be equipped with the necessary and adequate human resources and logistic support, taking the financial position of the compony into consideration.	Adopted	4.6
1.1.2 The remuneration of the Presiding Board of the General Meeting shall be disclosed in the Annual Report on Corporate Gavernance.	Adopted	4.6
1.2 PARTICIPATION AT THE MEETING
1.2.1 The requirement for the Board to receive statements for share deposit or blocking far participation at the general meeting shall not exceed 5 warking days.	Adapted	4.2
1.2.2 Shauld the General Meeting be suspended. the compony shall not compel share blocking during that period until the meeting is resumed and shall then prepore itself in advance as required far the first session.	Adopted	4.2

Adoption information	Description in Report
Adopled	4.4
Adopted	4.4
Adopted	4.3
Adopted	4.5
Adopted	4.7
Adopted	4.8

(5 year intervals), on whether that statutory provision is to be amended or prevoils - without super quorum requirements as to the one legally in force - and that in said resolution, all votes issued be counted, without opplying said restriction. 1.6.2 In cases such as change at control or chonges to the composition of the Board of Directors, defensive measures shall not be adapted that instigate immediate and serious Not applicoble asset erosion in the compony, and further disturb the free transmission of shares and voluntory performonce ossessment by the shoreholders af the members of the Board of Directors. BOARD OF DIRECTORS AND SUPERVISORY - BOARD II.1 General Points II.1.1 Structure and Dutles II.1.1.1 The Boord of Directors sholl ossess the adopted model in its Annual Report on Carporate Governance and pin-point possible 1.1/1.5 Adopted hold-ups to its functioning and sholl propose meosures that it deems fit for surpassing such obstacles.	Description in Report
II.1.1.2 Companies shall set up internal control and risk monogement systems in order to sofeguard the compony's worth ond which will identify and manoge the risk. Said systems shall include at least the following components: i) setting of the compony's strategic objectives os regards risk assumption; ii) identifying the main risks associoted to the company's activity ond ony events thot might generate risks; Adopted iii) onolyze and determine the extent of the 3.7 impact and the likelihood that each af soid potential risks will occur; iv) risk management aimed of oligning those octual incurred risks with the compony's strategic options for risk assumption; v) control mechanisms for executing measures for adapted risk management ond its effectiveness: vi} adoption of internol mechanisms for information and communicotion on several

Recommendation	Adoption information	Description in Report
components of the system and of risk warning; vii) periodic assessment of the implemented system and the adoption of the amendments that are deemed necessary.
11.1.1.3 The Board of Directors shall ensure the establishment and functioning of the internal control and risk management systems. The Supervisory Board shall be responsible for assessing the functioning of said systems and proposing the relevant adjustment to the campany's needs.	Adopted	3.3.2/3.7
II.1.1.4 The campanies shall: i] identify the main econamic, financial and legal risk that the campany is expased ta during the exercise af its activity; ii) describe the performance and efficiency of the risk management system, in its Annual Repart on Carporate Gavernance.	Adopted	3.7.2
II.1.1.5 The Baard at Directors and the Supervisory Board shall establish internal regulatians and shall have these disclosed on the company's website.	Adopted	3.1
II. 1 .2 Incompatibility Governance and Independence 11.1.2.1 The Baard of Directors shall include a number of non-executive members that ensure the efficient supervision, auditing and assessment af the executive members' octivity.	Adopted	1.2.2 /3.1.3/0.1
II.1.2.2 Nan-executive members must include an adequate number af independent members. The size of the campany ond its shareholder structure must be taken into account when devising this number and may never be less than a fourth of the total number of Baard of Directors.	Adopted	1.2.2/0.1
II.1.2.3 The independency assessment at its nan- executive members carried aut by the Baard of Directors shall take into accaunt the legal and regulatory rules in force concerning the independency requirements and the incampatibility framework applicable to members of other carparate baards, which ensure orderly and sequential coherence in applying independency criteria to oll the company. An independent executive member shall nat be cansidered as such, if in another carparate board and by tarce of applicable	Adapted	0.

Recommendation	Adoption information	Description in Report
rules, may not be an independent executive member.
II.1.3 Eligibility and Appointment Criteria
II.1.3.1 Depending on the applicable model, the Chair of the Supervisory Board and of the Auditing and Finoncial Matters Committees shall be independent and adequately competent to cary out his/her duties.	Adopted	3.3.1
11.1.3.2 The selection process of candidates for non-executive members shall be conjured so as prevent interference by executive members.	Adapted	3.5
11.1.4 Policy on the Reporting of Irregularities
11.1.4.1 The company shall adopt a palicy whereby irregularifies accuming within the company are reported. Such reports shall contain the following information: i) the means by which such irregularities may be reported internally, including the persons that are entitled to receive the reparts; ii) how the report is to be handled, including confidential treotment, should it be required by the reporter.	Adopled	3.9
11.1.4.2 The general guidelines on this policy shall
be disclosed in the Annual Report of Corporate Governance.	Adapted	3.9
II.1.5 Remuneration
II,1,5.1 The remunerotion of the members of the Board of Directors shall be structured so that the farmers' interests are capable of being aligned with the long-term interests of the campany. Furthermore, the remuneratian shall be bose on performance assessment and shall discouroge taking on extreme risk. Thus, remunerations shall be structured as follaws: i] The remunerotion of the Board of Directors carrying out executive dufies shall include a variable element which is determined by a perfarmance assessment carried out by the campany's competent badies according ta pre- established quontifiable criteria. Soid criteria shall take into cansideration the company's real growth and the actual growth generated for the sharehalders, its long-ferm sustainability and the risks taken on, as well as campliance with the rules applicable to the company's activity. ii) The variable component of the remunerolion	Adopted	5.1/5.2/5.3

Adoption information

Description in Report

shall be reasonoble overall as regard the fixed companent of the remuneration and maximum limits shall be set for all components.

Recommendation

iii) A significant part af the varioble remuneratian shall be deferred far a period nat less thon three years and its payment sholl depend of the campony's steody positive performonce during said period;

iv) Members af the Boord of Directors shall not enter into contracts with the company or third porties that will hove the effect of mitigoting the risk inherent in the voriability of the remuneration established by the compony:

v) The Executive Directors shall hold, up to twice the value of the total annual remuneration, the company shares that were ollotted by virtue of the variable remunerotion schemes, with the exception of those shares that ore required to be sold for the payment of taxes on the gains of said shores:

vi) When the varioble remuneration includes stock options, the period for exercising same sholl be deferred for o period of not less than three veors:

vii) The appropriote legol instruments shall be established so thot in the event of a Director's dismissol without due cause, the envisoged compensotion shall not be paid out if the dismissal or termination by agreement is due to the Director's inadequate performonce:

viii| The remuneration of Non-Executive Directors shall not include ony component the value af which is subject to the performance ar the value of the campany.

11.1.5.2 A statement on the remuneration policy of the Board of Directors ond Supervisory Boord referred to in Article 2 of Law No. 28/2009 of June 19th, shall contoin, in oddition to the content therein stoted, adequate information on: i} which groups of companies the remuneration policy and proctices of which were taken as a boseline for setting the remuneration;

ii) the payments for the dismissal or termination by ogreement of the Director's duties,

II.1.5.3 The remuneration policy statement referred to in Article 2 of Law No. 28/2009 shall olso include the Director's remunerotions which contoin an important voriable component,

Adopted 5.4/5.2 Adopted

5.4

<-- PDF CHUNK SEPARATOR -->

Recommendation	Adoption information	Description in Report
within the meaning of Article 248-B/3 of the Securities Code. The statement shall be detailed ond the policy presented shall particularly take the long-term performance of the company, compliance with the rules applicable to its business and restraint in taking risks into account. II.1.5.4 A propasal shall be submitted at the General Meeting on the approval of plans for
the allatment af shares and/ar aptions for share purchase ar further yet an the variatians in share process, to members of the Baard of Directars and Supervisory Baard and other managers within the cantext of Article 248/3/B af the Securities Cade. The prapasal shall cantain the	Nat applicable	5.1/5.7
regulatian plan ar in its absence, the plan's conditions. The main charoctenstics af the refirement benefit plans established far members of the Baard af Directors and Supervisary Baard ond other monogers within the cantext of Article 248/3/B of the Securities Code, shall also be approved at the General Meeting.
11.1 .5.5 Doesn't exist
11.1.5.6 At least one of the Remuneration Committee's representatives shall be present of the Annual General Meeting for Shareholders.	Adopted	5.6
II.1.5.7 The amount of remuneration received, as a whole and individually, in other componies of the graup and the pensian rights acquired during the financial year in question shall be disclosed in the Annuol Report on Corparate Governance.	Adopted	5.3
11.2 Board of Directors
11.2.1 Within the limits established by law far each management ond supervisary structure. and unless the company is of o reduced size, the Board af Directors shall delegate the day-ta-day running and the delegoted duties shall be	Adapted	3.2.1.2
identified in the Annual Corporate Governonce Repart.
11.2.2 The Board of Directors must ensure that the compony acts in accordance with its goals and	Not Adopted
	shall not delegate its duties, namely in what ("Under Spanish Law, the matters referred ta in
concerns:	this recommendation con be delegated by the
strategy and policies:	i) the definition af the company's general Board of Directors to the Executive Committee. It is camman practice in Spanish listed companies
	ii) the definition of the graup's carparate for the delegation af pawers to be far-reaching,

Recommendation	Adoption information	Description in Report
structure; iii)decisions token that are considered to be preparation of accounts"). strategic due to the amounts, risk and particular characteristics involved.	with the exception of matters related to the
11.2.3 Should the Chair of the Boord of Directors carry out executive duties, the Boord of Directors shall set up efficient mechanisms for coordinating non-executive members that can ensure that these may decide upan, in an independent and informed manner, and furthermare shall explain these mechanisms to the shareholders in the Corparate Gavernance Report.	Adopted	3.1 .3
11.2.4 The annuol management repart shall include a description of the activity corned out by the Nan-Executive Directors and shall mention ony restraints encountered.	Adopted	3.1.3
11.2.5 The company shall expound its policy of portfolio rototion on the Board of Directors, including the person respansible for the financial portfolio, ond report on same in the Annual Corporate Governance Report.	Adapted	3.5
II.3 CEO, Executive Committee and Executive Board of Directors
II.3.1 When managing Directors that carry out execulive duties are requested by other Directors to supply information, the former must do so in a timely manner and the information supplied must adequately suffice the request mode.	Adopted	3.2.1.3/3.1.3
11.3.2 The Chair of the Executive Committee shall send the convening notice and minutes of the meetings to the Choir of the Board of Directors and, as applicoble. to the Chair of the Supervisory Board or the Auditing Committee, respectively.	Adopted	3.2.1.3
11.3.3 The Chair of the Boord of Directors shall send the canvening notices and minutes of the meetings to the Choir of the General and Supervisary Board and the Chair of the Financiol Matters Committee.	Not applicable
II.4 General and Supervisory Board, Financial Matters Committee, Audit Committee and Supervisory Board
II.4.1 Besides carrying out its supervisory duties,	Not opplicable

Recommendation	Adoption information	Description in Report
the General and Supervisory Board shall advise, tollow-up and carry out an on-going assessment on the management of the compony by the Executive Board of Directors. Besides other subject matters, the General and Supervisory Boord shall decide on: i) the definition of the strategy and general policies of the company; ii) the corporate structure of the graup; and iii) decisians taken that are considered to be strategic due to the amounts, risk and particular characteristics involved.
11.4.2 The onnual reports and tinancial infarmatian on the activity camed aut by the General and Supervisory Committee, the Finonciol Matters Committee, the Auditing and Supervisory Committee must be disclosed on the company's website.	Adopted	3.3.4/6.2.5
11.4.3 The annual reports on the activity carried aut by the General and Supervisory Board, the Finoncial Matters Committee, the Audit Committee and the Supervisory Baard must include a description on the supervisary octivity and shall mention ony restroints that they may have come up against.	Adopted	3.3.4
11.4.4 The General and Supervisory Boord, the Auditing Committee ond the Supervisory Boord (depending an the applicable model) shall represent the campany for all purposes at the external auditor, and shall propose the services supplier, the respective remuneration, ensure thot adequate conditions for the supply of these services are in ploce within the company, as well as being liaisan affer between the company and the first recipient of the reports.	Adopted	3.3.2
11.4.5 Accarding to the applicable model, the Generol and Supervisory Board, Audit Committee and Supervisory Board shall assess the external auditar on an annual basis and advise the General Meeting that he/she be discharged whenever justifiable graunds are present.	Adapted	3.3.2/3.8
11.4.6 The internal audit services and thase that ensure campliance with the rules applicable to the company {complionce services) shall functianally report ta the Audit Committee, the General and Supervisory Board ar in the case of	Adopted	3.3.2

EDP Renováveis - 2010 Corporate Governance Report

11 / 100

Recommendation	Adoption information	Description in Report
companies adopting the Latin model, an
independent Director ar Supervisory Board,
regardless af the hierarchical relatianship that
these services have with the executive
management of the campany.
11.5 Special Committees
II.5.1 Unless the company is of reduced size and
depending on the adapted model, the Board of
Directors and the General and Supervisary
Committees, shall set up the necessary
Committees in order to:
i) ensure that a competent and independent
ossessment of the Executive Director's
performonce is corried out, as well os its own
overall performonce and further yet, the	Adopled	1.1/1.5/3.3.2/3.2.2.2
performonce of oll existing committees;
ii) study the adopted gavemonce system and
venty its efficiency and propose to the
campetent bodies, measures to be carried out
with a view to its improvements;
iii) in due lime identify potential candidotes with
the high profile required for the performonce of
Director's duties.
11.5.2 Members of the Remunerotion Committee	Not applicoble
or equivalent shall be independent from the
	members of the Boord of Directors ond include ("The members of the Nominations and
	at leost one member with knowledge and Remunerations Committee are members of the
	experience in motters of remuneration policy. Boord of Directors. However, its members are
	considered independent members and do not
	therefore belong to the Executive Committee. In
	occordonce with Articles 23 ond 217 of the	1.2.6.2/3.2.2.1
	Sponish Componies Low, the remuneration
	scheme for Directors should be fixed in the
	articles of ossociation. It is normal proctice in
	Sponish componies for this remuneration to be
	decided upon by the General Meeting of
	Shareholders and for its allocation to the
	different members of the Board of Directars ta be
	decided on by the Board itself.").
11.5.3 Any noturol or legol person which provides
or has provided, over the post three years,
services to ony structure subject to the Boord of
Directors, to the Board of Directors of the
company or that has to do with the current	Adopted	3.2.2

recommendotion also opplies to ony notural or

..... :

cansultant to the company shall not be recruited to assist the Remunerotion Committee. This

Recommendation	Adoption information	Description In Report
legol person who hos on employment contract
or provides services.
11.5.4 All the Committees sholl draw up minutes of		3.2.1.3/3.2.2.3/
the meetings held.	Adopted	3.2.3.3/3.3.3
III. INFORMATION AND AUDITING
III.1 General Disclosure Obligations
III.7.1 Companies shall maintain permanent
contact with the morket thus upholding the
principle of equality for shoreholders ond ensure
that investors are able ta access information in a	Adopted	6.2.1 / 6.2.2
uniform foshion. To this end, the company shall
create an Investor Assistance Unit.
III.1.2 The following informotion that is made
available on the company's Internet website
sholl be disclosed in the English language:
o) The campany, public company status,
headquarters and remaining dato provided for
in Article 171 af the Partuguese Commercial
Campanies Cade;
b) Articles of Association;
c) Credentials of the Members of the Boord of	Adopted	6.2.5
Directors and the Market Liaison Officer:
d) Investor Relations Office, its functions and
contact information;
e) Financial statements;
f ) Half-yearly calendar of company events;
g) Proposals submitted for discussion and voting
at general meetings;
h) Invitotion to generol meetings.
III.1.3. Companies sholl advocate the rotation of
auditors after two or three terms in occordance
with four or three yeors respectively. Their
continuance beyond this period must be based
on a specific opinion for the Supervisory Board to	Adopted	3.8
formally consider the conditions of auditor
independence and the benefits ond costs of
replacement.
III.1.4. The external ouditor must, within its
verify the implementation of powers.
remuneration policies ond systems, the efficiency
and functioning of internal control mechanisms	Adopted	3.8
and report any shortcomings to the campany's
Supervisory Board.
III.1.5. The company sholl not recruit the external	Adapted	5.8

		Description in
Recommendation	Adoption information	Report
auditor for services other than audit services, nor any entity with which same takes port or incorporates the same network. Where recruiting such services is called for, soid services should not be greater than 30% of the value of services rendered to the company. The hiring of these services must be approved by the Supervisory Board and must be expounded in the Annual Corporate Governance Report. IV. CONFLICTS OF INTEREST
IV. 1 Shareholder Relationship
IV.1.1 Where deals are concluded between the company ond shareholders with qualifying holdings, or entifies with which same are linked in occardance with Article 20 of the Securities Code, such deals sholl be carried out in normal market conditions.	Adopted	3.6
IV.1.2 Where deals of significont importance are undertoken with holders of qualitying holdings, or entities, with which same are linked in accordance with Article 20 of the Securities Cade, such deals shall be subject to a	Adopted (According to the Sponish law and the governonce structure, these functions were 3.2.3.2 / 3.3.2
preliminary opinion from the Supervisory Boord. The procedures and criteria required to define the relevont level of significonce of these deals and other conditions shall be estoblished by the Supervices (Road Scard	delegoted by the Board of Directors to the Reloted-Party Tronsactions Cammittee ond the Audit ond Control Committee)

0.1. STATEMENT ON COMPLIANCE WITH INDEPENDENCE CRITERIA

Article 20.2 of the EDPR's Articles of Association defines as independent members of the Board of Directors that are able to perform their offices without being limited by relations with the company, its shareholders with significant holdings or its Directors and meet the other legal requirements.

For the purpose of this statement of compliance with independence criteria and for the sake of comparison between EDPR and the other companies listed on Eurolist by Euronext Lisbon in matters of compliance with corporate governance recommendations, we have also considered the criteria for appraising independence and incompatibilities set forth in Articles 414-A (1), (save for paragraph b)), 414 (5) and 423-B nº 4 both of the Portuguese Commercial Companies Code ("Código das Sociedades Comerciais"), and so the Board of Directors of EDPR considers that the following Directors meet cumulatively (i) these criteria of independence required by law and the Articles of Association and (ii) if they were to apply those criteria of incompatibilities as legally defined:

Name	Position	Date of End of
		Appointment Term
António Nogueira Leite	Director (Independent) Chairperson of the Related-Party Transactions 04-06-2008 Committee		04-06-2011
Daniel M. Kammen	Director (Independent)	04-06-2008	04-06-2011
Francisco Jasé Queiraz de Barros de Director (Independent) Locerda	Member af Audit and Cantral Committee	04-06-2008	04-06-2011
Gilles August	Directar (Independent)	14-04-2009	14-04-2012
João Lapes Raimundo	Director (Independent) Member of the Naminations and Remunerations 04-06-2008 Cammittee		04-06-2011
Joga Mella Franco	Director (Independent) Choirperson of Audit and Control Committee And Member of the Related-Party Transactions Cammittee	04-06-2008	04-06-2011
Jarge Santos	Director (Independent) Chairpersan af the Nominatians and Remunerations 04-06-2008 Cammittee		04-06-2011
José Araúja e Silva	Directar (Independent)	04-06-2008	04-06-2011
José Silva Lapes	Directar (Independent) Member of the Audit and Control Cammittee	04-06-2008	04-06-2011
Rafael Caldeira Valverde	Director (Independent) Member of the Nominations and Remunerations 04-06-2008 Committee		04-06-2011

1. CORPORATE GOVERNANCE STRUCTURE

1.1. MODEL OF MANAGEMENT AND SUPERVISION

EDPR has adopted the governance structure in effect in Spain. It comprises a General Meeting of Shareholders, which expresses corporate wishes, and a Board of Directors that represents and manages the company.

As required by law and the Articles of Association, the Company's Board of Directors has set up four committees. These are the Executive Committee, the Audit and Control Committee, the Nominations ond Remunerations Committee and the Committee on Related-Party Transactions. The Company's governance structure is shown in the chart below.

The governance model of EDPR is designed to ensure the transparent, meticulous separation of duties and the specialization of supervision. The most important bodies in the management and supervision model at EDPR are the following:

• General Meeting of Shareholders
• Board of Directors:
• Executive Committee;
• Audit and Control Committee:
• External auditor.

The purpose of the choice of this model by EDPR is to adapt the Company's corporote governance structure to the Portuguese legislation. The governance model adopted by EDPR therefore seeks, insofar as it is compatible with its personal law, to correspond to the so-called "Anglo-Saxon" model set forth in the Portuguese Commercial Companies Code, in which the management body is a Board of Directors, and the supervision and control duties are of the responsibility of an Audit and Control Committee.

The choice of this model is essentially an attempt to establish compatibility between two different systems of company law, which can be considered applicable to this model.

The experience of institutional operating indicates that the governance model adopted by the shareholders is appropriate to the corporate organization of EDPR activity, especially because it affords transparency and an healthy balance between the management functions of the Executive Committee, the supervisory functions of the Audit and Control Committee and oversight by different specialized Board of Directors committees.

The institutional and functional relotionship between the Executive Committee, the Audit and Control Committee and the other non-executive members of the Board of Directors has been of internal harmony conducive to the development of the company's business.

In order to ensure a better understanding of EDPR corporate governance by its shareholders, the Company posts its updated Articles of Association at www.edprenovaveis.com.

1.2. CORPORATE BODIES

1.2.1. GENERAL MEETING OF SHAREHOLDERS

The General Meeting of Shareholders, when properly convened, has the power to decide and adopt majority decisions on matters that the law and the Articles of Association set forth that it should be decided and be submitted for its approval.

The Board of the General Meeting of Shareholders', through the Chairperson of the General Meeting, is responsible for organizing its proceedings. It is made up of the Chairperson of the Meeting, the Chairperson of the Board of Directors, or his substitute, the other Directors and the Secretary of the Board of Directors.

The Ordinary General Meeting shall meet annually within the first six [6] months of the year and shall include the following matters:

· Evaluation of the Company's management and approval of the annual accounts from the previous financial year, management report and decision on the application of the previous fiscal year's income or loss;

• · Appointment and renewal of the Board of Directors in accordance with these Articles and the legal provisions in force, covering or eliminating vacancies that may occur or, as appropriate, ratifying the appointments of Directors made on a provisional basis by the Baard of Directors;
• Appointment af auditors;
• · Decision on the matters proposed by the Board of Directors;
• · All other matters provided in the law in force.

The Chairperson of the General Meeting shall:

• · Verify whether the meeting was properly constituted, as well as the sufficiency af the proxies granted by the Shareholders;
• · Chair the meeting in order to decide the subjects contained in the Agenda;
• · Give the floor to the Shareholders who request it but it may take back the floor should he consider that the matter has been sufficiently discussed;
• · Organize the votes and announce the results; and
• · Have, in general, all the powers required to duly conduct the meeting or recognized in the law in force.

The Chairperson of the General Meeting was appointed on June 4th 2008.

Chairperson of the General Meeting

Rui Chancerelle de Machete

1.2.2. BOARD OF DIRECTORS

The Board of Directors has the broadest powers for the management and governance of the Company, with no limitations other than the competences expressly allocated exclusively by the General Meeting of Shareholders, by law or the Articles of Association.

The structure, competences and functioning of the Board of Directors are described in more detail in point 3.1. The Board of Directors currently consists of the following sixteen (16) members:

Name	Position	Date of Appointment	End of Term
António Mexia	Chairperson and Director	18/03/2008	18/03/2011
Ana Moria Fernandes	Vice-Chairperson, CEO	18/03/2008	18/03/2011
António Martins da Costo	Director	18/03/2008	18/03/2011
João Manso Neto	Director	18/03/2008	18/03/2011
Nuno Alves	Director	18/03/2008	18/03/2011
Antónia Nogueira Leite	Director (Independent)	04/06/2008	04/06/2011
Daniel M. Kammen	Director (Independent)	04/06/2008	04/06/2011
Froncisco José Queiroz de Barros de l acerda	Director (Independent)	04/06/2008	04/06/2011
Gilles August	Director (Independent)	14/04/2009	14/04/2012
João Lopes Raimundo	Director {Independent}	04/06/2008	04/06/2011
João Manuel de Mello Franco	Director (Independent)	04/06/2008	04/06/2011
Jorge Santos	Director (Independent)	04/06/2008	04/06/2011
José Araujo e Silva	Director (Independent)	04/06/2008	04/06/2011
José Silva Lopes	Director (Independent)	04/06/2008	04/06/2011
Manuel Menéndez Menéndez	Director	04/06/2008	04/06/2011
Rafael Caldeira Valverde	Director (Independent)	04/06/2008	04/06/2011

The positions held by the members of the Board in the last five (5) years, those that they currently hold and positions in Group and non-Group companies are listed in Annexes I, II and III, respectively. Annex IV also gives a brief description of the Directors' professional and academic careers.

Finally, the shares of EDPR owned by each Director are described in the table in Annex V.

1.2.3. CHAIRPERSON AND VICE-CHAIRPERSON OF THE BOARD OF DIRECTORS

The Chairperson of the Board is the Chairperson of the Compony and fully represents it, using the company name, implementing decisions of the General Meeting, Board of Directors and the Executive Committee.

Without prejudice to the powers of the Chairperson under the law and Articles of Association, he also has the following powers:

• · Convening and presiding over the meetings of the Board of Directors, establishing their agenda and directing discussions and decisions;
• · Acting as the Company's highest representative dealing with public bodies and any sectorial or employers bodies.

The Chairperson of the Board is appointed by the members of the Board of Directors, unless this is done by the General Meeting. The current Chairperson was appointed on March 18th 2008.

Chairperson of the Board

António Mexia

It is the Vice-Chairperson who replaces the Chairperson when he is unable to attend the meetings. The Board may also delegate executive powers to the Vice-Chairperson.

The Vice-Chairperson is appointed by the Board of Directors on the proposal of the Chairperson. The Vice-Chairperson was appointed on March 18th 2008.

lice - Chairperson of the Board

Ano Maria Fernandes

1.2.4. CHIEF EXECUTIVE OFFICER

The Board of Directors may appoint one or more Chief Executive Officers. Chief Executive Officers are appointed by a proposal of the Chairperson or two-thirds of the Directors. Chief Executive Officers are appointed with a vote in favor of two-thirds of the Directors and must be chosen from among the Directors.

The competences of each Chief Executive Officer are those deemed appropriate in each case by the Board, with the only requirement being that they are delegable under the law and Articles of Association.

The Chief Executive Officer was appointed on June 4th 2008 with competences including coordination of the implementation of Board and Executive Committee decisions, monitoring, leading and coordinating the management team appointed by the Executive Committee, representing the company in dealings with third parties and other related duties.

CEO

Ana Maria Fernandes

1.2.5. COMPANY SECRETARY

The duties of the Company Secretary are those set forth in current laws, the Articles of Association and Board Regulations. In particular, in accordance with the Board Regulations and in addition to those set forth in the Articles of Association, his competences are:

• · Assisting the Chairperson in her duties;
• · Ensuring the smooth operation of the Board, assisting and informing it and its members;
• · Safeguarding company documents;
• · Describing in the minutes books the proceedings of Board meetings and bearing witness to its decisions;
• · Ensuring at all times the formal and material legality of the Board's actions so that they comply with the Articles of Association and Board Regulations;
• · Monitoring and guaranteeing compliance with provisions imposed by regulatary bodies and consideration of their recommendations;
• · Acting as secretary to the committees.

The Company Secretary, who is also the General Secretary and Director of the Legal Department at EDPR, was appointed on December 4th 2007.

Company Secretary

Emilio Garcio-Conde Noriega

1.2.6. COMMITTEES

The structure, competences and operation of the Executive Committee, Nominations and Remunerations Committee and the Committee on Related-Party Transactions are described in point 3.2. Nonetheless, the nature of the committees and the names of their members are detailed below.

1.2.6.1. EXECUTIVE COMMITTEE

The Executive Committee is a permanent body to which all competences of the Board of Directors that are delegable under the law and the Articles of Association can be delegated, with the exception of;

• · election of the Chairperson of the Board of Directors,
• · appointment of Directors by cooption,
• · requests to convene or convening of General Meetings,
• · preparation and drafting of the Annual Report and submission to the General Meeting,
• · change of registered office and
• · drafting and approval of mergers, spin off or transformation of the company.

The committee currently consists of five (5) members, who were appointed on June 4th 2008, plus the Secretary.

Executive Committee
Chairperson	António Mexia
CEO	Ana Maria Fernandes
	António Mortins do Casta
	João Manso Neto
	Nuno Alves
Secretary	Emilio Gorcío-Conde Noriega

The members of the Executive Committee shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the Executive Committee at any time and the members may resign said positions while still remaining Company Directors.

The structure, competences and functioning of the Executive Committee are described in point 3.2.1.

1.2.6.2. NOMINATIONS AND REMUNERATIONS COMMITTEE

The Nominations and Remunerations Committee is a permanent body with consultive and advisory nature and its recommendations and reports are not binding.

The Nominations and Remunerations Committee currently consists of three (3) independent members, who were appointed on June 4th 2008, plus the Secretary.

Nominations and Remunerations Committee
Chairperson	Jorge Sontos
	João Lopes Roimundo
	Rafael Caldeira Valverde
Secretary	Emilio Garcia-Conde Noriego

None of the committee members are spouses or up to third-degree relatives in direct line of the other members of the Board of Directors.

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

The structure, competences and functioning of the Nominations and Remunerations Committee are described in point 3.2.2.

1.2.6.3. COMMITTEE ON RELATED-PARTY TRANSACTIONS

The Committee on Related-Party Transactions is a body of the Board of Directors.

The committee currently consists of three (3) members, who were appointed on June 4th 2008, plus the Secretary.

Committee on Related-Party Transactions
Chairperson	António Nogueira Leite
	João Manso Neto
	João Manuel de Mella Franco
Secretary	Emilio García-Conde Noriego

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remaining Company Directors.

The structure, competences and functioning of the Committee on Related-Party Transactions are described in point 3.2.3.

1,3. AUDIT AND CONTROL COMMITTEE

The Audit and Control Committee is a permanent body and performs supervisory tasks independently from the Board of Directors.

The committee currently consists of three (3) members who are independent Directors and were appointed on June 4th 2008, plus the Secretary.

udit and Control Committee
Chairperson	Joãa Monuel de Mella Franca
	Francisco José Queiroz de Borros de Locerdo
	João Silva Lopes
Secretary	Emilia García-Cande Noriego

The committee members shall maintain their positions for as long as they are Company Directors. Nonetheless, the Board may decide to discharge members of the committee at any time and the members may resign said positions while still remoining Company Directors.

The structure, competences and functioning of the Audit and Control Committee are described in point 3.3.

1.4. ORGANIZATION CHART

EDPR has adopted the following organization chart for its management:

The EDPR' Management Team was appointed by the Executive Committee on October 14th 2008 to manage the day-to-day running of the company. The Management Team is coordinated by the Chief Executive Officer, comprising four main oreas of responsibility assigned to four officers (the Chief Financial Officer, the Chief Business Development Officer, the Chief Operating Officer for Europe and the Chief Operating Officer for North America) and a Company Secretary and Legal Counsel. The functions and competences of the management team are as follows:

1.4.1. CHIEF FINANCIAL OFFICER

The job of the Chief Financial Officer is to propose and ensure the implementation of the Group's financial policy and management, including (i) negotiating, managing and controlling financing, (ii) optimizing cash management and (iii) proposing financial risk management policy; to coordinate and prepare budget and business plan of the Group, with the Group's business platforms; to manage the Group's monthly closing of accounts and financial statements, and ta analyze the financial and operational performance of the Graup; to manage relations with the Group's shareholders, potential investors and market analysts to promote the value of its shares on the capital market; and to coordinate the Group's procurement and its relations with main suppliers and ensuring the implementation of the Group's procurement strategy and policy.

CFO

Rui Teixeiro

1.4.2. CHIEF BUSINESS DEVELOPMENT OFFICER

The job of the Chief Business Development Officer is to assess investments, promote the development of EDPR business and set out the strategic risk guidelines for the company. In line

with the strategic plan and in coordination with the other members of the management team, he must optimize the value and risk profile of the group's business portfolio, while watching the evolution of markets and new technologies. His teams coordinate and implement new business development initiatives in new countries and are responsible for monitoring and assessing investments in the consolidated business platforms. Additionally he is now responsible within the Management Team for the renewable business in Brazil, a recent upstart within the EDPR portfolio.

CBDO

Luis Adão da Fonseco

1.4.3. CHIEF OPERATING OFFICER FOR EUROPE

It is the job of the Chief Operating Officer for Europe to coordinate the EDPR European platform in establishing, developing and implementing the EDPR Group's strategic plan for the renewable energies business, draffing and implementing the strategic plan for Europe in accordance with the guidelines set by the Board of Directors of EDPR, planning, organizing and managing resources, controlling, measuring and improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDPR a leader in the renewable energy sector in Europe.

COO - Europe

João Paula Costeira

1.4.4. CHIEF OPERATING OFFICER FOR NORTH AMERICA

The Chief Operating Officer for North America is responsible for coordinating the North American platform of EDPR in establishing, developing and implementing the EDPR Group's strategic plan for the renewable energies business, drafting and implementing the strategic plan for North America, in accordance with the guidelines set by the Board of Directors of EDPR, planning, organizing and managing resources, controlling, measuring and improving the management of projects and subsidiary companies and achieving the results expected by the Group to make EDPR a leader in the renewable energy sector in North America.

COO - NA

Gabriel Alonsa Imaz

1.4.5. COMPANY SECRETARY AND LEGAL COUNSEL

He assists the Management Team in its legal, administrative and logistics activities to ensure that it functions effectively, provides legal advice to the group in order to guarantee compliance with applicable legislation, and provides legal support at Management meetings, including the circulation of its decisions.

Company Secretary and Legal Counsel

Emilio Gorcía-Conde Noriega

1.5. STATEMENT ON THE GOVERNANCE STRUCTURE

In order to comply with the Recommendation II.1.1.1 of the Portuguese Corporate Governance Code and according to the results of the reflection made by the Audit and Control Committee (point 3.3.2) regarding the terms of the Recommendation 11.5.1 part ii), the governance model adopted has been ensuring an effective performance and articulation of EDPR Social Bodies, and proved to be adequate to the company's governance structure without any constraints to the performance of its checks and balances system adopted to justify the changes made in the Governance practices of EDPR.

2. SHAREHOLDER STRUCTURE

2.1 CAPITAL STRUCTURE

0

The EDPR share capital of EUR 4,361,540,810 is represented by 872,308,162 shares with a face value of EUR 5 each. All shares integrate a single class and are fully issued and paid. There are no holders of special rights.

Pursuant to Article 8 of the Company's Articles of Association, there are no restrictions on the transfer of EDPR shares.

As far as the Baard of Directors of EDPR is aware, there are currently no shareholders' agreements regarding the Company.

2.2 SHAREHOLDER STRUCTURE

The breakdown of the EDPR structure by region and investor type at 31 December 2010 was as follows:

EDPR Shareholder Structure (%)

At the end of 2010, EDPR's tree float comprises more than 120,000 institutional and private investors in over 50 countries with special focus on Portugal, United Kingdom, United States and Rest of Europe. Institutional investors represented 79% of the free float, with private investors standing for the remaining with 21%.

Geographic Breakdown of Free Float

Investor Type of Free Float

2.3. QUALIFYING SHAREHOLDING

Qualifying shareholdings in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholders' holdings. As of December 31, 2010, no qualifying Shareholdings in EDPR with the exception of EDP – Energias de Portugal, S.A were identified.

Shareholder	Number of shares	Capital Vote	%
EDP - Energias de Portugal, SA
EDP ~ Energias de Portugol, S.A. Sucursal
en España	541.027.156	62.0%	62.0%
Hidroeléctrica del Cantábrica. S.A.	135.256.700	15.5%	15.5%
Total	676.283.856	77.5%	77.5%

3. MANAGEMENT AND CONTROL SYSTEM

Pursuant to Articles 10 and 19 et seq of the Articles of Association of EDPR, the Company's managing body is the Board of Directors, and there are faur committees stemming from it. They are the Executive Committee, the Audit and Control Committee, the Nominations and Remunerations Committee and the Committee on Related-Party Transactions.

3.1. STRUCTURE, COMPETENCES AND FUNCTIONING OF THE BOARD OF DIRECTORS

3.1.1. STRUCTURE

Pursuant to Articles 20 and 21 of the Company's Articles of Association, the Board of Directors shall consist of no less than five (5) and no more than seventeen (17) Directors. Their term of office shall be three (3) years, and they may be re-elected once or more times for equal periods. The Board of Directors currently consists of sixteen (16) members, whose particulars were indicated in point 1.2.2 above.

3.1.2. COMPETENCES

Pursuant to Aticle 19 of the Company's Articles of Association, the Board of Directors has the broadest powers for the administration, management and governance of the Company, with no limitations other than the responsibilities expressly and exclusively invested in General Meeting of Shareholders in the Company's Articles of Association or in the applicable Iaw. The Board is therefore expressly empowered to:

• · Acquire on a lucrative or onerous title basis personal and real property, rights, shares and interests that may suit the Company;
• · Sell and mortgage or charge personal and real property, rights, shares and interests of the Company and cancel mortgages and other rights in rem;
• · Neactiate and conclude as many loans and credit operations that it may deem appropriate;
• · Enter and formalize all sorts of acts or contracts with public entities or private persons;
• · Exercise civil and criminal actions and all further actions to be undertaken by the Company, representing it before governmental officers, authorities, corporations, governing, administrative, administrative-economic, administration and judicial courts, labor courts and the labor sections ("Juzgados de lo Social e Salas de lo Social") of the Supreme Court and of the High Courts of the Autonomous Communities, with no limitations whatsoever, including before the European Court of Justice, and in general before the Government, in all its levels and hierarchies; to intervene or promote, follow and terminate, through all procedures and instances, the processes, court sections or proceedings; to accept decisions, to file any kind of appeal, including the cassation one and other

extraordinary appeals, to discontinue or confess, to agree an early termination of a proceeding, to submit litigious questions to arbitration judges, and to cary out all sorts of notices and requirements and to grant a power of attorney to Court Representatives and other representatives, with the case-related powers and the powers which are usually granted to litigation cases and all the special powers applicable, and to revoke such powers;

• · Agree the allotment of dividends;
• Call and convene General Meetings and submit to them the proposals that it deem appropriate;
• · Direct the Company and organize its operations and exploitations by acknowledging the course of the company businesses and operations, managing the investment of funds, making extraordinary depreciations of bonds in circulation and realizing anything that it is considered appropriate to obtain maximum gains towards the object of the Company;
• · Freely appoint and dismiss Directors and all the Company's technical and administrative personnel, defining their office and their retribution;
• · Agree any changes of the registered office's address within the same borough;
• · Incorporate under the law all sorts of legal persons; contribute and assign all sorts of assets and rights, as well as entering merger and cooperation agreements, association, grouping and temporary union agreements between companies or businesses and joint property agreements and agreeing their alteration, transformation and termination;
• · All further powers expressly granted to the Board in these Articles or in the applicable law. This list is without limitations and has a mere indicative nature.

Regarding the decisions to increase the share capital, the Board of Directors, by delegation from the General Meeting, may decide to increase the share capital once or several times. This delegation, which may be the subject of replacement, can include the power to demand a pre-emptive right in the issue of shares that are the subject of delegation and with the requirements established by law.

On the other hand, the General Meeting may also delegate to the Board of Directors the power to implement an adopted decision to increase the share capital, indicating the date of its implementation and establishing any other conditions that have not been specified by the General Meeting. This delegation may be the subject ot replacement. The Board of Directors may use this delegation wholly or in part and may also decide not to perform it in consideration of the conditions of the Company, the market or any particularly relevant events or circumstances that justify said decision, of which the General Meeting must be informed at the end of the time limit or limits for performing it.

3.1.3. FUNCTIONING

In addition to the Articles of Association and the law, the Board of Directors is governed by the regulations approved on May 3th 2008. The regulations on the functioning of the Board are available to Company shareholders at the website www.edprenovaveis.com.

The Board of Directors must meet at least four (4) times a year, preferably once a quarter. Nonetheless, the Chairperson, on his own initiative or that of three (3) Directors, shall convene a Board meeting whenever he deems it necessary for the Company's interest. The Board of Directors held five (5) meetings during the year ended at December 31st 2010.

Meetings are convened by the Chairperson, who may order the Secretary to send the invitations. Invitations shall be sent at least five (5) days prior to the date of the meeting. Exceptionally, when the circumstances so require, the Chairperson may call a meeting of the Board without respecting the required advance notice.

The meetings of the Board are volid if half of the Directors plus one are present or represented. Directors shall attend Board meetings personally and, on exception, if they are unable to do so, they shall delegate their representation in writing to another Director. Without prejudice to the above, the Board of Directors shall be deemed to have been validly convened, with no need for an invitation, if all the Directors present or represented agree unanimously to hold the meeting as universal and accept the agenda to be dealt with at it.

Decisions are adopted by absolute majority among those present. Each Director present or represented has one vote and the Chairperson has the casting vote in the event of a tie.

In order for the non-executive Directors to be able to decide independently and be informed, Articles 22, 24 and 25 of the Board regulations established the following mechanisms:

• · Invitations to meetings shall include the agenda, although provisional, of the meeting and be accompanied by relevant available information or documentation;
• · The Directors have the broadest powers to obtain information on any aspect of the Company, to examine its books, records, documents and other registers of the Company's operations. In order to prevent distortions in the Company management, the exercise of the powers to obtain information shall be channeled through the Chairperson or Secretary of the Board af Directors:
• · Any Director may request the hiring, on the Company's account, of legal advisers, accountants, financial or commercial specialists or other experts. The performance of the job must necessarily related to concrete problems of a certain importance and complexity. Requests to hire experts shall be channeled through the Chairperson or Secretary of the Board of Directors, who shall be subject to the approval of the Board of Directors.

With the mechanisms set forth in the regulations, non-executive Directors have encountered no difficulties in performing their duties.

In 2010, the non-executive Directors were involved in the governance of EDPR not only by participating in meetings of the Board of Directors, where they gave their opinions on different company matters, made any suggestions they saw fit and took decisions on matters submitted to them, but olso by working on the Nominations and Remunerations Committee on Related-Party Transactions and Audit and Control Committee, where all the members are nonexecutive, with the exception of the Committee on Related-Party Transactions, which has one executive Director. João Manuel Manso Neto.

3.2. STRUCTURE, COMPETENCES AND FUNCTIONING OF COMMITTEES

3.2.1. EXECUTIVE COMMITTEE

3.2.1.1. STRUCTURE

Pursuant to Article 27 of the Company's Articles of Association, the Executive Committee shall consist of no less than three (3) and no more than six (6) Directors. The committee currently consists of the members indicated in point 1.2.6.1.

Its constitution, the appointment of its members and the extension of the powers delegated must be approved by two-thirds (2/3) of the members of the Board of Directors.

3.2.1.2. COMPETENCES

The Executive Committee is a permanent body thot has received all of the Board of Directors' delegable powers under the law and the articles of association, with the exception of: i) election of the Chairperson of the Board of Directors, iij appointment of Directors by cooplion, iiij request to convene or convening of General Meetings, iv) preparation and drafting of the Annual Report and Accounts and submission to the General Meeting, v) change of registered office and vi) draffing and approval of mergers, spin off or transtormation of the company.

The Executive Committee members have been deiegated all the powers of representation of the Company so that any of its members can act jointly in the name and on behalf of the Company.

3.2.1.3. FUNCTIONING

In addition to the Articles of Association, this committee is also governed by the regulations approved on June 4th 2008 and also by the Board Regulations. The committee's regulations are available to the shareholders at www.edprenovaveis.com.

The Executive Committee shall meet at least once a month and whenever is deemed appropriate by its Chairperson, who may also suspend or postpone meetings when he sees fit. The Executive Committee shall also meet when requested by at least two (2) of its members. The Executive Committee held thirty-three (33) meetings during the year ended on December 31\$1 2010.

The Executive Committee shall draft minutes for each of the meetings held and shall inform the Board of Directors of its decisions at the first Board meeting held after each committee meeting.

The Chairperson of the Executive Committee, who is currently also the Chairperson of the Board of Directors, shall send the Chairperson of the Audit and Control Committee invitations to the Executive Committee meetings and the minutes of those meetings.

Meetings of the Executive Committee are valid if half of its members plus one are present or represented. Decisions shall be adopted by simple majority. In the event of a tie, the Chairperson shall have the casting vote.

Executive Directors shall provide any clarifications needed by the other corporate bodies whenever requested to do so.

3.2.2. NOMINATIONS AND REMUNERATIONS COMMITTEE

3.2.2.1. STRUCTURE

Pursuant to Article 29 of the Company's Articles of Association, the Nominations and Remunerations Committee shall consist of no less than three (3) and no more than six (6) Directors. At least one of its members must be independent and shall be the Chairperson of the committee.

The members of the committee should also not be members of the Executive Committee. The committee currently consists of the members indicated in point 1.2.6.2 which are all independent Directors.

The Nominations and Remunerations Committee is made up of independent members of the Board of Directors, in compliance with Recommendation 44 of the Unitied Code of Good Governance approved by decision of the Board of the Spanish Securities Committee (hereinafter the CNMV), as amended by CNMV Circular 4/2007 of December 27th, which lays down that the Nominations and Remunerations Committee must be entirely made up of

external Directors numbering no fewer than three (3). As it is made up of independent Directors (in Spain the committee may only be comprised of Directors) it complies as completely as possible with the recommendation indicated in point 11.5.2 of the Portuguese Code of Corporate Governance.

3.2.2. COMPETENCES

• The Nominations and Remunerations Committee is a permanent body with an informative and advisory nature and its recommendations and reports are not binding.
• As such, the Nominations and Remunerations Committee has no executive functions. The main functions of the Nominations and Remunerations Committee are to assist and report to the Board of Directors about appointments (including by cooption), re-elections, dismissals and remunerations of the Board and its positions, about the composition of the Board and the appointment, remuneration and dismissal af senior management personnel. The Nominations and Remunerations Committee shall also inform the Board of Directors on general remuneration policy and incentives to them and senior management. These tunctions include the following:
• · Defining the standards and principles governing the composition of the Board of Directors and the selection and appointment of its members.
• · Proposing the appointment and re-election of Directors in cases of appointment of co-option and in other cases for submission to the General Meeting by the Board.
• · Proposing to the Board of Directors who the members of the different committees should be.
• · Proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method and amounts payable to Directors. Making proposals to the Board on the conditions of the contracts signed with Directors.
• · Informing and making proposals to the Boord of Directors regarding the appointment and/or removal of executives, and the conditions of their contracts and generally defining the hiring and remuneration policies of executive staff.

Reviewing and reporting on incentive plans, pension plans and compensation packages. Any other functions assigned to it in the Articles of Association or by the Board of Directors.

3.2.2.3. FUNCTIONING

In addition to the articles of association, the Nominations and Remunerations Committee is governed by the Regulations approved on June 4th 2008 and also by the Board regulations. The committee's regulations are available at www.edprenovaveis.com.

This committee shall meet at least once every quarter and also whenever its Chairperson sees fit. This committee shall draft minutes of every meeting held and inform the Boord of Directors of decisions that it makes at the first Board meeting held after each committee meeting.

The meetings of this committee shall be valid if at least half of the Directors on it plus one are present or represented. Decisions shall be odopted by simple majority. The Chairperson shall have the deciding vote in the event of a tie.

3.2.2.4. ACTIVITY IN 2010

In 2010 the main proposals made by the Nominations and Remunerotions Committee were:

• · Propose an annual fixed remuneration for the Chairperson of the General Meeting;
• · The Annual Report on the Fixed remuneration and annual and multi-annual variable remuneration for the year 2009 and 2010;
• · Performance evaluation of the Board of Directors and the Executive Committee.

A report on the activities of the Nominations and Remunerations Committee in the year ended on December 31st 2010 is available to shareholders at www.edprenovaveis.com.

3.2.3. RELATED PARTY TRANSACTIONS COMMITTEE

3.2.3.1. STRUCTURE

Pursuant to Article 30 of the Articles of Association, the Board may set up other committees, such as the Related Party Transoctions Committee. This committee shall consist of no fewer than three (3) members. The majority of the members of the Related Porty Transactions Committee shall be independent, although in the case of this committee it has one non-independent Member, loão Manuel Manso Neto.

Members of the Related Party Transactions Committee shall be considered independent if they can perform their duties without being conditioned by relations with EDPR, its majority shareholders or its Directors and, if this is the case, meet the other requirements of applicable legislation.

The committee currently consists of the members indicated in point 1.2.6.3.

3.2.3.2. COMPETENCES

The Related Party Transactions Committee is a body belonging to the Board of Directors and performs the following duties, without prejudice to others that the Board may assign to it:

· Periodically reporting to the Board of Directors on the commercial and legol relations

between EDP or related entities and EDPR or related entities.

• · In connection with the approval of the Company's annual results, reporting on the commercial and legal relations between the EDP Group and the EDPR Group, and the transactions between related entities during the fiscal year in question.
• · Ratifying transactions between EDP and/or related entities with EDPR and/or related entities by the stipulated deadline in each case, provided that the value of the transaction exceeds EUR 5,000,000 or represents 0.3% of the consolidated annual income of the EDPR Group for the fiscal year before.
• · Ratifying any modification of the Framework Agreement signed by EDP and EDPR on May 7th 2008
• · Making recommendations to the 8oard of Directors of the Company or its Executive Committee regarding the transactions between EDPR and related entities with EDP and related entities.
• · Asking EDP for access to the information needed to perform its duties.

Should the Related Party Transactions Committee not ratify business or legal relations between EDP or its reloted parties and EDPR ond its related parties, said relations shall require the approval of two-thirds (2/3) of the members of the Board of Directors, whenever at least half of the members proposed by entities other than EDP, including independent Directors, vote in fovor, unless, before submission for ratification by the Related Party Transactions Committee, this majority of members has voiced it approval.

The previous paragraphs shall not apply to operations between EDP or its related parties and EDPR or its related parties that have standard conditions and these conditions are applied in the same way in transactions with porties not related to EDP and EDPR or their respective related parties.

3.2.3.3. FUNCTIONING

In addition to the Articles of Association, the Related Party Transactions Committee is governed by the regulations approved on June 4™ 2008 and by the Board Regulations. The committee's regulations are available at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit

This committee shall draft minutes of every meeting held and inform the Board of Directors of decisions that it makes at the first Board meeting held after each committee meeting.

The meetings of this committee shall be valid if at least half of the Directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.

3.2.3.4. ACTIVITY IN 2010

In 2010, the Related Party Transactions Committee revised, approved and proposed to the Board of Directors the approval of all agreements and controcts between reloted parties submitted to its considerotion.

Point 3.6 of this report includes a description of the fundamental aspects of the agreements and contracts between related parties, the object of which does not pertain to the ordinary course of EDPR business.

The Related-Porty Transactions Committee was informed that in 2010, the average value and the maximum value regarding the transactions onolyzed by the Committee was EUR 1.617.274,26 and EUR 3.106.692M, respectively.

The total value of the transactions with the EDP Group in 2010 was EUR 14.2M which corresponds to a 5.3% of the total value of S&S, and EUR270M for total operational costs.

A report on the activities of the Related Party Tronsactions Committee in the year ended on December 31st 2010 is available to shareholders at www.edprenovaveis.com.

3.3. AUDIT AND CONTROL COMMITTEE

331 STRUCTURE

Pursuant to Article 28 of the Articles of Association, the Audit and Control Committee consists of no fewer than three (3) and no more thon five (5) Directors. The majority of the members shall be independent Directors. The committee currently consists of the members indicated in point 1.3, the majority of which, as well as the Chairperson, are independent.

3.3.2. COMPETENCES

The Audit and Control Committee is a permanent body and performs independent supervision of the work of the Board of Directors. The competences of the Audit and Control Committee are mentioned below.

Concerning the new recommendations introduced in 2010 by the Portuguese Code of

Corporate Governance the referred competences were reinforced as mentioned below, with the following changes introduced on the Audit and Control Committee Regulations, to guarantee the compliance of the referred code:

• · Reporting, through the Chairperson, at General Meeting son questions falling under its jurisdiction.
• · Proposing the appointment of the Company's auditors to the Board of Directors for subsequent approval by the General Meeting, as well as the contractual conditions, scope of the work -- specially concerning audit services, "audit related" and "non audit" - annual activity evaluation and revocation or renovation of auditor appointments. (to comply with Recommendation III. 1.5 of the Portuguese Corporate Governance Code of 2010)
• · Supervising the financing reporting and the functioning of the internal risk management and control systems, as well as, evaluate those systems and propose the adequate adjustments according to the Company necessities. (to comply with Recommendation II.1.1.3 of the Portuguese Corporate Governance Code of 2010)
• · Supervising internal oudits and compliance. (to comply with Recommendation 11.4.6 of the Portuguese Corporate Governance Code of 2010)
• · Establish a permanent contact with the external auditors, to assure the conditions, including the independence, adequate to the services provided by them, octing as a the Company speaker tor these subjects related to the ouditing process and receiving and maintaining information on any other questions regarding accounting subjects. (to comply with Recommendation 11.4.4 of the Portuguese Corporate Governance Code of 2010)
• · Preparing an annual report on its supervisory activities, including eventual constraints, and expressing an opinion on the Management Report, the accounts and the proposals presented by the Board of Directors. (to comply with Recommendation 11.4.3 of the Portuguese Corporate Governance Code of 2010)
• · Receiving notices of financial and accounting iregularities presented by the Company's employees, shareholders or entity that has a direct interest and judicially protected, related with the Compony social activity. (to comply with Recommendation II.1.4.1 of the Portuguese Corporate Governance Code of 2010)
• · Engaging the services of experts to collaborate with Committee members in the performance of their functions. When engaging the services of such experts and determining their remuneration, the importance of the matters entrusted to them and the economic situation of the company must be taken into account.
• · Drafting reports at the request of the Board and its committees.
• · Reflecting on the governance system adopted by EDPR in order to identify areos for improvement;
• · Any other powers entrusted to it by the Board of Directors or the Articles of Association.

3.3.3. FUNCTIONING

In addition to the Articles of Association and the law, this committee is governed by the regulations approved on June 4th 2008 and also by the Board regulotions. The committee's regulations are at the shareholders' disposal at www.edprenovaveis.com.

The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit. In 2010, the Audit and Control Committee met eleven (11) times not only to monitor the closure of quarterly accounts in the first half-year but also to familiarize itself with the preparation ond disclosure of financial information, internal control and risk manogement activities.

This committee shall draft minutes of every meeting held and inform the Board of its decisions at the first Board meeting held after each committee meeting.

The meetings of the Audit and Control Committee shall be valid if at least half of the Directors on it plus one are present or represented. Decisions shall be adopted by simple majority. The Chairperson shall have the casting vote in the event of a tie.

3.3.4. ACTIVITY IN 2010

In 2010, the Audit and Control Committee's activities included the following: (i) analysis of relevant rules to which the committee is subject in Portugal and Spain, (ii) assessment of the external auditor's work, especially concerning with the scope of work in 2010, and approval ot all "audit related" and "non audit" services, (iii) supervision of the quality and integrity of the financial information in the financial statements and participation in the Executive Committee meeting at which these documents were analyzed and discussed, (iv) drafting of an opinion in the individual and consolidated annual reports and accounts, in a quarterly and yearly basis (v) pre-approval of the 2010 Internal Audit Action Plan, (VI) supervision of the quality, integrity and efficiency of the internal control system, risk management and internal auditing, (vii) reflection on the corporate governance system odopted by EDPR, (viii) analysis of the evolution of the SCIRF project, (ix) information about the whistle-blowing.

Apart from its regular activity in 2010, the Audit and Control Committee were also involved in the following activities:

• Analysis of the acquisition process of turbines for the 2010/2012 period;

• Analysis of the competences delegation process of the EDPR Group;

• Analysis to the new regulations of the Internal Audit Department of the EDPR Group.

The Audit and Control Committee found no constraints during its control and supervision octivities.

A report on the activities of the Audit and Control Committee in the year ended on December 31st 2010 is avoilable to shareholders at www.edprenovaveis.com.

3.4. INCOMPATIBILITY AND INDEPENDENCE

Following the recommendations of the CMVM, Article 12 of the Boord regulations requires at least twenty-five percent (25%) of the Directors to be independent Directors, who are considered to be those who can perform their duties without being conditioned by relations with the Company, its significant shareholders or Directors and, if applicable, meet the requirements of applicable laws.

In addition, pursuant to Article 23 of the Articles of Association, the following may not be Directors:

• · People who are Directors of or are associated with any competitor of EDPR and those who are related to the above. A company shall be considered to be a competitor of EDPR if it is directly or indirectly involved in the generation, storage, transmission, distribution, sale or supply of electricity or combustible gases and also those interests opposed to those of EDPR, a competitor or any of the companies in its Group, and Directors, employees, lawyers, consultants or representatives of any of them. Under no circumstances shall companies belonging to the same group as EDPR, including abroad, be considered competitors;
• · People who are in any other situation of incompatibility or prohibition under the law or Articles of Association. Under Spanish law, people, omong others, who are i) aged under eighteen (18) years, (ii) disqualified, iii) competitors; (iv) convicted of certain offences or (v) hold certain management positions are not allowed to be Directors.

3.5. RULES OF APPOINTMENT AND DISCHARGE OF MEMBERS OF THE BOARD OF DIRECTORS AND OF THE AUDIT AND CONTROL COMMITTEE

The policy of portfolio rotation in the company comprehends that each Member of the Board af Directors is appointed by majority of the General Meeting for an initial period of three (3) years and may be re-elected once or more times for further periads of three (3) years. Nonetheless, pursuant to Article 23 of the Articles of Association and 243 of the Spanish Companies Law, shareholders so wishing may group their shares until they constitute an amount of copital equal to or higher than the result of dividing it by the number of Directors and appoint those that, using only whole fractions, are deducted from the corresponding proportion. Those making use of this power cannot intervene in the appointment of the other members of the Board of Directors.

Given that the Directors do not have to be elected on the same date, if there is a vacancy, pursuant to Article 23 of the Articles of Association and 243 of the Spanish Companies Law, the Board of Directors may co-opt people from the shareholders, who will occupy the position until the next General Meeting, which shall ratify the co-opted Director. Pursuant to Article 247 of the Spanish Companies Law, the co-option of Directors, as for other Board decisions, must be approved by absolute majority of the Directors at the meeting.

Pursuant to Article 28 of the Articles of Association, the members of the Audit and Control Committee are appointed by the Board of Directors. The term of office of the members of the Audit and Control Committee is the same as their term as Directors. The committee members, the majority of whom must be independent, can be reelected and discharged by the Board of Directors at any time. The term of office of the Chairperson of the Audit and Control Committee is three (3) years, after which he may only be re-elected for a new term of three (3) years. Nonetheless, chairpersons leaving the committee may continue as members of the Audit and Control Committee.

3.6. BUSINESS BETWEEN THE COMPANY AND MEMBERS OF THE COMPANY'S GOVERNING BODIES OR GROUP COMPANIES

EDPR has not signed any contracts with the members of the corporate bodies during the year 2010.

Regarding related party transactions, EDPR and/or its subsidiaries have signed the contracts detailed below with EDP -- Energias de Portugal, S.A. (hereinafter, EDP) or other members of its group not belonging to the EDPR subgroup.

3.6.1. FRAMEWORK AGREEMENT

The framework agreement was signed by EDP and EDPR on May 7th 2008 ond came into effect when the latter was admitted to trading. The purpose of the framework agreement is to set out the principles and rules governing the legal and business relations existing when it came into effect and those entered into subsequently.

The framework agreement establishes that neither EDP, nor the EDP Group companies other

than EDPR and its subsidiaries can engage in activities in the field of renewable energies without the consent of EDPR. EDPR shall have worldwide exclusivity, with the exception of Brazil, where it shall engage its activities through a joint venture with EDP - Energias do Brasil, S.A., for the development, construction, operation and maintenance of facilities or activities related to wind, solar, wave and/or tidal power and other renewable energy generation technologies that may be developed in the future. Nonetheless, the agreement excludes technologies being developed in hydroelectric power, biomass, cogeneration and waste in Portugal and Spain.

Finally, it lays down the obligation to provide EDP with any information that it may request from EDPR to fulfill its legal obligations and prepare the EDP Group's consolidated accounts.

The framework agreement shall remain in effect for as long as EDP directly owns more than 50% of the share capital of EDPR or appoints more than 50% of its Directors.

3.6.2. EXECUTIVE MANAGEMENT SERVICES AGREEMENT

On November 4th 2008 EDP and EDPR signed an Executive Management Services Agreement. Through this contract, EDP provides management services to EDPR, including matters related to the Company. Under this agreement EDP appoints four people to form EDPR's Executive Committee, for which EDPR pays EDP an amount for the services rendered.

Under this contract, EDPR is due to pay an amount of EUR 836,400 for management services rendered by EDP in 2010.

The initial term of the contract is March 18th 2011.

3.6.3. FINANCE AGREEMENTS AND GUARANTEES

The finance agreements between EDP Group companies and EDPR Group companies were established under the above described Framework Agreement and currently include the following:

3.6.3.1. LOAN AGREEMENTS

EDPR (as the borrower) has loan agreements with EDP Finance BV (as the lender), a company 100% owned by EDP - Energias de Portugal, S.A.. Such loan agreements can be established bath in EUR and USD, usually have a 10-year tenor and are remunerated at rates set an arm's length basis. As at December 31st 2010, such loan agreements totaled EUR 1,351,695,248 and USD 1,934,621,254.

3.6.3.2. COUNTER-GUARANTEE AGREEMENT

A counter-guarantee agreement was signed, under which EDP or EDP Energias de Portugal Sociedade Anónima, sucursal en España (hereinafter guarantor or EDP Sucursal) undertakes on behalf of EDPR, EDP Renewables Europe SL (hereinafter EDPR EU) and Horizon Wind Energy LLC (hereinafter EDPR NA) to provide corporate guarantees or request the issue of any guarantees, on the terms and conditions requested by the subsidiaries, which have been approved on a case by case basis by the EDP executive board.

EDPR will be jointly liable for compliance by EDPR EU and EDPR NA. The subsidiaries of EDPR undertake to indemnify the guarantor for any losses or liabilities resulting from the guarantees provided under the agreement and to pay a fee established in orm's length basis. Nonetheless, certain guarantees issued prior to the date of approval of these agreements may have different conditions.

The agreement may be terminated (i) by any party at any time, whenever there are no guarantees in effect, or if (ii) any of the subsidiaries ceases to be controlled by the guarantor with regard to the guarantees provided to said subsidiary.

3 6 3.3. CURRENT ACCOUNT AGREEMENT

EDP Sucursal and EDPR signed an agreement through which EDP Sucursal manoges EDPR' cash accounts. The agreement also regulates a current account between both companies, remunerated on arm's length basis. As at December 31st 2010, the current account had a balance of EUR 170,111,807 in favor of EDPR.

The agreement is valid for one year as of date of signing and is automatically renewable for equal periods.

3.6.3.4. FINANCING AGREEMENTS

In order to manage its USD cash surplus, at December 31st 2010 EDPR had two short term deposits placed with EDP Finance BV in the total amount of USD 244,033,835.

The two short term deposits mature on January 2010.

3 6 3 5 CROSS CIIRRENCY INTEREST RATE SWAPS

Due to the net investment in EDPR NA, the company and Group accounts of EDPR and the accounts of EDP Sucursal España, were exposed to the foreign exchange risk. With the purpose of hedging this foreign exchange risk, EDP Group settled o cross currency interest rate swap (CIRS) in USD and EUR, between EDP Sucursal and EDPR for a total amount of USD 2,632,613. Also a CIRS in PLN and EUR, between EDP Energias de Portugal Sociedade Anónima, sucursal en España and EDPR, S.A. was settled for a total amount of PLN 309,307,188, related with the net investment in polish companies.

3.6.3.6. HEDGE AGREEMENTS - EXCHANGE RATE

EDP Sucursal and EDPR entered into several hedge agreements with the purpose of managing the transaction exposure related with the investment payments to be done in Poland, fixing the exchange rate for EUR/PLN in accordance to the prices in the forward market in each contract date. At December 31st 2010, a total amount of EUR 38,803,000 remained outstanding.

3.6.4. HEDGE AGREEMENTS - COMMODITIES

EDP and EDP Renewables Europe SL entered into hedge agreements for a total volume of 1,826 MWh for 2010 at the forward market price at the time of execution related with the expected sales of energy in the Spanish market.

3.6.5. TRADEMARK LICENSING AGREEMENT

On May 14th 2008, EDP and EDPR signed an agreement under which the former granted to the latter a non-exclusive license for the trademark "EDP Renováveis" for use in the renewable energy market and related activities.

In return for the granting of the trademark license, EDPR will pay to EDP fees calculated on the basis of the proportion of the costs pertaining to the former in the Group's annual budget for image and trademark services, which are subject to annual review. The fee established for 2010 was EUR 1,500,000.

The license is granted indefinitely and shall remain in effect until the expiry of EDP's legal ownership of the trademark or until EDP ceases to hold the majority of the capital or does not appoint the majority of Directors of EDPR. EDP may also terminate the agreement in case of nonpayment or breach of contract.

The licensing agreement is restricted by the terms of the framework agreement.

3.6.6. CONSULTANCY SERVICE AGREEMENT

On June 4th 2008, EDP and EDPR signed a consultancy service agreement. Through this agreement, and upon request by EDPR, EDP (or through EDP Sucursal) shall provide consultancy services in the areas of legal services, internal control systems, financial reporting, taxation, sustainability, regulation and competition, risk management, human resources, information technology, brand and communication, energy planning, accounting and consolidation, corporate marketing and organizational development.

The price of the agreement is calculated as the cost incurred by EDP plus a margin. For the first year, it was fixed at 8% based on an independent expert on the basis of market research. For 2010 the estimated cost of these services is EUR 3, 106,692.

The duration of the agreement is one (1) year tacitly renewable for equal periods.

3.6.7. RESEARCH AND DEVELOPMENT AGREEMENT

On May 13th 2008, EDP Inovação, S.A. (hereinafter EDP Inovação), an EDP Group company, and EDPR signed on agreement regulating relations between the two companies regarding projects in the field of renewable energies (hereinafter the R&D Agreement).

The object of the R&D Agreement is to prevent conflicts of interest and foster the exchonge of knowledge between companies and the establishment of legal and business relationships. The agreement forbids EDP Group companies other thon EDP Inovação to undertake or invest in companies that undertake the renewable energy projects described in the agreement.

The R&D Agreement establishes an exclusive right on the part of EDP Inovação to project and develop new renewable energy technologies that are already in the pilot or economic and/or commercial feasibility study phase, whenever EDPR exercises its option to undertake them.

The agreement shall remain in effect for as long as EDP directly maintains control of more than 50% of both companies or appoints the members of the Board and Executive Committee of the parties to the agreement.

3.6.8. MANAGEMENT SUPPORT SERVICE AGREEMENT BETWEEN EDP RENOVÁVEIS PORTUGAL S.A., AND EDP VALOR - GESTÃO INTEGRADA DE RECURSOS, S.A.

On January 1st 2003, EDP Renováveis Portugal, S.A., holding company of the EDPR subgroup in Portugal, and EDP Valor - Gestão Integrada de Recursos, S.A. (hereinafter EDP Valor), an EDP Group company, signed a management support service agreement.

The object of the agreement is the provision to EDP Renováveis Portugal by EDP Valor of services

in the areas of procurement, economic and financial management, fleet management, property management and maintenance, insurance, occupational health and safety and human resource management and training.

The remuneration paid to EDP Valor by EDP Renováveis Portugal S.A. and its subsidiaries for the services provided in 2010 totaled EUR 691,445.

The initial duration of the agreement was five (5) years from date of signing and it was tacitly renewed for a new period of five (5) years on January 1st 2008.

Either party may renounce the contract with one (1) year's notice.

3.6.9. INFORMATION TECHONOLOGY MANAGEMENT SERVICES AGREEMENT BETWEEN EDP RENOVÁVEIS S.A. AND EDP - ENERGIAS DE PORTUGAL, S.A.

On January 1st 2010, EDP Renováveis Portugal, S.A., and EDP - Energias de Portugal S.A. (hereinafter EDP), signed an IT management services agreement.

The object of the agreement is to provide to EDPR the information technology services described on the contract and its attachments by EDP - Energias de Portugal S.A.

The amount to be paid to EDP - Energias de Portugal S.A. for the services provided in 2010 totaled EUR 1,146,251.

The initial duration of the agreement is one (1) year from date of signing and it is tacitly renewed for a new period of one (1) year.

Either party may renounce the contract with one (1) month notice.

3.7. INTERNAL CONTROL SYSTEMS AND RISK MANAGEMENT

3.7.1. INTERNAL CONTROL SYSTEM OVER FINANCIAL REPORTING

EDP Renováveis (EDPR) has an Internal Control System over Financial Reporting (SCIRF) structured using as a reference in terms of control objectives fulfillment, and controls implementation the COSO framework (Committee of Sponsoring Organizations of the Treadway Commission) with regard to business processes and entity level controls, and the COBIT framework (Control Objectives for Information and related Technologies) with regard to controls of information technology systems.

In accordance with EDPR's strategic orientation, SCIRF activities are aimed at strengtheing the quality of financial information provided to shareholders and to the markets and at promoting the effectiveness and efficiency of operations, in compliance with applicable regulations at all times.

The COSO framework emphasizes the aspects related with the risk assessment activities, since there is a growing interest in organizations of all sizes to enhance Enterprise Risk Management. This approach is present throughout SCIRF's methodology and documentation (SCIRF Manual, Responsibilities Model, processes and controls), by means of a set of control and risk objectives, that caver concepts like financial information risk, fraud or unauthorized use.

During the year 2010, SCIRF has been performed through (i) the maintenance and monitoring of the Internal Control Cycle and (ii) the independent review of SCIRF by KPMG.

Under the model adopted at EDPR, the following activities for the maintenance and monitoring of the Internal Control Cycle have been performed:

· Update of the scope: review and identification of relevant risks, accaunts and processes, based on moteriality and risk criteria, with a top-down and bottom-up methodology, and a coverage level analysis.

· The necessary actions for the consolidation and/or incorporation of new geographies in the scope.

· Maintenance, adaptation and management of the system in line with (i) the implementation of identified improvement opportunities, (ii) the changing structure and (iii) business requirements.

SCIRF presence in different geographies, according to the scope applied in 2010, includes 380 controls in the European platform [including country-specific and transversal controls in some geographies) in Spain, Portugal, France, Belgium and Paland, 384 controls in the North American platform, and 110 controls at group level, as illustrated in the figure belaw. These controls include entity level controls, process controls and information technology controls).

In order to assess the reliability and strength of the SCIRF (already implemented in the European and American platforms), and in line with the strategic objectives of EDPR, it was decided to undertake an independent review, to be conducted by a prestigious international institution (KPMG). The goal was materialized in 2010, following the International Standard on Assurance Engagements (ISAE) 3000 methodology. In this review no material weakness were identified. The work of the review consisted of:

(i) obtaining an understanding of SCIRF in terms of the consolidated financial reporting;

(ii) evaluation of the risk ot material weaknesses;

(iii)test and evaluation of the operational effectiveness of controls based on the evaluation of risk:

(iv) execution of other procedures which were considered as necessary.

It is also important to highlight the following developments that took place in 2010:

• · the creation of SCIRF logo;
• · the launch of the implementation of a new internet based tool to support SCIRF;
• · the significant participation of EDPR for the consecution of the Quality Assessment certification of EDP's group Internal Audit department by the Institute of Internal Auditors.

The SCIRF activities and their progress have been quarterly reported to the Audit and Control Committee, complying with its supervision and follow-up missions regarding the company's internal control systems and risk management.

At the year-end in accordance with CMVM Recommendation III.1.4 the external auditors, within the scope of their powers, verified the efficiency and functioning of the Internal Control Systems and reported their conclusions to the Audit and Control Committee. Additionally, KPMG reported the result of their review of SCIRF to the Audit and Control Committee.

With this report and the teamwark of the Internal Audit and Control Committee in accordance with CMVM Recommendation II.1.1.3 made its final assessment report and presented to the Board.

3.7.2 RISK MANAGEMENT

The basic principle behind EDPR's risk management approach is that risk management should not only protect value but also create value. This value creation is obtained by optimizing company's risk-return taking into consideration shareholders risk appetite.

Therefore, EDPR's risk framework was designed to be not a stand-alone activity separated from the main activities and processes of the company, but to be part of the responsibilities of management as an integrating element of all organizational processes, including strategic planning.

3.7.2.1. RISK FRAMEWORK AND PROCESS

In EDPR's risk framework, risk process aims to link the company's overall strategy into manager's day-to-day decisions, enabling the company to increase the likelihood of achieving its strategic objectives.

EDPR's general strategy is translated into major strategic questions that are grouped by risk area and then subject to EDPR's risk process. The outcome of the risk process is a set of specific guidelines per risk area that will guide managers in their decisions according to the company's risk profile.

Each strategic question is subject to a core risk process which is composed of four major steps:

• · Make sense starts with the identification of the risks that may affect the accomplishment of the strategic goals and is followed by the respective measurement both in terms of likelihood of occurrence and potential impact; the aim of this step is to generate an understanding of all the dynamics behind the issue under analysis in order to assess the severity of the risk as well as to anticipate all possible mitigating actions in the exposure to the risk is above acceptable limits.
• · Make choices after an understanding of the risk, the next step is to discuss whether the risk needs to be treated or not. It it does there is a need to discuss on the most appropriate risk treatment strategies and methods, and the outcome of this discussion is a proposed action plan that is later subject to approval by the Executive Committee.
• · Make happen following the approval of the action plan, guidelines are written and then sent to the risk manager that will take them into consideration in its day-to-day decisions.
• · Make revision after the implementation of the mitigation strategies there is a follow-up of their effectiveness to assess if any adjustments are needed; this risk reporting and control step has two major functions: (1) to track EDPR's risk position comparing its alignment with both the company's risk profile and risk policy approved by the Executive Committee for each risk. and (2) to control the mitigation actions by defining and implementing all the mechanisms necessary to check if these actions are being implemented according to plan.

3.7.2.2. RISK FUNCTIONS AND RISK COMMITTEE

Risk management in EDPR is supported by three distinct organizational functions:

During 2010, EDPR created a Risk Committee to integrate and coordinate all the risk functions and to assure the link between risk strategy and the company's operations.

EDPR's Risk Committee intends to be the forum to discuss how EDPR can optimize its risk-refurn position according to its risk profile. The key responsibilities of this committee are:

• · To analyze EDPR overall exposures and propose actions;
• · To follow-up the effectiveness of the mitigation actions;
• · To review transactional limits, risk policies and macro-strategies;
• · To review reports and significant findings of the risk profiler analysis and the risk control areas;
• · To review the scope of the work of the risk profiler and its planned activities.

This committee meets on a quarterly basis and is composed by all Management Team members, representative directors trom corporate functions and from the operational platforms and, depending on the issues under discussion, the respective risk managers.

In 2010 this committee, created in July, met twice to discuss and propose EDPR's general risk management framework and to discuss and recommend energy management risk policies.

In order to assure the alignment of EDPR's risk management decisions with EDP's risk-return profile, representatives from EDP will be part of EDPR's risk committee in 2011 .

3.7.2.3 RISK AREAS AND RISK RELATED STRATEGIC QUESTIONS

The following table summarizes the main risk areas of EDPR's business and also describes the risk related strategic questions. The full description of each risk and how they are managed by EDPR can be found in next chapter.

Risk areas	Risks descriptions	Risk related strategic questions (mot exhaustive)
regulations	1. Countries & - Changes in regulations may impoct EDPR's business in · What is EDPR's current regulatory iske a given country :	· Haw much should EDPR grow in current markets? · Where shauld EDPR focus entering new markets?
2. Revenues	- Revenues received by EDPR's projects may diverge · What is the expasure of aur revenue stream from what is expected;	both in prices ond wind variations? · What is the impact on EDPR's EBITDA? · Whot should the market strategy be to cover market volatility?
3. Financing	- EDPR may not be oble to raise enough cosh lo · Whot shauld be the risk profile from on finance all its planned capex; - EDPR may not be able to fulfi its financial obligations; · What is the synthetic rating of the company	investar's point of view? ond what measures could be done ta improve it2 · What is the probability of a cash flow stress que to market conditians?
contracts	4. Wind turbine - Changes in turbine prices . What should be the hedging strategy for profitability; - Contracts should take into account the pipeline quantities? development risk;	turbine prices in terms of price structure and · Whot is the trade-off between supplier
		diversification and rappel discount?
5.	Pipeline - EDPR may deliver an installed capacity different from · How many MW can EDPR expect to put in development its targets or suffers delays and/ar anticipations in its operation with its current pipeline? installation	· How many projects may be canceled or be delayed over permitting issues? · What is the actual risk of nat achieving the installed capacity fargets? · What is the appropriate buffer ta ensure that EDPR delivers the target capocity? · How should EDPR's pipeline look like in 2012?
	6. Operations - Projects may deliver a volume different from · Is there any operating risk with significant expected.	impact in EDPR?

3.7.2.4.1 Counties and regulation

3.7.2.4.1.1 Regulatory risks

The development and profitability of renewable energy projects are subject to policies and regulatory frameworks. The jurisdictions in which EDPR operates provide numerous types of incentives that support the energy generated from renewable sources.

Support for renewable energy sources has been strong in previous years, and both the European Union and various US federal and state bodies have regularly reaffirmed their wish to continue and strengthen such support.

In Europe, each country presented in 2010 their Renewable National Energy Action Plans (RNEAPs). These plans provide detailed information about how each Member State expects to comply with its 2020 binding target, including the technology mix and the forecasted trajectory to reach it.

Regarding US, various State Governments have taken an active role in the development of energy generated from renewable sources through the implementation of RPS (Renewable Portfolio Standard) program.

It cannot be guaranteed that the current support will be maintained or that the electricity produced by future renewable energy projects will benefit from state purchase obligations, fax incentives, or other support measures for the electricity generation from renewable energy sources. This is particularly true in an economic downturn context.

Management of regulatory risks

EDPR is managing its exposure to regulatory risks in two different ways. The first one is trough a geographic diversification strategy based on a methodology comprising a positive correlation between country defined targets and gap from current level, technological mix of installed generation, energy demand and supply, regulatory track record stability and incentives mechanism. EDPR also analyses the country wind resource, land and site availability, permitting complexity and interconnection availability.

The second one is by being an active member in several wind associations. EDPR belongs to the most prestigious wind energy associations, both at national level. EDPR is an active member of the following renewable (specially wind energy) associations. Being an active member in all these associations allows EDPR to be aware of any regulatory change, and represent wind energy sector's interests when required by the governments.

EUROPE	EWEA [EUROPEAN WIND ENERGY ASSOCIATION)
SPAIN	AEE (ASOCIACIÓN EMPRESARIAL EQUICA)
PORTUGAL	APREN (ASSOCIACÃO PORTUGUESA DE PRODUTORES DE ENERGIA ELECTRICA DE FONTES RENOVAVEIS)
FRANCE	SER (SYNDICAT DES ENERGIES RENOUVELABLES]
BELGIUM	APERE (ASSOCIATION POUR LA PROMOTION DES ENERGIES RENOUVELABLES)
	EDORA (FEDERATION DE LENERGIE D'ORIGINE RENOL VELABLE ET ALTERNATIVE)
POLAND	PIGEO (POLSKA IZBA GOSPODARCZA ENERGII ODNAWIALNEJ)
	PSEW POLSKIE STOWARZYSZENIE ENERGETYKI WATROWEJI
	PTEW (POLSKIE TOWARZYSTWO ENERGETYKI WIATROWEJ)
ROMANIA	RWEA (ROMANIAN WIND ENERGY ASSOCIATION)
UNITED KINGDOM	BWEA (BRITISH WIND ENERGY ASSOCIATION)
	RENEWABLE UK
	SCOTTISH RENEWABLES
ITALY	ANEV (ASSOCIAZIONE NAZIONALE ENERGIA DEL VENTO)
	APER (ASSOCIAZIONE PROMOTORI ENERGIE RINNOVABILI)
UNITED STATES	AMERICAN WIND ENERGY ASSOCIATION (AWEA)
	IOWA WIND ENERGY ASSOCIATION
	RENEW WISCONSIN
	RENEW INC
	THE WIND COALITION
	AMERICAN WIND WILDLIFE
	CEERT
	COLORADO INDEPENDENT ENERGY ASSOCIATION
	INTERWEST ENERGY ALLIANCE
	WESTERN POWER TRADING FORUM
	SMART GRID OREGON
	TEXAS RENEWABLE ENERGY
	WEST TEXAS WIND ENERGY
	RENEWABLE NORTHWEST PROJECT
CANADA	CANWEA [CANADIAN WIND ENERGY ASSOCIATION]
BRAZIL	ABEEQUCA (ASSOCIACAO BRASILEIRA DE ENERGIA ESLICA)
	CERIE ICENTRA DE ESTO ATÉCIAS ELA DECURSOS NATIJRAIS FENEPOLAS!

3.7.2.4.2 Revenues

3.7.2.4.2.1 Exposure to market electricity prices

The electricity sold by EDPR depends in some extent on the incentives schemes for renewable energy in place in each of the countries where EDPR operates. In some of the markets this creates an exposure to market prices for electricity. Market prices may be volatile as they are affected by various factors, including the cost of fuels, average rainfall levels, the cost of power plant construction, technological mix of installed generation capacity and demand. Therefore, a decline in market prices to unexpected levels could have a material adverse effect on EDPR's business, financial condition or operating income.

Management of electricity prices exposure

EDPR faces limited market price risk as it pursues a strategy of being present in countries or regions with long term visibility on revenues. In most countries where EDPR is present, prices are determined through regulated framework mechanisms. On the markets where is expected short term volatility on market prices, EDPR uses various financial and commodity hedging instruments in order to optimize the exposure to fluctuating electricity prices. However, it may not be possible to successfully hedge the exposures or it may face other difficulties in executing the

hedging strategy.

In Europe, EDPR operates in countries where the selling price is defined by a feed-in-tariff (Spain, Portugal and France) or in markets where on top of the electricity price EDPR receives either a pre-defined regulated premium or a green certificate, whose price is achieved on a regulated market (Spain, Belgium, Poland, Romania). Additionally, EDPR is developing activity in Italy and UK where the mechanism is also through green certificates.

In the case of North America, EDPR focus is developing strategy on the States which by having a RPS program in place provides higher revenues visibility, through the REC {Renewable Energy Credit) system and by non-compliance penalties. The North America market does not provide ony regulated framework system for the electricity price although it may exist for the RECs in some States. Most of EDPR's capacity in the US hos predefined prices determined by long-term contracts with local utilities in line with the Company's policy of signing long-term contracts for the output of its wind farms.

In Brazilian operations, selling price is defined through a public auction which is later translated into a long-term contract.

Under EDPR's global approach to optimize the exposure to market electricity prices, the Company evaluates on a permanent basis if there are any deviations to the defined limits, assessing in which markets financial hedges may be more effective to correct it. In 2010, to manage this exposure EDPR financially hedged a significant part of its generation in Spain and, in the US closed for the long-term a significant portion of its exposure through several physical and financial deals.

3.7.2.4.2.2 Risk related to volatility of energy praduction

The amount of electricity generated by EDPR on its wind farms, and therefore EDPR's profitability, are dependent on climatic conditions, which vary across the locations of the wind farms, and from season to season and year to year. Energy output at wind farms may decline if wind speeds falls outside specific ranges, as turbines will only operate when wind speeds are within those ranges.

Variations and fluctuations in wind conditions at wind farms may result in seasonal and other fluctuations in the amount of electricity that is generated and consequently the operating results and efficiency.

Management of risks related to volatility of energy production

EDPR mitigates wind resource volatility and seasonality by having a strong knowledge in the design of its wind farms, and by the geographical diversification - in each country and in different countries - of its asset base. This "portfolio effect" enables to offset wind variations in each area and to keep the total energy generation relatively steady. Currently EDPR is present in 11 countries: Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil.

3.7.2.4.3 Financing

3.7.2.4.3.1 Risks related to the exposure to financial markets

EDPR is exposed to fluctuations in interest rates through financing. This risk can be miligated using fixed rates and hedging instruments, including interest rate swaps.

Also because of its presence in several countries, currency fluctuations may have a material adverse effect on the financial condition and results of operations. EDPR may attempt to hedge against currency fluctuations risks by natural hedging strategies, as well as by using hedging instruments, including forward foreign exchange contracts and Cross Interest Rate Swaps.

EDPR hedging efforts will minimize but not eliminate the impact of interest rate and exchange rate volatility.

Management of financial risks

The evolution of the financial markets is analyzed on an on-going basis in accordance to EDP Group's risk management policy approved by the EDPR`s Board of Directors.

The Board of Directors is responsible for the definition of general risk-management principles and the establishment of exposure limits following the recommendation of the risk committee.

Taking into accaunt the risk management policy and exposure limits previausly approved, the Financial Department identifies, evaluates and submits for approval by the Board the financial strategy appropriate to each project/location.

The execution of the approved strategies is also undertaken by the Financial Department, in accordance with the policies previous defined ond opproved.

Fixed rate, Natural hedging and Financial instruments are used to minimize potential adverse effects resulting from the interest rate and foreign exchange rate risks on its financial performance.

3.7.2.4.3.1.1 Interest rate risk

The purpose of the interest rate risk management policies is to reduce the exposure of long term debt cash flows from market fluctuations, mainly by issuing long term debt with a fixed rate, but olso through the settlement of derivative financial instruments to swap from floating rate to fixed rate when long term debt is issued with floating rates.

The main potential exposure comes from shareholder loans from the EDP Group and from institutional investors in connection with its Partnership Structures in the US operations, as well as, project financing and third party loons from entities outside the EDP Group.

In the floating-rate financing context which represents approx. 5% of EDPR's gross debt, EDPR may contract interest-rate derivative financial instruments to hedge cash flows associated with future interest payments, which have the effect of exchange floating interest rate.

EDPR has a portfolio of interest-rate derivatives with maturities between approximately 1 and 10 years. Sensitivity analyses are performed of the fair value of financial instruments to interest-rate fluctuations

Given the policies adopted by EDPR Group its financial cash flows are substantially independent from the fluctuation in interest rate markets.

3.7.2.4.3.1.2 Exchange rate risk

EDPR operates internationally and is exposed to the exchange-rate risk resulting from investments in foreign subsidiaries. Currently, main currency exposure is the U.S. dollar/euro currency fluctuation risk that results principally from the shareholding in EDPR NA. With the ongoing increasing capacity in others non-euro regions, EDPR will become also exposed to other local currencies (Brazil, Poland and Romania).

EDPR general policy is the Natural Hedging in order to match currency cash flows, minimizing the impoct of exchange rates changes while value is preserved. The essence of this approach is to create financial foreign currency outflows to match equivalent foreign currency inflows. Often the debt is raised in the same foreign currency in which operating cash flows are received. The Financial Department is responsible for monitoring the exchange rates changes, seeking to mitigate the impact of currency fluctuations on the net assets and net profit of the group, using natural hedging strategies, as well as, exchange-rate derivatives and/or other hedging structures with symmetrical characteristics to those of the hedged item. The effectiveness of these hedges is reassessed and monitored throughout their lives.

3.7.2.4.3.2 Counterparty credit risk

Counterparty risk is the default risk of the other party in an agreement, either due to temporary liquidity issues or long term systemic issues.

Management of counterparty credit risk

EDPR policy in terms of the counterparty credit risk on financial transactions is managed by an analysis of the technical capacity, competitiveness, credit notation and exposure to each counterparty. Counterparties in derivatives and financial transactions are restricted to highquality credit institutions, there cannot be considered any significant risk of counterparty non-compliance and no collateral is demanded for these transactions.

In the specific case of EDPR EU, credit risk is not significant due to the reduced average payment period for customer balances and the quality of its debtors. In Europe, main customers are operators and distributors in the energy market of their respective countries.

In the case of EDPR NA, counterparty risk analysis is more relevant given typical price stucture and the contracting terms of PPA contracts. In the light of this, counterparty risk is carefully evaluated taking into account the offtakers' credit rating. In many cases, additional credit support is required in line with the exposure of the contract.

3.7.2.4.3.3 Liquidity risk

Liquidity risk is the risk that EDPR will not be able to meet its financial obligations as they fall due.

Management of Ilquidity risk

EDPR's strategy to manage liquidity is to ensure, as far as possible, that it will always have significant liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring in unacceptable losses or risking damage to EDPR's reputation.

The liquidity policy followed by EDPR ensures compliance with the planned payment commitments/obligations, through maintaining sufficient credit facilities and having access to the EDP Group liquidity facilities.

3.7.2.4.4 Wind turbine contracts

3.7.2.4.4.1 Wind turbine supply risk

Wind turbine generators (WTG) is a key element in the development of EDPR's wind-related energy projects, as the shortfall or an unexpected sharp increase in WTG prices can create a question mark on new project's development and its profitability. WTG represents the majority of a wind farm capital expenditure (on average, between 70% and 80%).

Management of wind turbine supply risk

EDPR faces limited risk to the availability and prices' increase of WTG due to its framework agreements with the major global wind turbines suppliers. The Company uses a large mix of turbines suppliers in order to reduce its dependency on any one supplier being one of the worldwide wind energy developers with a more diversified and balanced portfolio.

When signing framework agreements with one or more WTG suppliers, EDPR balances the cost, best fit with Company's pipeline and flexibility on time, geography and model/technology.

Pursuing this medium-term framework agreements strategy, EDPR reduces the risk of contracting large amounts of new WTG exposed to the spot market while having long term visibility on the total cost of ownership due to the fix cast structure of the frameworks signed. On the other way, by not contracting all the WTG needed for its growth plan, EDPR increases its short term flexibility pipeline development. Finally, EDPR in these framework agreements ensure additional geographic flexibility to best fit its pipeline development with changes in future conditions in a given market.

3.7.2.4.5 Pipeline development

3.7.2.4.5.1 Permitting risks

Wind farms are subject to strict international, state, regional and local regulations relating to the development, construction, licensing, grid interconnection and operation of power plants. Among other things, these laws regulate: land acquisitions, leasing and use; building, transportation and distribution permits; landscape and environmental permits; and regulations on energy transmission and distribution network congestions. Development process of wind farms is subject to the obtaining such permits. If authorities do not grant these permits or they do so with delays or with other restrictions, such actions could have a material adverse effect on the development of further business.

Management of permitting risk

EDPR miligates this risk by having development activities in 11 different countries (Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, US, Canada and Brazil) with a portfolio of projects in several maturity stages. EDPR has a large pipeline located in the most attractive regions providing a "buffer" to overcome potential delays in the development of new projects, ensuring growth targets. For this high quality pipeline is worth to highlight EDPR's early mover status in the majority of its markets and the partnerships created with strong local expertise in the development and construction of wind farms.

3.7.2.4.6 Operations

3.7.2.4.6.1 Wind turbine performance risk

Wind forms output depend upon the availability and operating performance of the equipment necessary to operate it, mainly the components of wind turbines and transformers. Therefore the risk is that the performance of the turbine does not reach its optimum implies that the energy output is not the expected. The best indicator to measure the WTG performance is the availability level - the period of time it was actually available to operate within that period and delivering the agreed power curve.

Management of wind turbine performance risk

EDPR mitigates this risk by using a mix of turbine suppliers which minimizes technological risk, by signing a medium-term full-scope maintenance agreement with the turbine supplier and by an adequate preventive and scheduled maintenance. Additionally, technical warranties are signed with the turbine suppliers, in order to guarantee that the performance of the turbine will be optimum. After this period, O&M is usually contracted with an external company, but a technical assistance agreement is also signed with the turbine supplier.

Most recently, and following the general trend in the wind sector, EDPR is externalizing some pure technical O&M activities of its wind farms. Through EDPR Dispatch Center, the Company remotely controls all its wind farms reacting on real time to grid requirements and by gathering all the 24-day operating data it is increasing its know-how in managing core O&M activities.

3.8. EXTERNAL AUDITOR

The Audit and Control Committee is responsible for proposing to the Board of Directors for submission to the General Meeting the appointment of the Company auditors and the terms of their contracts, scope of their duties and revocation and renewal of their contracts.

In order to protect the External Auditor independence, the following competences of the Audit and Control Committee were exercised during 2010:

• · Direct and exclusive supervision from the Audit and Control Committee;
• · Evaluation of the qualifications, independence and performance of the External Auditor and the annual report from the External Auditor regarding the information of all existing relations between the Company and the Auditors or people related to them, including all the services rendered and all the services in course. The Audit and Control Committee, in order to evaluate its independence, obtained from the External Auditor information regarding their independence according to Decree-Law n.º 224/2008, November 20th, that changes the bylaws of the External Auditors Association;
• · Revision of the transparency report signed by the External Auditor and published on their website. This report is about a group of subjects regulated on article 62°-A from the Decree-Law n.º 224/2008, mainly related to the internal Control System and to the process of quality control realized by the competent entities;
• · Analysis with the External Auditor of the scope, planning and resources to use on the services provided.

EDPR's External Auditor is, since the year 2007, KPMG Auditores S.L., therefore there is still no need to rotate the auditor according to Recommendation III. 1.3 of the Portuguese Corporate Governance Code.

In 2010, according to the Audit and Control Committee's competences and in line with Recommendations II.4.4 and II.4.5, it was the corporate body in charge of the permanent contact with the external auditor on matters that may pose a risk to their independence and any other matters related to the auditing of accounts. It also receives and stores information on any other matters provided far in legislation on audits and in auditing standards in effect at any time

The Audit and Control Committee assessed the performance of the external auditor in providing the services hired by the Company and made a positive evaluation of their quality, considering that they meet applicable standards and that it is advisable to maintain the same auditar.

The work of the externol ouditor, including reports and oudits of its accounts, was supervised and evaluated in accordance with applicable rules and standards, in particular international auditing standards. The external auditor in coordination with the Audit and Control Committee verifies the implementation of remunerotion policies and the efficiency and functioning of internal control mechanisms. The external auditor reports to the Audit and Control Committee all the shortcomings.

3.9. WHISTLE-BLOWING POLICY

Since the beginning of trading on the Eurolist by Euronext Lisbon, it has sought to introduce measures to ensure its good governance and that of its companies, including the prevention of improper practices, especiolly in the fields of accounting and finance.

The Board of Directors of EDPR theretore decided to provide its employees with a direct, confidential communication channel for them to report any presumed unlawful practices or alleged accounting or financial irregularities occurring in their company. These communications go directly to the Audit ond Control Committee.

EDPR creation of this channel for whistle-blowing on irregularities in financial and accounting practices is essentially intended:

· To enoble any employee to freely report his/her concerns in these areas to the Audit and Control Committee:

· To facilitate eorly detection of irregularities that, if they occurred, might cause serious losses to the EDPR Group and its employees, customers and shareholders.

Contact with the Company's Audit and Control Committee is only possible by email and post, and access to information received is restricted.

Any complaint addressed to the Audit and Control Committee will be kept strictly confidential and the whistle-blower will remain anonymous, provided that this does not prevent the investigation of the complaint. \$/he will be assured that the Company will not take any retaliatory or disciplinary action as a result of exercising his/her right to blow the whistle on irregularities, provide information or ossist in an investigation.

The Secretary of the Audit and Control Committee receives all the communications and presents a quarterly report to the members of the Committee.

in 2010 there were no communicatians regarding any irregularity at EDPR.

3.10 ETHICS

EDPR is governed by a strong sense of ethics, whose principles are embodied in the day-to-day activities of its employees, according to ethical practices generally considered to be consensual but which, for reasons of appropriate disclosure, transparency and impartiality, the company decided to provide details on.

For that purpose, EDPR developed and approved a global Code of Ethics, to be adopted by all company's employees, without prejudice to other legal or regulating provisions. EDPR Employees' must comply with the Code of Ethics and with the approved corporate policies, which provide those practices and should follow main principles such as:

• · Transparency, honesty and integrity
• Working environment
• · Development of human capital
• Human rights .
• · Non-discrimination and equal opportunities
• Integrity
• Environment and sustainability ●
• · Disciplinary action

The Code of Ethics has been disseminated to all employees.

A "whistle-blowing" e-mail channel is available at the Company's Intranet. It allows a direct and confidential communicotion of any presumably illegal practice and/or of any alleged accounting or financial iregularity occuring within the company. A "Code of Ethics" e-mail channel is also available for the communication of any breach to the Code articles.

4. EXERCISE OF SHAREHOLDER'S RIGHTS

4.1. DESCRIPTION AND COMPETENCES OF THE GENERAL MEETING OF SHAREHOLDERS

The General Meeting of Shareholders is a meeting of shareholders that, that when properly convened, has the power to deliberate and odopt, by majority, decisions on matters that the law and Articles of Association reserve for its decision and ore submitted for its approvol. In particular, it is responsible for:

• · Evaluation of the Company's management and opproval of the annual accounts from the previous finoncial year, management report and decision on the application of the previous fiscal yeor's income or loss;
• · Appointment and renewal of the Board of Directors in accordance with these Articles and the legal provisions in force, covering or eliminating vacancies that may occur or, as appropriate, ratifying the appointments of Directors made on a provisional basis by the Board of Directors;
• Appointment of auditors;
• · Decision on the matters proposed by the Board of Directors;
• · All other matters provided in the law in force.
• · Increasing and reducing the share capital and delegating to the Board of Directors, if applicable, within the legal time limits, the power to set the date or dates, who may use said delegation wholly or in part, or refraining from increasing or reducing the capital in view of the conditions of the market or the Company or any particularly relevant fact or event justifying such a decision in their opinion, reporting it at the first General Meeting of Shareholders held after the end of the time limit for its execution;
• · Delegating to the Board of Directors the power to increase the share capital pursuant to Article 297 of Royal Legislative Decree 1/2010 of July 2nd 2010, which approves the Revised Text of the Law on Public Limited Companies (Spanish Companies Law);
• Issuing bonds;
• · Amending the Articles of Association;
• · Dissolving, merging, spin off and transtormation the Company;
• · Deciding on any matter submitted to it for decision by the Board of Directors, which shall be obliged to call a General Meeting of Shareholders as soon as possible to deliberote and decide on concrete decisions included in this article submitted to it, in the event of relevant facts or circumstances that affect the Company, shareholders or corporate bodies.

The decisions of the General Meeting are binding on all shareholders, including those voting against and those who did not participate in the meeting.

A General Meeting may be ordinary or extraordinary. In either case, it is governed by the law and Articles of Association.

An Ordinary General Meeting must be held in the first six (6) months of each year to review of the performance the company management, approve the annual report and accounts for the previous year and the proposal for appropriation of profits and approve the consolidated accounts, if appropriate. The General Meeting also decides on any other matters falling within its powers and included on the agenda;

An Extraordinary General Meeting is any meeting other than that mentioned above.

4.2. RIGHT TO ATTEND

All shareholders, irrespective of the number of shares that they own, may attend a General Meeting and take part in its deliberations with right to speak and vote.

In order to exercise their right to attend, shareholders must have their shares registered in their name in the Book Entry Account at least five (5) days in advance of the General Meeting.

Moreover, although there is no express provision on the matter in the Articles of Association, in the event of the suspension of a General Meeting, EDPR plans to adopt Recommendation 1.2.2 of the Portuguese Corporate Governance Code and not require the blocking of shares more than five days in advance.

Any shareholder with the right to attend may send a representative to a General Meeting, even if this person is not a shareholder. Power of attorney is revocable. The Board of Directors may require shareholders' power of attorney to be in the Company's possession at least two (2) days in advance, indicating the name of the representative.

Power of attorney shall be specific to each General Meeting, in writing or by remote means of communication, such as post.

4.3. VOTING AND VOTING RIGHTS

Each share entitles its holder to one vote.

Shares issued without this right do not have voting rights, with the exception of cases set forth by current legislation.

There is no employee share-owning system at EDPR and so no relevant control mechanisms on the exercise of voting rights by employees or their representatives have been set up.

4.4. MAIL AND ELECTRONIC COMMUNICATION VOTES

Shareholders may vote on points on the agenda, relating to any matters of the Shareholder's competence, by mail or electronic communication. It is essential for their validity that they be received by the company by midnight of the day before the date scheduled for the first calling to order of the General Meeting.

Votes by mail shall be sent in writing to the place indicated on the invitation to the meeting accompanied by the documentation indicated in the Shareholder's Guide.

In order to vote by electronic communication, shareholders must express this intention to the Chairperson of the General Meeting of the in the form indicated in the invitation to the meeting, sufficient time in advance to permit the vote within the established time limit. They will then receive a letter containing a password for voting by electronic communication within the time limit and in the form established in the call of the General Meeting.

Remote votes can be revoked subsequently by the same means used to cast them within the time limit established for the purpose or by personal attendance at the General Meeting by the shareholder who cast the vote or his/her representative.

The Board of Directors has approved a Shareholder's Guide for the first General Meeting, detailing mail and electronic communication voting forms among other matters. It is at shareholders' disposal at www.edprenovaveis.com.

4.5. QUORUM FOR CONSTITUTING AND ADAPTING DECISIONS OF THE GENERAL MEETING

Both ordinary and extraordinary General Meetings are validly constituted when first called if the Shareholders, either present or represented by proxy, represent at least twenty five percent (25%) of the subscribed voting capital. On the second call the General Meeting will be validly constituted regardless of the amount of the capital present in order to comply with the minimum established under the Spanish Companies Law.

Nanetheless, to validly approve the issuance of bonds, the increase or reduction of capital, the transformation, merger or spin-off of the Company, and in general any necessary amendment to the Articles of Association, the Ordinary or Extraordinary Shareholders' Meeting will need: on the first call, that the Shareholders, either present or represent at least fifty percent (50%) subscribed voting capital and on the second call, that the Shareholders, either present or represented by proxy, represent at least twenty five percent (25%) of the subscribed voting capital.

In the event the shareholders attending represent less than fifty percent (50%) of the subscribed voting capital, the resolutions referred to in the previous paragraph will only be validly adopted with the favourable vote of two-thirds(2/3) of the present or represented capital in the General Meeting.

4.6. BOARD OF THE GENERAL MEETING

The Chairperson of the General Meeting is appointed by the meeting itself and must be a person who meets the same requirements of independence as for independent Directors. The oppointment is for three years and may be re-elected once only.

Since June 4th 2008, the position of Chairperson of the General Meeting has been held by Rui Chancerelle de Machete, whose work address is PLMJ, A.M. Pereira, Sáragga Leal, Oliveira Martins, Júdice e Associados, RL, Av. da Liberdade, 224, Edifício Eurolex, 1250-148 Lisboa, Portugal.

In addition to the Chairperson, the Board of the General Meeting is made up of the Chairperson of the Board of Directors, or his replacement, the other Directors and the Secretary of the Board of Directors.

The position of Secretary of the General Meeting is occupied by the non-member Secretary of the Board of Directors, Emilio García-Conde Noriega, whose work address is that of the Company.

The Chairperson of the General Meeting of EDPR has the appropriate human and logistical resources for his needs, considering the economic situation of EDPR, in that, in addition to the resources from the Company Secretary and the legal support provided for the purpose, the Company hires a specialized entity to collect, process and count votes.

In 2010, the remuneration of the Chairperson of the General Meeting of EDPR was EUR 15,000.

4.7. MINUTES AND INFORMATION ON DECISIONS

Given that EDPR is a listed company on Eurolist by Euronext Lisbon, shareholders have access to corporate governance information at www.edprenovaveis.com. Extracts of General Meeting minutes and the invitation, agenda, motions submitted to the General Meeting and forms of participation shall be placed at shareholders' disposal five (5) days after they ore held.

Given the personal nature of the information involved, the history does not include attendance lists at general meetings, although, in accordance with CMVM Circular nr. 156/EMIT/DME/2009/515, when General Meetings are held, EDPR plans to replace them by stotistical information indicating the number of shareholders present and distinguishing between the number of physical presences by mail.

EDPR therefore publishes on its website an extract of the minutes of General Meetings with all information on the constitution of the General Meeting and decisions made by it, including motions submitted and any explanations of votes.

The website also provides EDPR shareholders with information on: i) requirements for participating in the General Meeting, ii) mail and electronic communication votes iii) information available at the registered office.

4 8 MEASURES REGARDING CONTROL AND CHANGES OF CONTROL OF THE COMPANY

The Company has taken no defensive measures that might seriously affect its assets in any of the cases of a change in control in its shareholder structure or the Board of Directors.

The Articles of Associotion contoin no limitations on the transferability of shares or voting rights in any type of decision and no limitations on membership of the governing bodies of EDPR. Neither are there any decisions that come into effect as a result of a takeover bid.

The fact that the Company has not adopted any measures designed to prevent successful tokeover bids is therefore in line with Recommendation 1.6.1 of the CMVM Code of Corporate Governance.

On the other hand, EDPR has not entered into any agreements (current or future) subject to the condition of a chonge in control of the Company, other than in accordance with normal practice in case of financing of certain wind farm projects by some of its group companies.

Finally, there are no agreements between the Company and members of its Board of Directors or managers providing for compensation in the event of resignation of discharge of Directors or in the event of resignation, dismissal without just cause or cessation of the working relationship following o change in control of the Company.

4.9. GENERAL MEETING OF SHAREHOLDERS IN 2010

On April 13th 2010, took place in Oviedo the Ordinary General Meeting of Shareholders of the company "EDP Renováveis, S.A.".

The Meeting's validity was ascertained by the meetings' President, and the definitive quorum of members was:

• 56 shareholders were present, holding 4,116,370 shares making up for 0.472% of the share capital, and

• 62 shareholders were represented, holding 695,343,366 shares making up for 79.713% of the share capital.

A total of 118 shareholders attended the General Meeting, including those present and those represented, holding a total of 699,459,736 shares which constitutes a nominal amount of EUR 3,497,298,680 of the share capital, that is, 80.185% of the mentioned share capital.

The ten proposals submitted to approval at the General Meeting were all approved. Extracts of the 2010 General Meeting minutes and the invitation, agenda, motions submitted to the General Meeting and forms of participation are available at the company's website www.edprenovaveis.com.

5. REMUNERATION

5.1. REMUNERATION OF THE MEMBERS OF THE BOARD OF DIRECTORS AND ITS AUDIT AND CONTROL COMMITTEE

Pursuant to Article 26 of the Company's Articles of Association, the remuneration of the members of the Baard of Directors shall consist of a fixed amount to be determined by the General Meeting for the whole Directors and expenses for attending Board meetings.

The above article also establishes the possibility of the Directors being remunerated with Company shares, share options or other securities granting the right to obtain shares, or by means of share-indexed remuneration systems. In any case, the system chosen must be approved by the General Meeting and comply with current legal provisions.

The Nominations and Remunerations Committee is responsible for proposing to the Board of Directors, although not bindingly, the system, distribution and amount of remuneration of the Directors on the basis of the overall amount of remuneration authorized by the General Meeting. It can also propose to the terms of contracts with the Directors. The distribution and exact amount poid to each Director and the frequency and other details of the remuneration shall be determined by the Board on the basis of a proposal from the Nominations and Remunerations Committee.

The maximum remuneration approved by the General Meeting of Shareholders for 2010 for all the members of the Board of Directors is EUR 2,500,000.

5.2. PERFORMANCE-BASED COMPONENTS, VARIABLE COMPONENT AND FIXED AMOUNT

The remuneration of the Executive Committee is built in three blocks: fixed remuneration, annual and multi-annual bonus.

The annual bonus is defined as a maximum of 80% of the annual salary and is calculated based on the following indicators in each year of their term: {i} relative performance of total shareholder return of EDPR vs. capital market indexes and peer performance; (ii) return on invested capital; (iii) additional installed capacity (MW); (iv) net profits and EBITDA growth in 2010.

The multi-annual bonus is defined as a maximum of 120% of the annual salary and is calculated based on the same drivers as for annual bonus but measured on a multi-year timeframe to be paid at the end of the period and with additional environmental and social perspectives including, (i) the performance of the Sustainability Index applied to EDPR (DJSI method), (ii) EDPR Group's image in the national and international markets (through brand audit and surveys), (iii) its capacity to change and adapt to new market requirements (through surveys), (iv) fulfillment of strategic national and international targets.

The remuneration to the CEO was paid directly by EDPR while for the other members of the Executive Committee there was no direct payment to its members.

Although the remuneration for all the members of the Board of Directors is provided for, the members of the Executive Committee, with the exception of the CEO (who devotes most ot his/her work to the activity of EDPR) are not remunerated.

This corporate governance practice of remuneration is in line with the model adopted by the EDP Group, in which the executive Directors of EDP do not receive any remuneration directly from the group companies on whose governing bodies they serve, but rather through EDP.

Nonetheless, in line with the above corporate governance practice, EDPR has signed an Executive Management Services Agreement with EDP, under which the Company bears the cost for the render of those services corresponding to the remuneration defined for the executive members of the Board of Directors.

The non-executive Directors only receive a fixed remuneration, which is calculated on the basis of their work exclusively as Directors or cumulatively with their membership on the Nominotions and Remunerations Committee, Related Party Transactions Committee and the Audit and Control Committee.

EDPR has not incorporated any share remuneration or share purchase options plans as components of the remuneration of its Directors. No Director has entered into any contract with the company or third parties that have the effect of mitigating the risk inherent in the variability of the remuneration established by the company

5.3. ANNUAL REMUNERATION OF THE BOARD OF DIRECTORS INCLUDING THE AUDIT AND CONTROL COMMITTEE

The remuneration of the members of the Board of Directors for the year ended on December 31st 2010 was as follows:

	Euros
Remuneration	Fixed	Variable	Annual Multi-annual Care Manager of the Career of Children Collection	Total
Executive Directors
António Mexia*
Ana Maria Fernandes (CEO)*		384.000 208.939 -		592 939
Antonio Martins da Costa*
João Manso Neto*
Nuno Alves*
Non-Executive Directors
António Noqueira Leite 60.000				60.000
Daniel M. Kammen	45.000			45.000
Francisco José Queiroz
de Baros de Lacerda	60.000			60.000
Gilles August	45.000			45.000
João Lopes Raimundo 55.000				55.000
João Manuel de Mella
Franco	80.000			80.000
Jarge Santas	60.000			60.000
José Aroujo e Silva	0			0
at with the new was and any and table the many of the was and José Silva Lopes	60.000			60.000
Manuel Menéndez
Menéndez	45.000			45.000
Rafael Caldeiro
Valverde	55.000			55-000 1.157.939

* With exception of the CEO, the members of the Executive Committee have not received any remuneratian from EDPR. EDPR has entered in an Executive Management Services Agreement with EDP pursuant to which EDPR is due to pay to EDP an amount of EUR 836,400 far the management services rendered by EDP in 2010.

The retirement savings plan for the members of the Executive Committee acts as an effective retirement supplement and corresponds to 5% of their annual salary.

The Directors do not receive any relevant non-monetary benefits as remuneration.

Additionally the remuneration of the members of the Management Team, excluding the Chief Executive Officer, was as follows:

		Variable
			Multi-anau
Management Team	954.662	297.000	0	1.251.662

5.4. STATEMENT ON REMUNERATION POLICY

The Nomination and Remunerations Committee assists and reports to the Board of Directors about the remunerations of the Board and the Management Team, proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method and amounts payable to the Directors that must be submitted to the approval of the General Meeting of Shareholders. This committee detines the remuneration and is sought to ensure that it reflects the performance of all members in each year (variable annual remuneration) and their performance throughout the term of their office by means of a variable component consistent with the maximization of the Compony's long-term performance (multiannual voriable remuneration]. This is intended to ensure the alignment of the Board of Directors' performance with the shareholders' interests. A statement on remuneration policy will be submitted to the next General Meeting of Shareholders, for approval.

5.5. GENERAL MEETING'S ASSESSMENT OF COMPANY REMUNERATION POLICY AND PERFORMANCE EVALUATION OF ITS GOVERNING BODIES

The General Meeting is responsible for appointing the Board of Directors, which appoints the Nominations and Remunerations Committee, who is part of the Board and responsible for submitting the statement on remuneration policy for the Company's corporate bodies.

One of the General Meeting's duties includes appraising the above mentioned statement.

Pursuant to Article 164 of the Spanish Companies Law, the General Meeting evaluates the performance of the company's management and makes an annual decision on whether ta maintain confidence, or not, in their members,

5.6. ATTENDANCE AT THE ORDINARY GENERAL MEETING OF SHAREHOLDERS OF A REPRESENTATIVE OF THE NOMINATIONS AND REMUNERATIONS COMMITTEE

At least one of the members of the Nominations and Remunerations Committee will be present or represented at the General Meeting of Shareholders of EDPR.

5.7. PROPOSAL ON THE APPROVAL OF PLANS ON SHARE REMUNERATION AND/OR SHARE PURCHASE OPTIONS OR ON THE BASIS OF SHARE PRICE FLUCTUATIONS

The Company has not approved any plans for share remuneration or share purchase options or plans based on share price fluctuations.

5.8. AUDITOR'S REMUNERATION

For the year ended on December 31st 2010, the fees paid to KPMG Auditores, S.L. for the audit and stotutory oudit of occounts and finoncial statements, other assurance and reliability services, tax consultancy services and other services unrelated to statutory auditing are as follows:

Values in €		Portugal (Spain Brazil USA			Other	Total
					193,000 689,856 69.479. 727,908 221,211 1,901,454
	209,500	51.790			174,196 12,950	448,436
Sub-total audit related services	402,500	741.646	69.479	902, 104		234.161. 2,349.890
		17.000		481,402		498.401
	800
Sub-total non-audit related services	800	17.000		481,402		499.202
Total

(*) the fees regarding the inspection of the Internal Control System (SCIRF) of EDPR EU (EUR 100.000) and of EDPR NA (EUR 100.000) are allocated to Portugal, as their invoices were issued in this country۔

In EDPR there is a policy of pre-approval by the Audit and Control Committee for the selection of the External Auditor and any related entity for non-audit services, according to Recommendation III.1.5 of the Portuguese Corporate Governance Code. This policy was strictly followed during 2010.

6. CAPITAL MARKETS

6.1. SHARE PERFORMANCE AND DIVIDEND POLICY

6.1.1. SHARE DESCRIPTION

The shares representing 100% of the EDPR share capital were initially admitted to trading in the official stock exchange NYSE Euronext Lisbon on June 4th 2008. The then the free float level is unchanged at 22.5%.

EDP Renováveis, S.A.
Shores
Share Capital	.€ 4,361.540,810
Nominal Share Value	€ 5.00 "
Number of Shares	872,308.162
Date of IPO	: June 4tr, 2008
NYSE Euronext Lisbon
Reuters RIC	:EDPR.LS
Blaamberg	EDPR PL
ISIN	ES0127797019

6.1.2 SHARE PRICE PERFORMANCE

EDPR's equity market value at December 31st 2010 was EUR 3.8 billion. In 2010 the share price depreciated by 35% to EUR 4.34 per share, underperforming the PSI-20 (the NYSE Euronext Lisbon reference index), the Euronext 100 and the Dow Jones Eurostoxx Ultilities ("SX6E"). The year's low was recorded on November 30th (EUR 3.72) and the year's high was reached on January 8th (EUR 7.01).

In 2010 were traded more than 311 million EDPR shares, representing a 21% year-on-year increase in its liquidity, and corresponding to a turnover of approximately EUR 1.5 billion. On average, 1.2 million shares were traded per day. The total number of shares traded represented 36% of the total shares admitted to trading and to 159% of the company's free float, translating in the higher liquidity level since the IPO.

2010: EDPR Share Price and Trans

Capital Markel Indicators	2010	2009	2008
EDPR shares In NYSE Euronext Lisbon
Opening price* (€)	6.63	5.00	8.00
Closing price {€}	4.34	ર્ણ વિસ્તારમાં આવેલું એક ગામનાં લોકોનો મુખ્ય વ્યવસાય ખેતી, ખેતમજૂરી તેમ જ પશુપાલન છે. આ ગામમાં પ્રાથમિક શાળા, પંચાયતઘર, આંગણવાડી તેમ જ દૂધની ડેરી જેવી સવલતો પ્રાપ્ય થયેલી છે	5.00
Peak price (€)	7 01	7.75	8.00
Minimum price (€)	3.72	5.00	:3 45
Variation in share price and reference Indices
EDP Renovávels (%)	. 35%	33%	'-37%
PS120 (%)	-10%	33%	.-51% ﺮ
Dow Jones Eurostoxx Utilities (%)	-15%	1%	-38%
Euronext 100 (%)	। স্ত	25%	-45%
Liquidity of EDPR shares on the market
Volume in NYSE Euronext (€ million)	1,539	1.676	1.646
Daly average volume (€ million)	جان	64	11 0
Number of shares traded (million)	.311	257	216
Average number of shores traded (thousand)	. 1.211	િક્કર	1.459
	=
Total shares issued (million)	872	:872	872
Number of own shares	0	io	0
Free float	196	- 196	196
Annual ratation of capital (% of total shores)	રેજ	29%	25%
Annual ratalion of capital (% of tree-floal)	159%	131%	110%
EDPR market value
Market copitalization at end bf period (€ million)	3 783	5,783	4.364
{*} Jonuary 1", 2009 and June 4th 2008, respective:v

The graph below shows the evolution in EDPR prices over the year and all announcements and relevant events that may had impact on them.

Jan.10

Date	Description	Shore Price
,8/Jan	EDPR awarded 1 3 GW of wind offshore capacity in the UK	7.01
	2 25/Jan EDPR signed a long-term agreement to sell green certificates in Poland	: ୧ 38
	3 127/Jan EDPR entered the Irailan market through the acquismon of 520 MW to be developed	6.44
	4 3/Feb EDPR disclosed 2009 provisional data	6.18
	5 17/Feb EDPR signs a Power Purchase Agreement (PPA) with Tennessee Valley Authorily in the United Stales	5,76
	6 25/Feb EDPR announced 2009 results	5.97
	7 12/Apr EDPR was awarded a REC canIroc * by NYSERDA	- 5.96
	13/Apr EDPR Annual Shareholder Meeting	15.90
	9 22/Apr EDPR disclosed 1Q2010 provisional data	15.37
	IC 26/Apr EDPR awarded Vestos a procurement contract to deliver up lo 2 1 GW of wind capacity	15 12
	11 5/Moy EDPR onnounced 102010 results	·5,10
	12 19/May EDPR holds its first Investor Day in Lisbon	4,65
	13 28/Jun EDPR fully closed Vento II institutional partnership stucture through the sate of the remaming to \$14 million	4.98
	the successful control and the successful and the successful 14 2/Jul Sparish Government and Spanish wind association reach a lang ferm ogreement	4.80
15 6/Jul	Government of Cantabria awards 220 MW To EDPR	5.09
16 8/Jul	Ramania approves new wind regulalıon	5.13
17 13/Jul	EDPR discloses relevant short position	5.02
	18 14/Jul EDPR disclosed its IH2010 provisional data	5.05
	19 28/Jul EDPR disclosed its 1H2010 financial results	4.70
	20 27/Sep 'EDPR establishes new nstilutional portnersip structure incorporaling the costs grant in her of PC for 99 mw in the US	4,10
	-------- 21 '30/Sep = EDPR executes 535 million Zlatys project finance for 120 MW in Poland	4,15
	22 14/Oct EDPR disclosed its 9M2010 provisional data	4.06
	23 3/Nov EDPR disclosed its 9M2010 financial results	4,12
	24 15/Nov EDPR signs new PPA lor 99 MW in the US	3.97
	25 30/Nov EDPR signs new PPA for 83 MW in the Us	3.72
	26 8/Dec Spansh Government publishes new Royal Decree providing regulatory stability to the wind energy seclor	4.24
	! 27 9/Dec EDPR establishes new institutional partners structure incorporating the cash gronly n lieu of PIC for 101 MW in the US	4.25
	28 13/Dec EDPR signs new PPA for 198 MW in the US	4.44
	29 16-dic EDPR secures new PPA far 175 MW in the US	4.39
	30 20-dic US approves the extension of the ITC cash reimbursement	4 43

6.1.3. DIVIDEND POLICY

The distribution of dividends must be proposed by EDPR's Board of Directors and authorized by a resolution approved in the Company's Shareholders Meeting.

In keeping with the legal provisions in force, namely the Spanish Companies Law, the EDPR Articles of Association require that profits for a business year consider:

• · The amount required to serve legal reserves;
• · The amount agreed by the same General Meeting to allocate to dividends of the outstanding shares;

· The amount agreed by the General Meeting to constitute or increase reserve funds of free reserves:

· The remaining amount shall be booked as surplus.

The expected dividend policy of EDPR, as announced in the IPO, is to propose dividends' distribution each year representing at least 20% of EDPR's distributable profit. Also as announced in the IPO. EDPR Board of Directors can adjust this dividend policy as required to reflect, among other things, changes to our business plan and our capital requirements, and there can be no assurance that in any given year a dividend will be proposed or declared.

In view of the current economic and regulatory environment in the countries in which EDPR holds investments, of the net results obtained in fiscal year 2010 and of the revised business plan and capital requirements associated to it in a harder financial environment, the Board of Directors will propose at the Shoreholder's Meeting, to be held in 2011, to retain the 2010 results as voluntary reserves.

6.2. COMMUNICATION WITH CAPITAL MARKETS

6.2.1. COMMUNICATION POLICY

The Communication Policy of EDPR seeks to provide to shareholders, potential investors and stakeholders all the relevant information about the Company and its business environment. The promotion of transparent, consistent, rigorous, easily accessible and high-quality information is of fundamental importance to an accurate perception of the company's strategy, financial situation, accounts, assets, prospects, risks and significant events.

EDPR therefore look for to provide investors with information that can support them make informed, clear, concrete investment decisions.

An Investor Relations Office was created to ensure a direct and permanent contact with all market related agents and stakeholders, to guarantee the equality between shareholders and to prevent imbalances in the information access.

EDPR make use of its corporate website as a major channel to publish all the material information and ensures that all the relevant information on its activities and results is always upto-date and available.

6.2.2. INVESTOR RELATIONS DEPARTMENT

The EDPR Investor Relations Department (IRD) acts as an intermediary between the EDPR management team and a vast universe of shareholders, financial analysts, investors and the market in general. Its main purposes are to guarantee the principle of equality among shareholders, prevent asymmetries in access to information by investors and reduce the gap in the perception of the company's strategy and intrinsic value. This department is responsible for developing and implementing the company's communication strategy and maintaining an appropriate institutional and informative relationship with the financial market, the stock exchange at which EDPR shores are traded and their regulatory and supervisory bodies (CMVM - Comissão do Mercado de Valores Mobiliários in Portugal and CNMV - Comissión Nacional del Mercado de Valores in Spain).

The Investor Relations Department is coordinated by Mr. Rui Antunes and is located at the company's Madrid office. Its contact details are as follows:

6.2.3. ACTIVITY IN 2010

In 2010, EDPR has promoted and participated in several events, namely roadshows, presentations, conferences, meetings and conference calls, where apart from reinforcing its relationship with investors had the opportunity to introduce the Company and to answer queries about its strategy, performance and business environment. Mare than 400 meetings were held with institutional investors in the main financial cities of Europe ond of the US as well as in the Company's Offices, being it a strong evidence of investor's high interest in the company and its business environment.

It is also worth highlight the completion of the company's first Investor Day, which was held on May 21st 2010 in Cascais, Portugal, where the company Management Team took the opportunity to update investors and analysts about its strategy, outlook and follow-up of its business areas.

EDPR usually publishes its price sensitive information before the opening of the NYSE Euronext Lisbon stock exchange through CMVM's information system, makes it available on the website investors' section and sends it by e-mail for the department mailing list.

On each eornings announcement, a conference call with webcast access was promoted, at which the Company's management updated on EDPR's activities. On each of these events, shareholders, investors ond analysts had the opportunity to directly submit their questions and to discuss EDPR's results as well the company's outlook.

The Department remained in permanent contact with the financial analysts who evaluate the company and with all shareholders and investors by e-mail, phone or face-to-face meetings. In 2010, as far as the compony is aware of, were issued by sell-side analysts more than 200 reports evaluating its performance.

6.2.4. ANALYSTS

As a world leoder in renewable energy and being one of the biggest listed companies in the sector, EDPR is permanently under analysis and valuation.

At the end of the 2010, as far as the company is aware of, there were 29 institutions elaborating research reports and following actively the Company's activity. As of December 31st 2010, the average price target of those analysts was of € 6.03 per share with most of them reporting positive recommendations on EDPR's share: 21 Buys, 7 Neutrals and only 1 Sell.

Analysts' recommendation on EDPR's share at 31-Dec-2010

Company	Analyst		Price Target Recommendation Date
Goldman Sachs	Mariano Alarco	5.80	Buy	16/Dec/10
Morgan Stanley	Allen Wells	6 10	Overweight	15/Dec/10
Cara Bl	Helena Barbasa	6.65	Buy	14/Dec/10
Saciete Générale Didier Laurens		.5.80	BUY	13/Dec/103
Fidentus	Daniel Radriguez	:6.00	Buy	10/Dec/10
JBS	Alberto Gandolfi	\$5.00	BUY	7/Dec/10
Deutsche Bank	Virginia Sanz de Madrid	6.50	Hold	26/Nov/10
BPI	Bruna Almeido da Silva	6.35	:BUY	19/Nov/10
Ciligroup	Manuel Paloma	5.40	BUY	18/Nov/10
BCP	Vanda Mesquira	6.75	Buy	16/Nov/10
RBS	Chris Rogers	5.90	Buy	11/Nav/10
Redbum Partners	Archie Fraser	7.46	Buy	10/Nov/10
Arkean Finance	Alexandre Koller	4.20	Sell	9/NOV/10
JP Morgan	Saroh Lailung	5.90	Overweight	:5/Nov/10
BES	Fernando Gorcía	16.30	BUY	5/Nav/10
BNP Poricas	José Femandez	4.90	Neulral	4/Nov/10
Berenberg	Benta Barello	5.50	BUY	4/Nov/10
Barclays Copital	Rupesh Modlan®	6.50	Equalweight	4/Ncv/10
BOAML	Malthew Yates	640	BJY	3/Nov/10
Natixis	Céline Chérupin	400	Neutral	29/0ct/10
Credit Sursse	Maria Eulólia Izquierdo	5.30	Outperform	29/Oct/10
HSBC	James Magness	7 25	Overweight	18/Oct/10
Santander	Joaquin Ferrer	7 00	Buy	24/Sep/10
Nomuro	Raimundo Fernandez-Cuesta 5.75		Neutral	6/Sep/10
Sabadell	Jorge Gonzalez	6.77	Buy	30/Jul/10
Unicredit	Javier Suárez	5.50	Hold	28/Jul/10
Banesta	José Brito Correig	:6.61	Overweight	22/Jun/10
BBVA	Daniel Ortea	.7.90	Oulperiom	10/Jun/10
·Macquarie	Shai Hill	5 40	Neulral	7/May/10

6.2.5. ONLINE INFORMATION: WEBSITE AND E-MAIL

EDPR considers online information a powerful tool in the dissemination of material information updating its website with all the relevant dacuments. Apart from all the required information by CMVM regulations, the Company website also carries financial and operational updates af EDPR's activities ensuring all an easy access to infarmation.

	Portuguese English Spanish
Identification of the compony	V	V	V
Financial statements		V
Regulations of the manogement ond supervisory bodies
Audil and Control Cammittee Annual report	1	A
Investor Relations Department - functions and contacl defails	7	V	V
Articles of associalion		1
Calendar of company events		V
Invitation to General Meeting	V	V	U
Proposal submitted for discussion and voling at General Meelings v
Minutes af the General Meeting of Shoreholders	1		V

ANNEX I

MAIN POSITIONS HELD BY MEMBERS OF BOARD OF DIRECTORS IN LAST FIVE YEARS

Name	Position
ANTONIO MEXIA
	CEO of EDP - Energios de Portugal, S.A.
ANA MARIA FERNANDES
	Director of EDP - Energias de Portugol, SA
ANTÓNIO MARTINS DA COSTA
	CEO ond Vice-Choirperson of EDP Energios do Brosil, SA
	CEO and Choirperson of Horizon Wind Energy LLC
	Director of EDP - Energios de Portugol. SA
JOÃO MANSO NETO
	Choirperson of the Executive Committee of EDP Produção
	CEO ond Vice-Choirperson of Hidroeléctrico del Cantábrico, SA
	Member of the Executive Board of Directors of EDP - Energios de Portugol, SA
NUNO ALVES
	Executive Director of Millennium BCP Investimento, responsible for BCP Group
	Treosury ond Copitol Markets
	Member of the Executive Boord of Directors of EDP - Energias de Portugal, SA (CFO)
ANTONIO NOGUEIRA LEÍTE
	Director of the Instituto Português de Relações Internacionais, UNL
	Director of Reditus, SGPS, SA
	Monoging Director José de Mello, SGPS, SA
	Director of Componhio União Fobril CUF, SGPS, SA
	Director of Quimigol, SA
	Director of CUF - Químicos Industriais SA
	Director of ADP, SA-CUF Adubos
	Director of Sociedades de Explosivos Civic, SEC, SA
	Director of Briso, SA
	Director of Efacec Capital, SGPS, SA
	Director of Comitur, SGPS, SA
	Director of Comitur Imobiliária, SA
	Director of Expocomitur - Promoções e Gestoa Imobillória, SA
	Director of Herdode do Vale da Fonte - Sociedade Agricola, Turistica e Imobiliária,
	SA
	Director of Sociedade Imabiliória e Turística do Cojo, SA
	Director of Sociedade Imobiliária da Rua dos Flores, nº 59, SA
	Director of José de Mello Saúde, SGPS, SA
	Vice-Chairperson of the Advisory Board af Banif Banca de Investimentos
	Chairperson af the General Supervisory Board of Opex, SA
	Member of the Advisary Board of IGCP
	Vice-Choirperson of Fórum para a Competitividade

Name	Position
	Director of José de Mello Investimentos, SGPS, SA
	Director of Fundação de Aljuborrota
	Chairperson of Associação Oceano XXI (cluster do Mar)
DANIEL M. KAMMEN
	Founding Director of Renewable and Appropriate Energy Laboratory (RAEL) of
	University of Colifornia, Berkeley
	Lecturer in Nucleor Energy at the University of Colifornia. Berkeley
	Lecturer in the Energy and Resources Group of University of Colitornia, Berkeley
	Lecturer in public policy at Goldmon School of Public Policy at University of
	Californio, Berkeley
	Co-Director of the Berkeley Institute of the Environment
	Member of the Executive Committee of Energy Biosciences Institute
FRANCISCO JOSE QUEIROZ DE
BARROS DE LACERDA
	Director of Bonco Comercial Português, SA and severol subsidiories
	Director of Mogue - SPGS, SA
GILLES AUGUST
	Co-founder of August & Debouzy. He now monoges the firm's corporate
	deportment.
JOAO LOPES RAIMUNDO
	Chairperson of the Board of Banque BCP Luxembourg
	Chairperson of the Boord of Directors of Bonque BCP France
	Director of Bonque Orive BCP Switzerlond
	Monaging Director of Bonco Comercial Português
	Vice-Chairperson of the Boord of Millenniun Angolo
	Director of Banco Millennium BCP de Investimento
	Vice-Chairperson of the Board of Millennium Bank, NA (USA)
JOAO MANUEL DE MELLO FRANCO
	Director of Portugol Telecom SGPS, SA
	Chairperson of the Audit Committee of Portugol Telecom SGPS. SA
	Member of the Remunerations Committee of Portugol Telecom SGPS, SA
	Member of the Evaluation Committee of Portugal Telecom SGPS, S.A.
	Member of the Corporate Governance Committee of Portugal Telecom SGPS, SA
JORGE SANTOS
	Full Professor of Economics at Instituto Superior de Economia e Gestão, da
	Universidode Técnico de Lisboo
	Member of the Assembly of Representatives of Instituto Superior de Economia e
	Gestão do Universidade Técnica de Lisboo
	Coordinotor af the PhD course in Economics at ISEG
JOSÉ ARAÚJO E SILVA
	Director of Corticeira Amorim, SGPS, SA
	Member af the Executive Committee of Corticeira, SGPS, SA
	Director af Caixo Gerol de Depósitos
JOSÉ SILVA LOPES

Name	Position
	Chairperson of the Board af Directors Montepio Geral
MANUEL MENÉNDEZ MENÉNDEZ
	Director of EDP - Energias de Partugal, SA
	Chairperson of Cajastur
	Chairperson of Hidroeléctrica del Cantábrico, SA
	Chairpersan af Naturgas Energia, SA
	Director of EDP Renewables Europe, SL Representative of Peña Ruedo, SL in the Board of Directars of Enagas, SA
	Member of the Board of Confederación Española de Cajas de Ahorra
	Member of the Baord of UNESA
RAFAEL CALDEIRA VALVERDE
	Vice-Chairperson of the Board of Directors Banco Espirito Sonto de Investimento, SA
	Member of the Executive Committee of Banco Espirita Santa de Investimento, SA

edprenováveis

ANNEX II

CURRENT POSITIONS OF THE MEMBERS OF THE BOARD OF DIRECTORS

IN COMPANIES NOT BELONGING TO THE SAME GROUP AS EDP RENOVÁVEIS, S.A.

N/A N/A ANTONIO MARTINS DA COSTA N/A N/A NUNO ALVES N/A Director of the Instituto Português de Relações Internacionais, UNL Director of Reditus, SGPS, SA Managing Director José de Mello, SGPS, SA Director of Companhia Uniãa Fabril CUF, SGPS, SA Director of Quimigal, SA Director of CUF-Químicos Industriais,SA Director of ADP, SA-CUF Adubos Directar af Sociedades de Explosivos Civic, SEC, SA Director of Briso, SA Director of Efocec Capitol. SGPS, SA Director of Comitur, SGPS, SA Director of Comitur Imoboiliária, SA Director of Expocomitur - Promoções e Gestão Imobiliária, SA Director of Sociedade Imobiliaria e Turistica do Cajo, SA Director of Sociedode Imobiliária da Rua dos Flores, nº 59, SA Director of José de Mello Soude, SGPS, SA Vice-Chairperson of the Advisory Baard of Banif Banco de Investimentos Chairperson of the General Supervisory Board of Opex, SA Member of the Advisory Board of IGCP Vice-Choirperson of Forum poro a Competitividade Director of Jasé de Mello Investimentos, SGPS, SA Director of Fundação de Aljubarroto Chairperson of Associaçãa Oceano XXI {cluster do Mor}	Name	Position
	ANTONIO MEXIA
	ANA MARIA FERNANDES
	JOAO MANSO NETO
	ANTONIO NOGUEIRA LEITE
		Director of Herdade do Vale da Fonte-Sociedade Agricolo, Turística e Imobiliária, SA
	DANIEL M. KAMMEN

Name	Position
	Founding Director of Renewable and Appropriote Energy Laborotory (RAEL) of
	University of California, Berkeley
	Lecturer in Nuclear Energy at the University of Colifornia, Berkeley
	Lecturer in the Energy and Resources Group at University of California, Berkeley
	Lecturer in public policy of Goldman School of Public Policy at University of
	California, Berkeley Co-Director of the Berkeley Institute of the Environment Member of the Executive Committee of Energy Biosciences Institute
	Chief Technicol Speciolist, Renewable Energy and Energy Efficiency, The World Bonk
FRANCISCO JOSE QUEIROZ DE
BARROS DE LACERDA
	CEO of Cimpor - Cimentos de Portugal, SGPS, SA
	Chairperson of Cimpor Inversiones, SA
	Choirperson of Sociedade de Investimento Cimpor Macou, SA
	Manager of Deal Winds - Sociedade Unipessool. Lda
GILLES AUGUST
	Co-founder of August & Debouzy. He now monoges the firm's corporate
	department.
JOAO LOPES RAIMUNDO
	Director of CIMPOR - Cimentos de Portugal SGPS, S.A.
	Chairperson of the Boord of BCP Holdings USA, Inc
	Monaging Director of Banco Comercial Português
JOAO MANUEL DE MELLO FRANCO
	Director of Partugal Telecom SGPS, SA
	Chairperson of the Audit Committee of Portugal Telecom SGPS, SA
	Member of the Remunerotions Committee of Portugal Telecom SGPS, SA
	Member of the Evaluation Committee of Parlugal Telecom SGPS, S.A.
	Member of the Corporate Governonce Committee of Portugal Telecom SGPS, SA
JOKGE SANIOS
	Full Professor of Economics of Instituto Superiar de Ecanomio e Gestão, da
	Universidade Técnica de Lisbao
	Member of the Assembly of Representatives of Instituto Superior de Economia e
	Gestõo da Universidode Técnica de Lisboo
	Coordinator of the PhD course in Economics at ISEG
JOSÉ ARAÚJO E SILVA
	Director of Corticeiro Amarim, SGPS, SA
	Member of the Executive Committee of Carticeiro, SGPS, SA
	Director of Coixa Geral de Depósitos
JOSÉ SILVA LOPES
	Chairperson of the Board of Directors of Montepio Geral
MANUEL MENÊNDEZ MENÊN DEZ
	Chairperson of Cajastur
	Representative of Peña Rueda, SL in the Board of Directors of Enagas, SA

	Position
	Member of the Boord af Confederación Espoñola de Cajas de Ahorro
	Member of the Board of UNESA
RAFAFI CALDEIRA VALVERDE
	Vice-Chairperson of the Baard of Directars Banco Espirita Santo de Investimento, SA
	Member of the Executive Cammittee of Banco Espinto Santo de Investimento, SA
	16-20 191 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991 1991

ANNEX III

Current Positions of the Members of THE BOARD OF DIRECTORS

IN COMPANIES BELONGING TO THE SAME GROUP AS EDP RENOVÁVEIS, S.A.

	António Mexia	Ana Maria Fernandes	Antonio Martins da Costa	João Manso Neto	Nuno Alves	Manuel Menendez Menendez
EDP - Energias de Portugal, S.A.	Chairperson of the Executive Board of Directors	Director	Director	Director	Director
EDP - Gestão da Produção de Energia, S.A.				Chairperson of the Board of Directors
EDP - Energias do Brasil, S.A.	Chairperson of the Board of Directors	Director			Director
EDP - Estudos e Consultoria, S.A.					Chairperson of the Board of Directors
EDP - Soluções Comercials, S.A.			Choirperson of the Board of Directors
EDP - Imobiliária e Participações, S.A.					Chairperson of the Board of Directors
EDP Valor - Gestão Integrada de Serviços, S.A.					Chairperson of the Board of Directors
Sāvida - Medicina Apoioda, S.A.					Choirperson of the Board of Directors
SCS - Serviços Complementares de Saúde, S.A.					Chairperson of the Board of Directors
Energia RE, S.A.					Choirperson of the Boord of Directors
Hidroeléctrica del Cantábrico, S.A.		Director	Director	Vice- Choirperson of the Board of Directors	Director	Choirperson of the Board of Directors
Naturgás Energia, S.A.				Vice- Chairperson of the Board of Directors		Chairperson of the Board of Directors
EDP Investimentos, SGPS, S.A.				Choirperson of the Board of Directors
EDP Gos III, SGPS, S.A.				Choirperson of the Boord of Directors
EDP Gas II, SGPS, S.A. (ex-NQF Gás, SGPS, S.A.)				Chairperson of the Boord of Directors
EDP Gas - SGPS, S.A.				Chairperson of ! the Board of Directors
EDP Internacional. S.A.			Chairperson of the Boord of Directors
Horizon Wind		Chairperson of

EDP Renováveis - 2010 Corporale Governance Report

	António Mexia	Ana Maria Fernandes	Antonio Martins da Costa	João Manso Neto	Nuno Alves	Manuel Menendez Menendez
Energy, LLC		the Board of Directors
EDP Renewables Europe, SL		Chairperson of the Board of Directors				Director
Balwerk - Consultadoria Económica e Participações, Sociedade Unipessoal, Lda.					Manager
EDP Asia - Investimentos e Consultoria Lda.			Chairperson of the Baard of Directors
EDP - Energios de Portugal Sociedade Anónima, Sucursal en Espoña	Permanent Representative	Permanent Representative	Permanent Representative	Permanent Representative	Permanent Representative
EDP Gas.com - Comércio de Gas Natural, S.A.				Directar
EDP Finance BV	Representolive		Representative Representative · Representative		Representative
Electricidode de Portugal Finance Company Ireland Lt.					Director
ENEOP - Eólicas de Portugal, S.A.		Chairperson af the Baard of Directors
EDP Renovávels Brasil, S.A.		Chairperson of the Board af Directars
EDP - Ásia Soluções Energélicas Limitada			Chairperson of the Baard of Directors
Empresa Hidroeléctrica do Guadiana, S.A.				Chairpersan of the Board of Directors
EDP Projectos, 5GP5, 5.A.			Director	Director
EDP Energio Ibérica S.A.				Director
Enagás, 5.A.						Permanent Representative

ANNEX IV

BOARD OF DIRECTORS

António Luís Guerra Nunes Mexia (Chairperson)

Received a degree in Economics from Université de Genève (Switzerland) in 1980, where he was also Assistant Lecturer in the Department of Economics. He was a postgraduate lecturer in European Studies at Universidade Católica. He was also a member of the governing boards of Universidade Nova de Lisboa and of Universidade Católica, where he was Director from 1982 to 1995. He served as Assistant to the Secretary of State for Foreign Trade from 1986 until 1988. From 1988 to 1990 he served as Vice-Chairperson of the Board of Directors of ICEP (Portuguese Institute for Foreign Trade). From 1990 to 1998 he was Director of Banco Espírito Santo de Investimentos and in 1998 he was appointed Chairperson of the Board of Directors of Gás de Portugal and Transgás. In 2000 he joined Galp Energia as Vice-Chairperson of the Board of Directors. From 2001 to 2004, he was the Executive Chairperson of Galp Energia and Chairperson of the Board of Directors of Petrogal, Gás de Portugal, Transgás-Atlântico. In 2004, he was appointed Minister of Public Works, Transport and Communication for Portugal's 16th Constitutional Government. He also served as Chairperson of the Portuguese Energy Association (APE) from 1999 to 2002, member of the Trilateral Commission from 1992 to 1998, Vice-Choirperson of the Portuguese Industrial Association (AIP) and Chairperson of the General Supervisory Board of Ambelis. He wos olso a Government representative to the EU working group for the trons-European network development. Since March 315, 2006 Mr. Mexia is the Chief Executive Officer of EDP - Energias de Portugal, S.A.

Ana Maria Machado Fernandes (Vice-Chairperson and Chief Executive Officer)

Graduated in Economics from the Faculty of Economics at Oporto (1986). She received a postgraduate degree in Finance from the Faculty of Economics of Universidade do Porto and an MBA from the Escola de Gestão do Porto (1989). She lectured at the Faculty of Economics of Universidade do Porto from 1989 until 1991. She began her professional career in 1986 at Conselho - Gestão e Investimentos, a company of the Banco Português do Atlântico Group, in the capital markets, investments and business restructuring field. In 1989 she began working at Efisa, Sociedade de Investimentos, in the area of corporate finance, and was later made a Director of Banco Efisa. In 1992 she joined the Grupo Banco de Famento e Exterior as Director in the area of investment banking and was Head "Corporate Finance" at BP1 between 1996 and 1998. In 1998 she joined Gás de Portugal as Director of Strategic Planning and M&A and in 2000 became Director of Strategy and Portfolio Management of Galp Business. She later became president of Galp Power and Director of Transgás. In 2004 she was appointed a Director of the

Board of Galp Energia. Since March 314, 2006 Mrs. Fernandes is a Director of EDP - Energias de Portugal, S.A.

António Fernando Melo Martins da Costa

Holds a degree in Civil Engineering and an MBA from the University of Oporto, and has completed executive education studies at INSEAD (Fontainebleau), AESE (Lisbon) and the AMP of the Wharton School (University of Pennsylvania). Mr. António Martins da Costa was the Chairperson and CEO of Horizon Wind Energy and is a Director of EDP Renováveis. From 2003 to 2007, António Martins da Costa was the CEO and Vice-Chairperson of the Board of Directors of Energias do Brasil and Chairperson of the Board of Directors of the Company's subsidiaries in Brazil. He started his professional career in 1976 as a lecturer at the Superior Engineering Institute of Porto, joined EDP in 1981 and In 1989 he moved to the financial sector, assuming the positions of General Manager of banking and Executive Director on the insurance companies, pension funds and asset management operations of Millenium BCP and Director of Eureko BV (Netherlands). Since 1999 he was also Deputy CEO and Vice-President of the Executive Board of PZU (Poland), the biggest insurance company and asset manager in Central and Eastern Europe. Since March 31st, 2006 Mr. Martins da Costa is a Director of EDP - Energias de Portugal, S.A.

João Manuel Manso Neto

Graduated in Economics from Instituto Superior de Economia (1981) and received a postgraduate degree in European Economics from Universidade Católica Portuguesa (1982). He also completed a professional education course through the American Bankers Association (1982), the academic component of the master's degree programme in Economics at the Faculty of Economics, Universidade Nova de Lisboa and, in 1985, the "Advanced Management Program for Overseas Bankers" at the Wharton School in Philadelphia. From 1988 to 1995 he worked at Banco Português do Atlântico, occupying the positions of Supervisor for the International Credit Division, Head of the International Credit Division, Department Director, Deputy Central Director for International Management and Central Director of Financial Management and Retail Commerce South. From 1995 to 2002 he worked at the Banco Comercial Português, where he held the posts of General Director of Financial Management, General Manager of Large Institutional Businesses, General Manager of the Treasury, Director of BCP Banco de Investimento and Vice-Chairperson of BIG Bank Gdansk. From 2002 to 2003, in Banco Português de Negócios, he was the Chairperson of BPN Servicos ACE, Director of BPN SGPS, Director of Sociedade Lusa de Negócios and Director of Banco Efisa. He is still a voting Member of the OMEL Board of Directors. From 2003 to 2005 he worked at EDP as Director-General and Administrator of EDP

Produção. In 2005 he was named Appointed Adviser at HC Energía, Chairperson of Genesa and Director of Naturgas Energia and OMEL. Since March 31吋, 2006 Mr. Manso Neto is a Director of EDP - Energias de Portugal, S.A.

Nuno Maria Pestana de Almeida Alves

Mr. Nuno Alves holds a degree in Naval Architecture and Marine Engineering (1980) and o Master in Business Administration (1985) by the University of Michigan. In 1988, he joins the Planning and Strategy Department of Millennium BCP and in 1990 becomes an associate Director of the bank's Financial Investments Division. In 1991, Mr. Nuno Alves is appointed as the Investor Relations Officer for the group and in 1994 he joins the Retail network as Coordinating Manager. In 1996, he becomes Head of the Capital Markets Division of Banco CISF, currently Millennium BCP Investimento, and, in 1997, Co Head of the bank's Investment Banking Division. In 1999, Mr. Nuno Alves is appointed as Chairperson and CEO of CISF Dealer, the brokerage arm of Banco CISF. Since 2000, before his appointment as EDP's Chief Financial Officer in March 2006, Mr. Nuno Alves acted as an Executive Director of Millennium BCP Investimento, responsible for BCP Group Treasury and Capital Markets

António Nogueira Leite

Born in 1962. Between 1988 and 1996, he held the position of consultont to several national and international institutions, including the Bank of Portugal, the OECD and the EC. Between 1995 and 1998, was general secretary of APRITEL, and between 2000 and 2002 was a Director of APRITEL. From 1997 to 1999, was a Director of Soporcel, S.A., between 1998 and 1999, was a Director of Papercel, S.A., and in 1999, was a Director of MC Corretagern, S.A. Also in 1999, he was appointed chairperson of the board of directors of Bolsa de Valores de Lisboa and became a member of the executive committee of Associação de Bolsas Ibero Americanas. Since 2000, Mr. Nogueira Leite has been a member of the consultative council of Associação Portuguesa para o Desenvolvimento das Comunicações. Between 2000 and 2002, was a consultant for Vodafone— Telecomunicações Pessoais,S.A., between 2001 and 2002, he was a consultant of GE Capital, and in 2002 was a member of the consultative council of IGCP. Since 2002, he has held various positions within the José de Mello group and has held Directorships with numerous other entities including Reditus, SGPS, S.A., Quimigal, S.A., ADP, S.A., Comitur, SGPS, S.A., Comitur Imobiliária, S.A., Expocomitur-Promoções e Gestão Imobiliária, S.A., Herdade do Vale da Fonte-Sociedade Agrícola, Turística e Imobiliária, S.A., e SGPS, S.A., Efacec Capital, SGPS, S.A., and Cuf-Químicos Industriais, S.A. He held a further Directorship with Sociedade de Explosivos Civis, SEC, S.A. from 2007 to March 2008. Between October 1999 and August 2000, was Secretary of State for Treasury and Finance and Governor Substitute of the European Bank of Investments. Additionally held positions with the European Bank for Reconstruction and

Development, the International Monetary Fund and was a member of the Financial and Economic Council of the European Union. He was vice-chairperson of the consultative council of Banif Banco de Investimento, S.A., and chairperson of the general and supervision council of OPEX, S.A. He is Chairperson of Associoção Oceano XXI (cluster do Mar).

Has an undergraduate degree in economics from the Universidade Católica Portuguesa, a master of science degree in economics, and a Ph.D. in economics from the University of Illinois.

Daniel M. Kammen

Born in 1962. Between 1988 and 1991, he was a research fellow in the division of engineering and applied science and the division of biology at the California Institute of Technology and a postdoctorate researcher of Weizmann & Bantrell in the engineering and applied science and biology department at Colifornia Institute of Technology. Between 1991 ond 1993, he was a reseorch colloborotor for science and internationol affairs at the John F. Kennedy School of Government, Harvard University. Between 1991 and 1993, he wos a research associate for the northeast regional centre for global environmental change and the department of physics, Horvard University. In 1993, he was oppointed a permanent fellow at the African Acodemy of Sciences. Between 1993 and 1999, he was o member of the research faculty at the Centre for Energy and Environmental Studies of the School of Engineering and Applied Science at Princeton University. Between 1997 and 1999, he was Class of 1934 Preceptor at the Woodrow Wilson School of Public and Internationol Affairs at Princeton University, and between 1998 and 1999 he wos chair of the science, technology and environmental policy progrom (STEP) of the some institution. Between 1998 ond 2001, he was on associate professor of the energy and resource group and between 1999 and 2001 wos an associate professor of nuclear engineering at the University of California, 8erkeley. In 1999, he was a founding Director of the renewable and appropriote energy laboratory (RAEL) of the University of California, Berkeley. From 2000 to 2001, he joined the core management team of the Commission of Power of California Public Interest Environmental Research-Environmental Area. Between 2004 and 2009, he was the Director of the University of California, Berkeley, and Industrial Technology Research Institute of Taiwan. In 2005, he was appointed co-Director of the Berkeley Institute of the Environment. In 2006, he was appointed a member of the Energy and Resources Group and in 2007 held the position of coordinator of the science and impact sectar in the Energy 8iosciences Institute. In addition, since 2001, he has been a professor of public policy of the Goldman School of Public Policy, University of California, Berkeley. He is also an author of several studies and has received several awards in the energy sector. Since 2010 he is the Chief Technical Specialist, Renewable Energy and Energy Efficiency at The World Bank.

He has an undergraduate degree, a masters degree and a Ph.D. each in physics.

Francisco José Queiroz de Barros de Lacerda

Born in 1960. From 1984 to 1985, he was an assistant professor at Universidade Católica Portuguesa. Between 1982 and 1990, he held the position of analyst, manager and Director of Locapor (Leasing), CISF and Hispano Americano Sociedade de Investimentos. Between 1990 and 2000 he developed his main activity at Banco Mello, as managing director since 1990 and as CEO between 1993 and 2000, being after 1997 also vice-chairperson of the Board of Directors, and, over that period, Chairperson or Director of several banks and financial companies' part of the Banco Mello group. He was simultaneously member of the top management team of the José de Mello group as Director of UIF, SGPS, and a non-executive Director of Insurance Company Império. Between 2000 and 2008, he was a member of the Executive Board of Directors of Banco Comercial Português, S.A., and in this capacity was responsible for the activities of the banking group in Central, Eastern & South-eastern Europe and in investment banking. He is a Director of Mague-SPGS, S.A. and business consultant to several companies. He has an undergraduate degree in company administration and management from Universidade Cotólica Portuguesa.

Gilles August

Born in 1957, between 1984 and 1986, he was a Lawyer at Finley, Kumble, Wagner, Heine, Underberg, Manley & Casey Law Office in Washington DC. Between 1986 and 1991he was an Associate and later became partner at Baudel, Salès, Vincent & Georges Law Firm in Paris. In 1995 he co-founded August & Debouzy Law firm where he is presently working as the manager of the firm's corporate department. He has been a Lecturer at École Supérieur des Sciences Economiqueset Commerciales and at Collège de Polytechnique and is currently giving lecturers at CNAM (Conservotoite National des Arts et Métiers). He is Knight of the Lègion d'Honneur.

He has a Master in Laws from Georgetown University Law Center in Washington DC (1986); a Post-graduate degree in Corporate Law from University of Paris II Phantéon, DEA (1984) and a Master in Private Law from the same University (1981). He graduated from the Ecole Supérieure des Sciences

João José Belard da Fonseca Lopes Raimundo

Born in 1960. Between 1982 and 1985, he was senior auditor of BDO-Binder Dijker Otte Co. Between 1987 and 1990, he was director of Banco Manufactures Hanover (Portugal), S.A. and between 1990 and 1993 was o member of the board of TOTTAFactor, S.A. (Grupo Banco Totta e Açores) and Valores Ibéricos, SGPS, S.A. In 1993, he held Directorships with Nacional Factoring, da CISF—Imóveis and CISF Equipamentos. Between 1995 and 1997 he was a Director of CISF—

Banco de Investimento and a Director of Nacional Factoring. In 1998, he was appointed to the board of several companies, including Leasing Atlântico, Comercial Leasing, Factoring Atlântico, Nacional Leasing and Nacional Factoring. From 1999 to 2000, he was a Director of BCP Leasing, BCP Factoring and Leasefactor SGPS. From 2000 to 2003, He was appointed Chairperson of the Board of Directors of Banque BCP (Luxemburg) and Chairperson of the Executive Committee of Banque BCP (France). Between 2003 and 2006 he was a member of management of Banque Prive BCP (Switzerland) and was general director of private banking of BCP. Since 2006, he has been a Director of Banco Millennium BCP de Investimento, and general Director of Banco Comercial Português and Vice-Chairperson and CEO of Millenniumbep bank, NA. Mr. Lopes Raimundo is presently Director of CIMPOR - Cimentos de Portugal SGPS, S.A., Chairperson of the Board of BCP Holdings USA, Inc.

Has an undergraduate degree in company management and administration from Universidade Católica Portuguesa de Lisboa, and a master of business administration degree from INSEAD.

João Manuel de Mello Franco

Born in 1946. Between 1986 and 1989, he was a member of the management council of Tecnologia das Comunicações, Lda. Between 1989 and 1994, he was chairperson of the board of Directors of Telefones de Lisboa e Porto, S.A., and between 1993 and 1995 he was chairperson ot Associação Portuguesa para a Desenvolvimento das Comunicações. From 1994 to 1995, he was chairperson of the board of Directors of Companhia Portuguesa Rádio Marconi and additionally was chairperson of the board of Directors of Companhia Santomense de Telecomunicações e da Guiné Telecom. From 1995 to 1997, he was vice-chairperson of the board of Directors and chairperson of the executive committee of Lisnave (Estaleiros Navais) S.A. Between 1997 and 2001, he was chairperson of the board of Directors of Soponata and was a Director and member of the audit committee of International Shipowners Reinsurance, Co S.A. Between 2001 and 2004, he was vice-chairperson of José de Mello Imobiliária SGPS, S.A., and was chairperson of the boards of Directors of IMOPOLIS, S.A., José de Mello Residenciais & Serviços, S.A. and Engimais, S.A. Since 1998, he has been a Director of Portugal Telecom SGPS, S.A., chairperson of the audit committee since 2004, and member of the corporate governance committee since 2006.

Has an undergraduate degree in mechanical engineering from Instituto Superior Técnico. He additionally holds a certificate in strategic management and company boards and is the holder of a grant of Junta de Energia Nuclear.

Jorge Santos

Born in 1951. From 1997 to 1998, he coordinated the committee for evaluation of the EC Support Framework II and was a member of the committee for the elaboration of the ex-ante EC Support Framework III. From 1998 to 2000, he was chairperson of the Unidade de Estudos sobre a Complexidade na Economia and from 1998 to 2002 was chairperson of the scientific council of Instituto Superior de Economia e Gestão of the Universidade Técnica de Lisboa. From 2001 to 2002, he coordinated the committee for the elaboration of the Strategic Programme of Economic and Social Development for the Peninsula of Setúbal. Since 2007, he has been coordinator of the masters program in economics, and since 2008, he has been a member of the representatives' assembly of Instituto Superior de Gestão of the Universidade Técnica de Lisboa (ISEG).

Has an undergraduate degree in economics from Instituto Superior de Economia e Gestão, a master degree in economics from the University of Bristol and a Ph.D. in economics from the University of Kent. He additionally has a doctorate degree in economics from the Instituto Superior de Economia e Gestão ot Universidade Técnica de Lisboa, and has consequently held the positions of Professor Auxiliar and Professor Associado with Universidade Técnica de Lisboa. He has been appointed as university professor (catedrático) of Universidade Técnica de Lisboa and is the President of the Department of Economics at ISEG.

José Fernando Maia de Araújo e Silva

Born in 1951. He began his professional career as an assistant lecturer at Faculdade de Economia do Porto. From 1991 he was invited to be a lecturer at Universidade Católica do Porto and additionally held a part-time position as technician for Comissão de Coordenação da Região Norte. He has since held the position of Director of several componies, including of Banco Espírito Santo e Comercial de Lisboa and Soserfin—Sociedade Internacional de Serviços Financeiros-Oporto group. He has been involved in the finance and management coordination of Sonae Investimentos SGPS, was executive Director of Sonae Participações Financeiras, SGPS, S.A. and was vice-chairperson of Sonae Indústria, SGPS, S.A. He has additionally held Directorships with Tafisa, S.A., Spread SGPS, S.A. and Corticeira Amorim, SGPS. He presently serves on the board of Directors of Caixa Geral de Depósitos, S.A.

Has an undergraduote degree in economics from the Faculdade de Economia do Porto and has obtained certificates from Universidade de Paris IX, Dauphine and the Midland Bank International bonker's course in London.

José Silva Lopes

Born in 1932. From 1969 to 1974, he was a Director of Caixa Geral de Depósitos and Director of the Cabinet of Studies and Planning of the Ministry of Finance. In 1972, he held the position of deputy chief of negotiations for the free market agreement of the EC. Between 1974 and 1978, he was Minister of Finance, additionally holding the position of External Markets Minister between 1974 and 1975. Between 1975 and 1980, he held the position of Governor of the Bank of Portugal. From January 2004 till 2010, he was chairperson of the board of Directors of Montepio Geral.

In 2003, he was awarded the Order of Gra Cruz by the President of Portugal for his 48 years of service as an economist predominantly for the Portuguese state. In 2004, he was awarded a degree of doutor honoris causa by Instituto Superior de Gestão. Also has a degree in finance from the Instituto Superior de Ciências Económicas e Financeiras.

Manuel Menéndez Menéndez

Born in 1960. He has been a Director and a member of the executive committee of each of Cajastur and Hidrocantábrico. He has been a member of the board of directors, executive committee and audit and control committee of AIRTEL. He has also been a Director of LICO Corporación and ENCE, vice-chairperson of the board of SEDES, S.A. and executive chairperson of Sociedad de Garantía Recípraca de Asturias. Curently, he is chairperson of Cajastur, Hidrocantábrico and Naturgas Energia, a Director of EDP Renewables Europe, S.L. and Confederación Española de Cajas de Ahorros, a member of the Junta Directiva de UNESA and a member of Registro Oficial de Auditores de Cuentas. He also represents Peña Rueda, S.L. (a subsidiary of Cajastur) on the board af Directors of Enagas.

Has an undergraduate degree in economics and company management and a Ph.D. in ecanomic sciences, each from the University of Oviedo. He has been appointed university professar (catedrático) of company management and accounts at the University of Oviedo.

Rafael Caldeira Valverde

Born in 1953. In 1987, he joined Banco Espírito Santa de Investimento, S.A. and was the Director responsible for financial services management, client management, structured financing management, capital markets management, and for the department far origination and information; between 1991 and 2005 he was also Director and Member of the Executive Committee. In March 2005, he was appointed as vice-chairperson of the board of Directors of Banco Espírita Santo de Investimento, S.A. and formed part of the executive committee of the company. He is Vice-Chairperson of the Board of Directors and Member of the Executive Committee of Banco Espírito Santo de Investimento, S.A. Director of BES Investimento do Brasil, S.A.; ESSI, SGPS, S.A.; ESSI COMUNICAÇÕES, SGPS, S.A.; ESSI INVESTIMENTOS, S.A. and Espírito Santo Investment Holdings Limited.

Has an undergraduate degree in economics from the Instituto de Economia da Faculdade Técnica de Lisboa.

SECRETARY OF THE BOARD

Emillo García-Conde Noriega

Born in 1955. In 1981, he joined Soto de Ribera Power Plant, which was owned by a consortium comprising Electra de Viesgo, Iberdrola and Hidrocantábrico, as legal counsel. In 1995, he was appointed general counsel of Soto de Ribera Power Plont, and also chief of administration and human resources of the consortium. In 1999, he was appointed as legal counsel at Hidrocantábrico, and in 2003 was appointed general counsel of Hidrocantábrico and also a member of its management committee. Presently serves as general counsel of the Company, as secretary of the Board, and is also Director and/or secretary on Boards of Directors of a number the Company's subsidiaries in Europe.

Holds a master's degree in law from the University of Oviedo.

ANNEX V

SHARES OF EDP RENOVÁVEIS OWNED BY MEMBERS OF THE BOARD OF DIRECTORS AS AT 31.12.2010

Name	Direct	Indirect	Total
António Luis Guerra Nunes Mexia	3,880	320	4,200
Ana Maria Machado Femandes	1,510	O	1,510
João Manuel Manso Neto	O	0	0
Nuno Maria Pestana de Almeida Alves	5,000	0	5,000
António Fernando Melo Martins da Costa	1,330	150	1,480
Francisco José Queiroz de Barros de Lacerda	310	310	620
João Manuel de Mello Franco	380	0	380
Jorge Manuel Azevedo Henriques dos Santos	200	0	200
José Silva Lopes	760	0	760
José Fernando Maia de Araújo e Silva	80	0	80
Rafael Caldeira de Castel-Branco Valverde	O	O	0
António do Pranto Nogueira Leite	0	0	0
João José Belard da Fonseca Lopes Raimunda	170	670	840
Daniel M. Kammen	0	0	0
Manuel Menéndez Menendez	0	0	0
Gilles August	0	0	0

l · Jedprenováveis

Members of the Board of Directors of the Company EDP Renováveis, S.A.

DECLARE

To the extent of our knowledge, the informotion referred to In sub-paragraph a) of paragraph 1 of Article 245 of Decree-Law no. 357-A/2007 of October 31 and other documents relating to the submission of accounts required by current regulations have been prepared in accordance with applicable accounting standards, retlecting a true and fair view of the assets, liablities, financial position and results of EDP Renovávels, S.A. and the companies included in its scope of consolidation and the management report fairly presents the evolution of business performance and position of EDP Renováveis, S.A. and the companies included in its scope of consolidation, containing a description of the principal risks and uncertaintles that they face.

Lisbon, February 23, 2010.
Mr. Antonio Luls Gyerra Nunes Mexia
	Mr. António Fernando Melo Marlins da Costa Mr. Nuno Marla Pestana de Almeida Alves
Mr. João Manuel Manso Neto	Mr. Jósé Silva Lopes
	Mr. António do Pranto Nogueira Lette
Mr. José Fernando Maia de Araújo e Silva
	MixJoão Manuel de Mello Franco
Mr. Daniel M. Kammen	Mr. Francisco José Queiroz de Berros de Lacerda
Mr. Gilles August	Mr. João José Belard da Fonseca Lopes Raimundo