EDP Renováveis

529900MUFAH07Q1TAX062020-01-012020-12-31529900MUFAH07Q1TAX062019-01-012019-12-31529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:NoncontrollingInterestsMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:EquityAttributableToOwnersOfParentMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:NoncontrollingInterestsMember529900MUFAH07Q1TAX062020-12-31529900MUFAH07Q1TAX062019-12-31529900MUFAH07Q1TAX062018-12-31529900MUFAH07Q1TAX062018-12-31ifrs-full:IssuedCapitalMember529900MUFAH07Q1TAX062018-12-31ifrs-full:SharePremiumMember529900MUFAH07Q1TAX062018-12-31EDPR:ReservesAndRetainedEarningsMember529900MUFAH07Q1TAX062018-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900MUFAH07Q1TAX062018-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900MUFAH07Q1TAX062018-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember529900MUFAH07Q1TAX062018-12-31ifrs-full:EquityAttributableToOwnersOfParentMember529900MUFAH07Q1TAX062018-12-31ifrs-full:NoncontrollingInterestsMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:IssuedCapitalMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:SharePremiumMember529900MUFAH07Q1TAX062019-01-012019-12-31EDPR:ReservesAndRetainedEarningsMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900MUFAH07Q1TAX062019-01-012019-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember529900MUFAH07Q1TAX062019-12-31ifrs-full:IssuedCapitalMember529900MUFAH07Q1TAX062019-12-31ifrs-full:SharePremiumMember529900MUFAH07Q1TAX062019-12-31EDPR:ReservesAndRetainedEarningsMember529900MUFAH07Q1TAX062019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900MUFAH07Q1TAX062019-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900MUFAH07Q1TAX062019-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember529900MUFAH07Q1TAX062019-12-31ifrs-full:EquityAttributableToOwnersOfParentMember529900MUFAH07Q1TAX062019-12-31ifrs-full:NoncontrollingInterestsMember529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:IssuedCapitalMember529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:SharePremiumMember529900MUFAH07Q1TAX062020-01-012020-12-31EDPR:ReservesAndRetainedEarningsMember529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900MUFAH07Q1TAX062020-01-012020-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember529900MUFAH07Q1TAX062020-12-31ifrs-full:IssuedCapitalMember529900MUFAH07Q1TAX062020-12-31ifrs-full:SharePremiumMember529900MUFAH07Q1TAX062020-12-31EDPR:ReservesAndRetainedEarningsMember529900MUFAH07Q1TAX062020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember529900MUFAH07Q1TAX062020-12-31ifrs-full:ReserveOfCashFlowHedgesMember529900MUFAH07Q1TAX062020-12-31ifrs-full:ReserveOfGainsAndLossesOnFinancialAssetsMeasuredAtFairValueThroughOtherComprehensiveIncomeMember529900MUFAH07Q1TAX062020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember529900MUFAH07Q1TAX062020-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:EURiso4217:EURxbrli:shares EDP Renováveis, S.A. and subsidiaries Independent auditor´s report Consolidated Annual Accounts at 31 December 2020 Consolidated Management Report PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, www.pwc.es 1 R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ª Inscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290 Independent auditor´s report on the consolidated annual accounts To the shareholders of EDP Renováveis, S.A. Report on the consolidated annual accounts Opinion We have audited the consolidated annual accounts of EDP Renováveis, S.A. (the Parent company) and its subsidiaries (the Group), which comprise the statement of financial position at December 31, 2020, the income statement, the statement of comprehensive income, the statement of changes in equity, the statement of cash flows and related notes, all consolidated, for the year then ended. In our opinion, the accompanying consolidated annual accounts present fairly, in all material respects, the equity and financial position of the Group as at December 31, 2020, as well as its financial performance and cash flows, all consolidated, for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union (IFRS-EU) and other provisions of the financial reporting framework applicable in Spain. Basis for opinion We conducted our audit in accordance with legislation governing the audit practice in Spain. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the consolidated annual accounts section of our report. We are independent of the Group in accordance with the ethical requirements, including those relating to independence, that are relevant to our audit of the consolidated annual accounts in Spain, in accordance with legislation governing the audit practice. In this regard, we have not rendered services other than those relating to the audit of the accounts, and situations or circumstances have not arisen that, in accordance with the provisions of the aforementioned legislation, have affected our necessary independence such that it has been compromised. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated annual accounts of the current period. These matters were addressed in the context of our audit of the consolidated annual accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. EDP Renováveis, S.A. and subsidiaries 2 Key audit matter How our audit addressed the key audit matter Assessment of the recovery of the carrying amount of certain non -current assets of the Group The accompanying consolidated annual accounts present goodwill, intangible assets, property, plant and equipment, right of use assets and investments, accounted for under the equity method, amounting to € 1,222,666 , € 314,228 , €1 3,941,718 , €6 74,045 and € 474,884 thousand, respectively at 31 December 20 20 . These assets are allocated to cash generating units (CGUs) as indicated in note 19 to the accompanying consolidat ed annual accounts. These assets mainly relate to electricity generating facilities through renewable sources in Europe, North America and Brazil, that are directly affected by the regulatory framework (note 1) applicable in each of the countries in whic h the Group operates. At each year end, management carries out impairment tests of the carrying amount of these assets at CGU level, as described in note 2. M, by estimating the present value future cash flows generated by these assets, considering the business plans approved by management. The key assumptions used in the preparation of these cash flows are detailed in note 19 to the accompanying consolidated annual accounts. In addition, management has carried out a sensitivity analysis on the key assumptions which, based on earlier experi ence, may reasonably show variations, as detailed in note 19. As a result of these analyses, Group management has considered necessary to recognise/ reverse the valuation adjustments detailed in notes 13 and 1 9. This area is key because it entails the application of critical judgements and significant estimates by management (note 4) concerning the key assumptions used in the calculations performed, which are subject to uncertainty, and the fact that significant future changes in them could have a significant impact on the Group’s consolidated annual accounts. We started our analysis by gaining an understanding of the process and the relevant controls that the Group has in place to analyse the recovery of its n on-current assets. In addition, we considered the adequacy of the allocation of assets to CGUs and the process for identifying those requiring an assessment of impairment, in accordance with accounting legislation. We assessed the adequacy of the measurement models employed, the assumptions and estimates used in the calculations, including, among others, estimated performance of electricity prices, consistency with the applicable regulatory framework and the evolution of discount rates. We also verified whether the electr icity prices included in the cash flow projections prepared by the Group in the past were consistently in keeping with real data. Respect to discount rates, in collaboration with our valuation experts, we verified the methodology used in their estimation and that their value is within a reasonable range. Also, we have checked the mathematical accuracy of the calculations and models prepared by management and assessed the sensitivity calculations carried out and the estimates of the magnitude of the and we have compared the recoverable value calculated by the Group with the assets’ carrying amount. Finally, we also assessed the sufficiency of the information disclosed in the consolidated annual accounts with respect to the assessment of the recoverable amount of these assets. Based on the procedures carried out, we consider that management’s approach and conclusions and the information disclosed in the accompanying consolidated annual accounts are reasonable and consistent with the evidence obtained. EDP Renováveis, S.A. and subsidiaries 3 Key audit matter How our audit addressed the key audit matter Offshore Joint Venture agreement As indicated in note 6 of the accompanying consolidated annual accounts, during 2020 the Group has signed an agreement with the Engie group through which the joint management of the offshore business of both groups is agreed. As a result of this agreement, the Group approved a capital increase in the subsidiary OW Offshore, S.L. (previously EDPR Offshore España, S.L.) for the same amount that the EDP R Group held in said Company. This capital increase has been fully subscribed and paid up by the Engie Group, thus acquiring 50% of the shares in said company. Likewise, the EDPR Group has sold all of its shares in the offshore business to the company OW O ffshore, S.L. (note 6). As a result of the realization of the described agreement, the Group has recorded a profit of € 217,633 thousand in the consolidated income statement as of December 31, 2020 (notes 6 and 9). Accounting for this transaction requires an analysis of whether or not the Group maintains control (note 2.B) once the transaction has been carried out, as well as the fair value of the transferred business, which implies the application of critical judgments as indicated in note 4, and assumes the existence of relevant estimates in relation to the results of the transaction, and requires special attention in our audit due to the magnitude of the amounts indicated, for which we have considered this a key matter. In auditing the transaction car ried out by the Group, we applied, among other, the following procedures: x Obtention, reading and analysis of sales- purchase agreements and the accounting analyses performed by management. x A nalysis of compliance with the contractual conditions for the loss of control over th e offshore business by the Group as a result of the operations performed. x Understanding and verifying the calculations performed by management to determine the profit on each operation. x Assessing the disclosures and information included in the consolidated annual accounts regarding this joint venture agreement. Based on the procedures performed, we consider that the accounting treatment followed by management regarding the aforementioned transaction, and the disclosures considered in the accompanying consolidated annual accounts, are reasonable and consistent with the evidence obtained. Sales of controlling interests in subsidiaries that are not considered as a business As indicated in note 6 to the accompanying consolidated annual accounts, during 2020 the Group sold its interest in the subsidiaries Bon Vent de Corbera, S.L.U., Eólica Sierra de Ávila, S.L.U., Parc Eòlic de Torre Madrina, S.L.U., Parc Eòlic de Coll de Moro, S.L.U., Parc Eòlic de Vilalba dels Arcs, S.L.U. , Aprofitament D'Energies Renovables de L'Ebre, S.L. and EDPR Wind Ventures XVII, LLC and its subsidiaries , with the consequent loss of control. In auditing the sales transactions carried out by the Group, we applied, among other, the following procedures: x Obtention, reading and analysis of sales- purchase agreements and the accounting analyses performed by management. x Analysis of compliance wit h the contractual conditions for the loss of control over these subsidiaries by the Group as a result of the operations performed. EDP Renováveis, S.A. and subsidiaries 4 Key audit matter How our audit addressed the key audit matter These transactions have generated a profit amounting to €21 2,267 thousand (note 9) recognised in the consolidated income statement at December 31, 2020. Recognition of these transactions according to the accounting policies indicate in note 2.B requires analysing whether the Group maintains control or not, once the transaction is closed, and it entails the application of critical judgments , as indicated in note 4, and assumes the existence of relevant estimates in relation to the results of the sale, and requires special attention in our audit because of the magnitude of the amounts indicated , for which w e have therefore considered this a key audit matter. x Understanding and verifying the calculations performed by management to determine the profit on each operation. x Assessing the disclosures and information included in the consolidated annual accounts regarding these sales. Based on the procedures performed, we consider that the accounting treatment followed by management for the operations mentioned and the disclosures made in the accompanying consolidated annual accounts are reasonable and consistent with the evidence obtained. Acquisition of the renewable energy business of Viesgo Group As indicated in notes 6 and 42 of the accompanying consolidated annual accounts, during 2020 the Group acquired 100% of the shares in a renewable energy business with a presence in Spain and Portugal for the amount of €537,487 thousand. The Group's management has qualified this operation as a business combination and, consequently, has estimated the fair value of the assets acquired and the liabilities assumed, and has assigned the acquisition price of the business to these assets and liabilities provisionally in accordance with as described in note 42. The key assumptions used in determining the fair value of the assets acquired in this business combination are detailed in note s 4 and 42 of the accompanying consolidated annual accounts . This area is key because it entails the application of critical judgments and significant estimates by management (note 4) concerning the key assumptions used, which are subject to uncertainty, and the fact that significant future changes in them could hav e a significant impact in the Group ’s consolidated annual accounts. In auditing the business combination carried out by the Group, we applied, among other, the following procedures: x Obtention, reading and analysis of business purchase agreements and the accounting analyses performed by management. x Analysis of compliance with the contractual conditions for gain of control over the business by the Group. On the other hand, with the collaboration of our valuation experts, we have evaluated the adequacy of the valuation models used to determine the fair value of the assets acquired and liabilities assumed, the assumptions and estimates used in the calculations that include, among others, estimates of the evolution of electricity prices, coherence with the applicable regulatory framework and the evolution of discount rates. Respect to discount rates, in collaboration with our valuation experts, we verified the methodology used in their estimation and that their value is within a reasonable range. EDP Renováveis, S.A. and subsidiaries 5 Key audit matter How our audit addressed the key audit matter Likewise, we have verified the mathematical accuracy of the calculations and models prepared by management and we have verified the provisional allocation of the acquisition price to the fair value of the assets and liabilities acquired, as well as the accounting record of the associated impacts. Based on the procedures performed, we consider that the provisional accounting record s applied by management, and the disclosures considered in the accompanying consolidated annual accounts, are reasonable and consistent with the evidence obtained. Recognition and measurement of derivative financial instruments As indicated in note 5 to the accompanying consolidated annual accounts, the Group is exposed to certain financial risks, namely, exchange rate risk, interest rate risk and electricity price risk, due to the activities performed and the countries where it operates. In order to manage these risks, management has contracted several derivatives amounting to € 110.840 thousand and € 89.015 thousand, in assets and liabilities, respectively (note 37) at December 31, 2020. The fair value of the derivatives is estimated through complex v aluation techniques that require the application of judgement and the use of significant assumptions by management (nota 4) . On the other hand, the derivatives designated as accounting hedges have to meet some criteria in relation to the documentation of the hedge as it indicated in note 2.D. Due to the uncertainty associated with the estimations of the fair value of these instruments and the complexity of complying with accounting legislation on the application of hedge accounting, we consider this a key audit matter. We started our analysis by understanding the procedure established by management to identify and measure the derivatives and the relevant controls on this area. For a sample of derivatives financial instruments selected, we checked their main characteristics with their respective contracts. Similarly, and with the involvement of our experts in the valuation of derivatives, we assessed the valuation methodology used and for a sample of instruments, we performed a contrast assessment over the management’s valuation. Moreover, for a sample of the instruments designated as accounting hedges, we assessed the documentation is according to requirements established in prevailing accounting regulations. Finally, we an alysed the sufficiency of the disclosures included in the accompanying consolidated annual accounts regarding financial derivatives. As a result of our tests, we consider that the measurement of financial derivatives financial instruments and the informa tion disclosed in the accompanying consolidated annual accounts are reasonable and consistent with the information available. EDP Renováveis, S.A. and subsidiaries 6 Other information: Consolidated management report Other information comprises only the consolidated management report for the 2020 financial year, the formulation of which is the responsibility of the Parent company´s directors and does not form an integral part of the consolidated annual accounts. Our audit opinion on the consolidated annual accounts does not cover the consolidated management report. Our responsibility regarding the consolidated management report, in accordance with legislation governing the audit practice, is to: a) Verify only that the statement of non-financial information and certain information included in the Annual Corporate Governance Report, as referred to in the Auditing Act, has been provided in the manner required by applicable Portuguese legislation and, if not, we are obliged to disclose that fact. b) Evaluate and report on the consistency between the rest of the information included in the consolidated management report and the consolidated annual accounts as a result of our knowledge of the Group obtained during the audit of the aforementioned financial statements, as well as to evaluate and report on whether the content and presentation of this part of the consolidated management report is in accordance with applicable regulations. If, based on the work we have performed, we conclude that material misstatements exist, we are required to report that fact. On the basis of the work performed, as described above, we have verified that the information mentioned in section a) above has been provided in the manner required by applicable legislation and that the rest of the information contained in the consolidated management report is consistent with that contained in the consolidated annual accounts for the 2020 financial year, and its content and presentation are in accordance with applicable regulations. Responsibility of the directors and the audit, control and related party transactions committee for the consolidated annual accounts The Parent company´s directors are responsible for the preparation of the accompanying consolidated annual accounts, such that they fairly present the consolidated equity, financial position and financial performance of the Group, in accordance with International Financial Reporting Standards as adopted by the European Union and other provisions of the financial reporting framework applicable to the Group in Spain, and for such internal control as the directors determine is necessary to enable the preparation of consolidated annual accounts that are free from material misstatement, whether due to fraud or error. In preparing the consolidated annual accounts, the Parent company´s directors are responsible for assessing the Group´s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the aforementioned directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. The Parent company´s audit, control and related party transactions committee is responsible for overseeing the process of preparation and presentation of the consolidated annual accounts. Auditor's responsibilities for the audit of the consolidated annual accounts Our objectives are to obtain reasonable assurance about whether the consolidated annual accounts as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor´s report that includes our opinion. EDP Renováveis, S.A. and subsidiaries 7 Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with legislation governing the audit practice in Spain will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated annual accounts. As part of an audit in accordance with legislation governing the audit practice in Spain, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: x Identify and assess the risks of material misstatement of the consolidated annual accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group´s internal control. x Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Parent company´s directors. x Conclude on the appropriateness of the Parent company´s directors´ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group´s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor´s report to the related disclosures in the consolidated annual accounts or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor´s report. However, future events or conditions may cause the Group to cease to continue as a going concern. x Evaluate the overall presentation, structure and content of the consolidated annual accounts, including the disclosures, and whether the consolidated annual accounts represent the underlying transactions and events in a manner that achieves fair presentation. x Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated annual accounts. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the Parent company´s audit control and related party transactions committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Parent company´s audit control and related party transactions committee with a statement that we have complied with relevant ethical requirements, including those relating to independence, and we communicate with the audit control and related party transactions committee those matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Parent company´s audit control and related party transactions committee, we determine those matters that were of most significance in the audit of the consolidated annual accounts of the current period and are therefore the key audit matters. EDP Renováveis, S.A. and subsidiaries 8 We describe these matters in our auditor´s report unless law or regulation precludes public disclosure about the matter. Report on other legal and regulatory requirements European single electronic format We have examined the digital files of the European single electronic format (ESEF) of EDP Renovaveis, S.A. and its subsidiaries for the 2020 financial year that comprise an XHTML file which includes the consolidated annual accounts for the financial year and XBRL files with tagging performed by the entity, which will form part of the annual financial report. The directors of EDP Renovaveis, S.A. are responsible for presenting the annual report for the 2020 financial year in accordance with the formatting and markup requirements established in the EU Delegated Regulation 2018/815 of the European Commission (hereinafter the ESEF Regulation). Our responsibility is to examine the digital files prepared by the Parent company´s directors, in accordance with legislation governing the audit practice in Spain. This legislation requires that we plan and execute our audit procedures in order to verify whether the content of the consolidated annual accounts included in the aforementioned digital files completely agrees with that of the consolidated annual accounts that we have audited, and whether the format and markup of these accounts and of the aforementioned files has been effected, in all material respects, in accordance with the requirements established in the ESEF Regulation. In our opinion, the digital files examined completely agree with the audited consolidated annual accounts, and these are presented and have been marked up, in all material respects, in accordance with the requirements established in the ESEF Regulation. Report to the Parent company´s audit, control and related party transactions committee The opinion expressed in this report is consistent with the content of our additional report to the Parent company's audit, control and related party transactions committee dated 24 February 2021. Appointment period The General Ordinary Shareholders' Meeting held on 3 April 2018 appointed to PricewaterhouseCoopers Auditores, S.L. as auditors of the Group for a period of 3 years, as from the year ended 31 december 2018. Services provided Services provided to the Group for services other than the audit of the accounts, are indicated in the note 45 to the consolidated annual accounts. PricewaterhouseCoopers Auditores, S.L. (S0242) Iñaki Goiriena Basualdu (16198) 24 February 2021 22725304Q IÑAKI GOIRIENA 2021-02-24 11:06 Signer: CN=22725304Q IÑAKI GOIRIENA C=ES 2.5.4.42=IÑAKI 2.5.4.4=GOIRIENA BASUALDU Public key: R S A / 2 0 4 8 b i ts At EDP R , we are in the business of innovating. Our 4 decade long track record has turned us into better energy providers and pioneers of the green evolution. Change has been our driver as we deliver an agile network with more eﬃcient, smart and sustainable solutions. As leaders in the energy transition, we see investment in renewables as an active way to engage with future generations, promoting decarbonisation in energy production and consumption. We are playing our part for a more balanced and sustainable world, one that is inclusive, diverse and humane. We’re changing tomorrow now. Changing tomorrow now. INDEX 2020 Consolidated Annual Accounts 2020 Consolidated Annual Accounts 3 2020 Consolidated Management Report Message from the CEO 3 01 The Company EDPR in Brief 10 2020 in Review 20 Organisation 24 02 Strategic Approach Business Environment 37 Strategy 44 Risk Management 48 03 Execution Financial Capital 58 Human Capital 69 Supply Chain Capital 74 Social Capital 76 Natural Capital 80 Digital Capital 82 Innovation Capital 86 Sustainable Development Goals 88 04 Sustainability 93 05 Corporate Governance 154 06 Remuneration Report 253 Concepts and Definitions 264 G FROM DISRUPTION TO EVOLUTION Changing tomorrow now. Changing tomorrow now. 2020 Consolidated Annual Accounts Consolidated income statement 3 Consolidated statement of comprehensive income 4 Consolidated statement of financial position 5 Consolidated statement of changes in equity 6 Consolidated statement of cash-flows 7 Notes to the Consolidated Annual Accounts 9 2020 CONSOLIDATED ANNUAL ACCOUNTS 3 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS Consolidated income statement for the years ended 31 December 2020 and 2019 THOUSAND EUROS NOTES 2020 2019 Revenues 7 1,528,974 1,642,129 Income from institutional partnerships in U.S. wind farms 8 201,783 181,570 1,730,757 1,823,699 Other income 9 498,414 399,680 Supplies and services 10 -304,437 -309,032 Personnel costs and employee benefits 11 -141,156 -130,693 Other expenses 12 -122,614 -134,086 Impairment losses on trade receivables and debtors 23 -88 -1,535 -69,881 -175,666 Joint ventures and associates 20 -6,151 3,392 1,654,725 1,651,425 Provisions 32 -702 -1,236 Amortisation and impairment 13 -600,034 -591,625 Operating profit 1,053,989 1,058,564 Financial income 14 76,735 38,028 Financial expenses 14 -361,793 -387,484 Financial result – net -285,058 -349,456 Profit before tax and CESE 768,931 709,108 Income tax expense 15 -82,907 -82,945 Extraordinary contribution to the energy sector (CESE) 15 -3,173 -3,496 Net profit for the year 682,851 622,667 ATTRIBUTABLE TO Equity holders of EDP Renováveis 29 555,680 475,128 Non-controlling interests 30 127,171 147,539 Net profit for the year 682,851 622,667 Earnings per share basic and diluted - Euros 28 0.64 0.54 4 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Consolidated statement of comprehensive income for the years ended at 31 December 2020 and 2019 2020 2019 THOUSAND EUROS EQUITY HOLDERS OF THE PARENT NON- CONTROLLING INTERESTS EQUITY HOLDERS OF THE PARENT NON- CONTROLLING INTERESTS Net profit for the year 555,680 127,171 475,128 147,539 Items that will never be reclassified to profit or loss Actuarial gains/(losses) -3 -4 -114 -9 Tax effect of actuarial gains/(losses) 8 1 27 3 5 -3 -87 -6 Items that are or may be reclassified to profit or loss Fair value reserve (Equity instruments at fair value) -2,954 -240 -92 -7 Tax effect of fair value reserve (Equity instruments at fair value) - - - - Fair value reserve (cash flow hedge) -8,372 -487 91,963 -1,423 Tax effect from the fair value reserve (cash flow hedge) 2,968 501 -22,285 321 Share of other comprehensive income of joint ventures and associates, net of taxes 13,515 - -12,917 - Reclassification to profit and loss due to changes in control 74,511 - -1,489 - Exchange differences arising on consolidation -200,061 -99,195 -6,108 17,072 -120,393 -99,421 49,072 15,963 Other comprehensive income for the year, net of income tax -120,388 -99,424 48,985 15,957 Total comprehensive income for the year 435,292 27,747 524,113 163,496 5 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS Consolidated statement of financial position as at 31 December 2020 and 2019 THOUSAND EUROS NOTES 2020 2019 ASSETS Property, plant and equipment 16 13,491,718 13,263,860 Right-of-use assets 17 674,045 615,964 Intangible assets 18 314,228 290,317 Goodwill 19 1,222,666 1,199,210 Investments in joint ventures and associates 20 474,884 460,185 Equity instruments at fair value 40 13,318 15,960 Deferred tax assets 21 122,168 126,172 Debtors and other assets from commercial activities 23 23,048 18,940 Other debtors and other assets 24 272,853 107,196 Collateral deposits associated to financial debt 31 21,544 20,393 Total Non-Current Assets 16,630,472 16,118,197 Inventories 22 54,528 34,085 Debtors and other assets from commercial activities 23 255,986 284,072 Other debtors and other assets 24 585,056 393,370 Current tax assets 25 140,761 55,530 Collateral deposits associated to financial debt 31 9,061 11,446 Cash and cash equivalents 26 474,384 581,759 Assets held for sale 27 12,307 214,194 Total Current Assets 1,532,083 1,574,456 Total Assets 18,162,555 17,692,653 EQUITY Share capital 28 4,361,541 4,361,541 Share premium 28 552,035 552,035 Reserves 29 -245,009 -124,617 Other reserves and Retained earnings 29 2,123,302 1,708,752 Consolidated net profit attributable to equity holders of the parent 555,680 475,128 Total Equity attributable to equity holders of the parent 7,347,549 6,972,839 Non-controlling interests 30 1,276,282 1,361,861 Total Equity 8,623,831 8,334,700 LIABILITIES Medium / Long term financial debt 31 3,449,621 2,598,688 Provisions 32 309,607 272,380 Deferred tax liabilities 21 427,102 355,484 Institutional partnerships in U.S. wind farms 33 1,933,542 2,289,784 Trade and other payables from commercial activities 34 439,103 459,966 Other liabilities and other payables 35 853,475 923,974 Total Non-Current Liabilities 7,412,450 6,900,276 Short term financial debt 31 496,895 817,849 Provisions 32 5,697 5,667 Trade and other payables from commercial activities 34 1,346,110 1,269,455 Other liabilities and other payables 35 167,649 245,123 Current tax liabilities 36 109,812 92,828 Liabilities held for sale 27 111 26,755 Total Current Liabilities 2,126,274 2,457,677 Total Liabilities 9,538,724 9,357,953 Total Equity and Liabilities 18,162,555 17,692,653 6 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Consolidated statement of changes in equity for the years ended at 31 December 2020 and 2019 THOUSAND EUROS TOTAL EQUITY SHARE CAPITAL SHARE PREMIUM RESERVES AND RETAINED EARNINGS EXCHANGE DIFFERENCES HEDGING RESERVE FAIR VALUE RESERVE EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF EDP RENOVÁVEIS NON- CONTROLLING INTERESTS Balance as at 31 December 2018 8,122,404 4,361,541 552,035 1,767,963 -68,927 -109,962 6,364 6,509,014 1,613,390 COMPREHENSIVE INCOME - Fair value reserve (equity instruments at fair value) net of taxes -99 - - - - - -92 -92 -7 - Fair value reserve (cash flow hedge) net of taxes 68,576 - - - - 69,678 - 69,678 -1,102 - Share of other comprehensive Income in joint ventures and associates, net of taxes -12,917 - - - -2,587 -10,330 - -12,917 - - Reclassification to profit and loss due to changes in control -1,489 - - - -1,697 208 - -1,489 - - Actuarial gains/(Losses) -93 - - -87 - - - -87 -6 Exchange differences arising on consolidation 10,964 - - - -6,108 - - -6,108 17,072 - Net profit for the year 622,667 - - 475,128 - - - 475,128 147,539 Total comprehensive income for the year 687,609 - - 475,041 -10,392 59,556 -92 524,113 163,496 Dividends paid -61,061 - - -61,061 - - - -61,061 - Dividends attributable to non-controlling interests -44,707 - - - - - - - -44,707 Sale with loss of control of EDPR Europe subsidiaries -289,345 - - - - - - - -289,345 Other changes resulting from acquisitions/sales and equity increases -73,299 - - 9,127 -667 -497 - 7,963 -81,262 Other -6,901 - - -7,190 - - - -7,190 289 Balance as at 31 December 2019 8,334,700 4,361,541 552,035 2,183,880 -79,986 -50,903 6,272 6,972,839 1,361,861 COMPREHENSIVE INCOME - Fair value reserve (equity instruments at fair value) net of taxes -3,194 - - - - - -2,954 -2,954 -240 - Fair value reserve (cash flow hedge) net of taxes -5,390 - - - - -5,404 - -5,404 14 - Share of other comprehensive Income in joint ventures and associates, net of taxes 13,515 - - - 15,179 -1,664 - 13,515 - - Reclassification to profit and loss due to changes in control 74,511 - - - 39,791 34,720 - 74,511 - - Actuarial gains/(Losses) 2 - - 5 - - - 5 -3 Exchange differences arising on consolidation -299,256 - - - -200,061 - - -200,061 -99,195 - Net profit for the year 682,851 - - 555,680 - - - 555,680 127,171 Total comprehensive income for the year 463,039 - - 555,685 -145,091 27,652 -2,954 435,292 27,747 Dividends paid -69,784 - - -69,784 - - - -69,784 - Dividends attributable to non-controlling interests -38,231 - - - - - - - -38,231 Other changes resulting from acquisitions/sales and equity increases -65,972 - - 9,293 - - - 9,293 -75,265 Other 79 - - -92 1 - - -91 170 Balance as at 31 December 2020 8,623,831 4,361,541 552,035 2,678,982 -225,076 -23,251 3,318 7,347,549 1,276,282 7 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS Consolidated statement of cash flows for the years ended 31 December 2020 and 2019 THOUSAND EUROS 2020 2019 OPERATING ACTIVITIES Cash receipts from customers 1,502,906 1,680,947 Payments to suppliers -365,012 -382,839 Payments to personnel -137,899 -129,606 Other receipts / (payments) relating to operating activities -47,068 -40,609 Net cash from operations 952,927 1,127,893 Income tax received / (paid) -45,247 -38,036 Net cash flows from operating activities 907,680 1,089,857 INVESTING ACTIVITIES Cash receipts relating to: Changes in cash resulting from perimeter variations () 32,907 - Property, plant and equipment and intangible assets 1,859 2,907 Interest and similar income 12,510 19,106 Dividends 28,695 22,347 Loans to related parties 320,538 598,493 Sale of subsidiaries with loss of control 1,072,259 499,190 Other receipts from investing activities 18,509 534,619 1,487,277 1,676,662 Cash payments relating to: Changes in cash resulting from perimeter variations () -22,333 -104,433 Acquisition of subsidiaries -579,644 -13,310 Property, plant and equipment and intangible assets -1,547,262 -1,209,725 Loans to related parties -673,164 -245,770 Other payments in investing activities -302,259 -671,464 -3,124,662 -2,244,702 Net cash flows from investing activities -1,637,385 -568,040 FINANCING ACTIVITIES Payments/receipts related with transactions with non-controlling interest without change of control -1,007 -20,386 Receipts / (payments) relating to loans from third parties 24,340 57,781 Receipts / (payments) relating to loans from non-controlling interests -41,568 -42,304 Receipts / (payments) relating to loans from Group companies 813,832 -159,027 Interest and similar costs including hedge derivatives from third parties -33,957 -54,597 Interest and similar costs from non-controlling interests -6,943 -8,608 Interest and similar costs including hedge derivatives from Group companies -136,858 -185,254 Payments of lease liabilities -43,555 -41,122 Dividends paid -106,630 -98,686 Receipts / (payments) from derivative financial instruments 35,010 4,038 Receipts / (payments) from institutional partnerships in North America 248,728 105,627 Other cash flows from financing activities -76,883 -56,737 Net cash flows from financing activities 674,509 -499,275 Changes in cash and cash equivalents -55,196 22,542 Effect of exchange rate fluctuations on cash held -52,179 7,674 Cash and cash equivalents at the beginning of the period 581,759 551,543 Cash and cash equivalents at the end of the period () 474,384 581,759 () Mainly includes (i) 32,906 thousand Euros related to cash and cash equivalent balances of Viesgo acquired companies (see note 6 and 42); and ii) -24,346 related to cash and cash equivalent balances of the Spanish porffolio of companies that were sold during 2020 (see note 6). () See note 26 of the consolidated financial statements for a detailed breakdown of Cash and cash equivalents. 8 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Variations in the following captions, including cash flow variations, during the period ending December 31, 2020 are as follows: THOUSAND EUROS BANK LOANS (*) GROUP LOANS NON- CONTROLLING INTERESTS LOANS U.S. INSTITUTIONAL PARTNERSHIPS DERIVATIVES () TOTAL Balance as of December 31, 2019 737,965 2,646,733 245,083 2,289,785 151,315 6,070,881 Cash flows - Receipts / (payments) relating to loans from third parties 24,340 - - - - 24,340 - Receipts / (payments) relating to loans from non-controlling interests - - -41,568 - - -41,568 - Receipts / (payments) relating to loans from Group companies - 813,832 - - - 813,832 - Interest and similar costs including hedge derivatives from third parties -27,131 - - - -6,826 -33,957 - Interest and similar costs from non controlling interests - - -6,943 - - -6,943 - Interest and similar costs including hedge derivatives from Group companies - -93,908 - - -42,950 -136,858 - Receipts/ (payments) from derivative financial instruments - - - - 35,010 35,010 - Receipts / (Payments) from institutional partnership in US wind farms - - - 248,728 - 248,728 Changes of perimeter () -83,275 - - -320,944 6,477 -397,742 Exchange differences -68,567 -181,239 -8,593 -181,373 -26,669 -466,441 Fair value changes - - - - -8,859 -8,859 Accrued income/expenses 36,268 92,499 12,302 4,414 -146,409 -926 Unwinding - - - 94,718 - 94,718 Changes in U.S. Institutional Partnerships related to ITC/PTC - - - -201,783 - -201,783 Balance as of December 31, 2020 619,600 3,277,917 200,281 1,933,545 -38,911 5,992,432 () Net of collateral deposits; () The Group considers as financing activities all derivative financial instruments excluding derivatives related with commodities; () Mainly refer to decreases due to the sale of Spanish and US portfolio of companies (see note 6); NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 COVID-19 . Macroeconomic, regulatory, operational, accounting impact and stakeholders 10 01. The business operations of the EDP Renováveis Group 12 02. Accounting policies 28 03. Recent accounting standards and interpretations issued 45 04. Critical accounting estimates and judgments in applying accounting policies 46 05. Financial risk management policies 49 06. Consolidation perimeter 54 07. Revenues 08. Income from institutional partnerships in u.s. wind farms 61 09. Other income 61 10. Supplies and services 62 11. Personnel costs and employee benefits 12. Other expenses 63 13. Amortisation and impairment 64 14. Financial income and financial expenses 64 15. Income tax expense and Extraordinary Contribution to the Energy Sector (CESE) 65 16. Property, plant and equipment 69 17. Righ of use asset 73 18. Intangible assets 74 19. Goodwill 76 20. Investments in joint ventures and associates 78 21. Deferred tax assets and liabilities 84 22. Inventories 86 23. Debtors and other assets from commercial activities 86 24. Other debtors and other assets 87 25. Current tax assets 88 26. Cash and cash equivalents 88 27. Assets and liabilities held for sale 88 28. Share capital and share premium 89 29. Other comprehensive income, reserves and retained earnings 90 30. Non-controlling interests 92 31. Financial debt 93 32. Provisions 95 33. Institutional partnerships in U.S. wind farms 96 34. Trade and other payables from commercial activities 97 35. Other liabilities and other payables 98 36. Current tax liabilities 100 37. Derivative financial instruments 38. Commitments 104 39. Related parties 106 40. Fair value of financial assets and liabilities 110 41. Relevant subsequent events 113 42. Business combination 116 43. Environment issues 118 44. Operating segments report 119 45. Audit and non-audit fees Annex I 121 Annex II 138 9 61 66 100 119 10 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 COVID-19. Macroeconomic, Regulatory, Operational, Accounting Impact and Stakeholders In late 2019, in the Chinese city of Wuhan, a virus, SARS-COV-2, that can cause a serious respiratory infection like pneumonia was first identified in humans. During the year 2020, the desease caused by the virus, the COVID-19, was classified by the World Health Organization (WHO) as a pandemic. The COVID-19 has forced the world to change its habits and is having several social, economic, regulatory, operational, accounting and public health impacts. Macroeconomic Impact The current global crisis with the COVID-19 pandemic incorporates significant risks to the economy and society, remaining an uncertainty regarding the duration of the epidemic crisis and its long term economic impacts. In global macroeconomic terms, COVID-19 has impacted the EDPR Group's activity in its various geographies and areas of the value chain. However, a prudent strategy to hedge energy and financial market risks, the maintenance of robust liquidity levels as well as an active management of suppliers and critical supplies, have allowed to significantly mitigate the impacts of this crisis. EDPR Group's energy business has been impacted by the drop-in demand associated with the lockdown, as well as by a strong decline in pool prices in the various geographies, partly felt a few months before the COVID-19 crisis in Europe and somehow recovered at the end of the year. The price risk hedging strategy, with high levels of fixed-price coverage, has allowed to contain the impacts of the fall in pool prices in several geographies of EDPR Group. Regarding the financial markets, there was a very significant increase in the volatility of exchange and interest rates which gradually reduced after March minimum. In terms of exposure to credit risk, although there has been no material increase in bad debts, there has been an increase in exposure from Electricity and GC hedges and a general deterioration of the financial situation of counterparties across the globe. However, since Group’s main customers and counterparties are utilities, regulated entities and regional market agents, with a sound credit profile, the impact of the credit exposure has been minimal. EDP, being the main shareholder of EDPR, has been strengthening its financial position and is taking the appropriate mitigation measures from the first signs, making it better prepared to absorb the potential impacts that may result from this pandemic. Regulatory Impact A set of extraordinary and urgent measures to respond to the epidemiological situation of the new COVID-19 were implemented and approved across the different geographies where EDPR has a presence. Further details on regulatory changes can be found in note 1 below. Operational Impact EDPR operates a solid business model which risks to its day-to-day operations with reduced exposure to merchant prices, as shown by the 94% of revenues already contracted for 2021, as of December 2020. Due to Covid-19, the company has suffered some construction and supply chain disruptions leading to a total of c.0.5 GW COD delays, however without impact in projects´ fundamentals. These delays have been compensated by the +0.5 GW acquisition from Viesgo renewables business and the anticipation of some projects in Brazil. 11 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Accounting Impact To assess possible accounting impacts arising from COVID-19, the EDPR Group reassessed the estimates it considers relevant and which may have been impacted by this fact. Thus, on 31 December 2020, the EDPR Group carried out a series of analysys of these relevant estimates and concluded that no significant accounting impacts have arisen derived from COVID-19 pandemic. Stakeholders Following the Covid-19 pandemic, EDPR implemented a Response Plan focused on protecting the employees, helping local communities and minimizing the impacts on the business continuity and the Business Plan. Accordingly, the Company implemented protective measures, focusing on anticipation and prevention, working to guarantee re-establishment under safe conditions for all: • Employees As a responsible company, EDPR quickly took measures to minimise the conditions for the virus to spread, focusing on people’s health and keeping essential services in operation. In February, EDPR implemented travel restrictions, adopted measures for those who had recently been in affected areas and distributed hand sanitizers in its facilities. In early March, EDPR activated the Contingency Plan and implemented home office in all geographies, which had the support of two pilot projects to implement home office a day per week recently put in place, and restricted visits to its facilities while continuously communicating with employees regarding any updates on the situation and providing instructions in case of a positive or possible infection. At the end of the year, employees continued to have the option to work from home or to gradually return to facilities according to a Reopening Plan with geographical specifications, guaranteeing the highest health and safety standards for all and complying with legal and space limitations. Even during the global crisis, EDPR was able to continue hiring and maintain the promotions, mobilities and training sessions, adapting the processes to the current situation. Regarding the recruitment and onboarding processes, all events were adapted to be done through online interactive sessions, and EDPR welcomed +20% of employees throughout the year vs 2019. For the promotion of work life balance, EDPR implemented various initiatives focused mainly on family, time and health and also shared several health, wellbeing and home office tips in its intranet throughout the year. Moreover, the challenges that the COVID-19 pandemic brought to the training activities and development programs were successfully overcome by redesigning and adapting training contents and sessions to virtual, e-learning or remote formats. Lastly, despite the global pandemic, there was a slight increase in the number of mobility processes in 2020 compared to the previous year. • Communities The COVID-19 pandemic has disrupted everyone’s lives and daily routines. Faced with this unprecedented situation, EDPR has carried out a solidarity campaign distributing over €1 million in aid and setting up initiatives in all its markets to he lp local communities combat the pandemic and recover from the socioeconomic crisis. EDPR helped people in need mostly through donations to food banks, purchases of healthcare equipment, medical devices and rapid testing kits, and the facilitation of online learning and digital educational materials. The Company has provided support in all 15 countries where it is present: Spain, Portugal, France, Belgium, Italy, Poland, Romania, Greece, Brazil, Colombia, USA, Canada and Mexico, as well as Mozambique and Nigeria through the Access to Energy - A2 E program. EDPR’s response to the global crisis is aligned with its commitment to maintain a relationship of proximity with the local communities, seeking to know, respect and support their needs, looking to contribute to improve the living conditions of the society. 12 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 01. The business operations of the EDP Renováveis Group EDP Renováveis, Sociedad Anónima (hereinafter referred to as “EDP Renováveis” or “EDPR”) was incorporated in Spain on 4 December 2007. Its main corporate objective is to engage in activities related to the electricity sector, namely the planning, construction, operation and maintenance of electricity generating power stations, using renewable energy sources, mainly wind and solar. The registered offices of the company are located in Oviedo, Plaza del Fresno 2, Spain. On 18 March 2008 EDP Renováveis was converted into a company incorporated by shares (Sociedad Anónima). The Company belongs to the EDP Group, of which the ultimate parent company is EDP Energias de Portugal, S.A., with registered offices at Avenida 24 de Julho, 12, Lisbon. As at 31 December 2020 and 31 December 2019, EDP Energias de Portugal, S.A through its Spanish branch EDP S.A. - Sucursal en España ("EDP Branch") held a qualified shareholding of 82.6% of the share capital and voting rights of EDPR and 17.44% of the share capital was free floated in the Euronext Lisbon. In December 2011, China Three Gorges Corporation (CTG) signed an agreement to acquire 780,633,782 ordinary shares in EDP from Parpública - Participações Públicas SGPS, S.A., representing 21.35% of the share capital and voting rights of EDP Energias de Portugal S.A., a majority shareholder of the Company. This operation was concluded in May 2012. The terms of the above-mentioned agreement through which CTG became a shareholder of the EDP Group stipulate that CTG would make minority investments totaling 2,000 million of Euros in operating and ready-to-build renewable energy generation projects (including co-funding capex). Within the agreement mentioned above, the following transactions have taken place: • In June 2013, EDPR completed the sale of 49% equity shareholding in EDPR Portugal to CTG through CITIC CWEI Renewables S.C.A; • In May 2015, EDPR closed the sale of 49% of the following EDPR Brasil subsidiaries to CTG through CWEI Brasil participaçoes LTDA: Elebrás Projetos S.A, Central Nacional de Energia Eólica S.A, Central Eólica Baixa do Feijão I S.A, Central Eólica Baixa do Feijão II S.A, Central Eólica Baixa do Feijão III S.A, Central Eólica Baixa do Feijão IV S.A, Central Eólica Jau S.A. and Central Eólica Aventura S.A; • In October 2016, EDPR completed the sale of 49% equity shareholding in EDP Renewables Polska SP.Zo.o. to CTG through ACE Poland S.Á.R.L. and the sale of 49% equity shareholding in EDP Renewables Italia S.r.l. to CTG through ACE Italy S.Á.R.L.; • In June 2017, EDPR Group closed the sale of 49% equity shareholding in EDPR PT - Parques Eólicos, S.A. to CTG through ACE Portugal S.Á.R.L.; • In December 2018, EDPR completed the sale of 10% equity shareholding in the equity consolidated offshore company Moray East Holdings Limited to CTG through China Three Gorges (UK) Limited. As at 31 December 2020, EDP Renováveis S.A. directly holds a 100% stake in the share capital of the following companies: EDP Renewables Europe, S.L. (EDPR EU), EDP Renewables North America, LLC (EDPR NA), EDP Renewables Canada, Ltd. (EDPR Canada), EDP Renováveis Brasil, S.A. (EDPR BR), Colombian companies Eolos Energía S.A.S. E.S.P., Vientos del Norte S.A.S. E.S.P., Solar Power Solutions S.A.S. E.S.P. and Vietnamese company EDP Renewables Vietnam Ltd. EDPR EU operates through its subsidiaries located in Spain, Portugal, France, Belgium, Poland, Romania, Italy, United Kingdom and Greece. EDPR EU's main subsidiaries are: EDP Renovables España, S.L (wind farms in Spain), EDP Renováveis Portugal, S.A. and EDPR PT – Parques Eólicos, S.A. (wind farms in Portugal), EDPR France Holding S.A.S. (wind farms in France), EDP Renewables Belgium (wind farms in Belgium), EDP Renewables Polska, SP.ZO.O and EDPR Renewables Polska HoldCo, S.A. (wind farms in Poland), EDPR România S.r.l. (wind and photovoltaic solar farms in Romania), EDP Renewables Italy, S.r.l. and EDP Renewables Italia Holding, S.r.l. (wind farms in Italy) and Energiaki Arvanikou M.Epe and Wind Park Aerorrachi M.A.E. (main wind farms in Greece). 13 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Further, during 2020, EDPR EU acquired the renewable business of Viesgo through the acquisition of Viesgo Europa, S.L.U. and Viesgo Renovables, S.L.U. that operate wind farms in Spain and Portugal (see note 6). EDPR NA's main activities consist of the development, management and operation of wind and solar farms in the United States of America and providing management services for EDPR Canada and EDPR Mexico. EDPR Canada and EDPR Mexico’s main activities consist of the development, management and operation of wind farms in Canada and Mexico. EDPR BR's main activities consist of the development, management and operation of wind farms in Brazil. EDPR Group is currently developing wind and solar onshore projects in other countries such as Colombia, Hungary and Vietnam. Further, EDPR Group signed an agreement with ENGIE on January 2020 to establish a co-controlled 50/50 joint venture, OW Offshore S.L., in fixed and floating offshore wind business. This entity will be the exclusive vehicle of investment of EDPR and ENGIE for offshore wind opportunities worldwide (see note 6). EDP Renováveis Group, through its subsidiaries has an installed capacity, as follows: INSTALLED CAPACITY MW 31 DEC 2020 31 DEC 2019 United States of America 5,828 5,714 Spain 2,137 1,974 Portugal 1,228 1,164 Romania 521 521 Poland 476 418 France 125 53 Brazil () 436 467 Mexico 400 200 Italy 271 271 Belgium 10 - Canada 68 30 11,500 10,812 () Includes 137 MW in 2019 related to Babilônia wind farms since these were operational the entire year until the companies were sold at the end of 2019 (see note 6). Additionally, the EDP Renováveis Group through its equity-consolidated companies has an installed capacity, attributed to EDPR, as follows: INSTALLED CAPACITY MW 31 DEC 2020 31 DEC 2019 United States of America 471 398 Spain 167 152 Portugal 20 - Offshore 10 - 668 550 The above installed capacity includes 486 MW from the acquisition of the renewables business of Viesgo at the end of December 2020 (Spain: 406 MW and Portugal: 80 MW). From this installed capacity, 35 MW refer to equity-consolidated companies considering that one of the Spanish companies of the Viesgo portfolio, totaling 134 MW, was equity-consolidated in 2019 (67 MW) and is full-consolidated in 2020 (134 MW). See note 6. 14 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Regulatory framework for the activities in the United States of America The United States federal government and various state governments have implemented policies designed to promote the growth of renewable energy, including wind power. The primary federal renewable energy incentive program is the Production Tax Credit (PTC), which was established by the U.S. Congress as part of 1992 Energy Policy Act. Additionally, many states have passed legislation, principally in the form of renewable portfolio standards (“RPS”), which require utilities to purchase a certain percentage of their energy supply from renewable sources, similar to the Renewable Energy Directive in the EU. American Recovery and Reinvestment Act of 2009 includes a number of energy related tax and policy provisions to benefit the development of wind energy generation, namely (i) a three year extension of the PTC until 2012 and (ii) an option to elect a 30% Investment Tax Credit ("ITC") that could replace the PTC through the duration of the extension. This ITC allows the companies to receive 30% of the cash invested in projects placed in service or with the beginning of construction in 2009 and 2010. In December 2010, the Tax Relief, Unemployment, Insurance and Reauthorization, and Job Creation Act of 2010 was approved and includes an one year extension of the ITC, which allow the companies to receive 30% of the cash invested in projects with beginning of construction until December 2011 as long as placed in service until December 2012. On 1 January 2013, the US Congress approved "The American Taxpayer Relief Act" that includes an extension of the Production Tax Credit (PTC) for wind energy, including the possibility of a 30% Investment Tax Credit (ITC) instead of the PTC. Congress set 31 December 2013 as the new expiration date of these benefits and changed the qualification criteria (projects will only qualify as long as they are under construction by year-end 2013). The legislation also includes a depreciation bonus on new equipment placed in service which allows the depreciation of a higher percentage of the cost of the project (less 50% of the Investment Tax Credit) in the year that it is placed in service. This bonus depreciation was 100% in 2011 and 50% for 2012. On 16 December 2014 and 15 December 2015, the U.S. Congress approved the "Tax Increase Prevention Act of 2014" and Consolidated Appropriations Act, 2016” that included an extension of the PTC for wind, including the possibility of a 30% Investment Tax Credit instead of the PTC. Developers have until the end of 2016 to start construction of new wind farms to qualify for 10 years of production tax credits at the full level. Congress introduced a phase out for projects that start construction after 2016 and before 2020. These projects will still qualify for production tax credits, but at reduced levels. The levels are 80% for projects starting construction in 2017, 60% in 2018, and 40% in 2019. Developers of projects that start construction before 2020 may elect to claim 30% investment tax credits instead of production tax credits, subject to a similar phase out. The phase out reduces the value of the 30% investment tax credit to 24% in 2017, 18% in 2018, and 12% in 2019. Neither production tax credits nor investment tax credits are allowed for wind projects that start construction in 2020 or later. The aforementioned "Consolidated Appropriations Act, 2016" also extended the Investment Tax Credit (ITC) for solar projects. Solar projects that are under construction by the end of 2019 will now qualify for the 30% ITC. The credit is reduced to 26% for projects starting construction in 2020 and to 22% for projects starting construction in 2021. The credit drops to a permanent 10% level for projects that begin construction in 2022 or later. Additionally, on 5 May 2016, the US Internal Revenue Service issued guidance that wind farms have 4 years from their start of construction to be placed in service and qualify for the PTC. As a result, projects that start construction prior to year-end 2019 and are placed in service prior to year-end 2023 will be eligible for the PTC. The IRS ruling also includes a provision that allows developers to secure the PTC if 5% of a project's capital components by dollar value are safe harbored in a given year and construction is complete within 4 years. Thus, if a developer safe harbors 5% of project Capex in 2016 for a given project, the project will qualify for 100% PTC if construction is completed by year-end 2020. 15 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 On 22 June 2018, the IRS released Notice 2018-59, which provides guidance to determine when a solar project begins construction for ITC purposes and specifies that projects have until 2024 to be placed in service and qualify for the ITC at levels above 10%. The ITC percentage for a solar project is determined based on the year in which construction of the project begins – provided the solar project is also placed in service before Jan 1, 2024 – as follows: (i) before Jan 1, 2020, 30%; (ii) in 2020, 26%; (iii) in 2021, 22%; and (iv) any time thereafter (regardless of the year in which the solar project is placed in service), 10%. Similar to the IRS guidance regarding the wind PTC, establishing the beginning of construction is deemed by (i) engaging significant physical work or (ii) paying or incurring 5% of the ultimate tax basis of the project. Thus, if a developer safe harbors 5% of project Capex in 2019, the project will be qualified for a 30% ITC if the construction is concluded before Jan 1, 2024. Similarly, if a developer safe harbors 5% of project Capex in 2021, the project will be qualified for a 22% ITC if the construction is concluded before Jan 1, 2024. On 20 December 2019, the President signed the Taxpayer Certainty and Disaster Tax Relief Act of 2019. The act changes the phase down schedule for the Production Tax Credit for onshore wind energy projects. Under prior law, the PTC phased down to 40% for projects beginning construction in 2019 and then to 0% for facilites for which construction began in 2020. The new act leaves in place the 40% PTC rate for 2019 projects, then increases the PTC to 60% for projects beginning construction in 2020. Projects beginning construction in 2021 & later will have no PTC. The act made no changes to the solar ITC. The Taxpayer Certainty and Disaster Tax Relief Act of 2019 also did not include the creation of any new tax credits for offshore wind or energy storage, despite previously proposed legislation that sought to do so. Two bills recently introduced in the U.S. Senate would extend the 30% investment tax credit (ITC) for offshore wind projects for another 6 to 8 years. Legislation has also been introduced to make energy storage technologies fully eligible for the ITC that is currently available to solar and some solar-plus-storage projects. More than 100 House Democrats signed a letter asking for a long-term extension of clean energy tax credits. While tax credits for offshore wind and storage were not included in the Taxpayer Certainty and Disaster Tax Relief Act of 2019, it is still possible that they could be included in future legislation. Improved ITC for offshore wind and storage would improve the economic outlook for those resources. On 9 February 2016, the U.S. Supreme Court stayed implementation of the Clean Power Plan (CPP) announced by the United States' Environmental Protection Agency (EPA) on 3 August 2015, a rule to cut carbon pollution from existing power plants. On 7 December 2017, EPA Administrator Scott Pruitt announced at a hearing of the U.S. House Energy and Commerce Committee that the EPA will introduce a replacement rule to replace the CPP. As of 29 June 2018, EPA’s agenda put a final Clean Power Plan repeal date in October with speculation a replacement rule will be proposed at the same time. On 21 August 2018, the EPA proposed the Affordable Clean Energy (ACE) rule to replace the CPP to establish emissions guidelines for states to develop plans to address GHG emissions from existing coal-fired plants. The rule would allow states full discretion to set heat-rate improvements (HRI) for unit-specific emissions standards. The HRIs may be overstated, since they appear to be based on potential improvements at inefficient plants that have already retired; i.e. the existing fleet may have already applied BSER measures and therefore do not have room for improvement. The Affordable Clean Energy (ACE) rule was issued by the Environmental Protection Agency ("EPA") June 19, 2019. This rule will replace the prior administration's Clean Power Plan in efforts to support energy diversity. On 1 June 2017, President Trump announced that the U.S. would withdraw from The Paris Agreement, an international accord to combat climate change. The ultimate impact of these changes on renewable demand is not yet clear for several reasons: most of these changes will be contested in court; States regulators decide on the energy mix at State level; the most important energy players are already implementing the main elements of the Clean Power Plan; and the Executive Order does not impact ITC/PTC, which is the main development driver for the US renewable energy market. On 23 January 2018, Trump signed a proclamation setting in place four years of tariffs for cell and module imports. The tariffs commence at 30% of reported value, decrease in subsequent years and don’t apply to the first 2.5GW of cell import s each year. On 3 April 2018, the Trump administration released a list of more than 1,300 imported products from China that may be subject to a 25% tariff. The list of imports from China includes “wind - powered electric generating sets,” which will have minimal impact on the U.S. wind industry due to the low number of wind turbines imported from China. The Trump administration also placed a 25% tariff on steel imports and a 10% tariff on aluminum imports, two raw materials that are sometimes used in manufacturing wind and solar energy components. 16 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 On 8 January 2018, the Federal Energy Regulatory Commission ("FERC") rejected a proposal from the Department of Energy to subsidize certain coal and nuclear plants by providing cost recovery for plants with onsite fuel supplies. The FERC instead asked regional grid operators to assess how best to enhance the resilience of the power system. FERC's five members unanimously rejected the proposed DoE rule. Instead, FERC asked regional grid operators to review an extensive list of questions about improving power system resilience and report back within 60 days. It is currently unclear as to whether or not the DoE will continue to pursue coal and nuclear subsidies and, if so, how the DoE will seek to do so. On 3 January 2019, the 116th United States Congress convened with a Republican-majority Senate and a Democratic- majority House of Representatives. In the prior Congress, Republicans held majorities in both the Senate and the House of Representatives. With this change, a shift in governing philosophy is expected. Democratic representatives have informally proposed a range of potential legislative actions having to do with climate change. One of these proposals is a "Green New Deal" which features a 100% United States RPS standard. Such a standard, if implemented, would increase demand for renewable electricity in the U.S. However, new legislation regarding climate change and renewable energy has yet to be formally proposed and the details of such legislation, if proposed at all, are unclear. Additionally, any legislation passing the Democratic-majority House of Representatives would also to have to pass the Republican-majority Senate and be signed by President Trump before becoming law. While this "Green New Deal" is not currently a likely success, it is an indicator that Green goals are becoming bolder and seeking greater results such as, in this case, a 100% renewable mandate. On June 26, 2019, a new bill was introduced to the Senate targeting a national 50% renewable energy standard (RES) by 2035. While the bill has not been passed and currently has only a handful of sponsors, it supports the growing bipartisan trend towards climate action. On 24 September 2020, the House of Representatives passed the Clean Economy Jobs and Innovation Act, a companion bill to the Senate Innovation Act. While this Act does not directly accelerate the decarbonization of the electric grid, it does combine a series of bills that would authorize new research, development, and demonstration initiatives at the Department of Energy (DoE). The Clean Economy Jobs and Innovation Act supports the objectives of Congressional Democrates to implement policy achieving economy-wide net-zero emissions by 2050. The bill focuses on investing in clean energy innovation programs and setting up a foundation upon which future energy and climate legislation could be built. In 2020, Joe Biden was elected to become the 46th President of the United States, while the US Congressional elections resulted in Democratic majorities in the House and Senate. As a result, a change in governing philosophy and priorites is expected. As a presidential candiate, Biden & other Democratic candidates were widely perceived as placing climate change as a higher priority than typical presidential candidates from previous elections. An example of this prioritization is Biden's proposed plan to, among other things, direct the to U.S. achieves a 100% clean energy economy and reach net- zero emissions no later than 2050. Because legislation based on this plan will require Congress's approval, it's unclear to what extent specific aspects of this plan will be enacted or how they will be enforced. However, it's widely expected that the new adminstration will push for pro-renewables policies such as those outlined in Biden's plan. In the short-term, the most immediately actionable steps for the new administration may be to nominate new heads of the the Environmental Protection Agency, Department of Transportation, Department of Energy, and Department of Interior, among other agencies. In Congress, Chuck Schumer, D-NY, will become the new Senate Majority Leader. In the past, Schumer has pledged to push for green infrastructure legislation among other climate change-related proposals. Regulatory framework for the activities in Spain The main piece regulating the Spanish electricity sector is Law 24/2013 that replaced Law 54/1997. This law is part of a comprehensive reform of the Spanish energy sector. The main purposes of this law is to adapt the regulation to the evolution of the electricity sector and to guarantee the sustainability of the system in the long term, removing existing deficiencies in the system operation. Specifically, the Law aims at correcting the structural tariff deficit. The law sets principles and provisions governing the electricity sector, with the objective to effectively guarantee the supply of electricity and to adapt it to the needs of consumers ensuring safety, quality, efficiency, objectivity, transparency and electricity at the minimum cost. 17 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 As a part or this Energy Reform, Royal Decree-Law 9/2013 was passed in July 2013. The purpose of this Royal Decree- Law was to adopt a series of measures to ensure the sustainability of the electricity system. In particular, RDL 9/2013 introduced a new legal and economic regime for existing renewable, cogeneration and waste energy facilities. The RDL set the principles governing these facilities, and these principles were then developed by law 24/2013 and Royal Decree 413/2014. In accordance with this new framework, renewable facilities would receive during their operating lifetime, in addition to the remuneration for the sale of the energy valued at the market price, a specific remuneration composed by (i) an “investment premium” and (ii) “an operating remuneration premium” designed to cover the share of a facility’s operating costs that could not be recovered by means of energy sales. The calculation of the aforementioned remuneration shall be carried out on the basis of the standard costs and revenues (initial investment, operation and revenue from the sale of energy) corresponding to a “standard power plant, over the useful regulatory life and based on the business activity that would be carried out by and efficient and well- managed company”. Under this scheme, projects would receive a remuneration guaranteeing a “reasonable profitability” calculated, for the first six-year regulatory period, at "300 basis points above the yield on 10-year government bonds over the l ast ten years”. The Spanish Government published in June 2014, Order IET/1045/2014, which included the parameters to remunerate the renewable energy assets, under the new remuneration framework. DL 413/2014 confirmed that wind farms that started operations in 2003 (or before) would not receive any further incentive, while the rest of wind farms would receive an incentive calculated in order to reach a 7,398% return. This order describes more than 1.300 possible types of renewables installation, 23 of them corresponding to wind farms of more than 5 MW classified by the year of first operation (from 1994 to 2016). In October 2015 the Government approved Royal Decree 947/2015 and a Ministerial Order aimed at allowing the nstallation of new renewable capacity through competitive tenders. In January 2016, the first auction renewable auction was held. The auction was designed to provide a similar remuneration that the one applying to operating installations (RD 413/2014). Following this framework, tender participants were requested to bid discounts on the “initial investment” (CAPEX) parameter which would then, by being plugged in the formula set by RD 413/2014 determine the “Rinv” (investment premium) that would eventually be awarded . In 2017, two auctions were held. The first one was held in May, and was technology neutral. Nearly all the capacity was awarded to wind projects (2.979 MW out of 3.000 MW). The auction was very competitive and all the wining participants bid the maximum discount. Following the outcome of the first 2017 tender, the Spanish government decided to launch an additional tender for a maximum of 3 GW. This new tender was held in July, and was opened to wind and solar PV exclusively. Additionally, the royal decree ruling the tender (RD 650/2017) included the possibility to increase the allocated capacity to all capacity bidding the same discount, provided it would not create an overcost to the system. Following this clause, all projects offering the maximum allowed discount were successful (no tiebreaker rule was triggered). In October 2018, the Spanish Ministry for Energy transition and environment introduced several measures aiming at limiting electricity cost for final consumers and serving as a first step towards the long term energy transition. The implemented measures include the suspension of the 7% generation tax during a period of 6 months, the facilitation of self-consumption and the administrative extension until March 2020 of the connection rights for the renewable plants awarded in previous year´s auctions. On November 22, 2019 Royal Decree Law 17/2019 was passed, introducing a series of measures aimed at guaranteeing a stable regulatory and economic framework to encourage the development of renewable energy generation in Spain. The RDL updates the “reasonable return” for renewable generation for the next regulatory period starting on 1 January 2020 at a level of 7,39% for assets before RDL 9/2013 and 7,09% for the new ones. 18 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Another objective of the RDL was to adopt a new regulation governing access to the network in nodes affected by the closure of coal and nuclear power plants and concessions for the private use of water, where new renewable projects could offer an alternative. The grid access to renewable projects in areas affected by the closure of thermal facilities, is based on the technical and economic benefits, as well as the environmental and social ones, in particular job creation. On February 28th, the final version of the Rinv (investment premium) adjustment was published (as in 2019 ended the second semi-regulatory period of the RD 413/2014 framework). Three main adjustments were introduced: (i) the estimation of pool prices using forward prices, (ii) the adjustment of the OPEX to reflect the removal of the 0.5 €/MWh access fee and (iii) the inclusion of the system operator remuneration. On March 14, Royal Decree 463/2020 entered into force, declaring the state of alarm for the management of the health crisis caused by the coronavirus (COVID 19). During extreme situations (among them, health crises) article 116 of the Spanish Constitution allows the executive to declare the state of alarm, a measure that enables it to prohibit the free movement of people throughout the country and to take all steps required to guarantee the supply of food to the nation's markets. It also allows the government to take over the means of production and requisition goods. Initially the state of alarm was set to last until March 29 but the Congress extended it to June 21st. Also, the government toughened the lockdown measures requiring the halt of all “non - essential” activities from March 30 to April 9, including wind farms ’ construction. Several subsequent Royal Decrees were published during the State of Alarm. These RD included economic and social measures to fight the pandemic effects. Despite the lockdown, several consultations were launched by the Energy Ministry (Hydrogen Strategy, Electric Energy Storage (EES), offshore strategy and FEDER auctions. Due to the disruption caused by COVID-19, a 2-month extension (from the last day of the state of alarm) of the connection rights expiring on 31st March 2020, was decided. The final version of the Spanish NECP (National Energy and Climate Plan) for the period 2021-2030 was sent to the European Commission. The Government approved Royal Decree Law 23/2020 of 23 June approving measures in the area of energy and other areas aimed at economic recovery. The objective of this Royal Decree Law is to guide energy policy for economic recovery, financial resource mobilisation and sustainable job creation. In particular, RD/2020 consists of a battery of measures intended to help the energy transition, remove barriers to the large-scale deployment of renewable energy sources and promote energy efficiency. On July 17th, the Ministerial Order TED/668/2020 was approved, setting the adjusted “Rinv” (investment premium) values for 2018 and 2019, accounting for the temporal suspension of the 7% levy on generation during Q4 2018 and Q1 2019. The Ministry for the Ecological Transition and Demographic Challenge (MITECO) decided to allocate 316 million euros to support innovative projects that favour the integration of renewable energies in the systems. Different lines of action, drawn up in collaboration with the Autonomous Communities, are expected to contribute to the achievement of the objectives that Spain, in its NECP, has set in this area: doubling the consumption of renewable energy by 2030, and reaching climate neutrality in 2050. Specifically, the Official State Gazette (BOE) published on August 3rd set the regulatory criteria to allocate 246 million euros in aid to renewable projects in a competitive competition regime. On September 10th, several tenders were announced in Madrid, Andalucía, Extremadura, Asturias, Castilla La Mancha, Cataluña and Murcia regions. The announced competitive procedures will allocate 80 million euros to renewable projects. On November 4, 2020, Royal Decree 960/2020 regulating the economic regime for renewable energies for electricity production facilities, was approved. The RD sets the framework for a new scheme for RES investment (including hybrid, energy storage projects and repowering) to be awarded in auctions. It defines some general characteristics of the scheme, although most aspects remain flexible and will need to be defined in lower level legislation. Additionally, it sets the obligation of publishing a 5-years auction calendar. 19 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Regarding the auction mechanism, the RD establishes that the auction product may be power, energy or a combination of both and that auctions would be structured as pay-as-bid ones. A maximum price will be set although it may be confidential and a minimum price may also be introduced. The awarded price will be defined in €/MWh and will not be indexed. The RD includes the possibility of defining so- called “symmetrical incentives” for market participation. In this case, th e price received for the energy sold in each market (day-ahead/intra-day) will be adjusted by a factor applied to the difference between (i) the price of the day-ahead market and (ii) the awarded price. The tenure of the scheme is set as the sooner of achieving a maximum energy, or 10 to 15 years (exceptionally up to 20 years for technologies with high CAPEX or high technology risk which will need to be defined for each auction). Following the approval of RD 960/2020, The Ministry for the Ecological Transition and Demographic Challenge (MITECO) approved Order TED/1161/2020 of December 4, 2020 in which it sets the auction mechanism for the first auction. The Order also includes the auction calendar for the next 5 years. Over the next 5 years, the Spanish Government plans to launch tenders for 20GW of renewable power (mainly wind: 8.5GW and solar PV: 10GW) in order to achieve the 60GW target set out in the Spanish National Energy and Climate Plan for 2021-2030. After the publication of the Order, the first auction was announced for the 26 of January of 2021. According to the announcement, 3 GW of RES will be auctioned, of which at least 1 GW will be reserved for wind energy and 1 GW for solar PV. As expected, the key auction award variable will be energy price (zero euros bids will be allowed) and an unknown maximum price will be applicable. Winning bids will be awarded 12-year power purchase agreements (PPAs) for PV, solar thermal, onshore and offshore wind and hydropower, and 15-year PPAs for biomass, biogas and bio-liquid technologies. The tender requirements set that participants shall prepare and submit a strategic plan including, among others, estimates in relation to the projects´ contribution to job creation and carbon footprint reduction, and opportunities for the local, regional and national industrial value chain. On December 29, 2020, the Royal Decree on access and connection to the energy transmission and distribution networks (RD 1183/2020) was approved. This Royal Decree establishes the principles and criteria in relation to the application, processing and granting of permits for access and connection to the electricity transmission and distribution networks. With the approval of this RD, the government aims at preparing the regulatory framework for the planned deployment of renewables, while helping to eliminate inefficiencies and speculative behaviours to ensure the achievement of energy policy objectives. Regulatory framework for the activities in Portugal The principal pieces of legislation regulating the Portuguese electricity sector are Decree-Law 29/2006 of 15 February 2006 (amended by Decree-Law 215-A/2012) and Decree-Law 172/2006 of 23 August 2006 (amended by Decree-Law 215-B/2012). The legislative framework for renewable energy is primarily contained in Ministerial Order 243/2013 of 2 August 2013, which sets out the terms, conditions and criteria for the licensing of electricity generation under special regime with guaranteed remuneration. The Portuguese legal provisions applicable to electricity generation from renewable resources are currently established by Decree-Law 189/88 dated 27 May, as amended by Decree-Law 168/99 dated 18 May, Decree-Law 312/2001 dated 10 December, and Decree-Law 339-C/2001 dated 29 December. Also relevant is Decree-Law 33-A/2005, dated 16 February 2005 (“DL 33 - A/2005”), which establishes the remuneration formula applicable to energy produced by renewable sources (this is, the formula to calculate the feed-in tariff). In September 2012 and after months of negotiations, the Portuguese wind industry reached an agreement with the Portuguese government to extend the existing feed-in tariff regime in exchange of an upfront payment. 20 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Following the agreement, the Portuguese Government published a decree articulating its terms, the Decree Law 35/2013. The Government proposed four alternative tariff schemes to be chosen by wind developers. EDPR and ENEOP chose a 7-year extension of the tariff defined as the average market price of previous twelve months, with a floor of 74€/MWh and a cap of 98€/MWh to be updated annually with inflation from 2021 onwards, in exchange of a payment of 5.800€/MW from 2013 to 2020. The Environment and Energy Ministry published in July 2014, Decree Law 94/2014 that allowed wind operators to increase the capacity of their operating wind farms up to 20%. The additional production generated by the increased capacity is remunerated at 60 €/MWh, whilst the remaining production is remunerated following the feed -in tariff scheme. The Portuguese government, in its 2019 Budget, included an extension of the special energy tax (so-called CESE) to renewables. However, renewable facilities with licenses granted through public tenders are exempted. In line with the 2019 Budget, the 2020 State Budget envisaged that small producers (up to 20 MW) would be exempted from paying the CESE. Also, passive subjects with more than 60 MW under tariff schemes would also be exempted from paying the tax. On January 31, Portaria 43/2019 on over- equipment “sobrequipamientos” (“SE”) was published. The new Portaria set a new remuneration scheme for SE of 45€/MWh (non -indexed values) for 15 years, period after which the SE would be under the ordinary regime not being entitled to be under the tariff extension scheme set by D-L 35/2013. The new scheme exempts developers from requesting ERSE authorization to the SE. On June 3rd the DL 76/2019 was published. This DL is a comprehensive review of the legal basis of the Portuguese electricity sector. Regarding new renewable capacity, the Decree changes the order in which grid capacity reservation and production license are obtained. New projects will need to obtain the title of grid capacity reservation prior to applying for the production license. The Decree also introduces three ways to obtain grid capacity reservation, being one of them through competitive tenders. Portugal launched its first utility-scale renewable energy auction in July 2019, for 1,4 GW of solar PV capacity. Developers could present two kinds of offers: one with a fi xed price below €45/MWh and another with a variable tariff which included a requirement to pay compensation to the electricity system, depending on spot market power prices. Both systems would be have a 15-year length. In December 2019, the DGEG (Direção-Geral de Energia e Geologia) released regulation of the Licensing Monitoring Committee (Comissão de Acompanhamento dos Processos de Licenciamento) of the solar PV plants resulting from the 2019’s Auction. This Committee was set up with the aim of contrib uting to the fulfilment of the obligations arising from the tender procedure, in particular regarding the deadline for obtaining the licence In Portugal, a GO (Guarantees of Origin) system was launched starting in March 2020. Registration shall be compulsory for renewable producers above 5 MW and high efficiency cogeneration. Until 2021YE, renewable plants <1 MW and self- consumption ones will be exempted. In order to prevent further spread of the Covid-19, the state of emergency was declared by Presidential Decree no. 14- A/2020, of 18 March, as authorized by the Parliament’s Resolution no. 15 A/2020, of March 18, 2020. DGEG suspended all deadlines linked to licensing procedures for all electrical projects after March 16, 2020. In particular, this suspension comprehends the deadlines for any administrative proceeding to be performed by solar promoters with projects awarded in the first solar auction (June 2019). The Emergency State was lifted on May 2, 2020 and replaced by the Calamity State. On March 27, 2020 a new solar auction was announced by the Energy Secretary of State. Developers had to choose one of the following three remuneration schemes: 1) A fix ed guaranteed tariff structure, where the bids expressed a discount to a reference price, in €/MWh. Awarded projects would enter into an hourly two-side CfD with OMIP for 15 years. The CfD would be settled based on the actual price captured by the specific plant. 21 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 2) A market scheme where the promoters bid for a contribution made to the National Electric System (“SEN”) and where the promoters that bid the largest contributions would be awarded with the capacity title. Participants would then commit to pay this quantity for 15 years and their projects would get their revenues from participating in the electricity market on a merchant basis. 3) A new system consisting of a market scheme for power plants incorporating a storage system, in which participants bid the value of the capacity payment that would like to receive in €/MW (MW of connection capacity). In exchange, they shall sign a “one - side” CfD contract (“available contract”) with REN to protect the system against price spikes events . On March 31, 2020 Law 3/2020 accompanying the State Budget was published setting the main policies and investments for the 2020-23 period. In terms of energy, the path to carbon neutrality in 2050 is set by confirming the 55% emission reduction target in 2030, promoting regional guidelines for carbon neutrality and envisaging the development of 5-year carbon budgets. Also, the main goals of the Portuguese National Energy and Climate Plan (NCEP) are also confirmed by the Law (preparation works for coal phase out, installations of 2 GW of solar PV in the next 2 years, reinforcement of existing onshore, promotion of hybrid and Energy storage, offshore wind, hydrogen, etc.). Energy efficiency, e-mobility and economic incentives for decarbonization are also among the government priorities. On July 10th, the Ministry Council officially approved the NCEP setting 2030 Renewable targets. The Plan commits to a 47% RES contribution that translates into 80% RES-E. According to the NCEP, Portugal expects to reach 9,3 GW of wind and 9 GW of solar PV by 2030. The Portuguese Parliament rejected in December 2020 the repeal of the law passed in 2013, allowing the extension of the remuneration for wind farms for a period of 5 to 7 years. Regulatory framework for the activities in France The electricity sector in France is primarily governed by Act 2000-108 passed on 10 February 2000, which constitutes the general legislative framework for the operation of generation facilities. Act 2000 allowed wind operators to enter into long-term agreements for the purchase and sale of their energy with lectricité de France (EDF), the national incumbent. The tariffs were initially set in 2006, then updated in the “Arrêté du 17 novembre 2008” at the following level: i) during the first ten years of the EDF A greement, EDF would paid a fixed annual tariff, set at €82/MWh for wind farms that had made the application in 2008 (after 2008, this tariff was updated using an inflation -related index); ii) During years 11 to 15 of the EDF Agreement, the initial tariff would be revised considering the load factors achieved by the facility iii) After year 16, no specific support scheme would be granted (wind farms would need to sell the energy in the market and would receive market prices). In July 2015, the “Energy Transition Bill”, whose aim was to build a long -term and comprehensive energy strategy, was passed. In 66 articles, the bill included ambitious emission reduction targets while it also targeted to reduce fossil fuels use (including nuclear). Regarding renewables, the Energy Transition Bill increased the renewable target up to 32% by 2030. A new Contract-for- difference (CfD) was released in December 2016 in line with the European “Guidelines on State aid for environmental protection and energy 2014- 2020”. Acco rding to this new scheme, wind farms having requested a PPA in 2016 would receive a 15-years CfD, being the strike price (and the terms of the tariff) very similar to the previous feed-in tariff. From 2017 onwards, wind farms of more than 6 wind turbines (and more than 3 MW per turbine) would need to participate in competitive tenders to obtain a 20-year CfD. The first tender was held in November 2017. However, smaller wind farms (with 6 turbines or less, and 3 MW per turbine or less) would be exempted from participating in tenders. On November 27, 2017, the “Pluriannual Energy Planning” (PPE) was released. According to the PPE, 40% of the energy would be produced from renewable sources by 2030.The PPE included different targets for renewables: 35,6-44,5 GW of solar capacity, 34-35,6 GW of onshore wind and 4,7-5 GW of offshore wind, by 2028. 22 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 On November 29, 2017, the government approved the Décret 2018-1054 aimed at accelerating legal procedures following claims against the administrative authorization of wind farms. In particular, the Decree removes the two-level court system in the event of litigation. The third offshore round took place in March 2019 with all major players participating (grouped in 10 consortiums). The French Parliament approved on 26 September 2019 the so- called “Energy and Climate Law”, committing the country to carbon-neutrality by 2050. The adoption of the Energy-Climate law constitutes a major step toward achieving the government's ambition to address climate change by becoming carbon neutral by 2050. This objective represents a reduction of France's greenhouse gas emissions by a factor of more than six compared to 1990’s emission level. In order to achieve carbon neutrality by 2050, the Energy-Climate law provides for the reduction of fossil fuels consumption by 40% by 2030 (instead of the previous 30% target) and for the end of coal-based electricity generation by 2022. The law provides that the share of nuclear in the electricity mix should be reduced to 50% by 2035. Regarding wind energy, the law redefines the authority responsible for permitting onshore wind projects. Concerning offshore wind, the law also includes a higher target of auctioning 1 GW of capacity until 2024 (doubling the volumes defined by France’s initial energy pla n published in January 2019). A new version of the PPE (Programmation Plurianuelle de l´Énergie) was approved in 2020, in line with the final version of France’s NECP (National Energy and Climate Plan). It increased offshore wind targets vs. the previous version whilst decreased solar PV’s. In total, the PPE sets that France will need to achieve between 33,2 and 34,7 GW of onshore wind in 2028, 5,2-6,2 GW of offshore wind and 35,1-44 GW of solar PV. The PPE also includes a schedule of tenders to be held between 2020 and 2034. The French Assemblée Nationale approved on March 21, 2020, a law introducing the “State of health emergency” during the coronavirus pandemic. The law includes measures limiting private liberties (such as lock-downs and requisitions) and contains provisions regarding postponing the second round of the French municipal elections, economic measures to support the economy and other measures impacting the French justice and labour law. Measures easing restrictions across the country were applied from May 11th. Economic rescue packages could amount to up to 110 billion euros, and will include guarantees, loans, moratorium on debt repayments, among others. In the renewables sector, extensions of several deadlines have been envisaged to cope w ith delays and the sector has itself been declared “strategic”. Test periods for CR16 and CR17 projects have been extended 3 months. Additionally, a 7-month extension of COD deadlines has been announced but will be restricted to wind and solar projects with (i) COD initially scheduled after March 12th, (ii) remuneration scheme granted before or during the period March 12th to June 23rd and (iii) nominal capacity less than 200 MW. On 8 September France published a hydrogen commitment, exceeding previous European national strategies, by pledging 6.5GW of electrolyser capacity by 2030. The plan came after the French government announced an economic recovery plan due to the coronavirus outbreak of €100bn, including €30bn entirely devoted to ecological transitio n. The newly hydrogen strategy included a commitment of €7bn budget for low -carbon hydrogen between 2020-2030. Regulatory framework for the activities in Poland The legislation applicable to renewable energy in Poland was initially contained in the “Energy Act” passed on 10 April 1997, which was subsequently amended in 2002 and 2004. The Energy Act introduced a Green Certificate scheme with mandatory quotas. According to the scheme, energy suppliers are required to: a) purchase GC and submit them to the Energy Regulator, or b) pay a substitution fee calculated in accordance with the Energy Act. If suppliers fail to meet their obligation (either the submission of GC or the payment of substitution fee), they must pay a fine, equal to 130% of the substitution fee in that year. 23 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The Green Certificate scheme was replaced in 2015 by a new system, consisting in Contracts-for-Difference (CfD) granted through competitive tenders. However, the law guaranteed that the GC scheme would be maintained (with some adjustments) for operating plants. The law also introduced the possibility for operating plants to voluntary shift to the CfD system, through specific tenders for operating assets. In June 2016, after a long approval process, the so- called “Wind Turbine Investment Act” was approved, including (i) new minimum distance for new wind farms and (ii) higher real estate tax burden. In July 2017 a new methodology to calculate the substitution fee was approved. According to the new formula, the substitution fee would be calculated every year as 125% of the average CG market price of the previous year capped at 300PLN. In October 2018, the Energy Regulatory Office published a call for the first auction in Poland in which wind onshore and solar PV with capacity above 1MW could participate to get a 15- year CfD. The first auction was held in November 2018. Poland’s National Energy and Climate Plan (NECP) was sent to the European Commission in December 2019. The Plan targets a 23% share of renewable energy in 2030. In addition, the share of renewables in electricity generation will rise to 32% in 2030. Onshore wind installed capacity could increase up to 9,6 GW in 2030 while offshore wind to 3,8 GW in 2030 and 8 GW in 2040. On 13 March 2020, the Minister of Health announced a state of epidemiological threat in Poland, which is a legal situation aimed at introducing measures to reduce the spread of COVID-19. Following the announcement, some restrictions were approved, including the prohibition on entering the territory of Poland for foreigners, the obligation of a 14-day home quarantine or the suspension of all international flight and railway connections, among others. The restrictive measures started to be lifted on April 20th. Several economic relief measures, the so-called government anti-crisis shields, were approved since the start of the state of epidemiological threat. In particular, the following ones apply to renewable producers: • renewable projects awarded in the 2018 and 2019 auctions would benefit from COD extensions (up to 12 months), if some delays are proved (for example, (i) delays in the delivery of equipment that is part of the installation, (ii) in the construction or (iii) the grid connection, among others); • also, power companies will be obliged to adjust in the grid connection agreements the date of the first delivery, considering the deadlines extensions. Regulatory frameworks for the activities in Romania A Green Certificate mechanism was introduced in Romania in 2005 to promote renewable energies and to comply with the European renewable targets. According to this scheme, electricity suppliers and industrial consumers are obliged to source a certain amount of GC every year (a fine is applicable if this annual quota is not met). On the other side, renewable generators receive GC by each MWh produced. Law 220/2008 of November, introduced some changes in the initial GC system, improving the framework for renewable generators. In particular, it increased the amount of GC to be received by wind generators (from 1 GC/MWh to 2 GC/MWh until 2015 and 1 GC/MWh from 2016 onwards). The law also guaranteed that the trading value of GC would have a floor of 27€ and a cap of 55€ . Law 123/2012 of 19 July 2012 on Electricity and Natural Gas eliminated the provision of bilateral contracts not publicly negotiated as a mean to sale electricity. Thus, the trading of electricity could only be carried out on a centralized market. 24 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The Romanian Parliament approved Law of 17 December 2013, introducing several changes to the GC scheme and in particular: • For operating renewable plants: decision to postpone (or “freeze”) part of the granted GC : • wind generators would have 1 GC (out of 2 GC) postponed from trading from 1 July 2013 to 31 March 2017; • solar generators would have 2 GCs (out of 6 GCs) postponed from trading from 1 July 2013 to 31 March 2017; • postponed GC would be gradually recovered until 31 December 2020 (starting on 1 April 2017 for solar PV and 1 January 2018 for wind). • For new renewable plants: decision to reduce the amount of granted GC: • wind facilities would receive 1.5 GC/MWh until 2017 and 0.75 GC/MWh from 2018 onwards; • solar facilities would only receive 3 GC from 1 January 2014 onwards; • these GC could be immediately traded. On 24 March 2014, the President of Romania approved EGO 57/2013 with the following amendments: (i) Reduction of the GC validity from 16 months to 12 months; and (ii) the obligation for ANRE (Energy Regulator) to communicate in each year the GC quota for the following year. Other amendments were introduced in 2015 by Law 122/2015. Among other changes, the law included: (i) supplier’s obligation to purchase GC on a quarterly basis (ii) the inclusion of imported e lectricity in the GC scheme, and (iii) the removal of the right to receive GC for the electricity sold at negative prices. In March 2017, the government approved a new emergency ordinance (EGO 24/2017) to further amend the renewable law 220/2008. As expected, the GC scheme was extended until 2031 (GC will remain valid until March 2032). The Ordinance also confirmed the removal of the indexation of the GC parameters (GC floor would remain fixed at 29,4€ and GC cap would be fixed at 35€). Regarding wind energ y, the ordinance approved the extension of the GC recovery period from 2018 to 2025, while solar PV’s GC postponement was extended until the end of 2024 (the recovery will take place from 2025 to 2030). The State of emergency was declared on 16 March 2020, through presidential Decree 195/2020. The Decree aimed at controlling the spread of COVID-19. Among others, the Decree included restrictions of certain rights (introducing for example compulsory quarantines). It also included the possibility of price controls for certain goods and/or services (for example, of electricity prices). The State of emergency was subsequently extended until May 16th. During the State of emergency period, the government released several economic relief measures such as extension of payment deadlines for local taxes, a tax debt restructuring program, a reduction of the monetary interest rate, among others. ANRE published Order 61/2020 of March 31st stating that negative prices would be allowed from September 2020 in line with Order 236/2019. Emergency Ordinance 74/2020, amending the Energy Law 123 was approved on May 14th, allowing PPAs signed outside the centralized markets for new renewable projects operating from June 2020. In June 2020, the Romanian Energy Ministry proposed a Memorandum with the basic characteristics of a potential CfD scheme, addressed at low carbon technologies (renewables, CCS and ESS). 25 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Regulatory frameworks for the activities in Italy On 6 July 2012, the Government approved a new renewable framework by means of the Decree on Renewables (DM FER) introducing a feed-in-tariff support scheme. The key aspects of this regulation provided by the DM FER were the following: (i) wind farms over 5 MW would be remunerated under a feed-in tariff scheme defined by tenders; (ii) capacity to be tendered would be determined in line with the agreed technologies’ capacity paths ; (iii) the reference tariff for 2013 was 127 €/MWh for onshore wind and tender participants would bid offering discounts on this reference tariff (in %); (iv) The reference tariff would decrease 2% per year and (v) tariffs would be granted for 20 years. The new system replaced the previous one based on GCs. Under the previous system, producers obtained their revenues from the sale of the electricity in the electricity market and from the sale of GCs. Wind farms built until December 2012 continued to operate under the previous system until 2015 (from 2015 onwards, the GC system was transformed into a feed-in-premium in which, for the remaining duration of the original incentive period, the value was set at 78% of the difference between €180 and the electricity price) . Spalma Incentivi Decree, published in November 2014, stipulated that wind farms under the GCs scheme could voluntarily adhere to an extension of the support period of 7 years in exchange of a permanent reduction of the premium/GCs received, being the coefficient of reduction calculated individually for each wind farm depending on their remaining regulatory life. As the option was voluntary, wind farms that refused to accept this change remained under previous GCs scheme. On November 10, 2017, The Strategia Energetica Nazionale (National Energy Strategy), known by the acronym SEN, was presented after several months of public consultation. One of the main features of the SEN is that it included the complete phase-out of coal power generation by 2025, five years ahead of schedule. The SEN also highlighted the role of renewables and targeted that renewable energy would increase to 28% of energy consumption in 2030. According to the SEN, the RES-E (renewables in electricity production) would increase up to 55% in 2030. The Italian Ministry of Economic Development signed in July 2019 a decree implementing a new set of auctions to be held between 2019 and 2021, seeking to allocate around 5,5 GW of wind and solar PV. On 9 March 2020, a national quarantine, restricting the movement of the population was approved, in response to the growing pandemic COVID-19 . A gradual ease of restrictions started on May 4th. Regarding the electricity sector, several measures were introduced, including a suspension of all bureaucratic terms for renewables since March 13th, a relief of several reporting obligations, the implementation of transitory measures between 10 March and 30 June 2020 to limit the burden of imbalance costs and an extension of all permits expired during the emergency state of 90 days, among others. The Italian energy agency GSE (Gestore dei Servizi Energetici) announced in May 2020 the results of the second national auction for renewables projects (with a capacity of more than 1 MW). In July 2020, Law Decree 76, the so- called “Decreto Semplificazioni” on urgent measures for simplification and digital innovation, came into force. The Decree aims to simplify procedures for the following: (i) public contracts and construction; (ii) public procedures and responsibilities; (iii) digital administration; and (iv) business, environment and green economy activities. Regarding renewable projects, one of the key measures is the rationalization of the Environmental Assessment process, setting several simplification measures and defining specific deadlines. The Italian grid operator Terna awarded 250 MW of energy storage capacity in a Fast Reserve auction that took place in December 2020. The auction was heavily oversubscribed with around 1,3 GW competing for 250 MW of tendered capacity. 26 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Regulatory frameworks for the activities in Brazil The Electricity Sector in Brazil is regulated by Federal Law nr 8,987 of 13 February 1995, which generally rules the concession and permission regime of public services; Law nr 9,074 of 7 July 1995, which rules the grant and extension of public services concession or permission contracts; Federal Law nr 10,438 of 26 April 2002, which governs the increase in Emergency Electric Power Supply and creates the 3,300 MW Program of Incentives for Alternative Electricity Sources (PROINFA); Federal Law nr 10,762 of 11 November 2003 and Law nr 10,848 of 15 March 2004, concerning commercial rules for the trade of Electric Power; and, subsequent amendments to the legislation. The institutions that ensure a proper development and functioning of Electricity Sector in Brazil are: a) the Energy Research Company (“EPE”), responsible for long term planning in the electric sector; b) the Electric Sector Monitoring Committee (“CMSE”), responsible to continuously assess the secur ity of electricity supply, c) the Chamber for the Commercialization of Electric Energy (“CCEE”), an institution dealing with commercialization of electricity in Interconnected System, d) Nation al Electricity Regulatory Agency (“ANEEL”), responsible for re gulate and inspect the electricity sector, as well as establishing the tariff for the consuming public and promote energy auctions together with MME, EPE and CCEE; f) Ministry of Mines and Energy (MME) responsible for the creation and implementation of policies, acting as the Conceding Authority; g) the National Electric System Operator (ONS), which is responsible for the coordination of real time operation and supervision of the energy generation and transmission grid. Federal Law nº 9.427 of Dec 26th 1996 establishes the possibility of Renewable Energy producers to sell directly to the final consumer(s) (aggregated demand > 500kW), at any voltage level. As part of the regulatory incentive framework, Renewable Energy producers (small hydro, biomass, wind and solar) are granted a reduction of, at least, 50% in the Distribution and Transmission System Use Tariff (TUSD and TUST) provided that pre-defined rules are met. The Law nº 13.203 of Dec 8th,2015 extended the subsidy for larger solar, wind and biomass plants. Renewable energy production from plants which receive the above- mentioned subsidy is defined as “incentivized energy”, while the electricity production from no- incentivized sources is defined as “conventional energy”. Special Consumers, the ones which consumption demand is above 500 kW and under 3 MW, are allowed to purchase electricity only from incentivized sources. Since Jul 2019, the minimum demand is gradually reducing, so that, as of Jan 2023 those Special Consumers will be allowed to purchase incentivized or conventional energy by their own free choice. The Decree nr 5,025 of 30 March 2004, regulates the Federal Law nr 10,438 and states the "Alternative Energy Sources" economical and legal framework. PROINFA participants have granted a PPA with ELETROBRÁS, and are subject to the regulator (ANEEL) authority. The Decree nº 5,163 of 30 July 2004 regulates the Federal Law nº 10,848, establishing two trading environments for sale and purchase energy: the Regulated Contracting Environment ("ACR"), with the participation of energy producers, traders and distribution agents, and the Free Contracting Environment ("ACL"), in which Producers, Traders, Importers & Exporters and Free Consumers participate. In the ACR, distribution companies are allowed to buy “distributed energy” (local generation), by observing a limit of 10% of the total demand of each distribution agent. In terms of tariff moderation for Captive Consumers (consumption demand < 500 kW), Brazilian Energy Sector provides for the purchase of electricity by distributors through regulated auctions, subject to the lowest cost criteria, aiming to reduce the cost of acquisition of electric energy that is re-passed to captive customer tariffs. These auctions seek to provide the lowest possible price of electricity to be re-passed to the consuming public. During the fourth quarter of 2019, Ministry of Mines and Energy set strategic lines of activities to be developed towards the modernization of the Brazilian electricity sector. One of the first measures taken relates to the PLD (short-term price), currently calculated on a weekly basis. Hourly PLD has been calculated on a test basis (“shadow operation”) since 2018, aiming to become economically effective as of 1 January 2021. It aims to improve efficiency between electricity production and consumption based on an efficient management of price formation and real-time operation. 27 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The government has taken measures in response to Covid-19 impacts in main areas as the energy sector, by means of Decrees, Provisional Measures and changes in existing regulation. By the end of March, to ensure uninterrupted supply of energy to consumers, Decree nº 10.282/2020 reinforced electricity generation, transmission and distribution as essential activities. This included the equipment supply needed for operation and maintenance. By the end of April 2020, the range was extended to include construction works. Through Normative Resolution nº 878/2020, the Brazilian Electricity Regulatory Agency (ANEEL) suspended energy supply cuts regardless of the consumers’ capacity of payment for 90 days as of 23 March 2020. In addition, the low-income population registered for lower tariffs (the Social Tariff program) will not undergo periodic checks over the next three months, and therefore will not be subject to the loss of the benefit. Measures have also been taken to prevent distributors (DSO)´ s financial losses due to a potential high default rate, and consequently affect their stakeholders. In order to add liquidity, ANEEL authorized the transfer of resources from sector funds to distributors and consumers, totalizing R$2,43 billion so far. Provisional Measure nº 950/2020 propose temporary use of resources from National Treasury, other sector funds and bank loans for DSO to be paid for all consumers, as well as new measures to subsidize low-income consumers, providing a 90-day exemption from paying the electricity bills. ANEEL also released a first assessment of Covid-19 impacts to the energy sector, through which reinforced the need of maintenance of the economic and financial balance of contracts, preservation of contracts and the participation of all segments (generators, TSO, DSO, consumers) towards the best solutions. On 23 June 2020, ANEEL enacted the Normative Resolution nº 885/2020 establishing the loan conditions to support the DSO in reducing the impacts of Covid, without resources from National treasury. A total of 19 banks led by BNDES will inject up to R$ 16,25 billion to “Conta Covid” and will be paid by consumers in 60 months. To benefit from the resources, the DSOs may declare they wave the right to question any of the conditions in court, preserve the PPAs and limit the distribution of dividends in the case of a default. In March 2020, the Chamber of Electric Energy Commercialization (CCEE) and the National Power System Operator (ONS) estimated a 0,9% decrease in total consumption for 2020 compared with last year, based on a “close to zero” variation of GDP due to the impacts of COVID-19 on economic activity. On May 1st, Ministry of Economy made a significant downward revision of GDP forecast, from 0 to 5% decline for the worst-case scenario of Brazilian economy. By the end of June 2020, Central Bank of Brazil updated the GDP projection for 2020 reducing it from -5% to -6,5%. Under this circumstance, demand for electricity is expected to further diminish. Due to the uncertainties on future demand for electricity, the regulated auctions scheduled for 2020 are postponed. According to CCEE and ONS, it´s also an opportunity to revisit guidelines in order to introduce cheaper and more efficient power plants. One strategy proposed is to restrict the participation in regulated auctions to thermal plants which unit variable cost (CVU) are less than R$300/MWh, allowing for lower spot market prices (PLD). The National Development Bank (BNDES), main financing institution announced several measures to support sectors of oil and gas, airports, ports, energy, transportation, urban mobility, health, industry and commerce and services. Other measures regarding public health, tax and employment rules were announced in response to COVID-19. On 1 September 2020, the Brazilian government issued the Provisional Measure (“MP”) nº 988/2020 with the main pu rpose of reducing the electricity bills for consumers. The Brazilian Congress has a 120-day period to approve the MP and convert it into Law, otherwise it will become ineffective. 28 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 For renewable generators, the main impact is due to the cut in subsidies in the rates of the transmission and distribution system tariff within a 12-month deadline as of the MP enactment. Power plants authorized during this period and which requires an increase of power capacity will still be granted with the benefit and shall start commercial operation within a 48-month period after the published authorization. All those power plants already granted by the benefit before the MP are not affected. The end of subsidies must be compensated by the development of mechanisms based on the environmental benefits due to renewable energy sources related to low-carbon emission. On 8 September 2020, the Law 14.052/2020 was finally enacted and establishes the conditions for hydro generators to renegotiate debts due to the hydrological risk s, which caused a low Generation Scaling Factor (“GSF”) during a prolonged drought, intensified by measures taken by the government to secure the national grid operation. The debt has been impacting the short-term market settlement, which currently involves more than R$ 9 billion. ANEEL has a 90-day period to propose a regulation, which must be, at first, submitted to a public hearing. On 8 December 2020, MME announced a regulated auction schedule for the next three years (2021- 2023). Three kinds of auctions are expected aiming at contracting energy from new and existing power plants and the expansion of the transmission system. New energy auctions A-3/A-4 and A-5/A-6 for 2021 are scheduled to take place on June and September, respectively. As of 1 January 2021, the short-term price (PLD) comes into effect in an hourly basis, after two years of shadow operation. Although, since the last year, the ONS has been operating based on the new dispatch model results, just now the hourly PLD became effective for the purpose of commercialization. 02. Accounting policies A) Basis of preparation The accompanying consolidated annual accounts (financial statements hereinafter) reflect the results of EDP Renováveis, S.A. and its subsidiaries (EDPR Group or Group) and the Group's interest in its joint ventures and associated companies. The consolidated financial statements for 2020 have been prepared to present fairly the consolidated equity and consolidated financial position of EDP Renováveis, S.A. and subsidiaries at 31 December 2020, the consolidated results of operations, consolidated statement of comprehensive income, consolidated cash flows and changes in consolidated equity for the year then ended. In accordance with Regulation (EC) no. 1606/2002 of 19 July 2002, of the European Council and Parliament, the Group's consolidated financial statements are prepared in accordance with International Financial Reporting Standards (IFRS), as endorsed by the European Union (EU). IFRS comprise accounting standards issued by the International Accounting Standards Board (IASB) and its predecessor body as well as interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and their predecessor bodies. The Board of Directors approved these consolidated annual accounts on 23 February 2021. The annual accounts are presented in thousand Euros, rounded to the nearest thousand. The financial statements have been prepared on a going concern basis under the historical cost convention, modified by the application of fair value accounting to derivative financial instruments, financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income, except those for which a reliable measure of fair value is not available. Assets and liabilities that are hedged under hedge accounting are stated at fair value in respect of the hedged risk. Non-current assets and disposal groups held for sale are stated at the lower of carrying amount and fair value less costs to sell. Liabilities for defined benefit plans are recognised at the present value of the obligation net of plan assets fair value. 29 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 In accordance with IFRS 3 - Business Combinations, if the initial purchase price allocation of assets, liabilities and contingent liabilities acquired is identified as provisional, in the subsequent 12 months after the business combination transaction, the legal acquirer should make the final allocation of the purchase price related to the fair value of the assets, liabilities and contingent liabilities acquired. These adjustments with impact on the amount of goodwill determined and booked in previous periods, originate a restatement of the comparative information, which is reflected on the Statement of financial position, with effect from the date of the business combination transaction. The preparation of financial statements in accordance with IFRS requires the Board of Directors to make judgments, estimates and assumptions that affect the application of the accounting policies and of the reported amounts of assets, liabilities, income and expenses. The estimates and related assumptions are based on historical experience and other factors considered reasonable in accordance with the circumstances, the results of which form the basis for making judgments regarding the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The areas involving the highest degree of judgment or complexity, or for which the assumptions and estimates are considered significant, are disclosed in note 4 - Critical accounting estimates and judgments in applying accounting policies. Accounting policies have been applied consistently by all Group companies and in all periods presented in the consolidated financial statements. The new standards and interpretations recently issued but not yet effective and that the Group has not yet applied on its consolidated financial statements, are detailed in note 3. Change in results presentation of Joint Ventures and Associated companies In January 2020, EDPR Group signed an agreement with ENGIE for the establishment of a joint venture company, OW Offshore, S.L., with equal control for both sides - as an exclusive investment veihicle for worlwide opportunities in wind offshore projects (fixed and floating projects), combining development and industrial skills of both companies. As part of the deal, EDPR Group and ENGIE are preparing their offshore wind projects and the in-course projects of this new company, starting with a total of 1.5 GW in construction and 3.7 GW in development, working together to create a global leader in this sector. As at 31 December 2020, a total of 1.5 GW is in construction, 5.1 GW in development and 25 MW in operation. With the relevance of this agreement and the growing expectations for offshore renewable business, EDPR Group decided to change the way it controls these investments, changing the presentation of results with Joint Ventures and Associate companies in Consolidated Income Statement. Previously to this change, EDPR Group presented a caption in Consolidated Income Statement, in which reflected only the results with Joint Ventures and Associates, being the results from acquisitons or disposals recorded as financial income or expenses. With this change, and considering the interests of Joint Ventures and Associates, and in special the referred vehicle for offshore wind activity, are an extension of EDPR Group operating activity, through which conducts its operation and strategy, EDPR Group starts including after the other operation income and costs caption, a single caption related to Joint Ventures and Associates, integrating the results from this companies as well the results from acquisitions and/or disposals in these investments. This criteria has also been applied to 2019 figures. B) Basis of consolidation The accompanying consolidated financial statements reflect the assets, liabilities and results of EDP Renováveis, S.A. and its subsidiaries and the equity and results attributable to the Group, through the investments in associates and jointly controlled entities. EDPR Group applies prospectively as from 1 January 2010, IFRS 3 (revised) for the accounting of business combinations. Controlled entities Investments in subsidiaries where the Group has control are fully consolidated from the date the Group assumes control over their financial and operating activities until the moment that control ceases to exist. 30 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee, independently of the percentage of voting rights held. Accumulated losses are attributed to non-controlling interests in the corresponding proportions held, implying that the Group can recognise negative non-controlling interests. On a step acquisition process resulting in the acquisition of control the revaluation of any interest previously held is booked against the income statement. On a partial disposal resulting in loss of control over a subsidiary, any participation retained is revalued at market value on the sale date and the gain or loss resulting from this revaluation is booked against the income statement, as well as any gain or loss resulting from the disposal. Jointly controlled entities The Group classifies an arrangement as a joint arrangement when the jointly control is contractually established. Joint control exists only when decisions about the relevant activities require the unanimous consent of the parties that collectively control the arrangement. After determining the existence of joint control, the Group classifies joint arrangements into two types - joint operations or joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement, so the assets and liabilities (and related revenues and expenses) in relation to its interest in the arrangement are recognised and measured in accordance with relevant IFRSs applicable. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement, so this investment shall be included in the consolidated financial statements under the equity method. The consolidated financial statements include the Group's attributable share of total reserves and profits or losses of joint ventures, included in the consolidated financial statements under the equity method. When the Group’s share of losses exceeds its interest in a jointly controlled entity, the Group's carrying amount is reduced to zero and recognition of further losses is discontinued, except to the extent that the Group has a legal or constructive obligation to cover such losses on behalf of that entity. Entities over which the Group has significant influence Investments in associates are included in the consolidated financial statements under the equity method from the date the Group acquires significant influence to the date it ceases. Associates are entities over which the Group has significant influence, but not control, over its financial and operating policies. The existence of significant influence by the Group is usually evidenced by one or more of the following: • Representation on the Executive Board of Directors or equivalent governing body of the investee • Participation in policy-making processes, including participation in decisions about dividends and other distributions • Existence of material transactions between the Group and the investee • Interchange of managerial personnel • Provision of essential technical information. 31 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The consolidated financial statements include the Group's attributable share of total reserves and profits or losses of associates, included in the co nsolidated financial statements under the equity method. When the Group’s share of losses exceeds its interest in an associate, the Group's carrying amount is reduced to zero and recognition of further losses is discontinued, except to the extent that the Group has a legal or constructive obligation to cover such losses on behalf of the associate. Accounting for investments in subsidiaries and associates in the company's financial statements Investments in subsidiaries and associates not classified as held for sale or not included in a disposal group which is classified as held for sale are accounted for at cost in the company's financial statements, and are subject to periodic impairment tests, whenever indication exists that certain financial investment may be impaired. Business combination From 1 January 2010 the Group has applied IFRS 3 Business Combinations (2008) in accounting for business combinations. Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group. Control is the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, the Group takes into consideration potential voting rights that currently are exercisable. Acquisitions on or after 1 January 2010 For acquisitions on or after 1 January 2010, the Group measures goodwill at the acquisition date as: • The fair value of the consideration transferred; plus • The recognised amount of any non-controlling interests in the acquiree; plus • If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less • The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss. Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classified as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in profit or loss. After that period, adjustments to initial measurement are only made to correct an error. Acquisitions between 1 January 2004 and 1 January 2010 For acquisitions between 1 January 2004 and 1 January 2010, goodwill represents the excess of the cost of the acquisition over the Group’s interest in the recognised amount (generally fair value) of the identifiable assets, liabilities and conting ent liabilities of the acquire. When the excess was negative, a bargain purchase gain was recognised immediately in profit or loss. 32 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurred in connection with business combinations were capitalised as part of the cost of the acquisition. Accounting for acquisitions of non-controlling interests From 1 January 2010, acquisitions of non-controlling interests are accounted for as transactions with owners in their capacity as owners and therefore no goodwill is recognised as a result of such transactions. The adjustments to non- controlling interests are based on a proportionate amount of the net assets of the subsidiary. Previously, goodwill was recognised on the acquisition of non-controlling interests in a subsidiary, which represented the excess of the cost of the additional investment over the carrying amount of the interest in the net assets acquired at the date of the transaction. Business combinations achieved in stages In a business combination achieved in stages, on the date of obtaining control, the excess of the aggregate of (i) the consideration transferred, (ii) the amount of any non-controlling interest recognised in the acquiree and (iii) the fair value of the previously held equity interest in the acquired business; over the net of amounts of the identifiable assets acquired and liabilities assumed, is recognised as goodwill. If applicable, the negative difference, after evaluating the consideration transferred, of the amount of any non-controlling interest recognised in the acquiree and the fair value of the previously held equity interest in the acquired business; over the net value of the identifiable assets acquired and liabilities assumed, is recognised in the income statement. The Group recognises the difference between the fair value of the previously held equity interest in the acquired business and the carrying value in consolidated results in Other income. Additionally, the Group reclassifies the deferred amounts in other comprehensive income relating to the previously held equity interest to the income statement or consolidated reserves, according to their nature. Investments in foreign operations The financial statements of the foreign subsidiaries and associates of the Group are prepared using their functional currency, defined as the currency of the primary economic environment in which they operate. In the consolidation process, the assets and liabilities of foreign subsidiaries are translated into Euros at the official exchange rate at the balance sheet date. Regarding the investments in foreign operations that are consolidated using the full consolidation method and equity method, the exchange differences between the amount of equity expressed in Euros at the beginning of the period and the amount translated at the official exchange rates at the end of the period, on a consolidated basis, are booked against reserves. Foreign currency goodwill arising on the acquisition of these investments is remeasured at the official exchange rate at the balance sheet date directly against reserves. The income and expenses of foreign subsidiaries are translated into Euros at the approximate exchange rates at the dates of the transactions. Exchange differences from the translation into Euros of the net profit for the period, arising from the differences between the rates used in the income statement and those prevailing at the balance sheet date are recognised in reserves. On disposal of a foreign subsidiary, the related exchange differences previously recognised in reserves, are accounted for in the income statement. 33 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Balances and transactions eliminated on consolidation Inter-company balances and transactions, including any unrealised gains and losses on transactions between group companies, are eliminated in preparing the consolidated financial statements. Unrealised gains and losses arising from transactions with associates and jointly controlled entities are eliminated to the extent of the Group's interest in those entities. Common control transactions The accounting for transactions among entities under common control is excluded from IFRS 3. Consequently, in the absence of specific guidance, within IFRSs, the EDP Renováveis Group has developed an accounting policy for such transactions, as considered appropriate. According to the Group's policy, business combinations among entities under common control are accounted for in the consolidated financial statements using the EDP consolidated book values of the acquired company (subgroup). The difference between the carrying amount of the net assets received and the consideration paid, is recognised in equity. Put options related to non-controlling interests EDP Renováveis Group records written put options at the date of acquisition of a business combination or at a subsequent date as an advance acquisition of these interests, recording a financial liability for the present value of the best estimate of the amount payable, irrespective of the estimated probability that the options will be exercised. The difference between this amount and the amount corresponding to the percentage of the interests held in the identifiable net assets acquired is recorded as goodwill. Until 31 December 2009, in years subsequent to initial recognition, the changes in the liability due to the effect of the financial discount are recognised as a financial expense in the consolidated income statement, and the remaining changes are recognised as an adjustment to the cost of the business combination. Where applicable, dividends paid to minority shareholders up to the date the options are exercised are also recorded as adjustments to the cost of the business combination. In the event that the options are not exercised, the transaction would be recorded as a sale of interests to minority shareholders. As from January 2010, the Group applies IAS 27 (2008) to new put options related to non-controlling interests and, therefore, subsequent changes in the carrying amount of the put liability are recognised in profit or loss. Disposal of subsidiaries When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount of the investment recognised in profit or loss. Fair value is the initial carrying amount for the purposes of the subsequent recording of the interest retained in the associate, joint venture or financial asset. In addition to that, any amount previously recorded in other comprehensive income in relation to that entity is recorded as if the Group had directly sold all the related assets and liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. If the ownership of a holding in an associate is reduced but significant influence is retained, only the proportional part of the amounts previously recognised in other comprehensive income will be reclassified to the income statement. C) Foreign currency transactions Foreign currency transactions are translated at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currency are translated into Euros at the exchange rates at the balance sheet date. These exchange differences arising on translation are recognised in the income statement as financial results. 34 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Foreign currency non-monetary assets and liabilities accounted for at historical cost are translated using the exchange rates at the dates of the transactions. Foreign currency non-monetary assets and liabilities stated at fair value are translated into Euros at the exchange rates at the dates the fair value was determined. D) Derivative financial instruments and hedge accounting Derivative financial instruments are recognised on the trade date at fair value. Subsequently, the fair value of derivative financial instruments is re-measured on a regular basis, being the gains or losses on re-measurement recognised directly in the income statement, except for derivatives designated as hedging instruments. The recognition of the resulting gains or losses on re-measurement of the derivatives designated as hedging instruments depends on the nature of the risk being hedged and of the hedge model used. The fair value of derivative financial instruments corresponds to their market value, if available, or to quotes indicated by external entities through the use of valuation techniques, which are compared in each date of report to fair values available in common financial information platforms. Hedge accounting The Group uses financial instruments to hedge interest rate risk, exchange rate risk and price risk resulting from its operational and financing activities. Derivatives not qualified for hedge accounting under IFRS 9 are accounted for as trading instruments. Hedging derivatives are recorded at fair value, being the gains and losses recognised in accordance with the hedge accounting model applied by the Group. Hedge relationship exists when: i) The hedging relationship consists only hedging instruments and hedged items that are eligible as per determined in IFRS 9; ii) At the inception of the hedge there is formal documentation of the hedging relationship and the Group's risk management objective and strategy for the hedge; iii) There is an economic relationship between the hedged item and the hedging instrument; iv) The effect of credit risk does not dominate the value changes that result from that economic relationship; v) The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. Fair value hedge Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged assets and liabilities or group of hedged assets and liabilities that are attributable to the hedged risk. When the hedging relationship ceases to comply with the requirements for hedge accounting, the accumulated gains or losses concerning the fair value of the risk being hedged are amortised over the residual period to maturity of the hedged item. Cash flow hedge Changes in the fair value of derivatives qualified as cash flow hedges are recognised in reserves. The cumulative gains or losses recognised in reserves are reclassified to the income statement when the hedged item affects the income statement. 35 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 When a hedging relation of a future transaction is discontinued, the changes in the fair value of derivative recognised in reserves remain recognised in reserves until the future hedged transaction occurs. When the future transaction is no longer expected to occur, the cumulative gains or losses recognized in reserves are recorded immediately in the income statement. Net investment hedge The net investment hedge model is applied on a consolidated basis to investments in subsidiaries in foreign currencies. This model allows that the exchange differences recognised in the currency translation reserve to be offset by the foreign exchange differences in foreign currency loans or currency derivatives contracted, recognised in Currency translation reserve - Net investment hedge. For cross currency interest rate swaps, the cross-currency basis spread and forward points are not designated into the hedge relationship, but deferred as a hedging cost in other comprehensive income, in Currency translation reserve - Net investment hedge - Cost of hedging, and recognized in profit or loss over the period of the hedge. The ineffective portion of the hedging relationship is recognised in the income statement. The accumulated foreign exchange gains and losses regarding the net investment and the related hedging instrument recognised in equity are transferred to the income statement when the foreign currency subsidiary is sold, as part of the gain or loss resulting from the disposal. Effectiveness For a hedge relationship to be classified as such, in accordance with IFRS 9, its effectiveness must be demonstrated. Therefore, the Group performs prospective tests at the inception date and at each balance sheet date, in order to demonstrate its effectiveness, showing that any adjustments to the fair value of the hedged item attributable to the risk being hedged are offset by adjustments to the fair value of the hedging instrument. Any ineffectiveness is recognised in the income statement when it occurs. E) Other financial assets IFRS 9 introduced a model for the classification of financial assets based on the business model for managing the financial assets ("business model test") and their contractual cash flow characteristics ("SPPI test"), replacing prior requirements which determined the classification in the categories present in IAS 39. EDPR Group classifies its financial assets, at the initial recognition, in accordance with the aforementioned requirements introduced by IFRS 9, on the following categories: Financial assets at amortised cost A financial asset is measured at amortised cost if: (i) it is held within a business model whose objective is to hold assets in order to collect its contractual cash flows; and (ii) the contractual cash flows represent solely payments of principal and interest. Financial assets included within this category are initially recognised at fair value and subsequently measured at amortised cost. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss. Loans and trade receivables are generally held to collect contractual cash flows and are expected to give rise to cash flows representing solely payments of principal and interest, thus they meet the criteria for amortised cost measurement under IFRS 9. Financial assets measured at fair value through other comprehensive income (FVOCI) A financial asset is measured at fair value through other comprehensive income if (i) the objective of the business model is a chieved by both collecting contractual cash flows and selling financial assets; and (ii) the asset’s contractual cash flows represent solely payments of principal and interest. Financial assets included within this category are initially recognised and subsequently measured at fair value, with the changes in the carrying amount booked in other comprehensive income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses, which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in other comprehensive income is reclassified to profit or loss. 36 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Financial assets at fair value through profit or loss (FVTPL) Financial assets that do not meet the criteria to be classified as financial assets at fair value through other comprehensive income (FVOCI) or at amortised cost, are classified at fair value through profit or loss, deemed to be a residual category under IFRS 9. Regardless of the business model assessment, EDPR Group can elect to classify a financial asset at fair value through profit or loss if doing so reduces or eliminates a measurement or recognition inconsistency (“accounting mismatch”). Changes in the business model assessment over time Financial assets are not reclassified subsequent to their initial recognition. However, if the Company changes its business model for managing financial assets, it will classify newly originated or newly purchased financial assets under the new business model but will keep the classification of existing assets under the previous business model. Recognition and derecognition of financial assets Purchases and sales of financial assets are recognised on the trade date, which is the date on which the Company commits to purchase or sell these financial assets. Financial assets are derecognised when: (i) the contractual rights to receive their future cash flows have expired, (ii) the Company has transferred substantially the risks and rewards of ownership, or (iii) although retaining some, but not substantially all the risks and rewards of ownership, the Company has transferred control over the assets. Impairment EDPR Group recognise an impairment loss based on the Expected Credit Loss (ECL) model, before the objective evidence of a loss event from past actions. This model is the basis for the recognition of impairment losses on held financial assets that are measured at amortised cost or at fair value through other comprehensive income (which includes cash and cash equivalents, trade receivables, loans and debt securities). The impairment methodology applied depends on whether there has been a significant increase in credit risk. If the credit risk on a financial asset does not increase significantly since its initial recognition, EDPR Group measures the loss allowance for that financial asset at an amount equal to 12-month expected credit losses. If the credit risk increases significantly since its initial recognition, EDPR Group measures the loss allowance for that financial asset at an amount equal to lifetime expected credit losses. Regardless of the above, a significant increase in credit risk is presumed if there is an objective evidence that the financial asset is impaired, including if there is observable data that comes to the attention of the holder of the asset about the following loss events, among others: significant financial difficulty of the issuer or obligor; restructuring of an amount due to the Company in terms that it would not consider otherwise; a breach of contract, such as a default or delinquency in interest or principal payments; or it becoming probable that the borrower will enter bankruptcy or other financial reorganization. As soon as the loss event occurs (what is previous defined in IAS 39 as "objective evidence of impairment"), the impairment allowance would be allocated directly to financial asset affected, which provide the same accounting treatment, from that point, as previously provided by IAS 39, including the treatment of interest revenue. The asset’s carrying amount is reduced and the amount of the loss is recognised in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases, the previously recognised impairment loss is reversed in profit or loss, if the decrease can be related objectively to an event occurring after the impairment loss was recognised. 37 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Trade receivables and loans EDPR Group applies the simplified approach and record lifetime expected losses on all trade receivables including those with a significant financing component. The estimated ECL are calculated based on actual credit loss experience over a period that, per business and type of customers, is considered statistically relevant and representative of the specific characteristics of the underlying credit risk. Considering the particularities of each business, exposures are segmented based on common credit risk characteristics such as credit risk grade, geographic region and/or industry. Actual credit loss experience is adjusted by scalar factors to reflect differences between economic conditions during the period over which historical data was collect, current conditions and EDPR Group's view of economic conditions over the expected lives of the receivables. For loans carried at FVOCI, EDPR Group performs an analysis based on the general approach. On making its assessment, the company has to make assumptions about risk of default and expected loss rates, which requires judgement. The inputs used for risk assessment and for calculation of the loss allowances for financial assets includes: (i) credit ratings (as far as available) from external credit rating companies such as Standard and Poor, Moody’s and Fitch.; (ii) significant changes in the expected performance and behavior of the borrower, including changes in the payment status of borrowers in the Group and changes in the operating results of the borrower; (iii) Public market data, namely on probabilities of default and loss given default expectations; and (iv) macroeconomic information (such as market interest rates or growth rates). F) Trade payables and other liabilities An instrument is classified as a financial liability when there is a contractual obligation for the issuer to liquidate capital and/or interests, through delivering cash or other financial asset, regardless of its legal form. Financial liabilities are recognised at the issuance date (trade date): (i) initially at fair value less transaction costs; and (ii) subsequently at amortised cost, using the effective interest method. All financial liabilities are booked at amortised cost, with the exception of the financial liabilities hedged at fair value hedge, which are stated at fair value on risk component that is being hedged. Initial measurement of lease liabilities (rents due from lease contracts) As provided by IFRS 16, as from 1 January 2019 EDPR Group measures the lease liability (rents due from lease contracts) on the commencement date based on the present value of the future payments of that lease contracts, discounted using EDPR Group's incremental borrowing rate for each portfolio of leases identified. EDPR Group determines the lease term as the non ‐ cancellable period of a lease, together with both: (i) periods covered by an option to extend the lease, if the lessee is reasonably certain to exercise that option; and (ii) periods covered by an option to terminate the lease, if the lessee is reasonably certain not to exercise that option. EDPR Group applies the recognition exemption provided by IFRS 16 for the leases which lease term is 12 months or less, or that are for a low-value asset. After the commencement date, the lease liability (rents due from lease contracts) are increased to reflect interest on the liability and reduced to reflect the lease payments made. Remeasurement of the lease liabilities (rents due from lease contracts) EDPR Group remeasure the lease liability (rents due from lease contracts), and adjusts the corresponding right-of-use assets, by discounting the revised lease payments, using an unchanged discount rate, if either: • There is a change in future lease payments resulting from a change in an index or a rate used to determine those payments; or • There is a change in the amounts expected to be payable under a residual value guarantee. 38 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 If there is a lease modification that do not qualifies to be accounted as a separate lease, EDPR Group remeasures the lease liability (rents due from lease contracts) and adjusts the corresponding right-of-use assets by discounting the revised lease payments, using a revised discount rate at the effective date of the modification. The variable lease payments that do not depend in an index or a rate are not included in the measurement of the liability regarding the rents due from lease contracts, nor the right-of-use asset. Those payments are recognised as cost in the period in which the event or condition that gives rise to the payments occurs. Derecognition EDPR Group derecognises a financial liability (or a part of a financial liability) from its statement of financial position when, and only when, the obligation specified in the contract is discharged or cancelled or expires. An exchange between an existing borrower and lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability, or a part of it, is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of a financial liability (or part of a financial liability) extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. G) Equity instruments A financial instrument is classified as an equity instrument when there is no contractual obligation at settlement to deliver cash or other financial asset to another entity, regardless of its legal form, and there is a residual interest in the assets of an entity after deducting all its liabilities. Costs directly attributable to the issuance of equity instruments are recognised in equity, as a deduction to the amount issued. Amounts paid or received relating to sales or acquisitions of equity instruments are recognised in equity, net of transaction costs. Distributions related to equity instruments are deducted from equity, as dividends, when declared. Equity instruments at fair value EDPR Group classifies the equity instruments that are held for trading at fair value to profit or loss. For all other equity instruments, management has the ability to make an irrevocable election on initial recognition, on an instrument-by- instrument basis, to present changes in fair value in other comprehensive income. If this election is made, all fair value changes, excluding dividends that are a return on investment, will be included in other comprehensive income. There is no recycling of amounts from other comprehensive income to profit and loss (for example, on sale of an equity investment) being, at that time, transferred to retained earnings. H) Borrowing costs Borrowing costs that are directly attributable to the acquisition or construction of assets are capitalised as part of the cost of the assets. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. To the extent that funds are borrowed generally, the amount of borrowing costs eligible for capitalisation are determined by applying a capitalisation rate to the expenditures on these assets. The capitalisation rate corresponds to the weighted average of the borrowing costs applicable to the borrowings of the enterprise that are outstanding during the period, other than borrowings made specifically for the purpose of obtaining a qualifying asset. The amount of borrowing costs capitalised during a period does not exceed the amount of borrowing costs incurred during the period. 39 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The capitalisation of borrowing costs commences when expenditures for the asset are being incurred, borrowing costs have been incurred and activities necessary to prepare all or part of the assets for their intended use or sale are in progress. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying assets for their intended use or sale are completed. Capitalisation of borrowing costs shall be suspended during extended periods in which active development is interrupted. I) Property, plant and equipment Property, plant and equipment are stated at acquisition cost less accumulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. In case of projects in a development stage, costs are only capitalized when it is probable that the project will be finally built. If due to changes in regulation or other circumstances costs capitalized are derecognized from property plant and equipment, they are recognized in the profit and loss caption of “Other expenses”. Replacements or renewals of complete items are recognized as increases in the value of propert y, plant and equipment and the items replaced or renewed are derecognized and recognized in the “Other expenses” caption. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Cost also may include transfers from equity of any gain or loss on qualifying cash flow hedges of foreign currency purchases of property, plant and equipment. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. The cost of acquisition includes interest on external financing and personnel costs and other internal expenses directly or indirectly related to work in progress accrued solely during the period of construction. The cost of production is capitalised by charging costs attributable to the asset as own work capitalised under financial expenses and personnel costs and employee benefit expense in the consolidated income statement. Subsequent costs are recognised as separate assets only when it is probable that future economic benefits associated with the item will flow to the Group. Repair and maintenance costs are charged to the income statement during the financial period in which they are incurred. The Group assesses assets impairment, whenever events or circumstances may indicate that the book value of the asset exceeds its recoverable amount and, at least, anually, being the impairment recognised in the income statement. Land is not depreciated. Depreciation on the other assets is calculated using the straight-line method over their estimated useful lives, as follows: NUMBER OF YEARS Buildings and other constructions 8 to 40 Plant and machinery: - Renewable assets 30 to 35 - Other plant and machinery 4 to 12 Transport equipment 3 to 5 Office equipment and tools 2 to 10 Other tangible fixed assets 3 to 10 J) Intangible assets The Group´s intangible assets are booked at acquisition cost less accumulated amortisation and impairment losses. The Group does not own intangible assets with indefinite lives. 40 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The Group performs impairment tests, whenever events or circumstances may indicate that the book value of the asset exceeds its recoverable amount, being any impairment recognised in the income statement. Acquisition and development of software Acquired computer software licenses are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs are amortised on the basis of their expected useful lives. Costs that are directly associated with the development of identifiable specific software applications by the Group, and that will probably generate economic benefits beyond one year, are recognised as intangible assets. These costs include employee costs directly associated with the development of the referred software and are amortised using the straight-line method during their expected useful lives. Maintenance costs of software are charged to the income statement when incurred. Industrial property and other rights The amortisation of industrial property and other rights is calculated using the straight-line method for an expected useful live expected of less than 6 years. Green Certificates In some jurisdictions, on top of the market price, generators receive certificates (GCs) for their performance, which are sold to the off-takers obliged to fulfil a quota obligation (a share of energy that must be sourced from renewable sources). Being these certificates considered subsidies under IAS 20 they are recognised when generated as intangible assets at fair market value. The intangible assets registered will be discharged at the time of their effective sale and difference between the selling price and the fair value of the GCs will be registered in the profit and loss account. Power purchase agreements Acquired Power Purchase Agreements (PPAs) are booked as intangible assets and amortised using the straight-line method according with the duration of the contract. K) Leases/ Right-of-use assets EDPR Group has adopted IFRS 16 and therefore presents the information related to lease contracts in the caption Right-of- use assets, creating a separate line in the Consolidated Statement of Financial Position. These assets are accounted for at cost less accumulated depreciation and impairment losses. The cost of these assets comprises the initial costs and the initial measurement of the liabilities regarding the rents due from lease contracts, deducted from the prepaid amounts and any incentives received. Depreciation of right-of-use assets is calculated on a straight-line basis over their estimated useful lives, considering the lease contract terms. Remeasurement of right-of-use assets If EDPR Group remeasures the lease liability (rents due from lease contracts) (see f), the corresponding right-of-use assets shall be adjusted accordingly. L) Non-current assets held for sale and discontinued operations Non-current assets or groups of non-current assets held for sale (groups of assets and related liabilities that include at least one noncurrent asset) are classified as held for sale when their carrying amounts will be recovered mainly through sale, the assets or groups of assets are available for immediate sale and the sale is highly probable. 41 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The Group also classifies as non-current assets held for sale, non-current assets or groups of assets acquired exclusively for its subsequent resale, that are available for immediate sale and the sale is highly probable. Prior to their classification as held for sale, the measurement of all non-current assets and all assets and liabilities included in a disposal group, is adjusted in accordance with the applicable IFRS standards. Subsequently, these assets or disposal groups are measured at the lowest between their carrying amount and fair value less costs to sell. M) Impairment of non-financial assets The carrying amounts of the Group's non-financial assets, other than inventories and deferred tax assets, are reviewed to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is then estimated. The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the cash-generating unit). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash- generating units which are expected to benefit from the synergies of the combination. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro-rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in circumstances that caused the impairment. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. N) Inventories Inventories are measured at the lower of the acquisition cost and net realisable value. The cost of inventories includes purchases, conversion and other costs incurred in bringing the inventories to their present location and condition. The net realisable value is the estimated selling price in the ordinary course of business less the estimated selling costs. The cost of inventories is assigned by using the weighted average method. O) Classification of assets and liabilities as current and non-current The Group classifies assets and liabilities in the consolidated statement of financial position as current and non-current. 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 Group ’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 Group’s normal operating cycle, they are he ld primarily for the purpose of trading, they are due to be settled within twelve months of the balance sheet date or the Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. 42 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Financial liabilities are classified as current when they are due to be settled within twelve months after the reporting period, 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 reporting period and before the consolidated financial statements are authorised for issue. P) Provisions Provisions are recognised when: (i) the Group has a present legal or constructive obligation, (ii) it is probable that settlement will be required in the future and (iii) a reliable estimate of the obligation can be made. Dismantling and decommissioning provisions The Group recognises dismantling and decommissioning provisions for property, plant and equipment when a legal or contractual obligation is settled to dismantling and decommissioning those assets at the end of their useful life. Consequently, the Group has booked provisions for property, plant and equipment related with renewables assets, for the expected cost of restoring sites and land to its original condition. The provisions correspond to the present value of the expenditure expected to be required to settle the obligation and are recognised as part of the initial cost or an adjustment to the cost of the respective asset, being depreciated on a straight-line basis over the asset useful life. Discounting and inflation rates used for 2020 are: EUROPE NORTH AMERICA BRAZIL Discount Rate [0.00% - 4.04%] [0.13% - 1.45%] [2.79% - 7.64%] Inflation Rate [0.60% - 2.85%] [2.00% - 3.50%] [3.76% - 4.47%] Discounting and inflation rates used for 2019 were: EUROPE NORTH AMERICA BRAZIL Discount Rate [0.00% - 4.53%] [1.56% - 2.32%] [4.46% - 6.61%] Inflation Rate [0.85% - 3.90%] [2.00% - 3.75%] [4.37% - 5.72%] Decommissioning and dismantling provisions are remeasured on an annual basis based on the best estimate of the settlement amount and EDPR’s technical department performed an in-depth analysis taking into account the reality of the EDPR’s fleet. This analysis led to the conclusion that the average cost per megawatt and salvage value of the renewable assets required to be updated with effect December 2020 (see note 32). The unwinding of the discount at each balance sheet date is charged to the income statement. Tax liabilities Liabilities for payment of taxes or levies related to an activity of the Group are recognized as the activity which triggers the payment is carried out, according to the laws regulating such taxes or levies. However, in the cases of taxes or levies with right of reimbursement of the amount already paid proportionally to the period of time in which there is no activity or the asset which triggers the payment is no longer owned, liabilities are recognized on a proportional basis. Q) Recognition of revenue from contracts with customers EDPR Group recognises revenue in accordance with the core principle introduced by IFRS 15. Thus, the Group recognises revenue to depict the transfer of control of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for these goods or services, as provided in the 5 steps methodology, namely: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to performance obligations; and (v) recognise revenue when (or as) the entity satisfies a performance obligation. 43 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Costs and revenues are recorded in the year to which they refer regardless of when paid or received, in accordance with the accrual basis. Differences between amounts received and paid and the corresponding revenue and cost are recorded under Other assets and Other liabilities. Revenue in EDPR Group arises essentially from electricity generation. The transfer of control occurs when the energy is generated and injected into the transport/distribution grids. The electricity generated is sold under free market conditions or through the establishment of medium/long term power purchase agreements. In what concerns variable transaction prices, EDPR Group only recognises revenue when it is highly probable that there will not be any significant reversal of the recognised revenue, when it becomes certaint. IFRS 15 requires that this estimate of variable transaction prices is determined using either (i) the expected value method – based on probability-weighted amounts, or (ii) the most likely outcome method. EDPR Group considers the facts and circumstances when analyzing the terms of each contract with customers, applying the requirements that determine the recognition and measurement of revenue in a harmonized manner, when considering contracts with the same characteristics and in similar circumstances. R) Financial results Financial results include interest costs on borrowings, interest income on funds invested, dividend income, foreign exchange gains and losses, realised gains and losses, changes in fair value of derivative financial instruments related to financing activity classified by the Group, within IFRS 9, as held for trading and consequently measured at fair value through profit or loss and changes in the fair value of hedged risks, when applicable. Interest is recognised in the income statement on an accrual basis. Dividend income is recognised on the date the right to receive is established. Considering the accounting model provided by IFRS 16, as from 1 January 2019 the financial results start to include the interest expenses (unwinding) calculated on the liabilities regarding the rents due from lease contracts. S) Income tax Income tax recognised in the income statement includes current and deferred tax. Income tax is recognised in the income statement except to the extent that it relates to items recognised directly in equity, in which case it is also recognised in equity. Deferred taxes arising from the revaluation of assets measured at fair value through other comprehensive income and cash flow hedge derivatives recognised in equity are recognised in the income statement in the period the results that originated the deferred taxes are recognised. Current tax is the tax expected to be paid on the taxable income for the period, using tax rates enacted at the statement of financial position date and any adjustment to tax payable in respect of previous years. Deferred taxes are calculated in accordance with the balance sheet liability method, considering temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax basis, using the tax rates enacted or substantively enacted at the balance sheet date for each jurisdiction and that are expected to be applied when the temporary differences are reversed. Deferred tax liabilities are recognised for all taxable temporary differences except for goodwill not deductible for tax purposes, differences arising on initial recognition of assets and liabilities that affect neither accounting nor taxable profit and differences relating to investments in subsidiaries, to the extent that these will probably not be reversed in the future. Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available to absorb deductible temporary differences for taxation purposes. 44 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The Group offsets, as established in IAS 12, the deferred tax assets and liabilities if, and only if: i) the entity has a legally enforceable right to offset current tax assets against current tax liabilities; and ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in future periods in which deferred tax liabilities or assets are expected to be settled or recovered. When accounting for interest and penalties related to income taxes, EDPR Group considers whether a particular amount payable or receivable is, in its nature, a taxable income and, if so, applies IAS 12 to this amount. Otherwise, IAS 37 is applied. T) Earnings per share Basic earnings per share are calculated by dividing the consolidated net profit attributable to equity holders of EDP Renováveis S.A. by the weighted average number of ordinary shares outstanding during the year, excluding the average number of ordinary shares purchased by the Group and held as treasury stock. For the diluted earnings per share calculation, the weighted average number of ordinary shares outstanding is adjusted to consider conversion of all dilutive potential ordinary shares, such as convertible debt and stock options granted to employees. The dilution effect corresponds to a decrease in earnings per share resulting from the assumption that the convertible instruments are converted or the options granted are exercised U) Cash and cash equivalents Cash and cash equivalents include balances with maturity of less than three months from the date of acquisition, including cash and deposits in banks. This caption also includes other short-term, highly liquid investments that are readily convertible to known amounts of cash and specific demand deposits in relation to institutional partnerships that are funds required to be held in escrow sufficient to pay the remaining construction related costs of projects in institutional equity partnerships in U.S.A., in the next twelve months. The Group classifies as cash and cash equivalents the balance of the current accounts with EDP Group formalized under cash-pooling agreements. V) Government grants Government grants are recognised initially as deferred income under non-current liabilities when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant. Grants that compensate the Group for expenses incurred are recognised in profit or loss on a systematic basis in the same periods in which the expenses are recognised. W) Environmental issues The Group takes measures to prevent, reduce or repair the damage caused to the environment by its activities. Expenses derived from environmental activities are recognised as other operating expenses in the period in which they are incurred. X) Institutional partnerships in U.S. wind farms The Group has entered in several partnerships with institutional investors in the United States, through limited liability Company operating agreements that apportion the cash flows generated by the wind farms between the investors and the Company and allocates the tax benefits, which include Production Tax Credits (PTCs), Investment Tax Credits (ITCs) and accelerated depreciation, largely to the investor. 45 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The institutional investors purchase their minority partnership interests for an upfront cash payment with an agreed targeted internal rate of return over the period that the tax credits are generated. This anticipated return is computed based on the total anticipated benefit that the institutional investors will receive and includes the value of PTCs / ITCs, allocated taxable income or loss and cash distributions received. The control and management of these wind farms are a responsibility of EDPR Group and they are fully consolidated in these financial statements. The financial instruments held by the institutional investors issued by the partnerships represent compound financial instruments as they contain characteristics of both financial liabilities and equity. The Group has determined that at the funding dates, the fair values of the original proceeds is equal to the fair values of the liabilities at that time and no value was assigned to the equity component. Subsequently, these liabilities are measured at amortized cost. This liability is reduced by the value of tax benefits provided and cash distributions made to the institutional investors during the contracted period. The value of the tax benefits delivered, primarily accelerated depreciation and ITC are recognized as Income from institutional partnerships on a pro-rata basis over the useful life of the underlying projects (see note 8). The value of the PTCs delivered are recorded as generated. This liability is increased by an interest accrual that is based on the outstanding liability balance and the targeted internal rate of return agreed. After the Flip Date, the institutional investor retains a non-significant interest for the duration of the structure. This non- controlling interest is entitled to distributions ranging from 2.5% to 10% and taxable income allocations ranging from 5% to 10%. EDPR NA has an option to purchase the institutional investor’s residual interest at fair market value during a defined period following the flip date. This amount is reclassified from the total equity attributable to the Parent to non- controlling interests caption in the period in which the flip date takes place. Y) Statement of Cash Flow The Statement of Cash Flow is presented under the direct method, by which gross cash flows from operating, financing and investing activities are disclosed. The Group classifies cash flows related to interest and dividends paid as financing activities and interest and dividends received as investing activities. 03. Recent accounting standards and interpretations issued Standards, amendments and interpretations issued effective for the Group The amendments to standards already issued and effective and that the Group applied in the preparation of its financial statements, can be analysed as follows: • Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) The amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7) have been issued by International Accounting Standards Board (IASB) in September 2019 and endorsed by the EU on January 15, 2020, and became effective as of 1 January 2020 and must be applied retrospectively. The amendments clarify that entities would continue to apply certain hedge accounting requirements assuming that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging instrument are based will not be altered as a result of interest rate benchmark reform. The amendments for IFRS 9 include a number of reliefs that apply to all hedging relationships of interest rate risk that are affected by interest rate benchmark reform. The reliefs are intended to be narrow in their effect. Accordingly, entities will cease to apply the relief when the earlier of the following occurs: (i) uncertainty regarding timing and amount of the resulting cash flows is no longer present; or (ii) hedging relationship terminates. 46 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The EDPR Group adopted, retroactively, the requirements of IBOR Reform to the existing hedging relationships on 1 January 2020 and to those that were subsequently designated, and that are directly affected. In particular, a hedge relationship is considered to be directly affected if the respective reform creates uncertainty regarding: (i) The reference interest rate designated in a hedge relationship to hedge a given risk or, (ii) The term or amount of the flows associated with the reference interest rate of the hedged item or the hedged instrument. The reform will impact fair value measurement, the effects of hedge accounting and the net financial results when the alternative rates are defined. As of 31 December 2020, no changes were made to the contracts with respect to IBOR Reform. The EDPR Group is monitoring the contractual relationships affected by IBOR Reform in order to minimize the uncertainty regarding the applicable interest rates and the timing of the flows associated with the reference interest rate. As of this date, no significant impacts are expected. The new standards that have been issued and that are already effective and that the Group has applied on its financial statements, with no significant impacts are the following: • IAS 1 (Amended) and IAS 8 (Amended) - Definition of material • IFRS 3 (Amended) - Definition of a business; • Amendments to References to the Conceptual Framework in IFRS; and • IFRS 16 (Amended) - Covid 19 - Related Rent Concessions. Standards, amendments and interpretations issued but not yet effective for the Group The standards, amendments and interpretations issued but not yet effective for the Group (whose effective application date has not yet occurred or, despite their effective dates of application, they have not yet been endorsed by the UE) are the following: • IFRS 17 - Insurance Contracts • IAS 1 (Amended) - Classification of Liabilities as Current or Non-current; • IFRS 3 (Amended) - Reference to the Conceptual Framework; • IAS 16 (Amended) - Proceeds before Intended Use; • IAS 37 (Amended) - Onerous Contracts – Cost of Fulfilling a Contract; • Annual Improvement Project (2018-2020); • IFRS 4 (Amended) - Deferral of effective dates to apply two optional solutions (temporary exemption from IFRS 9 and overlay approach); and • Amendments to IFRS 9, IFRS 7, IFRS 4 and IFRS 16 - Interest Rate Benchmark Reform (Phase 2). 04. Critical accounting estimates and judgments in applying accounting policies The IFRS set forth a range of accounting treatments and require the Board of Directors to apply judgment and make estimates in deciding which treatment is most appropriate. The main accounting estimates and judgements used in applying the accounting policies are discussed in this note in order to improve the understanding of how their application affects the Group’s reported results and disclosures. A broad er description of the accounting policies employed by the Group is disclosed in note 2 to the Consolidated Financial Statements. 47 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Although estimates are calculated by the Board of Directors based on the best information available at 31 December 2020 and 2019, future events may require changes to these estimates in subsequent years. Any effect on the financial statements of adjustments to be made in subsequent years would be recognised prospectively. Considering that in many cases there are alternatives to th e accounting treatment adopted by EDP Renováveis, the Group’s reported results could differ if a different treatment was chosen. EDP Renováveis believes that the choices made are appropriate and that the financial statements are presented fairly, in all ma terial respects, the Group’s financial position and results. The alternative outcomes discussed below are presented solely to assist the reader in understanding the financial statements and are not intended to suggest that other alternatives or estimates would be more appropriate. Measurement of the fair value of financial instruments Fair values are based on listed market prices, if available. Otherwise, fair value is determined either by the price of similar recent transactions under market conditions, or determined by external entities, or based on valuation methodologies, supported by discounting future cash flows techniques, considering market conditions, time value, yield curves and volatility factors. These methodologies may require the use of assumptions or judgements in determining fair values. Consequently, the use of different methodologies and different assumptions or judgements in applying a particular model, could generate different financial results from those reported. Additionally, financial instruments’ classification as debt or equity requires judgement in the interpretation of contractual clauses and in the evaluation of the existence of a contractual obligation to deliver cash or other financial assets. Review of the useful life of the assets The Group reviews periodically the reasonableness of the assets' useful lives that are used to determine the depreciation rates of assets assigned to the activity, and prospectively changes the depreciation charge of the year based on such review. Lease Liabilities (Rents due from lease contracts) With the adoption of IFRS 16, the Group recognises right-of-use assets (ROU assets) and lease liabilities (rents due from lease contracts), if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group assesses whether: i) the contract involves the use of an identified asset; ii) it has the right to obtain substantially all of the economic benefits from the use of the asset throughout the period of use; and iii) it has the right to direct the use of the asset. EDPR Group uses judgement on its assessment, namely concerning the termination and extension contract options and the determination of the incremental borrowing rate to be applied for each portfolio of leases identified. Impairment Impairment of long-term assets and Goodwill Impairment test are performed whenever there is an indication that the recoverable amount of property, plant, equipment and intangible assets is less than the corresponding net book value of assets. On an annual basis, the Group reviews the assumptions used to assess the existence of impairment in goodwill resulting from acquisitions of shares in subsidiaries. The assumptions used are sensitive to changes in macroeconomic indicators and business assumptions used by management. The net interest in associates is reviewed when circumstances indicate the existence of impairment. Considering the uncertainties regarding the recoverable amount of property, plant and equipment, intangible assets and goodwill as they are based on the best information available, changes in the assumptions could result in changes on the determination of the amount of impairment and, consequently, in results. 48 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Income taxes The Group is subject to income taxes in numerous jurisdictions. Certain interpretations and estimates are required in determining the global amount for income taxes. There are several transactions and calculations for which the ultimate tax determination is uncertain during the ordinary course of business. Different interpretations and estimates would result in a different level of income taxes, current and deferred, recognised in the period. Tax Authorities are entitled to review EDP Renováveis, and its subsidiaries’ determination of its annual taxable earnings, for a determined period that may be extended in case there are tax losses carried forward. Therefore, it is possible that some additional taxes may be assessed, mainly as a result of differences in interpretation of the tax law. However, the EDP Renováveis and its subsidiaries, do not anticipate any significant changes to the income tax booked in the financial statements. Dismantling and decommissioning provisions The Board of Directors considers that Group has contractual obligations with the dismantling and decommissioning of property, plant and equipment related to wind and solar electricity generation. For these responsibilities the Group has recorded provisions for the expected cost of restoring sites and land to its original condition. The provisions correspond to the present value of the expenditure expected to be required to settle the obligation. EDPR’ s technical department performed an in- depth analysis taking into account the reality of the EDPR’s fleet. This analysis led to the conclusion that the average cost per megawatt and salvage value of the renewable assets required to be updated, with effect December 2020 (see note 2.P and 32). The use of different assumptions in estimates and judgments referred may have produced different results from those that have been considered. Entities included in the consolidation perimeter In order to determine which entities must be included in the consolidation perimeter, the Group evaluates whether it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. This evaluation requires judgement, assumptions and estimates in order to conclude whether the Group is in fact exposed to variable returns and has the ability to affect those returns through its power over the investee. Other assumptions and judgments could lead to a different consolidation perimeter of the Group, with direct impact in the consolidated financial statements. Business combinations Under IFRS 3 (Business Combination) in a business combination, the acquirer shall recognise and measure in the consolidated financial statements the assets acquired and liabilities assumed at fair value at the acquisition date. The difference between the purchase price and the fair value of the assets and liabilities acquired leads to the recognition of goodwill or a gain from a purchase at a low price (bargain purchase). The fair value determination of the assets acquired and liabilities assumed is carried out internally or by independent external evaluators, using the discounted cash flows method, using the replacement cost or other fair value determination techniques, which rely on the use of assumptions including macroeconomic indicators such as inflation rates, interest rates, exchange rates, discount rates, sale and purchase prices of energy, cost of raw materials, production estimates, useful life and business projections. Consequently, the determination of the fair value and goodwill or gain from a purchase at a low price is subject to numerous assumptions and judgments and therefore changes could result in different impacts on results. 49 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Fair value measurement of contingent consideration Contingent consideration from a business combination or a sale of a financial investment is measured at fair value at the acquisition date as part of the business combination or at the date of the sale in the event of a sale of a financial investment. This contingent consideration is subsequently remeasured at fair value at each report date. Fair value is based on discounted cash flows. The main assumptions consider the probability of achieving each objective and the discount factor, corresponding to the best estimates of management at each report date. Changes in assumptions could have significant impact on the values of contingent assets and liabilities recognised in the financial statement. 05. Financial risk management policies The businesses of EDP Renováveis Group are exposed to a variety of risks, including the effects of changes in electricity market prices, foreign exchange and interest rates. The main financial risks arise from interest-rate and the exchange-rate exposures. The volatility of financial markets is analysed on an on- going basis in accordance with EDPR’s risk management policies. Financial instruments are used to mitigate potential adverse effects on EDP Renováveis financial performance resulting from interest rates and foreign exchange rates changes. The Board of Directors of EDP Renováveis is responsible for the definition of general risk-management policies and the establishment of exposure limits. Recommendations to manage financial risks of EDP Renováveis Group are proposed by EDPR's Finance and Global Risk Departments and discussed in the Financial Risk Committee of EDP Renováveis, which is held quarterly. The pre-agreed strategy is shared with the Finance Department of EDP - Energias de Portugal, S.A., to verify the accordance with the policies approved by the Board of Directors of EDP. The evaluation of appropriate hedging mechanisms and the execution is done by EDPR but may also be outsourced to the Finance Department of EDP. All transactions undertaken using derivative financial instruments require the prior approval of the Board of Directors, which defines the parameters of each transaction and approves the formal documents describing their objectives. Exchange-rate risk management EDPR/EDP Group’s Financial Department are responsible for managing the foreign exchange exposure of the Group, seeking to mitigate the impact of exchange rate fluctuations on the net assets and net profits of the Group. Instruments used for hedging are foreign exchange derivatives, foreign exchange debt and other hedging structures with offsetting exposure versus the item to be hedged. The effectiveness of these hedges is reassessed and monitored throughout their lives. EDPR operates internationally and is exposed to the exchange-rate risk resulting from investments in foreign subsidiaries. With the objective of minimizing the impact of exchange rates fluctuations, EDP Renováveis general policy is to fund each project in the currency of the operating cash flows generated by the project. Currently, the main currency exposure is the U.S. Dollar, resulting from the shareholding in EDPR NA. EDPR is also exposed to Polish Zloty, Romanian Leu, Brazilian Real, British Pound, Canadian Dollar, Colombian Peso and in the near future EDPR will also be exposed to the Hungarian Forint and Vietnamese Dong. Currencies in emerging markets have suffered a depreciation following COVID-19, but net investment hedges currently in place have mitigated the potential impact in EDPR balance sheet. To hedge the risk originated with net investment in EDPR NA, EDP Renováveis uses financial debt expressed in USD and also entered into a CIRS in USD/EUR with EDP - Energias de Portugal, S.A. Following the same strategy adopted to hedge these investments in USA, EDP Renováveis has also entered into CIRS in PLN/EUR, BRL/EUR, GBP/EUR, CAD/EUR and in COP/EUR to hedge the investments in Poland, Brazil, United Kingdom, Canada and Colombia (see note 37). 50 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Sensitivity analysis - Foreign exchange rate As a consequence, a depreciation/appreciation of 10% in the foreign currency exchange rate, with reference to 31 December 2020 and 2019, would originate an increase/(decrease) in EDP Renováveis Group income statement and equity before taxes, as follows: 31 DEC 2020 THOUSAND EUROS PROFIT OR LOSS EQUITY +10% -10% +10% -10% USD/EUR 8,321 -10,171 -11,209 13,670 8,321 -10,171 -11,209 13,670 31 DEC 2019 THOUSAND EUROS PROFIT OR LOSS EQUITY +10% -10% +10% -10% USD / EUR 12,281 -15,010 -66,568 81,360 12,281 -15,010 -66,568 81,360 This analysis assumes that all other variables, namely interest rates, remain unchanged. Interest rate risk management The Group’s operating cash flows are substantially independent from the fluctuation in interest -rate markets. The purpose of the interest-rate risk management strategy is to reduce the exposure of debt cash flows to market fluctuations. As such, whenever considered necessary and in accordance to the Group's policy, interest-rate financial instruments are contracted to hedge interest rate risks. These financial instruments hedge cash flows associated with future interest payments, converting floating rate loans into fixed rate loans. All these hedges are undertaken on liabilities in the Group’s debt portfolio and are mainly perfect hedges with a high correlation between changes in fair value of the hedging instrument and changes in fair value of the interest-rate risk or upcoming cash flows. The EDP Renováveis Group has a portfolio of interest-rate derivatives with maturities up to 15 years. The Financial Department of EDP Group undertakes sensitivity analyses of the fair value of financial instruments to interest-rate fluctuations or upcoming cash flows. About 93% of EDP Renováveis Group financial debt bear interest at fixed rates, considering operations of hedge accounting with financial instruments. Sensitivity analysis - Interest rates EDPR/EDP Group’s Financial Department are responsible for managing the interest rate risk associated to activities developed by the Group, contracting derivative financial instruments to mitigate this risk. 51 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Based on the EDPR Group debt portfolio and the related derivative financial instruments used to hedge associated interest rate risk, as well as on the shareholder loans received by EDP Renováveis, a change of 50 basis points in the interest rates with reference to 31 December 2020 and 2019 would increase/(decrease) in EDP Renováveis Group income statement and equity before taxes, as follows: 31 DEC 2020 THOUSAND EUROS +50 BPS -50 BPS +50 BPS -50 BPS Cash flow hedge derivatives - - 722 -9,259 Unhedged debt (variable interest rates) -1,660 1,660 - - -1,660 1,660 722 -9,259 31 DEC 2019 THOUSAND EUROS +50 BPS -50 BPS +50 BPS -50 BPS Cash flow hedge derivatives - - -10,595 -19,797 Unhedged debt (variable interest rates) -1,752 1,752 - - -1,752 1,752 -10,595 -19,797 This analysis assumes that all other variables, namely foreign exchange rates, remain unchanged. Counter-party credit-rate risk management in financial transactions The EDP Renováveis Group counter-party risk exposure in financial and non-financial transactions is managed by an analysis of technical capacity, competitiveness and probability of default to the counter-party. EDP Renováveis has defined a counter-party risk policy inspired in Basel III, which is implemented across all departments in all EDP Renováveis geographies. EDP Renováveis Group is exposed to counter-party risk in financial derivatives transactions in energy sales (electricity, GC and RECs) and in supply contracts. Counterparties in derivatives and financial transactions are restricted to high-quality credit institutions or to the EDP Group. Most relevant counterparties in derivatives and financial transactions are companies within EDP Group. Financial instruments contracted outside EDP Group are generally engaged under ISDA Master Agreements and credit quality of external counterparties is analysed and collaterals required when needed. In the process of selling the energy (electricity, GCs and RECs produced), counter-party exposure arises from trade receivables, but also from mark-to-market of long-term contracts: • In the specific case of the energy sales of EDPR EU Group, the Group’s main customers are utilities and regulated entities in the different countries (EDP and CNMC in the case of the Spanish market). Credit risk from trade receivables is not significant due to the limited average collection period for customer balances and the quality of its debtors. Additional counter-party risk comes from the countries with renewables incentives, which it is usually treated as regulatory risk • In the specific case of EDPR NA Group, the Group’s main customers are regulated utility companies and regional market agents in the US. As it occurs in Europe, credit risk from trade receivables is not significant due to the limited average collection period for customer balances and the quality of the debtors. However, the exposure due to the mark-to-market of long-term contracts may be significant. This exposure is managed by a detailed assessment of the counter-party before signing any long term agreement and by a requirement of collaterals when financial soundness of the counterparty deteriorates. 52 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Regarding Trade receivables and other debtors, they are recognized net of the impairment losses. The Group believes that the credit quality of these receivables is adequate and that no significant impaired credits exist that have not been recognised as such and provided for. Counter-party exposure to suppliers arises mainly from contracts with equipment manufacturers and civil engineering contractors. Counter-party analyses are performed for each new contract. If needed, either parent company guarantees or bank guarantees are requested to comply with the limits of exposure established by EDP Renováveis counter-party risk policy. The maximum exposure to customer credit risk by counterparty type is detailed as follows: THOUSAND EUROS DEC 2020 DEC 2019 CORPORATE SECTORS AND INDIVIDUALS Supply companies 19,952 46,248 Business to business 4,718 151 Other 25,781 15,035 Total Corporate sectors and individuals 50,451 61,434 Public sector 2,131 19,356 Total Public sector and Corporate sectors/individuals 52,582 80,790 Trade receivables by geographical market for the Group EDPR, is as follows: THOUSAND EUROS DEC 2020 EUROPE NORTH AMERICA BRAZIL TOTAL Corporate sectors and individuals 33,121 17,217 113 50,451 Public sector 2,131 - - 2,131 Total 35,252 17,217 113 52,582 THOUSAND EUROS DEC 2019 EUROPE NORTH AMERICA BRAZIL TOTAL Corporate sectors and individuals 47,406 10,646 3,382 61,434 Public sector 8,005 - 11,351 19,356 Total 55,411 10,646 14,733 80,790 In accordance with accounting policies - note 2 e), impairment losses are determined using the simplified approach precluded in IFRS 9, based on life time expected losses. Regarding specific counter-party exposure caused by COVID-19, during the first semester of 2020 there was a general deterioration of the financial situation of counterparties across the globe, with the subsequent increase in credit risk from Electricity hedges, PPAs and supply contracts. However, there was no impact for EDPR due to the quality of its counter-parties. During the second semester of 2020, the situation normalized with a general improvement in global credit risk. Liquidity risk Liquidity risk is the possibility that the Group will not be able to meet its financial obligations as they fall due. The Group 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 unacceptable losses or risking damage to the Group's reputation. 53 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The liquidity policy followed ensures compliance with payment obligations acquired, through maintaining sufficient credit facilities and having access to the EDP Group facilities who manages the Group liquidity risk through the engagement and maintenance of credit lines and financing facilities with a firm underwriting commitment with international reliable financial institutions as well as term deposits, allowing immediate access to funds. These credit lines are used to complement and backup national and international commercial paper programs, allowing the EDP Group’s short -term financing sources to be diversified. The Directors have estimated cash flows that show that the Group will meet the commitments existing at the close of the 2020 financial year and those foreseen for 2021. The maturity analysis for financial debt (see note 31), including expected future interests, is as follows: THOUSAND EUROS DEC 2021 DEC 2022 DEC 2023 DEC 2024 DEC 2025 FOLLOWING YEARS TOTAL Bank loans 77,747 74,874 65,849 60,940 42,169 328,624 650,203 Loans received from EDP Group 418,905 513,111 461,180 430,669 202,829 1,258,163 3,284,857 Other loans 1,027 1,005 1,202 1,011 1,031 13,114 18,390 Expected future interests 80,509 105,856 91,908 71,759 51,346 194,633 596,011 578,188 694,846 620,139 564,379 297,375 1,794,534 4,549,461 Electricity market price risk As of 31 December 2020, electricity market price risk affecting the EDP Renováveis Group is not significant. In the case of EDPR NA, the great majority of the plants are under power purchase agreements or long term financial contracts, with fixed or escalating prices. In the case of EDPR EU, the electricity is sold in Spain, France, Italy, Portugal and Poland through regulated tariffs, physical or financial PPAs. In Romania the green certificates have a floor. For the small share of energy with merchant exposure after tariff regimes, PPAs or long term financial contracts (electricity, green certificates and RECs), market risk is managed through the execution of electricity, green certificate and REC forward contracts. For this marginal exposure EDPR EU and EDPR NA have electricity, green certificates and REC financial swaps that qualify for hedge accounting (cash flow hedge) that are related to sales for the years 2021 to 2025 (see note 37). The purpose of EDP Renováveis Group is to hedge in advance a significant volume of the merchant exposure to reduce the volatility of energy prices in each reporting year. With COVID-19, electricity market prices dropped during 2020 in most of EDPR geographies due to the reduction in demand following the loc kdown and the decrease in economic activity. However, impact of lower energy prices on EDPR’s results was negligible, as EDPR’s marginal merchant exposure was already hedged for 2020 and 2021 . Capital management The Group’s goal in managing equity, in acco rdance with the policies established by its main shareholder, is to safeguard the Group’s capacity to continue operating as a going concern, grow steadily to meet established growth targets and maintain an optimum equity structure to reduce equity cost. In conformity with other sector groups, the Group controls its financing structure based on the leverage ratio. This ratio is calculated as net financial borrowings divided by total equity and net borrowings. Net financial borrowings are determined as the sum of financial debt, institutional equity liabilities corrected for non-current deferred revenues, less cash and cash equivalents. Climate-related risk The Earth's climate has changed throughout history. Scientists attribute the current global warming trend observed since the mid-20th century to the human expansion of the "greenhouse effect" – warming that results when the atmosphere traps heat radiating from Earth toward space. Over the last century, the burning of fossil fuels like coal and oil has increased the concentration of atmospheric carbon dioxide (CO2). 54 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 EDPR is a clear example of how fighting against climate change creates business opportunities. The Company’s core business, to deliver clean energy by developing, building and operating top quality wind farms and solar plants, inherently implies the reduction of greenhouse gas emissions, contributing to the world’s fight against climate change and its impacts. Nevertheless, on the risk side, meteorological changes may pose a risk for EDPR’s acti vities and results since they are carried out in areas of the planet that are being affected by climate change. In addition, future estimations of wind and solar production are based on analysis of historical measurements for more than 20 years and they are considered to be representative of the future. However, relevant unexpected meteorological changes could lead to a lower production than the one expected from historical data. Thus, when evaluating a new investment, EDPR considers potential changes in the production forecasted but, even so, the size of the potential deviation in the case of relevant meteorological changes is uncertain. Moreover, renewable plants in construction and in operation are exposed to weather hazards, natural disasters, etc. These risks depend on the location of the assets. At EDPR, all plants are insured from the physical damage during construction and operation. During operation, any natural disaster, weather hazard or accident will also be partially insured to revenue losses d ue to the event. Thus, no material impacts are identified in the EDPR’s consolidated financial statements as a consequence of climate-related matters. 06. Consolidation perimeter During the year ended in 31 December 2020, the changes in the consolidation perimeter of the EDP Renováveis Group were: Companies acquired: EDPR Group, through its fully owned subsidiary EDP Renewables Europe S.L., acquired 100% of the companies Viesgo Europa, S.L.U., Viesgo Renovables, S.L.U. and related affiliates in the context of the conclusion, by the end of December 2020, of the acquisition of the renewables business of Viesgo for a total consideration of 563,488 thousand Euros of which an amount of 26,001 thousand Euros refers to shareholders loans. Related affiliates and indirect stake acquired are the following ones: FULL-CONSOLIDATED METHOD Viesgo Mantenimiento, S.L.U. 100% Northeolic Monte Buño, S.L. 75% Compañía Eólica Aragonesa, S.A. 100% Parque Eólico do Barlavento, S.A. 89.98% S.E.E. - Sul Energía Eólica, S.A 100% IE2 Portugal, SGPS, S.A. 100% Eoliser - Serviços de Gestão para Parques Eólicos, Lda. 100% EQUITY-CONSOLIDATED METHOD Elecdey Carcelén, S.A. 23% Eos Pax IIa, S.L. 48.5% Geólica Magallón, S.L. 36.24% San Juan de Bargas Eólica, S.L. 47.01% Unión de Generadores de Energía, S.L. 50% Eólica de São Julião, Lda. 45% EQUITY INSTRUMENTS AT FAIR VALUE Elecdey Ascoy, S.A. 19.5% Eólica de Levante, S.L 25% Eólicas Páramo de Poza, S.A. 15% 55 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 This transaction has been considered, for consolidation purposes, within the scope of IFRS 3 – Business Combinations and has implied the recognition of goodwill in the consolidated financial estatements of 148,341 thousand Euros that includes previous Goodwill recognized in the book value at acquisition date amounting to 112,279 thousand. This transaction includes a business combination achieved in stages for the company Compañía Eólica Aragonesa, S.A., where EDPR had 50% of the shares of the company previously to this transaction, which has generated a gain in the amount of 1,887 thousand Euros, which was recorded in the consolidated income statement (see notes 9, 19 and 42). The following acquisitions were classified as asset purchases, out of scope of IFRS 3 – Business Combinations, due to the substance of these transactions, the type of assets acquired and the very early stage of the projects: • EDPR France Holding, S.A.S. acquired 100% of the company Société D'Exploitation du Parc Eolien Source de Sèves, S.A.R.L.; • EDP Renewables Italia Holding, S.R.L. acquired 100% of the company Aliseo, S.r.l., 100% of the company VRG Wind 153, S.r.l. and 60% of the companies Energia Emissioni Zero 4, S.r.l., Wind Energy San Giorgio, S.r.l. and Giglio, S.r.l.; • EDP Renewables Polska, Sp. zo.o. acquired 100% of the companies Wind Field Wielkopolska, Sp. zo.o., FW Warta, Sp. z o.o.; Neo Solar Farms, Sp. z o.o.; and R.Wind, Sp. z o.o.; • Korean Floating Wind Power Co., Ltd. acquired 90% of the company East Blue Power Co., Ltd.; • EDP Renováveis S.A. and EDP Renewables Europe S.L. acquired 100% of the company Parque Solar Los Cuervos, S. de R.L. de C.V.; • EDP Renewables Polska HoldCo, S.A. acquired 100% of the company Budzyn, Sp. z o.o.; • EDP Renováveis, S.A. acquired 100% of the company Solar Power Solutions, S.A.S. E.S.P. which holds 100% of the companies Elipse Energía, S.A.S. E.S.P., Omega Energía, S.A.S. E.S.P. and Kappa Energía, S.A.S. E.S.P.; • EDP Renewables Europe, S.L. acquired 85% of the companies Sunlight Solar, Kft and ESC ER Ő M Ű , Kft. and 100% of the companies Wind Shape, Ltd., Altnabreac Wind Farm Limited, Ben Sca Wind Farm Limited, Moorshield Wind Farm Limited, Drummarnock Wind Farm Limited, and Wind 2 Project 1 Limited; • EDP Renewables North America LLC acquired 100% of the companies RE Scarlet LLC and Misenheimer Solar LLC; • EDP Renováveis Brasil S.A. acquired 100% of the companies Central Solar Lagoa I, S.A. and Central Solar Lagoa II, S.A. Disposals with loss of control: • In the fourth quarter of 2020, EDP Renewables North America LLC through its fully owned subsidiary EDPR Wind Ventures XVII, LLC sold to CC&L Java Wind USA LLC by 231,714 thousand Euros, the equivalent of 264,646 thousand US dollars, 80% of its direct and indirect interests in the following companies: • 2017 Vento XVII, LLC; • Quilt Block Wind Farm LLC; • Meadow Lake V LLC; • Redbed Plains Wind Farm LLC; • Hog Creek Wind Project, LLC. 56 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 In accordance with the Shareholders Agreement and other relevant contracts, it has been established a shared control of the Companies which led to a loss of control over the companies and their consolidation by the equity method. This disposal with loss of control generated a gain which has been registered within the “Other income” caption of the consolidated financial statements in the amount of 99,359 thousand Euros (see note 9). Companies sold and liquidated: • In the fourth quarter of 2020, EDPR Group, through its fully owned subsidiary EDP Renewables España S.L., sold to FRGE 2 S.a.r.l the EDPR’s entire stake in the following portfolio of Spanish companies: • Bon Vent de Corbera, S.L.U. • Eólica Sierra de Ávila, S.L.U. • Parc Eòlic de Torre Madrina, S.L.U. • Parc Eòlic de Coll de Moro, S.L.U. • Parc Eòlic de Vilalba dels Arcs, S.L.U. • Aprofitament D'Energies Renovables de L'Ebre, S.L. Total proceeds for the transaction amount to 449,658 thousand Euros from which an amount of 112,724 thousand Euros refer to shareholders loans. This transaction has generated a gain, net of transaction costs, amounting to 112,908 thousand Euros, which has been registered within the “Other income” caption of the consolidated income statement (see note 9); • EDP Renewables North America LLC sold the company Rosewater Wind Farm LLC for a total amount of 160,741 thousand Euros, the equivalent of 183,586 thousand US dollars. This transaction has generated a gain, as of 31 December 2020, which has been registered within the “Other income” caption of the consolidated financial statements in the amount of 14,438 thousand Euros (see note 9 and 34); • The companies Frontier Beheer Nederland, B. V. and Frontier, C.V., in which OW Offshore, S.L. held, directly or indirectly, a 30% financial interest, were liquidated; • EDP Renewables North America LLC liquidated the following companies: Horizon Wind Ventures VI LLC, 2009 Vento VI LLC, Horizon Wind Ventures VII LLC, 2010 Vento VII LLC, Horizon Wind Ventures VIII LLC and 2010 Vento VIII LLC. Companies merged: • Merger of the companies EDPR RO PV, S.R.L., Studina Solar, S.A., Cujmir Solar, S.A., Potelu Solar, S.A., Vanju Mare Solar, S.A., Foton Delta, S.A., Foton Epsilon, S.A. into the company EDPR România, S.R.L. with no impact in the consolidated financial statements. 57 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Companies Incorporated: • Vanosc Energie, S.A.S.; • Transition Euroise Roman II, S.A.S.; • Mordel Limited • EDPR Offshore South Korea Co., Ltd.; • EDP Renewables Hungary Kft.; • EDP Renewables Vietnam Ltd.; • Duff Solar Park II LLC; • EDPR Northeast Allen Solar Park LLC; • Indiana Crossroads Solar Park II LLC; • RTSW Solar Park LLC; • RTSW Solar Park II LLC; • RTSW Solar Park III LLC; • RTSW Solar Park IV LLC; • RTSW Solar Park V LLC; • RTSW Solar Park VI LLC; • EDPR Wind Ventures XXII LLC; • 2020 Vento XXII LLC; • Rosewater Ventures LLC; • Timber Road II Storage LLC; • Timber Road III Storage LLC; • Top Crop I Storage LLC; • Top Crop II Storage LLC; • Twin Groves I Storage LLC; • Twin Groves II Storage LLC; • Cattlemen Solar Park LLC; • Rail Splitter Wind Farm II LLC; • Azalea Springs Solar Park LLC; • Riverstart Development LLC; • Riverstart Ventures LLC; • Timber Road Solar Park II LLC; • Timber Road Solar Park III LLC; • Edwardsport Solar Park LLC; • Crescent Bar Solar Park LLC; • Esker Solar Park II LLC; • Bluebird Prairie Solar Park LLC; • Tillman Solar Park LLC; • EDPR NA DG Holding LLC. * EDPR Group holds, through its subsidiary EDPR NA, a set of subsidiaries legally established in the United States without share capital and that, as at 31 December 2020, do not have any assets, liabilities, or any operating activity. Other changes: • A joint control partnership has been executed following the strategic memorandum of understanding dated May 2019 and signed between EDPR and ENGIE by which a co-controlled 50/50 joint venture in fixed and floating offshore wind business, OW Offshore S.L., has been established, including its subsidiaries: • OW FS Offshore, S.A.; • 4THEWIND I, B.V.; • 4THEWIND II, B.V. • 4THEWIND III, B.V.; • 4THEWIND IV, B.V. • 4THEWIND V, B.V. • 4THEWIND VI, B.V. • 4THEWIND VII, B.V. • 4THEWIND VIII, B.V. • Ancoris Beheer Nederland, B.V. • Les Eoliennes Flottantes du Golfe du Lion, S.A.S.; • Éoliennes en Mer Dieppe - Le Tréport, S.A.S.; • Éoliennes en Mer Îles d'Yeu et de Noirmoutier, S.A.S.; • EDPR Japan Godo Kaisha; • Les Eoliennes en Mer Services, S.A.S.; • EDPR Offshore South Korea Co., Ltd.; • OW France, S.A.S.; • Moray East Holdings Limited; • Relax Wind Park IV, Sp. z o.o.; • Moray Offshore Windfarm (East) Limited; • Morska Farma Wiatrowa Neptun, Sp. z o.o.; • Delphis Holdings Limited; • B-Wind Polska, Sp. z o.o.; • Moray West Holdings Limited; • C-Wind Polska, Sp. z o.o.; • Moray Offshore Windfarm (West) Limited; • Ocean Wind UK Ltd; • Korean Floating Wind Power Co., Ltd.; • Mordel Limited; • East Blue Power Co. Ltd.; • Moray Offshore Renewable Power Limited; • Windplus, S.A.; • B&C Wind Polska sp. z o.o. s.c.; • Ventum Ventures III Holding, B.V.; • Redwood Coast Offshore Wind LLC; • Ventos do Atlântico - Projetos de Energía Eólica Ltda; • Electrabel Offshore Energy, CVBA; • SeaMade, N.V; • North Sea Wave, N.V.; • OW North America LLC; • North River Wind LLC; • Mayflower Wind Energy LLC. 58 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 As a result of this transaction, EDP Renováveis has registered a gain in the amount of 217,633 thousand Euros in the other income caption of the consolidated income statement (see note 9); • EDPR owns 100% of Nation Rise LP trough Quatro Limited Partnership (99,99%) and Nation Rise Wind Farm GP Inc. (0,01%). • EDPR France Holding, S.A.S. sold 15% of the company Transition Euroise Roman II, S.A.S. with no significant impacts in the consolidated financial statements. During the year ended in 31 December 2019, the changes in the consolidation perimeter of the EDP Renováveis Group were: Companies acquired: • EDP Renováveis, S.A. acquired 100% of the Colombian companies Eolos Energías, S.A.S. E.S.P. and Vientos del Norte, S.A.S. E.S.P. These operations were classified as asset purchases, out of scope of IFRS 3 – Business Combinations, due to the substance of these transactions, the type of assets acquired and the very early stage of the projects; • EDP Renováveis Brasil, S.A. acquired 100% of the companies Central Eólica Boqueirão I, S.A., Central Eólica Boqueirão II, S.A., Monte Verde Holding, S.A. and Jerusalém Holding, S.A.. These operations were classified as asset purchases, out of scope of IFRS 3 – Business Combinations, due to the substance of these transactions, the type of assets acquired and the very early stage of the projects; • EDP Renováveis Brasil, S.A. acquired 100% of the companies Central Eólica Catanduba I, S.A. and Central Eólica Catanduba II, S.A.; • EDPR Offsore España, S.A.S. acquired, directly or indirectly, 100% of the companies B-Wind Polska, Sp. z o.o., C- Wind Polska, Sp. z o.o.,Ventum Ventures III Holding, B.V., Fluctus V, B.V., Fluctus VI, B.V., Fluctus VII, B.V. and 30% of the companies Frontier Beheer Nederland, B. V. and Frontier, C.V.; • EDP Renewables Polska, Sp. z o.o., acquired 100% of the company EDPR Polska Solar Sp. z.o.o.; • EDP Renewables Polska, Sp. z o.o., acquired 100% of the companies Lichnowy Windfarm Sp. Zo.o., EW Dobrzyca sp. z o.o., Ujazd, Sp. zo.o., Winfan, Sp. zo.o., Kowalewo Wind, Sp. zo.o., European Wind Power Krasin, Sp. zo.o., Nowa Energia 1, Sp. zo.o. and Farma Wiatrowa Bogoria, Sp. zo.o. These operations were classified as asset purchases, out of scope of IFRS 3 – Business Combinations, due to the substance of these transactions, the type of assets acquired and the very early stage of the projects; • EDP Renewables Polska HoldCo, S.A. acquired 100% of the company Gudziki Wind Farm Sp. z o.o; • Monte Verde Holding, S.A. acquired 100% of the company Central Eólica Monte Verde VI, S.A. This operation was classified as an asset purchase, out of the scope of IFRS 3 – Business Combinations, due to the substance of the transaction, the type of assets acquired and the very early stage of the projects; • EDP Renewables Europe and EDP Renováveis S.A. acquired 100% of the Greek company Aioliko Parko Fthiotidos Erimia E.P.E. This operation was classified as an asset purchase, out of the scope of IFRS 3 – Business Combinations, due to the substance of the transaction, the type of assets acquired and the very early stage of the projects. Sale of companies without loss of control: • EDPR France Holding, S.A.S. sold 10% of its financial interest in Parc Éolien d’Entrains -sur-Nohain, S.A.S. (formerly Parc Éolien de Citernes, S.A.S.) by 46 thousand Euros. 59 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Companies sold and liquidated: • In the second quarter of 2019, EDPR Group, through the companies EDP Renewables Europe S.L.U. and EDPR Yield, S.A.U. sold to Beta Energy Investments S.A.R.L. and BETA II S. R.L. the EDPR’s stake of 51% in the companies EDPR Participaciones, S.L.U. and EDP Renewables France, S.A.S. respectively, with a subsequent sale of the entire stake held by EDPR in following subsidiaries: • EDPR Participaciones’ subsidiaries: Bon Vent de Vi lalba, S.L.U., Bon Vent de L'Ebre, S.L.U., Eólica Don Quijote, S.L.U., Eólica Dulcinea, S.L.U., Eólica de Radona, S.L.U., Eólica del Alfoz, S.L.U., Eólica La Navica, S.L.U., Parc Éolien de Dammarie, S.A.R.L., Parc Éolien de Preuseville, S.A.R.L., Parc Éolien d'Escardes, S.A.S., Parc Éolien de Montagne Fayel, S.A.S., Parc Éolien de Francourville, S.A.S., Green Wind, S.A, Eólica do Castelo, S.A., Eólica da Lajeira, S.A., Eólica do Velão, S.A. and Eólica do Cachopo, S.A. Additionally, EDPR Group sold the stake held by the company EDPR Eólica de Radona, S.L.U in the company Infraestructuras Medinaceli, S.L. (8.76%) and the stake held by the companies Bon Vent de l'Ebre S.L and Bon Vent de Vilalba S.L. in the company Aprofitament Energies Renovables Terra Alta, S.A. (9.70% and 10.42% respectively); • EDP Renewables France’ subsidiaries: Neo Plouvien, S.A.S., Centrale Eolienne Gueltas Noyal -Pontivy, S.A.S., Centrale Eolienne Segur, S.A.S., Centrale Eolienne Saint Barnabé, S.A.S., Centrale Eolienne Patay, S.A.S., Centrale Eolienne Canet-Pont de Salars, S.A.S., Centrale Eolienne Neo Truc de L'Homme, S.A.S., SOCPE de Sauvageons, S.A.R.L., SOCPE Le Mee, S.A.R.L., SOCPE Petite Pièce, S.A.R.L., SOCPE de la Vallée du Moulin, S.A.R.L., SOCPE de la Mardelle, S.A.R.L., SOCPE des Quinze Mines, S.A.R.L., Parc Éolien de Tarzy, S.A.R.L., Eolienne de Saugueuse, S.A.S., Parc Éolien de Roman, S.A.R.L., Parc Éolien des Vatines, S.A.S., Parc Éolien de Varimpre, S.A.S. and Parc Éolien du Clos Bataille, S.A.S.; Total proceeds for the transaction amount to 806,090 thousand Euros from which an amount of 304,732 thousand Euros refer to shareholders loans. This transaction has generated a gain, net of transaction costs, amounting to 225,644 thousand Euros, which has b een registered within the “Other income” caption of the condensed consolidated income statement (note 9). • In the fourth quarter of 2019, EDPR Group through the company EDP Renováveis Brasil, S.A. sold to Allif SLP I LP the EDPR’s stake of 100% in the comp any Babilônia Holding, S.A. with a subsequent sale of the entire stake held by EDPR in the following subsidiaries: • Central Eólica Babilônia I, S.A. • Central Eólica Babilônia II, S.A. • Central Eólica Babilônia III, S.A. • Central Eólica Babilônia IV, S.A. • Central Eólica Babilônia V, S.A. Estimated total proceeds amount to 132,227 thousand Euros (the equivalent of 597,096 thousand Brazilian Real). This transaction has generated a gain, net of transaction costs, amounting to 87,078 thousand Euros, which has bee n registered within the “Other income” caption of the condensed consolidated income statement (note 9) ; • EDP Renewables Polska, Sp. z o.o., sold 100% of the company EDP Renewables Polska OPCO, S.A. for a residual consideration; • Moray East Holdings Limited liquidated the companies Telford Offshore Windfarm Limited, MacColl Offshore Windfarm Limited and Stevenson Offshore Windfarm Limited. 60 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Companies Incorporated: • Little Brook Solar Park LLC * • EDPR Solar Ventures III LLC • Bright Stalk Solar Park LLC * • 2019 SOL III LLC • Crossing Trails Wind Power Project II LLC * • Greenbow Solar Park LLC * • Headwaters Wind Farm IV LLC • Holly Hill Solar Park LLC * • North River Wind LLC • Pleasantville Solar Park LLC * • EDPR Japan GK. • Mineral Springs Solar Park LLC * • Custolito, S.R.L. • Solar Ventures Acquisition LLC • EDPR Hellas 1 M.A.E. • EDPR Solar Ventures IV LLC • EDPR Hellas 2 M.A.E. • 2019 SOL IV LLC • EDPR Terral S.L.U. • Fotovoltaica Lote A, S.A. • EDPR Amaris S.L.U. • Solar Ventures Purchasing LLC • EDPR Suvan S.L.U. • Goldfinger Ventures LLC • Black Prairie Solar Park LLC * • Goldfinger Ventures II LLC • Duff Solar Park LLC * • Blackford County Wind Farm LLC • Eastmill Solar Park LLC * • Blackford County Solar Park LLC • Lowland Solar Park LLC * • 2019 SOL V LLC • Moonshine Solar Park LLC * • EDPR Solar Ventures V LLC • Sedge Meadow Solar Park LLC * • Goldfinger Ventures III LLC • EDPR Wind Ventures XX LLC • EDPR Sicilia PV, S.R.L. • 2019 Vento XX LLC • EDPR FS Offshore, S.A. • EDPR Wind Ventures XXI LLC • Alabama Solar Park LLC. * EDPR Group holds, through its subsidiary EDPR NA, a set of subsidiaries legally established in the United States without share capital and that, as at 31 December 2019, do not have any assets, liabilities, or any operating activity. Other changes: • In the fourth quarter of 2019, EDP Renewables North America LLC (EDPR NA), through the company Solar Ventures Purchasing LLC (Solar VP), sold 50% of its interest in Solar Ventures Acquisition, LLC (Solar VA) to Goldeneye SVA LLC (wholly owned by ConnectGen). Further, EDPR NA sold 50% of its interest in the companies Goldfinger Ventures, LLC (Goldfinger I) and Goldfinger Ventures II, LLC (Goldfinger II) to ConnectGen. Subsequent to EDPR NA’s selling transaction referred for Solar VA, this joint venture acquired the companies Sunshine Valley Solar, LLC (Sunshine Valley), Sun Streams, LLC (Sun Streams) and Windhub Solar A, LLC (Windhub Solar). Subsequent to EDPR NA’s selling transaction referred above for Goldfinger I and Goldfinger II, the joint venture Solar VA sold the companies Sunshine Valley and Windhab Solar to a subsidiary of Goldfinger I and sold the company Sun Streams to a subsidiary of Goldfinger II; • EDP Renewables Europe, S.L.U. acquired 32% of the company Dunkerque Éoliennes en Mer, S.A.S.; • EDP Renewables Europe, S.L.U. and EDP Renováveis S.A. acquired from RG Renovatio Group Limited 15% of the share capital of the companies Cernavoda Power, S.A., Pestera Wind Farm, S.A., VS Wind Farm, S.A. and Sibioara Wind Farm, S.R.L., increasing to 100% its share interest in the companies; • EDP Renovables España, S.L. acquired 25% of the Spanish companies Sitemas Eólicos Tres Cruces, S.L.U. and Desarrollos Energéticos del Val, S.L.; • EDPR Offshore España, S.L. acquired 61% of the South Korean company Korean Floating Wind Power Co., Ltd. The companies included in the consolidation perimeter of EDPR Group as at 31 December 2020 and 2019 are listed in Annex I. 61 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 07. Revenues Revenues are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 REVENUES BY BUSINESS AND GEOGRAPHY Electricity in Europe 802,171 887,838 Electricity in North America 648,225 636,074 Electricity in Brazil 36,215 75,073 1,486,611 1,598,985 Other revenues 8,182 6,682 1,494,793 1,605,667 Services rendered 27,336 7,654 CHANGES IN INVENTORIES AND COST OF RAW MATERIAL AND CONSUMABLES USED Cost of consumables used and changes in inventories 6,845 28,808 Total Revenues 1,528,974 1,642,129 The breakdown of revenues by segment is presented in the segmental reporting (see note 44). 08. Income from institutional partnerships in U.S. wind farms Income from institutional partnership in U.S. Wind Farms in the amount of 201,783 thousand Euros (31 December 2019: 181,570 thousand Euros), includes revenue recognition related to production tax credits (PTC), investments tax credits (ITC) and other tax benefits, mostly from accelerated tax depreciation related to projects Sol I and II, Blue Canyon I, Vento I to V, Vento IX to XVIII and Vento XX to XXI (see note 33). 09. Other income Other income is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Amortisation of deferred income related to power purchase agreements 2,244 2,578 Contract and insurance compensations 21,653 23,707 Gains on business combinations 1,887 - Gains on disposals 444,340 313,444 Other income 28,290 59,951 498,414 399,680 The power purchase agreements between EDPR NA and its customers were valued based on market assumptions, at the acquisition date of the business combination, using discounted cash flow models. At that date, these agreements were valued at approximately 190,400 thousand of USD and booked as a non-current liability (see note 34). This liability is amortised over the period of the agreements against other income. As at 31 December 2020, the amortisation for the period amounts to 2,244 thousand Euros (31 December 2019: 2,578 thousand Euros) and the non-current liability amounts to 6,438 thousand Euros (31 December 2019: 9,318 thousand Euros). 62 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The amount of 1,887 thousand Euros in caption Gains of business combinations refers to the business combination achieved in stages for the company Compañía Eólica Aragonesa, S.A., where EDPR had 50% of the shares of the company and gained control through the acquisition of the remaining 50% of the shares in the context of the acquisition transaction of Viesgo’s renewable business (see note 6 and 42). As at 31 December 2020, the caption Gains on disposals essentially includes: • Gain amounting to 217,633 thousand Euros resulting from loss of control in the EDPR’s offshore business during 2020 as a consequence of the the joint control partnership in this business following the strategic memorandum of understanding dated May 2019 and signed between EDPR and ENGIE by which a co-controlled 50/50 joint venture in fixed and floating offshore wind business, OW Offshore, S.L., has been established (see note 6); • Gain amounting to 112,908 thousand Euros resulting from the sale of the entire stake in the companies Bon Vent de Corbera, S.L.U., Eólica Sierra de Ávila, S.L.U., Parc Eòlic de Torre Madrina, S.L.U., Parc Eòlic de Coll de Moro, S.L.U., Parc Eòlic de Vilalba dels Arcs, S.L.U. and Aprofitament D'Energies Renovables de L'Ebre, S.L. (see note 6); • Gain amounting to 99,359 thousand Euros related to the sale of the 80% stake and loss of control in the companies EDPR Wind Ventures XVII, LLC and subsidiaries (see note 6); and • Gain amounting to 14,438 thousand Euros resulting from the sale of the entire stake in the company Rosewater Wind Farm LLC (see note 6). As at 31 December 2019, the caption Gains on disposals essentially included : (I) gain related to the sale of the EDPR’s stake of 51% in the companies EDPR Participaciones, S.L.U. and EDP Renewables France, S.A.S. (see note 6) in the amount of 225,644 thousand Euros; and (ii) gain related to the sale of 100% of the stake in the company Babilônia Holding, S.A. and subsidiaries (see note 6) in the amount of 87,078 thousand Euros. As at 31 December 2020, the caption other income includes: i) management and cost reinvoicing for UK offshore projects in the amount of 8,686 thousand Euros; and ii) price adjustment amounting to 3,335 thousand Euros according to the corresponding agreements in the transaction of selling 49% of Baixas de Feijão portfolio of companies to CTG that took place in 2015. 10. Supplies and services This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Rents and leases 22,993 21,306 Maintenance and repairs 190,934 204,655 SPECIALISED WORKS: - IT Services, legal and advisory fees 13,354 12,730 - Shared services 12,004 7,037 - Other services 30,604 17,754 Other supplies and services 34,548 45,550 304,437 309,032 As per the adoption of IFRS 16 on 1 January 2019, the caption Rents and leases mainly includes costs for variable lease payments and rental costs for short-term leases. 63 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 11. Personnel costs and employee benefits Personnel costs and employee benefits is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 PERSONNEL COSTS Board remuneration (see note 39) 569 606 Remunerations 115,284 103,367 Social charges on remunerations 18,587 17,054 Employee's variable remuneration 26,896 26,049 Other costs 3,331 4,042 Own work capitalised (see note 16) -38,324 -34,417 126,343 116,701 EMPLOYEE BENEFITS Costs with pension plans 5,752 5,480 Costs with medical care plans and other benefits 9,061 8,512 14,813 13,992 141,156 130,693 As at 31 December 2020, Costs with pension plans relates essentially to defined contribution plans in the amount of 5,636 thousand Euros (31 December 2019: 5,365 thousand Euros) and defined benefit plans amounting to 3 thousand Euros (14 thousand Euros as at 31 December 2019). The average breakdown by management positions and professional category of the permanent staff during 2020 and 2019 is as follows: 2020 2019 Directors 228 199 Managers 157 157 Specialists 1,034 906 Technicians 216 207 1,635 1,469 The breakdown by gender of the permanent staff as of 31 December 2020 and 2019 is as follows: 31 DEC 2020 31 DEC 2019 Male 1,206 1,090 Female 529 476 1,735 1,566 The consolidation perimeter, available in Annex I of the consolidated annual accounts, includes the companies of the acquisition transaction reported at the end of December 2020. The information presented above do not include 45 employees of the companies whose shares were acquired since their integration is in the analysis phase. 64 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 In the companies in Spain where there is a legal obligation to have people with disabilities in the workforce to comply with the LISMI due to the number of employees, EDPR has opted for the exceptionality measures provided by the Law. The Company is able to comply with the quota that legally applies to it through contracts of goods or services with companies that promote t he hiring of disabled people and also through donations. EDPR’s companies under this obligation are covered with the exceptionality measures since February 2018 and for a period of three years. For the rest of EDPR countries, the approach is the same. Recently, as part of EDPR's global strategy, a Diversity and Equality Committee has been set up with the participation of the Executive Committee, whose objective is to integrate the commitment to this issue within the company. One of the objectives of this Committee is focused on the group of people with disabilities as one of the most important topics to be developed. 12. Other expenses Other expenses are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Taxes 76,072 73,760 Losses on fixed assets 1,492 16,460 Other costs and losses 45,050 43,866 122,614 134,086 The caption Taxes, on 31 December 2020, includes the amount of 23,666 thousand Euros (31 December 2019: 21,313 thousand Euros) related to taxes for energy generators in Spain, affecting all the wind farms in operation, amounting to 7% of revenues for each wind farm. Other costs and losses includes an amount of 10,439 thousand Euros that refers to a change in the fair value of the contingent consideration related to the sale in 2018 to Sumitomo Corporation of 13,5% stake in the companies Éoliennes en Mer Dieppe - Le Tréport, S.A.S. and Éoliennes en Mer Îles d'Yeu et de Noirmoutier, S.A.S., in accordance with the relevant agreements signed (see note 24). 13. Amortisation and impairment This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 PROPERTY, PLANT AND EQUIPMENT Buildings and other constructions 1,501 1,722 Plant and machinery 558,837 544,396 Other 4,641 4,988 Impairment loss 348 15,380 565,327 566,486 RIGHT-OF-USE ASSETS Right-of-use assets 34,311 32,524 INTANGIBLE ASSETS Industrial property, other rights and other intangibles 16,841 9,942 616,479 608,952 Impairment of goodwill 132 - 132 - Amortisation of deferred income (Government grants) -16,577 -17,327 600,034 591,625 65 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Right of use assets includes depreciation of related assets due to the implementation of IFRS 16 on 1 January 2019. Amortisation of deferred income (Government grants) refers to grants for fixed assets received by EDPR NA subgroup under the American Recovery and Reinvestment Act promoted by the United States that are amortised through the recognition of revenue in the income statement over the useful life of the related assets (see note 34). 14. Financial income and financial expenses Financial income and financial expenses are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 FINANCIAL INCOME Interest income 16,344 20,659 Derivative financial instruments: Interest 1,161 1,657 Fair value 19,431 5,588 Foreign exchange gains 39,443 9,732 Other financial income 356 392 76,735 38,028 FINANCIAL EXPENSES Interest expense 137,206 184,770 Derivative financial instruments: Interest 46,554 84,724 Fair value 15,352 4,388 Foreign exchange losses 49,807 6,819 Own work capitalised -26,120 -17,742 Unwinding 129,740 118,785 Other financial expenses 9,254 5,740 361,793 387,484 Net financial income / (expenses) -285,058 -349,456 Derivative financial instruments include interest liquidations on the derivative financial instrument established between EDPR and EDP Finance BV and EDP - Energias de Portugal, S.A. (see notes 24, 35 and 37). In accordance with the corresponding accounting policy, the borrowing costs (interest) capitalised in tangible fixed assets in progress as at 31 December 2020 amounted to 26,120 thousand Euros (at 31 December 2019 amounted to 17,742 thousand Euros) (see note 16), which are included under Own work capitalised (financial interest). The interest rates used for this capitalisation vary in accordance with the related loans’ Interest expense refers to interest on loans bearing interest at contracted and market rates. Interest expense refers to interest on loans bearing interest at contracted and market rates. Unwinding expenses refers essentially to: (i) the implied return in institutional partnerships in U.S. wind farms amounting to 94,718 thousand Euros (31 December 2019: 85,320 thousand Euros) (see note 33); (ii) financial update of lease liabilities in the amount of 29,594 thousand Euros due to the implementation of IFRS 16 on 1 January 2019 (31 December 2019: 27,994 thousand Euros); and (iii) financial update of provisions for dismantling and decommissioning of wind farms in the amount of 5,420 thousand Euros (31 December 2019: 5,462 thousand Euros) (see note 32). 66 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 15. Income tax expense and Extraordinary Contribution to the Energy Sector (CESE) The following note includes an analysis on the reconciliation between the theoretical and the effective income tax rate applicable at the level of the EDPR Group, on a consolidated basis. In general terms, the analysis on the reconciliation between the theoretical and the effective income tax rate aims at quantifying the impact of the income tax, recognised in the income statement, which includes both current and deferred tax. The note also includes an analysis on the extraordinary contribution to the energy sector (CESE). As the EDPR Group prepares and discloses its financial statements in accordance with IFRS, an alignment between the accounting of income tax expense or income and the corresponding cash flow is not mandatory. Accordingly, this analysis does not represent the income tax paid or received by the EDPR Group for the corresponding reporting period. Notwithstanding the above, the income tax paid by the EDPR Group on a country-by-country basis is disclosed in the Annual Report, which is available on EDPR's website (www.edpr.com). This website also includes the details on the general principles concerning EDPR Group's mission and tax policy and the overall tax contribution to public finance in 2020. Main features of the tax systems of the countries in which the EDP Renewables Group operates The statutory corporate income tax rates applicable in the countries in which EDP Renewables Group operates are as follows: COUNTRY 31 DEC 2020 31 DEC 2019 EUROPE: Belgium 25% 29.58% France 28% 28% - 32.02% Greece 24% 24% Hungary 9% 9% Italy 24% - 28.8% 24% - 28.8% Poland 19% 19% Portugal 21% - 31.5% 21% - 31.5% Romania 16% 16% Spain 25% 25% United Kingdom 19% 19% AMERICA: Brazil 34% 34% Canada 26.5% 26.5% Colombia 32% 33% Mexico 30% 30% United States of America 24.91% 24.91% EDP Renováveis S.A. and its subsidiaries file individual tax returns in accordance with the applicable tax legislation. Nevertheless, the company and the majority of its Spanish subsidiaries are taxed under the tax consolidation group regime foreseen in the Spanish law. EDP - Energias de Portugal, S.A. - Sucursal en España (Branch) is the dominant company of this Group, which includes other subsidiaries that are not within the renewables energy industry. As per the applicable tax legislation, tax periods may be subject to inspection by the various Tax Administrations during a limited number of years. Statutes of limitation differ from country to country as follows: USA, Belgium, Colombia and France: 3 years; Spain, United Kingdom and Portugal: 4 years; Brazil, Romania, Poland, Italy, Greece and Mexico: 5 years; and Canada: 10 years. Notwithstanding this, it is important to note that, in case of Portugal and France, if tax losses/credits being carried-forward are utilized, the statute of limitation is extended to the years when such tax losses/credits were generated. In Spain, tax losses may be subject to the Tax Authorities' verification up to 10 years after they are generated; once this period has expired, taxpayers must prove the origin of the tax losses whose utilization is intended. 67 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Tax losses generated each year are also subject to Tax Administrations’ review and reassessment. As per the legislation currently in force, losses may be used to offset yearly taxable income assessed in the subsequent periods as follows: 5 years in Portugal, Greece and Poland; 7 in Romania; 10 in Mexico; 12 in Colombia; 20 in Canada; and indefinitely in the United States, Spain, France, Italy, Belgium, Brazil and United Kingdom. Notwithstanding this, it is important to note that, in some geographies, tax losses generated in previous years might be subject to the limitation period that was applicable at the moment when they were generated (e.g., Portugal and the United States). Moreover, in France tax losses in a given year may be carried back against the taxable base assessed in the previous tax year, and in Canada in the 3 previous years. Nothwithstanding this, the deduction of tax losses in the USA, Portugal, Spain, Brazil, France, Italy, the United Kingdom and Poland is limited to a percentage of the taxable income of each period, or subject to other limitations. EDP Renováveis Group companies may, in accordance with the law, benefit from certain tax benefits or incentives under specific conditions. Most importantly, Production Tax Credits in the US which are the dominant form of wind remuneration in that country, and represent an extra source of revenue per unit of electricity over the first 10 years of the asset’s life. Wind farms that qualify for the application of the PTC prior to 1 January 2017, benefit from 100% of the credit ($28/MWh in 2018, $25/MWh in 2019 and 2020 and $26/MWh in 2021 – being adjusted to inflation in subsequent years). The PTC amount is reduced by 20% for wind farms qualifying in 2017, 40% in 2018 and 60% in 2019 Additional legislation in 2020 and 2021 extended the aforementioned regime to wind facilities, with start of construction in 2020 or 2021, attributing 60% of the tax credit amount. Additionally, EDP Group companies benefit from the Investment Tax Credit which avails solar projects to a credit based upon its capital expenditures. This credit amount equates to 26% for projects that start construction before 2022 and 22% for projects starting construction in 2023 as long as these projects go into service by 2025. Transfer pricing legislation is duly complied with by EDP Renováveis Group. Its policy follows the rules, guidelines and best international practices applicable across all geographies where the Group operates, in due compliance with the spirit and letter of the Law. Changes in the tax law with relevance to the EDP Renewables Group in 2020 As from 2020, the statutory CIT rates applicable in Belgium, France and Colombia are reduced as follows are reduced as follows: • In Belgium, with effect from 1 January 2020, the standard rate of CIT is reduced to 25% and the austerity surcharge is abolished; • In France, the Finance Bill 2018 voted on 30 December 2017 (LOI n° 2017-1837 du 30 décembre 2017 de finances pour 2018) approved a progressive reduction of the general CIT rate to 25% by 2022. For fiscal years starting in 2020, the CIT rate amounts to 28%; • In Colombia, the CIT rate is lowered from 33% to 32%. A further progressive reduction of 1% per year is expected until year 2022, dropping the final CIT rate to 30%. Corporate income tax provision. This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Current tax -32,098 -54,743 Deferred tax -50,809 -28,202 Income tax expense -82,907 -82,945 68 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The effective income tax rate as at 31 December 2020 and 2019 is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Profit before tax 768,931 709,108 Income tax expense -82,907 -82,945 Effective Income Tax Rate 10.78% 11.70% The difference between the theoretical and the effective income tax expense, results from the application of the law provisions in the determination of the tax base, as demonstrated below. The reconciliation between the nominal and the effective income tax rate for the Group during the years ended 31 December 2020 and 2019 is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Profit before taxes 768,931 709,108 Nominal income tax rate () 25,00% 25.00% Theoretical income tax expense -192,233 -177,277 Fiscal revaluations, amortization, depreciation and provisions 1,437 -8,144 Tax losses and tax credits 30,788 14,604 Financial investments in associates -6,231 725 Difference between tax and accounting gains and losses 56,363 73,212 Effect of tax rates in foreign jurisdictions and CIT rate changes 3,090 -6,959 Taxable differences attributable to non-controlling interests (USA) 15,298 15,921 Other 8,581 4,973 Efective income tax expense as per the Consolidated Income Statement -82,907 -82,945 () Statutory corporate income tax rate applicable in Spain The main captions are the following: • The caption "Tax losses and tax credits" mainly reflects the effect of the abovereferred PTCs retained by EDPR North America and the effect of tax losses in different geographies. • The caption "Difference between tax and accounting gains and losses" refers to changes in the Group’s perimeter not subject to income taxes. • The caption "Taxable differences attributable to non-controlling interests (USA)" essentially includes the effect inherent to the attribution of taxable income to non-controllable interests in the subgroup EDPR NA, as determined by the tax legislation of that geography. During 2020, the EDPR Group had various tax audits regarding different topics. The most relevant one was a general tax audit made to the tax consolidation group headed by EDP - Energias de Portugal, S.A. - Sucursal en España (Branch), whose scope covered fiscal years 2013 - 2016 and mainly focused on certain EDPR holding companies in Spain. The process was closed in November, 2020 without significant impacts in the consolidated financial statements. 69 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Extraordinary Contribution to the Energy Sector (CESE) Law 83-C/2013, of the State Budget 2014 ("Lei do Orçamento de Estado 2014"), approved by the Portuguese Government on 31 December 2013, introduced an extraordinary contribution applicable to the energy sector (CESE), with the objective of financing mechanisms that promote the energy sector systemic sustainability, through the establishment of a fund which aims to contribute for the reduction of tariff debt and to finance social and environmental policies in the energy sector. This contribution focuses generally on the economic operators that develop the following activities: (i) generation, transportation or distribution of electricity; (ii) transportation, distribution, storage or wholesale supply of natural gas; and (iii) refining, treatment, storage, transportation, distribution and wholesale supply of crude oil and oil products. CESE is calculated based on the companies’ net assets as at 1 January, which comply, cumulatively, to: (i) property, plant and equipment; (ii) intangible assets, except industrial property elements; and (iii) financial assets assigned to concessions or licensed activities. In the case of regulated activities, CESE focuses on the value of regulated assets if it is higher than the value of those assets.The CESE system has been successively extended and is now valid for 2020 through Law nº 71/2018 of 31 December. As mentioned in note 1, Portuguese government has extended the CESE to renewables. As at 31 December 2020, EDPR Group recorded in caption Tax Liabilities a value for this contribution of 3,173 thousand Euros. 16. Property, plant and equipment This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 COST Land and natural resources 29,585 31,724 Buildings and other constructions 19,276 15,666 Plant and machinery: - Renewables generation 16,446,322 17,396,990 - Other plant and machinery 10,985 9,764 Other 67,562 61,600 Assets under construction 2,571,806 1,446,787 19,145,536 18,962,531 ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES Depreciation charge -564,979 -551,106 Accumulated depreciation in previous years -4,941,938 -4,993,990 Impairment losses -348 -15,380 Impairment losses in previous years -146,553 -138,195 -5,653,818 -5,698,671 Carrying amount 13,491,718 13,263,860 The movement in Property, plant and equipment during 2020, is analysed as follows: THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFF TRANSFERS EXCHANGE DIFFERENCES CHANGES IN PERIMETER/ OTHER BALANCE AT 31 DEC COST Land and natural resources 31,724 770 -1,369 - -1,608 68 29,585 Buildings and other constructions 15,666 3,537 -250 72 -1,601 1,852 19,276 Plant and machinery 17,406,754 300,260 -80,025 722,866 -1,063,063 -829,485 16,457,307 Other 61,600 3,401 -586 2,527 -3,009 3,629 67,562 Assets under construction 1,446,787 2,012,655 -5 -725,465 -187,822 25,656 2,571,806 18,962,531 2,320,623 -82,235 - -1,257,103 -798,280 19,145,536 70 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 THOUSAND EUROS BALANCE AT 01 JAN CHARGE FOR THE PERIOD IMPAIRMENT LOSSES/ REVERSES DISPOSALS/ WRITE-OFF EXCHANGE DIFFERENCES CHANGES IN PERIMETER / OTHER BALANCE AT 31 DEC ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES Buildings and other constructions 11,513 1,501 - -130 -1,148 - 11,736 Plant and machinery 5,567,921 558,837 -275 -78,988 -308,117 -215,406 5,523,972 Assets under construction 76,129 - 623 - -3,771 - 72,981 Other 43,108 4,641 - -535 -2,211 126 45,129 5,698,671 564,979 348 -79,653 -315,247 -215,280 5,653,818 Plant and machinery includes the cost of the wind farms and solar plants under operation. Additions include the investment in wind farms and solar plants under development and construction mainly in the United States, Brazil, Poland and France. This caption also includes the allocation of the acquisition cost of certain companies due to the nature of the transactions, the type of assets and the initial stage of completion of the projects acquired (see note 6). The most significant ones, including additions from their acquisition, are: • Mexican company Parque Solar Los Cuervos, S. de R.L. de C.V. in the amount of 122,379 thousand Euros; • Polish companies Wind Field Wielkopolska, Sp. zo.o, Neo Solar Farm, Sp. z o.o., R.Wind, Sp. z o.o. and FW Warta, Sp. z o.o.for a total amount of 75,725 thousand Euros; • Colombian companies Elipse Energía, S.A.S. E.S.P., Omega Energía, S.A.S. E.S.P. and Kappa Energía, S.A.S. E.S.P. for a total amount of 55,862 thousand Euros; • UK companies Wind 2 Project 1 Limited, Altnabreac Wind Farm Limited, Ben Sca Wind Farm Limited, Moorshield Wind Farm Limited and Drummarnock Wind Farm Limited for a total amount of 55,765 thousand Euros; • Italian companies Energia Emissioni Zero 4, S.r.l., Aliseo, S.r.l., Wind Energy San Giorgio, S.r.l., Giglio, S.r.l. and VRG Wind 153, S.r.l. for a total amount of 29,336 thousand Euros; • French company Vaudrimesnil Energie, S.A.R.L. in the amount of 13,731 thousand Euros; • Greek company Wind Shape, Ltd. in the amount of 5,159 thousand Euros. Transfers from assets under construction into operation mainly refer to wind and solar farms that became operational mainly in the United States, Spain and France. Exchange differences are mainly generated by the variation in the exchange rate of the Brazilian Real, Polish Zloty and US Dollar. The caption Changes in perimeter/Other mainly includes: • Increase amounting to 209,736 thousand Euros related to the acquisition of the renewables business of Viesgo. The effect of the fair value adjustment of the assets, in the amount of 214,254 thousand Euros, has been included in the caption Additions (see note 6 and 42). • Decrease due to the sale of the 80% stake and loss of control in the companies EDPR Wind Ventures XVII, LLC and subsidiaries in the amount, net of accumulated depreciation, of 476,964 thousand Euros (see note 6); 71 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 • Decrease due to the sale of the following Spanish portfolio of companies: Bon Vent de Corbera, S.L.U., Eólica Sierra de Ávila, S.L.U., Parc Eòlic de Torre Madrina, S.L.U., Parc Eòlic de Coll de Moro, S.L.U., Parc Eòlic de Vilalba dels Arcs, S.L.U. and Aprofitament D'Energies Renovables de L'Ebre, S.L. in the amount, net of accumulated depreciation, of 332,602 thousand Euros (see note 6); • Decrease due to the sale of the entire stake in the company Rosewater Wind Farm LLC in the amount, net of accumulated depeciation, of 109,754 thousand Euros (see note 6). The Company has taken out an insurance global program to cover risks relating to property, plant and equipment. The coverage provided by these policies is considered to be sufficient. Loans with credit institutions formalized as ‘Project Finances’ are sec ured by the shares of the corresponding wind farms and, ultimately, by the fixed assets of the wind farm to which the financing is related (see note 31). Additionally, the construction of certain assets has been partly financed by grants received from different Government Institutions. The movement in Property, plant and equipment during 2019, is analysed as follows: THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFF TRANSFERS EXCHANGE DIFFERENCES CHANGES IN PERIMETER/ OTHER BALANCE AT 31 DEC COST Land and natural resources 32,589 1,196 - - -40 -2,021 31,724 Buildings and other constructions 21,905 197 - - 230 -6,666 15,666 Plant and machinery 18,489,046 15,050 -62,894 501,213 166,855 -1,702,516 17,406,754 Other 128,252 3,196 -666 1,194 1,371 -71,747 61,600 Assets under construction 923,436 1,087,899 -11,747 -502,407 9,325 -59,719 1,446,787 19,595,228 1,107,538 -75,307 - 177,741 -1,842,669 18,962,531 THOUSAND EUROS BALANCE AT 01 JAN CHARGE FOR THE PERIOD IMPAIRMENT LOSSES/ REVERSES DISPOSALS / WRITE - OFF EXCHANGE DIFFERENCES CHANGES IN PERIMETER / OTHER BALANCE AT 31 DEC ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES Buildings and other constructions 13,462 1,722 - - 158 -3,829 11,513 Plant and machinery 5,491,951 544,396 9,771 -56,137 44,984 -467,044 5,567,921 Assets under construction 70,021 - 5,609 - 499 - 76,129 Other 98,000 4,988 - -626 1,150 -60,404 43,108 5,673,434 551,106 15,380 -56,763 46,791 -531,277 5,698,671 Plant and machinery includes the cost of the wind farms and solar plants under operation. Additions include the investment in wind farms and solar plants under development and construction mainly in the United States, Spain, Italy, France, Brazil and Portugal. This caption also includes the allocation of the acquisition cost of certain companies due to the nature of the transactions, the type of assets and the initial stage of completion of the projects acquired (see note 6). The most significant ones, including additions from their acquisition, are: • Polish companies B-Wind Polska, Sp. z o.o. and C-Wind Polska, Sp. z o.o., Lichnowy Windfarm, Sp. z o.o, EW Dobrzyca, sp.z o.o., Kowalewo Wind, Sp. zo.o., European Wind Power Krasin, Sp. zo.o., Nowa Energia 1, Sp. zo.o. and Farma Wiatrowa Bogoria, Sp. zo.o. totalling 62,058 thousand Euros • Colombian companies Eolos Energías, S.A.S. E.S.P. and Vientos del Norte, S.A.S. E.S.P. amounting to 26,828 thousand Euros and 9,202 thousand Euros respectively 72 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 • Brazilian portfolio of companies Pereira Barreto amounting to Euro 5,906 thousand Euros. Disposals/Write-offs, net of accumulated depreciation, include, among others, 16,172 thousand Euros for EDPR NA that mainly refers to the abandonment of ongoing projects in North America (see note 12). Transfers from assets under construction into operation mainly refer to wind and solar farms that become operational in the United States, Portugal, Italy, Spain and France. Exchange differences are mainly generated by the variation in the exchange rate of the US Dollar and Romanian Leu. The caption Changes in perimeter/Other mainly includes: • Decrease due to the sale of the companies EDPR Participaciones S.L., EDP Renewables France S.A.S. and their subsidiaries (see note 6), in the amount, net of accumulated depreciation, of 1,046,834 thousand Euros • Decrease due to the sale of Brazilian portfolio of companies Babilônia (see note 6) in the amount, net of accumulated depreciation, of 190,365 thousand Euros; and • Decrease due to the reclassification to held-for-sale of the assets related to the UK company EDPR UK and the Polish companies B-Wind Polska, Sp. z o.o. and C-Wind Polska, Sp. z o.o. (see note 27) in the amount, net of depreciation, of 570 thousand Euros and 9,907 thousand Euros respectively. Assets under construction as at 31 December 2020 and 2019 are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 EDPR NA Group 1,485,274 1,003,395 EDPR EU Group 712,437 345,918 EDPR BR Group 229,503 61,279 Others 144,592 36,195 2,571,806 1,446,787 Assets under construction as at 31 December 2020 are mainly related to wind and solar farms under construction and development in the United States of America, Poland, Brazil, Canada, Colombia, Mexico, Italy, Spain and France. Financial interests capitalized during the period amount to 26,120 thousand Euros as at 31 December 2020 (31 December 2019: 17,742 thousand Euros) (see note 14). Personnel costs capitalised during the period amount to 38,324 thousand Euros as at 31 December 2020 (31 December 2019: 34,417 thousand Euros) (see note 11). The EDP Renováveis Group has purchase obligations disclosed in Note 38 - Commitments. 73 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 17. Righ of use assets In the context of the adoption of IFRS 16 as of 1 January 2019 (see note 3), the caption Right of use assets was created, which presents the following detail: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 COST Land and natural resources 699,214 625,386 Buildings and other constructions 30,246 17,710 Plant and machinery: 118 166 Other 4,150 3,196 733,728 646,458 ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES Depreciation charge -34,311 -30,494 Accumulated depreciation -25,372 - -59,683 -30,494 Carrying amount 674,045 615,964 The movements in Right of use assets, for the Group, for the period ended 31 December 2020, are as follows: THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFF EXCHANGE DIFFERENCES CHANGES IN PERIMETER/ OTHER BALANCE AT 31 DEC COST Land and natural resources 625,386 137,186 -8 -48,206 -15,144 699,214 Buildings and other constructions 17,710 14,915 -281 -1,485 -613 30,246 Plant and machinery: 166 - - -48 - 118 Other 3,196 858 -9 -69 174 4,150 646,458 152,959 -298 -49,808 -15,583 733,728 THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFF EXCHANGE DIFFERENCES CHANGES IN PERIMETER/ OTHER BALANCE AT 31 DEC ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES Land and natural resources -25,064 -27,517 1 2,635 1,803 -48,142 Buildings and other constructions -4,353 -5,641 136 330 180 -9,348 Plant and machinery: -5 -4 - 2 - -7 Other -1,072 -1,149 4 24 7 -2,186 -30,494 -34,311 141 2,991 1,990 -59,683 The caption Changes in perimeter/Other mainly includes: • Increase amounting to 15,403 thousand Euros related to the acquisition of the renewables business of Viesgo (see note 6 and 42); • Decrease, net of accumulated depreciation, amounting to 29,646 thousand Euros due to the sale of the 80% stake and loss of control in the companies EDPR Wind Ventures XVII, LLC and subsidiaries (see note 6); 74 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 • Decrease, net of accumulated depreciation, amounting to 8,919 thousand Euros due to the sale of the following Spanish portfolio of companies: Bon Vent de Corbera, S.L.U., Eólica Sierra de Ávila, S.L.U., Parc Eòlic de Torre Madrina, S.L.U., Parc Eòlic de Coll de Moro, S.L.U., Parc Eòlic de Vilalba dels Arcs, S.L.U. and Aprofitament D'Energies Renovables de L'Ebre, S.L (see note 6). The movements in Right of use assets, for the Group, for the period ended 31 December 2019, are as follows: THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFF EXCHANGE DIFFERENCES CHANGES IN PERIMETER/ OTHER BALANCE AT 31 DEC COST Land and natural resources 585,989 95,409 - -1,392 -54,620 625,386 Buildings and other constructions 19,763 2,714 -7 -15 -4,745 17,710 Plant and machinery: 172 - - -4 -2 166 Other 2,601 808 -51 3 -165 3,196 608,525 98,931 -58 -1,408 -59,532 646,458 THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFF EXCHANGE DIFFERENCES CHANGES IN PERIMETER/ OTHER BALANCE AT 31 DEC ACCUMULATED DEPRECIATION AND IMPAIRMENT LOSSES Land and natural resources - -26,535 - 47 1,424 -25,064 Buildings and other constructions - -4,873 4 6 510 -4,353 Plant and machinery: - -5 - - - -5 Other - -1,111 8 - 31 -1,072 - -32,524 12 53 1,965 -30,494 The caption Changes in perimeter/Other mainly includes a decrease due to the sale of the the companies EDPR Participaciones S.L., EDP Renewables France S.A.S. and their subsidiaries (see note 6), in the amount, net of accumulated depreciation, of 53,295 thousand Euros and a decrease in the amount of 4,270 thousand Euros due to the reclassification to held for sale of certain offshore companies (see note 27). 18. Intangible assets This caption is analysed as follows: THOUSAND EUROS EUROS 31 DEC 2020 31 DEC 2019 COST Industrial property, other rights and other intangible assets 369,249 345,384 Concession Rights 27,786 15,182 Intangible assets under development 44,199 44,906 441,234 405,472 ACCUMULATED AMORTISATION Amortisation charge -16,841 -9,942 Accumulated amortisation in previous years -98,207 -92,949 Impairment losses - - Impairment losses in previous years -11,958 -12,264 -127,006 -115,155 Carrying amount 314,228 290,317 75 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Industrial property, other rights and other intangible assets mainly include: • Generated green certificates pending to be sold amounting to 148,668 thousand Euros (31 December 2019: 152,940 thousand Euros) (see note 2 i)); • Sofware and applications in the amount of 108,243 thousand Euros (31 December 2019: 81,612 thousand Euros); • Wind generation licenses amounting to 64,228 thousand Euros in the EDPR NA Group (31 December 2019: 72,649 thousand Euros). The movement in Intangible assets during 2020, is analysed as follows: THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS / WRITE-OFFS TRANSFERS EXCHANGE DIFFERENCES OTHERS BALANCE AT 31 DEC COST Industrial property, other rights and other intangible assets 345,384 719 -14 24,479 -13,783 12,464 369,249 Concession rights 15,182 - - 12,304 -23 323 27,786 Intangible assets under development 44,906 37,006 - -36,783 1 -931 44,199 405,472 37,725 -14 - -13,805 11,856 441,234 THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFFS EXCHANGE DIFFERENCES OTHERS BALANCE AT 31 DEC ACCUMULATED AMORTISATION AND IMPAIRMENT LOSSES Industrial property, other rights and other intangible assets 110,712 14,681 -14 -4,964 -111 120,304 Concession Rights 4,443 2,160 - -9 108 6,702 115,155 16,841 -14 -4,973 -3 127,006 Additions mainly refer to software license acquisitions during the period. The caption Others mainly includes an increase amounting to 13,340 thousand Euros related to the acquisition of the renewables business of Viesgo (see note 6 and 42). The movement in Intangible assets during 2019, is analysed as follows: THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFFS EXCHANGE DIFFERENCES OTHERS BALANCE AT 31 DEC COST Industrial property, other rights and other intangible assets 264,361 32,254 -14,141 -1,853 64,763 345,384 Concession rights - - -402 - 15,584 15,182 Intangible assets under development 48,260 7,052 - - -10,406 44,906 312,621 39,306 -14,543 -1,853 69,941 405,472 76 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 THOUSAND EUROS BALANCE AT 01 JAN ADDITIONS DISPOSALS/ WRITE-OFFS EXCHANGE DIFFERENCES OTHERS BALANCE AT 31 DEC ACCUMULATED AMORTISATION AND IMPAIRMENT LOSSES Industrial property, other rights and other intangible assets 61,975 9,643 -14,125 -237 53,456 110,712 Concession Rights - 299 -402 - 4,546 4,443 61,975 9,942 -14,527 -237 58,002 115,155 Additions include the recognition of deferred green certificates rights in Romania and Poland in the amount of 17,192 thousand Euros and 6,243 thousand Euros respectively. 19. Goodwill For the Group, the breakdown of Goodwill resulting from the difference between the cost of the investments and the corresponding share of the fair value of the net assets acquired, is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Goodwill booked in EDPR EU Group: 577,547 495,516 - EDPR Spain Group 470,784 388,180 - EDPR France Group 25,904 25,904 - EDPR Portugal Group 43,712 43,712 - Other 37,147 37,720 Goodwill booked in EDPR NA Group 644,499 702,818 Goodwill booked in EDPR BR Group 620 876 1,222,666 1,199,210 The movements in Goodwill, by subgroup, during 2020 are analysed as follows: THOUSAND EUROS BALANCE AT 01 JAN INCREASES DECREASES IMPAIRMENT EXCHANGE DIFFERENCES CHANGE PERIMETER / OTHERS BALANCE AT 31 DEC EDPR EU Group: - EDPR Spain Group 388,180 - - -132 - 82,736 470,784 - EDPR France Group 25,904 - - - - - 25,904 - EDPR Portugal Group 43,712 - - - - - 43,712 - Other 37,720 - - - -573 - 37,147 EDPR NA Group 702,818 - - - -58,319 - 644,499 EDPR BR Group 876 - - - -256 - 620 1,199,210 - - -132 -59,148 82,736 1,222,666 Changes in the perimeter / others refer to: • Increase in the amount of 148,341 thousand Euros related with the acquisition of Viesgo’s renewable business (see note 6 and 42) of which an amount of 4,641 thousand Euros refers to associate companies consolidated by the equity method, thus presented in Investments in joint ventures and associates caption (see note 20); • Decrease in the amount of 60,964 thousand Euros related with the sale of the following Spanish portfolio of companies: Bon Vent de Corbera, S.L.U., Eólica Sierra de Ávila, S.L.U., Parc Eòlic de Torre Madrina, S.L.U., Parc Eòlic de Coll de Moro, S.L.U., Parc Eòlic de Vilalba dels Arcs, S.L.U. and Aprofitament D'Energies Renovables de L'Ebre, S.L. (see note 6). 77 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The movements in Goodwill, by subgroup, during 2019 are analysed as follows: THOUSAND EUROS BALANCE AT 01 JAN INCREASES DECREASES EXCHANGE DIFFERENCES CHANGES PERIMETER / OTHERS BALANCE AT 31 DEC EDPR EU Group: - EDPR Spain Group 490,385 - - - -102,205 388,180 - EDPR France Group 61,460 - - - -35,556 25,904 - EDPR Portugal Group 43,712 - - - - 43,712 - Other 40,318 - - -161 -2,437 37,720 EDPR NA Group 689,799 - - 13,019 - 702,818 EDPR BR Group 888 - - -12 - 876 1,326,562 - - 12,846 -140,198 1,199,210 Changes in the perimeter/ others includes the decrease in the amount of 138,704 thousand Euros due to the sale of the the companies EDPR Participaciones S.L., EDP Renewables France S.A.S. and their subsidiaries (see note 6). Impairment tests - EDPR Group Goodwill, property, plant and equipment, right of use assets, intangible assets and investments in joint ventures and associates of the EDPR Group are tested for impairment each year. In the case of operational wind farms, it is performed by determining the recoverable value through the value in use. Goodwill is allocated to each country where EDPR Group performs its activity, so the EDPR Group aggregate all the CGUs cash flows in each country in order to calculate the recoverable amount of goodwill and the rest of the assets allocated. To perform this analysis, a Discounted Cash Flow (DCF) method was used. This method is based on the principle that the estimated value of an entity or business is defined by its capacity to generate financial resources in the future, assuming these can be removed from the business and distributed among the company’s shareholders, without compromising the maintenance of the activity. Therefore, for the businesses developed by EDPR's CGUs, the valuation was based on free cash flows generated by the business, discounted at appropriate discount rates. The future cash flows projection period used is the useful life of the assets (30 to 35 years) which is consistent with the current depreciation method. The cash flows also incorporate the long-term off-take contract in place and long-term estimates of power prices, whenever the asset holds merchant exposure. The main assumptions used for the impairment tests are as follows: • Power produced: net capacity factors used for each CGU utilize the wind studies carried out, which takes into account the long-term predictability of wind output and that wind generation is supported in nearly all countries by regulatory mechanisms that allow for production and priority dispatching whenever weather conditions permit; • Electricity remuneration: regulated or contracted remuneration has been applied where available, as for the CGUs that benefit from regulated remuneration or that have signed contracts to sell their output during all or part of their useful life; where this is not available, prices were derived using price curves projected by the company based on its experience, internal models and using external data references; • New capacity: tests were based on the best information available on the wind farms expected to be built in coming years, adjusted by probability of success and by the growth prospects of the company based on the Business Plan Targets, which includes the commitment to develop under construction wind farms, its historical growth and market size projections. The tests considered the contracted and expected prices to buy turbines from various suppliers; • Operating costs: established contracts for land leases and maintenance agreements were used; other operating costs were projected consistent with the company’s experience and internal models; 78 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 • Terminal value: considered as a 15% of the initial investment in each wind farm, considering inflation; • Discount rate: the discount rates used are post- tax, reflect EDPR Group’s best estimate of the risks specific to each CGU and range as follows: 2020 2019 Europe 3.55-6.01% 3.1% - 5.8% North America 4.9%-7.1% 4.9%-6.3% Brazil 8.51%-10.17% 8.8% - 10.4% Others 8.24% - Impairment tests done have taken into account the regulation changes in each country, as disclosed in note 1. EDPR has performed the following sensitivity analyses in the results of goodwill impairment tests performed in Europe, North America and Brazil in some of the key variables, such as: • 5% reduction of Merchant Prices used in the base case. This sensitivity analysis performed for this assumption independently would not suppose any impairment for the goodwill allocated to each country • 100 basis points increase of the discount rate used in the base case. This sensitivity analysis performed for this assumption independently would not suppose any impairment for the goodwill allocated to each country. 20. Investments in Joint Ventures and Associates This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 INVESTMENTS IN ASSOCIATES Interests in joint ventures 388,337 429,743 Interests in associates 86,547 30,442 Carrying amount 474,884 460,185 For the purpose of the consolidated financial statements presentation, goodwill arising from the acquisition of joint ventures and associated companies is presented in this caption. During 2020, and in the context of the acquisition of the renewable business of Viesgo, there has been an increase of goodwill arising from the acquisition of associated companies in the amount of 4,641 thousand Euros (see note 42). The movement in Investments in joint ventures and associates, is analysed as follows: THOUSAND EUROS 2020 2019 Balance as at 1 January 460,185 348,725 Changes in the consolidation perimeter 5,965 - Changes in consolidation method -18,574 - Acquisitions / Increases 101,664 214,582 Share of profits of joint ventures and associates -6,151 3,392 Dividends -28,197 -21,882 Exchange differences -38,410 3,660 Hedging reserve in joint ventures and associates -1,633 -10,330 Transfer of losses to loans/liabilities - 12,282 Transfer to assets held-for-sale - -90,280 Others 35 36 Balance as at 31 December 474,884 460,185 79 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Changes in the consolidation perimeter refers to: • Increase amounting to 9,436 thousand Euros in interests in associates for the companies Elecdey Carcelén, S.A., Eos Pax IIa, S.L., Geólica Magallón, S.L., San Juan de Bargas Eólica, S.L., Unión de Generadores de Energía, S.L. and Eólica de São Julião, Lda. related to the acquisition of the renewable business of Viesgo (see note 6). The effect of the fair value adjustment of the interest in associates, in the amount of 44,023 thousand Euros, has been included in the caption Acquisitions / Increases. Further, Acquisitions / Increases also includes the result of the purchase price allocation exercise, according to IFRS 3 requirements, that has resulted in the recognition of Goodwill in the amount of 4,641 thousand Euros (see note 42); • Net decrease amounting to 2,369 thousand Euros due to the reorganization resulting from loss of control in the EDPR’s offshore business during 2020 as a consequence of the the joint control partnership in this business following the strategic memorandum of understanding dated May 2019 and signed between EDPR and ENGIE by which a co-controlled 50/50 joint venture in fixed and floating offshore wind business, OW Offshore, S.L., has been established. This entity will be the exclusive vehicle of investment of EDPR and ENGIE for offshore wind opportunities worldwide (see note 6); • Decrease amounting to 1,102 thousand Euros related to the company Aprofitament D'Energies Renovables de L'Ebre, S.L.in the context of the transaction of the sale of the entire stake of certain Spanish portfolio (see note 6). Changes in the consolidation method refers to: • Increase amounting to 37,368 thousand Euros related to the 20% of interest in the portfolio of companies EDPR Wind Ventures XVII, LLC and subsidiaries (see note 6) as a consecuence of the sale of the 80% stake and loss of control in such portfolio (see note 6). The effect of the fair value adjustment of the interest in joint ventures, in the amount of 20,561 thousand Euros, has been included in the caption Acquisitions / Increases; • Decrease amounting to 46,527 thousand Euros related to the company Compañía Eólica Aragonesa, S.A. where EDPR had 50% of the shares of the company and gained control, throught a business combination achieved in stages, by acquiring the remaining 50% of the shares in the context of the acquisition transaction of Viesgo’s renewable business (see note 6 and 42). • Decrease amounting to 9,415 thousand Euros related to the company Nation Rise Wind Farm GP Inc. Nation Rise has reached the construction phase of a 100 MW wind farm in Ontario, Canada. This facility was scheduled to begin commercial operations in the first quarter of 2020. On December 6th, 2019, the Ontario Minister of the Environment, Conservation and Parks issued a decision to revoke Nation Rise’s Renewable Energy Approval (REA). This was a reversal of prior approvals by the same Ministry and was also previously ratified by the Environmental Review Tribunal. As a result of this decision, EDPR was forced to halt all construction activities. Immediately following this revocation, Nation Rise filed a Notice of Application for Judicial Review of the Ministers revocation of the REA. Subsequent to the filing for judicial review, Nation Rise was successful in obtaining a determination of force majeure, providing for a delay in the start date of the project’s power sales contract. On M ay 13, 2020, the Ontario Superior Court rendered its decision fully in favor of the Nations Rise project and overturned the Ministry’s actions. Considering the positive outcome of the litigation, the project will continue its development and construction. As a consequence of the delays caused by the legal procedure, and according with the agreements reached in the selling contract of the project with Axium, as of 3 of June 2020, EDPR returned the original consideration received plus interest and now owns 100% of the project. Additions / Increases caption, besides the fair value adjustments mentioned above in the amount of 64,584 thousand Euros, mainly includes capital contributions to North American companies. 80 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The following table resumes the companies' financial information of joint ventures included in the Group consolidated accounts, as of December 2020: THOUSAND EUROS FLAT ROCK WIND-POWER GOLDFINGER VENTURES II PORTFOLIO VENTO XVII PORTFOLIO GOLDFINGER VENTURES PORTFOLIO VENTO XIX PORTFOLIO COMPANIES' FINANCIAL INFORMATION OF JOINT VENTURES Non-Current Assets 196,645 296,754 506,707 202,360 449,712 Current Assets (including cash and cash equivalents) 3,021 2,859 4,590 533 11,435 Cash and cash equivalents 1,927 1,044 -126 41 4,569 Total Equity 192,900 162,372 166,781 118,492 120,578 Long term Financial debt - - - - - Non-Current Liabilities 3,714 132,423 338,441 80,810 336,584 Short term Financial debt - 89 - - - Current Liabilities 3,052 4,818 6,075 3,591 3,985 Revenues 7,106 19,068 39,505 10,838 25,448 Fixed and intangible assets amortisations - - - - - Other financial expenses -55 -4,664 -29,782 -2,759 -18,485 Income tax expense - - - - - Net profit (loss) for the year -19,919 4,102 -1,694 -818 20,055 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 103,315 69,539 53,917 51,794 44,943 Goodwill (included in Net assets) - - - - - Dividends paid 10,149 6,231 - 3,180 5,477 THOUSAND EUROS FLAT ROCK WIND-POWER II EVOLUCIÓN 2000 OCEANWINDS OTHER COMPANIES' FINANCIAL INFORMATION OF JOINTVENTURES Non-Current Assets 80,247 31,945 872,533 841 Current Assets (including cash and cash equivalents) 2,334 2,581 133,404 2,613 Cash and cash equivalents 1,085 589 38,740 343 Total Equity 79,905 19,922 8,790 2,886 Long term Financial debt - 3,679 - - Non-Current Liabilities 1,411 8,750 166,013 541 Short term Financial debt - 4,522 10,611 - Current Liabilities 1,265 5,854 831,854 27 Revenues 2,726 6,743 1,108 - Fixed and intangible assets amortisations - - - - Other financial expenses -25 -125 -29,414 - Income tax expense - -657 305 - Net profit (loss) for the year -7,996 1,970 -18,096 -3,472 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 39,952 14,431 9,027 1,419 Goodwill (included in Net assets) - 2,667 5,352 - Dividends paid - - - 1,262 81 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The following table resumes the companies' financial information of joint ventures included in the Group consolidated accounts, as of December 2019: THOUSAND EUROS FLAT ROCK WIND-POWER GOLDFINGER VENTURES II PORTFOLIO GOLDFINGER VENTURES PORTFOLIO VENTO XIX PORTFOLIO FLAT ROCK WIND-POWER II COMPANIES' FINANCIAL INFORMATION OF JOINT VENTURES Non-Current Assets 231,447 296,964 219,354 493,325 94,214 Current Assets (including cash and cash equivalents) 1,547 1,037 1,396 25,138 1,465 Cash and cash equivalents 593 1,037 1,396 16,732 635 Total Equity 225,323 185,572 137,831 100,274 92,251 Long term Financial debt - - - - - Non-Current Liabilities 4,001 111,368 81,447 377,751 1,516 Short term Financial debt - - - 198 - Current Liabilities 3,670 1,061 1,472 40,438 1,912 Revenues 8,378 - - 25,063 3,203 Fixed and intangible assets amortisations - - - - - Other financial expenses -56 -114 -140 -13,616 -26 Income tax expense - - - - - Net profit (loss) for the year -18,771 -84 -124 22,701 -7,534 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 121,607 79,136 59,237 51,837 46,125 Goodwill (included in Net assets) - - - - - Dividends paid 12,688 - - 3,289 - THOUSAND EUROS COMPAÑÍA EÓLICA ARAGONESA EVOLUCIÓN 2000 NATION RISE PORTFOLIO OTHER COMPANIES' FINANCIAL INFORMATION OF JOINTVENTURES Non-Current Assets 124,191 34,271 81,180 842 Current Assets (including cash and cash equivalents) 7,883 4,174 5,577 2,817 Cash and cash equivalents 6,263 2,450 - 340 Total Equity 109,738 18,406 41,974 3,097 Long term Financial debt - 8,200 - - Non-Current Liabilities 19,621 14,764 9,770 540 Short term Financial debt - 3,959 458 - Current Liabilities 2,715 5,275 35,013 22 Revenues 19,262 8,092 - - Fixed and intangible assets amortisations - - - - Other financial expenses -342 -126 -19 - Income tax expense 1,359 -840 - -1 Net profit (loss) for the year 1,018 2,521 -223 46,812 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 45,830 13,581 10,861 1,529 Goodwill (included in Net assets) 26,108 2,667 - - Dividends paid 3,086 1,416 - - 82 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The following table resumes the companies' financial information of associates included in the Group consolidated accounts, as of December 2020: THOUSAND EUROS EÓLICA SÃO JULIÃO PQ. EÓLICO SIERRA DEL MADERO GEÓLICA MAGALLÓN SAN JUAN DE BARGAS COMPANIES' FINANCIAL INFORMATION OF ASSOCIATES Non-Current Assets 6,145 45,647 6,884 8,740 Current Assets 11,197 14,281 3,698 2,141 Equity 2,780 33,412 4,960 7,973 Non-Current Liabilities 13,504 3,974 1,615 642 Current Liabilities 1,058 22,542 4,007 2,266 Revenues 9,122 9,895 3,903 2,679 Net profit (loss) for the year 1,389 2,547 1,038 -340 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 24,031 14,031 11,658 10,939 Goodwill (included in Net assets) 1,457 - 683 - Dividends paid - 1,470 - - THOUSAND EUROS DESARROLLOS EÓLICOS DE CANARIAS EOS PAX II PQ. EÓLICO BELMONTE OTHER COMPANIES' FINANCIAL INFORMATION OF ASSOCIATES Non-Current Assets 2,690 1,479 18,590 25,946 Current Assets 1,529 1,915 2,033 9,065 Equity 2,616 2,640 8,234 20,501 Non-Current Liabilities 1,035 414 4,790 12,727 Current Liabilities 568 340 7,599 1,783 Revenues 1,788 2,820 4,575 9,108 Net profit (loss) for the year 154 493 1,187 -2,794 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 7,641 5,966 4,184 8,097 Goodwill (included in Net assets) 6,479 - 1,726 3,976 Dividends paid 428 - - - The following table resumes the companies' financial information of associates included in the Group consolidated accounts, as of December 2019: THOUSAND EUROS PQ. EOLICO BELMONTE DESARROLLOS EÓLICOS DE CANARIAS PQ. EÓLICO SIERRA DEL MADERO OTHER COMPANIES' FINANCIAL INFORMATION OF ASSOCIATES Non-Current Assets 20,849 3,163 47,410 46,683 Current Assets 6,188 2,294 13,810 11,658 Equity 7,039 3,405 34,419 22,490 Non-Current Liabilities 13,708 1,283 5,446 34,158 Current Liabilities 6,290 769 21,355 1,693 Revenues 4,057 3,238 11,109 11,492 Net profit (loss) for the year 1,384 1,610 3,662 3,036 AMOUNTS PROPORTIONALLY ATTRIBUTED TO EDPR GROUP Net assets 3,830 8,003 14,456 4,153 Goodwill (included in Net assets) 1,726 6,479 - 1,479 Dividends paid - 720 - 683 83 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 During 2020, the significant companies' financial information of joint ventures and associates presented the following fair value reconciliation of net assets proportionally attributed to EDPR Group: THOUSAND EUROS EQUITY % INVESTMENT FAIR VALUE ADJUSTMENTS GOODWILL OTHERS NET ASSETS Flat Rock Windpower 192,900 50,00% - - 6,865 103,315 Vento XIX portfolio 120,578 20,00% 21,881 -1,053 44,943 Flat Rock Windpower II LLC 79,905 50,00% - - - 39,952 Vento XVII portfolio 166,781 20,00% 20,561 - - 53,917 Evolución 2000 19,922 49,15% 1,972 2,667 - 14,431 Goldfinger Ventures II LLC 162,372 50,00% -11,647 - - 69,539 OceanWinds 8,790 50,00% - 5,352 -720 9,027 Goldfinger Ventures LLC 118,492 50,00% -7,452 - - 51,794 Eólica de São Julião, Lda. 2,780 45,00% 21,321 1,457 - 24,031 Parque Eólico Sierra del Madero 33,412 42,00% - 14,031 Geólica Magallón, S.L. 4,960 36,24% 9,177 683 - 11,658 San Juan de Bargas Eólica, S.L. 7,973 47,01% 7,190 - 10,939 Desarrollos Eólicos Canarias, S.A. 2,616 44,75% - 6,479 -9 7,641 Eos Pax IIa, S.L. 2,640 48,50% 4,298 - 388 5,966 Parque Eólico Belmonte 8,234 29,90% - 1,726 -4 4,184 During 2019, the significant companies' financial information of joint ventures and associates presents the following fair value reconciliation of net assets proportionally attributed to EDPR Group: THOUSAND EUROS EQUITY % INVESTMENT FAIR VALUE ADJUSTMENTS GOODWILL OTHERS NET ASSETS Flat Rock Windpower 225,323 50,00% - - 8,945 121,607 Goldfinger Ventures II portfolio 185,572 50,00% -13,650 - - 79,136 Goldfinger Ventures portfolio 137,831 50,00% -9,679 - - 59,237 Vento XIX portfolio 100,274 20,00% 31,782 - - 51,837 Flat Rock Windpower II LLC 92,251 50,00% - - - 46,125 Compañía Eólica Aragonesa 109,738 50,00% -9,039 - - 45,830 Parque Eólico Sierra del Madero 34,419 42,00% - - - 14,456 Evolución 2000 18,406 49,15% 1,867 2,667 - 13,581 Nation Rise portfolio 41,974 25,00% 367 - - 10,861 Desarrollos Eólicos de Canarias 3,405 44,75% - 6,479 - 8,003 Parque Eólico Belmonte 7,039 29,90% - 1,726 - 3,830 EDPR commitments to provide funding to Joint Ventures as at 31 December 2020 are: 2020 CAPITAL OUTSTANDING BY MATURITY THOUSAND EUROS TOTAL LESS THAN 1 YEAR FROM 1 TO 3 YEARS FROM 3 TO 5 YEARS MORE THAN 5 YEARS EDPR Commitments to provide funding to Joint Ventures 305,000 305,000 - - - 305,000 305,000 - - - EDPR Commitments to provide funding for Joint Ventures in 2020 refer to funds agreed to be provided to OceanWinds during 2021 for financing the offshore business, in the form of shareholder loans. 84 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 EDPR commitments to provide funding to Joint Ventures as at 31 December 2019 are: 2019 CAPITAL OUTSTANDING BY MATURITY THOUSAND EUROS TOTAL LESS THAN 1 YEAR FROM 1 TO 3 YEARS FROM 3 TO 5 YEARS MORE THAN 5 YEARS EDPR Commitments to provide funding to Joint Ventures 67,533 67,533 - - - 67,533 67,533 - - - EDPR Commitments to provide funding for Joint Ventures refer to: • C ommited funds for Offshore projects through formalized shareholder’s loan agreements which outstanding undisbursed amount as of December 31, 2019 is 16,911 thousand Euros • Commited funds for Offshore projects through formalized capital contributions which outstanding undisbursed amount as of December 31, 2019 is 9,792 thousand Euros • Commited funds by EDPR North America in relation to Goldfinger joint ventures that refers to the outstanding obligation to complete the construction of the related solar farm facilities in the amount of 40,830 thousand Euros. EDPR Group granted parent company guarantees for certain joint venture projects. Total guarantees granted refer to financial and operational guarantees granted by EDPR to joint ventures in the amount of 29,946 thousand Euros and 287,736 thousand Euros respectively. Further, EDP Energías de Portugal Sucursal en España has granted financial and operational guarantees to EDPR’s joint ventures in the amount of 244,708 thousand Euros and 10,187 thousand Euros respectively. 21. Deferred tax assets and liabilities EDP Renováveis Group records the tax effect resulting from temporary differences between the assets and liabilities determined on an accounting basis and on a tax basis. As at 31 December 2020, on a consolidated basis, the movement by nature of Net Deferred Tax Assets and Liabilities are as follows: NET DEFERRED TAX ASSETS THOUSAND EUROS BALANCE AT 31.12.2019 MOV. RESULTS MOV. RESERVES PERIMETER VARIATIONS, EXCHANGE DIFFERENCES AND OTHERS BALANCE AT 31.12.2020 Tax losses and tax credits 701,336 -24,006 - -59,306 618,024 Provisions 11,538 432 - -1,330 10,640 Financial instruments 14,305 194 350 -2,654 12,195 Property plant and equipment 52,232 11,000 831 732 64,795 Non-deductible financial expenses 35,502 -331 - -641 34,530 Other temporary differences 40,605 -1,230 3,795 -2,773 40,397 Assets/liabilities compensation of deferred taxes -729,346 -10,019 -975 81,927 -658,413 126,172 -23,960 4,001 15,955 122,168 85 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 NET DEFERRED TAX LIABILITIES THOUSAND EUROS BALANCE AT 31.12.2019 MOV. RESULTS MOV. RESERVES PERIMETER VARIATIONS, EXCHANGE DIFFERENCES AND OTHERS BALANCE AT 31.12.2020 Financial instruments 6,119 3,661 1,623 -460 10,943 Property plant and equipment 323,362 2,786 - -41,547 284,601 Allocation of fair value to assets and liabilities acquired 384,082 8,960 - 40,401 433,443 Income from institutional partnerships (US wind farms) 348,976 23,930 53 -29,491 343,468 Other temporary differences 26,870 -5,306 -923 1,463 22,104 Assets/liabilities compensation of deferred taxes -733,925 -12,370 267 78,571 -667,457 355,484 21,661 1,020 48,937 427,102 The compensation between deferred tax assets and liabilities is performed at each subsidiary, and therefore the consolidated financial statements reflect the total deferred tax assets and deferred tax liabilities of the Group's subsidiaries. The Group tax losses carried forward are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 EXPIRATION DATE 2020 - 8,787 2021 41,339 47,691 2022 11,692 15,860 2023 23,438 34,799 2024 32,270 31,288 2025 18,867 10,897 2026 10,946 5,388 2027 to 2041 2,039,491 2,216,496 Without expiration date 384,497 248,522 2,562,540 2,619,728 In addition to the above, EDPR North America LLC has State tax losses that are recorded in the Group's accounts. The associated deferred tax asset raised to 65,449 thousand Euros as at 31 December 2020 (72,020 thousand Euros as at 31 December 2019). Of the total tax losses available to carry forward as at 31 December 2020, an amount of 216,022 thousand Euros does not have an associated deferred tax asset, in accordance with the applicable accounting standards since, at the present date, there is still not sufficient visibility about the future period in which such tax losses will be used. 86 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 22. Inventories This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Advances on account of purchases 8,328 669 Finished and intermediate products 8,874 13,352 Raw and subsidiary materials and consumables 37,326 20,064 54,528 34,085 23. Debtors and other assets from commercial activities Debtors and other assets from commercial activities are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 DEBTORS AND OTHER ASSETS FROM COMMERCIAL ACTIVITIES - NON- CURRENT Trade receivables 600 1,355 Deferred costs 20,157 15,369 Sundry debtors and other operations 2,291 2,216 23,048 18,940 DEBTORS AND OTHER ASSETS FROM COMMERCIAL ACTIVITIES - CURRENT Trade receivables 200,425 228,188 Services rendered 12,252 5,808 Advances to suppliers 5,363 6,160 Deferred costs 26,488 30,659 Sundry debtors and other operations 12,723 14,444 257,251 285,259 Impairment losses -1,265 -1,187 279,034 303,012 Decrease of trade receivables-current, besides the normal course of the business, is also explained by the company sale transactions that took place during the year (see note 6) with an impact in trade receivables of a decrease in the amount of 17,332 thousand Euros, partially compensated with the acquisition of renewable business of Viesgo, with an impact in trade receivables of an increase in the amount of 11,664 thousand Euros. The amount as at 31 December 2020 principally refers to EDPR EU in the amount of 101,919 thousand Euros (118,490 thousand Euros as at 31 December 2019) and to EDPR NA in the amount of 83,107 thousand Euros (86,374 thousand Euros as at 31 December 2019), which mainly includes electricity generation invoicing. The caption of Debtors and other assets from commercial activities – Current includes 1,265 thousand Euros, which is the result of increases in impairment losses under the expected credit loss model recommended in IFRS 9. The credit risk analysis are disclosed in note 5, under the Counterparty credit risk management section. 87 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 24. Other debtors and other assets Other debtors and other assets are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 OTHER DEBTORS AND OTHER ASSETS - NON-CURRENT Loans to related parties 6,688 2,686 Derivative financial instruments 28,412 11,081 Sundry debtors and other operations 237,753 93,429 272,853 107,196 OTHER DEBTORS AND OTHER ASSETS - CURRENT Loans to related parties 409,453 8,234 Derivative financial instruments 82,428 20,347 Sundry debtors and other operations 93,175 364,789 585,056 393,370 857,909 500,566 Sundry debtors and other operations- non current mainly include: • fair value of the contingent consideration in connection with the sale in 2020 and 2018 of 29,5% and 13,5% stake of the French companies Éoliennes en Mer Dieppe - Le Tréport, S.A.S and Éoliennes en Mer Îles d'Yeu et de Noirmoutier, SAS to OW Offshore S.L. and Sumitomo Corporation respectively, in accordance with the relevant agreements signed, that amounts to 69,557 thousand Euros and 27,031 thousand Euros (36,551 thousand Euros as at 31 December 2019); • 68,204 thousand Euros to be received in the long-term upon the achievement of certain milestones in accordance with the relevant agreements related to the sale transaction in 2020 of the entire stake in the company Rosewater Wind Farm LLC (see note 6, 9 and 34); • 29,515 thousand Euros (19,738 thousand Euros as at 31 December 2019) mainly related to Interconnection and transmission deposits in EDPR NA; • 16,352 thousand Euros (the same amount as at 31 December 2019) as advances for the acquisition of the Italian project Aria del Vento; and • 13,056 thousand Euros (the same amount as at 31 December 2019) as part of the price adjustment, according to the corresponding agreements, in the transaction of selling 49% of EDP Renováveis Portugal S.A to CTG that took place in 2013. Loans to related parties mainly include loans granted to OceanWinds in the amount of 398,262 thousand Euros in the short-term and 5,815 thousand Euros in the long-term, in the context of the agreement with ENGIE on January 2020 to establish a co- controlled 50/50 joint venture, OW Offshore S.L., to jointly develop fixed and floating offshore wind business. These loans bear interest at market rates, which are made of a reference rate indexed to Euribor or Libor in its majority, plus a market spread. At 31 December 2020 the caption Sundry debtors and other operations includes estimated corporate income tax due by EDP Energias de Portugal, S.A. Sucursal en España in the amount of 11,748 thousand Euros. Significant decrease in this caption with respect to 31 December 2019 mainly refer to i) proceeds received in 2020 in the amount of 132,227 thousand Euros related to the sale at the end of 2019 of the Brazilian portfolio of companies Babilônia; ii) a decrease amounting to 123,041 thousand Euros related to financing proceeds of Nation Rise project (see note 20) and iii) proceeds received in 2020 for loans related with the transaction of acquisition of the certain projects in 2019 by the Joint Ventures Goldfinger Ventures and Goldfinger Ventures II that amounted to 54,506 thousand Euros as at 31 December 2019. For derivatives, refer to note 37. 88 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 25. Current tax assets Current tax assets is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Income tax 14,088 17,985 Value added tax (VAT) 120,002 29,266 Other taxes 6,671 8,279 140,761 55,530 26. Cash and cash equivalents Cash and cash equivalents are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Cash 5 38 BANK DEPOSITS Current deposits 169,367 95,347 Term deposits 55,927 49,419 Specific demand deposits in relation to institutional partnerships 34,287 60,957 259,581 205,723 Other short term investments 214,798 375,998 474,384 581,759 Term deposits include temporary financial investments to place treasury surpluses. Specific demand deposits in relation to institutional partnerships are funds required to be held in escrow sufficient to pay the remaining construction related costs of projects in institutional equity partnerships (see note 33), under the accounting policy 2 x). The governing agreements of these partnerships and specific escrow agreements define the appropriate expenditure of these funds. The caption “Other short term investments” essentially includes, as at 31 December 2020 and 2019, the debit balance of the current account with EDP Servicios Financieros España S.A. in accordance with the terms and conditions of the contract signed between the parties (see note 39). 27. Assets and liabilities held for sale The criteria for classifying assets and liabilities as held for sale and discontinued operations, as well as their presentation in the EDPR Group’s consolidated financial statements, are presented under accounting policies - note 2 k). This caption is analysed as follows: 31 DEC 2020 31 DEC 2019 THOUSAND EUROS ASSETS HELD FOR SALE LIABILITIES HELD FOR SALE ASSETS HELD FOR SALE LIABILITIES HELD FOR SALE Electricity generation assets – Offshore 12,307 111 214,194 26,755 12,307 111 214,194 26,755 89 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 On May 2019, EDPR and Engie announced the signing of a strategic Memorandum of Understanding (MoU), to create a co-controlled 50/50 joint-venture in fixed and floating offshore wind. Under the terms of the MoU, EDPR and ENGIE, would combine their offshore business in this joint-venture. As a consequence of such agreement, and according to the analysis performed under IFRS 5 and IFRS 10, the transaction were considered highly probable and related assets and liabilities for the companies developing the offshore projects, principally joint ventures, were classified as held for sale at 31 December 2019. This sale transaction was concluded during 2020 (see note 6). Balances as at 31 December 2020 refer to a 33,4% stake in the UK offshore company Moray West Holdings Ltd for which EDPR has a commitment for plan to sell such stake, thus related equity investment and loans granted to the company are classified as held for sale. 28. Share capital and share premium At 31 December 2020 and 2019, the share capital of the Company is represented by 872,308,162 shares of Euros 5 per value each, all fully paid. The shares are in book-entry bearer form, the company is entitled to request the listing of its shares and all the shareholders are registered in the relevant book-entry records. These shares have the same voting and profit-sharing rights and are freely transferable. EDP Renováveis, S.A. shareholder's structure as at 31 December 2020 and 2019 is analysed as follows: NO. OF SHARES % CAPITAL % VOTING RIGHTS EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) 720,191,372 82.56% 82.56% Other () 152,116,790 17.44% 17.44% 872,308,162 100.00% 100.00% () Shares quoted on the Lisbon stock exchange There was no movements in Share capital and Share premium during 2020. The Share Premium is freely distributable. Earnings per share attributable to the shareholders of EDPR are analysed as follows: 31 DEC 2020 31 DEC 2019 Profit attributable to the equity holders of the parent(in thousand Euros) 555,680 475,128 Profit from continuing operations attributable to the equity holders of the parent (in thousand Euros) 555,680 475,128 Weighted average number of ordinary shares outstanding 872,308,162 872,308,162 Weighted average number of diluted ordinary shares outstanding 872,308,162 872,308,162 Earnings per share (basic) attributable to equity holders of the parent (in Euros) 0.64 0.54 Earnings per share (diluted) attributable to equity holders of the parent (in Euros) 0.64 0.54 Earnings per share (basic) from continuing operations attributable to the equity holders of the parent (in Euros) 0.64 0.54 Earnings per share (diluted) from continuing operations attributable to the equity holders of the parent (in Euros) 0.64 0.54 The EDPR Group calculates its basic and diluted earnings per share attributable to equity holders of the parent using the weighted average number of ordinary shares outstanding during the period. The company does not hold any treasury stock as at 31 December 2020 and 2019. 90 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The average number of shares was determined as follows: 31 DEC 2020 31 DEC 2019 Ordinary shares issued at the beginning of the period 872,308,162 872,308,162 Average number of realised shares 872,308,162 872,308,162 Average number of shares during the period 872,308,162 872,308,162 Diluted average number of shares during the period 872,308,162 872,308,162 29. Other comprehensive income, reserves and retained earnings This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 OTHER COMPREHENSIVE INCOME Fair value reserve (cash flow hedge) -23,251 -50,903 Fair value reserve (equity instruments at fair value) 3,318 6,272 Exchange differences - Currency translation arising on consolidation 344,738 455,827 Exchange differences - Net investment hedge -569,648 -535,701 Exchange differences - Net investment hedge - Cost of hedging -166 -112 -245,009 -124,617 OTHER RESERVES AND RETAINED EARNINGS Retained earnings and other reserves 1,986,665 1,572,115 Additional paid in capital 60,666 60,666 Legal reserve 75,971 75,971 2,123,302 1,708,752 1,878,293 1,584,135 Currency translation reserve - Net investment hedge and Cost of hedging The changes in these captions for the period are as follows: THOUSAND EUROS NET INVESTMENT HEDGE COST OF HEDGING Balance as at 31 December 2019 -535,701 -112 Changes in fair value 187,995 -53 Tax effect changes in fair value -46,999 - Exchange rate -180,824 - Others 5,881 -1 Balance as at 31 december 2020 -569,648 -166 Additional paid in capital The accounting for transactions among entities under common control is excluded from IFRS 3. Consequently, in the absence of specific guidance, within IFRSs, the Group EDPR has adopted an accounting policy for such transactions, judged appropriate. According to the Group's policy, business combinations among entities under common control are accounted for in the consolidated financial statements using the book values of the acquired company (subgroup) in the EDPR consolidated financial statements. The difference between the carrying amount of the net assets received and the consideration paid is recognised in equity. 91 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Legal reserve The legal reserve has been appropriated in accordance with Article 274 of the Spanish Companies Act whereby companies are obliged to transfer 10% of the profits for the year to a legal reserve until such reserve reaches an amount equal to 20% of the share capital. This reserve is not distributable to shareholders and may only be used to offset losses, if no other reserves are available, or to increase the share capital. Profit distribution (parent company) The EDP Renováveis, S.A. Board of Directors proposal for 2020 profits distribution to be presented in the Annual General Meeting is as follows: EUROS BASE FOR DISTRIBUTION Profit for the period 2020 1,388,573,084.60 DISTRIBUTION Legal Reserve 138,857,308.46 Dividends 69,784,652.96 Retained earnings 1,179,931,123.18 The EDP Renováveis, S.A. Board of Directors proposal for 2019 profits distribution that was presented in the Annual General Meeting is as follows: EUROS BASE FOR DISTRIBUTION Loss for the period 2019 -8,788,570.89 Retaining earnings from previous periods 69,784,652.96 DISTRIBUTION Prior years' losses -8,788,570.89 Dividends 69,784,652.96 Fair value reserve (cash flow hedge) The Fair value reserve (cash flow hedge) comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments. Fair value reserve (equity instruments at fair value) This reserve includes the cumulative net change in the fair value of equity instruments at fair value as at the balance sheet date: THOUSAND EUROS Balance as at 1 January 2019 6,364 Parque Eólico Montes de las Navas, S.L. -92 Balance as at 31 December 2019 6,272 Parque Eólico Montes de las Navas, S.L. -2,954 Balance as at 31 December 2020 3,318 92 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Exchange differences arising on consolidation This caption reflects the amount arising on the translation of the financial statements of subsidiaries and associated companies from their functional currency into Euros. The exchange rates used in the preparation of the consolidated financial statements are as follows: EXCHANGE RATES AT 31 DECEMBER 2020 EXCHANGE RATES AT 31 DECEMBER 2019 CLOSING RATE AVERAGE RATE CLOSING RATE AVERAGE RATE US Dollar USD 1.227 1.142 1.123 1.120 Zloty PLN 4.615 4.444 4.257 4.298 Brazilian Real BRL 6.374 5.889 4.516 4.414 New Leu RON 4.869 4.837 4.783 4.745 Pound Sterling GBP 0.899 0.890 0.851 0.878 Canadian Dollar CAD 1.563 1.530 1.460 1.486 Mexican Peso MXN 24.35 24.51 21.22 21.56 Colombian Peso COP 4,191 4,215 3,686 3,674 Japanese Yen JPY 126.5 121.8 121.9 122.0 Hungarian Forint HUF 363.9 351.2 - - Vietnamese Dong VND 28,309 26,605 - - 30. Non-controlling interests This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Non-controlling interests in income statement 127,171 147,539 Non-controlling interests in share capital and reserves 1,149,111 1,214,322 1,276,282 1,361,861 Non-controlling interests, by subgroup, are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 EDPR NA Group 821,118 914,554 EDPR EU Group 399,419 369,398 EDPR BR Group 55,745 77,909 1,276,282 1,361,861 The movement in non-controlling interests of EDP Renováveis Group is mainly related to: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Balance as at 1 January 1,361,861 1,613,390 Dividends distribution -38,231 -44,707 Net profit for the year 127,171 147,539 Exchange differences arising on consolidation -99,195 17,072 Acquisitions and sales without change of control - -23,023 Increases/(Decreases) of share capital -75,265 -57,720 Other changes -59 -290,690 Balance as at 31 December 1,276,282 1,361,861 93 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Other changes mainly included at 31 December 2019 a decrease amounting 289,345 thousand Euros related to the sale of the companies EDPR Participaciones S.L., EDP Renewables France S.A.S. and subsidiaries (see note 6) where non- controlling interest held certain stake in these companies. 31. Financial debt Financial debt current and Non-current is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 FINANCIAL DEBT - NON-CURRENT Bank loans: - EDPR EU Group 231,156 361,397 - EDPR BR Group 156,014 112,031 - EDPR NA Group 185,288 215,280 Loans received from EDP group entities: - EDP Renováveis, S.A. 303,966 460,444 - EDP Renováveis Servicios Financieros, S.L. 2,555,834 1,449,186 Other loans: - EDPR EU Group 17,363 350 Total Debt and borrowings - Non-current 3,449,621 2,598,688 Collateral Deposits - Non-current () Collateral Deposit - Project Finance and others -21,544 - 20 393 Total Collateral Deposits - Non-current -21,544 -20,393 FINANCIAL DEBT - CURRENT Bank loans: - EDPR EU Group 57,508 53,872 - EDPR BR Group 7,788 13,147 - EDPR NA Group 11,877 12,806 Loans received from EDP group entities: - EDP Renováveis, S.A. 117,452 134,239 - EDP Renováveis Servicios Financieros, S.L. 269,181 569,003 Other loans: - EDPR EU Group 1,029 147 Interest payable 32,060 34,635 Total Debt and borrowings - Current 496,895 817,849 Collateral Deposits - Current () Collateral Deposit - Project Finance and others -9,061 - 11,446 Total Collateral Deposits - Current -9,061 - 11,446 Total Debt and borrowings – Current and Non-current 3,946,516 3,416,537 Total Debt and borrowings net of collaterals – Current and Non-current 3,915,911 3,384,698 () Collateral deposits mainly refer to amounts held in bank accounts to comply with obligations under project finance agreements entered into by certain EDP Renewable subsidiaries. Loans received from EDP group entities current and non-current as at 31 December 2020 mainly refer to a set of loans granted by EDP Finance BV amounting to 2,832,418 thousand Euros, including accrued interests and deducted of debt origination fees (2,415,213 thousand Euros non-current and 417,205 thousand Euros current) and by EDP Servicios Financieros España S.A. amounting to 445,499 thousand Euros (non-current). The bundled average maturity regarding long-term loans is approximately 4 and a half years and bear interest at weighted average fixed market rates of 1.9% for EUR loans and 3.7% for USD loans. 94 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The main events regarding financing and refinancing of the group refers to new corporate loans signed for 1,460,992 thousand Euros that replaced amortization of 497,783 and 261,348 thousand Euros, extending the average maturity and reducing the debt average cost. On the external debt side, the disposal of certain portfolio of Spanish companies (see note 6) resulted in a decrease in financial debt in the amount of 83,097 thousand Euros whilst the acquisiton of Viesgo added new 18,059 thousand Euros financing facilities. At the same time in Brazil two disbursements, for a total of 48,896 thousand Euros, were made from the facility signed with BEI and EDPR Brazil. Bank loans bear interest at market rates, which are made of a reference rate indexed to Libor or Euribor in its majority, plus a market spread. As at 31 December 2020, future debt and borrowings payments and accrued interest by type of loan and currency are analysed as follows: THOUSAND EUROS 2021 2022 2023 2024 2025 FOLLOWING YEARS TOTAL BANK LOANS Euro 35,168 35,597 34,257 29,220 16,208 55,308 205,758 American Dollar 25,056 11,304 11,546 9,776 12,846 172,338 242,866 Brazilian Real 8,226 15,009 3,657 2,569 3,257 82,914 115,632 Others 9,297 12,964 16,389 19,375 9,858 18,064 85,947 77,747 74,874 65,849 60,940 42,169 328,624 650,203 LOANS RECEIVED FROM EDP GROUP Euro 4 211,587 233,000 - - - 444,591 American Dollar 418,901 301,524 228,180 430,669 202,829 1,258,163 2,840,266 418,905 513,111 461,180 430,669 202,829 1,258,163 3,284,857 OTHER LOANS Euro 1,027 1,005 1,202 1,011 1,031 13,114 18,390 1,027 1,005 1,202 1,011 1,031 13,114 18,390 Origination fees -784 -1,046 -938 -886 -437 -2,843 -6,934 496,895 587,944 527,293 491,734 245,592 1,597,058 3,946,516 As at 31 December 2019, future debt and borrowings payments and accrued interest by type of loan and currency are analysed as follows: THOUSAND EUROS 2020 2021 2022 2023 2024 FOLLOWING YEARS TOTAL BANK LOANS Euro 40,817 43,687 43,997 40,989 39,302 117,166 325,958 American Dollar 18,198 12,605 12,348 12,612 12,720 150,836 219,319 Brazilian Real 13,540 9,463 13,232 4,132 3,443 83,159 126,969 Others 8,133 10,033 14,049 17,763 21,572 32,778 104,328 80,688 75,788 83,626 75,496 77,037 383,939 776,574 LOANS RECEIVED FROM EDP GROUP Euro 262,302 - 211,587 233,000 - - 706,889 American Dollar 476,011 422,824 329,357 249,243 463,935 - 1,941,370 738,313 422,824 540,944 482,243 463,935 - 2,648,259 OTHER LOANS Euro 153 104 34 211 - - 502 153 104 34 211 - - 502 Origination fees -1,305 -765 -831 -735 -745 -4,417 -8,798 817,849 497,951 623,773 557,215 540,227 379,522 3,416,537 95 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The Group has project finance financings that include the usual guarantees on this type of financings, namely the pledge or a promise of pledge of bank accounts and assets of the related projects. As at 31 December 2020, these financings amount to 643,984 thousand Euros (31 December 2019: 771,854 thousand Euros), which are included within the financial debt caption. At 31 December 2020, the Group confirms the fulfillment of all the covenants of the Project Finance Portfolio under the Facilities Agreements. Additionally, there are 18,034 thousand Euros of other loans that are guaranteed by EDPR, which are also included within the financial debt caption. The fair value of EDP Renováveis Group's debt is analysed as follows: 31 DEC 2020 31 DEC 2019 THOUSAND EUROS CARRYING VALUE () MARKET VALUE CARRYING VALUE () MARKET VALUE Financial debt - Non-current 3,449,621 3,506,887 2,598,688 2,640,975 Financial debt - Current 496,895 496,895 817,849 817,849 3,946,516 4,003,782 3,416,537 3,458,824 () Net of origination fees The market value of the medium/long-term (non-current) debt and borrowings that bear a fixed interest rate is calculated based on the discounted cash flows at the rates ruling at the balance sheet date. The market value of debt and borrowing that bear a floating interest rate is considered not to differ from its book value as these loans bear interest at a rate indexed to Euribor. The book value of the short-term (current) debt and borrowings is considered to be the market value. 32. Provisions Provisions are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Dismantling and decommission provisions 305,628 270,353 Provision for other liabilities and charges 9,454 7,514 Long-term provision for other liabilities and charges 3,757 1,847 Short-term provision for other liabilities and charges 5,697 5,667 Employee benefits 222 180 315,304 278,047 Dismantling and decommission provisions refer to the costs to be incurred for dismantling wind and solar farms and restoring sites and land to their original condition, in accordance with the corresponding accounting policy. The above amount refers to: (i) 151,704 thousand Euros for wind farms in North America (31 December 2019: 128,615 thousand Euros); (ii) 149,249 thousand Euros for wind farms in Europe (31 December 2019: 139,475 thousand Euros); and (iii) 4,675 thousand Euros for wind farms in Brazil (31 December 2019: 2,263 thousand Euros). The variation in the dismantling provision is mainly explained by: • Update on the estimated dismantling cost according to an in- deep analysis performed by the EDPR’s technic al as well as update in the discount and inflation rates used for determining the provisions, with a net impact of an increase in the amount of 31,384 thousand Euros; • Increase in the amount of 18,519 thousand Euros related to the acquisition of the renewable business of Viesgo (see note 6); • Increase in the amount of 5,420 thousand Euros due to the financial update of the provision during 2020 (see note 14); 96 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 • Decrease in the amount of 17,816 thousand Euros related to the sale transactions that took place during the year (see note 6). There were no significant movements in provisions for other liabilities and charges either in 2020 or in 2019. EDP Renováveis believes that the provisions booked on the consolidated statement of financial position adequately cover the foreseeable obligations described in this note. Therefore, it is not expected that they will give rise to liabilities in addition to those recorded. 33. Institutional partnerships in U.S. wind farms This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Deferred income related to benefits provided 799,094 1,002,871 Liabilities arising from institutional partnerships in U.S. wind farms 1,134,448 1,286,913 1,933,542 2,289,784 The movements in Institutional partnerships in U.S. wind farms are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Balance at the beginning of the period 2,289,784 2,231,249 Proceeds received from institutional investors 307,860 188,490 Deferred transaction costs -3,252 -2,235 Cash paid to institutional investors -55,880 -82,480 Income (see note 7) -201,783 -181,570 Unwinding (see note 14) 94,718 85,320 Loss of control of companies with institutional partnerships -320,944 - Exchange differences -181,373 42,832 Others 4,412 8,178 Balance at the end of the period 1,933,542 2,289,784 The Group has entered in several partnerships with institutional investors in the United States, through limited liability companies operating agreements that apportions the cash flows generated by the wind farms between the investors and the Company and allocates the tax benefits, which include Production Tax Credits (PTC), Investment Tax Credits (ITC) and accelerated depreciation, largely to the investor. During the first quarter of 2020, EDPR NA, has secured and received proceeds amounting to 130,055 thousand Euros (148,539 thousand dollars) related to institutional equity financing from JP Morgan, in exchange for an interest in onshore wind projects. Additionally, during the third quarter of 2020, EDPR NA, has secured and received proceeds amounting to 177,805 thousand Euros (203,075 thousand dollars) related to institutional equity financing from Bank of America, in exchange for an interest in the 405 MW onshore wind projects. EDPR has lost control in 2020 over the Vento XVII portfolio upon the completion of the sale of 80% of equity shareholding (see note 6), implying a decrease in the amount of 320,944 thousand Euros in the Institutional partnerships liabilities related to this portfolio. Others mainly include proceeds received by EDPR during 2020 amounting to 7,780 thousand Euros related to PTC generated after flip date in the context of certain tax equity deals that are structured to include an option to allocate substantially all of the projects’ generated PTCs to the tax equity investors after the Flip Date. 97 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 EDPR NA is providing its tax equity investors with standard corporate guarantees typical of these agreements to indemnify them against costs they may incur as a result of fraud, willful misconduct or a breach of EDPR NA of any operational obligation under the tax equity agreements. 34. Trade and other payables from commercial activities Trade and other payables from commercial activities are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 TRADE AND OTHER PAYABLES FROM COMMERCIAL ACTIVITIES - NON- CURRENT Government grants / subsidies for investments in fixed assets 303,408 347,770 Electricity sale contracts - EDPR NA 6,438 9,318 Property, plant and equipment suppliers 122,349 36,132 Other creditors and sundry operations 6,908 66,746 439,103 459,966 TRADE AND OTHER PAYABLES FROM COMMERCIAL ACTIVITIES - CURRENT Suppliers 66,781 60,500 Property, plant and equipment suppliers 1,167,391 1,119,486 Other creditors and sundry operations 111,938 89,469 1,346,110 1,269,455 1,785,213 1,729,421 Government grants for investments in fixed assets are essentially related to grants received by EDPR NA subgroup under the American Recovery and Reinvestment Act promoted by the United States of America Government. At the moment of the EDPR North America acquisition, the contracts signed between this subsidiary and its customers, determined under the terms of the Purchase Price Allocation, were valued through discounted cash flow models and market assumptions at 190,400 thousands of USD, being booked as a non-current liability under Electricity sale contracts - EDPR NA, which is depreciated over the useful life of the contracts under Other income (see note 9). Property plant and equipment suppliers-non current mainly includes success fees payables in the long term for the acquisition of certain projects in Colombia for a total amount of 61,658 thousand Euros, UK for a total amount of 31,647 thousand Euros and Poland for a total amount of 16,664 thousand Euros that, due to the nature of such transactions, the type of assets acquired and the initial stage of completion of the projects, they have been considered asset acquisitions (see note 6). Variation in other creditors and sundry operations – non current is mainly explained by: i) the evolution of the energy pool prices in the Spanish market related to the establishment of the pool boundaries adjustment as a result of the publication of Royal Decree-Law 413/2014 and Order IET/1045/2014; and ii) the sale of certain portfolio of Spanish companies (see note 6) with an impact in such caption of a decrease in the amount of 9,646 thousand Euros. Property plant and equipment suppliers -current refer to wind and solar farms in construction mainly in the USA in the amount of 586,681 thousand Euros (968,998 thousand Euros as of December 31, 2019), Mexico in the amount of 120,758 thousand Euros (124 thousand Euros as of December 31, 2019), Canada in the amount of 82,332 thousand Euros (34,566 thousand Euros as of December 31, 2019), Poland in the amount of 65,036 thousand Euros (15,911 thousand Euros as of December 31, 2019), Italy in the amount of 55,265 thousand Euros (28,902 thousand Euros as of December 31, 2019) and Spain in the amount of 46,769 thousand Euros (19,690 thousand Euros as of December 31, 2019). This caption also includes success fees payables for the acquisition of certain projects in Colombia, UK, Greece, Brazil, Italy, France and Poland for a total amount of 60,173 thousand Euros that due to the nature of such transactions, the type of assets acquired and the initial stage of completion of the projects, they have been considered asset acquisitions. 98 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The Company has prepared the below information for Spanish subsidiaries, according to criterion required by the Spanish Accounting and Auditing Institute (ICAC) resolution of 29 January 2017 on disclosures in notes to financial statements of late payments to suppliers in commercial transactions: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 DAYS Average payment period 51 50 Ratio paid operations 56 50 Ratio of pending operations 20 49 Total payments made 102,986 152,192 Total outstanding payments 20,206 13,430 35. Other liabilities and other payables Other liabilities and other payables are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 OTHER LIABILITIES AND OTHER PAYABLES - NON-CURRENT Amount payable for the acquisition of subsidiaries 850 831 Loans from non-controlling interests 155,630 210,701 Derivative financial instruments 62,895 135,051 Rents due from lease contracts 633,794 572,993 Other creditors and sundry operations 306 4,398 853,475 923,974 OTHER LIABILITIES AND OTHER PAYABLES - CURRENT Amount payable for the acquisition of subsidiaries 19,260 102,243 Derivative financial instruments 26,120 51,150 Loans from non-controlling interests 44,651 34,383 Rents due from lease contracts 55,915 45,255 Other creditors and sundry operations 21,703 12,092 167,649 245,123 1,021,124 1,169,097 The caption Loans from non-controlling interests Current and Non-Current mainly includes: i) Loans granted by ACE Portugal (CTG Group) due to the sale in 2017 of 49% of shareholding in EDPR PT – Parques Eólicos S.A and subsidiaries for a total amount of 29,282 thousand Euros, including accrued interests (32,302 thousand Euros as of 31 December 2019), bearing interest at a fixed rate of 3.75%; ii) Loans granted by ACE Poland (CTG Group) due to the sale in 2016 of 49% of shareholding in EDP Renewables Polska HoldCo, S.A. and subsidiaries for a total amount of 88,950 thousand Euros including accrued interests (109,287 thousand Euros as at 31 December 2019), bearing interest at a fixed rate of a range between 2.95% and 7.23%; iii) Loans granted by ACE Italy (CTG Group) due to the sale in 2016 of 49% of shareholding in EDP Renewables Italia, S.r.l. and subsidiaries for a total amount of 50,284 thousand Euros including accrued interests (55,474 thousand Euros as at 31 December 2019), bearing interest at a fixed rate of 4.50%; iv) Loans granted by CITIC CWEI Renewables (CTG Group) due to the sale in 2013 of 49% of shareholding in EDP Renováveis Portugal, S.A. for a total amount of 26,462 thousand Euros including accrued interests (31 December 2019: 38,654 thousand Euros), bearing interests at a fixed rate of 5.50%. 99 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Derivative financial instruments non-current includes 12,014 thousand Euros (31 December 2019: 102,088) mainly related to hedge instruments of USD and EUR with EDP - Energias de Portugal, S.A., which was formalised in order to hedge the foreign exchange risk of the net investment held in EDPR NA, expressed in USD (see note 37 for non-current and current derivatives). The amount receivable as at 31 December 2020 related to these hedge instruments is 43,974 thousand Euros (see note 24). The caption Rents due from lease contracts - Non-Current and Current includes lease liabilities as a consequence of the adopton of IFRS 16 on 1 January 2019. Variation in both captions is as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Balance as at 1 January 618,248 598,211 Increases due to new lease contracts 149,816 93,305 Unwinding (note 14) 29,594 27,994 Payment of leases -43,555 -41,122 Exchange differences -48,866 -1,396 Changes in the perimeter and other changes -15,528 -53,128 Others - -5,616 Balance at the end of the period 689,709 618,248 Increases due to new lease contracts are mainly located in the USA, Poland, Mexico, France and Brasil. Changes in the perimeter and other changes in 2020 mainly refers to: • Increase in the amount of 15,579 thousand Euros related to the acquisition of the renewable business of Viesgo (see note 6); • Decrease in the amount of 31,433 thousand Euros due to the sale of the 80% stake and loss of control in the companies EDPR Wind Ventures XVII, LLC and subsidiaries (see note 6); • Decrease in the amount of 9,202 thousand Euros due to the sale of the following portfolio of companies: Bon Vent de Corbera, S.L.U., Eólica Sierra de Ávila, S.L.U., Parc Eòlic de Torre Madrina, S.L.U., Parc Eòlic de Coll de Moro, S.L.U., Parc Eòlic de Vilalba dels Arcs, S.L.U. and Aprofitament D'Energies Renovables de L'Ebre, S.L (see note 6). Changes in the perimeter and other changes in 2019 refers to the sale of EDPR Participaciones S.L., EDP Renewables France S.A.S. and subsidiaries in 2019 (see note 6). As at 31 December 2020, the nominal value of the rents due from lease contracts is detailed as follows: (i) less than 5 years: 252,537 thousand Euros; (ii) from 5 to 10 years: 216,956 thousand Euros; (iii) from 10 to 15 years: 218,379 thousand Euros; and (iv) more than 15 years: 470,789 thousand Euros. Amount payable for the acquisition of subsidiaries at 31 December 2020 is mainly related to the remaining cost to incur in the amount of 19,210 thousand Euros in the Rosewater project sold in 2020 but EDPR retains the obligation to complete the construction of the related wind farm facilities at the EDPR’s sole cost (see note 6, 9 and 24). 100 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 36. Current tax liabilities This caption is analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Income tax 16,947 35,276 Withholding tax 1,682 2,816 Value added tax (VAT) 56,027 19,672 Other taxes 35,156 35,064 109,812 92,828 37. Derivative financial instruments As of 31 December 2020, the fair value and maturity of derivatives is analysed as follows: THOUSAND EUROS FAIR VALUE NOTIONAL (THOUSAND UNITS) ASSETS LIABILITIES UNITS UNTIL 1 YEAR 1 TO 5 YEARS MORE THAN 5 YEARS TOTAL NET INVESTMENT HEDGE Cross currency rate swaps 55,594 -12,566 EUR 718,584 903,784 - 1,622,368 55,594 -12,566 718,584 903,784 - 1,622,368 FAIR VALUE HEDGE Cross currency rate swaps 6,511 -12 EUR 22,865 164,750 - 187,615 6,511 -12 22,865 164,750 - 187,615 CASH FLOW HEDGE Power price swaps 18,963 -41,469 MWh 11,595 15,148 8,236 34,979 Interest rate swaps 2,271 -24,834 EUR 97,089 265,514 80,551 443,154 Currency forwards 14,282 -429 EUR 296,022 20,508 - 316,530 35,516 -66,732 TRADING Power price swaps 8,454 -3,035 MWh 2,708 1,562 - 4,270 Interest rate swaps - -1,705 EUR 639 2,578 10,631 13,848 Cross currency rate swaps 1,893 -421 EUR 81,140 - - 81,140 Currency forwards 2,872 -4,544 EUR 203,985 56,419 - 260,404 13,219 -9,705 110,840 -89,015 101 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 As of 31 December 2019, the fair value and maturity of derivatives is analysed as follows: THOUSAND EUROS FAIR VALUE NOTIONAL (THOUSAND UNITS) ASSETS LIABILITIES UNITS UNTIL 1 YEAR 1 TO 5 YEARS MORE THAN 5 YEARS TOTAL NET INVESTMENT HEDGE Cross currency rate swaps 2,524 -133,483 EUR 536,806 1,610,066 - 2,146,872 2,524 -133,483 536,806 1,610,066 - 2,146,872 FAIR VALUE HEDGE Cross currency rate swaps 642 -456 EUR 61,182 60,720 - 121,902 642 -456 61,182 60,720 - 121,902 CASH FLOW HEDGE Power price swaps 22,107 -29,330 MWh 11,080 11,972 3,088 26,140 Interest rate swaps 114 -15,383 EUR 108,087 406,074 145,303 659,464 Currency forwards 2 -5,457 EUR 43,616 74,111 - 117,727 22,223 -50,170 TRADING Power price swaps 4,466 -1,201 MWh 1,814 2,179 - 3,993 Cross currency rate swaps - -407 EUR - 38,881 - 38,881 Currency forwards 1,573 -484 EUR 87,848 22,887 - 110,735 6,039 -2,092 31,428 -186,201 The fair value of derivative financial instruments is recorded under Other debtors and other assets (note 24) or Other liabilities and other payables (note 35), if the fair value is positive or negative, respectively. The net investment derivatives are mainly related to the CIRS in USD and EUR with EDP SA as referred in the notes 39 and 40. The net investment derivatives also include CIRS in CAD, PLN, BRL and COP with EDP with the purpose of hedging EDP Renováveis Group's operations in Canada, Poland, Brazil and Colombia. Interest rate swaps relate to the project finances and have been formalised to convert variable to fixed interest rates. Cash flow hedge power price swaps are related to the hedging of the sales price. EDPR NA has entered into a power price swap to hedge the variability in the spot market prices received in some of its projects. Additionally, both EDPR NA and EDPR EU have entered in short-term and long-term hedges to hedge the short-term and long-term volatility of certain un- contracted generation of its wind farms. In certain US power markets, EDPR NA is exposed to congestion and line loss risks which typically have a negative impact on the price received for power generated in these markets. To economically hedge these risk exposures, EDPR NA entered into Financial Transmission Rights (“FTR”) and a three year fixed for floating Locational Marginal Pri ce (LMP) swap. The trading derivative financial instruments are derivatives contracted for economic hedging that are not eligible for hedge accounting. Fair value of derivative financial instruments is based on quotes indicated by external entities, which are compared in each date of report to fair values available in common financial information platforms. These entities use discounted cash flows techniques usually accepted and data from public markets. The only exceptions are the CIRS in USD/EUR with EDP Finance and EDP SA, which fair values are determined by the Financial Department of EDP, using the same above- mentioned discounted cash flows techniques and data. As such, according to IFRS13 requirements, the fair value of the derivative financial instruments is classified as of level 2 (see note 40) and no changes of level were made during this period. 102 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 In 2020, the future undiscounted cash flows of the derivative financial instruments in EDP Group, are as follows: NOTIONAL THOUSAND EUROS UNTIL 1 YEAR 1 TO 5 YEARS MORE THAN 5 YEARS TOTAL NET INVESTMENT HEDGE Cross currency rate swaps 10,989 -23,848 - - 12,859 10,989 -23,848 - - 12,859 FAIR VALUE HEDGE Cross currency rate swaps -1,732 2,381 - 649 -1,732 2,381 - 649 CASH FLOW HEDGE Power price swaps 2,940 -2,716 -571 -347 Interest rate swaps -5,143 -8,653 -460 -14,256 Currency forwards 13,617 86 - 13,703 11,414 -11,283 -1,031 -900 TRADING Power price swaps 4,523 206 - 4,729 Interest rate swaps -511 -232 -961 -1,704 Cross currency rate swaps 770 - - 770 Currency forwards -2,391 870 - -1,521 2,391 844 -961 2,274 23,062 -31,906 -1,992 -10,836 In 2019 the future undiscounted cash flows of the derivative financial instruments in EDP Group, are as follows: NOTIONAL THOUSAND EUROS UNTIL 1 YEAR 1 TO 5 YEARS MORE THAN 5 YEARS TOTAL NET INVESTMENT HEDGE Cross currency rate swaps -81,009 -153,238 - -234,247 Currency forwards - 904 - 904 -81,009 -152,334 - -233,343 FAIR VALUE HEDGE Cross currency rate swaps 471 -261 - 210 471 -261 - 210 CASH FLOW HEDGE Power price swaps -10,275 -3,312 - -13,587 Interest rate swaps -5,299 -11,080 - -16,379 Currency forwards -3,692 -1,014 - -4,706 -19,266 -15,406 - -34,672 TRADING Power price swaps 1,760 89 - 1,849 Cross currency rate swaps -563 - - -563 1,197 89 - 1,286 -98,607 -167,912 - -266,519 103 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The changes in the fair value of hedging instruments and risks being hedged are as follows: 31 DEC 2020 31 DEC 2019 CHANGES IN FAIR VALUE CHANGES IN FAIR VALUE THOUSAND EUROS HEDGING INSTRUMENT HEDGED ITEM INSTRUMENT RISK INSTRUMENT RISK Net Investment hedge Cross currency rate swaps Subsidiary accounts in USD, PLN, BRL, GBP, CAD and COP 187,995 -187,925 -49,179 47,901 Fair Value hedge Currency forward Subsidiary accounts in PLN 6,313 7,875 186 -194 Cash-flow hedge Interest rate swap Interest rate -7,294 - 635 - Cash-flow hedge Power price swaps Power price -15,283 - 101,131 - Cash-flow hedge Currency forward Exchange rate 19,307 - -7,864 - 191,038 -180,050 44,909 47,707 During 2020 and 2019 the following market inputs were considered for the fair value calculation: INSTRUMENT MARKET INPUT Cross currency interest rate swaps Fair value indexed to the following interest rates: Euribor 3M, Euribor 6M, Libor 3M, daily brazilian CDI, CAD-BA-CDOR 3M, Wibor 3M and COOVIBR index; and exchange rates: EUR/BRL, EUR/PLN, EUR/CAD, EUR/GBP, EUR/COP and EUR/USD. Interest rate swaps Fair value indexed to the following interest rates: Euribor 3M, Euribor 6M, Wibor 6M, Libor 3M and CAD-BA-CDOR 3M. Foreign exchange forwards Fair value indexed to the following exchange rates: EUR/USD, EUR/PLN, EUR/GBP, BRL/CNY, BRL/EUR, BRL/USD and COP/USD. Power price swaps Fair value indexed to the price of electricity. The movements in cash flow hedge reserve have been as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Balance at the beginning of the year -65,249 -143,419 Fair value changes -10,764 91,963 Transfers to results 4,407 305 Non-controlling interests included in fair value changes -4,020 -1,423 Effect of derivatives in the equity consolidated companies 33,461 -12,668 Effect of the sale without loss of control of EDPR Europe subsidiaries 9,510 - Others -258 -7 Balance at the end of the year -32,913 -65,249 The gains and losses on the financial instruments portfolio booked in the income statement are as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 Net investment hedge - ineffectiveness -1,492 -1,278 CASH-FLOW HEDGE Transfer to results from hedging of financial liabilities 1,094 1,346 Transfer to results from hedging of commodity prices -5,501 -1,651 Non eligible for hedge accounting derivatives 17,594 6,637 11,695 5,054 104 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The amount from transfers to results from hedging of commodity prices is registered in Revenues while the remaining gains and losses are registered in Financial income and Financial expense, respectively (see note 14). The effective interest rates for derivative financial instruments associated with financing operations during 2020, were as follows: EDPR GROUP CURRENCY PAYS RECEIVES INTEREST RATE CONTRACTS Interest rate swaps EUR [ 0.26% - 3.67% ] [ 0.52% - 0.54% ] Interest rate swaps PLN [ 2.48% - 2.78% ] [ -0.28% ] Interest rate swaps USD [ 1.86% ] [ -0.22% ] Interest rate swaps CAD [ 2.10% - 2.59% ] [ -0.50% ] CURRENCY AND INTEREST RATE CONTRACTS CIRS (currency interest rate swaps) EUR/USD [ 0.45% - 0.60% ] [ -0.54% ] CIRS (currency interest rate swaps) EUR/CAD [ 0.22% - 0.86% ] [ -0.57% - -0.51% ] CIRS (currency interest rate swaps) EUR/COP [ 1.17% ] [ -0.54% ] CIRS (currency interest rate swaps) EUR/BRL [ 0.69% - 5.95% ] [ -0.54% - -0.44% ] CIRS (currency interest rate swaps) EUR/PLN [ 0.32% - 3.15% ] [ -0.54% - 1.84% ] The effective interest rates for derivative financial instruments associated with financing operations during 2019, were as follows: EDPR GROUP CURRENCY PAYS RECEIVES INTEREST RATE CONTRACTS Interest rate swaps EUR [ 1.06% - 3.67% ] [ 0.31% - 0.34% ] Interest rate swaps PLN [ 2.48% - 2.78% ] [ -1.79% ] Interest rate swaps USD [ 1.86% ] [ -2.10% ] Interest rate swaps CAD [ 2.59% ] [ -1.97% ] CURRENCY AND INTEREST RATE CONTRACTS CIRS (currency interest rate swaps) EUR/USD [ 2.11% - 2.30% ] [ -0.38% ] CIRS (currency interest rate swaps) EUR/CAD [ -0.04% - 2.45% ] [ -0.41% - -0.31% ] CIRS (currency interest rate swaps) EUR/BRL [ 5.94% - 5.95% ] [ -0.40% ] CIRS (currency interest rate swaps) EUR/PLN [ -0.04% - 4.69% ] [ -0.04% - 2.03% ] 38. Commitments As at 31 December 2020 and 2019, the financial commitments not included in the statement of financial position in respect of financial, operational and real guarantees provided, are analysed as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 GUARANTEES OF OPERATIONAL NATURE EDP Renováveis, S.A. 586,594 606,984 EDPR NA Group 854,336 825,839 EDPR EU Group 2,337 1,206 EDPR BR Group 1,447 1,793 Total 1,444,714 1,435,822 105 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 The above operating guarantees, which are not included in the consolidated statement of financial position or in the Notes, as at 31 December 2020 and 2019, mainly refer to Power Purchase Agreements (PPA), interconnection, permits and market participation guarantees. Additionally to the above guarantees, an amount of 200 thousand Euros and 982 thousand Euros refer to guarantees of operational nature related to the Spanish portfolio of companies and the US company Rosewater Wind Farm LLC respectively, that were sold as at 31 December 2020 (see note 6) although EDPR assumes temporarily the responsibility under such guarantees until these are effectively replaced. Refer to note 39 for guarantees granted by EDP Group companies to EDPR Group companies. Refer to note 20 for guarantees granted by EDP Group and EDPR Group to joint venture companies. There are additional financial and operating guarantees granted by EDPR Group that have underlying liabilities already reflected in its Consolidated Statement of Financial Position and/or disclosed in the Notes. EDPR does not expect any significant liability arising from the above commitments related to financial, operational and real guarantees provided. The EDPR Group future cash outflows not reflected in the measurement of the lease liabilities and purchase obligations by maturity date are as follows: 31 DEC 2020 CAPITAL OUTSTANDING BY MATURITY THOUSAND EUROS TOTAL UP TO 1 YEAR 1 TO 3 YEARS 3 TO 5 YEARS MORE THAN 5 YEARS Future Cash Outflows not reflected in the measurement of the Lease Liabilities 63,596 6,952 11,157 6,429 39,058 Purchase obligations 3,706,644 2,377,806 943,891 67,168 317,779 3,770,240 2,384,758 955,048 73,597 356,837 31 DEC 2019 CAPITAL OUTSTANDING BY MATURITY THOUSAND EUROS TOTAL UP TO 1 YEAR 1 TO 3 YEARS 3 TO 5 YEARS MORE THAN 5 YEARS Future Cash Outflows not reflected in the measurement of the Lease Liabilities 140,968 9,241 20,670 15,962 95,095 Purchase obligations 3,671,859 1,586,407 1,640,889 99,820 344,743 3,812,827 1,595,648 1,661,559 115,782 439,838 As from 1 January 2019 onwards EDPR Group has adopted IFRS 16 and therefore presents the information related to lease contracts in the caption Right-of-use assets (see note 17). Purchase obligations include debts related with long-term agreements of property, plant and equipment and operational and maintenance contracts product and services supply related to the Group operational activity. When prices are defined under forward contracts, these are used in estimating the amounts of the contractual commitments. Some of the disposal of non-controlling interests transactions retaining control carried out in previous years incorporate contingent assets and liabilities according to the terms of the corresponding agreements. 106 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 39. Related parties The Members of the Board of Directors of the Company and its delegated Committees do not own directly or indirectly any shares from EDPR, as of 31 December 2020 or 31 December 2019, except for Spyridon Martinis that owns 10,413 shares that were acquired before his appointment as Director of the Company. According to Article nr 229 of "Ley de Sociedades de Capital" (Spanish Companies Law), the members of the Board of Directors of EDP Renováveis have not communicated, or the parent company has knowledge, of any conflict of interests or incompatibility that could affect the performance of their duties. Remuneration of the members of the Board of Directors In accordance with the Company's by-laws, the remuneration of the members of the Board of Directors is proposed by the Nominations and Remunerations Committee to the Board of Directors on the basis of the overall amount of remuneration authorized by the General Meeting of Shareholders. The Board of Directors approves the distribution and the exact amount to be paid to each Director on the basis of this proposal. The average number of members of the Board of Directors during 2020 and 2019 is 15. The remuneration paid to the members of the Board of Directors in 2020 and 2019 were as follows: THOUSAND EUROS 31 DEC 2020 31 DEC 2019 CEO - - Board members 569 606 569 606 EDPR signed an Executive Management Services Agreement with EDP, under which EDP bears the cost for the services rendered by its Executive and Non-Executive Directors, which are João Manso Neto, António Mexia, Vera de Morais Pinto Pereira Carneiro (from March 2019) and Rui Teixeira (from October 2019). 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. Under this contract, EDPR is due to pay an amount to EDP, for the services rendered by the Executive Managers and the Non-executive Managers. The amount due under said Agreement for the management services rendered by EDP in 2020 is 1,095 thousand Euros (854 thousand Euros in 2019), of which 960 thousand Euros refers to the management services rendered by the Executive Members and 135 thousand Euros to the management services rendered by the non-executive Members. The retirement savings plan for the members of the Executive Committee that are also Officers, acts as an effective retirement supplement with a range between 3% to 6% of their annual salary. The percentage is defined according with the retirement savings plan applicable in their home country. In the case of the Directors that are also EDPR Executive Officers (Duarte Bello, COO EU&BR; Spyridon Martinis, COO Offshore and New Markets & CDO; and Miguel Ángel Prado Balboa, COO EDPR NA), excluding the Chief Executive Officer which remuneration is referred above, there are contracts that were signed with other group companies, as follows: Duarte Bello and Sp y r i don Martinis with EDP Energias de Portugal S.A. Sucursal en España; and Miguel Ángel Prado Balboa with EDP Renewables North America LLC. The remuneration under these contracts is as follows: REMUNERATION * PAYER FIXED VARIABLE ANNUAL VARIABLE MULTI-ANUAL TOTAL Duarte Bello EDP Energías de Portugal, S.A. Sucursal en España 228 145 38 411 Miguel Ángel Prado EDPR North America LLC 467 208 238 913 Spyridon Martinis EDP Energías de Portugal S.A. Sucursal en España 228 145 - 373 All the amounts are in thousand EUR, except Miguel Ángel Prado ones, which are in thousand USD 107 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Additionally, the above members received the following non-monetary benefits: retirement savings plan (as described above), company car and Health Insurance. In 2020, the non-monetary benefits amounted to 268 thousand Euros. Further, in application of a deferral policy, in 2020 an amount of 84 thousand Euros was paid to Miguel Amaro (former Executive CFO of the Group), for the services rendered in 2016-2017. Relevant balances and transactions with subsidiaries and associates of China Three Gorges Group Within the context of the transactions with CTG related to the sale of 49% of EDPR Portugal, EDPR PT-PE, EDPR Italia and EDPR Polska equity shareholding to CTG Group, CTG has granted loans to the EDPR Group in the amount of 194,978 thousand Euros including accrued interests (43,617 thousand Euros as current and 151,259 thousand Euros as non-current) as at 31 December 2020. As at 31 December 2019, this balance amounted to 235,717 thousand Euros including accrued interests (29,712 thousand Euros as current and 206,005 thousand Euros as non-current). See note 35. Balances and transactions with EDP Group companies In their ordinary course of business, EDPR Group companies establish commercial transactions and operations with other Group companies, whose terms reflect current market conditions. As at 31 December 2020, assets and liabilities with related parties, are analysed as follows: ASSETS THOUSAND EUROS LOANS AND INTERESTS TO RECEIVE OTHERS TOTAL EDP Energias de Portugal, S.A. - 69,234 69,234 EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) - 8,175 8,175 Joint Ventures and Associated companies 415,940 75,478 491,418 EDP Serviço Universal, S.A. - 24,218 24,218 EDP Servicios Financieros España, S.A. - 214,002 214,002 EDP España S.A.U. - 21,640 21,640 Other EDP Group companies - 40,871 40,871 415,940 453,618 869,558 LIABILITIES THOUSAND EUROS LOANS AND INTERESTS TO PAY OTHERS TOTAL EDP Energias de Portugal, S.A. - 32,101 32,101 EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) - 8,109 8,109 Joint Ventures and Associated companies - 2,603 2,603 EDP Finance B.V. 2,832,418 596 2,833,014 EDP Servicios Financieros España, S.A. 445,499 92 445,591 EDP Global Solutions - 23,817 23,817 Other EDP Group companies - 3,946 3,946 3,277,917 71,264 3,349,181 Assets mainly refer to: • Debit balance of the Euro and US Dollar current accounts with EDP Servicios Financieros España, S.A. (see note 26) amounting to 214,002 thousand Euros as at 31 December 2020 (375,978 thousand Euros as at 31 December 2019); 108 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 • Loans granted to companies consolidated by the equity method and namely to OceanWinds in the total amount of 404,077 thousand Euros (see note 24); • Commercial receivables related to the sale of energy in EDPR Portugal and EDPR Spain through EDP Serviço Universal, S.A. (which is a last resort retailer due to regulatory legislation) and EDP España S.A.U. respectively; • Derivatives contracted with EDP Energias de Portugal, S.A. which market value as at 31 December 2020 amounts to 66,392 thousand Euros (see note 37). Liabilities mainly refer to: • Loans obtained by EDP Renováveis S.A. and by EDP Renováveis Servicios Financieros S.L. from EDP Finance BV in the amount, including interests and deducted from debt origination fees, of 2,832,418 thousand Euros (31 December 2019: 1,939,844 thousand Euros) and from EDP Servicios Financieros España S.A. in the amount of 445,499 thousand Euros (31 December 2019: 706,889 thousand Euros). See note 31; • Derivatives with the purpose of hedging the foreign exchange risk of EDP Renováveis mainly with respect of the investment in EDPR NA, having the EDP Group established Cross-Currency Interest Rate Swaps (CIRS) in USD and EUR between EDP - Energias de Portugal, S.A.and EDP Renováveis. At each reporting date, these CIRS are revalued to its market value, which corresponds to a spot foreign exchange revaluation, resulting in a perfect hedge (revaluation of the investment in EDPR NA and of the USD external financing). As at 31 December 2020, the amount payable by EDP Renováveis to EDP - Energias de Portugal, S.A.related to these CIRS amounts to 12,014 thousand Euros (31 December 2019: 129,156 thousand Euros) (see notes 35 and 37). The amount receivable as at 31 December 2020 related to these CIRS is 43,974 thousand Euros. Transactions with related parties for the year ended 31 December 2020 are analysed as follows: THOUSAND EUROS OPERATING INCOME FINANCIAL INCOME OPERATING EXPENSES FINANCIAL EXPENSES EDP Energias de Portugal, S.A. 36,279 20,626 -2,108 -32,347 EDP Energias de Portugal, S.A. Sucursal en España (EDP Branch) 1,600 - -19,746 -881 Joint Ventures and Associated companies 240,095 6,954 -4,600 -31,378 EDP Serviço Universal, S.A. 226,573 - -26 - EDP Comercializadora, S.A.U,. 42,513 - -372 - EDP Finance B.V. - - - -108,538 EDP Servicios Financieros España, S.A. - 649 - -17,076 EDP España S.A.U. 58,963 - -796 -495 EDP Clientes S.A. 37,824 - -1,966 - Other EDP Group companies 220 - -5,366 - 644,067 28,229 -34,980 -190,715 Operating income mainly includes: i) the gain for the sale of the offshore business to Oceanwinds in the amount of 217,633 thousand Euros (see note 6); ii) electricity sales to EDP Serviço Universal, S.A. which is a supplier of last resource in Portugal due to regulatory legislation and to EDP Comercializadora, S.A.U. replaced by EDP España S.A.U. and subsequently by EDP Clientes S.A as the commercial agent in Spain; and iii) swap commodities transactions with EDP Energias de Portugal, S.A. Financial income and financial expenses with EDP Energias de Portugal, S.A. Sucursal en España (EDP Branch) are related to derivative financial instruments. Financial expenses with EDP Finance B.V. and EDP Servicios Financieros España S.A., EDP Energias de Portugal, S.A., and EDP Branch are mainly related to derivative financial instruments and interests on the loans granted to EDP Renováveis S.A. and EDP Renováveis Servicios Financieros, S.A. referred above. 109 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 As at 31 December 2019, assets and liabilities with related parties, are analysed as follows: ASSETS THOUSAND EUROS LOANS AND INTERESTS TO RECEIVE OTHERS TOTAL EDP Energias de Portugal, S.A. - 16,175 16,175 EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) - 329 329 Joint Ventures and Associated companies 20,161 3,034 23,195 EDP Serviço Universal, S.A. - 25,629 25,629 EDP Comercializadora, S.A.U. - 16,779 16,779 EDP Servicios Financieros España, S.A. - 375,978 375,978 Other EDP Group companies - 58 58 20,161 437,982 458,143 LIABILITIES THOUSAND EUROS LOANS AND INTERESTS TO PAY OTHERS TOTAL EDP Energias de Portugal, S.A. - 9,856 9,856 EDP - Energias de Portugal, S.A. Sucursal en España (EDP Branch) - 6,370 6,370 Joint Ventures and Associated companies - 40 40 EDP Finance B.V. 1,939,844 129,488 2,069,332 EDP Servicios Financieros España, S.A. 706,889 377 707,266 Other EDP Group companies - 2,429 2,429 2,646,733 148,560 2,795,293 Transactions with related parties for the year ended 31 December 2019 are analysed as follows: THOUSAND EUROS OPERATING INCOME FINANCIAL INCOME OPERATING EXPENSES FINANCIAL EXPENSES EDP Energias de Portugal, S.A. 3,884 10,596 -1,496 -22,430 EDP Energias de Portugal, S.A. Sucursal en España (EDP Branch) 1,411 - -16,115 -1,664 EDP HC Energía Group companies (electric sector) - -119 -498 Joint Ventures and Associated companies 12,549 12,596 -318 -39 EDP Serviço Universal, S.A. 282,055 - -3 - EDP Comercializadora, S.A.U,. 241,818 - -2,365 - EDP Finance B.V. - - - -152,210 EDP Servicios Financieros España, S.A. - 247 - -32,234 Other EDP Group companies 444 23 -4,735 - 542,161 23,462 -25,151 -209,075 110 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 As part of its operational activities, the EDP Renováveis Group must present guarantees in favor of certain suppliers and in connection with renewable energy contracts. As at 31 December 2020, EDP España and EDP Energías de Portugal Sucursal en España granted operational guarantees to suppliers in favor of EDP Renováveis S.A. and EDPR NA in the amount of 356,919 thousand Euros (373,716 thousand Euros as at 31 December 2019). The operational guarantees are issued following the commitments assumed by EDPR EU and EDPR NA in relation to Power Purchase Agreements (PPA), interconnection, permits and market participation. Further, an amount of 5,274 thousand Euros refer to guarantees of operational nature granted by EDP España related to the companies EDPR Participaciones S.L., EDP Renewables France S.AS. and subsidiaries, that were sold in 2019 (see note 6) although EDPR assumes temporarily the responsibilidy under such guarantees until these are effectively replaced. Refer to note 20 for guarantees granted by EDP Group and EDPR Group to joint venture companies. 40. Fair value of financial assets and liabilities Fair value of financial instruments is based, whenever available, on quoted market prices. Otherwise, fair value is determined through internal models, which are based on generally accepted cash flow discounting techniques and option valuation models or through quotations supplied by third parties. Non-standard instruments may require alternative techniques, which consider their characteristics and the generally accepted market practices applicable to such instruments. These models are developed considering the market variables that affect the underlying instrument, namely yield curves, exchange rates and volatility factors. Market data is obtained from generally accepted suppliers of financial data (Bloomberg and Reuters). As at 31 December 2020 and 2019, the following table presents the interest rate curves of the major currencies to which the Group is exposed. These interest rates were used as the base for the fair value calculations made through internal models referred above: 31 DEC 2020 31 DEC 2019 CURRENCIES CURRENCIES EUR USD EUR USD 3 months -0.55% 0.24% -0.38% 1.91% 6 months -0.53% 0.16% -0.32% 1.91% 9 months -0.52% 0.17% -0.29% 0.00% 1 year -0.52% 0.21% -0.25% 2.00% 2 years -0.52% 0.20% -0.29% 1.70% 3 years -0.51% 0.24% -0.24% 1.69% 5 years -0.49% 0.33% -0.11% 1.73% 7 years -0.39% 0.66% 0.02% 1.80% 10 years -0.26% 0.93% 0.21% 1.90% Non-listed equity instruments, for which a reliable and consistent fair value estimate is not available either by internal models or external providers, are recognized at their historical cost. Equity instruments at fair value and financial assets at fair value through profit or loss Listed financial instruments are recognized at fair value based on market prices. The financial instruments for which reliable fair value estimates are not available, are recorded in the statement of financial position at their cost. 111 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Cash and cash equivalents, trade receivables and suppliers These financial instruments include mainly short term financial assets and liabilities. Given their short term nature at the reporting date, their book values are not significantly different from their fair values. Financial debt The fair value of the financial debt is estimated through internal models, which are based on generally accepted cash flow discounting techniques. At the reporting date, the carrying amount of floating rate loans is approximately their fair value. In case of fixed rate loans, mainly the intercompany loans granted by EDP Group, their fair value is obtained through internal models based on generally accepted discounting techniques. Derivative financial instruments All derivatives are accounted at their fair value. For those which are quoted in organized markets, the respective market price is used. For over-the-counter derivatives, fair value is estimated through the use of internal models based on cash flow discounting techniques and option valuation models generally accepted by the market, or by dealer price quotations. CIRS with EDP - Energias de Portugal, S.A. (note 37) With the purpose of hedging the foreign exchange risk resulting from the net investment in EDPR NA, the Group entered into CIRS in USD and EUR with EDP - Energias de Portugal, S.A.. These financial derivatives are presented in the statement of financial position at its fair value, which is estimated by discounting the projected USD and EUR cash flows. The discount rates and forward interest rates were based on the interest rate curves referred to above and the USD/EUR exchange rate is disclosed on note 29. See also note 35. The fair values of assets and liabilities as at 31 December 2020 and 31 December 2019 are analysed as follows: 31 DECEMBER 2020 31 DECEMBER 2019 THOUSAND EUROS CARRYING AMOUNT FAIR VALUE DIFFERENCE CARRYING AMOUNT FAIR VALUE DIFFERENCE FINANCIAL ASSETS Equity instruments at fair value 13,318 13,318 - 15,960 15,960 - Debtors and other assets from commercial activities 279,034 279,034 - 303,012 303,012 - Other debtors and other assets 857,909 857,909 - 500,566 500,566 - Derivative financial instruments 110,840 110,840 - 31,428 31,428 - Cash and cash equivalents 474,384 474,384 - 581,759 581,759 - 1,735,485 1,735,485 - 1,432,725 1,432,725 - FINANCIAL LIABILITIES Financial debt 3,946,516 4,003,782 57,266 3,416,537 3,458,824 42,287 Suppliers 1,356,521 1,356,521 - 1,216,118 1,216,118 - Institutional partnerships in U.S. wind farms 1,933,542 1,933,542 - 2,289,784 2,289,784 - Trade and other payables from commercial activities 428,692 428,692 - 513,303 513,303 - Other liabilities and other payables 1,021,124 1,021,124 - 1,021,124 1,021,124 - Derivative financial instruments 89,015 89,015 - 186,201 186,201 - 8,775,410 8,832,676 57,266 8,643,067 8,685,354 42,287 112 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The fair value levels used to valuate EDP Renováveis Group financial assets and liabilities are defined as follows: • level 1 - Quoted prices (unadjusted) in active market for identical assets and liabilities • level 2 - Inputs other than quoted prices included within Level 1 that are observable for assets or liabilities, either directly (i.e. as prices) or indirectly (i.e., derived from prices) • level 3 - Inputs for assets or liabilities that are not based on observable market data (unobservable inputs). 31 DECEMBER 2020 31 DECEMBER 2019 THOUSAND EUROS LEVEL 1 LEVEL 2 LEVEL 3 LEVEL 1 LEVEL 2 LEVEL 3 FINANCIAL ASSETS Equity instruments at fair value - - 13,318 - - 15,960 Derivative financial instruments - 110,840 - - 31,428 - - 110,840 13,318 - 31,428 15,960 FINANCIAL LIABILITIES Liabilities arising from options with non-controlling interests - - 883 - - 883 Derivative financial instruments - 89,015 - - 186,201 - - 89,015 883 - 186,201 883 The remaining assets and liabilities are valuated within Level 1 or correspond to assets and liabilities which fair value is the same as its carrying amount. In 2020, there are no transfers between levels. The movement in 2020 and 2019 of the financial assets and liabilities within Level 3 are analysed was as follows: EQUITY INSTRUMENTS AT FAIR VALUE TRADE AND OTHER PAYABLES THOUSAND EUROS 31 DEC 2020 31 DEC 2019 31 DEC 2020 31 DEC 2019 Balance at the beginning of the year 15,960 8,438 883 910 Gains / (Losses) in other comprehensive income -3,194 -99 - - Purchases 1,218 7,662 - - Disposals - - - -27 Others -666 -41 - - Balance at the end of the year 13,318 15,960 883 883 Purchases of equity instruments at fair value mainly refer to the equity instruments acquired in the context of the acquisition of Viesgo’s renewable business (see note 6 and 42). The Trade and other payables within level 3 are related to Liabilities with non-controlling interests. The movements in 2020 and 2019 of the derivative financial instruments are presented in note 37. 113 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 41. Relevant subsequent events EDPR informs about PPA contracts secured for two solar projects in the US EDPR through its fully owned subsidiary EDP Renewables North America LLC, has closed two 15-year Power Purchase Agreement to sell the energy produced by two solar PV plants totalling 275 MW. In detail, the projects located in the U.S. states of Mississippi and Indiana, are expected to commence operations in 2023. With this new agreement, EDPR has now globally 2.0 GW of total solar PV capacity secured for the 2020-2023 period. EDPR informs about agreement to acquire 85% of a distributed solar platform in the US EDPR through its fully owned subsidiary EDP Renewables North America, LLC, has entered into an agreement to acquire a majority interest in C2 Omega LLC, the distributed solar platform of C2 Energy Capital LLC. In detail, EDPR will acquire an 85% equity stake in a solar generation portfolio that includes 89 MW of operating and imminent completion capacity and a near-term pipeline of around 120 MW, across nearly 200 sites in 16 states. EDPR ’s investment in C2’s distributed solar platform business corresponds to an enterprise value of approximately $119m for the acquisition of the operating capacity (89 MW). The transaction will also include certain earn-out payments based on the growth in future operational capacity. C2's management team will continue to be engaged in the day-to-day operations of the business. The transaction will establish EDPR’s presence in the fast -growing distributed generation segments as an owner-operator of one of the largest commercial and industrial distributed generation portfolios in the U.S., and will enable EDPR to serve a rapidly growing market and offer to its customers a range of new services and solutions to meet their renewable energy needs. The completion of this transaction is subject to customary conditions precedent, and closing is expected to occur in the first quarter of 2021. EDP Renováveis informs about changes in Corporate Bodies EDPR informs about a resolution approved by EDPR´s Board of Directors in the meeting held on 19 January 2021: After the public communication of António Mexia and João Manso Neto about their no availability to be re-elected for their positions in EDP and following the appointment on 19 January 2021 by EDP’s shareholders of a new Executive Board of Directors team at EDP, and taking in consideration that both informed today that they will put their positions at the disposal of the Board, the Board of EDPR has agreed to cease António Mexia as Chairman of EDPR´s Board, and João Manso as Vice-Chairman of EDPR´s Board and CEO of EDPR. In addition, EDPR informs that has received the following resignations as members of EDPR’s Board of Directors: • Francisca Oliveira, with effect from 30 December 2020 (was also member of EDPR’s Audit, Control and Related Party Transactions Committee); • Duarte Bello, with effect from 19 January 2021 (was also member of the Executive Committee); • Spyridon Martinis, with effect from 19 January 2021 (was also member of the Executive Committee); • Miguel Angel Prado, with effect from the next General Shareholders Meeting (was also member of the Executive Committee). To fulfil the vacant positions, EDPR’s Board has co -opted: • Miguel Stilwell de Andrade, as Executive Director; • Ana Paula Marques, as Non-executive Director; • Joan Avalin Dempsey, as Non-executive and Independent Director. 114 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 Furthermore, EDPR’s Board has appointed Miguel Stilwell de Andrade as Chairman of EDPR´s Board and CEO of EDPR and R ui Teixeira, currently EDPR’s Executive Director and Consejero Delegado, as CFO of the company. To better maximize EDPR’s Board participation in the management of the company, the Board has decided to eliminate the Executive Committee body, which included up to now Executive Board members of the company, whose executive staff will now be integrated in a Management Team composed by: • Miguel Stilwell de Andrade, CEO;- • Rui Teixeira, CFO; • Duarte Bello, COO Europe and Brazil; • Miguel Angel Prado, COO North America; • Spyridon Martinis, CDO & COO Offshore. To cover the vacant position in the EDPR’s Audit, Control and Related -Party Transactions Committee, following the resignation from Francisca Oliveira, EDPR´s Board of Directors has agreed to name Francisco Seixas da Costa as member of such Committee. Following this appointment, EDPR’s Audit, Control and Related -Party Transactions Committee is composed by: • Acácio Jaime Liberado Mota Piloto (Chairman); • António do Pranto Nogueira Leite; • Francisco Seixas da Costa. With this resolution, EDPR’s Audit, Control and Related -Party Transactions continue to be composed only by independent members. Lastly, the Board of Directors has agreed that a General Shareholders’ Meeting will be summoned for the February 22nd with the following agenda: • Ratification of co-opted Directors; • Deliberate on the termination of members of the Board of Directors; • Establishment of the number of Board Members in 12; • Amendment to the By- Laws to eliminate the role of the Chairman of the Shareholders’ Mee ting, and allow the Shareholders Meeting to be chaired by the Board of Directors Chairman; • Delegation of powers. EDP Renováveis, S.A. informs about Spanish and Italian renewable energy auctions EDPR was awarded long-term Contract-for- Differences (“CfDs”) at the Spanish & Italian renewable energy auctions to sell electricity. In detail, at the Spanish auction, a portfolio of 6 projects of wind and solar, including hybrid projects, with a total capacity of 143 MW have been awarded. The projects are expected to become operational in 2022 and 2023. These new long- term contracts reinforce EDPR’s footprint in Spain with 2.3 GW in operation and close to 0.4 GW already secured in the country for the following years. 115 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 At the Italian auction, a wind project of 44 MW and expected to become operational in 2022 has also been awarded. In Italy, EDPR has 271 MW already operational and more than 0.2 GW secured for the coming years. As of today, EDPR has globally secured 6.7 GW for projects expected to become operational from 2021 onwards. EDPR enters Hungarian market with a 50 MW solar PV project EDPR secured a 15-year Contract-for-Difference("CfD") to sell energy produced by a solar PV project in Hungary totalling 50 MW and with expected commercial operation in 2022. With this project, EDPR increases its worldwide footprint by entering in a new market with a sustainable development of its Renewable Energy Source. Hungary expects to increase its solar PV capacity to 6.5 GW by 2030, mostly through an auctionbased regulatory framework. EDPR approved its new Strategic Plan for the 2021-2025 period At the end of February, EDPR approved its new Strategic Plan for the 2021-2025 period and the main three pillars are as follows: - Growth: accelerated and selective growth with +20 GW of additions for 2021-2025; - Value: on going asset rotation with €8bn of proceeds for the period ; - Excellence: high quality teams and efficient operations targeting a Core Opex/MW CARG 2021-2025 of -2%. The strategy is set to deliver superior growth through 2025 promoting clean energy while operating in a sustainable way across the three ESG dimensions. By 2025, EDPR targets to have 25 GW of installed capacity, €2.3bn of EBITDA and €0.8bn of net income . EDPR Extraordinary General Shareholders' Meeting EDPR informs that at the Extraordinary General Shareholders' Meeting held on 22 February 2021, Shareholders have adopted the following resolutions: • Board of Directors: ratification of appointments of Directors by co-optation. - Ratification of the appointment by co-option as Executive Director of Mr. Miguel Stilwell de Andrade. - Ratification of the appointment by co-option as Dominical Director Mrs. Ana Paula Garrido de Pina Marques. - Ratification of the appointment by co-option as Independent Director of Mrs. Joan Avalyn Dempsey. • Board of Directors: dismissal (separación) of Directors. - Dismiss ( separar ) Mr. António Luis Guerra Nunes Mexia of his position as Dominical Director. - Dismiss ( separar ) Mr. João Manuel Manso Neto of his position as Executive Director. • Adjustment of the number of Members of the Board in twelve (12). • Amendment of articles 12 (“Notice of General Meetings”) and 16 (“Chairman of the General Meetings”) of Articles of Association. • Delegation of powers to the formalization and implementation of all resolutions adopted at the Extraordinary General Shareholders’ Meeting, for the execution of any relevant public deed and for its interpretation, correction, addition or development in order to obtain the appropriate registrations. All information and documentation of the Extraordinary General Shareholders’ Meeting is also available in the Company´s website (www.edpr.com). 116 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 42. Business Combination EDPR entered in July 2020 into an agreement with certain funds managed by Macquarie Infrastructure and Real Assets (together with its managed funds), for the acquisition of the control of the renewable business of Viesgo, and namely the acquisition of 100% of the shares in the companies Viesgo Europa, S.L.U. and Viesgo Renovables, S.L.U. which in turn owns a portfolio of affiliates (see note 6). At that moment, the completion of this transaction was subject to customary conditions precedent. With this transaction, completed in 16 December 2020 once the aforementioned customary conditions precedent were fulfilled, EDPR has gained control over the renewable business of Viesgo, that comprises 0.5 GW (EBITDA + Equity MW) of renewable installed capacity in Spain (84%) and Portugal (16%), for a total consideration of 563,488 thousand Euros of which an amount of 26,001 thousand Euros refers to shareholders loans. This transaction is considered under the scope of IFRS 3 - Business combinations. Within this transaction, EDPR has gained control over the company Compañía Eólica Aragonesa, S.A. (CEASA), where EDPR had 50% of the shares of the company and acquired the remaining 50% of the shares, considering this acquisition a business combination achieved in stages under IFRS 3. Until the date in which the control was obtained, the shareholding previously held was being included in the consolidated financial statements under the equity method. Total value of the equity investment, previously to the transaction, amounted to 46,527 thousand Euros of which an amount of 1,954 thousand Euros corresponds to the result of the company for the year 2020 attributable to EDPR. For simplification purposes, and considering this does not have a material effect, the Group used the financial statements as at 31 December 2020 of the companies acquired, to determine pre-acquisition results and, consequently, the companies have been consolidated from that date with no impact in the 2020 consolidated profit and loss of the EDPR Group, except for the result of the aforementioned business combination achieved in stages detailed below. If this acquisition had occurred in the beginning of the exercise, it would have contributed to the consolidated financial statements with Revenues, mainly from energy sales, in the approximate amount of 78,000 thousand Euros and with a Net profit for the period in the approximate amount of 17,000 thousand Euros, referring to the twelve-month period ended at 31 December 2020. At the acquisition date, EDPR Group has determined the fair value of the assets acquired and liabilities assumed, based on a valuation performed internally. The valuation methodology utilized was a discounted cashflow approach, where cash flows for each project were forecasted for the remaining life of the assets. The main components of cashflow, namely production, long term power prices and operational costs were estimated using EDPR’s own methodology using historical data of the assets provided by the seller and information from similar wind farms in EDPR’s portfolio. The after tax cash flows were then discounted at the weighted average cost of capital reflecting the risk of each of the country and adjusted for the contracted profile of each project. Lastly to the aggregate value of the portfolio, adjustments were made for one-off items, other balance sheet assets or liabilities and synergies, to reach the final equity valuation. 117 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 Such valuation has determined a fair value of the net assets acquired in the amount of 503,312 thousands of Euros. Fair value of identifiable assets and liabilities at the acquisition date is presented as follows: THOUSAND EUROS BOOK VALUE AT ACQUISITION DATE FAIR VALUE ADJUSTMENT FAIR VALUE AT ACQUISITION DATE ASSETS Property, plant and equipment 203,027 214,254 417,281 Right-of-use assets 15,403 - 15,403 Intangible assets 13,340 - 13,340 Goodwill 112,279 - 112,279 Investments in joint ventures and associates 9,437 44,023 53,460 Equity instruments at fair value 182 366 548 Deferred tax assets 15,184 - 15,184 Other Non-Current Assets 484 - 484 Total Non-Current Assets 369,336 258,643 627,979 Inventories 4,028 - 4,028 Debtors and other assets from commercial activities 12,351 - 12,351 Other debtors and other assets 40,941 - 40,941 Current tax assets 4,553 - 4,553 Cash and cash equivalents 32,907 - 32,907 Total Current Assets 94,780 - 94,780 Total Assets 464,116 258,643 722,759 LIABILITIES Medium / Long term financial debt 17,095 - 17,095 Provisions 18,719 1,100 19,819 Deferred tax liabilities 11,449 56,631 68,080 Other liabilities and other payables 14,948 - 14,948 Total Non-Current Liabilities 62,211 57,731 119,942 Short term financial debt 964 - 964 Trade and other payables from commercial activities 31,886 - 31,886 Current tax liabilities 5,704 - 5,704 Other current liabilities 6,113 - 6,113 Total Current Liabilities 44,667 - 44,667 Total Liabilities 106,878 57,731 164,609 Total Net assets at fair value 558,150 - Non-controlling interests -8,311 - Net assets previously held in CEASA (business combination achieved in stages) -46.527 Total Net assets acquired at fair value 503,312 - Total consideration transferred for the acquisition of the shares -537,487 Goodwill 36,062 Gain on acquisition (CEASA -business combination achieved in stages) -1,887 118 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The aforementioned Viesgo's valuation has determined a fair value for Property, plant and equipment in the amount of 417,281 thousand Euros, generating a fair value adjustment of 214,254 thousand Euros and a corresponding deferred tax liability in the amount of 56,631 thousand Euros (see note 15 and 19). Further, some of the affiliates of Viesgo Renovables, S.L.U. are associates companies which are consolidated by the equity method, as well as equity instruments at fair value where the valuation determined a fair value adjustment in the amount of 44,023 thousand Euros and 366 thousand Euros respectively. At the acquisition date, certain contingent liabilities have been identified, therefore additional provisions have been recognized in the amount of 1,100 thousand Euros. The purchase price allocation exercise carried out in accordance with IFRS 3 resulted as follows: i) Goodwill recognition in the amount of 148,341 thousand Euros (see note 20) as per the difference of the net assets acquired at fair value and the consideration transferred for the acquisition of the shares. This amount includes the previous Goodwill recognized in the book value at acquisition date amounting to 112,279 thousand Euros and an additional amount of 36,062 thousand Euros, of which an amount of 4,641 thousand Euros refers to associate companies consolidated by the equity method, thus presented in the caption Investments in joint ventures and associates caption (see note 20); and ii) Gain in the step acquisition of CEASA in the amount of 1,887 thousand Euros as a consequence of the remeasurement at fair value of the investment previously held, being registered the corresponding difference between the fair value and the book value in the Other income caption of the consolidated financial statements (see note 9). The aforementioned goodwill resulting from the purchase price allocation, which is identified as provisional according to what is indicated in note 2.A, is mainly attributable to the high-quality of the portfolio with strong wind resource (29% average load factor) and with a low risk profile, of which 87% of the capacity is regulated, with an average age of 13 years (~7 years of remaining regulated life) considering that the portfolio also counts with an attractive potential for future extensions/repowering given the aforementioned profile, as well as to the benefits and synergies that are expected to arise as a result of its integration into EDPR Group. 43. Environment issues Expenses of environmental nature are the expenses that were identified and incurred to avoid, reduce or repair damages of an environmental nature that result from the Group's normal activity. These expenses are booked in the income statement of the year, except if they qualify to be recognised as an asset, according to IAS 16. During the year, the environmental expenses recognised in the income statement in the amount of 5,912 thousand Euros (31 December 2019: 5,611 thousand Euros) refer to costs with the environmental management plan. Investments of an environmental nature booked as Property, plant and equipment and intangible assets during 2020 amount to 14,829 thousand Euros (31 December 2019: 18,343 thousand Euros). As referred in accounting policy 2 p), the Group has established provisions for dismantling and decommissioning of property, plant and equipment when a legal or contractual obligation exists to dismantle and decommission those assets at the end of their useful lives. Consequently, the Group has booked provisions for property, plant and equipment related to electricity wind generation for the responsibilities of restoring sites and land to its original condition, in the amount of 304,661 thousand Euros as at 31 December 2020 (31 December 2019: 270,353 thousand Euros) (see note 32). 119 NOTES TO THE CONSOLIDATED ANNUAL ACCOUNTS FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019 44. Operating segments report The Group generates energy from renewable resources and has three reportable segments which are the Group’s business platforms, Europe, North America and Brazil. The strategic business units have operations in different geographic zones and are managed separately because their characteristics are quite different. For each of the strategic business units, the Group’s CEO reviews internal management reports on at least a quarterly basis. The accounting policies of the reportable segments are the same as described in note 2. Information regarding the results of each reportable segment is included in Annex 2. Performance is based on segment operating profit measures, as included in the internal management reports that are reviewed by the Management. Segment operating profit is used to measure performance as management believes that such information is the most relevant in evaluating the results of certain segments relative to other entities that operate within these industries. Inter-segment pricing is determined on an arm’s length basis. A business segment is an identifiable component of the Group, aimed at providing a single product or service, or a group of related products or services, and it is subject to risks and returns that can be distinguished from those of other business segments. The Group generates energy from renewable sources in several locations and its activity is managed based on the following business segments: • Europe: refers to EDPR EU Group companies operating in Spain, Portugal, Belgium, France, Italy, Netherlands, Poland, Romania, United Kingdom, Hungary and Greece • North America: refers to EDPR North America, EDPR Canada and EDPR Mexico Group companies that operate in United States of America, Canada and Mexico, respectively • Brazil: refers to EDPR Brasil Group companies that operate in this country. Segment definition The amounts reported in each business segment result from the aggregation of the subsidiaries and business units defined in each segment perimeter, including the intra-segment eliminations, without any inter-segment allocation adjustment. The financial information disclosed by each business segment is determined based on the amounts booked directly in the subsidiaries that compose the segment, including the intra-segment eliminations, without any inter-segment allocation adjustment. 45. Audit and non-audit fees PricewaterhouseCoopers (PwC) was appointed in the Shareholder’s Meeting held on April 3rd, 2018 as the external auditor of the EDPR Group for years 2018, 2019 and 2020. Fees for professional services provided by this company and the other related entities and persons in accordance with Law 22/2015 of 20 July, for the year ended in 31 December 2020 and 2019 are as follows: 31 DECEMBER 2020 THOUSAND EUROS EUROPE NORTH AMERICA BRAZIL TOTAL Audit and statutory audit of accounts 1,346 1,150 167 2,663 Other non-audit services 170 11 4 185 Total 1,516 1,161 171 2,848 120 THE FOLLOWING NOTES FORM AN INTEGRAL PART OF THESE CONSOLIDATED ANNUAL ACCOUNTS ANNUAL REPORT EDPR 2020 The amount of Other non-audit services in Europe includes, among others, services that refer to the entire Group such as the review of the internal control system on financial reporting and review of the non-financial information related to sustainability included in the EDPR Group’s annual report, which are invoiced to a European company. This amount also includes the limited review as of June 30, 2020 of the EDPR Consolidated Financial Statements and other reviews for Group consolidation purposes which are considered non-audit services according to the respective local regulation. Total amount for Europe includes 734 thousand Euros of services provided by PricewaterhouseCoopers Auditores S.L. from which 583 thousand Euros refer to audit services and 151 thousand Euros refer to non-audit services. The above fees exclude the fees for full consolidated Viesgo companies which are also audited by PwC in the amount of 90 thousand Euros and the fees for the companies that were sold during 2020 (see note 6). 31 DECEMBER 2019 THOUSAND EUROS EUROPE NORTH AMERICA BRAZIL TOTAL Audit and statutory audit of accounts 1,173 1,328 175 2,676 Other audit-related services - - 26 26 1,173 1,328 201 2,702 Other non-audit services 182 42 4 228 182 42 4 228 Total 1,355 1,370 205 2,930 The amount of Other non-audit services in Europe includes, among others, services that refer to the entire Group such as the review of the internal control system on financial reporting and review of the non-financial information related to sustainability included in the EDPR Group’s annual report, which are invoiced to a European company. This amount also includes the limited review as of June 30, 2019 of the EDPR Consolidated Financial Statements and other reviews for Group consolidation purposes which are considered non-audit services according to the respective local regulation. Total amount for Europe includes 644 thousand Euros of services provided by PricewaterhouseCoopers Auditores S.L. from which 494 thousand Euros refer to audit services and 150 thousand Euros refer to non-audit services. 121 Annex I The Subsidiary Companies consolidated under the full consolidated method, as at 31 December 2020 and 2019, are as follows: 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights GROUP'S PARENT HOLDING COMPANY AND RELATED ACTIVITIES EDP Renováveis, S.A. (Group's parent holding company) Oviedo PwC 100,00% 100,00% 100,00% 100,00% EDP Renováveis Servicios Financieros, S.A. Oviedo PwC 100,00% 100,00% 100,00% 100,00% EUROPE GEOGRAPHY / PLATFORM Spain EDP Renewables Europe, S.L.U. (Europe Parent Company) Oviedo PwC 100,00% 100,00% 100,00% 100,00% EDP Renovables España, S.L.U. Oviedo PwC 100,00% 100,00% 100,00% 100,00% Acampo Arias, S.L. Zaragoza PwC 95,00% 95,00% 95,00% 95,00% Aplicaciones Industriales de Energías Limpias, S.L. Zaragoza n.a. 61,50% 61,50% 61,50% 61,50% Aprofitament D'Energies Renovables de la Terra Alta, S.A. Barcelona n.a. 28,27% 44,09% 28,27% 44,09% Bon Vent de Corbera, S.L.U. Barcelona PwC 0,00% 0,00% 100,00% 100,00% Compañía Eólica Aragonesa, S.A. Zaragoza PwC 100,00% 100,00% 50,00% 50,00% Desarrollos Eólicos de Teruel, S.L. Zaragoza n.a. 51,00% 51,00% 51,00% 51,00% EDPR Suvan S.L.U. Madrid n.a. 100,00% 100,00% 100,00% 100,00% EDPR Terral S.L.U. Madrid n.a. 100,00% 100,00% 100,00% 100,00% EDPR Yield, S.A.U. Oviedo PwC 100,00% 100,00% 100,00% 100,00% Eólica Arlanzón, S.A. Madrid PwC 85,00% 85,00% 85,00% 85,00% Eólica Campollano, S.A. Madrid PwC 75,00% 75,00% 75,00% 75,00% Eólica Fontesilva, S.L.U. La Coruña PwC 100,00% 100,00% 100,00% 100,00% Eólica La Brújula, S.A.U. Madrid PwC 100,00% 100,00% 100,00% 100,00% Eólica La Janda, S.L.U. Madrid PwC 100,00% 100,00% 100,00% 100,00% Eólica Sierra de Ávila, S.L.U. Madrid PwC 0,00% 0,00% 100,00% 100,00% Iberia Aprovechamientos Eólicos, S.A. Zaragoza PwC 94,00% 94,00% 94,00% 94,00% Northeolic Monte Buño, S.L. Cantabria n.a. 75,00% 75,00% 0,00% 0,00% Parc Eòlic de Coll de Moro, S.L.U. Barcelona PwC 0,00% 0,00% 100,00% 100,00% Parc Eòlic de Torre Madrina, S.L.U. Barcelona PwC 0,00% 0,00% 100,00% 100,00% Parc Eòlic de Vilalba dels Arcs, S.L.U. Barcelona PwC 0,00% 0,00% 100,00% 100,00% Parc Eòlic Serra Voltorera, S.L.U. Barcelona PwC 100,00% 100,00% 100,00% 100,00% Parque Eólico Altos del Voltoya, S.A. Madrid PwC 92,50% 92,50% 92,50% 92,50% Parque Eólico de Abrazadilla, S.L.U. Madrid n.a. 100,00% 100,00% 100,00% 100,00% Parque Eólico La Sotonera, S.L. Zaragoza PwC 69,84% 69,84% 69,84% 69,84% Parque Eólico Los Cantales, S.L.U. Zaragoza PwC 100,00% 100,00% 100,00% 100,00% Parque Eólico Santa Quiteria, S.L. Zaragoza PwC 100,00% 83,96% 100,00% 83,96% Renovables Castilla La Mancha, S.A. Madrid PwC 90,00% 90,00% 90,00% 90,00% Tébar Eólica, S.A.U. Madrid PwC 100,00% 100,00% 100,00% 100,00% Viesgo Europa, S.L.U. Cantabria PwC 100,00% 100,00% 0,00% 0,00% Viesgo Mantenimiento, S.L.U. Cantabria n.a. 100,00% 100,00% 0,00% 0,00% Viesgo Renovables, S.L.U. Cantabria PwC 100,00% 100,00% 0,00% 0,00% OW Offshore, S.L.  Madrid PwC - - 0,00% 0,00%  Loss of control in 2020 122 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights OW FS Offshore, S.A. Oviedo PwC - - 0,00% 0,00% Portugal EDP Renováveis Portugal, S.A. Porto PwC 51,00% 51,00% 51,00% 51,00% EDP Renewables SGPS, S.A. Porto PwC 100,00% 100,00% 100,00% 100,00% EDPR PT - Parques Eólicos, S.A. Porto PwC 51,00% 51,00% 51,00% 51,00% EDPR PT - Promoção e Operação, S.A. Porto PwC 100,00% 100,00% 100,00% 100,00% Eólica da Coutada, S.A. Soutelo de Aguiar PwC 100,00% 51,00% 100,00% 100,00% Eólica da Linha, S.A. Porto PwC 100,00% 100,00% 100,00% 100,00% Eólica da Serra das Alturas, S.A. Boticas PwC 50,10% 25,55% 50,10% 25,55% Eólica da Terra do Mato, S.A. Porto PwC 100,00% 51,00% 100,00% 51,00% Eólica das Serras das Beiras, S.A. Piódão - Arganil PwC 100,00% 51,00% 100,00% 51,00% Eólica de Alagoa, S.A. Arcos de Valdevez PwC 60,00% 30,60% 60,00% 30,60% Eólica de Montenegrelo, S.A. Vila Pouca de Aguiar PwC 50,10% 25,55% 50,10% 25,55% Eólica do Alto da Lagoa, S.A. Porto PwC 100,00% 51,00% 100,00% 51,00% Eólica do Alto da Teixosa, S.A. Alhões PwC 100,00% 51,00% 100,00% 51,00% Eólica do Alto do Mourisco, S.A. Cerdedo PwC 100,00% 51,00% 100,00% 51,00% Eólica do Espigão, S.A. Vila Nova CMV PwC 100,00% 51,00% 100,00% 51,00% Eólica do Sincelo, S.A. Porto PwC 100,00% 100,00% 100,00% 100,00% Eólica dos Altos de Salgueiros-Guilhado, S.A. Vila Pouca de Aguiar PwC 100,00% 51,00% 100,00% 51,00% Eoliser - Serviços de Gestão para Parques Eólicos, Lda. Lisboa n.a. 100,00% 100,00% 0,00% 0,00% Fotovoltaica Lote A, S.A. Porto PwC 100,00% 100,00% 100,00% 100,00% IE2 Portugal, SGPS, S.A. Lisboa PwC 100,00% 100,00% 0,00% 0,00% Malhadizes - Energia Eólica, S.A. Porto PwC 100,00% 51,00% 100,00% 51,00% Parque Eólico do Barlavento, S.A. Lisboa PwC 89,98% 89,98% 0,00% 0,00% S.E.E. - Sul Energía Eólica, S.A. Lisboa PwC 100,00% 100,00% 0,00% 0,00% France EDPR France Holding, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Bourbriac II, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% La Plaine de Nouaille, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Le Chemin de la Corvée, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Le Chemin de Saint Druon, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Monts de la Madeleine Energie, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Monts du Forez Energie, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien d’Entrains -sur-Nohain, S.A.S. Paris PwC 90,00% 90,00% 90,00% 90,00% Parc Éolien de Boqueho-Plouagat, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Eolien de Dionay, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de Flavin, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de la Champagne Berrichonne, S.A.R.L. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de la Côte du Cerisat, S.A.S. Paris EY 100,00% 100,00% 100,00% 100,00% Parc Éolien de La Hetroye, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de Mancheville, S.A.R.L. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de Marchéville, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de Paudy, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien de Prouville, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% Parc Éolien des 7 Domaines, S.A.S. Paris PwC 100,00% 100,00% 100,00% 100,00% 123 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Parc Éolien des Longs Champs, S.A.R.L. Paris n.a. 100,00% 100,00% 100,00% 100,00% Parc Eolien Louvières, S.A.R.L. Paris n.a. 100,00% 100,00% 100,00% 100,00% Transition Euroise Roman II, S.A.S. Paris n.a. 85,00% 85,00% 0,00% 0,00% Vanosc Energie, S.A.S. Paris n.a. 100,00% 100,00% 0,00% 0,00% Vaudrimesnil Energie, S.A.R.L. Paris n.a. 100,00% 100,00% 0,00% 0,00% OW France, S.A.S.  Paris n.a. - - 0,00% 0,00% Poland EDP Renewables Polska, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% EDP Renewables Polska HoldCo, S.A. Warsaw PwC 51,00% 51,00% 51,00% 51,00% EDP Renewables Polska Solar, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 100,00% 100,00% R.Wind, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 0,00% 0,00% Budzyn, Sp. z o.o. Warsaw n.a. 100,00% 51,00% 0,00% 0,00% Elektrownia Wiatrowa Kresy I, Sp. z o.o. Warsaw PwC 100,00% 51,00% 100,00% 51,00% EW Dobrzyca, sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% EWP European Wind Power Krasin, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% Farma Wiatrowa Bogoria, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% Farma Wiatrowa Starozreby, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 100,00% 100,00% FW Warta, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 0,00% 0,00% Gudziki Wind Farm, sp. z o.o. Warsaw n.a. 100,00% 51,00% 100,00% 51,00% Karpacka Mala Energetyka, Sp. z o.o. Warsaw n.a. 85,00% 85,00% 85,00% 85,00% Korsze Wind Farm, Sp. z o.o. Warsaw PwC 100,00% 51,00% 100,00% 51,00% Kowalewo Wind, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% Lichnowy Windfarm, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% Masovia Wind Farm I, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% Miramit Investments, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 100,00% 100,00% Molen Wind II, Sp. z o.o. Warsaw PwC 100,00% 51,00% 100,00% 51,00% Neo Solar Farm, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 0,00% 0,00% Nowa Energia 1, Sp. z o.o. Warsaw PwC 100,00% 100,00% 100,00% 100,00% Radziejów Wind Farm, Sp. z o.o. Warsaw PwC 100,00% 51,00% 100,00% 51,00% Rampton, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 100,00% 100,00% Relax Wind Park I, Sp. z o.o. Warsaw PwC 100,00% 51,00% 100,00% 51,00% Relax Wind Park III, Sp. z o.o. Warsaw PwC 100,00% 51,00% 100,00% 51,00% Ujazd, Sp. z o.o. Warsaw PwC. 100,00% 100,00% 100,00% 100,00% Wind Field Wielkopolska, Sp. zo.o. Warsaw PwC 100,00% 100,00% 0,00% 0,00% Winfan, Sp. z o.o. Warsaw n.a. 100,00% 100,00% 100,00% 100,00% B-Wind Polska, Sp. z o.o. Gdynia PwC - - 100,00% 100,00% C-Wind Polska, Sp. z o.o. Gdynia PwC - - 100,00% 100,00% MFW Neptun, Sp. z o.o. Warsaw PwC - - 100,00% 100,00% Relax Wind Park IV, Sp. z o.o. Warsaw PwC - - 100,00% 100,00% Romania EDPR România, S.R.L. Bucarest PwC 100,00% 100,00% 100,00% 100,00% Cernavoda Power, S.A. Bucarest PwC 100,00% 100,00% 100,00% 100,00% Pestera Wind Farm, S.A. Bucarest PwC 100,00% 100,00% 100,00% 100,00% Sibioara Wind Farm, S.R.L. Bucarest PwC 100,00% 100,00% 100,00% 100,00%  Loss of control in 2020 124 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights VS Wind Farm, S.A. Bucarest PwC 100,00% 100,00% 100,00% 100,00% EDPR RO PV, S.R.L. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% Cujmir Solar, S.A. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% Foton Delta, S.A. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% Foton Epsilon, S.A. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% Potelu Solar, S.A. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% Studina Solar, S.A. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% Vanju Mare Solar, S.A. Bucarest n.a. 0,00% 0,00% 100,00% 100,00% United Kingdom Altnabreac Wind Farm Limited Edinburgh n.a. 100,00% 100,00% 0,00% 0,00% Ben Sca Wind Farm Limited Edinburgh n.a. 100,00% 100,00% 0,00% 0,00% Moorshield Wind Farm Limited Edinburgh n.a. 100,00% 100,00% 0,00% 0,00% Drummarnock Wind Farm Limited Edinburgh n.a. 100,00% 100,00% 0,00% 0,00% Wind 2 Project 1 Limited Edinburgh n.a. 100,00% 100,00% 0,00% 0,00% Ocean Winds UK Limited London PwC - - 100,00% 100,00% Moray Offshore Renewable Power Limited  London PwC - - 100,00% 100,00% Italy EDP Renewables Italia, S.r.l. Milan PwC 51,00% 51,00% 51,00% 51,00% EDP Renewables Italia Holding, S.r.l. Milan PwC 100,00% 100,00% 100,00% 100,00% Aliseo, S.r.l. Milan PwC 65,00% 65,00% 0,00% 0,00% AW 2, S.r.l. Milan PwC 75,00% 75,00% 75,00% 75,00% Breva Wind, S.r.l. Milan PwC 100,00% 100,00% 100,00% 100,00% Conza Energia, S.r.l. Milan PwC 100,00% 100,00% 100,00% 100,00% Custolito, S.r.l. Milan n.a. 100,00% 100,00% 100,00% 100,00% EDPR Sicilia PV, S.r.l. Milan n.a. 100,00% 100,00% 100,00% 100,00% EDPR Sicilia Wind, S.r.l. Milan n.a. 100,00% 100,00% 100,00% 100,00% EDPR Villa Galla, S.r.l. Milan PwC 100,00% 51,00% 100,00% 51,00% Energia Emissioni Zero 4, S.r.l. Milan PwC 60,00% 60,00% 0,00% 0,00% Giglio, S.r.l. Milan n.a. 60,00% 60,00% 0,00% 0,00% Lucus Power, S.r.l. Milan PwC 100,00% 100,00% 100,00% 100,00% Re Plus, S.r.l. Milan n.a. 100,00% 100,00% 100,00% 100,00% San Mauro, S.r.l. Milan PwC 75,00% 75,00% 75,00% 75,00% Sarve, S.r.l. Milan PwC 51,00% 51,00% 51,00% 51,00% T Power, S.p.A. Milan Baker Tilly 100,00% 100,00% 100,00% 100,00% TACA Wind, S.r.l. Milan PwC 100,00% 100,00% 100,00% 100,00% Tivano, S.r.l. Milan PwC 75,00% 75,00% 75,00% 75,00% VRG Wind 153, S.r.l. Milan n.a. 80,00% 80,00% 0,00% 0,00% WinCap, S.r.l. Milan PwC 100,00% 100,00% 100,00% 100,00% Wind Energy San Giorgio, S.r.l. Milan n.a. 60,00% 60,00% 0,00% 0,00% Greece Aioliko Parko Fthiotidos Erimia E.P.E. Agia Paraskevi n.a. 100,00% 100,00% 100,00% 100,00% EDPR Hellas 1 M.A.E. Attica n.a. 100,00% 100,00% 100,00% 100,00% EDPR Hellas 2 M.A.E. Attica n.a. 100,00% 100,00% 100,00% 100,00% Energiaki Arvanikou E.P.E. Athens PwC 100,00% 100,00% 100,00% 100,00%  Loss of control in 2020 125 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Wind Park Aerorrachi M.A.E. Athens PwC 100,00% 100,00% 100,00% 100,00% Wind Shape, Ltd. Attica n.a. 100,00% 100,00% 0,00% 0,00% Belgium EDP Renewables Belgium, S.A. Brussels PwC 100,00% 100,00% 100,00% 100,00% The Netherlands EDPR International Investments, B.V. Amsterdam PwC 100,00% 100,00% 100,00% 100,00% 4THEWIND I, B.V.  Zwolle n.a. - - 100,00% 100,00% 4THEWIND II, B.V. Zwolle n.a. - - 100,00% 100,00% 4THEWIND III, B.V. Zwolle n.a. - - 100,00% 100,00% Ventum Ventures III Holding, B.V. Zwolle n.a. - - 100,00% 100,00% Hungary EDP Renewables Hungary Hungary PwC 100,00% 100,00% 0,00% 0,00% Sunlight Solar, Kft. Hungary PwC 100,00% 100,00% 0,00% 0,00% ESC ERŐMŰ, Kft. Hungary PwC 100,00% 100,00% 0,00% 0,00% North America geography / platform Mexico EDPR Servicios de México, S. de R.L. de C.V. Ciudad de México n.a. 100,00% 100,00% 100,00% 100,00% Eólica de Coahuila, S.A. de C.V. Ciudad de México PwC 51,00% 51,00% 100,00% 51,00% Parque Solar Los Cuervos, S. de R.L. de C.V. Ciudad de México n.a. 100,00% 100,00% 0,00% 0,00% Vientos de Coahuila, S.A. de C.V. Ciudad de México n.a. 100,00% 100,00% 100,00% 100,00% USA EDP Renewables North America LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 17th Star Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% 2007 Vento I LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2007 Vento II LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2008 Vento III LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2009 Vento IV LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2009 Vento V LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2009 Vento VI LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% 2010 Vento VII LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% 2010 Vento VIII LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% 2011 Vento IX LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2011 Vento X LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2014 Sol I LLC Delaware PwC 100,00% 50,00% 100,00% 51,00% 2014 Vento XI LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2014 Vento XII LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2015 Vento XIII LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2015 Vento XIV LLC Delaware PwC 100,00% 51,00% 100,00% 51,00% 2016 Vento XV LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2016 Vento XVI LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2017 Sol II LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2017 Vento XVII LLC Delaware PwC - - 100,00% 100,00% 2018 Vento XVIII LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2019 SOL V LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00%  Loss of control in 2020 126 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights 2019 Vento XX LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2019 Vento XXI LLC Delaware PwC 100,00% 100,00% 100,00% 100,00% 2020 Vento XXII LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Alabama Ledge Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Alabama Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Antelope Ridge Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Arbuckle Mountain Wind Farm LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Arkwright Summit Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Arlington Wind Power Project LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Aroostook Wind Energy LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Ashford Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Athena-Weston Wind Power Project II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Athena-Weston Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Avondale Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% AZ Solar LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Azalea Springs Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Bayou Bend Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% BC2 Maple Ridge Holdings LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% BC2 Maple Ridge Wind LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Big River Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Black Prairie Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Black Prairie Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Black Prairie Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Black Prairie Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackford County Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackford County Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackstone Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackstone Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackstone Wind Farm IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackstone Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blackstone Wind Farm V LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Canyon Windpower II LLC Texas n.a. 100,00% 100,00% 100,00% 100,00% Blue Canyon Windpower III LLC Texas n.a. 100,00% 100,00% 100,00% 100,00% Blue Canyon Windpower IV LLC Texas n.a. 100,00% 100,00% 100,00% 100,00% Blue Canyon Windpower V LLC Texas n.a. 100,00% 51,00% 100,00% 51,00% Blue Canyon Windpower VI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Canyon Windpower VII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Harvest Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot IX LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot V LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot VI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% 127 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Blue Marmot VII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot VIII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Blue Marmot XI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Bluebird Prairie Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Bright Stalk Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Broadlands Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Broadlands Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Broadlands Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Buffalo Bluff Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Cameron Solar LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Casa Grande Carmel Solar LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Castle Valley Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Cattlemen Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Chateaugay River Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Cielo Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Clinton County Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Cloud County Wind Farm LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Coldwater Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Coos Curry Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Crescent Bar Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Crittenden Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Cropsey Ridge Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Crossing Trails Wind Power Project II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Crossing Trails Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Dairy Hills Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Diamond Power Partners LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Drake Peak Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Dry Creek Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Duff Solar Park II LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Duff Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% East Klickitat Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Eastmill Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR CA Solar Park II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR CA Solar Park III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR CA Solar Park IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR CA Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR CA Solar Park V LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR CA Solar Park VI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR NA DG Holding LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% EDPR Northeast Allen Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% EDPR Solar Ventures I LLC Delaware n.a. 50,00% 50,00% 51,00% 51,00% EDPR Solar Ventures II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Solar Ventures III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Solar Ventures IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Solar Ventures V LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% 128 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights EDPR South Table LLC Nebraska n.a. 100,00% 100,00% 100,00% 100,00% EDPR Vento I Holding LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Vento IV Holding LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR WF LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures X LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XI LLC Delaware n.a. 51,00% 51,00% 51,00% 51,00% EDPR Wind Ventures XII LLC Delaware n.a. 51,00% 51,00% 51,00% 51,00% EDPR Wind Ventures XIII LLC Delaware n.a. 51,00% 51,00% 51,00% 51,00% EDPR Wind Ventures XIV LLC Delaware n.a. 51,00% 51,00% 51,00% 51,00% EDPR Wind Ventures XIX LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XVI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XVII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XVIII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XX LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XXI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% EDPR Wind Ventures XXII LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Edwardsport Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Esker Solar Park II LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Esker Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Estill Solar I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Five-Spot LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Ford Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Franklin Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Goldfinger Ventures III LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Green Country Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Green Power Offsets LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Greenbow Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Gulf Coast Windpower Management Company LLC Delaware n.a. 75,00% 75,00% 75,00% 75,00% Hampton Solar II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Headwaters Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Headwaters Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Headwaters Wind Farm IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Headwaters Wind Farm LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Helena Harbor Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Hidalgo Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Hidalgo Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% High Prairie Wind Farm II LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% High Trail Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Hog Creek Wind Project LLC  Delaware n.a. - - 100,00% 100,00% Holly Hill Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Chocolate Bayou I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Midwest IX LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Northwest I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00%  Loss of control in 2020 129 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Horizon Wind Energy Northwest IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Northwest VII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Northwest X LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Northwest XI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Panhandle I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Southwest I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Southwest II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Southwest III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Southwest IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Energy Valley I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Freeport Windpower I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind MREC Iowa Partners LLC Delaware n.a. 75,00% 75,00% 75,00% 75,00% Horizon Wind Ventures I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Ventures II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horizon Wind Ventures III LLC Delaware n.a. 51,00% 51,00% 51,00% 51,00% Horizon Wind Ventures IX LLC Delaware n.a. 51,00% 51,00% 51,00% 51,00% Horizon Wind Ventures VI LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% Horizon Wind Ventures VII LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% Horizon Wind Ventures VIII LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% Horizon Wyoming Transmission LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Horse Mountain Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Indiana Crossroads Solar Park II LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Indiana Crossroads Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Indiana Crossroads Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Jericho Rise Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Juniper Wind Power Partners LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Leprechaun Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Lexington Chenoa Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Lexington Chenoa Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Lexington Chenoa Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Little Brook Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Loblolly Hill Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Loki Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Loma de la Gloria Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Lone Valley Solar Park I LLC Delaware n.a. 100,00% 50,00% 100,00% 51,00% Lone Valley Solar Park II LLC Delaware n.a. 100,00% 50,00% 100,00% 51,00% Long Hollow Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Lost Lakes Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Lowland Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Loyal Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Machias Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Madison Windpower LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Marathon Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Marble River LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Martinsdale Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% 130 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Meadow Lake Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Meadow Lake Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Meadow Lake Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Meadow Lake Wind Farm IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Meadow Lake Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Meadow Lake Wind Farm V LLC  Delaware n.a. - - 100,00% 100,00% Meadow Lake Wind Farm VIII LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Mesquite Wind LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Mineral Springs Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Misenheimer Solar LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Moonshine Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% New Trail Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Nine Kings Transco LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% North Slope Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Number Nine Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Old Trail Wind Farm LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% OPQ Property LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Pacific Southwest Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Paulding Wind Farm II LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Paulding Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Paulding Wind Farm IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Paulding Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Paulding Wind Farm V LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Paulding Wind Farm VI LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Peterson Power Partners LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Pioneer Prairie Wind Farm I LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Pleasantville Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Plum Nellie Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Poplar Camp Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Post Oak Wind LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Prospector Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Quilt Block Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Quilt Block Wind Farm LLC * Delaware n.a. - - 100,00% 100,00% Rail Splitter Wind Farm II LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Rail Splitter Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% RE Scarlet LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Redbed Plains Wind Farm LLC Delaware n.a. - - 100,00% 100,00% Reloj del Sol Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Renville County Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Rio Blanco Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Rising Tree Wind Farm II LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Rising Tree Wind Farm III LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Rising Tree Wind Farm LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Riverstart Development LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00%  Loss of control in 2020 131 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Riverstart Solar Park II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Riverstart Solar Park III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Riverstart Solar Park IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Riverstart Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Riverstart Solar Park V LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Riverstart Ventures LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Rolling Upland Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Rosewater Ventures LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Rosewater Wind Farm LLC Delaware n.a. 0,00% 0,00% 100,00% 100,00% RTSW Solar Park II LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% RTSW Solar Park III LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% RTSW Solar Park IV LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% RTSW Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% RTSW Solar Park V LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% RTSW Solar Park VI LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Rush County Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Rye Patch Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Saddleback Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Sagebrush Power Partners LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% San Clemente Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Sardinia Windpower LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Sedge Meadow Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Shullsburg Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Signal Hill Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Simpson Ridge Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Simpson Ridge Wind Farm III LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Simpson Ridge Wind Farm IV LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Simpson Ridge Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Simpson Ridge Wind Farm V LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Solar Ventures Purchasing LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Spruce Ridge Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Stinson Mills Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Sustaining Power Solutions LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Sweet Stream Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Telocaset Wind Power Partners LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Tillman Solar Park LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Timber Road II Storage LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Timber Road III Storage LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Timber Road Solar Park II LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Timber Road Solar Park III LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Timber Road Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Top Crop I Storage LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Top Crop II Storage LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Tug Hill Windpower LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Tumbleweed Wind Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% 132 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Turtle Creek Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Twin Groves I Storage LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Twin Groves II Storage LLC Delaware n.a. 100,00% 100,00% 0,00% 0,00% Waverly Wind Farm II LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Waverly Wind Farm LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Western Trail Wind Project I LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Wheat Field Holding LLC Delaware PwC 51,00% 51,00% 51,00% 51,00% Wheat Field Wind Power Project LLC Delaware n.a. 100,00% 51,00% 100,00% 51,00% Whiskey Ridge Power Partners LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Whistling Wind WI Energy Center LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% White Stone Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Whitestone Wind Purchasing LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Wildcat Creek Wind Farm LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Wilson Creek Power Project LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% Wind Turbine Prometheus LP Delaware n.a. 100,00% 100,00% 100,00% 100,00% Wrangler Solar Park LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% WTP Management Company LLC Delaware n.a. 100,00% 100,00% 100,00% 100,00% North River Wind LLC  Delaware n.a. - - 0,00% 0,00% OW North America LLC Delaware n.a. - - 0,00% 0,00% Canada EDP Renewables Canada Ltd. British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Blue Bridge Solar Park GP Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Blue Bridge Solar Park Limited Partnership British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Bromhead Solar Park GP Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Bromhead Solar Park Limited Partnership Saskatchewan n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables Canada Management Services Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables Sask SE GP Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables Sask SE Limited Partnership Ontario n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables SH II Project GP Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables SH II Project Limited Partnership Alberta n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables SH Project GP Ltd. British Columbia n.a. 100,00% 100,00% 100,00% 100,00% EDP Renewables SH Project Limited Partnership Alberta n.a. 100,00% 100,00% 100,00% 100,00% Halbrite Solar Park GP Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Halbrite Solar Park Limited Partnership Saskatchewan n.a. 100,00% 100,00% 100,00% 100,00% Kennedy Wind Farm GP Ltd British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Kennedy Wind Farm Limited Partnership Saskatchewan n.a. 100,00% 100,00% 100,00% 100,00% Nation Rise Wind Farm GP II Inc. British Columbia n.a. 100,00% 100,00% 100,00% 100,00% Nation Rise Wind Farm GP Inc. British Columbia n.a. 100,00% 100,00% 0,00% 0,00% Nation Rise Wind Farm Limited Partnership Ontário PwC 100,00% 100,00% 0,00% 0,00% Quatro Limited Partnership Ontário n.a. 100,00% 100,00% 100,00% 100,00% SBWF GP Inc. British Columbia n.a. 51,00% 51,00% 51,00% 51,00% South Branch Wind Farm II GP Inc. British Columbia n.a. 100,00% 100,00% 100,00% 100,00% South Branch Wind Farm II Limited Partnership Ontário n.a. 100,00% 100,00% 100,00% 100,00% South Dundas Windfarm Limited Partnership Ontário PwC 51,00% 51,00% 51,00% 51,00%  Loss of control in 2020 133 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights SOUTH AMERICA GEOGRAPHY / PLATFORM: Brazil EDP Renováveis Brasil, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Aventura Holding, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Aventura I, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Eólica Aventura II, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Aventura III, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Aventura IV, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Aventura V, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Baixa do Feijão I, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Eólica Baixa do Feijão II, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Eólica Baixa do Feijão III, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Eólica Baixa do Feijão IV, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Eólica Boqueirão I, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Boqueirão II, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Catanduba I, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Catanduba II, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica JAU, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Eólica Jerusalém I, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Jerusalém II, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Jerusalém III, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Jerusalém IV, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Jerusalém V, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Jerusalém VI, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Monte Verde I, S.A. Lagoa Nova PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Monte Verde II, S.A. Lagoa Nova PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Monte Verde III, S.A. Lagoa Nova PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Monte Verde IV, S.A. Lagoa Nova PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Monte Verde V, S.A. Lagoa Nova PwC 100,00% 100,00% 100,00% 100,00% Central Eólica Monte Verde VI, S.A. Lagoa Nova PwC 100,00% 100,00% 100,00% 100,00% Central Eólica SRMN I, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica SRMN II, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica SRMN III, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica SRMN IV, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Eólica SRMN V, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Central Nacional de Energia Eólica, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Central Solar Lagoa I, S.A. São Paulo n.a. 100,00% 100,00% 0,00% 0,00% Central Solar Lagoa II, S.A. São Paulo n.a. 100,00% 100,00% 0,00% 0,00% Central Solar Pereira Barreto I, S.A. Pereira Barreto PwC 100,00% 100,00% 100,00% 100,00% Central Solar Pereira Barreto II, S.A. Pereira Barreto PwC 100,00% 100,00% 100,00% 100,00% Central Solar Pereira Barreto III, S.A. Pereira Barreto PwC 100,00% 100,00% 100,00% 100,00% Central Solar Pereira Barreto IV, S.A. Pereira Barreto PwC 100,00% 100,00% 100,00% 100,00% Central Solar Pereira Barreto V, S.A. Pereira Barreto PwC 100,00% 100,00% 100,00% 100,00% Elebrás Projetos, S.A. São Paulo PwC 51,00% 51,00% 51,00% 51,00% Jerusalém Holding, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% 134 ANNUAL REPORT EDPR 2020 2020 2019 Company Head Office Auditor % of capital % of voting rights % of capital % of voting rights Monte Verde Holding, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% SRMN Holding, S.A. São Paulo PwC 100,00% 100,00% 100,00% 100,00% Colombia Elipse Energía, S.A.S. E.S.P. Bogotá n.a. 100,00% 100,00% 0,00% 0,00% Eolos Energías, S.A.S. E.S.P. Bogotá n.a. 100,00% 100,00% 100,00% 100,00% Kappa Energía, S.A.S. E.S.P. Bogotá n.a. 100,00% 100,00% 0,00% 0,00% Omega Energía, S.A.S. E.S.P. Bogotá n.a. 100,00% 100,00% 0,00% 0,00% Solar Power Solutions, S.A.S. E.S.P. Bogotá n.a. 100,00% 100,00% 0,00% 0,00% Vientos del Norte, S.A.S. E.S.P. Bogotá n.a. 100,00% 100,00% 100,00% 100,00% ASIA GEOGRAPHY / PLATFORM: Japan OW Japan Godo Kaisha Tokyo n.a. - - 0,00% 0,00% Vietnam EDP Renewables Vietnam Ltd. Ho Chi Minh n.a. 100,00% 100,00% 100,00% 100,00%  Loss of control in 2020 The main financial indicators of the jointly controlled companies included in the consolidation under the equity method as at 31 December 2020, are as follows: COMPANY SHARE CAPITAL HEAD OFFICE AUDITOR % OF CAPITAL % OF VOTING RIGHTS 4THEWIND I, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND II, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND III, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND IV, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND V, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND VI, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND VII, B.V. € 100 Zwolle n.a. 100,00% 50,00% 4THEWIND VIII, B.V. € 100 Zwolle n.a. 100,00% 50,00% Ancoris Beheer Nederland, B.V. € 100 Zwolle n.a. 100,00% 50,00% Ceprastur, A.I.E. € 360.607 Oviedo n.a. 56,76% 56,76% Desarrollos Energéticos Canarios, S.A. € 37.564 Las Palmas n.a. 49,90% 49,90% Desarrollos Energéticos del Val, S.L. € 137.070 Soria n.a. 25,00% 25,00% Electrabel Offshore Energy € 13.606.250 Belgium Deloitte 100,00% 50,00% Éoliennes en Mer Dieppe - Le Tréport, S.A.S. € 31.436.000 Bois Guillaume EY 60,50% 30,25% Éoliennes en Mer Îles d'Yeu et de Noirmoutier, S.A.S. € 36.376.000 Nantes EY 60,50% 30,25% Evolución 2000, S.L. € 117.994 Albacete PwC 49,15% 49,15% Les Eoliennes en Mer Services, S.A.S. € 40.000 Courbevoie EY 100,00% 30,25% Les Eoliennes Flottantes du Golfe du Lion, S.A.S. € 40.000 Montpellier EY 80,00% 40,00% North Sea Wave, N.V. € 362.500 Belgium n.a. 17,50% 8,75% OW France, S.A.S. € 1.307.527 Paris PwC 100,00% 50,00% OW FS Offshore, S.A. € 3.500.000 Oviedo PwC 100,00% 50,00% OW Offshore, S.L. € 3.731.000 Madrid PwC 50,00% 50,00% SeaMade, N.V € 76.524.001 Belgium n.a. 17,50% 8,75% 135 ANNUAL REPORT EDPR 2020 COMPANY SHARE CAPITAL HEAD OFFICE AUDITOR % OF CAPITAL % OF VOTING RIGHTS Sistemas Eólicos Tres Cruces, S.L. € 50.000 Soria n.a. 25,00% 25,00% Ventum Ventures III Holding, B.V. € 100 Zwolle n.a. 100,00% 50,00% Windplus, S.A. € 1.779.000 Lisboa PwC 85,17% 42,63% Ventos do Atlântico - Projetos de Energía Eólica Ltda BRL 100 São Paulo n.a. 100,00% 50,00% B&C Wind Polska sp. z o.o. s.c. PLN 0 Warsaw n.a. 100,00% 50,00% B-Wind Polska, Sp. z o.o. PLN 60.000 Gdynia PwC 100,00% 50,00% C-Wind Polska, Sp. z o.o. PLN 1.850.000 Gdynia PwC 100,00% 50,00% MFW Neptun, Sp. z o.o. PLN 220.000 Warsaw PwC 100,00% 50,00% Relax Wind Park IV, Sp. z o.o. PLN 4.490.000 Warsaw PwC 100,00% 50,00% Delphis Holdings Limited £ 4,13 Edinburgh n.a. 100,00% 50,20% Moray East Holdings Limited £ 10,000,000 London PwC 56,60% 28,30% Moray Offshore Renewable Power Limited £ 23027589 London PwC 100,00% 50,00% Moray Offshore Windfarm (East) Limited £ 10,000,000 London PwC 100,00% 28,30% Moray Offshore Windfarm (West) Limited £ 1,000 London PwC 100,00% 64,20% Moray West Holdings Limited £ 1,000 London PwC 33,40% 64,20% Mordel Limited £ 2 Edinburgh PwC 100,00% 50,00% Ocean Winds UK Limited £ 9578002 London PwC 100,00% 50,00% 2017 Vento XVII LLC € 536.689.832 Delaware PwC 20,00% 20,00% 2018 Vento XIX LLC € 493.538.562 Delaware PwC 20,00% 20,00% 2019 SOL III LLC € 235.989.831 Delaware PwC 100,00% 50,00% 2019 SOL IV LLC € 316.169.431 Delaware PwC 100,00% 50,00% Flat Rock Windpower LLC € 215.034.270 Delaware KPMG 50,00% 50,00% Flat Rock Windpower II LLC € 543.598.932 Delaware KPMG 50,00% 50,00% Goldfinger Ventures II LLC € 194.656.553 Delaware n.a. 50,00% 50,00% Goldfinger Ventures LLC € 146.473.771 Delaware n.a. 50,00% 50,00% Hog Creek Wind Project LLC € 96.319.972 Delaware n.a. 100,00% 20,00% Mayflower Wind Energy LLC € 468.300.200 Delaware BDO 50,00% 25,00% Meadow Lake Wind Farm V LLC € 147.518.483 Delaware n.a. 100,00% 20,00% Meadow Lake Wind Farm VI LLC € 264.400.228 Delaware n.a. 100,00% 20,00% Nine Kings Wind Farm LLC € 0 Delaware n.a. 50,00% 50,00% North River Wind LLC € 0 Delaware n.a. 100,00% 50,00% OW North America LLC € 228.689.706 Delaware n.a. 100,00% 50,00% Prairie Queen Wind Farm LLC € 223.444.606 Delaware n.a. 100,00% 20,00% Quilt Block Wind Farm LLC € 138.049.755 Delaware n.a. 100,00% 20,00% Redbed Plains Wind Farm LLC € 154.582.883 Delaware n.a. 100,00% 20,00% Redwood Coast Offshore Wind LLC € 0 Delaware n.a. 50,00% 25,00% Solar Ventures Acquisition LLC € 0 Delaware n.a. 50,00% 50,00% Sun Streams LLC € 317.353.745 Delaware n.a. 100,00% 50,00% Sunshine Valley Solar LLC € 201.098.196 Delaware n.a. 100,00% 50,00% Windhub Solar A LLC € 36.343.904 Delaware n.a. 100,00% 50,00% OW Japan Godo Kaisha ¥ 24.400.001 Tokyo n.a. 100,00% 50,00% East Blue Power Co., Ltd. KRW 200.000.000 Seoul n.a. 90,00% 27,56% Korean Floating Wind Power Co., Ltd. KRW 10.000.000 Seoul n.a. 61,25% 30,63% OW South Korea Co., Ltd. KRW 65.000.000 Seoul n.a. 100,00% 50,00% 136 ANNUAL REPORT EDPR 2020 The main financial indicators of the jointly controlled companies included in the consolidation under the equity method as at 31 December 2019, are as follows: COMPANY SHARE CAPITAL HEAD OFFICE AUDITOR % OF CAPITAL % OF VOTING RIGHTS Ceprastur, A.I.E. € 360.607 Oviedo n.a. 56,76% 56,76% Compañía Eólica Aragonesa, S.A. € 6.701.165 Zaragoza PwC 50,00% 50,00% Desarrollos Energéticos Canarios, S.A. € 37.564 Las Palmas n.a. 49,90% 49,90% Desarrollos Energéticos del Val, S.L. € 137.070 Soria n.a. 25,00% 25,00% Evolución 2000, S.L. € 117.994 Albacete PwC 49,15% 49,15% Sistemas Eólicos Tres Cruces, S.L. € 50.000 Soria n.a. 25,00% 25,00% Éoliennes en Mer Dieppe - Le Tréport, S.A.S. € 31.436.000 Bois Guillaume EY 29,50% 29,50% Éoliennes en Mer Îles d'Yeu et de Noirmoutier, S.A.S. € 36.376.000 Nantes EY 29,50% 29,50% Les Eoliennes en Mer Services, S.A.S. € 40.000 Courbevoie EY 100,00% 29,50% Les Eoliennes Flottantes du Golfe du Lion, S.A.S. € 40.000 Montpellier EY 35,00% 35,00% Windplus, S.A. € 1.250.000 Lisboa PwC 54,40% 54,40% Moray East Holdings Limited £ 10,000,000 London PwC 33,30% 33,30% Moray Offshore Windfarm (East) Limited £ 10,000,000 London PwC 100,00% 33,30% Moray Offshore Windfarm (West) Limited £ 1,000 London PwC 100,00% 67,00% Moray West Holdings Limited £ 1,000 London PwC 67,00% 67,00% 2018 Vento XIX LLC $ 483.122.053 Delaware PwC 20,00% 20,00% 2019 SOL III LLC $ 246.422.986 Delaware PwC 100,00% 50,00% 2019 SOL IV LLC $ 0 Delaware PwC 100,00% 50,00% Flat Rock Windpower LLC $ 536,426,287 Delaware KPMG 50,00% 50,00% Flat Rock Windpower II LLC $ 211,171,187 Delaware KPMG 50,00% 50,00% Goldfinger Ventures II LLC $ 208.565.999 Delaware n.a. 50,00% 50,00% Goldfinger Ventures LLC $ 154.978.239 Delaware n.a. 50,00% 50,00% Mayflower Wind Energy LLC $ 159.000.000 Delaware BDO 50,00% 50,00% Meadow Lake Wind Farm VI LLC $ 273.341.071 Delaware n.a. 100,00% 20,00% Nine Kings Wind Farm LLC $ $ 0 Delaware n.a. 50,00% 50,00% Prairie Queen Wind Farm LLC $ 191,095,968 Delaware n.a. 100,00% 20,00% Solar Ventures Acquisition LLC $ 0 Delaware n.a. 50,00% 50,00% Sun Streams LLC $ 333,609,989 Delaware n.a. 100,00% 50,00% Sunshine Valley Solar LLC $ 208.520.098 Delaware n.a. 100,00% 50,00% Windhub Solar A LLC $ 37.902.128 Delaware n.a. 100,00% 50,00% Nation Rise Wind Farm GP Inc. CAD 1,276 British Columbia n.a. 25,00% 25,00% Nation Rise Wind Farm Limited Partnership CAD 62,024,174 Ontário PwC 25,00% 25,00% Korean Floating Wind Power Co., Ltd. KRW 10.000.000 Seoul n.a. 61,25% 61,25% 137 ANNUAL REPORT EDPR 2020 The Associated Companies included in the consolidation under the equity method as at 31 December 2020, are as follows: COMPANY SHARE CAPITAL HEAD OFFICE AUDITOR % OF CAPITAL % OF VOTING RIGHTS Biomasas del Pirineo, S.A. € 454.896 Huesca n.a. 30,00% 30,00% Blue Canyon Windpower LLC € 63.851.000 Texas PWC 25,00% 25,00% Desarrollos Eólicos de Canarias, S.A. € 1.817.130 Gran Canaria PwC 44,75% 44,75% Elecdey Carcelén, S.A. € 6.969.600 Albacete PwC 23,00% 23,00% Eólica de São Julião, Lda. € 500.000 Lisboa PwC 45,00% 45,00% Eos Pax IIa, S.L. € 6.010 Coruña PwC 48,50% 48,50% Geólica Magallón, S.L. € 3.400.000 Zaragoza PwC 36,24% 36,24% Parque Eólico Belmonte, S.A. € 120.400 Madrid KPMG 29,90% 29,90% Parque Eólico Sierra del Madero, S.A. € 7.193.970 Madrid KPMG 42,00% 42,00% San Juan de Bargas Eólica, S.L. € 5.000.000 Zaragoza PwC 47,01% 47,01% Solar Siglo XXI, S.A. € 80.000 Ciudad Real n.a. 25,00% 25,00% Solar Works! B.V. € 6.769.000 Rotterdam RSM Global 20,19% 20,19% Unión de Generadores de Energía, S.L. € 23.044 Zaragoza PwC 50,00% 50,00% The Associated Companies included in the consolidation under the equity method as at 31 December 2019, are as follows: COMPANY SHARE CAPITAL HEAD OFFICE AUDITOR % OF CAPITAL % OF VOTING RIGHTS Aprofitament D'Energies Renovables de L'Ebre, S.L. € 14,933,030 Barcelona Jordi Guilera Valls 13,29% 13,29% Biomasas del Pirineo, S.A. € 454,896 Huesca n.a. 30,00% 30,00% Desarrollos Eólicos de Canarias, S.A. € 1,817,130 Gran Canaria PwC 44,75% 44,75% Parque Eólico Belmonte, S.A. € 120,400 Madrid KPMG 29,90% 29,90% Parque Eólico Sierra del Madero, S.A. €7,193,970 Madrid KPMG 42,00% 42,00% Solar Siglo XXI, S.A. € 80,000 Ciudad Real n.a. 25,00% 25,00% Dunkerque Éoliennes en Mer, S.A.S. € 10,000 Montpellier n.a. 32,00% 32,00% Frontier Beheer Nederland, B. V. € 1,000 Zwolle n.a. 30,00% 30,00% Frontier, C.V. € 1,000 Zwolle n.a. 30,00% 30,00% Solar Works! B.V. € 2,089 Rotterdam RSM Global 20,19% 20,19% Blue Canyon Windpower LLC $ 63,851,000 Texas PwC 25,00% 25,00% 138 ANNUAL REPORT EDPR 2020 Annex II Group Activity by Operating Segment Operating Segment Information for the years ended 31 December 2020 THOUSAND EUROS EUROPE NORTH AMERICA BRAZIL SEGMENTS TOTAL Revenues 824,236 669,387 36,497 1,530,120 Income from institutional partnerships in U.S. wind farms - 201,783 - 201,783 824,236 871,170 36,497 1,731,903 Other operating income 286,789 195,096 3,335 485,220 Supplies and services -158,130 -163,268 -9,080 -330,478 Personnel costs and Employee benefits expenses -32,203 -76,147 -1,498 -109,848 Other operating expenses -68,402 -50,111 -3,258 -121,771 28,054 -94,430 -10,501 -76,877 Joint ventures and associates 3,940 -186 0 3,754 Gross operating profit 856,230 776,554 25,996 1,658,780 Provisions -690 0 -12 -702 Amortisation and impairment -222,290 -358,953 -8,834 -590,077 Operating profit 633,250 417,601 17,150 1,068,001 Assets 6,010,251 8,945,159 424,778 15,380,188 Liabilities 542,984 1,051,609 54,800 1,649,393 Operating Investment 514,864 1,176,021 202,816 1,893,701 Note: The Segment "Europe" includes: i) revenues in the amount of 360,244 thousand of Euros from Spanish companies; ii) assets from Spanish companies in the amount of 2,407,017 thousands of Euros. 139 ANNUAL REPORT EDPR 2020 Reconciliation between the Segment Information and the Financial Statements THOUSAND EUROS Revenues of the Reported Segments 1,530,120 Revenues of Other Segments 8,945 Elimination of intra-segment transactions -10,091 Revenues of the EDPR Group 1,528,974 Gross operating profit of the Reported Segments 1,658,780 Gross operating profit of Other Segments 997 Elimination of intra-segment transactions -5,052 Gross operating profit of the EDPR Group 1,654,725 Operating profit of the Reported Segments 1,068,001 Operating profit of Other Segments -6,129 Elimination of intra-segment transactions -7,883 Operating profit of the EDPR Group 1,053,989 Assets of the Reported Segments 15,380,188 Not Allocated Assets 2,066,385 Financial Assets 1,069,010 Tax assets 255,659 Debtors and other assets 741,716 Assets of Other Segments 8,074,745 Elimination of intra-segment transactions -7,358,763 Assets of the EDPR Group 18,162,555 Investments in joint ventures and associates 474,884 Liabilities of the Reported Segments 1,649,393 Not Allocated Liabilities 6,682,416 Financial Liabilities 1,393,633 Institutional partnerships in U,S, wind farms 1,933,542 Tax liabilities 475,934 Payables and other liabilities 2,879,307 Liabilities of Other Segments 1,307,863 Elimination of intra-segment transactions -100,948 Liabilities of the EDPR Group 9,538,724 Operating Investment of the Reported Segments 1,893,701 Operating Investment of Other Segments 204,761 Operating Investment of the EDPR Group 2,098,462 140 ANNUAL REPORT EDPR 2020 THOUSAND EUROS TOTAL OF THE REPORTED SEGMENTS OTHER SEGMENTS ELIMINATION OF INTRA-SEGMENT TRANSACTIONS TOTAL OF THE EDPR GROUP Income from institutional partnerships in U.S. wind farms 201,783 - - 201,783 Other operating income 485,220 19,971 -6,777 498,414 Supplies and services -330,478 -25,147 51,188 -304,437 Personnel costs and Employee benefits expenses -109,848 -31,308 - -141,156 Other operating expenses -121,771 38,358 -39,289 -122,702 Provisions -702 - - -702 Amortisation and impairment -590,077 -7,126 -2,831 -600,034 Joint ventures and associates 3,754 -9,588 -317 -6,151 Operating Segment Information for the years ended 31 December 2019 THOUSAND EUROS EUROPE NORTH AMERICA BRAZIL SEGMENTS TOTAL Revenues 924,828 650,835 74,180 1,649,843 Income from institutional partnerships in U.S. wind farms - 181,570 - 181,570 924,828 832,405 74,180 1,831,413 Other operating income 246,430 50,352 88,263 385,045 Supplies and services -157,754 -148,252 -15,345 -321,351 Personnel costs and Employee benefits expenses -29,016 -63,294 -2,682 -94,992 Other operating expenses -70,919 -56,685 -5,484 -133,088 -11,259 -217,879 64,752 -164,386 Joint ventures and associates 3,680 -297 - 3,383 Gross operating profit 917,249 614,229 138,932 1,670,410 Provisions -1,229 - -8 -1,237 Amortisation and impairment -254,246 -316,897 -15,703 -586,846 Operating profit 661,774 297,332 123,221 1,082,327 Assets 5,530,854 9,016,481 340,888 14,888,223 Liabilities 321,225 1,497,315 32,397 1,850,937 Operating Investment 258,381 31,663 866,711 1,156,755 Note: The Segment "Europe" includes: i) revenues in the amount of 373,829 thousand of Euros from Spanish companies; ii) assets from Spanish companies in the amount of 2,437,701 thousands of Euros. 141 ANNUAL REPORT EDPR 2020 Reconciliation between the Segment Information and the Financial Statements THOUSAND EUROS Revenues of the Reported Segments 1,649,843 Revenues of Other Segments 49,077 Elimination of intra-segment transactions -56,791 Revenues of the EDPR Group 1,642,129 Gross operating profit of the Reported Segments 1,670,410 Gross operating profit of Other Segments -17,707 Elimination of intra-segment transactions -1,278 Gross operating profit of the EDPR Group 1,651,425 Operating profit of the Reported Segments 1,082,307 Operating profit of Other Segments -20,038 Elimination of intra-segment transactions -3,705 Operating profit of the EDPR Group 1,058,564 Assets of the Reported Segments 14,888,223 Not Allocated Assets 1,555,540 Financial Assets 578,827 Tax assets 393,370 Debtors and other assets 583,343 Assets of Other Segments 42,621 Elimination of intra-segment transactions 1,206,269 Assets of the EDPR Group 17,692,653 Investments in joint ventures and associates 460,185 Liabilities of the Reported Segments 1,850,937 Not Allocated Liabilities 1,382,027 Financial Liabilities - Institutional partnerships in U,S, wind farms 355,484 Tax liabilities 517,503 Payables and other liabilities 509,040 Liabilities of Other Segments 17,820 Elimination of intra-segment transactions 6,107,169 Liabilities of the EDPR Group 9,357,953 Operating Investment of the Reported Segments 1,156,755 Operating Investment of Other Segments 51,882 Operating Investment of the EDPR Group 1,208,637 142 ANNUAL REPORT EDPR 2020 THOUSAND EUROS TOTAL OF THE REPORTED SEGMENTS OTHER SEGMENTS ELIMINATION OF INTRA-SEGMENT TRANSACTIONS TOTAL OF THE EDPR GROUP Income from institutional partnerships in U.S. wind farms 181,570 - - 181,570 Other operating income 385,045 14,948 -313 399,680 Supplies and services -321,351 -29,375 41,694 -309,032 Personnel costs and Employee benefits expenses -94,992 -35,087 -614 -130,693 Other operating expenses -133,088 -16,289 147,842 -1,535 Provisions -1,237 - 1 -1,236 Amortisation and impairment -586,846 -2,350 -2,429 -591,625 Joint ventures and associates 3,383 -607 616 3,392 O A C T FROM TOMORROW TO BEYOND Changing tomorrow now. Changing tomorrow now. INDEX 2020 Consolidated Management Report Message from the CEO 3 01 The Company EDPR in Brief 10 2020 in Review 20 Organisation 24 02 Strategic Approach Business Environment 37 Strategy 44 Risk Management 48 03 Execution Financial Capital 58 Human Capital 69 Supply Chain Capital 74 Social Capital 76 Natural Capital 80 Digital Capital 82 Innovation Capital 86 Sustainable Development Goals 88 04 Sustainability 93 05 Corporate Governance 154 06 Remuneration Report 253 Concepts and Definitions 264 3 "Clean energy will be at the center of the post-COVID recovery, helping to stimulate the economy and accelerate the energy transition." 4 ANNUAL REPORT EDPR 2020 February 2021 Dear Stakeholder, 2020 was a challenging year but one that showed the best in our people and in our company. EDPR’s main priority has been to protect its employees’ health, ensuring business continuity and supporting the local communities in which it operates. As a company, we’ve remained resilient, delivering on short and long-term objectives, and maintaining our leadership in a sector of increasing global importance. I believe EDPR is well placed to build on its pioneering role in renewable energy and continue to grow. Clean energy will be at the center of the post-COVID recovery, helping to stimulate the economy and accelerate the energy transition. The current crisis has also helped to galvanize the movement to a net zero global economy, with growing momentum in the public and private sectors as well as civil society. In Europe, the €1 trillion Green Deal announced in December 2019 sits ﬁrmly at the heart of the EU’s strategy to drive the economic recovery post COVID-19. A further €750 billion recovery fund the “Next Generation EU” has been established, with around 30% of it earmarked to support decarbonization efforts. On the ﬁrst day in oﬃce the Biden Administration returned the US to the Paris Climate Agreement. During 2020 a number of countries committed to net zero emission targets by 2050, with eight now having enshrined the commitment into law. That ambition at the national level has been echoed in the private sector, with leading companies making pledges to become net zero by 2050 or earlier. Total net zero commitments to date represent nearly 50% of global CO 2 emissions and 50% of global GDP, which could increase signiﬁcantly if the US were to make the commitment as well. EDPR made a number of strategic moves in 2020 designed to maintain our position of leadership in the energy transition and accelerate the global shift to net zero, including: • The creation of Ocean Winds (OW), a joint venture between EDPR and ENGIE dedicated to the offshore wind energy. OW aims to be among the world’s top ﬁve largest offshore operators by 2025, reaching 5–7 GW of projects in operation or construction and 5–10 GW at an advanced development phase. • The acquisition of Viesgo ’s renewables portfolio, a total of c.0.5GW in 24 wind farms located in Spain and Portugal. The purchase of this high-quality portfolio strengthens the position of EDPR in Spain and offers signiﬁcant opportunities for future growth. • The acquisition of a solar distributed platform in the US with 89 MW in operation and a near-term pipeline of 120 MW, across nearly 200 sites and 16 states. This transaction will establish EDPR’s presence in the fast-growing generation segments as an owner-operator of one of the largest commercial and industrial distributed generation portfolios in the US. MESSAGE FROM THE CEO Miguel Stilwell de Andrade 5 We have created a leading global renewable energy company through the execution of a focused strategy, with an operating portfolio of more than 12 GW of onshore wind and solar assets, generating 28.5 TWh of clean energy and avoiding 18.5 mt of CO 2. In 2020, EDPR added a total of 1,580 MW and had 2.4 GW of new capacity under construction by year-end . EDPR also continued its program of asset rotation, selling down 766 MW of assets in Brazil, Spain and the US . We have 6 GW of secured capacity to be installed in the coming years, providing clear visibility on the execution of our strategic plan. Our EBITDA totaled €1,655 million, and our net proﬁt, attributable to EDP Renováveis’ shareholders, reached €556 million mainly driven by the successful execution of the sell-down strategy. In February 2021 we presented our new Business Plan, outlining our strategy to deliver superior growth through 2025 . The company’s strategy is centred on three distinct pillars: i) growth - we will triple growth in renewables from current levels, adding 4 GW/year in core-low risk geographies across the world. We will strengthen our leadership position in wind onshore, build a sound market presence in solar and be a global player in offshore wind through the 50:50 JV Ocean Winds while developing new technologies and business models to ensure long term renewables competitive edge and growth; ii) value - we will accelerate growth, leveraging our distinctive asset rotation model to target €8 billion in proceeds and continue to provide an attractive return on investment; iii) excellence – we will continue managing the full value chain to deliver competitive and quality projects at the highest standards and unique O&M knowledge to maximize eﬃciency while guaranteeing the best ESG standards. EDPR’s commitment to a sustainable growth model and its contribution to mitigating climate change through the promotion of renewable energies in emerging markets has been recognized by the Global Challenges Index. This model is based on environmental protection across the entire value chain, promoting social welfare and development, and fostering best- practices with regards to governance. Innovation and Digitalisation are also two key words in EDPR’s sustainable strategy. We work to create clean energy whilst constantly innovating and improving our digital facilities for more eﬃcient and better results. The company’s efforts have been acknowledged through its inclusion in various sustainability indexes, including FTSE4Good, Forum Ethibel, and in rankings such as Top Employer and Bloomberg Gender Equality, amongst others. On behalf of EDP Renováveis Board of Directors, I would like to thank our stakeholders, namely our employees, contractors, suppliers and clients. We’ve been inspired by the way EDPR’s 1,735 employees from over 30 countries have overcome this challenging year, working as a great team and successfully reaching our targets together. I would also like to extend my thanks to EDPR’s Management Team for their great work in 2020, in particular to João Manso Neto, recognizing his valuable contribution to the growth and achievements of EDPR, and to Rui Teixeira for his leadership in recent months. I am honored to be leading EDPR. I can say I look forward to contributing to its continued success and the execution of the new 2021-25 strategic business plan. The future is net zero - EDPR’s vision and long track-record can only make long-term growth prospects stronger than ever. A N FROM A JUST TRANSITION TO SUSTAINABLE COMMUNITIES Changing tomorrow now. Changing tomorrow now. Pioneering the new green normal 01 EDPR in Brief 10 Vision, values and commitments 10 EDPR in the world 11 Business description 13 EDPR Main Events 2020 14 Stakeholders focus 16 Sustainability Roadmap 18 2020 in Review 20 Key metrics 20 Share performance 22 Organisation 24 Shareholder structure 24 Governance model 25 Organisation structure 29 Integrity and ethics 31 THE COMPANY INNOVATION With the aim of creating value in the many areas in which we operate. SUSTAINABILITY Aiming to improve the quality of life of current and future generations. HUMANIZATION Building genuine and trusting relationships with our employees, customers, partners and communities. SUSTAINABILITY We assume the social and environmental responsabilities that result from our performance thus contributing towards the development of the regions in which we operate. We ensure the participatory, competent and honest governance of our business. We avoid speciﬁc greenhouse gas emissions with the energy we produce. CLIENTS We place ourselves in our clients' shoes whenever a decision has to be made. We listen to our clients and answer in a simple and clear manner. We surprise our clients by anticipating their needs. PEOPLE We join conduct and professional rigour to enthusiasm and initiative, emphasizing team work. We promote the development of skills and merit. We believe that the balance between private and professional life is fundamental in order-to be successful. RESULTS We fulﬁl the commitments that we embraced in the presence of our shareholders. We are leaders due to our capacity of anticipating and implementing. We demand excellence in everything that we do. VALUES COMMITMENTS A global energy company, leading the energy transition to create superior value VISION 1.1. EDPR in brief 1.1.1. 10 ANNUAL REPORT EDPR 2020 11 NORTH AMERICA SOUTH AMERICA United States of America 6,299 MW 16,633 GWh 1,843 MW Canada 68 MW 78 GWh 62 MW Mexico 400 MW 710 GWh 96 MW 772 Capacity Installed Employees Generation Capacity secured Brazil 436 MW 1,093 GWh 1,102 MW Colombia 490 MW 97 EDPR IN THE WORLD In 2020 , EDPR generated 28.5 TW h avoiding the emissions of 18.5 million tons of CO 2 . EDPR is a market leader with top quality assets in 14 countries, and has 1,735 employees 1 . The company manages a global portfolio of 12.2 GW of installed capacity, has added 1,580 MW in 2020 and has 6 GW already secured for the coming years , as of December 2020. 1 The consolidation perimeter available in Annex I of the Consolidated Financial Statements includes the companies of the acquisition transaction reported at the end of December 2020. The tables presented do not include 45 employees of the companies whose shares were acquired, since their integration is currently under analysis. 1.1.2. 12 EUROPE OFFSHORE 866 Spain 2,304 MW 4,346 GWh 279 MW Portugal 1,248 MW 2,624 GWh 278 MW France 126 MW 212 GWh 103 MW Belgium 10 MW 2 GWh Poland 476 MW 1,059 GWh 567 MW Italy 271 MW 595 GWh 200 MW Romania 521 MW 1,186 GWh Greece 155 MW United Kingdom 950 MW 269 MW net for EDPR France 1,022 MW 312 MW net for EDPR Belgium 487 MW 43 MW net for EDPR Portugal 25 MW 10 MW net for EDPR United States of America 804 MW 201 MW net for EDPR 13 BUSINESS DESCRIPTION 1.1.3. Renewable resources analysis • Install meteorogical equipment to collect and study wind proﬁle and solar radiance. Long term contract for the sell of energy • Secure long term contracts for energy sale, guaranteeing stable and predictable cash-ﬂows. Obtain permits • Engage with local public authorities to secure environmental, construction, operating and other licenses. Project funding • Find appropriate ﬁnancing for the project. DEVELOPMENT CONSTRUCTION OPERATION DISMANTLING Start of operations & deliver clean energy • A better energy, a better future, a better world! Construction • Build access roads, prepare foundations, assemble wind turbines or solar panels, construct substation. Dismantling • Once wind farms and solar plants reach the end of useful life (30-35 years), there is a process of land restoration and proper treatment of the wastes generated. Site identiﬁcation • Search for sites with top-class wind conditions or irradiance resource and analyse grid connection feasibility. Design layout & equipment choice • Optimise the layout of the asset and select the best ﬁt of equipment model based on the site characteristics. Data Analysis • Monitor real-time operational data, analyse performance and identify opportunities for improvement. Ongoing maintenance service • Keep availability ﬁgures at the highest level possible and minimise failure rates. JAN EDPR enters the 2020 Bloomberg Gender-Equality Index for the ﬁrst time FEB EDPR concludes €0.3 billion asset rotation deal for a 103 MW wind farm in Brazil MAR EDPR commits to donate over €1 million throughout 15 countries to help local communities overcome the global pandemic EDPR MAIN EVENTS IN 2020 1.1.4. APR — MAY — JUN JAN — FEB — MAR APR EDPR announces the payment of a gross dividend of €0.08 per share MAY EDPR is awarded a 20-year CfD for two projects in Italy for a total capacity of 54 MW 14 ANNUAL REPORT EDPR 2020 OCT — NOV — DEC JUL — AUG — SEP JUL EDPR appoints Rui Teixeira as a new member of EDPR’s Executive Committee and as Joint CEO AUG EDPR informs about a sale agreement for 242 MW in Spain SEP EDPR announces $700 million Sell-down deal of an 80% stake in a wind & solar portfolio in the US with 563 MW (450 MW net) NOV EDPR secures a PPA for a portfolio that comprises a 36 MW wind farm project and a 27 MW solar power plant in Spain DEC EDPR is awarded with long-term CfD for 5 wind and solar projects in Poland with 220 MW JUL EDPR informs about agreement to acquire 100% of the renewables business of Viesgo OCT EDPR reaches an agreement for the joint-development of a wind portfolio of 900 MW in Greece 15 STAKEHOLDER FOCUS 1.1.6. As stated in its Stakeholders Relations Policy, EDPR aims to maintain an open and transparent dialogue with its stakeholders in order to build and strengthen trust, promote information and knowledge sharing, anticipate challenges and identify cooperation opportunities. The Company does so through four major guiding commitments: Communicate, Comprehend, Trust, and Collaborate. These commitments underlie a Policy that aims to go beyond mere compliance with formal law requirements, thereby contributing to an effective and genuine engagement of and with different stakeholders. These four pillars also form the basis of EDPR’s annual objectives regarding stakeholder relationship management. Governance model At EDPR, stakeholders’ management is governed by the Stakeholder Steering Committee (SSC) and the Stakeholder Working Group (SWG), which focus on strategy and implementation at an organisational level. The SSC was formed to deliver the stakeholder end-of-year report, set yearly objectives and formulate management plans to achieve them. The SWG, a more operational team, is composed by managers from different departments and units and its main purpose is to implement the SSC’s plans and align on-the-ground operations with executive decisions. A digital customer-relationship-management (CRM) tool is in place to manage and monitor EDPR’s relationships with stakeholders and the achievement of management milestones and objectives, providing an informed and systematic approach to a results-driven, comprehensive model. Performance data is collected through two different paths: the CRM platform for internal use, and qualitative and quantitative research for external viewing. In 2020, a quantitative research survey was conducted to validate qualitative research (in-depth interviews) that was carried out over the past two years. Following the precedent set in previous years, t he Stakeholder Management Plan’s methodology was established with the strategic support of the SCC, implemented by the SWG and monitored using the CRM tool. EDPR regularly identifies the stakeholders that influence the company and works to analyse and understand their expectations and interests in the decisions that directly impact them. INCLUDE IDENTFY PRIORITISE COMPREHEND INFORM LISTEN RESPOND Committed in promoting a two-way dialogue with stakeholders through information and consulting initiatives is a part of EDPR’s objective. This can be attainable by listening, informing and responding to stakeholders in a consistent, clear, rigorous and transparent manner, resulting in a strong meaningful and lasting relationship. COMMUNICATE INTEGRATE SHARE COOPERATE REPORT TRANSPARENCY INTEGRITY RESPECT ETHICS EDPR aims to collaborate with stakeholders by building startegic partnerships that agregate and disperse knowledge, skills an tools. These will promote the creation of shared value in a differentiating way. One of the company’s beliefs is the importance of a trustworthly relationship with the stakeholders in establishing stable, long- term relationships. These relationships with the stakeholders are based on values like transparency, integrity and mutual respect. COLLABORATE TRUST 16 ANNUAL REPORT EDPR 2020 Stakeholders map EDPR's Stakeholders are those entities or individuals that inﬂuence or are inﬂuenced by the activities and services of the Company, and they are organised into four categories: Democracy, Social and Territorial Environment, Value Chain, and Market. In 2020, three new players were included in the Stakeholders Map: tax equity investors were included in the investor and shareholders category, and off-takers and asset owners were included in the clients category. EDPR's stakeholders in 2020 are shown in the following diagram: Stakeholders support Appropriate monitoring and classiﬁcation of stakeholder groups assists in decision-making and obtaining additional and accurate information, allowing EDPR to fulﬁl its commitment to them and to increase stakeholder involvement by adapting its strategies. After having properly identiﬁed the stakeholder groups with which the company maintains a close relationship, EDPR has established a series of criteria that helps the company to classify, analyse, evaluate and readjust its relationships based on real business interests. Studying the link between variables—such as power, impact, legitimacy and visibility, and urgency—has allowed the company to create a Stakeholders Matrix, identifying the expectations and demands of stakeholders and integrating them into organizational strategy. In addition, communication channels are used to build and consolidate collaboration, understanding and trust, making them essential to the effective management of stakeholder relationships. For almost all stakeholders, the most used and preferred types of communication are e-mails, phone calls, meetings and events. Another preferred channel is EDPR’s website, particularly for stakeholders within the area of ﬁnance such as banks, analysts and investors. Each group of stakeholders is allocated a speciﬁc communication channel tailored to their needs, which is vital to maintain good relationships. Through a combination of these channels, along with the Stakeholders Global Survey and interviews, EDPR can accurately identify each stakeholder’s perceptions, expectations, value drivers and behaviours, therefore improving communication while strengthening relationships between various groups of stakeholders. Despite the limitations faced due to the COVID-19 pandemic, EDPR continued to communicate and gather feedback from its stakeholders mainly through online channels. 2020 achievements For many years, EDPR has actively listened to and established a dialogue with its various stakeholders to understand their needs. Consequently, throughout 2020, EDPR applied its stakeholder methodology in Spain and, for the ﬁrst time, in France and North America. The application of this stakeholder methodology in these three markets means that it has now been applied to 72% of EDPR’s installed capacity. In these markets, EDPR conducted surveys with more than 1,000 people with three main goals in mind: to measure all opinions on EDPR's performance regarding its stakeholders; to better understand expectations to effectively respond to demands; and to identify concrete actions to improve the Company's relationships. As a result of the answers collected in the surveys, an action plan will be implemented in 2021 in order to better respond to the demands of the stakeholders and to generate value for both parties. Regardless of the challenges caused by the global pandemic, EDPR was able to continue to gather feedback from various stakeholders. SOCIAL AND TERRITORIAL ENVIRONMENT VALUE CHAIN MARKET DEMOCRACY Competitors Financial entities Investors & shareholders Media & opinion leaders Municipalities Local comunities Landowners NGO's Public authorities & regulation Parliament & political parties International instituitions Associations Clients Employees & unions Suppliers Scientiﬁc community Universities Off-takers Asset owners Tax equity investors 17 SUSTAINABILITY ROADMAP 1.1.6. CORE BUSINESS SUSTAINABILITY ROADMAP STRATEGIC LINES (2019-22) SUSTAINABILITY ROADMAP GOALS (2019-22) EXECUTION 2019-2020 SDGs DIRECT IMPACT SUSTAINABILITY ROADMAP STRATEGIC LINES (2019-22) SUSTAINABILITY ROADMAP GOALS (2019-22) EXECUTION 2019-2020 SDGs 0 0 Ensure high safety standards for employees & contractors Fatal accidents Fatal accidents 0 0 Guarantee high environmental standards Significant spills and fires Significant spills and fires > 30% 30% Maintain the rate of female employees Female employees Female employees C.7 GW 2.5 GW Increase renewable energy installed capacity Cumulative build-out Built EDPR is aware of the importance of electricity in the sustainable development and is committed to focus not only on the Sustainable Development Goals directly related to its business such as Climate Action and Affordable and Clean Energy, but also on a business model that positively impacts others SDGs. 18 ANNUAL REPORT EDPR 2020 €4.6M Support local communities in their social development Social investment €8M 22% Ensure a high participation in voluntary actions 20% Employees participating in volunteering activities Employees participating in volunteer activities €4.6M Foster universal access to sustainable energy (A2E) Invested in A2E 1 €20M Investment in A2E 100% 86% Implement digital transformation plan promoting digital skills Employees participating in digitalisation trainings Employees participating in digitalisation trainings DIRECT IMPACT SUSTAINABILITY ROADMAP STRATEGIC LINES (2019-22) SUSTAINABILITY ROADMAP GOALS (2019-22) EXECUTION 2019-2020 SDGs 28% Promote the transition to electric vehicles Service vehicles to be replaced by electric vehicles Hybrid operational vehicles > 75% 75% Maintain the recovery waste ratio Total waste recovered (and > 90% hazardous waste recovered) Total waste recovered (93% hazardous waste recovered) 1 Cumulative investment impacted by fx rate: SolarWorks! in Mozambique (€2.2 million) and Rensource in Nigeria ($2.9 million) By incorporating the ESG principles into its strategy, policies and procedures, and by establishing a culture of integrity, EDPR not only defends its basic responsibilities with people and the planet, but also sets the stage for long-term success. Following this long-term commitment, 10 Sustainability goals were defined within the 2019-2022 Business Plan, framed by eight of the seventeen Sustainable Development Goals. EDPR monitors closely its contribution to these goals, and annually reports the evolution on their execution. 19 Social investment KEY METRICS 1.2. 2020 in review 1.2.1. OPERATIONAL 29 TWh 12.2 GW Generation -5% YoY 96.7% 30% Technical availabiity vs 96.8% in 2019 Load factor -1pp vs 2019 Installed capacity EBITDA + Net Equity +1,580 MW New additions EBITDA + Net Equity 18.5 mt CO 2 Emissions avoided 20 ANNUAL REPORT EDPR 2020 1 – With the exception of the Executive Committee, the BoD committees are composed exclusively by independent members. 2 – Calculation based on 2019YE installed capacity. EDPR certifies the facilities the year after the COD (commercial operating date). Thus, the facilities that have entered into operation in 2020 will be certified in 2021. €2,100 m €1,655 m €55 m € m CAPEX vs €1,109m in 2019 €48 k/MW Core OPEX / average MW +1% YoY Net income vs €475m in 2019 €3.4 Bn Net debt vs €2.8 Bn in 2019 Operating cash-flow -17% YoY EBITDA Flat YoY FINANCIAL ESG 81% Employees trained in digitalisation 76% 100% Total waste recovered €2.5 m S ocial investment Independent members of BoD committees 1 100% Capacity certiﬁed 2 ISO 14001 & ISO 45001 1,735 Employees +11% YoY 6 21 9 08 22 ANNUAL REPORT EDPR 2020 1.2.2. Share performance EDPR has 872.3 million shares listed and admitted to trading in NYSE Euronext Lisbon. On December 31 st , 2020, EDPR had a market capitalisation of € 19.9 billion, above the € 9.1 billion at previous year- end, and equivalent to € 22.80 per share. In 2020, the total shareholder return was +119%, considering the dividend paid on Apr 24 th of €0.0 8 per share. Indexed EDPR Share Performance vs. PSI20 & SX6E EDPR PSI 20 SX6E EDPR IN CAPITAL MARKETS 2020 2019 2018 2017 Opening Price (€) 10.42 7.78 6.97 6.04 Minimum Price (€) 8.82 7.72 6.78 5.71 Maximum Price (€) 23.00 10.50 9.17 7.20 Closing Price (€) (adjusted for dividend and splits) 22.80 10.42 7.78 6.97 Market Capitalisation (€ Millions) 19,889 9,089 6,782 6,077 Total Traded Volume: Listed & OTC (Millions) 381.87 162.72 209.59 421.94 of which in Euronext Lisbon (Millions) 47.96 36.24 44.01 101.63 Average Daily Volume (Millions) 1.49 .64 .82 1.65 Turnover (€ Millions) 4,965.74 1,502.80 1,587.12 2,744.04 Average Daily Turnover (€ Millions) 19.32 5.89 6.22 10.76 Rotation of Capital (% of Total Shares) 44% 19% 24% 48% Rotation of Capital (% of Floating Shares) 195% 83% 107% 215% Total Shareholder Return 120% 36% 12% 16% Share Price Performance 119% 34% 12% 15% PSI 20 -6% 10% -12% 15% Dow Jones Eurostoxx Utilities 10% 22% 0% 16% 23 EDPR’S MAIN EVENTS I N 2020 1 13-Jan EDPR secures a PPA for a new 66 MW solar project in Brazil 2 21-Jan EDPR releases FY 2019 Operating Data 3 23-Jan EDPR finalises the agreement with ENGIE to create a 50:50 JV for offshore wind 4 29-Jan EDPR is awarded a 20-year CfD for 109 MW of wind at Italian auction 5 12-Feb EDPR concludes €0.3 billion asset rotation deal for 103 MW Babilonia wind farm in Brazil 6 20-Feb EDPR releases FY 2019 results 7 02-Mar Spanish government published the regulatory revision for wind energy assets 8 26-Mar EDPR Annual Shareholders Meeting 9 30-Mar EDPR announces payment of a gross dividend of €0.08 per share 10 15-Apr EDPR releases 1Q20 Operating Data 11 16-Apr EDPR secures a long-term 200 MW solar PPA in Mexico 12 21-Apr EDPR secures a PPA for 59 MW in Spain 13 24-Apr EDPR starts the payment of dividends 14 06-May EDPR secures a 15-year PPA for 100 MW in the state of California, USA 15 07-May EDPR releases 1Q20 Results 16 28-May EDPR is awarded a 20-year CfD for 2 projects in Italy for a total capacity of 54 MW 17 07-Jul EDPR releases Clarification on Public Prosecutor measures regarding EDPR Board members 18 09-Jul EDPR releases 1H20 Operating Data 19 15-Jul EDPR informs about agreement to acquire 100% of the renewables business of Viesgo 20 10-Aug EDPR informs about a sale agreement for 242 MW in Spain 21 02-Sep EDPR announces sale agreement of an 80% stake in North America 22 03-Sep EDPR releases 1H20 Results 23 09-Oct EDPR releases 9M20 Operating Data 24 13-Oct EDPR secures PPA for 100 MW in the US 25 29-Oct EDPR releases 9M20 Results 26 19-Nov EDPR informs about a PPA secured for 63 MW in Spain 27 24-Nov EDPR announces PPA contract for a 74 MW solar project in the US 28 14-Dec EDPR is awarded in CfD for 5 project of wind and solar in Poland with 220 MW 29 15-Dec EDPR announces conclusion of 242 MW sale agreement in Spain 30 16-Dec EDPR concludes the 100% acquisition of the renewables business of Viesgo 31 28-Dec EDPR informs about the conclusion of an 80% equity stake sale agreement in North America Source: BLOOMBERG / EDPR 24 ANNUAL REPORT EDPR 2020 42% 37% 6% 1% 4% 10% Shareholders (Ex-EDP) by Type INVESTMENT FUNDS SRI RETAIL PENSION FUND CORPORATIONS OTHER 24% 20% 8% 10% 5% 4% 4% 15% 10% Shareholders (Ex-EDP) by Country US UK PORTUGAL FRANCE GERMANY SWITZERLAND SWEDEN ROE OTHER 1.3. Organisation 1.3.1. Shareholder structure EDPR shareholders are spread across more than 20 countries, being EDP the main shareholder. EDPR total share capital is, since its initial public offering (IPO) in June 2008, composed of 872,308,162 shares issued with a nominal value of five euros each, fully paid. All these shares are part of a single class and series and are admitted to trading on the Euronext Lisbon regulated market. Major shareholders, the EDP Group The majority of the Company’s share capital is owned by EDP Group, holding 82.6% of the share capital and voting rights, since the General and Voluntary Public Tender Offer closed in August 2017, where EDP Group increased by 5.03% its shareholding in EDPR’s share capital and voting rights. EDP Group is a vertically integrated utility company, the largest generator, distributor and supplier of electricity in Portugal, has significant operations in electricity in Spain and is one of the largest private generation group in Brazil through its stake in Energias do Brasil. In the Iberian Peninsula, EDP is the third largest electricity generation company and one of the largest distributors of electricity. EDP has a worldwide relevant presence, being present in 19 countries and has about 12,000 employees around the world. In 2020, EDP had an installed capacity of 23.7 GW, generating 64.3 TWh, of which 74% came from renewables. EDP is part of sustainability indexes (DJSI World and Europe), following its performance in the economic, social and environmental dimensions. Its holding company, EDP S.A. is a listed company whose ordinary shares are traded in the Euronext Lisbon since its privatisation in 1997. Broad base of investors EDPR has an international base of investors. Excluding EDP Group, EDPR shareholders comprise more than 30,000 institutional and private investors spread worldwide. Within institutional investors, which represent about 94% of shareholder base (ex-EDP Group), investment funds are the major type of investor, followed by sustainable and responsible funds (SRI). EDPR is a member of several financial indexes that aggregate top performing companies for sustainability. Worldwide shareholders EDPR shareholders are spread across 26 countries, the United States being the most representative country accounting for 24% of EDPRshareholder base (ex-EDP Group), followed by the UK, France, Portugal, Germany, Sweden and Switzerland. In the Rest of Europe, the most representative countries are Norway, Belgium, Spain Netherlands. 83% 17% EDPR Shareholder EDP OTHER 25 1.3.2. Governance Model The organisation and functioning of EDPR corporate governance model aims to achieve the highest standards of corporate governance, business conduct and ethics referenced on the best national and international practices. EDPR is a Spanish Company listed in a regulated stock exchange in Portugal, being the regulation of its corporate organisation subject to the Spanish law, but trying to parallelly also comply to the extent possible with the Portuguese recommendations contained in the Corporate Governance Code of the Instituto Português de Corporate Governance (“IPCG”). Considering the applicable guidelines as of this regulatory framework, EDPR’s model was designed with the aim of ensuring a transparent and meticulous separation of duties and management by the same time that provides a specialisation in the supervision functions. As such, EDPR’s governance structure is comprised by a General Shareholders’ Meeting an d a Board of Directors (BoD) that represents and manages the Company, which in accordance with the law and its Articles of Association has additionally set up 3 delegated Committees entirely composed its members: the Executive Committee, the Audit, Control and Related-Party Transactions Committee and the Nominations and Remunerations Committee. Additionally, as detailed in the Corporate Governance chapter, with the purpose of adapting to the extent possible this structure to the Portuguese legislation, EDPR parallelly seeks to correspond it 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. This structure and its functioning enable a fluent workflow between all levels of the governance model, as each of the delegated Committees shall report the decisions taken to the Board of Directors, and additionally all the Committees Members are also Members of the Board. Hence, this organisation allows Directors to receive the complete information at Board of Directors level in order to take the corresponding decisions, and all in all, ensuring in time and manner the access to all the information in order to appraise the performance, current situation and perspectives for the further development of the Company. As exposed above, the governance model of EDPR was designed to ensure the transparent and meticulous separation of duties and the specialisation of supervision through the following structure of its governing bodies: 26 ANNUAL REPORT EDPR 2020 A) General shareholders’ meeting The General Shareholders’ Meeting is the body where the shareholders participate. Represents the Company with the full authority corresponding to its legal personality and has the power to deliberate, vote and adopt decisions, particularly on matters that the law and Articles of Association reserve for its decision and must be submitted for its approval. B) Board of Directors The Board of Directors is the body that represents and administrates the Company under the broadest powers of management, supervision and governance with no limitations other than the responsibilities expressly and exclusively gra nted to the jurisdiction of the General Shareholders Meeting in the Company’s Articles of Association or in the applicable law. In line with the best corporate governance practices and in accordance with its Articles of Association, EDPR’s Board of Directors shall consist of no less than 5 and no more than 17 members (including a Chairperson), who are elected for 3 years period and that may be re-elected for equal periods. To this extent, a total of 15 positions that composed of EDPR’s Board of Directors as of December 31st, 2020, there was 1 vacant and 14 Directors out of which 9 were non-executive, being 5 of them also independent. 1 Related to the BoD composition and in the context of a judicial procedure undergoing related to the activity of EDP – Energias de Portugal, António Mexia and João Manso Neto, were suspended from their executive functions in all EDP Group companies - the process continues in the inquiry phase and they have not been formally accused - and following this, the Board of Directors of EDPR met on July 6 th , 2020 and identified Rui Teixera as the best candidate to reinforce the executive line of the Company, mainly considering his deep knowledge of the business (in particular with regards of renewables), and he had been CFO of EDP Renováveis during several years, and therefore, his involment would imply a continuity and support in the completion of the Bussiness Plan in these special circumstances. Based on that, the Board resolved to appoint him as a new member of EDPR’s Executive Committee and Joint CEO, designated as the responsible person to coordinate the Executive Committee activities and to liaise with EDP – EDPR’s principal shareholder . Delegated committees of the board of directors As stated, EDPR BoD has set up three delegated Committees entirely composed by its members: the Executive Committee, the Audit, Control and Related-Party Transactions Committee and the Nominations and Remunerations Committee. I) Executive committee This is the delegated body of the Board of Directors entrusted to perform the daily management of the business. As of 31 st December 2020, EDPR’s Executive Committee was composed by the following members that were also Joint Directors: - João Manso Neto (CEO and Chairman of the Executive Committee) - Rui Teixeira (Joint CEO and Executive Committee Coordinator) - Duarte Bello (COO Europe & Brazil and member of the Executive Committee) - Miguel Ángel Prado (COO North America and member of the Executive Committee) - Spyridon Martinis (COO Offshore and New Markets , CDO and member of the Executive Committee) 1 Francisca Guedes de Oliveira presented her resignation as Member of the Board with effects 30th December 2020, and therefore also as member of the Audit, Control, and Related Party Transactions Committee. In order to fill this vacancy at the committee level, the Board of Directors resolved at its meeting held on January 19th, 2021 to appoint Francisco Seixas as new member of the Audit, Control and Related Party Transactions Committee. 27 II) Audit, control and related party transactions committee This is the specialised and delegated Committee of the BoD in charge of, among others, the appointment of the Company’s auditors and the internal risk management and control systems, supervision of internal audits and compliance and ratification of transactions between EDPR and EDP and between its related parties, qualified shareholders, directors, key employees or his relatives and prepares an annual report on its supervisory activities. The Audit, Control and Related Party Transactions Committee consists of three non-executive and independent members, during 2020, were the following: • Acacio Piloto, who is the Chairman • Antonio Nogueira Leite • Francisca Guedes de Oliveira 2 III) Nominations and remunerations committee This is the specialised and delegated Committee of the Board of Directors in charge of, within others, the assistance and report to the Board about appointments, re-elections, dismissals, evaluation and remunerations of the Directors. During 2020, the Nominations and Remunerations Committee consists of three independent members, who are the following: • Antonio Nogueira Leite, who is the Chairman • Francisco Seixas da Costa • Conceição Lucas 2 Francisca Guedes de Oliveira presented her resignation as Member of the Board with effects 30 th December 2020, and therefore also as member of the Audit, Control, and Related Party Transactions Committee. In order to fill this vacancy at the committee level, the Board of Directors resolved at its meeting held on January 19 th , 2021 to appoint Francisco Seixas as new member of the Audit, Control a nd Related Party Transactions Committee. 28 ANNUAL REPORT EDPR 2020 Remuneration policy EDPR governance model is reinforced by an incentive structure with transparent remuneration through variable remuneration based on key performance indicators. The definition of the proposal of the remuneration policy for the members of the Board of Directors is incumbent on Nominations and Remunerations Committee, which is appointed by the Board of Directors. The 2020-2022 Remuneration Policy is aligned with the strategic grounds of the Company: growth, risk control and efficiency and establishes that the indicators shall be set in accordance with 6 clusters: (i) Shareholders, (ii) People, (iii) Environment & Communities, (iv) Assets and Operations, (v) Innovation & Partners, and (vi) Clients though 14 KPIs, including all dimensions of EDPR ‘s strategy. Each of such clusters shall have at least one indicator. For more information, please refer to the Approval of the Remuneration Policy of the members of the Board of Directors, available at the 10 th Item of the 2020 General Shareholders’ Meeting agenda. For further detailed information regarding the responsibilities and roles of the different social bodies, the activity during 2020 and the Company’s up -to-date articles of association and regulations, please refer to the Corporate Governance chapter of the report and visit www.edpr.com . 29 1.3.3. Organisation structure The organisation structure is designed to accomplish the strategic management of the company and a transversal operation of all the business units, ensuring alignment with the defined strategy, optimising support processes and creating synergies. Organisational model principles The EDPR organisation model is organised around five main elements: a Corporate Center Holding, an Onshore Europe & Brazil platform, an Onshore North America platform, a New Geographies platform and, lastly, an Offshore platform. Each element includes different business units specialized in each of the countr ies’ specificities. The principles on which EDPR bases its organisational model is defined by the Executive Committee. These are a set of performance aspects that define the characteristics of the relationships, grant the rights between EDPR Holding and the business units, and ensure optimal efficiency and value creation. CORPORATE HOLDING ONSHORE Europe & Brazil ONSHORE North America OFFSHORE Joint Venture NEW GEOGRAPHIES Spain Portugal France & Belgium Poland Italy Romania Brazil United States of America Canada Mexico Greece Colombia 30 ANNUAL REPORT EDPR 2020 EDPR Holding EDPR Holding seizes value creation through the dissemination of best practices in the organisation and the standardisation of corporate processes to the platforms and the business units to improve efficiency. The internal coordination model and interface with EDP Group impacts functions and responsibilities of both the company’s processes and structure. The assignments of the main responsibilities and activities of EDPR Holding to fulfil their respective missions include: • Define internal structures; • Ensure a global budget and its periodic monitoring; • Manage the essential human resources; • Provide appropriate management information; • Compete for a culture of excellence throughout the Group; • Integrate risk management and compliance in each area of responsibility, ensuring the monitoring and effectiveness of controls. EDPR Platforms The four platforms are defined as: Onshore Europe & Brazil, Onshore North America, New Geographies and Offshore. • Europe & Brazil Onshore platform: There are different business units where the company operates, namely Spain, Portugal, France/Belgium, Italy, Poland, Romania and Brazil. • North America Onshore platform: There are three business units that represent the operational regions in North America: United States of America, Mexico and Canada. • New Geographies platform: This platform grants EDPR’s international business expansion in any geography where the company does not currently operate. • Offshore platform: In January 2020, EDPR finalised the agreement with ENGIE to create a 50:50 Joint Venture for offshore wind that grants the development of projects in the UK, Portugal, France, Belgium, Poland, and the US. 1.3.4. Integrity and ethics Ethical behaviour is absolutely essential for the functioning of the economy. EDPR recognises its importance and complexity and is committed to address ethics and its compliance, b ut it is the employees’ responsibility to comply with ethical obligations. Ethics are the cornerstone of EDPR strategy, to the extent that EDPR has a Code of Ethics, an Anti-Corruption Policy and a Compliance Policy that go beyond just defining the Company principles to be adopted, but also how employees and any other service providers working on behalf of EDPR should behave when dealing with the Company stakeholders. Ethics The Code of Ethics refers to principles of action that include compliance with legislation, integrity regarding matters such as bribery and corruption, respect for human and labour rights, transparency and corporate social responsibility, including its contribution to sustainable development and its responsibility for the economic, environmental and social impacts of its decisions and activities. In addition, the Code has its own regulation that defines a process and channel, open to all stakeholders, to report any potential claim or doubt on the application of the Code. The Ethics Ombudsperson is behind this communication channel and is responsible for analysing and presenting to the Ethics Committee any potential ethical problem. The Code is communicated and distributed to all employees and interested parties and complemented with tailored training sessions. This Code is a privileged tool that frames the reflection on Ethics, but it is essentially a guide to support EDPR employees in their daily decisions when performing their job activities. It does not override the law and regulations – which must always be fully and scrupulously complied with – but rather complements them by supporting responsible decision making. In that sense, EDPR’s Code of Ethics applies to all Company employees regardless of their position in the organisation and working location, and they all must comply with it. Additionally, the commitments in this Code are equally applicable to EDPR business partners, representatives and suppliers who are, in any way, entitle to act on behalf of EDPR. The Code and its regulations are published on the intranet and website of EDPR and attached to the labour agreements of the new hires to their written acknowledgement when they join the Company. Likewise, this Code has been widely circulated to the employees of the Group through internal communications, and specific training on Ethics is provided during the year to all employees with the objective of promoting awareness. Due to legal or regulatory requirements, as well as EDPR ’s significant presence on the world energy scene, operating in several countries with over 1,700 employees, a new Code of Ethics has been approved by the Board of Directors in December 2020. The revision of the Code had the following objectives: (i) adapt the Code of Ethics in terms of content and format, considering best practices and new trends, (ii) i ntroduce “living tools” in Ethics, that support EDPR globally across geographies and businesses, (iii) create a new concept that integrates and systematizes all ethics related topics and supports the ethics training and (iv) reflect EDPR identity: a people-centred company that focuses on trusted relationships, operating in a sector in transformation and acting with integrity. Additionally, the Ethics Ombudsperson plays an essential role in the ethics process. Her role is to provide impartiality and objectivity in registering and documenting all claims of ethical nature submitted to her. She monitors their progress and ensures that the identity of the complainants remains confidential, while entering into contact with them whenever appropriate, until the case is closed. The Ethics Ombudsperson is responsible for presenting all claims to the Ethics Committee, which is composed by three members: the Chairman of the Audit, Control and Related Party Transactions Committee, the Chairman of the Appointments and Remuneration Committee, and the Compliance Officer. The Ethics Committee shall meet at least once a year and whenever the Chairman deems it is necessary, and its meetings shall be validly convened when one-half plus one of its members are present or represented at the meeting. In 2020, there were three claims to the Ethics Ombudsperson through the Ethics Channel.Two of them were considered unfounded and one as inconclusive. Thus, the Ethics Committee declared the closing 1 of the processes and filed the claims. 1 One of the claims was concluded in early 2021. 31 Anti-Corruption EDPR Anti-Corruption Policy implies a series of procedures regarding the relationships of EDPR employees with external parties, namely the approval of certain actions regarding hospitality to and from external parties, donations, and sponsorships. Company Personnel and Transaction Partners are encouraged to raise concerns about any issue or suspicion of bribery or corruption at the earliest possible stage through the Compliance Channel. In 2020, no claims were submitted through the Compliance Channel related to Anti-Corruption issues. The Policy is available at EDPR’s website and intranet, and it is attached to the labour agreements of the new hires to their written acknowledgement when they join the Company. In addition, EDPR analyses all the new markets where it operates through a Market Overview including sustainability topics such as human rights, labour and environment. This study also evaluates the corruption risk. Moreover, EDPR has Compliance questionnaires related to the anti-corruption practices of the suppliers and the counterparts in the M&A processes to ensure that they are all aligned with EDPR’s Anti -Corruption Policy. Corporate compliance The implementation of a solid corporate culture of integrity and transparency is a priority for EDPR, structuring its monitoring through a regulatory compliance conduct basis and the adoption of ethical principles, both consolidated as central elements of its business model. In order to lead and manage the necessary measures for this implementation and functioning, the Company has a Compliance Officer. In addition, EDPR has been working with the support of specialized advisors in the evaluation of the potential corporate criminal liability risks of the Company in all its geographies and in the assessment of the compliance structure to be adopted to comply with the requirements of the applicable criminal regulations. In this context, EDPR has a Criminal and Legal Risk Prevention Model (Compliance Model) with the goal of establishing, developing, promoting and maintaining an adequate ethical business culture. The Compliance Model is constantly updated according to the most demanding national and international standards. Moreover, the Company has an international criminal risk matrix and a Compliance Area created to support and provide assistance to the Compliance Officer. The main activities performed during 2020 to strengthen corporate compliance were: • Revision and update of the International Compliance Model, for the identification and evaluation of the criminal risks in all geographies of EDPR and review the associated controls. • Approval of a Third Party Integrity Due Diligence procedure, reinforcing the mechanisms for identifying and preventing possible integrity risks for EDPR in the relationship with third parties. In 2020, 157 Compliance analysis to third parties were performed, of which just 2 presented a special risk of corruption. They were complemented with a deep external investigation, recommending the inclusion of robust clauses related to corruption in the corresponding agreements. • Concerning the risk of interactions with public officials or political exposed persons, EDPR developed a procedure to guide employees and representatives when leading with such entities and to monitor these relationships. • Training and communication are fundamental tools to strengthen and disseminate the culture of ethics and integrity. In 2020, a Compliance training was launched to the new hires. Other vital aspect of the EDPR Compliance Model is the Compliance programme for Personal Data Protection. EDPR has strengthened its management system, creating a new governance model with a multidisciplinary team supporting the Data Protection Officer in implementing and monitoring GDPR obligations. Also, a global Personal Data Protection Policy was approved to support the management of personal data across EDPR. Both documents are in EDPR’s intranet and website. Additionally, the Compliance Channel allows any employee, supplier, contractor, client or any person or entity outside the Company who has indications or doubts of behaviour contrary to the law and/or that may imply the materialization of a criminal risk, to inform it through [email protected]. Only the Compliance Officer and the Compliance Area have access to the Channel, and its bylaws are available at the intranet and website of the Company. In 2020, no claims were submitted through the Compliance Channel. 32 ANNUAL REPORT EDPR 2020 D V E S T Y FROM DIVERSIFICATION TO VALUE CREATION Changing tomorrow now. Changing tomorrow now. Powering a sustainable lifestyle for a brighter future 02 37 37 39 41 44 45 46 47 Business Environment Renewables are the backbone of decarbonization The evolution of renewables around the world in 2020 Regulatory Framework Strategy Selective growth Self-funding business Operational excellence Risk Management 48 STRATEGIC APROACH 37 Strategic approach 2.1. Business environment 2.1.1. Renewables are the backbone of decarbonization 2.1.1.1. Green recovery COVID-19 is not only a global pandemic and public health crisis; it has also severely damaged the global economy and financial markets. However, it has also boosted the climate movement and the sense of urgency in climate action, leading to bolder commitments from countries all around the world. We are now at a pivotal moment, as national governments are designing stimulus packages to revive their economies. The recovery from COVID-19 is showing a new willingness to set ambitious mitigation targets, which can strengthen the case for accelerating the transition to a climate-neutral society. Low carbon policies can not only mitigate climate and health risks, but also reactivate the world economy. In this context, renewables must be at the heart of rebuilding policies as they are the cheapest generating alternative in most countries, while they can also stimulate the economy by creating “green” jobs, ensuring energy security and saving money from fossil fuel imports. Demand for “Green recovery” is materializin g in different ways, including more ambitious emission and renewable targets. In December 2020, the world celebrated the 5 th anniversary of the Paris Agreement and the United Nations hosted an important summit in which 75 countries announced new commitments, with 24 pledging to reach carbon neutrality. 38 ANNUAL REPORT EDPR 2020 In Europe, the Green Deal announced in December 2019 is at the heart of the EU’s strategy to drive the economic recovery from the COVID-19 pandemic, in particular through the so- called “Next Generation EU”, a €750 billion recovery instrument announced in May 2020. Around 30% of the €750 billion fund will be used to support decarbonization, in addition to the €1 trillion previously announced by the Green Deal. Additionally, several EU Member countries are announcing national recovery plans, some of which have substantial green components. In parallel, EU leaders agreed in December 2020 to cut the bloc’s net emissions by at least 55% by 2030, compared to 1990 levels, increasing considerably from its previous level of 40%. To achieve this target, the European Commission (EC) is preparing its “Fit for 55 Package” of proposals, an umbrella term for all the revisions and initiatives linked to the 55% emission reduction target. The Renewable Energy Directive will need to be reviewed, to align the current “at least 32% renewable target by 2030” wi th the new 55% emission reduction target. In the US, president Joe Biden signed on its first day of mandate an executive order to reinstate the US to the Paris Climate agreement, which highlights the urgency of tackling climate change. In 2020, many countries have also adopted net zero emission targets by 2050. As of today, at least 8 countries have already put the commitment into law (Norway, Denmark, New Zealand, the UK, Hungary, Germany, Sweden and France), while others, like the EU have proposed the legislation (under the E U Green Deal) and are awaiting ratification. Together, net zero commitments so far represent nearly 50% of global CO 2 emissions and 50% of global GDP, which could increase importantly if the US were to join as well, in line with current President Biden recent announcement. Other large economies are also considering to becoming carbon neutral, like Japan and South Africa (in 2050) or China (in 2060). Companies have also shown a growing environmental awareness in 2020, despite the severe turmoil caused by the COVID-19 pandemic. According to the analysis conducted by the non-profit global Climate-Disclosure Project platform (CDP), the number of major companies who’ve disclosed their environmental impact and importantly committed t o reducing it increased 14% in 2020. 2.1.1.2. The future is green Despite the slowdown witnessed by the power sector during the COVID-19 pandemic, renewable energy grew in 2020. According to the International Energy Agency (IEA), around 90% of the power capacity added worldwide was renewable. All analysts have also highlighted that the renewable energy sector, and in particular, the renewable electricity sector, have showed a strong resilience to the crisis. While global energy demand has declined by around 5% (according to IEA estimates), electricity from renewable sources has grown by almost 7%. In total, around 200 GW of additional renewable capacity has been connected in 2020. A rise of 15% in the auctioned capacity 1 hints at this growing interest in renewable capacity. For the medium and long-term, prospects are also excellent. Wind and solar PV capacity is on track to overtake natural gas in 2023, and coal in 2024, becoming the largest source of electricity generation worldwide in 2025. Most of the energy analysts foresee a rapid grow of wind and solar PV, thanks to a continued sharp cost reduction, driven by improving technologies, economies of scale, increasingly competitive supply chains and growing developer experience. 1 From January to October 2020. Source: IEA Global Warming in 2020 According to the Global Carbon Project (GCP), global carbon dioxide (CO 2 ) emissions from fossil fuel and industry are expected to drop by 7% in 2020, the largest absolute drop ever recorded, as economies around the world feel the effects of COVID-19 lockdowns. However, 2020 reduction will not slow the pace of global warming as emissions continue to accumulate in the atmosphere propelling the world closer to crossing the 1.5°C warming threshold. Indeed, the NASA reported in January 2021 that 2020 had been the hottest year ever on record. The climate crisis materialized in soaring temperatures, enormous storms, unprecedented wildfires and climate-related floods that killed at least 8.200 people and cost the world USD 210 billion in insured losses, according to a report published by Munich Re. According to this study, natural catastrophe losses in 2020 were significantly higher than the previous year. 39 20% 27% 35% 43% 2010 2019 2030E Share of renewables in power generation Share of renewable energy Most optimistic estimate According to the International Renewable Energy Agency (IRENA), the Levelised Cost of Electricity (LCOE) of solar PV has fallen 82% since 2010, followed by onshore wind at 39% and offshore wind at 29%. With these technologies becoming the least-cost option for new capacity in an increasingly number of countries, their contribution in the energy mix is expected to take a leading role. In the next decade, renewables are expected to be the backbone of energy transition. According to consulted experts 2 , renewables will generate in 2030 between 35-43% of the electricity generation 3 , from around 27% in 2019. However, in the wake of the COVID-19 recovery, strengthen policies are expected, and therefore, the share of renewables could increase accordingly. 2.1.2. The evolution of renewables around the world in 2020 Wind Global wind additions are likely to witness considerable growth in 2020 4 , with analysts 5 forecasting around 60-72 GW of new capacity, vs 60.4 GW in 2019. For example, according to the latest market outlook published by the Global Wind Energy Council (GWEC), wind could increase as much as 71.3 GW in 2020, despite the impact of the COVID-19 pandemic. However, as China announced in January 2021 the staggering figure of nearly 72 GW of wind additions in 2020 (nearly tripling the amount of capacity in 2019), wordwide wind additions are now expected to be much higher, probably around 100-112 GW. 6 All forecasts highlight wind industry resilience during the pandemic crisis. Despite that national lockdowns led to a slowdown of construction activity (essentially caused by supply chain disruptions and logistical challenges) in the first half of the year, deployment accelerated in the second half. The offshore wind sector has also proved to be resilient. According to preliminary data, around 6.9 GW could have been connected, around 4 GW in China, and 2.9 GW in Europe. In Europe, the wind industry experienced disruptions in the first semester but total additions were nevertheless comparable to previous years. According to Wind Europe, 3.9 GW of onshore wind facilities were connected in the first six months of the year, slightly over the average of the previous three years (3.7 GW) while offshore installations were slightly below the three-year average (1.2 GW in 2020 vs 1.5 GW in 2017-2019). Overall, preliminary results are particularly encouraging 2 Consulted experts and analysts include: IRENA, IEA, IHS, Wood MacKenzie and BNEF, among others. 3 Central scenarios (or scenarios taking into account existing policies and enacted targets) have been used to elaborate this range. 4 At the time of preparation of this report, data from the global wind energy council (GWEC), the american wind energy association (AWEA) or wind europe, have not been released 5 Experts consulted include: GWEC, IHS markit, bloomberg new energy finance, international energy agency, wood mackenzie, IEA, wind europe and US energy information administration, among others. 6 Most of the experts consulted had forecast that China would install around 30 GW of wind in 2020, therefore, 40 GW below the final figure. 40 ANNUAL REPORT EDPR 2020 considering that wind installations are typically higher in the second half of the year, mainly due to the strongest activity in summer months, suggesting that total 2020 additions could easily surpass the 10 GW threshold (probably around 12 GW). In 2020, wind power contributed to 15% of Europe’s total electricity generation, its highest -ever share, according to a report released by Enappsys Ltd. In the United States, developpers commissioned 16.9 GW of new onshore wind capacity, far more than the previous record of 13.2 GW achieved in 2012, according to the American Clean Power Association. These impressive results are partly explained by the rush of wind developers to connect their projects before the phase-out of the full value of the US production tax credit (PTC) at the end of 2020. China remained the undisputed world’s wind power leader, adding 71.6 GW of wind energy, more than doble the previous record (29.4 GW in 20 1 5) according to the National Energy Administration (NEA). Despite challenges posed by COVID-19 pandemic, developers in China were rushing to complete projects before the phase-out of the current remuneration scheme. It has been a particularly good year for offshore wind installations as it is estimated that around 3.5-4 GW of offshore wind facilities have been added. However, given astonishing total figure of 71.6 GW (that includes both onshore and offshore facilities), offshore additions could be much higher. After this surge of new installations, China may become the largest offshore wind operator worldwide in 2020 or 2021 the latest. Solar PV Solar PV grew robustly around the world in 2020 despite the turmoil caused by the COVID-19 crisis. Although final data are still being collected, experts points out that around 106-132 GW of new facilities could have been connected in 2020 7 . Therefore, 2020 final figure is expected to be in line with 2019 data (108 GW) or, more likely, above. In Europe, 18.2 GW of solar PV capacity was added, up 11% from the 16.2 GW installed in 2019, according to Solar Power Europe. With this surge in new installations, the European solar PV industry proved its resilience during the coronavirus pandemic as 2020 was the second-best year for installations, only behind 2011 when 21.4 GW were installed. Over the past 12 months, Germany led the way with 4.8 GW of new installations, followed by 2.8 GW in the Netherlands and 2.6 GW in Spain. Poland more than doubled its additions to 2.2 GW, and France installed 0.9 GW. In the US, utility-scale solar additions more than doubled from 2019 levels, as 11.158 MW were connected in 2020, according to the Energy Information Administration (EIA). With those additions, there are now more than 47 GW of solar PV operating in the US, enough to power 11 million American homes. China remains the largest market. According to the National Energy Administration, the country added 48 GW of solar PV additions, exceeding all expectations. This figure largely surpasses the 30.1 GW added in 2019, although it remains below the 2017 record of 52.8 GW. 7 Experts consulted included: BNEF, IHS, Wood Mackenzie, IEA, The Solar Energy Industries associations (SEIA) among others 41 2.1.3. Regulatory Framework 42 ANNUAL REPORT EDPR 2020 EDPR NA Regulatory and Market Environment: EDP R operates in most of the electricity markets in the US, Canada, and Mexico. The nature of regulations and market rules vary from market to market with different degrees of influence from Federal and State/Provincial regulators in each market. The opportunities and constraints for EDPR assets and prospects are significantly defined by these regulations and market rules. Regional Transmission Organizations (“RTO”), Independent System Operators (“ISO”) exist throughout much of North America to operate a region's electricity grid, administer the region's wholesale electricity markets, and provide reliability planning for the region's bulk electricity system. RTOs carry additiona l responsibility for the region’s transmission network. US markets with RTOs and ISOs fall under greater Federal influence through the Federal Energy Regulatory Commission (“FERC”) which results in more transparent tariff and market rules. Regulation and market rules for regions not in RTO/ISO footprints tend to be influenced by various combinations of entities including State regulators, vertically integrated utilities, municipal governments, and Federal Agencies. In general, EDPR seeks to build assets in North American markets where long-term contracts are available for the bulk of the output of its generation facilities. In addition to electrical power, EDPR's facilities can produce capacity and ancillary services in regions with demand for these products. Many states have enacted Renewable Portfolio Standards (“RPS”) require obligated entities to provide a certain percentage of their energy supply from qualifying renewable sources, similar to the Renewable Energy Directive in the EU. Over the last few years, North American states have expanded these targets such that renewable portfolio standards in over ten states require 50% or more of their energy supply to be delivered via renewable resources in the next ten to twenty years. Certain facilities within the EDPR wind and solar portfolio, given their location, produce renewable energy credits (“REC”), certificates of clean energy (“CEL”) and other environmental attributes which are typically sold, along with the energy, capacity, and ancillary services, from the plants under long-term contracts. These RECs generated via renewable production may also be sold separately from the wind and solar generation, if not already included in the long-term contracts. The party owning the RECs is solely entitled to the benefits of the environmental attributes. 43 US federal, state and local governments have established various incentives to support the development of renewable energy projects. Included in these incentives are the Investment Tax Credit (“ITC”), Production Tax Credit (“PTC”), cash grants, and tax equity financing. Pursuant to the US federal Modified Accelerated Cost Recovery System, wind and solar projects are fully depreciated for tax purposes over a five-year period even though the useful life of such projects is generally much longer than five years. Owners of utility-scale wind facilities are eligible to claim the ITC upon initially achieving commercial operation or PTCs for generation from qualifying facilities. The PTC is awarded based on the volume of electricity produced by the wind facility during the first ten years of commercial operation. This incentive was established by the US Congress as part of the 1992 Energy Policy Act and has been extended several times through the American Recovery and Reinvestment Act of 2009, the American Taxpayer Relief Act of 2013, the Tax Increase Prevention Act of 2014, the Consolidated Appropriation Act of 2016, and most recently as part of the $1.4 trillion omnibus and COVID-19 relief package. The ITC and PTC levels for a given facility depend on that facility’s start of construction date and commissioning date and remain fixed at this level for the first ten years of operation. 44 ANNUAL REPORT EDPR 2020 2.2. Strategy Since its inception, EDPR has been performing a strategy focused on selective growth, by investing in quality projects with predictable future cash-flows and seamless execution, supported by core competences that yield superior profitability, all embedded within a distinctive and self-funding model designed to accelerate value creation. As a result of undertaking such strategy, at the same time flexible enough to accommodate changing business and economic environments, EDPR remains today a leading company in the renewable energy industry. EDPR’s strategy is supported by its three main pillars: EDPR Business model to deliver solid and ambitious growth targets through 2022 positioning to successfully lead a sector with increased worldwide relevance. 45 2.2.1. Selective Growth Selective growth is the key principle behind EDPR’s investment selection process, with new projects having long -term PPAs secured or being awarded long-term contracts under stable regulatory frameworks, as well as exhibiting above portfolio average load factor. As presented in March 2019, EDPR plans to add c.7.0 GW for the 2019-2022 period, of which 87% is already secured. EDPR will diversify geographically and technologically growing on wind onshore, offshore and solar along with the entrance in new markets. 46 ANNUAL REPORT EDPR 2020 2.2.2. Self-funding business EDPR self- funding model has been a cornerstone of EDPR’s strategy and its success has been crucial for funding and propel growth. The self- funding model relies on a combination of the cash generated from operating assets and EDPR’s strategy of selling stakes in projects in operation or under development, along with the US Tax Equity structures to finance the profitable growth of the business. This model allows the company to create value while recycling capital. Sell-down strategy Proceeds from selling majority stakes in operational or under development assets are also important sources of funds for the self-funding model of EDPR in financing its profitable growth. Under this strategy, EDPR sells majority stakes in projects in operation or in late stage of development, allowing the company to recycle capital, with up-front cash flow crystallization, and create value by reinvesting proceeds in accretive growth, with the option to provide operating and maintenance services. On the top of these, the Sell Down strategy makes visible the value creation on reported financial statements, with capital gains being booked in the income statement. As of 2020, EDPR already announced more than € 2 .3 billion out of the >€4.0 billion of sell down proceeds for 2022, representing around 57.5% of such target. 47 2.2.3. Operational Excellence One of the strategic pillars that has always been a keystone of the Company, setting it apart in the industry, is the drive to maximis e the operational performance of its wind and solar plants. In this area, EDPR’s teams, namely in operations and maintenance (O&M), have established a strong track record. EDPR has set targets for three key metrics: Load Factor, Technical Availability and Core Opex per MW. These metrics provide an overall view of the progress in EDPR wind assessment, O&M and cost control efforts, and also serve as good indicators for the overall operational efficiency of EDPR. Maintaining high levels of availability Availability is the ratio between the energy actually generated and the energy that would have been generated without any downtime due to internal reasons, namely due to preventive maintenance or repairs. Therefore, it is a clear performance indicator of the company’s O&M practices as it focuses on reducing to a minimum any malfunctions and performing maintenance activities in the shortest possible timeframe. With a target of more than 97.5%, EDPR will continue to improve availability through new predictive maintenance optimisation measures supported by the 24/7 control and dispatch centre, reducing damages most common during extreme weather and improving the scheduling of planned stops. Also, a new spare parts warehousing strategy will be key in reducing downtime during unexpected repairs. The company has always maintained high levels of availability, having registered availability of 97% as of December 2020. Leveraging quality growth on distinctive wind assessment toward 33% load factor Load factor (or net capacity factor) is a measure for the renewable resource quality, that reflects the percentage of the maximum theoretical energy output, in a given period. EDPR 2019-22 Business Plan target a 33% load factor, mainly on the back of the increase competitiveness of new capacity additions. In 2020, EDPR reached a load factor of 30%. Increasing efficiency, by reducing Core Opex/Avg. MW In addition to all company initiatives to boost production, EDPR also focuses on strict cost control efforts to improve efficiency and profitability. Leveraging on the experience accumulated over time, EDPR plans to reduce Core Opex/ avg. MW by -1% CAGR 2019-22. Core Opex is defined by Supplies and Services (including O&M activities) and Personnel costs, which are the costs that EDPR can actively manage. The target of reducing the manageable company costs structure, also benefits from the economies of scale of a growing company. In 2020, adjusted by Sell-down, offshore costs (cross-charged to projects’ SPVs), service fees, one offs and forex, Core Opex per avg. MW was +1% YoY, given upfront costs to support expected growth over the coming years and adjusted Core Opex per MWh was also +1% YoY. M3 Program and self-performance Based on EDPR’s expertise, under the M3 program O&M teams will decide on the optimal balance between external contractors and in- house maintenance. This new program has quickly generated savings in operational expenses and increased control over quality. The self- perform program is a step further in EDPR’s integration of maintenance tasks and activities, which is being implemented in the US, and consequently minimizes third- parties’ dependency. EDPR targets to increase the share of its fleet under the M3 and Self-Perform program to c.60% by 2022, from c.30% levels in 2015, while at the same time keeping flexibility to choose the most competitive sourcing contract. 2.3. Risk management In line with EDPR’s controlled risk profile, Risk Management process defines the mechanisms for evaluation and management of risks and opportunities impacting the business, increasing the likelihood of the Company in achieving its financial, operational and sustainability targets, while minimising fluctuations of results. Risk management process EDPR’s Enterprise Risk Management Process is an integrated and transver sal management model that ensures the minimisation of the effects of risk on EDPR's capital and earnings, as well as the implementation of best practices of Corporate Governance and transparency. EDPR’s Enterprise Risk Management Process is inspired on Basel Committee on Banking Supervision’s principles, guidelines and recommendations. The process aligns EDPR’s risk exposure with the Company’s desired risk profile. Risk management policies are aimed to mitigate risks, without ignoring potential opportunities, thus, optimising return versus risk exposure. The process is closely followed and supervised by the Audit, Control and Related Party Transactions Committee, an independent supervisory body composed of non-executive members. Risk management is endorsed by the Executive Committee, supported by the Risk Committee and implemented in day-to- day decisions by all managers of the Company. EDPR created three distinct meetings of the Risk Committee, separating discussions on execution of mitigation strategies from those on definition of new policies, in order to help decision-making: • Restricted Risk Committee: Held every month, it is mainly focused on development risk and market risk from selling energy (electricity price, basis, profile, GCs and RECs). It is the forum to discuss the evolution of projects under development and construction and the execution of mitigation strategies to reduce merchant exposure. It also monitors the limits of defined risk policies, with regards to counterparty risk, operational risk and country risk. • Financial Risk Committee: Held every quarter, it is held to review main financial risks and discuss the execution of mitigation strategies. Exchange rate risk, interest rate risk, inflation risk and credit risk arising from financial counterparties are risks reviewed in this committee. • Risk Committee: Held every quarter, it is the forum where new strategic analysis is discussed and new policies and procedures are proposed for approval to the Executive Committee. Additionally, EDPR’s overall risk position is reviewed, together with EBITDA@Risk and Net Income@Risk. 48 ANNUAL REPORT EDPR 2020 Risk map at EDPR Risk Management at EDPR is focused on covering all risks of the Company. In order to have a holistic view, they are classified in five Risk Categories. Within each Risk Category, risks are classified in Risk Groups. The full description of the risks and how they are managed can be found in the Corporate Governance chapter. The graph below summarises the Risk Categories, the Risk Groups and the Risk Management mitigation strategies at EDPR. 49 50 ANNUAL REPORT EDPR 2020 Risk analyses and impact of COVID-19 in EDPR The year 2020 was marked by the outburst of the COVID-19 pandemic. In March, EDPR carried out a comprehensive assessment of the potential impacts on the company’s operations, followed by recommendations of actions to be put in place and a process for continuous monitoring of the situation. The impact of COVID-19 has been transversal across all areas and geographies of the company, but those impacts can be grouped under several risk categories: • Market Risk: • Energy price risk: Energy price significantly dropped during 2020 in most of EDPR geographies due to the reduction in demand following the lockdown and a lower economic activity. However, impact of low energy prices on EDPR results was minimal, as EDPR’s marginal merchant exposure was mostly hedged for 2020. • FX risk: Emerging economies suffered a strong depreciation of their currencies. Net Investment hedges at EDPR mitigated most of the FX fluctuations. On the other hand, a specific plan for hedging FX transactional exposures in Capex was set out, in order to avoid hedging at particularly unfavorable rates due to the pandemic. Monitoring of market risk was performed on a monthly basis in the Restricted Risk Committee, adjusting the position when necessary. • Counterparty Risk: Despite the increase in exposure from counterparties in financial hedges and the temporary deterioration of the financial situation of some of EDPR’s PPA off -takers, impact for EDPR was negligible. The existing collateral in electricity hedges and a diversified portfolio of creditworthy PPA off-takers, some of which improved their credit metrics during the year, made EDPR resilient to increase in counterparty risk. Monitoring of counterparty risk was also performed monthly in the Restricted Risk Committee. • Operational Risk: • Execution Risk: The impact of the pandemic on the construction and execution of projects lead to some COD delays, due to construction stoppages and/or supply chain disruptions. To mitigate this risk, EDPR implemented a strategy of prioritization of projects and set out a review of contractual clauses to prevent or minimize changes in tariff regimes, PPA penalties or Capex increases. By the end of 2020, incentivized regime contracts or PPAs were all maintained despite some COD delays. Monitoring of the evolution of the execution risk at EDPR was performed on a weekly basis, together with the Engineering & Construction Department. • Operation Risk: No significant impact, as the potential reduction in plant availability due to delayed maintenance or repairs was residual. • Personnel Risk: EDPR initially implemented travel restrictions and other measures designed to stop the spread of the coronavirus and guarantee the safety of its personnel. In March, EDPR activated its Contingency Plan for pandemics, introducing home office in all geographies and restricting access to its facilities, while minimizing disruptions in its operations, thus ensuring business continuity. EDPR employees have a Reopening Plan for gradually returning to the facilities according to the development of the pandemic, with geographical specifications, guaranteeing the highest health & safety standards. 51 During 2020, EDPR updated its view on the sustainability of RES policies in the geographies where the Company is present and in new potential geographies. This deep-dive analysis was performed within the scope of the Country Risk Policy. EDPR carried out a review of historical Capex deviations for projects in both Europe & Brazil and North American platforms, with the aim of improving the accuracy of Capex contingencies to be included in the modelling of future projects. Finally, an updated methodology for EBITDA@Risk and NI@Risk was approved, through a bottom-up calculation allowing for a closer and more intuitive monitoring of the different risks. Considering EDPR’s increase in size, NI@Risk limits were updated on EDPR’s ERM (Enterprise Risk Management) framework. EDPR risk matrix by financial impact EDPR Risk Matrix is a qualitative assessment of likelihood and impact of the different risk categories within the Company. It is dynamic and it depends on market conditions and future internal expectations. EDPR sustainability risks EDPR’s commitment with its stakeholders means that the Company cares about a responsible and sustainable development, assuring the best practices in this area. In this context, EDPR has identified five risk factors key to the sustainability of the Company. The highest standards have been put in place to mitigate these risks: • Corruption and Fraud Risk: EDPR has implemented a Code of Ethics and an Anti-Corruption Policy. The Code of Ethics has its own regulation that defines a process and channel, open to all stakeholders, to report any potential claim or doubt on the application of the code. The Ethics Ombudsperson is behind this communication channel, and is responsible for analysing and presenting to the Ethics Committee any potential ethical problem. The Compliance Channel is also available to report any questionable practice and wrongdoing. The Integrity and Ethics section of the report (subchapter 1.3.4.) includes further information on how EDPR addresses and mitigates this risk. • Environmental Risk: EDPR has implemented an Environmental Management System, certified with the ISO 14001:2015, in order to follow best practices in the sector. More information regarding how EDPR addresses and mitigates this risk is available at the Natural Capital section of the report (subchapter 3.5.). • Human Resource Risk: EDPR forbids any kind of discrimination, violence or behaviour against human dignity, as stated in its Code of Ethics. Strict compliance is enforced, not only making the Ethics Channel available to all stakeholders but also through constant awareness for all employees of the Company. The Human Capital section of the report (subchapter 3.2.) and the Human Rights & Labour Practices section of the report (subchapter 3.4.2.) include further information on how EDPR addresses and mitigates this risk. 52 ANNUAL REPORT EDPR 2020 • Health and Safety Risk: EDPR has deployed a H&S management system, complying with the new ISO 45001:2018 standard , pursuing the “zero accidents” target. This year, the Covid-19 pandemic had impact on the H&S risk. The Health & Safety section of the report (subchapter 3.4.1.) addresses how EDPR has mitigated this risk. • Human Rights Risk: EDPR has committed, through its Code of Ethics, to respect international human rights treaties and best work practices. All suppliers which sign a contract with EDPR are committed to b e aligned with EDPR’s Code of Ethics principles. The Human Rights & Labour Practices section of the report (subchapter 3.4.2.) includes further information on how EDPR addresses and mitigates this risk. In addition, quantification of the financial impact on the Company’s performance of these five sustainability risk factors is included within the Operational Risk analysis. EDPR frequently evaluates the economic impact of its Operational Risk, following the guidelines of Basel III. The analysis includes the identification, estimation and mitigation of individual operational risks belonging to the short, medium and long term in all its geographies. For this purpose, EDPR takes into account present and future relevance of these risks, as well as historical data of their impact, with the help of department heads. The final results of the Operational Risk analysis are then communicated to the Executive Committee and shared with every department involved. In spite of the impact of the COVID-19 pandemic in Health & Safety, none of the five sustainability risk factors mentioned above had a material financial impact on the Company’s performance . Emerging risks at EDPR Changes in wind patterns at a global level caused by climate change Academic papers have been published regarding how wind patterns have changed in recent years due to global warming and whether these changes may remain in the long run. There has been no clear conclusion, but it might imply that some regions will have weaker wind in the future, leading to drops in expected wind energy production, while some others will be experiencing an increase in wind energy production. Moreover, the deployment of a high density of windfarms in a region, both onshore and offshore, might affect the wind patterns itself. In order to mitigate this wind energy production risk, when evaluating a new investment, EDPR considers stressed changes in forecasted wind energy production. In addition, the geographical diversification of EDPR portfolio mitigates this potential risk. Increase of distributed generation resources in combination with the massive integration of new trends such as smart grids, electric vehicles or blockchain Proliferation of distributed generation with combination of Solar PV and storage or batteries might lead to a possible change in the market in terms of reduction of demand from centralized generation by consumers due to self-consumption of distributed generation, decrease in electricity prices set for uncontracted centralized generation, and changing dynamics of energy flows in the grid, which might change the share of transmission and distribution costs for centralized generators. Nonetheless, distributed generation could be seen as an opportunity for development of new products and services for those companies that adapt to this trend. 53 N G C H E FROM MORE TO BETTER Changing tomorrow now. Innovating to power the planet Changing tomorrow now. 03 Financial Capital 58 Operational Performance 58 Financial Performance 60 Human Capital 69 Supply Chain Capital 74 Social Capital 76 Health & Safety 76 Respect Human and Labour Rights 77 Contribute to the Society 78 Promote Access to Energy for All 79 Natural Capital 80 Digital Capital 82 Innovation Capital 86 Sustainable Development Goals 88 EXECUTION 58 ANNUAL REPORT EDPR 2020 Execution 3.1. Financial capital 3.1.1. Operational performance INSTALLED CAPACITY (MW) VS. 2019 NCF GWh Dec-20 Built Sold Decom. Var. YoY Dec-20 Dec-19 Var. YoY Dec-20 Dec-19 Var. YoY EUROPE Spain 2,137 +401 (237) - +163 25% 28% -3.1pp 4,346 5,298 (18%) Portugal 1,228 +64 - - +64 26% 29% -3.4pp 2,624 3,160 (17%) Rest of Europe 1,403 +140 - - +140 27% 26% +0.6pp 3,054 3,333 (8%) France 126 +73 - - +73 31% 22% +9.2pp 212 465 (44%) Belgium 10 +10 - - +10 22% - 2 68 (47%) Italy 271 - - - - 25% 27% -1.9pp 595 551 +43% Poland 476 +58 - - +58 29% 30% -1.3pp 1,059 1,098 +19% Romania 521 - - - - 26% 25% +0.9pp 1,186 1,151 +9% Total 4,769 +605 (237) - +367 26% 28% -2.1pp 10,024 11,791 (15%) NORTH AMERICA US 5,828 +587 (465) (8) +114 33% 34% -0.8pp 16,633 15,696 +6% Canada 68 +38 - - +38 30% 27% +3.0pp 78 70 +12% Mexico 400 +200 - - +200 41% 42% -1.1pp 710 726 (2%) Total 6,296 +825 (465) (8) +352 33% 34% -0.8pp 17,421 16,492 +6% BRAZIL Total 436 +105 (137) - (32) 38% 43% -4.9pp 1,093 1,757 (38%) GRAND TOTAL 11,500 +1,535 (839) (8) +688 30% 32% -1.4pp 28,537 30,041 (5%) Equity Consolidated 668 +45 +73 - +118 Wind Onshore (SP + PT) 187 +35 - - +35 Wind/ Solar Onshore (US) 471 - +73 - +73 Wind Offshore 10 +10 - - +10 EBITDA MW + EQUITY CONSOL. 12,168 +1,580 (766) (8) +806 59 EDPR continues to deliver solid selective growth With a top-quality portfolio, EDPR has a strong track record and proven capability to execute superior projects and deliver on targets. The installed asset base of 12.2 GW is not only young, on average 9 years, it is also mostly certified in terms of environmental and health and safety standards. Since 2008, EDPR has more than doubled its installed capacity, resulting in a total installed capacity of 12,168 MW (EBITDA + Equity Consolidated). As of December 2020, EDPR had 4,966 MW installed in Europe, 6,766 MW in North America and 436 MW in Brazil. 2020 installations concentrated in North America Since Dec ‐ 19, EDPR added a total of 1,580 MW, including the 486 MW from the acquisition of the renewables business of Viesgo. In 2020, EDPR added 1,370 MW of wind onshore, corresponding to 640 MW in Europe, namely 436 MW in Spain (15 MW from equity stake), 84 MW in Portugal (20 MW from equity stake), 73 MW in France, 58 MW in Poland and 10 MW in Belgium, while in North America 625 MW of wind were built, more precisely 587 MW in United States and 38 MW in Canada, finnally, in Brazil EDPR built 105 MW worth of wind onshore projects. In terms of solar PV, 200 MW were installed in Mexico, whilst 10 MW of wind offshore were built, corresponding to Windplus floating in Portugal (equity stake). Pursuing its Sell-down strategy, EDPR successfully concluded the Sell-down of its entire ownership in the 137 MW Babilonia wind farms in Brazil, 237 MW in a Spanish portfolio, 80% sell-down of a 563 MW portfolio in the US (of which 200 MW will become operational in 2021) and a 102 MW Build and Transfer wind farm in US. All in all, in 2020, EDPR YTD consolidated portfolio net variation was positive by 806 MW. 5% decrease in Year on Year generation EDPR produced 28.5 TWh of clean energy in 2020, -5% YoY. The YoY evolution comes in line with a lower average installed capacity YoY following the execution of EDPR’s Sell -down strategy (3Q19: 997MW of European Assets (-1.2 TWh YoY); 1Q20: 137 MW in Brazil (-671 GWh YoY) and 4Q20: 237 MW in Spain (-64 GWh YoY)). In 2020, EDPR achieved a 30% load factor (vs 32% in 2019) reflecting 92% of P50 (long term average for 12M). In the 4Q20, EDPR reached a 34% load factor (vs 35% in 4Q19), with QoQ comparison being affected by lower wind resource, mainly in Brazil. EDPR achieved a 96.7% availability in 2020, vs 96.8% in 2019. The company continues to leverage on its competitive advantages to maximise wind farm output and on its diversified portfolio across different geographies to minimise the wind volatility risk. 56% 19% 11% 10% 4% 12.2 GW of EBITDA MW + Equity Consol. (%) NA SP PT ROE BR 61% 55% 11% 11% 9% 11% 15% 18% 4% 6% 2020 2019 Generation breakdown NA ROE PT SP BR 60 ANNUAL REPORT EDPR 2020 Solid growth and diversified portfolio delivers balanced output EDPR’s operations in Europe were a major driver for the electricity production decrease in 2020, decreasing -15% YoY to 10.0 TWh and representing 35% of the total output. This is mainly explained by the deconsolidation of 997 MW in Jul-19 and 237 MW deconsolidation in Spain at the end of 2020 following Sell-down transactions and by lower wind resource. In Europe, EDPR achieved a 26% load factor (vs 28% in 2019). EDPR obtained a load factor of 25% in Spain (-3pp YoY), while in Portugal reached a load factor of 26% (-3pp YoY). In Rest of Europe, EDPR accomplished a 27% load factor (+1pp YoY), mainly driven by France (+9pp YoY). EDPR’s production in Brazil decreased to 1.1 TWh vs 1.8 TWh in the 2019, representing 4 % of total EDPR’s generation, driven by the deconsolidation in the 1Q20 of 137 MW from the Sell-down of Babilonia wind farms. In Brazil, EDPR reached a 38% load factor (vs 43% in 2019). In North America, output increased +6% YoY to 17.4 TWh, reflecting the new capacity in operation partially impacted by a lower wind resource at 33% (-1pp YoY). North America represents 61 % of EDPR’s total output in the twelve months of 2020. Propelled by capacity additions in 2020, EDPR manages a portfolio of 12.2 GW As of December 2020, EDPR had 2.4 GW of new capacity under construction, of which 1,648 MW related to wind onshore, 404 MW to solar PV and 311 MW from equity participations in offshore projects. In terms of wind onshore, in Europe were 722 MW under construction, with 85 MW in Spain, 135 MW in Portugal, 30 MW in France, 292 MW in Poland, 136 MW in Italy and 45 MW in Greece. In North America 970 MW were under construction, of which 770 MW corresponding to wind onshore projects in US and Canada and 200 MW from a solar project in US. In Brazil 155 MW of wind onshore and 204 MW of solar were under construction. In terms of wind offshore, EDPR had a total of 311 MW of wind offshore in construction from equity stakes, 269 MW from Moray East in the UK and 43 MW from SeaMade in Belgium. As a result of continuous growth effort, EDPR also has a young portfolio with an average operating age of 9 years, with an estimate of over 21 years of useful life remaining to be captured. 3.1.2. Financial performance Income statement Revenues reached over €1. 7 billion and EBITDA summed €1. 7 Billion. Revenues totalled € 1,731 million (-5% decrease year on year) on the back of Sell-down assets deconsolidation (- €1 29 million versus 2019), lower wind resource (- € 89 million year on year) along with forex translation and others (- €1 0 million versus 2019) not offset by additional installed capacity (+€ 82 million versus 2019), higher average selling price excluding Sell-down (+€ 53 million year on year). Other operating income amounted to €498 million (+€99 million versus 2019), with year on year evolution reflecting the gains (€444 million) related to Sell-down transactions closed by the end of the year in the US and Spain together with Offshore transactions, namely the stakes sold to the Offshore JV with Engie (as of Dec-20, all assets were transferred pursuant to the agreement signed in Jan-20). 12 11 1 4 7 9 8 3 2 4 9 Spain Portugal France Italy Poland Romania US Canada Mexico Brazil EDPR Assets' Average Age and Useful Life (years) ASSET AVERAGE AGE AVERAGE USEFUL LIFE 1,731 1,824 2020 2019 Revenue evolution (€ millions) 61 In the context of EDPR’s continuous growth, Operating Costs (Opex) totalled € 568 million (-1% year on year). In comparable terms, adjusted by offshore costs (mainly cross charged to projects’ SPV), Sell -down assets deconsolidated, one-offs, service fees and forex, Core Opex (defined as Supplies and Services and Personnel Costs) per average MW was +1% year on year, given upfront costs to support expected growth over the coming years. In 2020, EBITDA summed € 1,655 million (vs € 1,651 million in 2019) and EBIT amounted to € 1,054 millio n (versus € 1,055 million in 2019), with Sell-down transactions having a positive impact of - €17 million in Depreciation and Amortisation and a - €28 million write-down of a wind-farm (151 MW in US) approved for repowering in 2021. Net Financial Expenses decreased to € 285 million (-18% year on year) with year on year comparison impacted by lower average cost of debt in the period (3.5% vs 4.0% in 2019). At the bottom line, Net Profit summed € 556 million (versus € 475 million in 2019) mainly driven by the successful execution of the Sell-down startegy. Non- controlling interests in the period totalled € 127 million, decreasing by € 20 million year on year, as a result of assets sold. CONSOLIDATED INCOME STATEMENT (€ MILLIONS) 2020 2019 1 ∆ % REVENUES 1,731 1,824 (5%) Other Operating Income 498 400 +25% Operating Costs (568) (575) (1%) Supplies and Services (304) (309) (1%) Personnel Costs (141) (131) +8% Other Operating Costs (123) (136) (10%) Share of Profit of Associates (6) 3 (281%) Total 1,731 1,824 (5%) EBITDA 1,655 1,651 +0% EBITDA/Revenues 1 1 +505% Provisions (1) (1) (43%) Depreciation and Amortisation (617) (609) +1% Amortisation Government Grants 17 17 (4%) Total 1,655 1,651 +0% EBIT 1,054 1,055 (0%) Financial Income/ (Expense) (285) (349) (18%) Total 1,054 1,055 (0%) PRE-TAX PROFIT 769 709 +8% Income Taxes (86) (86) (4%) Profit of the Period 683 623 +10% Total 769 709 +8% NET PROFIT (EQUITY HOLDERS OF EDPR) 556 475 +17% Non-controlling Interests 127 148 (14%) Total 556 475 +17% 1 From 2020 onwards share of profits of associates will be accounted at EBITDA level. Only for YOY comparision purposes, 2019 data is also adjusted. 62 ANNUAL REPORT EDPR 2020 Balance sheet In 2020 total equity increased by €2 89 million. Total Equity of €8. 6 billion increased by €2 89 million in 2020 , of which €1,8 78 million are attributable to reserves and retained earnings. Equity attributable to EDPR shareholders increased € 375 million year on year, mainly explained by +€ 556 million from Net profit in the period, +€ 82 million from Acquisition/sale of companies, along with - €1 87 million of the exchange rate effects, - € 8 million from variation in fair value cash flow hedges and - € 70 million from dividend payments. Total Liabilities increase d € 181 million year on year to €9. 5 billion, explained by the increase in financial debt (+ € 530 million), deferred tax liabilites (+ € 72 million), rents due from lease contracts (+€71 million) and in provisions (+€ 37 million), despite the decrease in deferred revenues from Institutional partnerships (- €213 million), in Institutional partnerships ( - €143 million), and other liabilities (- € 173 million). Debt-to-equity ratio stood at 111% by the end of 2020. Liabilities were mainly composed of financial debt (41%; versus 37% in 2019), liabilities related to institutional partnerships in the United States (12%; versus 14% in 2019) and accounts payable (23% versus 26% in 2019). Liabilities to tax equity partnerships in the United States de creased by € 356 million to €1, 934 million. Deferred revenues related to institutional partnerships primarily represent the non-economic liability associated to the tax credits already realised by the institutional investor, arising from accelerated tax depreciation, and yet to be recognised as income by EDPR throughout the remaining useful lifetime of the respective assets. Deferred tax liabilities reflect the liabilities arising from temporary differences between the accounting and the tax basis of assets and liabilities. Accounts payables include trade suppliers, PP&E suppliers, deferred income related to investment grants received and derivative financial instruments. As total assets summed €1 8.2 billion in December 2020, the equity ratio of EDPR reached 47%. Assets were 74% composed of net PP&E - property, plant and equipment representing €13. 5 billion (+ € 228 million versus 2019). In detail it included +€ 2.3 billion of capex investments, - €0.6 billion of depreciation charges along with negative exchange differences of - €1 .6 billion and - €1.0 billion coming from sales and acquisitions. Net intangible assets of €1.5 billion mainly include €1.2 billion from goodwill registered in the books, for the most part re lated to acquisition of Viesgo renewable business, while accounts receivable is mainly related to loans to related parties, trade receivables, guarantees and tax receivables. 63 STATEMENT OF FINANCIAL POSITION (€ MILLIONS) 2020 2019 ∆ € ASSETS Property, Plant and Equipment, net 13,492 13,264 +228 Intangible Assets and Goodwill, net 1,537 1,490 +47 Financial Investments, net 488 476 +12 Deferred Tax Assets 122 126 (4) Inventories 55 34 +20 Accounts Receivable - Trade, net 279 303 (24) Accounts Receivable - Other, net 999 556 +443 Right-of-use asset 674 616 +58 Collateral Deposits 31 32 (1) Cash and Cash Equivalents 474 582 (107) Assets Held for Sale 12 214 (202) Total 18,163 17,693 +470 EQUITY Share Capital + Share Premium 4,914 4,914 0 Reserves and Retained Earnings 1,878 1,584 +294 Net Profit (Equity Holders of EDPR) 556 475 +81 Non-controlling Interests 1,276 1,362 (86) Total 8,624 8,335 +289 LIABILITIES Financial Debt 3,947 3,417 +530 Institutional Partnerships 1,143 1,287 (143) Provisions 315 278 +37 Deferred Tax Liabilities 427 355 +72 Deferred Revenues from Institutional Partnerships 790 1,003 (213) Other Liabilities 2,227 2,400 (173) Rents due from lease contracts 689 618 +71 Total 9,539 9,358 +181 TOTAL EQUITY AND LIABILITIES 18,163 17,693 +470 Cash flow statement and Net debt Operating cash-flow impacted by top line performance In 2020, EDPR generated Operating Cash- flow of € 908 million (-17% YoY), with year on year evolution explained by weaker top line performance. The key items that explain 2020 cash-flow evolution are the following: • Funds from operations, resulting from EBITDA after net interest’s expenses, share of profits of associates and current taxes, were €1, 519 million (versus €1, 441 million in 2019) • Operating Cash-flow, which is the EBITDA net of income tax and adjusted by non-cash items (namely income from United States institutional partnerships) and net of changes in working capital, was € 908 million (-17% year on year). Non-cash items include €4 32 million from capital gains related to the assets sold to Ocean Winds (EDPR and Engie's Offshore JV) and other sales in the US and Spain; • Capital expenditures with capacity additions, ongoing construction and development works totalled € 2,099 million (+89% year on year) mainly from higher capex in North America and Europe; 64 ANNUAL REPORT EDPR 2020 12% 15% 14% 13% 46% 2021 2022 2023 2024 >2024 DEBT MATURITY PROFILE (%) • Payments to institutional partnerships totalled € 56 million, contributing to the reduction of Institutional Partnership liabilities. Total net dividends and other capital distributions paid to minorities totalled €1 84 milli on (including € 70 million to EDPR shareholders). In the period, forex & others had a posit ive impact increasing Net Debt by € 3 million. CASH- FLOW (€ MILLIONS) 2020 2019 ∆ % EBITDA 1,655 1,651 0% Current Income Tax (35) (55) -36% Net Interest Costs (101) (156) -35% FFO (FUNDS FROM OPERATIONS) 1,519 1,441 5% Net Interest Costs 101 156 -35% Share of Profit of Associates 6 (3) -281% Income from Institutional Partnerships (202) (173) 17% Non-cash Items Adjustments (439) (290) 51% Changes in Working Capital (78) (41) 88% OPERATING CASH-FLOW 908 1,089 -17% Capex (2,098) (1,109) 89% Financial Desinvestments/ (Investments) (1,093) (291) 275% Changes in Working Capital related to PP&E Suppliers 552 (100) -651% Government Grants - - n/a NET OPERATING CASH-FLOW (1,731) (412) 320% Sale of Non-controlling Interests and Sell-down Strategy 950 989 -4% Proceeds from Institutional Partnerships 305 186 63% Payments to Institutional Partnerships (56) (81) -31% Net Interest Costs (Post Capitalisation) (101) (138) -27% Dividends Net and Other Capital Distributions (184) (151) 22% Forex & Others 178 (138) -229% DECREASE/(INCREASE) IN NET DEBT (640) 257 -349% As of December 2020 , Net Debt totalled € 3,443m (+ € 640m vs December 2019) reflecting on the one hand assets’ cash generated and on the other hand investments in the period including the acquisition of Viesgo renewables and forex translation. Institutional Partnership Liabilities summed €1, 143m (- €1 43m vs December 2019), with benefits captured by the projects and tax equity partners along with a new institutional tax equity financing in the period (flat vs Dec-19 in USD). NET DEBT & TAX EQUITY (€ MILLIONS) 2020 2019 ∆ € Net Debt 3,443 2,803 +640 Institutional Partnerships 1,143 1,287 -143 Total 4,586 4,090 +496 65 Europe In 2020, Europe de creased its revenues to € 824 million (-11% versus 2019) due to lower production at 10.0 TWh (-15% year on year) and despite higher selling prices during the year (+4% versus 2019). Net Operating costs (Operating costs net of other operating income), decreased to - € 28 million, primarily explained by the increase in other operating income explained by the capital gains received from the Spanish portfolio Sell-down in 2020 (€ 113 million). Operating costs roughly remainerd flat in 2020 when comparing with last year. All in all, EBITDA in Europe totalled € 856 million, a -7% decrease versus 2019, reflecting an EBITDA margin of 104% (versus 99% in 2019). North America In North America, rev enues increased to €8 71 million in 2020 (+5% year on year) on the back of higher capacity in operation (+352 MW versus 2019). Net Operating costs decreased € 124 million to € 94 million, reflecting mainly the € 99 million capital gain accounted from a 80% sale of a 363 MW portfolio in the US and the €14 million gains in a 102 MW Build and Transfer in the US, that translated into a + € 145 million increase in other operating income. Operating costs increased +22 million in 2020 . As a consequence, North America EBITDA totalled € 777 million (versus €6 15 million in 2019), reflecting an EBITDA margin of 89% (versus 74% in 2019). Brazil In Brazil, revenues decreased to €36 million (versus €74 million in 2019) on the back of lower win d resource that decreased production -38% year on year and despite higher average selling price during the year (+6% versus 2019). Net Operating costs increased €75 million to €11 million, due to the decrease in other operating income explained by the €87 million capital gain from the Sell- down of Babilonia wind farm accounted in 2019. All in all, EBITDA in Brazil totalled €26 million, versus €139 million in 2019 reflecting an EBITDA margin of 71% (versus 188% in 2019). STATEMENT (€ MILLIONS) 2020 2019 2 ∆ % 2020 2019 2 ∆ % 2020 2019 2 ∆ % Europe North America Brazil REVENUES 824 925 -11% 871 832 5% 36 74 -51% Other Operating Income 287 246 17% 195 50 290% 3 88 -96% Operating Costs -259 -258 0% -290 -268 8% -14 -24 -42% Supplies and Services -158 -158 0% -163 -148 10% -9 -15 -39% Personnel Costs -32 -29 11% -76 -63 21% -1 -3 -50% Other Operating Costs -68 -71 -4% -50 -57 -12% -3 -5 -35% Share of Profit of Associates 4 4 14% 0 0 -37% 0 0 - EBITDA 856 917 -7% 777 615 26% 26 139 -81% EBITDA/Revenues 104% 99% 5% 89% 74% 21% 71% 188% -62% Provisions -1 -1 -42% - - - - - - Depreciation and Amortisation -223 -255 -13% -375 -333 13% -9 -16 -45% Amortisation of Government Grants 1 1 -39% 16 16 -2% 0 0 -100% EBIT 633 658 -4% 418 298 40% 17 123 -86% 2 From 2020 onwards share of profits of associates will be accounted at EBITDA level. Only for YOY comparision purposes, 2019 data is also adjusted. 66 ANNUAL REPORT EDPR 2020 COVID-19 impacts EDPR was able to manage the COVID-19 crisis with high efficiency, maintaining normal levels of availability and posted lower costs in terms of travelling and marketing. Due to COVID-19, the company has suffered some construction and supply chain disruptions leading to a total of c.0.5 GW COD delays, however without impact in projects ’ fundamentals. These delays have been compensated by the +0.5 GW acquisition from Viesgo renewables business and the anticipation of some projects in Brazil. Other reporting topics Subsequent events The following are the most relevant subsequent events from the first months of 2021 until the publication of this report: EDPR informs about PPA contracts secured for two solar projects in the US Madrid, January 4 th 2021: EDP Renováveis, SA (“EDPR”), through its fully owned subsidiary EDP Renewables North America LLC, has closed two 15- year Power Purchase Agreement (“PPA”) to sell the energy produced by two solar PV plants totalling 275 MW. In detail, the projects located in the US states of Mississippi and Indiana are expected to commence operations in 2023. With this new agreement, EDPR reached globally 2.0 GW of total solar PV capacity secured for the 2020-2023 period. EDPR informs about agreement to acquire 85% of a distributed solar platform in the US Madrid, January 18 th 2021: EDP Renováveis, SA (“EDPR”), through its fully owned subsidiary EDP Renewables North America, LLC ("EDPR NA"), has entered into an agreement to acquire a majority interest in C2 Omega LLC ("C2 Omega"), the distributed solar platform of C2 Energy Capital LLC (“C2”). In detail, EDPR will acquire an 85% equity stake in a solar generation portfolio that includes 89 MW of operating and imminent completion capacity and a near-term pipeline of around 120 MW, across nearly 200 sites in 16 states. EDPR’s investment in C2’s distributed solar platform business corresponds to an enterprise value of approximately $119m for the acquisition of the operating capacity (89 MW). The transaction will also include certain earn-out payments based on the growth in future operational capacity. C2's management team will continue to be engaged in the day-to-day operations of the business. The transaction will establish EDPR’s presence in the fast -growing distributed generation segments as an owner-operator of one of the largest commercial and industrial distributed generation portfolios in the US, and will enable EDPR to serve a rapidly growing market and offer to its customers a range of new services and solutions to meet their renewable energy needs. The completion of this transaction is subject to customary conditions precedent, and closing is expected to occur in the first quarter of 2021. EDP Renováveis informs about changes in Corporate Bodies Madrid, January 19 th 2021: EDP Renováveis, S.A. ("EDPR") informs about a resolution approved by EDPR´s Board of Directors: After the public communication of António Mexia and João Manso Neto about their no availability to be re-elected for their positions in EDP and following the appointment by EDP’s shareholders of a new Executive Board of Directors team at EDP, and taking in consideration that both informed that they will put their positions at the disposal of the Board, the Board of EDPR has agreed to cease António Mexia as Chairman of EDPR´s Board, and João Manso as Vice-Chairman of EDPR´s Board and CEO of EDPR. EDPR would like to thank António Mexia and João Manso Neto for their enormous dedication and contribution to the company, for the definition and implementation of a sustainable growth strategy, that brought EDPR to be a leader in the renewables’ sector, clearly and greatly valued by the company’s stakeholders. 67 In addition, EDPR informs that has received the following resignations as members of EDPR’s Board of Direct ors: Francisca Oliveira, with effect from December 30 th 2020 (was also member of EDPR’s Audit, Control and Related Party Transactions Committee); Duarte Bello, with effect from January 19 th 2021 (was also member of the Executive Committee); Spyridon Martinis, with effect from January 19 th 2021 (was also member of the Executive Committee); Miguel Ángel Prado, with effect from the next General Shareholders Meeting (was also member of the Executive Committee). To fulfil the vacant positions, EDPR’s Board has c o-opted: Miguel Stilwell de Andrade, as Executive Director; Ana Paula Marques, as Non-executive Director; Joan Avalin Dempsey, as Non-executive and Independent Director. F urthermore, EDPR’s Board has appointed Miguel Stilwell de Andrade as Chairman of EDPR´s Board and CEO of EDPR and Rui Teixeira, currently EDPR’s Executive Director and Consejero Delegado , as CFO of the Company. To better maximis e EDPR’s Board participatio n in the management of the Company, the Board has decided to eliminate the Executive Committee body, which included up to now Executive Board members of the company, whose executive staff will now be integrated in a Management Team composed by: Miguel Stilwell de Andrade, CEO; Rui Teixeira, CFO; Duarte Bello, COO Europe and Brazil; Miguel Ángel Prado, COO North America; Spyridon Martinis, CDO & COO Offshore. T o cover the vacant position in the EDPR’s Audit, Control and Related -Party Transactions Committee, following the resignation from Francisca Oliveira, EDPR´s Board of Directors has agreed to name Francisco Seixas da Costa as member of such Committee. Follo wing this appointment, EDPR’s Audit, Control and Related -Party Transactions Committee is composed by: Acácio Jaime Liberado Mota Piloto (Chairman); António do Pranto Nogueira Leite; Francisco Seixas da Costa. W ith this resolution, EDPR’s Audit, Control and Related-Party Transactions Committee continues to be composed only by independent members. Lastly, the Board of Directors has agreed that a General Shareholders’ Meeting will be summoned for the February 22 nd with the following agenda: Ratification of co-opted Directors; Deliberate on the termination of members of the Board of Directors; Establishment of the number of Board Members in 12; Amendment to the By-Laws to eliminate the role of the Chairman of the Shareholders’ Meeting, and allow the Shareholde rs Meeting to be chaired by the Board of Directors Chairman; Delegation of powers. EDP Renováveis, S.A. informs about Spanish and Italian renewable energy auctions Madrid, January 27 th 2021: EDP Renováveis, S.A. (“EDPR”) was awarded long -term Contract-for- Differences (“CfDs”) at the Spanish & Italian renewable energy auctions to sell electricity. In detail, at the Spanish auction, a portfolio of 6 projects of wind and solar, including hybrid projects, with a total capacity of 143 MW have been awarded. The projects are expected to become operational in 2022 and 2023. These new long- term contracts reinforce EDPR’s footprint in Spain with 2.3 GW in operation and close to 0.4 GW already secured in the country for the following years. At the Italian auction, a wind project of 44 MW and expected to become operational in 2022 has also been awarded. In Italy, EDPR has 271 MW already operational and more than 0.2 GW secured for the coming years. As of today, EDPR has globally secured 6.7 GW for projects expected to become operational from 2021 onwards. EDPR enters Hungarian market with a 50 MW solar PV project Madrid, February 12 th 2021: EDP Renováveis, SA (“EDPR”) secured a 15 -year Contract-for-Difference ("CfD") to sell energy produced by a solar PV project in Hungary totalling 50 MW and with expected commercial operation in 2022. With this project, EDPR increases its worldwide footprint by entering in a new market with a sustainable development of its Renewable Energy Source. Hungary expects to increase its solar PV capacity to 6.5 GW by 2030, mostly through an auction-based regulatory framework. 68 ANNUAL REPORT EDPR 2020 As part of its growth strategy, EDPR continues to study worldwide opportunities while developing profitable projects focused in countries with low risk profile and regulatory stability. EDPR's success in securing new long-term contracts reinforces its low-risk profile and growth strategy based on the development of competitive projects with long-term visibility. EDPR approved its new Strategic Plan for the 2021-2025 period At the end of February, EDPR approved its new Strategic Plan for the 2021-2025 period and the main three pillars are as follows: Growth: accelerated and selective growth with +20 GW of additions for 2021-2025; Value: ongoing asset rotation with €8bn of proceeds for the period; Excellence: high quality teams and efficient operations targeting a Core Opex/MW CARG 2021-2025 of -2%. The strategy is set to deliver superior growth through 2025 promoting clean energy while operating in a sustainable way across the three ESG dimensions. By 2025, EDPR targets to have 25 GW of installed capacity, €2.3bn of EBITDA and €0.8bn of net income . EDPR Extraordinary General Shareholders' Meeting Madrid, February 22 nd 2021: EDP Renováveis, S.A. (“EDPR”) informs that at the Extraordinary General Shareholders' Meeting, Shareholders have adopted the following resolutions: • Board of Directors: ratification of appointments of Directors by co-optation. • Ratification of the appointment by co-option as Executive Director of Mr. Miguel Stilwell de Andrade. • Ratification of the appointment by co-option as Dominical Director Mrs. Ana Paula Garrido de Pina Marques. • Ratification of the appointment by co-option as Independent Director of Mrs. Joan Avalyn Dempsey. • Board of Directors: dismissal ( separación ) of Directors. • Dismiss ( separar ) Mr. António Luis Guerra Nunes Mexia of his position as Dominical Director. • Dismiss ( separar ) Mr. João Manuel Manso Neto of his position as Executive Director. • Adjustment of the number of Members of the Board in twelve (12). • Amendment of articles 12 (“Notice of General Meetings”) and 16 (“Chai rman of the General Meetings”) of Articles of Association. • Delegation of powers to the formalisation and implementation of all resolutions adopted at the Extraordinary General Shareholders’ Meeting, for the execution of any relevant public deed and for its interpretation, correction, addition or development in order to obtain the appropriate registrations. All information and documentation of the Extraordinary General Shareholders’ Meeting is also available in the Company´s website ( www.edpr.com ). Information on average payment terms to suppliers In 2020, total payments made from Spa nish companies to suppliers amounted to € 102,986 thousand with an average payment period of 51 days, below the payment period stipulated by law of 60 days. Own shares As of December 2020, EDPR did not hold own shares and no transactions were made during the year. 3.2. Human capital 2020 was a year undeniably characterised by the COVID-19 pandemic. Despite 2020's challenges, EDPR team's commitment and capacity to adapt by working together while apart allowed the Company to keep achieving and surpassing its 2020 ambitious goals while always putting health and wellbeing first. Following the outbreak of the COVID-19 pandemic, EDPR implemented a Response Plan focused on protecting employees, helping local communities and minimizing the impacts on the business continuity and the Business Plan. As a responsible company, EDPR quickly took measures to minimis e the conditions for the virus to spread, focusing on people’s healt h and keeping essential services in operation. In February, EDPR implemented travel restrictions, adopted measures for those who had recently been in affected areas and distributed hand sanitizers in its facilities. In early March, EDPR activated the Contingency Plan and implemented home office in all geographies, which had the support of two pilot projects to implement home office a day per week recently put in place, and restricted visits to its facilities while continuously communicating with employees regarding any updates on the situation and providing instructions in case of a positive or possible infection. At the end of the year, employees continued to have the option to work from home or to gradually return to facilities according to a Reopening Plan with geographical specifications, guaranteeing the highest health and safety standards for all and complying with legal and space limitations. Even during the global crisis, EDPR was able to continue hiring and maintain the promotions, mobilities and training sessions, adapting the processes to the current situation. Employee journey A customised value proposition is offered to employees throughout their journey in EDPR, which allows them to join a multinational team and grow along with it. EDPR believes that motivated workforce aligned with the company’s strategy is one of the key drivers behind the ability to deliver positive results. In this sense, EDPR bases its Human Resources policies on the Business Plan Achievements and implements its actions considering an active listening of the employees. During 2020, the Company launched the Climate Survey as every two years, in which 95% of the employees participated. The results of general employees ’ satisfaction showed improvement comparing to the previous survey, as the levels of EDPR employees’ enablement were of 76% of favourability (comparing to 71% in last survey) and 83% of favourability regarding engagement (73% in the previous survey). In addition, EDPR launched two surveys to evaluate the home office implementation. Firstly, a survey was launched for employees who were working remotely, which formed the majority. Then, a second survey was launched for those who 69 continued in their usual positions, to understand the details of their situation while working on the premises. Both surveys were very well received and had high percentages of employee participation, and employees stressed that the strategy and resources provided by EDPR to address the pandemic were appropriate and successful. Even so, EDPR continuously works to provide excellent conditions for its employees, to grow and develop talent at all levels, and to optimise its employment policies and labour practices. As a result, EDPR has been recognised by the Top Employers Institute as one of the best companies to work for in Europe in 2020 and, at a local level, in Spain, France, Italy, Portugal, Poland and the UK. This certification endorses EDPR as one of the best companies to work at thanks to the journey it offers its employees. The main actions implemented by EDPR in 2020 in this regard are detailed in this chapter. Joining & Integrating Attracting talent EDPR aims to be a long-term market leader in the renewable energy sector and is aware that its team is key to achieve this. Therefore, the Company is continuously striving to attract talent, bringing in the right skills and profiles to address current and future business challenges, and retain professionals who seek to excel in their work in order to position the company as "the first choice for employees" in the labour market. In EDPR, non-discrimination and equal opportunities are guaranteed during all the selection processes. This is reflected in its Code of Ethics, which contains specific clauses on non-discrimination and equal opportunities, in line with the company's culture of diversity and inclusion and the respect for human and labour rights. During 2020, EDPR implemented different talent and attraction initiatives with the goal of strengthening its image as a leading employer: • Pool of Engineers Program: 5 exceptional junior engineers for Tech profiles and different academic backgrounds were selected to join EDPR and be an active part of one of the most compelling junior engineer programs in the market. Through the program, EDPR gives new talents the tools to develop themselves professionally and personally, having the chance to get to know and influence different technical areas, including a tailor-made training program. During this twenty-four-month program, junior engineers will have the opportunity to complete two rotations in EDPR in different technical areas. • Job Fairs: In 2020, EDPR attended 8 job fairs from the most relevant Universities and Business Schools from Spain and Portugal with an assistance of almost 7,836 students. Throughout the year, the job fair events were adapted to the COVID-19 pandemic and done online. EDPR also held an on-site Open Day at its offices at the beginning of the year. • LinkedIn: The platform is used as the main source of Recruitment, covering up to 67% of the Corporate positions hired during 2020. 70 ANNUAL REPORT EDPR 2020 Integrating the team Onboarding plays a critical role in a new hire's success and happiness, and builds relationships that are important to job satisfaction and performance. Aware of this, EDPR has an Onboarding Policy for new hires which details the process and measures to follow when integrating a new employee in the Company. The integration process is more important than ever now, as most companies have transitioned to remote work in response to the COVID-19 pandemic, making completely virtual onboarding of new hires a necessity. A good onboarding process is especially important for remote employees since they don't have as many opportunities to organically integrate into the company processes and culture. With this in mind, EDPR adapted its initiatives to integrate employees whenever possible, striving to make virtual onboarding seamless, dynamic and informative. One of t he measures detailed in EDPR’s Policy is to prepare a meeting with an HR buddy in the employee’s first day . In addition, some new hires have the opportunity to have breakfast with the CEO, a meeting where employees get to introduce themselves personally and ask the Company’s CEO some questions, while also giving the leader some insight from the team. This year, both these meetings were done through interactive video sessions. Also as a part of its Onboarding Policy, EDPR holds an annual Welcome Day event, which is exclusively for new employees. Welcome Day is focused on improving the integration and networking of the new members of the team and includes some short presentations from different business areas of the Company for an introduction on the C ompany’s functioning. In addition, the CEO usually gives a welcome speech to the new employees and participates in a Q&A session, which helps the participants to know and better understand the Company’s strategy . In 2020, there were two editions of this event. One was held in person in January with an attendance of 107 new hires, and another with an attendance of 116 new hires was done online in July, adapting the event to the global pandemic. In addition, EDPR shares a monthly newsletter to its employees where all the new hires ’ names, occupation and country of work are included, fostering their integration. During 2020, despite the global pandemic and economic crisis, EDPR welcomed 441 team members (+20% vs 2019), of whom 29% are women. The new hires represented 16 different nationalities, and their average age was 34 years old. 95% of the new employees correspond to levels of Specialists and Technicians, of which 80% have University degree or above. 99% of the hires were allocated in permanent positions and, furthermore, 113 internships were carried out during 2020. Being EDPR EDPR works daily to create a climate of trust and professionalism among its team to incentivise responsibility and excellent performance. That is why the Company regularly implements activities, measures and campaigns that are important for the employees professional and personal development such as providing an individualised value proposition, creating working conditions that allow employees to grow and bloom, supporting their wellbeing and their families, supporting volunteer activities and promoting diversity and inclusion. All in all, the Company continuously works so that being part of EDPR means to feel fulfilled, treasured and supported. Individualisation Part of EDPR value proposition is a competitive remuneration package aligned with the best practices in the market. EDPR Compensation Package includes (i) an Annual Base Salary and (ii) a Variable Pay depending on the achievements of Area, Company KPIs and an Individual Global Assessment of the employee, and also an (iii) above market practice benefits package such as Health Insurance or Pension Plan. The remuneration package is not static, which means that it evolves at the same pace of employees’ needs and concerns as well as the business. In recent years, EDPR focused on analysing the life-cycle status of EDPR employees including topics such as their generation or if they have children or not in order to offer a tailor-made Benefits Package with an individualised approach from a communication perspective, so that it is adapted to the employees’ needs. This translates into unique professional and personal experiences and development opportunities. 71 Work Life Balance 2020 was a year of uncertainty, change and adaptation in which both physical and mental health were a priority. Now more than ever, promoting a balance between work and personal life is crucial to be a more competitive company and to build a fairer society based on flexibility, respect and equal opportunities. EDPR thus implements various initiatives focused mainly on family, time and health, offering its team a wide range of benefits that strengthen the Company’s position as flexible and family-friendly, and fostering time efficiency of employees’ daily tasks to balance their professional and personal life while still delivering excellent results. Accordingly, EDPR ’s Work Life Balance (WLB) practices have been awarded for nine years through the Responsible Family Employer Certification (EFR – Empresa Familiarmente Responsable) by Spain’s F undación MásFamilia. In 2020, EDPR was awarded with the level of excellence in this certification, recognising the Company’s efforts to balance professional and personal life, excellence and flexibility. To achieve this continuously, EDPR is dedicated to constant improve the initiatives implemented in order to provide the most suitable and updated benefits to its employees. During the year, EDPR launched the “Flex - Movement”, a n initiative to streamline flexibility measures and to improve the conditions necessary to make EDPR a dynamic, innovative and growth-based company. The movement included actions such as facilitating the approval workflow of requests to work from home in exceptional circumstances, and the opportunity to work in any EDPR office in the world up to 15 days a year. In addition, among the novelties announced, EDPR started in February two pilot projects in Spain and Poland to implement home office a day per week. The pilot then worked as a foundation for implementing remote work in a global scale due to the COVID-19 crisis. Later in the year, as a result of the successful implementation of home office globally, EDPR approved a remote work strategy, which will be fully implemented post-pandemic. The Company believes remote work is key to improve flexibility, work life balance and overall wellbeing of its team, whilst still being productive. Therefore, employees will be able to work remotely 2 days per week, where feasible. In addition, the Company created a wellness platform to further development a wellness culture and promote healthy habits. The programs promoted by the platform aim to generate a culture in which employees choose to adopt healthy habits voluntarily, sharing their experiences, forming support networks to facilitate the process and motivating each other. EDPR also shared several health, wellbeing and home office tips in its intranet throughout the year. To raise awareness regarding mental health specifically, EDPR launched the Mind Your Mind campaign in October, which promoted educational talks with specialists, employees and other key speakers on how to approach the topic especially during the current social context. Furthermore, EDPR has a volunteer program addressed to its employees in order to promote social responsibility, giving them the opportunity to grow not only at work but also personally while also contributing to the society. As a result, EDPR employees are given 4 hours a month to dedicate to volunteering initiatives. During the COVID-19 pandemic, EDPR reinforced the volunteering activities proposed, adding initiatives that run on an online model and adding the possibility to make donations to support the health and wellbeing of the society during this global crisis. Diversity & Inclusion EDPR incorporates the principles of Diversity and Inclusion in its values and practices as it is aware that a diverse team helps bring together different perspectives and know-how, and represent different sources of talent. Specifically, EDPR aims to contribute to improving the quality of life of its employees, eliminate career barriers and promote gender equality, seeking to ensure an environment of openness in a workplace where mutual respect and equal opportunity prevail. In 2020, EDPR created a Diversity & Inclusion Committee to promote its commitment to these crucial principles. The main goals of the Committee are to reflect the Company’s strategy on D&I, which integrates the definition and development of initiatives that contribute to a global action plan and local action plans, and to foster sharing knowledge and best practices. Even so, as a responsible company, EDPR aims to actively promote these values among its team. Thus, during 2020, EDPR launched SHE , an interactive game-based learning to mitigate unconscious biases, and launched a Diversity, Equity, and Inclusion online training session. As a recognition of its great commitment to gender equality, the Company entered the Bloomberg Gender Equality Index for the first time in 2020. EDPR is therefore included in the list of 325 companies making the largest strides in the transparency of gender-related information and in promoting women’s equality around the world. EDPR is dedicated to continuously fostering a culture founded on human equality and the strength in diversity and will continue to lead by example. The Company upholds its commitment to Diversity & Inclusion not only through words, but through actions that truly make a positive impact on people. 72 ANNUAL REPORT EDPR 2020 Growing with the company People are EDPR’s most important asset, and that is why the Company invests in intergenerational knowledge sharing and in the ongoing training of its team. In this sense, EDPR is committed to the development of its employees, offering them an attractive professional career and aligning their capabilities and skills with the current and future needs of the company. The growth and development of the Company's business leads EDPR to invest in the employees by discovering, improving and emphasising the potential of each mainly through internal mobility, training and development actions. Mobility EDPR considers both functional and geographical mobility as a tool that contributes to the organisational development by stimulating employees’ motivation, skills, productivity , personal fulfilment and fostering the share of best practices. The mobility processes within EDPR aim to respond to the different challenges and needs of the Company, considering the characteristics of the different geographies. In 2020, despite the global pandemic, there were 85 mobility processes (2 more than in 2019), 62 of which functional, 12 geographical and 11 both functional and geographical mobility processes. Training EDPR offers job-specific ongoing training opportunities to contribute to the improvement of knowledge and skills, as well as specific development programs aligned with the Company's strategy. The 360 potential appraisal process is created for all e mployees with the goal of defining each person’s training needs along with their manager, which is then used to define a customised Training Plan. The annual Training Plan is based on a catalogue of programs that is constantly evolving and is aligned with the Company’s challenges and new markets. The key aspect about the courses offered is that they usually contain subjects to promote the development of skills needed to ensure the sustainability of EDPR’s business. Moreover, the networking and the share of best practices foster innovation and improve performance During 2020, EDPR delivered a total of 49,505 training hours throughout 2,627 sessions that included 28,588 participants. This translates into an average of 30 hours of training per employee and results in 96% of EDPR ’s team receiving training. The challenges that the COVID-19 pandemic brought to the training activities were successfully overcome by redesigning and adapting training contents and sessions to virtual, e-learning or remote formats. This effort allowed to maintain the main training ratios aligned with previous years, increasing the training courses delivered in e-learning, live webinars or other non- synchronous including game-based training (a total of 76% of training hours or 93% of the attendances were delivered in online methodology). Therefore, EDPR highlights Digitalisation as one of the main training drivers that accelerated during 2020 as a result of the methodologies and by contents increasingly delivered on Collaborative Tools (Microsoft 365 suite), Agile methodologies, Data Analyse tools, Cybersecurity, use of Drones, SMART business or Artificial Intelligence. Knowledge management EDPR is aware of the importance of Knowledge as a valuable asset within the business and in employees’ development. Thus, EDPR is boosting LINK as a knowledge platform increasing the number of areas, domains and curated documents with valuable content captured and shared across the organisation, to help its employees learn from the past to face future challenges and move the company forward. During 2020, EDPR launched 40fiveminutes , an online initiative to easily share main business insights in a friendly and informal way to those employees who sign up to the sessions. Becoming a Learning Organisation implies a strong knowledge sharing mind-set, so EDPR strives to improve the use of knowledge by regularly distributing customised relevant documents or events, working to overcome additional challenges brought by COVID-19. Development In order to support the company’s growth, aligning current and future organisational demands with employees’ capabilities as well as to enhance their professional development, EDPR has designed development programs for middle management, providing them with proper tools to take on new responsibilities as well as to adapt to the new challenges leading teams remotely. In 2020, one of the most important development programs was the Lead Now Program, which aims to support middle managers in the role they are assuming as team leaders. Participants have the possibility to self-assess their management style, go deeper into the skills needed and get to know the role they are performing in the different HR processes of EDPR. Through short online sessions, 3 editions took place in 2020 and reached 42 employees. Despite the pandemic, EDPR worked to adapt the development sessions to a new online format and maintained the internal promotions. 73 74 ANNUAL REPORT EDPR 2020 +4,300 suppliers contribute to EDPR’s success Total invoiced volume Suppliers in EU&BR: 37% 1 Suppliers in NA: 63% 1 97% 2 local purchases at country level 3.3. Supply chain capital EDPR’s market leadership, based in value creation capacity, innovation and relationship with its stakeholders, is much influenced by the performance of its suppliers. Technical excellence together with sustainability is the basis of EDPR relationship with suppliers. This results in close collaboration, joint capacity to innovate, strengthen the sustainability practices and improve the quality of the Company’s operations. Key data EDPR ’s supply chain EDPR has a strong and permanent interaction with its supply chain, in particular with the strategic suppliers understood as WTG (Wind Turbine Generator) manufacturers and suppliers, Balance of Plant (BOP) and Operation and Maintenance (O&M) contractors. Those suppliers contribute in a meaningful and visible way to the value of EDPR core activities – construction and operation of wind farms and solar plants. This close relationship allows EDPR to benefit from all the new technical solutions and innovations available on the market to maximise the value creation in the projects worldwide. High quality and sustainable procurement EDPR’s procurement process is developed within the framework of the Procurement Policy, which extends to EDPR’s both direct and indirect suppliers, and from which the most relevant aspects for EDPR regarding the supply chain’s high quality and sustainability are established: development of activities that promote the sharing of the best sustainability practices in EDPR purchases; contribution to the growth and profitability of the business through the promotion of initiatives for the progress and continuous improvement of the supply chain; systematic monitoring of suppliers’ performance and risk profile; dissemination and implementation of EDPR’s sustainability policies (Environmental and H&S policies and Code of Ethics) in the acquisition of goods and services and involvement and empowerment of all actors in the supply chain. Implementation of the Procurement Policy leads to a better con trol in the suppliers’ management process, assuring EDPR values are respected, product quality is high and risks are minimised. EDPR has in place requirements related to Sustainability, Quality and Risk management that have to be met by its suppliers throughout the main procurement phases: registration process, contracting and, lastly, the monitoring and evaluation of the suppliers. 1 Weight of each platform on the total invoiced volume in 2020. 2 EDPR defines spending in local suppliers at a country level as purchases to suppliers in countries where EDPR is present divided by the total invoiced volume in 2020. 75 Registration The registration process is an indispensable requirement for any company who intends to become a supplier or apply for a qualification process issued by EDPR. The Corporate System of Supplier Registration of the Company works as the support to search and select suppliers by providing detailed information, validated and updated by credible sources in order to guarantee their accreditation through financial, technical quality and sustainability criteria. In 2020, EDPR implemented a Supplier Qualification Process. The main goal of this process is to provide a more thorough analysis on critical topics such as technical capabilities, health and safety, environment and ethics, and to establish highly standardised minimum requirements to ensure that the suppliers with whom EDPR conducts business are qualified. The qualified suppliers are included in a Suppliers Qualification List and are able to participate in the EDPR bidding and contracting processes. Contracting The incorporation of adequate criteria in the bidding and contracting processes of the company is essential to ensure the management and mitigation of operational risks in the supply chain. In Europe & Brazil, EDPR has a Suppliers Sustainability Guide in place for both construction and O&M operations, providing an overview of the sustainability requirements EDPR expects its suppliers to meet. The guide includes H&S, environmental and ethical requirements such as compliance with applicable regulations, policies, internal norms, procedures and systems in place. In addition, EDPR has implemented a process that classifies suppliers according to their H&S and environmental risks. The classification serves as an input in the selection of suppliers during the bidding phase. Based on the individual values obtained in this classification, suppliers may be excluded from the bidding process. If the supplier wants to be re-considered or participate in new processes, an action plan to solve the identified issues has to be presented and EDPR shall approve the action plan proposal. Adequate compliance by all EDPR suppliers with applicable H&S and environmental requirement is essential to guarantee the correct performance of the contracted services and works. Aiming to ensure that suppliers comply with these requirements, the Company has established a disciplinary and sanctioning regime, which is included in all requests for proposal, contracts and purchase orders so any provider will be always informed about the consequences of not complying with EDPR H&S and environmental requirements. In parallel, financial capacity of the suppliers and their insurance policy are e valuated according to the EDPR’s Credit -in procedure that defines the requirements to ensure the compliance with EDPR’s Counterparty Risk Policy and the proper follow-up of active guarantees. EDPR Counterparty Risk Policy sets the methodology and process to measure counterparty risk of new contracts, monitor counterparty risk of existing contracts, define in which moments and situations it should be used and establish guidelines and mitigation instruments to reduce counterparty risk when they exceed established limits. Monitoring and evaluation In order to guarantee that the suppliers comply with the previously mentioned requirements, EDPR monitors strategic suppliers during their services delivery. EDPR performs internal inspections during the construction and operation phases to monitor the suppliers performance regarding environmental and H&S aspects and to identify potential risks. In 2020, EDPR performed 1,262 inspections to 156 suppliers regarding EHS procedures. As a result, the Company identifies corrective actions needed and establishes an action plan for continuous improvement. Furthermore, EDPR hires an external party for additional supervision in these areas. These processes are reinforced by the integrated Health and Safety and Environmental Management System, which was developed and externally certified in 2020 according to international standards ISO 45001 and ISO 14001. Moreover, EDPR has Compliance questionnaires related to the anti-corruption practices of the suppliers to ensure that they are all aligned with EDPR’s Anti -Corruption Policy. In addition, EDPR approved of a Third Party Integrity Due Diligence procedure in 2020, reinforcing the mechanisms for identifying and preventing possible integrity risks for EDPR in the relationship with third parties. All parameters of the Qualification system are periodically reviewed and reassessed by EDPR to guarantee that supply chain performance remains on the high quality level required. 76 ANNUAL REPORT EDPR 2020 3.4. Social capital EDPR believes it is indispensable to contribute to the development of the society respecting both human and labour rights and creating value in different ways, for different people. With this in mind, the Company is guided by four key social responsibility principles: guarantee the highest health and safety standards, respect human and labour rights in the whole value chain, contribute to the society and promote access to energy for all. 3.4.1. Guarantee the highest health & safety standards The health and safety of those who contribute to EDPR’s activities is a key value and a priority for its success. Therefore, the Group aims to promote and build on a positive safety culture in which every employee, service provider and supplier is engaged. According to its Code of Ethics, EDPR undertakes to give priority to the employees and suppliers’ safety, health and wellbeing and to ensure the development of appropriate occupational health and safety management systems. The commitment to guarantee the welfare of employees and contractors is supported by EDPR’s Occupational Health and Safety Policy. In 2020, EDPR updated this policy after carrying out its in-depth and detailed review, mainly to ensure it is line with the new demands and trends of work motivated by the evolution of the business and the digitalisation of processes. In 2020, the COVID-19 pandemic resulted in a new way of living and working through strengthened H&S measures, adaption of work arrangements, and management of stress and other psychosocial risks. Following the initial outbreak of the pandemic, EDPR implemented a Response Plan focused on protecting employees, local communities and the business continuity, quickly taking measures to minimise the conditions for the virus to spread, focusing on people’s health and keeping essential services in operation. In February, EDPR implemented travel restrictions, adopted measures for those who had recently been in affected areas and distributed hand sanitizers in its facilities. In early March, EDPR activated the Contingency Plan and implemented home office in all geographies and restricted visits to its facilities, while continuously communicating with employees regarding any updates on the situation and providing instructions in case of a positive or possible infection. At the end of July, AENOR granted an external certification to EDPR’s protocols and action guidelines that had been implemented during the COVID-19 pandemic. The certification, which was renewed through a new audit in October, highlights and recognises the proper application of good practices throughout the management process of the pandemic, and also verifies that the implemented protocols are in accordance with the regulations and best practices set out in order to deal with the risks associated with COVID-19 in the Company’s facilities. The certification covers all of EDPR's activities: project development, construction and operation, and all the associated activities developed by EDPR. At the end of the year, employees continued to have the option to work from home or to gradually return to facilities according to a Reopening Plan with geographical specifications, guaranteeing the highest health and safety standards for all and complying with legal and space limitations. In addition, the Company created a wellness platform to further develop a wellness culture and promote healthy habits. The programs promoted by the platform aim to generate a culture in which employees choose to adopt healthy habits voluntarily, sharing their experiences, forming support networks and motivating each other. EDPR also shared several health, wellbeing and home office tips in its intranet throughout the year. To raise awareness regarding mental health specifically, EDPR launched the Mind Your Mind campaign in October, which promoted educational talks with specialists, employees and other key speakers on how to approach the topic especially during the current social context. Even though 2020 was an atypical year, the Company gave its best effort to adapt to the current pandemic focusing mainly on preventing infections, arranging its work activities to implement a global home office regime, preparing an adequate plan to return to the physical facilities and raising awareness for mental health and wellbeing, while always putting the health and safety of its employees first. 77 EDPR team's commitment and capacity to adapt by working together while apart allowed the Company to keep achieving and surpassing its 2020 ambitious goals. In line with its Business Plan, the Company built 1,580 MW during the year, comparing to 888 MW in 2019. This growth is consistent with the increase of worked hours (+57% YoY) which, in turn, is reflected on the number of work-related injuries. During 2020, EDPR registered 24 work-related accidents with absence for employees and contractors, compared to 10 in 2019. The injury and the lost day rate were 1.9 work accidents per million hours worked and 68 days lost due to work accident per million hours worked, respectively. Nonetheless, EDPR continuously works to improve these ratios and to bring awareness to the best H&S practices. Following the reference provided by the international standards ISO 14001:2015 and ISO 45001:2018, EDPR merged the Environmental Management System with the H&S Management Systems for a more global and efficient approach, simplifying processes and managing the potential risks of its activity. In 2020, the new Health, Safety and Environment Management System (HSEMS), where synergies play a fundamental role, was implemented and jointly certified by an independent certifying organisation. The implementation of this integrated system allows for better management and prevention of future accidents, with the objective of zero accidents overall. The commitment to health & safety is further supported through the ISO 45001 certification. By the end of 2020, this certification covers 100% 1 of EDPR’s installed capacity. 3.4.2. Respect human and labour rights At EDPR, it is top priority to promote human rights and fair labour practices across the entire value chain. The Company is committed to integrate the social aspects in planning and decision-making and to guarantee responsible operations throughout the whole lifecycle of its business. As a result, EDPR undertakes to respect and foster due respect for these practices within the Company and in its supply chain, as well as to provide dignified working conditions for all. This is reflected in the Code of Ethics, which contains specific clauses regarding non-discrimination and equal opportunitie s, in line with the Company’s culture of diversity and respect for human and labour rights. The Code is not an isolated feature – it belongs to an Ethics Framework that includes functional units, specific regulations, monitoring and accountability for our ethical performance, along with training, awareness-raising and capacity building for employees, service providers and suppliers. EDPR requires its suppliers and service providers to comply with their ethical standards. In this way, the alignment with the spirit of EDPR’s Code of Ethics is required. Moreover, the Sustainable Procurement Policy references the promotion of respect for dignity and human rights, and the rejection of any form of forced labour or child labour, harassment, discrimination, abuse or other types of physical or psychological violence. A Code of Ethics channel is available for the communication of any breach of the Code related to the matters of human rights or labour practices, including those in the context of the supply chain. The Ethics Ombudsman receives ethical-related complaints, investigates and documents the procedure for each of them. A preliminary report is then submitted to the Ethics Committee, whose main goal is to ensure compliance with the Code of Ethics within EDPR. As a responsible company, EDPR incorporates the principles of Diversity and Inclusion in its values and practices as it is aware that a diverse team helps bring together different perspectives and know-how, and represent different sources of talent. Specifically, EDPR aims to contribute to improving the quality of life of its employees, eliminate career barriers and promote gender equality, seeking to ensure an environment of openness in a workplace where mutual respect and equal opportunity prevail. In 2020, EDPR created a Diversity & Inclusion Committee to promote its commitment to these crucial principles. The main goals of the Committee are to reflect the Company’s strategy on D&I, which integrates the definition and development of initiatives that contribute to a global action plan and local action plans, and to foster sharing knowledge and best practices. 1 Calculation based on 2019YE installed capacity. EDPR certifies the facilities the year after the COD (commercial operating date). Thus, the facilities that have entered into operation in 2020 will be certified in 2021. 78 ANNUAL REPORT EDPR 2020 3.4.3. Contribute to the society The Company believes that besides excelling in the way it performs, there must be a main factor weighing in every action or activity EDPR does – people. The Company considers that in order to have a positive impact on society, it is vital to work for the common good by promoting and supporting social investment activities. EDPR’s Social Investment is developed within the fra mework of its Social Investment Policy, which establishes the corporate objectives and strategies related to this area. As a result, EDPR invests in activities that will positively impact the promotion and development of the following four main priorities: • Lift Up Our Heritage: Protect and promote cultural heritage, local traditions and access to culture and art, contributing to a more vibrant and creative society; • Build Up Community: Build thriving and inclusive communities by improving the living conditions of those in need and supporting the wellbeing of people near our projects, and focus on enhancing energy inclusion and access to energy; • Enhance Our Environment: Promote and protect biodiversity and natural heritage for the benefit of society members; • Brighten Up Our Future: Promote energy efficiency, renewable energy and decarbonization through increased awareness, supporting education on renewable energy for all. As an integral part of the communities where it operates and as stated in its Code of Ethics, EDPR undertakes to maintain a relationship of proximity with the local communities engaging in regular and open dialogue, seeking to know their needs, respecting their cultural integrity and looking to contribute to improve the living conditions of local population, taking measures to consider and respect the community interests. Therefore, in line with its Social Investment Policy and the communities’ needs and expectations, EDPR has defined a Catalogue of Activities that works as a tool for defining the social investment made in local communities. In addition to the development of social activities, EDPR provides long-lasting economic benefits to the surrounding areas that include, but are not limited to, infrastructure investments, tax payments, landowners’ royalty payment s and job creation. EDPR’s social investment in local communities during 2020 was much influenced by the COVID-19 pandemic. Faced with this unprecedented situation, EDPR carried out a solidarity campaign distributing over €1 million in aid and setting up initiatives in all its markets to help local communities overcome the pandemic and recover from the socioeconomic crisis. EDPR helped people in need mostly through donations to food banks, purchases of healthcare equipment, medical devices and rapid testing kits, and the facilitation of online learning and digital educational materials. The Company has provided support in all 15 countries where it is present: Spain, Portugal, France, Belgium, Italy, Poland, Romania, Greece, Brazil, Colombia, USA, Canada and Mexico, as well as Mozambique and Nigeria through the A2E program. EDPR’s response to the global crisis is aligned with its commitment to preserve a relationship of proximity with the local communities and support its development. However, as a responsible company, EDPR works to promote the well-being and development of not only the communities where it operates but also of society in general, focusing on the people who contribute to the success of the Company’s business and how society may benefit from it. In addition, EDPR has a volunteer program addressed to its employees in order to promote social responsibility, giving them the opportunity to grow personally while also contributing to the society. During the COVID-19 pandemic, EDPR reinforced the volunteering activities proposed, adding initiatives that run on an online model and adding the possibility to make donations to support the health and wellbeing of the society during this global crisis. In 2020, EDPR invested in the development of the society mainly through internally developed and collaborative initiatives, donations to charitable organisations and volunteering activities. 79 Key data 3.4.4. Promote access to energy for all As a global leader in the renewable energy sector, EDPR defined a clear strategy for promoting Access to Energy (A2E): to provide clean energy in developing countries based on energy efficiency and decentralised renewable energy solutions, that promote the sustainable development of the communities involved. Access to renewable energy makes the difference for people not connected to the electricity grid not only by providing sustainable energy services but also by enabling improvement on health and education conditions, job creation and new economic activities. Moreover, the use of clean energies and the promotion of energy efficiency has a positive impact on the environment. In 2018, EDPR purchased a stake in SolarWorks!, a company engaged in the marketing of decentralised solar energy solutions for off- grid domestic and business customers in Mozambique. The acquisition of the €2.2 million minority stake was an important step in the group's strategy for universal access to sustainable energy. In 2019, EDPR reinforced its strategy to promote universal access to sustainable energy by investing $2.9 million in Rensource, a company that develops and manages decentralized solar energy systems, to support its expansion in Nigeria. The investment, which was the result of a financing initiative completed by EDPR and other international investors, allowed EDPR to participate in Africa's largest market and to bring sustainable, low-cost energy solutions to more communities. These investments confirm the progress of the A2E strategy, which in cludes the commitment to invest €20 million until 2022 with the goal of impacting 550,000 people in developing countries. The A2E initiative powerfully contributes to make EDPR’s vision of a sustainable, safe and healthy world a reality . 3.5. Natural capital Wind and solar power are two of the most environmentally friendly ways of producing energy and actively contribute to the decarbonization of the economy. Even though EDPR's business inherently implies a positive impact on the environment, the company continues to work on a daily basis to hold itself to a higher standard. The Company’s sustainable future depends on solid performance efforts during the development phase. Therfore, EDPR implements relevant measures during this stage to identify and prevent the impacts of its activities on the environment. After identifying sites with top-class resource conditions, EDPR carries out environmental viability studies to detect the environmental constraints to take into consideration throughout the remaining phases of the value chain. The potential environmental impacts of each project are assessed in detail in the Environmental Impact Studies and other specific studies, and are always performed by professional external experts. These studies evaluate the potential impacts that a project may have on environmental aspects such as fauna, flora, soil, air and water bodies, among others. This process ensures the location of projects in the best sites, guaranteeing respect for the environment. During 2020, EDPR invested more than 4.4 million euros in Environmental Impact Studies of its projects in the development phase. The construction process is closely followed by EDPR teams, who work to minimise potential impacts or disturbances and to ensure proper restoration of the land once the works finish. Even so, since the success of the construction phase highly depends on suppliers, EDPR requires that they adopt all necessary measures to ensure strict compliance with all applicable environmental regulations as well as EDPR's Environmental Policy and internal norms, procedures and systems in place as regards to environmental management. In order to guarantee that the suppliers comply with the environmental requirements during constructions, EDPR has an environmental monitoring plan in coordination with the Construction Manager and the suppliers, which is implemented by an external party and includes the environmental surveillance during the construction works. Within this framework, the Company performs internal inspections to monitor the suppliers environmental performance during construction. In 2020, EDPR performed about 450 inspections to more than 50 suppliers regarding their environmental and H&S procedures during the construction of the Company’s projects. Beyond the emissions related to the operation phase, from a life cycle point of view, others shall be considered (manufacture of components, transport, construction...). 80 ANNUAL REPORT EDPR 2020 1 According to the life cycle assessments of our main turbine suppliers. EDPR's Environmental Policy assumes specific commitments with the protection of the climate, the engagement with biodiversity and the preservation of natural resources. This policy allows EDPR to control, manage, communicate and to ensure the continuous improvement of its environmental performance along the entire value chain. EDPR produces renewable energy, which inherently implies the reduction of GHG emissions. Wind and solar energy have zero carbon emissions and do not produce harmful SOx, NOx or mercury emissions, protecting valuable air and water resources and contributing to the world's fight against climate change. Also, generation from wind and solar energy does not consume water in its operational processes. Even so, as stated in its Environmental Policy, EDPR seeks to prevent, correct or compensate the potential impact of its activities on the environment through a set of commitments that ensure the implementation and maintenance of an effective Environmental Management System (EMS). Following the reference provided by the international standards ISO 14001:2015 and ISO 45001:2018, EDPR merged the Environmental with the H&S management systems for a more global and efficient approach, simplifying processes and managing the potential risks of its activity. In 2020, the new Health, Safety and Environment Management System (HSEMS), where synergies play a fundamental role, was implemented and certified by an independent certifying organization. In 2020, EDPR's operations avoided the emission of 18.5 million tons of CO 2 . The CO 2 emissions related to EDPR's activities represent 0.2% of the total amount of emissions avoided. As a responsible company, EDPR has two main aspects in consideration when dismantling a wind farm at the end of its useful life: land restoration and proper treatment of the wastes generated. Even though EDPR works to minimise any impact on the land surrounding its facilities, the Company commits to clean up and rehabilitate the sites to return the area to its initial state. In 2020, EDPR developed a guide for environmental management during the dismantlement phase to serve as a framework of best practices to follow and environmental aspects to keep in mind when dismantling a project. The main waste generated during this phase are dismantled turbines. EDPR prioritises their reuse by keeping some pieces for future repairments, selling some of the material to third parties and recycling it.The wind turbine is around 80%-90% 1 made of recyclable material, as the missing percentage is related to the turbine's blades that are composed and manufactured by complex materials chat make it hard to recycle. In this regard, EDPR is working to support processes to recover the blades and encourage circular economy. In 2020, EDPR finished the morphological and vegetal restoration of the Zas wind farm in Spain, which was dismantled for repowering in 2019, restoring 100% of the hectares impacted. EDPR wind farms with a projected life span of 30 years will pay back its life cycle energy consumption in less than a year', meaning, more than 29 years of a wind farm's life will be producing clean energy. 81 82 ANNUAL REPORT EDPR 2020 3.6. Digital Capital The digital journey is a never-ending transformation given the rapid evolution of Technology and its big impact on the Business and the People. The digital journey is a never-ending transformation given the rapid evolution of Technology and its big impact on the Business and the People. “Digitali s e” is one of the action verbs of EDPR, that includes a very significant number of innovative projects with the same purpo se: “Business transformation” and “Business culture”. In the end, the focus is continuously improving user experience and operation to maximise operative efficiency and revenues, ensuring the best practices supported by technology and new trends: Robotics & Automation, Analytics, Big Data & AI, AR/ VR, Blockchain, Digital Platforms, Drones, Internet of Things (IoT) and “Mobile e Social Media”. During 2020, EDPR invested €12 million during in Digital projects and obtained a score of 3.48 on a scale of 1 to 5 in the “IDC Digital Maturity Index” (compared with 3 .02 of score in 2019). The “Digital Maturity Index” is an internal evaluation that fosters the continuous improvement mindset in EDPR. In 2020, the followed model was stablished by IDC, “The Future Enterprise”, based in five pillars: 1) Leadership at scale; 2) Empathy at scale; 3) Work model at scale; 4) Resilience at scale; 5) Insight at scale. Digital transformation is one of EDPR's strategic pillars for the coming years, as we must continue to improve our digital capabilities to stay competitive with our peers as we continue to grow. EDPR’s digital strategy involves not just the use of new technologies, but also upskilling and reskilling people to use these technologies, along with a clear definition of the processes that will change from physical to digital. 83 Technology The focus of digitalisation is seen as the way to achieve the necessary capacity to adapt in new contexts and to maximise efficiency in the operation (characterised by high-level performance, in a global geography). EDPR participated in different typologies of IT/OT projects adapting it to the different business challenges specific needs and level of maturity, to ensure that initiatives are accordingly followed with the best practices of architecture and security: • “ Quick- wins” (small proof of concept; until 2months) • “mVP” (“minimum Viable Products; from 3 months and until 6 months) • “Core IT projects” (projects or products to support of business units operation and is included all operation, maintenance and technological evolution of applications and infrastructure such as Big Data) In 2020, EDPR participated in 15 mVP’s and 7 “quick - wins” and the “Core IT” projects were marked by the commitment to use Cloud applications, with more than 70,000 hours spent in development and maintenance. Big Data technologies continue to be strongly explored by EDPR and it is considered the most appropriate way to respond to the organisation's operational data management needs and as a great solution to support the decision-making of market strategies. Additionally, within the scope of EDPR Core IT projects, stands out the transformation of the management model to the “Agile methodology”. EDP Group has been changing management of its projects, transforming them from a Waterfall to Agile methodology in order to achieve a greatest flexibility and alignment of all stakeholders (from the developer to the final client), improving team communication and the success delivery of requirements reducing the time to market. Moreover, Cybersecurity is increasing and it is one of the main points for the operational Business and strategic information definition of the Company. For these reasons, the Security Department has been taking a series of actions to improve its indexes. The BitSight rating is focused on the organisation's cybersecurity risk, with less elasticity. It should be noted that by the end of 2020, EDPR obtained the rating of "Advanced", with 790 points. 84 ANNUAL REPORT EDPR 2020 Processes EDPR is focused on ensuring that business processes are clear, efficient, aligned with business needs, and known to all stakeholders. As such, EDPR’s Process Map is based on EDPR Value Chain and critical processes are aligned towards meeting business objectives. In 2020, the efforts were focused on automating and digitalising processes to achieve business requirements with greater efficiency and to help employees spend less time on repetitive tasks. Several programs have been launched to fast-track digital transformation at EDPR: • The Plan for Optimisation of Administrative Processes has been launched to identify business needs in terms of process digitalisation and automation for every Department in the company. More than 273 initiatives have been identified that would enhance process automation along the different stages of the value chain. • The use of digital process technology was a priority and an important step to provide digitalisation in support of knowledge work. Moreover, this technology is key to accelerate digitalisation of processes. • The increasing evolution of Robotic Process Automation (RPA) technology represents an important milestone at EDPR. This technology is performing many of the repetitive and mundane tasks that would have previously fallen on multiple employees across a variety of departments. Currently, 201 different automations are in place throughout EDPR, saving 89,000 hours of employee time and enabling employees to focus on activities that are more valuable. The challenge in process optimisation is t hat there’s no one -size-fits-all formula: every process needs to be assessed individually. The future is to work smarter, not harder! vs 150 in 2019 vs 40,000 in 2019 vs 70 in 2019 85 People Every change in culture must start with people and when talking about Digital Transformation it means a change in our mindset to become more digital. Digital transformation only takes place if the people with the necessary skills are involved in the process. Following the training roadmap initiated in 2019 on Digital Upskills, in 2020 different initiatives have been launched towards empowering people in this Digital Transformation Process. "Digital Upskills" is an initiative implemented in 2020, based on the monitoring of digital skills and know-how of employees. The intention is to reinforce an increasingly digital culture and to give new capacities in this phenomenon that are in constant changing. These initiatives are based on the 70-20-10 development methodology, so the roadmap includes not only training moments (10), but also learning initiatives through knowledge sharing and relationship development (20), as well as through on-the-job experiences (70). During 2020, EDPR delivered 9,496 training hours (19.2% of the total) with 10,753 attendances (37.6%), highlighting ongoing digitalisation initiatives on Cybersecurity, collaborative tools of the O365 suite, exclusive TECH SERIES for the Digital Champions Community (about IA, Being SMART and other cutting-edge topics). In addition, digital contents were another important pillar of the digital skills transformation: new resources coming from eLearning solutions, recorded webinars conducted internally by employees or the recent addition of the UDEMY for Business portfolio with +5,000 online courses added to the learning offer at EDPR. At the end of 2020, 81% of the employees received training in digitalisation during the year, reaching a cumulative total of 86% of the headcount in the period 2019-2020. EDPR maintains the discussion during regular meetings in our Digital Skills Committees composed by the main stakeholders in this field and lead by the CEO whose main objective is to foster digital skills or mindset as part of the Digital culture and promote collaborative skills to work more efficiently, the automation or robotisation of tasks and processes as part of the digital transformation path. Employee involvement is considered key in this process and therefore the Digital Champions community remained active during 2020. Employees with special digital capabilities, ability to work with collaborative tools and specific knowledge and concerns on digital technologies are part of this program to extend the Digital Mindset throughout the Organisation. New initiatives are expected to be launched regularly in order to reinforce and ensure that a digital culture is spreading all over the Company and that everyone is on board with the changes that will happen across the business. 86 ANNUAL REPORT EDPR 2020 3.7. Innovation Capital Technical innovation is one of the hallmarks of EDPR. The Company ’ s history is built on the continuous searching of new trends and solutions in energy production to meet its stakeholders expectations. Accordingly, EDPR develops projects within the framework of its two main strategic pillars for Innovation: Cleaner Energy focused on sustainable power generation, and Energy Storage & Flexibility to ensure a smoother transition to an energy mix system. WIND Repowering When approaching the end of its lifespan, wind turbines need to be assessed. One of the solutions implemented by EDPR is repowering the wind farm, which means reducing the overall number of wind turbines and replacing them with more efficient ones. This results in a net increase of power generated, reduced O&M costs, reduced land area per MW and, due to the use of more modern wind turbines, a better integration with the grid and reduced noise pollution. Last year, EDPR successfully repowered its first wind farm, located in Spain. During 2020, EDPR had another wind farm in Spain going through this repowering process, and will continue to implement this solution throughout its portfolio. Predictive Diagnostics & Performance Improvement Through advanced analytical technics, EDPR detects failures in early stage or high degradation levels in components/systems to avoid unplanned maintenance. EDPR’s m ain focus has been in detections in major components (Gearbox, Generator, Main bearing, etc.), repairing uptower instead of replacing the components or saving offline time, but also includes other detections with lower impact in other systems. After investigating the most important technical issues which impact production losses or costs, EDPR installs retrofits to reduce/mitigate that impact and foster performance improvement. These include simple retrofits like changing the position of a sensor, or major SOLAR Bifacial panel EDPR is participating in some innovative projects to collect more data and know-how on new technologies of solar energy with the objective to anticipate trends and to improve return of investment (ROI) in this technology. An example of one of these projects, which started in 2020, is a photovoltaic system with innovative bifacial panel and 1 axis tracker, in Évora, proven to be more efficient than a traditional alternative. Controlling, monitoring and optimising software In 2020, EDPR installed the TrueCapture technology software in two of its solar sites in North America to increase annual energy production (IAEP). In this initiative, TrueCapture technology allows each row to be tracked independently, providing a greater energy output of the PV plant based on two algorithms: Row-to-Row (R2R) and diffuse. CLEANER ENERGY 87 EDPR’s commitment to innovation and new technologies has made it a leader in the renewable energy sector. Currently, the Company continues to take advantage of all expertise obtained since the start of its inception to ensure more efficient solutions, more attractive returns and a more sustainable future. As a result, EDPR engages in projects that englobe wind energy, solar energy, energy storage plants, floating offshore wind farms, green hydrogen and hybrid power plants. BATTERY STORAGE Energy battery storage EDPR has been working in different projects of energy battery storage. Energy storage reserves renewable energy supply for periods of high energy demand. Increased energy storage capacity can lead to cost savings on both sides of the meter and can improve the overall efficiency of the grid through reduced cycling and changes in output, resulting in lower emissions. In this context, EDPR developed a combination of solar and storage which was designed to increase efficiency and provide greater balance in energy supply. This r epresented the Company’s first Power Purchase Agreement (PPA) with operative storage system (200 MW of solar energy and 40 MW of energy storage). EDPR also is testing the use of energy storage system integrated at a PV Station (DC-coupling level) to validate relevant functionalities in this type of solutions (namely clipping recapture, low voltage and cloud-cover energy harvesting, among others). In addition, EDPR is also present in strategic projects in order continuously develop knowledge in the storage area. A great example of these types of pilot projects is “STOCARE”, a power plant where EDPR is studying the application of energy storage combined with wind energy generation. HYDROGEN Green hydrogen Green hydrogen is gaining relevance on the European scene and the European Commission has announced its strategy in 2020, which sets more ambitious targets for this energy and, in parallel, alliances are being established to lead the implementation. Portugal and Spain have a prominent position and believe that hydrogen business can help achieve: • Decarbonization • Renewables empowering (to establish renewables revenue) • Storage & Flexibility improvement EDPR participated in some initiatives and projects of green hydrogen in 2020, including onshore and offshore systems to evaluate its potential, and it will continue studying what is the best approach of the organization and the right time to consolidate to bet on this promising solution of green energy production. ENERGY STORAGE & FLEXIBILITY CLEANER ENERGY …ensuring decent work, gender equality & preservation of the environment. EDPR continuously works to provide excellent conditions for its employees, grow and develop talent at all levels and optimise its employment policies and labour practices. As a result, EDPR has been recognised by the Top Employers Institute as one of the best companies to work for in Europe in 2020. EDPR’s Code of Ethics contains specific clauses of non-discrimination and equal opportunities, fostering respect for all employees. The commitment of the company to equality and advancing women in the workplace was further recognised when EDPR entered the Bloomberg Gender-Equality Index for the first time in 2020. EDPR’s business is its best contribution to reduce biodiversity loss. Nevertheless, the Company’s commitment to contribute to the protection of biodiversity leads to an active role in the conservation of wildlife surrounding its facilities. In 2020, EDPR finished the morphological and vegetal restoration of the Zas wind farm in Spain which was dismantled the previous year, restoring 100% of the hectares affected by the project. …impacting positively on communities & fostering innovative infrastructures & circular economy… EDPR works to promote the wellbeing and development of the communities where it operates and of society in general. In 2020, due to COVID-19 pandemic, EDPR carried out a €1 million solidarity campaign to help local communities overcome the global crisis and adapted its volunteering activities to an online model. Nonetheless, EDPR maintained its social investment strategy, investing a total of €2.5 million in the development of social activities during the year. Innovation is part of EDPR’s day-to-day reality. The Company is focused on the more disruptive technologies of the industry and is committed to foster innovative solutions throughout its entire value chain. In 2020, EDPR centred on promoting digital skills and 81% of its employees participated in digitalisation trainings. Even though EDPR is in the renewable energy business, it goes beyond its commitment with sustainability by fostering a culture of responsible operations and circular economy. In 2020, EDPR recovered a total of 76% of the waste it generated, and 94% of the hazardous waste generated. EDPR supplies affordable & clean energy while mitigating the climate change… EDPR is a global leader in the sector of renewable energy and one of the world’s largest wind energy producer, ending the year with 12.2 GW of installed capacity. In 2020, the Company generated 29 TWh of clean energy, a cost-effective way to fight climate change. Wind and solar power are two of the most environmentally friendly ways of producing energy. EDPR’s business inherently implies the reduction of GHG emissions and therefore has a positive impact on the environment. In 2020, EDPR’s activities avoided the emission of 18.5 million tons of CO 2 . SUSTAINABLE DEVELOPMENT GOALS 3.8. 88 ANNUAL REPORT EDPR 2020 P E FROM STRIVE TO THRIVE O Changing tomorrow now. Changing the world is a team effort Changing tomorrow now. 04 Materiality assessment 93 Climate change 95 Economic business sustainability 100 Health & Safety 101 People management 106 Corporate governance 121 Suppliers management 122 Community engagement 125 Innovation 127 Environmental management 128 Ethics and Compliance 132 Communication and transparency 134 Digital transformation 137 Reporting principles 138 Annex I: State of consolidated non-financial information 139 Annex II: GRI Content Index 143 Annex III: Independent Assurance Report 147 SUSTAINABILITY 93 Sustainability 4.1. Materiality assessment The macro-economic context, where the challenges of sustainability are increasing, summing up with the diversity of EDPR ’s stakeholders, results in a large and complex list of important issues, which must be prioritised according to its relevance and significance. An issue is considered material when it influences the decision, the action and the performance of an organisation and its stakeholders. 4.1.1. Background and objectives EDPR ’s material issues were identified and the results achieved supported the preparation of this Annual Report, as reflected in the Company’s management strategy and, in particular, in its agenda for sustainabilit y. 4.1.2. Methodology The methodology adopted is based on the Accountability Standards and the information is collected corporately and within each business units as well. Materiality is acquired by the interception of the issues identified by stakeholders with the importance given internally by the business. The topics identified by the Company are prioritised according to the frequency with which they appear in the different categories analysed. 94 ANNUAL REPORT EDPR 2020 Relevance for society The relevance for society is determined by the importance/impact of a specific theme from an external perspective to the Company, designated as society perspective. Therefore, the society vision reflects the vision idea/concept of the several stakeholder groups that have influence on or are influenced by EDPR ’s activities. This vision must be achieved through sources that ensure independence from the Company to collect, on most cases, external data. In parallel, the establishment of a society perspective is also supported by documents, analysis and international/national specific studies that allow a broad outlook on the emerging trends in the sustainability area. Consequently, the Company considers that the vision of the several stakeholders reflects the vision of society, thus allowing the assessment of the expectations outside EDPR. Relevance for business The vision of the business is obtained through the evaluation of the importance/impact of a specific theme from an internal perspective to the Company. This vision is originated from the analysis of the defined business strategic goals as these depict the current positioning and concerns of EDPR and reflect the future vision of the business. In 2019, EDPR defined a new strategic plan until 2022 and, thus, the material issues for the Company in which this assessment was based were updated accordingly. Results The materiality matrix describes visually and promptly the most sensitive and impacting themes by comparing the relevance to society with the relevance to the business. The critical and sensitive themes for EDPR, obtained from the analysis of the materiality matrix, allows the Company to drive the strategy and support the decision-making process as well as to focus the report of information based on shared interests between EDPR and stakeholders, facilitating the relationship between them. Materiality matrix Note: Environmental management includes biodiversity, waste management and spills. EDPR did not identify the following topics as material: • Water: Generation from wind energy does not consume water in its operational processes. The water is consumed mainly for human use. • Light pollution: EDPR activities do not have a material impact in light pollution. • Raw materials: EDPR core business does not consume raw materials. • Food waste: EDPR activities do not have a material impact in food waste. 95 4.2. Climate change For information regarding GRI 103 – Management Approach for this material topic, please refer to section Selective Growth of the chapter Strategy and sections Operational Performance and Natural Capital of the chapter Execution. GRI EU1 – Installed capacity, broken down by primary energy source and by regulatory regime INSTALLED CAPACITY (MW) 2020 2019 ∆ YoY EUROPE Spain 2,304 2,126 +178 Portugal 1,258 1,164 +94 Rest of Europe 1,403 1,263 +140 Total 4,966 4,553 +413 BRAZIL Total 436 467 (31) NORTH AMERICA US 6,299 6,112 +187 Canada 68 30 +38 Mexico 400 200 +200 Total 6,766 6,342 +424 GRAND TOTAL 12,168 11,362 +806 Note: The reported data includes EBITDA and Equity MWs. By December 2020, EDPR operational portfolio totalled 12.2 GW, of which 5 GW in Europe, including 2.3 GW in Spain, 1.3 GW in Portugal, 1.4 GW in Rest of Europe, 6.8 GW in North America and the remaining 0.4 GW in Brazil. From the 12.2 GW, 484 MW are related to solar PV and 11,674 MW to wind onshore technology and 10 MW to offshore wind technology (equity stake). Pursuing its Sell-down strategy, in 2020, EDPR concluded the sale of its entire ownership in the 137 MW Babilonia wind farms in Brazil, 237 MW in a Spanish portfolio, 80% sell-down of a 563 MW portfolio in the US (of which 200 MW will become operational in 2021) and a 102 MW Build and Transfer wind farm in the US. All in all, YTD portfolio net variation was +806 MW. In 2020, EDPR built 1,370 MW of wind onshore, corresponding to 640 MW in Europe, 625 MW in North America and 105 MW in Brazil, 200 MW of solar PV in Mexico, and 10 MW of wind offshore corresponding to Windplus floating in Portugal (equity stake), totalling 1,580 MW built in the year. 96 ANNUAL REPORT EDPR 2020 GRI EU2 – Net energy output broken down by primary energy source and by regulatory regime ELECTRICITY GENERATED (GWh) 2020 2019 ∆% YoY EUROPE Spain 4,346 5,298 (18%) Portugal 2,624 3,160 (17%) Rest of Europe 3,054 3,333 (8%) Total 10,024 11,791 (15%) BRAZIL Total 1,093 1,757 (38%) NORTH AMERICA US 16,633 15,696 +6% Canada 78 70 +12% Mexico 710 726 (2%) Total 17,421 16,492 +6% GRAND TOTAL 28,537 30,041 (5%) EDPR produced 29 TWh of clean energy in 2020, -5% YoY. The YoY evolution comes in line with a lower average installed capacity YoY following the execution of EDPR’s Sell -down strategy: 3Q19 – 997 MW of European Assets (-1.2 TWh YoY); 1Q20 – 137 MW in Brazil (-671 GWh YoY); and 4Q20 – 237 MW in Spain (-64 GWh YoY). In 2020, operations in Europe, North America and Brazil generated 35%, 61% and 4% of the total output, respectively. In Europe, generation decreased 15% YoY, mainly impacted by the deconsolidation of 997 MW in Jul-19 from a Sell-down transaction and by a lower wind resource. In North America, output increased +6% YoY to 17.4 TWh, reflecting the new capacity in operation partially impacted by a lower wind resource. In Brazil, production decreased to 1,093 GWh, driven by the deconsolidation in the 1Q20 of 137 MW from the Sell-down of Babilonia wind farms. GRI 201-2 – Financial implications and other risks and opportunities for the organisation's activities due to climate change The Earth's climate has changed throughout history. Scientists attribute the current global warming trend observed since the mid-20th century to the human expansion of the "greenhouse effect" 1 – warming that results when the atmosphere traps heat radiating from Earth toward space. Over the last century, the burning of fossil fuels like coal and oil has increased the concentration of atmospheric carbon dioxide (CO 2 ). EDPR is a clear example of how fighting against climate change creates business opportunities. The Company’s core business, to deliver clean energy by developing, building and operating top quality wind farms and solar plants, inherently implies the reduction of greenhouse gas emissions, contributing to the world’s fight against climate change and its impacts. Since its inception, EDPR has been performing a strategy focused on selective growth, by investing in quality projects with predictable future cash-flows, and seamless execution, supported by core competences that yield superior profitability, all embedded within a distinctive and self-funding model designed to accelerate value creation. As a result of undertaking such strategy, at the same time flexible enough to accommodate changing business and economic environments, EDPR remains today a leading company in the renewable energy industry. As presented in the Strategic Update, EDPR plans to add c.7.0 GW in 2019-2022 period, of which, in December 2020, 87% is already secured, investing more than 8 billion euros financed 1 IPCC Fifth assessment report, summary for policymakers. 97 by sell- down and assets’ cash flows. EDPR will diversify geographically and technologically growing on wind onshore, offshore and solar along with the entrance in new markets. During 2020, EDPR built 1,580 MW and finished the year managing a global portfolio of 12.2 GW. Benefiting from a diversified portfolio, the Company generated 28.5 TWh of renewable energy, avoiding the emissions of 18.5 million tons of CO 2 . Capital expenditures and financial investments with capacity additions, ongoing construction and development works during the year totalled € 3,193 million. However, EDPR faces climate change not only as a business opportunity, but also as an opportunity to innovate. EDPR’s commitment to innovation and new technologies has made it a leader in the renewable energy sector. Currently, the Company continues to take advantage of all expertise obtained since the start of its inception to ensure more efficient solutions, more attractive returns and a more sustainable future. As a result, EDPR engages in projects that englobe wind energy, solar energy, energy storage plants, floating offshore wind farms, green hydrogen and hybrid power plants. Nevertheless, on the risk side, meteorological changes may pose a risk for EDPR ’s activities and results since they are carried out in areas of the planet that are being affected by climate change. In addition, future estimations of wind and solar production are based on analysis of historical measurements for more than 20 years and they are considered representative of the future. However, relevant unexpected meteorological changes could lead to a lower production than the one expected from historical data. Thus, when evaluating a new investment, EDPR considers potential changes in the production forecasted but, even so, the size of the potential deviation in the case of relevant meteorological changes is uncertain. Moreover, renewable plants in construction and in operation are exposed to weather hazards, natural disasters, etc. These risks depend on the location of assets. At EDPR, all plants are insured from the physical damage during construction and operation. During operation, any natural disaster, weather hazard or accident will also be partially insured to revenue losses due to the event. Thus, no material impacts are identified in the EDPR´s consolidated financial statements as a consequence of climate-related matters. As a sector leader, EDPR is aware of the urgency to fight climate change and even though its business inherently implies a positive impact on the environment, the Company continues to work on a daily basis to hold itself to a higher standard and to incorporate innovation in its value chain in order to further contribute to the protection of the climate. GRI 302-1 - Energy consumption within the organisation Wind turbines and solar panels require a small amount of electricity to operate. This energy consumption is generally self- consumed. Given the intermittency of wind generation, sometimes it is needed to consume electricity from the grid. ENERGY CONSUMPTION (GJ) 2020 2019 ∆% YoY WIND FARMS Electricity consumption 296,457 269,758 +10% OFFICES Electricity consumption 8,920 16,658 (46%) Gas 3,947 6,478 (39%) FLEET Petrol consumption 25,109 23,541 +7% Diesel consumption 5,144 6,698 (23%) Total 339,578 323,133 +5% Note 1: Gas conversion factor according to Agência Portuguesa de Ambiente. Note 2: EDPR reports EBITDA wind farms ’ energy consumption the year after the COD (commercial operating date), when the trial period is over and the consumption is significant. Thus, the energy consumption of wind farms that have entered into operation in 2020 will be included in the 2021 report. Note 3: Fleet energy consumption refers to O&M fleet. Note 4: Energy consumption from offices refers to 1Q20 data (due to the home office implemented the rest of the year), except for O&M offices in NA. Note 5: Data regarding gas consumption from offices in 2019 was restated. 98 ANNUAL REPORT EDPR 2020 GRI 302-4 - Reduction of energy consumption EDPR ’s activity is based on clean energy generation, and it produces about 298 times the energy consumed by itself. Nonetheless, the Company is conscious about promoting a culture of rational use of resources and promotes many internal campaigns to encourage sustainable behaviours. For example, EDPR has included the objective to promote the transition of its fleet to electric vehicles in its Sustainability Roadmap 2019-2022. GRI 305-1 - Direct (scope 1) GHG emissions EDPR ’s Scope 1 emissions represent 2,405 tons of CO 2 equivalent, -6% vs 2019. 1,928 tons are emitted by transportation related to the windfarms operation, 207 tons by gas consumption in the Company’s offices and the rest of it is related to SF 6 . Part of the equipment used for electricity generation purposes contains SF 6 gasses and during 2020, EDPR registered emissions of 11 kg of this gas, which is equivalent to 270 tons of CO 2 eq. Note 1: Emissions were estimated according to GHG protocol (including official sources such as IPCC or the U.S department of energy). Note 2: Gas consumption from offices refers to 1Q20 data (due to the home office implemented the rest of the year), except for O&M offices in NA. Note 3: Data regarding gas consumption from offices in 2019 was restated. GRI 305-2 - Energy indirect (scope 2) greenhouse gas (GHG) emissions EDPR ’s CO 2 indirect emissions represent 28,425 tons, +8% vs 2019. Of the 2020 scope 2 emissions, 27,595 tons are driven by electricity consumption by the wind farms and solar plants and 829 tons by electricity consumption in the offices. In 2020, 100% of the emissions related to electricity consumption in windfarms and offices in all EDPR countries have been compensated by Certifications of Origin in Spain and Renewable Energy Certifications (RECs) in the US, obtained from the renewable energy generation. Note 1: The emission factors used are based on the following sources: Portugal - EDP, Turbogás, Tejo energia, Rede Eléctrica Nacional (REN), and Entidade reguladora dos serviços energéticos (ERSE); Spain - Red Eléctrica de España (REE); Brazil - ministry of science and technology – SIN (national interconnected system); Other European countries and Canada - IHS Cera. Note 2: Electricity consumption emissions were calculated with the global emission factors of each country. Note 3: Electricity consumption from offices refers to 1Q20 data (due to the home office implemented the rest of the year), except for O&M offices in NA. GRI 305-3 – Other indirect (scope 3) greenhouse gas (GHG) emissions EDPR ’s work requires employees to travel and commute. Based on the estimates, the transportation used by employees accounted for a total of 1,289 tons of CO 2 emissions, -77% vs 2019 mainly due to the travel restrictions and home office regime implemented after the outbreak of the COVID-19 pandemic. Note 1: Emissions were estimated according to GHG protocol, by following the Defra standard. Note 2: Employee commuting emissions were calculated from data collected in a survey to all employees, and corresponds to 1Q20 data (due to the home office implemented the rest of the year). Note 3: Employees transportation by air and train in Portugal is not included. Note 4: When calculating employees transportation by air, the radioactive factor is not considered. Note 5: Fleet energy consumption refers to O&M fleet. 99 Total CO 2 emissions GRI 305-5 - Reduction of greenhouse gas (GHG emissions) Even though EDPR activity inherently implies the reduction GHG emissions, the Company goes one-step forward by compensating 100% of the scope 2 emissions. EDPR ’s core business activity inherently implies the reduction GHG emissions. Wind and solar energy has zero carbon emissions, contributing to the world’s fight against climate change and does not produce harmful SOx, NOx, or mercury emissions, protecting valuable air and water resources. In 2020 , it was estimated that the Company’s activities avoided the emission of 18.5 million tons of CO 2 . The Company’s emissions represent 0.2% of the total amount of emissions avoided and 86% of the total emissions are from the necessary electricity consumption by the wind farms. Even though EDPR ’s activity is based on the clean energ y generation, it is conscious about promoting a culture of rational use of resources and therefore the Company has included in its Sustainability Roadmap 2019-2022 the objective to promote the transition of its fleet to electric vehicles. In 2020, 100% of the emissions related to electricity consumption in windfarms and offices in all EDPR countries have been compensated by Certifications of Origin in Spain and Renewable Energy Certifications (RECs) in US, obtained from the renewable energy generation. Note 1: To calculate the emissions avoidance, the energy generation has been multiplied by the CO 2 eq. emission factors of each country and state within the us. EDPR considers the emission factor of just fossil fuel energy, as it is considered that by increasing the generation of renewable energy, there is a displacing of these technologies, while other renewable technologies and nuclear plants will continue with its quota of generation. Note 2: The emission factors used are based on the following sources: Portugal - EDP, turbogás, tejo energia, rede eléctrica nacional (REN), and entidade reguladora dos serviços energéticos (ERSE); Spain - red eléctrica de españa (REE); brazil - ministry of science and technology – sin (national interconnected system); USA - emissions & generation resource integrated database (EGRID) for each state emission factor; other european countries, Mexico and Canada - IHS cera. 27.6 1.0 3.2 0.3 CO 2 Eq. Emitted in 2020 (k tons) Wind Farms Energy Consumption Offices Energy Consumption Employees transportation SF6 24.7 2.0 7.5 0.2 CO 2 Eq. Emitted in 2019 (k tons) Wind Farms Energy Consumption Offices Energy Consumption Employees transportation SF6 100 ANNUAL REPORT EDPR 2020 4.3. Economic business sustainability For information regarding GRI 103 – Management Approach for this material topic, please refer to section Financial Performance of the chapter Execution. GRI 201-1 – Direct economic value generated and distributed ECONOMIC VALUE GENERATED AND DISTRIBUTED (€M) 2020 2019 ECONOMIC VALUE GENERATED Revenues 1,529 1,642 Other Income 700 581 Share of Profit in Associates 6 3 Financial Income 77 38 Total 2,312 2,264 ECONOMIC VALUE DISTRIBUTED Supplies and Services 304 309 Other Costs 123 136 Personnel Costs 141 131 Financial Expenses 362 387 Current Tax 32 55 Dividends 107 99 Total 1,069 1,117 ECONOMIC VALUE ACCUMULATED 1,243 1,147 PROFIT BEFORE INCOME TAX (€M) 2020 2019 Spain 306 52 Portugal 104 300 France & Belgium -3 31 Poland 21 13 Romania 30 28 Italy 14 14 UK 0 -1 Brazil 15 102 US 276 157 Canada -1 2 Mexico 13 13 Others -5 -2 GRAND TOTAL 769 709 101 4.4. Health & Safety For information regarding GRI 103 – Management Approach for this material topic, please refer to section Health & Safety of the chapter Execution. GRI 403-1 – Occupational health and safety management system The management of all issues related to health and safety is collected and described in the integrated Health & Safety and Environment Management System (HSEMS), which covers all employees and operationd of the Company. The processes and procedures are regulated in the management system are developed to comply with the legal requirements of each country, the ISO 45001 standard, and the requirements that have been considered appropriate by EDPR to carry out a correct management of the related issues with the H&S of all workers. GRI 403-2 – Hazard identification, risk assessment and incident investigation The process to identify hazards and assess the H&S risks arising from the C ompany’s activity and facilities is developed according to the Hazards Identification and Risks Assessment procedure of the HSEMS, in which responsibilities and methodologies are defined to ensure risks are reduced and, if possible, avoided. The Risk Assessment of each job position is reviewed and updated as applicable, pursuant to the C ompany’s commitment to continuous improvement . The preparation of these risk assessments is carried out by senior H&S technicians. The risk assessments, as well as the risk assessment procedure itself, are audited every year with an internal audit and the external audit of ISO 45001 certification. All the topics that emerge from the audits are managed according to the Findings Management procedure of the HSEMS, and an action plan is drawn. The results of this action plan are reviewed in subsequent audits. In addition, the Communication, Consultation & Participation procedure of the HSEMS includes information on hazards communication management. The process of risks communication is an effective tool to establish an active information channel, fast and effective among employees, managers and the top management, to act in the fastest way possible and avoid risks that may arise. To promote the participation and commitment of the entire Company, any employee may report anomalies or detected risks on H&S and environmental issues. When an unsafe act or condition is detected, the employee may report it in an internal tool, specifying whether an immediate action is required. EDPR’s commitment not to retaliate against any worker who expresses a concern about safety issues or who has intervened in any incident is included in the Company's H&S policy, which was updated in 2020. The Policy also indicates that workers should remove themselves from work situations that they believe could cause injury or ill health, as no situation can justify endangering someone’s life. To know how to report, investigate and follow-up on an incident, there is an Incidents Management procedure available in the HSEMS. The purpose of this procedure is to define the process to identify, respond, report, analyse and investigate incidents and respond to emergency situations, as well as to take the necessary actions to prevent and/or mitigate them. GRI 403-3 – Occupational health services EDPR ensures that medical examinations are provided to the employees according to the legal requirements of each country, to determine whether a potential or current employee is medically fit to carry out their specific duties. EDPR has external medical services for all employees 2 for the medical follow-up, whose management is carried out directly by the medical service of the joint prevention service of the EDP Spain company. The detailed results of the medical examinations are confidential but shared with the employee, as EDPR receives only the conclusion of the examination: apt, not apt or apt with restrictions, indicating the restrictions. GRI 403-4 – Worker participation, consultation, and communication on occupational health and safety A significant part of the organisation plays a fundamental role in the implementation of its health and safety policy. The Company created health and safety committees that collect information from different operational levels. 2 Except for employees working from the Oviedo office. 102 ANNUAL REPORT EDPR 2020 GRI 403-5 – Worker training on occupational health and safety The Company’s commitment to ensure high safety standards for employees and contractors make EDPR an increasingly safe place to work, prioritizing the safety and wellbeing of all stakeholders with the objective of zero accidents overall. In order to achieve this goal, EDPR provides training to both its employees and its contractors regarding both generic occupational health & safety aspects as well as training on specific work-related hazards. GRI 403-6 – Promotion of worker health 2020 was a year of uncertainty, change and adaptation in which both physical and mental health were a priority. As a result, the Company created a wellness platform to further development a wellness culture and promote healthy habits. EDPR also shared several health, wellbeing and home office tips in its intranet throughout the year. To raise awareness regarding mental health specifically, EDPR launched the Mind Your Mind campaign, which promoted educational talks with specialists, employees and other key speakers on how to approach the topic especially during the current social context. GRI 403-7 – Prevention and mitigation of occupational health and safety impacts directly linked by business relationships In order to guarantee that the suppliers comply with EDPR’s requirements regarding sustainability in the supply chain, EDPR monitors strategic suppliers during their services delivery. EDPR performs internal inspections during the construction and operation phases to monitor the suppliers performance regarding environmental and H&S aspects and to identify potential risks. In 2020, EDPR performed 1,262 inspections to 156 suppliers regarding EHS procedures. As a result, the Company identifies corrective actions needed and establishes an action plan for continuous improvement. Moreover, to prevent possible H&S risks to workers from other companies, EDPR provides a risk guide for the facility to all contractors before starting their work on the facility. In addition, the Company requires that the contractors participate in drills that are carried out at the facilities, so that everyone knows how to act in the event of an emergency. EDPR also has established, through the HSEMS’s Safety Alerts Management technical instruction, the communication to contractors of any safety alert that may be applicable to the facility or the contractor. GRI 403-9 – Work-related injuries Note: The information reported in the tables below does not include data related to EDPR UK from July 2019 to March 2020. LOST WORKDAYS DUE TO WORK-RELATED INJURIES (#) 2020 2019 EMPLOYEES CONTRACTORS TOTAL EMPLOYEES CONTRACTORS TOTAL LOST WORKDAYS DUE TO WORK-RELATED INJURIES Europe 0 199 199 0 152 152 South America 0 287 287 0 2 2 North America 84 297 381 146 71 217 Total 84 783 867 146 225 371 WORKED HOURS (#) 2020 2019 EMPLOYEES CONTRACTORS TOTAL EMPLOYEES CONTRACTORS TOTAL WORKED HOURS Europe 1,495,066 1,789,806 3,284,872 1,359,030 2,165,326 3,524,356 South America 178,608 2,559,350 2,737,958 128,552 244,225 372,777 North America 1,494,544 5,164,448 6,658,992 1,285,576 2,884,550 4,170,126 Total 3,168,218 9,513,604 12,681,822 2,773,158 5,294,101 8,067,259 103 WORK-RELATED INJURIES (#) 2020 2019 EMPLOYEES CONTRACTORS TOTAL EMPLOYEES CONTRACTORS TOTAL Fatal work-related injuries 0 0 0 0 0 0 Europe 0 0 0 0 0 0 South America 0 0 0 0 0 0 North America 0 0 0 0 0 0 High-consequence work-related injuries 1 0 0 0 0 0 0 Europe 0 0 0 0 0 0 South America 0 0 0 0 0 0 North America 0 0 0 0 0 0 Work-related injuries with lost workdays 2 1 23 24 1 9 10 Europe 0 6 6 0 4 4 South America 0 10 10 0 1 1 North America 1 7 8 1 4 5 Total work-related injuries that result in fatalities and lost workdays 1 23 24 1 9 10 Europe 0 6 6 0 4 4 South America 0 10 10 0 1 1 North America 1 7 8 1 4 5 Recordable work-related injuries without lost workday s 3 5 22 27 9 19 28 Europe 0 8 8 0 5 5 South America 0 3 3 0 0 0 North America 5 11 16 9 14 23 TOTAL RECORDABLE WORK-RELATED INJURIES 4 6 45 51 10 28 38 Europe 0 14 14 0 9 9 South America 0 13 13 0 1 1 North America 6 18 24 10 18 28 1 Excludes fatalities. According to GRI, refers to work-related injuries that result in an injury from which the worker cannot, does not, or is not expected to recover fully to pre-injury health status within 6 months. Currently, EDPR's best approach to determine the recovery time of an injury is to assume it is the same as the lost workdays. 2 Excludes high-consequence injuries. 3 Includes injuries that result in restricted work or transfer to another job, medical treatment beyond first aid, or loss of consciousness; or significant injury or ill health diagnosed by a physician or other licensed healthcare professional. 4 Includes work-related injuries that arise from exposure to hazards at work and that occur at the workplace, travelling for work and working from home. Corresponds to the sum of work-related injuries without absence, with absence and fatal. Commuting incidents are not included (there was 1 commuting accident in 2020 related to an EDPR employee that did not result in lost days). Note 1: Recordable work-related injuries without lost workdays includes minor first aid injuries. The number of lost days is calculated as the number of calendar days starting the day after the accident. Note 2: The employee impacted by the accident with absence is male. EDPR does not register H&S indicators by gender for contractors. notwithstanding this, based on EDPR experience, the majority of the contractors working on EDPR sites are men. 104 ANNUAL REPORT EDPR 2020 FREQUENCY RATE OF WORK-RELATED INJURIES (x) 2020 2019 EMPLOYEES CONTRACTORS TOTAL EMPLOYEES CONTRACTORS TOTAL Rate of fatal work-related injuries 0.0 0.0 0.0 0.0 0.0 0.0 Europe 0.0 0.0 0.0 0.0 0.0 0.0 South America 0.0 0.0 0.0 0.0 0.0 0.0 North America 0.0 0.0 0.0 0.0 0.0 0.0 Rate of high-consequence work-related injuries 1 0.0 0.0 0.0 0.0 0.0 0.0 Europe 0.0 0.0 0.0 0.0 0.0 0.0 South America 0.0 0.0 0.0 0.0 0.0 0.0 North America 0.0 0.0 0.0 0.0 0.0 0.0 Rate of work-related injuries with lost workdays 2 0.3 2.4 1.9 0.4 1.7 1.2 Europe 0.0 3.4 1.8 0.0 1.8 1.1 South America 0.0 3.9 3.7 0.0 4.1 2.7 North America 0.7 1.4 1.2 0.8 1.4 1.2 Rate of work-related injuries that result in fatalities and lost workdays 0.3 2.4 1.9 0.4 1.7 1.2 Europe 0.0 3.4 1.8 0.0 1.8 1.1 South America 0.0 3.9 3.7 0.0 4.1 2.7 North America 0.7 1.4 1.2 0.8 1.4 1.2 Rate of recordable work- related injuries without lost workdays 3 1.6 2.3 2.1 3.2 3.6 3.5 Europe 0.0 4.5 2.4 0.0 2.3 1.4 South America 0.0 1.2 1.1 0.0 0.0 0.0 North America 3.3 2.1 2.4 7.0 4.9 5.5 RATE OF TOTAL RECORDABLE WORK- RELATED INJURIES 4 1.9 4.7 4.0 3.6 5.3 4.7 Europe 0.0 7.8 4.3 0.0 4.2 2.6 South America 0.0 5.1 4.7 0.0 4.1 2.7 North America 4.0 3.5 3.6 7.8 6.2 6.7 SEVERITY RATE OF WORK-RELATED INJURIES (x) 2020 2019 EMPLOYEES CONTRACTORS TOTAL EMPLOYEES CONTRACTORS TOTAL RATE OF LOST WORKDAYS DUE TO WORK-RELATED INJURIES Europe 0 111 61 0 70 43 South America 0 112 105 0 8 5 North America 56 58 57 114 25 52 Total 27 82 68 53 43 46 In 2020, EDPR registered 24 work-related accidents of employees and contractors that resulted in lost workdays, comparing to 10 accidents in 2019. This difference is mainly due to the 57% increase in worked hours, following the Company’s Business Plan and ambitious goals of growth in renewable energy installed capacity. EDPR built 1,580 MW during 2020, 105 comparing to 888 MW in the previous year. The injury and the lost work day rate were 1.9 work accidents per million hours worked and 68 workdays lost due to occupational accidents per million hours worked, respectively. Following the reference provided by the international standards ISO 14001:2015 and ISO 45001:2018, EDPR merged the Environmental Management System with the H&S Management Systems for a more global and efficient approach, simplifying processes and managing the potential risks of its activity. In 2020, the new Health, Safety and Environment Management System (HSEMS), where synergies play a fundamental role, was implemented and jointly certified by an independent certifying organisation. The implementation of this integrated system allows for better management and prevention of future accidents, with the objective of zero accidents overall. The commitment to H&S is further supported through the ISO 45001 certification. By the end of 2020, this certification covers 100% 2 of EDPR’s installed capacity. GRI 403-10 – Work-related ill-health EDPR has no knowledge of any cases of occupational diseases in the company. EDPR is working to systematise the registration of this type of diseases, if detected. Absenteeism In the table below, the hours and rate of absenteeism in 2020 and 2019 are disclosed by country. ABSENTEEISM BY COUNTRY 2020 2019 HOURS (#) RATE (%) HOURS (#) RATE (%) EUROPE Spain 8,566 0.8% 7,050 0.8% Portugal 3,681 2.3% 1,675 1.2% France & Belgium 933 0.7% 768 0.5% Italy 290 0.4% 1,502 2.4% Poland 1,591 1.9% 1,089 1.7% Romania 808 1.2% 1,496 2.5% SOUTH AMERICA Brazil 247 0.2% 119 0.1% Colombia 168 0.7% - - NORTH AMERICA North America 672 0.04% 1,168 0.1% Note 1: EDPR defines absenteeism as total of non-worked hours in workable periods. including absence hours due to accidents, absence hours due to diseases and absence hours due to other not justified motives. Note 2: Absenteeism for North America considers only lost worked hours caused by accidents. GRI EU17 - Days worked by contractor and subcontractor employees involved in construction, operation and maintenance activities Contractors involved in construction, operation and maintenance activities worked an average of 1,189,201 days during 2020, which represents an increase of 80% when compared to the previous year. Note: Does not include information related to EDPR UK from January to March. GRI EU25 - Number of injuries and fatalities to the public involving company assets, including legal judgments, settlements and pending legal cases of diseases EDPR has no knowledge of any legal judgments, settlements and pending legal cases of diseases in 2020, neither in 2019. Note: for the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system. 2 Calculation based on 2019YE installed capacity. EDPR certifies the facilities the year after the COD (commercial operating date). Thus, the facilities that have entered into operation in 2020 will be certified in 2021. 106 ANNUAL REPORT EDPR 2020 4.5. People management For information regarding GRI 103 – Management Approach for this material topic, please refer to section Human Capital of the chapter Execution. Moreover, please find other people management related topics at the end of this section. Note: The consolidation perimeter available in Annex I of the Consolidated Financial Statements includes the companies of the acquisition transaction reported at the end of December 2020. The tables presented do not include 45 employees of the companies whose shares were acquired, since their integration is currently under analysis. GRI 102-8 – Information on employees and other workers In the table below, the number of full-time / part-time employees in 2020 is disclosed by age group, gender and professional category. FULL-TIME/PART TIME EMPLOYEES (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE FULL-TIME Directors 0 2 45 123 7 54 231 Managers 3 5 37 105 5 14 169 Specialists 115 166 199 486 29 72 1,067 Technicians 6 78 34 90 17 10 235 Total 124 251 315 804 58 150 1,702 PART-TIME Directors 0 0 1 0 2 0 3 Managers 0 0 2 0 0 0 2 Specialists 0 0 21 1 3 0 25 Technicians 0 0 3 0 0 0 3 Total 0 0 27 1 5 0 33 GRAND TOTAL 124 251 342 805 63 150 1,735 Note: The number of part-time employees includes employees with reduced working day due to maternity/paternity (91% of the part-time employees). In the table below, the number of full-time / part-time employees in 2019 is disclosed by age group, gender and professional category. FULL-TIME/PART TIME EMPLOYEES (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE FULL-TIME Directors 0 1 43 118 8 42 212 Managers 4 5 30 95 3 14 151 Specialists 96 152 178 443 24 65 958 Technicians 5 60 34 84 18 9 210 Total 105 218 285 740 53 130 1,531 PART-TIME Directors 0 0 0 0 2 0 2 Managers 0 0 1 0 0 0 1 Specialists 0 0 23 2 3 0 28 Technicians 0 0 4 0 0 0 4 Total 0 0 28 2 5 0 35 GRAND TOTAL 105 218 313 742 58 130 1,566 107 EDPR fosters quality employment with c.99% of permanent contracts throughout the year (based on the proportion of permanent and temporary contracts at the end of each month). Temporary employees do not represent more than 1% along the year, and therefore EDPR does not report the average contracts. In the table below, the number of permanent / temporary employees in 2020 is disclosed by age group, gender and professional category. PERMANENT/ TEMPORARY EMPLOYEES (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE PERMANENT Directors 0 2 46 123 9 54 234 Managers 3 5 39 105 5 14 171 Specialists 113 164 220 484 32 71 1,084 Technicians 6 77 36 90 17 10 236 Total 122 248 341 802 63 149 1,725 TEMPORARY Directors 0 0 0 0 0 0 0 Managers 0 0 0 0 0 0 0 Specialists 2 2 0 3 0 1 8 Technicians 0 1 1 0 0 0 2 Total 2 3 1 3 0 1 10 GRAND TOTAL 124 251 342 805 63 150 1,735 Note 1: EDPR keeps a constant number of employees throughout the year that makes the difference between the final number of employees and the average not significant (6%). Note 2: All temporary employees are located in Europe. In the table below, the number of permanent / temporary employees in 2019 is disclosed by age group, gender and professional category. PERMANENT/ TEMPORARY EMPLOYEES (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE PERMANENT Directors 0 1 43 118 10 42 214 Managers 4 5 31 95 3 14 152 Specialists 92 145 201 441 27 64 970 Technicians 5 60 38 84 18 9 214 Total 101 211 313 738 58 129 1,550 TEMPORARY Directors 0 0 0 0 0 0 0 Managers 0 0 0 0 0 0 0 Specialists 4 7 0 4 0 1 16 Technicians 0 0 0 0 0 0 0 Total 4 7 0 4 0 1 16 GRAND TOTAL 105 218 313 742 58 130 1,566 Note 1: EDPR keeps a constant number of employees throughout the year that makes the difference between the final number of employees and the average not significant (5%). Note 2: 15 temporary employees are located in Europe and 1 in brazil. 108 ANNUAL REPORT EDPR 2020 The average number of contractors during 2020 was 919 in Europe, 822 in South America and 2,614 in North America. In the table below, the number of employees in 2020 is disclosed by age group, gender, country and professional category. EMPLOYEES BY COUNTRY (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE SPAIN Directors 0 0 23 37 4 23 87 Managers 2 2 15 36 0 4 59 Specialists 40 59 87 155 14 23 378 Technicians 2 0 7 1 2 1 13 Total 44 61 132 229 20 51 537 PORTUGAL Directors 0 0 1 5 0 6 12 Managers 0 0 0 5 0 2 7 Specialists 4 4 10 46 1 12 77 Technicians 0 0 1 0 0 0 1 Total 4 4 12 56 1 20 97 REST OF EUROPE Directors 0 1 4 21 0 4 30 Managers 0 0 5 11 2 1 19 Specialists 20 23 41 86 0 9 179 Technicians 1 1 2 0 0 0 4 Total 21 25 52 118 2 14 232 SOUTH AMERICA Directors 0 0 1 7 0 0 8 Managers 0 0 3 7 1 0 11 Specialists 8 12 18 37 1 2 78 Technicians 0 0 0 0 0 0 0 Total 8 12 22 51 2 2 97 USA Directors 0 1 17 51 5 21 95 Managers 1 3 16 44 2 7 73 Specialists 43 67 64 156 16 26 372 Technicians 3 77 25 89 15 9 218 Total 47 148 122 340 38 63 758 REST OF NORTH AMERICA Directors 0 0 0 2 0 0 2 Managers 0 0 0 2 0 0 2 Specialists 0 1 0 7 0 0 8 Technicians 0 0 2 0 0 0 2 Total 0 1 2 11 0 0 14 GRAND TOTAL 124 251 342 805 63 150 1,735 109 In the table below, the number of employees in 2019 is disclosed by age group, gender, country and professional category. EMPLOYEES BY COUNTRY (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE SPAIN Directors 0 0 25 34 4 22 85 Managers 3 2 6 38 0 3 52 Specialists 35 50 87 133 11 22 338 Technicians 1 0 9 4 3 1 18 Total 39 52 127 209 18 48 493 PORTUGAL Directors 0 0 1 5 0 5 11 Managers 0 0 0 4 0 2 6 Specialists 1 2 7 43 1 11 65 Technicians 0 0 1 1 0 1 3 Total 1 2 9 53 1 19 85 REST OF EUROPE Directors 0 0 4 23 0 4 31 Managers 0 1 9 13 2 2 27 Specialists 19 32 44 93 0 8 196 Technicians 0 0 4 1 0 0 5 Total 19 33 61 130 2 14 259 SOUTH AMERICA Directors 0 0 0 7 0 0 7 Managers 0 0 2 4 0 0 6 Specialists 5 11 13 20 0 1 50 Technicians 0 0 0 0 0 0 0 Total 5 11 15 31 0 1 63 USA Directors 0 1 12 47 6 11 77 Managers 1 2 14 33 1 7 58 Specialists 36 55 50 149 15 23 328 Technicians 4 60 22 78 15 7 186 Total 41 118 98 307 37 48 649 REST OF NORTH AMERICA Directors 0 0 0 2 0 0 2 Managers 0 0 0 3 0 0 3 Specialists 0 2 0 5 0 0 7 Technicians 0 0 2 0 0 0 2 Total 0 2 2 10 0 0 14 REST OF THE WORLD Directors 0 0 1 0 0 0 1 Managers 0 0 0 0 0 0 0 Specialists 0 0 0 2 0 0 2 Technicians 0 0 0 0 0 0 0 Total 0 0 1 2 0 0 3 GRAND TOTAL 105 218 313 742 58 130 1,566 110 ANNUAL REPORT EDPR 2020 GRI 102-41 - Collective bargaining agreements According to its Code of Ethics, EDPR undertakes to respect freedom of trade union association and recognise the right to collective bargaining. At EDPR, from 1,735 employees, 20% were covered by collective bargaining agreements in 2020. Collective bargaining agreements include different topics such as career development, mobility, salaries, health & safety etc. and apply to all employees working under an employment relationship with some companies of EDPR group, regardless of the type of contract, the professional group into which they are classified, their occupation or job. However, matters relating to the corporate organisation itself, the laws of each country or even usage and custom in each country result in certain groups being expressly excluded from the scope of collective bargaining agreements. The collective bargaining agreements that are applied at EDPR are usually negotiated at state level or regional level, and EDPR may be just one of the players among other leading sectorial companies in the negotiation with employees’ representatives, and in some cases, governmental representatives. In Portugal and Brazil, EDP negotiates its own agreements with employees, and those apply to all employee working for companies of the group, including EDPR. During the last years, EDPR has performed different benchmark analysis of the benefits stated at the different collective bargaining agreements that apply to our employees, comparing them against the benefits offered by the Company and, in general terms, the Company offers a more competitive benefits package compared to what is stated in the collective bargaining agreement. EMPLOYEES COVERED BY COLLECTIVE BARGAINING AGREEMENTS UN 2020 2019 UN 2020 2019 EUROPE Spain # 49 45 % 9% 9% Portugal # 93 85 % 96% 100% Rest of Europe # 124 112 % 53% 43% Total # 266 242 % 31% 29% SOUTH AMERICA Brazil # 82 63 % 99% 100% Colombia # 0 - % 0% - Total # 82 63 % 85% 100% NORTH AMERICA US # 0 0 % 0% 0% Rest of North America # 0 0 % 0% 0% Total # 0 0 % 0% 0% GRAND TOTAL # 348 305 % 20% 19% 111 GRI 401-1 - New employee hires and employee turnover Throughout the year, EDPR hired 441 employees. NEW HIRES (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Europe 32 47 31 74 0 7 191 South America 4 3 7 20 2 1 37 North America 19 75 29 73 2 15 213 Rest of the world 0 0 0 0 0 0 0 Total 55 125 67 167 4 23 441 In 2019, EDPR hired 368 employees. NEW HIRES (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Europe 33 44 30 63 1 3 174 South America 3 4 3 5 0 0 15 North America 19 51 15 74 6 11 176 Rest of the world 0 0 1 2 0 0 3 Total 55 99 49 144 7 14 368 During 2020, 149 employees left the Company, resulting in a turnover ratio of 9%. TURNOVER (%) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Europe 7% 8% 7% 4% 4% 0% 5% South America 0% 8% 9% 4% 0% 0% 5% North America 13% 17% 9% 14% 5% 11% 13% Total 9% 14% 8% 8% 5% 5% 9% Note 1: 2020 departures exclude transfers to OW, the offshore JV with ENGIE. Note 2: Turnover calculated as departures / 2020YE headcount. In 2019, 190 employees left the Company, resulting in a turnover ratio of 12%. TURNOVER (%) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Europe 22% 5% 11% 8% 0% 4% 9% Brazil 20% 0% 7% 3% 0% 100% 6% North America 20% 23% 15% 15% 14% 17% 17% Total 21% 15% 12% 11% 9% 9% 12% Note: Turnover calculated as departures / 2019YE headcount. 112 ANNUAL REPORT EDPR 2020 Of the 149 departures registered in 2020, 15% were dismissals. DISMISSALS (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Directors 0 1 0 2 0 0 3 Managers 0 0 0 1 0 0 1 Specialists 0 1 5 4 0 1 11 Technicians 1 2 1 3 0 0 7 Total 1 4 6 10 0 1 22 Note: 2020 departures exclude transfers to OW, the offshore JV with ENGIE. Of the 190 departures registered in 2019, 11% were dismissals. DISMISSALS (#) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Directors 0 0 0 2 0 0 2 Managers 0 0 1 1 0 0 2 Specialists 1 0 6 7 0 0 14 Technicians 0 7 1 0 1 2 11 Total 1 7 8 10 1 2 29 GRI 401-2 - Benefits provided to full-time employees that are not provided to temporary or part-time employees As a responsible employer, a quality employment that can be balanced with personal life is a priority for the Company. The package of benefits provided to full-time employees does not differ from that offered to part-time employees. This benefits package, depending on the country, includes medical insurance, life insurance, pension plan and conciliation measures. GRI 402-1- Minimum notice periods regarding operational changes Per country case law, EDPR may have a minimum period which it must comply with for giving formal notice of organisational changes at the companies in the Group with an impact on employees. However, it is customary to communicate significant events to the affected groups in advance. As an employer in the United States, EDPR complies with the Worker Adjustment and Retraining Notification (WARN) Act Guide to Advance Notice of Closings and Layoffs. 113 GRI 404-1 – Average & total hours of training per year per employee In 2020, EDPR invested €1. 4 million in training, The number of training hours decreased -6% vs 2019, -23% for women employees and +0.4% for male employees. AVERAGE TRAINING HOURS (#) 2020 TOTAL 2019 TOTAL FEMALE MALE FEMALE MALE Directors 27 19 21 29 26 27 Managers 24 35 32 49 48 48 Specialists 25 29 27 35 33 34 Technicians 15 67 53 27 56 47 Total 24 33 30 34 37 36 Note: Average training hours are calculated as total training hours / YE average headcount. TOTAL TRAINING HOURS (#) 2020 TOTAL 2019 TOTAL FEMALE MALE FEMALE MALE EUROPE Directors 1,290 2,603 3,893 1,315 3,271 4,586 Managers 520 2,508 3,027 1,285 3,510 4,794 Specialists 6,127 13,775 19,903 7,115 14,082 21,198 Technicians 272 27 299 946 392 1,337 Total 8,209 18,913 27,122 10,661 21,255 31,915 SOUTH AMERICA Directors 23 176 200 0 162 162 Managers 94 291 385 90 224 314 Specialists 871 1,647 2,517 526 1,227 1,753 Technicians - - - - - - Total 988 2,115 3,102 616 1,613 2,229 NORTH AMERICA Directors 174 515 689 189 631 819 Managers 375 1,237 1,612 391 1,250 1,641 Specialists 1,645 4,091 5,736 2,974 5,000 7,974 Technicians 612 10,633 11,245 737 7,593 8,330 Total 2,806 16,476 19,282 4,291 14,474 18,765 GRAND TOTAL 12,003 37,503 49,505 15,567 37,342 52,909 GRI 404-2 - Programs for upgrading employee skills and transition assistance programs People are EDPR’s most important asset, and that is why the Company invests in intergenerational knowledge sharing and in the ongoing training of its team. In this sense, EDPR is committed to the development of its employees, offering them an attractive professional career and aligning their capabilities and skills with the current and future needs of the company. The growth and development of the Company's business leads EDPR to invest in the employees by discovering, improving and emphasising the potential of each mainly through internal mobility, training and development actions. 114 ANNUAL REPORT EDPR 2020 Mobility EDPR considers both functional and geographical mobility as a tool that contributes to the organisational development by stimulating employees’ motivation, skills, productivity, personal fulfilment and fostering the share of best practices. The mobility processes within EDPR aim to respond to the different challenges and needs of the Company, considering the characteristics of the different geographies. In 2020, despite the global pandemic, there were 85 mobility processes (2 more than in 2019), 62 of which functional, 12 geographical and 11 both functional and geographical mobility processes. Training EDPR offers job-specific ongoing training opportunities to contribute to the improvement of knowledge and skills, as well as specific development programs aligned with the Company's strategy. The 360 potential appraisal process is created for all employees with the goal of defining each person’s training needs along with their manager, which is then used to define a customised Training Plan. The annual Training Plan is based on a catalogue of programs that is constantly evolving and is aligned with the Company’s challenges and new markets. The key aspect about the courses offered is that they usually contain subjects to promote the development of skills needed to ensure the sustainability of EDPR’s business. Moreover, the networking and the share of best practices foster innovation and improve performance During 2020, EDPR delivered a total of 49,505 training hours throughout 2,627 sessions that included 28,588 participants. This translates into an average of 30 hours of training p er employee and results in 96% of EDPR’s team receiving training. The challenges that the COVID-19 pandemic brought to the training activities were successfully overcome by redesigning and adapting training contents and sessions to virtual, e-learning or remote formats. This effort allowed to maintain the main training ratios aligned with previous years, increasing the training courses delivered in e-learning, live webinars or other non- synchronous including game-based training (a total of 76% of training hours or 93% of the attendances were delivered in online methodology). Therefore, EDPR highlights Digitalisation as one of the main training drivers that accelerated during 2020 as a result of the methodologies and by contents increasingly delivered on Collaborative Tools (Microsoft 365 suite), Agile methodologies, Data Analyse tools, Cybersecurity, use of Drones, SMART business or Artificial Intelligence. Development In order to support the company’s growth, aligning current and future organisational demands with employees’ capabilities as well as to enhance their professional development, EDPR has designed development programs for middle management, providing them with proper tools to take on new responsibilities as well as to adapt to the new challenges leading teams remotely. In 2020, one of the most important development programs was the Lead Now Program, which aims to support middle managers in the role they are assuming as team leaders. Participants have the possibility to self-assess their management style, go deeper into the skills needed and get to know the role they are performing in the different HR processes of EDPR. Through short online sessions, 3 editions took place in 2020 and reached 42 employees. Despite the pandemic, EDPR worked to adapt the development sessions to a new online format and maintained the internal promotions. Knowledge management EDPR is aware of the importance of Knowledge as a valuable asset within the business and in employees’ development. Thus, EDPR is boosting LINK as a knowledge platform increasing the number of areas, domains and curated documents with valuable content captured and shared across the organisation, to help its employees learn from the past to face future challenges and move the company forward. During 2020, EDPR launched 40fiveminutes , an online initiative to easily share main business insights in a friendly and informal way to those employees who sign up to the sessions. Becoming a Learning Organisation implies a strong knowledge sharing mind-set, so EDPR strives to improve the use of knowledge by regularly distributing customised relevant documents or events, working to overcome additional challenges brought by COVID-19. 115 GRI 404-3 - Percentage of employees receiving regular performance and career development reviews EDPR defines two assessment processes for its employees. The annual performance assessment, which covers all employees entitled to variable remuneration, and the potential assessment. All EDPR ’s employees, regardless of their professional category, are evaluated every two years to determine their development potential by providing the most suitable training. EDPR creates tailored development plan to address specific needs. Moreover, EDPR offers the possibility to all employees to define an Individual Development Plan. This plan is a very effective tool that enable the Company to structure training actions for the employee aimed at widening their abilities and expertise since it requires a reflection upon the results of their skills assessment and identify the individual's strong points and improvement areas, taking into consideration the employee's development level, as well as the teamwork and organisational strategy. The potential assessment process is independent from performance appraisal and is based on a 360 degree evaluation model which considers feedback from oneself, peers, subordinates and the manager. GRI 405-1 - Diversity of governance bodies and employees In the table below, the proportion of members of the Board of Directors in 2020 is disclosed by age group and gender. BOARD OF DIRECTORS (%) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL Female 0% 7% 7% 14% Male 0% 29% 57% 86% Total 0% 36% 64% 100% In the table below, the proportion of members of the Board of Directors in 2019 is disclosed by age group and gender. BOARD OF DIRECTORS (%) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL Female 0% 13% 7% 20% Male 0% 27% 53% 80% Total 0% 40% 60% 100% Following the best Corporate Governance practices, EDPR has analysed and discussed about the possible criteria applicable in the selection of the new members of its Governing Bodies. As a conclusion, the Nominations and Remunerations Committee and the Board of Directors resolved at their meetings held on November 2 nd , 2016, and December 14 th , 2016 respectively, to take into account among others the following: the education, experience in the energy sector, integrity and independence, having a proven expertise, and the diversity that such candidate may provide to the related body. Likewise, on the Shareholder’s Meeting held on March 20 th , 2020, the Board of Directors made public its particular interest in supporting the gender diversity in accordance with the Lei nº 62/2017 of August 1 st , and specifically committed at the seventh resolution of the agenda, to promote that at the first Elective Shareholders’ Meeting to be held after termination of the current term of office of the Board Members, the percentage of Board Members corresponding to the less represented gender is increased to a 33.3%. Based on the above criteria, after the previous advice of the Nominations and Remunerations Committee, the Board of Directors would submit a proposal to the General Shareholders’ Meeting (including for sake of clarity, the curriculum vitae of the candidates, which will be publicly disclosed with the other supporting documents of the meeting). The appointment proposals should be approved by majority. 116 ANNUAL REPORT EDPR 2020 In the table below, the proportion of employees in 2020 is disclosed by age group, gender and professional category. EMPLOYEES (%) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Directors 0% 0% 3% 7% 1% 3% 13% Managers 0% 0% 2% 6% 0% 1% 10% Specialists 7% 10% 13% 28% 2% 4% 63% Technicians 0% 4% 2% 5% 1% 1% 14% Total 7% 14% 20% 46% 4% 9% 100% In the table below, the proportion of employees in 2019 is disclosed by age group, gender and professional category. EMPLOYEES (%) UNDER 30 YEARS OLD BETWEEN 30 AND 50 YEARS OLD OVER 50 YEARS OLD TOTAL FEMALE MALE FEMALE MALE FEMALE MALE Directors 0% 0% 3% 8% 1% 3% 14% Managers 0% 0% 2% 6% 0% 1% 10% Specialists 6% 10% 13% 28% 2% 4% 63% Technicians 0% 4% 2% 5% 1% 1% 14% Total 7% 14% 20% 47% 4% 8% 100% Note: EDPR does not register the number of employees with disabilities. GRI 405-2 - Ratio of basic salary and remuneration of women to men Note 1: 2020 figures do not include expats, 2020 mobilities, long term absences, new hires from December and Executive Committee members, totalling 34 employees. 2019 figures do not include expats, employees from new geographies, new hires from December and November except for Spain and Executive Committee members, totalling 62 employees. Note 2: The calculations are based on the December headcount. The base salaries of the new hires are annualised but the rest of the monetary and non-monetary benefits are not annualised, which may cause deviations. For 2019 figures, the base salary for the employees promoted during that year are annualised based on the new salary. Note 3: The wage gap is calculated female/male remuneration based on GRI methodology. The cal culation considers the employee’s working hours . REMUNERATION (€) 2020 2019 ∆% YoY FEMALE MALE FEMALE MALE FEMALE MALE UNDER 30 YEARS OLD Directors - 108,598 - 169,193 - (36%) Managers 76,782 85,282 59,563 77,790 +29% +10% Specialists 51,842 56,754 54,037 53,435 (4%) +6% Technicians 39,956 64,702 45,556 63,772 (12%) +1% BETWEEN 30 AND 50 YEARS OLD Directors 169,553 182,250 164,806 177,395 +3% +3% Managers 91,152 92,833 93,922 93,202 (3%) (0.4%) Specialists 65,743 73,118 64,869 74,695 +1% (2%) Technicians 56,744 72,482 53,101 65,719 +7% +10% OVER 50 YEARS OLD Directors 172,520 191,570 205,682 195,296 (16%) (2%) Managers 103,016 109,042 94,820 110,040 +9% (1%) Specialists 87,004 96,545 94,429 96,597 (8%) (0%) Technicians 71,538 77,410 68,640 70,515 +4% +10% 117 WAGE GAP - AVERAGE REMUNERATION (€) 2020 F/M 2019 F/M FEMALE MALE FEMALE MALE EUROPE Directors 120,462 133,936 90% 123,810 138,167 90% Managers 68,215 72,104 95% 68,123 70,330 97% Specialists 48,720 52,813 92% 50,744 52,809 96% Technicians 32,439 39,667 82% 35,214 34,620 102% SOUTH AMERICA Directors 131,173 100,229 131% - 117,008 - Managers 45,894 46,112 100% 56,023 59,214 95% Specialists 31,403 34,846 90% 40,084 40,305 99% Technicians - - - - - - NORTH AMERICA Directors 245,121 256,996 95% 262,674 257,669 102% Managers 129,728 126,619 102% 122,487 133,687 92% Specialists 96,219 110,500 87% 94,628 107,951 88% Technicians 67,116 69,712 96% 65,362 67,029 98% WAGE GAP - AVERAGE BASE SALARY (€) 2020 F/M 2019 F/M FEMALE MALE FEMALE MALE EUROPE Directors 83,698 94,836 88% 88,592 99,047 89% Managers 51,530 55,581 93% 54,335 55,876 97% Specialists 40,383 43,206 93% 42,727 42,929 100% Technicians 27,087 31,956 85% 29,040 28,480 102% SOUTH AMERICA Directors 110,160 71,179 155% - 90,571 - Managers 36,577 34,830 105% 42,872 43,038 100% Specialists 23,492 25,638 92% 30,149 28,347 106% Technicians - - - - - - NORTH AMERICA Directors 168,591 173,662 97% 179,670 176,772 102% Managers 91,993 88,426 104% 90,904 94,550 96% Specialists 76,523 81,263 94% 75,655 81,931 92% Technicians 48,806 46,549 105% 48,528 44,940 108% GRI 102-38 – Annual total compensation ratio The ratio presented below represents of the annual total compensation for the organisation’s highest -paid individual in each country of significant operations to the median annual total compensation for all employees. ANNUAL TOTAL COMPENSATION RATIO (x) 2020 2019 ∆% YoY Spain 5.6 5.3 6% Portugal 4.2 4.9 -13% US 6.1 6.3 -4% Note 1: João Manso Neto and Rui Teixeira did not receive any remuneration from EDPR. EDPR and EDP signed an executive management services agreement according to which EDPR paid to EDP a fee for the services rendered by these officers. Note 2: X as unit means times. 118 ANNUAL REPORT EDPR 2020 GRI EU15 - Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region EMPLOYEES ELIGIBLE TO RETIRE (%) 2020 2019 IN 10 YEARS IN 5 YEARS IN 10 YEARS IN 5 YEARS BY EMPLOYMENT CATEGORY Directors 10% 6% 10% 7% Managers 2% 1% 0% 0% Specialists 5% 3% 4% 2% Technicians 6% 5% 7% 4% BY COUNTRY Europe Spain 4% 2% 4% 2% Portugal 20% 16% 20% 15% Rest of Europe 3% 2% 2% 1% Total 6% 4% 5% 3% South America Brazil 0% 0% 0% 0% Colombia 0% 0% 0% 0% Total 0% 0% 0% 0% North America US 6% 4% 6% 3% Rest of North America 0% 0% 0% 0% Total 6% 4% 6% 3% GRAND TOTAL 5% 4% 5% 3% Note: The employees eligible to retire in the next 5 years is with 60 years reference and in the next 10 years with 57 years reference. Other people management related topics: Communication with employees EDPR ’s global presence with employees from different nationalities and generations requires the Company to listen and provide feedback on the different ambitions and expectations. Thus, EDPR launches a Climate Survey every two years, which allows the Company to better understand and act in accordance with the employees’ opinion. In addition, EDPR works to keep its employees well informed and therefore continues to improve the internal communications channels, which also helps to keep employees motivated and committed to the Company’s strategy. In 2020, remote working during the COVID-19 pandemic resulted in internal communications to play a critical role. As many organisations across the world, EDPR had to introduce new practices to ensure effective cross-departmental collaboration, fluid communications and employee engagement. EDPR implemented several initiatives in this regard, such as the continuous communication with employees regarding updates of the pandemic through multiple channels, a several Home Office campaigns encouraging employees to follow a series of tips to help them successfully work from home. EDPR has an Internal Communication Committee (ICC), which seeks to improve the way EDPR ’s different channels are used and perceived across the organization, while enhancing intra-platform and bidirectional communication and alignment with the Company’s vision and objectives. It also facilitates top - down communication of the company’s strategy. EDPR and EDP Group have strategically invested in this area with innovative communication channels that have consistently been recognised internationally for their mix of dynamism and creativity. 119 These are EDPR ’s internal communication channels that keep emplo yees informed and connected every day: • Intranet: The platform takes online interaction among employees to a new level, by including social media-style features and advanced customisation options. It’s a place to share information, work together, and learn about the projects and news from EDPR and EDP. • Workplace: EDPR introduced this new internal communication tool in 2020. The social network aims to revolutionize internal communication by customizing content according to the audience, by bringing it closer to the company hierarchy, by fostering top-down and bidirectional communication and improving teamwork. With this initiative, EDPR reinforced its commitment with digitalization. • EDP On Renew magazine: The print magazine has been a mainstay of EDP Group’s i nternal communications since 1988. The OnRenew edition, specific to EDPR, shows the Company and its people through stories, opinion articles and editorials. • EDP On TV: The TV Channel has been broadcasting on EDPR and EDP offices and online. Includes dynamic news reports and interviews on news and events. It is the medium that truly puts a face on projects and initiatives. • HR phone app: EDPR has in place a phone app to provide employees with news, access to selection processes or measures in a practical and simple way. This tool proves to be particularly useful to keep connected to often-travelling and geographically dispersed employees. • Internal newsletters: Monthly newsletters give a broader reach to news and info rmation regarding the Company’s projects, teams, successes, and strategies. In addition to these communication channels, EDPR holds Companywide Annual Meetings that allow employees to streamline their long-distance communication to improve their day-to-day work, share their concerns, and get to know the business goals set by EDPR ’s top management. The Company also holds meetings and team building events; conference calls regarding results, and a robust website that informs both internal and external stakeholders. All of these communication efforts work to motivate employees, promote knowledge sharing and bring people together. Employees with disabilities In the companies in Spain where there is a legal obligation to have people with disabilities in the workforce to comply with the LISMI due to the number of employees, EDPR has opted for the exceptionality measures provided by the Law. The Company is able to comply with the quota that legally applies to it through contracts of goods or services with companies that promote the hiring of disabled people and also through donations. EDPR ’s companies under this obligation are covered with the exceptionality measures since February 2018 and for a period of three years. For the rest of EDPR countries, the approach is the same. Recently, as part of EDPR's global strategy, a Diversity and Equality Committee has been set up with the participation of the Executive Committee, whose objective is to integrate the commitment to this issue within the company. One of the objectives of this Committee is focused on the group of people with disabilities as one of the most important topics to be developed. W ork organisation & implementation of “right to disconnect” policies With the aim of delivering excellent results and meeting deadlines, EDPR employees need to be flexible and highly responsible on their daily routine. Keeping that in mind, in 2017 EDPR designed Work Smarter, a Code that includes a set of guidelines to work efficiently by maximising the time efficiency of each daily task, mainly regarding work organisation, email & phone and meetings. Additionally, different initiatives took place during 2017 in order to involve employees around this different way of working. Some of the initiatives were placing inspiring sentences and clocks in the meeting rooms to remind the employees that their time is gold. Within Work Smarter, some of the initiatives were focused on the right to disconnect. For the moment, EDPR does not have policies regarding the right of people to disconnect from work during non- work hours but messages of disconnection and good practice will continue to be conveyed. In 2020, due to the COVID-19 and subsequent home office regime implemented, EPDR shared several tips in its intranet on how to better work from home, which included the separation between professional and personal life, setting a work schedule and taking breaks. 120 ANNUAL REPORT EDPR 2020 Work life balance 2020 was a year of uncertainty, change and adaptation in which both physical and mental health were a priority. Now more than ever, promoting a balance between work and personal life is crucial to be a more competitive company and to build a fairer society based on flexibility, respect and equal opportunities. EDPR thus implements various initiatives focused mainly on family, time and health, offering its team a wide range of benefits that strengthen the Company’s position as flexible and family- friendly, and fostering time efficiency of employees’ daily tasks to balance their professional and personal life whil e still delivering excellent results. Accordingly, EDPR’s Work Life Balance (WLB) practices have been awarded for nine years through the Responsible Family Employer Certification (EFR – Empresa Familiarmente Responsable) by Spain’s Fundación MásFamilia. In 2020, EDPR was awarded with the level of excellence in this certification, recognising the Company’s efforts to balance professional and personal life, excellence and flexibility. To achieve this continuously, EDPR is dedicated to constant improve the initiatives implemented in order to provide the most suitable and updated benefits to its employees. During the year, EDPR launched the “Flex - Movement”, an initiative to streamline flexibility measures and to improve the conditions necessary to make EDPR a dynamic, innovative and growth-based company. The movement included actions such as facilitating the approval workflow of requests to work from home in exceptional circumstances, and the opportunity to work in any EDPR office in the world up to 15 days a year. In addition, among the novelties announced, EDPR started in February two pilot projects in Spain and Poland to implement home office a day per week. The pilot then worked as a foundation for implementing remote work in a global scale due to the COVID-19 crisis. Later in the year, as a result of the successful implementation of home office globally, EDPR approved a remote work strategy, which will be fully implemented post-pandemic. The Company believes remote work is key to improve flexibility, work life balance and overall wellbeing of its team, whilst still being productive. Therefore, employees will be able to work remotely 2 days per week, where feasible. In addition, the Company created a wellness platform to further development a wellness culture and promote healthy habits. The programs promoted by the platform aim to generate a culture in which employees choose to adopt healthy habits voluntarily, sharing their experiences, forming support networks to facilitate the process and motivating each other. EDPR also shared several health, wellbeing and home office tips in its intranet throughout the year. To raise awareness regarding mental health specifically, EDPR launched the Mind Your Mind campaign in October, which promoted educational talks with specialists, employees and other key speakers on how to approach the topic especially during the current social context. Furthermore, EDPR has a volunteer program addressed to its employees in order to promote social responsibility, giving them the opportunity to grow not only at work but also personally while also contributing to the society. As a result, EDPR employees are given 4 hours a month to dedicate to volunteering initiatives. During the COVID-19 pandemic, EDPR reinforced the volunteering activities proposed, adding initiatives that run on an online model and adding the possibility to make donations to support the health and wellbeing of the society during this global crisis. Equality plans EDP Renováveis S.A. has an Equality Plan for the period 2020-2022 in accordance with the Spanish Organic Law 3/2007 which has already achieved 41% compliance at a global level and has taken the appropriate steps to comply with local legislation on equality as required. Adopted measures to promote employment related to equality EDPR incorporates the principles of Diversity and Inclusion in its values and practices as it is aware that a diverse team helps bring together different perspectives and know-how, and represent different sources of talent. Specifically, EDPR aims to contribute to improving the quality of life of its employees, eliminate career barriers and promote gender equality, seeking to ensure an environment of openness in a workplace where mutual respect and equal opportunity prevail. In 2020, EDPR created a Diversity & Inclusion Committee to promote its commitment to these crucial principles. The main goals of the Committee are to reflect the Company’s strategy on D&I, which integrates the definition and development of initiatives that contribute to a global action plan and local action plans, and to foster sharing knowledge and best practices. Even so, as a responsible company, EDPR aims to actively promote these values among its team. Thus, during 2020, EDPR launched SHE , an interactive game-based learning to mitigate unconscious biases, and launched a Diversity, Equity, and Inclusion online training session. As a recognition of its great commitment to gender equality, the Company entered the 121 Bloomberg Gender Equality Index for the first time in 2020. EDPR is therefore included in the list of 325 companies making the largest strides in the transparency of gender- related information and in promoting women’s equality around the world. EDPR is dedicated to continuously fostering a culture founded on human equality and the strength in diversity, and will continue to lead by example. The Company upholds its commitment to Diversity & Inclusion not only through words, but through actions that truly make a positive impact on people. Sexual harassment protocol As stated in its Code of Ethics, EDPR commits to respect and foster due respect for employees and fulfil their right to dignified working conditions. In particular, EDPR seeks to protect its employees and will not tolerate acts of psychological aggression or moral coercion, such as insults, threats, isolation, invasion of privacy or professional limitation aimed at constraining the person, affecting their dignity or creating an intimidating, hostile, degrading, humiliating or disruptive environment. The Code of Ethics has its own regulation that defines a process and channel, open to all stakeholders, to report any potential claim or doubt on the application of the Code. For the moment, EDPR does not have a specific sexual harassment protocol. Universal accessibility Most of the offices in which EDPR has its operations are not owned by the company. Therefore, EDPR is limited in the implementation of accessibility measures in its offices. However, in other topics in which EDPR has decision-making power, such as the creation of its website, the company took measures to comply with the accessibility specifications that help blind people to use it. 4.6. Corporate governance For information regarding GRI 103 – Management Approach for this material topic, please refer to section Organisation of the chapter The Company. For further information on the topic please see chapter Corporate Governance. Average remuneration of EDPR board members and officers Board members remuneration In 2020, the average salary for EDPR Board male members has been €56,701 (+9% vs. 2019) and €57,500 (no variation vs. 2019) for female members. Note 1: António Mexia, João Manso Neto, Vera Pinto and Rui Teixeira did not receive any remuneration from EDPR. EDPR and EDP signed an Executive Management Services Agreement according to which EDPR paid to EDP a fee for the services rendered by these Board Members. Note 2: Miguel Ángel Prado receives both the remuneration as officer and board member from EDPR North America LPP and is not considered in this average. Note 3: The calculations include all board members that belonged to EDPR BoD in 2020. Officers remuneration In 2020, the average salary for ED PR executive officers, all male, has been €527,724 (+23% vs. 2019 impacted by multi - annual remuneration), including fixed salary, variable salary, retirement savings plan, company car and health insurance. EDPR’s executive officers are the members of the E xecutive Committee. Likewise, in application of the deferral policy, in 2020 an amount of 84.443€ was paid to Miguel Amaro (former Executive CFO of the company), for the services rendered in 2016-2017. Note 1: João Manso Neto and Rui Teixeira did not receive any remuneration from EDPR. EDPR and EDP signed an executive management services agreement according to which EDPR paid to EDP a fee for the services rendered by these officers. Note 2: The calculations include officers that belonged to EDPR Executive Committee in 2020 except for João Manso Neto and Rui Teixeira. 122 ANNUAL REPORT EDPR 2020 4.7. Suppliers management GRI 204-1 - Proportion of spending on local suppliers At EDPR, there is no specific policy or in-house procedure for preferring locally based suppliers. Nevertheless, under equal commercial terms, EDPR chooses local suppliers in order to enhance the socio-economic sustainability of the 14 countries across Europe and the Americas where it is present. In this way, 97% of vendor spending in 2020 was sourced from local suppliers at a country level. Moreover, during the construction of the Company’s projects, the local community can see an influx of temporary local construction workers and suppliers that provide a positive impact on the local economy. Note 1: EDPR defines spending in local suppliers at a country level as purchases to suppliers in countries where EDPR is present divided by the total invoiced volume in 2020. GRI 308-2 - Negative environmental impacts in the supply chain and actions taken EDPR’s procurement process is developed within the framework of the Procurement Policy, which extends to EDPR’s both direct and indirect suppliers, and from which the most relevant aspects for EDPR regarding the supply chain’s high quality and sustainability are established. Accordingly, EDPR has in place requirements related to Sustainability, Quality and Risk management that have to be met by its suppliers throughout the main procurement phases: registration process, contracting and, lastly, the monitoring and evaluation of the suppliers. EDPR has a Corporate System of Supplier Registration in place which works as the support to search and select suppliers by providing detailed information, validated and updated by credible sources in order to guarantee their accreditation through financial, technical quality and sustainability criteria. This includes environmental topics such as the existence of an environmental management system and its certification, the existence of environmental requirements in the suppliers procurement conditions or the availability of procedures and resources to assure the prevention/minimisation of environmental impacts. In 2020, EDPR implemented a Supplier Qualification Process. The main goal of this process is to provide a more thorough analysis on critical topics such as technical capabilities, health and safety, environment and ethics, and to establish highly standardised minimum requirements to ensure that the suppliers with whom EDPR conducts business are qualified. The qualified suppliers are included in a Suppliers Qualification List and are able to participate in the EDPR bidding and contracting processes. The incorporation of adequate criteria in the bidding and contracting processes of the company is essential to ensure the management and mitigation of operational risks in the supply chain. In Europe & Brazil, EDPR has a Suppliers Sustainability Guide in place for both construction and O&M operations, providing an overview of the sustainability requirements EDPR expects its suppliers to meet. The guide includes H&S, environmental and ethical requirements such as compliance with applicable regulations, policies, internal norms, procedures and systems in place. In addition, EDPR has implemented a process that classifies suppliers according to their H&S and environmental risks. The classification serves as an input in the selection of suppliers during the bidding phase. Based on the individual values obtained in this classification, suppliers may be excluded from the bidding process. If the supplier wants to be re-considered or participate in new processes, an action plan to solve the identified issues has to be presented and EDPR shall approve the action plan proposal. Adequate compliance by all EDPR suppliers with applicable H&S and environmental requirement is essential to guarantee the correct performance of the contracted services and works. Aiming to ensure that suppliers comply with these requirements, the Company has established a disciplinary and sanctioning regime, which is included in all requests for proposal, contracts and purchase orders so any provider will be always informed about the consequences of not complying with EDPR H&S and environmental requirements. 123 In order to guarantee that the suppliers comply with the previously mentioned requirements, EDPR monitors strategic suppliers during their services delivery, which are mainly during the construction and operation phases of EDPR’s projects. EDPR requires that suppliers adopt all necessary measures to ensure strict compliance with all applicable environmental regulations as well as EDPR's Environmental Policy and internal norms, procedures and systems in place as regards to environmental management. In order to guarantee that the suppliers comply with the environmental requirements during constructions, EDPR has established an environmental monitoring plan in coordination with the Construction Manager and the suppliers, which is implemented by an external party. In addition, EDPR performs internal inspections during the construction and operation phases to monitor the suppliers performance regarding environmental and H&S aspects and to identify potential risks. In 2020, EDPR performed 996 inspections to 131 suppliers regarding EHS procedures in EU&BR, and 72 inspections to 10 suppliers in NA regarding their environmental performance. As a result, the Company identifies corrective actions needed and establishes an action plan for continuous improvement. Furthermore, EDPR hires an external party for additional supervision in these areas. These processes are reinforced by the integrated Health and Safety and Environmental Management System, which was developed and externally certified in 2020 according to international standards ISO 45001 and ISO 14001. All parameters of the Qualification system are periodically reviewed and reassessed by EDPR to guarantee that supply chain performance remains on the high quality level required. In a previous study to characterise EDPR’s supply chain, performed in 2015, including the analysis of the exposure to economic, social and environmental risks, performed using the ESCHER (Efficient Supply Chain Economic and Environmental Reporting) methodology developed by PwC, it was determined that 300 thousand-ton GHG emissions were associated to EDPR’s direct and indirect purchases, only 5% of which related to direct purchases. Through this study, EDPR aims to identify areas where should focus its improvement activities in order to significantly reduce its exposure to risk and optimise impacts. GRI 414-2 - Negative social impacts in the supply chain and actions taken EDPR’s procurement process is developed within the framework of the Procurement Policy, which extends to EDPR’s both direct and indirect suppliers, and from which the most relevant aspects for EDPR rega rding the supply chain’s high quality and sustainability are established. Accordingly, EDPR has in place requirements related to Sustainability, Quality and Risk management that have to be met by its suppliers throughout the main procurement phases: registration process, contracting and, lastly, the monitoring and evaluation of the suppliers. EDPR has a Corporate System of Supplier Registration in place which works as the support to search and select suppliers by providing detailed information, validated and updated by credible sources in order to guarantee their accreditation through financial, technical quality and sustainability criteria. This includes environmental topics such as the existence of an environmental management system and its certification, the existence of environmental requirements in the suppliers procurement conditions or the availability of procedures and resources to assure the prevention/minimisation of environmental impacts. In 2020, EDPR implemented a Supplier Qualification Process. The main goal of this process is to provide a more thorough analysis on critical topics such as technical capabilities, health and safety, environment and ethics, and to establish highly standardised minimum requirements to ensure that the suppliers with whom EDPR conducts business are qualified. The qualified suppliers are included in a Suppliers Qualification List and are able to participate in the EDPR bidding and contracting processes. The incorporation of adequate criteria in the bidding and contracting processes of the company is essential to ensure the management and mitigation of operational risks in the supply chain. In Europe & Brazil, EDPR has a Suppliers Sustainability Guide in place for both construction and O&M operations, providing an overview of the sustainability requirements EDPR expects its suppliers to meet. The guide includes H&S, environmental and ethical requirements such as compliance with applicable regulations, policies, internal norms, procedures and systems in place. In addition, EDPR has implemented a process that classifies suppliers according to their H&S and environmental risks. The classification serves as an input in the selection of suppliers during the bidding phase. Based on the individual values obtained in this classification, suppliers may 124 ANNUAL REPORT EDPR 2020 be excluded from the bidding process. If the supplier wants to be re-considered or participate in new processes, an action plan to solve the identified issues has to be presented and EDPR shall approve the action plan proposal. Adequate compliance by all EDPR suppliers with applicable H&S and environmental requirement is essential to guarantee the correct performance of the contracted services and works. Aiming to ensure that suppliers comply with these requirements, the Company has established a disciplinary and sanctioning regime, which is included in all requests for proposal, contracts and purchase orders so any provider will be always informed about the consequences of not complying with EDPR H&S and environmental requirements. In order to guarantee that the suppliers comply with the previously mentioned requirements, EDPR monitors strategic suppliers during their services delivery, which are mainly during the construction and operation phases of EDPR’s projects. To prevent possible H&S risks to workers from other companies, EDPR provides a risk guide for the facility to all contractors before starting their work on the facility. In addition, the Company requires that the contractors participate in drills that are carried out at the facilities, so that everyone knows how to act in the event of an emergency. In addition, EDPR performs internal inspections during the construction and operation phases to monitor the suppliers performance regarding environmental and H&S aspects and to identify potential risks. In 2020, EDPR performed 996 inspections to 131 suppliers regarding EHS procedures in EU&BR, and 194 inspections to 20 suppliers in NA regarding their H&S performance. As a result, the Company identifies corrective actions needed and establishes an action plan for continuous improvement. Furthermore, EDPR hires an external party for additional supervision in these areas. These processes are reinforced by the integrated Health and Safety and Environmental Management System, which was developed and externally certified in 2020 according to international standards ISO 45001 and ISO 14001. Moreover, EDPR has Compliance questionnaires related to the anti-corruption practices of the suppliers to ensure that they are all aligned with EDPR’s A nti-Corruption Policy. In addition, EDPR approved of a Third Party Integrity Due Diligence procedure in 2020, reinforcing the mechanisms for identifying and preventing possible integrity risks for EDPR in the relationship with third parties. In 2020, 157 Compliance analysis to third parties were performed, of which just 2 presented a special risk of corruption. They were complemented with a deep external investigation, recommending the inclusion of robust clauses related to corruption in the corresponding agreements. All parameters of the Qualification system are periodically reviewed and reassessed by EDPR to guarantee that supply chain performance remains on the high quality level required. In a previous study to characterise EDPR’s supply chain, performed in 2015, including the analysis of the exposure to economic, social and environmental risks, performed using the ESCHER (Efficient Supply Chain Economic and Environmental Reporting) methodology developed by PwC, it was determined that more than 20,000 job s related to EDPR’s direct purchases were created, more than €735 million gross value added was associated to EDPR’s purchases, and that ~0% of EDPR’s direct purchases were identified as having significant risk for incidents of child labour, forced or comp ulsory labour or freedom of association. Through this study, EDPR aims to identify areas where should focus its improvement activities in order to significantly reduce its exposure to risk and optimise impacts. 125 4.8. Community engagement For information regarding GRI 103 – Management Approach for this material topic, please refer to section Contribute to the Society of the chapter Execution GRI 202-2 - Proportion of senior management hired from the local community The Code of Ethics contains specific clauses of non- discrimination and equal opportunities in line with the Company’s culture of diversity. This is reflected in the procedures for hiring people via a non-discriminatory selection processes. A potential employee’s race, gender, sexual orientati on, religion, marital status, disability, political orientation or opinions of any other nature, ethnic or social origin, place of birth or trade union membership are not considered. There are no specific procedures explicitly requiring local recruitment. However, a high percentage of EDPR employees’ are hired from the same country in which the Company operates. LOCAL RECRUITMENT (%) 2020 2019 DIRECTORS Europe 84% 83% South America 50% 43% North America 79% 78% Rest of the world - 100% GRI 203-1 - Infrastructure investments and services supported Wind and solar energy require infrastructure investments which benefit surrounding communities. This includes the reinforcement of existing electricity networks and the rehabilitation of existing roads or the construction of new roads. The investment in roads is necessary in order to transport heavy equipment (wind turbine components, power transformers, etc.) to the site during construction. The improved road system facilitates future maintenance activities after construction works, as well as improves access to remote locations for the surrounding communities. During the operation of the wind farms, these roads are maintained. The integration of the generation capacity may also require upgrades in the distribution and transmission grids that belong to the system operators. Those upgrades indirectly benefit the quality of service offered in the surrounding areas by minimising electricity supply interruptions. In 2020, EDPR invested € 18 million in the development of community roads surrounding its projects. GRI 203-2 - Significant indirect economic impacts Renewable energy technologies are viewed not only as tools for mitigating climate change, but are also increasingly recognised as investments that can provide direct and indirect economic advantages by reducing dependence on imported fuels (and hence, improving trade balances), enhancing local air quality and safety, advancing energy access and security, propelling economic development and creating jobs. In 2020, EDPR implemented several economic development projects, which foster job creation and profit generation. GRI 411-1 - Incidents of violations involving rights of indigenous peoples EDPR has no knowledge of any incident of violations involving rights of indigenous people in 2020, neither in 2019. Note: For the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system, and claims/doubts reported in the Ethics Channel and considered a violation of the Code of Ethics by the Ethics Ombudsperson and the Ethics Committee. 126 ANNUAL REPORT EDPR 2020 GRI 413-1 – Operations with local community engagement, impact assessments, and development programs EDPR ’s main goal regarding their relationship with communities near its facilities is to preserve a close and long-term connection with them in order to guarantee a good coexistence. This concern presents itself as a valuable instrument in the entire life cycle of EDPR ’s o perations that goes from the development, construction and operation of wind farms and solar plants to their dismantlement. During the development phase, EDPR performs an environmental impact assessment for all the projects. This assessment includes the most significant issues for the affected areas both from an environmental and social perspective. During the entire life cycle of its operations, EDPR promotes the well-being and development of the communities throughout the countries where it operates. EDPR considers that in order to make a positive impact on local communities, it is vital to work for the common good by promoting and supporting social and environmental activities. EDPR’s Social Investment is developed within the framework of its Social Investment Policy, which establishes the corporate objectives and strategies related to this area. As a result, EDPR invests in activities that will positively impact the promotion and development of the following four main priorities: • Lift Up Our Heritage: Protect and promote cultural heritage, local traditions and access to culture and art, contributing to a more vibrant and creative society; • Build Up Community: Build thriving and inclusive communities by improving the living conditions of those in need and supporting the wellbeing of people near our operations, also focusing on enhancing energy inclusion and access to energy; • Enhance Our Environment: Promote and protect biodiversity and natural heritage for the benefit of the members of the society; • Brighten Up Our Future: Promote energy efficiency, renewable energy and decarbonization through increased awareness, supporting education on renewable energy for all. Moreover, EDPR has implemented a catalogue of activities focused on the previous four priorities, which is dynamic and updated according to the expectations and needs of the communities surrounding the facilities. The catalogue includes key performance indicators that should be used to monitor each activity. As a result, EDPR invested €2. 5 million in the development of society. This investment includes over €1 million distributed among the 15 countries where the Company is present as a solidarity campaign in response to the COVID-19 pandemic to help local communities overcome the pandemic and recover from the socioeconomic crisis. EDPR helped people in need mostly through donations to food banks, purchases of healthcare equipment, medical devices and rapid testing kits, and the facilitation of online learning and digital educational materials. EDPR’s response to the global crisis is aligned with its commitment to preserve a relationship of proximity with the local communities and support its development. 127 GRI 413-2 – Operations with significant actual and potential negative impacts on local communities EDPR does not have individual consumers, according to the concept this term has associated in the Spanish regulation (Law 11/2018). Regarding the complaint systems, given the core business of the Company, EDPR does not deal directly with individual consumers. However, EDPR considers the local communities near its operations as its clients and makes different complaint channels available to them, among which is the Ethics Channel. Noise, visual impact, TV interferences and ice thrown from wind turbines are identified as EDPR ’s business environmental impacts within the category of disturbance to the local communities. EDPR implements the necessary measures to make these impacts as minor as possible. Moreover, during the operation phase, EDPR has grievance mechanisms in place available to the local communities to ensure that suggestions or complaints are properly recorded and addressed. This allows EDPR not only to solve the complaints but also to introduce improvements in all processes. In 2020, EDPR registered 45 complaints regarding impact on the local communities -61% comparing to 2019. There were 41 complaints in the US, of which 30 are already solved. 14 claims were related to noise, 18 related to road drainage, 5 related to impact on the view or creation of shadows, and 4 related to possible interferences with the TV signal. In addition, there were 4 complaints in France, 1 related to noise, 1 related to impact on the view or creation of shadows and 2 related to possible interferences with the TV signal. 4.9. Innovation For information regarding GRI 103 – Management Approach for this material topic, please refer to section Innovation Capital of the chapter Execution. 128 ANNUAL REPORT EDPR 2020 4.10. Environmental management For information regarding GRI 103 – Management Approach for this material topic, please refer to section Natural Capital of the chapter Execution. GRI 304-2 - Significant impacts of activities, products, and services on biodiversity As a responsible company, EDPR is aware of the sensitivity of natural ecosystems and the pressures affecting biodiversity. Thus, EDPR assumes its commitment to contribute to the prevention or reduction of loss in biodiversity, as stated in its Environmental Policy. EDPR's commitment towards biodiversity protection is focused on the main impacts of its activities: migrating birds, bats and habitat fragmentation. As a result, the Company particularly commits to protect the wildlife surrounding its wind farms. The Company has implemented relevant measures to identify the impacts of its operations on biodiversity, including: • Environmental impact assessments and/or risk mapping: During the development phase of any project of the Company, the potential environmental impacts are analysed in detail in the environmental impact studies of the projects and other specific environmental studies, always performed by professional external experts. These studies evaluate the possible impacts of the projects in factors such as fauna, flora, soil, air and water bodies, among others. • Monitoring of biodiversity indicators: EDPR has established an environmental monitoring which is implemented by an external party. Even so, efforts are intensified with specific monitoring procedures in the small number of sites located inside or close to protected areas. In addition, the Company has defined general procedures in its Environmental Management System to prevent, correct or compensate impacts in the environment. The environmental strategy of the Company complements this approach, with the ambition for a globally positive balance through projects focused on the conservation of wildlife. Moreover, as a sustainable company, it is EDPR’s duty to contribute to the development of research and conservation programs, as well as to broaden scientific knowledge on biodiversity matters by supporting institutions and strengthening dialogue and partnerships. GRI 304-3 - Habitats protected or restored EDPR’s business is its best contribution to reduce biodiversity loss. Nevertheless, the Company’s commitment to contribu te to the protection of biodiversity leads to an active role in the conservation of wildlife surrounding its facilities. Even though EDPR works to minimise any impact on the land surrounding its facilities, the construction and dismantlement processes of wind farms and solar plants are closely followed by EDPR teams, who work to reduce potential impacts or disturbances and to ensure proper restoration of the land once the works finish, cleaning up and rehabilitating the sites to return the area to its initial state. In 2020, EDPR finished the morphological (22 hectares) and vegetal (28 hectares) restoration of the Zas wind farm in Spain which was dismantled the previous year, restoring 100% of the hectares affected by the project. In addition, EDPR strongly participated in the protection of biodiversity mainly through collaborations with several organisations to further protect wildlife surrounding its facilities. 129 GRI 304-1 - Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Note 1: EDPR reports EBITDA wind farms’ energy consumption the year after the COD (commercial operating date), when the trial period is over and the consumption is significant. Thus, the energy consumption of wind farms that have entered into operation in 2020 will be included in the 2021 report. Note 2: This table contains information regarding every EDPR operational sites in or adjacent to protected areas. EDPR does not own sites in or adjacent to protected areas in France, Italy, Brazil, the United States, Canada or Mexico. COUNTRY FACILITY NAME TYPE OF OPERATION POSITION IN RELATION WITH PROTECTED AREA FACILITY AREA IN PROTECTED NATURAL AREA (ha) % FACILITY AREA IN PROTECTED NATURAL AREA (%) ATRIBUTE OF THE PROTECTED AREA STATUS OF THE PROTECTED AREA Ilza Wind farm Partially Within 6.6 81% Terrestrial Regional Park Tomaszow Wind farm Adjacent 0.0 0% Terrestrial-Fresh w ater Natura 2000 Pena Suar Wind farm Inside 6.3 100% Terrestrial Natura 2000 Açor Wind farm Partially Within 0.1 1% Terrestrial Natura 2000 Açor II Wind farm Partially Within 6.0 88% Terrestrial Natura 2000 Cinfaes Wind farm Inside 4.9 100% Terrestrial Natura 2000 Bustelo Wind farm Inside 8.9 100% Terrestrial Natura 2000 Falperra-Rechãzinha Wind farm Partially Within 29.2 88% Terrestrial Natura 2000 Fonte da Quelha Wind farm Inside 8.1 100% Terrestrial Natura 2000 Alto do Talefe Wind farm Inside 9.2 100% Terrestrial Natura 2000 Fonte da Mesa Wind farm Partially Within 8.2 83% Terrestrial Natura 2000 Madrinha Wind farm Inside 4.1 100% Terrestrial Natura 2000 Safra-Coentral Wind farm Inside 19.7 100% Terrestrial Natura 2000 Negrelo e Guilhado Wind farm Partially Within 9.6 98% Terrestrial Natura 2000 Testos Wind farm Partially Within 2.9 22% Terrestrial Natura 2000 Natura 2000 National protected area Tocha Wind farm Inside 6.8 100% Terrestrial Natura 2000 Padrela/Soutelo Wind farm Partially Within 1.0 41% Terrestrial Natura 2000 Guerreiros Wind farm Partially Within 0.1 0.2% Terrestrial Natura 2000 Vila Nova Wind farm Partially Within 7.1 42% Terrestrial Natura 2000 Vila Nova II Wind farm Partially Within 9.1 34% Terrestrial Natura 2000 Balocas Wind farm Partially Within 0.4 1% Terrestrial Natura 2000 Ortiga Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 S. João Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Alto Arganil Wind farm Partially Within 0.8 5% Terrestrial Natura 2000 Salgueiros-Guilhado Wind farm Partially Within 0.3 3% Terrestrial Natura 2000 Serra do Mú Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Albesti Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Pestera Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Sarichioi Wind farm Partially Within 0.1 0.1% Terrestrial Natura 2000 Burila Mica Solar plant Inside 22.7 100% Terrestrial-Fresh w ater Natura 2000 Sierra de Boquerón Wind farm Inside 10.4 100% Terrestrial Natura 2000 La Cabaña Wind farm Partially Within 8.2 53% Terrestrial Natura 2000 Corme Wind farm Partially Within 6.0 40% Terrestrial-Marine Natura 2000 Natura 2000 National protected area Coll de la Garganta Wind farm Partially Within 0.06 1% Terrestrial-Fresh w ater Natura 2000 Avila Wind farm Adjacent 0.0 0% Terrestrial-Fresh w ater Natura 2000 Buenavista Wind farm Adjacent 0.0 0% Terrestrial-Marine Natura 2000 Serra Voltorera Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Villoruebo Wind farm Partially Within 2.1 43% Terrestrial-Fresh w ater Natura 2000 Villamiel Wind farm Partially Within 1.9 29% Terrestrial-Fresh w ater Natura 2000 La Mallada Wind farm Partially Within 1.4 8% Terrestrial-Fresh w ater Natura 2000 Las Monjas Wind farm Partially Within 0.01 0% Terrestrial-Fresh w ater Natura 2000 Coll de la Garganta Wind farm Partially Within 0.06 1% Terrestrial-Fresh w ater Natura 2000 Tejonero Wind farm Partially Within 0.2 1% Terrestrial Natura 2000 Ávila Wind farm Adjacent 0.0 0% Terrestrial-Fresh w ater Natura 2000 Sierra de los Lagos Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Mostaza Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Los Almeriques Wind farm Adjacent 0.0 0% Terrestrial-Fresh w ater Natura 2000 Suyal Wind farm Adjacent 0.01 0.1% Terrestrial Natura 2000 Serra Voltorera Wind farm Adjacent 0.0 0% Terrestrial Natura 2000 Monseivane Wind farm Partially Within 17.2 97% Terrestrial-Fresh w ater Natura 2000 La Celaya Wind farm Partially Within 9.0 70% Terrestrial-Fresh w ater Natura 2000 La Peña Wind farm Inside 12.4 100% Terrestrial IBA Partially Within 0.01 0.3% Terrestrial Natura 2000 Adjacent 0.0 0% Terrestrial Natura 2000 Romania Poland Portugal Serra Alvoaça Wind farm Terrestrial Cerro del Conilete Wind farm Partially Within 7.8 61% Terrestrial 0.0 Spain Tahivilla Wind farm Adjacent 0% 130 ANNUAL REPORT EDPR 2020 GRI 306-2 - Waste by type and disposal method The main contribution to the hazardous waste produced by wind farms is related to oil and oil-related wastes such as oil filters or oil containers, used mainly for lubrication of the turbines. The consumption of this oil is based on certain pre- defined replacement time frequencies (between 2 and 5 years, based on the component, oil type and manufacturer). Annual fluctuations in hazardous waste generated are heavily dependent on the multiannual oil replacement programs above mentioned. During 2020, the recovery rate of hazardous waste was 94%, which is above EDPR’s 90% recovery target. Non-hazardous wastes generated by the Company include metals, plastics, paper or domestic garbage which are recycled in their vast majority. The following table summarises the amount of wastes generated in EDPR’s facilities and the rate of their recovery: WASTE GENERATED UN 2020 2019 ∆% YoY HAZARDOUS WASTE Total hazardous waste disposed t 30 44 (32%) Total hazardous waste recovered t 436 527 (17%) Total t 466 571 (18%) NON-HAZARDOUS WASTE Total non-hazardous waste disposed t 224 312 (28%) Total non-hazardous waste recovered t 364 508 (28%) Total t 588 820 (28%) GRAND TOTAL t 1,055 1,391 (24%) RATIOS Total waste kg/GWh 37 47 (20%) Total waste recovered % 76% 74% +2% Hazardous waste recovered % 94% 92% +1.4% Note 1: For the purposes of this report, all wastes have been classified as hazardous or non-hazardous according to European waste catalogue; however, in each country where EDPR has a geographic presence, each wind farm is required to adhere to national law by following company procedures for handling, labelling, and storage of wastes to ensure compliance. in cases like in the united states, when the company’s operations generate small quantities of substances which fall into additionally-regulated categories such as used oils and universal wastes, EDPR follows strict standards for handling and disposal of these waste types to ensure and remain compliant with all applicable laws. Note 2: EDPR reports EBITDA wind farms’ energy consumption the year after the COD (commercial operating date), when the trial period is over and the consumption is significant. Thus, the energy consumption of wind farms that have entered into operation in 2020 will be included in the 2021 report. Note 3: Includes waste both from operational facilities and offices. Waste from offices refers to 1Q20 data (due to the home office implemented the rest of the year). Note 4: Data from 2020 excludes 84 tons of waste caused by non-recurrent events. Data from 2019 excludes 948 tons of waste caused by non-recurrent events, of which 922 correspond to non-hazardous waste caused by a wind turbine that fell in France. 131 GRI 306-3 - Significant spills Given EDPR’s activity and its locations, oil spills and fires are the major environmental risks the Company faces. The Environmental Management System is designed and implemented to prevent emergency situations from happening. But, just to be cautionary, the system covers the identification and management of these, including the near miss situations. As of 2019, EDPR defines significant spills and fires as any spill affecting water bodies/courses, protected soils or soils of interest because of its natural value, or fire affecting protected areas and/or species (according to local protection laws), derived from the O&M activities in the facilities. EDPR continues to register near miss situations, when a registered incident does not reach the category of significant spill. In 2020, there were no significant spills and 83 near miss situations were registered, -26% vs 2019. EDPR performs regular environmental drills to guarantee that all employees and suppliers are familiar with the risks and have received the appropriate training to prevent and act, if necessary. Note: EDPR reports EBITDA wind farms’ energy consumption the year after the COD (commercial operating date), when the trial p eriod is over and the consumption is significant. Thus, the energy consumption of wind farms that have entered into operation in 2020 will be included in the 2021 report. Other environmental management related topics: Despite EDPR's core activities do not pose any threats of serious or irreversible damage to the environment, the Company, in compliance with the Precautionary Principle, applies cost-effective measures to prevent environmental degradation such as provisions for dismantling and decommissioning of property, plant and equipment to dismantle and decommission those assets at the end of their useful lives. Consequently, EDPR has booked provisions for property, plant and equipment related to electricity wind and solar generation for the responsibilities of restoring sites and land to its original condition, in the amount of € 305,628 thousands as at 31 December 2020 (+13% vs. 2019). 132 ANNUAL REPORT EDPR 2020 4.11. Ethics and Compliance For information regarding GRI 103 – Management Approach for this material topic, please refer to section Integrity and ethics of the chapter The Company. GRI 205-1 - Operations assessed for risks related to corruption EDPR analyses all the new markets where it operates through a Market overview including Sustainability topics such as human rights, labour and environment. This study also evaluates the corruption risk. In addition, EDPR has Compliance questionnaires in place related to the anti-corruption practices of the suppliers and the counterparts in the M&A processes in order to ensure that they are all aligned with EDP R’s Anti -Corruption Policy and Code of Ethics. This year, a new procedure regarding Third Party Integrity Due Diligence was approved, reinforcing the mechanisms for identifying and preventing possible integrity risks for EDPR in the relationship with third parties. In this sense, during 2020, 157 Compliance analysis to third parties were performed. Of these 157, just two of them presented a special risk of corruption and were completed with a deeply external investigation. In these cases, it was recommended the inclusion of robust clauses related to corruption in the corresponding agreements. GRI 205-2 - Communication and training on anti-corruption policies and procedures EDPR Anti-Corruption Policy implies a series of procedures regarding the relationships of EDPR employees with external parties, namely the approval of certain actions regarding hospitality to and from external parties, donations, and sponsorships. Company Personnel and Transaction Partners are encouraged to raise concerns about any issue or suspicion of bribery or corruption at the earliest possible stage through the Compliance Channel. The Anti-Corruption Policy is available at the Company’s website and intranet, and it is also attached to the labour agreements of the new hires to thei r written acknowledgement when they join the Company. GRI 205-3 - Confirmed incidents of corruption and actions taken EDPR has no knowledge of any confirmed incident of corruption in 2020, neither in 2019. Note: For the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system and claims/doubts reported in the Compliance Channel. GRI 406-1 - Incidents of discrimination and corrective actions taken In 2020, EDPR had knowledge of a complaint for discrimination at the Equal Employment Opportunity Commission (EEOC). The issue was analysed by the responsible area and finally, resolved and withdrawn by the complainant. In 2019, EDPR also had knowledge of a complaint for discrimination at the Equal Employment Opportunity Commission (EEOC). Likewise, the issue was analysed by the responsible area and finally, resolved and withdrawn by the complainant. Note: For the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system, and claims/doubts reported in the Ethics Channel and considered a violation of the Code of Ethics by the Ethics Ombudsperson and the Ethics Committee. GRI 407-1 - Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk Throughout EDPR’s operations, both employees and suppliers must comply with the EDPR’s Cod e of Ethics, which has specific clauses to respect freedom of trade union association and recognise the right to collective bargaining. During 2020, neither in 2019, EDPR did not register any claims/doubts in the Ethics Channel regarding operations with significant risk where the right to freedom of association and collective bargaining may be at risk. 133 In a previous study to characterise EDPR’s supply chain, performed in 2015, including the analysis of the exposure to economic, social and environmental risks, performed using the ESCHER (Efficient Supply Chain Economic and Environmental Reporting) methodology developed by PwC, it was determined that ~0 of EDPR’s direct purchases were identified in which the right to exercise freedom of association and collective bargaining may be at significant risk. Through this study, EDPR aims to identify areas where should focus its improvement activities in order to significantly reduce its exposure to risk and optimise impacts. GRI 408-1 - Operations and suppliers at significant risk for incidents of child labour Throughout EDPR’s operations, both employees and suppliers must comply with the EDPR’s Code of Ethics, which has specific clauses against child labour. During 2020, neither in 2019, EDPR did not register any claims/doubts in the Ethics Channel regarding operations with significant risk for incidents of child labour. In a previous study to characterise EDPR’s supply chain, performed in 2015, including the analysis of the exposure to economic, social and environmental risks, performed using the ESCHER (Efficient Supply Chain Economic and Environmental Reporting) methodology developed by PwC, it was determined that ~0 of EDPR’s direct purchases were as having significant risk for incidents of child labour. Through this study, EDPR aims to identify areas where should focus its improvement activities in order to significantly reduce its exposure to risk and optimise impacts. GRI 409-1 - Operations and suppliers at significant risk for incidents of forced or compulsory labour Throughout EDPR’s operations, both employees and suppliers must comply with the EDPR’s Code of Ethics, which has specific clauses against forced labour. During 2020, neither in 2019, EDPR did not register any claims/doubts in the Ethics Channel regarding operations with significant risk for incidents of forced and compulsory labour. In a previous study to characterise EDPR’s supply chain, performed in 2015, including the analysis of the exposure to economic, social and environmental risks, performed using the ESCHER (Efficient Supply Chain Economic and Environmental Reporting) methodology developed by PwC, it was determined that ~0 of EDPR’s direct purchases were as having significant risk for incidents of forced or compulsory labour. Through this study, EDPR aims to identify areas where should focus its improvement activities in order to significantly reduce its exposure to risk and optimise impacts. Other corporate ethics topics: Money laundering The money laundering risk involves to acquire, possess, use, convert or transmit goods knowing that they have their origin in a criminal activity, or perform any other act that seeks to cover their illicit origin. EDPR has identified in its Compliance Model the money laundering risk and has, developed several controls and measures to minimize the probability of occurrence. Currently, the money laundering risk is categorized as low. 134 ANNUAL REPORT EDPR 2020 4.12. Communication and transparency Contributions to foundations and non-profit entities EDPR contributed with more than 682 thousand euros to Foundations (97% related to Fundación EDP España and Instituto EDP in Brazil), -9% vs 2019. In addition, EDPR contributed more than 534 thousand euros to non-profit organisations and NGOs, +76% YoY most ly due to EDPR’s solidarity campaign in response to the COVID -19 pandemic. GRI 102-13 – Membership of associations The EDP Group raises awareness to policy makers and legislators about the interests of the business sector and/or its own. Globally, EDP Grou p’s activities include participation in industry associations (“Industry Institutions”) comprising multiple industry participants that work to advance shared policy objectives. EDPR ’s approach and involvement with Industry Institutions is in accordance with EDP Group’s internal regulations, policies and procedures, including the principles of integrity and transparency expressed in the Code of Ethics. In Europe, activities are monitored by means of voluntary registration on a platform created for that purpose by the European Commission – "Transparency Register". EDP has been registered since the creation of this platform in 2011. In North America, relevant Industry Institutions are required to disclose and/or register campaign finance and lobbying activities in accordance with applicable local, state, or federal law. In the following table are presented the contributions concerning the activities of representation of interests of EDPR: ACTIVITIES OF REPRESENTATION OF INTEREST (€k) 2020 2019 Trade associations or tax-exempt groups 1,874 1,414 Lobbying, interest representation or similar 586 771 Other 22 29 Local, regional or national political campaigns / organizations / candidates 0 0 Total 2,482 2,214 The table below contains the most relevant contributions for associations in 2020: MOST RELEVANT CONTRIBUTIONS (€k) 2020 American Energy Action 350 American Wind Energy Association 333 American Wind Wildlife Institute 79 Wind Europe 73 FUNSEAM (Fundación para la Sostenibilidad Energética y Ambiental) 60 GRI 201-4 - Financial assistance received from government EDPR has not received any financial assistance from the government in 2020, neither in 2019. Note: The American legislation foresees - and has foreseen in the past - several tax incentives for the production of renewable energy in the united states. Some examples are the production tax credits, the research and development tax credits, the former cash grant, the so-called macrs (a way of accelerated depreciation), etc. these tax credits are in most cases are part of the renewable energy remuneration scheme. 135 GRI 206-1 – Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices EDPR has no knowledge of any legal actions for anti-competitive behaviour, anti-trust or monopoly practices in 2020, neither in 2019. Note: for the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system. GRI 307-1 - Non-compliance with environmental laws and regulations EDPR has no knowledge of any non-compliance with environmental laws and regulations in 2020, neither in 2019. In addition, during 2020 and 2019, the company did not receive any significant penalty for non-compliance with environmental laws and regulations. Note 1: For the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system and that have obtained an unappealable judgement. Note 2: EDPR defines as significant penalty the ones above €10k. GRI 415-1 - Political contributions The Anti-Corruption Policy, in line with the principles defined in the Code of Ethics, prohibits any contribution or association of the EDPR brand to political parties, candidates, campaign structures / political candidacy or to related persons or entities, namely through the delivery of goods or the provision of services, directly or indirectly, on behalf or representation of EDP, since it may jeopardize the integrity of the EDPR Group entities, unless otherwise required by law. Still under these principles, EDPR should make available the necessary arrangements for employees to take part, in their strictly personal capacity, in political processes, under applicable law. In North America, EDPR retains political consultants for lobbying activities. However, these political consultants are prohibited from making contributions to political candidates, campaigns or parties on behalf of or in the name of EDPR. Additionally, EDPR has provided financial support for the activities of America Energy Action, a welfare organization organized under Section 501(c)(4) of the US Internal Revenue Code. Such social welfare organizations may participate legally in some political activity on behalf of or in opposition to candidates for public office. However, any such political activity must be completely independent of any political candidate or political campaign. Finally, in accordance with U.S. law, and at the request of US employees, EDPR provides properly regulated mechanisms for employees participation in political processes and has enabled the establishment of a political action committee (PAC) called the EDPR NA PAC. The EDPR PAC is funded entirely by voluntary personal monetary contributions made by members of the PAC, who are eligible employees in accordance with US law, and decisions on which political campaigns to support are made with the approval of the PAC governing board, which is made up of elected members of the PAC, also in accordance with US law. These activities are then aligned with the above mentioned principles of the Integrity Policy and the Code of Ethics. GRI 419-1 - Non-compliance with laws and regulations in the social and economic area EDPR has no knowledge of any non-compliance with social and economic laws and regulations in 2020, neither in 2019. During 2020, the company received a significant penalty of € 21.8k tax related. During 2019, the company did not receive any significant penalty for non-compliance with social and economic laws and regulations. Note 1: For the information reported in this indicator, EDPR considers passive contingencies associated with litigation qualified as probable in 2020 recorded in the contingencies reporting system and that have obtained an unappealable judgement. Note 2: EDPR defines as significant penalty the ones above €10k. 136 ANNUAL REPORT EDPR 2020 GRI 207-1 – Approach to tax EDPR’s fiscal strategy is based on five main pillars: 1) EDPR has an ethical and civic duty to contribute to the financing of the general functions of the States in which it operates, by paying the taxes, levies and other contributions that are due, contributing to the well-being of citizens and to the development of the Group's local business. In this context, it carries out its fiscal function with rigor and professionalism, in line with the "EDPR Fiscal Mission", in accordance with the following principles: • Implements the options which are most appropriate to the business and to the shareholders, in faithful compliance with the spirit and letter of the Law; • Pays the taxes that are due in all the geographical areas where it carries out its activity; • Adopts the arm’s length principle in intra -group transactions, in the context of the applicable international transfer pricing rules, guidelines and best practices, by transversally implementing an internal transfer pricing policy based on three main principles: • All intra-group transactions of a commercial or financial nature have a pre-defined pricing, with terms and conditions that are in line with what would normally have been practised between independent entities, in comparable operations; • The definition of the transfer price is based on the economic rationale of the intra-group transaction and, in accordance with the internal rules of the EDPR, not constituting an instrument for tax planning and / or tax evasion; • The documentation of intra-group transactions is fully compliant with the Guidelines of the Organisation for Economic Co-operation and Development (OECD), without prejudice to the specific aspects of the internal legislation of each geographical area. • Adopts tax practices based on principles of economic relevance and commonly accepted business practices; • Discloses true and complete information concerning relevant transactions; and, • Seeks to defend its legitimate interests by administrative means and, when appropriate, judicially, when the payment of any taxes, contributions and levies reasonably raises doubts regarding its legality. 2) EDPR reconciles the responsible compliance with tax obligations, with the commitment to create value for its shareholders, efficiently managing its tax burden and using the available tax benefits and incentives applicable in each region, taking into account the Group's global interest and foreseeing significant tax risks. 3) EDPR is committed to maintain a relationship with the Tax Authorities of the countries where it operates based on principles of trust, good faith, transparency, cooperation and reciprocity, aiming to facilitate the application of the Law and to minimize litigation. 4) EDPR applies responsible policies, striving to maintain a low-risk tax profile in order to avoid conducts that could generate significant tax risks. To this end, EDPR implemented a global risk management policy with the objective of identifying, quantifying, managing, monitoring and minimizing the tax risks, in close connection with the highest levels of control and decision. 5) EDPR considers transparency a core principle of its fiscal function, particularly through: • Not resorting to opaque structures or operating in jurisdictions for reasons that do not have a close connection with the economic activity developed within them. EDPR does not have subsidiaries in territories considered to be noncooperating in accordance with Spanish and Portuguese legislations and / or with the OECD benchmarks; and, 137 • Disclosure of tax information in accordance with the best international practices and recommendations, to facilitate the understanding of the global contribution for the economies and the principles governing its fiscal policies and practices. GRI 207-2 – Tax governance, control and risk management The process of management and control of the tax risk begins with the identification and mapping of the risks to which the EDPR is subject. In this sense, EDPR continuously assesses the tax risks and uncertainties, conducting regular exercises in order to identify, quantify and monitor risks that arise from external events with potential material impact. Accordingly, the Group implemented a risk management policy for identifying, quantifying, managing, monitoring and mitigating, among others, the tax risks, particularly the risk of materialization of the tax contingencies. Indeed, EDPR, through a specialised team, continuously monitors the processes associated with tax risks and contingencies (related and not related to ongoing litigation), in close cooperation with the respective Business Units, corporate legal services and external lawyers and consultants. In addition, the EDPR’s Executive Committee is involved in the decision -making process of the relevant operations, being its tax impact, if any, analysed, documented and included in the documentation submitted for approval, in particular when it may constitute an important element for the final decision, in order to ensure long-term value creation for shareholders. EDPR also has an Audit, Control and Related-Party Transactions Committee, whose main mission, upon delegation of the BoD, includes the permanent monitoring and supervision of any matters related to the internal control system over financial information and the risk management process, particularly in its fiscal aspects. 207-4 – Country-by-country reporting CORPORATE INCOME TAX PAID (€M) 2020 2019 Spain 18 9 Portugal 34 34 France / Belgium 1 8 Poland 4 4 Romania 0 0 Italy 3 4 Greece 0 - UK 0 0 Brazil 15 5 Colombia 0 - US 0 0 Canada 0 0 Mexico 0 0 Others 0 0 Total 76 65 Note 1: The American legislation foresees - and has foreseen in the past - several tax incentives for the production of renewable energy in the United States. Some examples are the production tax credits, the research and development tax credits, the former cash grant, the so-called macrs (a way of accelerated depreciation), etc. these tax credits, that in most cases are part of the renewable energy remuneration scheme, have accumulated during the last years, allowing the minimization of CIT cash-out in this geography. Note 2: As a general rule, the corporate income tax cash-out detailed above considers both the down payments corresponding to the fiscal year in course (where applicable) and the balance of the corporate income tax corresponding to the previous year. Note 3: For information regarding Profit before income tax, please refer to 4.3 Economic Business Sustainability, page 100. For the number of employees by country, please refer to 4.5 People Management, pages 108-109. 4.13. Digital transformation For information regarding GRI 103 – Management Approach for this material topic, please refer to section Digital Capital of the chapter Execution. 138 ANNUAL REPORT EDPR 2020 4.14. Reporting principles This is the twelfth year EDPR publishes an integrated report describing the Company’s performance, with respect to the three pillars of sustainability: economic, environmental and social. Information is presented according Global Reporting Initiative (GRI) Standard 101 Foundation guidelines for Sustainability Reporting and also provides information on the additional electricity sector supplement indicators directly related to the Company business, which is the power generation from renewable sources, basically wind. A full GRI standards content index for the report can be found in the website www.edpr.com United Nations Global Compact Global Compact is an initiative of the United Nations launched in 2000 that defines guideline directives for businesses that opt to contribute to sustainable development. EDPR has become signatory of this initiative and is committed to put these principles into practice, informing society of the progress it has achieved. Additionally, in 2015, in the United Nations General Assembly, the world leaders decided to assume a set of global goals to change the world until 2030. The agenda that must guide the joint work of governments, citizens, companies and organisations, consists of 17 Sustainable Development Goals (SDGs) with the ambition of ending poverty, fighting against inequality and stopping climate change. EDPR will direct its contributions to eight of the 17 Sustainable Development Goals. To learn more about the un global compact, please visit WWW.UNGLOBALCOMPACT.ORG Global Reporting Initiative The GRI Standards are the first global standards for sustainability reporting, representing the global best practice for reporting on a range of economic, environmental and social impacts. A Company’s adherence to this initiative means that it concurs with the concept and practices of sustainability. This Annual Report has been prepared in accordance with the GRI Standards in its Core option, and these Standards have been independently assured according to ISAE 3000 by PwC. To learn more about the GRI guidelines, please visit WWW.GLOBALREPORTING.ORG 139 Annex I: Non-financial information statement NON-FINANCIAL INFORMATION STATEMENT (SPANISH LAW 11/2018) AREA CONTENT SCOPE/ PERIMETER RELATED GRI STANDARDS PAGE/CHAPTER BUSINESS MODEL Brief description of the Group's business model, which includes: • Its business environment; • Its organisation and structure; • The markets in which it operates; • Its goals and strategies; • The main factors and trends that may affect its future evolution. Global EU1; EU2; 102-2; 102-4; 102-6; 102-7; 102-18; 103 1.1.2 EDPR in the world 3 , pages 11-12; 1.1.3 Business description, page 13; 1.1.6 Sustainability Roadmap, pages 18-19; 1.3 Organisation, pages 24-32; 2.1 Business Environment, pages 37-43; 2.2 Strategy, pages 44-47; 3.1.2 Financial Performance pages 60-68; 4.2 Climate Change, pages 95-97. POLICIES A description of the policies that the Group applies regarding these issues, which includes: • Due diligence procedures implemented for the identification, evaluation, prevention and mitigation of significant risks and impacts; • verification and control procedures, including adopted measures. Global 103; 102-16 1.1.1 Vision, Values & Commitments, page 10; 1.3.4 Integrity and Ethics, pages 31-32; 3.2 Human Capital, pages 69-73; 3.3 Supply Chain Capital, pages 74-75; 3.4 Social Capital, pages 76-79; 3.5 Natural Capital, pages 80-81. SHORT, MEDIUM AND LONG-TERM RISKS The main risks regarding these issues related to the activities of the Group, including, where relevant and proportionate, its business relationships, products or services that may have negative effects in these areas, and • how the group manages these risks, • explaining the procedures used to detect and evaluate them according to national, European or international reference frameworks for each subject. • Information on the impacts that have been detected must be included, offering a breakdown of them, in particular on the main risks in the short, medium and long term. Global 201-2; 205-1; 304-2; 306-3; 308-2; 407-1; 408-1; 409-1; 413-2; 414-2 2.3 Risk Management, pages 48-53; 4.3 Climate Change, pages 96-97; 4.7 Suppliers Management, pages 122-124; 4.8 Community Engagement, page 127; 4.10 Environmental Management, pages 128 and 131; 4.11 Ethics and Compliance, pages 132-133. KPI S Key indicators of non-financial results that are relevant to the specific business activity, and that meet the criteria of comparability, materiality, relevance and reliability. Global Please refer to Annex II: GRI Content Index ENVIRONMENTAL TOPICS Global Environment: 103 3.5 Natural Capital, pages 80-81; 4.2 Climate Change, pages 96 and 98-99; 4.7 Suppliers Management, page 122; 4.10 Environmental Management, pages 128 and 131; 4.12 Communication and Transparency, page 135. • Detailed information on current and foreseeable effects of company's activities on the environment and where applicable, H&S, environmental assessment or certification procedures; • Resources dedicated to the prevention of environmental risks; • The application of the Precautionary Principle, the amount of provisions and guarantees for environmental risks (e.g. derived from the law of environmental responsibility). Global 102-11; 201-2; 304-2; 305-1; 305-2; 305-3; 305-5; 307-1; 308-2 Pollution Measures to prevent, reduce or repair carbon emissions that seriously affect the environment, taking into account any form of air pollution specific to an activity, including: Global 302-4; 305-5 4.2 Climate Change, pages 98 and 99. Noise Global 413-2 4.8 Community Engagement, page 127. Light pollution - - 4.1 Materiality Assessment, page 94. Circular economy and waste prevention and management Circular economy. Global 306-2 3.5 Natural Capital, pages 80-81; 4.10 Environmental Management, page 130. Waste prevention, recycling, reuse, other forms of recovery and disposal. Global 306-2; 306-3 4.10 Environmental Management, pages 130-131. Actions to combat food waste. - - 4.1 Materiality Assessment, page 94. 3 Secured MWs are not verified by PwC. 140 ANNUAL REPORT EDPR 2020 NON-FINANCIAL INFORMATION STATEMENT (SPANISH LAW 11/2018) AREA CONTENT SCOPE/ PERIMETER RELATED GRI STANDARDS PAGE/CHAPTER ENVIRONMENTAL TOPICS Sustainable use of resources Water consumption and water supply according to local constraints. Global - 4.1 Materiality Assessment, page 94. Consumption of raw materials and the measures adopted to improve the efficiency of their use. Global - 4.1 Materiality Assessment, page 94. Direct and indirect consumption of energy, measures taken to improve energy efficiency and the use of renewable energies. Global 302-1; 302-4 4.2 Climate Change, pages 97-98; 3.5 Natural Capital, page 81. Climate Change 103 2.1.1 Renewables are the backbone of decarbonization, pages 37-39; 2.1.2 The evolution of Renewables around the world in 2020, pages 39-40; 3.5 Natural Capital, pages 80-81. The important elements of greenhouse gas emissions generated as a result of the company's activities, including the use of the goods and services it produces. Global 305-1; 305-2; 305-3 4.2 Climate Change, pages 98-99. The measures adopted to adapt to the consequences of climate change. Global 201-2; 302-4; 305-5 4.2 Climate Change, pages 96-97, 98 and 99. The reduction goals established voluntarily in the medium and long-term to reduce greenhouse gas emissions and the means implemented for that purpose. Global 305-5 4.2 Climate Change, page 99. Protection of biodiversity Measures taken to preserve or restore biodiversity. Global 304-2; 304-3 4.10 Environmental Management, page 128. Impacts caused by activities or operations in protected areas. Global 304-1 4.10 Environmental Management, page 129. SOCIAL AND EMPLOYEES TOPICS Employment Global 103 3.2 Human Capital, pages 69-73. Total number and distribution of employees by gender, age, country and professional category. Global 102-8; 405-1 4.5 People Management, pages 106-109 and 115-116. Total number and distribution of work contract modalities. Global 102-8 4.5 People Management, pages 106-109. Annual average of permanent contracts, temporary contracts and part-time contracts by gender, age and professional category. Global 102-8; 405-1 4.5 People Management, pages 106-109 and 115-116. Number of dismissals by gender, age and professional category. Global 401-1 4.5 People Management, page 112. Average remunerations and their evolution disaggregated by gender, age and professional category or equal value. Wage gap, the remuneration of equal or average positions in the company. Global 405-2 4.5 People Management, pages 116-117. Avg. remuneration of directors and executives, incl. variable remuneration, allowances, compensation, payment to l/t savings forecast systems and any other perception disaggregated by gender. Global - 4.6 Corporate Governance, page 121. Implementation of labour disconnection policies. Global - 4.5 People Management, page 119. Employees with disabilities. Global - 4.5 People Management, page 119. Work organisation Working hours organisation. Global EU17 4.4 Health & Safety, page 105; 4.5 People Management pages 119-120 Number of hours of absenteeism. Global - 4.4 Health & Safety, page 105. Measures designed to facilitate the enjoyment of conciliation and encourage joint responsibility of these by both parents. Global - 4.5 People Management, page 120. Health & Safety Global Conditions of health and safety at work. Global 103 ; 403-1 ; 403-2; 403-3; 403-5; 403-6; 403-7 3.4.1 Guarantee the highest health & safety standards, pages 76-77; 4.4 Health & Safety, pages 101-102. 141 NON-FINANCIAL INFORMATION STATEMENT (SPANISH LAW 11/2018) AREA CONTENT SCOPE/ PERIMETER RELATED GRI STANDARDS PAGE/CHAPTER SOCIAL AND EMPLOYEES TOPICS Work-related accidents, in particular their frequency and severity, occupational diseases, disaggregated by gender. Global 403-9; 403-10 4.4 Health & Safety, pages 102-105. Social Relations Organisation of social dialogue, including procedures for informing and consulting employees and negotiating with them. Global 402-1 4.5 People Management, page 112 and 118-119. Percentage of employees covered by collective bargaining agreements by country. Global 102-41 4.5 People Management, page 110. The result of collective bargaining agreements, particularly in the health & safety at work area. Global 102-41 4.5 People Management, page 110. Training Policies implemented in the training area. Global 404-2; 404-3 4.5 People Management, pages 113-115. Total amount of training hours by professional categories. Global 404-1 4.5 People Management, page 113. Universal accessibility for people with disabilities - 4.5 People Management, page 121. Equality Measures taken to promote equal treatment and opportunities between women and men. Global 405-1 4.5 People Management, pages 115-116 and 120-121. Equality plans (Chapter III of Organic Law 3/2007, of the 22nd of March, for effective equality of women and men), measures adopted to promote employment, protocols against sexual and gender- based harassment, integration and the universal accessibility of people with disabilities. Global - 4.5 People Management, page 120. Policy against all types of discrimination and, where appropriate, management of diversity. Global - 1.3.4 Integrity and Ethics, pages 31-32; 3.4.2 Respect human and labour rights, page 77; 4.5 People Management, pages 120-121. HUMAN RIGHTS Application of due diligence procedures in the field of human rights; Prevention of the risks of violation of human rights and, where appropriate, measures to mitigate, manage and repair possible abuses. Global - 1.3.4 Integrity and Ethics, pages 31-32; 3.4.2 Respect human and labour rights, page 77. Complaints regarding cases of violation of human rights. Global 411-1 1.3.4 Integrity and Ethics, page 31; 4.8 Community Engagement, page 125. Promotion and compliance with the provisions of the fundamental Conventions of the International Labour Organization related to respect for freedom of association and the right to collective bargaining. Global 102-41; 407-1 4.5 People Management, 110; 4.11 Ethics and Compliance, pages 132-133. The elimination of discrimination in employment and occupation. Global 406-1 3.4.2 Respect human and labour rights, page 77; 4.11 Ethics and Compliance, page 132. The elimination of forced or compulsory labour. Global 409-1 3.4.2 Respect human and labour rights, page 77; 4.11 Ethics and Compliance, page 133. The effective abolition of child labour. Global 408-1 3.4.2 Respect human and labour rights, page 77; 4.11 Ethics and Compliance, page 133. CORRUPTION AND BRIBERY Adopted measures to prevent corruption and bribery. Global 205-1; 205-2; 205-3; 415-1 4.11 Ethics and Compliance, page 132; 4.12 Communication and Transparency, page 135. Measures to combat money laundering. Global - 4.11 Ethics and Compliance, page 133. Contributions to foundations and non-profit entities. Global 413-1 4.8 Community Engagement, page 126; 4.12 Communication and Transparency, page 134. SOCIETY Company's commitments to the sustainable development The impact of the society's activity on employment and local development. Global 202-2; 203-1; 203-2; 413-1 4.8 Community Engagement, pages 125 and 126. The impact of society's activity on local populations and in the territory. Global 103; 413-1; 413-2 3.4.3 Contribute to the society, pages 78-79; 4.8 Community Engagement, pages 125-126. 142 ANNUAL REPORT EDPR 2020 NON-FINANCIAL INFORMATION STATEMENT (SPANISH LAW 11/2018) AREA CONTENT SCOPE/ PERIMETER RELATED GRI STANDARDS PAGE/CHAPTER SOCIETY The relationships maintained with the local communities and the modalities of dialogue with them. Global 413-1; 413-2 4.8 Community Engagement, pages 126-127. The association or sponsorship actions. Global 102-13; 413-1 4.12 Communication and Transparency, page 134; 4.8 Community Engagement, page 126. Subcontracting and suppliers The inclusion of social issues, gender equality and environmental issues in the Procurement Policy. Consideration of the suppliers and subcontractors' social and environmental responsibility when interacting with them. Global 102-9; 103; 204-1; 308-2; 414-2 3.3 Supply Chain Capital, pages 74-75. 4.7 Suppliers Management, pages 122-124. Supervision systems and audits and their results. Global 308-2; 414-2 3.3 Supply Chain Capital, page 75; 4.7 Suppliers Management, pages 122-124. Customers Measures for the health and safety of consumers. Global EU25; 413-2 4.4 Health & Safety, page 105; 4.8 Community Engagement, page 127. Complaining system, complaints received and their resolution. Global 205-3; 406-1; 407-1; 408-1; 409-1; 413-2; 1.3.4 Integrity and Ethics, pages 31-32; 4.8 Community Engagement, page 127; 4.11 Ethics and Compliance, pages 132-133. Tax information Profit before income tax, by country. Corporate income tax paid. Global 201-1; 207-4 4.3 Economic Business Sustainability, page 100; 4.12 Communication and Transparency, page 137. Financial assistance received from the government. Global 201-4 4.12 Communication and Transparency, page 134. OTHERS Annual total compensation ratio. Global 102-38 4.5 People Management, page 117. Legal actions for anti-competitive behaviour, anti- trust and monopoly practices. Global 206-1 4.12 Communication and Transparency, page 135. Non-compliance with environmental laws and regulations. Global 307-1 4.12 Communication and Transparency, page 135. Non-compliance with laws and regulations in the social and economic area. Global 419-1 4.12 Communication and Transparency, page 135. Statement from senior decision-maker. Global 102-14 Message from the CEO, pages 3-5. Identifying and selecting stakeholders; Approach to stakeholder engagement. Global 102-40; 102-42; 103 1.1.5 Stakeholder focus, pages 16-17. Key topics and concerns raised; List of material topics. Global 102-44; 102-47 4.1 Materiality Assessment, page 94. Innovation Global 103 3.7 Innovation Capital, page 86-87. Note: In addition to the indicators included in this table, non-financial information can be found in the following indicators: 102-1, 102-3, 102-5, 102-10, 102-12, 102-43, 102-45, 102-46, 102-48, 102-49, 102-50, 102-51, 102-52, 102-53, 102-54, 102-55, 102-56. 143 Annex II: GRI Content Index External assurance: The GRI indicators included in the following table have been verified by PwC. See the correspondent Independent Verification Report in pages 147-149. Additionally, some GRI indicators refer to Notes in EDPR's 2020 Consolidated Annual Accounts, which have been audited by PwC. See the correspondent Independent Auditor's Report on the Consolidated Annual Accounts at the beginning of the document. GRI STANDARD DISCLOSURES PAGE/CHAPTER GENERAL DISCLOSURES GRI 102: General Disclosures 2016 102-1 Name of the organisation 5. Corporate Governance (A. Shareholder Structure), page 154. 102-2 Activities, brands, products and services 1.1.3 Business Description, page 13. 102-3 Location of headquarters EDPR head offices are located in Madrid (Spain). 102-4 Location of operations 1.1.2 EDPR in the world, pages 11-12. 102-5 Ownership and legal form 5. Corporate Governance (A. Shareholders Structure), pages 154-158; 2020 Consolidated Annual Accounts - Note 1, pages 12-28. 102-6 Markets served 1.1.2 EDPR in the world, pages 11-12. 102-7 Scale of the organisation 1.1.2 EDPR in the world, pages 11-12; 3.1.2 Financial Performance: pages 61-68. 102-8 Information on employees and other workers 4.5 People Management, pages 106-109; 102-9 Supply chain 3.3 Supply Chain Capital, pages 74-75. 102-10 Significant changes to the organisation and its supply chain 5. Corporate Governance (A. Shareholders Structure), pages 154-158; 2020 Consolidated Annual Accounts - Note 6 & 41, pages 54-60 and pages 114-116. 102-11 Precautionary Principle or approach 2.3 Risk Management, pages 48-53; 4.10 Environmental Management, page 131; 5. Corporate Governance (C. Internal Organization), pages 180-201. 102-12 External Initiatives 4.14 Reporting Principles, page 138. 102-13 Membership of associations 4.12 Communication and Transparency, page 134. 102-14 Statement from senior decision-maker Message from the CEO, pages 3-5. 102-16 Values, principles, standards, and norms of behaviour 1.3.4 Integrity and Ethics, pages 31-32; 5. Corporate Governance (C. Internal Organization), pages 180-201. 102-18 Governance structure 1.3 Organisation, pages 24-32; 5. Corporate Governance, pages 154-244. 102-38 Annual total compensation ratio 4.5 People Management, page 117. 102-40 List of stakeholder groups 1.1.5 Stakeholders Focus, page 17. 102-41 Collective bargaining agreements 4.5 People Management, page 110. 102-42 Identifying and selecting stakeholders 1.1.5 Stakeholders Focus, pages 16-17; 4.14 Reporting Principles, page 138. 102-43 Approach to stakeholder engagement 1.1.5 Stakeholders Focus, pages 16-17; 4.1 Materiality Assessment, pages 93-94; 4.14 Reporting Principles, page 138; Please visit our stakeholders’ information on the sustainability section in our website, www.EDPR.com 102-44 Key topics and concerns raised 4.1 Materiality Assessment, pages 93-94; 4.14 Reporting Principles, page 138. 102-45 Entities included in the consolidated financial statements 2020 Consolidated Annual Accounts - Note 6, pages 54-60. 102-46 Defining report content and topic boundaries 4.1 Materiality Assessment, pages 93-94; 4.14 Reporting Principles, page 138. 102-47 List of material topics 4.1 Materiality Assessment, pages 93-94. 102-48 Restatements of information 2020 Consolidated Annual Accounts - Note 6, pages 54-60; 4.2 Climate Change, pages 97-99. 102-49 Changes in reporting 2020 Consolidated Annual Accounts - Note 6, pages 54-60. 102-50 Reporting period 4.14 Reporting Principles, page 138. 102-51 Date of most recent report 4.14 Reporting Principles, page 138. 102-52 Reporting cycle 4.14 Reporting Principles, page 138. 102-53 Contact point for questions regarding the report “Contact us” at www.EDPR.com 102-54 Claims of reporting in accordance with the GRI Standards 4.14 Reporting Principles, page 138. 102-55 GRI content index Annex II - GRI Content Index, pages 143-146. 102-56 External assurance 4.14 Reporting Principles, page 138. 144 ANNUAL REPORT EDPR 2020 GRI STANDARD DISCLOSURES PAGE/CHAPTER MATERIAL TOPICS Climate Change GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 2.1 Business Environment, pages 37-43. 103-2 The management approach and its components 3.1.1 Operational Performance, pages 58-60; 3.5 Natural Capital, 80-81. 103-3 Evaluation of the management approach 3.5 Natural Capital, pages 80-81. GRI 201: Economic Performance 2016 201-2 Financial implications and other risks and opportunities due to climate change 4.2 Climate Change, pages 96-97. GRI 302: Energy 2016 302-1 Energy consumption within the organisation 4.2 Climate Change, page 97. 302-4 Reduction of energy consumption 4.2 Climate Change, page 98. GRI 305: Emissions 2016 305-1 Direct (Scope 1) GHG emissions 4.2 Climate Change, page 98. 305-2 Energy indirect (Scope 2) GHG emissions 4.2 Climate Change, page 98. 305-3 Other indirect (Scope 3) GHG emissions 4.2 Climate Change, page 98. 305-5 Reduction of GHG emissions 4.2 Climate Change, page 99. GRI EU EU1 Installed capacity, broken down by primary energy source and by regulatory regime 4.2 Climate Change, page 95. EU2 Net energy output broken down by primary energy source and by regulatory regime 4.2 Climate Change, page 96. Economic Business Sustainability GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 2.2 Strategy, page 44. 103-2 The management approach and its components 2.2.2 Self-funding business, page 47; 2.2.3 Operational excellence, page 47. 103-3 Evaluation of the management approach 3.1.2 Financial Performance, pages 60-68. GRI 201: Economic Performance 2016 201-1 Direct economic value generated and distributed 4.3 Economic Business Sustainability, page 100. Health & Safety GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.4.1 Health & Safety, pages 76-77. 103-2 The management approach and its components 3.4.1 Health & Safety, pages 76-77. 103-3 Evaluation of the management approach 3.4.1 Health & Safety, pages 76-77. GRI 403: Occupational Health and Safety 2018 403-1 Occupational health and safety management system 4.4 Health & Safety, page 101. 403-2 Hazard identification, risk assessment, and incident investigation 4.4 Health & Safety, page 101. 403-3 403-4 Occupational health services Worker participation, consultation, and communication on occupational health and safety 4.4 Health & Safety, page 101. 4.4 Health & Safety, page 101. 403-5 Worker training on occupational health and safety 4.4 Health & Safety, page 102. 403-6 Promotion of worker health 4.4 Health & Safety, page 102. 403-7 Prevention and mitigation of occupational health and safety impacts directly linked by business relationships 4.4 Health & Safety, page 102. 403-9 Work-related injuries 4.4 Health & Safety, pages 102-105. 403-10 Work-related ill health 4.4 Health & Safety, page 105. GRI EU EU17 Days worked by contractor and subcontractor employees involved in construction and O&M activities 4.4 Health & Safety, page 105. EU25 Number of injuries and fatalities to the public involving company assets, including legal judgements, settlements and pending legal cases of diseases 4.4 Health & Safety, page 105. People Management GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.2 Human Capital, pages 69-73. 103-2 The management approach and its components 3.2 Human Capital, pages 69-73. 103-3 Evaluation of the management approach 3.2 Human Capital, pages 69-73. GRI 401: Employment 2016 401-1 New employee hires and employee turnover 4.5 People Management, pages 111-112. 401-2 Benefits provided to full-time employees that are not provided to temporary or part-time employees 4.5 People Management, page 112. GRI 402: Labour / Management Relations 2016 402-1 Minimum notice periods regarding operational changes 4.5 People Management, page 112. GRI 404: Training and Education 2016 404-1 Average hours of training per year per employee 4.5 People Management, page 113. 404-2 Programs for upgrading employee skills and transition assistance programs 4.5 People Management, pages 113-114. 404-3 Percentage of employees receiving regular performance and career development reviews 4.5 People Management, page 115. GRI 405: Diversity and Equal Opportunity 2016 405-1 Diversity of governance bodies and employees 4.5 People Management, pages 115-116. 405-2 Ratio of basic salary and remuneration of women to men 4.5 People Management, pages 116-117. GRI EU EU15 Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region 4.5 People Management, page 118. 145 GRI STANDARD DISCLOSURES PAGE/CHAPTER Corporate Governance GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 1.3 Organisation, pages 24-32. 103-2 The management approach and its components 1.3 Organisation, pages 24-32. 103-3 Evaluation of the management approach 1.3 Organisation, pages 24-32. Suppliers Management GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.3 Supply Chain Capital, pages 74-75. 103-2 The management approach and its components 3.3 Supply Chain Capital, pages 74-75. 103-3 Evaluation of the management approach 3.3 Supply Chain Capital, pages 74-75. GRI 204: Procurement Practices 2016 204-1 Proportion of spending on local suppliers 4.7 Suppliers Management, page 122. GRI 308: Supplier Environmental Assessment 2016 308-2 Negative environmental impacts in the supply chain and actions taken 4.7 Suppliers Management, pages 122-123. GRI 414: Supplier Social Assessment 2016 414-2 Negative social impacts in the supply chain and actions taken 4.7 Suppliers Management, pages 123-124. Community Engagement GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.4.3 Contribute to the society, pages 78-79. 103-2 The management approach and its components 3.4.3 Contribute to the society, pages 78-79. 103-3 Evaluation of the management approach 3.4.3 Contribute to the society, pages 78-79. GRI 202: Market Presence 2016 202-2 Proportion of senior management hired from the local community 4.8 Community Engagement, page 125. GRI 203: Indirect Economic Impacts 2016 203-1 Infrastructure investments and services supported 4.8 Community Engagement, page 125. 203-2 Significant indirect economic impacts 4.8 Community Engagement, page 125. GRI 411: Rights of Indigenous People 2016 411-1 Incidents of violations involving rights of indigenous peoples 4.8 Community Engagement, page 125. GRI 413: Local Communities 2016 413-1 Operations with local community engagement, impact assessments, and development programs 4.8 Community Engagement, page 126. 413-2 Operations with significant actual and potential negative impacts on local communities 4.8 Community Engagement, page 127. Innovation GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.7 Innovation Capital, pages 86-87. 103-2 The management approach and its components 3.7 Innovation Capital, pages 86-87. 103-3 Evaluation of the management approach 3.7 Innovation Capital, pages 86-87. Environmental Management GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.5 Natural Capital, pages 80-81. 103-2 The management approach and its components 3.5 Natural Capital, pages 80-81. 103-3 Evaluation of the management approach 3.5 Natural Capital, pages 80-81. GRI 304: Biodiversity 2016 304-1 Operational sites owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas 4.10 Environmental Management, page 129. 304-2 Significant impacts of activities, products, and services on biodiversity 4.10 Environmental Management, page 128. 304-3 Habitats protected or restored 4.10 Environmental Management, page 128. GRI 306: Effluents and Waste 2016 306-2 Waste by type and disposal method 4.10 Environmental Management, page 130. 306-3 Significant spills 4.10 Environmental Management, page 131. Ethics and Compliance GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 1.3.4 Integrity and Ethics, pages 31-32. 103-2 The management approach and its components 1.3.4 Integrity and Ethics, pages 31-32. 103-3 Evaluation of the management approach 1.3.4 Integrity and Ethics, pages 31-32. GRI 205: Anti-corruption 2016 205-1 Operations assessed for risks related to corruption 4.11 Ethics and Compliance, page 132. 205-2 Communication and training on anti-corruption policies and procedures 4.11 Ethics and Compliance, page 132. 205-3 Confirmed incidents of corruption and actions taken 4.11 Ethics and Compliance, page 132. GRI 406: Non-discrimination 2016 406-1 Incidents of discrimination and corrective actions taken 4.11 Ethics and Compliance, page 132. GRI 407: Freedom of Association and Collective Bargaining 2016 407-1 Operations and suppliers in which the right to freedom of association and collective bargaining may be at risk 4.11 Ethics and Compliance, pages 132-133. GRI 408: Child Labour 2016 408-1 Operations and suppliers at significant risk for incidents of child labour 4.11 Ethics and Compliance, page 133. GRI 409: Forced or Compulsory Labour 2016 409-1 Operations and suppliers at significant risk for incidents of forced or compulsory labour 4.11 Ethics and Compliance, page 133. 146 ANNUAL REPORT EDPR 2020 GRI STANDARD DISCLOSURES PAGE/CHAPTER Communication and transparency GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 1.1.5 Stakeholders Focus, pages 16-17. 103-2 The management approach and its components 1.1.5 Stakeholders Focus, pages 16-17. 103-3 Evaluation of the management approach 1.1.5 Stakeholders Focus, pages 16-17. GRI 201: Economic Performance 2016 201-4 Financial assistance received from government 4.12 Communication and Transparency, page 134. GRI 206: Anti-competitive Behaviour 2016 206-1 Legal actions for anti-competitive behaviour, anti-trust, and monopoly practices 4.12 Communication and Transparency, page 135. GRI 307: Environmental Compliance 2016 307-1 Non-compliance with environmental laws and regulations 4.12 Communication and Transparency, page 135. GRI 415: Public Policy 2016 415-1 Political contributions 4.12 Communication and Transparency, page 135. GRI 419: Socioeconomic Compliance 2016 419-1 Non-compliance with laws and regulations in the social and economic area 4.12 Communication and Transparency, page 135. GRI 207: Tax 2019 207-1 Approach to tax 4.12 Communication and Transparency, pages 136-137. 207-2 207-3 Tax governance, control, and risk management Stakeholder engagement and management of concerns related to tax 4.12 Communication and Transparency, page 137. Omitted as it is not available. EDPR will work on including tax related topics in the approach and management of stakeholders in 2021’s report. 207-4 Country-by-country reporting 4.3 Economic Business Sustainability, page 100; 4.5 People Management, pages 108-109; 4.12 Communication and Transparency, page 137; 2020 Consolidated Annual Accounts - Note 1, pages 12-28; 2020 Consolidated Annual Accounts - Annex I, pages 121-139; Reporting requirements iv, v, vii, ix and x of GRI 207-4 are omitted as the information is not available with the requested detail by tax jurisdiction. EDPR will work on obtaining the required details in a near future. Digital Transformation GRI 103: Management Approach 2016 103-1 Explanation of the material topic and its boundary 3.6 Digital Capital, pages 82-85. 103-2 The management approach and its components 3.6 Digital Capital, pages 82-85. 103-3 Evaluation of the management approach 3.6 Digital Capital, pages 82-85. PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400, www.pwc.es 1 R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ª Inscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290 Independent verification report To the shareholders of EDP Renováveis, S.A.: Pursuant to Article 49 of the Code of Commerce, we have verified, under a limited assurance scope, the accompanying Non-financial information statement (“NF S ”) for the year ended 31 December 2020 of EDP Renováveis, S.A. and subsidiaries (hereinafter “ EDPR ”) which forms part of EDPR´s consolidated management report. The content of the consolidated management report includes additional information to that required by the current mercantile legislation related to non-financial information reporting which has not been covered by our verification work. In this respect, our work has been restricted solely to verifying the information identified in the tables: Annex I: “Non - financial information statement” and Annex II: “GRI content index” incl uded in the consolidated management report. Responsibility of the Board of Directors The preparation of the NFS included in EDPR's consolidated management report and the content thereof are the responsibility of the Board of Directors of EDP Renováveis, S.A. The NFS has been drawn up in accordance with the provisions of current mercantile legislation and with the Sustainability Reporting Standards of the Glob al Reporting Initiative (“GRI Standards”) described in accordance with the Essential Option and the Sectorial Supplement Electric Utilities , in line with the details provided for each matter in the tables: Annex I: “Non - financial information statement” and Annex II: “GRI content index” included in the consolidated management report. This responsibility also includes the design, implementation and maintenance of the internal control considered necessary to allow the NFS to be free of any immaterial misstatement due to fraud or error. The directors of EDP Renováveis, S.A. are also responsible for defining, implementing, adapting and maintaining the management systems from which the information required to prepare the NFS is obtained. Our independence and quality control We have complied with the independence requirements and other ethical requirements of the Code of Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants (“IESBA”) which is based on the fundamental principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. 2 Our firm applies the International Standard on Quality Control 1 (ISQC 1) and therefore has in place a global quality control system, which includes documented policies and procedures related to compliance with ethical requirements, professional standards and applicable legal and regulatory provisions. The engagement team has been formed by professionals specialising in non-financial information reviews and specifically in information on economic, social and environmental performance. Our responsibility Our responsibility is to express our conclusions in an independent limited verification report based on the work carried out. Our work has been carried out in accordance with the requirements laid down in the current International Standard on Assurance Engagements (ISAE) 3000 Revised, Assurance Engagements Other than Audits or Reviews of Historical Financial Information (ISAE 3000 Revised) issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC) and with the Guidelines for verification engagements on non- financial statements issued by the Spanish Institute of Auditors (“Instituto de Censores Jurados de Cuentas de España”). In a limited assurance engagement, the procedures performed vary in terms of their nature and timing of execution, and are less extensive than those carried out in a reasonable assurance engagement. Accordingly, the assurance obtained is substantially lower. Our work has consisted of posing questions to Management and several EDPR units that were involved in the preparation of the NFS, in the review of the processes for compiling and validating the information presented in the NFS, and in the application of certain analytical procedures and review sampling tests, as described below: x Meetings with EDPR personnel to ascertain the business model, policies and management approaches applied, the main risks related to these matters and to obtain the information required for the external review. x Analysis of the scope, relevance and integrity of the contents included in the NFS for 2020, based on the materiality analysis carried by EDPR and described in section 4.1. “Materiality assessment” of the consolidated management report, considering the content required under current mercantile legislation. x Analysis of the procedures used to compile and validate the information presented in NFS for 2020. x Review of information concerning risks, policies and management approaches applied in relation to material issues presented in the NFS for 2020. x Verification, through sample testing, of the information relating to the content of the NFS for 2020 and its adequate compilation using data supplied by the EDPR´s sources of information. x Obtainment of a management representation letter from the Directors and Management of EDP Renováveis, S.A. 3 Conclusions Based on the procedures performed and the evidence we have obtained, nothing has come to our attention that causes us to believe that EDPR's NFS, for the year ended 31 December 2020 has not been prepared, in all its significant aspects, in accordance with the provisions of current mercantile legislation and the Sustainability Reporting Standards of the Global Reporting Initiative (“GRI Standards”) following the Essential Option and the Sectorial Supplement “Electric Utilities”, in accordance with the details provided for each matter in tables: Annex I: “Non -financial information statement” and Annex II: “GRI content index” included in the consolidated management report. Use and distribution This report has been drawn up in response to the requirement laid down in current Spanish mercantile legislation and therefore might not be suitable for other purposes or jurisdictions. PricewaterhouseCoopers Auditores, S.L. Pablo Bascones Ilundain 24 February 2021 2021-02-24 11:59:38 ( UTC +01:00 ) 51075979V PABLO JESUS BASCONES G FROM DISRUPTION TO EVOLUTION Changing tomorrow now. Fostering excellence to meet the world's needs Changing tomorrow now. 05 Part I - Information on shareholder structure, organisation and corporate governance 154 Shareholder structure 154 Corporate Board and Committees 159 Internal organisation 180 Remuneration 202 Related-party transactions 209 Part II - Corporate Governance assessment 214 Annex I - Curriculum Vitae of the members of the Board of Directors 229 CORPORATE GOVERNANCE 154 ANNUAL REPORT EDPR 2020 Corporate Governance PART I - Information on shareholder structure, organisation and corporate governance A. Shareholder structure I. Capital structure 1. Capital structure EDP Renováveis, S.A. (hereinafter referred to as “EDP Renováveis”, “EDPR” or the “Company”) total share capital is, since its initial public offering (IPO) in June 2008, EUR 4,361,540,810 consisting of issued and fully paid 872,308,162 shares with nominal value of EUR 5.00 each. All the shares are part of a single class and series and are admitted to trading on the Euronext Lisbon regulated market. Codes and tickers of EDP Renováveis SA share: ISIN:ES0127797019 LEI:529900MUFAH07Q1TAX06 Bloomberg Ticker (Euronext Lisbon): EDPR PL Reuters RIC:EDPR.LS 155 EDPR main shareholder is EDP – Energias de Portugal, S.A., through EDP – Energias de Portugal, S.A. Sucursal en España (hereinafter referred as “EDP”), with 82.6% of share capital and voting rights. Excluding EDP, EDPR shareholders comprise more than 30,000 institutional and private investors spread across 30 countries with main focus in the United States and United Kingdom. Institutional Investors represent about 94% of Company shareholders (ex-EDP Group), mainly investment funds and socially responsible investors (“SRI”), while Private Investors, mostly Portuguese, stand for the remaining. For further information about EDPR shareholder structure please see chapter 1.3 of the Annual Report (“Organisation”). 2. Restrictions to the transferability of shares EDPR’s Articles of Association have no restrictions on the transferability of shares. 3. Own shares EDPR does not hold own shares. 4. Change of control EDPR has not adopted any measures designed to prevent successful takeover bids, nor defensive measures for cases of a change in control in its shareholder structure or agreements subject to the condition of a change in control of the Company, other than in accordance with normal practice, and therefore, has not adopted any mechanisms that imply payments or assumption of fees in the case of the transfer of control or the change in the composition of the managing body, or that could be likely to harm the free transferability of shares or shareholder assessment of the performance of the members of the managing body. Notwithstanding the above, the following are normal market practice related to a potential change of control: • In the case of financing of certain wind farm projects, lenders have the right to approve change in control at the borro wer if the later ceased to be controlled, directly or indirectly by EDPR. • In the case of guarantees provided by EDP Group companies, if EDP directly or indirectly ceases to have the majority of EDPR then EDP is no longer obliged to provide such services or guarantees. The relevant subsidiaries will be obliged to provide for the cancellation or replacement of all outstanding guarantees within approximately sixty (60) days of the change of control event. • In the cases of intra-group services agreements and according to the Framework Agreement signed between EDP Renováveis S.A.and EDP Energias de Portugal S.A., the contracts will maintain their full force as long as (i) EDP maintains its share capital above 50% or the right to exercise directly or indirectly more than 50% of voting rights on EDPR’s share capital, or (ii) even if the share capital of EDP or its voting rights are below 50%, but more than half of the Members of the Board or of EDPR’s Executive Committee are ele cted through an EDP proposal. 5. Special agreements regime EDPR does not have a special system for the renewal or withdrawal of counter measures for the restriction on the number of votes capable of being held or exercised by only one shareholder individually or together with other shareholders. 6. Shareholders ’ agreements The Company is not aware of any shareholders’ agreement that may result in restrictions on the transfer of securities or voti ng rights. 156 ANNUAL REPORT EDPR 2020 II. Shareholdings and bonds held 7. Qualified holdings Qualifying holdings in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholder’s ownerships. The table below includes the information about the qualifying holdings of EDPR and their voting rights as of December 31 st , 2020: SHAREHOLDER SHARES %CAPITAL %VOTING RIGHTS EDP – ENERGIAS DE PORTUGAL, S.A. – SUCURSAL EN ESPAÑA EDP – ENERGIAS DE PORTUGAL, S.A. – SUCURSAL EN ESPAÑA 720,191,372 82.6% 82.6% Total qualified holdings 720,191,372 82.6% 82.6% EDP detains 82.6% of EDPR capital and voting rights, through EDP – Energias de Portugal, S.A. – Sucursal en España. As of December 31 st , 2020 , EDPR’s shareholder structure consisted in a total qualified sha reholding of 82.6%, corresponding to EDP Group. 8. Shares held by the Members of the Management and Supervisory Boards The table below reflects the Members of the Board of Directors/Delegated Committees of the Company that, as of December 31 st 2020, directly or indirectly own EDPR shares: BOARD MEMBER DIRECT SHARES INDIRECT SHARES Spyridon Martinis 10,413 - () These shares were bought before the appointment as Director of the Company (being the first acquisition in 2011 and the last one in 2018). 9. Powers of the Board of Directors The Board of Directors is vested with the broad-ranging powers of administration, management, and governance of the Company, with no other limitations besides the powers which are expressly assigned to the General Shareholders’ Meetings in the Company’s Articles of Association (specifically in article 13) or in the applicable law. In this regard, the powers of the Board include, without limitation 1 to: • Acquire on 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 sort of acts and contracts with public entities or private persons; • Exercise any 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, administrative-litigation and judicial courts, labor courts and the labor sections of the Supreme Courts 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 or 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 carry out all sort of notices and requirements and to grant power of 1 This list has a merely indicative nature, as the Board of Directors may perform all further powers expressly granted to the Board in the Articles or in the applicable law. 157 attorney to Court Representatives and other representatives, with 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 interim dividends; • Call and convene the General Meetings and submit to them the proposals that it deem appropriate; • Direct the Company and the 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 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 business and joint property agreements, and agreeing their alteration, transformation and termination; Likewise, the General Shareholders’ Meeting held in March 26 th , 2020, approved the delegation to the Board of Directors of the power to issue in one or more occasions both: • Fixed income securities or other debt instruments of analogous nature; • Fixed income securities or other type of securities (warrants included) convertible or exchangeable into EDP Renováveis, S.A. shares, or that recognize at the Board of Directors’ discretion the right of subscription or acquisition of shares of EDP Renováveis, S.A. or of other companies, up to a maximum amount of three hundred million Euros (EUR 300,000,000) or its equivalent in other currency. As part of such delegation, the General Shareholder’s Meeting delegated into the Board of Directors the power to increase the share capital up to the necessary amount to execute the related tasks above. Additionally, it was also approved to authorize the Board of Directors for the acquisition of own shares by the Company and/or the affiliate companies up to the maximum limit of 10% of the subscribed share capital. These delegations may be exercised by the Board of Directors within a period of five (5) years since the proposal was approved, and within the limits provided under the law and the By-Laws. The General Shareholders’ Meeting may also delegate to the Board of Directors the power to implement an adopted decision to increase the share capital, indicating the date or dates of its implementation and establishing any other conditions that were not specified by the General Shareholders’ Meeting. The Board of Directors may use this delegation wholly or partially, and may also decide not to perform it in accordance with the situation and conditions of the Company, the market, or any particularly relevant events or circumstances that justify such decision - of which the General Shareholders’ Meeting must be informed at the end of the time limit or limits for adopting and performing the decision. Additionally, in compliance with its personal law and Company’s internal regulations , some functions of the Board of Directors are non- delegable and, as such, have to be performed at this level, which are the following: • Election of the Chairperson of the Board of Directors; • Appointment of Directors by co-option; • Request to convene or convening of General Shareholders’ Meetings and the preparation of the agenda and proposals of resolutions; • Preparation of the Annual Reports and Management Reports and their presentation to the General Shareholders’ Meeting; • Change of Headquarters; 158 ANNUAL REPORT EDPR 2020 • Preparation and approval of mergers, spin-off, or transformation projects of the Company; • Monitoring the effective functioning of the Board of Directors committees and the performance of delegated bodies and appointed directors; • Definition of the Company’s general policies and strategies. In any case, the following transactions individually considered, shall be subject to the prior approval of the Board of Directors, or its ratification in cases of justified urgency: - Acquisition or sale of assets, rights or participations with an economic value higher than seventy-five million Euros (EUR 75,000,000) and not included in the budget approved by the Board of Directors; - Opening or closing of establishments/branches or relevant parts of establishments /branches, as well as the extension or reduction of its activity; - Other business activity or transactions, including expansion investments, with a significant strategic relevance or with an economic value higher than seventy-five million Euros (EUR 75,000,000) and not included in the budget approved by the Board of Directors; or - Creation or termination of strategic alliances or partnerships or other forms of long-term cooperation; • Authorization or waiver of the obligations arising from duty of loyalty; • Its own organisation and functioning; • Preparation of any report required by the law to the management body, provided that the operation referred in the report cannot be delegated; • Appointment and dismissal of Chief Executive Officer, top management directly depending from the Board of Directors or any of its members, and their general contractual conditions including remuneration; • Decisions concerning director’s remuneration within the Articles of Association’s frame and, if any, the remuneration policy approved by the General Meeting; • Policy concerning own shares; • The faculties that the General Meeting may have delegated on the Board of Directors, except for the cases expressly authorized by the first to sub delegate them Should be noted that as exposed in topic 15 of this Chapter 5 of the Annual Report, as of 31 st December 2020, EDPR does not have a Supervisory Board, but its Board of Directors has set up three Delegated Committees entirely composed by Members of the Board of Directors, and all these directors are necessarily involved in the definition of the strategy and policies of the Company as per the non - delegable basis of these functions under its personal law. Therefore, in compliance with its personal law, all the members of the delegated committees will assess and give its opinion on the strategic lines and the risk policy of the Company at the Board level prior to its final approval. Likewise, should be noted that the corresponding monitorization of the accomplishment of these actions, as detailed in topic 29 this Chapter 5 of the Annual Report, is performed by the Audit, Control and Related Party Transactions Committee and the Nominations and Remunerations Committee, both of which are integrally formed by non-executive and independent directors. 10. Significant business relationships between the holders of qualifying holdings and the Company Information on any significant business relationships between the holders of qualifying holdings and the Company is described on topic 90 of this Chapter 5 of the Annual Report. 159 B. Corporate Boards and Committees I. General Shareholders’ Meeting A) Composition of the Board of the General Meeting 11. Board of the General Shareholders’ Meeting The Members of the Board of the General Shareholders’ Meeting are its Chairman, the Chairman of the Board of Directors (or his substitute), the other Directors and the Secretary of the Board of Directors. In accordance with article 180 of the Spanish Compa nies’ Law, all the Board Members are obliged to attend the General Meetings. The Chairman of the General Shareholders’ Meeting is José António de Melo Pinto Ribeiro, who was elected on the General Meeting of April 8 th , 2014, for a three-year (3) term; and re-elected on the General Shareholders’ Meeting held on April 6 th ,2017 for a last mandate of three-year (3) term. Mr. Pinto Ribeiro office was extended until the first General Shareholders ’ Meeting following of the end of this office term. The Chairman of the Board of Directors is António Mexia, who was re-elected as member of the Board for a three-year (3) term by the General Shareholders’ Meeting held in June 27 th , 2018, and for the position of Chairman of the Board of Directors on its meeting subsequently held on the same date. The Secretary of the Board of Directors is Emilio García-Conde Noriega who is also the Secretary of the General Shareholders’ Meeting, and was appointed as Secretary of the Board of Directors on December 4 th , 2007. The Secretary of the Board of Directors’ mandate does not have an end of term date according to the Spanish Companies Law since is not a Board Director. The Chairman of the General Shareholders’ Meeting of EDPR has at his disposal, the necessary human and logistical resources required for the performance of his duties. Therefore, in addition to the resources provided by the Company’s General Secretary, in 2020 the Company hired a specialized entity to give support to the meeting and to collect, process and count the votes submitted by the shareholders on the General Shareholders’ Meeting held on March 26 th . B) Exercising the right to vote 12. Voting rights restrictions Each EDPR share entitles its holder to one vote. EDPR’s Articles of Association have no restrictions regarding voting rights. 13. Voting rights EDPR’s Articles of Association have no reference to a maximum percentage of voting rights that may be exercised by a single shareholder or by shareholders that are in any relationship. All shareholders, regardless the number of shares owned, may attend to the General Shareholders’ Meeting and request the information or explanations that they consider relevant regarding the matters included in the Agenda of the convened meeting, and are entitled as shareholders of the Company, to take part in its deliberations and to participate in its voting process. The Board of Directors approves a Shareholder’s Guide for each General Shareholders’ Meeting, detailing among other matters, the procedure and requirements for the submission through mail and electronic communication of voting forms. This Guide is available at the Company’s webs ite ( www.edpr.com ). As informed in the related Notice and in the corresponding Shareholders’ Guide, in order to exercise their right to attend, the shareholders must have the ownership of their shares duly registered in the Book Entry Account at least five (5) days prior to the date of the General Shareholders’ Meeting. Any shareholder may be represented at the General Shareholders’ Meeting by a third party by means of a revocable Power of Attorney (even if such representative is not a shareholder). 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. These Powers of Attorney shall be grant ed specifically for each General Shareholders’ Meeting and can be evidenced in writing or by remote means of communication such as email or post. 160 ANNUAL REPORT EDPR 2020 According to the applicable law and the Company’s Articles of Association, the notice of EDPR’s General Shareholders’ Meetings is published in the Official Gazette of the Commercial Registry and on the Company’s website at least thirty (30) days prior to the meeting date. Likewise, the Notice of the General Shareholder’s Meeting is published at the website of Sociedade Gestora de Sistemas de Liquidação e de Sistemas Centralizados de Valores Mobiliários, S.A (“Interbolsa”) and on the website of the Comissão do Mercado de Valores Mobiliários (“CMVM”) – at www.cmvm.pt - and of the Comisión Nacional del Mercado de Valores (“CNMV”) – at www.cnmv.es - as the case may be. Simultaneously with the publication of the meeting Notice, the supporting documentation in relation to the General Shareholders’ Meeting is published on the CMVM website. Likewise, as soon as the notice of the meeting is formally published, the following information and documentation related to the General Shareholders’ Meeting is made available at the Company’s website (www.edpr.com): • the notice of the General Shareholders’ Meeting; • the total number of shares and voting rights at the date of the Meeting notice; • the template letter expressing the intention to attend the Meeting, the template of the letter of representation and the template of the ballot to be sent by mail, and also, the links to the electronic platforms that the Company provides for the telematic submission of the intention to attend and the voting on the topics included in the Agenda; • the full texts of the proposed resolutions (included when received if such were the case, those proposed by shareholders) and related supporting documentation, that will be submitted to the General Shareholders’ Meeting for approval; • The Shareholders’ Guide; • The consolidated texts in force (Articles of Association and the other applicable regulations). In 2020, the Company included the English and Portuguese versions of the information and documents related to the General Shareholders´ Meeting on its website (www.edpr.com) with the notice of the meeting, being the Spanish version of the documents the one that prevailed. Shareholders may vote on the topics included on the Shareholders’ Meeting Agenda, in person (including by means of the corresponding representative) at the meeting, by ordinary mail, or by electronic communication (in this latest case, through a telematic vote platform made available at the Company’s website or sending the related filled and signed templates by email), and in any case providing the documentation indicated in the Shareholder’s Guide. Pursuant to the terms of article 15 of the Articles of Association, both electronic and mail-in votes must be received by the Company before midnight (24.00 hours) of the day before the scheduled meeting date of first call. Remote votes can be revoked subsequently by the same means used to cast them, always within the deadlines established for that purpose, or by personal attendance to the General Shareholders’ Meeting of the shareholder who casted the vote to his/her representative. 14. Decisions that can only be adopted by a qualified quorum According to EDPR’s Articles of Association and as established in the law, both ordinary and extraordinary General Shareholders’ Meetings are validly constituted when first called if the shareholders, either present or represented, jointly reach at least twenty-five percent (25%) of the subscribed voting capital. On second call, the General Shareholders’ Meeting will be validly constituted regardless of the amount of the capital present or represented. Notwithstanding the above percentages, to validly approve the issuance of bonds, the increase or reduction of capital, the transformation, global assignment of assets and liabilities, merger or spin-off of the Company, the transfer of the Registered Office abroad, the elimination or limitation of pre-emptive rights of new shares and in general, any necessary amendment to the Articles of Association, in the Ordinary or Extraordinary Sha reholders’ Meeting, it is required that on first call, the Shareholders, either present or represented, reach at least fifty percent (50%) of the subscribed voting capital and, on second call, at least twenty-five percent (25%) of the subscribed voting capital. In relation to the quorum required to validly approve these matters, in accordance with the Law and the Articles of Association, when the shareholders attending represent more than fifty percent (50%) of the subscribed voting capital, the above mentioned resolutions will be validly adopted by absolute majority, and in the case the shareholders attending represent between the 161 twenty-five percent (25%) and the fifty percent (50%) – but without reaching it - the favorable vote of the two-thirds (2/3) of the present or represented capital in the General Shareholders’ Meeting will be required to approve these resolutions. EDPR has not established any mechanism that may intend to cause mismatching between the rights to receive dividends or the subscription of new securities and the voting right of each common share, and has not adopted mechanisms that hinder the passing of resolutions by shareholders, including fixing a quorum for resolutions greater than that provided by the law. II. Management and supervision A) Composition 15. Corporate Governance model EDPR is a Spanish Company listed in a regulated stock exchange in Portugal. The corporate organisation of EDPR is subject to its personal law and to the extent possible, to the recommendations contained in the Corporate Governance Code of the Instituto Português de Corporate Governance (“IPCG”), resulted as of the Protocol signed on October 13 th , 2017 between the Comissão do Mercado de Valores Mobiliários (“CMVM” – Portuguese Securities Market Commission) and the IPCG, which was last reviewed in July 2020. This governance code is available at the IPCG website (https://cam.cgov.pt/). As such, the Company intends to comply with both legal systems but always taking into account that its personal law is the Spanish one, and that in case of discrepancy, the aim is to adopt the law that entails more protectionism for its shareholders. The governance structure of EDPR is the one applicable under its personal law, that comprises a General Shareholders’ Meeting and a Board of Directors that represents and manages the Company. Additionally, with the purpose of adapting this structure to the extent possible to the Portuguese legislation, parallelly seeks to correspond it 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 organisation and functioning of EDPR corporate governance model aims to achieve the highest standards of corporate governance, business conduct and ethics referenced on the best national and international practices. In line with its governance model above referred, and as detailed along topics 15 - 29 of this Chapter 5 of the Annual Report and contemplated in the law and Articles of Association of the Company, as of December 31 st , 2020, EDPR does not have a Supervisory Board, but its Board of Directors has set up three Delegated Committees entirely composed by Members of the Board of Directors: the Executive Committee, the Audit, Control and Related-Party Transactions Committee and the Nominations and Remunerations Committee. This structure and its functioning, enables a fluent workflow between all levels of the governance model, as: i) each of the Delegated Committees shall report the decisions taken to the Board of Directors (drafting the minutes of each of the meetings and also providing whatever further clarification is required by the Board), and ii) as the committees Members are also members of the Board, all of them will also receive the complete information at Board of Directors level (as convening of the meetings, supporting documents and related minutes) in order to take the corresponding decisions; and all in all, thus ensuring in time and manner the access to all the information to the whole Board of Directors in order to appraise the performance, current situation and perspectives for the further development of the Company. The General Secretary constitutes the focal point in charge of the centralization of the reception and management of all the information and documents to be provided to the different Governing Bodies. This information is prepared by the different departments of EDPR, with the support when necessary of external experts, and always managed in a strictly confidential basis. Additionally, the corresponding duties and functioning procedures for the Governing Bodies (including but without limitation, the performance of their functions, their Chairmanship, periodicity of meetings, their functioning and the duties of their members) have been defined at the Articles of Association and Board of Directors and Delegated Committees Regulations (which are published at the website of the Company www.edpr.com ), with the aim of ensuring the adequacy in terms of time and manner of the elaboration, management and access to the information in order to procced at each level with the corresponding acknowledgements and decisions. In line with the above, the General Secretary sends the notices and supporting documents of the topics to be discussed in each meeting of the Board and of each of its committees to their proper discussion during the meeting. Additionally, the minutes of all meetings are drawn and also circulated. 162 ANNUAL REPORT EDPR 2020 The governance model of EDPR was designed to ensure the transparent and meticulous separation of duties, management and the specialization of supervision, through the following governing bodies: • General Shareholders’ Meeting • Board of Directors • Executive Committee • Audit, Control and Related Party Transactions Committee The experience gained operating the Company through this structure indicates that the governance model approved by EDPR shareholders, and adopted in EDPR, is the most appropriate in line with the corporate organisation of its activity, especially because it affords transparency and a healthy balance between the management and the supervisory functions. The links of the Company Website that refers to the information of the Governing Bodies and its regulations are indicated in topics 59-65 of this Chapter 5 of the Annual Report. 16. Rules for the nomination and replacement of directors According to Article 29.5 of the Company’s Articles of Association, the Nominations and Remunerations Committee is empowered by the Board of Directors to propose, advise and inform the Board regarding the appointments (including by co- option), re-elections, removals and remuneration of the Board Members, as well as the composition of the committees of the Board. This committee also advises on the appointment, remuneration and dismissal of top management officers. As also referred in the Company Articles of Association (Article 21) the term of office of the Board Members shall be of three (3) years, and may be re-elected once or more times for equal periods. Following the best Corporate Governance practices, EDPR has analyzed and discussed about the possible criteria applicable in the selection of the new members of its Governing Bodies. As a conclusion, the Nominations and Remunerations Committee and the Board of Directors resolved at their meetings held on November 2 nd , 2016, and December 14 th , 2016 respectively, to take into account among others the following: the education, experience in the energy sector, integrity and independence, having a proven expertise, and the diversity that such candidate may provide to the related body. Likewise, on the Sh areholder’s Meeting held on March 2 6 th , 2020, the Board of Directors’s made public its particular interest in supporting the gender diversity in accordance with the Lei n º 62/2017 of August 1 st , and specifically committed at the seve n th resolution of the agenda, to promote that at the first Elective Shareholders’ Meeting to be held after termination of the current term of office of the Board Members, the percentage of Board Members corresponding to the less represented gender is increased to a 33 . 3%. Based on the above criteria, after the previous advice of the Nominations and Remunerations Committee, the Board of Directors would submit a proposal to the General Shareholders’ Meeting (including for sake of clarity, the curriculum vitae of the candidates, which will be publicly disclosed with the other supporting documents of the meeting in the terms referred in topic 13 above). The appointment proposals should be approved by majority. For more information about the composition of the Board of Directors please check the Sustainability Chapter of the Annual Report at its topic GRI 405-1,and the Annex I of this Chapter 5 of the Annual Report, which includes the curricular details of its Members. Additionally, in case of a vacancy, pursuant to the Articles of Association and the Spanish Companies Law, the Board of Directors may co- opt a new Board Member, who will occupy the position until the next General Shareholders’ Meeting, to which a proposal will be submitted for the ratification of such appointment by co-option. Pursuant to the Spanish Companies Law, the co-option of Directors must be approved by absolute majority of the Directors at the Board meeting. Finally, pursuant to Article 23 of the Articles of Association and 243 of the Spanish Companies Law, shareholders may group their shares until constituting an amount of capital equal or higher than the result of dividing the company’s capital by the number of Members of the Board, to be entitled to appoint a number of Directors equal to the result of the fraction using only whole amounts. Those shareholders making use of this power, cannot intervene in the nomination of the other members of the Board of Directors. 163 17. Composition of the Board of Directors Pursuant to Article 20 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. Considering the size of EDPR and the complexity of the risks intrinsic to its activity, a Board with a total of fifteen (15) members has been considered as adequate, being ten (10) of them non-executive. The Secretary of the Board of Directors is Emilio García-Conde Noriega. Likewise, according to the proposal submitted by the Nominations and Remunerations Committee, the Board of Directors approved on its meeting held on May 7 th , 2019 the appointment of María Gonzalez Rodríguez as Vice-Secretary of the Board of Directors of EDPR. By the end of 2019, Gilles August presented his resignation to the position as Board Member, and in order to fill the vacancy left, and in accordance with the proposal submitted by the Nominations and Remunerations Committee, the Board of Directors approved on its meeting held on October 29 th , 2019 the appointment by cooption of Rui Teixeira based on his extensive professional career as executive member of the managing bodies of EDP and EDPR, and the material know-how about renewable energy acquired during his nearly seven (7) years as executive director of EDPR few years ago. This appointment was duly ratified by the Shareholders’ Meeting held on March 26 th , 2020. Few months later, in the context of a judicial procedure undergoing related to the activity of EDP – Energias de Portugal, António Mexia and João Manso Neto, were suspended from their executive functions in all EDP Group companies - the process continues in the inquiry phase and they have not been formally accused - and following this, the Board of Directors of EDPR met on July 6 th , 2020 and identified Rui Teixera as the best candidate to reinforce the executive line of the Company, mainly considering his deep knowledge of the business (in particular with regards of renewables), and he had been CFO of EDP Renováveis during several years, and therefore, his involment woud imply a continuity and support in the completion of the Bussiness Plan in these special circumstances. Based on that, the Board resolved to appoint him as a new member of EDPR’s Executive Committee and Joint CEO, designated as the responsible person to coordinate the Executive Committee activities and to liaise with EDP – EDPR’s principal shareholder . At the en of 2020, with effects 30 th December, Francisca Guedes de Oliveira resigned to her position as Member of the Board. As of December 31 st , 2020, the Board of Directors is composed by the following fourteen (14) Directors: BOARD MEMBER POSITION DATE OF FIRST APPOINTMENT DATE OF RE- ELECTION END OF TERM António Mexia Chairman 18/03/2008 27/06/2018 27/06/2021 João Manso Neto Vice-Chairman CEO 4/12/2007 27/06/2018 27/06/2021 Rui Teixeira Joint CEO and Executive Committee Coordinator 29/10/2019 - 27/06/2021 Duarte Bello Director 26/09/2017 27/06/2018 27/06/2021 Miguel Ángel Prado Director 26/09/2017 27/06/2018 27/06/2021 Spyridon Martinis Director 26/02/2019 - 27/06/2021 Vera Pinto Director 26/02/2019 - 27/06/2021 Manuel Menéndez Director 04/06/2008 27/06/2018 27/06/2021 António Nogueira Leite Director 26/02/2013 27/06/2018 27/06/2021 Acácio Piloto Director 26/02/2013 27/06/2018 27/06/2021 Allan J. Katz Director 09/04/2015 27/06/2018 27/06/2021 Francisca Guedes De Oliveira Director 09/04/2015 27/06/2018 N/A Francisco Seixas da Costa Director 14/04/2016 27/06/2018 27/06/2021 Conceição Lucas Director 27/06/2018 - 27/06/2021 Alejandro Fernandez de Araoz Director 27/06/2018 - 27/06/2021 Francisca Guedes de Oliveira presented her resignationto her position as Member of the Board with effects 30 th December 2020. 164 ANNUAL REPORT EDPR 2020 18. Executive, Non-Executive and Independent Members of the Board The independence of the Directors is evaluated according to the Company’s personal law, and annually confirmed by each of the corresponding Directors through the signature of an independence declaration. Likewise, EDPR Board of Directors Regulations, and Article 20.2 its Articles of Association, defines independent Directors as those who are able to perform their duties without being limited by relations with the Company, its significant Shareholders, or its management officers and comply with the other legal requirements. Corporate Governance recommendations of the IPCG Code state that the number of non-executive directors should be higher than the number of executive directors, and that at least one third over the total members shall be non-executive members that also comply with the independence criteria. To this extent, and provided that the independence criteria applicable to EDPR Directors are the ones established under its personal law, from a total of fifteen (15) positions that composed of EDPR’s Board of Directors as of December 31 st , 2020, there was one (1) vacant and fourteen (14) Directors out of which nine (9) were non- executive, being five (5) of them also independent. In accordance with the law and pursuant the last amendment of Articles of Association, it has been established that Non- Executive Directors can only be represented in the Board meetings by other Non- Executive Director. As such, it has been concluded that the composition of the Board and its Delegated Committees is suitable for the size of the company and the complexity of the risks intrinsic to its activity mainly considering that enables a separation of duties, management and specialization of supervision at the same time that the non-executive and independent directors take part in all the decisions also at the Board of Directors level. Should be noted to this extend that the Board of Directors is composed by a majority of non-executive members, and being balanced the number of executive and independent; and that the Audit, Control and Related Party Transactions Committee and the Nominations and Remunerations Committee, are entirely composed by non- executive and independent members. Spanish law, Regulations of the Board of Directors and Company Articles of Association regulate the criteria for the incompatibilities with the position of Director. Specifically, Article 23 of the Articles of Association, establish that the following can not be Directors: • Those who are directors of or are associated with any competitor of EDPR, or have family relations with them. In this respect a Company shall be considered as a competitor of EDPR, whenever it is engaged, if it is directly or indirectly involved in the production, storage, transport, distribution, marketing or supply of electricity or fuel gas; or also if has interests opposed to those of EDPR, or to the ones of any competitor or any of the companies in its group, and the Board members, 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; • Those who are in any other situation of incompatibility or prohibition under the law or EDPR’s Articles of Association. Under Spanish law, among others, are not allowed to be Directors those who are underage – under eighteen (18) years - and were not emancipated, disqualified, competitors, convicted of certain offences, or that hold certain management positions. The prevention and avoidance of the conflict of interest in the performance of the duties of the Directors of EDPR is regulated in line with the terms contained in article 229 of the Spanish Companies Law and implemented in article 28.3 of the Board of Directors Regulations, which is also applicable to the committees under article 12 of their respective regulations. This article states that in case any direct or indirect conflict of interest arose, it shall be communicated to the Board of Directors, being the Director involved obliged to abstain from intervening in the corresponding operation. Additionally, all the Board Members (and hence those of its Delegated Committees, as they are entirely composed by Members of the Board) shall annually sign an statement declaring their compliance with the terms of the requirements stated under article 229 of the Spanish Companies Law, and their commitment to notify any variation in the information declared under the statement as soon as it may occur, in order to fully comply with the loyalty duty and avoid any interference or irregularity in any decision-making process. 165 The following table includes the executive, non-executive and independent members of the Board of Directors as of December 31 st , 2020: BOARD MEMBER POSITION António Mexia Chairman and Non-Executive Director João Manso Neto Vice-Chairman and Executive Director Rui Teixeira Joint CEO and Executive Director Duarte Bello Executive Director Miguel Ángel Prado Executive Director Spyridon Martinis Executive Director Vera Pinto Non-Executive Director Manuel Menéndez Non-Executive Director António Nogueira Leite * Non-Executive Director and independent Director Acácio Piloto Non-Executive Director and independent Director Allan J. Katz Non-Executive Director and independent Director Francisca Guedes De Oliveira Non-Executive Director and independent Director Francisco Seixas da Costa Non-Executive Director and independent Director Conceição Lucas Non-Executive Director and independent Director Alejandro Fernandez de Araoz Non-Executive Director * Having been appointed as first time in 2008, the present term of office is the last one in which he can be considered as Independent Director. ** Francisca Guedes de Oliveira presented her resignation to her position as Member of the Board with effects 30 th December 2020. Following the best corporate governance recommendations, considering that the Chairperson of the Board of Directors of EDPR, Antonio Mexia, is a non-independent Director, the Nominations and Remunerations Committee approved on its meeting held on February 18 th , 2019 to propose to the independent Members of Board the appointment Antonio Nogueira Leite as Lead Independent Director whose functions would namely be: i) act, when necessary, as an interlocutor between the Chairperson of the Board of Directors and the other Directors, (ii) ensure the necessary conditions and means so the Directors may carry out their functions; and (iii) coordinate the independent Directors in the assessment of the performance of the managing body. This proposal was unanimously approved by all the independent Directors (with the abstention of the candidate proposed) on the Board meeting held February 26 th , 2019. 19. Professional qualifications and biographies of the Members of the Board of Directors The main positions held by the members of the Board of Directors in the last five (5) years, those that they currently hold in Group and non-Group companies and other relevant curricular information details are available in the Annex I of this Chapter 5 of the Annual Report. 20. Family, professional and business relationships of the Members of the Board of Directors with qualifying shareholders Qualifying Shareholders in EDPR are subject to the Spanish Law, which regulates the criteria and thresholds of the shareholders’ holdings. As of December 31 st , 2020, and as far as the Company was informed, there are no family or business relationships of Members of the Board of Directors with qualifying shareholders but only professional relationships due to the fact that some of the Members of EDPR’s Board of Directors are currently Members of the Board of Directors in other companies belonging to the same group as EDP Energias de Portugal S.A., which are the following: • António Mexia; • João Manso Neto; 166 ANNUAL REPORT EDPR 2020 • Manuel Menéndez Menéndez; • Vera Pinto; • Rui Teixeira. Or employees in other companies belonging to EDP’s Group, which are the following: • Duarte Bello; • Miguel Ángel Prado; • Spyridon Martinis. 21. Management structure As exposed in topic 15 above, the governance model of EDPR was designed to ensure the transparent and meticulous separation of duties and the specialization of supervision through the following structure of its governing bodies: General Shareholders’ Meeting: which is the body in which the shareholders participate. Represents the Company with the full authority corresponding to its legal personality and has the power to deliberate, vote and adopt decisions, particularly on matters that the law and Articles of Association reserve for its decision and that must be submitted for its approval. Board of Directors: that represents and administrates the Company under the broadest powers of management, supervision and governance with no limitations other than the responsibilities expressly and exclusively granted to the jurisdiction of the General Shareholders Meeting in the Company’s Articles of Association or in the applicable law. 167 Executive Committee: which is the delegated body of the Board of Directors entrusted to perform the daily management of the business. As of 31 st December 2020, EDPR’s Executive Committee was composed by the following members that were also Joint Directors: - João Manso Neto (CEO and Chairman of the Executive Committee) - Rui Teixeira (Joint CEO and Executive Committee Coordinator) - Duarte Bello (COO Europe & Brazil and member of the Executive Committee) - Miguel Ángel Prado (COO North America and member of the Executive Committee) - Spyridon Martinis (COO Offshore and New Markets , CDO and member of the Executive Committee) Other Delegated Committees: as regulated by the applicable Law and pursuant to the best corporate governance recommendations, EDPR has set up two additional specialized internal committees: The Audit, Control and Related Party Transactions Committee, whose main duties are the appointment of the company’s auditors, the monitorization of internal risk management and control systems, the supervision of internal audits and compliance, and also the ratification of transactions between EDPR and EDP and between its related parties, qualified shareholders, directors, key employees or their relatives. The Nominations and Remunerations Committee, whose main duties are the assistance and report to the Board of Directors in the appointments, re-elections, dismissals, evaluation and remunerations of the members of the Board of Directors. B) Functioning 22. Board of Directors regulations EDPR’s Board of Directors Regulations are available at Company’s website ( www.edpr.com ), and at Company’s headquarters at Plaza del Fresno, 2, Oviedo, Spain. 23. Number of meetings held by the Board of Directors According to the Law and its Articles of Association, EDPR’s Board of Directors meetings take place at least once every quart er. During the year ended on December 31 st , 2020, the Board of Directors held eight (8) meetings. The notices and supporting documents of the topics to be discussed in each meeting are sent to the Board members in advance to their proper discussion during the meeting. Additionally the minutes of all meetings are drawn and also circulated. 168 ANNUAL REPORT EDPR 2020 The table below expresses the attendance percentage of the participation of the Directors to the meetings held during 2020: BOARD MEMBER POSITION ATTENDANCE António Mexia Chairman and Non-Executive Director 33.3% João Manso Neto Vice-Chairman and Executive Director 100% Rui Teixeira Joint CEO and Executive Director 100% Duarte Bello Executive Director 100% Miguel Ángel Prado Executive Director 100% Spyridon Martinis Executive Director 100% Vera Pinto Non-Executive Director 100% Manuel Menéndez Non-Executive Director 87.5% António Nogueira Leite Non-Executive Director 75% Acácio Piloto Non-Executive Director 100% Allan J. Katz Non-Executive Director 87.5% Francisca Guedes De Oliveira Non-Executive Director 100% Francisco Seixas da Costa Non-Executive Director 87.5% Conceição Lucas Non-Executive Director 100% Alejandro Fernandez de Araoz Non-Executive Director 87.5% () The percentage reflects the meetings attended by the Members of the Board, provided that, on July 6 th , 2020 António Mexia and João Manso Neto were suspended from their executive functions in all EDP Group companies and thus the percentage shown in the table reflects the attendance calculated over the meetings celebrated until such date. 24. Competent body for the performance appraisal of Executive Directors The key performance indicators for the appraisal of the Executive Directors are set in advance and approved by the General Shareholder’s Meeting. Once the corresponding fiscal year is completed, the Nominations and Remunerations Committee performs the first assessment about the compliance with such key performance indicators, and submits its recommendation to the Board of Directors, which evaluates the proposal of this committee and makes the final decision. Should be noted that according to the personal law of EDPR, the definitive assessment of this performance is a non-delegable competence of the Board of Directors. 25. Performance evaluation criteria The criteria for assessing the Executive Directors’ perfo rmance are described on topics 70, 71 and 72 of this Chapter 5 of the Annual Report. 26. Availability of the Members of the Board of Directors The members of Board of Directors of EDPR are fully available for the performance of their duties having no constraints for the execution of this function simultaneously with other positions. Additionally, Executive Directors of EDPR, do not perform any other executive duties outside the Group. The positions held at the same time in other companies within and outside the Group, and other relevant activities undertaken by members of the Board of Directors throughout the financial year are listed in the Annex I of this Chapter 5 of the Annual Report. 169 C) Committees within the Board of Directors or Supervisory Board and Managing Directors 27. Board of Directors’ Committees As previously exposed, in line with Spanish Law and as specifically foreseen in Article 10 of the Company’s Articles of Association, the Board of Directors is entitled to create delegated bodies. The Board of Directors of EDPR has set up three committees: • Executive Committee • Audit, Control and Related-Party Transactions Committee • Nominations and Remunerations Committee With the exception of the Executive Committee, the other committees are composed exclusively by independent members. 28. Executive Committee composition Pursuant to Article 27 of the Company’s Articles of Association, the Executive Committee shall consist of no less than four (4) and no more than seven (7) Directors. Its constitution, the nomination 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. As of December 31 st , 2020, EDPR Executive Committee was composed by the following members, who were also Joint Directors: • João Manso Neto, Chairman and CEO • Rui Teixeira, who since July 6 th is the Executive Committee Coordinator • Duarte Bello (COO Europe& Brazil) • Miguel Ángel Prado (COO North America) • Spyridon Martinis (COO Offshore & New Markets, and CDO) Additionally, Emilio García-Conde Noriega is the Secretary of the Executive Committee. 29. Committees competencies Executive Committee Composition The composition of the Executive Committee is described on the previous topic. Competences The Executive Committee is a permanent body in charge of the daily management of the Company, to which all the competences of the Board of Directors that are delegable under the law and the Articles of Association can be assigned. 170 ANNUAL REPORT EDPR 2020 Functioning In addition to the Articles of Association, this committee is also governed by its regulations approved on June 4 th 2008 and last amended on November 2 nd , 2016. The committee regulations are available at the Company’s website (www.edpr.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 notices and supporting documents of the topics to be discussed in each meeting of this committee are sent to its members in advance to their proper discussion during the meeting, being the minutes of all meetings drawn and also circulated. Additionally, this committee informs about of its decisions at the first Board held after each committee meeting. Meetings of the Executive Committee are valid if half of its members plus one are present or represented. Decisions shall be adopted by majority. In the event of a tie, the Chairman shall have the casting vote. Executive Directors shall provide any clarifications needed by the other Directors or corporate bodies whenever requested to do so. 2020 Activity The Executive Committee’s main activity is the daily management of the Company, and in the execution of such duties, during 2020 held a total of fifty-one (51) meetings. Audit, Control and Related Party Transactions Committee Composition Pursuant to Article 28 of the Company’s Articles of Association and Article 9 of its Regulations, the Audit, Control and Related Party Transactions Committee consists of no less than three (3) and no more than five (5) members. According to Article 28.5 of the Articles of Association the term of office of the Chairman of the Audit, Control and Related Party Transactions Committee is a maximum of six (6) years. Following the proposal submitted by the Nominations and Remuneration Committee, its Chairman, Acacio Piloto, was first elected for this position on June 27 th , 2018. The Audit, Control and Related Party Transactions Committee consists of three (3) non-executive and independent members, plus the Secretary who until December 30 th 2020 2 , were the following: • Acacio Piloto, who is the Chairman • Antonio Nogueira Leite • Francisca Guedes de Oliveira Additionally, Mr. Emilio García-Conde Noriega is the Secretary of the Audit, Control and Related Party Transactions Committee. The committee members shall maintain their positions for as long as they are Company Directors. Nevertheless, the Board may decide to discharge members of the committee at any time, and also the members may resign of these positions but still maintaining their seat as Members of the Board of Directors. 2 Francisca Guedes de Oliveira presented her resignation as Member of the Board with effects 30 th December 2020, and therefore also as member of the Audit, Control, and Related Party Transactions Committee. In order to fill this vacancy at the committee level, the Board of Directors resolved at its meeting held on January 19 th , 2021 to appoint Francisco Seixas as new member of the Audit, Control a nd Related Party Transactions Committee. 171 Competences Notwithstanding the other duties that the Board may assign to this committee, it shall perform supervisory functions of Audit and Control independently from the Board of Directors, as well as, supervisory functions of the transactions between Related Parties, as follows: A) Audit and Control functions: • Reporting through the Chairperson on questions falling under its jurisdiction to the General Shareholders’ Meetings; • Proposing the appointment of the Company’s auditors to the Board of Directors for subsequent approval by the General Shareholders’ 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 the auditor appointments; • Supervising the finance reporting and the functioning of the internal risk management and control systems, as well as evaluating those systems and proposing the adequate adjustments according to the Company necessities (including without limitation, the monitorization of the development of the strategic lines and risk policies defined); • Supervising internal audits and compliance; • Establishing a permanent contact with the external auditors to assure the conditions, including independence, that may be adequate for provision of services performed by them acting as the Company speaker for the subjects related to the auditing process, and receiving and maintaining information on any other questions regarding accounting subjects; • Preparing an annual report on its activities, including eventual constraints, and expressing an opinion on the Management Report, the accounts and the proposals presented by the Board of Directors; • Receiving notices of financial and accounting irregularities presented by the Company’s employees, shareholders, or entities that have a direct interest and judicially protected, related with the Company’s social activity; • 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, it must be taken into account the importance of the matters entrusted to them and the economic situation of the Company); • Drafting reports at the request of the Board and its committees; B) Related Party Transactions functions: • Periodically reporting to the Board of Directors on the commercial and legal relations between EDP or related entities and EDP Renováveis 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 EDP Renováveis Group, and the transactions between related entities during the fiscal year in question; • Ratifying transactions between EDP and/or related entities with EDP Renováveis and/or related entities by the stipulated deadline in each case, provided that the value of the transaction exceeds €5.000,000 or represents 0.3% of the consolidated annual income of the EDP Renováveis Group for the fiscal year before; • Ratifying any modification of the Framework Agreement signed by EDP and EDP Renováveis on May 7 th , 2008; • Making recommendations to the Board of Directors of the Company or its Executive Committee regarding the transactions between EDP Renováveis and related entities with EDP and related entities; • Asking EDP for access to the information needed to perform its duties; 172 ANNUAL REPORT EDPR 2020 • Ratifying, in the correspondent term according to the necessities of each specific case, the transactions between Qualifying Holdings other than EDP with entities from the EDP Renováveis Group whose annual value is superior to 1.000.000€; • Ratifying, in the correspondent terms according to the necessities of each specific case, the transactions between Board Members, “Key Employess” and/or Family Members with entities from EDP Renováveis Group whose annual value is superior to 75.000€. Functioning In addition to the Articles of Association and the law, this committee is governed by its regulations approved on June 27 th 2018, which are available at the Company’s website (www.edpr.com). The committee shall meet at least once a quarter and additionally whenever its Chairperson sees fit. The notices and supporting documents of the topics to be discussed in each meeting of this committee are sent to its members in advance to their proper discussion during the meeting. Additionally, this committee shall draft minutes of every meeting held and inform the Board of Directors of its decisions at the first Board held after each committee meeting. Decisions shall be adopted by majority and the Chairperson shall have the casting vote in the event of a tie. 2020 Activity In 2020 the Audit, Control and Related Party Transactions c ommittee’s activities included the following: A) Audit and Control Activities: • Monitor the closure of quarterly accounts, first half-year and year-end accounts; • Information about the proposals of application of results for the fiscal year ended on December 31 st 2020 and the distribution of dividends; • Information about the independence of the External Auditor; • Assessment of the external auditor’s work, especially concerning the scope of work in 2020, approval of all “audit related” and “non - audit” services and analysis of external auditor’s remuneration; • Analysis the service proposal presented by the external Auditors for 2021-2023; • Supervision of the quality and integrity in the preparation and disclosure of the financial information in accordance with the applicable accounting policies, estimates and judgments; • Drafting of an opinion about the individual and consolidated reports (including the Corporate Governance report) and accounts, in a quarterly, half year and yearly basis; • Monitorization of the 2020 Internal Audit Action Plan and pre-approval of the draft prepared for the 2020 Internal Audit Action Plan; • Monitorization of the recommendations issued by Internal Audit and reviewing the Internal Audit Standard; • Follow-up and supervision of the quality, integrity and efficiency of the treasury management (finance and debt), the internal control system, risk management and internal auditing; • Evaluation of the strategies and risk policies adopted, and elaborating a report including its assessment about the risk management during 2020; • Information about Whistle-Blowing; 173 • Information about the contingencies affecting to the Group; • Issuance of the report of its activities performed during 2019 and self-assessment about its performance, as well as an specific anual report regarding the appraisal of the Internal Audit functions and Internal control activities. • Analysis of the decision of incorporating a new department (“CIC”) in the Company centralizing the Compliance and Internal Control functions (including SCIRF), as well of the proposal issued by the Nominations and Remunerations Committee regarding the candidate to perform its direction; • Analysis of the new candidate proposed for the Internal Audit direction. B) Related Party Transactions Activities: In 2020, the Audit, Control and Related Party Transactions Committee revised, approved and proposed to the Board of Directors the approval of agreements and contracts between related parties submitted to its consideration. Section E – I, topic 90 of Chapter 5 this Annual Report includes a description of the fundamental aspects of the agreements and contracts between related parties. The Audit, Control and Related Party Transactions Committee found no constraints during its control and supervision activities. The information regarding the meetings celebrated by this committee and the attendance of its related members during the year 2020 is described at topic 35. Nominations and Remunerations Committee Composition Pursuant to Article 29 of the Company’s Articles of Association and Article 9 the Nominations and Remunerations Committee Regulations, this committee shall consist of no less than three (3) and no more than six (6) members. At least one of its members must be independent and shall be its Chairman. In accordance with its personal law (Spanish law), with recommendation V.3.3. of the Corporate Governance Code of IPCG,and to the extent possible with recommendation V.2.1. of the Corporate Governance Code of IPCG (as considering that in Spain this committee shall be created by the Board and being entirely comprised by members of its Board of Directors), the Nominations and Remunerations Committee of EDPR is entirely constituted by Non-Executive Directors and being the majority of them independent. As of December 31 st , 2020, the Nominations and Remunerations Committee consists of three (3) independent members, who are the following: • Antonio Nogueira Leite, who is the Chairman • Francisco Seixas da Costa • Conceição Lucas Additionally, Emilio García-Conde Noriega is the Secretary of the Nominations and Remunerations Committee. 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 remaining Company Directors. 174 ANNUAL REPORT EDPR 2020 Competences The Nominations and Remunerations committee is a permanent body belonging to the Board of Directors with an informative and consultative nature and its recommendations and reports are not binding. 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 co-option), re- elections, removals and remuneration of the Board Members and its Officers, the composition of the Board delegated committees; as well as the appointment, remuneration, and removal of executive staff. The Nominations and Remunerations Committee shall also inform the Board of Directors on general remuneration and incentive policy and incentives for Board members and executive staff. 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 (including nominations by co-option) for the submission to the Gene ral Shareholders’ Meeting by the Board of Directors; • Proposing to the Board of Directors the candidates for the different committees; • Proposing to the Board, within the limits established in the Articles of Association, the remuneration system, distribution method, and amounts payable to the Directors; • Making proposals to the Board of Directors on the conditions of the contracts signed with Directors; • Informing and making proposals to the Board 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 in the Articles of Association or by the Board of Directors. On its meeting held on December 14th, 2016, the Board of Directors approved to delegate the functions related to the reflection on the Corporate Governance structure and on its efficiency in the Nominations and Remunerations Committee. In the performance of these functions, this committee annually issues a report where the Corporate Governance system adopted by the Company is analyzed. In accordance with the personal law of EDPR, all the Board Members shall attend to the General Shareholder’s Meeting, and as exposed in topic 15 of this Chapter 5 of the Annual Report, all the Delegated Committees are composed Directors. As such, the Chairperson of the Nominations and Remunerations Committee shall attend the Shareholder’s Meetings, and in case its agenda includes any topic related to remuneration of the company’s governing bodies, this Director will be most adequate to answer. During 2020 one Shareholders’ Meeting was held on March 26 th , and the Chairperson of the Remuneration Committee, Antonio Nogueira Leite, attended. Functioning In addition to the Articles of Association, the Nominations and Remunerations Committee is governed by its Regulations approved on June 4 th 2008. The notices and supporting documents of the topics to be discussed in each meeting of this committee are sent to its members in advance to their proper discussion during the meeting. Additionally, this committee shall draft minutes of every meeting held and inform the Board of Directors of its decisions at the first Board held after each committee meeting. Decisions shall be adopted by majority and the Chairperson shall have the deciding vote in the event of a tie. 175 2020 Activity In 2020 the Nominations and Remunerations Committee held two (2) meetings, and the main activities performed were: • Performance evaluation of the Board of Directors and Delegated Committees; • Analysis of the main principles of the new Remunerations Policy proposed for 2020-2022; • Drafting of the Declaration of the Board of Directors Remuneration Policy for 2020 to be proposed to the Board of Directors for its submission to the General Shareholders Meeting; • Analysis of the decision of incorporating a new department (“CIC”) in the Company centralizing the Compliance and Internal Control functions (including SCIRF), as well as the proposal regarding the candidate to perform its direction and the objtectives, functions and reporting lines to be applied; • Development of an analysis regarding the gender diversity criteria regulation and recommendations applicable to EDPR in 2020; • Drafting the report of its activities performed during the year 2019; • Analysis and issuance of a reflection on the Corporate Governance system adopted by EDPR; • Analisis and ackwoledgement of the mesures applied to António Mexia and João Manso Neto in the context of the judicial procedure undergoing related to the activity of EDP – Energias de Portugal, concluding to this extent that the reinforcement of the executive line with an additional member would be advisible to ensure the agility of its response, and therefore proposed to the Board of Directors to establish the number of members of the Executive Committee in five (5) in accordance with Article 27.3 of the Bylaws, and to appoint Rui Teixeira as new member of the Executive Committee and as Joint CEO, designated as the responsible person to coordinate the Executive Committee activities and to liaise with EDP – EDPR’s principal shareholder . III.Supervision A) Supervision 30. Supervisory Board model adopted EDPR’s governance model, as long as it is compatible with its personal law (Spanish law), corresponds 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, Control and Related Party Transactions Committee. 31. Composition of the Audit, Control and Related Party Transactions Committee The Audit, Control and Related Party Transactions Committee is comprised only by non-executive and independent members, as follows: MEMBER MEMBER DATE OF FIRST APPOINTMENT Acacio Piloto Chairman 27/06/2018 Antonio Nogueira Leite Vocal 6/11/2018 Francisca Guedes de Oliveira Vocal 27/06/2018 Francisca Guedes de Oliveira presented her resignation as Member of the Board with effects 30 th December 2020, and therfore also as member of the Audit, Control, and Related Party Transactions Committee. In order to fill this vacancy at the committee level, the Board of Directors resolved at its meeting held on January 19 th , 2021 to appoint Francisco Seixas as new member of the Audit, Control and Related Party Transactions Committee. 176 ANNUAL REPORT EDPR 2020 32. Independence of the Members of the Audit, Control and Related Party Transactions Committee Information concerning the independence of the members of the Audit, Control and Transactions Party Committee is available on the chart of topic 18 of this Chapter 5 of the Annual Report. As mentioned on the first paragraph of topic 18, the independence of the members of the Board and of its c ommittees is evaluated according to the Company’s personal law, the Spanish law. 33. Professional qualifications and biographies of the Members of the Audit, Control and Related Party Transactions Committee Professional qualifications of each member of the Audit, Control and Related Party Transactions Committee and other important curricular information, are available in the Annex I of this Chapter 5 of the Annual Report. B) Functioning 34. Audit, Control and Related Party Transactions Committee Regulations The Audit, Control and Related Party Transactions Committee regulations are available at the Company’s website (www.edpr.com) and at the Company’s Headquarters at Plaza del Fresno, 2, Oviedo, Spain. 35. Number of meetings held by the Audit, Control and Related Party Transactions Committee The Audit, Control and Related Party Transactions Committee regularly meets representatives of the internal specialized departments involved in the areas under c ommittee’s competences in order to discuss the information periodically reported about, among others, work plans and resources of the internal auditing service (including Compliance), Company accounts, detection of potential irregularities (whistleblowing), global risk management and audit and non-audit services provided by the External Auditor (including the appraisal about its independence). This relationship provides a wider information to the committee that would be taken into account for the development of its functions and in particular, for the assessments issued under the elaboration of the Internal Control Report, the SCIRF Report and the Risk Management Report, that this committee issues for every fiscal year. During 2020, the Audit, Control and Related Party transactions Committee held a total of nine (9) meetings, and as referred in paragraph above, in order to better perfom its supervisory functions over the activities reported by the areas within its competentences, the committee invited the responsible teams of the related areas to several of these meetings as follows: Internal Audit participated in eight (8), CIC (Compliance and Intercal Control) in four (4), Global Risk in four (4), Planing and Control in four (4); Finance in five (5) and Administration, Consolidation and Tax in nine (9). Likewise, the committee invited the External Auditors to four (4) of these meetings. The following tables reflect the attendance of the members of the Audit, Control and Related Party Transactions Committee to its meetings held during 2020: MEMBER POSITION ATTENDANCE Acacio Piloto Chairman 100% Antonio Nogueira Leite Vocal 89% Francisca Guedes de Oliveira Vocal 100% 36. Availability of the Members of the Audit, Control and Related Party Transactions Committee The members of the Audit, Control and Related Party Transactions Committee are fully available for the performance of their duties having no constraints for the execution of this function simultaneously with positions in other companies. The positions held simultaneously in other companies inside and outside the Group and other relevant activities undertaken by members of this committee throughout the financial year are listed in Annex I of this Chapter 5 of the Annual Report. 177 C) Powers and duties 37. Procedures for hiring additional services to the External Auditor In accordance to the Recommendation VII.2.1. of the IPCG Corporate Governance Code, in EDPR there is a policy of pre- approval by the Audit, Control and Related Party Transactions Committee of the the provision of non-audit services to be provided by the External Auditor and any related entity. This policy was strictly followed during 2020. The non – audit services provided by the External Auditor and entities in a holding relationship with or incorporated in the same network as the External Auditor were previously approved by the Audit, Control and Related Party Transactions Committee according to Article 8.A), b) of its Regulations, considering the following aspects: (i) such services having no effect on the independence of the External Auditor and any safeguards used; and (ii) the position of the External Auditor in the provision of such services - notably the External Auditor ’ s experience and knowledge of the Company. Furthermore, although hiring services other than auditing services to the External Auditor is admissible, it is envisaged as an exception. In 2020 such services reached only around 6.5% of the total amount of services provided to the Company. 38. Other duties of the Audit, Control Related Party Transactions Committee Apart from the competences expressly delegated on the Audit, Control and Related Party Transactions Committee according to Article 8 of its Regulations, and in order to safeguard the independence of the External Auditor, the following additional competences of this committee were exercised during the 2020 financial year and should be highlighted: • Pre-approval of any services to be hired from the External Auditor and perform its direct and exclusive supervision; • Assessment of the qualifications, independence, and performance of the External Auditors, and obtaining, yearly and directly from the External Auditors, written information on all relations existing between the Company and the Auditors or associated persons, including all services rendered and all services in progress. In order to evaluate independence, the Audit Committee, obtained the info rmation regarding External Auditors’ independence in light of the Spanish Law no. 22/2015 of July 20th, 2015 ( “ Ley de Auditoría de Cuentas ” ); • Review of the transparency report, signed by the Auditor and disclosed at its website. This report covers the matters provided for under Law no. 22/2015 of July 20th, 2015 ( “ Ley de Auditoría de Cuentas ” ); including those regarding the quality control internal system of the audit firm and the quality control procedures carried out by the competent authorities; • Review with the External Auditors their scope, planning, and resources to be used in their provision of services; IV-V. STATUTORY AND EXTERAL AUDITORS 39-41. According to the Spanish law, the External Auditor ( “ Auditor de Cuentas ” ) is appointed by the General Shareholders ’ Meeting and corresponds to the statutory auditor body ( “ Revisor Oficial de Contas ” ) described on the Portuguese Law. The information about the External Auditor is available in topics 42 to 47 of Section V of this Chapter 5 of the Annual Report. 42. External Auditor identification The main criteria considered in the selection of the most suitable and competitive firm to be appointed as External Auditor are the following: • Recognized technical and professional track record as External Auditor; • Consolidated Know-How about the business developed by the whole Group; 178 ANNUAL REPORT EDPR 2020 • Tailored and highly prepared working team; • Competitive contractual conditions and working methodology (including but without limitation, the total estimation of hours required for the development of the services- both as a total for the complete provision of services, and per each professional category of the proposed team); • Competitive fee proposal, including the final cap and a breakdown referring the price average per hour, and the remuneration per hour for each professional category of the proposed team. As a result of a competitive process launched in 2017, during which the above criteria were exhaustively analyzed, PricewaterhouseCoopers Auditores, S.L. was appointed as EDPR SA External Auditor by the Shareholder’s Meeting held on April 3 rd , 2018. PricewaterhouseCoopers Auditores, S.L., is a Spanish Company registered at the Spanish Official Register of Auditors under number S0242 with Tax Identification Number B-79031290 and whose audit partner in charge of EDPR is Iñaki Goiriena. 43. Number of years of the External Auditor PricewaterhouseCoopers Auditores, S.L. is in charge of the audit of EDPR SA accounts for the years 2018, 2019 and 2020, being 2018 the first year performing these duties. 44. Rotation Policy According to the personal Law of EDPR - the Spanish Law- the maximum term for an audit firm as the External Auditor of a company is established in a 10-year term. Following the proposal of the Audit, Control and Related Party Transactions Committee presented to the Board of Directors to its submission to the General Shareholders’ Meeting, on its meeting held on April 3 rd , 2018, it was approved to appoint PricewaterhouseCoopers Auditores, S.L as EDPR’s External Auditor for the years 2018, 2019 and 2020. 45. External Auditor evaluation The Audit, Control and Related Party Transactions Committee is responsible for the monitorization and annual evaluation of the services provided by the External Auditor according to the competences granted by its Regulations. In order to perform this assessment, this committee periodically includes in the agenda of its meetings a topic regarding the review of the services provided by the External Auditor (both audit an non-audit ) and the fees already incurred and those estimated until year end. Likewise, and as exposed in topic 35 of this Chapter 5 of the Annual Report, the External Auditor attends and participates in some of the meetings held by this committee, mainly in order to analyze the results of their audit reports. As such, the Audit, Control and related Party Transactions Committee acts as the company speaker with the External Auditor, with whom establishes a permanent contact throughout the year to assure the proper conditions for the provision of both the statutory audit services and non-audit services, and being also the body in charge of monitoring its independence along the year. Likewise, the External Auditor shall sign an annual statement declaring its independence. During 2020 , according to the Audit, Control and Related Party Transactions Committee’s competences and in line with Recommendation VII.2.2, this committee was the first and direct recipient and the corporate body in charge of the permanent contact with the External Auditor on matters that may pose a risk to their independence as well as any other matters related to the auditing of accounts. Additionally, in compliance with the auditing standards in effect, it also receives and maintains the record of information about other matters as provided in the applicable auditing and accounting legislation. The External Auditor, within the scope of its duties, verified the implementation of the remuneration policies and systems of the corporate bodies as well as the efficiency and effectiveness of the internal control mechanisms and report any shortcomings to the Audit, Control and Related Party Transactions Committee of the Company. 179 46. Non-Audit Services carried out by the External Auditor On March 3 rd , 2016, it was approved the regulation on the provision of services by the Statutory Auditor or Statutory Audit Firm, which defines and promotes criteria and methodologies to safeguard the independence of the audit and non-audit services (SDA). In accordance with such regulation, the Audit, Control and Related Party Transactions Committee closely follows the requests of non- audit services, each of which necessarily require the preapproval of this committee before its provision as per exposed in topic 29 of this Chapter 5 of the Annual Report and Article 8.A),b) of its Regulations. The identification of such non- audit services that will eventually be provided by the External Auditors is performed under the rules issued by the European Union on this matter, in particular under Regulation 537/2014 and the Spanish Auditing Law nº 22/2015, of 20 th July, as well as when applicable, in line with the particularities of the local regulations where the service is to be provided. During 2020 the non-audit services provided by the External Auditor of EDP Renováveis S.A (PricewaterhouseCoopers Auditores, S.L) consisted mostly on i) limited review as of June 30 th , 2020 of the EDPR Consolidated Financial Statements; ii) review of the internal control system on financial reporting for the EDPR Group; and iii) review of the non-financial information related to sustainability included in the EDPR Group’s annual report. Ot her non-audit services provided by the External Auditor or its network to EDPR’s subsidiaries mainly refer to i) quarterly reviews as of March 31 st ,2020 and September 30 th , 2020 for EDP Group’s consolidation purposes; and ii) agreed-upon procedures, mainly related to the review of covenants in the context of bank financing agreements, external auditor’s certifications for share capital transactions as required by local Laws and IFRS conversion/adoption for some EDPR subsidiaries. PricewaterhouseCoopers Auditores, was engaged to provide the above-mentioned services due to its in-depth knowledge of the Group’s activities and processes. These engagements did not risk their independence as External Auditors and were pre - approved by the Audit, Control and Related Party Transactions Committee prior to rendering the services. 47. External Auditor remuneration in 2020 for EDP Renováveis S.A. and subsidiaries TYPE OF SERVICE PORTUGAL SPAIN BRAZIL US OTHER TOTAL % Audit and statutory audit of accounts 161,802 583,370 166,671 1,066,435 684,006 2,662,284 93.5% Total audit related services 161,802 583,370 166,671 1,066,435 684,006 2,662,284 93.5% Other non-audit services - 151,382 4,000 - 29,007 184,389 6.5% Total non-audit related services - 151,382 4,000 - 29,007 184,389 6.5% Total 161,802 734,752 170,671 1,066,435 713,013 2,846,673 100,00% The amount of Other non-audit services in Spain includes, among others, services that refer to the entire Group such as the review of the internal control system on financial reporting and review of the non-financial information related to sustainability included in the EDPR Group ’ s annual report, which are invoiced to a Spanish companies. This amount also includes the limited review as of June 30, 2020 of the EDPR Consolidated Financial Statements and other reviews for Group consolidation purposes which are considered non-audit services according to the respective local regulation. Total amount for Spain refers to services provided by PricewaterhouseCoopers Auditores S.L. The above fees exclude the fees for full consolidated Viesgo companies which are also audited by PricewaterhouseCoopers Auditores S.L in the amount of 90,471 Euros and the fees for the companies that were sold during 2020 (see note 6 of the consolidated annual accounts). 180 ANNUAL REPORT EDPR 2020 C. Internal organisation I. Articles of Association 48. Amendmets to the articles of association The amendments of the Articles of Association of the Company are of the responsibility of the General Shareholders’ Meeting. According to Article 17 of the Company’s Articles of Association (“ Constitution of the General Shareholders’ Meeting, Adoption of resolutions ”), to validly approve any amendment to the Articles of Association, the Ordinary or Extraordinary Shareholders’ Meeting will need: • On first call, that the Shareholders either present or represented by proxy, represent at least fifty percent (50%) of the subscribed voting capital. • On 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 that the shareholders attending represent more than fifty percent (50%) of the subscribed voting capital, the resolutions referred to in the present paragraph will be validly adopted when reached absolute majority. If the shareholders attending represent between twenty-five percent (25%) and fifty percent (50%) – but without reaching it – the favorable vote of two- thirds (2/3) of the present or represented capital in the General Shareholders’ Meeting will be required in order to validly approve these resolutions. II. Reporting of irregularities 49. Irregularities communication channels WHISTLEBLOWING EDPR has always carried out its activity by consistently implementing measures to ensure the good governance of its companies, including the prevention of incorrect practices, particularly in the areas of accounting and finance. On this basis, and in compliance with the provisions of IPCG Corporate Governance Code, EDPR provides the Group workers with a channel enabling them to report directly and confidentially to the Audit, Control and Related Party transactions Committee any practice presumed illicit or any alleged accounting and/or financial irregularity in their Company. With this channel for reporting irregular accounting and financial practices, EDPR aims to: • Guarantee conditions that allow workers to freely report any concerns they may have in these areas to the Audit, Control, and Related Party Transactions Committee; • Facilitate the early detection of irregular situations, which, if practiced, might cause serious damage to the EDPR Group, its workers, customers and shareholders. Contact with the Company’s Audit, Control and Related Party Transactions Committee to this extent is only possible by email and post, and access to information received is restricted. Any complaint addressed to the Audit, Control and Related Party Transactions 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/she 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 process and functioning rules of this channel are explained in the Welcome Presentation organized every year for the new hires of EDPR and also published on the intranet and website of the Company. The bylaws of this channel are available at the intranet of the Company, which includes, among other issues, the regulation of the suitable means and procedure of communication and treatment of irregularities, and the terms of safeguarding the confidentiality of the information transmitted and the identity of its provider. 181 The Secretary of the Audit, Control and Related Party Transactions Committee receives all the communications and presents a quarterly report to the members of the Committee. In 2020 there were no communications through this channel regarding any irregularity at EDPR. CODE OF ETHICS AND ETHICS CHANNEL EDPR has astrong commitment in relation to the dissemination and promotion of compliance with ethic guidelines and principles like transparency, honesty, integrity, non-discrimination, equal opportunity, and sustainability, which is encouraged to all employees. With this goal, a new Code of Ethics was approved in December 2020 which replaces the Code of Ethics of February, 2014 as well as the regulation to the Code of Ethics. The commitments of this new Code are equally applicable to EDPR business partners, representatives and suppliers who are, in any way, entitled to act on behalf of EDPR. Other suppliers are explicitly required to respect this Code, in accordance with the obligations arising from qualification procedures or established contracts. The Code of Ethics is an “action guide” reflecting the way EDPR believes one should work, therefore its enforcement is inevitably mandatory; and thefore, employees who do not comply with this Code shold be subject to disciplinaty actions under the terms of the applicable regulations. Suppliers to whom the Code is applicable will also be subject, in the event of non- compliance, to the measures or sanctions contractually established or arising from the assessment and qualification procedures in force at EDPR. The Code is a privileged tool that frames the reflection on Ethics, but it is essentially a means of supporting the resolution of ethical issues, since it presents standards and norms of behaviour that help sustain our decisions Both the Code and its regulations are published on its intranet and website and attached to the labour agreements of the new hires to their written acknowledgement when they join the Company. Likewise, this Code has been widely circulated to the employees of the Group through internal communications and additionally, with the objective that every employee of the Company receive an specific training on Ethics at least once, the Company periodically, provides an online course (“Ética EDP”) to all the employees. In this sense, during 2020 the following Ethic courses were launched: (i) Ethics is Value: in me, in society, in EDP ; and (ii) Ética é valor:15 anos de edifício ético EDP . In order to support and achieve its Ethics Code and Ethics commitments and initiatives, and with the aim of minimizing the risk of unethical practices, generating transparency and trust in relationships, EDPR has also approved and implemented the following: • Ethics Committee: is a committee enterely composed by independent members , whose objective is to ensure the Code of Ethics compliance within the Company, processing all information received to this extent and establishing, if appropriate, corrective actions. The main functions of the Ethics Committee are the receipt, registration, processing and reporting to the Board of Directors of information and reports received by the employees regarding infractions of the Code in matters of legislation and ethics, conduct in the work environment, human rights and equal opportunities, integrity, relations with customers and suppliers, the environment and sustainability. These functions include the following: - Proposing corporate ethics instruments, policies, goals and targets; - Monitoring application of the Code of Ethics, laying down guidelines for its regulation and overseeing its proper application by the Company and its subsidiaries; - Analysing reported infractions of the Code of Ethics, deciding on their relevance and admissibility; - Deciding if there is any need for a more in-depth investigation to ascertain the implications and persons involved. The Ethics Committee may, for this purpose, use internal auditors or hire external auditors or other resources to assist in the investigation; - Appointing the Ethics Ombudsperson; - Any other functions assigned to it in the Articles of Association or by the Board of Directors. 182 ANNUAL REPORT EDPR 2020 The Ethics Committee shall be composed by three members: the Chairman of the Audit, Control and Related Party Transactions Committee, the Chairman of the Appointments and Remuneration Committee, and the Compliance Officer. As of December 31 st , 2020, the members of the Ethics Committee are as follows: - Acacio Piloto, Chairman of the Ethics Committee as Chairman of the Audit, Control and Related Party Transactions Committee; - Antonio Nogueira Leite, vocal of the Ethics Committee as Chairman of the Nominations and Remunerations Committee; - Joao Paulo Cruz Bastia Mateus, vocal of the Ethics Committee as Compliance Officer of EDPR; The Ethics Committee shall meet at least once a year and whenever the Chairman deems it is necessary, and its meetings shall be validly convened when one-half plus one of its members are present or represented at the meeting. The resolutions of the Ethics Committee shall be approved by majority vote with the Chairman casting deciding vote in the event of a tie. This Committee shall also inform the Board of Directors of the resolutions it approves at the first meeting of the Board following the Committee meeting in which the resolution was agreed. • Ethics Ombudsperson: is an external person from the Company that receives complaints and doubts submitted through the Ethics Channel and investigates and documents the procedure for each of them, with guaranteed confidentiality in relation to the identity of the claimant. The appointment for this position is made by the Ethics Committee. Its main functions are therefore as follows: - Receiving the doubts and claims submitted through the Ethics channel and preparing and documenting the cases; - Submitting the related reports of the claims received to the Ethics Committee; - Monitoring each case analyzed until its conclusion, liaising with the complainant whenever necessary. Since January 2019, the Ombudsperson of EDPR is Maria Manuela Casimiro da Silva. • Ethics Channel: is an internal and external channel made available for the submission of claims and doubts about the infringements of the Ethics Code in matters of legislation and ethics, conduct in the work environment, human rights and equal opportunities, integrity, relations with customers and suppliers, environment and sustainability. This channel is available on the intranet and Website of the Company and its existence and functioning is also introduced in Welcome Presentation organized every year for the new hires of EDPR. The procedure and workflow of the claims and queries submitted through this channel is regulated under the Regulations of the Code of Ethics and the regulations of the Ethics Committee, and is as follows: 1. The claimant (internal or external) submits its communication through the Ethics Channel (by email or letter through the template available at the Website an intranet), which is received by the Ethics Ombudsperson. 2. The Ethics Ombudsperson starts the investigation and drafts the related report. 3. The Ethics Ombudsperson submits the summary of the investigation to the Ethics Committee (omitting the identity of the complainant) for its deliberation about the effective infringement of the Ethics Code or not and, to analyse if additional information is needed. If the latest were the case, an investigation will be carried out with the support of internal or external means as appropriate. 4. The final decision about the query or claim is communicated to the claimant. The Ethics Ombudsperson will make further contact with the complainant to report the opinion of the Ethics Committee. In 2020, there were three (3) claims submitted through the Ethics Channel. Two of them were considered unfounded, and the other one as inconclusive. Thus, the Ethics Committee declared the closing 3 of the processes and filed the claims. 3 One of the claims was concluded in early 2021. 183 ANTI-CORRUPTION POLICY In order to ensure compliance with the standards of Anti-Corruption Regulation in every geography where EDPR operates, the Company developed in 2014 an Anti-Bribery Policy of application to all EDPR Group, which was approved by its Board of Directors on December 19 th 2014, and last updated in 2017. A new revision of the Anti-Corruption Policy was performed in July 2019 and approved by the Executive Committee; and communicated to all EDPR Employees. This Anti-Corruption Policy implies a series of procedures regarding the relationships of EDPR employees with external parties, namely the approval of certain actions regarding hospitality to and from external parties, donations, and sponsorships. This Policy was implemented in the Group in 2015, through the introduction of several approval systems in the corporate’s employee channels in order to ensure transparency and prevent any corrupt business practice, and since then, has been periodically communicated EDPR employees. Once this implementation was finished, the corresponding training sessions were organized for part of our employees, and made available the Policy in the intranet and Website, in order to ensure appropriate knowledge and understanding of the Policy. It is also attached to the labor agreements of the new hires to their written acknowledgement when they join the Company, and besides that, in the Welcome Presentation organized every year for the new hires of EDPR, they are also explained the main contents of this documents and its functioning. III. Internal Control and Risk Management 50. Internal Audit EDPR’s Internal Audit Department is composed by eight (8) members. The function of EDPR’s Internal Audit is to carry out an objective and independent assessment of the Group’s activities and of its internal control situation, in order to make recommendations to improve the internal control mechanisms over systems and management processes in accordance with the Group’s objectives. The functions of the Internal Audit Department of EDPR were evaluated by the “ Instituto de Auditores Internos ” for the first time in 2020, (as until the date, that was analized jointly with EDP), obtaining the highest calification. EDPR has a Responsibilities Model and a SCIRF Manual (Internal Control System over Financial Reporting), in which individuals, governing bodies and committees responsible for implementing and managing the internal control system are indicated. The Responsibilities Model includes the functions and main activities in the management and maintenance of the system at all levels of the organization including monitoring activities related to the annual cycle, the implementation of controls and documentation of evidence and supervision activities. The SCIRF Manual incorporates the general principles of the Internal Control System over Financial Reporting as well as the methodology used, the procedures for ensuring the effectiveness of internal control and design of models, documentation, evaluation and reporting. In line with the general principles of the model adopted by EDPR for the management of the SCIRF, the COSO Internal Control integrated Framework 2013 (Committee of Sponsoring Organisations of the Treadway Commission), the responsibility for supervising the Internal Control System lies in the Board of Directors and the Audit, Control and Related Party Transactions Committee. The CEO is accountable before the Board and must ensure the proper functioning and effectiveness the SCIRF, promoting its design, implementation and maintenance. The Executive Committee must support the CEO in this task, guiding the development of the Entity Level Controls of the company and the controls in their areas of responsibility, relying when necessary on other levels of the organisation. Also, the Senior Managers are responsible for evaluating any deficiencies and implementing appropriate improvement opportunities. To fulfil these responsibilities, EDPR’s Internal Control offers support and advice for the management and development of the SCIRF. 184 ANNUAL REPORT EDPR 2020 51. Organisational structure of Internal Audit The Internal Audit function in EDPR Group is a corporate function carried out by the Internal Audit Department, which reports both to the Chairman of EDPR’s Executive Committee and to EDPR’s Audit, Control and Related Party Transactions Committee. 52. Risk Management EDPR’s Enterprise Risk Management Process is an integrated and transversal management model that ensures the minimization of the effects of risk on EDPR's capital and earnings, as well as the implementation of best practices of Corporate Governance and transparency. The process aligns EDPR’s risk exposure with the company’s desired risk profile. The Enterprise Risk Management Framework was approved in 2016, in accordance with the guidelines agreed at its Board of Directors level. Based on this risk framework, the Company develops a Risk Management System through individual risk policies and procedures for most relevant risks, where it is defined the methodology to calculate probability of occurrence and impacts, as well as mitigation measures and thresholds. In addition, these risk policies and procedures establish the process for control, periodic evaluation and eventual adjustments. The approvals necessary to proceed with this system are submitted to the Executive Committee, which will inform the Board of Directors of these progresses. Likewise, the Risk Management System is closely followed and supervised by the Audit, Control and Related Party Transactions Committee, an independent supervisory body composed of non executive members that reports to the Board of Directors, in charge, among others, of the monitorization of the compliance and progresses of the Risk Management Plan and possible improvements to the measures and controls for mitigating potential risks identified within EDPR. Market, counterparty, operational, business and strategic risks are identified and assessed and, following the result of the assessment, Risk Policies are defined and implemented across the company. These policies are aimed to mitigate risks without compromising potential opportunities, thus, optimizing return versus risk exposure. In 2020, EDPR updated the Enterprise Risk Management Framework following Risk Committees discussions in order to update of risk limits for the NI@Risk metric, following the recent growth of the company. During 2020, EDPR updated its view on the sustainability of RES policies in the geographies where the Company is present and in new potential geographies. This deep-dive analysis was performed within the scope of the Country Risk Policy. EDPR carried out a review of historical capex deviations for projects in both Europe & Brazil and North American platforms, with the aim of improving the accuracy of Capex contingencies to be included in the modelling of future projects. Finally, an updated methodology for EBITDA@Risk and NI@Risk was approved, through a bottom-up calculation allowing for a closer and more intuitive monitoring of the different risks. 185 53. Risk Map Risk Management at EDPR is focused on covering all risks of the company. In order to have a holistic view of risks, they are grouped in Risk Categories, which are Market, Counterparty, Operational, Business and Strategic. The definition of Risk Categories at EDPR is as follows: • Market Risk – It refers to the risk to EDPR resulting from movements in market prices. Due to the relationship between wind production and energy price, production risk is considered within market risk. In particular, market risk are changes in energy prices, production, interest rates, foreign exchange rates, inflation and commodity prices (other than energy); • Counterparty Risk (credit and operational) – Risk that counterparty to a transaction could default before final settlement of the transaction’s cash flows. A direct economic loss would occur if transactions with the counterparty had positive economic value at the time of default. Even in the case of not defaulting, it may not comply with its contract obligations (timing, quality, etc.), implying additional higher costs due to its replacement or to delays in fulfilling the contract; • Operational Risk (other than counterparty) – Defined as the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events (such as an increase in equipment default rates, increasing O&M, or natural disasters), including the effect of a loss created by not being able to ensure business continuity; • Business Risk – Potential loss in the company’s earnings due to adverse changes in business margins. Such losses can result above all from a serious increase in equipment prices or changes in the regulatory environment. Changes in electricity prices and production are considered market risks; • Strategic Risk – It refers to risks coming from macroeconomic, political, social or environmental situation in countries where EDPR is present, as well as those coming from a change in competitive landscape, from technology disruptions, from changes in energy markets or from governance decisions (investment decisions criteria, Corporate Governance and Reputational issues). Within each Risk Category, risks are classified in Risk Groups. 1. Market Risk 1. i) Energy price risk EDPR faces limited electricity 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. In those countries with no regulated tariffs, power purchase agreements are negotiated with different off- takers to eliminate electricity and Green Certificate or Renewable Energy Credit (REC) price risks. Despite EDPR’s strategy of eliminating market price risk, EDPR still has some plants with merchant exposure. In Europe, EDPR operates in countries where the selling price is defined by a feed-in-tariff (Portugal, France and Italy) 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 and Romania). EDPR is also developing projects in the UK and in Greece, under contract for differences remuneration schemes. In countries with a predefined regulated premium or a green certificate scheme, EDPR is exposed to electricity price fluctuations. Considering current Power Purchase Agreements (PPAs) in place, EDPR is exposed to electricity price risk in Romania, in Poland, in Belgium and partially in Spain. Additionally, in European countries with a green certificate scheme (Romania, Belgium and Poland), EDPR is exposed to fluctuation on the price of green certificates. The US market does not provide a regulated framework system for the electricity price. Nevertheless, renewable generation is incentivized through PTCs (Production Tax Credits) and regional Renewable Portfolio Standard (RPS) programs that allow 186 ANNUAL REPORT EDPR 2020 receiving RECs for each MWh of renewable generation. REC prices are very volatile and depend on the regional supply/demand equilibrium in the relevant market. Most of EDPR’s capacity in the US has predefined prices determined by bundled (electricity + REC) long-term contracts with local utilities in line with the Company’s policy of avoiding electricity price risk. Despite existing long term contracts, some EDPR’s plants in the US do not have PPA and are selling merchant with exposure to electricity and REC prices. Additionally, some plants with existing PPAs do not sell their energy where it is produced and are therefore exposed to basis risk (difference in price between the location where energy is produced and that where energy is sold). In Ontario (Canada), the selling price is defined by a long-term feed-in-tariff, thus, there is no electricity price exposure. In Brazilian and Colombian operations, the selling price is defined through a public auction which is later translated into a long - term contract. Electricity price exposure is almost null, with little exposure for the production above or below the contracted production. Under EDPR’s global approach to minimize the exposure to market electricity prices, the Company evaluates on a permanent basis, if there are any deviations to the pre-defined limits (measured through EBITDA at risk, Net Income at risk and total merchant exposure). EDPR intends to eliminate Green Certificates and REC price risk with the signing of bundled PPAs with private off-takers, which include the sale of the electricity and the Green Certificate or REC. In some cases, the off-taker may be interested in contracting only the Green Certificate or the REC, thus a GCPA (Green Certificate Purchase Agreement) or a RECPA (REC Purchase Agreement) is signed. In those geographies with remaining merchant exposure, EDPR uses various commodity-hedging instruments in order to minimize the exposure to fluctuating market prices. In some cases, due to the lack of liquidity of financial derivatives, it may not be possible to successfully hedge all existing merchant exposure, after considering PPAs in place. In 2020 EDPR had financially hedged most of its remaining merchant exposure in Poland, Romania, Spain, Brazil and the US, mitigating any potential impact from COVID-19 pandemic. As aforementioned, some US plants have exposure to REC price risk and/or basis risk (difference in electricity price between locations). EDPR hedges REC prices through forward sales and basis exposures through financial swaps or FTR (Financial Transmission Rights). 1. ii) Energy Production Risk The amount of electricity generated by EDPR’s renewable plants is dependent on weather conditions, which vary across locations, from season to season and from year to year. Variation on the amount of electricity that is generated affects EDPR’s operating results and efficiency. Not only the total wind or solar production in a specific location is relevant, but also the profile of production. Wind usually blows more at night than at daytime, when energy prices are lower and the opposite for solar. Generation profile will affect the discount or add-on in price of a plant versus a baseload generation. Finally, curtailment of a plant will also affect its production. Curtailment occurs when the production of a plant is stopped by the TSO (Transmission System Operators) for external reasons to the Company. Examples of cases of curtailment are upgrades in transmission lines or exceptional congestion (high level of electricity generation for available transmission capacity). EDPR mitigates wind and solar resource volatility and seasonality through geographical diversification of its asset base in different countries and regions. EDPR acknowledges the correlation between different plants in its portfolio that allows for this geographical diversification, which enables EDPR to partially offset production variations in each region and to keep the total energy generation relatively steady. Currently, EDPR is present in 14 countries: Spain, Portugal, France, Belgium, Poland, Romania, Italy, UK (no generation), Greece (no generation), Colombia (no generation), US, Canada, Brazil and Mexico. 187 Nevertheless, 2020 was a year with generation slightly below the one initially forecasted. EDPR continues to analyze the potential use of financial products to hedge wind risk and might use this product to mitigate risk in specific cases. Profile risk and curtailment risk are managed ex-ante. For every new investment, EDPR factors the effect that expected generation profile and curtailment will have on the output of the plant. Generation profile and curtailment of EDPR’s plants are constantly monitored by EPDR’s Risk department to detect potential future changes. 1. iii) Risks related to financial markets EDPR finances its plants through project finance or corporate debt. In both cases, a variable interest rate might imply significant fluctuations in interest payments. On the other hand, due to EDPR’s presence in several countries, revenues are denominated in different currencies. Consequently, exchange rate fluctuations may have a material adverse effect on financial results or on the value of the foreign investment. 1. iii) a) Interest rate risk Given the policies adopted by EDPR Group, current exposure to variable interest rate is not significant and financial cash flows are substantially independent from the fluctuation of interest rates. The purpose of interest rate risk management policies is to reduce the exposure of long-term debt cash flows to market fluctuations, mainly by contracting long term debt with a fixed rate. When long-term debt is issued with floating rates, EDPR settles derivative financial instruments to swap from floating to fixed rate. EDPR has a portfolio of interest-rate derivatives with maturities of up to 14 years. Sensitivity analyses of the fair value of financial instruments to interest-rate fluctuations are periodically performed. With most of interest rate being fixed, main exposure to interest rates arises at refinancing. To protect against this risk, EDPR intends to maintain a balanced maturity profile for its corporate fixed debt, thus, diversifying the risk of bad timing when refinancing occurs. Repricing calendar of debt is continuously monitored together with interest rates in order to detect good timing for restructuring debt. Taking into account risk management policy and approved exposure limits, Global Risk Area supports the Finance team in interest rate hedging decisions and the Finance team submits the financial strategy appropriate to each project/location for Executive Committee’s approval. 1. iii) b) Exchange rate risk EDPR has international operations and is exposed to the exchange-rate risk resulting from investments in foreign subsidiaries. Currency exposure in operating plants is to U.S. dollar, Romanian leu, Polish zloty, Brazilian real, British pound, Canadian dollar and Colombian pesos. In addition, EDPR has a marginal fiscal exposure to MXN due to Mexican assets. EDPR hedges risk against currency fluctuations by financing in the same currency as the revenues of the project. When local financing is not available, EDPR hedges debt cash flows though cross currency interest rate swaps. EDPR also hedges net investment (investment after deducting local debt) in foreign currency through cross currency interest rate swaps. Finally, EDPR contracts foreign exchange forwards to hedge the risk in specific transactions, mainly in payments to suppliers which may be denominated in different currencies. 188 ANNUAL REPORT EDPR 2020 EDPR’s hedging efforts minimize exchange rate volatility, but do not eliminate completely this risk due to high costs associated to hedging FX in certain situations. 1. iii) c) Inflation risk In specific projects, regulated remuneration is linked to inflation. Additionally, O&M costs are considered to be linked to inflation in most cases. Exposure to inflation in revenues may be naturally hedged with exposure to interest rates and EDPR regularly analyses inflation exposure and its relationship with interest rates to adjust level of interest rate coverage in project finance structures. Exposure to inflation in O&M costs is managed at the moment of the investment decisions, by executing sensitivity analyses. iii) d) Liquidity risk Liquidity risk is the risk of EDPR not meeting its financial obligations. Liquidity risk is mainly related to extreme market movements in electricity prices, interest rates,exchange rates or credit markets,which may change the expected cash flow from revenues, opex, margin calls or funding (due to credit downgrades). EDPR tracks liquidity risk in the short term (margin calls, etc.) and in the long term (financing sources) in order to meet strategic targets previously set (EBITDA, debt ratio and others). EDPR’s strategy to manage liquidity risk is to ensure that its liquidity is sufficient to meet financial liabilities when due, under both normal and stressed conditions, and without incurring unacceptable losses or risking damage to EDPR’s reputation. Different funding sources are used such as Tax Equity investors, commercial banks, multilateral organisations, corporate debt and asset rotation in order to ensure long-term liquidity to finance planned projects and working capital. The Directors have estimated cash flows that show that the Group will meet the commitments existing at the close of the 2020 financial year and those foreseen for 2021. 1.iv) Commodity price risk (other than energy) In projects in which there is a significant number of years between investment decision and start of construction, EDPR may be exposed to the price of the materials used in turbine manufacturing, foundations and interconnection through escalation formulae included in the contracts with suppliers. In order to manage this risk, EDPR may hedge the market exposure in OTC/future commodity markets, considering the risks (potential losses) and the cost of the hedge. 2. Counterparty Risk Counterparty credit risk is the risk that the counterparty to a transaction could default before the final settlement of the transaction’s cash flows. An economic loss could occur, either a direct economic loss if the transaction has a positive value at the moment of default (counterparty credit risk) or a replacement cost due to change of the counterparty (counterparty operational risk). 2. i) Counterparty Credit Risk If the transactions or portfolio of transactions with the counterparty has a positive economic value at the time of default, an economic loss would occur. To control credit risk at EDPR, thresholds of Expected Loss and Unexpected Loss are established at company level as defined under Basel Standards and re-evaluated monthly. If the threshold is surpassed by the company as a whole, mitigation measures are implemented in order to remain within the pre-established limit. 189 Additionally, Expected Loss limits are established for each individual counterparty or Group of counterparties (parent and subsidiaries). 2.ii) Counterparty Operational Risk If the transactions or portfolio of transactions with the counterparty do not have a positive economic value at the time of default, it will impact operations. Despite no direct loss at the time of default, the replacement of the counterparty could imply a cost to EDPR due to potential delays, higher contract value with a new counterparty (replacement costs), etc. Construction and O&M subcontractors are counterparties to which EDPR is exposed from an operational point of view. To minimize the probability of incurring in potential replacement costs with counterparties, EDPR´s policy concerning counterparty operational risk is managed by an analysis of the technical capacity, competitiveness, credit quality and replacement cost of the counterparty. 3. Operational Risk Operational risk is the risk of loss resulting from inadequate or failed internal processes, people and systems or from external events (such as an increase in equipment default rates, increasing O&M, or natural disasters). Moreover, it includes the risk of the business being disrupted due to internal or external causes (such as a pandemic, cyberattack or IT systems malfunctioning), affecting business continuity. 3. i) Development Risk Renewable plants are subject to strict regulations at different authority levels (international, national, state, regional and local) relating to the development, construction, grid interconnection and operation of power plants. Among other things, these laws regulate landscape and environmental aspects, building licenses, land use and land securing and access to the grid issues. While level of exigency might be different depending on the geographies, EDPR acknowledges a trend for legislations to align towards concentrating the most restrictive rules and development risks on the consenting (environmental and urban permissions) and interconnection (electricity connection of the plant to the national grid). In this context, EDPR’s experience gathered in different countries is useful to anticipate and deal with similar situations in other countries. During the development and design phase, EDPR focuses on the optimization of its projects. By mastering the variables, such as choice of locations, layout, etc., the objective is to make our projects more resilient to permitting risks. Additionally, EDPR mitigates development risk by generating optionality, with development activities in 14 different countries (Spain, Portugal, France, Belgium, Poland, Romania, UK, Italy, Greece, US, Canada, Colombia, Brazil and Mexico) and a portfolio of projects in several stages of maturity. EDPR has a large pipeline of projects that provide a “buffer” to overcome potential delays in the development of prioritized projects, ensuring growth targets and being able to compensate permitting delays in some geographies. 3. ii) Execution Risk During the construction of the foundations, interconnection and substation of a plant, and the installation of the equipment, different events (bad weather, accidents, etc.) might occur that could imply an over cost or a delay in the commercial operation date of the plant: • The delay implies a postponement of cash flows, affecting profitability of the investment. • When a plant has a PPA, a delay of the commercial operation date might imply the payment of LDs, with the consequent loss of revenues and the impact on annual financial results. During the design phase, EDPR engineering teams supervise the engineering and the installation method. Construction is subcontracted to technically capable construction companies. 190 ANNUAL REPORT EDPR 2020 In both cases, a critical path analysis is performed to assess the reliability of construction and installation plan. Also, collaterals may be required to the counterparty following EDPR’s Counterparty Risk Policy. 3.iii) Operation Risk Damage to Physical Assets Risk Renewable plants in construction and in operation are exposed to weather hazards, natural disasters, etc. These risks depend on the location. All plants are insured the physical damage during construction and operation. During operation, any natural disaster, weather hazard or accident will be partially insured to revenue losses due to the event. Equipment Performance Risk (O&M costs) Output from renewable plants depends upon the operating availability of the equipment. EDPR mitigates this risk by using a mix of suppliers which minimizes technological risk, avoiding exposure to a unique manufacturer. EDPR also engages suppliers through medium-term full-scope maintenance agreements during the first years of operation to ensure alignment with supplier in minimizing technology risk. Finally, for older plants, EDPR has created an Operation and Maintenance (O&M) program with an adequate preventive and scheduled maintenance program. EDPR externalizes non-core technical O&M activities of its renewable plants, while primary and value added activities continue to be controlled by EDPR. 3. iv) Information Technology Risk IT (Information Technologies) risk may occur in the technical network (information network for plants operation) or in the office network (information network of corporate services: ERP, accounting…) EDPR mitigates this risk creating redundancy of servers and control centers of renewable plants. Redundancy is created in a different location to anticipate potential natural disasters, etc. 3. v) Legal claims Risk (compliance, corruption, fraud) EDPR faces potential claims of third parties, corruption and fraud of its employees. EDPR has implemented an internal “Code of Ethics” and an Anticorruption Policy where the company commits to comply with legal obligations in every community where EDPR is established. Additionally, the company Ombudsperson receives all the complaints sent through the “Code of Ethics” channel and decides the appropriate procedure for each one of them. An anticorruption mailbox is also available to report any questionable practice. 1.3. vi) Personnel Risk EDPR identifies four main risk factors regarding personnel: turnover, health and safety, human rights, and discrimination, violence or behavior against human dignity. • Turnover: A high turnover implies direct costs of replacement and indirect costs of knowledge loss. EDPR mitigates turnover through constant reassessment and benchmarking of remuneration schemes in different geographies. Additionally, EDPR offers flexibility to its employees to improve work life balance. In 20120, EDPR was elected as “Top Employer” in Spain by the Top Employers Institute. • Health and safety: EDPR has deployed an H&S management system, complying with OHSAS 18001, pursuing the “zero accidents” targe t. 191 • Human rights: EDPR has committed, through its “Code of Ethics”, to respect international human rights treaties and best work practices. All counterparties which sign a contract with EDPR are committed to respect EDPR’s “Code of Ethics ”. • Discrimination, violence or behavior against human dignity: EDPR forbids any kind of discrimination, violence or behavior against human dignity, as stated in its “Code of Ethics”. Strict compliance is enforced, not only through the reporting channel of the Ombudsperson, but also through constant awareness from all employees of the company. 3. vii) Processes Risk Internal processes are subject to potential human errors that may negatively affect the outcome. Internal Audit Department regularly reviews internal processes and recommends the establishment of new controls or the improvement in the implementation of existing procedures. Moreover, business continuity is ensured by a Global Crisis Plan, which defines the procedure to follow for each level of crisis and frames individual emergengy plans at activity or asset level. 4. Business Risk 4. i) Regulatory Risk (renewables) The development and profitability of renewable energy projects are subject to policies and regulatory frameworks. The jurisdictions in which EDPR operates provide different types of incentives supporting energy generated from renewable sources. Remuneration schemes have become less competitive in some countries due to the financial crisis and it cannot be guaranteed that current support will be maintained in all EDPR’s geographies or that future renewable energy projects will benefit from current support measures. Regulation promoting green energy has been revised or is under revision in some of the countries where EDPR is present. In the US, renewable generation from wind will be incentivized through Production Tax Credits (PTC) at a Federal level for all projects beginning of construction up to 2021. Level of incentives will be progressively fading out. Additionally, wind and solar production is also incentivized through State RPS Programs that allow receiving RECs (Renewable Energy Credit) for each MWh of renewable generation. EDPR is managing its exposure to regulatory risks through diversification, by being present in several countries and through participation as an active member in several wind and solar associations. Regulatory Risk in each of EDPR’s countries is monitored continuously, considering current regulation, potential drafts of new laws, feedback from associations, evolution of installed renewable generation capacity and other inputs. EDPR has developed an internal quantitative assessment of Regulatory Risk that serves as an indicator for changes in supporting schemes. This measure is updated annually in all EDPR´s geographies. Regulatory Risk is also considered ex-ante, at the moment of the investment, through sensitivity analyses that are performed to evaluate its impact in project profitability under different scenarios. 4.ii) Equipment Market Risk Equipment Price Risk Price of equipment is affected, not only by market fluctuations of the materials used, but also by the demand of this equipment or a possible increase in trade tariffs and levies For every new project, EDPR secures the demand risk by engaging in advance with manufacturers, elected through a competitive process. 192 ANNUAL REPORT EDPR 2020 Equipment Supply Risk The demand for new plants may offset the offer of equipment. Currently, the local component requirement in some geographies (Ex: Brazil) may create this shortfall situation. In the event of a trade war, supply chain of equipment suppliers may be affected, creating further imbalances in local component requirements. EDPR currently faces limited risk to the availability and price increase of equipment due to existing framework agreements with major global suppliers. The Company uses a large mix of suppliers in order to diversify equipment supply risk. For geographies with specific requirements of local component, EDPR does not engage in a project before securing the supply of the equipment. This risk is further explained on EDPR’s annual report due to its current relevance in the business. 5.Strategic Risk 5. i) Country Risk Country Risk is defined as the probability of occurrence of a financial loss in a given country due to macroeconomics, political or natural disasters. EDPR has defined a Country Risk Policy that assesses country risk through an internal scoring based on publicly available data. This internal scoring is compared with external assessments from renowned organisations. Each risk factor affecting country risk is evaluated independently to decide on potential mitigating actions: • Macroeconomic Risk: risks from the country’s economic evolution, affecting re venue or cost time of the investments • Political Risk: all possible damaging actions or factors for the business of foreign companies that emanate from any political authority, governmental body or social group in the host country • Natural disaster risk: natural phenomena (seismicity, weather) that may impact negatively in the business conditions Before approving a project in a new geography, EDPR analyses the risk of the new country and compares it to our existing portfolio. Mitigation measures may be decided when this risk is above a certain threshold. In addition, EDPR uses a Security risk index to rank countries from a security and safety standpoint, establishing mitigation measures for employees when above a pre-defined threshold. 5. ii) Competitive landscape In the renewable business, size can be an advantage or disadvantage in specific situations. For example, in development of renewable plants, small and dynamic companies are usually more competitive than larger companies. On the other hand, when participating in tender processes for offshore wind farms, the size of the investment benefits larger companies. Additionally, the consequences of a change in the competitive landscape due to mergers and acquisitions may also be a risk. To mitigate the risks, EDPR has a clear knowledge of its competitive advantages and tries to leverage on them. When EDPR has no advantage versus its competitors, alternatives are considered in order to become competitive. For example, for offshore wind farms, EDPR has partnered with large companies with previous experience in large electricity generation projects, in order to become a more competitive consortium. 5. iii) Technology disruptions Most renewables are relatively recent technologies, which are continuously evolving and improving efficiency. As such, some initially expensive technologies can become competitive in a relatively short time. EDPR growth focuses in the most competitive renewable technologies at the moment, which are onshore wind, offshore wind and PV solar, but also participates in other innovative projects such as floating offshore wind. 193 5. iv) Meteorological changes Future estimations of wind and solar production are based on analysis of historical measurements for more than 20 years, and they are considered to be representative of the future. Relevant unexpected meteorological changes could lead to a lower production than the one expected from historical data. When evaluating a new investment, EDPR considers potential changes in the production forecasted, however, the size of the potential deviation in the case of relevant meteorological changes is uncertain. 5. v) Investment decisions criteria Not all projects have the same risk profile. This will depend on merchant exposure of remuneration, construction risk, etc. In order to take proper business decisions, EDPR uses Risk Adjusted Metrics for investment decisions, which take into consideration the different risks inherent of each project. 5. vi) Energy Planning Assumptions in future evolution of energy markets affect the profitability of the investments for the period after the fixed remuneration (regulated tariff or PPAs). Structure of electricity markets in most of EDPR geographies (marginal setting price) were not designed to consider a great share of generation from renewable sources with zero marginal price. Thus, the increase in renewable generation could lead to lower pool prices in medium term if reforms of electricity markets are not properly undertaken. When investing, EDPR performs sensitivity analyses to stress pool price scenarios for the period without fixed remuneration to understand the robustness of the profitability of the investment. 5. vii) Corporate Organisation and Governance Corporate governance systems should ensure that a company is managed in the interests of its shareholders and other relevant stakeholders. In particular, EDPR has an organisation in place with a special focus on transparency, where the management body (Board of Directors) is separated from the supervision and control duties (Audit and Control Committee). Members of the Audit Committee are invited to the General Risk Committee of EDPR. 5. viii) Reputational risk Companies are exposed to public opinion and today’s social networks are a rapid mean to expr ess particular opinions. A bad reputation could eventually harm financial results of a company in the short and in the long term. Sustainability makes part of the essence of EDPR. EDPR is not only committed in building a better future, but also in doing it well, in an ethical and sustainable manner, consequently limiting reputational risk. 6. Impact of COVID-19 The year 2020 was marked by the outburst of COVID-19 pandemic. Already in March, EDPR carried out a comprehensive assessment of the potential impacts o n the company’s operations, followed by recommendations of actions to be put in place and a process for continuous monitoring of the situation. 194 ANNUAL REPORT EDPR 2020 The impact of COVID-19 has been transversal across all areas and geographies of the company, but those impacts can be grouped under several risk categories: Market Risk: • Energy price risk: Energy price significantly dropped during 2020 in most of EDPR geographies due to the reduction in demand following the lockdown and a lower economic activity. However, impact of low energy prices on EDPR results was minimal, as EDPR’s marginal merchant exposure was mostly hedged for 2020. • FX risk: Emerging economies suffered a strong depreciation of their currencies. Net Investment hedges at EDPR mitigated most of the FX fluctuations. On the other hand, a specific plan for hedging FX transactional exposures in Capex was set out, in order to avoid hedging at particularly unfavorable rates due to the pandemic. Monitoring of market risk was performed on a monthly basis in the Restricted Risk Committee, adjusting the position when necessary. Counterparty Risk: Despite the increase in exposure from counterparties in financial hedges and the temporary deterioration of the financial situation of some of EDPR’s PPA off -takers, impact for EDPR was negligible. The existing collateral in electricity hedges and a diversified portfolio of creditworthy PPA off-takers, some of which improved their credit metrics during the year (ie: Pacific Gas and Electric Company), made EDPR resilient to increase in counterparty risk. Monitoring of counterparty risk was also performed monthly in the Restricted Risk Committee. Operational Risk and Business Continuity : • Execution Risk: The impact of the pandemic on the construction and execution of projects lead to some COD delays, due to construction stoppages and/or supply chain disruptions. To mitigate this risk, EDPR implemented a strategy of prioritization of projects and set out a review of contractual clauses to prevent or minimize changes in tariff regimes, PPA penalties or Capex increases. By the end of 2020, incentivized regime contracts or PPAs were all maintained despite some COD delays. • Monitoring of the evolution of the execution risk at EDPR was performed on a weekly basis, together with the Engineering & Construction Department. • Operation Risk: No significant impact, as the potential reduction in plant availability due to delayed maintenance or repairs was residual. • Personnel Risk: EDPR initially implemented travel restrictions and other measures designed to stop the spread of the coronavirus and guarantee the safety of its personnel. In March, EDPR activated its Contingency Plan for pandemics, introducing home office in all geographies and restricting access to its facilities, while minimizing disruptions in its operations, thus ensuring business continuity. • EDPR employees have a Reopening Plan for gradually returning to the facilities according to the development of the pandemic, with geographical specifications, guaranteeing the highest health & safety standards. 195 54. Risk functions and framework A corporation can manage risks in two different ways, one risk at a time on a largely and compartmentalized basis, or all risks together within a coordinated and strategic framework. The latter approach is called “Enterprise Risk Management” and is the approach used at EDPR. Risk Management at EDPR is supported by three distinct organisational functions, each on a different role: Strategy (Risk Profiler), Management (Risk Manager) and Controlling (Risk Controller). RISK FUNCTIONS DESCRIPTION Strategy – General risk strategy & policy Global Risk Department provides analytically supported proposals to general strategic issues. Responsible for proposing guidelines and policies for risk management within the company Management – Risk management & risk business decisions Implement defined policies by Global Risk Responsible for day-to-day operational decisions and for related risk taking and risk Controlling – Risk monitoring Responsible for follow-up of the results of risk taking decisions and for contrasting alignment of operations with general risk policy approved by the board The Risk Committee is the forum where the different Risk Functions discuss the policies to be implemented and control the risk exposure of the company. EDPR’s Risk Committee integrates and coordinates all Risk Functions and assures the link between corporate’s risk appetite and defined strategy and the operations of the company. EDPR created three distinct meetings of the Risk Committee in order to separate discussions on execution of mitigation strategies from those on the definition of new policies: • Restricted Risk Committee: Held every month, it is mainly focused on development risk and market risk from energy price (market, basis, profile, GCs and RECs). It is the forum to discuss the evolution of projects under development and construction and the execution of mitigation strategies to reduce merchant exposure. It also monitors the limits of defined risk policies, with regards to counterparty risk, operational risk and country risk. • Financial Risk Committee: Held every quarter, its objective is the review of the main financial risks and to discuss the execution of mitigation strategies. Exchange rate risk, interest rate risk and credit risk from financial counterparties are most relevant risks reviewed by this committee. • Risk Committee: Held every quarter, it is the forum where new strategic analyses are discussed and new policies are proposed for approval to the Executive Committee. Additionally, EDPR ’ s overall risk position is reviewed, together with EBITDA@Risk and Net Income@Risk. 55. Details on the internal control and risk management systems implemented in the company regarding the procedure for reporting financial information With the purpose of not only controlling risks, but also managing them ex-ante, EDPR has created Global Risk policies that are enforceable at a Global Level. These policies are proposed and discussed in the Risk Committee and approved by the Executive Committee. EDPR’s Enterprise Risk Management Process is inspired on Basel Committee on Banking Supervision’s p rinciples, guidelines and recommendations and is similar to other risk management frameworks. In this respect, performance of risk metrics at EDPR and their compliance with established internal risk limits are assessed on a monthly basis. Additionally, a formal review and update of each Risk Policy, and the adequacy of its limits, is performed every two years 196 ANNUAL REPORT EDPR 2020 INTERNAL CONTROL SYSTEM OVER FINANCIAL REPORTING EDPR has an Internal Control System over Financial Reporting (SCIRF) updated and monitored in line with international standards of Internal Control. This system covers the main aspects of the COSO framework: maintaining a control environment for the preparation of qualified financial information, assessment of the risks of financial reporting, existence of control activities to mitigate risks of error, information and communication and evaluation mechanisms. SCOPE REVISION AND UPDATE The SCIRF Manual includes the annual update of the scope that aims to identify companies, areas and processes that must be included in the scope of SCIRF, according to criteria of materiality and risk, including the risk of error or fraud. The risk analysis included in the scoping process for SCIRF, includes both the different types of risk (operational, economic, financial, technological or legal) and the control objectives of financial reporting (existence and occurrence, completeness, measurement, presentation, disclosure and comparability, and rights and obligations in terms of their potential impact on the financial statements). The results of the updated scope with the methodology outlined are communicated at all levels of the organisation involved in the SCIRF and supervised by the Audit, Control and Related Party Transactions Committee. CONTROL ACTIVITIES In documented SCIRF processes and controls, information capture mechanisms are established (including identification of the scope of consolidation) and are specified the steps and checks that are carried out for the preparation of the financial information that will be part of consolidated financial statements. The procedures for the review and approval of financial information are provided by the areas of Planning and Control, and Administration, Consolidation and Tax. Financial information is supervised in the scope of its competences by the Audit, Control and Related Party Transactions Committee, prior to the formulation of the accounts by the Board of Directors. The SCIRF includes control activities related to these processes, embodied in Entity Level Controls, Process Controls and General Computer Controls. These processes include review and approval activities of the financial information which are described in the processes of elaboration of individual accounts, preparation of consolidated accounts and processing of consolidated financial statements. EDPR has descriptions of Competency Profiles for the Positions to be carried out in the exercise of the main features of each position that includes a description of the main responsibilities. These include the descriptions of the key positions of those involved in the preparation of financial information. These descriptions include responsibilities in the preparation of financial information and compliance with internal control procedures. The documentation of processes and associated controls designed include among others, the completion of closure activities by completing monthly closing checklists by entity, setting time limits for the closures, the identification of the relevance of the operations in order to be reviewed at the appropriate level, conducting analytical reviews of financial information, the existence of limitations in systems to prevent erroneous records or access by unauthorized persons, analysis of deviations from the budget, the analysis in Executive Committees of relevant and significant facts that could cause a significant impact on the accounts, or the allocation of responsibilities for calculating amounts to be provisioned for them to be carried out by authorized personnel with the right skills. In addition to the mentioned processes, major transactional processes resulting from the scope are documented. The description of the activities and controls are designed with the aim of ensuring the registration, evaluation, appropriate presentation and disclosure of transactions in financial reporting. 197 Control activities of EDPR’s SCIRF also include those relating to systems and information technology (Computer General Controls) following an international reference, the COBIT framework (Control Objectives for Information and related Technologies). The importance of this area is that information systems are the tools with which financial information is prepared, and is therefore relevant for transactions conducted with them. These control activities include those related to access control to applications and systems, segregation of duties, management of corrective and preventive maintenance, new projects implementation, administration and management of the systems, facilities and operations (back-ups, security incidents) and their proper monitoring and planning. These activities are developed taking into account the requirements of control and supervision. Among the activities of SCIRF’s scope update, there is a periodic a nalysis of the existence of service suppliers that perform relevant activities in relation to the processes of preparing financial information. SCIRF SUPERVISION The Audit, Control and Related Party Transactions Committee supervises the SCIRF in the scope of the exercise of their activities through the monitoring and supervision of the developed mechanisms for SCIRF’s implementation, evolution and evaluation, and the results of the scope analysis and the extent of the situation in terms of coverage. To this extent, the Internal Control Area assists the Audit, Control and Related Party Transactions Committee. EDPR has an Internal Control area, integrated in the Compliance and Internal Control Department, which report to the Chairman of the Executive Committee. The Audit, Control and Related Party Transactions Committee supervises the Internal Control area activities. The main functions of the Internal Control area are set out in the SCIRF Manual, which includes, among others, the evaluation of the activities of internal control systems, including the internal control system over financial reporting. Internal Control supports the Audit, Control and Related Party Transactions Committee in supervising the implementation and maintenance of SCIRF and reports the results of the evaluation, improvement actions identified and their evolution. The entity has action plans for improvement actions identified in SCIRF’s assessment processes, which are accompanied and supervised by the Internal Control area, considering their impact on the financial information. Also in the year 2020, as in previous years, a process of self-certification was made by the heads of the various process and Entity Level Control owners regarding proper documentation update on SCIRF controls and processes in their area of responsibility and the implementation of controls with corresponding evidence. SCIRF EVALUATION Besides the monitoring and evaluation activities described in the preceding paragraph, in case the auditors identified internal control weaknesses in the scope of their financial audit work, they are expected to communicate these circumstances to the Audit, Control and Related Party Transactions Committee, which regularly monitors the results of the audit work. Additionally, in 2020 the EDPR Group decided to have its SCIRF audited by the external auditor. As a result of its evaluation, the external auditor issued a report with a favorable opinion on the SCIRF of the EDPR Group, according to ISAE 3000 (International Standard on Assurance Engagements 3000), included in Annex II of this Chapter 5 of the Annual Report. CORPORATE COMPLIANCE The implementation of a solid corporate culture of integrity and transparency has always been a priority for EDPR, structuring its supervision and monitoring, through a regulatory compliance conduct basis and through the adoption of ethical values and principles; both consolidated as central elements of its business model.In order to lead and manage the necessary measures and initiatives required to this implementation and its functioning, the Compliance Officer figure was created in 2016 in EDPR . Since then, EDPR has been working with the support of specialized advisors in the evaluation of the potential corporate criminal liability risks of the Company in all its geographies and in the assessment of the compliance structure to be adopted in order to comply with the requirements of the applicable criminal regulations. 198 ANNUAL REPORT EDPR 2020 In this context, the Board of Directors of EDPR approved the Criminal and Legal Risk Prevention Model (Compliance Model) on December 2017 with the goal of promoting, establishing, developing and maintaining an adequate ethical business culture. The Compliance Model is constantly updated according to the most demanding national and international standards. During 2018, the Company completed the first update of the Compliance Model and started working on the definition of a criminal risk matrix at an international level including an inventory of the potential risks and its controls in each of the geographies where EDPR operates. In June 2019, the Compliance Area was created to support and provide assistance to the Compliance Officer. The Compliance Area main responsibilities are promoting a culture of prevention based on the principle of “absolute rejection” towards the commission of illegal acts and fraud situations, guaranteeing the dissemination of the principles of the Compliance Model and managing the cases of complaints from employees or collaborators. In February 2020, with the commitment of stregnght the Compliance culuture and comply with the international standars in Corporate Governance, the Departmant of Compliance and Internal Control was created. A new department which reports, directly, to the CEO. Among the activities performed during 2020, main were: 1) The review and update of the International Compliance Model. For this review, a third-party consultant was engaged to identify and evaluate the criminal risks in all geographies of EDPR and review the associated controls in order to ensure the International Compliance Model was reflecting the most current legal and organisational changes. Additionally, EDPR has updated the identification and evaluation of the risks in the following geographies: Brazil, Poland, Romania, French and Belgium. 2) A new procedure regarding Third Party Integrity Due Diligence has been approval with the aim to deepen the general principles performance and the duties of the EDPR Group companies and their employees in relation to third parties, aligning their business operations with the best market practices and with strict compliance with the applicable legislation and regulations, reinforcing the mechanisms for preventing and combating practice of illegal acts, in particular conduct associated with the practice of acts of corruption, bribery, money laundering and terrorist financing. 3) Additionally, concerning the risk of interactions with public officials or politicaly exposed persons, EDPR developed a procedure to guide employees and representatives when leading with such entities and to monitor this relationships. The main aims of this procedure are: (i) Reinforce and implement compliance with the principles set out in EDPR's Anti- Corruption Policy, (ii) establish the rules for guiding the relationship and maintenance of interactions between EDPR employees and their subsidiaries or third party representatives acting on behalf of EDPR or its subsidiaries, with Public Officials and PEPs and (iii) establish the guidelines for the hiring of PEPs and the respective monitoring and risk management mechanisms. 4) Training and communication are fundamental tools to strengthen and disseminate the ethic and integrity culture. In that sense, the following activities have been developed: (i) Training in Brazil for the head of the different departments and (ii) online training for the new hires with the main goal to explain the fundamentals of Compliance and the essential aspects of our Model. Regarding Personal Data Protection, EDPR has been strengthing its management system. A new governance model was created, with a multidisciplinary team supporting the Data Protection Officer in the implementation and monitoring of the GDPR obligations.Adittionally, a global Personal Data protection Policy was approved to support the management of personal data across all EDPR Group and we have updated our privacy notice for employees. Both documents are published in our intranter and in our web. Last but not least, a privacy policy for candidates was also approved in order to inform them about the process of their personal data in the hiring process. Additionally, the Compliance Channel allows any employee, supplier, contractor, client or any person or entity outside the Company, who has indications or doubts of behavior contrary to the law and / or that may imply the materialization of a criminal risk, must immediately inform it, through [email protected]. The bylaws of this Channel are available at the intranet and website of the Company and only have access to it the Compliance Officer and the Compliance Area. In 2020, no claims were submitted through the Compliance Channel. 199 IV. Investor Assistance 56. Investor Relations department EDPR seeks to provide to shareholders, investors, financial analysts and other stakeholders and the market in general, all the relevant information about the Company and its business environment, on a regular basis and whenever a relevant fact takes place. The promotion of transparent, consistent, rigorous, easily accessible, and high-quality information is essential to an accurate perception of the Company’s strategy, financial situation, accounts, assets, prospects, ris ks, and significant events. EDPR, therefore, looks to provide the market with accurate information that can support them in making informed, clear and concrete investment decisions. The Investor Relations Department was created to ensure a direct and permanent contact with all market related agents and stakeholders, to guarantee effective communication, equality between shareholders and to prevent imbalances in the information access. The EDPR Investor Relations Department (IR) is the intermediary between EDPR and its actual and potential shareholders, the financial analysts that follow Company’s activity, all investors and other members of the financial community. The main purpo se of the department is to guarantee the principle of equality among shareholders, by preventing asymmetries in the access of the information and reducing the gap between market perception and Company’s strategy and intrinsic value. The Investor Relations department centralizes all relevant and material information that could impact EDPR share price. This information is prepared by the different departments of EDPR, with the support when necessary of external experts, and always managed in a strictly confidential basis. The department responsibility also comprises developing and implem enting EDPR’s communication strategy and preserving an appropriate institutional and informative relationship with the financial market, the stock exchange at which EDPR shares trade and the regulatory and supervisory entities (CMVM – Comissão de Mercado de Valores Mobiliários – in Portugal and CNMV – Comisión Nacional del Mercado de Valores – in Spain. EDPR is clearly aware of the importance of detailed and transparent information, delivered on-time to the market. Consequently, EDPR publishes Company’s pri ce sensitive information before the opening or following the closing of the Euronext Lisbon stock exchange through CMVM’s information system and, simultaneously, make that same information available on the website investors’ section and through the IR department’s mailing list. In 20 20, EDPR made 26 market notifications, in addition to quarterly, semi-annual and annual results presentations, handouts and operating data statement elaborated by the IR Department. In addition, the IR Department also elaborates key data files and interim presentations which are available on the website investors’ section. On each earnings announcement, EDPR promotes a conference call and webcast, opened to the market in general, at which the Company’s management updates the market 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 as the Company’s outloo k and strategy. EDPR IR Department is coordinated by Rui Antunes and is located at the Company’s head offices in Madrid, Spain. The department structure and contacts are as follows: IR Contacts: • Rui Antunes, Head of Planning & Control, Investor Relations and Sustainability • Calle Serrano Galvache, 56; Centro Empresarial Parque Norte; Edificio Olmo – 7th floor; 28033 – Madrid – España • Website: www.edpr.com/en/investors-1 • E-Mail: [email protected] • Phone: +34 902 830 700 / +34 914 238 429 200 ANNUAL REPORT EDPR 2020 EDPR IR Department was in continuous contact with capital markets agents, namely shareholder and investors, along with financial analysts who evaluate the Company. In 2020, as far as the Company is aware, sell - side analysts issued more than 75 reports evaluating EDPR’s business and performance. At the end of the 2020, as far as the Company is aware of, there were 19 institutions elaborating research reports and following actively EDPR activity. As of December 31 st 2020, the average price target of those analysts was of Euro 16.18 per share with 7 “Neutral” , 11 “Buy” and 1 “Sell” recommendations. COMPANY ANALYST PRICE TARGET DATE RECOMMENDATION Bank of America Merrill Lynch Mikel Zabala € 20.60 02-Dec-20 Buy Barclays Jose Ruiz € 1 7.80 07-Dec-20 Equalweight BBVA Daniel Ortea € 1 4.00 08-Jul-20 Outperform Berenberg Lawson Steele € 1 4.50 06-Jul-20 Buy Bernstein Meike Becker € 22.00 07-Dec-20 Outperform CaixaBank BPI Gonzalo Sanchez € 1 3.15 06-Jul-20 Neutral Caixa BI Helena Barbosa € 9.95 06-Jan-20 Neutral Commerzbank Tanja Markloff € 1 9.00 30-Oct-20 Buy Exane BNP Manuel Palomo € 16 .20 05-Oct-20 Outperform Goldman Sachs Alberto Gandolfi € 1 8.00 29-Oct-20 Buy JB Capital Jorge Guimarães € 1 4.70 07-Sep-20 Neutral JP Morgan Javier Garrido € 1 4.50 28-Aug-20 Overweight Kepler Cheuvreux Jose Porta € 22.00 15-Dec-20 Buy Morgan Stanley Arthur Sitbon € 12.80 25-May-20 Overweight MedioBanca Sara Piccinini € 18.70 14-Oct-20 Outperform ODDO BHF Philippe Ourpatian € 11.00 04-Sep-20 Sell RBC Fernando Garcia € 1 7.50 23-Nov-20 Equalweight Santander Bosco Muguiro € 14.00 30-Jul-20 Hold Société Générale Jorge Alonso € 1 7.00 02-Nov-20 Hold 57. Market Relations Representative EDPR representative for relations with the market is Rui Antunes, Head of Planning & Control, Investor Relations and Sustainability Department. 58. Information Requests During the year, IR Department received more than 150 information requests and interacted more than 80 times with institutional investors. On average, information requests were replied in less than 24 hours, with complex requests being replied within one-week time. As of December 31 st 2020 there was no pending information request. 201 IV. Website – Online information 59-65. 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 and CNMV regulations, EDPR website also carries financial and operational updates of Company’s activities ensuring an easy access to the information. EDPR website: www.edpr.com INFORMATION LINK Company information www.edpr.com/en/edpr/our-company/who-we-are Corporate by- laws and bodies/committees’ regulations www.edpr.com/en/investors/corporate-governance/company-data Members of the corporate bodies www.edpr.com/en/investors/corporate-governance/governing-bodies Market relations representative, IR department www.edpr.com/en/investors Information channels www.edpr.com/en/edpr Financial statements documents www.edpr.com/en/investors/investors-information/reports-and-results Corporate events Agenda www.edpr.com/en/investors-1 General Shareholders’ Meeting information www.edpr.com/en/investors/corporate-governance/general-meetings 202 ANNUAL REPORT EDPR 2020 D. Remuneration I. Power to establish 66. Competences to determine the Remuneration of the Corporate Bodies The Nominations and Remunerations Committee is a permanent body belonging to the Board of Directors with an informative and advisory nature. Its recommendations and reports are non-binding. The Nominations and Remunerations Committee has no executive functions. The main functions of the Nominations and Remunerations Committee are to assist and inform the Board of Directors regarding the nominations (including by co-option), re- elections, dismissals, and the remuneration of the Board Members and its position about the composition of the Board of Directors, as well as the nominations, remuneration, and removal of senior management personnel. The Nominations and Remunerations Committee is the body responsible for proposing to the Board of Directors the determination of the remuneration of the Executive Directors of the Company; the Declaration on Remuneration Policy; the evaluation and compliance of the KPI’s (Key Performance Indicators); the annual and multi annual variable remuneration, if applicable, and also proposes the remuneration of the Non-Executive Directors and members of the Board Committees. The Board of Directors is responsible for the approval of the above-mentioned proposals except to the extent it concerns the Declaration on the Remuneration Policy which is approved by the General Shareholders’ Meeting. The Board of Directors also evaluates with an annual periodicity its own performance and the performance of its delegated Committees. The evaluation of the performance of the Board of Directors and its Executive Committee, is then additionally submitted for the approval of the General Shareholder Meeting. The Declaration on the Remuneration Policy is submitted by the Board of Directors to the approval of the General Shareholders’ Meeting as an independent proposal. According to the Company’s Articles of Association the Board of Directors remuneration is subject to a maximum value that can only be modified by a Shareholders agreement. II. Nominations and Remunerations Committee 67. Nominations and Remunerations Committee The Composition of the Nominations and Remunerations Committee is reflected on topic 29 of the report. The Company has not stablished any restrictions within its Articles of Association, Regulations or internal policies limiting the competence of the Nominations and Remunerations Committee of hiring any consulting services that may find necessary to carry out its duties; additionally in case such services would be hired, it should be noted that they should be rendered independently, ensuring that the service provider do not provide any other services to EDPR or to any company in controlling or group relationship. 68. Knowledge and experience regarding Remuneration Policy The Chairman of the Nominations and Remunerations Committee has knowledge and experience regarding Remuneration Policy. III. Remuneration structure 69. Remuneration Policy Pursuant to Article 26.1 of the Company’s Articles of Association the Directors shall be entitled to a remuneration which con sists of a fixed amount to be determined annuall y by the General Shareholders’ Meeting for the whole Board of Directors and of (ii) attendance fees regarding the Board Meetings. The above-mentioned 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 Shareholders’ Meeting and comply with current legal provisions. 203 The total amount of the remunerations that the Company will pay to its Directors under the terms provided in the previous paragraphs shall not exceed the amount determined by the General Shareholders’ Meeting. The maximum remuneration approved by the General Shareholders’ Meeting for all the members of the Board of Directors was EUR 2,500,000 per year. Pursuant to Article 26.4 of the Company’s Articles of Association, the rights and duties of any kind derived from the conditi on of Board Member shall be compatible with any other rights and obligations either fixed or variable that could correspond to the Board Members as a consequence of other employment or professional engagements, if any, carried out in the Company. Variable remuneration resulting from said contracts or from any other relationship, including being a Board Member, will be limited to a maximum annual amount to be established by the General Shareholders’ Meeting. The maximum annual amount approved by the General Shareholders’ Meeting for the variable remunera tion for all the executive members of the Board of Directors was EUR 1,000,000 per year EDPR, in line with EDP Group corporate governance practices, has signed an Executive Management Services Agreement with EDP, under which the Company bears the cost for such services to some of the members of the Board of Directors to the extent their services are devoted to EDPR. The Non-Executive Directors only receive a fixed remuneration, which is calculated on the basis of their work exclusively as Directors or with their membership on the Nominations and Remunerations Committee and to the Audit, Control and Related Party Transactions Committee. Those members who are seated in two different Committees do not accumulate two remunerations. In these cases, the remuneration to be received is the one that corresponds to the highest value. 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. In EDPR there are not any payments for the dismissal or termination of Director's duties. The remuneration policy for the Directors of the Company is submitted each year to the General Shareholders’ Meeting for approval. 70. Remuneration Structure The remuneration policy applicable for 2020-2022 was proposed by the Nominations and Remuneration Committee and approved by the General Shareholders’ Meeting held on March 26 th , 2020 (the “Remuneration Policy”) . It defines a structure with a fixed remuneration for all members of the Board of Directors, whereas for the members of the Executive Committee defines a fixed and a variable remuneration, with an annual component and a multi-annual component. Additionally, on its meeting dated October 16 th , 2019 the Appointments and Remunerations Committee agreed to propose to the Board of Directors a Complementary Long Term Program homogeneous for the three COOs and for the 2019-2022 term. Such Complementary Long Term Program was approved at the Board of D irectors’ meeting dated October 29, 2019. Such plan substituted the Complementary Long Term Program approved on 2017. On the topic below can be found the KPIs (“Key Performance Indicators”) stated in the Remuneration Policy for variable annual and multi-annual variable components. 204 ANNUAL REPORT EDPR 2020 71. Variable Remuneration Variable annual and multi-annual remuneration applies to the members of the Executive Committee. The variable annual remuneration may range from 0 to 68% over the annual fixed remuneration and the multi-annual remuneration from 0 to 102% over the annual fixed remuneration for the CEO, and over 250.000€ for other members of the Executive Committee. The key performance indicators (KPIs) used to determine the amounts of the annual and multi -annual variable remuneration regarding to each year of the term are proposed by the Nominations and Remunerations Committee with the aim of align them with the strategic grounds of the Company: growth, risk control and efficiency. These are the same for all members of the Executive Committee, although with specific targets for the platforms in the case of COOs . For the year 2020 the KPIs were: KEY PERFORMANCE INDICATOR CEO COO’ S NA AND EU COO IG WEIGHT WEIGHT EDPR RESULTS WEIGHT EDPR RESULTS PLATFORM RESULTS WEIGHT EDPR RESULTS PLATFORM RESULTS Total Shareholder return 15% 100 % TSR vs. Wind peers & Psi 20 100% 100% 100% 100% 0% 100% 100% 0% Shareholders 80% 60% Operatin Cash Flow (€ million) 10% 100% 10% 50% 50% 10% 100% 0% AR/Sell-down + Tax Equity (€ million) 10% 100% 10% 100% 0% 10% 100% 0% EBITDA+ sell down gains (€ million) 10% 100% 10% 50% 50% 10% 100% 0% Net Profit (€ million) 10% 100% 10% 100% 0% 10% 100% 0% Core Opex Adjusted (€ thousand/MW) 10% 100% 10% 50% 50% 10% 100% 0% Projects with FID (% of total ’19 - ’22 additions in BP) 10% 100% 10% 50% 50% 10% 50% 50% Clients 10% Renewable Capacity Built (in MW) 10% 100% 10% 50% 50% 10% 50% 50% Assets & Operations 10% Technical Energy Availability (%) 5% 100% 5% 50% 50% 5% 100% 0% Capex per MW (€ thousand) 5% 100% 5% 50% 50% 5% 50% 50% Environment & Commnunitie s 5% Certified MW % 5% 100% 5% 50% 50% 5% 100% 0% Innovation & partners 5% H&S frequency rate (employees + contractors) 5% 100% 5% 50% 50% 5% 100% 0% People Management 10% People Management 10% 100% 10% 50% 50% 10% 50% 50% Remuneration Committee 5% 100 % Appreciation remuneration committee 100% 100% 100% 100% 0% 100% 100% 0% 205 There is also a qualitative evaluation of the CEO about the annual performance of the members of the Executive Committee. This evaluation will have a weight of 20% for the final calculation in the annual variable remuneration and of 32% in the multi- annual variable remuneration. The other 80% will be calculated based on the weights indicated in the next paragraph for the annual variable remuneration and 68% for the multi-annual variable. According to the Remuneration Policy approved by the General Shareholders’ Meeting, the maximum variable remuneration (annual and multi-annual) is applicable if all the above mentioned K PI’s were achieved and the performance evaluation is equal or above 110%. As mentioned above a Complementary Long Term Program homogeneous for the three COOs (COO NA, COO EU & BR and COO Offshore) and for the 2019-2022 term was approved in 2019. The conditions of such Complementary Long Term Program are: (i) four year period (2019-2022); (ii) Target Award will be 4 x 50% of base annual remuneration of each COO; (iii) KPIs are consistent through the whole term and specific for each COO; and (iv) payments will be done in accordance with the percentage of the achieved fulfilment with a limit of 120% of the Target Award. 72. Multi-Annual Remuneration In line with corporate governance practices, the Remuneration Policy incorporates the deferral for a period of three years of the multi-annual variable remuneration, being the relevant payment conditioned to the lack of any willful illicit action, known after the appraisal and which endangers the sustainable performance of the company. The amounts paid in application of such deferral policy during 2020 for the multinual accrued in 2017 are reflected in topic 78 of this Chapter 5 of the Annual Report. 73. Variable Remuneration Based On Shares EDPR has not allocated variable remuneration on shares and does not maintain Company shares that the Executive Directors have had access to. 74. Variable Remuneration Based On Options EDPR has not allocated variable remuneration on options. 75. Annual Bonus And Non-Monetary Benefits The key factors and grounds for any annual bonus scheme are described on topics 71 and 72. Additionally, the Officers, with the exception of the CEO, received the following non-monetary benefits: retirement savings plan (as described in the following topic), company car and Health Insurance. In 2020, the non-monetary benefits amounted to 267.733 EUR. The Non-Executive Directors do not receive any relevant non-monetary benefits as remuneration 76. Retirement Savings Plan The retirement savings plan for the members of the Executive Committee that are also Officers, acts as an effective retirement supplement with a range between 3% to 6% of their annual salary. The percentage is defined according with the retirement savings plan applicable in their home country. The retirement savings plan applicable to 2020, which is included within the Remuneration Policy applicable for the term office 2020-2022, was defined and proposed by the Nominations and Remunerations Committee to the Board of Directors for its submission to the General Shareholder’s Meeting, which approved it on its meeting held on March 26 th , 2020. 206 ANNUAL REPORT EDPR 2020 IV. Remuneration disclosure 77. Board of Directors remuneration The remuneration paid by EDPR to the members of its Board of Directors for the year ended on December 31 st 2020 was as follows: REMUNERATION TOTAL FIXED (€) EXECUTIVE DIRECTORS João Manso Neto 0 Rui Teixeira 0 Duarte Bello 61,804 Miguel Ángel Prado 0 Spyridon Martinis 61,804 NON-EXECUTIVE DIRECTORS Antonio Mexia 0 Vera Pinto 0 Manuel Menéndez Menéndez 45,000 António Nogueira Leite 60,000 Acácio Jaime Liberado Mota Piloto 80,000 Allan J.Katz 45,000 Francisca Guedes de Oliveira 60,000 Francisco Seixas da Costa 55,000 Conceiçao Lucas 55,000 Alejandro Fernández de Araoz Gómez-Acebo 45,000 TOTAL 568,608 *António Mexia, João Manso Neto, Vera Pinto and Rui Teixeira do not receive any remuneration from EDPR. EDPR and EDP signed an Executive Management Services Agreement according to which EDPR pays to EDP a fee for the services rendered by these Board Members. Duarte Bello, Miguel Ángel Prado and Spyridon Martinis ,as Officers and members of the Executive Committee, and for the relevant period of 2020 corresponding to each of them, received their remuneration as Directors as described on the table above and as other Group co mpanies’ employees, as described on the table below. According to the Executive Management Services Agreement signed with EDP, EDPR is due to pay an amount to EDP, for the services rendered by the Executive Managers and the Non-Executive Managers. The amount due under said Agreement for the management services rendered by in 2020 is EUR 1,094,560, of which EUR 959,560 refers to the management services rendered by the Executive Members and EUR 135,000 to the management services rendered by the Non-Executive Members. The retirement savings plan for the members of the Executive Committee, excluding the Officers, acts as an effective retirement supplement and corresponds to 5% of their annual salary. The Non-Executive Directors may opt between a fixed remuneration or attendance fees per meeting, in a value equivalent to the fixed remuneration proposed for a Director, taking into consideration the duties carried out. 207 78. Remuneration from other Group Companies The total remuneration of the Officers during the relevant 2020 period corresponding to each of them, ex-CEO, was the following: OFFICER PAYER FIXED VARIABLE ANNUAL VARIABLE MULTI- ANNUAL VARIABLE PLURI- ANNUAL TOTAL Duarte Bello EDP Energías de Portugal, S.A. Sucursal en España 228 , 196 € 145,000 € 37 , 500 € 410 , 696 € Miguel Ángel Prado EDPR North America LLC 466,897$ 162 , 328$ 237 , 908$ 45 , 725$ 912 , 858$ Spyridon Martinis EDP Energías de Portugal S.A. Sucursal en España 228 , 196 € 145,000 € 0 373 , 196 € All the amounts are in EUR, except Miguel Ángel Prado ones, which are in USD. Likewise, in application of the deferral policy, in 2020 an amount of 84 , 443€ was paid to Miguel Amaro (former Executive CFO of the company), for the services rendered in 2016-2017. 79. Remuneration paid in form of profit sharing and/or bonus payments In EDPR there is no payment of remuneration in the form of profit sharing and/or bonus payments and the reasons for said bonuses or profit sharing being awarded. 80. Compensation For Resigned Board Members In EDPR there is no compensation paid or owed to former executive Directors concerning contract termination during the financial year. 81. Audit, Control And Related Part Transactions Committee Remuneration POSITION COMMITEE MEMBER REMUNERATION Chairman Acacio Piloto 80,000 € Vocal Antonio Nogueira Leite 60,000 € Vocal Francisca Guedes de Oliveira 60,000 € The Non-Executive Directors receive only a fixed remuneration, which is calculated based on their work exclusively as Directors or with their membership on the Nominations and Remunerations Committee, or the Audit, Control and Related Party Transactions Control Committee. 82. Remuneration Of Th e Chairperson Of The General Shareholders’ Meeting In 2020, the remuneration of the Chairman of the General Shareholders’ Meeting of EDPR was EUR 15,000. V. Agreements with remuneration implication 83-84. EDPR has no agreements with remuneration implication. For avoidance of doubt, the Company has not adopted any mechanism that imply payments or assumption of fees in the case of change in the composition of the managing body (Board of Directors), and which could be likely to harm the free transferability of shares and a shareholder assessment of the performance of the members of this managing body. 208 ANNUAL REPORT EDPR 2020 VI. Share-allocation and/or Stock Option Plans 85-88. EDPR does not have any Share-Allocation and/or Stock Option Plans. 209 E. Related-Party transactions I. Control Mechanisms and Procedures 89. Related-Party Transactions Controlling Mechanisms A Framework Agreement was signed in 2008 in order to regulate the Related Party Transactions (understanding as such those relationships performed between companies of EDP Group and those of EDPR Group), stating that in compliance with the transparency purposes for future investors, such shall continue to be developed in line with the market prices, in an arm’s l ength basis, and following certain predefined principles and rules (considering criteria as parties involved, scope and amount). In order to supervise the transactions between the Group Companies and its qualified shareholders, the Board of Directors has created the Audit, Control and Related Party Transactions Committee, a permanent body with delegated functions. Without prejudice to other duties that the Board may assign to this committee, it shall perform supervisory functions of Audit and Control independently from the Board of Directors, as well as, supervisory functions of the transactions between Related Parties including their compliance with the principles of the Framework Agreement. The detail of the duties of this committee is included in topic 29 of this Chapter 5 of the Annual Report. Under its Audit and Control competences, it also supervises the transactions with qualified shareholders when requested by the Board of Directors according to Article 8.A), i) of its Regulations. This information is included on the annual report of the Audit, Control and Related Party Transactions Committee. In light of all the above, and in accordance to the Governance Model detailed in topic 15 of this Chapter 5 of the Annual Report, EDPR has implemented an structure for the evaluation of Related Party Transactions, that involves its Executive Committee (which as the body in charge of the daily activity of Company, will first discuss the commercial and legal viability of the operations) and the Audit Control and Related Party Transactions Committee which, as referred above, analyzes the compliance of each Related Part Transaction with the Framework Agreement and reports them to the Board of Directors, which finally approves the Related Party Transactions. It should be noted that in accordance with article 13.3 of the Regulations of the Audit, Control and Related Party Transactions Committee, the resolutions adopted by this committee are reported to the Board of Directors at the first Board meeting held following the meeting of the committee in which such proposals were discussed. That means that in case there are Related Party Transactions, they are reported to the Board of Directors at least every quarter (maximum period elapsed between Board of Directors Meeting in accordance with Article 22 of its Regulations). 90. Transactions subject to control during 2020 During 2020, EDPR has not signed any contracts with the members of its corporate bodies or with holders of qualifying holdings, excluding EDP, as mentioned below. The contracts signed between EDPR and its related parties have been analyzed by the Related Party Transactions Committee according to its competences, as mentioned on the previous topic, and have been concluded according to the market conditions. The total amount of supplies and services in 2020 incurred with or charged by the EDP Group was EUR 30.379.196 corresponding to 9.98% of the total value of Supplies & Services for the year (EUR 304,436,934). The most significant contracts in force during 2020 are the following: FRAMEWORK AGREEMENT The framework agreement was signed by EDP and EDPR on May 7 th 2008 and 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, 210 ANNUAL REPORT EDPR 2020 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. It lays down the obligation to provide EDP with any information that it may request from EDPR to fulfil its legal obligations and prepare the EDP Group’s consolidated accounts. The framework agreement shall remain in effect for as long as EDP directly or indirectly owns more than 50% of the share capital of EDPR or appoints more than 50% of its Directors. MANAGEMENT SERVICES AGREEMENT On November 4 th , 2008 EDP and EDPR signed a Management Services Agreement that has been amended during the last years in accordance of the variations in the services rendered by EDP to the Company. Through this contract, EDP provides management services to EDP Renováveis, including matters related to the day-to- day running of the Company. As of 31 December 2020, under this agreement EDP renders management services corresponding to four people from EDP which are part of EDPR’s Management: (i) two Executive Managers which are members of the EDPR Executive Committee and CEO, and (ii) two Non-Executive Managers, for which EDP Renováveis pays EDP an amount defined by the Related Party Committee, and approved by the Board of Directors and the Shareholders Meeting. Under this contract, EDPR incurred an amount of EUR 1,094,560 for the management services rendered in 2020. FINANCE AGREEMENTS AND GUARANTEES The most significant finance agreements between EDP Group companies and EDPR Group companies were established under the above-described Framework Agreement and currently include the following: LOAN AGREEMENTS EDPR and EDPR Servicios Financieros SA (as the borrower) have loan agreements with EDP Finance BV and EDP Servicios Financieros España (as the lender), companies 100% owned by EDP Energias de Portugal S.A. Such loan agreements can be established both in EUR and USD, up to 10-year tenor and are r emunerated at rates set at an arm’s length basis. As of December 31 st 2020, such loan agreements totalled USD 3,438,967,282.26 and EUR 444,587,000. CURRENT ACCOUNT AGREEMENT EDPR Servicios Financieros (EDPR SF) and EDP Servicios Financieros España (EDP SFE) signed an agreement through which EDP SFE manages EDPR SF’s cash accounts. The agreement also regulates the current account (cc) scheme on arm’s length basis. As of December 31 st 2020, there are two different current accounts with the following balance and counterparties: • in USD, for a total amount of USD 191,094,741.78 in favour of EDPR SF; • in EUR, for a total amount of 58,273,603.27 in favour of EDPR SF. The agreements in place are valid for one year as of date of signing and are automatically renewed for equal periods. COUNTER-GUARANTEE AGREEMENT A counter-guarantee agreement was signed, under which EDP or EDP Energias de Portugal S.A., Sucursal en España (hereinafter guarantor or EDP Sucursal) undertakes on behalf of EDPR, EDP Renewables Europe SLU (hereinafter EDPR EU), and EDP Renewables North America 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’s 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 arm’s length basis. 211 Nonetheless, certain guarantees issued prior to the date of approval of these agreements may have different conditions. As of December 31 st 2020, such counter-guarantee agreements totalled EUR 269.368.743,30 and USD 356.075.000. A counter-guarantee agreement was signed between EDPR Group and EDP España, under which, EDPR group can request the issue of any guarantee, on the terms and conditions requested by the subsidiaries of EDPR. EDPR group undertake to indemnify the guarantor for any losses or liabilities resulting from the guarantees provided under this agreement and to pay a fee established in arm’s length basis. As of December 31 st 2020, the amount of guarantees issued under this agreement totalled EUR 66.013.905,70 . CROSS CURRENCY INTEREST RATE SWAPS Due to the net investments in EDPR NA, EDPR Canada, EDPR Brazil, , in United Kingdom, in Poland, and in Colombian companies, EDPR’s accounts were exposed to the foreign exchange risk. With the purpose of hedging this foreign exchange risk, EDPR Group companies settled the following Cross Currency Interest Rate Swap (CIRS). As of December 31 st 2020 the total amount of CIRS by geography and currency are as following • in USD/EUR, with EDP Energias de Portugal SA for a total amount of USD 1,778,815,770.00 • in CAD/EUR, with EDP Energias de Portugal SA for a total amount of CAD 149,650,000 • in BRL/EUR, with EDP Energias de Portugal SA for a total amount of BRL 122,500,000 • in GBP/EUR, with EDP Energias de Portugal SA for a total amount of GBP 43,400,000 • in PLN/EUR, with EDP Energias de Portugal SA for a total amount of PLN 986,113,009.10 • in COP/EUR with EDP Energias de Portugal SA for a total amount of COP 37,326,000,000.00 HEDGE AGREEMENTS – EXCHANGE RATE EDPR Group companies entered into several hedge agreements with EDP Energias de Portugal S.A., with the purpose of managing the transactional exposure related to the short term or transitory positions, in Colombian, Polish and United Kingdom subsidiaries, fixing the exchange rate for USD/EUR, EUR/PLN and GBP/EUR in accordance to the prices in the forward market in each contract date. As of December 31 st 2020, the total amount of Forwards and Non Delivery Forwards by geography and currency are as following: • Colombian operations, for USD/EUR a total amount of EUR 66,808,023.14 (FWDs) • Polish operations, for EUR/PLN, a total amount of PLN 1,624,881,824.00(FWDs+NDFs) • United Kingdom operations, for GBP/EUR a total amount of EUR 2,537,972.64.00 (FWDs) HEDGE AGREEMENTS – COMMODITIES EDP and EDPR EU entered into hedge agreements for 2020 for a total volume of of 2.310.192 MWh (sell position) and 566.005 MW (buy position) at the forward market price at the time of execution related with the expected sales of energy in the Spanish market. 212 ANNUAL REPORT EDPR 2020 CONSULTANCY SERVICE AGREEMENT On June 4 th 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 organisational 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 2020 the estimated cost of these services is EUR 6,545,289. This was the total cost of services provided for EDPR, EDPR EU, and EDPR NA. The duration of the agreement is one (1) year tacitly renewable for equal periods. RESEARCH AND DEVELOPMENT AGREEMENT On May 13 th , 2008, EDP Inovação S.A. (hereinafter EDP Inovação), an EDP Group Company, and EDPR signed an 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 exchange of knowledge between companies and the establishment 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 fee corresponding to this agreement in 2020 is EUR 260,567. The agreement shall remain in effect for as long as EDP directly or indirectly maintains control of more than 50% of both companies or appoint the majority of the members of the Board and Executive Committee of the parties to the agreement. MANAGEMENT SUPPORT SERVICES AGREEMENT BETWEEN EDP RENOVÁVEIS PORTUGAL S.A., AND EDP GLOBAL SOLUTIONS - GESTÃO INTEGRADA DE SERVIÇOS S.A . On January 1 st , 2003, EDPR – Promoção e Operação S.A., and EDP Global Solutions - Gestão Integrada De Serviços S.A. (hereinafter EDP Global Solutions), an EDP Group Company, signed a management support service agreement. The object of the agreement is the provision to EDPR – Promoção e Operação S.A. by EDP Global Solutions 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 accrued by EDP Global Solutions by EDPR Promoção e Operação S.A. and its subsidiaries for the services provided in 2020 totalled EUR 1,707,898. The initial duration of the agreement was five (5) years from date of signing on January 1 st 2008, and tacitly renewable for equal periods of one (1) year. Either party may renounce the contract with one (1) year’s notice. INFORMATION TECHONOLOGY MANAGEMENT SERVICES AGREEMENT BETWEEN EDP RENOVÁVEIS S.A. AND EDP ENERGIAS DE PORTUGAL S.A. On January 1 st , 2010 EDPR and 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. The amount incurred for the services provided in 2020 totalled EUR 3,723,820. 213 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. CONSULTANCY AGREEMENT BETWEEN EDP RENOVÁVEIS BRASIL S.A., AND EDP ENERGIAS DO BRASIL S.A. The object of the agreement is to provide to EDP Renováveis Brasil S.A. (hereinafter EDPR Brasil) the consultancy services described on the contract and its attachments by EDP – Energias do Brasil S.A. (hereinafter EDP Brasil). Through this agreement, and upon request by EDPR Brasil, EDP Brasil 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 organisational development. The amount incurred by EDP Brasil for the services provided in 2020 totalled BRL 219,237. The initial duration of the agreement is one (1) year from the date of signing and it is tacitly renewed for a new period of one (1) year. 91. Description of the procedures applicable to the supervisory body for the assessment of the business deals The most significant contracts signed between EDPR and its Qualified Shareholders are analyzed by the Audit, Control and Related- Party Transactions Committee according to its competences, as mentioned on topic 89 of the Chapter 5 of this Annual Report. II. Data on business deals 92. Details of the place where the financial statements including information on business dealings with related parties are available, in accordance with IAS 24, or alternatively a copy of said data. The information on business dealings with related parties is available on Note 39 of the Financial Statements. 214 ANNUAL REPORT EDPR 2020 PART II – Corporate Governance Assessment I. Details of the Corporate Governance code implemented Following the protocol signed between the CMVM and the Portuguese Institute of Corporate Governance (IPCG) on October 13 th , 2017, the CMVM revoked its Corporate Governance Code (2013), which was replaced by a single applicable code, the new Corporate Governance Code of the IPCG, which entered into force on January 1 st , 2018, and that was reviewed in 2020. For the purposes of the proper preparation of corporate governance reports for the year beginning in 2020, and to be reported in 2021, they should continue to be prepared in accordance with the structure of contents referred the annex to CMVM Regulation No. 4/2013 available at the CMVM website ( www.cmvm.pt). The report template is divided into two parts: • Part I - mandatory information on shareholder structure, organisation and governance of the company. This information shall be referred within points 1 to 92 of this Corporate Governance Report in accordance with the structure included in that Annex. • Part II - Corporate governance assessment: should include a declaration in which they must: (i) identify the applicable code, (ii) state whether or not they adhere to each of the recommendations of this code and, (iii) with respect to recommendations that do not follow, explain reasonably why. The agreement between CMVM and IPCG on the new Corporate Governance Code may be found on the Protocol signed on October 13 th , 2017, which is available at the website of CMVM ( http://www.cmvm.pt/) . Likewise, the reviewed version Corporate Governance Code of the IPCG is published on the website of IPCG and of the Monitoring Committees ( https://cam.cgov.pt/ ) II. Analysis of Compliance with the Corporate Governance code implemented The following table shows the recommendations set forth in the Corporate Governance Code of the IPCG and indicates EDPR’s compliance with it and the place in this report in which they are described in more detail. Also in order to comply with the best Corporate Governance recommendations, and according to the results of the reflection made by the Nominations and Remunerations Committee, the governance model that was adopted has been ensuring an effective performance and articulation of EDPR Governing 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. The explanation of the Corporate Governance Code of the IPCG recommendations that EDPR does not adopt or that the Company deems not applicable, reasoning and other relevant comments as well as reference to the part of the report where the description may be found, are in the table below. In this context, EDPR states that it has adopted the Corporate Governance recommendations on the governance of listed companies provided in the Corporate Governance Code of the IPCG, with the exceptions indicated in the following table. 215 CORPORATE GOVERNANCE RECOMMENDATIONS - STATEMENT OF COMPLIANCE CHAPTER I - GENERAL PROVISIONS 1.1. COMPANY’S RELAT IONSHIP WITH INVESTORS AND DISCLOSURE I.1.1 The Company should establish mechanisms to ensure the timely disclosure of information to its governing bodies, shareholders, investors and other stakeholders, financial analysts, and to the markets in general. ADOPTED Section B - II, a) Topic 15 (Page 161); Section C-IV Topic 56, Section C-V, 59 – 65 (Pages 200 - 202) 1.2. DIVERSITY IN THE COMPOSITION AND FUNCTIONING OF THE COMPANY’S GOVERNING BODIES I.2.1 Companies should establish standards and requirements regarding the profile of new members of their governing bodies, which are suitable according to the roles to be carried out. Besides individual attributes (such as competence, independence, integrity, availability, and experience), these profiles should take into consideration general diversity requirements, with particular attention to gender diversity, which may contribute to a better performance of the governing body and to the balance of its composition. ADOPTED Section B-II, a) Topics 16 and 17 (Pages 162, 163) I.2.2 The company’s managing and supervisory boards, as well as their committees, should have internal regulations — namely regulating the performance of their duties, their Chairmanship, periodicity of meetings, their functioning and the duties of their members — , disclosed in full on the company’s website. Minutes of the meetings of each of these bodies should be drawn out. ADOPTED Section B-II, a) Topic 15 (Page 161); 216 ANNUAL REPORT EDPR 2020 I.2.3 The composition and the number of annual meetings of the managing and supervisory bodies, as well as of their committees, should be disclosed on the company’s website ADOPTED Section B-II, a) Topic 15 (Page 161, 162); Section C-V, Topics 59 – 65 (Page 201) I.2.4 A policy for the communication of irregularities (whistleblowing) should be adopted that guarantees the suitable means of communication and treatment of those irregularities, with the safeguarding of the confidentiality of the information transmitted and the identity of its provider, whenever such confidentiality is requested. ADOPTED Section C-II, Topic 49 (Page 180) 1.3. RELATIONSHIPS BETWEEN THE COMPANY BODIES I.3.1 The bylaws, or other equivalent means adopted by the company, should establish mechanisms that, within the limits of applicable laws, permanently ensure the members of the managing and supervisory boards are provided with access to all the information and company’s collaborators, in order to appraise the performance, current situation and perspectives for further developments of the company, namely including minutes, documents supporting decisions that have been taken, calls for meetings, and the archive of the meetings of the managing board, without impairing the access to any other documents or people that may be requested for information. ADOPTED Section B-II, a) Topic 15 (Page 161) I.3.2 Each of the company’s boards and committees should ensure the timely and suitable flow of information, especially regarding the respective calls for meetings and minutes, necessary for the exercise of the competences, determined by law and the bylaws, of each of the remaining boards and committees. ADOPTED Section B-II, a) Topic 15 (Page 161); Section B-II, c) Topic 29 (Pages 170, 172 and 174) 217 1.4 CONFLICTS OF INTEREST I.4.1 The members of the managing and supervisory boards and the internal committees are bounded, by internal regulation or equivalent, to inform the respective board or committee whenever there are facts that may constitute or give rise to a conflict between their interests and the company’s interest. ADOPTED Section B-II, a) Topic 18 (Page 164) I.4.2 Procedures should be adopted to guarantee that the member in conflict does not interfere in the decision- making process, without prejudice to the duty to provide information and other clarifications that the board, the committee or their respective members may request. ADOPTED Section B-II, a) Topic 18 (Page 164) 1.5. RELATED PARTY TRANSACTIONS I.5.1 The managing body should disclose in the corporate governance report or by other means publicly available the internal procedure for verifying transactions with related parties. ADOPTED Section E-I, Topic 89 (Page 209) I.5.2 The managing body should report to the supervisory body the results of the internal procedure for verifying transactions with related parties, including the transactions under analysis, at least every six months. ADOPTED Section E-I, Topic 89 (Page 209) 218 ANNUAL REPORT EDPR 2020 CHAPTER II – SHAREHOLDERS AND GENERAL MEETINGS II.1 The company should not set an excessively high number of shares to confer voting rights, and it should make its choice clear in the corporate governance report every time its choice entails a diversion from the general rule: that each share has a corresponding vote. NOT APPLICABLE Section B-I, b) Topics 12 and 13 (Page 159) II.2 The company should not adopt mechanisms that make decision making by its shareholders (resolutions) more difficult, specifically, by setting a quorum higher than that established by law. ADOPTED Please note EDPR’s personal law is the Spanish one, and as such, the majorities and quorums applicable for the Shareholders’ Meeting resolutions are not the ones set under Portuguese Law, but those established under the Spanish one, with which is completely aligned. Section B-I, b) Topic 14 (Pages 160, 161) II.3. The company should implement adequate means for the remote participation by shareholders in the general meeting, which should be proportionate to its size. NOT ADOPTED EDPR has deeply analyzed the needs and priorities of its shareholders worldwide, and therefore, since 2009, it is provided the possibility of fulfilling all the requirements necessary to validly exercise their right to vote by distance means (registry of intention to attend, submission of the certificate of titularity of shares, granting of representation proxies, and properly voting). The efficiency and interest of our shareholders in these initiatives has been clearly proved, as nearly almost all of the participation is exercised by these means. In the same way, EDPR has also reviewed the track record of participation in the Sh areholders’ Meeting the day of its celebration (when generally all the votes are submitted beforehand by distance voting), the shareholding structure of the Company, and its shareholders’ profiles; concluding that the implementation of a streaming system to digitally participate will imply a material cost where the demonstrated preferences of almost all EDPR shareholders is to submit their votes by distance means. Hence, EDPR considers for the time being not so recommendable to follow his initiative. Section B-I, b) Topic 13 (Pages 159, 160) II.4. The company should also implement adequate means for the exercise of remote voting, including by correspondence and electronic means. ADOPTED Section B-I, b) Topic 13 (Pages 159, 160) 219 II.5. The bylaws, which specify the limitation of the number of votes that can be held or exercised by a sole shareholder, individually or in coordination with other shareholders, should equally provide that, at least every 5 years, the amendment or maintenance of this rule will be subject to a shareholder resolution — without increased quorum in comparison to the legally established — and in that resolution, all votes cast will be counted without observation of the imposed limits. NOT APPLICABLE Section A-I, Topic 5 (Page 155); Section B-I, b) Topic 12 (Page 159) II.6. The company should not adopt mechanisms that imply payments or assumption of fees in the case of the transfer of control or the change in the composition of the managing body, and which are likely to harm the free transferability of shares and a shareholder assessment of the performance of the members of the managing body. ADOPTED Section A-I, Topic 4 (Page 155); Section D - IV, Topic 80 (Page 207); and Section D - V, Topics 83- 84 (Page 207) CHAPTER III – NON-EXECUTIVE MANAGEMENT, MONITORING AND SUPERVISION III.I Without prejudice to the legal powers of the chair of the managing body, if he or she is not independent, the independent directors should appoint a coordinator from amongst them, namely, to: (i) act, when necessary, as an interlocutor near the chair of the board of directors and other directors, (ii) make sure there are the necessary conditions and means to carry out their functions; and (iii) coordinate the independent directors in the assessment of the performance of the managing body, as established in recommendation V.1.1. ADOPTED Section B-II, a) Topic 18 (Page 165). 220 ANNUAL REPORT EDPR 2020 III.2 The number of non- executive members in the managing body, as well as the number of members of the supervisory body and the number of the members of the committee for financial matters should be suitable for the size of the company and the complexity of the risks intrinsic to its activity, but sufficient to ensure, with efficiency, the duties which they have been attributed. The formation of such suitability judgment should be included in the corporate governance report. ADOPTED Section B-II, a) Topic 18 (Pages 164 and 165) III.3 In any case, the number of non-executive directors should be higher than the number of executive directors. ADOPTED Section B-II, a) Topic 18 (Page 164 and 165) III.4 Each company should include a number of non- executive directors that corresponds to no less than one third, but always plural, who satisfy the legal requirements of independence. For the purposes of this recommendation, an independent person is one who is not associated with any specific group of interest of the company, nor under any circumstance likely to affect his/her impartiality of analysis or decision, namely due to: i. having carried out functions in any of the company’s bodies for more than twelve years, either on a consecutive or nonconsecutive basis; ii. having been a prior staff member of the company or of a company which is considered to be in a controlling or group relationship with the company in the last three years; iii. having, in the last three years, provided services or established a significant business relationship with the company or a company which is considered to be in a controlling or group relationship, either directly ADOPTED The independence criteria applicable to EDPR are those stablished under its personal law (Spanish law). Section B-II, a) Topic 18 (Pages 164 and 165) 221 or as a shareholder, director, manager or officer of the legal person; iv. having been a beneficiary of remuneration paid by the company or by a company which is considered to be in a controlling or group relationship other than the remuneration resulting from the exercise of a director’s duties; v. having lived in a non-marital partnership or having been the spouse, relative or any first degree next of kin up to and including the third degree of collateral affinity of company directors or of natural persons who are direct or indirect holders of qualifying holdings, or vi. having been a qualified holder or representative of a shareholder of qualifying holding. III.5 The provisions of paragraph (i) of recommendation III.4 does not inhibit the qualification of a new director as independent if, between the termination of his/her functions in any of the company’s bodies and the new appointment, a period of 3 years has elapsed (cooling-off period). NOT APPLICABLE Section B-II, a) Topic 18 (Page 164 ) III.6 The supervisory body, in observance of the powers conferred to it by law, should assess and give its opinion on the strategic lines and the risk policy prior to its final approval by the management body. ADOPTED Section A -II, Topic 9 (Page 158) 222 ANNUAL REPORT EDPR 2020 III.7 Companies should have specialised committees, separately or cumulatively, on matters related to corporate governance, appointments, and performance assessment. In the event that the remuneration committee provided for in article 399 of the Commercial Companies Code has been created and should this not be prohibited by law, this recommendation may be fulfilled by conferring competence on such committee in the aforementioned matters. ADOPTED Section B - II, a) Topic 15 (Page 161) Section B-II, c), Topics 27, 28 and 29 (Pages 169 - 175) CHAPTER IV – EXECUTIVE MANAGEMENT IV.I The managing body should approve, by internal regulation or equivalent, the rules regarding the action of the executive directors applicable to their performance of executive functions in entities outside of the group. ADOPTED Section B-II, b) Topic 26 (Page 168) IV.2 The managing body should ensure that the company acts consistently with its objects and does not delegate powers, namely, in what regards: i. the definition of the strategy and main policies of the company; ii. the organisation and coordination of the business structure; iii. matters that should be considered strategic in virtue of the amounts involved, the risk, or special characteristics. ADOPTED Section A -II, Topic 9 (Page 158) IV.3 In the annual report, the managing body explains in what terms the strategy and the main policies defined seek to ensure the long-term success of the company and which are the main contributions resulting therein for the community at large. ADOPTED Chapter 1.1.6 Sustainability Roadmap of the Management Report – Pages 18 and 19 223 CHAPTER V – EVALUATION OF PERFORMANCE, REMUNERATION AND APPOINTMENT V.1 EVALUATION OF PERFORMANCE V.I.I The managing body should annually evaluate its performance as well as the performance of its committees and executive directors, taking into account the accomplishment of the company’s strategic plans and budget plans, the risk management, the internal functioning and the contribution of each member of the body to these objectives, as well as the relationship with the company’s other bodies and committees. ADOPTED Section A -II, Topic 9 (Page 158); Section B-II b), Topic 24 (Page 168); Section D – I Topic 66 (Page 202); Section D – III, Topic 71 (Page 204) V.2 Remuneration V.2.I The company should create a remuneration committee, the composition of which should ensure its independence from the management, which may be the remuneration committee appointed under the terms of article 399 of the Commercial Companies Code. ADOPTED Section B - II, c) Topic 27 (Page 169); Section B- II, Topic 29 (Page 173); Section D - I, Topic 66 (Page 202) V.2.2 The remuneration should be set by the remuneration committee or the general meeting, on a proposal from that committee. ADOPTED Section D – I, Topic 66 (Page 202); Section D – III, Topic 69 (Pages 202, 203) V.2.3 For each term of office, the remuneration committee or the general meeting, on a proposal from that committee, should also approve the maximum amount of all compensations payable to any member of a board or committee of the company due to the respective termination of office. The said situation as well as the amounts should be disclosed in the corporate governance report or in the remuneration report. ADOPTED Section D – IV, Topic 80 (Page 207) 224 ANNUAL REPORT EDPR 2020 V.2.4 In order to provide information or clarifications to shareholders, the chair or, in case of his/her impediment, another member of the remuneration committee should be present at the annual general meeting, as well as at any other, whenever the respective agenda includes a matter linked with the remuneration of the members of the company’s boards and committees or, if such presence has been requested by the shareholders. ADOPTED Section B-I, a) Topic 11 (Page 159); Section B-II, a) Topic 29 (Page 174) V.2.5 Within the company’s budgetary limitations, the remuneration committee should be able to decide, freely, on the hiring, by the company, of necessary or convenient consulting services to carry out the committee’s duties. ADOPTED Section D – II Topics 67 (Page 202) V.2.6 The remuneration committee should ensure that those services are provided independently and that the respective providers do not provide other services to the company, or to others in controlling or group relationship, without the express authorization of the committee. ADOPTED Section D – II Topics 67 (Page 202) V.2.7 Taking into account the alignment of interests between the company and the executive directors, a part of their remuneration should be of a variable nature, reflecting the sustained performance of the company, and not stimulating the assumption of excessive risks. ADOPTED Section D – III, Topics 70 -72 (Pages 203 - 205) 225 V.2.8 A significant part of the variable component should be partially deferred in time, for a period of no less than three years, being necessarily connected to the confirmation of the sustainability of the performance, in the terms defined by a company’s internal regulation. ADOPTED Section D – III, Topic 72 (Page 205) V.2.9 When variable remuneration includes the allocation of options or other instruments directly or indirectly dependent on the value of shares, the start of the exercise period should be deferred in time for a period of no less than three years. NOT APPLICABLE Section D – III, Topics 73 and 74 (Page 205) V.2.10 The remuneration of non- executive directors should not include components dependent on the performance of the company or on its value. ADOPTED Section D – III, Topic 69 (Page 203); Section D – IV, 77 (Page 206) V.3 Appointments V.3.I The company should, in terms that it considers suitable, but in a demonstrable form, promote that proposals for the appointment of the members of the company’s governing bodies are accompanied by a justification in regard to the suitability of the profile, the skills and the curriculum vitae to the duties to be carried out. ADOPTED Section B-II, a) Topics 16, 17 (Pages 162, 163) V.3.2 The overview and support to the appointment of members of senior management should be attributed to a nomination committee unless this is not justified by the company’s size. ADOPTED Section B- II,c) Topic 29 (Page 174) V.3.3 This nomination committee includes a majority of non- executive, independent members. ADOPTED Section B- II, c) Topic 29 (Page 173) 226 ANNUAL REPORT EDPR 2020 V.3.4 The nomination committee should make its terms of reference available, and should foster, to the extent of its powers, transparent selection processes that include effective mechanisms of identification of potential candidates, and that those chosen for proposal are those who present a higher degree of merit, who are best suited to the demands of the functions to be carried out, and who will best promote, within the organisation, a suitable diversity, including gender diversity. ADOPTED Section B-II, a) Topics 16, 17 (Pages 162, 163); CHAPTER VI – INTERNAL CONTROL VI.I The managing body should debate and approve the Company’s strategic plan and risk policy, which should include the establishment of limits on risk-taking. ADOPTED . Section A -II, Topic 9 (Pages 157); Section C) - III, Topic 52 (Page 184) VI.2 The supervisory board should be internally organised, implementing mechanisms and procedures of periodic control that seek to guarantee that risks which are effectively incurred by the company are consistent with the company’s objectives, as set by the managing body. ADOPTED Topic 35 (Page 176); Section C – II, Topic 52 (Pages 184) VI.3 The internal control systems, comprising the functions of risk management, compliance, and internal audit should be structured in terms adequate to the size of the company and the complexity of the inherent risks of the company’s activity. The supervisory body should evaluate them and, within its competence to supervise the effectiveness of this system, propose adjustments where they are deemed to be necessary. ADOPTED Section B- II, c) Topic 29 (Page 171); Section B- III, Topic 30 (Page 175); Section C – III, Topics 50-55 (Pages 183-198) 227 VI.4 The supervisory body should provide its view on the work plans and resources allocated to the services of the internal control system, including the risk management, compliance and internal audit functions, and may propose the adjustments deemed to be necessary. ADOPTED Section B- II, c) Topic 29 (Pages 171 - 173); Section B – III, b) Topic 35 (Page 176) VI.5 The supervisory body should be the recipient of the reports prepared by the internal control services, including the risk management functions, compliance and internal audit, at least regarding matters related to the approval of accounts, the identification and resolution of conflicts of interest, and the detection of potential irregularities. ADOPTED Section B- II, c) Topic 29 (Pages 171 - 173) Section B – III, b) Topic 35 (Page 176); VI.6 Based on its risk policy, the company should establish a risk management function, identifying (i) the main risks it is subject to in carrying out its activity; (ii) the probability of occurrence of those risks and their respective impact; (iii) the devices and measures to adopt towards their mitigation; and (iv) the monitoring procedures, aiming at their accompaniment. ADOPTED Section C) – III, Topics 52 - 55 (1854 - 198); Chapter 2 of this Annual Report (Pages 48-53) VI.7 The company should establish procedures for the supervision, periodic evaluation, and adjustment of the internal control system, including an annual evaluation of the level of internal compliance and the performance of that system, as well as the perspectives for amendments of the risk structure previously defined. ADOPTED Section C) -III, Topics 52, 54, 55 (Pages 184, 195 - 199) 228 ANNUAL REPORT EDPR 2020 CHAPTER VII – FINANCIAL INFORMATION VII.1 Finantial information VII.1.1 The supervisory body’s internal regulation should impose the obligation to supervise the suitability of the preparation process and the disclosure of financial information by the managing body, including suitable accounting policies, estimates, judgments, relevant disclosure and its consistent application between financial years, in a duly documented and communicated form. ADOPTED Section B- II, Topic 29 (Pages 171, 172 and 173); Section B – III, b) Topic 35 (Page 176); Section C – III, Topic 55 (Pages 195 - 198) VII.2 Statutory Auditor, Accounts and Supervision VII.2.1 By internal regulations, the supervisory body should define, according to the applicable legal regime, the monitoring procedures aimed at ensuring the independence of the statutory audit. ADOPTED Section B- II, c) Topic 29 (Page 171), Section B – III, c) Topics 37 and 38 (Page 177); Section B – IV-V, Topics 45, 46 and 47 (Pages 178 and 179) VII.2.2 The supervisory body should be the main interlocutor of the statutory auditor in the company and the first recipient of the respective reports, having the powers, namely, to propose the respective remuneration and to ensure that adequate conditions for the provision of services are ensured within the company. ADOPTED Sections B – II, c) Topic 29 (Page 171); Section B – V, Topics 45, 46 (Pages 178 and 179) VII.2.3 The supervisory body should annually assess the services provided by the statutory auditor, their independence and their suitability in carrying out their functions, and propose their dismissal or the termination of their service contract by the competent body when this is justified for due cause. ADOPTED Section B – II, c) Topic 29 (Pages 171 - 173); Section B – III a), Topic 30 (Page 175), Section B – III, c) Topics 37 and 38 (Page 177); Section B- IV- V, Topic 45 (Page 178) 229 Annex I Board of Directors EDP Renováveis 2020 - CVs António Mexia Born: 1957 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Chairman of the Board of Directors of EDP Renováveis, S.A. • Chairman and CEO of the Executive Board of Directors of EDP – Energias de Portugal, S.A. • Permanent Representative of EDP – Energias de Portugal, Sociedade Anónima, Sucursal en España, and Representative of EDP Finance BV • Chairman of the Board of Directors of EDP – Energias do Brasil, S.A. • Chairman of the Board of Directors of Fundação EDP CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Sustainable Energy for All-Chairman OTHER PREVIOUS POSITIONS • Minister of Publi c Works, Transport and Communication for Portugal’s 16th Constitutional Government • Chairman of the Portuguese Energy Association (APE) • Executive Chairman of Galp Energia • Chairman of the Board of Directors of Petrogal, Gás de Portugal, Transgás and Transgás-Atlântico • Vice-Chairman of the Board of Directors of Galp Energia • Director of Banco Espírito Santo de Investimentos • Vice-Chairman of the Board of Directors of ICEP (Portuguese Institute for Foreign Trade) • Assistant to the Secretary of State for Foreign Trade • Assistant Lecturer in the Department of Economics at Université de Genève (Switzerland) EDUCATION: • BSc in Economics from Université de Genève (Switzerland) • Postgraduate lecturer in European Studies at Universidade Católica 230 ANNUAL REPORT EDPR 2020 João Manso Neto Born: 1958 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Executive Vice-Chairman of the Board of Directors and Chairman of the Executive Committee (CEO) of EDP Renováveis, S.A. • Chairman of the Board of Directors of EDP Renewables Europe, S.L.U., EDP Renováveis Brasil S.A., EDP Renováveis Servicios Financieros, S.A. and EDPR FS Offshore, S.A. • Executive Director of EDP Energias de Portugal, S.A. • Member of the Board of Directors of EDP España, S.A.U. • Permanent Representative of EDP Energias de Portugal, S.A. Sucursal en España, and Representative of EDP Finance BV • Chairman of the Board of Directors of EDP Gás.com Comércio de Gás Natural, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Member of the Board of the Operador del Mercado Ibérico de Energía, Polo Español (OMEL) • Member of the Board of OMIP – Operador do Mercado Ibérico (Portugal), SGPS, S.A. • Member of the Board of MIBGAS MAIN POSITIONS IN THE LAST FIVE YEARS • Member of the Executive Board of Directors of EDP Energias de Portugal, S.A. • Chairman of EDP Gestão da Produção de Energia, S.A. • CEO and Vice-Chairman of EDP España, S.A.U. • Vice-Chairman of Naturgás Energia Grupo, S.A. • Member of the Board of the Operador del Mercado Ibérico de Energía, Polo Español (OMEL) • Member of the Board of OMIP – Operador do Mercado Ibérico (Portugal) SGPS, S.A. OTHER PREVIOUS POSITIONS • Head of the International Credit Division, and General Manager responsible for Financial and South Retail areas at Banco Português do Atlântico • General Manager of Financial Management, General Manager of Large Corporate and Institutional Businesses, General Manager of the Treasury, Member of the Board of Directors of BCP Banco de Investimento and Vice- Chairman of BIG Bank Gdansk in Poland at Banco Comercial Português • Member of the Board of Banco Português de Negócios • General Manager and Member of the Board of EDP Produção EDUCATION • Degree in Economics from Instituto Superior de Economia • Post-graduate degree in European Economics from Universidade Católica Portuguesa • Program in Economics at the Faculty of Economics, Universidade Nova de Lisboa • Advanced Management Program for Overseas Bankers at the Wharton School in Philadelphia 231 Rui Manuel Rodrigues Lopes Teixeira Born: 1972 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of Directors of EDP Renováveis, S.A. • Member of the Executive Committee of EDP Renováveis, S.A. • Member of the Board of Directors of EDP Energias de Portugal, S.A. • CEO of EDP España, S.L.U. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS • Member of the Board of Directors of EDP Renováveis, S.A. • Member of the Executive Committee of EDP Renováveis, S.A. • Member of the Board of Directors of EDP Energias de Portugal, S.A. • CEO of EDP España, S.L.U. • President of EDP Gestão de Produção de Energia, S.A. OTHER PREVIOUS POSITIONS • Consultant at McKinsey & Company, focusing on energy, shipping, and retail banking • Project manager and ship surveyor for Det Norske Veritas • Assistant director of the commercial naval department of Gellweiler – Sociedade Equipamentos Maritimos e Industriais, Lda EDUCATION • Graduate of Harvard Business School’s Advanced Management Program, AMP184 • Master in Business and Administration from the Universidade Nova de Lisboa • Master degree in Naval Architecture and Marine Engineering from the Instituto Superior Técnico de Lisboa 232 ANNUAL REPORT EDPR 2020 Duarte Bello Born: 1979 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Chief Operating Officer of EDP Renováveis, S.A. for Europe and Brazil • Member of the Board of Directors of EDP Renováveis, S.A. • Member the Executive Committee of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS • Head of EDP Group M&A and Corporate Development • Member of EDP Group Investment Committee OTHER PREVIOUS POSITIONS • Chief of Staff for EDP’s CEO • Project Manager in EDP Group M&A and Corporate Development • Financial Analyst at Schroder Salomon Smith Barney in London and Lisbon • Financial analyst in Citigroup’s Investment Banking division in London EDUCATION • Business and Administration from Faculdade de Economia da Universidade Nova de Lisboa • MBA from INSEAD (Singapore and France) 233 Miguel Ángel Prado Born: 1975 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Chief Operating Officer of EDP Renováveis, S.A. for North America and CEO EDP Renewables North America LLC • Member of the Board of Directors of EDP Renováveis, S.A. • Member of the Executive Committee of EDP Renováveis, S.A. • Responsible for Corporate Procurement at EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS • Head of Investments, Mergers and Acquisitions at EDP Renováveis, S.A. • Leadership of the asset rotation strategy of EDP Renováveis, S.A. • Member of EDPR Group Investment Committee OTHER PREVIOUS POSITIONS • He has worked in EDP and EDPR for nearly 17 years, investing more than 18 Billion by executing a significant number of relevant acquisitions in 12 different countries • Manager at Arthur Andersen/Deloitte Corporate Finance department EDUCATION • PhD in Business and Management by the University of Oviedo and Bradford (UK) • Executive MBA by the IE (Instituto de Empresa, Madrid) 234 ANNUAL REPORT EDPR 2020 Spryridon Martinis Spettel Born: 1979 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Chief Executive Officer of Ocean Winds • Chief Operating Officer of EDP Renováveis, S.A. for Offshore and New Markets • Chief Development Officer of EDP Renováveis, S.A. • Member of the Board of Directors of EDP Renováveis, S.A. • Member of the Executive Committee of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS: • Executive Business Initiatives Director, EDP Renováveis,S.A. • Executive Operating Director – Europe, EDP Renováveis,S.A. • Asset Management & Business Development Director – Europe, EDP Renováveis,S.A. • Director of EDPR Polska, France and Belgium • Business Development Director & Coordinator – Europe, EDP Renováveis,S.A. OTHER PREVIOUS POSITIONS • Head of Business Development, Eastern & Northern Europe, EDPR • Project Finance specialist, Corporate Finance, Energy Division, BANKIA • Business Development Coordinator, Gamesa EDUCATION • Executive Global Leadership Vanguard Program, Xynteo • International Executive MBA, IE Business School • Full time MBA, IEDE-Laureate University • Postgraduate degree in Finance, CESMA • University Degree in Economic & Business Sciences,Aristotle University 235 Vera Pinto Pereira Born: 1974 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Executive Board Member at EDP Energias de Portugal SA • President of the Board at EDP Comercial • President of the Board at EDP Soluções Comerciais • Board Member at EDP España, S.A.U. • Board Member at EDP Renováveis, S.A. • Board Member at Fundação EDP CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS • Executive Vice President – Managing Director for Spain and Portugal at Fox Network Group • Non-executive Board Member at Pulsa Media OTHER PREVIOUS POSITIONS • MEO TV Business Director – at Portugal Telecom (Altice) • TV Service Director – at TV Cabo Portugal – PT Multimedia (NOS) • Founding Partner of Innovagency Consulting • Associate in Mercer Management Consulting EDUCATION • Master in Business Administration (M.B.A.), Fontainebleau – INSEAD • Graduate & Post-Graduate Degrees in Economics – Universidade NOVA de Lisboa – NOVA School of Business and Economics 236 ANNUAL REPORT EDPR 2020 Manuel Menéndez Menéndez Born: 1959 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of Directors of EDP Renováveis, S.A. • Chairman of the Board of Directors of EDP España, S.A.U. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • CEO of Liberbank, S.A. MAIN POSITIONS IN THE LAST FIVE YEARS • Chairman and CEO of Liberbank, S.A. • Chairman of Cajastur • Chairman of EDP España, S.A.U. • Chairman of Naturgás Energía Grupo, S.A. • Member of the Board of Confederación Española de Cajas de Ahorro (CECA) • Member of the Board of AELÉC OTHER PREVIOUS POSITIONS • Member of the Board of Directors of EDP Renewables Europe, S.L.U. • University Professor in the Department of Business Administration and Accounting at the University of Oviedo EDUCATION • BSc in Economics and Business Administration from the University of Oviedo • PhD in Economic Sciences from the University of Oviedo 237 António Nogueira Leite Born: 1962 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of Directors of EDP Renováveis, S.A. • Chairman of the Nominations and Remunerations Committee of EDP Renováveis, S.A. • Member of the Audit, Control and Related Party transactions Committee of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Senior Board Advisor at Hipoges Iberia,S.A. • Chairman of the Board, Embopar, SGPS, S.A. • Chairman of the Board, Sociedade Ponto Verde, S.A. • Vice- Chairman of “Fórum para a Competitividade” • Chairman of the Board at Forum Oceano MAIN POSITIONS IN THE LAST FIVE YEARS • Director of Sagasta, STC,S.A. • Member of the Advisory Committee at Incus Capital Advisors OTHER PREVIOUS POSITIONS • Vice-Chairman of the Executive Committee of Caixa Geral de Depósitos, S.A. • Chairman of the Board at Caixa Banco de Investimento, S.A., Caixa Capital SCR SGPS, S.A., Caixa Leasing e Factoring, S.A. Partang, SGPS, S.A. • Director, Group José de Mello (one of Portugal’s leading private groups) • Director of Soporcel, S.A. (1997-1999) • Director of Papercel SGPS, S.A. (1998-1999) • Director of MC Corretagem, S.A. (1998-1999) • Chairman of the Board, Lisbon Stock Exchange (1998-1999) • Secretary of State for Treasury and Finance and Alternate Governor (IMF, EBRD, EIB, WB) • Member of the Economic and Financial Committee of the European Union • Advisor GE Capital (2001-2002) • Director of Brisal, S.A.(2002-2011) • Director of CUF, SGPS, S.A. (2002-2011) • Director of CUF Quimicos, S.A.(2005-2011) • Director of Efacec Capital, S.A.(2005-2011) • Director of Jose de Mello Saúde, SGPS, S.A. (2005-2011) • Director of Jose de Mello Investimentos, SGPS, S.A. (2010-2011) • Chairman of the Board of Directors, OPEX, S.A. (2002-2011) EDUCATION • Degree, Universidade Católica Portuguesa, 1983 • Master of Science in Economics, University of Illinois at Urbana-Champaign • PhD in Economics, University of Illinois at Urbana-Champaign 238 ANNUAL REPORT EDPR 2020 Acácio Piloto Born: 1957 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of Directors of EDP Renováveis, S.A. • Chairman of the Audit, Control and Related-Party Transactions Committee of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS • Member of the Supervisory Board and Chairman of the Risk Committee of Caixa Económica Montepio Geral • Member of the Nominations and Remunerations Committee of EDP Renováveis, S.A. • Member of the Related-Party Transactions Committee of EDP Renováveis, S.A. OTHER PREVIOUS POSITIONS • International Division of Banco Pinto e Sotto Mayor • International and Treasury Division of Banco Comercial Português • Head of BCP International Corporate Banking • Member of the Executive Committee of AF Investimentos SGPS and Chairman of the following group companies: AF Investimentos, Fundos Mobiliários; AF Investimentos, Fundos Imobiliários; BPA Gestão de Patrimónios; BCP Investimentos International; AF Investimentos International and Prime International • Member of BCP Investment Committee • Executive Board Member of BCP – Banco de Investimento, in charge of Investment Banking • Millennium BCP Group Treasurer and Head of Capital Markets • Millennium BCP Chair of Group ALCO • CEO of Millennium Gestão de Ativos SGFIM • Chairman of Millennium SICAV • Chairman of BII International • Member of the Board of Directors and Member of the Audit Committee of INAPA IPG, S.A. EDUCATION • Law degree by the Law Faculty of Lisbon University • During 1984 and 1985 he was a scholar from the Hanns Seidel Foundation, Munich where he obtained a Post-Graduation in Economic Law by Ludwig Maximilian University • Post- Graduation in European Community Competition Law by Max Planck Institut • Trainee at the International Division of Bayerische Hypoteken und Wechsel Bank • Professional education courses, mostly in banking, financial and asset management, namely the International Banking School (Dublin, 1989), the Asset and Liability Management Seminar (Merrill Lynch International) and the INSEAD Executive Program (Fontainebleau) • Nova SBE Executive Program on Corporate Governance and Leadership of Boards 239 Francisca Guedes de Oliveira Born: 1973 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of EDP Renováveis, S.A. • Member of the Audit, Control and Related-Party Transactions Committee of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Associate Dean at Católica Porto Business School (responsibility of Faculty Management) (until june 2020) • Associate Dean for the Master Programmes at Católica Porto Business School (until June 2020) • Assistant Professor at Católica Porto Business School • Member of the Social and Economic Council • President of the Tax Comitee of Unilabs Portugal MAIN POSITIONS IN THE LAST FIVE YEARS • Coordinator of the MSc programme in Business Economics at Católica Porto Business School • Coordinator of the seminars in economics at the Master of Public Administration at Católica Porto Business School • Coordinator of the PhD in Economics at the Universidade Católica de Moçambique • Coordinator of the work group appointed by the Finance Minister dedicated to evaluate Tax Expenditures OTHER PREVIOUS POSITIONS • Assistant Professor at Católica Porto Business School • Researcher at the National Statistics Institute EDUCATION • Executive programme at London School of Economics • PhD in Economics at Nova School of Business and Economics • Master in Economics at Faculdade de Economia da Universidade do Porto • Undergraduate degree in Economics at Faculdade de Economia da Universidade do Porto • PhD scholarship from Fundação para a Ciência e Tecnologia 240 ANNUAL REPORT EDPR 2020 Allan J.Katz Born: 1947 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of EDP Renováveis, S.A CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Founder of the American Public Square • Executive Committee Chair of the Academic and Corporate Board to ISCTE Business School in Lisbon Portugal • Board Member of the International Relation Council of Kansas City • Board Member of the WW1 Commission Diplomatic Advisory Board • Creator of Katz, Jacobs and Associates LLC (KJA) • Frequent speaker and moderator on developments in Europe and on American Politics MAIN POSITIONS IN THE LAST FIVE YEARS • Ambassador of the United States of America to the Republic of Portugal • Distinguished Professor at University of Missouri Kansas City OTHER PREVIOUS POSITIONS • National Director of the Public Policy practice group at the firm of Akerman Senterfitt • Assistant Insurance Commissioner and Assistant StateTreasurer for the State of Florida • Legislative Counsel to Congressman Bill Gunter and David Obey • General Counsel to the Commission on Administrative Review of the US House of Representatives • Member of the Board of the Florida Municipal Energy Association • President of the Brogan Museum of Art & Science in Tallahassee, Florida • Board member of the Junior Museum of Natural History in Tallahassee, Florida • First Chair of the State Neurological Injury Compensation Association • Member of the State Taxation and Budget Commission • City of Tallahassee Commissioner EDUCATION • BA from UMKC in 1969 • JD from Washington College of Law at American University in Washington DC in 1974 241 Francisco Seixas Da Costa Born: 1948 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of Directors of EDP Renováveis, S.A. • Member of the Nominations and Remunerations Committee of EDP Renováveis, S.A. • Member of the Audit, Control and Related Party Transactions Committee of EDP Renováveis, S.A. (appointed in January 19 th , 2021) CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Member of the Board of Directors of Jeronimo Martins SGPS, S.A. • Member of the Board of Directors of Mota Engil SGPS, S.A. • Member of the Board of Directors of Mota Engil Africa, S.A. • Member of the Audit Committee of Mota Engil Africa, S.A. • Chairman of the Fiscal Council of Tabaqueira II, S.A. • Chairman of the Advisory Council of A.T. Kearney Portugal MAIN POSITIONS IN THE LAST FIVE YEARS • Member of the Consultative Council of Calouste Gulbenkian Foundation • Member of the Independent General Council, RTP - Radio e Televisão de Portugal, S.A. • Invited Researcher, Universidade Autónoma, Lisbon, Portugal OTHER PREVIOUS POSITIONS • Portuguese ambassador to the United Nations, OSCE, UNESCO, Brazil and France • Secretary of State for European Affairs (1995/2001), Portuguese government, Lisbon EDUCATION • Degree in Political and Social Sciences, Lisbon University 242 ANNUAL REPORT EDPR 2020 Conceição Lucas Born: 1956 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of EDP Renováveis, S.A. • Member of the Nominations and Remunerations Committee of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Chairwoman of Banco Atlantico Europa, S.A. • Member of the Nominations and Remunerations Committee of Banco Atlantico Europa,S.A. • Chairwoman of Atlantico Europa, SGPS, S.A MAIN POSITIONS IN THE LAST FIVE YEARS • Executive Board Member of Millennium BCP, for Corporate and Investment Banking • Member of the Board of BCP Capital • Manager of BCP Africa SGPS • Vice-Chairman of the Board of Directors and Chairman of the Audit Board of Medis • Vice-Chairman of the Board of Directors and Chairman of the Audit Board of Ocidental • Vice-Chairman of the Board of Directors and Chairman of the Audit Board of Millennium BCP Ageas insurance group • Vice-Chairman of the Board of Directors and Chairman of the Audit Board of Ocidental Vida • Member of the Supervisory Board of Bank Millennium S.A. (Poland) (2012-2015) • Member of the Board of Banco Millennium Angola (BMA), in Angola • Member of the Board and Member of the Remunerations Commission of BIM – Banco Internacional de Moçambique • Member of the Remuneration Commission of SIM – Seguradora Internacional de Moçambique • Board member and Vice-Chairman of Banque Privée, Geneve, Switzerland OTHER PREVIOUS POSITIONS • Chairman of the Board of Directors of Millennium BCP Gestão de Ativos (MGA) • Member of the Board of Fundação Millennium BCP • Executive Board Member of Banco Privado Atlantico – Europa • Co-head of Société Générale, Rep. Office, in Portugal • Senior Manager, Banco Espirito Santo,Portugal • Manager of Petrogal, S.A. • Générale Bank, branch in Portugal EDUCATION • Degree in Management and Business Administration, Portuguese Catholic University (UCP), Lisbon • Post-graduate degree in Hautes Etudes Européennes, major in Economics, College of Europe, Bruges • MSc, London School of Economics,London University 243 Alejandro Fernández De Araoz Gómez- Acebo Born: 1962 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • Member of the Board of EDP Renováveis, S.A. CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • Partner of Araoz & Rueda, Abogados • Member of the Board and Vice-Secretary of Inversiones Doalca Socimi, S.A. • Member of the Board of Bodegas Benjamin de Rothschild & Vega-Sicilia, S.A • Vocal-International Advisory Board of Scope Ratings AG. • “Patrono” and Secretary of Fundación Ar iane de Rothschild • Representative in Spain of Fundación Daniel y Nina Carasso MAIN POSITIONS IN THE LAST FIVE YEARS • (none) OTHER PREVIOUS POSITIONS • Lawyer at Estudio Legal, Abogados, Madrid • Secretary and legal advisor of Fundación José Ortega y Gasset-Gregorio Marañón • Associate Professor of Commercial Law in Instituto de Estudios Bursátiles • Associate-Professor of Commercial Law in Facultad de Derecho Universidad Complutense de Madrid • Associate-Professor at Program of Instruction for Lawyers (PIL), a joint program between Harvard Law School and Instituto de Empresa • Professor in Instituto de Empresa EDUCATION • Law Degree from the Complutense University, Madrid • Researcher, Ludwig-Maximilian Universitat, Munich • Researcher, Cambridge MA, Harvard Law School • Master in Law, New York University School of Law • Master in Law, London School of Economics and Political Science, University of London • PhD in Law, Complutense University,Madrid • Business Tax Consultancy Course, ICADE • Advance Course of Maritime Busisness, Instituto Marítimo Español • European Business Law, City of London Polytechnic 244 ANNUAL REPORT EDPR 2020 Emilio García-Conde Noriega Born: 1955 CURRENT POSITIONS IN EDPR OR EDP GROUP OF COMPANIES • General Secretary and General Counsel of EDP Renováveis, S.A. • Member/Chairman and/or Secretary of several Boards of Directors of EDPR’s subsidiaries CURRENT POSITIONS IN COMPANIES OUTSIDE EDPR AND EDP GROUP OF COMPANIES • (none) MAIN POSITIONS IN THE LAST FIVE YEARS • General Secretary and General Counsel of EDP Renováveis, S.A. • Member and/or Secretary of several Board of Directors of EDPR’s subsidiaries OTHER PREVIOUS POSITIONS • Legal Counsel of Soto de Ribera Power Plant (consortium comprising Electra de Viesgo, Iberdrola and Hidrocantábrico) • General Counsel of Soto de Ribera Power Plant • Chief of administration and human resources of the consortium • Legal Counsel of Hidrocantábrico • General Counsel of Hidrocantábrico and member of the management committee EDUCATION • Law Degree from the University of Oviedo EDP Renováveis, S.A. Independent Reasonable Assurance Report on the design and effectiveness of the Internal Control System Over Financial Reporting (ICSFR) as of December 31, 2020 PricewaterhouseCoopers Auditores, S.L., Torre PwC, Pº de la Castellana 259 B, 28046 Madrid, España Tel.: +34 915 684 400 / +34 902 021 111, Fax: +34 915 685 400 1 R. M. Madrid, hoja 87.250-1, folio 75, tomo 9.267, libro 8.054, sección 3ª Inscrita en el R.O.A.C. con el número S0242 - CIF: B-79 031290 Independent reasonable assurance report on the design and effectiveness of the Internal Control System over Financial Reporting (ICSFR) To the Board of Directors of EDP Renováveis, S.A.: We have carried out a reasonable assurance engagement of the design and effectiveness of the Internal Control System over Financial Reporting (hereinafter, ICSFR) and the description of it that is included in the attached Report that forms part of the corresponding section of the Annual Corporate Governance Report of the Directors Report, prepared according to the applicable portuguese regulation, accompanying the consolidated annual accounts of EDP Renováveis, S.A., and its subsidiaries (hereinafter, the EDPR Group) as at December 31, 2020. This system is based on the criteria and policies defined by the EDPR Group in accordance with the guidelines established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its "Internal Control-Integrated Framework" report. An Internal Control System over Financial Reporting is a process designed to provide reasonable assurance over the reliability of financial information in accordance with the applicable financial reporting framework and includes those policies and procedures that: (i) enable the records reflecting the transactions performed to be kept accurately and with a reasonable level of detail; (ii) provide reasonable assurance as to the proper recognition of transactions to make it possible to prepare the financial information in accordance with the accounting principles and standards applicable to it and that they are made only in accordance with established authorizations; and (iii) provide reasonable assurance in relation to the prevention or timely detection of unauthorised acquisitions, use or sales of the Group’s assets that could have material effect on the financial information. Inherent Limitations In this regard, it should be borne in mind that, given the inherent limitations of any Internal Control System over Financial Reporting, regardless of the quality of the design and operation of the system, it can only allow reasonable, but not absolute security, in relation to the objectives it pursues, which may lead to errors, irregularities or fraud that may not be detected. On the other hand, the projection to future periods of the evaluation of internal control is subject to risks such that said internal control being inadequate as a result of future changes in the applicable conditions, or that in the future the level of compliance of the established policies or procedures may be reduced. Director's responsibility The Directors of EDP Renováveis, S.A., are responsible for taking the necessary measures to reasonably ensure the implementation, maintenance and supervision of an appropriate Internal Control System over Financial Reporting, as well as the evaluation of its effectiveness, the development of improvements to that system and the preparation and establishment of the content of the information relating to the ICSFR attached. Our Responsability Our responsibility is to issue a reasonable assurance report on the design and effectiveness of the EDPR Group Internal Control System over Financial Reporting, based on the work we have performed and on the evidence we have obtained. We have performed our reasonable assurance engagement in accordance with International Standard on Assurance Engagements 3000 (ISAE 3000) (Revised), "Assurance Engagements other than Auditing or Reviews of Historical Financial Information", issued by the International Auditing and Assurance Standards Board (IAASB) of the International Federation of Accountants (IFAC). 2 A reasonable assurance engagement includes the understanding of the Internal Control System over Financial Reporting, assessing the risk of material weaknesses in the internal control, that the controls are not properly designed or they do not operate effectively, the execution of tests and evaluations on the design and effective implementation of this ICSFR, based on our professional judgment, and the performance of such other procedures as may be deemed necessary. We believe that the evidence we have obtained provides a sufficient and adequate basis for our opinion. Our Independence and Quality Control We have complied with the independence requirements and other ethical requirements of the Accounting Professionals Code of Ethics issued by the International Ethics Standards Board for Accountants (IESBA), which is based on the fundamental principles of integrity, objectivity, professional competence and diligence, confidentiality and professional behavior. Our firm applies the “International Standard on Quality Control 1 (ISQC 1)” and maintains an exhaustive qualitative control system that includes documented policies and procedures regarding compliance with ethical requirements, professional standards, and applicable legal and regulatory provisions. Opinion In our opinion, the EDPR Group maintained, as at December 31, 2020, in all material respects, an effective Internal Control System over Financial Reporting for the period ended at December 31, 2020, which is based on the criteria and the policies defined by the EDP Renováveis Group’s management in accordance with the guidelines established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in its "Internal Control-Integrated Framework" report. In addition, the attached description of the ICSFR Report as at December 31, 2020 has been prepared, in all material respects, in accordance with the requirements established by the Code of Recommendations of the IPCG and the Appendix I to CMVM Regulation nº 4/2013 for the purposes of the description of the ICSFR in the Annual Reports of Corporate Governance. This work does not constitute an audit nor is it subject to the regulations governing the audit activity in force in Spain, so we do not express any audit opinion in the terms provided in the aforementioned regulations. PricewaterhouseCoopers Auditores, S.L. Iñaki Goiriena Basualdu 24 February 2021 22725304Q IÑAKI GOIRIENA 2021-02-24 16:5 1 Signer: CN=22725304Q IÑAKI GOIRIENA C=ES 2.5.4.42=IÑAKI 2.5.4.4=GOIRIENA BASUALDU Public key: RSA/2048 bits O A C T FROM TOMORROW TO BEYOND Changing tomorrow now. Driving change to set new standards Changing tomorrow now. 06 Remuneration Report 253 A - Remuneration structure and disclosure 255 B - Alignment of the application of the remuneration with the Remuneration Policy adopted. Contribution of the Remuneration Policy to the long term performance of the Company and criteria taken into account 257 C - Performance of the company and remuneration average of the employees 259 D - Remuneration from other Group Companies 260 E - Share-allocation and/or Stock Option Plans 260 F - Refund of a variable remuneration 260 G - Information on any withdrawal of the procedure for applying the remuneration policy and the derogations applied, including an explanation of the nature of the exceptional circumstances and an indication of the specific elements subject to the derogation 261 Other remunerations 261 REMUNERATION REPORT 253 Remuneration Report EDPR has rooted in its organizational culture the challenge and ambition to implement and achieve, at all times, the best corporate governance practices, and seeks, with transparency and rigor, to go beyond the legal and regulatory requirements applicable in this area. Despite the understanding of the Portuguese Securities Commission (CMVM) that the remuneration report only needs to be released and submitted to shareholders, for the first time, at the annual general shareholders’ meeting subsequent to the year in which the new remuneration policy is approved after the enter into force of Law nº 50/2020 of 25 August, (this is as of 2022), EDPR sought, under the terms of Article 245.º - C of the Portuguese Securities Code, to anticipate, already in 2021, to provide a version aiming to the effective compliance of such legal requirement. This commitment seeks to materialize our culture towards our Shareholders and the market in general. Pursuant to the terms of Article 245-C of the Portuguese Securities Code, as amended by Law no. 50/2020, of 25 August, this Remuneration Report envisages to provide a wide-ranging view of the remuneration attributed to the members of the corporate bodies of EDP Renováveis S.A., including all benefits, regardless of their form, due or attributed during the financial year of 2020. 254 ANNUAL REPORT EDPR 2020 Definition and adoption of the Remuneration Policy of EDP Renováveis The definition of the proposal of the remuneration policy for the members of the Board of Directors of EDPR is incumbent on Nominations and Remunerations Committee which is a elegated body of the Board of Directors enterely composed by non- executive and independent members. Under such competences this Committee takes the responsibility for proposing to the Board of Directors the determination of the remuneration of the Executive Directors of the Company; the Declaration on Remuneration Policy; the evaluation and compliance of the KPI’s (Ke y Performance Indicators); the annual and multi annual variable remuneration, and also proposes the remuneration of the Non-Executive Directors and members of the Board Committees. As such, this Committee prepares a proposal that defines the remuneration to be attributed to Directors and to the members of the Executive Committee, with the purpose that it reflects the performance of each of the members in each year of their term of office establishing for the Executive Committee Members a variable component which is consistent with the maximisation of the Company's long term performance (variable annual and multi-annual remuneration for a three-year period), and long term incentive plans for the achievement of the most challenging objectives of the business plan, thereby guaranteeing the alignment of the performance of the governing bodies with the interests of the shareholders. The Board of Directors is responsible for the approval of the above-mentioned proposals except to the extent it concerns the Declara tion on the Remuneration Policy which is annualy approved by the General Shareholders’ Meeting. The Board of Directors also evaluates with an annual periodicity its own performance and the performance of its delegated Committees. The evaluation of the performance of the Board of Directors and its Executive Committee, is then additionally submitted for the approval of the General Shareholder Meeting. The Declaration on the Remuneration Policy is submitted by the Board of Directors to the approval of the Gene ral Shareholders’ Meeting as an independent proposal. According to the Company’s Articles of Association the Board of Directors remuneration is subject to a maximum value that can only be modified by a Shareholders agreement. The remuneration policy applicable for 2020-2022 was proposed by the Nominations and Remuneration Committee and approved by the General Shareholders’ Meeting held on March 26 th , 2020. It defined a structure with a fixed remuneration for all members of the Board of Directors, whereas for the members of the Executive Committee defines a fixed and a variable remuneration, with an annual component and a multi-annual component. Additionally, on its meeting dated October 16 th , 2019 the Appointments and Remunerations Committee agreed to propose to the Board of Directors a Complementary Long Term Program homogeneous for the three COOs and for the 2019-2022 term. Such Complementary Long Term Program was approved at the Board of Directors’ meeting dated October 29, 2019. 255 A. Remuneration structure and disclousure The remuneration policy applicable for 2020-2022 defines a structure with a fixed remuneration for all members of the Board of Directors, whereas for the members of the Executive Committee defines a fixed and a variable remuneration, with an annual component, a multi-annual component and a Complementary Long Term Program homogeneous for the three COOs for the 2019-2022 term. The Non-Executive Directors only receive a fixed remuneration, which is calculated on the basis of their work exclusively as Directors or with their membership on the Nominations and Remunerations Committee and to the Audit, Control and Related Party Transactions Committee. Those members who are seated in two different Committees do not accumulate two remunerations. In these cases, the remuneration to be received is the one that corresponds to the highest value. EDPR, in line with EDP Group corporate governance practices, has signed an Executive Management Services Agreement with EDP, under which the Company bears the cost for such services to some of the members of the Board of Directors to the extent their services are devoted to EDPR. i. Remuneration paid by EDPR to its Directors for their functions as Members of the Board and Members of the Audit, Control and Related Party Transactions Committee and Nominations and Remunerations Committee for the year ended on December 31 st 2020: o Executive Directors DIRECTOR TOTAL FIXED (€) João Manso Neto 0 Rui Teixeira 0 Duarte Bello 61,804 Miguel Ángel Prado 0 Spyridon Martinis 61,804 ** João Manso Neto and Rui Teixeira do not receive any remuneration from EDPR. EDPR and EDP signed an Executive Management Services Agreement according to which EDPR pays to EDP a fee for the services rendered by these Board Members Duarte Bello, Miguel Ángel Prado and Spyridon Martinis ,as Officers and members of the Executive Committee, and for the relevant period of 2020 corresponding to each of them, received their remuneration as Directors as desc ribed on the table above and as other Group companies’ employees, as described at the end of this section. o Non Executive Directors that are not members of any delegated commitee DIRECTOR TOTAL FIXED (€) Antonio Mexia 0 Vera Pinto 0 Manuel Menéndez Menéndez 45,000 Allan J.Katz 45,000 Alejandro Fernández de Araoz Gómez-Acebo 45,000 António Mexia and Vera Pinto do not receive any remuneration from EDPR. EDPR and EDP signed an Executive Management Services Agreement according to which EDPR pays to EDP a fee for the services rendered by these Board Members. 256 ANNUAL REPORT EDPR 2020 o Non Executive Directors that are members of the Audit, Control and Related party Transactions Committee and/or the Nominations and Remunerations Committee AUDIT, CONTROL AND RELATED PARTY TRANSACTIONS COMMITEE DIRECTOR TOTAL FIXED (€) Acácio Jaime Liberado Mota Piloto (Chairman) 80,000 Francisca Guedes de Oliveira 60,000 António Nogueira Leite 60,000 NOMINATIONS AND REMUNERATIONS COMMITTEE DIRECTOR TOTAL FIXED (€) António Nogueira Leite (Chairman) 60,000 Francisco Seixas da Costa 55,000 Conceiçao Lucas 55,000 Those members who are seated in two different Committees do not accumulate two remunerations. In these cases, the remuneration to be received is the one that corresponds to the highest value (as the case of Antonio Nogueira Leite) ii. Remuneration paid to EDPR Executive Directors (ex CEO) for the functions performed as Officers for the year ended on December 31 st 2020 OFFICER PAYER FIXED VARIABLE ANNUAL VARIABLE MULTI- ANNUAL VARIABLE PLURI- ANNUAL TOTAL Duarte Bello EDP Energías de Portugal, S.A. Sucursal en España 228.196€ 145,000€ 37.500€ 410.696€ Miguel Ángel Prado EDPR North America LLC 466,897$ 162.328$ 237.908$ 45.725$ 912.858$ Spyridon Martinis EDP Energías de Portugal S.A. Sucursal en España 228.196€ 145,000€ 0 373.196€ All the amounts are in EUR, except Miguel Ángel Prado ones, which are in USD. Likewise, in application of the deferral policy, in 2020 an amount of 84.443€ was paid to Miguel Amaro (former Executive CFO of the company), for the services rendered in 2016-2017. 257 iii. Non-Monetary Benefits The Officers, with the exception of the CEO, received the following non-monetary benefits: retirement savings plan (as described in the following topic), company car and Health Insurance. In 2020, the non-monetary benefits amounted to 267.733 EUR. The Non-Executive Directors do not receive any relevant non-monetary benefits as remuneration. iv. Retirement Savings Plan The retirement savings plan for the members of the Executive Committee that are also Officers, acts as an effective retirement supplement with a range between 3% to 6% of their annual salary. The percentage is defined according with the retirement savings plan applicable in their home country. The retirement savings plan applicable to 2020, which is included within the Remuneration Policy applicable for the term office 2020-2022, was defined and proposed by the Nominations and Remunerations Committee to the Board of Directors for its submission to the General Shareholder’s Meeting, which approved it on its meeting held on March 26 th , 2020. The total amount of the remunerations that the Company paid to its Directors under the terms provided in the previous paragraphs have not ex ceeded the amount determined by the General Shareholders’ Meeting, which for year 2020 was set in EUR 2,500,000 for the Board of Directors and in EUR 1,000,000 for the Executive Committee. B. Allingment of the application of the remuneration with the Remuneration Policy adopted. Contribution of the Remuneration Policy to the long term performance of the Company and criteria taken into account. The remuneration policy adopted by EDPR for 2020 included key elements to enhance a Company’s management performance not only focused on short-term objectives, but also incorporate as part of its results the interests of the Company and of shareholders in the medium and long term. These elements are: (i) the definition of the indicators in accordance with the 6 clusters, (ii) the relative weight assigned to each KPIs to calculate annual, multiannual variable remuneration, and if such is the case, of the LTICPs, (iii) the relevance associated with the achievement of such KPIs on the platform in the case of COOs, (iv) the three-year term considered for determining the value of variable multi-annual component of the remuneration, as well as the four-year term considered for determining the value of the LTICP, (v) the deferral in three years for the payment of the variable multi-annual as recommended by CMVM as a good corporate governance practices, as well as conditioning its payment to the fact of there has not been unlawful actions known after the performance evaluated that may jeopardize the sustainability of the company’s performance, (vi) the use of the qualitative criteria focused on a strategic and medium term perspective of thedevelopment of the Company, and (vii) the existence of a maximum limit for the variable remuneration. As previously exposed, the remuneration policy applicable for 2020-2022 defines a structure with a fixed remuneration for all members of the Board of Directors (which is detailed in the previous section) and a fixed and a variable remuneration, with an annual component and a multi-annual component.for members of the Executive Committee. The variable annual remuneration may range from 0 to 68% over the annual fixed remuneration and the multi-annual remuneration from 0 to 102% over the annual fixed remuneration for the CEO, and over 250.000€ for other members of the Executive Committee. The key performance indicators (KPIs) used to determine the amounts of the annual and multi -annual variable remuneration regarding to each year of the term are proposed by the Nominations and Remunerations Committee with the aim of align them with the strategic grounds of the Company: growth, risk control and efficiency. These are the same for all members of the Executive Committee, although with specific targets for the platforms in the case of COOs . For the year 2020 the KPIs were: 258 ANNUAL REPORT EDPR 2020 KEY PERFORMANCE INDICATOR CEO COO’ S NA AND EU COO IG WEIGHT WEIGHT EDPR RESULTS WEIGHT EDPR RESULTS PLATFORM RESULTS WEIGHT EDPR RESULTS PLATFORM RESULTS Total Shareholder return 15% 100 % TSR vs. Wind peers & Psi 20 100% 100% 100% 100% 0% 100% 100% 0% Shareholders 80% 60% Operatin Cash Flow (€ million) 10% 100% 10% 50% 50% 10% 100% 0% AR/Sell-down + Tax Equity (€ million) 10% 100% 10% 100% 0% 10% 100% 0% EBITDA+ sell down gains (€ million) 10% 100% 10% 50% 50% 10% 100% 0% Net Profit (€ million) 10% 100% 10% 100% 0% 10% 100% 0% Core Opex Adjusted (€ thousand/MW) 10% 100% 10% 50% 50% 10% 100% 0% Projects with FID (% of total ’19 - ’22 additions in BP) 10% 100% 10% 50% 50% 10% 50% 50% Clients 10% Renewable Capacity Built (in MW) 10% 100% 10% 50% 50% 10% 50% 50% Assets & Operations 10% Technical Energy Availability (%) 5% 100% 5% 50% 50% 5% 100% 0% Capex per MW (€ thousand) 5% 100% 5% 50% 50% 5% 50% 50% Environment & Commnunitie s 5% Certified MW % 5% 100% 5% 50% 50% 5% 100% 0% Innovation & partners 5% H&S frequency rate (employees + contractors) 5% 100% 5% 50% 50% 5% 100% 0% People Management 10% People Management 10% 100% 10% 50% 50% 10% 50% 50% Remuneration Committee 5% 100 % Appreciation remuneration committee 100% 100% 100% 100% 0% 100% 100% 0% There is also a qualitative evaluation of the CEO about the annual performance of the members of the Executive Committee. This evaluation will have a weight of 20% for the final calculation in the annual variable remuneration and of 32% in the multi- annual variable remuneration. The other 80% will be calculated based on the weights indicated in the next paragraph for the annual variable remuneration and 68% for the multi-annual variable. According to the Remuneration Policy approved by the General Shareholders’ Meeting, the maximum variable remuneration (annual and multi- annual) is applicable if all the above mentioned KPI’s were achieved and the performance evaluation is equal or above 110%. 259 -16.1% 16.2% 12.4% 36.2% 118.8% 2016 2017 2018 2019 2020 Total shareholder return Source: Bloomberg 103,349 101,267 101,574 104,851 102,958 2016 2017 2018 2019 2020 Employee average remuneration (€) As mentioned above a Complementary Long Term Program homogeneous for the three COOs (COO NA, COO EU & BR and COO Offshore) and for the 2019-2022 term was approved in 2019. The conditions of such Complementary Long Term Program are: (i) four year period (2019-2022); (ii) Target Award will be 4 x 50% of base annual remuneration of each COO; (iii) KPIs are consistent through the whole term and specific for each COO; and (iv) payments will be done in accordance with the percentage of the achieved fulfilment with a limit of 120% of the Target Award. C. Performance of the company and remuneration average of the employees 260 ANNUAL REPORT EDPR 2020 D. Remuneration from other Group Companies As exposed in section B of this chapter 6 of the Annual Report, the remuneration of the Executive Directors related to the functions permormed as Officers were paid by EDP Energías de Portugal S.A. Sucursal en España and EDPR North America LLC as follows: OFFICER PAYER FIXED VARIABLE ANNUAL VARIABLE MULTI- ANNUAL VARIABLE PLURI- ANNUAL TOTAL Duarte Bello EDP Energías de Portugal, S.A. Sucursal en España 228.196€ 145,000€ 37.500€ 410.696€ Miguel Ángel Prado EDPR North America LLC 466,897$ 162.328$ 237.908$ 45.725$ 912.858$ Spyridon Martinis EDP Energías de Portugal S.A. Sucursal en España 228.196€ 145,000€ 0 373.196€ *All the amounts are in EUR, except Miguel Ángel Prado ones, which are in USD. In 2020, in application of the deferral policy adopted by EDPR, an amount of 84.443€ was paid by EDP Energías de Portugal, S.A. Sucursal en España to Miguel Amaro (former Executive CFO of the company), for the services rendered in 2016-2017. Likewise, according to the Executive Management Services Agreement signed with EDP, EDPR is due to pay an amount to EDP, for the services rendered by the Executive Managers and the Non-Executive Managers. The amount due under said Agreement for the management services rendered by in 2020 is EUR 1,094,560, of which EUR 959,560 refers to the management services rendered by the Executive Members and EUR 135,000 to the management services rendered by the Non-Executive Members. E. Share-allocation and/or Stock Option Plans EDPR does not have any Share-Allocation and/or Stock Option Plans. Should be noted that at 31 st December 2020, Spyridon Martinis had 10,413 shares of EDP Renováveis, but all of them were bought before his appointment as Director of the Company (being the first acquisition in 2011 and the last one in 2018). F. Refund of a variable remuneration EDPR has not regulated the option of refunding the variable remuneration of the Directors but in line with corporate governance practices, the Remuneration Policy incorporates the deferral for a period of three years of the multi-annual variable remuneration, being the relevant payment conditioned to the lack of any willful illicit action, known after the appraisal and which endangers the sustainable performance of the company. 261 G. Information on any withdrawal of the procedure for applying the remuneration policy and the derogations applied, including an explanation of the nature of the exceptional circumstances and an indication of the specific elements subject to the derogation The remuneration policy applicable for 2020- 2022 was approved by the General Shareholders’ Meeting held on March 26 th , 2020 and has been applied withouth exceptions since then. Should be noted to this extent that the Complementary Long Term Program approved for the three COOs for the 2019- 2022 term that was approved at the Board of Directors’ meeting dated October 29 th , 2019 substituted the Complementary Long Term Program approved on 2017. Other remunerations • Remuneration of the Chairman of the General Shareholders’ Meeting In 2020, the remuneration of the Chairman of the General Shareholders’ Meeting of EDPR, José António de Melo Pinto Ribeiro, was EUR 15,000. • External Auditor remuneration in 2020 for EDP Renováveis S.A. and subsidiaries TYPE OF SERVICE PORTUGAL SPAIN BRAZIL US OTHER TOTAL % Audit and statutory audit of accounts 161,802 583,370 166,671 1,066,435 684,006 2,662,284 93.5% Total audit related services 161,802 583,370 166,671 1,066,435 684,006 2,662,284 93.5% Other non-audit services - 151,382 4,000 - 29,007 184,389 6.5% Total non-audit related services - 151,382 4,000 - 29,007 184,389 6.5% Total 161,802 734,752 170,671 1,066,435 713,013 2,846,673 100,00% The amount of Other non-audit services in Spain includes, among others, services that refer to the entire Group such as the review of the internal control system on financial reporting and review of the non-financial information related to sustainability included in the EDPR Group’s annual report, which are invoi ced to a Spanish companies. This amount also includes the limited review as of June 30, 2020 of the EDPR Consolidated Financial Statements and other reviews for Group consolidation purposes which are considered non-audit services according to the respective local regulation. Total amount for Spain refers to services provided by PricewaterhouseCoopers Auditores S.L. The above fees exclude the fees for full consolidated Viesgo companies which are also audited by PricewaterhouseCoopers Auditores S.L in the amount of 90,471 Euros and the fees for the companies that were sold during 2020 (see note 6 of the consolidated annual accounts). Making all forms of sustainability real Changing tomorrow now. CONCEPTS AND DEFINITIONS 264 ANNUAL REPORT EDPR 2020 Concepts and definitions A Asset rotation Strategy aimed at crystallizing the value of a project by selling a minority stake in an asset and reinvesting the proceeds in another asset, targeting greater growth. Availability The percentage of time a wind turbine is technically available to capture the wind resource and convert it to electricity. B Blades The large “arms” of wind turbines that extend from the hub of a generator. Most turbines have either two or three blades. Wind blowing over the blades causes the blades to “lift” and rotate. BOP Balance of plant. All the supporting components and auxiliary equipment of the wind farm other than the generating unit. BP Business Plan. BU Budget. C CAGR Compound annual growth rate. Carbon leakage Occurs when due to the higher costs related with climate change policies (for example taxes or other penalties on carbon emissions), the companies decide to move their production to countries with more relaxed policies, therefore leading to higher carbon emissions ex-post. Capex Capital Expenditure. Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment (ex: construction of wind farms). Cash-flow Amount of cash generated and used by a company in a given period. Cash flow can be used as an indication of a company’s financial strength. CfD Contract for difference. Remuneration scheme based on the difference between the market price and an agreed “strike price” where if the “strike price” is higher than the market price, the CfD Counterparty pays the generator the price difference. CO 2 Carbon dioxide. A heavy colorless gas that does not support combustion, dissolves in water to form carbonic acid, is formed especially in animal respiration and in the decay or combustion of animal and vegetable matter, is absorbed from the air by plants in photosynthesis, and is used in the carbonation of beverages. COD Commercial Operating Date. Date at which the project starts officially operating, after the testing and commissioning period. Core opex Includes costs of supplies and services and with personnel, costs that are controllable by the company. Critical suppliers Includes suppliers of turbines, balance of plant and O&M. Curtailment The forced shut-down of some or all the wind turbine generators within a wind farm to mitigate issues associated with turbine loading export to the grid, or certain planning conditions. Curtailment is controlled by the regional transmission operator. 265 D Dividend pay-out ratio Measures the percentage of a company’s net income that is given to shareholders in the form dividends. (Total Annual Dividends per Share / Earnings per Share). Dividend policy Set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders. E EBITDA An accounting measure calculated using a company’s net earnings , before interest expenses, taxes, depreciation and amortization are subtracted, as a proxy for a company’s current operating profitability. EMS Environmental Management System. System that assures the protection of the environment through a proactive environmental management of the facilities in operation. EPS Earnings per share. The portion of a company's profit allocated to each outstanding share of common stock. Equity consolidation Accounting process of treating equity investments, in associate companies. Equity account is usually applied where the entity holds 20-50% of voting stock. F Feed in tariffs Remuneration framework that guarantees that a company will receive a set price from their utility, applied to all of the electricity they generate and provide to the grid. Financial investment An asset in which to put money into with the expectation of obtaining gains or an appreciation in to a larger sum of money. Forex/FX The market in which currencies are traded. Full scope Scheme of maintenance in which a third-party supplier is directly responsible for the full maintenance of the project. The project pays a fixed fee and assumes low risk. G GC Green certificate. Tradable commodity proving that certain electricity is generated using renewable energy sources. GCF Gross Capacity Factor – The ratio of a site’s gross output over a period of time, to its potential output if it were possible for it to operate at full capacity continuously over the same period of time. GHG Greenhouse gases. Gases that trap the heat of the sun in the Earth's atmosphere, producing the greenhouse effect; the two major greenhouse gases are water vapor and carbon dioxide; lesser greenhouse gases include methane, ozone, chlorofluorocarbons, and nitrogen oxides. GO/GoO Guarantee of Origin. Tracking instrument that guarantees that electricity has been produced from renewable energy sources. Those GO are traded and used by suppliers to sell green energy. Gross profit An accounting measure calculated using a company’s r evenue minus its cost of goods sold. Gross profit is a company’s residual profit for selling a product or service and deducting the cost associated with its production and sale. GW Unit of electric power equal to 1,000 MW. GWH Equal to 1,000 MW used continuously for one hour. H Hedging Risk management strategy used in limiting or offsetting probability of loss from fluctuations in the 266 ANNUAL REPORT EDPR 2020 prices of commodities, currencies, or securities. I IFRS16 Regulatory standard of operating leases that requires the recognition of lease commitments for the entire duration of contracts into the balance sheet liabilities as well as the recognition of a new asset “Right of Use Asset” as counterparty. Installed capacity Capacity installed and ready to produce energy. ISO 14001 ISO 14001:2015 – Environmental Management Certification is an international standard for designing and implementing an effective environmental management system (EMS) to enhance the company’s environmental performance. ISO 45001 ISO 45001:2018 - Specifies requirements for an occupational health and safety (OH&S) management system, and gives guidance for its use, to enable organizations to provide safe and healthy workplaces by preventing work-related injury and ill health, as well as by proactively improving its OH&S performance. ITC Investment tax credit. Tax incentive in the US which differ from the Production Tax Credit in the sense that the Tax Equity Investor receives a one shot tax credit that covers a percentage of the investment. L LCOE Levelized cost of electricity. Provides a common way to compare the cost of energy across technologies. LCOE takes into account the installed system price and associated costs such as financing, land, insurance, transmission, operation and maintenance, and depreciation. The LCOE is a true apples-to- apples comparison of electricity costs and is the most common measure used by electric utilities or purchasers of power to evaluate the financial viability and attractiveness of a wind energy project. M M3 Modular maintenance model. Maintenance scheme which is halfway between the self-perform and a full scope maintenance, with some activities being performed in-house. MW Unit of electric power equal to 106 watts. MWH Equal to 106 watts of electricity used continuously for one hour. N Net capacity factor (NCF) The ratio of a plant’s actual output over a period of time, to its potential output if it were possible for it to operate at full nameplate capacity continuously over the same period of time. Also known as Load Factor. Net debt A metric that shows a company’s overall debt situation calculated using company’s total debt less cash on hand. Net investment Equals (Capex + Financial investments – Financial divestments). O O&M Operations and maintenance. All the activities necessary to run the wind-farm in a reliable, safe and economical way including for instance maintenance, repair, monitoring and operation. P PPA Power purchase agreement. A legal contract between an electricity generator (provider) and a power purchaser (host). The power purchaser buys energy, and sometimes also capacity and/or ancillary services, from the electricity generator. PTC Production tax credit. The result of the Energy Policy Act of 1992, a commercial tax credit in the US that applies to wholesale electrical generators of wind energy facilities based upon the amount of energy generated in a year. R Renewable energy Energy that is derived from resources that are regenerative or that cannot be depleted including wind energy, solar, biomass, 267 geothermal, and moving water. Also known as alternative energy. REC Renewable energy credit. Represents the property rights to the environmental, social, and other non-power qualities of renewable electricity generation. A REC can be sold separately from the electricity associated with a renewable energy generation source. RES Renewable energy sources. RCF Retained cash-flow. The amount available to pay dividends to shareholders and/or to fund new investments and includes EBITDA after paying interests and tax equity investor’s costs and after paying distributions to equity partners and taxes. ROIC Cash Return on Invested Capital (based on Cash Flows). Represents a measure of the profitability and value creation of a project or company. RPS Renewable Portfolio Standard. Regulation in the US that places an obligation in certain states on electricity supply companies to source a specific percentage of their energy from renewable sources. S Self-perform Maintenance scheme in which all the maintenance works are done in-house which means that the project assumes the whole risk. Sell-down Divestment strategy by which the company sells majority stakes of projects in operation or under development to recycle capital, with up-front cash flow crystallization, and creates value by reinvesting the proceeds in accretive growth, while continuing to provide operating and maintenance services. SF6 Sulfur hexafluoride. Colorless, odorless, non-flammable and potent greenhouse gas which is used in the electrical industry especially in gas insulated switchgear power installations. Solar PV Solar photovoltaic. Plant that generates electricity by means of solar power through photovoltaics, consisting on an arrangement of several components, including solar panels to absorb and convert sunlight into electricity, a solar inverter, cables and other electrical accessories. T TSR Total Shareholder Return. Measures the return that the stock provides to the shareholder, including dividends paid and the stock price appreciation. Tax equity Financing structure (US) where the tax equity investor contributes capital in exchange of tax benefits and cash distributions during the 1st ten years the park operates, or until investment is recovered. TEI Tax Equity Investor – Financing structure (US) where the tax equity investor contributes capital in exchange of tax benefits and cash distributions during the 1st ten years the park operates, or until investment is recovered. U UN SDG United Nation’s Sustainable Development Goal. W WATT (W) The rate of energy transfer equivalent to one ampere under an electrical pressure of one volt. One watt equals 1/746 horsepower, or one joule per second. It is the product of voltage and current (amperage). Watts are the yardstick for measuring power. Wind energy Power generated by converting the mechanical energy of the wind into electrical energy using a wind generator. Wind farm Used in reference to the land, wind turbine generators, electrical equipment, and transmission lines for the purpose of generating wind energy and alternative energy. Y YoY Year-on-Year. YTD Year-to-date.

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