1. THE ITALIAN ENERGY STRATEGY AND BEYOND CROATIAN ENERGY ASSOCIATION 23rd FORUM Zagreb 28th November 2014 Stefano Mottarelli Public and EU Affairs

2. 2 Edison key figures 50,4 Bcm Hydrocarbons Reserves 111 Mineral Leases (gas and oil) 3 Gas Storage Centers 1 LNG Terminal (total capacity 8 bcm/y, Edison 6.4 bcm/y) 1HV Merchant Line (150 MW) 3 Pipeline projects 7,7 GW Installed Capacity 22 Thermoelectric Power Plants 47 Hydroelectic Power Plants 32 Wind Farms 9 Photovoltaic Systems 1 Biomass System

3. 3 Edison interest in Croatian power projects Edison is already present in Croatia in Exploration & Production business As of Power business, Edison has participated to a tender launched by the Croatian electricity company HEP for Plomin C Plomin C project  Coal fired power plant 500 MW to be built as third unit of Plomin PP  JV: 50% HEP – 50% strategic investor  A 20 years PPA on 50% of the capacity to be purchased by HEP  Edison has been pre-selected as a potential investor  By end of August 2014 Edison submitted its proposal  Edison did not receive the highest score but in case HEP determines that it is not possible to reach an agreement with the first-ranked Bidder, HEP may contact the next highest ranked Bidder to discuss next steps Edison is interested in potential investments in Croatia with HEP especially in Hydro PP projects

4. 4 Italy energy strategy so far: the beginning in the 19 th century Giuseppe Colombo EDISON 1883 First thermoelectrical power plant in Europe Growth 1883 – Coal power plant in the center of Milan, Santa Redegonda - ENERGY STRATEGY- MANAGED BY PRIVATE COMPANIES AND LOCAL UTILITIES Goal

5. 5 Giuseppe Colombo EDISON 1945 Growth Competitiveness - ENERGY STRATEGY- AGIP HYDROCARBONS GOALS Italy energy strategy so far: after the second world war 1883 First thermoelectrical power plant in Europe Growth Enrico Mattei AZIENDA GENERALE ITALIANA PETROLI

6. 6 Enrico Mattei AZIENDA GENERALE ITALIANA PETROLI Growth Competitiveness Security of Supply - ENERGY STRATEGY- NUCLEAR *Foreseen demand: 420  520 TWh @ 1990; nuclear: 20 GW @1985 ; 46  62 GW @1990. Giuseppe Colombo EDISON 1945 Growth Competitiveness 1883 First thermoelectrical power plant in Europe Growth GOALS 1975 Italy energy strategy so far: ENEL and the oil crisis in the 70s First national energy plan* 1962

7. 7 First national energy plan* - ENERGY STRATEGY - RENEWABLES AND COGENERATION Last national energy plan 1988 Enrico Mattei AZIENDA GENERALE ITALIANA PETROLI Growth Competitiveness Security of Supply Giuseppe Colombo EDISON 1945 Growth Competitivity 1883 First thermoelectrical power plant in Europe Growth 1975 Italy energy strategy so far: local environmental awareness in the 80s 1962 Growth Competitiveness Security of Supply Environment GOALS 1987 Referendum

8. 8 Growth Competitiveness Security of Supply Environment (local impacts) - ENERGY STRATEGY- LIBERALISATION AND «LOW CARBON» Kyoto Protocol signature 1997 Italy energy strategy so far: the Kyoto protocol and the «green globalisation» Last national energy plan 1988 Enrico Mattei AZIENDA GENERALE ITALIANA PETROLI Growth Competitiveness Security of Supply Giuseppe Colombo EDISON 1945 Growth Competitiveness 1883 First thermoelectrical power plant in Europe Growth 1975 Growth Competitiveness Security of Supply Environment (local and global impacts) GOALS 1962 First national energy plan*

9. 9 AT INTERNATIONAL AND EUROPEAN LEVEL: International and Italian policy framework in the last 15 years EU Commision RES Directive EU ETS Directive New RES & EU ETS Directive Energy Efficiency Directive New 2030 targets ? Kyoto Protocol signature 1997 2001 2003 2009 2012 2014 AT ITALIAN LEVEL: lack of a long term strategy. Nuclear “ Renaissance ” (2008) “Sblocca centrali” (2002) ~30 GW di CCGT in 10 years* Green Certificates and “ Conto Energia ” (2003 e 2005) ~30 GW RES in 10 years Gas “ Hub ” (2008) Import: 100 Bcm (pipeline ad LNG)

10. 10 The National Energy Strategy National Energy Strategy 2013 Growth Competitivity Security of supply Environment Growth Competitiveness Security of Supply Environment (local impacts) Kyoto Protocol signature 1997 Last national energy plan 1988 Enrico Mattei AZIENDA GENERALE ITALIANA PETROLI Growth Competitiveness Security of Supply Giuseppe Colombo EDISON 1945 Growth Competitiveness 1883 First thermoelectrical power plant in Europe Growth 1975 Growth Competitiveness Security of Supply Environment (local and global impacts) GOALS 1962 First national energy plan* 2011 Referendum

11. 1.Growth: enhance sustainable growth through energy sector development Investments in CCGT from 2000 30 Billion € Investments in RES from 2000 90 Billion € Expected investments until 2020 RES Traditional gas and electricty sector Enegy Efficiency Total Green and white economy: 130 Billion €, almost 70% of expected investments National Energy Strategy goals (1/4) 11

12. National Energy Strategy goals (2/4) 1.Growth: enhance sustainable growth through energy sector development 2.Competitiveness: to bring down energy price gap compared with other european countries France GermanySpainScandinavian countries 12 Electricity prices in Europe Italy PSV Dutch TTF Zeebrugge UK NPB Italy Gas prices in Europe

13. 1.Growth: enhance sustainable growth through energy sector development 2.Competitiveness: to bring down energy price gap compared with other european countries 3.Security of supply: increase security of supplies and reduce import Present gas import dependency ~90% Minimum and maximum delivery from storage during winter Total supply Peak demand Production Import Storage Gas system fragility at peak times (MMcm/d) National Energy Strategy goals (3/4) 13 Expected electricity demand (TWh) 346 46 345 21 Present electricity import dependency ~13%

14. 1.Growth: enhance sustainable growth through energy sector development 2.Competitiveness: to bring down energy price gap compared with other european countries 3.Security of supply: increase security of supplies and reduce import 4.Environment: achieve and go beyond «20-20-20» targets and have an active and leading role in 2050 Roadmap definition and enforcement GHG reduction - Mton CO 2 /year - RES development - % on final consumption- Energy Efficiency - Mtep primary demand- -18% vs. 2005 17% -20% vs. BAU@2020 «20-20-20» GOALS National Energy Strategy goals (4/4) 14 (-15% in 2011)* (11,5% in 2011)** * Source MiSE ** Source Eurostat Note: the target for ETS sectors is 21% reduction below 2005 level and Italy has already achieve 20% (verified emissions 2012)

15. The priorities of the National Energy Strategy 1.Energy efficiency enhancement, beyond European 2020 targets 2.Improvement of a liquid, competitive and integrated gas market, in order to be the main gas hub in South Europe 3.Renewables sources development, beyond 2020 targets 4.Improvement of liberalised, competitive and integrated electricity market, in terms of infrastructures and regulation, with a complete market integration of renewables 5.Refining sector and fuels distribution grid reorganization 6.Sustainable production of national hydrocarbons 7.Governance enhancement 15

16. 16 CCGTs Renewables Gas infrastructures E&P LNG Storages Edison and the National Energy Strategy

17. Beyond the Energy Strategy The Italian Presidency of the Council of the European Union will devote its efforts to four major, closely interlinked pillars of EU energy policy: 1.Framework for climate and energy beyond 2020 Italy will favour a constant, active involvement of the EU Council 2.EU energy security Italy will promote a thorough debate on the proposed EU Energy Security Strategy 3.Completion of the single energy market Italy will promote the rapid adoption of network codes, market coupling and will ensure an early debate on Commission’s Communication on the retail market 4.External energy policy Italy will focus attention on Euro-Mediterranean relations and on the safety of offshore hydrocarbon prospection, exploration and production activities 17

18. CROATIAN ENERGY ASSOCIATION 23rd FORUM Zagreb 28th November 2014 Grazie!