The Company ends the quarter with total installed capacity of 8,487 MW (up 70.5%), consolidating its leadership of the global wind energy business*

IBERDROLA RENOVABLES RECORDS FIVE-FOLD RISE IN NET PROFIT THROUGH SEPTEMBER 2008 TO €230.8 MILLION

• EBITDA came to €768 million in the first nine months, twice that of the same period a year earlier
• The Company enjoys a solid financial situation, with leverage of just 19% and equity of €11.1 billion
• It also has a stable business model, flexible enough to respond to fluctuating economic scenarios, and, if necessary, enabling it to adapt the rhythm of investments

IBERDROLA RENOVABLES generated net profit of €230.8 million in the first nine months of 2008, multiplying the year ago figure by a factor of five (growth of 373%) and doubling the net profit for all of 2007. Over the last nine months, the Company has consolidated its sector leadership* and reinforced its already-solid financial position.

EBITDA rose 114.6% year-on-year to €768 million in the period, while EBIT rose 115.6% to €432.4 million. Gross margin amounted to €1,085.2 billion (up 119.5%) and cash flow rose 169% to €572.7 million.

The geographical breakdown of EBITDA through September broke down into 59% generated in Spain, 22% in the US, 8% in the UK and 5% in the rest of the world, with mini-hydro accounting for 3% of the total and the US gas storage business, the remaining 3%.

Financial strength

IBERDROLA RENOVABLES has reinforced its solid financial position, with leverage standing at just 19.4% (net debt of €2.642 billion) and equity at the end of September at €11.1 billion.

The recent extension of tax credits for wind power in the US – the so-called production tax credits (PTCs) - provides regulatory stability for IBERDROLA RENOVABLES’ business plans in this market.

The Company’s business model is sufficiently flexible to enable it to adapt to fluctuating economic scenarios. It has the largest project pipeline in the sector, encompassing a geographically diversified 54,600 MW. Its wind turbine supply contracts are scalable, enabling it to adapt its investment plan by optimizing its project portfolio. The Company operates in markets with stable regulatory environments, with the bulk of revenue assured through long term contracts.

The Company’s competitive advantages, including geographic diversification, flexible wind turbine supply arrangements, a significant project pipeline and its financial strength, give it the ability to adapt investments should circumstances warrant, at all times maintaining its commitment to the financial targets set for 2010.

Higher capacity and output

The robust earnings performance in the first nine months was primarily underpinned by the first time consolidation of certain assets, capacity increases, higher pricing and improved performance across all businesses.

Specifically, the Company added 1,389 MW of capacity in the first nine months, an installation rate above the historical average, which means that it has already delivered 70% of the targeted 2,000 MW of new capacity planned for this year, thereby advancing in its plans to broaden its international footprint and geographical diversification.

IBERDROLA RENOVABLES had installed capacity of 8,487 MW at the end of September, a year-on-year growth of 70.5%. Of this figure, 8,146 MW corresponds to wind farms and 342 MW to mini-hydro facilities.

Installed wind power capacity in Spain stands at 4,450 MW (4,792 MW of capacity from renewable sources in total, including mini-hydro) with a further 3,696 MW of wind capacity abroad, of which 2,318 MW is located in the US**, 617 MW in the UK and 761 MW elsewhere, mainly Europe.

Electricity output meanwhile rose 83.6% during the first nine months of the year to 12.095 billion kilowatt hours (kWh). Wind power, at 11.664 billion kWh, accounted for 96.4% of total electricity generated by the Company in the first nine months of 2008.

By market, the Spanish wind farms accounted for 5.947 billion kWh (49.2% of the total), US facilities for 4.066 billion kWh (33.6%), farms in the UK for some 757 million kWh (6.3%) with the remaining 894 million kWh produced elsewhere (RoW 7.4%).

The load factor at operational wind farms was about 26% (2,269 hours), in line with the full year target. The mini-hydro power stations meanwhile generated 431 million kWh of power in the nine months, 3.6% of overall electricity produced by IBERDROLA RENOVABLES during the period.

Asset diversification

The geographical diversification of IBERDROLA RENOVABLES’ wind farm assets has enabled it to increase generation stability and to benefit from differing wind patterns in its operating markets, thereby increasing security of supply and improving its ability to forecast wind conditions.

Highlights of the period include inauguration of the El Marquesado wind farm complex in Granada, the largest in Andalusia, start-up of the Group’s largest wind farm worldwide, Klondike III, in the US, initiation of construction work on its first wind farm in Hungary, commissioning of the first buoy at the Santoña wave energy facility in Cantabria and analysis of three sites for tidal power stations in Scotland and Northern Ireland.

* Source: New Energy Finance (December 2007)
** Excludes 606 MW owned by a third party acquired under power purchase agreements

DISCLAIMER

This document has been prepared by Iberdrola Renovables, S.A. (the “Company”) exclusively for use during the presentation of energetic balance of the first semester of the 2008 fiscal year. As a consequence thereof, this document may not be disclosed or published, nor used by any other person or entity, for any other reason without the express and prior written consent of Iberdrola Renovables, S.A.

Iberdrola Renovables, S.A. does not assume liability for this document if it is used with a purpose other than the above.

The information and any opinions or statements made in this document have not been verified by independent third parties; therefore no express or implied warranty is made as to the impartiality, accuracy, completeness or correctness of the information or the opinions or statements expressed herein.

Neither Iberdrola Renovables, S.A. nor its subsidiaries or other companies of the Iberdrola Group or its affiliates assume liability of any kind, whether for negligence or any other reason, for any damage or loss arising from any use of this document or its contents.

Neither this document nor any part of it constitutes a contract, nor may it be used for incorporation into or construction of any contract or agreement.
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