Endesa and Iberdrola Hold First Virtual Power Plant Auction

  
    
  
  
    
      Endesa (NYSE:ELE) and Iberdrola today held Spain’s 
      first virtual power plant auctions (VPP) in which 1.45 TWh of power was 
      awarded. This first auction represents a landmark in the commitment of 
      both companies to the development of the Spanish energy market and the 
      promotion of forward contracting.
    
    
      More than 15 agents took part in today’s 
      auction, 11 of which were foreign (70% of the total), underlining the 
      success of the initiative and the level of confidence in the assurances 
      offered by Endesa and Iberdrola. Moreover, a larger number of companies 
      are expected to take part in subsequent auctions. These companies have 
      already made their interest known but were unable to register for the 
      first auction due to the tightness of the deadlines.
    
    
      The agents taking part in today’s VPP auctions 
      had a choice of two different products. Firstly, the companies auctioned 
      600 MWq (equivalent quarterly capacity) of base-load VPPs at a strike 
      price of Euro 17 per MWh, which can be used 24 hours a day and seven 
      days per week. Secondly, the companies auctioned 250 MWq of peak-load 
      capacity at a strike price of Euro 52 per MWh, which can be used from 
      8:00am to 12:00pm from Monday to Friday, excluding public holidays.
    
    
      The auction went smoothly, with bidding for base load capacity closing 
      after seven rounds with 550 MWq awarded (91.7% of the volume offered). 
      Bidding for peak-load capacity closed after the second round with 246 
      MWq awarded (98.4% of the volume offered). The agents paid a premium of 
      Euro 20,000 per MW of base-load per month for three months, Euro 20,115 
      per MW of base-load per month for six months and Euro 21,883 per MW of 
      base-load per month. These prices are in line with those on the OTC 
      market and the OMIP closing price. Peak-load capacity closed at Euro 
      2,310 per MW per month for one quarter, Euro 2,087 per MW per month two 
      quarters and Euro 2,867 per MW per month for four quarters.
    
    
      Virtual capacity auctions (VPPs) are a mechanism which has been 
      successfully used in other European markets to boost the liquidity of 
      the forward market. This project represented a challenge for Endesa and 
      Iberdrola, which organised Spain’s first VPP 
      auction in record time, despite the complexity of the undertaking.
    
    
      Following the publication of Royal Decree 1634/2006, Iberdrola and 
      Endesa implemented all the necessary mechanisms to successfully develop 
      the auction by developing the necessary legal framework, attracting the 
      interest of possible participants and ensuring that all participants had 
      equal and transparent access to information. To this end the companies 
      created a website (www.endesa-iberdrola-vpp) 
      and organised the Participant Conference on 25 April. Throughout the 
      process, the project enjoyed the support and collaboration of two 
      leading players in the sector: IBM and Deloitte.
    
    
      IBM was responsible for the organisation of the auction, demonstrating 
      its proven experience in the organisation of this type of auction. 
      Deloitte managed the auction, ensuring that it complied with the rules 
      and prevailing legislation at all times.
    
    
      * This document may contain certain forward-looking statements regarding 
      anticipated financial and operating results and statistics that are 
      subject to risks and uncertainties as well as to material risks, changes 
      and other factors which may be difficult to predict, including, without 
      limitation, those factors described in the Documento de Registro de 
      Acciones of Endesa filed within the Comisión 
      Nacional del Mercado de Valores and in the Form 20-F of Endesa filed 
      within the Securities and Exchange Commission, both for the fiscal year 
      ended December 31, 2004. For all of these forward-looking statements, we 
      claim the protection of the safe harbour for forward-looking statements 
      contained in the Private Securities Litigation Reform Act of 1995.