Strategy

STRATEGY

The 2009-2014 Industrial Plan, requiring investments totalling 7.2 billion euros, will provide strong momentum for the
devolvement of all of Edison’s businesses, with focus on areas with a high growth potential. A total of 1.8 billion euros will be invested to strengthen the Group’s main businesses:
- Hydrocarbon exploration and production;
- Development of natural gas procurement infrastructures;

while 5.4 billion euros will be used to develop activities in the areas of:
- International electric power generation;
- Power generation from renewable sources in Italy and abroad;
- Natural gas storage capacity in Italy.

Electric Power Operations
The guidelines of Edison's strategy include developing new generating capacity, mainly outside Italy; streamlining the existing facilities; and significantly accelerating investments in renewable energy projects. The Group will continue to streamline its CIP6 power plant portfolio with structural enhancement activities designed to make their deregulated-market generating capacity more flexible. Outside Italy, Edison will invest about 1.1 billion euros in new electric power generating capacity, mainly in Greece and Turkey. In Greece, the Group will consolidate its joint venture with Hellenic Petroleum, which includes T-Power’s 390-MW facility and a 420-MW combined-cycle power plant that Edison is building in Thisvi. In Turkey, the Group will focus its efforts on the thermoelectric and hydroelectric areas. Edison is strengthenings its commitment to renewable resource generation with investments that will total about 1 billion euros over the next five years. Specifically, new projects in Italy and abroad will raise the installed capacity of the Group’s wind farms from the current 304 MW to 810 MW in 2014. In the hydroelectric area, the emphasis will be on upgrading existing facilities to increase their generating capacity and the production of green certificates. Lastly, a major effort will be made to develop photovoltaic systems. Overall, installed capacity based on renewable sources is expected to reach 2,900 MW by 2014.

Hydrocarbons Operations
In the hydrocarbon area, the focus will be on the development of natural gas infrastructures that Edison is planning and building for the entire European market. Three major projects are scheduled for completion by 2014:
- The Rovigo offshore regasification terminal, which will be operation in 2009, making it possible to import 8 billion cubic meters of gas a year from Qatar, 6.4 billion cubic meters of which will be available to Edison.
- The GALSI gas pipeline linking Algeria with Sardinia and Tuscany, which should be completed in 2012. Under existing
contracts with Sonatrach, an Algerian company, the Group will have access to sufficient transmission capacity to import 2 billion cubic meters of natural a year from Algeria.
- The ITGI gas pipeline, which will link Italy with the Caspian Sea by way of Greece and Turkey. The Greece-Italy segment will have a transmission capacity of 8-9 billion cubic meters of natural gas a year, 80% of which will be available to the Group. In addition, Edison plans to expand its hydrocarbon exploration and production activities in North Africa and in other areas with a high exploration potential, with the goal of increasing both its reserves and annual production. More than 2.4 billion euros will be invested in these activities, including about 1.5 billion euros earmarked for the Abu Qir concession. Lastly, in order to improve the stability of Italy’s natural gas system, the Group will increase its natural storage capacity, which it plans to expand to a total of 2.2 billion cubic meters (more than 10% of Italy’s total capacity) by 2014, with investments amounting to about 700 million euros. This objective will be achieved by expanding the Goup’s two existing storage centers and developing new concessions.