CEZ WIND PROJECT IN ROMANIA Fantanele Cogealac

CEZ WIND PROJECT IN ROMANIA Fantanele & Cogealac ADRIAN BOROTEA CORPORATE AFFAIRS DIRECTOR - CEZ ROMANIA ENERGY FORUM 2010 Central & South. Eastern Europe Bucharest– May 14, 2010

CONTENTS § CEZ Group in Romania § General information § Fantanele & Cogealac Wind Farm § Regulatory aspects § Technical aspects § Financial aspects § Photos from construction Date: 11. 2009 Version: Presented 1

CEZ GROUP IS STABLE INTERNATIONAL UTILITY ACTIVE IN MORE THAN 10 COUNTRIES OF CSEE GENERAL INFORMATION Date: 11. 2009 Version: Presented 2

CEZ GROUP IN ROMANIA Sales and distribution services Electrocentrale Galati Powerplant Sales services § majority shareholder § objectives: new CCGT (400 MW) Botosani Satu Mare Baia Mare Suceava Fantanele & Cogealac wind farms Bistrita Oradea Iasi Zalau § Fantanele and Cogealac Wind Park will be together the largest onshore wind park in Europe § The total capacity: 600 megawatts § Total investment of CEZ Group into the project will reach € 1. 1 billion Piatra Neamt Cluj-Napoca Tîrgu Mures Bacau Miercurea Ciuc Arad Vaslui Alba lulia Timisoara Sfîntu Gheorghe Deva Sibiu Resita Tîrgu Jiu Galati Buzau Rîmnicu Vîlcea Tulcea Tirgoviste Drobeta. Turnu Severin Slobozia Slatina Bucuresti Calarasi Giurgiu Alexandria GENERAL INFORMATION Braila Ploiesti Pitesti Craiova Focsani Brasov Cernavoda 3 and 4 Units Constanta § CEZ is partner of joint venture with 9. 15 % participation Date: 11. 2009 Version: Presented 3

CONTENTS § CEZ Group in Romania § General information § Fantanele & Cogealac Wind Farm § Regulatory aspects § Technical aspects § Financial aspects § Photos from construction Date: 11. 2009 Version: Presented 4

Renewable Energy Sources (RES) supporting scheme – legislation § mandatory quota for suppliers combined with a system of green certificates (GC) trading § Eligible are producers generating energy from: § Wind energy, Solar energy, Geothermal energy, Biomas, Waves energy, § Hydro power plants less than 10 MW, commissioned or rehabilitated starting 2004 § Each supplier has a given percentage (a mandatory quota) obligation for green certificates and can comply with its quota obligation by purchasing green certificates on the green certificates market (bilateral contracts at negotiated prices and/or monthly centralised market of green certificates). § Electricity can be sold via bilateral contracts at regulated prices (only for producers less than 1 MW), or free at negotiated price § The certificates are issued monthly by the TSO § OPCOM administrates trading and certificates ownership at the end of the period § The bids for GC are honoured once per month; the clearing price applies for all the participants. Date: 11. 2009 Version: Presented 5

Law no. 220/2008 §Some “clean” producers receive for each 1 MWh produced more than 1 GC: 2 GCs for wind energy for the electricity generated until 2015 and 1 GC starting 2016, 3 GCs for biomass and 4 GCs for solar energy §GC may be traded within increased price limits set-up by new law: from 27 EURO/CV to 55 EURO/CV §If supplier will not achieve mandatory quota at end year, it will pay 70 EURO/CV to TSO who will allocate the amounts for strengthening T&D networks to easier other renewable producers connection to grids §New quota values for 2008 – 2020 period were set: 2008 2009 2010 2011 2012 5, 26% 6, 28% 8, 30% 2013 9, 0% 2014 2015 2016 2017 2018 2019 2020 10, 0% 10, 8% 12, 0% 13, 2% 14, 4% 15, 6% 16, 8% Date: 11. 2009 Version: Presented 6

Law no. 220/2008 increased no. of GC for 1 MWh to incentive investors RES - HYDRO energy Produced in plants with installed powers < 10 MW WIND energy Type of group power station Commissioned as of 1 January 2004 (new) Commissioned as of 1 January 2004 (refurbished) Refurbished Commissioned as of 1 January 2004 (new) From import, which have been used before for the production of electric power on other states territory (secod hand) Commissioned as of 1 January 2004 Biomass, Biogass, Waste fermentation gas, Bioliquid GEOTERMAL Energy Commissioned as of 1 January 2004 SOLAR Energy Commissioned as of 1 January 2004 IP(MW) Law 220 GC/MWh <1 MW > 1 MW < 1 MW > 1 MW Without IP limit 2 GC 1 GC 2 GC 0. 5 GC 2 GC 1 GC 2 GC until 2015 1 GC from 2016 3 GC Without IP limit Duratio n (years) 15 15 3 3 10 10 15 5 15 3 GC 15 4 GC 15 Date: 11. 2009 Version: Presented 7

Estimation of Min/Max price of the energy from RES Technology produce E/RES 1 to GC granted 2 Wind electric stations 2 M* Hydro electric stations 1 new or refurbished with 1

Law no. 220/2008 was informally notified to European Commision – October 2009 § Romania starts in October 2009 an informal consultation with EC on the support system in the light of communitarian legislation of State Aid § We consider that the supporting scheme settled by Law 220/2008 (mandatory quota combined with GC) is a market based system and does not constitute an not allowed State Aid § Law 220/2008 also stipulates a series of facilities to be granted to investors, susceptible to be State aid (art. 8 par. (2), art. 13 and art. 18). Such facilities are the object of a future Government Decision, will be applied only in compliance with the State aid legislation and will be notified separately. § Ro authorities based the argumentation on EC practice in the case of N 415/A/01 - Belgia, N 504/2000 – Marea Britanie, cauza N 474/2005 – Marea Britanie Date: 11. 2009 Version: Presented 9

CURRENTLY, WIND ENERGY SECTOR IS ALMOST NON EXISTENT IN ROMANIA Overview of the installed capacity and annual electricity production Installed capacity Annual Electricity Production 2007 2008 2009 MW/ Fuel 8, 000 7, 000 2006 2007 2008 GWh 28, 000 24, 000 6, 000 20, 000 5, 000 12, 000 3, 000 8, 000 2, 000 4, 000 1, 000 0 4, 000 16, 000 0 Coal Hydrocarbons Nuclear Water Wind Source: CEZ research Date: 11. 2009 Version: Presented

WIND FARMS PROJECT IN FANTANELE AND COGEALAC WILL BE THE LARGEST ON-SHORE WIND FARM BUILT IN EUROPE Basic information about wind farms CEZ project Both wind farms § Two wind farms projects in Dobrogea county, between villages of Fantanele and Cogealac (north of Constanta, 17 km west of the Black Sea coast); § Total projected size: 240 WTGs (1) of 2. 5 MW– installed capacity of 600 MW; § The project will be the largest onshore wind farm in Europe; § Once wind farms are operational, CEZ will have 10 % share on the Romanian market with renewable energy, including big hydro. Fantanele Project § § 1 st phase of the project – 139 wind turbines; To be finished in 2010; Construction has started in October 2008 Currently, we have erected 50 WTGs, build 100 km of roads, laid more than 140 km of cables 33 k. V and 110 k. V § 4 Transformer Substations 110 / 33 k. V § One Transformer Substation 400 / 110 k. V, connected to Transmission Grid TECHNICAL ASPECTS Cogealac Project § 2 nd phase of the project – 101 wind turbines; § To be finished at beginning of 2011; § Signed contract for with GE for supply of 101 WTGs (same as for Fantanele project) § more than 130 km of cables 33 k. V and 110 k. V § 4 Transformer Substations 110 / 33 k. V Note: (1) WTG – Wind Turbine Generator Source: CEZ Date: 11. 2009 Version: Presented 11

TWO PROJECTS ARE LOCATED NEAR COMMUNITIES OF COGEALAC AND FANTANELE, IN DOBROGEA COUNTY, NORTH OF CONSTANTA CITY Schematic plan of projects Construction stopped/ not started Ready for construction In construction Schematic borders of communes Fantanele and Cogealac Fantanele West 3 (35 WTG) Construction site of MTS 110/400 k. V FW 3 Fantanele East Fantanele West 2 ele FW 2 Fantan (34 WTG) FE National road N 22 Tulcea-Contanta FW 1 (35 WTG) Village of Fantanele Cogealac ala ge (35 WTG) c Fantanele West 1 Co Village of Cogealac Project (101 WTG) Constanta 45 km Source. : CEZ, maps. google. com TECHNICAL ASPECTS Date: 11. 2009 Version: Presented 12

FANTANELE & COGEALAC PROJECT IS DESIGNED TO PROVIDE 600 MW CAPACITY OF THE ECOLOGICAL ENERGY Overview of the key technical parameters of Fantanele & Cogealac project Technical parameter Description Total generation capacity 600 MW Wind turbine generators composition 240 generators (generation capacity 2. 5 MW each) – 100 m hub height, 99 m rotor diameter Energy transformation Generators are connected to seven 33 k. V/110 k. V substations, which deliver on 110 k. V level to the Main Transformer Station which connects the Fantanele wind farm on the 400 k. V grid line Constanta -Tulcea operated by Transelectrica. Selected technical information on Wind Turbine Generators (WTG) Producer: Maximum speed: Blades material: Cut-in wind speed: Cut-out wind speed: Rated power output: Tower: General Electric 73. 6 m/s fiber glass – epoxy resin/polyester 3 m/s 25 m/s 2. 5 MW tubular steel, 100 m Source: CEZ; General Electric TECHNICAL ASPECTS Date: 11. 2009 Version: Presented 13

FANTANELE & COGEALAC PROJECT CONDITIONS FOR REACTIVE POWER COMPENSATION Wind. FREE Reactive Power Technology is used § § § Wind turbines are GE 2. 5 xl – 50 Hz, cos f 0. 9 type; Electric generator is a permanent magnet and in 4 –quadrant IGBT Converter; By using GE technology with LVRT Wind. RIDE-THRU operating system is ensured uninterrupted operation in case of network perturbations; By using Wind. CONTROL System the power and voltage adjusting is possible to operate the wind farm as a conventional electrical generator; Through Wind. FREE Reactive Power Technology, the turbines can generate / absorb reactive power even with No wind; 40 turbines can operate with Wind. FREE Reactive Power system and can absorb up to 48 000 k. VA with NO wind. Only 34 such turbines would be needed to compensate for reactive generated by the cable grid which is 40 719 k. VA (about); In Conclusion § The system is able to compensate reactive power from wind farm grid, regardless of wind speed. Source: CEZ; General Electric TECHNICAL ASPECTS Date: 11. 2009 Version: Presented 14

CEZ IS DEDICATED TO KEEPING A CONSISTENT PUBLIC FRIENDLY POLICY TO THE COMMUNITIES Selected public related activities of CEZ Partnership with communities Supporting the local infrastructure projects § Long-term partner for the communities § Acknowledging its role and supporting their development § CEZ is currently building its relationship and involvement as partner, discussions with both the authorities and citizens § The village's infrastructure and facilities for the people are just some of the focus subjects § Dedicated to improving the quality of life in the community Sub-constructing work to local companies § Creating jobs for local citizens § Choosing local companies as partners (Eraos, Fantanele – construction works) § Supporting commerce (economical development) of the area TECHNICAL ASPECTS Date: 11. 2009 Version: Presented 15

CONTENTS § CEZ Group in Romania § General information § Fantanele & Cogealac Wind Farm § Technical aspects § Financial aspects § Photos from construction Date: 11. 2009 Version: Presented 16

SUMMARY OF WIND PROJECT KEY ASSUMPTIONS USED IN PROJECT 1 § § § § § Useful Life of wind farm - 25 years Efficiency of Wind Turbines comparable with the most efficient Wind Farms Positive trends in develpment of prices of energy and green certificates refflecting also inflation 2 Green certififcates till 2015 1 Green certificate till 2025 Repairs and maintenance costs comparable with European standards Start of full operation of Fantanele part in 5/2010 Only 12 full time employees Positive legal environment supporting investments into green technologies FINANCIAL ASPECTS Date: 11. 2009 Version: Presented 17

CEZ TRADE responsible for ELECTRICITY OFF-TAKE, IMBALANCES and BROKER FOR GREEN CERTIFICATES MARKET Trading model – green certificates Balancing Market Power plant TOMIS TEAM MWh ČEZ, a. s. Trading MW INVEST OTC market DAM Green CEZ Trading team Advisory and/or brokerage Managment of agreements, deliveries FINANCIAL ASPECTS Mutual delivery agreements certific ates CEZ Vanzare Other suppliers – OTC OPCOM Date: 11. 2009 Version: Presented 18

CONTENTS § CEZ Group in Romania § General information § Fantanele & Cogealac Wind Farm § Technical aspects § Financial aspects § Photos from construction Date: 11. 2009 Version: Presented 19

PICTURES FROM THE SITE (1) Pouring of blinding concrete Mounting of ring for foundation Construction of adapter ring and steel installation Date: 11. 2009 Version: Presented 20

PICTURES FROM THE SITE (2) Installation of adaptor ring Installation of cables Date: 11. 2009 Version: Presented 21

PICTURES FROM THE SITE (3) Installation of first WTG (FE 8) Date: 11. 2009 Version: Presented 22

PICTURES FROM THE SITE (4) Installation of blades Date: 11. 2009 Version: Presented 23

PICTURES FROM THE SITE (5) Date: 11. 2009 Version: Presented 24

PICTURES FROM THE SITE (6) Date: 11. 2009 Version: Presented 25

PICTURES FROM THE SITE (7) Date: 11. 2009 Version: Presented 26

Thank you very much for your kind attention!