Hello, and welcome to the nine-month 2021 EDPR results call. My name is Courtney and I'll be your coordinator for today's event. Please note that this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any time, please press star zero and you will be connected to an operator. I will now hand you over to your host, André Fernandes, Head of Investor Relations, Planning and Control and Sustainability, to begin today's conference. Thank you.
Good afternoon, everyone. Thank you very much for attending EDPR's third quarter 2022 results conference call. We have here with us our CEO, Miguel Stilwell d'Andrade , and our CFO, Rui Teixeira, who will run you through the key highlights of the business plan execution and of the nine-month results. We'll then move into Q&A, in which we will be taking your questions. This call is expected to last around one hour, and I'll now give the floor to our CEO, Miguel Stilwell d'Andrade .
Thank you, André. Good afternoon, everyone. I hope you're all doing well. It's also a pleasure to be on these calls and be able to not only present what we've been doing, but also take your questions afterwards. Anyway, today we have a lot to talk about. I'll get straight into the presentation. We move to slide five and just giving you a broad overview of the business plan execution, first of all, in the key pillars of growth. We are ramping up, and we have around 2.5 gigawatts added year-on-year. This is a good progress towards the 3 GW-plus , which we were aiming for in the 2021-2023 growth targets. This is actually the largest number of megawatts ever built by EDP Renováveis in 12 months.
I'd really like to highlight that this shows that there is a successful ramp-up of the growth rate, and it should give us confidence on the execution of the growth plan. Also today, we just announced the acquisition of Sunseap. You will have seen that news, I'm sure, this morning. I think it establishes a great platform in Asia-Pacific. This is a region, and I'll talk a little bit about this later on, but it's a huge growth potential in the region. So that's something I think that's worth also highlighting obviously. On secured capacity, we now have 8.1 GW secured, out of which 7.9 GW in 2021-2023. So that's around 75% of our 2021-2023 target. I think good progress there.
We also have visibility on an additional 4.1 GW of PPAs in our key markets, in which we are either shortlisted or currently under negotiation. We will hopefully be giving good visibility on the rollout of those PPAs also in the next couple of months. Overall, solid ramp-up of growth, a good platform for growth in Asia-Pacific, and also strong execution with short-term visibility on the additional PPAs. On the asset rotation program, the pillar here in the middle. We continue to see strong market appetite and attractive valuations, both for wind and solar. We have the EUR 2.3 billion of asset rotation proceeds. Multiples continue to be very attractive. On average EUR 1.6 million per MW, EUR 1.7 million for wind and EUR 1.2 million for solar.
I'll go there in a little bit more detail in a minute. As of September, we have EUR 550 million of asset rotation proceeds. Overall capital gains of EUR 151 million following the Mayflower earn out of EUR 30 million. Overall, we're on track to deliver capital gains above the EUR 300 million of guidance that we've given for this year. We have a couple of transactions which we've already announced, but which we're hoping to close over the next couple of weeks or months, but hopefully at least one or two by the end of the year. On excellence, which is the third pillar. For this, the nine months to date, EDP Renováveis has achieved 28% load factor.
This is down 0.6%, year-on-year, but it still reflects 95% of the expected gross capacity factor. We have had a bad year in terms of wind, I mean low resource, particularly in the U.S. and Spain, and I think that's something that we've talked about in previous quarters, and the third quarter was no exception. Regarding operations, we continue with a strong performance with core OpEx per megawatt decreasing 3% year-on-year. On the technical side, we continue to deliver a good availability of 97%, so slightly above year-on-year. In terms of operations, I think good performance there. On ESG, execution is well on track for the business plan targets. We have already most of the initiatives already in progress under the Changing Tomorrow Now program.
Finally, I mean, just on a note, it's not here on the slide, but we have an EBITDA of EUR 917 million. Net income of around EUR 150 million, EUR 148 million. This is mostly impacted by the lower capital gains year on year. The first quarter one-off ERCOT event and lower generation or lower winds in the US and Spain. I think that's something we have to recognize. So it hasn't been a great year from a wind resource perspective. And overall, the high pool prices in the third quarter have also introduced some pressure on the hedges. In Spain in particular, the EBITDA is EUR 40 million-EUR 45 million below expectation in the nine months.
EUR 30 million of which is from low wind, especially in the second and third quarter, which is below the P50. Then you have around EUR 10 million-EUR 15 million from financial hedges in the third quarter, given the high prices combined with low generation. I'll go through this in more detail then, and Rui will also elaborate more on this. Anyway, let's move forward to slide 6. Here, on the growth platform for Asia Pacific, in the Sunseap transaction we announced today. As you know, we had 20 GW of additions until 2025 set out in the strategic plan. 1.4 GW we've outlined or highlighted will come from new markets. These new geographies do bring us optionality. They bring diversification to our portfolio.
The expansion into Asia Pacific was something we've been working on now for a while. I think today's news is certainly good news. We move to slide seven. Just talking a little bit about the overall Asia Pacific market. It's one of the largest renewables markets globally. It has strong growth expectations, especially in solar. We're talking about 120 GW per year in terms of growth, so it's a massive market and at EDP Renováveis, we really felt it was important to tap this opportunity and have a foothold in the-
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Okay. Sorry for the technical difficulties. I mean, I think this is a first. I'm told that we somehow got disconnected around slide seven, so I'll resume on slide seven. Hopefully, you haven't heard that before. I'll just go back to slide seven and talk about Asia Pacific. This is really one of the largest markets globally. It's got, you know, huge growth expectations, especially in solar. You know, some key numbers which I think are worth highlighting, 120 GW per year market, so it's really a massive market. 55% of the global growth in renewables, and solar represents 65% of this growth in Asia Pacific.
Also something which I'm sure everyone will be familiar with, which is, I mean, this is a highly populated, densely populated, region, so it's over 4 billion people and over 50% of the global power demand. Finally, just to say that countries like China, Japan, South Korea, they've all committed to net zero emissions by 2050 or 2060. There does seem to be also a general trend towards decarbonization in the region and promoting renewables. Just a final message on this slide, if we are serious about reaching net zero by 2050, and there is a broad consensus around this, then all regions and all countries will need to contribute to this target. We want to make sure that EDP Renováveis is positioned in the long run to take advantage of this opportunity.
I think I'd just like to highlight this in relation to this region, which is obviously, I think, key to making us global. That's exactly the topic of the next slide. Slide eight. With this platform, we now become truly global. We already had a very strong platform in the U.S., very strong platform in Europe. We have a good platform in Latin America with Brazil, Chile, Colombia, and now we set up this platform also in Asia Pacific. We think that Sunseap's team is very complementary to EDPR, both geographically and technologically.
You know, their footprint, solar pipeline, together with our scale and our capabilities, the fact that we have, for example, wind, that we can also bring to the table, that means that we believe we will be able to build out the platform and accelerate the growth in the region. Once we complete the acquisition, we will be present in 25 markets, representing 75% of global growth over the next decade. That's, you know, we'll have a very strong representation in all the key markets. Moving to slide nine, a specific comment on Sunseap. It is a solar-focused platform. It is based out of Singapore, present in nine markets. 550 MW of operational and under construction assets. Most of these in Singapore, with a very low risk profile.
As you know, Singapore is a AAA rating. Sunseap is also present in Vietnam, where EDPR is also present, so we'll be able to integrate our positions there. Very young assets, below two years. 20-year contracted revenues, so 76% of that PPAs and 24% regulated at an average price of EUR 75 per MWh. Low risk, stable, long-term cash flows, completely aligned with EDPR's strategy. Also, they bring very strong client relationships and a track record. The off-takers include some of the EDPR clients in Europe and in the US, so companies like Amazon, Facebook, Microsoft, Apple. Solar distributed generation represents around 70% of the operating and under construction portfolio, and it's a key technology obviously to grow in Asia Pacific. Going forward, utility scale will also play a key and increasingly relevant role.
Sunseap brings a strong footprint in Asia Pacific, a great track record over 10 years of successfully developing the business there. It's got a fantastic management team with a lot of local knowledge, over 400 employees and growing, given the growth of the market. That will facilitate the local culture know-how and also the long-term build-up of relationships. I think they have a great reputation in the region, and I think that gives us a lot of confidence to leverage on that and accelerate growth. Also, very importantly, and moving to slide 10, Sunseap has a great pipeline. Overall, the portfolio is around 5.5 GW.
On top of the 550 MW of operating under construction, there are 130 MW of contracted capacity, almost 700 MW of secured capacity. We have a pipeline of almost 5 GW in different stages of development. Around 2 GW of advanced stage and 2.8 GW of early stage. Future growth will have more, obviously more geographic diversification and also higher exposure to solar utility scale going forward. Moving on to slide 11, talking just a little bit about valuations and stakes. We are leveraging our capabilities to really accelerate the growth and the value creation in Asia Pacific through Sunseap. The way we see it's putting the business on steroids and really leveraging it up. We will have an 87% stake. This may actually increase to around 91%.
Sunseap has, as I mentioned, a great management team, so the founders will stay invested with around 6.5%, and with their incentives fully aligned with the growth and the profitability of the business. I think this is the key point to make sure that we have a smooth transition, and we really bring the local experience and the new culture to EDPR with obviously they have a great knowledge of the markets and the developments in the Asia Pacific markets. We want to make sure that, you know, that we are able to merge the companies well and really leverage on Sunseap to take it even further and make it grow even faster. Together with the founders and the management, we will have around 94%.
That may actually increase to 98%. In terms of valuation, the implied price we are paying is around EUR 870 million. Breaking this down, I'd say that there's one block which is CapEx, implicit in that 550 MW . Since it's mostly solar distributed generation, it has an average CapEx per megawatt AC. This is important to stress. This is AC, not DC, of around EUR 1 million. We have the value creation associated with the operating under construction assets together with the secured capacity, a total of 700 MW . I'm sure you can come up with an NPV per megawatt reference for this bucket. I just re-emphasize that these assets are very young. They have 20-year contracted revenues and an average price of EUR 75 per MWh .
Finally, there's the pipeline and the platform, and we believe we'll be creating significant value from the existing pipeline, and we'll be able to leverage the Sunseap model. With strong development capabilities in this footprint in nine markets to really deliver the growth going forward. Overall, for EDPR, it really opens up a new region of the world where we didn't have a significant presence, and we think that this together, in terms of solar, together with what we can bring in wind, will really mean that we can ramp up this platform, as I say, in the Asia Pacific region. Okay, that's Sunseap. I'd just like to now talk you through some of the other key metrics for the business.
If we move to slide 12, we have around 8 GW secured, 8.1 GW secured, so it's up 2.7 GW year to date. I think that shows the origination capabilities and also the competitive projects that we are able to bring. If we zoom in just on 2021 to 2023, as I mentioned earlier, we'll have around 7.9 GW secured already until 2023, so that's around 75%. We continue to have the disciplined investment approach. I think attractive returns, low risk profile, contracted NPV of around 60%. We continue to see those metrics across the different projects that we are investing in. Overall, strong visibility on the 2021 to 2023 timeframe, and also solid risk return profile.
If we move to slide 13, and this is something we've talked about previously, but just to give you an update on this. We continue to be protected from CapEx cost inflation, as we've discussed on previous calls, and we have limited exposure on 10% of our secured capacity. For new projects, we are seeing the PPA market and the auctions adjusting to the sector-wide increase in CapEx. From that perspective, it's not hindering our competitiveness when bidding for new projects, and the return thresholds are being preserved. Just to give you a specific example, for example, look at the Spanish auction, now in October, you'll have seen that the average price of the auction went up. That has to do, we believe, with the adjustment also to the new CapEx expectations.
We are also seeing that when we are doing bilateral discussions on PPAs, where we are seeing those prices feeding through into new PPA prices, revised PPA prices under discussion and being accepted by clients. In relation to the supply chain, we have a strong position. We have a privileged relationship, I'd say, with the suppliers. We continue to monitor and to manage any disruptions that might happen to the supply chain. In relation to wind, we feel comfortable. There doesn't seem to be any material issue with our project in the short and the medium term. In solar, it's something we're monitoring more closely, obviously to make sure that any disruptions are dealt with quickly and that we can manage that in the context of our development and construction.
If we move to slide 14, in terms of pipeline, we continue to ramp up. We have good short-term visibility on growth. I wanted to highlight that 60% of the current secured capacity has been secured through PPAs, so that's a market where we continue to be very active, and we actually expect it to increase even more over the coming years. As I mentioned earlier, 4.1 GW of PPAs under negotiation and shortlisted, which we hope will provide short-term visibility on additional capacity. Slide 15, on offshore, Ocean Winds continues to grow, so operating capacity now 1.5 GW in 2022, expected to reach 3.4 GW by 2025. Moray East finalized construction. I had the pleasure of being up in Scotland a couple of weeks ago to just inaugurate the O&M center in Fraserburgh.
We're moving ahead also with some other projects in Scotland, so the Moray West, we're also expect to give visibility on that soon. We have several other projects that we are continuing to develop, Poland, U.S., South Korea. We are participating in the RFP in Massachusetts for Mayflower. Hopefully, we'll have visibility on that soon. In relation to ScotWind, we'll also have visibility on that soon. We have a good strong presence in Scotland. Let's wait and see what comes out of that auction. Slide 16, just a quick comment here on asset rotation. You will have seen most of these numbers, so just very quickly, EUR 2.3 billion of proceeds, 30% of the EUR 8 billion target for the full five-year plan. We're overall very happy with the multiples achieved in the execution.
Within the third quarter, we upsized the U.S. transaction to 80%, and we also signed the Polish transaction. Clearly we are on track to deliver capital gains north of EUR 300 million in 2021.
The actual value will depend on the timing of the regulatory approvals and the closing of each transaction. All in all, execution on the asset rotation going well. We continue to see strong appetite from investors, now our efforts are totally on the regulatory approval side to make sure that we can get at least some of these over the line here in by the end of 2021. Slide 17, a quick note on ESG. Circular economy and biodiversity. We have been promoting a lot the waste recovery in the operational phase for a while, extending our best practices now to the rest of the value chain. Repowering, although it's still not very material, EDPR is focused on tackling the repowering wave that we expect post-2025, especially in Spain, Portugal and the U.S. Far, we've done...
We've repowered two wind farms in Spain, and we are repowering another one in the U.S. In the two sites that we repowered in Spain, most of the, let's say, the waste generated was recovered, so almost 95%. In this respect, we are participating also in some blade recycling projects in Spain, the U.S., and also in Portugal. 100% of the area impacted during the repowering processes in Spain were fully restored. In relation to communities, we are obviously want to make sure that we work with the local communities so that we are able to keep the alignment with our core business and make sure that we are able to develop our projects in harmony with the local communities. In terms of people, we are aiming to achieve 36% female employees.
Currently, we're at 32%, but 37% of our new hires are all women, which I think contributes well to achieving our goals. Definitely looking out for equality of opportunities there. Lastly, just in relation to the sustainable suppliers goal, what we've been asking our core business suppliers is basically in terms of health and safety, environmental, ethical criteria to be totally aligned with us. It's not just a question of EDPR having certain goals and targets, it's also making sure that that extends to our suppliers, at least our key suppliers. With this business plan, as you know, we have the idea of going one step further by making sure that we have these ESG goals totally aligned with the suppliers.
I'll stop here, and I'll turn it over to Rui to walk you through the nine-month results and then come back at the end for closing remarks. Thank you.
Thank you, Miguel. Good afternoon to you all. Let's move on to the nine-month results. On slide 19, our financial performance year-on-year has been, as you know, mostly impacted by lower capital gains, the one-off ERCOT event in Q1, and also the lower generation that we have been observing in U.S. and Spain. We achieved EUR 917 million EBITDA and EUR 148 million net profit in the first nine months. That's on the back of generating 21 TWh of clean energy.
That's 5%. That's EUR 122 million at the net profit. On top of the EUR 100 million gain on the US asset rotation, we have also some positive price adjustments from 2020 transactions in offshore and in this Rosewater build and transfer project, along with EUR 30 million earn out from Mayflower. Below EBITDA, we continue to improve our average cost of debt, 3.4% versus 3.5%, that's a reduction of about 0.2 percentage points year-on-year. In the US, our top line is impacted by the Q1 one-off ERCOT event, you know, we extensively discussed this in the first quarter, but also by the fact that we are below the average resource.
For the period, we also have a weak wind resource in Spain as well. Let me just, you know, highlight here some impacts that we have in Spain that of course are hitting us in the nine months result. Overall, Spain is about EUR 45 million below our expectation for the nine months 2021. Out of these three, around EUR 30 million are from low winds, and that's particularly in the Q2 and Q3 where we are below the 90% of our P50. And about EUR 10 million-EUR 15 million from financial hedges in Q2 and Q3, given the high prices and the low generation.
Just to give you an expected full year result from this impact, with the P50 in terms of wind for the fourth quarter is around EUR 25 million. I think it's also worth highlighting that, given pool only went above the EUR 60 per MWh in July, the regulatory adjustment that is booked in the Q3 concentrates the regulatory adjustment for the full nine months of 2021. There is a concentration, it's a technicality, but there's a concentration here in the Q3. Just, you know, as snapshotting the balance sheet, net debt decreased year to date to EUR 3.32 billion. This is of course on the back of the EUR 1.5 billion capital increase. Around EUR 240 million asset rotation, the equity proceeds from that.
Around $0.6 billion of tax equity, which is already booked for the U.S. projects, and of course, it impacts the net debt reduction. I think it's important now that if we move to the operational side. If you move to slide 20, highlighting that, you know, we added 2.5 GW of wind and solar capacity year-on-year. This is the highest capacity ever installed by EDPR in a 12-month period. I think it is demonstrating the how we are ramping up the business and the growth rate. In addition to that, we have 2.7 GW which are under construction. I think this, you know, these are numbers that, you know, speak for themselves in terms of the ramping up of the growth profile at EDPR.
Year on year, we successfully completed 1 GW net of asset rotation deals. That's in Spain and U.S. We ended the period with a 13 GW portfolio by the end of September 2021. And a really balanced mix across the main platform. North America, 55%, Europe around 40%, and the rest of the world, Brazil 5%, and, you know, just still a minority position in the rest of the world here, just considering Vietnam, so not yet incorporating the acquisition that Miguel referred to, since it will be in APAC. Our load factor achieved 38% in this nine months. It is a recovery in Iberia and Brazil. Naturally, this is offset by the one-off ERCOT event, and across this period, a low resource in the U.S.
Technical availability at good levels, 97%. That's slightly above this number for last year. Electricity output increased 5% year-on-year, so this of course benefits from the capacity additions. Naturally, this is offset by the lower resource. We generate 21.5 TWh of clean energy, so we can say that we have avoided 13 million tons of CO2 emissions. Operations in North America, Europe, and Brazil generated respectively around 58%, 37%, and 6% of the total output. On page 21, in looking into the revenues, we have a reduction vis-à-vis last year, so the 5% reduction. Of course, this is due to sell downs.
If you want to see this on a like-for-like basis, we would be +2% versus nine months, 2020. But also driven by the lower average price around EUR 51 per MWh in some unfavorable effects, which as I said before, it's also partly offset by some new capacity. In Europe, the average price decreased 10% to EUR 74. That's of course driven in Spain. The asset mix, not only from the 2020 asset rotation deal, but also the impact of the regulatory and financial hedges in the context of very high pool prices.
In Portugal, the tariff extension and the new additions, in the rest of Europe, we actually observed an 11% increase in terms of the average, revenue price or price increase, that of course offsets these reductions in Spain and Portugal. In North America, the average price increased by 1%, with higher merchant prices, that was offset by the ERCOT event in Q1. In Brazil, average price was up by 9%, to BRL 139 . And this of course based on the fact that we're exposed to higher merchant prices, and also, you know, the evolution in terms of capacity.
Revenues totaled EUR 1.3 billion with impact from the sell down, so that's a reduction of EUR 92 million year-on-year. Lower average prices, so that's -EUR 37 million year-on-year if you exclude sell down. And some Forex translation, as I mentioned in beginning, and others that account for about EUR 54 million reduction versus last year. Which of course they are not offset by the capacity additions that have contributed to around EUR 180 million year-on-year. Like for like, as I said before, if we are to adjust for the sell downs, we would have increased revenues in EDPR by 2% year-on-year. On the OpEx, moving to the next slide.
Naturally, you know, we keep very, you know, focused you know in terms of excellence of the operations. Core OpEx per average megawatt is up only by 1% year-on-year. Actually this is a -3% if adjusted on the back of our O&M strategy. Of course, as you know, we have been front-loading the company in terms of resources to meet the business plan growth. Overall, you know, this leads us to have an EBITDA of EUR 917 million. Of course, this is driven not only by the top line performance, the lower capital gains year-on-year.
In terms of the geographical mix, you know, pretty much a 50/50 contribution from North America and Europe to EDPR results as on a consolidated basis. On the net profit, we ended the period with EUR 148 million, again on the back of the top line performance. The financials have improved. On the financials, as I said in the beginning, we have improved our cost of debt to 3.4%, so that's a reduction of 0.2 percentage points versus last year.
Again, I would like to emphasize that on the P&L, tax has a negative impact year-on-year, but the bulk of this is non-cash, and cash taxes are neutral, as when you compare it to the nine-month results, 2020. On the next slide, in terms of debt, net cash and tax equity increased EUR 191 million. Of course, you know, the asset rotation proceeds and capital increase, they have offset it or funded the growth acceleration. By September, we actually have debt approximately EUR 100 million lower versus the 31st of December last year. You know, almost 90% of the EUR 3.3 billion net debt is at the fixed interest rate.
It's, as you know, it's part of our risk profile. Tax equity increased $1.4 billion, naturally following the $0.6 billion of tax equity proceeds that we announced recently, but also offset by the reconsolidation of the tax equity associated with the U.S. as a rotation deal in June. Just also to finalize, focusing on the period, ESG on this slide 25. Starting by the environmental performance, as I said before, we avoided 13 million tons of CO₂ emissions, so we are effectively contributing to this global challenge of reaching a net zero. The company's emissions represent only about 0.2% of the avoided ones.
In terms of circularity, we are maintaining our recovery ratios in line with previous years, continuously working naturally to improve on those. In biodiversity, no significant spills, no significant fires. We had 56 near misses, and year-over-year, I mean, the variation is pretty much in line with the company growth. Social dimension, as Miguel said, we have surpassed 2,000 employees, so that's a 23% increase year-over-year. Actually, you know, moving towards our diversity goal, with the percentage of female employees increasing to 32%. Regarding health and safety, there was an average of 1.7 work-related accidents per million worked hours. 64 lost workdays per million worked hours, which is in line year-over-year.
Unfortunately, we have some severe accidents, two severe accidents that are impacting naturally the business. You know, we have been dedicating a significant amount of time to improve the safety, health and safety across the different operations and the construction sites, so learning from these lessons, unfortunately. Just a final note regarding communities, EDPR maintained its EUR 5 million cumulative investment in access to energy. We reached EUR 1.1 million in social investment, so that's slightly lower year-on-year, naturally given the COVID-19 response plan that we implemented last year within our local communities. With this, I would hand back to Miguel for his closing remarks. Thank you.
Okay. Thank you, Rui. Just to finalize the presentation, and just a couple of words on the overall environment and also on the outlook for renewables. All right, if we move to slide 27, I mean, we continue to see an environment, a policy environment, if you want, which is highly supportive of the energy transition. I mean, we have the recent news flow from COP26, which I'm sure you're following, now taking place in Glasgow. I think it just comes to show sort of the need to really elevate the global commitments and also different measures that the various different countries and political leaders and companies are taking to fight climate change. Clearly this fight for climate change requires strong fundamentals.
It will have an unprecedented growth in renewables, which I think it's an interesting document I'm sure you've read, highlighted by the International Energy Agency's World Energy Outlook, which was just recently released now in mid-October. It states that to limit global warming to 1.5 degrees, it would require an annual global clean energy investment of $4 trillion by 2030. Four times as much as the $1 trillion which was invested in 2020. I mean, these are absolutely staggering values. I mean, even a fraction of this would be a significant increase versus what we are seeing today. I believe there is obviously political will by a lot of different countries to move in that direction.
In Europe in particular, which has been a champion of climate change, the European Commission's toolbox to tackle the increase in energy costs, which has been obviously a big issue on the agenda recently, is very much to reinforce the need to deploy renewables. Clearly we need to also have energy efficiency solutions. We need to continue to build out grids across the continent. There will be the need to deploy EUR 750 billion from the NextGenerationEU. In that process, we expect we'll now be moving to the stage of application of projects at the national level, and hopefully we'll have more visibility during 2022.
I mean, bottom line is the European Commission has been very aggressive and I think very consistent in its fight for climate change, in supporting the need for deploying renewables and electrifying the economy and so forth. In relation to the US, I mean, clearly, I'm sure we've all been watching closely the Build Back Better framework package, which is being in discussion. As you know, there was already one package which had been approved, the infrastructure bill, which was, let's say they were tying it to the second package as well. It's currently estimated at around $1.8 trillion, the Build Back Better bill. It includes the long-term visibility of the fiscal incentives for clean energy investments, so the PTCs and the ITCs, and potentially extending those.
It gives a tax credit total amount of $320 billion to support the renewables in the medium term. Clearly the U.S., it seems to be taking some good steps. Hopefully in the very, very short term, the next couple of days, or certainly hopefully no more than a couple of weeks, there will be visibility on closing that. As you know, it's been something which has been around for a while, but it seems that people are quite optimistic about this. In terms of key takeaways, slide 28, and then just before moving on to Q&A. First, we really are going global now. I mean, we were already a global company that's now present in 25 markets, which exposes the company to 75% of worldwide growth in renewables until 2030.
I think this is a very significant step that we are taking. This growth platform in Asia Pacific basically will leverage on Sunseap. As I say, an established platform, fully consistent with our portfolio. It's got a low risk, long-term contracted profile, which is very similar to or something that we like very much. EDP Renováveis ramping up the growth, 2.5 GW added year-on-year. 2.7 GW under construction, so getting closer to the 3 GW sort of target per year. We now have over 8 GW secured with good returns and risk profile. That's 75% of the target until 2023. As a rotation, I talked about very solid and good.
Financials have been impacted in this third quarter of the nine months to date by the lower capital gains year-over-year, lower generation U.S. and Spain, but we believe that the attractive asset rotation deals that we've done will allow us to close the gap over the next couple of months. I think there is a need to look through the short-term pressure and really think about, let's say, the underlying potential and growth of EDP Renováveis , which is absolutely fantastic. The growth outlook continues to be very strong. We see it very strongly. EDP Renováveis is extremely well-positioned to capture it globally now in all the different platforms.
I'd just really like to reiterate, I mean, on behalf of the team, clearly very enthusiastic about the growth prospects for the business in the different regions, and now looking forward to also tackle the growth opportunity in Asia-Pacific. Clearly focused on the U.S., Europe, Latin America, and now this additional region. Focused on the plan, focused on delivering the megawatts and the numbers, and now happy to turn it over to Q&A. André.
Thank you.
Thank you, Miguel. We can move now to Q&A.
Thank you. As a reminder, if you would like to ask a question on today's call, please press star one on your telephone keypad. Please ensure your line is unmuted locally, and you will be advised when to ask your question. If you change your mind and wish to withdraw your question, please press star two. As a reminder, that was star one on your telephone keypad if you would like to ask a question. Our first question comes in from the line of Alberto Gandolfi, calling from Goldman Sachs. Please go ahead.
Hi, good afternoon, everyone. Thanks for taking my questions. The first one is to go back a little bit on slide 13. You basically said that you're insulated from any cost inflation. I just wanted to confirm, can you maybe again specify from on a time horizon basis, you know, do you think you are protected on cost inflation until the beginning of 2023, Q1, Q2, end of 2022? If you can give us some ideas. Any disruption from the supply chain you're seeing, shipping, freight, any delays that might derive from that. Second question is on the M&A transaction you announced today. May I just ask, in terms of financing, you believe that the balance sheet is okay?
You believe that just asset rotations would be sufficient, or any other ways of financing we should be thinking about here? The last question, a bit provocative, so apologies in advance if it doesn't come out properly right. You could argue that there isn't much net income that the company is generating for the first nine months of the year. Can I ask you how you explain that? Is it because you're really, besides the load factor that we're well below average, but you can argue that the capital gains you booked offsets losses from Texas. Point would be, is it just because you think you're ramping up capacity, you're putting so much upfront costs, and then revenues will gradually keep growing with inflation in most jurisdictions? Is it an increase in CapEx because you're accelerating construction?
How should we think about that and the evolution of net income in the next three, four, five years? Thank you so much.
Hi, Alberto. Some good questions. In relation to the first question, the cost inflation. Yes, I mean, we are insulated, in fact, for, you know, the project that we have in the short term. We not only have the, in many cases, the actual turbines and, you know, the solar panels delivered and were sort of the ones that are under construction, we have a high degree of confidence and, let's say, visibility on that. In relation to things which are further out, I believe you mentioned sort of 2023, I mean, in those cases, what we're doing, you know, to the extent that we haven't yet closed those projects, we will be feeding that through into the PPAs, as I mentioned, in terms of the cost inflation.
In terms of wind turbines, we also have good visibility. We have no indication to the contrary that there would you know, we would not be able to get access to the turbines that are being contracted. That's something which, you know, even recently we're talking to the teams. I think we have privileged relationship with the different suppliers. That's something, again, that, you know, we don't expect any certainly not any material, nothing that would be sort of out of usual delays or disruptions there. In relation to solar, it is maybe a slightly different story. In the short term, again, we have the visibility. In many cases, we already have the panels actually in our possession, and so it's. There's no issue there.
In the medium term, we are obviously monitoring the supply chain carefully and talking to the suppliers almost on a daily basis to really understand if there are any issues. So far, you know, I mean, the issues that are being highlighted have been delays, which could be, let's say, a month. That's sort of the type of timeframe which is really not material in the context. Even if it slipped a quarter from one to the other, in terms of profitability, we don't see that as an issue. There is a degree of uncertainty in the market at the moment, and we are working very closely with the suppliers to make sure that we have that. You know, we are able to close that, the timings so that we have better visibility on that.
Again, I'd say on wind, certainly there's no issue there. In terms of solar, it's just a lack of visibility, which we are working through, but so far we have not had any material, let's say indication that we would be out of, not able to comply with the targets. M&A transaction definitely, you know, will be done on balance sheet. I think we have space for that. I mean, this is a transaction which brings also some operational megawatts with good profitability and also a good pipeline. We would be deploying CapEx in any case, in the region. In that extent, you know, we are not expecting to do anything different, you know, from what we would normally do.
It would fit within the normal, let's say, structure of balance sheet that we would be assuming for the next couple of years. If you want, kind of, Rui can also comment with more detail on that. In relation to net income, I mean, this year, obviously there have been, you know, as I mentioned earlier, there have been some issues which have impacted us, so it's not been a great year. We have had much lower wind generation, so that is certainly something which has impacted the year. We've had some one-offs like ERCOT, which again, obviously not, you know, had impacted us earlier this year. Also in terms of some of the hedges in terms of Spain, I think, you know, Rui addressed that as well, although that's, let's say, more residual.
Really the key thing has been the wind generation. I mean, obviously we are ramping up growth, and ramping up growth means that we ramp up DevEx, we ramp up some of the growth costs. I think that's like built into the numbers over the certainly over the medium term. That's let's say the guidance I could probably give you on that. Anyway, we can come back to that again if you want any more detail on that.
Very clear. Thank you.
The next question comes in from the line of Manuel Palomo, calling from Exane BNP Paribas. Please go ahead.
Hello. Good afternoon, and thanks for taking my questions. I've got a follow-up on the transaction. I understand that today's announced transaction is not just a simple acquisition of assets. Could you please give us some additional information color about the transaction in terms of operational data, I mean, in terms of the expected EBITDA, net profit maybe for 2022. Also if you could give us a bit of the detail on those 540 MW in operation and under construction, how much is in operation, how much is under construction? My second question relates to Spain. I've seen that there's been a significant decline in the average selling price in the country from EUR 80.3 to EUR 58.5.
I would ask for a bit of color on the granularity on the different components for this decline in the price given the high wholesale prices that we are seeing. Also wanted to ask you a bit about your hedging policy for the coming year or years in Spain. One question would be if you have contracted volumes in Spain that could put you at risk in case the resource continues to be weak. The other question is whether you could give us an expectation in terms of volumes that are already hedged and also prices at which you have hedged those volumes. Thank you very much.
Yeah. Thanks, Manuel. In relation to the first question, I mean, some additional color I can probably provide for 2022 is that, you know, the expected EBITDA contribution would be around EUR 50 million for 2022, and we expect that to grow at around 25% CAGR over the next couple of years. There would be north of EUR 100 million certainly by 2025. In terms of, let's say financials, you know, and we don't go down to the net income level. In terms of megawatts, I'd say that talking AC operating end of the year, you'd probably be expecting to have around 430 MW. The rest would be coming in early next year, so probably another 200+ coming in in 2022 AC.
Hopefully more than that, but I'd say, let's say on the conservative side, that would be it. That's probably some of the color I can give at this stage in terms of the transaction. In terms of timing of closing, you know, it is subject to regulatory approval, so we will have to go through that still before we can actually step into the company. What we've done is just signed obviously the SPAs, and we expect that would happen, let's say the most optimistic scenario would still be this year. Given COVID et cetera, maybe early next year, so in terms of actual closing of the transaction. In relation to questions two and three, Rui, I can probably pass it on to Rui as a-
Thank you. Thank you, Miguel. Manuel, regarding Spain, maybe I think it's better if I just, you know, split this in three building blocks.
Let's start by the actuals pre-hedging, okay? We have about 2.5 TWh with, you know, generation, which is under the regulated framework, and that on average, we have a price of EUR 76.5 per MWh. We have about 1 TWh, so that's merchant, the capacity which is under a merchant, you know, on a merchant basis, so outside the regulatory framework. That was sold at an average price of EUR 67 per MWh. I mean, this includes the full price, you know, the WAF, so the wind adjustment factor, so on and so forth. You know, if you build these two together, you get to an average price of around EUR 74 per MWh. Again, this is pre-hedging. Okay?
Now, the second part of this is that, as you know, we have a hedging strategy to mitigate, you know, volatility, and ensure that we have a low risk profile. You know, before the year started or as the year was starting, we had approximately 2.2 TWh of energy sold forward at EUR 53.5 per MWh. Basically, when you combine these two, plus the fact that you have a lower wind resource this year in Spain, you get down to an average price of EUR 58.5 that we were reporting and that you were referring to. Again, this is a result of the combination of, on one hand, the fact that we...
Once we have the hedge in place, then, I mean, if there is any delta towards the regulatory hedge, I mean, that will be impacting the books and impacted the books. Secondly, because there is a part of this hedging that we had a shortfall in terms of volume, and therefore we were not able to generate the required power, and basically had to buy it at higher market prices. It's the combination of these two factors that, you know, what is the actual pre-hedging plus the hedging that yields EUR 68.5 per MWh. As we move forward to 2022, maybe here are two comments.
We have approximately 70% of our capacity or generation hedged for 2022. That's an average price of EUR 50 per MWh. As you know, I mean, there has been, there is now a discussion in terms of regulatory, you know, some potential regulatory change impacting 2022, which, you know, the government is discussing this with different renewables associations. This is something that we have to wait and see what is the outcome of that discussion and to what extent it could potentially impact the hedging strategy towards 2022. I mean, if nothing changes, as I said, I mean, we have about, you know, 70%, that's around 2.2 TWh also hedged for 2022 full year.
Thank you.
The next question comes in from the line of Jenny Ping calling from Citi. Please go ahead.
Hi. Thank you very much. I have two questions please. Just going back to the point around supply chain. We've just heard on the Ørsted call about solar panel delays in the U.S. and Vestas obviously reported today, and they highlighted some of the delays around onshore wind. Two out of three orders are being pushed back. I understand you say that you've got very strong relationships, but I just wondered whether you can elaborate a little bit more around that. Do you have existing sort of contracts in place to effectively mitigate any or clawback any lost earnings on the back of any delays in some of these supply chain issues which may come through end of this year, next year?
Just really trying to understand where your strong relationships, how that manifests itself. Secondly, on Sunseap, Manuel's already asked quite a bit of the details. I just wondered whether you can give the debt number, the net debt number that you'll be taking on. Very lastly, and apologies for a newbie question. When I look at Equinor, when I look at Ørsted, all of these companies are now starting to report, at least give guidance around their EBITDA ex gains. I just wondered to hear what your latest thoughts on that, in terms of your views and including the gains in EBITDA. Thank you very much.
Yeah. Thank you. Taking the first question on the supply chain. I mean, first of all, you know, we have contracts obviously for everything that is under construction and that we have secured. To that extent, you know, those contracts typically have clauses, which in the case of delays or significant delays, there are penalties associated with that. You know, that's, I don't think in anyone's interest that there would be those delays. We have these long-term relationships. I mean, we've been in this business now for, you know, almost two decades. If we're not the number one customer of Vestas, we are probably close, depends maybe on the year. I think in relation to that, we, you know, obviously we work with them and, you know-
Try to have the best terms possible, but we also have the contracts in place and we will obviously enforce those. As I mentioned earlier, you know, we have had no indication that there would be any delays on the projects that we already have under construction or that we are, let's say, developing over the next year or so. In relation to solar panels, I mean, there it's not so much a question of, let's say, well, I'm sorry, in relation to pricing as well, I mean, obviously, that's already built into the contract, so when we lock in the CapEx, we're also locking in the pricing and, yeah. To the extent that it's closed, it's closed.
If, for example, we are still in the process of an RFP or a tender or something, and there is an increase in the CapEx estimate, then we will see that through into the higher PPA prices or the auction prices. That's why I gave the example of Spain, where you saw an increase in the tender prices and also in some of the PPAs that we are currently negotiating where we've gone back to the customers with higher PPA prices. Since it's a general sector-wide thing, that's being accepted. I'd say that that's the visibility that we have. In relation to solar, as I say, again, we have good long-term relationships with suppliers like LONGi, Boviet, which are, let's say, some of the top suppliers globally.
You know, to the extent that there is issues on pricing, and there have been, we're also feeding that through into increased PPAs. In any case, when we talk about increases in PPAs, we're talking about maybe $2, $2, EUR 2 per MWh. I mean, that's the sort of size of the delta that we see in some cases. In terms of actual timing, as I say, there is some uncertainty, so we have had no indication that there will be any material delays. But in any case, it is something that we're following closely. Obviously we know that there have been issues in the supply chain, further upstream, and so, I mean, we're continuing to monitor the situation. But I don't have any specific, let's say, guidance to give you on that.
Apart from that, it seems to be manageable within the current context or within the current, let's say, estimates that we have given out to the market. Sorry, hopefully that answers the question or gives you a little bit more color on the question.
No, that's perfect. Thanks.
In terms of the net debt for Sunseap, it's around EUR 200 million. I think we've given enterprise value EUR 870 million, equity value around EUR 600-something million. I think that's the delta around EUR 200 million. What we have said, however, is since there are some of these projects under construction over the next couple of months or by the end of the year, probably the enterprise value would be closer to EUR 1 billion because of the additional CapEx that will be in place. Let's say breaking it down into very specific numbers, EV EUR 870 million as of date of signing. Equity value EUR 690 million. Net debt EUR 180 million.
The enterprise value will be closer to EUR 1 billion by the end of the year, which is probably when we would do the closing. In terms of guidance, I mean, to be honest, we consider and we have been considering now for a while that the asset rotation strategy is something which is, let's say, an intrinsic part of the business. I mean, we build megawatts. Some of them are to keep, others are to sell, and we give visibility on those gains. When you talk about cap gains, I mean, what we've indicated to the market, let's say, in the context of our business plan, is that the capital gains implicit in the business plan are roughly EUR 300 million per year over the next couple of years.
If you look at the numbers that you have for EDPR, that's sort of the level of gains. One minus the other would give you, let's say, the guidance X gains.
Thank you very much.
The next question comes in from the line of Mikel Zabala coming from Bank of America. Please go ahead.
Hi, good afternoon, Miguel. It's me, André. Two questions from me, please. As you pointed out in your slides, the last draft of the U.S. reconciliation bill is proposing ten-year extension for subsidies. Would it be fair to say that there is upside to your long-term capacity targets from February? And could you give us an idea in terms of the incremental opportunity here versus your plan if those extensions become a reality? The second question is, we've seen permitting issues in most of the European markets. It's been a problem for new projects. Could you please discuss the visibility that you have right now over Sunseap's pipeline, given it's so big vis-a-vis the operational capacity?
What can you tell us about the permitting situation in some of those Asian markets? Is it better than in Europe? Also conscious that it is a bit of a different game for distributed solar. So is it fair to say that this is easier technology to permit than utility scale solar? Thank you very much.
Yeah, I mean, great questions. In relation to the first one, I mean, I think actually your first question is slightly related to your second question as well. The 10-year extension is actually fantastic. I mean, obviously gives a big boost to the industry as a whole in the U.S. and, you know, just continues. I mean, if renewables is already competitive even without the PTCs, I think this really gives an extra boost to continue the growth of renewables in the U.S., both wind and solar, and also even other technologies like storage and hydrogen, which will also, and offshore, which also get, let's say, that additional boost. I mean, I wouldn't want to necessarily give a specific target, just because I don't have one-off upside to the long-term goals that we've given.
What I would say is, I would go back to one of the comments which I had made, which is if we want to reach the targets, the overall sort of, let's say Paris Agreement targets, with the 1.5 degrees, we would be investing $4 trillion per year globally, as opposed to the $1 trillion, so quadrupling. I mean, obviously, that's not the basis for our numbers, so our numbers are based on, I'd say, let's say more conservative growth plans. I mean, this is just a massive amount. I don't think the issue, I mean, the sky is the limit in terms of number of megawatts.
I think the big issue, which is on the table in terms of how fast we can roll this out, is making sure that each individual country has very specific targets. They go from that more aspirational goals to very concrete yearly goals over the next 10 years. They translate that, for example, into tenders or they translate that into a sort of specific processes, so that they continue to drive the demand sort of at the national and at the regional level. I think one of the things which we've also been highlighting, both with the European Commission and also within associations like WindEurope or Eurelectric, is around the permitting issues. Obviously some countries are easier than others.
I think there is work that can be done there, and that's something that I know, you know, at the highest level in the European Commission and I think also in the European Commission, they are looking at permitting issues, how they can, let's say, look at the best practices of different countries, come up with a list, for example, of countries and how they rank in terms of time to be able to get the permits done and to get projects sort of approved. As you know, it can vary quite a lot between different countries.
I think focusing now on some of those issues and making sure those are, say, more facilitated, I think that will help certainly translate some of these more ambitious targets into very concrete numbers on the ground and accelerate even more what we're currently seeing. In relation to Sunseap in particular, I mean, I think in Asia-Pacific, definitely the issues around permitting are relevant because, I mean, it is a densely populated region of the world, which is good and bad. I mean, it's good because there's a lot of demand there. There's a lot of need to decarbonize the economy. But it does mean that land is expensive and you need to really manage, let's say, just permitting to make sure it's compatible with the local communities.
I think that's why things like, you know, floating solar, or reclaiming land or offshore, I mean, all those or distributed generation, which is actually something which is really growing a lot in a lot of these countries, are ways of reaching those objectives, but in a way which is consistent also with the permitting issues and with the impact on the local communities. I think Sunseap has been very successful in terms of what they've done over the last couple of years and the way they have positioned themselves for this. In terms of growth going forward, I mean, we're talking about, you know, probably being able to grow at 200 MW-300 MW at least in the short term per year, AC, and sort of 300 MW-400 MW DC.
I think, as I said, I was probably upsizing that given the different markets and just given the overall size of the region. Hopefully that's added a little bit of color to your questions.
Yeah. Yeah. Thank you very much.
The next question comes in from the line of Philippe Ourpatian from ODDO BHF. Please go ahead.
Yes, good afternoon. Just three follow-up questions. The first one is concerning the 540 MW of Sunseap. You mentioned at EUR 1 million per MW, which seems to be quite high. Could you just elaborate on this figure? That's my first question. You mentioned also 20-year PPA, which is good news regarding the duration. But is the 670 MW which are in operation and secured are fully under PPA? Means 100% of the capacity is under PPA. That's the second question. The last question is concerning the valuation. Could you just elaborate how you are valued, the value creation you mentioned on the slide 11?
means that, could you just give us some parameter you use or more simply, I would say, this on the project margin generated versus the construction cost, which seems to be quite high, somewhere around 50%. Could you just elaborate concerning this valuation? Many thanks.
In relation to the first question, the 540 MW , I mean, it's high, but you have to think about it in terms of distributed generation. We're talking about, let's say, smaller project sizes. Typically it would be in the single-digit megawatts. And obviously in locations which have higher costs in terms of deployment because there are more distributed generation. In terms of the CapEx, you know, given the way they were developed, I think it's a normal or what would be expected. Also, just to remind you, it is AC and not DC.
Sometimes I think when people are comparing the CapEx numbers for solar, it is important to make that distinction because obviously it is, you know, AC and DCs do have around a 20% difference. I think in relation to CapEx, I mean, obviously we think CapEx will then continue to come down over the next couple of years, but we'll say that would be one first comment in relation to that. In relation to the second question, the 20-year PPAs. Yes, it is pretty much fully contracted for the PPAs or regulators. I think that's mentioned here on one of the slides. I don't have. Well, I can find exactly the number of the slide, but that is fully contracted and at around EUR 75 per MWh.
I just also highlight the price of the, or the implied price of those PPAs or regulated. In relation to the value creation, I'm glad you asked the question. I mean, what I would say is, you know, we look at these projects or we look at these acquisitions for our platform. I mean, we are applying the same type of investment metrics that we do for other projects. In this case, we would be looking at, let's say, above 2% spread over our cost of capital. That's assuming, let's say, a relatively prudent growth plan over the next couple of years. Let's say it would be basically taking the current operational projects and the margin on that using that sort of spread.
Also looking at the future value creation that will be had with that growth. The overall, it has to be in line with our investment criteria, so around the 1.4x or at least above the 2% spread. That's sort of the way we would look at it from a valuation perspective. That's why in terms of the slide, if you notice, I mean, in the way we brought it up, it's the CapEx and then the value creation and the pipeline. Those three bars actually sum up to more, or at least visually, they should sum up to more, look more than the implied enterprise value actually paid for it. Because we do believe we are, let's say, getting a good return for this investment, assuming relatively, you know, reasonable assumption.
Just one addition. If this means that for the pipeline of the 4.8 GW, you have taken the assumption that the utility scale business are going to be bigger than the DG, means that your CapEx will go down towards the normal level what we are seeing in some projects around the world, somewhere between 0.5-0.6. That's correct to assume?
What we've looked at, and then probably the best way to think about it is we've looked at what would be a reasonable growth rate or relatively, you know, being relatively conservative. Obviously, we don't want to be too aggressive here in terms of growth of megawatts over the next couple of years, until 2025, thereabout. The implied value creation that we will be getting on that, assuming our typical investment return, so, you know, around the 1.4x WACC or above 2% spread.
Just saying that's implied in that pipeline, we're assuming that we will develop at least part of it, not all of it, but at least part of it over the next couple of years, that we will be creating value from that pipeline, and that will give us a return, which will be, let's say, quite a bit higher than the EUR 870 million that we are paying for the platform.
Many thanks.
Okay.
The next question comes in from the line of Jorge Alonso, calling from Société Générale. Please go ahead.
Hi, good afternoon. Just a couple of questions left, please. Regarding the expansion into new markets, specifically in Asia, this is a solar platform, but do you think it could be a good idea for you to look for a similar transaction or a similar approach for developing wind in Asia? Or do you think your capabilities are good enough to go and do it directly? The second one is, if you can provide a little bit of color about a work in progress that you do expect to have at the end of the year?
Which amount of money will be invested and recorded in the net debt, but not contributing to EBITDA? Thank you very much.
Thanks, Jorge. In relation to the first comment, I think I mentioned the presentation that we would look to leverage on this platform to bring our competencies in wind. We are not looking or not thinking about, you know, buying any additional platform in Asia for wind. We think that, you know, given the team and the quality of the people there, plus our own expertise and, you know, the people we have internally, that we would be able to build on this platform to develop, let's say, the wind components for it. It's not in our plans to go out and do another acquisition for a specific wind platform. In relation to the second question on work in progress, I'm just looking around. I'm not sure we have the specific number.
Perhaps we, you know, we can follow that up later, but it's not something I have here off the top of my head.
Thank you. The next question comes in from the line of Sara Piccinini, calling from Mediobanca. Please go ahead.
Hi, good afternoon, and thanks for taking my questions. Just a clarification if possible about the deal of Sunseap. How do you consider the distributed solar generation versus the utility scale generation? Do you think is a more risky business or they have similar characteristics? That is fixed, sorry. When you indicate the EUR 75 per MWh, I presume this is for the assets already secure, but do you expect this tariff to be applicable also for the future projects? Also about the pipeline, I understood that large part of the pipeline is also related to floating PV. Can you please indicate a level of CapEx per MW for this technology? The second question is about the guidance.
Could you please indicate what is the level of EBITDA and net debt that you expect by year-end, considering the EUR 300 million capital gains and also the acquisition of Sunseap? Many thanks.
Okay. In relation to your questions. In relation to the first one, distributed generation versus utility scale. I mean, I think one of the key things and, you know, we've obviously been doing a lot of work on Asia Pacific and seeing how we can take advantage of the growth opportunity there. It is quite densely populated, and I think that's something to bear in mind. Distributed generation there, which can be sort of, you know, 2 MW, you know, that type of range or, you know, 1 MW-10 MW type range, can be quite an interesting solution because it can be deployed much closer to the industrial customers or the customers that, let's say that we are entering into PPAs with, and then growing that, sort of at scale, in the region.
It is relatively similar, I'd say, in the sense that you have also specific counterparts, and I mentioned some of them, you know, whether it's an Amazon or a Microsoft. Those are the type of customers that you can also have in this case. That's true for some markets. In other markets, for example, in Vietnam, I mean, maybe you have a regulated tariff, and so in that case, it would also be, let's say for the utility scale, it would also be something that we would be considering. From a technological point of view, it's not so different. From a regulatory point of view, I mean, the key thing is also looking at the regulation or at the counterparty. I don't think they're substantially different businesses at the end of the day.
We're not talking B2C, we're talking, you know, when I talk distributed generation, we're talking basically C&I and B2B customers. I don't see it as a materially very different business. In terms of the second question, the EUR 75 per MWh. These are for assets already secured. I mean, obviously this will evolve over time, depending on, you know, the countries, depending on whether, you know, what are the CapEx assumptions that we'll be using or sort of getting for the different projects. I would say that over time, we would expect these numbers to probably start coming down as also, you know, the sort of economies of scale start kicking in in some of these geographies.
I would say they would still stay relatively high numbers, certainly compared to perhaps some of the numbers we see in other parts of the world, for example, like in Iberia or some parts of the U.S. So the EUR 75 per MWh is for what we have secured. I wouldn't expect it to deviate too much over the next couple of years. In terms of floating PV solar CapEx, I don't have a specific estimate for that. We can get back to you on that. When we're looking at what is the pipeline, the value of a certain pipeline, the most important thing for us is, do we think that we can get a positive value creation, a positive margin on the projects when we invest in them?
That's why the metrics that we look for, whether it's the 2% minimum spread or the 1.4 times WACC, that's really what's most relevant for us. It then needs to be technologically feasible. You know, we need to make sure we have a good counterpart and that the PPA is competitive. In terms of the specific CapEx estimates, maybe we can come back to you with that. In terms of EBITDA and net income, what I'd say is that, you know, we are still comfortable with consensus. Essentially it will depend very much on, as I mentioned in the presentation, on closing some of the asset rotation transactions before the end of the year. I think we're making good progress there. As you know, we have several transactions on track, that we signed earlier this year.
I'd say, you know, we will be above EUR 300 million. That is our expectation by the end of the year. In line with the EBITDA and net income that's out in the market, which I think has been given out by IR.
Thank you. The next question comes in from the line of Olly Jeffery, calling from Deutsche Bank. Please go ahead.
Hi. Two questions from me, please. First is on just going back to the poor wind resource that we've seen this year. Just asking the question again, do you have any reason to believe that the P50 load factors that you're assuming in the future for wind should be lower? For example, are there any noises internally getting louder about having to look at this again? Or are you aware of any studies that are questioning?
P50 load factors as we look at them. Also, are you looking into this, are you carrying out an assessment into this area to see if you're still comfortable with where the P50s are? The second question I have is just specifically on the Portugal and Poland sales. You know, gone at quite high EV/MW multiples, EUR 2 million-EUR 2.4 million /MW. Can we expect when you complete these, that the gains that you get on these assets on a per MW basis are significantly higher than the EUR 250 per MW we saw at the beginning of the year? Because if you assume a typical CapEx, you might expect that the gains here are gonna be really quite chunky and in excess of EUR 500,000 per MW, perhaps. Any comments on that would be much appreciated.
Thank you very much.
Okay. All right. I think in relation to the first question, that's, I mean, the question I certainly ask internally constantly, and so far there's no reason to believe that this is changing. I mean, that's the honest answer. You know, when we look back over 20, 30, 40 years, I mean, you know, and look at the long-term trend and sort of we factor in the last couple of years or in the last couple of quarters, I mean, there's volatility. There always has been volatility. It seems to be within the normal range, and so the overall trend line does not seem to be deviating. You know, there will be good years, there will be bad years. I mean, this is clearly not a good year.
The only voice I think that is Rui and myself, making sure internally that we are sufficiently comfortable to be able to tell you and, you know, and the rest, that, you know, we have no reason to believe that this is changing. That's a question we ask ourselves internally, and that's the assessments we've been looking at and, you know, some of the statistics we've been looking at. As I say, nothing has led us to believe that there is a change. In relation to the second question, I mean, yes, you are right. I would say particularly in the case of Portugal, it would be a higher multiple per megawatt. In Poland, it'd probably be more in line with the values that you indicated.
I mean, we will provide specific numbers on that obviously when we close them. It is all subject to adjustments and to, you know, changes, depending on the contractual provisions that we have with the buyers. That's why we typically only give out the final numbers when we actually close the transaction. You know, hopefully by year-end we will have done that, and then we'll be able to provide additional information on that. I would say yes, I mean, your intuition is right in that the gains per megawatt will be higher than the 250.
Thank you.
The final question comes in from the line of Jorge Guimarães calling from JB Capital Markets. Please go ahead.
Hi, good afternoon. I just have two follow-up questions, if I may. The first is a technical one related to your issues with the regulatory hedging in Spain. I would like to understand exactly the mechanics of what happened in the quarter. If possible, if you can quantify what was the impact in the quarter of this regulatory hedge, as you might call it. The second one is related to distributed generation. You are doing a massive push on distributed generation with this acquisition of Sunseap. This is a thing that you mentioned in the past. Could we see EDPR buying more platforms of distributed generation in other geographies? Thank you very much.
Hi, George. In relation to the first one, I then pass it to Rui and probably in more detail, we can also then take it offline, just to walk you through the exact mechanics. I'll pass it to Rui. Perhaps I'll just answer the second question first and then before I pass the ball. I mean, in relation to DG, I think DG. Well, first, we're talking about typically these platforms are more B2B or C&I. The line between DG and utility scale sometimes becomes more blurred, certainly in certain geographies. I think our position has been that the same way that we look at, you know, wind, solar, offshore, within these technologies, you then have slightly different segments, and sometimes these are blurred.
You can have, for example, utility scale in France, which can be maybe 10 MW, and you can have what we would call distributed generation, which might be also some single digits or close to 10 MW, depending, just because it's behind the meter. I think, you know, we do see synergies there, and we do see these as different ways of, let's say, attacking the market in different geographies and also depending on the particular regulatory environment. I wouldn't see ourselves, you know, buying a lot more platforms, or at least, you know, we don't have a strategy for going out and buying more DG platforms. We have done that selectively where we think it adds value to us. This is one case. I mean, Sunseap does both.
'Cause it's expected going forward to do about 50% each, 50% utility, 50% more, let's say C&I, DG. We have done that in the U.S. with C2, so that's also complement to our existing platform in the U.S. I think that also gives us a good insight into the dynamics of the DG markets in the U.S. Again, we will do it selectively. We do think it's a good way, particularly in some geographies, of getting access to more growth, particularly on the solar side. It's not something that, let's say, we have an active strategy of specifically going out to buy more of those platforms. In relation to the first question, then I'll pass the ball if we, if you want to take that.
Yeah. Thank you, Miguel. Hi, Jorge. I would definitely we can take it offline and go through in more detail, but just in a ballpark. We have about EUR 15 million impact. It's EUR 10 million-EUR 15 million impact in Q3 from this financial hedging in Spain. Our full year estimate is around EUR 25 million on the basis of a P50 wind resource in the fourth quarter. That's, you know, the amount or the range that we are talking about. I mean, the mechanics just, you know, in one minute is basically. If you have regulatory.
Wind farms under regulatory framework, and if you are hedged, as you know, if the price goes above the regulatory cap, you'll have to get that additional revenue back to the system. If you are hedged, because we decided to hedge some volumes within the collar so that we don't take that volatility, then you need to give back the delta to your hedging and not to the regulatory cap. You know, that's what it's impacting. Again, if you want, what I can do is we take it offline and go step by step so that you can get comfort on the numbers and the dynamics. Are we there?
Thank you. That was the final question in the queue.
Okay. Thank you very much, everyone. Good afternoon.
Yeah. Thanks, everyone. Take care.
Take care. Bye-bye.