Investing in Geothermal Energy:

Geothermal Prospects of ‐‐Polyaigos, , Lesvos and Methana

Athens, December 2011 Contents

 The Greek RES market within the EU 2020 targets

 PPC Renewables S.A. – Company Profile

 Geothermal Projects in

2 Current Situation

 The high renewable energy potential in wind, solar, hydro, geothermal energy and biomass have always favoured the use of RES energy in Greece Greek RES Market* (Installed Capacity, End 2010)

 Despite the significant potential of the 4.000 3,956 country, its RES sector has been a flat and 1,736 MW slowly developed market during the past 3.000 2,220 years, reaching ~1,75 GW today 2.000 1,298  The adoption of the EU Directive (28) in 1.000 198 44 196 2009 led the Greek Government in passing a new legislation (L. 3851/2010), 0 Wind Solar Biomass SHPPs Large Total aiming to speed up renewable licensing HPPs * Including large HPPs procedures (i.e. minimizing the Source: HTSO, PPCR estimates bureaucracy), setting thus the basis for a new national fuel mix over the coming

years Approx. 8,5% market share of electricity consumption today

3 Recent Developments

According to EU directive, the national targets for 2020 are set as follows: Expected development of Greek RES market penetration Share of energy from RES in gross final energy to meet the EU target consumption at 18% by 2020 (Directive 28/2009) 20% % The Government raised voluntarily the RES penetration 20 target from 18% to 20% 18 18% The target for the share of electric energy from RES in Initial gross final electricity consumption is set (in the 2010 16 National 9,6 legislation) at 40% by 2020 Target 14

The other 2020 targets are:  Biofuels penetration: 10% 12

 Energy savings: 20% (not binding) 10 8,5% 1,9  CO reduction as follows: For sectors outside 2 8 2003/87/ΕC, 4% reduction in emissions compared 6,9% to 2005 level (66.7 mn) until 2020, and For sectors 6 within 2003/87/ΕC, 1.74% yearly reduction RES market penetration in 4 Year 2005 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20

RES penetration in the final energy consumption (%)

4 Break Down of National Renewable Energy Action Plan by RES

Source: Invest in Greece

 The realization of the NREAP targets set in the domestic legislation would require an average of 900 MW installations annually

Installed Energy % % Capacity Production participation participation target target (MW) (GWh) (MW) (GWh) Wind Energy 7.500 69,64% 16.797 71,55% PV 2.450 22,75% 3.225 13,74% SHPP’s 350 3,25% 1.349 5,75% Biomass 350 3,25% 1.763 7,51% Geothermal energy 120 1,11% 343 1,46% Total 10.770 100,00% 23.477 100,00%

5 PPC Renewables S.A. – Company Profile: Mission & Strategy

6 PPCR’s Current Portfolio

. PPCR current portfolio of installed assets is 144,7 MW, holding a leading position in the country in SHPPs

PPCR portfolio in MW (type & , End Evros Xanthi Rodopi Q3 2011) Drama Kavala Serres 144,7 Kilkis Pella Thessaloniki MW 0,7 Florina Chalkidiki Imathia Limnos Kastoria Kozani Pieria 

Grevena Larisa  Ioannina  Trikala 28,5 Kerkyra Magnisia Thesprotia Karditsa Arta  1 Preveza Evrytania  Fthiotida Evvoia  61,92 Aitoloakarnania Fokida Lefkada Voiotia  Attiki     Kefallinia Achaia Korinthia  Argolida Ileia Zakynthos  Arkadia Kyklades  PV in mainland Wind farms in Lakonia  Wind farms in mainland SHPPs in islands  SHPPS in mainland Wind Farm  • 20 Wind Farms (mainly in islands) SHPPs Lasithi Chania Rethymni   Irakleio  • 15 SHPPs (mainly in mainland) P/V  • 6 P/V installations 7 PPCR’s Pipeline

. 157 MW at the final stage of licensing procedure

. Additionally 620 MW are in the process to obtain the installation license

MW per stage of licensing process MW per type of RES

MW302,4 2.992

in operation 144,7 New Existing

with intallation license 157,7

with approved environmental terms 110,1 2.911 with production license 510,6 202 620,7 applications for production license 1.746,4 105 201 under study 764,0 42 73 81 25 37 Total 3.433,4 63 1 W SHP P Geot Biom Hybr P P V h. ass id

8 The total annual turnover of Greek geothermal market is estimated at ~ € 348 million based on current selling price of electricity produced in the Network

annual energy annual Power energy price output turnover (MW) (€/MWh) (MWh) (€ m.)

Expected Geothermal Installed 170 1.500.000 x 99,45 = 149 capacity by 2020

Additional estimated unexploited 230 2.000.000 x 99,45 = 199 geothermal potential

TOTAL estimated geothermal potential 400 3.500.000 99,45 348 in Greece x =

The total gross turnover of the unexploited geothermal potential in Greece is estimated at around € 348 million annually.

9 PPC/PPCR’s Major Geothermal Milestones

 1973: Beginning of exploratory drilling for Geothermal Fields  1986: Construction of the first Geothermal Power Plant in the island of Milos (2 MW)  1998: Founding of PPC Renewables S.A.  2006: Transfer of all PPC’s RES assets to PPC Renewables S.A.

Pic.1: Zefyria then Pic.2: Zefyria now

10 By 2020, PPCR is expected to hold shares equal to ~ 70% of the total installed capacity of geothermal energy in Greece

Έβρος

Ξάνθη Ροδόπη Δράμα Καβάλα Σέρρες Κιλκίς Πέλλα Θεσσαλονίκη Φλώρινα Ημαθία Χαλικιδική Λήμνος Καστοριά Κοζάνη Πιερία Lesvos PPCR’s expected installed Γρεβενά Λάρισα capacity by 2020 (MW) Iωάννινα Τρικάλα Mαγνησία Θεσπρωτία Kέρκυρα Καρδίτσα Άρτα Πρέβεζα Eυρυτανία Χίος 120 MW Φθιώτιδα Eύβοια

Aιτωλοακαρνανία Φωκίδα Λευκάδα Βοιωτία Σάμος Athens Kεφαλλονιά Aχαϊα Koρινθία

Ηλεία Zάκυνθος Aρκαδία Methana Nisyros Mεσσηνία Λακωνία Milos - Kimolos PPCR is expected to play a leading role in the Greek market for geothermal power

plants with 120 MW of a total of 170 MW

Ρέθυμνο Λασίθι by 2020. Χάνια Ηράκλειο

11 Portfolio of geothermal projects under development

Milos‐Kimolos‐ Name Lesvos Nisyros Methana Polyaigos

Installed Capacity 8MW 5 MW 5MW 5MW Annual Production 66.500 MWh 40.000 MWh 40.000 MWh 40.000 MWh

Owner 100% PPCR 100% PPCR 100% PPCR 100% PPCR Application for Application to RAE for Signing contract with Present stage Preparation for drilling production production license & Ministry (ΥΠΕΚΑ) license preparation for drilling

Total Cost €32m. €40m. €20m. €20 m. Estimated annual €8,5 m. €4,9 m. €4,5 m. €4,5 m. revenue

12 NISYROS: A GEOTHERMAL POWER PLANT WILL BE DEVELOPED ON THE ISLAND AT Ag. EIRINI

older drillings

Faults of geothermal significance

Planed position for 5 MW power plant

13 NISYROS: The power plant will cover the electric power needs of the 9 interconnected islands METHANA

Main features

 PPCR has achieved social consensus

 The geothermal field of Methana is not yet fully explored

 The prospect is to thoroughly explore the field

 The Geothermal Power Plant will be connected with the Greek mainland grid

Project’s history Investment Activities  8 studies have been conducted since 2000  3‐4 exploratory drillholes of medium depth will be  PPCR has secured the consent of the Local Government and has constructed received the required approval of environmental terms.  Drilling of an exploration well of 2.000m depth will  11 shallow exploratory slimholes (depth 250 m) have already follow been drilled.

Methana: Map of project

LEGEND

ARCHAEOLOGICAL SITES

SLIMHOLE DRILLINGS

POTENTIAL POSITION OF NEW WELLS (INCLINED WELLS)

MAIN RIFT STRUCTURE OF THE REGION MILOS –KIMOLOS ‐ POLYAIGOS

Main Features

 Social consensus is vital for the development of the Project

 Milos ‐Kimolos‐Polyaigos is a field of high geothermal capacity

 With the full field development, and after connecting to , this field can cover most of the energy

demand of the

 A 5 MW geothermal plant will be developed and 25‐30 new jobs will be created (direct employment)

MILOS –KIMOLOS ‐ POLYAIGOS

Hot Springs

K1 K5 PPC Slimholes K4

K2

K3

K8 K6

K7 LESVOS

Present situation The initial exploratory drilling was interrupted due to technical failures in Dec. '08 at 1,410 m, not having found satisfactory

temperatures

3 exploration wells are planned to be drilled at depth 600‐1000m at Stipsi and Argenos areas

19 Areas of Geothermal interest

ARGEN OS

STYPSI

POLYCHNI TOS

Stypsi Well Temperatures (0C) Geophysical survey