Solaria Energia Y Mdo Amb

Good afternoon, everyone, and welcome to Soria 2023 Full Year Result Webcast. My name is David Gangon. I'm the head of IR of Solaria. I am joined today by Arturo Díaz-Tejero Larrañaga, our chief executive officer. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. During this presentation, we'll begin with an overview of the full year results and the main development during this year, given by our CEO, Arturo. And following this, we will move on to the Q&A session. I would also like to highlight that you have to submit all your questions via the web. So thank you very much again. And I will now hand over the word to Arturo.

Thank you, David, and thanks to everyone joining this conference call. Like always, I will move extremely fast in the presentation of 2023 results of Solaria, and then we will pass to the Q&A session. Of course, here now. This year, I think that we have achieved a record from generation perspective. We have increased our generation, if you compare with last year, in 62%. Revenues continues growing. We have achieved 230 millions of euros. EBITDA, additional 36% of growth, 2023 versus 2022, and net profit. I think that this year was an extremely good financial year for Solaria. We continue growing. All the numbers continue growing. EBITDA, net profit, revenues, and energy generation. From capacity perspective, we have finished with close to 1.7 GW of capacity installed and connected to the grid, and we have under construction more than 1.5 GW. With these numbers, we can say that we are the leader in the Iberia region in solar photovoltaic technology, with more than 3 GW installed and under construction. Extremely important for us was the approval that we received on January of Garonja, the final approval, the final permitting process that we obtained at the beginning of January. Garonja today is under execution. Civil works we are doing and we are executing now the civil works and hopefully in the next 10-12 months, we will connect to the grid. It's our second flagship project, extremely important. As you know, after Trillo, Garonja for us is the second flagship project of our portfolio in the north of Spain, close to, in Burgos, close to the city of Burgos, and one of the largest PV plants that will be constructed in Spain. In order to give a global idea of the situation, something that we have explained during past presentations, but we have secured the financing for the 5.6 gigawatt portfolio that we are going to construct in the next two years. We have secured the financing with the European Investment Bank. with a credit loan of 1.7 billion euros, project finance structure. It was a great success that we announced on September of last year and that we are using now and we are using this project finance capacity in all the projects that we are going to construct during this year. Extremely important, price of PV modules, 500 MW that we have signed this contract a few months ago, one month ago approximately, two months ago approximately price record price of 0.093 euros per watt that is the lowest price in the history of solaria from purchasing point of view purchasing of modules point of view no good point i think that in the next days probably next weeks we are going to announce a new deal of 500 megawatts a new deal of acquisition of pb modules 500 megawatts additional 500 megawatts and probably We are going to stay in similar or even less level of price of modules. This is extremely important. At the end of the day it's CAPEX. CAPEX that we are improving all quarters and as you know PV modules is one of the key parts of the CAPEX. of the global capex of the PV assets. This price is a record price and it's extremely important for us. Of course, we have adjusted a bit the targets, 7%. Why? Because, as you know, the Spanish government at the end of last year approved the 7% tax for renewables, for renewables for all the generation, not renewables, globally for all the generation, and it's 7% of the sales. And we have adjusted our EBITDA targets according with this new tax approved by the government. Of course, we continue with our business plan, 18 gigawatts until 2030. The key point here is that we are including today more information about Italy and Germany. We are expanding activities out of Spain. We have today a good situation from pipeline perspective in Italy and in Germany. I think that more than 50% of our global pipeline will come from these countries. And this is extremely important because it's a geographical diversification that we are going to execute during the next years. And it's extremely important because Solaria in the next year will be the key player in the European Union from a renewable energy point of view. Of course, in order to enter in financial numbers, capacity increase and Garonia. As I have mentioned, we have started with the civil wars in Garonia. in extremely important for us from a strategic point of view and we will explain deeply during this conference call but garania will be one of the key assets not only for solaria globally for spain no and i will explain uh the good point is that we have increased our capacity originally was 595 megawatts and and we have get additional capacity and it was approved And today the project is 700 megawatts. I can say that is the largest PV asset in Iberia region. And the largest development or the largest photovoltaic development in Iberia region. As I have explained, 10-12 months will be connected to the grid. Of course, as always, we maintain some concepts that for us are fundamental. We need to be the top from ESG point of view and we maintain high level rating in ESG concepts. And we continue thinking that is one of the key points, especially if you work in renewables, especially if you are a renewable energy company. diversification not only from geographic perspective that i have mentioned italy spain portugal and germany no and not only from geographical perspective in technology wind and solar from wind perspective today we have more than 18 percent of our pipeline was associated and is associated with wind technology and will be developed and constructed in the next three years. And of course this is extremely important because today we can say that Solaris is not only a photovoltaic solar energy company, it's a renewable energy group involving different geographies and involving different technologies at the same time. Even I can say that we are not exactly only a renewable energy group, no? We are an infrastructure group, that groups not only in generation, that works in other applications and we will explain during this conference call, no? And profits, something that we always explain, no? We need to maintain a profit and healthy financial situation because, as you know, we are not rotating assets. We are not increasing capital and obviously all the cash comes from actual assets and future assets. 12% of minimum project IRR that we have always explained. Probably Solaria today is the best in class from CAPEX and OPEX perspective, globally in Europe or probably in Spain and globally in Europe. We don't acquire pipeline or similar, we develop all of our pipeline with our own team and we are not raising capital and we don't see this option for the future and we maintain all of our financing associated with project finance structure, deals that I have mentioned, European Investment Bank and additional deals that will be announced. And today this project finance is covering close to the 100% of our capex. Of course, financial numbers, production record, I think that I have mentioned, but it's important to say again, production record, sales record, of course, EBITDA record. It's important to mention, because all the market is extremely worried about this, merchant exposure. Today, our merchant exposure is around 30%. 70% approximately is close with fixed price with PPAs and 30% go to the merchant markets. EBITDA, net profit, we continue growing as I have explained. cash flow we maintain a really good level of cash after to invest more than 320 millions of euros that we have invested in 2023 that it was a strong effort for a medium-sized company like solaria we maintain a really good level of cash without any asset rotation without any increase of capital or similar and with the cash flow and the generation of our our pb assets and covering our capex with project finance Debt and situation of the debt is important to mention, especially with the actual situation of interest rate. All the market is worried about the situation of interest rate and when it's going to decrease. The average cost of debt is 3.5. That is not bad. It's good, especially because it's long-term debt. The average... 10 or for our project finance debt is 15 years, 14.4 and 3.5, 15 years is reasonable in our mind and more than 90% is project finance debt associated with our assets. Our level debt EBITDA is good, 4.9, hopefully during this year we are going to improve and hopefully during this year, especially with the reduction of our capex, we will improve all of these numbers and quarterly you will see the evolution. Of course, as I have mentioned, we adjust the numbers that we present with a 7% tax. Unfortunately, government has decided to approve again the 7% tax. In my mind, it's an enormous mistake because it's an old tax that it was a mistake of the previous government and they have decided to introduce again in the system. I think it's an enormous mistake that delay or damage in general generation not only renewals in general but today we have over the table and we have to include in our projections no but even with this effect of the seven percent we maintain a global EBITDA target for 2025 of more than 300 millions of euros that is significant probably is best in class for solar photovoltaic companies. And good news, at the same time that government has recuperated the 7% tax that I have mentioned, at the same time they have cancelled the clawback, that it was a direct attack to the renewable energy technologies. And good news, because they have cancelled the clawback and they have cancelled the Iberian exception, that it was an awful law approved by the government. Good point. Today we compete apple to apple with other technologies in the same situation because 7% is something that affects to all the technologies, not to renewables or inframarginal technologies. Clawback, an Iberian exception, was approved for inframarginal technologies. We have included here, this is extremely important for us, as you know, at the end of the day, the key point for us is project IRR levels. And we have included here an estimation based in our CAPEX, 0.375 euros per watt. And of course, projection about electrical prices is extremely difficult to make or to execute projection based on electrical prices, because as you know, It's all the time shaking and changing all the time. And I think that all the people is like in soccer. All the people knows about soccer. All the people knows about the future situation of electricity prices. All the people has opinion about price in the future of electricity. Honestly, after 25 years, I'm not completely sure about the situation of prices of electricity in the next 10, 12, 15 or 20 years. But usually people, all the people has opinion. But we will talk about this. I'm completely sure in the Q&A session we will talk about this. But even in the worst scenario that we have included, 39.6 euros per megawatt hour average price... The project IRR that we obtained, theoretical project IRR, is 14.2. That is acceptable with our criteria of 12% of minimum project IRR. asset rotation as you know solar is not extremely focused in asset rotation probably is the only company that is not focused today in asset rotation all the renewables and energy market is focused on asset rotation i understand with inflation situation but in our view asset could be rotate in the correct price no and in the correct strategy and the correct price could be rotate like always we have explained no As you know, we closed an asset rotation one year ago, or more than one year, in 2022. We closed a small asset rotation of 100 MW. We are negotiating new asset rotation in the Basque Country for 500 MW that could be increased, but today is based on 500 MW. 25%. As you know, Basque Country has a special law from tax point of view that they include 30% of tax credit on capex invested and this is extremely relevant for us. And probably this operation could be closed in the next 2-3 months. And it's good from financial perspective and it's good from tax point of view. Of course, this is something that I have mentioned, the portfolio, we are focusing the diversification of our portfolio, not only from geographic perspective, technology perspective, solar, wind, and geography, Spain, Italy, Portugal, Germany. And I think that more business will come. I think that Solaria at the end of the day is an infrastructure player looking for new business based obviously on generation, on renewable energy generation. but for us it's important to innovate and to make new business flagship projects and when we are going to enter in these new flagship projects you know because we have explained in all of our previous presentations Basque Country enormous project that will be extremely strategic for us and more than two gigawatts enormous probably the largest pb asset in europe and probably one of the largest in the world garonia that we have started with the construction civil works a trio that was done and we have now the second phase we are constructing the second the second phase it's 150 megawatts And more projects. We have included here Italy, because Italy is today an important country for us. We think that during especially 2025, 2026 will give to us a lot of surprises and good news. And of course, we have included here. Italy, we include the details. As you know, our target for Italy is 5 gigawatts. It's a complicated country, not easy to develop pipelines, not easy to construct PV assets or wind assets, not easy to sign PPAs. Great for us. It's the perfect place for us. Not easy, great. And I think that we are getting good successful. It's a complicated country. I love it. And 2.28 gigawatts was secured during last month, last quarter. And we are growing. Hopefully in the next quarter we could give update about new developments, situation of our pipeline. And hopefully during this year we will start with construction, massive construction in Italy. Of course, new concepts and things that could happen in the next year and during this year. A lot of things could happen here, but new business that we have over the table. As you know, Solaria, as I have mentioned, is not only a renewable energy generation company, it's an infrastructure player. We are constructing a lot of new substations. As you know, grid and substation is one of our key investments and is important in our CAPEX, the substation and the grid. And this grid and this substation is used not only by solaria, it's used by third parties, and even we are constructing substation and grid for third parties. It's one of our activities today because some players of the business of the renewable energy space, They appreciate our know-how and they are contracting and subcontracting us in some specialized works associated with substation, with grid, and it's good because it's healthy for us and it's a diversification of our P&L. power lines. We have today hundreds of power lines constructed and under construction. And hopefully we will have more than 1,000 kilometers of power lines in the next one, two years. And it's important because In two years we will be one of the key players from grid infrastructure point of view in Europe, not only in Spain, globally and the countries that we are working now. And this is extremely important for us because I think that will born a lot of new business associated with this. And we are going to rent, we are going to offer services to our not competitors our friends and colleagues and a new business will come from this investment that we are doing now and like always generia is growing we continue acquiring land or using hectares of land and we continue growing hopefully generia during this year could give news and we will see opportunities if you want we could go to the q a session and and we could answer the questions

Thank you, Arturo. I will now open the Q&A session. And once again, thank you for your time. The first question comes from Fernando Garcia from RBC. First question is what our assumption in terms of power price that we use for the new guidance of EBITDA. The second question is do we expect to connect more renewable in the short term? And then if we can give some capacity, capacity reading for the coming two years.

I think that the assumption that we have used and that we usually have used in previous presentations was the central scenario of advisor cure. The name of the advisor in this case is . Usually, today we are using Baringa. In the past, we have used other advisors. In this point, I know that it's extremely, as I have mentioned, it's extremely difficult to predict movements on power price. I have my own idea about the situation of the power price market, Spanish markets, especially in the next years. But in order to be fair, we have used the central scenario of a ringer advisor. In my view, it's optimistic. In my view, it's good. It's okay. And we will see the evolution of power price in the next three years. About the connections and what we are going to do during this year, hopefully we will connect more assets during next quarter. We haven't included our assumptions yet. But we are trying to do as much as possible in order to connect as soon as possible. Unfortunately, sometimes you depend on third parties. When I talk about third parties, it's infrastructure of Red Electrica, and we depend on them. Sometimes we finish our installations and we are waiting for the final connection one year or even... And unfortunately, we depend on third parties. Probably during the second half, we will have new connections, but we haven't included our assumptions. But hopefully in the second half, we will add 0.5, approximately, of gigawatts of additional capacity.

Second question coming from Jorge Alonso from Societe Generale. I think that part of the question we already answered, but the next question are coming from, if Solera is adding one to one spot five gigawatts in 2024, as those merchant currently. Next, asset rotation, to which asset are related COD in 2025 or 2026? and just maybe on the European Investment Bank Agreement if we require another 50% to fund the growth.

70-30 sound risk enabled for us is something that could change. For example, I can say that we are negotiating. a really good volume and we are negotiating with our customers, actual customers, because some of them need to sign PPA as soon as possible and we are negotiating with them really, I could say, large volume, the signature of large volume of megawatts in a PPA contract. And we are negotiating and if we achieve the correct price and the correct conditions, we could close. It's something like what I'm saying, that we could change this mix 70-30. If we have the correct price and the PPA with the correct partner, we could increase this number. And even with the strange situation actual today, with the strange situation in the power prices... we see a strong interest from our customers to sign additional PPAs and to increase the PPA deals with us and we are reasonable if we obtain a good price and you know that in the last quarter we have signed a good PPA and If we obtain good prices, we could increase our PPA exposure. And then asset rotation and the concept of asset rotation. As you know, Basque Country, the global project of 2 gigawatts, probably the connection will happen in 2026, probably. and the rotation is based on this project. Assets that will be connected in 2026. We are going to rotate now, but we'll be connecting in 2026. And the European Investment Bank. The European Investment Bank, the deal is associated with 50% of individual deals. is €1.7 billion and they allocate 50% of the individual deal. If you have a deal of €250 million, they allocate €125 million. But sometimes they support at the same time to the bank that entry with them and they allocate capital to these banks. For example, in the last deal they have allocated 50%, at the same time they have support with credit loan to the bank that has entry with us. You know that the last deal was signed with Santander and, of course, sometimes even they acquire position in the deals of the partner.

Next question is coming from Enrico Bartoli from Mediabanca. I think we already answered two parts of them, but the following ones are, when do we expect to receive final constitutionalization for the whole 4.5 gigawatts that are target to be complete by mid-2025? And maybe we can give some PPA price evolution in this negotiation with PPA counterparts.

We have to ask to the government, no? But in order to try to answer... Today, homework of Solaria was completely done. All the process was done. All the paperwork was done. All the projects were presented to the government. They have studied, they have pre-approved all the paperwork. I think that we are waiting for the final answer of the government. Theoretically, it should come shortly. But honestly, you know that the Spanish government, they have approved a delay of additional... ...a new additional six-month period in order to answer all the requests of approvals of new pipeline... ...and hopefully in the Q2 we are going to receive the final answer of the government. The good point, today we are really busy in the constructing activity. Honestly, I think that in Spain today you see from construction point of view... The only one that is closing deals, the only one that is constructing, real construction, the only one that is acquiring modules is Solaria. Other players are waiting for final approvals, but today Solaria will have more than 1.5 gigawatts under construction and we are acquiring modules, we are executing projects. It's like we are extremely busy working on the projects that we have today under construction, hopefully in the Q2. PPA prices. About the PPA prices, I think that you know that the last deal was announced with Endesa and the price that we think that is reasonable is between 40s, 50s. What does it mean? Between 40s, in 40s, it's reasonable. The good point for us is when you talk about customers and about PPAs, the key point today is you have a lot of players talking about PPAs that they could sign to supply electricity in one, two, three years. Honestly, in this case, you are going to see a strong reduction on prices of your PPA. The good point of Solaria is the PPA that could be signed, the PPA that we are offering to our customers is PPA that could sell electricity tomorrow. And this is an extremely important point from price point of view, because for customers is risk, zero risk. They are going to receive electricity tomorrow. And I think that this is an important advantage of Solaria that we signed PPA and we supplied electricity. I think that all of our customers are extremely satisfied with all the deals that we have and they want to repeat. And of course, PPA price today is obviously is not in the best moment today for negotiating because price of electricity and their noises that we have in the system is not good. People today are touching 40, around 40, 40, 41. Hopefully, in the next two months, we will see a positive evolution of prices. In our view, if we see 45, 46, 47, we could close a global deal.

Next question is coming from Alberto Gondolfi from Goldman Sachs. The first question is regarding the EBITDA target. I am right in saying that EBITDA target were only adjusted for the 7% revenue tax. What is the power price assumed on the merchant position in 2024? And what would be the mark-to-market price you think you can achieve this year? And the second question is on asset rotation. Is the valuation shown in slide 12 is the result of a binding offer or is this just our own estimate?

We have adjusted only including the 7% revenue tax, our EBITDA target. Power price assumed, as I have mentioned, is based on the advisor central scenario. It could be optimistic or not, it's difficult to say, but it's 64 euros per megawatt hour of merchant prices that, as I have mentioned, is around between 25 to 30% of our global situation. And the price that we are able to achieve this year is difficult. I'm talking about a scenario of advisors. My opinion is different. I think that this is shaking all the time. We will see the evolution in the next month. I think that we are living probably the worst days of the year because wind is in a strong situation, as you know, and the gas in an extremely weak situation. The good point of solar is that we have a really strong situation with really good PPAs. and with really good capex. That is the key part, the key critical part to be extremely efficient in order to be able to compete with worse prices. As I have mentioned today, PPA deals are touching prices of 40. 40, that is not bad. It's not bad, especially if you add the GDRs. It's not bad. On the asset rotation we haven't done a buying process, no. We are talking with a strategic partner and we are negotiating with only one partner. It's not something, as you know, Solaria usually if we want to sell An asset, we are not extremely exciting with assets rotation. In our view, always is not only a financial issue. It's important, obviously, to achieve a good price for us. But at the same time, we are looking for good partners for the long term. In this case, in the Basque Country, it's an extremely good partner and extremely good financial partner, strategic and financial partner. And we will announce to the market, and you will see.

Next question is coming from Thomas Reyes from CaixaBank. First question is, can we provide some more detail on this new 500 megawatt asset rotation program in the Basque Country, and also the way this tax credit cash-in works? And second question, I think that we already answered.

Tax credit is the government, the Basque government, is not only for Solaris, for all renewables energy investments. The Basque government approved a law that says that they recognize 30% of tax credit of the capex involved in the project. Suppose that you recognize 30%, if your capex is, I don't know, whatever, 1 euro, they recognize tax credit of 30%, 0.3 euros per watt. And CAPEX is based, for example, if we assume that a partner entering the asset paying one euro, the CAPEX recognized is one euro. And this is extremely important for us. For this reason is strategic for us the asset rotation, because it's not only an issue of money paid, in the in the operation the one euro 1.1 in this case is 1.15 is not only the price that is good in my view especially because this asset will be connected in 2026 is the recognition of tax credit that for us is the key part that is improved with this entry and

The next question is coming from Manuel Palomo from BNP regarding PPA market. I assume that we already answered. Regarding the wholesale price, I think we already answered, but Manuel is asking if we plan to still follow the strategy of 70-30 despite the evolution in wholesale price. And can we give maybe a little bit more update about the installation target for 2024 and 2025?

PPA market we have mentioned. I think that I'm optimistic about the deal that we are going to announce in the short term in the market. High volume, probably the largest volume that we have announced, and good price. Good price I have mentioned. Previous deals for us include a good price. And I have mentioned today the situation of the Spanish PPA market, if you talk with our customers and if you ask to them, it's around 40. Around 40 price for PPA if you supply electricity from now. 40, it depends on the player, but 40 is reasonable. But it's not the price that we are able to accept. Merchant exposure and situation, if the price is good or bad, we will see. I think that All years, after the last 10 years, I think I have these discussions about wholesale prices. And I know that all the people, as I have mentioned, different opinions, different views. And honestly, during the last six, seven years, during the annual results presentation, I remember three years ago, four years ago, always is the same question. During February's mark, price of electricity goes down with a wind effect. gas effect always is the same and from all the people start to talk about the volume of renewables that could affect seriously the price at the same time nobody ask about if it's not profitable why people is going to construct renewables And nobody asked at the same time why we don't introduce massively renewables in the system. Because if you see the numbers in 2023, unfortunately, we haven't achieved good numbers. If you compare with other countries, Spain, unfortunately, it's far away from Germany and even far away from Holland and other countries. I think that in Spain, like always, we talk a lot, we execute not too much. And a lot of bubbles around renewables, a lot of people talking about enormous development, enormous amounts of gigawatts that will come, but never come. And we will see decisions of the government if they are going to close or not nuclear plants, if they will continue or not, if the renewables will achieve or not all the expectations that all the market is talking about. and the evolution and the situation in a few months. And installation targets, as I have mentioned, during this year hopefully we are going to add additionally approximately, but it's complicated to predict because we depend on third parties, we could add 0.5 gigawatts. that could enter during this year, but we depend, as I have explained, of Red Electric and infrastructure that should be constructed by them and we are going to stay focused in the construction of 1.5 GW. When is it going to enter? We have decided to say in 12 months because it is reasonable for us, 12-15 months is reasonable if we are able to achieve E4 great but 12 is reasonable and we have included in the presentation.

Just to make a quick comment on that, you know that we already have under construction at the end of December more than 350 megawatts. And on top of that, we have received one gigawatts. So it's one spot three gigawatts that we may be able to connect in the coming 12 months. So Arturo was speaking about end of the year 2024. just because these 1.3GW are expected to be connected to ZUGIT before half of 2025, so will be already a 3GW player in the third or second quarter of 2025. Next question is coming from Eduardo Imedio from Renta4. What is Arturo's personal view on electricity prices? And with electricity demand decreasing and new capacity coming to the system, which are the drivers that you see for an increase in prices in the coming years?

As I have explained, it's complicated to predict the movements in the electricity prices because it depends on a lot of different factors that affect seriously. But from a global perspective, long term, talking about long term, the next years. But next years could affect price of today of electricity, especially from a speculative point of view. The central nuclear plants, what are going to do? The government has decided to close, but is it real or not? They are going to close or not? If they decide to close, it's something that will affect seriously, seriously the price of electricity, not in three or four or five years from today, because speculation will start, and we will see. But honestly, I'm not sure if the government is going to close or not the nuclear plants, because they changed the message. And I'm not saying that it's a good idea for Spain to close the nuclear plants. I'm saying that I don't know, because I talked with them. They say, yes, we are going to close, but... I don't know. And it's something that we will see. Renewables. People are talking about enormous volume of renewables. Government theoretically should approve enormous volume of gigawatts that will come. Two points of view for us. From infrastructure point of view, it's great for us because we will have a lot of customers asking to us, give me a quotation for substation. I need the construction of this substation, of this grid. I'm not able. I'm a fund. I need to subcontract you. I'm from... Infrastructure point of view, I think that it could be a great business for us if Spain decide to construct massively 40 gigawatts from infrastructure point of view. But of course, it's something that could affect the price of electricity. But it's serious. We are going to construct 40 gigawatts. Banks are going to finance 40 gigawatts. If the price of electricity, if we move and we enter in the system with 40 gigawatts, banks are going to give project finance associated with 40 gigawatts. If they think that the price of electricity goes to not zero, but 10 or 15, they might think that it's not reasonable. And at the same time, which is the capex of the players that will be involved in the construction of this massive volume because they are subcontracting us and we are expensive for example and which is the capex of these guys is 0.4 or is 0.8 euros per watt with 0.8 euros per watt and with the actual situation of price of electricity and interest rate it's interesting for them to construct why they are going to lose money i don't understand no And we need to see the evolution of this because during the last four or five years, I'm asking and I'm answering questions associated with price of electricity. And we have lived the Ukrainian war. We are living a strange situation around LNG gas because I have a lot of information about LNG. It's changing all the time. Today it's a speculating technology. It's shaking all the time. The price of gas is shaking all the time. Massive capacity, conflicts associated with this. It's like, honestly, I'm sorry if I'm not asking your question, saying the price of electricity during 2025-2026 will be this, because it's extremely complicated to predict. The key point for us, Solaria is the most effective player from CAPEX point of view and OPEX. Probably we are the key guy from project IRR perspective. It's like we are the most competitive player. And our work today is to be the most competitive player. If we have good price on PPAs, we will sign. Today we have a good coverage on PPAs. Probably we are going to announce a new deal, the largest deal... PPA deal of the history of Solaria and if we have good prices it's good for us and we could close. And of course our job is to maintain this project IRR of 13-14% and this is the key point.

Next question are coming from Marina Fuentes Juan, from Morgan Stanley, and from Alberto Gondolfi from Goldman Sachs, and from Oscar Najar from Ocos Santander. I think they're all doing the same question, and I will answer. In our CMD guidance, we prepared an EBITDA guidance with 87 euros per megawatt hour in 2024. and 67 in 2025. In this new EBITDA adjusted with energy tax, we adjust the power expectation, as Arturo said, to mid-60s. So the adjustment is not only the 7% tax, but it's also an adjustment in the power price for 2024. Next question is coming from Gonzalo Sanchez Bordona from UBS. Good afternoon. You mentioned we could have news on your infra division during this year. Can you please elaborate on this potential expected developments and potential financial impact?

I think that the EBITDA guidance is based on three concepts. Three concepts based on infrastructure business that is growing a lot. During the last quarter, we have obtained really good numbers. Based on works executed on substations for third parties, basically. Today, I can't say we are a construction company, but we are executing works for third parties that need to be connected and they don't have the capacity, we are the owner of substation and we are executing for them works that are giving to us really good results. And I think that even for us was a surprise the good results that we have obtained in the Q4. We think that if the government finally approve all the volume of gigawatts and if they execute the works, that hopefully they will do, This amount will be increased. Then the price of electricity and the cost of electricity, 70 percent, as I have said, the sales of electricity, 70 percent, as I have said, is associated with PPA that the price is the average is close to 40 something. And the 30% is merchant. Honestly, I think that we always follow curve of advisors, because here we don't include any personal curve or curve of Solaria. And the asset rotation, that in the third quarter we didn't have too much visibility of the asset rotation, the 25% that I have mentioned. and we didn't have too much visibility about the price of the asset rotation because we were talking with the player but without too much visibility today we have more visibility on price and the rotation and the volume, the final volume and the final price the final volume was decided, 500 MW, that I think that we have decided to sell or to rotate this amount, 500 MW, and the price was fixed, and it's a price of 1.15, and I think that is something that could affect the EBITDA guidance. I don't remember if in the third quarter we have included, probably we included 0.9 or something like this. But it's an update that is based on the visibility that we have today of this asset rotation, price of electricity and BPAs.

Maybe just a last question from Thomas Reis from Caixa and Jorge Alonso from Societe, just maybe to clarify. And I will try to answer, we can clarify the new capacity to be connected. As Arturo said, it's quite clear. Today we are one spot 65 in operation. And on top of that, we have another one spot five in under construction. And there is dot five that may be connected at the end of this year. and another gigawatts connected in 12 months. So it's more or less, it will be at more than 3 gigawatts at the beginning of 2025. On top of that, you know that we are waiting for new gigawatts authorization, including via Viciosa. You know that the third flagship project, Elena project, It's a 600 megawatt, and we may obtain the ready-to-build of Elena in the second quarter of this year. So according to this second quarter ready-to-build status, by summer 2025, we may be able to have more than 4 gigawatts installed. So I think that we don't have any more questions. So thank you very much for joining the call today.

Thank you. As David has explained, I think that we have decided to include a global number of 1.5 gigawatts. When will we be connected? We have decided to include 12 months. Honestly, we will try to do as soon as possible. And we depend on third parties and ourselves. This is a good point. Third parties is Red Electrica, basically. because works of Red Electrica and our internal job. The good point is that today we don't depend on license or permitting of the government. But we have decided to include this conservative view of 12 months, and if we are able to connect before, be sure that we will do. Thank you for the call, and thank you for all.