Ralco Hydro Plant -Chile- Begins to Operate with 120 MW More Capacity Than Forecast.

NEW YORK -- ENDESA (NYSE:ELE):

--The plant, owned by Endesa Chile, has been authorised to operate with total installed capacity of 690 MW in order to meet peak demand, increasing marginal annual average generation.

--Reformulation of plant capacity was possible thanks to the specifications of the equipment installed, by efficiently optimizing the technical scope of the generation units and the regulation of reservoir water.

--Endesa Chile has invested US$ 570 million in Ralco, which is the largest hydro project in Chile and will provide around 10% of the country's electricity requirements.

Conama, the Chilean environmental authority, has authorised the Ralco hydro plant, owned by Endesa Chile, to operate with total installed capacity of 690 MW. This represents an additional 120 MW of capacity which will serve to better distribute water resources and to meet peak demand, thereby increasing marginal annual average generation.

On 23 September 2004, Endesa Chile, a subsidiary of ENDESA (NYSE:ELE), presented a Declaration of Environmental Impact entitled "Increased Capacity at the Ralco Hydro Plant" to Conama, with the objective of employing the maximum capacity provided for by the turbines installed at the facility of up to 690 MW, by using a maximum flow rate of 452 m3/s. The Ralco hydro facility, which started operating last September, had been initially authorised to generate at a capacity of 570 MW and at a specifically designed flow rate of 368 m3/s.

Reformulation of plant capacity was possible thanks to the specifications of the equipment installed, detailed operations planning and trial operation tests carried out in September, by efficiently optimizing the technical scope of the generation units and the regulation of reservoir water.

The increase in the maximum potential flow rate will enable the plant to meet increased energy demand at certain times of day and during certain periods of the year by providing greater peak capacity when necessary.

Endesa Chile has invested US$ 570 million in Ralco, which is the largest hydro project in Chile and will provide around 10% of the country's electricity requirements.

Ralco, which represents a feat of civil engineering, involved the construction of a dam in the Bio Bio river bed, to form a reservoir with a total volume of 1.222 billion m3 and maximum surface area of 3,467 hectares. The water used by the plant is harnessed in this reservoir and channelled via a 7km tunnel to the machinery cavern where the generation units are located.

The dam is 155 metres tall and 360 metres long. It is the fourth largest dam in the world to be built using roller compacted concrete (RCC). Construction involved an average monthly direct workforce of 3,000 and used 1.6 billion m3 of concrete.