How are the strategies of Italian and European utilities changing? It was analyzed by the M&A Utilities Observatory of AGICI corporate finance, in a seminar where 8 fundamental points were identified.
1) Proclaimed the fossil fuel crisis: renewables at 80% of the additional capacity in 2014; distributed generation will account for 40% of additional capacity by 2020.
2) Asset sales planned for €30 billion to contain debts.
3) Growing attention to regulated sectors with investments of around 100 billion euro out of a total of 156.
4) Beware of technological change which can radically change the structure of the sector.
5) Rediscovery of the water and waste businesses which often support the profitability of multiutilities.
6) For the aggregation of utilities the Fondo Strategico Italiano confirms dedicated availability (500 million euros)
7) Stable or slightly growing economic projections: widespread efforts to maximize efficiency (estimated savings of €10bn) and to select profitable investments.
“The world of utilities and energy in particular – he declared Andrea Gilardoni, President of AGICI and founder of the Observatory – is therefore in a phase of profound change: it is clear what is left behind but much less clear what one wants to build both in terms of models and in terms of cost. For companies, this is a fundamental challenge, but the role of governments and regulatory authorities is also delicate and substantial. The basic problem is how to manage the transition, the timing, the modalities, the actors. And our research activity will develop in this direction”.
“The era of utilities seen as a safe haven immune to competition and change – he comments Marco Carta, Coordinator of the AGICI Observatory on Utilities – is now definitely gone. Self-consumption, batteries, renewables and efficiency are changing the overall picture. Utilities – continues Carta – will increasingly have to have a “consultant” approach towards the end customer, developing an equal relationship between provider and consumer. All of this implies new business models, an increasingly driven development of intelligence (ICT, broadband, big data, ...) and, above all, a new and renewed corporate culture that knows how to ride, and perhaps anticipate, change."
