2019 was a turning point for Enel. The year in which electricity production from renewable sources and that from conventional sources, on a global level, reached the equilibrium point. The CEO Francesco Starace underlined this during the presentation of the 2020-22 Strategic Plan to the financial community in Milan. A plan that envisages an increase in investments to 28,7 billion, half of which destined for green energy and the acceleration of the energy transition; which forecasts growth in Ebitda of over 20 billion at the end of the period and ensures a payout of 70% with a minimum dividend rising from 32 to 40 cents in 2022. And debts rising to 47,3 billion. We have thus entered into full energy transition.
Looking to the future, continued the number one of the electricity group, "we have reached the point where in our global portfolio renewables and thermoelectric generation have reached a point of equilibrium. It is digital transformation in deeds and not in words. The energy transition is ready to take off and we have already prepared over time, knowing that the next three years present a more volatile market scenario than the three that preceded them".
SUSTAINABILITYÀ AND A SINGLE PRODUCTION, THE GREEN ONE
Enel's keywords remain sustainability and growth, but they evolve with some relevant innovations. Half of the investments in the Plan (14,1 billion) will therefore be directed towards the development of new renewable capacity. An acceleration that will have to compensate for the phase out of coal-fired plants. Decarbonization will cut coal production by 74% at the end of the plan. In Italy, the closure of La Spezia, Fusina, Torre Valdaliga Nord and Brindisi is expected, coal plants that will all be stopped by 2025. At the same time, renewables will ensure 60% of Enel's electricity production worldwide with an acceleration of investments to 12,5 billion (one more than in the previous plan). The expected increase in new green capacity is 14.000 megawatts by 2022. In practice, Francesco Starace underlined, it no longer makes sense to manage production in two separate lines (Egp and Thermoelectric). The new one has already been born Single line of business for electricity generation which will be predominantly green (60% in 2022). The return on investment on decarbonization is high, between 12 and 13%. Ebitda by 2022 is expected to fly over 20 billion (from the 17,9 estimated for this year). The growth will come from EGP (1,4 billion), networks (0,7 billion) and Enel X (0,4). On the other hand, the contribution of thermoelectric power decreased, contributing only 100 million.
DIGITALIZATION AND DIGITAL PLATFORM
The other "leg" of Enel's strategy is perhaps the most surprising novelty of the new plan, already hinged since 2015 on the objectives of sustainability and the growth of renewables. In fact, Enel will invest 1,1 billion to develop new value-added services driven by the decarbonisation and electrification of the energy market. With two relevant data: the 4 and a half times increase in storage capacity (from 113 to 439 MegaWatt) and a 9 times increase in global recharging points for electric cars (from 82 to 736). The Enel top management calls him platforming and refers to the new digital platform through which to manage 75 million global customers (160-180 million people if we consider families) but also suppliers, prosumers, various assets (such as columns, in fact) and smart cities. All in one place. "Amazon and Google thought about it, it's hard to see why others can't think about it too", commented Francesco Starace who entrusted the task to Enel X led by Francesco Venturini. A novelty that certainly opens up new scenarios for the future.
AND LIBERALIZATION ARRIVES IN ITALY
Enel's strategic plan also embraces the end of the regulated market in Italy scheduled for next year in July and destined to be postponed for the third time, as Minister Patuanelli has just announced. However, the group has taken into account an increase in competition in Italy and has cut its customers from 23,9 to 18 million (-50% the share inherited from the regulated market) who at the end of the plan should all be on the free market. Italy's contribution to group EBITDA is expected to drop from 42% to 39% but Latin America will close the gap, growing from 30 to 33%. Brazil alone contributes growing from 9 to 14%. In this regard, given the emergence of social conflicts in many countries of the Latin American continent, Starace reassured: "The situation is evolving, we are dealing with "growing pains" with the middle class that no longer accepts the old way to rule. But we are not worried, there are very positive factors such as the launch of the pension reform in Brazil or the democratic constitutional reform in Chile which are part of the normal evolution of emerging countries”.
OPEN FIBER AND ALITALIA
In conclusion, some questions addressed to the CEO concerned the negotiations with Tim on Open Fiber and the hypothetical national consortium for Alitalia. After declining participation in the latter, Starace pointed out that “Open Fiber cannot be viewed as a start-up. It has now become a large company which is cabling Italy and employing 12-15 thousand people. It cannot therefore be unpacked or distorted. We are not in a hurry to sell, we are not abandoning situations of this type of emblem, further investigation is needed”.
