At the halfway point of the preliminary data of Enel budget 2022, the electricity group has convinced investors: substantial increase in revenues and above all in organic Ebitda beyond the targets (+19,9% to 19,7 billion) have been judged a reassuring visiting card on the full state of health of the group, on the ability to distribute the promised dividends and to pursue the objectives in 2023. On Friday, Enel shares rose against the market trend (+1,33% to 5,4 euros), accompanying a rise that began with the presentation of the Strategic Plan 2023-25 in October. The spotlights are now turning on the further steps to be taken and the new challenges to be faced in order to implement precisely those strategic lines that have obtained a good reception on the markets since analysts have judged the ambitious goal of debt reduction to be feasible with 21 billion of disposals scheduled. Most of them are to be implemented this year and the credibility of the plan was seen precisely with the preliminary data from Enel's 2022 financial statements, communicated to the market on Friday. There debt decline it has already begun – 10 billion less than the net financial debt in September – and will continue in the coming months to go from 60,1 billion in December (lower than estimates) to the 51-52 billion announced in the plan. So let's see what are the next steps that the CEO Francesco Starace is carrying on.
Enel 2023 challenges: Gigafactory 3Sun and development of renewables
A few days ago Enel opened the doors of the construction sites, started last year, for the expansion of the Gigafactory 3Sun in Catania. An investment of 600 million to bring the photovoltaic and storage panel factory from the current production of 200 MW to 3.000 Megawatts in 2024. These are more efficient solar panels than those currently available and a project that will make the Sicilian factory the most important 'Europe. A model that Francesco Starace intends to export to the USA where the incentives of the Biden plan attract European investments.
A plant of this size will serve to support theexpansion of renewables in Italy (and not only in Italy). Enel is currently the leading private operator in the world of energy from renewable sources and in 2022, through Enel Green Power (EGP), confirmed this leadership with a record of new plants installed: 5.223 MW of new renewable capacity, including 387 MW of storage systems (BESS, Battery Energy Storage Systems), up on the result of the previous year. The plans of the summit envisage continuing the process with an additional 21 GigaWatt of renewable capacity by 2025. In particular, 2023 promises to be a year of potential growth for renewables in Italy also thanks to the better prospects on the authorization front. In the first six months of the year, Enel Green Power will start construction sites for renewable plants for a total power of over 330 MW. A strong acceleration is also envisaged in the construction of storage systems for a total power of 1562 MW.
Strong acceleration on smart grids
More renewables, more electric cars, more automation and remote control of infrastructures, more Open Meters or more new generation electronic meters, more optical fiber. All this means electrification and for Enel it translates into a significant acceleration of strong investments – 15 billion in three years, 80% in Europe – on networks that are the backstage of the electrification of consumption. It is a less glaring but certainly no less important aspect of the energy transition underway and of which the national electric battleship was perhaps the first to seize the opportunities and challenges.
Enel is currently engaged in numerous projects entrusted to E-Distribuzione. E-Grid is one of the most important: 10 billion to upgrade, digitise, increase the resilience capacity of the distribution network. 76% of resources (2 billion out of a total of 2,7) is concentrated in the centre-south and in the islands to reduce the existing gaps between the various areas of the country. The distribution of OpenMeter is expected to be completed by 2024: the new digital meters allow remote monitoring of electrical parameters as well as the provision of energy consumption management and home automation services. Again: another challenge is that of SHA (Self Healing Automation): the intelligent network "heals by itself", in a few seconds. It is an automated exercise technique already active in various parts of Italy including Campania. It is being activated throughout Italy.
The Pnrr: a shower of billions, also for Enel and not only in Italy
To react to the shock of the pandemic, Europe has launched the Next Generation Eu, a 750 billion plan that Italy implemented with the Pnrr, the National Recovery and Resilience Plan. The other member countries of the Union did the same. In recent days, the Pnrr control room has called together the energy groups owned by the state - Eni, Enel, Snam - to take stock of the interventions. It is therefore clear that the Pnrr is one of the pillars on which Enel relies for the achievement of its objectives. What does it mean concretely? According to some internal calculations of the group, the portfolio of initiatives potentially feasible by Enel thanks to the help of Community funds reaches an amount equal to 58 billion euros, with an additional impact on European GDP of 159 billion euros and on employment equal to around 196.000 new jobs. In Italy the account stands at 26 billion approximately of projects (among which, precisely, the networks). Then there are 22,6 billion in Spain. These are mainly projects aimed at decarbonisation, distribution networks and electrification.
The debt-cutting sales plan: the next steps
The overview of the Enel 2023 challenge cannot fail to consider the fourth pillar, launched but not yet completed. Let's talk about 21 billion disposal plan which will lead to the reduction of net financial debt with a peak of 12 billion in 2023. Preliminary numbers from the 2022 budget indicate that the decline has begun and yet the debt stock is still 16% higher than 2021 levels. bring debt back to 51-52 billion by focusing the presence of the multinational Enel in 6 countries: Italy, Spain, Brazil, Chile and Colombia. 2022 has already seen theexit from Russia and targeted sales such as the Fortaleza plant in Brazil or the Goias distribution network or even the sale of 50% of Gridspertise. But 2023 will be the crucial year for the group's long-term rationalization strategy. What will be the next steps then? A few days ago the CEO Starace in Catania was explicit: "We closed an exclusive deal" for the sale of a share of 3Sun “and we will announce it in the next few days”. Rumors say it could be English NextEnergy has come into play to buy up to 50% of the Sicilian factory. We will see it in the coming weeks but in the meantime there is certainly an exclusive agreement with the Greek company Public Power Corporation SA (PPC) for the assets in Romania, announced in December. finally, it would be approaching theout of Peru. In fact, the first estimates on the assets that Enel has launched for sale through Enel Americas are circulating: in Peru it would be about 3 billion, 2 billion relating to generation plants in renewables and 1,2 billion in distribution.
