Internationalization, repowering (and reblading) in Italy and further acquisitions, especially in the photovoltaic sector, to diversify a portfolio currently unbalanced on wind power. The update of the industrial plan to 2022 presented in Genoa by Erg develops along these three main axes, on the occasion of the celebrations for the 80th anniversary of the company founded in 1938 by Edoardo Garrone, grandfather and namesake of the current president, who sanctioned the complete transformation, from oil refinery to 100% green energy producer, first in Italy for wind power but also active in solar, hydroelectric and natural gas.
“The divestments of the oil activities – said the managing director Luca Bettonte – cost us 3,6 billion. Then since 2008 we have invested even more, 4,5 billion, in clean energy, meanwhile distributing 1 billion in dividends to our shareholders”. The company, 63% owned by the Garrone family holding company, now in its third generation, and 36% on the market, will invest another 2022 billion between now and 1,68. In 2008, half of the business was still tied to oil, today 0%, with 56% wind, 23% hydro, 10% solar and 11% natural gas.
The plan presents a turning point above all in the international expansion of Erg, which aims straight at the more mature European markets: after having landed in Eastern Europe in the past, in the next few years the strategy is to grow in France, Germany and the United Kingdom, despite Brexit: “Brexit – said Bettonte – can actually represent an opportunity, because Great Britain could isolate itself and therefore have a greater need for renewable energies. This means more room for development for those who, like us, produce that energy". The market that will be followed most closely is the French one, where Erg already has 40 employees. And, once again, especially in the wind power field. “We go abroad either alone or with co-development agreements,” added the managing director.
In Italy however, where most of the activity still takes place, investments will be focused on repowering and reblading. What does it mean? In the first case, replacement from scratch of older plants and less efficient technologies. In the second, with the replacement of the wind blades only, a less expensive operation but which guarantees margins not so much in the plant's productivity, which will in any case be increased by 16%, as in its longevity. “We can think of extending the life of a wind farm from 20 to almost 30 years,” Bettonte revealed at a press conference. Reblading can also represent an added value for the Italian supply chain, given that the production of latest generation blades, which work more (starting with a lower wind and resisting a higher wind), is carried out by Italian companies.
Repowering, on the other hand, will make it possible to almost triple production, "without using an extra centimeter of land, rather halving the necessary plants", explained Bettonte. The plan provides for the renewal of plants which currently produce 153 MW and which will eventually produce 410 MW. These are almost entirely plants in Sicily, where there are practically guaranteed 2.200 hours of wind every year. “This will allow us, together with the expansion in Europe, to reach 3.600 MW produced in 2022, from approximately 2.770 in 2017”. Wind alone will grow from 1.760 to nearly 2.500 MW.
The plan also envisages significant growth in financial fundamentals. Erg, listed on the FTSE All Share, has gained 53% in recent years, in a period in which the index lost 42%. All this by distributing dividends, which are expected to amount to a further 600 million euros between now and 2022, without however affecting the debt, which according to the estimates commented by the top management at the Genoese press conference will be reduced to 1,250 billion. Ebitda should result in growth of 18% to 560 million.
Erg, historically linked to the city of Genoa but operating throughout Italy, from north to south, does not even forget the effects on local economies and employment. "With 100 investments, 30 benefits the area", commented Bettonte. Among other things, the company, to celebrate its 80th anniversary, has also decided to assign 675 treasury shares free of charge to each of the 80 employees, for a total value of 1,1 million. Another 1,2 million are awarded in the form of a bonus, of 1.500 euros for each employee.
Finally, Erg does not forget it very close relationship with Genoa and above all with the Valpolcevera, affected by the tragedy of the Morandi bridge as well as the place where the company's first refineries were built: the president Edorardo Garrone personally handed over a check for 1 million to the Municipality to "contribute to redevelopment and sustainable development projects in the wounded Valpolcevera from the collapse of the Morandi bridge".
