“We are no longer interested in oil”: the words of the president Edward Garrone ratify the green turning point of Erg which will end, as announced by the top management during the meeting with the press, in the hydroelectric plant of Galleto, in Umbria (taken over in November 2015 by E.On), with a possible change of company name and with the entry, after the liberalization planned in 2018, into the retail electricity market.
“We are unique among the large energy producers – said the managing director Luca Bettonte – to not yet be present on the retail market: we will evaluate entry after 2018, there are 20 million potential customers and we are interested". Erg was founded in 1938 in Genoa and is the acronym of Edoardo Raffinerie Garrone: a link, the one with oil, which now no longer exists. “We are proud of our past – said the founder's grandson – but to date of the 5.330 GWh produced, 85% comes from renewable sources and 12% from the thermoelectric plant of Priolo, in Sicily, which cannot technically be considered a renewable source but which has all the green characteristics. We are practically 100% green”.
Only the distribution plants of Total-Erg remain outside, a joint venture in which Erg holds a 51% stake, which is still functioning but is very ready to be sold: "The joint venture has given excellent results but is no longer part of the our core business”, confirmed Bettonte, recalling that Erg is now the first Italian player in wind energy and which will continue to be so, with a further 400 million invested for organic growth in the sector, envisaged in the 2018 business plan.
“Since 2008 we have sold oil assets for 3,3 billion, reinvesting even more (3,9, of which 3 in Italy) in renewable energies. All without giving up 800 million in dividends distributed in this period”. Just today, Erg detached the 2015 coupon, of 1 euro per share (0,5 of which of extraordinary dividend). “The dividend policy – added the vice-president Alessandro Garrone – is confirmed: in the coming years it will continue to be at least 0,5 euro per share, and we also confirm that the majority stake will remain in the San Quirico holding of the Garrone family, even if it is not certain that it will remain at 63%”.
In the green turning point, priority was therefore given to wind power: "We discarded solar power because it was too based on incentives, while the incentive policy worked for wind power, creating a mature industry". Erg produces 1.700 MW by exploiting the energy produced by the wind (63% of its total production), of which a thousand in Italy. A share, however, destined to decrease: "Before 2015 we invested 19% abroad, in six countries including Bulgaria, Romania, Poland, France, Germany and lastly in the United Kingdom with important investments foreseen in the 2018 business plan in Scotland and Northern Ireland. Now the foreign share is 37% and will eventually reach almost half”. Why? "We would also like to invest in Italy - explained Bettonte - but it is not possible because we have been waiting for the decree that regulates the sector for more than a year".
A situation that Bettonte defined as "embarrassing" and which puts the re-powering of the most profitable sites at risk. “Today we could exploit them even better with new technologies, instead we have to invest in other European countries where the productivity margin is lower but the risk is reduced because at least there are certain rules. Particularly in France and Germany”. A paradox that hasn't prevented Erg from insisting on Italy, also focusing on hydroelectricity with a large investment in one of the most interesting European water basins, which is based in Galleto but which actually affects three central regions (Umbria, Lazio and Marche) by exploiting the energy produced by the water of three rivers (Tiber, Nera, Velino) and by Lake Piediluco, which feeds a waterfall even higher than the nearby one – only for tourists – of the Marmore. “Sixteen power plants, seven dams and 150 km of tunnels: an absolutely avant-garde complex built in the 20s and 30s and capable of producing over 1.000 MW which complements wind power very well because there is less wind in the central part of the year but hydroelectric is stronger". explains Alessandro Bianchi, engineer in charge of the Erg Hydro plant in Galleto.
A heritage returned to Italian hands after being taken over over the years first by the Spanish Endesa and then by E.On. “Only in 2015 – Bettonte points out – we have invested a total of 1,3 billion euros, of which 950 million for the hydro plant, compared to a market capitalization of 1,8 billion: over 900MW of new power installed and acquired in the last twelve months”. A choice that had an excellent impact on the environment (nearly one million tons of CO2 avoided, equal to the equivalent emitted by 300 Rome-New York flights) but also on the accounts: the group's managers were keen to underline the of debt to 1,3 billion in 2018 (in 2015 it rose to 1,45) and the results for 2015 and for the first quarter of 2016 were encouraging. In March, the consolidated gross operating margin grew by 46% to 163 million and net profit by 68% to 57 million. In December, Erg closed with a net profit at replacement cost of 96 million euro, a sharp increase compared to 60 million in 2014 (+60%).
