Enel will mobilize 190 billion euros ($225 billion) by 2030 through its ownership and stewardship models to enhance its renewable power capacities. In this regard, the company plans to retain the renewables super major title and decarbonize all of its activities and services by 2050.
Enel and its plans for the energy transition
At the 2020 Capital Markets Day, the European renewables super major, Enel, shared its ten-year and three-year operational and financial plans. The company looks to enhance its renewable power capacity, since in the energy transition, “electricity is the winner,” Francesco Starace, Enel’s CEO & General Manager, said at the event.
Enel is currently the second-largest renewables utility globally and the first in Europe, being the first of its kind to transition 100% into the cloud in 2019. It has developed circa 3-gigawatts (GW) of new renewable assets per year in the last decade and has achieved 124-megawatts (MW) in storage facilities.
The company also delivers services to 74 million end-users, 60% of them digitalized through the deployment of 44.9 million smart meters, and plans to offset its coal generation entirely by 2027.
Regarding Enel’s short- and mid-term plans, Starace highlighted the relevance of digitalization for electricity utilities. “In the next twenty years, digital networks will be at the heart of the new energy world, and indeed, digital will be at the heart of the utilities of the future (…). We consider renewables to be the generation capacity of the future,” the CEO shared.
For Starace, utilities will need to become the center of the energy transition, being willing to add circular models to the existing linear ones and shaping a multilayer digital architecture.
Besides, the CEO observed users would have a pinpointing role for this transformation to go further. “The transition will also be achieved through re-use (…). Utility clients are consumers and prosumers at the same time,” the executive declared.
Enel’s 10-year plan
Starace shared Enel will work through two complementary business models to achieve its 10-year goals. The traditional ownership business model will be used to enhance profitability and efficiency in fully-owned Enel’s assets. The stewardship model will catalyze third-party investments to maximize the company and investors’ value creation.
In that regard, the company will mobilize 190 billion euros ($225 billion) over the next ten years through ownership and stewardship models. One hundred sixty billion will be allocated through the ownership model to build 75 thousand MW of Enel’s capacity. The other 30 billion in third-party investment to achieve a 20 thousand MW capacity.
Possibly of your interest: Transition bonds: finance houses join transition efforts
Enel plans to retain the renewables super major title, tripling its total renewable capacity by 2030, from its current 49GW to 145GW. This strategy looks to grow its global market share from the current 2.5% to 4%. “Even though this seems like a huge amount, please keep in mind this is still a very tiny portion of the renewables universe,” the General Manager added.
According to the CEO, renewables will save 200 million barrels of oil equivalent (BOE) by 2030, reducing at the same time greenhouse gas emissions (GHG) by 80% vis a vis 2017. Enel’s 2030 goals will also minimize household spending by 25% and households GHG by 40%. The company will also reduce by 85% its GHG from its cloud platforms.
Green Hydrogen and the Three-year Plan
The group will increase its battery energy storage capacities by 20-Terawatt hour capacity with a 5 billion investment in hybridizing existing renewable plants. In that regard, the company will rely on green hydrogen, based on different revenue streams, to speed-up the process.
Therefore, Enel will work on hydrogen saves services for industrial customers operating in sectors where emissions are hard to avoid. The company will also provide auxiliary services to strengthen the grid and help hybridize users with green hydrogen plants, saving electricity through electrolyzers and battery storage. The group has already green hydrogen project developments in the U.S., Spain, Italy, and Chile.
Alberto De Paoli, Enel’s Chief Financial Officer (CFO), illustrated the company’s 2021-2023 plan.
“The plan is to set the foundations for the 10-year plan, through the ownership and stewardship model,” the officer shared.
Enel will invest around 30 billion euros in the ownership model, with a growth rate in investments of approximately 40% compared to 10% in the past three years. These investments will split into renewables (45%), networks (43%), conventional generation (7%), and retail activities (5%).
On the other hand, in the stewardship model, the company will invest 2 billion euros and acquire 10 billion from third-party investment. The majority of this investment will go to renewables, flexibility technologies, E-transport, and fiber.
Closing Remarks
De Paoli said, “more than 90% of Enel’s investments will be aligned to the United Nations Sustainability and Development Goals (SDG) in the following three years.” Also, Enel will work under the European Union taxonomy, committing 80% to 90% to fight climate change and global warming.
Finally, Starace shared his closing remarks to the webcast, recognizing the relevance of social factors in Enel’s day to day activities. “We know that we work for society, to make progress more sustainable. And we have got conscious of this, even more, this year, and how vital our company is. We became much more digital than we thought we could be,” the CEO concluded.
