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Enel doubles down on renewables, networks investments in strategy overhaul

Image: Enel.

Image: Enel.

Italian utility Enel has unveiled a major upgrade of its strategy, ramping up investments in renewables, grids and clean energy ecosystems.

In an update this morning, Enel confirmed it would be increasing its investment in renewables and clean technologies between 2020 and 2022 to in excess of €28 billion, an increase of 11% on the plan it had previously outlined.

Of that sum, around €14.4 billion has been pegged for renewable power generation, with the intent of bringing forward around 14GW of new renewable capacity before the end of 2022. That is an increase of 22% on the amount of renewable power it had previously expected to develop, aimed at replacing significant quantities of coal-fired generation it intends to square off.

Meanwhile, renewables’ share of total Enel-owned generation capacity is now expected to reach 60% within three years.

The group’s second-largest area of investment is in grids, with Enel now intending to invest some €11.8 billion in the business unit to support further digitisation and automisation of the grids it operates. This will, Enel says, improve their resilience and quality of service, while a further €1.1 billion is to be ploughed into Enel X to bring forward new services to support greater decarbonisation of power.

Francesco Starace, CEO and general manager at Enel, said that the investment plan “underscores” the success of its existing business model, helping establish the utility as a “more sustainable, efficient and profitable organisation”.

“These actions are key to embracing the electrification of consumption, boosting the action against climate change as well as ensuring the supply of affordable, clean energy,” he said.

In ramping up its investments, Enel’s earnings are expected to soar in the coming years. The utility is now forecasting for earnings before interest, tax, depreciation and amortisation (EBITDA) in 2022 to stand at around €20.1 billion, 13% up on its forecasted earnings for 2019.

That’s representative of a compound annual growth rate of ~4.1%, growth triggered by the “robustness” of Enel’s new investment plan, Starace added.

Enel is not alone in the ranks of international utilities backing sizeable clean energy investments to bolster growth. Late last month Spanish utility giant Iberdrola lauded climbing profits, caused by record investments in renewables, with the company claiming that funding had created a "virtuous circle of growth".

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