Enel Group, a global energy powerhouse, has set its sights on a transformative journey in the renewable energy sector. The company has announced plans for a substantial gross capital expenditure (capex) amounting to approximately 12.1 billion euros, earmarked for investments between 2024 and 2026, specifically targeting the renewables sector.
Emphasis on Renewable Energy
The strategic investment will primarily focus on three key areas: onshore wind, solar, and battery storage. Innovation will be at the forefront of this initiative, utilizing repowering techniques to enhance plant efficiency and reduce generation costs. Additionally, integrating battery storage solutions will bolster power system flexibility and enable more efficient load management.
Regional Investment Breakdown
The investment breakdown across different regions showcases Enel Group’s commitment to global renewable energy expansion:
Europe: The group intends to invest roughly 7.2 billion euros in gross capex, leveraging its significant customer base to stabilize returns and cover renewable output.
Latin America: A gross capex investment of around 2.6 billion euros will follow a flexible approach, emphasizing renewable development supported by Power Purchase Agreements (PPAs).
North America: With an allocation of about 2.3 billion euros in gross capex, the focus will be on increasing profitability by emphasizing cash generation and leveraging partnership models.
Growth Projections
Enel Group anticipates substantial growth in Renewable Energy capacity, aiming to deliver approximately 13.4 gigawatts (GW) of new renewable capacity across all geographies where it operates. This growth is based on a robust pipeline, which stands at around 450 GW, with approximately 160 GW at an advanced stage. Such a substantial pipeline ensures visibility on returns while minimizing risks.
Environmental Impact and Business Segments
The strategic investment is anticipated to significantly impact the Group’s renewable capacity, reaching around 73 GW by 2026, marking a notable increase from the estimated 63 GW in 2023. Emission-free production is expected to rise to approximately 86% by 2026, showcasing a substantial environmental commitment.
Apart from renewables, the Group plans a gross capex of approximately 3 billion euros for the Customers’ segment. This includes geographical realignment and customer-centric strategies, focusing on Italy, Iberia, and Latin America. The aim is to enhance customer engagement across various segments, offering bundled solutions and dedicated services.
Financial Outlook and Efficiency Measures
Enel Group envisions its Ordinary EBITDA in the Integrated Business to reach around 15.5 billion euros in 2026, marking a significant increase from the expected 2023 baseline. Renewable energy is expected to be the primary growth driver.
Strategically, the Group is prioritizing financial equilibrium, aiming to boost cash generation substantially. With projected Funds From Operations (FFO) of approximately 43.8 billion euros, the company expects to cover net investments and dividends during 2024-2026.
The Group plans substantial cost reductions, aiming for around 1.2 billion euros by 2026. This includes efficiency measures in corporate processes, organizational optimization, technology adoption, and regulatory business cost savings.
CEO’s Vision
Flavio Cattaneo, CEO of Enel, emphasized the strategic shift towards a leaner, more flexible, and resilient organization. He outlined a selective investment approach to maximize profitability while minimizing risks in the coming years.
Infrastructure Investments
In addition to renewables, Enel Group has planned a gross capex of approximately 18.6 billion euros in Grids between 2024 and 2026, with about 15.2 billion euros net of grants, further solidifying its commitment to enhancing infrastructure.
Enel Group’s ambitious investment plans underline a decisive step towards a sustainable and innovative future, fostering global energy transformation while ensuring financial prudence and operational efficiency.