Enel Group intends to spend more than €12bn of gross capex on renewables as part of its 2024-2026 strategy.
The €12.1bn strategy includes investing in onshore wind, solar and battery storage while also leveraging on repowering, alongside “more selective investment decisions”.
In Europe, the Group plans to invest around €7.2bn euros of gross capex, with renewable generation supported by a large customer base that allows the Group to cover output and stabilize returns.
In Latin America, the Group plans to invest around €2.6bn of gross capex, following a flexible approach that leverages on renewable development supported by PPAs.
In North America, the Group plans to invest around 2.3 billion euros of gross capex, with the aim to increase profitability, focusing on cash generation and leveraging on the partnership model.
In order to increasingly focus on profitability of invested capital, the Group’s new approach to renewable investments is based on three different business models.
These are an ownership business model, in which the Group’s stake is 100%, to be applied mainly in Italy and Iberia, geographies with higher and hedged returns.
It will also use a partnership business model, in which the Group’s stake exceeds 50% (and is below 100%), to improve asset risk exposure, while retaining control and maximizing capital productivity as well as flexibility.
A stewardship business model, in which the Group’s stake is equal to or lower than 50%, that will continue to be applied to peripheral geographies, in order to leverage on the Group’s high-rated pipeline and global footprint as well as enhancing financial flexibility and capital returns.
Between 2024 and 2026, this new approach is expected to allow the Group to deliver around 13.4GW of new renewable capacity in all geographies.
At present Enel has a pipeline of around 450GW, of which approximately 160GW is at a mature stage.
This sizeable pipeline allows the Group to maximize visibility on returns while minimizing risks, with the possibility to monetize the portion of the pipeline which is not instrumental to its industrial growth.
In 2026, the Group’s renewable capacity is expected to reach approximately 73GW from around 63GW estimated in 2023.
Enel chief executive Flavio Cattaneo said: “The strategy that we are announcing today aims to reshape the Enel Group into a leaner, more flexible and resilient organisation, well positioned to face the challenges and seize the opportunities that may arise in the future.
“In the next three years, we will adopt a more selective approach towards investments in order to maximize profitability while minimizing risks.
“We will focus on our core countries by implementing integrated strategies, targeting networks, renewables as well as value creation in the customer segment through bundled commercial offers.
“Financial discipline will be the cornerstone of our strategy, boosting cash generation and efficiencies, with sustainability continuing to guide our business decisions.
“By carrying out these actions and reaching our targets, we will be able to further strengthen Group financial position and enhance value creation, ensuring sound returns for our shareholders.”