Italian energy giant Enel has unveiled a new strategy for 2024 to 2026, calling for a cautious approach towards renewables investment and higher spending on power grids.
The strategy prioritises profitability through selective fund allocation, simplified processes with a focus on core markets, and financial and environmental sustainability.
The state-run utility estimates a total gross capital expenditure (capex) of €35.8bn ($39.07bn) over the three years to 2026, of which €18.6bn will be invested in grids, partly financed by EU grants.
Enel states that it plans to be “more selective” over clean energy investments and to take a “less capital intensive and less risky approach”.
The company has earmarked €12.1bn of the gross capex to renewables, of which €7.2bn will be allocated to Europe, €2.6bn to Latin America and €2.3bn to North America.
It aims to invest chiefly in onshore wind, solar and battery, along with repowering.
Of the gross capex, €3bn will be invested in the customers' segment.
Of the total capex, 49% will be invested in Italy, 25% in Iberia, 19% in Latin America and 7% in North America.
The company’s focus will be on strengthening grids in Italy and boosting renewable capacity in the Iberia region.
In the Latin American market, it will focus on networks and in North America it will concentrate on the partnership model and prioritise cash generation.
The group has also reiterated its focus on its six core markets of Brazil, Chile, Colombia, Italy, Spain and the US.
It confirms its goals of withdrawing from coal power generation by 2027 and attaining zero emissions across all scopes by 2040.
The group projects ordinary earnings before interest, taxes, depreciation and amortisation in 2026 of between €23.6bn and €24.3bn, and net ordinary income of between €7.1bn and €7.3bn.
Enel CEO Flavio Cattaneo stated: “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 maximise profitability while minimising risks.
“We will focus on our core countries by implementing integrated strategies, targeting networks [and] 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 the group's financial position and enhance value creation, ensuring sound returns for our shareholders.”
In July 2023, Enel sold a 50% stake in Enel Green Power Australia and the Enel Green Power Australia Trust (EGPA) to Japan’s Inpex, valuing EGPA at €400m.
In the same month, its subsidiary Enel Green Power agreed to sell a 50% stake in its Greek renewables business Enel Green Power Hellas to Macquarie Asset Management for €345m.
