Here are Cattaneo’s first moves at Enel
Enel could invest up to 5 billion euros for projects linked to the European RePowerEu programme: not only electricity grids, but also batteries. Facts, numbers and scenarios
At the end of 2021, Enel announced its intention to spend 70 billion euros on renewable energy sources, plus another 70 billion on expanding and upgrading electricity grids, so as to be able to connect plants with end users. With the new administration of Flavio Cattaneo , who recently took over from Francesco Starace, the general line does not seem to have changed. Not for Italy, at least .
INVESTMENTS RELATED TO REPOWEREU
In fact, Enel has announced that it can spend up to 5 billion euros more than the 3.5 billion already allocated with the PNRR. Everything will depend on the period of application of REPowerEU , the European Union program for accelerating the ecological transition: if – as Il Sole 24 Ore explained – REPowerEU funds are spent between 2023 and 2027, Enel plans to invest between 2 and 4 billion; if, on the other hand, the times are extended to 2030, then the company will allocate between 3 and 5 billion.
WHAT ENEL WILL DO WITH PNRR FUNDS
Last January Enel was awarded tenders of the PNRR worth 3.5 billion to upgrade the capacity of the low and medium voltage electricity grids, which will have to receive the energy generated by renewable plants scattered throughout Italy, and to improve the resilience of the infrastructure for extreme weather events.
BATTERIES, NOT JUST NETWORKS
The resources of REPowerEU should make it possible to increase these investments and to direct them not only to the expansion of the networks, but also to the construction of accumulation systems (the batteries), necessary for the storage of the electricity produced intermittently by the wind and solar farms.
ENEL'S DEBTS
As Il Sole 24 Ore explains, large groups such as Enel have the financial strength necessary to advance large sums, which the state will repay later once the European funds arrive. But advancing financing means “having to classify those funds as debts on the balance sheet”, at least for a certain period of time. Enel's debt is already quite heavy: in March it amounted to 58.9 billion, to be brought to 51-52 by the end of the year. To achieve the objective, the company has started a process of divestment of assets for a total of 21 billion (the disposals already closed are around 11 billion).
WHAT ABOUT THE TAX ON EXTRA PROFITS?
The energy sector is on the alert because at the end of June the measure introduced by Mario Draghi's government which sets a maximum ceiling (about 60 euros per megawatt hour) on the selling price of energy generated from renewable sources will expire. This is a tax on extra profits that companies that produce electricity from wind and solar power have been able to collect thanks to the difference in the cost of generation with gas plants: in fact, it is gas that determines the final electricity prices; a year ago the prices of this fuel had reached very high values, while today they have returned to normal levels (about 30 €/MWh).
The provision should expire at the end of June, but there are those who fear that the government may decide to extend it until the end of 2023 to collect something: the tax on extra profits has not guaranteed the expected revenues also due to the many appeals, which however could end up in favor of the executive. But, as Il Sole 24 Ore writes, "if the tax remains, it will be more difficult [for the large energy companies, ed. ] to advance the money for investments".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/enel-investimenti-5-miliardi-repowereu/ on Wed, 07 Jun 2023 14:01:56 +0000.