What Enel will do in Italy, the USA and Latin America
Enel will invest 1 billion dollars in the construction of a large solar cell and panel factory in the United States. In Italy it will spend 600 million for the expansion of the Catania site. Meanwhile, the company is selling assets to reduce debt. All the details
Enel is planning the construction of a large solar cell factory (the devices that form photovoltaic modules, or panels) in the United States, going to fill a hole in the American supply chain: at the moment, in fact, there is no production of these in the country components, as local firms have been driven out of business by cheaper Asian competition .
3 GW OF CAPACITY, TO BE INCREASED TO 6
In addition to the cells, the Enel plant will also produce solar panels, for an initial capacity of 3 gigawatts that could reach 6 GW: the Italian company would become one of the most important players in the US solar industry. According to estimates by theWall Street Journal , which gave the news, the investment should amount to about 1 billion dollars.
COMPETING WITH CHINA
Giovanni Bertolino, head of the US division of 3Sun, the Enel group company specializing in the manufacturing of cells and panels, said that "economies of scale and learning curves are super important in this sector". In order to be able to compete with China – which dominates the international market for solar devices in terms of quantity, quality and prices, with a share of around 80 percent -, Enel will need large production volumes and efficient processes that take low costs.
THE (DETERMINING) ROLE OF THE INFLATION REDUCTION ACT
Enel's investment in the United States was favored by the Inflation Reduction Act, the law signed last August by President Joe Biden which – among other things – allocates important tax credits for those companies that develop clean energy technologies such as batteries for electric vehicles, wind turbines and solar components.
Due to the subsidies, the Inflation Reduction Act has created disagreements between the United States and the European Union, which fears losing its attractiveness for companies , but the law has strategic importance for Washington: it aims to counter China through the reinvigoration of American manufacturing in sectors crucial to the energy and digital transitions.
In addition to Enel, the incentives provided by the Inflation Reduction Act have prompted other companies, both foreign and American – such as the manufacturer of solar devices First Solar or the South Korean battery company LG Energy Solutions – to plan substantial investments in manufacturing capacity in the United States.
THE ACCELERATION OF SOLAR IN THE UNITED STATES
In recent years, the United States has acquired about 20 GW of new solar capacity per year, an amount of energy capable of powering three and a half million homes; some forecasts speak of a doubling of that number in the next decade.
WHERE WILL THE ENEL FACTORY BE LOCATED IN THE USA?
Enel has not yet chosen where to build the factory: the most likely sites are Texas and the Great Lakes region, which includes the states of Minnesota, Wisconsin, Illinois, Indiana, Michigan, Ohio, Pennsylvania and New York.
The company is expected to make a decision – primarily based on authorization speed – by the end of the year and expects to start production towards the end of 2024.
ENEL'S PLANS FOR PHOTOVOLTAIC IN ITALY
In Italy Enel produces both cells and solar panels in the 3Sun factory in Sicily, opened in 2010. With an investment of 600 million euros, the company wants to expand its capacity fifteen times , bringing it to 15 GW and making it the largest plant in Europe for the manufacture of bifacial photovoltaic modules (more efficient than conventional ones because they produce more energy for the same occupied surface).
Enel uses Tandem-type solar cells, made up of a silicon cell onto which a second perovskite cell is grafted, a more efficient absorbent material.
According to Enel estimates, the transformation of the factory will create a thousand jobs in the Catania area by 2024.
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ASSET SALE AND DEBT REDUCTION
Enel intends to sell its assets worth 21 billion euros to reduce its debt, which has grown significantly following the numerous acquisitions aimed at increasing generation capacity from renewable sources.
At the end of September, Enel's debt amounted to 69.7 billion euros. Through the asset sale, the company will permanently exit Argentina, Peru and Romania to focus on six key markets, including Italy, the United States and Brazil.
Enel's plans include the reduction of the debt to 58-62 billion by the end of December, and to bring it to 51-52 billion by the end of next year.
IPO in the US?
As MF-Milano Finanza reports today, Enel plans to proceed with an initial public offering (IPO) of Enel North America, its US subsidiary headquartered in Massachusetts.
A few days ago, the group's CEO, Francesco Starace, calling Enel North America a "strange big beast", spoke of the possibility of its IPO in the next twelve months "if the climate is favourable".
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/enel-fabbrica-pannelli-solari-stati-uniti/ on Fri, 25 Nov 2022 13:54:03 +0000.