Continuing to pursue the electrification of consumption, decarbonization and grid digitalization to facilitate the energy transition are just some of the actions in our 2023-2025 Strategic Plan, which was presented on Capital Markets Day on November 22 2022.
The now-annual appointment provided the opportunity to present not just our strategy for the three-year period 2023-25 but also to reiterate the Group’s commitment to sustainable electrification and achieving the goal of the zero emissions by 2040.
In recent years, the energy scene has been impacted by the double whammy of the COVID-19 pandemic and geopolitical conflict. At the same time, global warming has also accelerated, resulting in a growing number of extreme weather events. All of these factors, explained CEO and General Manager Francesco Starace, have increased the need to accelerate both the energy transition and digitalization, as well as the reorganization and rebalancing of global supply chains.
Despite the current contingencies, our strategy will continue to focus (as it has in recent years) on sustainability, leveraging the acceleration of the electrification of consumption. The increase in fixed price sales covered by growing zero emissions generation will rise to 90% in 2025 and will reduce outside volatility-related risks for both ourselves and our customers. This will work in favor of the transition from fossil fuel-generated energy to clean electricity.
In order to do this, it will be vital to grow our installed renewable capacity, which we foresee rising to 75 GW by the end of 2025. We will also be concentrating on boosting grids in countries in which the energy transition is best supported by government and regulatory policies. This will enable us to increase digitalization and consistently keep one step ahead of the growing demand for quality and resilience. We will also achieve our goal of having 80% of digitalized customers connected to our grids by 2025. In addition to this, we will be reinforcing our integrated commercial strategy by focusing on offering services such as e-vehicle charging infrastructure, energy storage systems and demand response services.
In the period 2023-2025, the Group plans further rationalization of its structure in a continuation of the process begun in 2022. This will mean focusing on its six ‘core’ countries – Italy, Spain, the United States, Brazil, Chile and Colombia – while exiting certain business and geographical areas that are less closely aligned with our strategy. This exit program is an integral part of the Plan to restructure the Group’s organization to maximize value for our shareholders. The result at the end of this process will be a “leaner structure delivering good results even in turbulent times,” Starace declared.
The Group will continue to pursue the principles of sustainability in its investment decisions, thereby creating shared value for all stakeholders involved. To implement the strategic actions outlined in the Plan, we will be making investments of around €37 billion, 94% of which will be in line with the UN’s Sustainable Development Goals (SDGs). We will be pursuing in particular SDG 7 (Affordable and clean energy), SDG 9 (Industry, innovation and infrastructure) and SDG 11 (Sustainable cities and communities), all of which are required in order to deliver SDG 13 (Climate action).
Under the new goals in the Strategic Plan, the Group’s ordinary EBITDA (gross operating margin) will rise to between €22.2 billion and €22.8 billion in 2025, up from the €19-plus billion goal anticipated for the end of 2022, with a net profit in excess of €7 billion compared to the €5 billion - €5.3 billion expected at the end of this year. A dividend of €0.43 per share is expected for the coming three years, which marks an increase on 2022.
Italy remains central to the Group’s strategy. While we have confirmed that coal-fired generation will end by 2025, our goal for the coming three-year period is to build renewable plants that will deliver an additional 4.1 GW capacity. This figure may even double, as Starace explained, if the approval process for building new plants becomes simpler.
Italy is also the headquarters of Enel Green Power’s 3Sun Gigafactory, which is on track to become Europe’s largest solar panel factory. It is also the only one in the world making HJT panels, which have a far higher energy yield. Annual output is due to increase to 3GW in 2024: that’s 15 times more than the current figure. This will help us to develop through sustainable partnerships that guarantee that the Italian system is both solid and competitive. Aside from acting as an example and a driver for the European photovoltaic industry, the expansion of 3Sun will also have a positive impact on the local economy by creating around a thousand new jobs.
“For Italy, we remain committed to making it freer and more independent from an energy perspective: that means putting more effort into renewables, major investment in solar panel production in Italy, and ongoing substantial investment in grids as a fundamental element in driving the electrification of consumption and freeing us as much as possible from having to use fossil fuels,” Starace concluded.
These are all results that can be achieved thanks to an organizational structure based on the digital platforms we have adopted, and most importantly of all, the skills and commitment of our people.