The strategy of the Enel Group has proven its ability to create sustainable long-term value, integrating the themes of sustainability and close attention to climate change issues. The Group is among the leaders guiding the energy transition through the decarbonization of electricity generation and the electrification of energy consumption, which represent opportunities both to increase value creation and to contribute positively to more rapid achievement of the Sustainable Development Goals set by the United National (SDGs) in the 2030 Agenda, placing SDG 13 for the fight against climate change at the centre of its strategy.
As a result, the 2020-2022 Strategic Plan is based on a renewed set of “purpose driven” strategic pillars that represent the main industry trends connected to energy transition and the fight against climate change, also identifying the main transformation enablers. The trends in decarbonization and electrification, which are naturally connected with the generation and sale of electricity, will be enabled by the development of increasingly digital grids and the evolution towards a platform-based business model.
Thanks to the strategies implemented in the field, the Group could achieve an ordinary low-carbon EBITDA of 18.3 billion euros in 2022 that will bring the contribution of products, services and technologies with low-carbon emissions to 91% of the total ordinary EBITDA. During the period of the Plan, in compliance with the objectives of EBITDA, more than 90% of Capex will be destined to products, services and technologies with low-carbon emissions.
The major decarbonization objectives of plan will be achieved thanks to an acceleration of renewables development as well as the progressive decommissioning of coal-fired plants. The objective is to achieve an entirely marginal level of coal generation by 2030, with a 74% decrease in production by 2022.
The target for increasing renewables capacity is expected to rise by 14.1 GW (11.6 GW considering exclusively the net installed capacity) in 2020-2022. Thanks to these initiatives, 60% of the Group’s total installed capacity in 2022 will be renewable.
In order to support the decarbonization process, the plan also envisages a significant contribution from the new flexibility services provided by Enel X. Demand response capacity will expand from 6.3 GW in 2019 to over 10.1 GW in 2022, while storage services will increase from the current 110 MW to about 440 MW in 2022.
Electrification, which means the substitution of electricity for other commodities in energy consumption, will play a central role in the Enel Group strategy. In line with the IEA sustainable development scenario, the share of electricity in final global energy consumption should reach 43% in 2040 (from 24% in 2018). This scenario assumes a significant increase in the average annual nvestment for end use, which in 2030-2040 should be almost 5 times that in 2018.
The opportunities deriving from this trend will involve a broad spectrum of activities, ranging from distributed generation to energy efficiency upgrading for buildings and electric vehicle infrastructure, thus supporting the growth of companies that move first. Enel’s plan seeks to achieve a stable market share in the free markets of European countries, supported by a 65% increase in the number of customers and 21% growth in volumes sold on the free market in 2022. Further impetus to the electrification process will come from electric mobility, with the installation of about 736,000 recharging points by 2022, and more generally from the new services offered by Enel X, which will permit developing business models oriented towards promoting the decarbonization of other industrial sectors and services.
In order to adequately support value creation from these two macro trends, the plan identifies electricity distribution network as one of the main enablers. The evolution of the role of distributors will be a key factor in supporting the greater complexity involved with distributed renewables generation and electric mobility, in managing the digitalization process driven by innovative services offered to customers and in ensuring the resilience of the energy system in view of the impacts of climate change. As a result, Enel will continue to invest in network digitalization between 2020 and 2022, increasing the number of second generation smart meters from 13.1 million to 28.8 million.
Platforms and ecosystems
Enel will adopt a platform-based model on a global level for its grids, in retail and in Enel X, which will make it possible to standardise and optimise the operating processes by supporting the obtainment of the efficiencies set forth in the Plan, and promote the establishment of new business opportunities that promote an energy model that is free from greenhouse gas emissions.