Enel Continues Its Growth in Renewables With an Improved Technological Mix To Reduce Volatility and Further Enhance Profitability

Enel will invest €12 billion ($12.7 billion) in renewables between 2025 and 2027 with a flexible capital allocation and a selective approach aimed at improving the technological mix, enhancing profitability and supporting the acceleration of the energy transition.

In the coming years, global electricity consumption is expected to keep growing, reaching a total of 32,000 TWh in 2030 vs 25,000 TWh in 2023 (+25%)*.

The electrification of industrial and domestic uses, the rise of electric mobility and the increase of data center power consumption will be some of the main reasons behind this growth.

With increasing demand, the need for additional sources of energy that must be abundant, come at an affordable price and be carbon-free, has never been more urgent. In this context, renewables are expected to grow massively across all transition-scenarios, and energy-systems will require baseload technologies and storage to match the demand and minimize price volatility.

The approach to renewable investment

"The managerial actions carried out in 2024 allowed us to achieve all the targets we announced to the markets and to strengthen the Group’s financial structure. We can therefore begin a new chapter of growth that will create further value for shareholders and stakeholders,” says Flavio Cattaneo, Enel Group CEO.

Over the next three years, Enel will allocate €12 billion ($12.7 billion) to renewables, reinforcing its commitment to the energy transition and enhancing its global renewable energy footprint. The focus will be on expanding its renewable energy portfolio by adding 12 gigawatts (GW) of capacity by 2027. The plan prioritizes high-quality and high-return investments in renewables, including a rebalancing of the Group’s generation mix towards hydro, onshore wind and battery storage. This shift in the energy mix is expected to improve the levelized cost of energy, reduce volatility and enhance overall profitability.

While the company is set to make strategic investments in greenfield projects, it will also seize opportunities in brownfield assets, where financial effort is often more sustainable and the risk profile more predictable.

The deal announced by Enel on November 15 for the acquisition of about 630 MW of hydro capacity in Spain is a clear example of the potential value creation upside of the capital allocation strategy. In fact, brownfield assets have the advantage of not being subject to permitting and construction risks, with the assets able to immediately start generating EBITDA. With this deal, Enel was able to further grow the share of its sale portfolio covered by own renewable production in Spain, increasing returns generated by its integrated presence.

“In the years ahead, we will add around 12 GW of capacity, with an improved technological mix of over 70% of onshore wind and programmable technologies (hydro and batteries). All this, united with the strong investments in grids and customers, will support the acceleration of the energy transition,” says Salvatore Bernabei, Head of Enel Green Power and Thermal Generation.

On track to achieve Net Zero

The Group plans to continue reducing its direct and indirect greenhouse gas emissions, in line with the Paris Agreement and compliant with the 1.5C pathway, as certified by the Science Based Targets initiative (SBTi). The Group confirmed its  target to close all of its remaining coal plants by 2027, subject to the authorizations of competent authorities. For coal plant reconversion, the Group will evaluate the best available technologies, based on the needs indicated by the transmission grid operators. The Group confirmed its ambition to reach zero emissions across all scopes by 2040. Furthermore, along this path, the Group aims to continue to preserve the social and economic context through its Just Transition plan.

Sustainable long term value creation

“The high visibility of results and the Group’s improved risk-return profile allowed us to revise our dividend policy with a new fixed minimum DPS of €0.46 ($0.49) increasing from €0.43 ($0.45) set in the previous plan, with potential further upside up to a 70% payout on net ordinary income while maintaining a strong financial position throughout the Plan,” says Stefano De Angelis, Enel Group CFO.

Thanks to the implementation of the new plan, strongly focused on grids and renewables, alongside customers, Enel expects to deliver a 40% increase in its EBITDA in 2027 versus the 2022 at a like-for-like level, reaching a range between €24.1 ($25.4) and €24.5 billion ($25.8 billion) EBITDA at the end of the plan versus €17.3 billion ($18.3 $billion) in 2022, while at the same time promoting environmental sustainability by reducing GHG emissions and preserving the socio-economic context through a Just Transition approach. As a result, on the back of its 2025-2027 Strategy, Enel is ready to begin a new era of sustainable growth and value creation for shareholders and stakeholders.

^*Source: IEA World Energy Outlook 2024 (STEPS scenario)