Italy's Enel cranks up spending to become carbon-free by 2040 - Reuters

A logo of Italian multinational energy company Enel is seen at the Milan's headquarter, Italy, February 5, 2020. REUTERS/Flavio Lo Scalzo/File Photo

Register now for FREE unlimited access to reuters.com

• Energy firm to exit coal by 2027, gas by 2040
• Core earnings to grow by 12% by 2024
• Enel's plans reflect sector's push to renewables

MILAN, Nov 24 (Reuters) - Europe's biggest utility Enel (ENEI.MI) will ramp up spending to 170 billion euros ($191 billion) this decade to fund its green power and networks businesses as it brings forward plans to become carbon-free by 2040.

The group will spend 70 billion euros on renewable energy to almost triple capacity it directly owns to 129 gigawatts (GW) by 2030 and will spend the same amount on infrastructure and networks to boost the number of grid customers and electricity sales.

Enel, one of the world's biggest green energy groups, will exit coal and gas generation by 2027 and 2040, respectively, replacing them with new green capacity and hybrid renewable-storage solutions. It will exit its gas retail business by 2040.

Register now for FREE unlimited access to reuters.com

"We will continue to grow in renewables, extracting value from what is already today the biggest private portfolio of renewable assets in the world," Chief Executive Francesco Starace said. Enel's gross renewable pipeline amounts to 371 GW.

German utilities E.ON (EONGn.DE) and RWE (RWEG.DE) have also unveiled green spending plans, amid pressure to shift away from fossil fuels to limit global warming. read more

Enel said it expected to raise 10 billion euros from asset sales in the course of the plan to 2024, of which 7 billion euros would be spent on organic growth.

The utility could sell renewable assets in parts of the world where it did not have an integrated generation and distribution network to focus on its key markets such as Italy, Spain and the United States, Starace said.

"The U.S. is a country where we should have an integrated position," Starace told the strategy presentation.

ELECTRIFYING CONSUMERS

The group, which controls Spanish utility Endesa (ELE.MC), said it planned to attract 40 billion euros from third parties, taking total spending to 2030 to 210 billion euros.

It said the investments would cut customer energy costs by 40% and help reduce carbon emissions by 80% by 2030.

"We need to electrify end consumption as much as possible," Starace said.

Enel's decision to ditch gas raises questions about the future of assets and clients managed by Endesa, Spain's second largest gas retailer with nearly 1.7 million customers.

Enel's core earnings, excluding restructuring costs, are expected to rise 12% to 21.0 billion-21.6 billion euros in 2024.

Some of Enel's short-term targets were trimmed compared to the previous plan, but the reductions were in line with market expectations, analysts said.

Enel shares were up 1.6% by 1153 GMT, slightly outperforming a 0.5% rise in the European utility index (.SX6P).

Net debt will rise to 61 billion-62 billion euros in 2024 from 53 billion-54 billion euros this year to help fund growth.

The company will pay a fixed dividend that will increase by 13% up to 0.43 euros/share between 2021 and 2024. The company said this target was a "minimum going forward".

($1 = 0.8892 euros)

Register now for FREE unlimited access to reuters.com

Reporting by Stephen Jewkes; Editing by Edmund Blair

Our Standards: The Thomson Reuters Trust Principles.

Adblock test (Why?)

Italy's Enel cranks up spending to become carbon-free by 2040 - Reuters
Read More