Italian power company Enel is expected to invest €5 billion euros in Brazil over the next three years, as part of the global plan announced on Wednesday, which foresees investments of €170 billion worldwide by 2030.
The group’s global investments over the decade represent an increase of 6% compared to that announced in 2020. Of the total, 43% will be directed to renewable power generation and 44% to network activities, with the remainder focused on technologies and energy services.
The main highlight of CEO Francesco Starace’s presentation to investors in Milan Wednesday was the announcement that the company will bring forward by ten years, to 2040, the goal to become carbon neutral.
Mr. Starace stressed that the next few years will be crucial for the world to achieve the decarbonization targets currently in force and that electrification will play a crucial role in this context. “The next decade will be the decade of electrification. It is a great challenge and a great opportunity for those who work in this market,” he said.
Enel’s decarbonization targets include direct and indirect carbon emissions. Thus, the company intends to exit all business related to the supply of gas by 2040, in addition to abandoning the coal-fired generation activity in 2027. “We have a goal of zero carbon and not just zero net carbon. The word ‘net’ is dangerous. Behind it there may be fictitious solutions. We will not have fictitious solutions here,” he said.
The company plans to increase threefold its global renewable capacity by 2030, reaching 154 gigawatts. Enel expects to start operating 21.2 GW of new renewable generation capacity, of which 26% will be in Latin America. The focus will be on solar and wind power, but there will be space for storage of energy and batteries in the portfolio.
Mr. Starace ruled out the possibility of investing in offshore wind generation, due to the higher costs and deadlines associated with the technology. On the other hand, he pointed out that Enel is interested in hydrogen. “We are going to invest in green hydrogen over the next three to four years to see if the technology is competitive,” he said.
Brazil is among the eight priority groups for Enel’s investments in the period, in which the company hopes to be able to double business margins by the end of the decade. The value of investments announced for Brazil over the next three years is in line with that put in place in recent years.
Mr. Starace stressed, however, that values can change, depending on the opportunities that the company finds. “The figures are purely indicative, not compromises. We will only invest if we have good returns,” he said.
Asked about the water crisis that Brazil faced in 2021 and that affected dam reservoirs, Mr. Starace said that local regulators managed the issue well and that he does not expect new problems in 2022.
According to Mr. Starace, the crisis ended up being a stimulus to expand investments in other renewable sources in the country. “The chances of the country suffering from it will fall again as it starts to count on more wind and solar power plants and that is what we intend to do,” he added.
He highlighted that the group wants to continue investing in large-scale renewable generation projects in Brazil aimed at the free market, in which large consumers choose energy suppliers. “The market is large and the appetite of industries and companies is high,” he explained.
Enel operates in Brazil in power generation, distribution, transmission, commercialization and services. The group has 18 million customers in the states of São Paulo, Ceará, Rio de Janeiro and Goiás. Altogether, the company operates more than 4.3 GW of generation, from wind, solar and hydroelectric sources.
Globally, at the end of the decade, the company wants to have 86 million customers in network services; with this, the volume of energy distributed by the group in the world should go to 570 terawatt hours in 2030 from 500 TWh estimated for 2021.
For Mr. Starace, high commodity prices, difficulties in accessing components and congestion at ports currently seen in the markets will not hinder Enel’s global growth trajectory.
The holding is interested in expanding investments in renewable generation in Colombia, Greece and Portugal. In Peru, the expectation is to focus mainly on distribution, with perspectives for energy storage projects.
In Mexico and Argentina, the company remains on hold. Mr. Starace explained that Enel has no plans to leave these countries, but stressed that the group hopes to have greater clarity on government decisions regarding the energy market before deciding on the next steps. Likewise, the executive said that Enel intends to remain listed on the Stock Exchange in Chile and dismissed rumors about a possible delisting.
Source: Valor international