Competition remains strong for second storage auction

A total of 55 applications representing standalone batteries with 1,668 MW in capacity have been submitted by RES investors to a second auction offering investment and operational support for standalone batteries, a solid turnout ensuring the strong competition registered at the first auction will be maintained.

Investment and operational support will be offered to projects totaling 288.21 MW, meaning applications for participation have oversubscribed this capacity by 5.7 times.

The field of contestants will be finalized at noon today, when a deadline for letters of guarantee expected from participants is set to expire.

According to sources, most participants have already submitted their letters of guarantee with applications. As a result, the number of participants is not expected to diminish.

All participants face 100-MW capacity limit totals for projects submitted to the first two auctions. Helleniq Energy, power utility PPC and Intrakat already exhausted this limit through the first auction and, as a result, cannot participate in the follow-up procedure.

Virtually all other major energy groups with a market presence in Greece have applied to  participate in the second auction, sources informed. These include, TERNA Energy, Mytilineos, the Copelouzos group, Elpedison, MORE, Enel, EDF, EDPR, BayWa, KiEFER and Faria.

A total of 12 projects were successful in the first auction, securing guaranteed revenues of between 34,000 and 64,100 euros per MWh for a year. A starting price of 115,000 euros per MWh, for a year, has been set for the second auction. Bidding is not expected to drop below 45,000 euros per MWh, for a year, market officials have projected.

 

ENEL finalizes sale of ENEL Romania to power utility PPC


Rome, October 25th, 2023 – Enel S.p.A. has finalized its sale to Greek power utility PPC of all the equity stakes held by the Enel Group in Romania, following the fulfillment of all the conditions precedent customary for these kinds of transactions set forth in the related sale agreement, signed on March 9th, 2023. In line with the above agreement, PPC paid a total consideration of approximately 1,240 million euros, equivalent to an enterprise value of around 1,900 million euros (on a 100% basis). An earn-out mechanism is also foreseen concerning a potential further post-closing payment, based on the future value of the retail business.

The overall transaction, excluding the potential earn-out, generated a positive effect on the Group’s consolidated net debt of around 2,080 million euros in 2023, that includes the cash-in of around 200 million euros of extraordinary dividends, which adds to the positive effect of about 85 million euros already generated in 2022.

The transaction also produced a cumulative negative impact for 2022-2023 on reported Group net income amounting to 1,398 million euros, of which 777 million euros in 2023 (including 655 million euros related to the release of the foreign exchange reserve). Conversely, the transaction bears no impact on Group ordinary economic results.

The disposal is in line with the Group’s Strategic Priorities, which envisage the repositioning of Enel on countries where the Group has higher growth potential as well as an integrated presence, namely Italy, Spain, the United States, Brazil, Chile and Colombia.

The Enel Group has been a leading energy player in Romania since 2005, operating in: power distribution with around 3.1 million customers in three key areas of the country, namely Muntenia Sud (including Bucharest), Banat and Dobrogea; supply, providing electricity, natural gas and value-added services; renewable energy, with around 600 MW of capacity; and advanced energy services, such as home services, distributed generation, energy efficiency and electric mobility.

PPC new business plan, worth over €9bn, unveiled November

Power utility PPC plans to unveil its new and revised business plan, covering 2023 to 2027, at its capital markets day, scheduled for November, following the completion of the energy group’s takeover of Italian group ENEL’s Romanian subsidiary ENEL Romania.

PPC’s new business plan is expected to include investments that exceed the existing 2022-to-2026 plan’s 9 billion-euro sum. The precise figure is expected to be decided on by PPC’s administration in October, once all details of the company’s takeover of ENEL Romania have been completed.

The main focus of PPC’s new business plan will be on renewables and the retail electricity market. PPC has made clear its interest to acquire a company with an extensive retail presence. Appliance retail chain Kotsovolos, a member of the Currys group, is one possibility. Kotsovolos is represented by 93 outlets around Greece.

PPC officials met recently with members of the Romanian government to discuss the ENEL Romania takeover’s completion, expected by the end of September.

The power utility is determined to include this addition in its updated business plan as the move promises to boost the company’s financial figures and facilitate new goals for the Greek and, primarily, Balkan markets.

According to sources, PPC’s five-year business plan from 2023 to 2027 will exceed 1.9 billion euros per year.

PPC chief to take part in Romanian Three Seas meeting

Greece aims to bolster its geopolitical influence in the Balkans through energy, power utility PPC’s takeover of Italian group ENEL’s Romanian subsidiary ENEL Romania being a key part of this strategy.

In addition to PPC’s takeover of ENEL Romania, Helleniq Energy recently invested in Romania and had been preceded by Mytilineos – both in renewable energy projects.

PPC’s ENEL Romania takeover has prompted an announcement from Romanian president Klaus Iohannis, who named Greece as a new member of The Three Seas, a diplomatic initiative taken by Romania’s political leadership to bring together EU member states and candidates located between the Baltic, Adriatic and Black Seas for collaboration in the fields of energy, infrastructure and the digital economy.

Austria, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Moldova, Poland, Romania, Slovakia, Slovenia, and Ukraine are the other members of The Three Seas initiative.

Iohannis, Romania’s president, will host a two-day meeting in Bucharest on September 6 and 7 for talks on collaboration in these domains. Ministers and entrepreneurs representing the aforementioned countries, including PPC’s chief executive officer Giorgos Stassis, energypress sources have informed, will take part at the upcoming Bucharest meeting.

Romania has become a geopolitical focal point as a result of the country’s close proximity to war-entangled Ukraine. In addition, Bucharest has established a pivotal role as a result of its support of Ukraine in the war with Russia and Moldova’s EU membership quest. Romania has also facilitated the movement of grain across its borders.

PPC takeover of ENEL Romania to be completed by September

Power utility PPC’s takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania will be completed by September, PPC’s chief executive officer Giorgos Stassis informed analysts during a conference call yesterday, held to present the power company’s first-half results.

As soon as the takeover is completed, PPC will stage a Capital Markets Day to update investors on its updated strategic plan.

New targets can be anticipated as PPC’s business plan will include an injection of new data linked to the ENEL Romania takeover, substantially increasing PPC’s financial performance.

The turnout for yesterday’s conference call was extensive, highlighting the market’s interest in PPC’s progress.

Stassis, the CEO, confirmed PPC’s target for an EBITA figure of 1.2 billion euros in 2023, adding that management will have decided on the distribution of dividends for 2023 at the end of the second half. A percentage of PPC’s profit can be excepted to be distributed in 2024.

Analysts, during the conference call, expressed great interest in PPC’s renewable energy projects. According to data presented by the company’s administration, RES projects either already operating or currently being developed represent a total capacity of 1.6 GW, just over 30 percent of PPC’s 5.1 GW target set for 2026.

Of this total, 228 MW represents new projects in operation, 451 MW represents projects for which contractor procedures are in progress, 100 MW concerns storage systems, 250 MW concerns projects that have secured connection terms, and 640 MW represents RES projects that have met environmental requirements and are now awaiting connection terms.

 

Brussels approves PPC takeover deal for ENEL Romania

The European Commission’s Directorate-General for Competition has approved power utility PPC’s 1.26 billion-euro takeover agreement for Italian group ENEL’s Romanian subsidiary ENEL Romania, sources have informed.

Though it would be possible for all sides involved to compete this acquisition before the end of summer, it will most likely get over the finish line around September as the second round of Greece’s general election, held yesterday, will delay the procedure by a month. The ruling center-right New Democracy party, which held on to power, is reshuffling personnel at ministerial posts.

PPC’s chief executive Giorgos Stassis and his administration are working intensively to update the corporation’s business plan, which could be presented to investors and analysts in October.

The plan will include PPC’s takeover of ENEL Romania as well as other key investment initiatives taken recently by the company such as its development of a CCGT facility in Alexandroupoli, northeastern Greece.

According to sources, PPC will raise its financial goals as a reflection of the company’s growth in size.

PPC is scheduled to hold a general shareholders’ meeting on June 29. The CEO, sources said, could set a date for the corporation’s return to dividend payouts.

 

PPC reaches agreement for €1.26bn buy of ENEL Romania

Power utility PPC and Italy’s ENEL have signed a sale and purchase agreement, following two months of negotiations, for the latter’s sale of its Romanian subsidiary ENEL Romania to the Greek corporation at a price of 1.26 billion euros.

The sale is expected to be completed by September, as long as competition-related authorities approve the agreement.

PPC plans to finance its acquisition of ENEL Romania through a loan of 800 million euros and 460 million euros in company capital.

A move of national importance, PPC’s acquisition of ENEL Romania promises to offer entry into a now-developed Balkan market, establishing the Greek corporation as a strategic market player with access to a significant energy corridor running from Romania and across Bulgaria, all the way to Greece.

Through the deal, PPC will acquire over 130,000 kilometers in electricity distribution networks, double its RES capacity and also gain 3.2 million new customers.

PPC’s ENEL Romania takeover talks at price under local standards

Power utility PPC appears to have reached an advanced stage in its negotiations with Italy’s ENEL for the acquisition of the latter’s Romanian subsidiary ENEL Romania, the various aspects of the deal said to be at price levels well below Greek market standards.

PPC’s offer for ENEL Romania’s retail division, for example, totaling approximately three million customers, results in a price of less than 90 euros per customer, which is less than half than the cost of recent corresponding acquisitions completed in the Greek market.

Mytilineos’ acquisition of Watt+Volt, an energy supplier with a portfolio numbering 200,000 customers, was worth 36 million euros, or 180 euros per customer.

The ENEL Romania deal’s price concerning networks is also being negotiated at a price level well below the cost of corresponding acquisitions recently completed in Greece. The price paid by Australia’s Macquarie for a 49 percent stake in Greek distribution network operator DEDDIE/HEDNO works out to 20 percent over the level being discussed between PPC and ENEL for ENEL Romania’s networks.

The same goes for the Romanian subsidiary’s renewable energy division. For example, Motor Oil acquired ELTECH Anemos for a figure twelve times its EBITDA, whereas the Romanian subsidiary’s RES portfolio is being negotiated at a price level of less than ten times its EBITDA.

PPC is negotiating a full acquisition of ENEL Romania for a takeover promising to expand the Greek utility’s interests in the Balkans, with the region’s fastest-growing economy as a base.

 

PPC takeover of ENEL Romania could be just weeks away

Power utility PPC, currently conducting due diligence for its planned acquisition of Italian energy group ENEL’s Romanian subsidiary ENEL Romania, has completed about 70 percent of the procedure, without issues, and could strike a deal within the next two to four weeks.

If the two sides do reach an agreement, PPC will fully acquire the Italian group’s Romanian subsidiary, a big move facilitating the Greek utility’s plan for expansion into the Balkan energy market with Romania, the region’s fastest growing economy, as a base.

An agreement between PPC and ENEL Romania would offer the former full control of ENEL Romania’s assets, regardless of the subsidiary’s varying stakes in network, supply and RES projects, ranging from 51 to 100 percent. ENEL holds the managerial rights to all its ventures in Romania, also included in the sale.

PPC officials have ruled out any chance of also expressing interest in ENEL’s interests in the Greek market. Asset prices in the Greek market greatly exceed those in Balkan markets, they explained.

An ENEL Romania deal would offer PPC three million customers in Romania as an addition to the company’s five million existing customers in Greece.

It would also offer PPC access to rich natural gas deposits in the Black Sea, while a Romanian venture would be supplied favorably-priced LNG arriving at Greek ports – currently via the Revythoussa islet terminal just off Athens and, in the near future, through a prospective FSRU at Alexandroupoli, northeastern Greece.

Two major energy deals promise to reshape Greek market in 2023

Two major deals expected to be struck early in 2023, barring surprise developments, namely Greek power utility PPC’s acquisition of ENEL Romania and Australian fund First Sentier’s takeover of TERNA Energy, promise to further internationalize the Greek energy market, reshaping it in the years to come through new opportunities and balances.

PPC’s completion of an agreement for ENEL Romania, a potential acquisition said to be worth between 1.3 and 1.4 billion euros, would open up the Balkans for the Greek utility and greatly increase the corporation’s size. ENEL Romania is roughly half the current size of PPC.

PPC and ENEL Romania’s parent company ENEL have signed a confidentiality agreement for exclusive negotiations ahead of due diligence.

As for TERNA Energy, the Australian fund First Sentier is believed to have completed its due diligence in November and reached a takeover agreement worth 2.34 billion euros.

According to sources, the Australian fund is now working on a financing agreement with Greek banks before finalizing the agreement.

If TERNA Energy’s share is sold at 22 euros, then the agreement with First Sentier could exceed 2.5 billion euros.

TERNA Energy’s investment plan for 2022-2029 is valued at 5.9 billion euros and includes additional RES installations of 5.5 GW, from 895 MW at present, the objective being to increase annual EBITDA to more than 700 million euros.

 

Operator decides on 2nd round qualifiers for smart meters

Electricity distribution network operator DEDDIE/HEDNO has shortlisted the second-round qualifiers in a tender awarding a contract for the installation of approximately 7.5 million smart throughout the country, to replace the existing analog meters, energypress sources have informed.

The DEDDIE/HEDNO board yesterday approved the shortlist of second-round qualifiers, roughly one-third of the original field of seven candidates.

The companies disqualified failed to meet procedural requirements or quality standards, the sources noted.

Interested parties faced a mid-June deadline to submit applications to the tender. The operator’s appraisal of first-round applications required considerable time as participants were called upon to clarify various details.

The tender’s first-round participants were: US-based Itron; Switzerland’s Landis+Gyr; Elster, now a member of international group Honeywell; Protasis, a Greek firm operating in Greece as a representative of French company Sagemcom; Slovenia-based Iskraemeco; Gridspertise, founded in 2021 by Italian group Enel to market the group’s smart network technology; and Intrasoft International, which became a member of Danish-headquartered IT group Netcompany last year.

DEDDIE/HEDNO plans to complete the project by 2030. Its cost is budgeted at 829 million euros. The upgrade will offer immediate benefits, which have been evaluated at 223 million euros in the first year alone, in 2031.

 

PPC takeover of ENEL Romania would establish utility in region

Power utility PPC has entered exclusive talks with Italy’s ENEL for the acquisition of the latter’s portfolio in Romania, a lucrative prospect offering networks in three Romanian regions, three million customers in the country’s retail electricity market, 550 MW in RES projects already operating, as well as 2,000 MW in RES projects at an advanced stage.

Completion of the deal would take PPC to another level and establish it as a regional force in southeast Europe’s energy market.

Market experts have put a price tag of between 1.3 and 1.4 billion euros on the possible deal.

Late last night, PPC and ENEL signed a confidentiality agreement obliging ENEL officials to only discuss a possible deal with PPC, which is conducting due diligence until January 23, in preparation for a deal that appears increasingly likely, as long as the two sides can agree on a price.

ENEL controls Romanian networks in the Muntenia region, surrounding Bucharest, the industrial zone of Timisoara, as well as Dobrota’s tourism section. The three networks offer a total capacity of 16 TWh.

PPC up against three big funds for Enel Romania acquisition

Power utility PPC is up against strong competition from three major funds handling capital worth hundreds of billions of euros for the acquisition of Enel Romania, a subsidiary of the major Italian energy group Enel, sources have informed.

Enel Romania has been placed for sale as its parent company wants to reduce its net debt figure.

PPC has been scouring neighboring markets for almost a year now, looking for opportunities to expand beyond Greece and establish a geostrategic position in the region.

The southeast European energy market is attracting major international investment interest as Balkan countries have plenty of potential for RES growth and also promise to serve as a new energy corridor in Europe.

Canadian fund Brookfield, handling over 750 billion euros in capital and globally present with investments in renewables, infrastructure, real estate and social security funds, is believed to be one of the funds PPC is up against for Enel Romania.

The UK’s Amber Infrastructure, handling over 10 billion euros in capital, primarily in infrastructure, has been named as another potential buyer of Enel Romania.

Enel’s debt figure surged to 70 billion euros in September following energy crisis measures taken by the Italian government, an extraordinary tax, and increased natural gas orders for coverage of customer needs.

Enel aims to cut its debt by roughly 21 billion euros through the sale of assets in countries such as Romania, Argentina and Peru.

 

Tourism boom revenue will help fund winter’s energy subsidies

The Greek tourism industry’s strong revenue figures being generated this summer, which could exceed those of the record-breaking summer of 2019 if July’s heightened activity is sustained through August, will prove invaluable in financing energy subsidies needed in coming months.

At the current rate, Greece’s tourism industry could contribute between 19 and 20 billion euros to the budget, well over the budget forecast of 16 to 17 billion euros.

International authorities, including Fatih Birol, executive director of the International Energy Agency, are warning of even tougher times ahead.

European countries greatly dependent on Russian natural gas are scrambling for solutions ahead of next winter. Germany is seeking nuclear-energy assistance from France. Chancellor Olaf Scholtz has reiterated energy prices will remain high for some time yet. Italian energy company Enel has warned customers that it cannot guarantee gas and electricity prices will continue to be offered under current agreements.

Latest calculations indicate that Greece’s electricity bill subsidies for households and businesses could soon exceed one billion euros per month.

The country’s electricity subsidy cost for August is expected to greatly exceed July’s figure of 722 million euros, which was based on a cost of 240 euros per MWh, now over 300 euros per MWh.

 

Seven international players meet smart meters tender deadline

A total of seven major international players have expressed non-binding, first-round interest in a new tender staged by distribution network operator DEDDIE/HEDNO for procurement and installation of digital power meters around the country.

The operator launched this new tender after its previous procedure, launched eight years ago, ended up being brought to a standstill by legal battles fought between rival bidders.

The seven companies that met the new procedure’s first-round deadline, which expired last Friday following five extensions granted to interested parties, are: US-based Itron; Switzerland’s Landis+Gyr; Elster, now a member of international group Honeywell; Protasis, a Greek firm operating in Greece as a representative of French company Sagemcom; Slovenia-based Iskraemeco; Gridspertise, founded in 2021 by Italian group Enel to market the group’s smart network technology; and Intrasoft International, which became a member of Danish-headquartered IT group Netcompany last year.

First-round offers are planned to be opened at midday today, setting in motion their appraisal.

The project, entailing the installation of approximately 7.5 million smart meters in Greece, is expected to be completed in 2030 and its budget is estimated at 830 million euros.

 

European CEO Alliance backs ambitious climate strategy

100 billion euros of investment to decarbonize their companies by 2030, a gradual introduction of a cross-sector CO2 price and ambitious phase-out dates for coal: These are some of the key points of ten top managers from the energy, transport and technology industries issued in a joint position paper. Thereby, the leading European CEOs are calling for far-reaching climate protection measures at the occasion of the seventh international climate strike on Friday, March 19, 2021.

The ten business leaders Björn Rosengren (ABB), Thierry Vanlancker (AkzoNobel), Francesco Starace (ENEL), Leonhard Birnbaum (E.ON), Ignacio Galán (Iberdrola), Søren Skou (Maersk), Christian Klein (SAP), Henrik Henriksson (Scania), Jean-Pascale Tricoire (Schneider Electric) and Herbert Diess (Volkswagen) are members of the “CEO Alliance for Europe’s Recovery, Reform and Resilience”.

This CEO Alliance formed in 2020 against the backdrop of the Covid-19 pandemic and the historic decisions on the European Green Deal. Their common goal is to make the EU the world’s leading region for climate protection while unlocking investments, driving innovations in tomorrow’s technologies and creating future-proof jobs.

The top managers published a joint position paper with ambitious proposals. They state: “We firmly believe that the EU Green Deal and Next Generation EU will put Europe’s innovation and business ingenuity to the service of the global climate cause, will kick-start a wave of investments into sustainability and resilience and will create future-proof jobs across the EU.”

The CEOs encourage European policy makers to take bold steps towards climate neutrality such as “continuing to pursue a standardized cross-sector CO2 price” and “setting end-dates for carbon-intense technologies”.

The CEO Alliance considers itself an “Action Tank”, working together in concrete joint projects: Cross-EU charging infrastructure for heavy duty transport, integration of EU Power systems, digital carbon footprint tracking, sustainable healthy buildings, e-buses for Europe, green hydrogen value chain and rapid build-up of battery production.

The aspiration of the top managers is to work with their companies across sectors to find practical solutions for effective climate protection. In doing so, they strive for an ongoing constructive dialogue with the EU Commission. In a digital meeting just days ago, the Executive Vice President of the Commission Frans Timmermans and the CEOs discussed the progress on the implementation of the Green Deal and the interim status of the Alliance’s joint projects.

Executive Vice-President Timmermans stated: “Making Europe climate neutral by 2050 is a huge challenge. The European Commission will propose legislation to put sectors like transport and energy on the right track. Our long term plan includes investment in charging infrastructure, battery production, renovation and renewable energy production. The NextGeneration EU recovery fund will help make this possible. Our goal is not any transition, it’s a just and fair transition, leaving no one behind. I welcome the CEO Alliance’s commitment to Europe’s green recovery and share their conviction that their companies have what it takes to build a sustainable future.”

 

 

 

 

 

Enel among world’s 50 most sustainable companies

Enel was among the winners of the 2020 SEAL (Sustainability, Environmental Achievement & Leadership) Business Sustainability Awards, which celebrate the leadership, transparency and commitment to sustainable business practices of global brands. Specifically, Enel was featured in the 2020 SEAL Organizational Impact Award category, which recognizes the overall corporate sustainability performance and represents the 50 most sustainable companies globally.

The 2020 SEAL Organizational Impact Award combines two world-class Environmental, Social and Governance (ESG) data sets – the CDP A-List™ and the Corporate Sustainability Assessment (CSA, now part of S&P Global ESG Scores™). Winners were selected by combining and ranking the aggregated results of the two sustainability assessments.
In particular, Enel’s recognition in the SEAL Organizational Impact Award was made possible by reaching the highest score (A/A) in the last CDP edition for the second consecutive year, and its highest ever score (89/100) in the CSA. Both ratings acknowledged Enel’s leadership in tackling climate change and fostering decarbonization of the global economy, promoting open innovation and responsible business management practices across its entire value chain.   SEAL Awards is an environmental advocacy organization that honors leadership through its awards, while funding research and pursuing environmental impact campaigns. The core pillars of the SEAL Awards are the Business Sustainability Awards, which recognize the world’s most sustainable companies, the Environmental Journalism Awards, and Environmental Research Grants.
As further proof of Enel’s commitment to ESG issues, the Group ranked first out of 150 Italian companies, receiving a total score of 95.55 in the January 2021 edition of the Reputation Science’s EGS Perception Index. The index evaluates companies’ sustainability perception on the web, allotting a score of 0 to 100, based on brand proximity to ESG topics.
Enel’s sustainability leadership is globally acknowledged through the Group’s presence in several other renowned sustainability indices as well as rankings, such as the Dow Jones Sustainability Indices World and Europe, MSCI ESG Leaders Indices, the FTSE4Good Index series, the CDP Climate “A” List, the Euronext Vigeo-Eiris 120 indices, the STOXX Global ESG Leaders index, the ISS “Prime” rating, the Refinitiv TOP 100 Diversity and Inclusion Index, the Bloomberg Gender-Equality Index, the Equileap Gender Equality in Europe Ranking, the ECPI indices and the Thomson Reuters/S-Network ESG Best Practices Indices.
The Group is increasingly attracting the attention of Socially Responsible Investors, whose stake in the company is steadily growing, representing now about 13.4% of Enel’s share capital, more than double compared to 2014 levels. This increase, which is in line with the growing recognition of the importance of non-financial elements in the creation of long-term sustainable value, reflects the bolstering of Enel’s global sustainability leadership.
Enel’s long track record of inclusion in the world’s leading sustainability rankings is supported by its commitment to be at the forefront of the major energy challenges facing society, such as sustainable urbanization. A specific example of how Enel is promoting sustainable urbanization by delivering concrete business solutions is shown in the third edition of the “Circular Cities – Cities of tomorrow” position paper available here: https://www.enel.com/company/stories/articles/2020/12/circular-cities-models
Furthermore, Enel is embedding its sustainability vision across the over 30 countries in which it operates, integrating the expectations of local stakeholders and promoting social and economic development while, at the same time, accelerating the energy transition towards a fully renewable energy model. A concrete example of how Enel Green Power is promoting the development of local communities in Panama while contributing to decarbonize the country’s energy mix can be found here: https://www.enelgreenpower.com/stories/articles/2021/01/fortuna-sustainable-hydroelectric-plant
[1] SEAL Awards is not affiliated with the CDP, CSA, or S&P Global. The selection process for the SEAL Organizational Impact Award drew entirely upon publicly available information from each of the CDP and CSA.

PPC scouring southeast Europe markets for opportunities

Power utility PPC, on a mission, in recent months, to seek investment opportunities in neighboring countries, is carefully planning its first expedition abroad after some time.

Although PPC’s new three-year business plan does not specifically reference investment plans abroad, the company’s interest in other markets has become apparent.

PPC is striving to become a modern corporation and market leader in southeast Europe by 2030, the power utility’s chief executive Giorgos Stassis told a Bloomberg event late last week.

Potential projects on the corporation’s radar include North Macedonia’s Cebren hydropower facility, a 500-600 million-euro project for which PPC has entered a tender with Archirodon as its partner, and, further ahead, RES investments.

Establishing oneself as a dominant player in the southeast European market is a major challenge as highlighted by the participation of ten consortiums, big names included, in the Cebren hydropower plant tender, the latest following a total of ten preceding procedures for this project, all fruitless.

A proportion of PPC’s 1.1 billion-euro EBITDA target for 2023 could be generated by business activities beyond Greece.

The power utility has assembled a working group tasked with scouring foreign-market opportunities in all sectors, including hydropower, photovoltaics, other RES technologies, project tenders, as well as acquisitions.

PPC has made a series of unsuccessful investment quests over the past 18 years, beginning with Romania’s privatization tender, in 2003, for electricity distributors Electrica Banat and Electrica Dabrogea. PPC had advanced to this procedure’s second round but ultimately lost to Italian powerhouse Enel.

Strong market test turnout for DEDDIE sale, 18 players in all

A total of 18 prospective bidders have taken part in a market test staged by Goldman Sachs for power utility PPC’s forthcoming sale of a 49 percent stake in subsidiary firm DEDDIE/HEDNO, the distribution network operator.

The list, forwarded by Goldman Sachs to PPC, includes investors already familiar to the Greek market such as US firm Blackrock, specializing in transportation and energy infrastructure long-term investments; prominent infrastructure funds; as well as many European operators.

France’s Engie and Italy’s Enel, both often linked with the DEDDIE/HEDNO sale, were not among the 18 market test participants, sources informed.

Interestingly, no previous market test staged to gauge interest in the prospective sale of any Greek State asset has generated such a strong turnout.

Authorities behind DEDDIE/HEDNO’s partial privatization hope this more than promising response for the market test will result in intense bidding competition and a higher sale price.

A clear picture on the number and identity of the sale’s participants will become apparent on January 29, the deadline for the procedure’s first round official expressions of interest.

Officials have attributed the strong market test interest to five key factors: the operator’s new regulatory framework; an elevated WACC level of 6.7 percent for 2021 to 2024, well over levels of between 2.5 and 3 percent offered by other European operators; strong confidence in the governance of the country, pivotal for long-term investments; good timing, as, at present, no other network operator in Europe is up for sale; and a massive accumulation of global capital currently available for investment as a result of numerous lockdowns imposed in many parts of the world since March.

The Greek government will aim to complete DEDDIE/HEDNO’s partial privatization in the first half of 2021.

 

Enel to boost hydrogen capacity over next decade, CEO tells forum

Enel Group CEO Francesco Starace, speaking at the recent European Hydrogen Forum, a major event gathering industry leaders, policy-makers, government representatives as well as the research community, noted the company intends to boost its green hydrogen capacity over the next decade.

“We are developing green hydrogen projects in Spain, Chile and the United States, and we have plans together with Eni for their refineries as well as with Snam and other players for other applications in Italy,” Starace noted during the Panel discussion. “We are very happy about the path the European Commission is taking towards the decarbonization of European society. This is something that, for us, is within reach and requires an acceleration in renewable investment. Furthermore, there are sectors like the cement, fertilizer and chemical industries, as well as transport by sea or air that cannot be fully electrified and need green hydrogen if we want to achieve a fully decarbonized society going forward. For these sectors, green hydrogen can truly be the answer to decarbonization. Technological development, however, is just in the initial phase and we have to accelerate its pace and study its evolution carefully in order to avoid mistakes in capital allocations and bets in solutions that need to be tested before large investments are put to work.”

In the hydrogen segment, the Enel Group plans to grow its green hydrogen capacity to over 2 GW by 2030. Enel plans to integrate electrolyzers with renewable plants producing electricity for direct sale and ancillary services to support further renewable penetration in the grid, with green hydrogen also being sold to industrial customers.

The European Hydrogen Forum, which is one of the highlights of the European Hydrogen Week, was been jointly organized by the European Commission’s Directorate General for Internal Market, Industry, Entrepreneurship and SMEs (DG GROW) and the Fuel Cells and Hydrogen Joint Undertaking (FCH JU), in partnership with Hydrogen Europe and Hydrogen Europe Research.

The first edition of the European Hydrogen Week, a fully digital series of events held between November 23 and 27, was dedicated to the essential role of hydrogen in fulfilling the EU’s commitment to achieve carbon neutrality by 2050.

The week of events was launched by the European Commission and FCH JU in order to match the ever-growing interest in hydrogen and fuel cell technologies, alongside marking the adoption of the EU Hydrogen Strategy in July.

 

 

 

Enel 2030 vision in 2021–2023 strategic plan: A Decade of opportunities  

The Road to 2030 

Over a decade of profound transformation, the Group is placing at the core of its strategy the acceleration of the energy transition, alongside sustainable and profitable growth to create significant value shared with all stakeholders and attractive returns for shareholders over time.

Group Ordinary EBITDA is expected to increase at a 5%-6% Compounded Annual Growth Rate (“CAGR”) while Net Ordinary Income is expected to increase at a 6%-7% CAGR between 2020 and 2030.

The Group expects to mobilize investments of 190 billion euros in the 2021-2030 period, boosting decarbonization, electrification of consumption and platforms to create sustainable shared value for all stakeholders and profitability over the medium and long term.

The Enel Group’s leadership position in the industry and its journey towards becoming a fully digital company enable the implementation of two business models: the traditional one, called “Ownership”, where digital platforms are a business enhancer supporting investment profitability, and the “Stewardship” model, which catalyzes third-party investments in partnership with Enel or where platforms are a business generator.

The Group plans to directly invest around 160 billion euros, of which over 150 billion euros through the Ownership business model and around 10 billion euros through the Stewardship business model, while further catalyzing around 30 billion euros from third parties.

As for the investment planned under the Ownership business model:

  • Nearly half will be devoted to Global Power Generation, with Renewables totaling around 70 billion euros, which are expected to lead to around 120 GW of installed capacity by 2030, 7 times higher than the approximately 45 GW currently installed. This will be accomplished by leveraging on a growing pipeline of more than 140 GW, alongside a worldwide platform-based Business Development, Engineering and Construction as well as Operation and Maintenance model;
  • Around 46% is expected to be deployed in Infrastructure and Networks, to address quality and resiliency improvements, new connections and infrastructure digitalization, resulting in a Group Regulated Asset Base (“RAB”) of some 70 billion euros in 2030 and over 90 million end users 100%-digitalized through smart meters, leveraging on an unparalleled scale of operations, the highest digitalization expertise and a distinctive intellectual property value;
  • The remaining amount relates to Customers and is expected to lead, by 2030, to a steep increase in customer value. The Group will enable electrification, accelerating customers’ path to sustainability and energy efficiency, combining traditional offerings with “beyond commodity” services. This business will leverage on the largest customer base worldwide, digital platforms and a growing integrated portfolio of offerings.

As for the investment under the Stewardship business model, the Group is expected to invest, approximately, an additional 10 billion euros, while catalyzing around 30 billion euros from third parties, enabling an overall amount of some 40 billion euros of investments, mainly related to Renewables, alongside Fiber, e-transport and flexibility.

The Group will reach an 80% reduction in direct CO2 emissions versus 2017 (Science-Based Targets initiative, SBTi-certified) and contribute to the creation of over 240 billion euros of Gross Domestic Product in Enel’s countries of presence through local investments in generation and electrification.

The 2021-2023 Strategic Plan

The Group plans to directly invest around 40 billion euros, of which around 38 billion euros through the Ownership business model and around 2 billion euros through the Stewardship business model, while further catalyzing 8 billion euros from third parties.

More than 90% of Enel’s consolidated investments will be in line with the UN Sustainable Development Goals (“SDGs”). In addition, according to Enel’s initial calculations, between 80% and 90% of the Group’s consolidated capex will be aligned to EU Taxonomy criteria for its substantial contribution to climate change mitigation.

The growth rate in investments versus the previous plan is expected to be around 36%.

As for the investment planned under the Ownership business model:

  • More than half is dedicated to Global Power Generation, with around 17 billion euros to Renewables, which will lead to an overall installed consolidated renewable capacity of 60 GW by 2023 (+33% versus 2020). The Group will further accelerate decarbonization by adding renewable capacity that will more than offset thermal decommissioning. As a result, the Group’s Scope 1 CO2 emissions are set to decrease by more than 30%, from 2020 to 2023, positioning the Group on track to achieve its 2030 science-based decarbonization target of 80% greenhouse gas (“GHG”) emission reduction versus 2017, in line with the 1.5°C pathway scenario;

Around 43% is expected to be deployed in Infrastructure and Networks. Capex acceleration is expected to drive the Group’s RAB up by 14% versus 2020, reaching around 48 billion euros in 2023;

  • The remaining amount relates to Customers. The value of Business to Customer (“B2C”) clients is expected to increase by around 30% and that of Business to Business (“B2B”) by around 45%, thanks to the elimination of regulated tariffs, mainly in Italy, and to the electrification of energy consumption trends that will call for “beyond commodity” services.

As for the investment under the Stewardship business model, the Group is expected to invest, approximately, an additional 2 billion euros, while catalyzing around 8 billion euros of investments from third parties, therefore enabling an overall capex of around 10 billion euros, mainly related to Renewables, alongside Fiber, e-transport and flexibility.

The outcome of these investments will show, across all businesses, double digit growth in the three-year plan period. Managed renewable capacity is expected to reach around 8 GW in 2023, more than double versus 2020. Additionally, with Enel X, the Group aims to increase the number of electric buses by more than 6 times to around 5,500 units in 2023, as well as to grow demand response capacity to 10.6 GW (+1.8 times versus 2020) and storage capacity to 527 MW (+4.2 times versus 2020). Finally, in 2023, Enel X is expected to reach around 780,000 public and private charging points made available worldwide (+4.5 times versus 2020).

At Group level, Ordinary EBITDA is expected to be in a range between 20.7 and 21.3 billion euros in 2023, implying a 5%-6% CAGR. Net Ordinary Income is expected to be in a range between 6.5 and 6.7 billion euros in 2023, implying an 8% to 10% CAGR, thanks also to the continued optimization of Group financial management – particularly through an increase in sustainable finance, which will account for around 50% of total gross debt in 2023 – leading to a lower cost of debt.

Enel has set up a simple, predictable and attractive dividend policy for the period. Shareholders will receive an increasing guaranteed fixed Dividend Per Share (“DPS”) over the next three years with a target of 0.43 euros/share in 2023, translating into a CAGR of approximately 7%.

Francesco Starace, CEO and General Manager of Enel said: “With this new Strategic Plan we are setting a direction for the next 10 years, mobilizing 190 billion euros in investments to pursue our goals in a decade full of opportunities. To realize this vision, we can leverage on our clear leadership in the utility sphere across three main elements, all driven by an innovative platform-based model. First, as a ‘Super Major’ in the renewable sector, we operate the world’s largest private generation fleet. Furthermore, we have an unparalleled global network system, where the platform-operating model drives improvements in quality, resiliency, efficiency and flexibility. Last but not least, we count on the largest customer base worldwide to which, through our business platforms, we provide innovative services and integrated offerings. Throughout the decade, we will strengthen the creation of sustainable shared value for all stakeholders, which is also embedded in an attractive remuneration for our shareholders.”

RAE to set DEDDIE’s WACC level this week, investors keen

The launch of a privatization procedure to offer a 49 percent stake in distribution network operator DEDDIE/HEDNO should be brought one step closer to its actualization this week as RAE, the Regulatory Authority for Energy, is expected to set a WACC level for 2020, before following up, a few weeks later, within December, with a WACC level covering 2021 to 2024.

These steps are intended to offer investors clarity on the operator’s earning potential.

The distribution network operator’s WACC level for 2021 to 2024 is expected to be set at just below 7 percent, a highly attractive level given the far lower yields offered by respective European distribution network operators.

Investor interest in the forthcoming DEDDIE/HEDNO sale is currently high, energy ministry sources informed. Though no companies were specified, the sources indicated that potential buyers who had surfaced prior to the pandemic remain interested.

Germany’s EON, Italy’s Enel, France’s Enedis and a number of Chinese firms had all expressed interest. Surprise additions to this list cannot be ruled out.

A market test, to measure the level of interest of prospective bidders, is expected to take place next month, immediately following an Investor Day online event planned by state-owned power utility PPC, the operator’s parent company, for early December, energy minister Costis Hatzidakis told a recent energypress conference.

DEDDIE/HEDNO, possessing networks covering 242,000 kilometers, has prepared a major investment plan that includes installation of 7.5 million smart power meters, a project budgeted at 850 million euros, and a digital upgrade of the network. The operator’s assets are valued at 3.6 billion euros.

Enel boosts 2030 greenhouse gas emission cut target to 80% from 70%

Enel has committed to an 80% reduction in its direct greenhouse gas (GHG) emissions per kWh by 2030, from a 2017 base-year, up from the previous target of 70%, becoming the first major, global, integrated utility to set an emission reduction target consistent with the United Nations pledges to limit global warming to 1.5°C above pre-industrial levels and to achieve net zero emissions by 2050, as validated by the Science Based Targets initiative (SBTi), the company has announced in a statement.

“With our commitment to such a drastic reduction in our emissions, we are leading the way in the fight against global warming,” said Francesco Starace, Enel CEO and General Manager. “As we progress along this path, we are working relentlessly to maintain our leadership in the energy transition through an ever-increasing focus on carbon-free activities. We are increasing the share of renewables in our generation mix. We are working with our customers towards energy efficiency and electrification, enabling change through reliable, digitized and resilient grids. A truly innovative and sustainable company is one that does not hold back from embracing change, but strives to lead it.”

Enel’s new SBTi-approved target entails a reduction in the Group’s 2030 direct emission threshold to 82 gCO2eq/kWh from 125 gCO2eq/kWh corresponding to the previous 70% target, which was announced last year.

Enel is contributing to the energy transition by promoting a sustainable business model across its entire value chain. It was one of the first companies in the world to join the SBTi in 2015. The Group is making good progress towards the achievement of the SBTi target as in 2019 its direct GHG emissions per kWh were reduced by more than 36% compared to 2007, and it will continue this trend through major investments in renewables and thermal decommissioning. Through Enel Green Power, which is now the world’s largest private renewable player, Enel currently boasts over 47 GW of installed renewable capacity, exceeding that of thermal sources. Furthermore, the Enel Group is working towards phasing out its coal footprint by 2030. All these activities are expected to lead up to the Group’s full decarbonization by 2050.

Currently, Enel operates the largest private electricity distribution network globally with a grid of more than 2.2 million kilometers for over 74 million end users, of which more than 60% are already digitized. In addition, Enel’s advanced energy solutions business line Enel X is proactively contributing to decarbonize other sectors such as transport, with more than 140,000 public and private charging points for electric vehicles made available worldwide.

The Intergovernmental Panel on Climate Change (IPCC), the United Nations body in charge of assessing the science related to climate change, has warned that, in order to limit some of the worst climate impacts, temperature rise must be held to 1.5°C above pre-industrial levels on the road to a net-zero future by 2050. Businesses have a critical role to play in order to tackle this global challenge and the SBTi is positioned as the world’s most recognized initiative to champion science-based target-setting as a way of boosting companies’ commitment to supporting the transition to a zero-emission economy.

The SBTi is a collaboration between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF).  It provides companies with a pathway to identify how much and how quickly they need to reduce their GHG emissions with the aim to curtail rising global temperatures. Furthermore, the SBTi enables companies to set emission reduction targets consistent with the most ambitious aim of the 2015 Paris Agreement on Climate Change: to limit global warming to 1.5°C above pre-industrial levels.

 

DEDDIE formula for required revenue approved by authority

RAE, the Regulatory Authority for Energy, has approved a formula determining the required revenue for electricity distribution networks, an important first step towards the finalization of distribution network operator DEDDIE/HEDNO’s regulatory framework, essential for its privatization procedure to offer a 49 percent stake, sources have informed.

A WACC level still needs to be set and approved for the operator. RAE intends to reach a decision by December 31 so that prospective buyers can have even greater clarity on the operator’s potential revenue.

Given the time required for the processing of related data concerning the operator’s regulated earnings and the network’s business development plan for 2021 to 2024, RAE should deliver a decision on the four-year period by March 31, 2021, which would be retroactively applied as of January 1, 2021.

The new framework includes two periods covering 2021-2024 and 2025-2028, offering investors a long-term picture of the investment’s potential yield.

According to sources, the authority intends to set a WACC level of just below 7 percent for 2021-2024, highly attractive for investors given levels of no more than 2.5 percent offered by equivalent distribution network operators around Europe.

RAE plans to launch a market test, to measure the level of investor interest in DEDDIE/HEDNO, next month.

Prior to the pandemic, Germany’s EON, Italy’s Enel, Enedis – an EDF subsidiary – as well as a number of Chinese companies, had expressed interest in the DEDDIE/HEDNO privatization plan.

Enel X Financial Services launches Enel X Pay

Enel X Financial Services, an Enel Group company that is fully owned by Enel X, has entered the digital financial services and mobile banking sector with Enel X Pay, an online banking account which, through a partnership with Mastercard, enables users to make fully secure payments and transfers in real time directly via smartphone app, to have a digital or physical card and monitor the transactions and spending of the whole family.

Enel X Pay was presented yesterday through a web press conference attended by Francesco Venturini, CEO of Enel X, Giulio Carone, CEO of Enel X Financial Services and Matteo Concas, Head of Financial Solutions of Enel X.

“Through Enel X Pay, we are expanding our platform of offers and products to financial services; a digital tool to easily manage financial transactions by relying on an innovative and trusted partner like Enel X,” said Francesco Venturini, Enel X CEO. “The disintermediation from traditional financial services give us the option of entering a highly competitive sector, bringing our ability to innovate and develop new solutions, from advisory and financial management services to insurance services.”

“With the launch of Enel X Pay we are bolstering our position in the fintech sector, contributing to the dissemination of digital payments and the development of financial services integrated with Enel’s ecosystem,” said Giulio Carone, CEO of Enel X Financial Services. “The business model we are looking at is that of a Big Tech firm, which makes available to customers its ability to innovate, counting on strategic partnerships with leading technology players, in order to offer high value-added solutions.”

Enel X Pay is a native digital account, involving a card and an Italian IBAN, which allows users to perform multiple types of transactions: from payment of bills, taxes and duties of the Public Administrations signed up to Italy’s pagoPA circuit, to SEPA transfers, from the peer-to-peer transfer of money with no additional costs, to donations aimed at solidarity initiatives to third sector associations like Save the Children, Food for Soul and Doctors without Borders.

With Enel X Pay, users can pay for the charging of electric cars in the infrastructures within the Hubject circuit. Hubject is the e-mobility joint venture involving the BMW Group, Bosch, EnBW, Enel X, Innogy, Mercedes Benz AG, Siemens and the Volkswagen Group, which boasts over 750 business partners and 250,000 interoperable charging points all over the world.

Users can manage the Enel X Pay banking account directly from the app bundled with a digital and physical card. The card is made out of plant-based bio-plastic and is linked to Mastercard, the key international payment circuit with over 52 million points of acceptance around the world.

In addition, courtesy of the Enel X Pay “family” option, a dedicated account can be activated for children between the ages of 11 and 18, providing them with a prepaid card while allowing them to make peer-to-peer transfers, withdrawals from ATMs as well as payments on e-commerce sites. Parents can rely on a useful tool which, on the one hand, offers children the freedom to manage their own funds and, on the other, allows the monitoring of their balance and transactions, while setting spending limits and fixing the amount of the prepaid card’s automatic top-ups.

The launch of Enel X Pay is a milestone in a process that the Enel Group has been engaged in for the last two years, accomplishing a series of strategic transactions. These include: the purchase of a majority stake in Paytipper, an institution with which the initial offering of online and offline payment services was created as well as the recent agreements with partners SIA and Tink which, through their highly secure and reliable technology platforms, will enable all Enel X Pay services, allowing for the development of additional open banking solutions tailored to customer needs.

Enel X Pay is available on the Google Play Store (Android) and, in the coming days, on the Apple App Store.

 

DEDDIE’s WACC close to 7%, RAE framework approval soon

Distribution network operator DEDDIE/HEDNO’s new WACC level, determining the yield, required by potential buyers, will be set at just below 7 percent for a four-year period covering 2021 to 2024, energypress sources have informed.

This WACC level, well over rates of no more than 2.5 percent offered by respective European operators, is expected to be seen as a very attractive offer by investors.

RAE, the Regulatory Authority for Energy, has been given the green light by the energy ministry to hasten proceedings for a launch of the DEDDIE/HEDNO privatization, offering a 49 percent stake, in November, as promised by the ministry.

DEDDIE/HEDNO has awaited RAE’s approval of its new regulatory framework, including the WACC level, to launch the tender. This framework will include an option for a four-year extension, covering 2025 to 2028.

If the privatization is launched next month, it could be completed within the first quarter of 2021.

Market officials have forecast a DEDDIE/HEDNO selling price of close to 1.5 billion euros for the 49 percent stake.

The operator’s assets, essentially comprising networks totaling 239,000 kilometers in length, plus substations, are estimated to be worth 3.5 billion euros.

The DEDDIE/HEDNO business plan for 2021 to 2024, still subject to official approval, should excite investors. It features investments worth 2 billion euros and network 5G add-on potential for a wide range of telephony and internet services.

The prospective installation of 7.5 million digital power meters in place of conventional meters around the country, an upgrade budgeted at 850 million euros, is another strong selling point. Recovery funds will be sought for this project, energy minister Costis Hatzidakis recently informed. This would save the operator a considerable amount.

Germany’s EON, Italy’s Enel, Enedis, a subsidiary of France’s EDF, as well as a number of Chinese companies had showed interest, unofficially, in the DEDDIE/HEDNO sale well before the pandemic broke out.