The 1990s: a new international dimension

The 1990s: a new international dimension

A decade of important geopolitical transformations, such as the end of the Cold War and the advent of globalization, also saw Enel’s transition from a state-owned utility to an integrated multinational operator, listed on the stock market.

In the years following the fall of the Berlin Wall the watchwords of the global economy changed rapidly. The Cold War was over and the world seemed to be moving away from an era of conflicts and borders, and heading towards globalization. This was also thanks to the creation in 1991 of the World Wide Web, which marked an essential step towards digitalization, opening up markets and competition. Strategic markets that until that time been dominated by state monopolies began their rapid transition to deregulation and internationalization. This happened in the rail transport and telecommunications sectors and it was also the case in the electricity market.

In Italy the foundations for this transformation were laid at the beginning of the decade. In 1991 an initial, minor deregulation of production enabled companies to generate electricity for their own use provided that they resold surplus energy on to Enel. Then 1992 saw the transformation of Enel into a listed company, although it only had one shareholder, the Italian Treasury, and this remained the case until 1999. However, this was an essential step in view of what already appeared to be a fixed trajectory: the deregulation of the market and the consequent transformation of Enel’s structure under privatization, the diversification of business, the division of activities between a number of companies and expansion on the international market.

Enel had effectively been preparing for its date with the global market since the beginning of the 1990s, in particular with its entrance into the E7 Group. Starting in 1992, this brought together the world’s leading electricity companies with the goal of developing common strategies, above all concerning sustainable development and cooperation in developing countries.

Alongside Enel, which officially joined at a summit organized in Florence in 1993, the Group also included France’s EDF, Japan’s Kansay and Tepco, Germany’s RWE and Canada’s Hydro Quebec and Ontario Hydro. This was the beginning of an internationalization journey that was to lead in 2000 to the acquisition of CHI Energy, one of the main producers of energy from renewable sources in the USA and Canada. In 2003 it became known as Enel North America. 2001, on the other hand, saw the construction begin on transmission lines in Brazil, a prelude to the substantial expansion in Latin America where today Enel Américas is a leading player. This expansion continued in 2007 with the purchase of Endesa, the main Spanish utility, which is now entirely owned by Enel.

On the technology front, meanwhile, the growth of renewables continued unabated. In 1994 Enel’s first wind farm, the Acquaspruzza Wind Farm, was built in the province of Isernia in Italy. That year also saw the construction of the Serre Persano photovoltaic plant near Salerno, which, with its 3.3 MW of installed capacity, was for a considerable time the largest in Europe. The building of wind farms continued at a constant pace for the entire decade, above all in central and southern Italy, and by 2000 installed capacity from wind and photovoltaic had increased tenfold compared with 1992 levels, from 3 to approximately 30 MW.

At the same time, politics also provided other building blocks for the transformation of the market, with legislation for the privatization of public companies approved by the Italian parliament in 1994 and the establishment of an independent national energy authority in 1995. In 1999, the so-called Bersani Decree and full deregulation marked the irreversible transformation of the energy sector. The monopoly of the production of electricity came to an end, and Enel was asked to drop below 50% of production capacity in order to leave space for competition from other operators. Production, distribution and transmission activities were divided up between three companies: respectively, Enel Produzione, Enel Distribuzione and Terna, which was tasked with managing the grid and to whom Enel sold its entire stake in 2005.

In November 1999, with what was then the largest ever public share offer on the Italian market, Enel S.p.A. was listed on the stock market. This operation involved more than 3 million 800 thousand investors in Italy and abroad, and in the first instance concerned just under 32% of the share capital. The company therefore began the new millennium in a position to complete its transformation from the national body dedicated to Italian electrification that it was at its inception, to the integrated multinational operator that it is today.

The transformation also included a new relationship with our customers, both big and small. It was by no means a coincidence that privatization coincided with the development of electronic meters to measure consumption in real time and provide technical assistance from the power supplier, a forerunner of today’s smart meters which are essential to making every customer an active player in the energy transition.

Today the company structure, which has evolved from its privatization in 1999, has the goal of providing every type of customer, in every part of the world, with a service that is tailored to the client’s needs thanks to companies like Enel X, e-distribuzione, Enel Green Power, Enel Energia and subsidiaries or associated companies on every continent. The 1990s made it possible to lay the foundations for today’s Enel Group, which is a multinational that’s present in 30 countries. With 92.3 GW of total capacity, it’s the world’s largest private operator in the renewables sector and – with a grid spanning 2.3 million kilometers and serving 70 million final clients – it’s the largest grid operator worldwide.