The energy of practicality

The energy of practicality

Not just renewable, but completely new: this is the energy that our Group will commit to in implementing the 2024-2026 Strategic Plan, which was presented in Milan on November 22. This was during the course of Capital Markets Day, the annual event at which Enel’s new CEO Flavio Cattaneo and CFO Stefano De Angelis explained the details.

A new energy because the Group’s management, which took over in May this year, is also new, as is the global context in which the Group is operating. As Cattaneo explained in his opening remarks, in the last 12 months the scenario has changed due to a series of events that have caused turbulence at all levels and have "disrupted the world we were used to living in." In addition to the well-known post-pandemic geopolitical events, there has been a significant rise in interest rates – up from 0% to 4.5% on average in the Eurozone – and inflation, which has reached 5.6% from 0.3% in 2020, with a corresponding downward revision in GDP growth in many countries.

The economic downturn has caused a contraction in demand for electricity in Europe, considerable price instability in some commodities such as gas (which is reflected in the cost of energy), and an increase in the cost of renewable technologies – particularly wind and solar – from the lows reached two years ago, in line with trends in inflation and the cost of money.

However, the medium-term scenario appears supportive for utilities: a new surge in electricity demand is expected due to the increasing electrification of consumption. At the same time, governments and regulators have understood the need to pursue increasing energy independence through the use of renewable sources. This is a context in which the role of distribution grids will be crucial in meeting demand and accommodating new capacity from renewables, along with that of energy storage systems – which in turn are critical to ensuring not only the penetration of renewables, but also a stable and reliable energy supply.

It is on these assumptions that our Group is basing its business plan for the next three years. As Enel CEO Cattaneo says: "In the next three years we will adopt a more selective approach to investments," with a focus on profitability, flexibility and resilience, and with efficiency and effectiveness being guiding factors in operations, through the simplification of processes and a leaner organization.

This approach is designed to maximize profitability and minimize risk. We will concentrate on our core countries – Italy, Spain, Chile, Brazil, Colombia, and the U.S. – implementing integrated strategies, focusing on grids, renewable energy, and the centrality of our customers.


There are three pillars of our Strategic Plan, which focuses on value, sustainability and the flexibility needed to take advantage of all the opportunities offered by a rapidly changing world. The first pillar is capital allocation, with investments selected on the basis of the best risk-return ratio, focusing on core countries where we are integrated and on the least risky technologies. The second pillar is effectiveness and efficiency through the optimization of costs, processes and organization leading to clear accountability. The third pillar is financial and environmental sustainability: we will create value for all stakeholders and contribute to the electrification of consumption, the energy transition, and the fight against climate change.

Indeed, we can confirm the targets of abandoning coal-fired generation in 2027, of exiting the gas market in 2040, and, in the same year, of achieving zero net emissions. By 2026, the plan also calls for 86% zero-emission generation, 12 percentage points higher than the figure expected for 2023.

Looking to the future, the constant monitoring of new technological solutions for accelerating electrification and the energy transition – from green hydrogen to space-based solar power, next-generation nuclear power, and long-life storage systems – will also be essential. In this way, Enel will always be ahead of the curve and be able to seize the best opportunities as they become profitable.

In the three-year period 2024-2026, gross investments of €35.8 billion are planned, 49% of which will be in Italy, 25% in Spain, 19% in Latin America, and the remainder in North America.

More than half of the investments (€18.6 billion) are earmarked for grids: particular attention is being paid to the regulatory environment, so as to increase their resilience and level of service, encourage the hosting of increasing quantities of renewables, increase connections, and, of course, ensure adequate remuneration. So much so that the ordinary EBITDA for the grid business in 2026 is expected to be about €8.4 billion, an increase of about one billion compared to expectations for 2023, on a like-for-like basis.

Approximately one-third of the total investment, about €12.1 billion, will be allocated for the development of renewables and in particular for new on-shore wind and solar capacity, the repowering of assets, and storage systems, again opting for markets with the best risk-return ratio and leveraging financial partnerships, from which about €6.1 billion in financing is expected.

About €3 billion, on the other hand, has been set aside for investments in consolidating and expanding the customer portfolio, 87% of which will be in Spain and Italy.

The business plan, as CFO Stefano De Angelis explained, focuses on financial balance: in addition to careful capital allocation, we will reduce costs by €1.2 billion with respect to the 2022 baseline, and generate robust cash flow from operations to the tune of €43.8 billion over the three-year period. In this way, we will fully fund net investments and pay dividends: the company will fuel growth and sustain dividend payments without increasing debt. This will significantly improve the Group's financial indicators: projections to 2026 show the FFO-net debt ratio increasing by 14 percentage points (from 15% in 2022 to 29% at the end of 2026) and the net debt-EBITDA ratio decreasing to about 2.3x in 2026 from about 3.1x in 2022. Ordinary EBITDA, which will reach a range of €23.6-24.3 billion in 2026, and ordinary net income, which will grow to a range of €7.1-7.3 billion at the end of 2026, will also increase.

These numbers support and strengthen the Group's commitment to shareholders, who are guaranteed a minimum dividend per share of €0.43 for the entire three-year period, with a potential increase to a 70% payout on ordinary net income, assuming cash flow neutrality is achieved.

To sum up, the plan that was presented envisages the creation of value for all stakeholders, generated by a company that, as the CEO put it, "will be increasingly lean, flexible and resilient," in which selective capital allocation, efficiency and effectiveness will be the pillars of capital and financial strengthening while ensuring the right level of flexibility for seizing opportunities as they arise.

If we were to summarize the plan in one word, it would be: practicality.