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Enel lays out South America expansion plans

Bnamericas Published: Tuesday, November 20, 2018
Enel lays out South America expansion plans

Italy's Enel has outlined plans to boost annual capital expenditure by 12% over the next three years as it sharpens its focus on renewable energy projects in South America.

In its latest strategic plan, the company said it would outlay 9.2bn euros (US$10.5bn) a year from 2019 to 2021, up from 8.2bn euros in the previous three-year forecast (from 2018 to 2020). Net income is seen jumping to 5.6bn euros in 2021, up from 4.1bn euros this year.

Some 16.5bn euros of the 27.5bn-euro gross capex for the period will be allocated to asset development, 6.2bn to asset management and 4.8bn to expanding its customer segment.

SEE Enel's top Latin American projects here

"Renewables and network operations [drives an] investment strategy that is focused on a shorter time to market and a higher degree of flexibility to better cope with the progressive transformation of the industry," CEO Francesco Starace said.

"The transformation under way in our industry is presenting challenges but also opening new opportunities. We are well positioned to create value in this transformation."

RENEWABLES

South America accounts for 45% of the company's 19GW renewables project pipeline, with North and Central America making up 24%, Australasia 21%, Europe & North Africa 7% and Italy & Iberia 3%.

Brazil will be home to around 41% of the 5GW of renewables expected to come online by 2021. Chile will be the next best represented South American country with 8% of the total.

Consolidated renewables capacity is projected to jump 25% to 48.4GW, with hydropower making up 28.1GW, wind 14.2GW, geothermal 0.9GW and solar & other 5.2GW.

In South America, total capacity is forecast to reach 15.9GW in 2021, up from 12.8GW at the end of this year. The region's share of Enel's overall renewables portfolio will remain stable at 33%.

Hydropower will rise to 10.2GW from 10GW, wind to 3.1GW from 1.6GW, geothermal to 0.1GW from zero and solar and other to 2.6GW from 1.1GW, according to the plan.

THERMOPOWER

Capacity from fossil fuel-fired plans and nuclear energy is expect to fall 15% over the period to 39.5GW.

Plants that operate on coal are expected to comprise 9.3GW, down from 15.8GW, while oil and gas-fired capacity is forecast to fall to 11.8GW, down from 12.3GW.

Combined cycle and nuclear stations are seen remaining stable at 15GW and 3.3GW respectively.

NETWORKS, DISTRIBUTION

Enel says it will invest 11.1bn euros to improve and expand connection networks from 2019 to 2021. Italy will receive 44% of the total, South America 36%, Europe and North Africa 17% and Iberia 3%.

Electricity distribution is seen rising to 517.6TWh at the end of the three-year cycle, up from 471.3TWh this year. In South America, the firm expects to dispatch 149.2TWh to its customers in 2021 compared to 115.8TWh in 2018.

POWER AND GAS

Power and gas retail volumes in South America are projected to reach 184.1TWh, up from 110.3TWh, making the region Enel's fastest growing geographical division for the segment. In total, Enel is targeting 395.3TWh from 61.6mn customers by 2021 compared to 336.1TWh from 58.5mn this year.

In the gas business, the company expects to increase its customer base to 7mn worldwide from 5.9mn, though it does not anticipate entering the South American market.

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