Europe's Biggest Utility Company to Ramp Up Spending on Wind, Solar Power
November 24 2020 - 10:06AM
Dow Jones News
By Sarah McFarlane
LONDON -- Enel SpA plans to spend EUR70 billion, equivalent to
$83 billion, expanding its presence in wind and solar power in the
coming decade, seeking to cement its position as the world's
largest renewable energy producer outside China and to capitalize
on the shift to green energy.
The Italian utilities company was an early mover in renewable
energy, giving it -- along with Iberdrola SA and NextEra Energy
Inc. -- an edge amid increasing global demand for low-carbon power,
and putting the trio among the world's most valuable energy
companies.
Enel said Tuesday that its planned investments would help boost
its renewable power capacity to 120 gigawatts, from the current 45
gigawatts. The move is part of a broader EUR160 billion spending
program over the next decade, which also includes investments in
electricity infrastructure, batteries and hydrogen produced from
renewable energy.
Chief Executive Francesco Starace said there were opportunities
to grow in both Europe and the U.S., where he hopes a Biden
administration will focus on the continuing transition to cleaner
energy.
"We see the U.S. still remaining very large in terms of
potential growth, " Mr. Starace said.
Renewable energy generation has grown in the U.S. in recent
years to the extent that green energy consumption overtook coal
last year, as utility companies set climate-change goals and the
cost of wind and solar power falls relative to coal.
However, some analysts caution that increased competition in the
renewables industry, as more companies enter the fray, could reduce
profits for Enel and other established players.
Enel's planned expansion of its renewable capacity follows a
similar move by Spain's Iberdrola, as well as pledges by major oil
companies like BP PLC and Royal Dutch Shell PLC to invest more in
low-carbon power.
Renewable energy's share of electricity generation is expected
to grow to 33% by 2025, from 27% this year, according to the
International Energy Agency.
Enel shares rose 4% Tuesday and are up 18% so far this year,
versus a 5% gain for the Stoxx Europe 600 Utilities index.
That rise has propelled Enel, along with Iberdrola and NextEra,
to join the ranks of some of the world's most valuable and
important energy companies at a time when traditional major oil
companies have been hit by the coronavirus pandemic. Covid-19 has
sapped demand for oil and could increase the pace of the transition
to low-carbon energy, as governments strive to include green
measures in their economic rescue packages.
The European Union, for instance, has committed to spending
around a third of its EUR750 billion recovery fund on addressing
climate concerns.
Enel also said Tuesday that it would accelerate its exit from
coal. The company is one of the largest owners of coal power
capacity in Europe but now plans to phaseout coal by 2027, three
years earlier than previously planned. It said the move would help
boost the company's emission-free electricity production to 85% by
2030, from around 66% this year.
With Enel's investment plans, its market share is expected to
near 5% in the next decade, from around 2.8% this year, Mr. Starace
forecast. "We will still be by far the largest player," he
said.
Write to Sarah McFarlane at sarah.mcfarlane@wsj.com
(END) Dow Jones Newswires
November 24, 2020 09:51 ET (14:51 GMT)
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