MILAN (Reuters) - Europe’s biggest utility Enel will spend 160 billion euros ($190 billion) over the next 10 years to become a green “super major” and make the company carbon-free by 2050.
It also expects to attract another 30 billion euros from parties outside the group to take overall spending to 190 billion euros as it looks to boost earnings and cut its carbon emissions by 80% by 2030.
Europe’s big utilities are investing heavily in the clean parts of their businesses as technological progress and more stringent rules to tackle climate change force energy companies, including big oil players, to rethink strategies.
This month Spanish rival Iberdrola said it planned to invest 75 billion euros in renewable energy production, grids and retail operations by 2025.
Enel, which controls Spanish utility Endesa, said it would spend around 70 billion euros by 2030 on renewable energy to almost triple its capacity to 120 gigawatts, drawing on a green pipeline of over 140 GW.
“We plan to strengthen our position as a super major in the renewable sector,” CEO Francesco Starace said in a call with investors. Around 80% of production will be generated from green energy by 2030, up from 54% today, he said.
Starace said the U.S. market remained attractive for green energy investments as did Europe too while Asia and India would play “a big part” for growth further out.
The utility, which plans to expand its green hydrogen capacity to more than 2 GW by 2030 and phase out coal earlier than expected in 2027, has also earmarked around 46% of spending for its regulated network business.
“We will pursue M&A mainly in distribution grids... since this guarantees us customers. It’s the right time,” Starace said, adding India could be an opportunity in the next three years.
Ordinary core earnings to 2023 are expected to grow by 5-6% per year while net debt will rise to 57 billion-58 billion euros to help to fund growth, Enel said.
Dividends will increase by an average of around 7% per year over the next three years to reach 0.43 euros per share in 2023, from an estimated 0.35 euros this year.
“Overall it seems to be a good plan... [with] significant growth in the long term, coupled with monster investments,” Milan-based broker Equita said.
At 1240 GMT Enel shares were up 3.1% while the European utility sector was flat.
Editing by Agnieszka Flak/Jason Neely/ Susan Fenton/Jane Merriman
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