MILAN (Reuters) - Euro zone financial and economic woes have created dramatic energy overcapacity in countries like Italy and Spain, the Chief Executive of Italy’s No.1 power utility Enel (ENEI.MI) said in an interview with the Financial Times.
“(The crisis) definitely has an impact,” CEO Fulvio Conti was quoted as saying in an interview published on Monday.
“For instance, in Italy we have 40 percent excess capacity. In Spain we have more or less the same.”
Enel controls Spanish utility Endesa (ELE.MC).
Conti said the uncertain economic outlook meant European governments were discouraged from investing in heavily-regulated and capital intensive businesses such as electricity.
But the crisis was also pushing the European Union closer to achieving a target of improving energy efficiency by 20 percent while cutting greenhouse emission and source more of its energy needs from renewable sources.
The Italian executive said he did not see shale gas becoming a significant supply source for Enel in the short and medium term due to the heavy investments needed and the fact that shale gas was to be found in some of Europe’s most picturesque areas.
“Gas will continue to be a major factor. But for gas to be increasing you need more facilities. You need more regasification units, more pipelines,” Conti said.
“There are some, but there will not be enough to make gas the only commodity, so we are investing also in coal.”
Reporting By Lisa Jucca