Europe's biggest utility Enel (ENEI.MI) bumped up spending on its green energy and networks businesses in the first quarter as it seeks to accelerate efforts to cut its carbon footprint.
The Italian group, which controls Spanish utility Endesa (ELE.MC), aims to cut its carbon emissions by 80% by 2030, partly by increasing renewables capacity it owns to 120 gigawatts (GW) from 48.8 GW at the end of March.
In the first quarter, 66% of its production was emissions free compared to 57% in 2019, thanks in large part to a sharp reduction in coal power generation.
The group, which has brought forward the phase-out of its coal generation to 2027 from 2030, shut down 2.8 GW of capacity last year.
"We will shut down 2.9 GW of coal capacity in 2021 - 2.6 GW in Spain and 300 megawatts in Italy," CFO Alberto De Paoli told analysts in a call on Thursday on first quarter results.
Enel, which makes 70% of its core earnings from green energy and distribution grids, said an 8.8% rise in spending in the period would put it on track for a new renewable capacity build record by the end of the year.
The group aims to boost its green project pipeline, now standing at 222 GW, to give it more options to choose the best projects. Parts of the pipeline could be sold or offered to co-investors, De Paoli said.
He said the group was looking for opportunities to expand its networks business outside Latin America where it was already in a good position. "The U.S. remains a key target for future expansion in grids," he said.
Europe's big utilities are investing heavily in the cleaner parts of their businesses as new technology and tougher rules on climate change force energy companies to rethink strategies.
A 1.7 billion euro capital gain from the sale of a stake in broadband infrastructure group Open Fiber would help Enel "increase the level of results after 2021", De Paoli said.
In the first three months ordinary core earnings fell 12.3% to 4.159 billion euros ($5 billion), due mainly to a one-off gain booked last year, in line with an analyst consensus.
Enel confirmed its financial targets for the year which include ordinary core earnings of 18.7-19.3 billion euros.
($1 = 0.8301 euros)
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