Under new CEO, Enel seen more focused on Italy, selective on renewables

By Francesca Landini

MILAN (Reuters) – Italy’s Enel, the world’s largest listed renewable energy developer, is expected to announce a greater focus on its home country and a more selective approach to green investments when its new CEO presents his strategy on Nov. 22.

A slight improvement in the dividend policy could also be in prospect as Flavio Cattaneo – who previously led telecom group TIM and power grid operator Terna – stamps his mark on the 64-billion-euro group, analysts and energy experts said.

Cattaneo succeeded long-serving CEO Francesco Starace in May in a management shake-up orchestrated by the Italian government, Enel’s biggest single shareholder.

He has so far kept his cards close to his chest, suggesting only that he would pay great attention to costs and keep Enel’s debt in check. It stood at 63 billion euros at the end of September.

“I expect, and would welcome, a higher focus on Italy with investments both in renewables and grids,” said Davide Tabarelli, head of think-tank Nomisma Energia, adding this could translate into a more cautious approach to overseas markets, including the United States.

Under Starace, Enel announced several initiatives that could benefit from the U.S. administration’s green subsidies, including building a new solar panel factory and the roll out of more than 10,000 electric-vehicle chargers.

Analysts expect the U.S will remain a core market, but see the group devoting at least 50% of investments to Italy in a move that will please nationalist Prime Minister Giorgia Meloni.

In his last business plan, Starace pledged to spend nearly 18 billion euros or 48% of Enel’s total capex in Italy in the 2023-25 period.


Looking at overall investments in renewable capacity, which were projected at nearly 6 billion euros per year on average in the 2023-25 plan, analysts said that Enel could become more selective amid higher interest rates and input costs.

An ongoing asset sale plan worth 21 billion euros could also result in reduced capex.

“We see scope for Enel to cut renewable investments by about one third versus the goal announced at 2021 and 2022 Capital Markets Day (CMD), in exchange for higher returning projects,” Goldman Sachs said in a recent research note.

If Cattaneo decides to slow down renewable development he must be careful to avoid making Enel too dependent on energy providers, especially in the group’s six core markets – Italy, Spain, the United States, Brazil, Chile and Colombia.

At the end of last year the group could boast an installed capacity of almost 60 GW of green energy. It expected to shut down its Italian coal power stations by 2025 and to achieve zero emissions by 2040.

(Reporting by Francesca Landini; Editing by Keith Weir, Kirsten Donovan)