Enel

Background information

enel-logo1Enel, Europe’s second largest electric utility, was born more than half a century ago on November 27th, 1962 when the nationalization of the country’s two biggest power providers, Edison and Montecatini, was passed through Parliament. It was the price paid by the ruling Christian Democrats to the Socialist Party for separating their destiny from the Communist Party and joining the government alliance. The deal was sold to the public opinion as a major step towards efficiency and rationalization, aimed at feeding the booming economy of the Sixties. Ente Nazionale per l’Energia Elettrica was given by law the mission of producing, importing and exporting, transmitting and distributing electricity. Having a state owned, monopolist power supplier allowed Italian people and businesses to enjoy low cost electricity ten years later, when the oil crisis first hit the country. Expensive oil was also a major push to develop alternative energy sources, which at that time was just a different name for nuclear power, a field in which Italy was a leading country in terms of state of the art technology. A major nuclear program was launched in the following years which should have culminated in the building of the biggest nuclear plant in Europe on the Tyrrhenian Sea shores just one hundred miles North of Rome. As Chernobyl blew up in April 1986 the new plant, just completed and ready to function, was banned along with the existing smaller nuclear plants after a landslide referendum vote. But the appetite for electric power was still all there as the same very year the power production passed for the first time the 200 bn Kwh threshold. As the Nineties arrived, the wind of privatization did not spare Enel, which in the meantime had become the first Italian company by sales : it was transformed into a proper Limited Company, totally owned by the Treasury, which then sold out part of its interest with an Initial Public Offer in 1999. The same year the government approved a major liberalization of the power market and split the transmission business from the production. Nowadays Enel, led by CEO Fulvio Conti, is among major integrated gas and electricity operators in Europe and Latin America. In 2007 it took over Endesa of Spain. As a consequence, it entered the LatAm market through the front door: today its activities in Spain and Latin America account for 45% of the group’s gross operating margin as it has various interests in Chile, Peru, Brazil and Colombia, while it operates with Enel Green Power too in Chile, Brazil, Panama, Mexico, Guatemala, Costa Rica, El Salvador and Nicaragua. Enel plans investing 5 billion dollars by 2015 in Latin American markets. Where, it says, the energy demand is forecast to grow by 50% in the next 20 years, compared with the 15% of the United States and the 17% of Europe. Worldwide, Enel boasts a presence in 40 countries across 4 continents. In Italy Enel manages the main part of electricity distribution as it offers integrated solutions of electricity and gas to 33 million clients. Its installed capacity is of some 40 GW of which 3 GW produced by renewables through Enel Green Power, a dedicated newco separately listed in the Milan stock exchange.

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