Enel S.p.A., or the Enel Group, is an Italian multinational energy company that is active in the sectors of electricity generation and distribution, as well as in the distribution of natural gas.
Enel was first established as a public body at the end of 1962, and then transformed into a limited company in 1992. In 1999, following the liberalisation of the electricity market in Italy, Enel was privatised.
Enel is the 84th largest company in the world by revenue, with EUR70.59 billion. It has a stock market capitalisation of EUR39.4 billion, making it Europe's largest integrated utility by capitalisation.
1898-1962: Towards a national policy for electricity
The hydroelectric power station of Rocchetta a Volturno
In 1898, the production of electricity in Italy was 100 GWh, and had a value of over $56 billion by 1960.[clarification needed] The majority of the electricity was produced by regional private companies, or by companies linked to other industrial bodies, that were both local and regional, by exploiting the specific characteristics of the territory: its hydrogeological resources.
The state subsidised the construction of power stations and other necessary construction work in a territory in order to increase the production of electricity. In 1961, the state regulated distribution with unified national tariffs set on the basis of equal consumption classes (through the Equalisation Fund for the Electricity Sector:137), and by requiring power companies to provide access to electricity for everyone.
In 1962, the government institutionalised the Entity for electricity with the aim of making electricity a means for the development of the country and in order to define a national policy for electricity based on the experiences of other countries such as France and the United Kingdom.
1962: Establishing the National Entity for Electricity
Enel logo (1963-1982)
At the beginning of 1962, the Fanfani IV Cabinet made committed the government to put together a proposal for the unification of the national electricity system within three months of the parliament passing a confidence motion.
During the Chamber of Deputies assembly of 26 June 1962, the government presented a bill that sanctioned the principles and procedures for the establishment of the Ente Nazionale per l'energia Elettrica (National Entity for Electricity, E.N.EL., or Enel).
According to the bill, Enel was going to acquire all assets of companies producing, processing, transmitting, and distributing electricity, with the exception of self-producers--companies that produced more than 70% of their electricity for other production processes--(the same exception was later applied to municipal authorities), and of small businesses that did not produce more than 10 million kilowatt hours per year.
Procedures to assess the value of the acquired companies were defined, and it was established that compensation was to be paid to creditors in 10 years at an interest rate of 5.5%. Within this framework, 1962 was to be considered a transition year, in which all income and expenses of the acquired companies would be transferred to Enel. 1963 was thus the first operational year of the newly formed company.
1963-1970: Modernization and development of the network
Enel's early goals were the modernization and development of the electricity grid with the construction of a high voltage power lines backbone, international connections, connections to the islands, rural electrification, and the creation of a national centre for dispatching. These projects were to be co-financed by the state through the issuing, in 1965, of bonds valued over 200 billion Italian liras. In 1967, Enel, which was originally supervised by the Committee of Ministers, began to be overseen by the inter-ministerial Committee for Economic Planning (CIPE), under the Ministry of Industry. During this period, production from thermal power stations surpassed, for the very first time, that of hydroelectric power.
In 1963, the National Dispatch Centre of Rome was created, to manage the energy network by coordinating the production plants, the transmission network, the distribution, as well as the interconnection of the Italian electricity system with that of foreign countries, by adjusting in real time the production and transmission of energy on the basis of actual demand.
In terms of rural electrification, the settlements that were not connected to the electricity grid declined from 1.27% in 1960 to 0.46% in 1964, with over 320,000 new residents being connected.
In the five-year period between 1966 and 1970, further investments for rural electrification were made, where 80% of the costs were covered by the state and 20% by Enel, part of those costs being incurred by reducing some rates as an incentive for agricultural development.
In 1968, the construction of the 380 kV high-voltage connection between Florence and Rome began, with the aim of joining the high voltage electrical system of the north with that of the centre and the south. Around the same time, international high voltage connections with France (380 kV Venaus-Villarodin, 1969) and Switzerland were also put in place. In the same year, undersea electrical cables were put in place to connect the peninsula and the islands of Elba (1966),Ischia (1967), and Sardinia through Corsica (1967).
In 1963, Enel was involved in the Vajont Dam disaster. On 9 October 1963, a huge landslide of 260 million cubic metres fell into the reservoir formed by the dam. The dam and power plant had been built by the Società Adriatica di Elettricità (the Adriatic Electricity Company, or SADE) and then sold to Edison, and it had just been transferred as part of the nationalisation process to the newly established Enel. The landslide created huge waves in the Vajont reservoir, which partially flooded the villages of Erto e Casso and swept over the dam, completely wiping out the towns in the valley below it: Longarone, Pirago, Rivalta, Villanova and Faè. Approximately two thousand people died in the disaster. Enel and Montedison were charged in the ensuing trial as the companies responsible for the disaster, a responsibility considered all more serious because of the predictability of the event. The two companies were forced to pay damages to the communities involved in the catastrophe.
1970-1989: The energy crisis and the search for new sources
Enel advert "For a better and more economical use of energy" during the years of the energy crisis (1976-1977)
The decade of the 1970s was distinguished by a major energy crisis that led the company to implement drastic austerity measures, and the establishment of a national energy plan that defined the objectives of both building new power plants and searching for new energy sources.
In 1975, as a result of the 1973 oil crisis and the austerity measures, and following the establishment of the first National Energy Plan (PEN), the aim of the company became that of reducing Enel's dependence on hydrocarbons, which was to be achieved with the use of other energy sources, including hydro, geothermal, coal, reducing waste, and, in particular, the use of nuclear power.
Several new plants were built in the course of the decade. In the early 1970s, the construction of the nuclear power station Caorso (Emilia-Romagna), the first major nuclear power plant in Italy (to generate 840-860 MW), began. The station became operational in 1978. Between 1972 and 1978, the hydroelectric plant of Taloro was built in the province of Nuoro (Sardinia). In 1973, the hydroelectric plant of San Fiorano became operational. In 1977, a thermoelectric power plant opened in Torre del Sale, near Piombino (Tuscany). At the end of the 1970s, the construction of the thermal power plant of Porto Tolle (Veneto) began, whose first completed section became active in 1980.
Between 1971 and 1977, the pilot 1000 kV transmission facilities in Suvereto (Tuscany) were tested.
In 1974, the construction of the Adriatic high voltage electric backbone was completed.
Between 1973 and 1977, wells for the production of geothermal energy were drilled in Torre Alfina, in the province of Viterbo (Lazio).
The dam of Alto Gesso (Piedmont) was completed in 1982 as part of the hydroelectric power station Luigi Einaudi "Entracque".
During 1985, the national center for the dispatch and control of the electricity network was gradually transferred from the center of Rome to Settebagni, and made a part of a bigger European network for the synchronisation of electricity production.
In 1986, Enel had its first positive balance, with a profit of 14.1 billion Italian liras.
In 1988, the new National Energy Plan (PEN) established its key objectives: increased energy efficiency, environmental protection, the exploitation of national resources, the diversification of sources of supply from abroad, and the overall competitiveness of the production system.
1990-present: liberalisation and privatisation
Enel's new logo presented 26 January 2016
Between 1990 and 2000, the Italian electricity market was progressively liberalized. In 1991, Law No. 9/1991 sanctioned a first partial liberalisation of the production of electricity generated from conventional sources and renewable energy sources; companies were allowed to produce electricity for their own use with an obligation to hand over the excess amount to Enel. In July 1992, the Amato I Cabinet turned Enel into a joint-stock company with the Treasury as the sole shareholder.
In 1999, the D'Alema I Cabinet issued Legislative Decree no. 79 of 16 March 1999 (known as the Bersani Decree) to liberalise the electricity sector. This opened up the possibility for other actors to operate in the energy market. Enel--which had so far been the only actor in the production, distribution, and sale of electricity in Italy--had now to change its corporate structure by distinguishing the three phases and constituting itself as three different companies: Enel Produzione, Enel Distribuzione, and Terna, respectively, for energy production, distribution, and transmission. Moreover, Enel could produce only 50% of the national production according to the new law.
In 1999, 31.7% of the company, in its new structure, was privatised. Following privatization, Enel was put on the stock market; its shares were listed on the Italian Stock Exchange with a value of EUR4.3 per share; the total number was 4,183 million shares for a total value of EUR18 billion.
In this period Enel was involved in several new projects.
In 1993, the company built the Serre photovoltaic plant. At the time, this was largest of its kind in Europe with an installed capacity of 3.3 megawatts.
In 1997, Enel, Orange S.A., and Deutsche Telekom funded Wind Telecomunicazioni as a joint venture, a mobile and fixed telecom operator.
In 2000, Enel launched a project to connect Italy's and Greece's power grids by laying a 160 km underwater power line, capable of carrying 600 megawatts, to connect Otranto (Apulia) with the Greek city of Aetos. The project, completed in 2002, had a total cost of EUR339 million.
During the 2000s, the company worked to reduce the environmental impact of the production of energy and on a progressive internationalization of Enel through a number of mergers and acquisitions.
In the following years, Enel continued investing in renewable energy and clean technologies.
In 2004, the company was included in the Dow Jones Sustainability Index, a stock market index that evaluates the financial performance of companies based on economic, environmental, and social performance.
This period was marked by the appointment of a new board of directors that set the reorganisation of assets abroad and reducing the company's debt as the main priorities for the future.
In 2011, Enel opened the first pilot carbon dioxide-capture facility in Italy, in the area of Brindisi, in the existing power plant ENEL Federico II.
That year Enel Distribuzione built its first Smart grid in Isernia, a grid capable of effectively adjusting the two-way flow of electricity generated from renewable sources. The total investment for this project was EUR10 million.
Also in 2011, Enel became part of the United Nations Global Compact, a United Nations initiative to encourage businesses to adopt sustainable policies worldwide,
and signed a cooperation framework agreement with the World Food Programme, to fight against world hunger and climate change. The cost of the project was EUR8 million, which included the production and distribution of high-efficiency cooking stoves, the installation of photovoltaic systems in the all WFP logistical premises, and giving support to humanitarian interventions.
In the same year the company was added to the FTSE4Good Index of the London Stock Exchange which measures businesses' behaviour in terms of environmental sustainability, relationships with stakeholders, human rights, the quality of working conditions, and fighting against corruption.
In 2012, Enel sold the remaining 5.1% of Terna in its possession, thus exiting completely from the high-voltage market.
In 2013 Enel signed an agreement, in Sochi, for the sale of 40% of Arctic Russia, a joint venture with Eni, which in turn controlled 49% of SeverEnergia, for $1.8 billion.
In 2014, Enel--together with Endesa, Accelerace, and FundingBox--initiated the INCENSe program (Internet Cleantech Enablers Spark), which was co-funded by the European Commission, for the promotion of technological innovation in renewable energy, and was joined by over 250 start-ups from 30 countries in 2015.
In 2014 and 2015, Enel was included in the STOXX Global ESG Governance Leaders index, an index that measures a company's environmental, social, and governance practices.
Enel took part in Expo 2015 in Milan as an Official Global Partner.
With a EUR29 million investment, as well as building its own pavilion, Enel built a Smart City over the entire Expo area, simulating a city of 100,000 inhabitants with a total energy consumption of 1 GWh per day.
The Smart City comprised a smart grid for the distribution of electricity, an operations center for the monitoring and management of the smart grid, an information system that allowed visitors to view in real-time the electricity consumption in each pavilion, charging stations for electric vehicles, and LED lighting of the entire exhibition site.
The company employs around 70,000 people, has over 60 million customers worldwide (56 million in the electricity market, and 6 million in the gas market) and a net installed generating capacity of over 89 GW.
Enel is the largest energy company in Europe by number of customers and the second by capacity, after EdF.
The Enel Group is organised in five divisions:
Global Generation: electricity generation.
Global Infrastructure and Networks: transport infrastructure and energy distribution.
Global Trading: provides Enel Group companies, as well as third parties, both with goods to be used in power plants and with optimisation services for energy production and distribution.
Upstream Gas: making investments for the exploration, production, and development of infrastructure for transporting gas.
For trading on international markets, as well as for the procurement and sale of energy products including gas, Enel owns 100% of Enel Trade, which in turn owns 100% of Enel Trade Romania, Enel Trade Croatia, and Enel Trade Serbia.
In Italy, Enel owns companies that produce, distribute and resell electricity:
100% of Enel Produzione and, through it, 51% of ENergy Hydro Piave.
100% of Servizio Elettrico Nazionale, which is tasked with selling electricity on the regulated market.
100% of Enel Energia - which deals with the sale of electricity and natural gas on the free market and to end customers. Enel Energia also owns 100% of Enel.si, a company that offers renewable energy solutions to end customers and franchises "Punto Enel Green Power".
In Spain, through its subsidiary Enel Iberoamerica (previously known as Enel Energy Europe), Enel holds 70.1% of Endesa, acquired in 2009 with an initial stake of 92%.
The acquisition earned Enel the 2009 Platts Global Energy Award for "Deal of the Year".
In 2016, Endesa acquired Enel Green Power España from Enel for EUR1.207 billion.
Enel has been operating in Russia since 2004.
It owns 56.43% of Enel Russia (formerly OGK-5) and 49.5% of the electricity supplier RusEnergoSbyt, through Enel Investment Holding BV.
In 2013, Rosneft, through NGK Itera, bought 40% of Enel's stake in Arctic Russia BV, a company which owned 19.6% of SeverEnergia.
In Chile, Enel controls 99.91% of Empresa Electrica Panguipulli SA, 51.80% of Enel Américas SA, 60.07% of Distribución Chile SA, 36.36% of Generación Chile SA, 99.91% of Enel Green Power Chile Ltd, 99.91% of Enel Green Power del Sur SpA, and 37% of Gas Atacama Chile SA.
Enel owns 50% of Open Fiber. According to the plan approved on 23 March 2016, operating in the so-called A and B clusters to "market success" as discussed by the Italian Council of Ministers on 3 March 2015, Open Fiber is to make FTTH broadband services available to 9.5 million Italian homes, in 282 communities in large urban areas, by 2022.
The areas chosen for the project are a subset of 641 communities the government classifies as A and B Clusters.
The full list of the 282 communities has not yet been made public, except for the 13 cities of Bari, Cagliari, Catania, Florence, Genoa, Naples, Padova, Palermo, Perugia, Venice, Bologna, Milan, and Turin.
Open Fiber has been selected by Infratel to make fibre optic networks available in the so-called "white" areas in Abruzzo, Molise, Emilia Romagna, Lombardy, Tuscany, Veneto, Piedmont, Valle d'Aosta, Liguria, Friuli Venezia Giulia, the autonomous province of Trento, Campania, Basilicata, Marche, Umbria, Lazio, and Sicily. Elisabetta Ripa took over as CEO in January 2018.
eMotorWerks is a "supplier of electric vehicle (EV) Charging stations, called JuiceBox, and owner and operator of JuiceNet, an Internet of Things (IoT) platform for the smart management of EV charging and other distributed energy storage facilities". It was acquired by Enel in October 2017.
the distribution and transformation of electricity and maintenance of plants through e-distribuzione.
consumer protection services through Servizio Elettrico Nazionale (National Electric Service) - which guarantees the supply of energy at the fixed price established by the Italian Regulatory Authority for Energy, Network, and the Environment in those areas in which e-distribuzione is the sole provider.
street lighting and artistic lighting through Enel Sole.
Following the liberalisation of the market, Enel can no longer produce more than 50% of the total electricity produced in Italy; and like all other providers, is bound by the Universal Service Act, and by European standards, to connect to the grid anyone who requests service. Generally, Enel is subject to the supervision and decisions of the Italian Regulatory Authority for Energy, Network, and the Environment [it].
Through its subsidiaries, Enel engages internationally in the following activities and areas:
Conducting fundraising financial activities, and using the funds in investment operations, through its subsidiaries Enel Investments, Enel Finance International, and International Endesa (located in the Netherlands).
Belgium - Enel's Marcinelle Energie plant generates a total capacity of 406 MW.
Greece - Enel operates here through Enel Green Power's hydropower (19 MW), photovoltaic (72 MW), and wind (200 MW) power plants for a total of 291 MW.
Netherlands - Enel operates here through a number of financing companies (Enel Finance International N.V., Enel Investment Holding B.V., and International Endesa B.V.) that raise funds through bond issuances and other forms of financing, and invest in the production and distribution of electricity. Enel is also present through Endesa Energia S.A., a company that sells gas and electricity to large customers in Europe.
Romania - Enel has over 2.8 million customers here through majority shares in a number of electricity distribution companies in Sud-Muntenia, including in Bucharest, in the Banat region, and in Dobruja. Enel Green Power is also one of the country's electricity providers, with a total capacity of 534 MW.
Slovakia - From 2006 to 2015, through its 66% holding in Slovenské Elektrárne, Enel produced a total of 5,700 MW of electricity in Slovakia, derived from nuclear, thermoelectric and hydroelectric sources. From the end of 2014, Enel received several offers from buyers interested in acquiring its shares of Slovenské Elektrárne. In 2015, it sold its entire holding to EP Slovakia for the sum of EUR750 million.
Spain and Portugal - Through its participation in Endesa, Enel is currently the main energy supplier in Spain and Portugal, with a total electricity production of 22,724 MW (6,376 MW of which is from renewable sources) and over 12 million customers in the electricity market, and 6 million in the gas market. In addition, Enel produces renewable energy with Enel Green Power España, for a total capacity of 1,745 MW in Spain, and of 163 MW in Portugal.
Enel Green Power was the second largest producer of solar energy in Latin America in 2014.
Projects scheduled for the coming years are going to increase photovoltaic production tenfold, turning the company into the largest photovoltaics manufacturer in the region.
Argentina - Enel produces electricity through Enel Américas's subsidiaries--Endesa Costanera, Hidroeléctrica El Chocón, and Dock Sud--for a total capacity of 4.522 MW. Through EDESUR Enel distributes electricity to over 2.5 million customers in the country.
Brazil - Enel produces electricity through its subsidiaries Enel Fortaleza and Cachoeira Dourada, for a total capacity of 2600 MW. Enel operates the transmission of electricity through Enel CIEN; as well as distribution through Enel Distribution Sao Paulo, which covers the city of São Paulo; Enel Distribuição Rio, which covers the state of Rio de Janeiro; Enel Distribuição Ceará, which covers the state of Ceará; and Enel Distribuição Goiás, which covers the state of Goiás; servicing a total of 17 million customers. Through one of its subsidiaries, Enel Brasil Participações Ltda, Enel Green Power produces electricity from renewable sources for a total of 376 MW - 203 MW of solar energy and 173 MW of hydroelectric power.
Chile - Enel produces 7,470 MW of electricity.[clarification needed] Enel has a production capacity of over 730 MW of hydroelectric and wind-generated energy.
Peru - Enel electricity production capacity totals 1,980 MW. Since 2011, Enel Green Power Peru has been working to develop alternative energy sources in the country and to obtain various concessions for electricity plants.
Uruguay - Enel Green Power has been building a wind power plant capable of 50 MW.
Costa Rica - Through Enel de Costa Rica SA, Enel produces a total of 80 MW of hydroelectric energy in Costa Rica.
Guatemala - Through Enel Green Power Guatemala, Enel produces a total of 160 MW of electricity from hydroelectric power.
Panama - Through its controlled company Enel Fortuna, Enel produces a total capacity of 300 MW, fulfilling 23% of the national demand for 2014.
Algeria - Enel holds 13.5% of the gas reserves in the Illizi Basin, in the southeast of the country, and 18.4% of the field of Isarene. In 2014, together with Dragon Oil, Enel acquired the gas exploration licenses for two additional areas: Msari Akabli and Tinrhert North. In Msari Akabli, Enel will have a stake of 70%, while Tinrhert North it will own a 30% stake.
Morocco - Enel produces electricity with Energie Electrique de Tahaddart, with a capacity of 384 MW. Enel Green Power has been chosen to construct five wind-power projects in Morocco, to generate a total of 850 MW, together with the German Siemens Group and the local NAREVA company.
South Africa - Enel has opened a generating plant that produces 200 MW of wind and 320 MW of solar energy.
Osage Wind LLC
On 11 November 2014, the United States Attorney for the Northern District of Oklahoma filed suit against Enel's subsidiary Osage Wind LLC, an 84-turbine industrial wind project in Osage County, Okla. In the suit, the United States alleges that Enel and Osage Wind are illegally converting minerals owned by the Osage Nation, a Native American tribe that has owned all mineral rights in the county since 1871. The suit says that Osage Wind should have obtained a permit from the Bureau of Indian Affairs before mining rock and other material for the pits in which turbine bases are built. The United States asked that all excavating on the 8,500 acre site cease and that dozens of turbines that are already being erected be removed.
Osage Wind has insisted that it is not mining and needs no permit. The company says that it has already spent nearly $300 million on the project, which is being built on privately-owned fee land, not land held in trust for American Indians.
Osage Wind LLC and a second and adjacent Enel wind project, Mustang Run, are also embroiled in cases pending before the Oklahoma Supreme Court in which the Osage Nation and Osage County, Oklahoma, are challenging the constitutional legitimacy of permits for both projects.
Enel had to exit the El Salvador electricity market after a long dispute with the Government of El Salvador.
Article 109 of the Constitution of El Salvador states that underground natural resources are the country's property and the government should not allow a foreign company to be the sole proprietor of geothermic generation. Both parties came to a settlement in 2014, but no details have been released.
Enel had been demanding over EUR 94 million from the Ministry of Economy of Slovakia in compensation for lost earnings it claims to have incurred as price proposals were rejected by the Slovakian Regulatory Office for Network Industries (URSO).
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