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Europe and Euro-Mediterranean Affairs

Europe and euro-mediterranean afffairs

Europe and Euro-Mediterranean Affairs

Operations

Net electricity generation

Milions of kWh
201820172018-2017
Thermal39,18139,830(649)-1.6%
Hydroelectric32221045.5%
Wind1,7001,814(114)-6.3%
Other sources163173(10)-5.8%
Total net generation41,07641,839(763)-1.8%
of which Russia39,18239,830(648)-1.6%
- of which other countries1,8942,009(115)-5.7%

In 2018, net electricity generation amounted to 41,076 million kWh, a decrease of 763 million kWh on the same period of 2017. This change was mainly due to a decrease in generation in Russia.

Contribution to gross thermal generation

Milions of kWh
201820172018-2017
Natural gas21,71252.6%22,38453.3%(672)-3.0%
Coal19,59247.4%19,64746.7%(55)-0.3%
Total41,304100.0%42,031100.0%(727)-1.7%

Gross thermal generation for 2018 posted a decrease of 727 million kWh to settle at 41,304 million kWh. The decrease for the period reflects the aforementioned drop in production in Russia and shows a reduced use of combined-cycle, coal and gas generation.

Net efficient generation capacity

MW
at Dec. 31, 2018at Dec. 31, 2017Change
Thermal plants8,8788,878--
Hydroelectric plants1919--
Wind farms741741--
Other123123--
Total net efficient capacity9,7619,761--
- of which Russia8,8788,878--
- of which other countries883883--

The net efficient capacity of 2018 was equal to 9,761 MW and was in line with that of the previous year.

Electricity distribution and transport networks

20182017Change
High-voltage lines at year end (km)6,5116,50550.1%
Medium-voltage lines at year end (km)35,06235,016460.1%
Low-voltage lines at year end (km)86,93586,0279091.1%
Total electricity distribution network (km) (1)128,508127,5489600.8%
Electricity transported on Enel’s distribution network (millions of kWh)15,64015,2064342.9%

(1) Il dato del 2017 tiene conto di una più puntuale determinazione delle quantità trasportate.

Electricity transport, which was concentrated entirely in Romania, posted an increase of 434 million kWh (+2.9%), going from 15,206 million kWh to 15,640 million kWh in 2018. The increase derives mainly from the trend in demand in the Romanian market, and in particular in the regions served by Enel.

Electricity sales

Milions of kWh
20182017Change
Free market7,5196,3181,20119.0%
Regulated market2,8814,029(1,148)-28.5%
Total electricity sold by Enell10,40010,347530.5%

Electricity sales in 2018 increased by 53 million kWh, going from 10,347 million kWh to 10,400 million kWh. This increase was due to greater electricity sales in Romania due to the gradual liberalization of the market

Performance

Milions of euro
201820172018-2017
Revenue2,3612,411(50)-2.1%
Gross operating margin516543(27)-5.0%
Operating income42030611437.3%
Capital expenditure390307 (1)8327.0%

(1) Il dato non include 44 milioni di euro riferiti al perimetro classificato come “posseduto per la vendita”.

The following tables shows a breakdown of performance by country in 2018

Revenue

Milions of euro
20182017Change
Romania1,2811,1801018.6%
Russia9971,135(138)-12.2%
Other countries8396(13)-13.5%
Total2,3612,411(50)-2.1%

Revenue for 2018 amounted to €2,361 million, a decrease of €50 million (-2.1%) from the previous year.

The performance was related to the following factors:

  • a decrease of €138 million in revenue in Russia related mainly to the weakening of the ruble against the euro (€123 million) and the decrease in unit prices and in output;
  • an increase of €101 million in revenue in Romania, essentially connected to the greater volumes transported and sold, which more than offset the reduction in electricity distribution rates and the negative impact of the application of IFRS 15. Revenue for new connections to the grid are deferred over the duration of the contract;
  • a decrease of €13 million in revenue in other countries.

Gross operating margin

Milions of euro
20182017Change
Romania230232(2)-0.9%
Russia232270(38)-14.1%
Other countries54411331.7%
Total516543(27)-5.0%

The gross operating margin amounted to €516 million, a decrease of €27 million compared with 2017. This performance was mainly due to:

  • a decrease of €38 million in the operating margin in Russia due to adverse exchange rate developments and the decrease in the generation margin;
  • a reduction of €2 million in the margin in Romania, which reflects the impact of IFRS 15 as discussed above, which was only partially offset by a decrease in customer acquisition costs, which, with application of the new standard, are now capitalized under intangible assets. This factor was accompanied by a decline in the margin for environmental certificates.

Operating income

Milions of euro
201820172018-2017
Romania95114(19)-16.7%
Russia169210(41)-19.5%
Other countries156(18)174-
Total42030611437.3%

Operating income amounted to €420 million in 2018, an increase of €114 million. This increase, in addition to being influenced by the changes described above, was significantly affected by the reversal of impairment losses relating to property, plant and equipment and intangible assets in Greece in the amount of €117 million and of the impairment losses recognized in 2017 on geothermal assets in Germany (€42 million).

Capital expenditure

Milions of euro
201820172018-2017
Romania1821344835.8%
Russia86109(23)-21.1%
Other countries122645890.6%
Total390307(1)8327.0%

(1) Il dato non include 44 milioni di euro riferiti al perimetro classificato come “posseduto per la vendita”.

Capital expenditure came to €390 million, an increase of €83 million compared with the previous year. The rise mainly reflected the investments in wind farms in Greece and an increase in investment in Romania, primarily attributable to electricity distribution grids. These factors were only partially offset by a decline in investment in Russia and Germany.