Italia

Italia

Operations

Net electricity generation

Milions of kWh
201820172018-2017
Thermal27,75732,421(4,664)-14.4%
Hydroelectric18,39514,0254,37031.2%
Geothermal5,6675,758(91)-1.6%
Wind1,2891,1881018.5%
Other sources124126(2)-1.6%
Total net generation53,23253,518(286)-0.5%

In 2018, net electricity generation totaled 53,232 million kWh, a decline of 0.5%, or 286 million kWh, from 2017. The increase in hydroelectric generation (of 4,370 million kWh) was essentially attributable to the improvement of water availability compared with the previous year, accompanied by an increase in wind generation of 101 million kWh. These factors resulted in a decrease thermal generation (of 4,664 million kWh) and a decrease in geothermal generation of 91 million kWh.

Contribution to gross thermal generation

Milions of kWh
201820172018-2017
Fuel oil--10-(10)-
Natural gas7,09723.5%8,39623.9%(1,299)-15.5%
Coal22,53474.7%26,13974.5%(3,605)-13.8%
Other fuels5551.8%5341.6%213.9%
Total30,186100.0%35,079100.0%(4,893)-13.9%

Gross thermal generation for 2018 amounted to 30,186 million kWh, a reduction of 4,893 million kWh (-13.9%) compared with 2017. The decrease involving the entire mix of fuels used was due to the reduced competitiveness of coal and gas, as well as to the increase in hydroelectric production, which made the use of thermal generation less advantageous.

Net efficient generation capacity

MW
at Dec. 31, 2018at Dec. 31, 2017Change
Thermal plants (1)13,61313,613--
Hydroelectric plants12,41112,425(14)-0.1%
Geothermal plants7627611-
Wind farms772772--
Other6681(15)-18.5%
Total net efficient capacity27,62427,652(28)-0.1%
 

(1) 741 MW of which unavailable due to long-term technical issues at December 31, 2017 and 2018.

Net efficient capacity in 2018 came to 27,624 MW, a decrease of 28 MW from the previous year. The change mainly reflects the transfer of the Tirso 1 and Tirso 2 hydroelectric plants to the Region of Sardinia.

Electricity distribution and transport networks

201820172018-2017
High-voltage lines at year end (km)1313--
Medium-voltage lines at year end (km)354,884353,8081,0760.3%
Low-voltage lines at year end (km)798,426795,3973,0290.4%
Total electricity distribution network (km)1,153,3231,149,2184,1050.4%
Electricity transported on Enel’s distribution network (millions of kWh) (1)227,660228,461(801)-0.4%

(1) The figure for 2017 reflects a more accurate measurement of amounts transported.

Electricity transported on the Enel network in Italy for 2018 decreased by 801 million kWh (-0.4%), going from 228,461 million kWh in 2017 to 227,660 million kWh in 2018.

Electricity sales

Milions of kWh
20182017Change
Free market:    
- business to consumer13,33112,4758566.9%
- business to business49,14144,7354,4069.8%
- safeguard-market customers2,0282,052(24)-1.2%
Total free market64,50059,2625,2388.8%
Regulated market:    
- enhanced-protection-market customers39,81843,958(4,140)-9.4%
TOTAL104,318103,2201,0981.1%

Energy sold in 2018 came to 104,318 million kWh for an overall increase of 1,098 million kWh compared with the prior year. This trend reflects the increase in sales on the free market, with a particular emphasis on business customers, as a result of the commercial strategy implemented.

Average number of customers

20182017Change
Free market:    
- business to consumer6,539,0105,938,899  600,11110.1%
- business to business1,666,2611,580,305  85,9565.4%
- safeguard-market customers39,06133,013  6,04818.3%
Total free market8,244,3327,552,217  692,1159.2%
Regulated market:    
- enhanced-protection-market customers17,357,76418,867,841(1,510,077)-8.0%
TOTAL25,602,09626,420,058(817,962)-3.1%

Natural gas sales

Milions of m3
201820172018-2017
Business to consumer2,9472,910371.3%
Business to business1,8141,901(87)-4.6%
Total4,7614,811(50)-1.0%

Gas sales in 2018 came to 4,761 million cubic meters, a decrease of 50 million cubic meters compared with the previous year, essentially attributable to sales to business customers

Performance 

Milions of euro
20182017Change
Revenue38,39838,781(383)-1.0%
Gross operating margin7,3046,8634416.4%
Operating income4,4984,470280.6%
Capital expenditure2,479(1)1,81266736.8%

(1) The figure does not include €3 million regarding units classified as “held for sale”.

The following tables break down performance by type of business in 2018.

Performance

Milions of euro
201820172018-2017
Thermal Generation and Trading19,04419,919(875)-4.4%
Infrastructure and Networks7,6727,584881.2%
Enel Green Power2,0841,82226214.4%
End-user markets16,36716,2561110.7%
Enel X247-247-
Services1,3881,314745.6%
Eliminations and adjustments(8,404)(8,114)(290)-3.6%
Total38,39838,781(383)-1.0%

Revenue in 2018 amounted to €38,398 million, a decrease of €383 million compared with 2017 (-1.0%), the result of the following main factors:

  • a €875 million decline (-4.4%) in revenue from Thermal Generation and Trading compared with 2017. This reduction is mainly attributable to:
    • a €863 million decline in revenue from trading on international energy markets due, essentially, to a reduction in quantities handled (-42.5 TWh) in proprietary trading conducted on the European electricity exchanges (particularly in France and Germany) despite a background of increasing prices;
    • a €333 million decline in revenue from the sale of electricity essentially related to the lower quantities generated. More specifically, the change is mainly attributable to the decrease in revenue from the sale of electricity under bilateral agreements with other national resellers (€952 million), only partially offset by the increase in revenue from sales on the Power Exchange (€188 million) and increased sales on enduser markets in Italy;
    • a €353 million increase in revenue from the sale of fuels, mainly gas, on domestic and international wholesale markets;
    • a €103 million increase in revenue related to fees recognized by the Regulatory Authority for Energy, Networks and Environment (ARERA) in transactions on the Power Exchange, mainly attributable to the reimbursement of costs of essential plants;
    • a €26 million increase in revenue from the sale of CO2 emission rights as a result of rising prices of allowances;
  • an increase of €88 million (+1.2%) in revenue from Infrastructure and Networks operations, largely reflecting:
    • recognition of a gain of €146 million, pursuant to ARERA Resolution 50/2018/R/eel, related to the reimbursement by the Energy and Environmental Services Fund for the system charges paid and not collected;
    • recognition of the payment of €128 million related to the agreement e-distribuzione reached with F2i and 2i Rete Gas;
    • an increase of €92 million in connection fees;
    • an increase of €60 million in revenue related to ARERA amendment 654/2015 (the “regulatory lag”), which was offset by a decline in rate revenue (€27 million) following the reduction in distribution and metering rates and the negative effect of prior-year items (€72 million) related to the publication of the rates for the years 2016 and 2017, as well as to the equalization of network losses;
    • the decrease in contributions from the Energy and Environmental Services Fund for white certificates (in the amount of €196 million) due to lower volumes purchased and the reduction in the unit contribution compared with 2017; 
    • a reduction in revenue from the sale of electricity meters to other companies of the Group (€60 million);
  • an increase in revenue from generation by the Enel Green Power Business Line of €262 million (+14.4%) due to higher average sales prices and greater quantities produced;
  • an increase of €111 million (+0.7%) in revenue from End-user markets for electricity, essentially reflecting:
    • an increase of €765 million in revenue on the free energy market related to the increase in quantities sold (+5.2 TWh), mainly to business customers;
    • a €52 million increase in revenue from the sale of natural gas to end users related to an increase in average prices;
    • a decrease of €318 million in revenue on the regulated electricity market, following a decrease in rate revenue connected to the decrease in quantities sold (-4.1 TWh) and in number of customers, as well as to the reduction in revenue recognized for sales services;
    • a decrease of €205 million in connection fees due to application of the new IFRS 15, which led to the recognition only of fees attributable to the seller;
    • a reduction in revenue (€198 million) related to the sale of Enel Sole and Enel.si to the new Business Line dedicated to developing value-added services;
  • a €247 million increase in revenue for value-added services, essentially due to the aforementioned change in the consolidation of the new Enel X Business Line.

Gross operating margin

Milions of euro
201820172018-2017
Thermal Generation and Trading22239(217)-90.8%
Infrastructure and Networks3,6793,4672126.1%
Enel Green Power1,2201,05416615.7%
End-user markets2,2332,00722611.3%
Enel X31-31-
Services119962324.0%
Total7,3046,8634416.4%

The gross operating margin amounted to €7,304 million in 2018, an increase of €441 million (+6.4%) compared with 2017. This change was essentially due to the following factors:

  • a decrease of €217 million in the margin on Thermal Generation and Trading due essentially to the reduction in thermal power generation and to the increase in costs for gas purchases following an increase in average prices;
  • an increase of €212 million in the margin from Infrastructure and Networks operations (+6.1%), largely due to:
    • recognition of a gain of €146 million, pursuant to 54 Annual Report 2018 ARERA Resolution 50/2018/R/eel, related to the reimbursement by the Energy and Environmental Services Fund for system charges paid and not collected;
    • recognition of the payment of €128 million related to the agreement e-distribuzione reached with F2i and 2i Rete Gas as mentioned above in relation to revenue;
    • a decrease of €11 million in the margin on electricity transport, primarily reflecting the reduction in rates and the negative effect of past items as noted earlier in relation to revenue;
    • a decline of €27 million in the margin on white certificates;
    • an increase in operating costs related mainly to the purchase of materials to be used for implementation of the Resilience project connected with the improvement or maintenance of service quality;
  • an increase in the margin on generation by the Enel Green Power Business Line of €166 million due to the greater quantities produced and sold at higher average prices than for the previous year;
  • an increase of €226 million in the margin from End-user markets (+11.3%), mainly attributable to:
    • an increase of €282 million in the margin on the free electricity and gas market, mainly related to the reduction in costs for agencies and telesellers due to application of IFRS 15, which provides for their capitalization when the customer base is increased;
    • a decrease of €20 million in the margin on the regulated electricity market, essentially attributable to a decrease in quantities sold, as well as to a decrease in revenue recognized for sales services;
    • a reduction of €41 million in margin due to the aforementioned change in the scope of consolidation;
  • an increase of €31 million in the margin for value-added services of the Enel X Business Line.

Operating income

Milions of euro
20182017Change
Thermal Generation and Trading(247)-(247)-
Infrastructure and Networks2,5082,3191898.2%
Enel Green Power8287458311.1%
End-user markets1,3791,361181.3%
Enel X(9)-(9)-
Services3945(6)-13.3%
Total4,4984,470280.6%

Operating income came to €4,498 million, an increase of €28 million, including an increase of €413 million in depreciation, amortization and impairment losses, compared with the €4,470 million recognized in 2017. The increase in depreciation, amortization and impairment losses refers largely to:

  • an increase in amortization and depreciation from the application of IFRS 15 in consideration of the capitalization of contract costs (€103 million); 
  • the impairment losses on the LNG regasification plant of Nuove Energie (€24 million), the Bastardo thermoelectric plant (€20 million), and the CIS Interporto Campano solar plant (€55 million); 
  • the impairment loss on intangible assets related to the termination of the Bioenergy Casei Gerola project; 
  • the impairment of trade receivables, mainly on enduser markets.

These effects were partially offset by a reduction in depreciation, mainly at e-distribuzione (€94 million) following a study of the operating performance of distribution plants, supported by technical advisors, following which it was considered reasonable to extend the economictechnical life of certain components of distribution plants compared with forecasts made in previous years.

Capital expenditure

Milions of euro
201820172018-2017
Thermal Generation and Trading1721155749.6%
Infrastructure and Networks1,6851,27541032.2%
Enel Green Power252(1)2272511.0%
End-user markets24813910978.4%
Enel X54-54-
Services68561221.4%
Total2,4791,81266736.8%

(1) Il dato non include 3 milioni di euro riferiti al perimetro classificato come “posseduto per la vendita”.

Capital expenditure in 2018 amounted to €2,479 million, up €667 million compared with the previous year. More specifically, the change is attributable to:

  • an increase of €410 million in capital expenditure in Infrastructure and Networks related mainly to the replacement of electronic meters for the Open Meter plan;
  • an increase of €109 million in capital expenditure in Enduser markets as a result of the capitalization of agency and teleseller costs as contract costs;
  • an increase of €57 million in capital expenditure in Thermal Generation and Trading;
  • an increase of €25 million in capital expenditure in the Enel Green Power Business Line, mainly related to solar plants;
  • an increase of €54 million in capital expenditure for the Enel X Business Line.