Enel

Multinational energy company based in Italy
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Enel S.p.A.
Company typeSocietà per azioni
Traded as
BIT: ENEL
FTSE MIB Component
IndustryElectric utility
Founded27 November 1962; 61 years ago (1962-11-27)
FounderItalian government
Headquarters
Rome
,
Italy
Area served
Worldwide (see section)
Key people
Paolo Scaroni (Chairman)[1]
Flavio Cattaneo (CEO)[2]
ProductsElectricity generation and distribution; natural gas distribution
RevenueIncrease €141 billion (2022)[3]
€11.2 billion (2022)[3]
Net income
€1.7 billion (2022)[3]
Total assetsIncrease €219.6 billion (2022) [3]
Total equity€42.1 billion (2022) [3]
OwnerGovernment of Italy (23.58%)[4]
Number of employees
65,124 (2022)[3]
Websitewww.enel.com

Enel S.p.A. is an Italian multinational manufacturer and distributor of electricity and gas. Enel, which originally stood for Ente nazionale per l'energia elettrica (National Electricity Board), was first established as a public body at the end of 1962, and then transformed into a limited company in 1992.[5] In 1999, following the liberalisation of the electricity market in Italy, Enel was privatised.[6] The Italian state, through the Ministry of Economy and Finance, is the main shareholder, with 23.6% of the share capital as of 1 April 2016.[7]

Enel is the 90th largest company in the world by revenue, with 140 billion in 2022.[8] As of 2018, Enel is also the second largest electric utility company in the world by revenue after the State Grid Corporation of China.[9] The company is quoted on the FTSE MIB index on the Borsa Italiana.[7]

History

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,[10] and had a value of over $56 billion by 1960.[clarification needed][11][12] The majority of the electricity was produced by regional private companies,[13] or by companies linked to other industrial bodies,[14][15][16] both local and regional, by exploiting the specific characteristics of the territory: its hydrogeological resources.[17]

The state subsidised the construction of power stations and other necessary construction work in the territory in order to increase the production of electricity.[18][19][20] 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[15]: 137 [21]), and by requiring power companies to provide access to electricity for everyone.[14][16][22][23]

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.[22][23]

1962: Establishment of the National Electricity Board

Enel logo (1963–1982)

At the beginning of 1962, the Fanfani IV Cabinet 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.[24][25]

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 (E.N.EL).[13]

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.[26][27]

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%.[26][28] 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.[29]

The first companies to be acquired were:[30] SIP (Piedmont),[31] Edison Volta (Lombardy),[32] SADE (Veneto),[33][34] SELT-Valdarno (Tuscany), SRE (Lazio), SME (Campania), SGES (Sicily), and Carbosarda (Sardinia).

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 at over 200 billion Italian liras.[35][36] 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.[26][37][38] During this period, production from thermal power stations surpassed, for the very first time, that of hydroelectric power.[39][40]

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.[5][30][36]

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.[41] 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.[42]

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.[43][44] Around the same time, international high voltage connections with France (380 kV Venaus-Villarodin, 1969) and Switzerland were also put in place.[45][46] In the same year, undersea electrical cables were put in place to connect the peninsula and the islands of Elba (1966),[47] Ischia (1967),[47][48] and Sardinia through Corsica (1967).[40]

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: Energy crisis and search for new sources

Enel advert "For a better and more economical use of energy" during the years of the energy crisis (1976–1977)[49][50]

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.[26][51][52]

Several new plants were built in the course of the decade.[53] 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.[54][self-published source?] Between 1972 and 1978, the hydroelectric plant of Taloro was built in the province of Nuoro (Sardinia).[55] In 1973, the hydroelectric plant of San Fiorano became operational. In 1977, a thermoelectric power plant opened in Torre del Sale, near Piombino (Tuscany).[56] At the end of the 1970s, the construction of the thermal power plant of Porto Tolle (Veneto) began, and its first completed section became active in 1980.[57][58]

Between 1971 and 1977, the pilot 1000 kV transmission facilities in Suvereto (Tuscany) were tested.[59][60] In 1974, the construction of the Adriatic high voltage electric backbone was completed.[61][62] Between 1973 and 1977, wells for geothermal energy production were drilled in Torre Alfina, in the province of Viterbo (Lazio).[63] The dam of Alto Gesso (Piedmont) was completed in 1982 as part of the hydroelectric power station Luigi Einaudi "Entracque".[64][65]

The 1980s were characterised by the construction of new plants and the testing of alternative forms of energy, the Italian nuclear power phase-out, as well as a gradual reduction of reliance on oil, which decreased from 75.3% in 1973 to 58.5% in 1985.[66][67][68] Several large power plants became active during this period. Among these, the fossil fuel power plant of Fiumesanto (Sardinia) in 1983–84;[24] the pumped-storage hydroelectricity power station of Edolo (Lombardy) in 1984–85, one of the biggest of its kind in Europe;[69] and the coal power plant of Torrevaldiagia Nord (Lazio) in 1984.[24]

In 1981, with the help of the European Economic Community, Enel built the first large-scale compact linear Fresnel reflector concentrated solar power plant, the 1 MWe Eurelios power station in Adrano (Sicily).[70] The plant was shut down in 1987. In 1984, the photovoltaic power station of Vulcano (Sicily) became active.[71] In the same year, the first wind farm in the country became operational in Alta Nurra (Sardinia).[72]

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.[73][74]

In 1986, Enel had its first positive balance, with a profit of 14.1 billion Italian liras.[75]

In 1987, in the aftermath of the Chernobyl disaster, the first referendum on nuclear power took place and was won by those opposed to nuclear power. This result marked the end of nuclear power in Italy, the closing and suspension of all construction of nuclear power stations, and the establishment of a new national energy plan.[54][76] The Caorso Nuclear Power Plant in Emilia-Romagna, which had been inactive since 1986 due to refuelling, was never reactivated and was finally closed in 1990. The Enrico Fermi Nuclear Power Plant in Piedmont was deactivated in 1987 and shut down in 1990. The construction work on the Montalto di Castro Nuclear Power Station, started in 1982, was interrupted in 1988. The station was converted the following year into a multi-fuel plant. The Latina Nuclear Power Plant was shut down in 1988. The Garigliano Nuclear Power Plant had been shut down since 1978.

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.[76][77][78][79]

1990–present: Liberalisation and privatisation