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Eni picks up 4 GW renewable energy pipeline in Spain, Italy and France

29 July 2021 Cristina Brooks

Italian major Eni has announced a series of European solar and wind acquisitions, forging ahead with its plan to grow and possibly sell off its combined retail electricity and renewable division.

Eni's renewable energy ambitions have accelerated with the publication of its 2020 action plan.

It currently aims to become a net-zero carbon energy company, reducing net GHG emissions its energy products sold (Scope 1, 2 and 3) 80% by 2050.

However, its long-term approach is achieve incremental emissions reductions in its existing portfolio, with E&P providing the company's near-term cash strength, according to IHS Markit analysts.

Eni's gas and electric utility subsidiary, Eni Gas e Luce, signed an agreement to acquire renewable energy holdings in Spain and France, on the back of plans to acquire 13 wind farms in Italy announced earlier this month.

The recent agreement would see it acquire the Spanish and French business of an independent power producer (IPP) which has a pipeline of 5 GW of solar projects in Spain, France, and Mexico, Dhamma Energy Group.

Dhamma Energy Group has a pipeline of 2.8 GW in Spain and France, including 400 MW of solar projects at an advanced stage of development. Dhamma Energy's Spanish pipeline includes ground-mounted solar plants, and its French pipeline includes both ground-mounted solar farms and rooftop solar plants.

It is the recipient of subsidies for certain French plants by way of French Energy Regulatory Commission tariffs.

On the same day, Eni announced a separate agreement that would see it acquire a portfolio of nine renewable energy projects, including 1 GW of solar and 230 MW of wind capacity in Spain, from New York-based investment manager Azora Capital. Eni is working with the company on a plan to further scale up its renewable energy activity in Spain, the company said.

Moving on to Italy, earlier this month Eni said it will acquire 13 wind farms with 315 MW capacity from two funds. In the first quarter of 2021, it also signed a deal with Italian operator Be Charge to supply renewable energy to electric vehicle and mobility charging stations and pursued its GreenIT joint venture to develop 1 GW of PV and wind power plants in the country.

Eni is also a player in the world-leading UK offshore wind market, which it entered with its acquisition of a 20% stake in the 2.4 GW Dogger Bank (A and B) project.

It appears the company is on track to continue building out its combined retail power and renewable activities, but it is also contemplating a spin-off of this segment through a public listing in 2022 to capitalize on the current hunger for renewable investments and boost income following a tumultuous period for the energy sector.

Renewable electricity in Spain and France

For Eni Gas e Luce, France and Spain are "pivotal" markets that can add value through integration between retail and renewables activities, the company said.

Eni Gas e Luce is building renewables to integrate with its French retail electricity business, active since 2003. Likewise, it entered the Spanish retail electricity and renewable energy market in January with the acquisition of a supplier of renewable energy, gas, and energy efficiency services in Spain and Portugal, Aldro Energía.

Eni follows in the footsteps of other majors that have acquired or are developing solar farms in the attractive Spanish solar market. The market benefits from available sunshine and a friendly permitting environment, IHS Markit Research and Analysis Manager Josefin Berg told Net-Zero Business Daily.

She said Spain offers developers two mature routes to market, private power purchase agreements (PPAs) of renewable energy for sale to greening companies in Europe as well as public tenders, most recently in January.

Transition plan

Under its net-zero plan, Eni said it will grow renewable capacity to 60 GW by 2050, and it also expects to further integrate its renewable energy portfolio with its green retail electricity business. "This will enable us to more efficiently supply our customers with renewable energy that we have produced ourselves," it said in a statement.

Starting on the path to the 60 GW goal, Eni has more than 1 GW of capacity already installed or sanctioned. Its production from renewable sources amounted to 117 GWh in the first quarter of 2021, almost a three-fold increase from 2020 following the ramp-up of new plants in Italy and acquisition of US assets in 2020, according to the company's first-quarter 2021 earnings report.

Meanwhile it continues its oil and gas E&P activities. Its production slowed quarter-on-quarter, producing 1.7 million bbls oil-equivalent/day, but it saw growth in its gasoline and petroleum activity, with year-on-year EBIT increasing by 19%.

Eni was the first among oil and gas majors to set a target for emissions reduction on an absolute basis and to disclose detailed carbon capture and carbon offsetting plans in its transition plan, according to the asset owner group Transition Pathway Initiative.

Posted 29 July 2021 by Cristina Brooks, Senior Journalist, Climate & Sustainability, IHS Markit

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