Enel SWOT and PESTLE Analysis

Strength

1. Diversified Business Model: Italy’s largest utility firm Enel has made major changes in their organizational model so as to become more cost efficient. Since then the company has been religiously following the policy of Open Power. According to the CEO, “Our new brand fully embodies the innovative, sustainable, multi-dimensional and open character of the Enel Group”. One of Enel’s biggest strength is that it has a sustainable business model which is contributing largely to the company’s success. The company operates across 5 continents with 73 million end users and 70 million customers. The company is involved in Networks, Thermal Generation, renewables, retail which gives them an advantage of being a diversified network provider. 46% of the EBITDA came from networks while 28% from renewables in 2018. The four critical areas where the company operates is Decarbonisation, Digitalisation, Urbanisation and Electrification.

2. Growing through acquisition: Enel has been building its presence in the international market through bolt-on acquisition of different companies and plants like EF Solare Italia, Celg Distribuiçao SA (“CELG”), specifically strengthening its position in networks and demand response where it has become the biggest player. In Decemeber 2018, the company acquired Eletropaulo which was renamed to Enel Distribuição São Paulo. This acquisition boosted the group end user to 73 million, up 11% compared to fiscal 2017. Further in Spain to boost the capacity Enel Green Power signed an agreement for the acquisition of five wind plants in Galicia and Catalonia. As a result of the acquisition, Electricity transported on the Enel distribution network showed an increase of 24.7 TWh (+5.4%) amounting to 485.4 TWh in 2018. Revenue from the transport of electricity showed an increase of €128 million compared with 2017 as a result of the acquisition. Enel is has become synonymous with greater sustainability, efficiency, profitability and lower risk, with their effective strategic positioning.

3. Industry leader in its operating sectors: Enel leads the mainstream areas of energy transition with 73 Million end users, 43 GW of installed renewables capacity, 70 million retail customers for both electricity and gas and 6.2GW in active demand management. As a private network operator the company has 65mn end users and 44mn digital meters. The company ranks 1 in Italy, Liberia and comes in top 3 in Latam in retail category. The Company has 47GW thermal capacity and ranks #1 as renewable operator. The company has received 5.7GW demand response for e-solutions. The company has 5 mn free customers in the retail market.

4. Focus on Innovation: In accordance of the Enel philosophy of “Open Innovation”, Enel has made innovation and digitalization key pillars of its strategy for growth in a rapidly changing environment. During 2018, the company expanded the hub network where startups have the opportunity to test their solutions with the support of Enel’s structures. The hub network was expanded to Silicon Valley, Tel Aviv, Madrid, Moscow, Santiago de Chile and Rio de Janiero and three Innovation Hub & Labs (Catania, Pisa and Milan), thus six innovation hubs. In 2018, Enel organized 27 innovation and sustainability challenges. As a part of their recent innovation the company has adopted Agrivolatic model which is a New Land Use Model in the Shadows of Solar Arrays. The company has also introduced a new predictive maintenance model called PresAGHO which is a model to predict and prevent potential faults in hydroelectric power plants.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

1. Innovation Hubs: Enel enables start-ups, SME’s and the innovation communities to gain access to laboratories, internal and external experts, plants and, above all, customers and data. The primary idea is to allow start-ups with significant technology potential to transform ideas into business solutions. With 2300+ startups scouted, 100+ active projects, 30+ scaled startups, 18 agreements with VCF, 21 innovative global partnerships, and 4 crowdsourcing initiatives in fiscal 2017, Enel was well rolled on its way to catch innovation where it happened. During 2018, the company expanded the hub network where start-ups have the opportunity to test their solutions with the support of Enel’s structures. The hub network was expanded to Silicon Valley, Tel Aviv, Madrid, Moscow, Santiago de Chile and Rio de Janiero and three Innovation Hub & Labs (Catania, Pisa and Milan), taking the tally to a total of six innovation hubs. In 2018, Enel organized 27 innovation and sustainability challenges.

2. Enel focus on digitalisation: Enel is a company focussed on its digital initiatives. In 2018 the company’s digital investment amounted to 19%. The company is entering into partnership with start-ups and launched 300 innovative projects. The Group increased the number of new smart meters by 1.2 million, thus reaching a total of almost 44 million smart meters installed globally (15% of which are second generation devices) as a boost to digitalisation. As a part of its digital transformation the company is planning an investment of over 5 billion euros, with the aim of improving the Group’s connectivity. One example of this connective transformation is the V2G technology. With this technology the owner of an electric car is not only just someone that drives it and spends when he or she recharges it. On the contrary, during the night its stored energy is used to stabilise the grid, the electric car becomes a supplier to the network. The benefit from this exchange will be in form of a profit to the owner thus creating a win-win.

3. New intelligent charging solutions: With its focus on e-mobility, Enel has taken forward steps to achieve the target towards e-mobility. In Italy the emobiity revolution is at a fast pace with an acceleration of registrations of plug-ins and fully electric vehicles doubling in the first eight months of 2018 compared with the same period of 2017. With its commitment to meet e-mobility challenges and implementation of the national charging infrastructure plan EnelX is launching new “intelligent charging solutions” which are modular, scalable turn-key solutions and are designed for individuals, companies and government organisations. As a part of its 5-year plan of installing charging infrastructure in Italy: 14,000 stations by 2022, with a total investment of up to 300 million euros, this system will help car manufacturers boost new model entry in the market.

Legal

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Environmental

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