Enel chairman says investments in grids are financially attractive

TRENTO, Italy (Reuters) – Investments in power grids are attractive for Italian power utility Enel and other groups that distribute electricity because, once approved by the authorities, they guarantee predictable returns, chairman Paolo Scaroni said on Friday.

This was one reason why the Italian group announced last November it would focus on its grid business while becoming more selective on the power generation business.

Scaroni said meeting the 2050 net-zero carbon emission global goal would require more than doubling high-voltage and distribution grids to transport an increasing volume of electricity, which should gradually replace fossil fuels.

“The investments in grids are capital expenditures that both Enel, (Italy’s power grid operator) Terna and electricity companies are happy to make because – once authorised – they enter the regulated asset base (RAB) and are partly funded by power bills,” Scaroni said speaking at a business conference in Trento.

The RAB is one of the key factors to calculate revenue for a regulated business.

The top executive also said nuclear power would be key to meeting decarbonisation targets set globally for 2050, adding that Italy would need more than 20 nuclear power plants should it include atomic power in its energy mix.

Nuclear power is a controversial issue in Italy where it was banned in a referendum in 2011.

Speaking about China’s dominance in the production of solar panels, electric vehicles and other components needed for the energy transition, Scaroni said he expected Europe would follow the U.S. and impose tariffs against cheap Asian products.

(Reporting by Francesca Landini; Editing by Josie Kao)