Endesa plans to increase its investments by 8%, up to 9.6 billion euros, in the period 2024-2027, according to the review of the strategic plan that it has communicated to the market today. With this it aims to “take advantage of the opportunities as much as possible and face the challenges derived from this process,” the company indicates to the National Securities Market Commission (CNMV), in what represents a historical investment record since it became a operate in its current and only market (the Iberian Peninsula), after being controlled by the Italian group Enel and running out of Latin American assets.
42% of this investment will be allocated to the distribution network (4,000 million), with a growth of 45% compared to the previous 2024-2026 plan. In turn, of those 4,000 million, it will be used to meet the objectives of the to meet the growing demand for new connections, “which can currently be rejected due to lack of capacity,” he points out. Another 25% will be used to improve the quality of service, optimizing the network structure and increasing remote operations of medium and low voltage lines, and the remaining 30% will go to digitalization and modernization.
Regarding the financial remuneration rate, Endesa has reiterated that the comparison with other countries where it has already been updated shows that the regulators of Germany, Italy, the United Kingdom, Denmark or Finland have applied a differential of more than 500 basis points over the profitability of the 10-year sovereign bonds of those countries. Along with this, the company has recalled the guides recently sent by the Ministry of Ecological Transition to the regulator, where it warns of the need for adequate remuneration.
The generation business will absorb 39% of the total investments, 3.7 billion euros. The criterion is to rebalance the commitment between technologies by reducing exposure to the solar business (15% of the investment), to reinforce wind (37% of the total) and hydroelectric (another 37%). The remaining 11% will go to battery storage. This investment includes one billion, which is expected to close in the first quarter of 2025 and will add 4,700 MW of current hydroelectric power.
Additionally, Endesa will invest approximately 1,000 million during the plan period for the maintenance of nuclear generation assets, non-peninsular systems and combined cycles. The marketing business will absorb another 900 million euros to recover the growth of the customer base and add 7.1 million in the free market, 6% more. Electricity sales will remain stable at around 84 TWh, with a strategic refocusing on fixed-price sales versus sales at prices indexed to the pool.
The objective of the energy company, which is celebrating its 80th anniversary these days, is to achieve net zero emissions by 2040 through the generation and sale of 100% renewable energy and the exit of the gas retail business. Endesa’s CO2 emissions will have been reduced by 65% at the end of 2024 compared to the base year 2017, and 74% in 2030. The company’s last coal plant in the Balearic Islands, which operates for reasons of security of supply, maintains its closure by 2027.
1.5 euros per share
Regarding the financial objectives of the plan, they are to achieve an accumulated annual growth of 4% in the gross operating result (ebitda), until reaching between 5,600 and 5,900 million in 2027 and, with an accumulated annual growth of 7%. The net debt will be between 10,000 and 11,000 million, 10% more due to the increase in investments and the payment of dividends.
The company extends the commitment of a pay out of 70% (percentage of the ordinary net profit destined to remunerate the shareholder) until 2027, guaranteeing a minimum of 1 euro per share and payment in cash. Based on 2024 results, Endesa estimates a dividend of 1.2 euros per share, 20% more than in 2023 and 9% more than the forecast announced a year ago. A first payment of 0.5 euros will be paid on January 8. The expectation is to reach 1.5 euros per share in 2027.
The document, which is presented today to investors by the CEO, José Bogas, and the general economic-financial director, Marco Palermo, also takes into account the main magnitudes and objectives contained in the update of the PNIEC presented by the Spanish Government in last September, which includes an investment forecast of 308,000 million euros, of which 82% must be executed by the private sector. The electrification of the economy will absorb 17% of this investment, ten points more than in the previous PNIEC; aggressive growth in new solar and wind capacity, as well as storage; and a solid commitment to an electrical network with more capacity and greater coverage. To this end, Endesa demands the approval of payment mechanisms for capacity.
The 55 TWh of new electricity demand included in the plan (307 TWh in 2030, not counting green hydrogen) is based on multiplying the electricity consumption of the transport sector by four, “for which we must commit to developing a recharging network solid”, according to Endesa. And in a predicted growth of 48% in industrial demand that must also be accompanied by the necessary development of the network.
Endesa considers that being able to meet industrial demand with a competitive price is a differential element in favor of Spain. Specifically, of the 50 GW of new demand that have requested access to the network on a national scale (of which 16 GW come from data centers), approximately 40% have achieved that access. Furthermore, the income from network use tolls that this new demand would pay is up to nine times higher than the costs of adapting the electrical network to accommodate it.
