Capitalising on a heritage of expertise in alternative power, Enel Green Power (EGP) has become the world’s foremost foreign investor in renewables based on greenfield project numbers, according to greenfield investment monitor fDi Markets.

EGP was formed as a subsidiary of the Italian power generation firm Enel in 2008, and represents about 13% of the Enel Group’s EBITDA, based on 2017’s figures. The company has 1293 plants spread across four continents and 30 countries, employing 4300 people. EGP’s managed capacity of 42 gigawatts is developed through hydroelectricity, wind, solar power, geothermal electricity, biomass and incineration sources.


The company arose largely due to Italy’s long history in the field. Geothermal power capturing was invented in Tuscany in 1904, and until the 1960s the Italian electricity system was powered by hydro (the country lacks significant fossil fuel resources). Out of this background, Enel has been researching and developing renewable technologies for 30 years.

First movers

With 64 FDI projects valued at an estimated $12.4bn since 2003, EGP has invested almost double the sum of its closest competitors, such as Spain’s Iberdrola, according to fDi Markets. “Historically, we have been among the first movers both in technology and geography. In many countries we’ve been the first to build a renewable plant,” says EGP chief executive Antonio Cammisecra. 

The latest was in Colombia, where the company is building the first utility-scale solar plant. “We’ve been very brave in introducing new tech in solar, wind, geothermal and hydro, taking the risk of having research exit the lab and enter the power plant,” adds Mr Cammisecra.

EGP takes a much longer view than, say, developers that sell project by project or funds that recycle capital every seven years. “When we envision a project, it’s for its entire life. So we enter Mexico or the US or wherever and we stay forever, and that’s coming from our utility culture, and we’re maintaining it. That’s our USP,” says Mr Cammisecra.

Reasons to invest

EGP has three key markers when assessing the investment value of a new country, according to Mr Cammisecra. First is the availability of at least two renewable resources. Second is a stable regulatory environment that is sufficiently friendly towards renewables, with stability being more important than incentives. Third is a stable macroeconomic environment where there is population or economic growth.

Mr Cammisecra wants to see increased renewables production as a result of customer choice, not just government policy. “We also hope that governments will really commit on the fight against climate change, and are optimistic that the role of tech will help in cost reduction,” he says. 

Considering the strong investment in the industry in 2017, EGP is not concerned by US energy policy.

Industry trends

The Enel Group has been among the few European utilities to create a dedicated company for renewables. The company’s global competition is mostly European: EDP, Iberdrola, EDF and Engie.

“Today we see three different animals in the industry: financially fragile developers undertaking lots of speculation; more rational and very aggressive infrastructure funds; and lastly, pension funds, the most emerging phenomena. Attracted by the apparent stability and ease of business in renewables, they think renewables are like bonds and so are investing massively,” says Mr Cammisecra.

Greenfield FDI into renewables has remained steady since 2007, with no major increases, according to fDi Markets. “It’s quite simple. We are doing more with less. The unit cost of the technology of wind and solar has been declined steadily, annually. So if you look at the graph of installed capacity, not investments, you will see growth,” says Mr Cammisecra.

However, greenfield projects in Europe have significantly dropped since 2013 due to the ending of the feed-in tariff system, and because many EU countries have achieved the first tranche of EU objectives for 2020, according to Mr Cammisecra.

Feed-in tariffs are a policy mechanism designed to increase investment in renewables by offering long-term contracts and price-based support to renewable energy producers, such as financial guarantees for every unit of electricity that is produced, usually over a period of 15 to 20 years.  

Spain’s example

The impact of feed-in tariffs is clear in the case of Spain’s renewable energy market. Spain is the world’s fifth biggest destination for greenfield FDI in renewables, garnering 126 projects since 2003, according to fDi Markets.

Foreign investment into Spanish renewables averaged 18 greenfield projects a year between 2006 and 2011. However, that number fell to a meagre two projects a year in the proceeding six years.

“Much of the development of renewable energy in Spain was due to its attractive feed-in tariffs programme [backed] by the government until 2012. The phasing out of feed-in tariff in 2012 hit the development of this sector,” says Chiradeep Chatterjee, a power analyst at GlobalData.

As a result, the share of non-hydro renewables in Spain’s energy capacity mix only increased from 29% in 2013 to 29.9% in 2016. Whereas between 2000 and 2013, it went from just under 5% to 29%, according to GlobalData’s latest report.

Evidently, government policies are key incentives for foreign investment into renewable energy, while consumer choice remains a secondary factor, something that could be of concern to Enel. As of June 2018, the EU increased its target for the amount of energy consumed by renewable sources, moving it to 32% by 2030, up from 27%.

Miguel Arias Cañete, EU climate commissioner, publicly announced that the binding nature of the goal would provide certainty to investors. “This new ambition will help us meet our Paris Agreement goals and will translate into more jobs, lower energy bills for consumers and less energy imports,” he added.