Enel targets record 6.1GW of new renewable energy capacity in 2022

Enel Green Power, the renewable energy arm of Italy-based utility Enel, plans to build some 6.1GW in new renewable capacity in 2021 after constructing a record 5.1GW of new wind farms, solar plants and battery energy storage systems (BESS) last year.

“Year after year we will raise the level of the bar” to reach a 2030 target of 154GW in owned and managed renewable and storage capacity, EGP chief executive Salvatore Bernabei said in a briefing with journalists.

In 2022, EGP plans about 90% of investments in its so-called tier 1 countries — namely Italy, Spain and Romania in Europe; Chile, Brazil, Peru and Colombia in Latin America; and the US.

EGP last year built a total of 70 new plants, with 2,596MW of wind and 2,238MW in solar, alongside 220MW of battery storage co-located at wind and solar plants in the US state of Texas. The new projects brought EGP’s cumulative capacity up to about 54GW.

The 5,120MW of new capacity built in 2021 was 2,014MW, or 64.8%, above the previous record set in 2020. EGP also set a record for production from green energy sources, with around 119TWh generated in 2021. Wind and solar accounted for 55.4TWh of the total, up 9TWh year on year, while hydro plants generated 57TWh and geothermal 6TWh.

EGP’s pipeline of renewables and battery storage projects also expanded to a record 370GW in 2021.

Capacity gains in 2021 were led by Latin America, where 1,950MW in new renewables plants was built, mainly in Brazil and Chile. North America added 1,384MW of new capacity, followed by Europe – primarily Spain and Italy. Another 754MW came from Africa, Asia and Oceania.   

While wind edged out solar in 2021, Bernabei expects the technology split in coming years to see about 60% of new capacity from solar and the remainder from wind. EGP remains firmly focused on onshore wind projects, given the higher Capex and longer investment timeframe required for offshore wind. New geothermal and hydroelectric power are set to play a marginal role.

Bernabei stressed that construction has already begun on 60% of the 21.2GW in renewable capacity EGP plans to build in 2022 to 2024. “For 2022, all sites are open and under construction,” he said.

The value of stability

According to Bernabei, that the recent spike in energy prices has been “neither positive nor negative” for renewable energy producers, but has helped trigger a reflection among some energy consumers.   

“It was already clear that renewables were cheaper [than fossil fuels], and now this is even clearer,” he said. “People have also started appreciating the value of stability,” he added, “and are increasingly understanding the best way to buy electricity is through a long-term power purchase agreement (PPA).”

EGP already uses PPAs extensively in the US, where the regulatory framework facilitates their use and customer demand is high. In other markets, such as in Europe, “there are things that need to be fine-tuned on the supply and demand side”, he said.

For 2022, the EGP boss sees the major obstacles to growth lying in permitting and supply chain constraints, although he sees room for cautious optimism on both fronts.

After slowing in some parts of the world due to personnel shortages tied to the Covid-19 pandemic and the need to digitalise authorisation processes, Bernabei anticipates permitting could continue to be an issue at the start of the year before becoming less of a problem as the year progresses. He noted “some administrations have organised themselves well” and proceeded with digitalisation.

“We are still suffering from delays in the transport of equipment worldwide given that activity is slowed down in ports,” said Bernabei. “We think this will last the first semester and also ease in the second half of the year.”