Enel SpA (ENEL) Earnings Call Transcript & Summary

Great. We are now good to start. Attention on the screen, please. Okay. Our CEO, Francesco Starace will illustrate our 2030 vision. Our CFO, Alberto de Paoli will walk you through the 2021-2023 plan. And before moving to questions, Francesco will share some closing remarks. During the Q&A session, I will call analysts connected either via Webex or call. Please raise your hands in Webex or send to us an e-mail to investor.relations@enel.com to book yourself. Now it's time to go. I hand over to you, Francesco.

Thank you very much, Monica, and good morning to everyone. Welcome to our 2020 Capital Market Day. The evolution of technology has transformed the energy since its inception. This is a trend that is today in evident acceleration. This is bringing about a rapid transition to a more decarbonized and sustainable planet. In this transition, electricity is a winner. Renewables are displacing thermal generation in the world energy electricity generation mix. And in 20 years, global renewables capacity is projected to grow more than 4x. You can see this in the chart here, vis-a-vis today, creating a huge market for global leaders. The increased share of renewable energy at lower economical and social cost is allowing consumers to opt for a higher share of electricity consumption. This increasing share of renewable energy supports this trend of growing electricity consumption. And this, in turn, supports growth in demand volumes and requires new services, creating new market opportunities for utilities. Infrastructure power grids, we connect growing renewable capacity and will have to become more resilient against extreme events and run at a higher quality of service and reliability levels. Digital networks will be at the heart of the new energy world and indeed, digital will be at the heart of the utilities of the future. So this thrusting and accelerated change of landscape will require utilities to become the center of a very complex system as summarized in this chart. Energy transition dynamics allow an expansion of traditional utilities' business models, adding circular models to asset-intensive and linear ones that are the ones that we have seen so far. Utility will not just act as owners and operators of assets but might become enablers and orchestrators of more complex systems. These systems will be composed of a multitude of distributed generation assets, such as renewable power plants, storage solutions, charging stations and also electric vehicles. Digital platforms will be key to manage this increasing complexity, driving a sustainable energy transition within the evolution of regulatory networks -- regulatory frameworks. Scale and efficiencies are gained through reuse and plug-and-play models, which in turn will reduce marginal costs. Utility clients are consumers and prosumers at the same time. They buy innovative and sustainable solutions and services and they will get access to shared value pools. Innovation is boosted, thanks to an open, fast and inclusive approach, allowing multiple stakeholders to participate into the innovation process. This will happen while driving data flows across company structures. How that takes place? In the new energy world, digital platforms are replacing the traditional siloed approach and the organizations that we have used so far. This means shaping a multilayer digital architecture connecting data, data lakes, as they are called, and solutions. The new platform-based architectures enables the adoption of a platform operating model, flexible and modular by definition, which is based on reuse and will reduce marginal costs. The implementation of a platform business model built as a service, such as demand response for large customers for the electrification of public transport systems and a strict compliance with an increasing amount of regulation around these very things. We believe regulation will play a key role in the evolution of this model across the utility industry. Let's see how we are preparing for this transition and where are we today. Enel future is leveraging on a strong leadership position that we have. We have created the world's largest private renewables operator with 49,000 of renewable capacity and we are the fastest-growing player in this space. We have the biggest network system with more than 74 million end users, and we are the most advanced in digital transformation and management of the networks. We manage the largest number of customer base, serving 70 million customers around the world. And the results that we have just achieved in 2020 are proving the resiliency of our integrated business model. We have 163% total shareholder return achieved over the last 5 years, which is a recognition of the industrial value we have created over time. But we are not just leading in terms of dimensions, we are also leading in terms of evolution in the transformation that we have started in 2016. We are now on Slide 8. Four years ago, we have kicked off a massive digital transformation journey. We have setting -- we have set the foundations to evolve towards a digital company. We have completed successfully our cloud transformation in April 2019, being the first major utility that is now 100% over the cloud. This transformation has a significant impact on the performances of our business in terms of scalability, automation, efficiency and accessibility. For example, global renewable business maintains its own position, thanks to an operating and maintenance platform and leverages on a worldwide platform-based development and engineering and construction model, which I shall illustrate later on. Enel X designs its offering to all customers according to a unified digital platform. And networks are converging their different operating models into a single platform, driving operations worldwide. Being a platform-based utility is enabling Enel to capture new opportunities to create value. We see 2 complementary business model emerging in our way of doing business. The traditional business model, which we call ownership. Here, platform play a role in making and enhancing this traditional business model to be more profitable so they drive efficiency into the system. And then there is a second business model, which we named stewardship. Here, the business model enabled by platform sees Enel as a catalyzer of investments of third parties, providing services, products, know-how or also co-investing. So it's a way of enhancing our capabilities, multiplying the way of projecting value around ourselves, helping others also co-invest with us. With this business model setup, Enel is positioned to fully benefit from the emerging opportunities. Where are these opportunities? Over the next 20 years, a total of $26 trillion will be required for an adequate renewables development, so we're talking about $24 trillion. Average annual rate of investment will be 4x higher than what has been the average investment rate of the last 10 years. This is on renewables. On networks, fuel investment will grow more than 2x compared to the period -- the last 10 years, the period 2010-2019. This will reach accumulated amount of about $12 trillion. Investment into improving end user energy efficiency, electric mobility included will increase, on average, more than 5x compared to the last 10 years, reaching a total of $14 trillion. So this whole figure adds up to a total of $50 trillion that will be invested into the power sector in the next 20 years. These are figures 2020-2040. Thanks to the leadership that we have, the dimensions that we have and the business models that we have put in place, we are perfectly positioned to capture the value that will be available to accelerate in this transition. We plan to mobilize investment for about EUR 190 billion over the next 10 years. We plan to invest around EUR 160 million of this EUR 190 billion up to 2030 through our ownership and stewardship models. We will also catalyze EUR 30 billion of third-party investment in the process. In 10 years, the group will add 95,000 megawatts of renewable capacities, which will more than triple the 2020 installed base. We expect 75,000 of these to be fully consolidated in our books and the rest to be managed by [ 4 ] third parties. As we grow our renewable business and in line with the transformation of the energy systems, we will invest in our regulated asset base that will reach EUR 70 billion of RAB, around 70% higher than today. Enel X will grow its solutions to business to B2B, B2C and B2G customers growing accordingly as you see in Chart 12. Now if we look at how these 2 models evolve over this period of 10 years, we first look at the classic ownership business model, which is shown here on Chart 13. The investment is accumulated amount of EUR 150 billion. They will result in a large increase in renewable consolidated capacity. It will reach 120,000 megawatts in our books at the end of 2030. Despite a projected decline in power prices, which we believe will happen, growth will not be at the detriment of returns, mainly thanks to efficiency and scale. An increase of 35% in RAB over end users, so this is a ratio that we put in here, this will happen as new CapEx will be triggered by new and distributed renewable capacity to be connected, coupled with the need of increasing levels of quality, reliability and resiliency to networks. And the growth of value per customer of 2x will happen when the completion of a global operating platform to manage customer operation worldwide will lead to a substantial decline in costs. The ownership business model, we couple with global -- with a growing importance of the stewardship business model, which is depicted in Chart 14. Within this model, operating platforms, business platforms and joint venture and partnership businesses will generate a cumulative EBITDA of around EUR 17 billion in the period, in the next 10 years period, vis-a-vis an investment by Enel of around EUR 10 billion in the same period. This -- don't forget, this EUR 10 billion will also attract another EUR 30 billion of investment by third party. So 50% of the overall investment of EUR 40 billion will be allocated to renewables. The rest will be evenly split in fiber, electricity transport and flexibility. Operating platforms will generate around EUR 4 billion of those EUR 17 billion in the period and business platforms around EUR 10 billion of those EUR 17 billion. Platform-enabling joint venture and partnership activities will account for about EUR 2.8 billion of EBITDA. The value associated with this last business will not be catalyzed entirely during the period. We calculate that our joint venture and partnerships will have an implied fair value at the end of the period, so in 2030, of around EUR 10 billion. These 2 models, ownership and stewardship, create long-term sustainable value. EBITDA and net income compound annual growth rate by 2030 are set to increase by mid- to high single digit with a good improvement to profitability over the period growth, and the group financials are supported by business ambitions that I will detail later. Before that, let me show you what we think will happen in our decarbonization, electrification and massive use of platforms in this period. As far as decarbonization is concerned, we have put some key figures and some performance indicators in front of you, first of which being that renewables will save more than 200 million barrels of oil equivalent by 2030 or around EUR 11 billion of costs and will reduce greenhouse gas emissions by 80% vis-a-vis 2017. Thanks to the push in electrification, we see households savings around 25% of the energy bills and a 40% reduction in their emissions if they switch to electricity. Enel's actions on decarbonization and electrification will create more than EUR 240 billion of GDP over the period between now and 2030. Investments into digital platforms, it will improve significantly the quality performance of our networks, with reduced emissions and will allow our C&I customers to save more than EUR 800 million cumulatively in the period. All of the business lines are contributing to value creation, setting sustainable long-term ambitions. And let's start now with a little bit of a snapshot of these ambitions. Here you see renewables. We plan to become and retain the role of renewable supermajor, with the world as a geographic footprint. Our ambition is to further strengthen this supermajor position that we enjoy today. We will triple our total renewable capacity to 145 gigawatts versus the 49 gigawatts that we have today. This will grow our global market share from 2.5% -- today, we have a 2.5% of the global [ yearly ] installed base to above 4%. So although this seems a very big growth, please bear in mind we're still a tiny portion of the very large renewable energy universe. So there's a lot of space there. We will be able to maintain profitability, thanks to our global operating platforms and the integrated position that we have along the value chain. The EUR 85 billion cumulative investment that will be needed to achieve our goal will be supported and made possible by the fact that we have the world's largest and most diversified development pipeline in the industry. The ownership model, and now let's take a closer look at how we work. And first, we start with the renewables ownership model. We will add in the period 75,000 megahertz renewable capacity, reaching around 120,000 megawatts owned at the end of 2030, which is 2.7x the current installed base. I want to stress here 1 point. We consider renewables to be the generation capacity of the future, so there will be no more difference between renewables and thermal generation. There will be generation and it will be, by far, renewables. We will value this renewable business as a component of the integrated value chain, not on a stand-alone basis. The technological split of new addition will be fairly balanced between solar and wind. It will deploy in all markets where we today already have or might build in the future an integrated presence along the value chain. So we are really looking at the integrated value chain approach. To back these growth ambitions, over the next 10 years, we will be investing around EUR 60 billion in the development of renewable capacity, a blended EBITDA CapEx return of around 11%, as you see on the right-hand side here of the chart. And this will be in line with the overall return we have on our asset base today. The stewardship model is interesting, too. The effort on this business model from our side will catalyze about EUR 20 billion of investment, of which 90% from third parties, resulting in more than 20,000 megawatts of capacity build and subsequently managed by us, mainly through joint venture and partnerships. In this part of the business, we will invest around EUR 2 billion. Third-party development fees, operation and maintenance contract fees, capital gains for the sale of developed projects will generate EUR 4.3 billion of adjusted EBITDA by year 2030. So at the end of the period, we estimate the value of the existing joint venture and partnerships, which will be in place at that time to be about EUR 3 billion. Now how can we do this -- based on what kind of tools? And the first and most important one is the existence of this pipeline. Today, we manage the largest renewables pipeline in the world. This is a pipeline that exceeds 140,000 megawatts today. This is an increase of about 50,000 megawatts. If you remember the pipeline we presented to all of you last year, it's about 50% compared to that pipeline -- 50% higher. And this provides a very, very large reservoir of capacity from where the group will pick up the investment opportunities in the coming years. Growth ambitions are on generation. But for the first time here, we show also a part of the pipeline which is about storage. Here, we have today 70,000 megawatts of storage investment opportunities, of which 3,000 are in mature state. Finally, of all this pipeline, 9,000 megawatts are today in various degrees of execution state. The technological split of the mature pipeline is well balanced between wind, mostly -- wind is onshore and solar, covering a geographic footprint that is unmatched at this point by any other player. I stress the point we see our footprint as being the world. The development of such a large pipeline benefits -- how can we manage this? This is based on the fact that we have built a platform that manages this pipeline in an integrated manner. Here you see, on the left-hand side, the presence of our business development effort. In more than 30 countries, we are employing around 450 people in our employees, and they themselves interface with a little bit more than 1,000 external people working on these development efforts. They all enjoy and share their business platform. This is a digital platform that provides project developers and planners with a common interface for pipeline management following every stage, from the individuals [ counting ] until handover to engineering and construction. This setup offers extreme flexibility, extreme adaptability and enables a very wide geographical spread seamlessly. Our development platform is very efficient. We invest about EUR 1 billion to support this expansion over the next [ few ] years. And at the same time, we project to reduce the unitary cost of development by 10% in a ratio of cost of development per megawatt. Now this is a platform that we have developed and used for business development. Similarly, we have a digitized platform approach for our engineering and construction processes. And this is shown on this part of the chart. As always, on the left, you see the geographical footprint, on the right-hand side, some key figures. Engineering and construction is a global community. This is run today by 1,600 employees and more than 12,300 external workers that are on our sites every day. This global platform manages today little less than 100 projects under construction, a number that grew remarkably since 2010, thanks also to automation solutions that are used in around 30% of our sites today. These solutions, together with expanding know-how are resulting into a 25% reduction by 2030 of the project lead time and an improvement in efficiency of our workforce, as you see in the reduction of headcount per megawatt in execution by 9%. Then we move to operation and maintenance and this is another platform-based operations. Today, we have about 4,500 workers. They are assisted by another 5,000 external colleagues. They manage 1,200 plants around the world that comprise 16,000 generation units in 23 countries. 100% of the fleet is manageable remotely. Around 86% of our workers are provided different degrees of digital equipment. This globally spread platform will support a decline in OpEx per megawatt for renewables of around 10% by 2030 while reducing production losses by an average across solar and wind by 7%. Now in the next 2 charts, we are going to show some opportunities that are unfolding in the front of renewables hybridization. The first one is the mix between battery storage and renewable capacity. We believe batteries will remain -- will develop quickly as a key enabler of system flexibility and reliability in this energy transition. In this next decade, the group is going to increase its battery energy storage by 20 terawatt-hour capacity, with aim to have an integrated competitive decarbonization offer. This will be value accretive. We have evidence of that nowadays because it will reduce the exposure of renewables to unbalancing costs, system costs as well as curtailments and network congestions. It will generate additional margin through capacity payments and auxiliary services. It will open to renewable actions that will target integration between renewables and storage. And we see this kind of auctions taking place more and more often as networks understand the need for flexibility in their own daily operations. Through 2030, Enel will invest EUR 5 billion in the hybridization of the existing renewable generation plants, adding battery storage to them. In terms of returns, we estimate on storage an EBITDA CapEx ratio of more than 15%. Then let's talk a little bit about green hydrogen. Our vision is based on the possible breakeven economics of green hydrogen vis-a-vis other CO2-intensive ways of production of hydrogen today. This business model will be mainly based on 3 types of revenue streams. We, first of all, have proceeds from green hydrogen sales to industrial customers that are operating in sectors in which emissions are hard to abate. The second is proceeds from ancillary services sold to the grid by the renewables hybridized with green hydrogen plants and, of course, proceeds from the sale of electricity, which is not diverted to the electrolyzers. At present, we have projects under development in Chile, in the U.S., in Spain and Italy, as you see in this chart. But any of the markets in which we are present today could, in principle, be considered for wind or solar plus electrolyzers. We expect to grow our green hydrogen build capacity to more than 2,000 megawatts by 2030, following the reduction of cost of electrolyzers, which could materialize in the next 5 years. So you can imagine the concentration of these 2,000 megawatts that we project concentrated in the second half of this period between 2020 and 2030. Now let's take a look at how the capacity and production of this global power generation will look at the end of the period. So what kind of picture comes out after all this is said and done. And you see that this slide summarizes the evolution of capacity and production through the next decade. At the end of this decade, Enel will double its total capacity from 88,000 to 170,000 megawatts, with a share of renewables representing more than 80% from a 55% that we have today of its total. Total production will be 85% of today, with more than 3/4, 80%, as you see here, represented by renewables and the remainder being basically gas and essentially modulating services as coal generation will be completely shut down. And as far as coal is concerned, you see here the downward trend of this way of producing energy. We have further reassessed our coal phaseout strategy. We will exit coal by 2027, no more 2030. That is 3 years later (sic) [ earlier ]than what we had communicated last year. This chart also shows that this acceleration of coal reduction started in 2017, with the share production coming from coal decreasing by a mere -- to a mere 7% in 2020 compared to 28% that we had in 2017. So it's already sharply decreasing. The phasing out of coal protects generation margins, increases over time the profitability of our asset base. This also allows us to boost the reduction of greenhouse gas emission in line with a 1.5% scenario. We want to underline here that we expect to reach around 218 grams per kilowatt-hour, Scope 1 emission, in 2020. Let's remember that in 2015, we have set a target that was certified by the Science Based Targets initiative for this 2020 year of 350 grams per kilowatt-hour, so we are 40% lower than what we had already projected in 2015. Second point, in September 2019, we announced a new target for 2030, consisting of a 70% reduction of CO2 emission per kilowatt-hour versus 2017, reaching a level of 125 grams per kilowatt-hour. And this has been certified by the Science Based Targets initiative under the 2 degrees pathway. But lastly, on October 30, we announced a further step-up of our ambition, setting a new emission target for 2030 from 125 to 82 grams per kilowatt-hour. This has also been certified by SBTi and as compliant, no more with the 2 degrees but a 1.5-degree scenario pathway, which is today the maximum ambitious possible. In addition to that, and you see in the lower part of this chart, we are set to reduce by 16% our Scope 3 indirect emission by 2030 in consideration of the ongoing electrification of energy consumption. So this is a reduction of the gas we are selling to our gas and retail customers and it's a 16% reduction of Scope 3. Now that's for generation. Let's look at networks. Enel Networks' ambition is to reinforce its position as a global leading player in scale, quality and resiliency. The efficient management of network will be enabled by adoption of a platform operating model, which will run on an increased level of digitalization of the infrastructure, as we have explained. We see a growth in the RAB [ to ] the regulatory asset base is growing with investments aiming at ensuring the highest level of quality at the lowest cost possible across grids. Our proprietary assets management and product know-how such as more smart meters will be monetized. Infrastructure will enable a more proactive role of customers, facilitating electricity choice as an individual contribution to sustainability. We see networks as a large and most important enabler of this growing trend of electrification worldwide. So investment in networks will increase steeply. The group will deploy around EUR 60 billion of cumulative investment over a decade, with an average yearly CapEx which is going to be 1.6x higher than the 2020 levels. And around 60% of this is projected to be spent in Europe. Around 70% of this will be devoted to further improve quality, where resiliency will be the main key driver to better withstand the increase of load associated with electrification and also the extraordinary external events that are associated with the consequences of climate change, unfortunately. About 20% will be invested in connection with benefit from the growing demand driven by urbanization and electrification of retail consumption and a 10% to further digitize the infrastructure. Well, now you might question, "Oh, this is fine. What happened with the tariffs? This is a lot of money so what about the users?" We think that the full digital transformation of infrastructure, the size and the scale of operation will lead to on optimization in operation and maintenance costs and the capital spending and that will result in superior efficiency levels. We expect the group system average interruption duration index, world average, to drop to 100 minutes by 2030 and the number of interruption that a customer will experience to decline by 1/3. We will increase, therefore, significantly the level of quality granted to customers and also maintain flat tariffs, thanks to efficiencies that are the ones resulting from this big digital transformation effort. So better quality, more resiliency, same tariffs. Now how do we do this? And how do we go about maintaining this digital platform worldwide? This is a single platform operating model enabled by the completion of the digital process we started. This will lead to improving quality, resiliency, efficiency and flexibility. We are creating a system where resource allocation planning is optimized worldwide. Engineering and construction standards enhance quality and capital productivity worldwide. Management of the asset is integrated, including planning, dispatching and execution in the same concept, in the same methodology worldwide. And routine activities are lean and data driven -- you can understand the advantages of a worldwide network system that manages such a large operating array of networks. The unparalleled scale of the network operation is depicted here. Today, the networks that we manage engage 90,000 people, out of which 35,000 are our employees. These 35,000 are about half of the total group headcount so you can say half of Enel is Networks. And it is, in many ways, in terms of EBITDA, in terms of employees, it's a large operation. And thanks to our employees, we run today 11 networks worldwide. We manage 74 million customers worldwide. We have 2.2 million kilometers of lines. Most of our customers are already served by digital meters. The platformization and digital transformation of our networks will support a reduction in OpEx per end users, as you can see here, of about 17% by 2023 when compared to 2020. Over time, we have built a strong knowledge about what a digital asset means, as you see on Slide 34. Enel has been an early mover in asset digitalization. And we are crystallizing proprietary expertise and know-how on smart meters and integrated systems. We have been the first operator worldwide rolling out massively smart meters since the beginning of this century, thereafter proceeding with the full digital transformation of network management and operation while most of the DSOs have started this process a decade later. The pace of smart meter deployment progressively accelerated. Today, we have full coverage of our end users in the key geographies of Spain and Italy already in 2020. Thanks to the second-generation smart meters and sensors spread over the distribution network, Enel is able to collect more than [ 7,000 billion ] data every year in Italy, information that we use to optimize network operation via predictive maintenance, load balancing, revenue protection, both in terms of quality and efficiency. This knowledge that we have built in time opens us new business opportunities. This is the first time that we show this concept to you. We were surprised to understand and become conscious of the fact that we have been -- become the third largest vendor of smart meters worldwide. We have evolved this concept into a full-fledged ecosystem of digital network systems, digital network devices and applications that run our digitized networks. Enel's mass meter technologies are among the most advanced ones in the sector because they rely on more than 20 years of experience in the refinement of the product. And the equipment is designed by Enel, implemented with leading-edge technologies that enable futureproof abilities and functionalities. Smart grid technologies are necessary to enable distributed energy resources and demand side flexibility. We think this is a business of the future in ways that, so far, we have not explored completely. Now if we move to customers, we have 3 categories. The first 1 is B2C so this is retail customer. In the business to customer segment, we will enable electrification, aiming at accelerating the adoption of highly to fully electric behavior in our customers. We have the largest power customer base worldwide in markets that are at different stages of liberalization and that are subject to different degrees of unbundling regulations. And the opportunities stemming from digitalization will be fully captured across these differences to provide a personalized experience to all our customers while unlocking very high and very strong operating efficiencies. The progressive elimination of regulated tariffs on some markets will unlock new sources of value. However, we believe regulators will continue to play an important role in energy retail markets. We don't think these markets will be as wildly deregulated as other commodities have been in the past. And in face of this regulatory attention, we see good opportunities for value creation on a per customer value basis. So we have a positive view of regulation, if you want. On B2B, we want to be the leading energy partner of global and local businesses, supporting and accelerating the path to sustainability and energy efficiency. Within the small, medium enterprise segments, we see customers increasing the electricity uptake -- so increasing their shift to electricity, and we see further value generated through beyond commodity services such as flexibility and customer insights. Even small companies have to be extremely careful about these parts of the value chain. Large and multinational customers will continue to increase their commitment to sustainability targets. They're really into it big time. And this will open additional opportunities for Enel by offering integrated offerings and portfolio solution to cover their needs. Traditional offerings such as PPAs, which was the first, if you want, tool we used in this space, they will couple with new services that are becoming very, very important, demand response, energy insights and e-mobility solution, coupled with pure supply of energy. On the B2G, so on government and institutional level, we are going to support administration in reaching the goal of decarbonization and long-term sustainability, mainly in large metropolitan areas. Cities currently account for 70% of the world energy demand, so 70% of the world energy demand has to do with what happens in cities. And they also account for 70% of CO2 emission worldwide, so cities are really very important going forward. And by the way, by 2050, 70% of the world population will live in cities compared to 55% of today. So not only cities are important, they will become more important going forward. So electrification of transportation and other areas is key to ensure a proper carbon footprint and a massive digitalization can be a driver in this for all municipalities in order to reduce the emission and make life in cities more human. Enel will support cities towards this part of transformation through electrification of public transportation, integrating this offer with mobility digital services, as for example, we have done in Italy on city analytics. To reach 100% decarbonization target, cities will need PPAs and distributed energy storage as well as production, which are part of current offering of our group. Platformization will open to new business opportunities, pushing on data valorization and operational efficiency. Now how do we manage all this? And this is another footprint that you show -- that is shown on the left-hand side of the chart here. Where are our customers today? You see that we have about 42 million customers in Europe and 28 million customers in Latin America. It's a big customer base, about 70 million customers, 60% of them in developed areas. In Latin America, these 28 million customers, 95% sit in very large metropolitan areas. So in all -- basically most of the large metropolitan areas of Latin America are our customer base. In this current position, we think we are unique. Enel can take advantage from energy transition trends, both in Europe and in elsewhere in the world where electrification is undergoing, dealing with the decarbonization that -- that is becoming a key driver in the development of this part of the equation. Market dimensions and ongoing elimination of regulated tariffs create new value pools coming from the scalability of operating and business platforms. On this journey, Enel can leverage on its digital platform and expertise. And we see here on Page 40 that retail operation can take huge advantage by digital operating platform. You can imagine, this is a huge digital universe, lots of data and repetitive operations of basically transactional nature. A globally unified customer operation and sales force management platform enables fertilization of best practices, a quick rollout of new services and products, cross-selling and also the diffusion of subscription business models. The automation of predictable and replicable processes in AI apply to complex processes, unlock cost efficiencies and operating efficiencies. Digitalization enables also new services that are customized and integrated with the offering of Enel X. They are defined globally and then rolled out locally. Enel X is running this on a digital platform from the beginning. This is a digital-native business. For B2C customers, Enel X works through its interface, JuiceBox, and groups is offering an open charging contract at fixed price for recharges of electrical vehicles. Through Enel X Pay, which is a proprietary app and system, we promote bill payments at a discount while engaging with customers that will have access to a wider range of digital financial services. We sell home equipment together with operation and maintenance contracts and insurance coverage to B2C customers. For B2B customer, Enel X manages one of the world's largest demand response portfolios, which is rapidly growing as regulation recognizes value for customers, and this will enable this business model to be widely spread in more and more areas of the world. For B2G customers, we complement our electrified public transport offering with commodity contracts, which also certifies the green content of the offering. Now where is this creating value? It is creating value for everybody. If we achieve these ambitions that we have just underlined in front of your eyes, let's start what this means for the operations of Enel. 80% of our electricity we will generate will come from renewable energies, as we have said. We will add 95,000 megawatts and more than 2,000 megawatts of green hydrogen over 10 years, supporting these decarbonization targets. Electrification will progress across customer segments, and the 100% smart meter coverage of all the networks will enable new services and will support efficiencies. This will create value for our customers, for society and also for the environment. The customers will enjoy a sharp improvement in quality of service while at the same time, will enjoy savings on energy bills and participate in the economic benefits from beyond commodity services. Society and environment will benefit from a sharp contraction of greenhouse gas emission and more than EUR 250 billion of GDP created by our local investment. And we will work substantially to improve the rate of [ secularity ], reducing material and fuel consumption in the group power fleet. As far as we are concerned, decarbonization our generation fleet means improving margins, reducing costs, accruing savings and reducing risks by eliminating phosphate fuels dependence. Electrification and integrated offering will significantly push up the value per customers in the B2B and B2C segments. The group platforms will open new businesses that will contribute to margins and will build up future value and reduce operating costs along the value chain. So what about our shareholders? We have set a very simple policy. This has 3 characteristics. It is simple, it is predictable and it is, in our eyes, quite attractive. Shareholders will receive a guaranteed fixed dividend per share over the next 3 years, which results in a 7% compound annual growth rate to 2023. The implied average 3 years dividend yield, together with an 8% to 9% compound annual growth rate in earnings, will result in a total return to shareholders of around 13%. Beyond 2023, we see ample growth, ample space to grow dividends. And every year, we will add 1 more year of visibility as we roll this plan forward. Given the significant opportunities associated with investment into the energy transition, you've seen the space that is opening in front of us and the capabilities that we put in place to profit from that space, we see [ total ] return as the appropriate metrics to measure shareholder remuneration going forward. So no more complex formulas, 3 simple numbers guaranteed for the next 3 years. I now hand over to Alberto to deep dive into the '21-'23 business plan targets. Alberto?

Thank you, and welcome, everybody, to our 2019 (sic) [ 2020 ] Capital Market Day. So my task is to drive you through the 3 years plan and also to show you how the 3 years plan will be the first 3 steps towards the 10 years Francesco has outlined. The next 3 years will be the stepping stones towards our continued leadership in 2030 through an acceleration of the effort of both the ownership and the stewardship model. Our group will activate around EUR 50 billion of direct and third-party investments. And in the 3 years' period, the outcome of massive investments is clearly visible in the key operating figures for [ 2033 ], showing, across all businesses, double-digit growth versus 2020. Renewable capacity is set to reach around 68,000 megawatts, out of which 60 gigawatts consolidated and 7.6 gigawatts under the stewardship model. Regulated asset base would grow around 14%. And finally, main KPIs for new services show significant progress, position us further to lead the energy transition. Now moving on the other chart so we can look closely on the ownership model. And here, we will invest around EUR 38 billion, with a growth rate in investments versus last plan of around 40%, which compares with the 10% plan-on-plan increase over the past 3 years. Almost 90% of the CapEx is allocated to Networks and Renewables totaling around EUR 33 billion in 3 years. Value creation remains strong across businesses. Global power generation sees return on new investments remaining sound, despite increasing competition, thanks to the key role that global platforms will play. RAB end users, growth on new investments that support quality and resiliencies with 70% of them deployed in Europe. The retail customers' value will increase driven by electrification, new services and continued market liberalization. As you know by now, the ownership business model is complemented by the other one, the stewardship business model, which we see now on Page 52. Investment mobilized for around EUR 10 billion, out of which EUR 2 billion directly invested by Enel will be concentrated on renewables, development, fiber network, e-transport and flexibility systems. This model will generate, in the next 3 years, more than EUR 3 billion of EBITDA, out of which around 50% from operating and business platforms and the remaining from partnership and joint ventures. This model is constantly expanding. The fair value of contracts will reach EUR 8.6 billion in 2023, a value that is more than 2x the value of 2020. The fair value of stakes in joint ventures and partnership would be EUR 4 billion, a value that is more than 20% higher than 2020 without considering the EUR 1.6 billion that will be realized during the plan period. The compounded effort of the ownership and stewardship business model will impact the value creation visibly in the short and the long term. EBITDA will grow at mid-single-digit CAGR to 2023, broadly stable throughout 2030. Net income for the '21, '23 period will increase at a high single-digit CAGR due to continued optimization of our financial management and the ongoing simplification of our structure. This will push our group net income EBITDA up by 300 basis points. These economic results will be delivered on sound financial strength that we see on Page 54. So you see that despite the step-up in CapEx, our leverage ratios will remain very solid. Enel's net debt-to-EBITDA ratio will stand at the level well below the average of our closest peers. And FFO on net debt reaches 26% in 2023, 400 basis points higher than 2020 driven by improving cash conversion. Let's now deep dive on the business lines, starting with power generation. The next 3 years will consolidate our position as a renewable super major in a market that will expand significantly. Newbuild capacity is set to reach around 20 gigawatts, up by almost 40% versus previous plan, bringing us to a total installed capacity in 2023 of around 68 gigawatts. Combined deployment of ownership and stewardship will result into a deployment of EUR 21 billion of CapEx accumulated. The growth rate in investment versus last plan is set to be around 35%. Leveraging on our E&C platform, annually built capacity will increase to 6.5 gigawatts and up by almost 1.4x versus current, gearing up towards to 9.6 gigawatts per annum targeted for the decade. On the next slide, we take a closer look at renewable development under the ownership business model, where you can see that we will add in the period more than 15 GW, leading to 60 GW of own installed capacity in 2023. More than 2/3 of newbuild capacity will be in countries where the group has an integrated presence. Wind and solar will remain balanced as we continue to use profitability as the main investment criteria. Gross CapEx for '21, '23 will be -- will total EUR 16.8 billion, out of which, EUR 15.7 billion for development of new capacity and reminder for maintenance. Profitability will remain stable, both on EBITDA CapEx and IRR spread over WACC, supported by the unparalleled level of our pipeline, our scale, flexible capital allocation as well as the integrated position along the value chain. Now we move to the stewardship business model on Page 58. We will build more than 4 GW of capacity under the stewardship business model, mainly in the Asia Pacific region and in Africa. Enel will mobilize EUR 3.9 billion total CapEx, of which EUR 500 million are direct investments of Enel and EUR 3.3 billion undertaken by third parties. Development fees and operation and maintenance contracts will generate cumulative EBITDA of around EUR 300 million. Through the next 3 years, we will grow the future value of contracts by 30% to EUR 1.1 billion on the basis of the margin of contracts in place as of 2023 that will be deployed on a residual life of almost 20 years. The value of our participations in joint venture and partnerships is estimated to reach around EUR 1 billion, doubling the value in 2020. And now we focus on the visibility on the delivery of our targets, starting with our pipeline. And I'm on Page 59. As said, today, Enel has the largest renewable pipeline in the world with more than 140,000 MW and the best global development platform. Breaking down our mature pipeline of 57 GW, we have 33 GW with potential commercial operation dates in the 2021-2023 period and 22 GW for the 2024-2025 period. 80% of our pipeline is currently in countries where we are already present, mainly with an integrated presence. Let's now see in detail how this unmatched pipeline safeguards and drives our growth targets. With respect to the almost 20 GW targeted additions, we have now 8.7 GW in execution and have received a target of 10.8 GW. Comparing this to the 33 gigawatt mature pipeline for 2021, 2023, we end up with a healthy ratio of 3x coverage on the remaining gigawatts to be addressed. If we split the overall ratio by geographic clusters, we obtain a similar result, providing extreme confidence on the 2 areas that will grow the most in the ownership business model. We have also 3.2x multiple of other countries, highlighting how increased pipeline development effort worldwide. Taking into account the 2 point -- 24 GW mature pipeline for the period beyond 2023 and the results shown over time in terms of pipeline growth and conversion, we sit comfortably on the 3 years' guidance and with our medium-term objectives. Before we move to financial results for the business, let's take a look at the overall industrial KPI for 2023. As you can see from the chart, we will significantly decarbonize our generation over the next 3 years and beyond. Overall capacity will increase by more than 10 GW, with renewables addition more than offsetting the shutdown of coal. The share of renewables goes up by 15 percentage points, and a larger perimeter production follows the same with an overall growth of around 50 terawatt hours, driven by renewables, which will account in 2023 for around 70% of total production. The sustainability of our generation portfolio increases drastically with CO2 emissions down over 30% and well on track towards our 2030 target. And now on Page 62 on the financials. These changes will lead to a significant improvement in profitability. Global power generation EBITDA will reach around EUR 7.7 billion in 2023, up by 13% versus 2020. Growth in renewables is the main driver of the period with incremental asset base contributing for EUR 1.5 billion, further complemented by EUR 300 million associated with the existing asset base. Conventional generation EBITDA is set to decline by EUR 900 million on lower coal margins, market dynamics affecting our gas portfolio, lower contribution of new [ gas ] assets, partially offset by efficiencies. Production mix, more skewed to renewables, will push EBITDA per megawatt, up by 20%, despite a 2% decline in power prices over the period. And ongoing efficiencies programs will result into a 7% decline in OpEx per megawatt ratio. We will now move to global infrastructure and network. I'm on Page 63. To extend our global leadership in networks and advance towards the 2030 ambition, the growth rate in cumulated investments versus last plan is set to be above 35%. This compares with an average increase on the last 3 plants of around 5%. Our RAB growth will grow by around 14% to 2023, reaching EUR 48 billion, fueled by investments on increased quality and digitization of the grid. Quality of services will improve significantly, recording a 20% reduction in the average duration of interruption. In our countries of presence, returns are clear and visible for 2021, 2023 as regulatory frameworks are stable and with limited regulatory events happening in the period. Ongoing discussion with regulators sound really constructive, both in overcoming the COVID crisis and on addressing future evolution of regulations. Moving now to the CapEx plan. The group will deploy EUR 16.2 billion CapEx over the next 3 years, pushing up the annual average investment to around EUR 5.4 billion, up 37% versus the 2022 plan. 70% of CapEx will be spent in Europe, with an increase of 46% versus last year. 65% of CapEx will be dedicated to improving quality across the board; around 23% to new connections, driven by urbanization trends; and the remaining to the ongoing digitalization of our grids. CapEx acceleration will drive up -- RAB up double digit. The RAB in, RAB out ratio for 2021, 2023 at 1.4 clearly highlights growth accrued in the period. Investments will enable significant progress on digitization and quality. And I am on Page 65, where you can see that the ongoing effort on digitization will bring the share of digitalized end user to 64%, up 4 percentage points. The smart meters coverage rate could be higher should Latin America regulators approve the deployment of smart meters in their respective countries. We expect to reach 100% as said in -- of digitalized end users at the end of the decade. In terms of quality and resiliency, we expect an improvement in both the main quality index, which are set to decline by 90% on average. As a result, our networks will become more efficient with OpEx/end users ratio reaching around EUR 34 in 2023, 17% less compared to 2020. Let's now have a look on how managerial action translates into financials. Networks EBITDA will increase by 19%, reaching EUR 9.5 billion at the end of 2023. Main drivers of this growth are associated with the EUR 300 million increase in RAB volume -- revenues on the back of higher investments; about EUR 400 million for efficiency program linked with a major operating platform implementation that will result into a decline, as said, in OpEx/end users for around 17%; EUR 500 million for increasing tariff due to inflation dynamics, partially offset by declining regulatory returns; and EUR 300 million for higher volumes, mainly in Brazil, where the impact of COVID-19 has been particularly strong. We will now take a look at the main drivers on the retail business, starting with business to consumer. I am on Page 67. The value of our business to consumers will increase by around 30% throughout the plan, thanks to 3 distinct dynamics: 10 million customers will be added to the free market, mainly transitioning out of the regulated segment; increased electrification of consumption trends and new onboarded client will support a 55% increase in volumes sold to the free market; and customers will trigger an increasing demand of beyond commodity services in the electrification path. The increase in customer value will not be limited to B2C as we see also in the next slide, where now we look at the B2B business, where we want to be the leading energy partner of global and local businesses by supporting and accelerating the path to sustainability and efficiency. With regard to small and medium enterprises, the number of clients is forecasted to grow by around 70% to around EUR 3.2 million in Europe. The end of regulatory tariff in Italy will take the major role in this increase. Customer value for the B2B segment is set to grow by more than 40%, and the main driver is associated with beyond commodity services on flexibility and customer insights. Additionally, customer decarbonization targets in need of energy efficiency will support an increase in volumes sold. On large and multinational clients, Enel is going to leverage on the integration of its global presence and scale in traditional offerings such as PPAs with new services like demand response, energy insight, e-mobility solution, with the aim to increase significantly the number of multinational companies into our portfolio. And last, moving to the B2G, business to government, to our business, towards cities. And I'm on Page 69. The effort of the group in the next 3 years will be directed towards supporting B2C with particular focus on cities. In their effort to reduce spending, municipalities look for more efficient and environmental-friendly solutions from street lighting, where we plan to increase our offer to 3.4 million of units. There is a 17% increase versus today; and in e-mobility, where we will add more than 200,000 public charging points in the 3 years' period and more than 5,000 electric buses via direct and indirect investments. Now on Page 70, you see how clients and volumes evolution are in Europe and Latin America. Our global footprint positions the group for evolving phases of market liberalization. Europe regulated tariff are progressively being eliminated, and customers will migrate to the free market. We plan a stable market share in the 3 markets with an increase of around EUR 10 million -- 10 million customers in the next 3 years. Our current plan, as you can see, does not anticipate the liberalization of LatAm countries by 2030. Should this kicks (sic) [kick] off, it will represent an additional value pool. And now on Page 71, we see a summary of the EBITDA for customers. As you can see, EBITDA will increase by 36%, reaching EUR 4.5 billion at the end of 2023. B2C gross margin will contribute for around EUR 500 million, thanks to the increase in volumes sold to the free market, electrification of consumption, which leads to unit consumption increase of around 4% and incremental needs for additional services. B2B gross margin will contribute for EUR 400 million, benefiting from recovery of volumes versus COVID-19 effect in 2020 and increasing marginality per client associated with flexibility and customer insight services. B2G gross margin contributed for around EUR 100 million, mainly thanks to services offered to cities. The efficiency program in real terms will add EUR 300 million to the 2023 EBITDA on the write down of an operating platform that will unify and digitalize customer operation. And to moving on the customer investment in EBITDA that can be divided into ownership and stewardship model, you see that retail EBITDA will increase 25%, reaching EUR 4 billion. EBITDA per customer will grow 30% to EUR 58 per customer, driven by migration of customers, increase in volume and decline in OpEx. As said, our stewardship business model will play a pivotal role in the services offered to our customers through our division Enel X where we will invest EUR 1.1 billion in the next 3 years' period with EBITDA that will have a fivefold increase to EUR 500 million. Third-party will invest around 74% of the total EUR 4.3 billion we expect to activate in the next 3 years. Now we can move now on the sustainable growth in value session. I'm on Page 74. And as you can see, more than 90% of our consolidated investments is going to be aligned to SDG. As highlighted last year, the group activities directly target SDG 7 9 11, all contributing to SDG 13 aimed at taking urgent action against climate change, which is a core priority for Enel. In addition, Enel contributes to all other SDGs by promoting a sustainable business model, pushing sustainable behaviors and leveraging through its stewardship model on SDG 17 to foster global partnerships in order to tackle the world multiple challenges. According, on the other side, to the EU taxonomy, our initial calculation is between 80% and 90% of our consolidated CapEx. This will be aligned to EU taxonomy criteria due to its substantial contribution to climate change mitigation. Utilities activities are, at the moment, not fully defined by taxonomy scheme such as our retail business, even if of a paramount importance to foster decarbonization and contributing to climate change. We, therefore, hope for a significant improvement into this scheme as we reckon it will be a reference for financial markets. All our global business lines EBITDA is set to grow, except for conventional generation, mainly due to the phase out of coal and the other dynamics we discussed before. We will now deep dive on how the value generated by Enel reverberates to all its stakeholders. As you can see from the chart, Enel, mid-term action will push decarbonization while creating value. The shift of generation technologies will result in higher profitability despite an expected reduction in power prices. Electrification and integrating offerings will expand customer value by an average of 30%. Digital platforms will create new business model, generating more than EUR 3 billion EBITDA in the period while supporting ongoing efficiencies across global business lines. And now let's take a look on how operations are supported by sustainable finance in our financial management. And I'm now on Page 77. Total sources of fund will reached around EUR 46 billion on a cash conversion of around 70% during the plan period, up by 10 percentage points versus 2020. The acceleration of capital expenditures will not affect our metrics and will allow us to maintain a stable 2.7x net debt EBITDA over the period. Furthermore, cash generation will have a stable profile, resulting into our FFO net debt ratio to remain stable at 26% over the plan and increasing 4 percentage points from the 22% expected in 2020. Going in details on the solidity of our credit metrics and liquidity profile, Enel has a strong credit profile as shown on the left-hand side of this chart, with a net debt-to-EBITDA ratio of around 2.7 expected in 2020 and in 2023, well below the average of our closest European peers. The level of yearly refinancing on average gross debt during the plan period is a mere 12%, 3% less than in the last 3 years. In addition, our liquidity amounts to over EUR 25 billion, covering 1.6x the long-term debt maturities in the plan, reducing refinancing risk. The strength of our balance sheet, together with ample liquidity creates stability and allow us to deploy investment needed to support the path to transformation as the group still retains headroom to capture future opportunities. On our financing need, we will continue to tap sustainability-linked instruments to support our growth. As you can see, sustainable finance sources now represent around 1/3 of total gross debt. This includes sustainability-linked bonds, green bond, sustainable loans, another form of subsidized financing. Our aim is to progressively refinance upcoming maturities and rise new funding via general purpose instruments linked with sustainable targets. As a consequence, the share of sustainable finance sources on total gross debt will increase to around 50% in 2023 and more than 70% in 2030. The cost of debt to our sustainability-linked bonds is, on average, approximately 15, 20 basis points lower compared to a plain vanilla bond, a level that we believe is associated with market recognition of the value of sustainability and that will drive our cost of debt reduction. The benefit of our sustainable finance are not limited to public bonds. As you remember, 1 year ago, Enel was the first and only company in the world to have launched sustainability-linked bonds. In the last 12 months, we have [ tapped ] the U.S. dollar, euro and pound markets for a total amount issued of EUR 4.4 billion. Through the sustainability-linked bonds, we have been able to create a link between sustainability targets and field. Innovative nature of our sustainability-linked bonds has been recognized internationally with the International Capital Market Association, publishing ad hoc sustainability-linked bond principles and ECB recognizing this new asset class to become eligible as Central Bank collateral. We have marked the way for companies aiming at financing their sustainable strategy with international company following suit and also starting issuing sustainable linked bonds. Beside bonds, the group has also included sustainability metrics into other financial instruments. We have signed around EUR 8 billion in loans, a revolving credit facility with a price adjustment linked to SDG 7. While in the first half 2020, the euro commercial paper programs of the group were updated as SDG 7 guaranteed Europe commercial paper program. In additional (sic) [addition], we benefit of around EUR 800 million of subsidized loan, and we expect to increase both public loans and brands in the planned period related to the European recovery funds. And in fact, as you see in now Page 81, EU will mark will make available about 1.8 billion -- EUR 1.8 trillion to support long-term economic growth. 40% of the grants will be made available to countries where the group is present, supporting an acceleration of investments in Europe. In particular, Italy and Spain will benefit of around EUR 150 billion, out of which, more than 30% have to be allocated on climate initiatives. More than 60% EU recovery plan is aligned with Enel business model, and we have already identified a wide range of eligible projects in the European countries in which we are present. Out of the total increase of investments of the plan, more than 70% is allocated to Europe. The sharp acceleration of our CapEx in Europe is connected with the grants and policy program made available by the European Union. In the next slide, I will go into detail on our financial strategy. And as you can see, thanks to our new funding strategy strongly to sustainable, our cost of gross debt is set to reach 3 -- 3.7% at the end of the year, 30 basis points lower than expected. We are planning to refinance about EUR 16 billion of outstanding debt and EUR 6.5 billion new funding out of a total EUR 1.18 billion at an overall expected cost of 0.9% versus current 3.7%. This is the result of the ongoing tightening of our credit spreads, also thanks to the progressive substitution of traditional instruments with sustainable finance and the continued low interest rate environment. A positive effect will also come from the ongoing centralization of finance with a share of new centralized funding on total new fund reaching 80% in 2023. On the right-hand side of this chart, you can see a remarkable decline in cost of debt compared to previous plan, translating in unchanged financial expenses despite an increased level of debt. And now a couple of points on our -- the derisking of our targets. As you can see from the -- this chart, our group has progressively delisted its operational and financial profile, leveraging on its integrating and sustainable business. This is evident when looking at the beta of our company, now at 0.85, well below the level of 1.14 recorded at the beginning of 2015. From an operational standpoint, the model continues to prove resilient, and it stabilized into 2021, 2022 period by the following drivers. Overall, the new plan foresees an 80% share of EBITDA from contracted and regulated activities, leaving only 20% exposed to merchant risk. Development on renewables is [ highly positioned ] with almost half of the target addressed in our extensive pipeline covering by 3x the residual portion. Almost 70% of renewable production is already sold forward, mainly through PPAs with our retail customer base, naturally hedging the remaining share. And now moving on Slide 85. You can see here how we secure production, and you can see from the chart that a whopping 96% of the generation margin in Italy and Spain is associated with the production of renewables and nuclear and entirely sold to the segment of our commercial portfolio that has shown a high degree of loyalty and stability over time. We have covered '21 for over 90%, '22 for almost 40% on a stable integrated margin, notwithstanding declining prices versus 2019. The management of margin in an integrated way with our retail portfolio provides us high visibility, limiting the downside risk. Now moving on Page 86. Our PPA sales portfolio amounts to 237 terawatts, up 24% versus last year and covers more than half of the accumulated '21, 2023 expected production. Quality across the portfolio is high with investment-grade buyers representing altogether more than 80% where previously, It is in this [ case ], still represent 80% of the total sold, but the growing share of C&I customer driven by electrification of consumption and the person of sustainability and efficiency of operation has gained further ground as it's now 20% of the total. Duration of the portfolio is skewed towards the long term. More than 50% of the contracts hold the tenor longer than 10 years and an overall average duration in excess of 12 years. Quality and duration of portfolio supports our targets of profitability and delivery, coupled with the constantly growing appetite of C&I customers. PPA sales will remain the staple of our renewable development and a key differentiating factors versus peers. And now let's have a look on targets. I'm on Page 88. Given the high current scenario volatility due to the pandemic, we have decided to move to range-based targets going forward. EBITDA is set to grow at a now to annual compound rate between 5% and 6% and net income between 8% and 10%. To underpin our confidence in the plan and to grant a total return to our shareholders in excess of 13%, we will pay a fixed dividend to 2023, growing at 7% CAGR, implying an average dividend yield for the period of around 5%. As Francesco mentioned, we expect our dividends to grow to 2030. And as we roll forward to our plan, every year, we will also provide a new fixed dividend for the last year of that plan. Thank you very much. And now I hand over to Francesco for the closing remarks.

Thank you, Alberto. And I want to, first of all, say that last year, we presented this strategy in Milan in person, and we had no clue on what was going to happen during the year after. I have to thank the dedication and the efforts that all our colleagues worldwide have put in their work during 2020 because it is thanks to them that the company has achieved its targets during a year that was absolutely unique in many ways. And I think that we can say that the sense of purpose that is part of our business comes stronger after this pandemia and during this pandemia, which is still raging, and helps us to enhance -- helped us to shape this strategy. And we know that we work for society. We know that we work to make progress more sustainable and that we have become conscious of this in a deeper way during this year. We have also become conscious of how digital this company is during this year. We have been able to basically flawlessly work in a very different environment, thanks to the fact that we have become much more digital than we even thought we would be. So when we look at these things together -- and that is something that helped us also shape the strategy which today, we are presenting to you with that, with a very strong physical position, our dimension, the efficiency of our operation, the global dimension in the global footprint we have and the consciousness of how digital this company has become. These two things put together shape the strategy and give us the, if you want, the vision that we have been able to present to you for the next decade dimensionally. This is an ambition which we have been able to pursue, thanks to the consciousness of our strengths and the fact that our people are totally focused and very motivated in pursuing a sustainable progress path. With more than 140,000 MW of renewable capacity, we will remain the energy leader in the global dimension of generation and will retain the role of renewables super major, which today we have. Adding RAB to RAB, we will reach a EUR 70 billion dimension in terms of RAB, which is also a very ambitious target. But that is associated with quality levels, resiliency level and flexibility level that are fundamental in the networks that we operate for the future and the development of electricity in the societies where we operate. And thanks to the digital transformation that we have put in place, our customers will be able to increase their share of electricity demand, enjoying a reduction in the overall energy bill. And that is something we are committed to and towards which we will keep working, creating value over the long term. Because we have been deeply rooting innovability and so innovation and sustainability in our operations during these years from the bottom up, we know that this is something that we remain in the chromosomes, in the genome of the company. It is thanks to this convention and this strength that we were able to offer also a very simple, extremely clear and attractive dividend policy going forward. We think shareholders should benefit from this approach as society as all of us and will enjoy the ride for the next 10 years with Enel. So thank you very much. And now back to Monica for questions. Monica?

Okay. Great. Thank you, CEO. Thank you, CFO. Now we can open to the Q&A session. We estimate to have approximately a little bit more than 1.5 hours, so plenty of time today. I start with a question from WebEx, and then I move to the questions that you have sent to our e-mail address. So the first question comes from Alberto Gandolfi, Goldman Sachs.

Hopefully, you can hear me. I don't like to start events by congratulating, but thank you. This is making our job much more interesting and you give us quite a lot to think about. So I had 3 questions. There a lot to talk about, but I'm going to start from this 3, please. The first one is trying to understand renewable super major status. What is the market share that you might be able to achieve globally? And maybe can you elaborate a little bit more what you have assumed in your plan in terms of the United States moving to net 0? New regions, you talk about Asia, Pacific and Africa. So I'm trying to figure out how do I know that 10 GW per year is reasonable? How do you know it's not 7 or 15? Your balance sheet remains very strong. And am I right to assume that the stewardship model could turn eventually into an ownership model? So you can enter into a region a stewardship and then it becomes ownership? Second question is about returns. So I was trying to understand, you typically used to say that EBITDA over CapEx used to be 10%, and now you're talking about 12%. Can I ask you where is this coming from? Is it more in emerging markets? Is it more merchant, so you have higher risk? Or is it just the competitive tension that is likely coming down because the addressable market is moving? And the last question is can you give us some tangible examples by division on the stewardship business model? So what is the typical renewable project? Where would you report it in the P&L? And if you can elaborate and help us maybe understand a bit more tangibly. I spoke very slowly because of a bit of return. You noticed I did not ask any question on the balance sheet M&A releveraging this year, but I noticed that your balance sheet still does not relever.

Okay. Alberto, thank you for the question. I will take question #1 and partially take #3, and then Alberto will manage question #2. So on renewables super major, you know that the view we have is that we have an expanding renewable energy space going forward. And this expansion in our eyes is not going to stop in the next 10 years, which is a little bit odd, but there are businesses that are contracting and others that are expanding. This is one that is expanding. And in our views, the expansion will have no stoppage in the next 10 years. So where we start, we start at the rate of our ratio of percentage of being kind of a large player but still relatively small in this space. We have 2.8, 2.7 year-on-year percentage of that market. So even with this incredible growth that we are projecting, with the multiples we have shown in the chart, we don't think we will get to 5%. We'll probably be a little bit below 5%. So it's an exaggeration to call us super major with a 5%, perhaps, but we will still be, by far, the largest company in the space, given the fact that this is a very large expanding space, which is today literally sucking in players from all angles of different businesses. So everyone is giving it a try. So 10 years is a long time. There might be a moment where consolidation might happen. But even in that case, we will be pretty well positioned in order to benefit from that. So on market share, where is the growth going to be? I think it's probably going to be in different times of the next decade. We see U.S. remaining a very big theme. Moving from one administration to the other at federal level doesn't really make such a big difference. We have not suffered from a slowdown during the 4 years of the Trump administration, and we think it will be benefiting the theme in general in the U.S. with the Biden administration. So we see the U.S. still remaining very large in terms of potential growth. We see potential of growth in Europe given the substitution effect from thermal generation into renewables. So Europe will still be a very big renewable energy theme for the next few years. For sure, the next decade, at least. In Asia, and particularly India, Southeast Asia will be a big part of this growth. Where is the stewardship model fitting in this? In renewables, basically, we see the stewardship model fitting in those parts of the world where we don't see any chance for regulatory or legal systems to have the possibility to build an integrated value chain position. So there are countries where by law or by regulatory frameworks, you are not entitled to put these things together. And in those places, value creation is possible on generation. But over the medium, long term, we think that is a place where we will develop projects. We'll then develop a joint venture, sell the majority to a third-party investor, which might enjoy relatively stable cash flow with PPAs attached. They remain as an operator. So some parts of the world. Today, for example, Southeast Asia is a little bit like that. Distribution companies are not really privatized at the moment. India is opening up, so India will be probably an integrated position opportunity. Mexico is not for constitutional reasons. So there are different situations. But the rule of thumb is can I have, in the next few years, position on the value chain? Yes or no? And that discriminates the 2 models. And then I just take an example for the #3 question is on renewables, I just give you an example. But another example could be a why not the networks? We could pan it up with investors and become a partial investor, not a consolidator investor in networks. But building value due to our incredible experience in managing networks and the plug-in digital platform we have assembled, into which you can plug in existing assets, make them efficient, run them as a whole of a system and create value. So that's something that we have not done so far, but it's something we could do in the near future. It's a very important and quite obvious value creation tool that we have. In the future, you've seen another example with fiber. I mean fiber is something we didn't have 4 years ago. Today, the value is pretty obvious to everyone. It's something we will keep doing in several opportunities whenever they will occur. So it's everything that has to do with potentially sharing value with others of the incredible capabilities that we have assembled in the company and the digital platform we have put together. On the #2 question, which is the returns, I think Alberto can give you some figures.

Yes. So Alberto, and so for your question, yes. On returns, I think you got from the presentation that we see a little reduction of returns looking at the 30 years' plan. Not in the next 3 years, which we see a sort of stable level of returns of our investments. Remember that we have already, say, 50% of the development under management. So we have already closed everything so we know exactly what the final number is. When it comes to how it's possible to manage this level, I would say, a balanced development plan. You asked if it is more Latin America, more Europe, more North America. It's quite balanced, I'd say that. So 30%, 30% and 30%. So we have roughly a 30% development in Europe, U.S. and also Latin America. Secondly, yes, we are backing more on long-term PPAs with C&I customers, as I said in the presentation. And we see here more room and ample room to keep margins stable with this kind of development. And for Europe, we back -- we still back our development on our customer base because we are going down of the traditional production like coal, and we are substituting renewables to the same customer that, as said, has a very high level of stability. All this stuff together is bringing the level of returns of EBITDA CapEx stable for the next 3 years. Then I said, we think that a little reduction in returns after 2023 will be possible looking at the market dynamics.

[Operator Instructions] So next question from the line of Harry Wyburd from Bank of America Merrill Lynch.

So I hope you can hear me coming from Southwest London here. I think this is a really great format. So I've got 3 questions. The first one is on the chronology of the returns in the plan. So I think if I've read correctly, you're assuming a slightly higher net income CAGR initially in the first 3 years and then slowing down a bit later on. I think if you look at the EBITDA over CapEx figures that you've guided to, they get slightly diluted in the 2030 plan relative to the next 3 years. And same for the IRR WACC spread. So I just wanted to understand why the target seemed a little bit softer in the latter years? Is it because you expect more competition? Is it because a lot of the low-hanging fruit in your pipeline is already picked? Or are you just being conservative? So just need to understand the chronology there. The second one is on risk management. Now you had useful small chart on, I think on Slide 84, saying that I think about 30% of your renewables capacity is going to be sold to your existing supply customers and a little bit more on forward sales. So my question here is how do you manage the risk that, I guess, ultimately, your supply customer sales are floating, whereas obviously a PPA is fixed. And do you think that's ultimately makes you your sort of earnings variability higher than perhaps some of your competitors who are selling only on PPAs? And do seem slightly higher WACC, for example, on that new capacity that's being sold, I guess, you can comment sort of soft merchant to your end floating price retail customers? And then finally, an obligatory one in sort of picking up a little bit where Alberto left off just on balance sheet and M&A. I think one thing that's been interesting is a lot of your peers have been doing some moderate-sized transactions. And I think perhaps, it's fair to say that the market has been willing to back, I think, some of those deals, even to raise equity to fund them with on some of your southern European peers. Has your view on M&A change? We know you get asked this on every single conference call every year or every quarter. But has your view changed in the last, say, 3 to 6 months after you've seen a lot of your peers do deals and perhaps after you've seen the market be maybe a bit friendly towards funding the acquisitions?

Thank you, Harry. It's always nice to see you. This time, we managed in a virtual manner. So yes, let me take this last question and also the one on the PPAs vis-à-vis retail customers, and Alberto will answer on returns. Yes, we've -- we keep this M&A approach open. And we've been active on M&A and sometimes successful, sometime less. We like renew -- we like distribution assets more than generating assets. We think this trend will materialize and continue in the future. So you would see us pursuing bolt-on M&A acquisition on -- mainly mostly distribution networks. And of course, this is always a function of what opportunities arise. And it's not something that you can decide on your own. So it's something we have to continue to pursue as we see this coming. But we think it makes perfectly sense, and it is the right time, by the way, to try and keep consolidating assets. This is, if you want, implied in the growth of customers connected to our networks that this plan has. I mean, you see that this number grows quite a lot, and it is partially due to the expansion, organic expansion of our networks and partially on the fact that there will be some networks added to the system going forward. On the risk management side, the -- let's say, there is an experience, which we all have on managing large customer retail portfolios. These customer retail portfolios have churn percentage. So what number of customers are leaving our portfolio every year. This number is roughly in the range of 10%, 14%, 20 -- 12%. This is between 10% and 14%, depending on the market. So if you assume that you stop your sales activities, which is not the case, so we keep this sale process going on, so the churn is just a number of customers that keep changing, but the number of customers remain even or sometimes, in certain geographies, keep growing as it is the case of Italy and for example, Romania. You can rest on the fact that you will always have that consumption of energy, that demand in your hands. So we make a point that this is an implicit PPA in many ways of a slightly changing year-on-year average price but roughly stable. So we consider that a very, very solid balance in the risk management concept, and it is indeed the reason why we pursue an integrated value position across the value chain. Because we think that is a value that materially speeds into the overall value chain. One of the reasons, for example, why we think it makes sense to acquire distribution assets is that acquiring distribution assets in many countries implicitly and explicitly brings new customers, in others only implicitly brings new customers because then you have to go about and sell energy to them in a different way. But it is a very, very strong advantage, and it is a very, very strong position to have. So I don't know if that answers the question, but we have a very strong anchor in the retail market position we have in certain markets that we consider a way -- in a way, a PPA with the benefits and the negatives of PPA. And then we -- for example, this year, we've seen the negatives. We had sold -- we have bought energy to sell to this demand and demand dropped, and we had to replace energy on the market and we took a hit. So it's another example that it is, indeed, in many ways, a PPA.

Harry, nice to see you on video. On your question on the difference of speed of growth between the first part of this plan and the second part. And so on the returns. Yes. Our returns is clear. So when we see 10 years plan, we think that in -- so in returns of renewables, also in possible market shares, we will have a compression. We think the competition will go up. We think that prices will go down because of the take of renewables. And we think on the other side, the LCOE would go down, not at the same speed. All the stuff together is going to compress a little bit the returns that we see in the long run. As said, this is not something that will affect the next few years also because 50% is already under construction, is already fixed. When it comes to different compounding annual growth rate of EBITDA and net income in a different period, EBITDA, you see in my page, in page I've shown, that is roughly stable. It's a linear growth of between 5% and 6%. Net income has a steep increase in the first few years because you have some things that are added to a normal growth, there are. So the COVID recovery, remember that the vast majority of the COVID impact is on bad debt, is on losses. So all this stuff, it is going to be recovered in the first year of the plan. The second is that so we are getting the most of the financial cost reduction because of the new issuing of sustainable finance and the interest rates that so we are taking the advantage that we foresee in the next 3 and then we have a scenario that will start to have an increase in the cost of debt. And finally, because we are massively so concentrating our simplification effort in the next -- in the first years of the plan through -- so increasing our economic interest in different areas of the world. Like -- so the deal that we are now doing and integrating renewables in Latin America and increasing our share of income -- our share in Enel Americas and other deals that we can do to further increase and simplify our structure. These 3 things are adding to the normal level of rate that this push in the first few years.

We'll move to next. Now I have to pay my due. Last year, there was an analyst that couldn't ask a question because we were restricted on time. So I call Lueder now. Please open the line of Lueder Schumacher from Soc Gen.

A number of questions from our side. The first one is on your renewable execution ability. You have been an early mover, but if I look at the incremental growth rate of your 3-year execution capacity, 3.9%, 4.7%, 5.1%, it doesn't seem that easy to speed this up. Can you maybe elaborate a bit on the main factors driving the increase in this execution capacity? And perhaps also more importantly, the bottlenecks that you are facing there because, obviously, there's all kinds of targets of renewable growth being branded about by all kinds of players at the moment, but it doesn't seem to be quite as simple to actually increase that. That's my first question. The second one is you target -- you mentioned it on Slide 19, I believe it was, an overall spread of a WACC of 150 basis points. But you did say that most of the growth under the stewardship model will be in the Asia Pacific, Africa region, what kind of spread of the WACC do you target in that region? And my last question is on Latin America. I do believe that the volatility in exchange rates that you mentioned as a reason for providing ranges is also the reason why this much loved detailed ordinary EBITDA table over the planned period has disappeared. But maybe you can give us an idea of what EBITDA for 2021 you expect for Latin America.

Thanks. Let me take the first question and then Alberto will fill the other two. On the challenging ramp-up of renewable, there are basically several bottlenecks. And you are absolutely right. It's not easy at all. It's something that we have taken very seriously from the very beginning. Maybe some of you that follow us from the very beginning, remember, the first year, we installed 200 megawatts, okay? And that, for us, was kind of a big thing. So it's true that to go from 3.9% to 4.7% to 5.1%, they are pretty sizable improvements and increases. But also, you have to see that we have done that so far. We have gone up gradually year-on-year. And every year, we have beaten our preceding year record safely. That means without making mistakes and without making large disasters, actually creating value. What are the key challenges? There are 3, basically. The first one is to have optionality in the selection of processes or projects where to invest. The pipeline is the key here. So you need to have a lot of pipeline in order to have -- sorry, let me just -- somebody has to click the video here. [Foreign Language] Okay. So sorry, this is a little bit of a bug that tells me that if someone doesn't click something in 29 seconds, something bad will happen. But no matter. So hopefully, something will happen in 22 seconds. So the pipeline is the key point in the presentation in development of renewables. If we have a pipeline that is about 3 to 4x larger than our projected investment in the period, then you can safely assume that, that pipeline will feed enough good projects in the overall curve. If you don't have that pipeline, that is the first bottleneck you're going to hit. And that we think that this is going to be a very important part of the development. For us, the pipeline is more than 3x the projected growth. So we are confident that this pipeline feeds the next 3 years. And you will see probably next year, a larger pipeline and so forth. Is there a limit here? So far, no, and we think the fact that we have a global position in the world ensures that the pipeline will keep growing at an adequate pace to feed this ambition. The second bottleneck is the capability to engineer and construct. This is perhaps the most complicated part because it entails a very large organization that must be able to contain the risks to spread the good practices and to, let's say, make sure that the whole environment where we work remains uniform across different geographies. Here, we have built a very solid team, a very large group of investors, of people that are able to take care of this matter. And so far, like we have said, we have about 100 projects in different parts of the world under construction. We had around 90 last year, 85 the year before and so forth. So this multiplicity of small-sized, medium-sized projects is what we want. We want to have granularity of investments, short-term cycle of investment so that we can manage stably our economics. And this comes at a price and the price of having a lot of good people working seamlessly, and that is enhanced by the digital transformation and the platforms we've put in place over the years. So these people work together into a single digital environment, and they communicate and work together in a very, very smooth way. And the third one is how to run this whole thing? I mean you need management that has clear accountability over these cases. And the organization we have set up from the very beginning, this is something we started in 2014, is one and one business line only, the responsibility of developing and building pipelines, and that is the global business line. So there's no interference but just help from the geographic dimension of our matrix organization. There's one single line and one accountability, which is very clear from now 6 years, so it's pretty ingrained in the organization, that helps a lot to make sure that people are aligned and perform.

Okay. So Lueder, so for your two questions on effects and for the spread in Asia Pacific. Well, taking account that we have -- so we are not changing spread over WACC for different areas because we are -- we have different WACC for a specific country. And our investment policies are set to have always 150, 200 basis points over that specific WACC to have the investment approved. So it doesn't change. But because you asked me on the stewardship model, remember that exactly -- so this kind of business allow us to try to find some third party that is keen to get a lower return because its intrinsic nature as a fund or other kind of partners and exactly to have around the contracts we can make the joint venture and the co-development that we can make with them to have a lower level of returns in the joint venture, and this is useful to win tenders. But on the other side, to make us to have exactly the level of returns that we are seeking for. That's why so this stewardship model works in -- particularly works for areas like India, South Asia, South Africa and all the Sub-Saharan areas. So that's the way which we work. On the FX. Latin America next year will have an EBITDA, in euro, of EUR 5.5 billion. That is, say, 25% of the total target. Remember when -- that when it comes to the impact you see on EBITDA, this is different from the net income impact. Remember that 10% variation in the assumption of FX in our business plan leads to a 2% variation in net income. That's more or less the rule of thumb that we have.

Okay. I think we can go to next question. Let's move to JPMorgan, Javier Garrido. Please open the line of Javier. Javier? Okay. Let's move to another analyst and then -- here we go. Javier.

Sorry, Monica. My first question was on the stewardship model. So you can elaborate more also in combination with the countries with potential integrated model. What are you booking for here? Are you looking for [ same ] integration with networks? Or is [ to move ], to have the opportunity to bring customers into your portfolio in those countries to consider even really integrated and therefore, make a transition from the stewardship model into the full ownership model? It will be very interesting to know your perspectives because you mentioned India as a potential candidate in the future. But given that you're a global player, it would be interesting to know where else you see the potential for that transition to happen. The second question is on your dividend policy. I understand that you are targeting, let's say, a more simplified approach to dividends with just a guaranteed dividend. But what is the rationale? What's the problem of keeping payout ratio as an additional, let's say, growth opportunity? Basically, in the past, you have the minimum guaranteed dividend. Why couldn't shareholders get an upside on potential performance if you keep a payout ratio as a potential source of upside? Then the third question is very specific. But taking the opportunity that you are talking of outlook to 2030, I would be very interested in hearing your latest thoughts on Italian hydro concessions, which in 2030, should have reached the end of their lives. And Italian concessions, not yours, have already reached that period. So what is your -- where are you in your discussions with the government? What is your thinking about what will happen in 2030 with your Italy and higher concessions?

Look, I think the question on the concessions is, I would say, perhaps a bit premature at this stage. I think the government that is today in charge will not be quite clearly in charge in 2030. So the view is a view that maybe has to do more with what is European evolution of concessional regulation over the next few years. And here, I think the debate is pretty open. Because there is a wide range of different concession regimes across the member states of Europe, which is something we have underlined in front of the commission, the previous Juncker Commission and the present commission, whereby you have member states with concessions that never expires. There are perpetual concessions in some European states, others with longer term other than shorter terms and so far. So disparity is pretty large. Why we bring this up is because this disparity creates a disparity in competition when it comes to concession regimes. Some players sit on concessions that never expire, but can't bet and can't bid on different concessions that may expire. And we think this is unfair and goes against the level playing field that Europe we should have. So I think the debate is more at the European level than at country level today. And we see some member states already exploring prolonging concessions, waiting for this European debate to settle and to find a common way. We think for us, we have our expiration in 2029. So I think for Italy, the moment will be to participate actively to this debate now and then decide on the concession tenders, if any of this sort will happen, perhaps 5 years down the road. That's as far as concessions are concerned. On the previous -- and the number one question, which is the stewardship model and its evolution, there are 2 answers. One is a short-term answer. So what about the next 3 years and then the longer-term 10 years. On the short-term answer, I think in the next 3 years, we have evidence that India will become a place where a player can acquire and manage a distribution network because there is an explicit plan of the government to divest in this sector. And we think this is an opportunity. There will be distribution assets put on sale in Europe. We have a process now going on. The U.S. has several players that have distribution assets in their hands, regulated distribution assets. Some distribution assets are in tender today, in this very moment, in parts of Latin America and namely Brazil. So this is something that in the next 3 years, we'll touch these geographies roughly. We don't see in 3 years, anything drastic happening in places where concessions are still not in place or where distribution assets are not possible. But in a longer time, you might think that maybe other countries or other geographies will open up to privatizing distribution assets. We're talking -- we're looking at, for example, Mexico or other parts of -- or Asia. So short term, I think the geographies I've told you will become -- are already more or less potential opportunities. Longer term, I think, Asia and some other parts of Latin America will become additional opportunities. On dividend policy, I think basically, we wanted to keep life of people less complicated. And we think the formulas don't really serve the purpose. I think the dividend is pretty strong, it's very simple, and then the most important thing is guaranteed for 3 years. We've seen that investors roughly prefer clarity and simplicity than complexity, and I would say conditionality and exposure to risk in this field. So that was basically the reason. Honestly, I think it's been a request that came from the largest part of the market. We don't see formulas, even complicated formulas, as we've seen in some expenses, helpful to the equity story, but rather complications.

Okay. We go to next question, I'll call now the line of Sam Arie from UBS.

Thank you for an excellent presentation. I have one question on numbers and one on bigger picture. On numbers, I think last year, you had a slide that was very helpful, which compared your estimated group cost of capital with your expected return on invested capital. I think one was a bit under 6%, the other was a bit over 10%. So you had a spread around 400 bps. I'm not sure I saw that in today's presentation, but I'd be really interested to know if those numbers have changed since last year or how you see group WACC and ROIC going forward. And then my bigger picture question is, if I may, I mean, I'm just looking ahead to next year. And there's a lot on the cards in this energy transition debate. There's a new leadership in the U.S. There's the UN Sixth Assessment. We've got vaccines now, so maybe we're moving on past COVID with the Glasgow conference, which was canceled this year, coming back next year. I'm just wondering, from your point of view, if you had a wish list, 3 things you might want to ask the global public sector for to help you in your energy transition activities, what would you want to see?

I like very much your second question, so I will take that one, and Alberto will take the other. But -- so look, I think the first wish list -- I only have 1 wish list, honestly, because I think the story is very clear. I mean, the development of electricity is the winning part of the energy transformation, and we are on electricity side. So that's okay. Just keep it like that, don't change anything. The issue which we would like every government to focus on is -- reflect on the fact that in order to speed up this investment flow, in order to accelerate the transformation, which is obviously a benefit from your own country, you have tools that are not fit for the purpose. And I'm referring to the complex of authorization processes that govern the investment part of this transformation. So we are dealing with an incredible opportunity in a given amount of time, but the ways which we all have inherited from the past, how do you authorize an investment, how do you control this investment going forward, how do you plan the network accordingly, they are all too slow, they are all too complicated, and they are all bottlenecks of different sizes in different countries, but they're all bottlenecks. There is not a country that is perfect, and there are countries that are widely imperfect. And I think that is the key point I would like to see solved because that is the limiting factor to the deployment of investment in a unitary -- in a unit of time. I would say that the U.S. today, even in the Trump administration, is still the most efficient authorization part of the process, is still the most efficient worldwide. And Europe is lagging behind in this field. It's very complex, cumbersome and sometimes frustrating exercise, even for large companies. So I think that's the only wish. I would like this wish fixed and the other ones we'll take care ourselves.

Yes, some changes are because we see in 2020, a further decrease in our overall WACC. So now we have roughly 20 basis points lower WACC, as an overall WACC of the company. While our ROIC is still stable and we see also it's stable the next year. And we think that we will be a little bit compressed going forward. But for the planned period, so not major changes. It's ranging around 9.5%. So we are working on almost 350, 400 basis points over WACC as ROIC return. So no major changes.

Okay. We go to next. We stay still in London. The next is Rob Pulleyn from Morgan Stanley. Rob, you should have your line open.

Thank you for the thorough presentation and the growth ambition to 2030. So three questions, if I may. You mentioned on the EU recovery fund that the EU grants are part of the support for higher CapEx going forward. So when do you expect to hear confirmation of those grants? And are there any risks that are now -- does not actually get those funds? The second one, and a little bit nitty-gritty, but may I ask on the macro assumptions, particularly on the FX in the back of the pack? And what informs these expectations and where they differ to the market at the moment, most notably on FX? And to what extent that is hedged? And thirdly, if I may just revisit an early question on the minorities, particularly in LatAm, and what degree of ownership is envisaged in this plan for 2023 and 2030?

Okay. I think on -- I will answer question #1 and #3, and Alberto will handle #2 and partially also #3. On the next-generation EU funds, the timing is during '21, obviously. Most countries will have to present. They will all present their project list and their investment plans to the EU and then wait for the feedback. The EU has set up task forces country by country in order to be able to manage this interface. So it's going to be pretty detailed and pretty complex. We don't see a risk in us not getting those projects that we present because we've been very careful in providing projects that are totally in line with the criteria that the commission has been very clear about. The criteria are the investment theme has to be in the direction of the green transformation of the economy; it has to have some digital content in its own strategy development; it has to create jobs. We cannot present projects that are part of the business as usual strategy. So this is something -- it's a mistake that we shouldn't make and obviously, we're not going to make. So things can always go wrong, but we don't see that a big risk. We are -- let's say, our strategy is fully in line with the strategy of the EU under this commission. So frankly, we don't see this a big issue. What might happen is, again, due to the syndrome I just finished discussing with the previous question, that things might develop slower than we all wish due to, let's say, the intrinsic viscousness of the authorization processes that still govern --- notwithstanding the good intentions, still govern the development stages in most countries of Europe. So I think that's the only risk we see, not getting the investment money or loans or grants, whatever they are. But the fact that this gets deployed over slower -- with a slower rate because of, let's say, difficulties in the implementation of permitting and things like that, that are the experience of every day in this continent. I think on minorities, we look at simplifying further the minority position we have in Latin America during this year. So you will probably see this change getting into '21. You know that this is something we have initiated in Latin America a few months ago. So I think this is something that will get us above the 65% threshold if our shareholders, together with us, agree on this combination of renewable energy assets into ENEL America. On 2030, we think we will keep listed companies in -- that will sit in this kind of environment. If you have liquid and functioning stock exchange and if you are the incumbent in that country, then it's much better to have a listed vehicle and this listed vehicle be listed. The perfect example is Endesa. It's a listed company, very successful in a very efficient and working stock exchange. We will not change this listing percentage. I think 30% is a good liquidity for this kind of vehicles. Other companies that are not functional to this will probably be delisted or consolidated. But every time we have this situation, Chile is another example like that, it will remain a listed company.

Yes. For -- so the FX impact, I would say, we are keeping a construct device on the emerging market currencies. So that are -- so a more optimistic view that is basic on so our deep knowledge of -- from the inside of the economies of the countries in which we work. And for a lot of also discussion and interaction with institution and for plans and programs. And we think that -- so this cyclical impact will be sort of recovered in the next years, giving space for also further possible increase in the FX. It's clear that consensus is different and -- but so everyone can take its final conclusion on what might be the final impact. And in the presentation you have in the next is we have assumption and also sensitivities on our numbers. And I remember that this impact might be -- is limited when it comes to the net income impact on our business. When it comes to euro-dollar, well, so also here, so we are looking more on the U.S. side. We think that U.S. has ample room higher than Europe to act on a financial measure and also act to monitor intervention. And on the other side, we think that Europe will more stay on a weaker euro to support export and to boost economic growth in the next years. This is the overall outcome. When it comes to hedge, remember that the vast majority of our production in Latin America is sort of hedged because it's dollarized in -- for the vast majority. And on the other side, it is not on distribution, but because distribution is linked to inflation, it is indirectly so hedged through towards FX via the inflection that every year will impact in the revenues of this -- of our distribution networks.

Okay. We go to next -- next is Meike Becker from Bernstein. Meike, the line is open now.

Let me start with one on the renewables return. For the different technologies, between solar and onshore wind, do you have different expectations? And if you break down the 50 basis point reduction in your returns, if possible, is there a mix shift, maybe shifting to solar? Is there also perhaps a view included? We have seen the risk for the sector coming down as the market has matured. So if possible, it would be great [indiscernible] to understand how that breaks down. The second question is, if I may ask you to take the crystal ball beyond 2030, how do we move from very low carbon emissions by 2030 to zero by 2050? I'm assuming that will have a lot to do with the gas generation. So I was just wondering what technology you see -- do you see in the lead for that to make it happen? Or is there also a volume aspect to that, just be less output?

Okay. And this is getting more and more interesting as time goes by because beyond 2030 is already almost science fiction. But what we -- what I can tell you today is that we think -- I know this seems a little bit contradictory, but I believe, by 2030, we will have so little gas left in the mix that this will not be a problem anymore for anyone. I mean this is something that will stay for some time just filling the gaps and sometimes just providing, how can I say, psychological comfort to a system that will probably accept the fact that it can live without even the backup of gas forever. But it will take another decade before we just get rid of it completely. I think it's -- gas will remain but very marginal, extremely marginal for a longer time than people think. From an emission standpoint, from a polluting standpoint, it will be completely negligible. The impact will be perhaps lower than today is associated with our chimneys in homes. So it's going to be very small. Now from a technology standpoint, I think 10 years is a very, very, very long time. I mean, probably in next 10 years, we would see changes in the generation capabilities that will be surprising us all, including me that -- I'm a veteran in the changes of this industry, but then I'm still surprised all the times. So we probably will have cash that will have more than 10,000 miles of autonomy charging from electrical chargers that today are not existing, and we'll see electricity getting in industries that today don't even think of it as an energy source. I think the debate on gas is going to be probably much more down to earth and less ideological. Once we all understand that this is a field that will remain in the mix, but will not contribute anymore to the emissions in a sensible manner. It will just be a reliable backup basically, okay? Then there is a big debate on hydrogen. And here, I think we just said what we think about it. It's only green hydrogen that interests us, and we think green hydrogen can become a competitive source of storage in the next 5 years, provided that electrolyzers costs go down a factor of 6. Seems a lot. But it's -- we've seen industries change that overnight. So we don't think this is going to be difficult for this industry. It can happen. But again, that's not a source of energy, it's a storage media. So it's a completely different question. On the...

On technologies, solar and wind. So in the short term, so in the next few years, so we still see no main differences between returns of the two technologies. We are working around 12%, both. It's clear that so it changes in every country in which we work. So there are countries in which solar is supported by, I don't know, in United States, ITC or so because of a very, very high level of radiation. So it's clear that we don't look at technologies. At the time in which we are in the investment community, we are looking at profitability and risk. So technology is only the best fit with a specific country with a specific regulation or the specific resource availability and also the better way to sell the energy in that country. So that's -- right now, it's the situation. If a technological breakthrough will happen, it's clear that so the profitability of risk will build towards a specific technology, and we will follow, increasing the rate of of that technology. If you see, our development plan is balanced. It's 50-50 because, more or less, it's not because we want to split it in two. Because the development in the countries in which we are, with the solar and other things, is bringing this picture. You know that our plan is not already undertaking and defined 100%. We have ample room to change, and we will follow, at the end, the rate of the 2 technologies in line with the best profitability we can get in the next few years.

Okay. Great. We move to next. I bet we are moving to Milan now. Please open the line of Antonella Bianchessi from Citigroup. I see the line is still closed.

Again, Monica, I think they haven't heard you. Try again.

Okay. The line of Antonella, can you open?