In 2022, the government will allocate an additional 3.8 billion euros to reduce bills, canceling system charges and reducing VAT for households and small businesses. Thus premier Mario Draghi according to whom, however, a structural solution is needed and a reflection on the energy price mechanism must be made. The profits that the companies have had will be looked at, which will therefore be called to share in the greater common costs, stresses Equita.
Premier Draghi added that the energy produced by hydroelectricity and renewables has an almost zero price and they sell at the prices of gas plants with significant margins. In particular, hydroelectric – continue the analysts – has been amortized for some time and instead those who produce with renewables may have a position of benefit from higher energy prices driven by expensive gas (the reference is to solar energy with the energy account and to RES who have completed the incentive cycle). Minister Cingolani indicated potential measures on a ‘voluntary’ basis in the sector.
The fact that the government and the EU are evaluating structural interventions in the powergen sector is bad news because it increases the regulatory risk. The possible interventions we imagine could be: the introduction of a maximum price for hydroelectric power generators / renewables / WTE beyond which the greater compensation is paid to reduce electricity bills. It would be a manageable solution because the companies have sold forwards on prices well below the current ones and the introduction of a pay-as-bid system in which a market price will be defined for each technology, but with the introduction of caps. The risk would be on how the cap by technology would be defined. Hydroelectric plants usually have low capital invested and therefore a return on capital cap would be a risk.
Among the Italian utilities, the analysts of the Milanese SIM continue, the main power generators from hydroelectric production / WTE are Enel with 18 twh, a2a with 5 twh and Iren with 1.5 twh. Among the renewables with greater exposure to solar energy with an energy account and with terminated incentives, Erg (8-10% Ebitda) is mentioned even if the company has already sold forwards (and is therefore not benefiting from the price trend).
Furthermore, according to what is reported by the newspapers, among the measures envisaged by Draghi in the energy sector there would be the possible lengthening of the times for the liberalization of the segment of greater electricity protection. The process could be diluted in the time until January 2024 (starting January 2023). Liberalization is potentially slightly negative for Enel (net loser of the liberalization process) and slightly positive for the municipal companies (A2A, Iren, Hera, Acea) which can potentially increase the customer base by gaining market share in the various reallocation processes (tender) of the protected customers. The effects could therefore be “diluted” over a longer period of time with the government once again reluctant to implement full liberalization.