Commissione Ambiente con l’AD di Enel Green Power, Salvatore Bernabei.

On the topic of price and stability. Yes, these graphs show exactly that: prices go down and the implicit stability as I said before, when the price is fixed it is stable. Now you say, why did prices increase despite renewables increasing? Because the price of gas increased. Look, before 2020 the price of gas was 19-20, today it reached $60, now it is at 37-38. And that is exactly the dependence: I depend on the price of gas. Decoupling. The Ferix auctions, which according to forecasts will award 60 GW, we can estimate 100 TWh on a production, a national consumption that today is 320, could reach, say, by 2030 to 350 GW, so 100 of those 350 will be awarded with a mechanism that does not depend on gas, the Ferix auction. So one way to decouple is to hold Ferix auctions, give permits and build renewables. That decouples. Another way to decouple is to use PPAs, power purchase agreements, which can also be done with existing energy, but you need a counterparty, someone to sell and someone to buy. I tell you truly as an external observer, in Italy there is a lack of culture of Power Purchase Agreements, a lack of culture of taking a multi-year commitment. Italy is not the only one with this cultural problem. There are other markets like Colombia where we also work, where people don't want to make a contract for more than 3 years. In other countries like Chile, the mines, which rightly want cost security because they cannot risk being uncovered, make purchase contracts for 15-20 years. So it is a cultural issue in my opinion, but if you do a PPA you decouple because you negotiate directly and protect yourself from any fluctuation. So there are ways to decouple, we need to work on it, right? Now on the topic of hydroelectric. Today, the laws are what they are: they provide that to reassign concessions there are three ways. Either a tender, or a mixed public-private company, or a proponent initiative, the so-called Pro Faning, which makes a proposal on the project, then a tender, etc. We are the only ones in Europe with this type of definition. No one else does tenders in Europe. As Enel, we tried to file appeals in Germany, Austria, because they were reassigning concessions automatically or because they never expired, saying 'I would like to participate', and the German and Austrian courts said 'No, you cannot participate in German concessions as is happening with the basins.' So unfortunately in Italy, what does this framework entail? We wait for the regions to hold tenders with all the difficulties that entails. Beyond the national-local issue, there is a theme, I don't want to get into that discussion, you have already addressed it, but it is also burdensome for the regions to hold a tender. A tender is a demanding thing. You know how many hundreds of concessions we have, the small ones are thousands, can you imagine doing thousands of tenders? Everything would stop. I tell you this as an external observer. Then there are other countries that have decided that since it is a strategic asset, they go with continuity, or they never expire, or they are reassigned automatically. There is what is called the fourth way, which could be an exit: in exchange for an investment plan that I make on the territory, on additional production, on sustainability, there is an extension. This approach, which in my opinion is common sense, is something we can work on, which would guarantee visibility to all operators but also to the country itself. Because on hydroelectric, one thing perhaps not well known: people say hydroelectric plants are very old, built many years ago. I go around every month to see hydroelectric plants in Italy and abroad. For work I am the head of generation, and I tell you I am amazed by what we have done in Italy, but I am also amazed by the amount of investments needed to maintain it. Do you have any idea what it means to maintain a dam built 100 years ago? It is a huge investment, but one does not see it. They say, 'Ah, you invested in the plant?' Yes, but the plant does not last 1000 years, they need maintenance. We have the Italian service that is the most demanding in the world for historical reasons. I tell you because I have also been in France talking with the French, they have a different national dam system with fewer requirements. We have more burden in maintaining dams. It is possible to invest in hydroelectric and generate additional output. We have estimated that about 10 TWh can be added compared to current generation. Remember that consumption is 320, so 10 TWh more can be added if all operators have visibility of a possible, for example, renewal of concessions and make investments to upgrade machinery earlier than would have been necessary to obtain that additional production, or because it is obsolete. But clearly if concessions have already expired, which operator invests? Because the recovery of these investments is multi-year. So stability must be achieved as soon as possible in Italy, one way or another. With the current plants, I could obtain incremental production, what is called repowering, of about 10 TWh for the Italian system, not just Enel, because we are not the only ones working. In fact, I would like to remind that Enel has 13% of national electricity production. This is another thing that perhaps is not known. They say Enel is the incumbent, the monopolist, but today of all Italian production, Enel produced 13%. So we are not exactly the incumbent as one might think. But we do our part, we try to manage the plants, but this issue of hydroelectric needs a novelty, because the current situation does not benefit our country, I believe.