MILAN: Italy’s Eni will expand its renewable energies in Europe, the US and the Pacific by developing its own projects and making small acquisitions, the clean energy group leader said on Friday.
Eni, which currently has a renewable capacity of only 350 megawatts, has committed to reaching 15 gigawatts by 2030 and 55 GW by 2050 – mainly by building its own capacity.
“We’re practically starting from scratch, so we need a lot of greenfield development and some small mergers and acquisitions to reach our 2030 goal,” Massimo Mondazzi told Reuters. “You will see new projects in the coming months.”
“We are targeting Europe, where we want to supply our customers with the renewable energy we produce, but also the USA, Australia and some growing areas in the Pacific.”
Eni took a first step towards offshore wind on Friday, spending £ 405 million ($ 548 million) to buy 20% of the 2.4 GW Dogger Bank project off the UK coast, which is the largest in the world.
Mondazzi said Eni has no plans to make acquisitions, but rather to do small businesses to enter new markets and technology. In addition, Eni can buy small retail portfolios to increase returns and create platforms for new services.
He acknowledged that the payback periods for green businesses could be longer than for oil and gas, but said they are far less capital intensive.
Some analysts have commented that getting cheap renewable energy deals can be difficult as assets are sought and sold at high prices.
In October, Total’s CEO announced that a bubble was forming in the M&A market for renewable energy projects.
The company will maintain its solar business in Australia, where it is currently selling gas equipment as a platform for growth.
“It’s an interesting country and we want to build additional renewable assets there and possibly connect some customers to those assets,” he said.
Mondazzi, until recently Eni CFO, has been named head of a new Energy Evolution business that was launched earlier this year to look after renewable energy and other clean energy companies such as biorefineries and hydrogen.
Eni, one of the largest overseas oil and gas producers in Africa with operations in Latin America, has committed to cutting its greenhouse gas emissions by 80% in one of the industry’s most ambitious remedial measures.
It will devote 25% of its investment to clean energy in 2023, with oil and gas making up the lion’s share. But that will change.
“After 2025, oil production will decline and the gas plateau will rise. It is likely that by 2030 50% of the expenditure will be made for our energy transition,” said Mondazzi.
Eni’s existing oil and gas reserves in the portfolio of around $ 50 / barrel are expected to generate 94% of their total value by 2035.
“We have little exposure to stranded assets and we are very careful about what assets we develop anyway,” he said. ($ 1 = 0.7390 pounds)