Operations

Net electricity generation

Millions of kWh    
 20172016Change
Thermal 43,754 35,525 8,229 23.2%
Nuclear 26,448 25,921 527 2.0%
Hydroelectric 5,038 7,288 (2,250) -30.9%
Wind 3,351 3,422 (71) -2.1%
Other sources 27 167 (140) -83.8%
Total net generation 78,618 72,323 6,295 8.7%

Net electricity generation in Iberia in 2017 amounted to 78,618 million kWh, an increase of 6,295 million kWh compared with 2016. This increase was mainly due to higher thermal power generation, which benefitted from the drought that affected Iberia in 2017, and greater electricity demand.

Contribution to gross thermal generation

Millions of kWh            
20172016Change
Heavy fuel oil (S>0.25%) 6,319 8.6% 6,254 9.7% 65 1.0%
Natural gas 9,750 13.2% 5,008 7.8% 4,742 94.7%
Coal 26,156 35.5% 22,413 34.7% 3,743 16.7%
Nuclear fuel 27,542 37.4% 26,993 41.9% 549 2.0%
Other fuels 3,865 5.3% 3,810 5.9% 55 1.4%
Total 73,632 100.0% 64,478 100.0% 9,154 14.2%



Gross thermal generation in 2017 came to 73,632 million kWh, an increase of 9,154 million kWh compared with the previous year. As for the generation mix, there was an increase across all types of fuels, especially natural gas.

Net efficient generation capacity

MW   
                             al 31,12,2017   al 31,12,2016Change
Thermal plants 13,030 13,030 - -
Nuclear plants 3,318 3,318 - -
Hydroelectric plants 4,752 4,764 (12) -0.3%
Wind farms 1,618 1,618  - -
Other 14 14 - -
Total net efficient capacity 22,732 22,744 (12) -0.1%

Net efficient capacity in 2017 totaled 22,732 MW, a decrease of 12 MW compared with the previous year.

Electricity distribution and transport networks

 2017 2016Change
High-voltage lines at year end (km) 19,560 19,539 21 0.1%
Medium-voltage lines at year end (km) 117,886 117,632 254 0.2%
Low-voltage lines at year end (km) 180,336 179,391 945 0.5%
Total electricity distribution network (km) 317,782 316,562 1,220 0.4%
Electricity transported on Enel’s distribution network (millions of kWh) (1) 112,004 109,201 2,803 2.5%

(1) The figure for 2016 reflects a more accurate measurement of amounts transported.

Electricity transported in 2017 totaled 112,004 million kWh, an increase of 2,803 million kWh, which is essentially in line with the development in demand.

Electricity sales

Millions of kWh        
  2017 2016Change
Free market 83,036 79,008 4,028 5.1%
Regulated market 13,478 14,482 (1,004) -6.9%
Total 96,514 93,490 3,024 3.1%

Electricity sales to end users in 2017 totaled 96,514 million kWh, an increase of 3,024 million kWh over the same period of 2016.

Performance

Millions of euro    
2017  2016Change
Revenue 19,994 18,953 1,041 5.5%
Gross operating margin 3,573 3,562 11 0.3%
Operating income 1,842 1,766 76 4.3%
Capital expenditure 1,105 1,147 (42) -3.7%

The following tables break down performance by type of business in 2017.

Revenue

Millions of euro    
              2017 2016Change
Generation and Trading 6,233 4,893 1,340 27.4%
Infrastructure and Networks 2,786 2,569 217 8.4%
Renewables 497 665 (168) -25.3%
End-user markets 15,798 14,121 1,677 11.9%
Services 475 249 226 90.8%
Eliminations and adjustments (5,795) (3,544) (2,251) -63.5%
Total 19,994 18,953 1,041 5.5%

Revenue in 2017 increased by €1,041 million due to:

  • a €1,677 million increase in revenue from End-user markets, of which €405 million for gas sales reflecting the increase in volumes in an environment of slightly rising unit prices. The increase in electricity sales was instead attributable to higher volumes sold in an environment of rising unit prices in the regulated market, while prices fell in the free market;
  • a €1,340 million increase in revenue from Generation and Trading, mainly associated with higher electricity sales in an environment of rising prices. Much of this revenue was generated with respect to domestic companies that sell electricity and is therefore also reflected in eliminations. In addition, there was the effect of the greater reimbursement received for costs incurred to ensure electricity generation in the extra-peninsular market;
  • a €168 million decrease in revenue from Renewables activities, mainly attributable to the drought conditions mentioned above that penalized hydroelectric generation, as well as the price adjustment relating to the sale of ENEOP recognized in 2016 in the amount of €30 million;
  • an increase of €217 million in revenue from Infrastructure and Networks operations, primarily reflecting the rate adjustments recognized in consideration of the draft ministerial order currently being finalized by the Ministry of Energy, Tourism and Digital Agenda.

Gross operating margin

Millions of euro    
 2017 2016Change
Generation and Trading 783 812 (29) -3.6%
Infrastructure and Networks 2,086 1,817 269 14.8%
Renewables 199 351 (152) -43.3%
End-user markets 467 677 (210) -31.0%
Services 38 (95) 133 -
Total 3,573 3,562 11 0.3%

The gross operating margin amounted to €3,573 million, up €11 million compared with 2016, reflecting:

  • an increase of €269 million in the margin on Infrastructure and Networks operations, which reflects the abovementioned prices adjustments and the effect of the recognition in 2016 of a number of charges relating to the early-retirement plan. The second factor had a positive impact on personnel costs in 2017 owing to the reduction in the average size of the workforce;
  • a decline of €210 million in the gross operating margin on End-user markets, essentially owing to the sharp increase in electricity and gas procurement costs, which was more than offset by efficiency gains, especially for personnel costs;
  • a €29 million decline in the gross operating margin on Generation and Trading operations, reflecting the deterioration in the generation margin, primarily owing to higher taxes on generation as a result of greater volumes produced (€72 million), in addition to the combined effect (totaling €63 million) of the ruling of the unconstitutionality of the tax on nuclear power generation in Catalonia in 2016 and the subsequent introduction in 2017 by the regional government of a new tax on nuclear power waste. These factors were only partly offset by the ruling under which Endesa is entitled to reimbursement of amounts paid for the “bono social” in 2016, 2015 and 2014, which had a positive impact of €222 million:
  • a decrease of €152 million in the margin from Renewables generation, which reflected the decline in revenue mentioned above and the reversal in 2016 (€28 million) in respect of the obligations for the construction and development of the Girabolhos hydroelectric plant in Portugal;
  • an increase of €133 million in the margin on Services, mainly owing to the €94 million reduction in personnel costs as a result of the combined effect of the recognition in 2016 of a number of charges relating to the early- retirement plan and the consequent reduction in the workforce in 2017.

Operating income

Millions of euro    
  2017 2016Change
Generation and Trading 191 187 4 2.1%
Infrastructure and Networks 1,367 1,047 320 30.6%
Renewables 12 89 (77) -86.5%
End-user markets 286 537 (251) -46.7%
Services (14) (94) 80 -85.1%
Total 1,842 1,766 76 4.3%

Operating income in 2017 totaled €1,842 million, including the effect of €1,731 million in depreciation, amortization and impairment losses (€1,796 million in 2016), an increase of €76 million compared with the previous year. The reduction in depreciation (€115 million), essentially due to the extension of the useful life of all the renewables generation plants, was partly offset by the greater impairment on trade receivables recognized in 2017 compared with 2016, primarily in the retail sector.

Capital expenditure

Millions of euro    
                 2017 2016Change
Generation and Trading 295 355 (60) -16.9%
Infrastructure and Networks 657 644 13 2.0%
Renewables 65 78 (13) -16.7%
End-user markets 55 53 2 3.8%
Services 33 17 16 94.1%
Total 1,105 1,147 (42) -3.7%

Capital expenditure came to €1,105 million, down €42 million year on year. In particular, capital expenditure in 2017 primarily concerned work on the distribution network (€657 million). This work was primarily associated with improvements in the quality of the service and the replacement of old meters with new generation smart meters, as well as with generation plants, largely nuclear and thermoelectric plants, amounting to €295 million.