The Enel organizational model

As from February 2012, the Group has adopted an operating model designed to enhance operational flexibility, making Enel one of the most financially robust and, at the same time, most nimble companies in the energy industry. The model is based on the following organizational arrangements:

  • Parent Company functions, which are responsible for directing and controlling strategic activities for the entire Group;
  • global service functions, which are responsible for providing services to the Group, maximizing synergies and economies of scale;
  • business lines, represented by six divisions, as well as the Upstream Gas Function (which pursues selective vertical integration to increase the competitiveness, security and flexibility of strategic sourcing to meet Enel’s gas requirements) and the Carbon Strategy Function (which operates in the world’s CO2 certificate markets).

The activities of the individual divisions are set out below.

The Generation, Energy Management and Sales Italy Division is responsible for:

  • the generation and sale of electricity:
    • generation from thermal and schedulable hydroelectric power plants in Italy (through Enel Produzione, Hydro Dolomiti Enel, SE Hydropower, SF Energy and ENergy Hydro Piave) and in Belgium with the Marcinelle thermoelectric plant operated by Enel Trade under a tolling agreement
    • trading on international and Italian markets, primarily through Enel Trade, Enel Trade Romania, Enel Trade Croatia and Enel Trade Serbia;
  • provisioning for all of the Group’s needs and the sale of energy products, including the sale of natural gas to distributors, through Enel Trade;
  • the development of natural gas regasification plants (Nuove Energie);
  • commercial activities in Italy, with the objective of developing an integrated package of electricity and gas products and services for end users. More specifically, it is responsible for the sale of electricity on the regulated market (Enel Servizio Elettrico) and the sale of electricity on the free market and the sale of natural gas to end users (Enel Energia). As from July 1, 2013, following the acquisition of Enel.si from the Renewable Energy Division, these businesses were joined by Enel’s retail plant and franchising activities in Italy.

The Infrastructure and Networks Division is primarily responsible for the distribution of electricity (Enel Distribuzione) and public and artistic lighting (Enel Sole) in Italy.

The Iberia and Latin America Division focuses on developing Enel Group’s presence and coordinating its operations in the electricity and gas markets of Spain, Portugal and Latin America. The geographical areas in which it operates are as follows:

  • Europe, with the generation, distribution and sale of electricity and the sale of natural gas in Spain and Portugal;
  • Latin America, with the generation, distribution and sale of electricity in Chile, Brazil, Peru, Argentina and Colombia.

The International Division supports the Group’s strategies for international growth, managing and integrating the foreign businesses outside the Iberian and Latin American markets, as well as monitoring and developing business opportunities that should present themselves on the electricity and fuel markets.

The chief geographical areas of operation for this Division are:

  • central Europe, where the Division is active in electricity sales in France (Enel France), power generation in Slovakia (Slovenské elektrárne) and Belgium (Marcinelle Energie);
  • south-eastern Europe, with the development of generation capacity in Romania (Enel Productie), and electricity distribution, sales and support activities in Romania (Enel Distributie Banat, Enel Distributie Dobrogea, Enel Energie, Enel Distributie Muntenia, Enel Energie Muntenia, Enel Romania and Enel Servicii Comune);
  • Russia, with electricity sales and trading (RusEnergoSbyt), power generation and sales (Enel OGK-5), and support services (Enel Rus) in the Russian Federation.

The Renewable Energy Division has the mission of developing and managing operations for the generation of electricity from renewable resources, ensuring their integration within the Group in line with the Enel Group’s strategies. The geographical areas of operation for this Division are:

  • Italy and the rest of Europe, with power generation from non-schedulable hydroelectric plants, as well as geothermal, wind and solar plants in Italy (Enel Green Power and other minor companies), Greece (Enel Green Power Hellas), France (Enel Green Power France), Romania (Enel Green Power Romania) and Bulgaria (Enel Green Power Bulgaria);
  • Iberia and Latin America, with power generation from renewable sources in Spain and Portugal (Enel Green Power España) and in Latin America (various companies);
  • North America, with power generation from renewable sources (Enel Green Power North America).

The mission of the Engineering and Research Division is to serve the Group by managing the engineering processes related to the development and construction of power plants (conventional and nuclear), while meeting Enel’s quality standards, ensuring compliance with the deadlines and financial objectives set for it. In addition, it is responsible for coordinating nuclear technology operations, providing independent monitoring of the Group’s nuclear activities with regard to safety issues. Finally, it manages research activities identified in the process of managing innovation, with a focus on strategic research and technology scouting.

In the Annual Report 2013, the results by operating segment are discussed on the basis of the organizational arrangements described above and taking account of the management approach as provided for under IFRS 8. For that reason, the generation and energy management results of the Generation, Energy Management and Sales Italy Division are shown separately from the results pertaining to electricity and gas sales in Italy, consistent with the practice in previous periods and with the structure of internal reporting to top management.
In addition, account was taken of the possibilities for the simplification of disclosures associated with the materiality thresholds also established under IFRS 8 and, therefore, the item “Other, eliminations and adjustments” includes not only the effects from the elimination of intersegment transactions, but also the figures for the Parent Company, Enel SpA, the “Services and other activities” area and the “Engineering and Research” Division, as well as the Upstream Gas Function.