Ladies and gentlemen, good morning. Thanks for attending the presentation of the Strategic Plan 2024-2035. It's a plan which ideally takes the relay from the January 2021 Strategic Plan. We have a busy agenda. Without any further ado, I would like to mention that we will be presenting with Luca Moroni the results of 2023, after which we have the strategic plan presentation with Mr. Mazzoncini. The Q&A session will be placed at the end of the presentations. I hand over to Luca Moroni.
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Thanks, Marco. Good morning, ladies and gentlemen, and welcome, also on my side, with the start, with the results of 2023, a year which has marked records in terms of group results, both in terms of profitability, margins, sustainability, financial soundness, and sustainability.
Let's start with the distinctive features of the year, as it's always the case, the positive factors and the negative drivers. We have had a very good year from a liquidity point of view. We have been able to manage proactively the energy scenario with a very effective hedging policy on the price of commodities. We have also been able to enlarge our customer base. Later, during the market business unit, we have a plus 420,000 net customers, also thanks to the award in the tenders for safeguard protection for other utilities launched at the end of 2022. Our RAB investments have enabled us to grow the RAB, so also the margin arising from the RAB and we maintain a thorough discipline when it comes to working capital and our net financial position as a consequence of that.
We have seen less production by thermal plants and a normalization of the ancillary services market with margins on MSD. Let's look at the results. They have been very positive. We had already shared the EBITDA performance, EUR 1.930 billion, growing by 30% vis-à-vis 2022. Net profit EUR 635 million, which is really an awesome result with an increase by 67% versus previous year. The acquisition also of flexibility in finance with a PFN EBITDA of 2.4 times with a net financial position closing the year at EUR 4.7 billion. We had already seen during the year the performance of the various business units. The increase in margins is mainly due to generation and trading and also merchant business.
Generation and trading, as I said earlier, we have had a very positive performance in industrial generation, a positive performance also in trading with great capacity and ability to manage the commodities prices with a view to hedging, to extrapolate better margins. Very positive merchant performance, recovering fully after a difficult 2022. In 2023, we have been able to express good margins also after the crisis that had characterized 2022, with closing down of some suppliers. Hence, the search among customers for more structured and reliable partners. The market has repositioned itself, and we have been able to manage the situation positively. On top of that, the award of orders in the safeguard market has allowed us to have better marginality.
We have invested in customer base retention, doing targeted actions so as to retain customers which, due to certain antitrust decisions, had seen a renewal of their offered prices at a time when there was a record in these prices. Also, the waste business unit is positive. We are investing in new plants, and also the grid and network business is growing thanks to the CapEx, to the investments in RAB. Here we see very quickly the various business units. You see an important increase in production from renewable energy sources, plus 35%. Good performance of hydroelectric plants and of all wind and photovoltaic solar plants that we have in full swing in our fleet after the acquisitions from Ardian portfolios. Some shrinkage when it comes to production of CCGT, an energy scenario which is now stabilizing itself. We have EUR 100 PUN single domestic price.
As I said, the MSD margin has reached mean levels that are comparable to the period before COVID, before 2020, when there was also the energy crisis. The market is growing. We have 420,000 new customers. We are growing sales of electricity and of gas also with higher profitability on average and also with higher volumes that we are selling. Waste business unit, I would like to draw your attention to the 15% increase in material recovery, which is a very important reference driver when it comes to our targets of Circular Economy. We have a positive waste collection performance. In the previous year, we had suffered from high energy prices, from the cost of fuels for our corporate vehicles. Here, we are closing the gap.
We are recovering also thanks to orders we have been awarded after tenders in some territories, not in the reference territories but in neighboring areas and also in flagship areas like Liguria region, Aosta Valley, Portofino, Courmayeur, just to mention some names where we have been awarded orders with good marginality. Positive performance also of waste treatment where the increase in marginality continues to be sustained and is very rewarding also thanks to investments in new plants in 2023. We have had full operations of two plants, one in Piedmont and one in Lombardy, and also a new line of WT always in Lombardy region. Smart infrastructure, so the grids, we see an increase in margins both in electricity and in gas grids and also in water cycle. There is some decrease in district heating.
Here, last year, we had benefited from an extraordinary situation relating to deferred tax assets. This business had benefited from this situation. This positive effect is no longer present. The reason some termicity effect. Here you see the acquisition that we have performed in plants we have acquired from SEA for management of heating in Milan airports. You see the RAB increases by 15% in electricity and by 7% in gas, so in line with our investment expectations. A quick look at what is happening to the P&L from EBITDA to net income. Here you see EUR 1.971 billion depreciations, EUR 800 million, increasing by about EUR 80 million year on year due to the effect of new CapEx and of perimeter. EUR 151 million risk provisions, plus EUR 60 million versus last year.
Last year, EUR 50 million were due to a release from a fund for postmortem items due to the increase in interest rates. This has been actualized, and the fund was the result of a more controlled 2022. Hence, the release. This was a one-off phenomenon. Financial charges, EUR 139 million. You see the net financial expenses. This is due to volumes and rates, combined. We have the bond placed in 2022 and in 2023 with a rate that was aligned to market rates, with smart operations, of course, but at a higher cost than in previous times. I would like to remind you that we closed the financial year with an average cost of debt of 2.5%. Taxes EUR 221 million, reflecting a tax rate of 25%, normalized 29% as in previous year.
Here, the difference is due to a positive extraordinary one-off item relating to taxes, and we close with a net profit of EUR 635 million. And here you see the EPS EUR 0.21 per share. CapEx, here we have only industrial CapEx excluding M&A in 2023 that have not been very significant value-wise. Here you see EUR 136 million with an 11% increase in CapEx, mainly in grids and in generation. In grids, due to the CapEx in distribution of electricity first and foremost and in plants with a start of the revamping project for Monfalcone plant, which will be replaced with CCGT, which will be operating with a blending of hydrogen and gas in the future. And then we have the percentage of CapEx, which is in line with the target, 72%, and with the EU taxonomy, always 72%.
Investments dedicated to the energy transition account for 70%, and to Circular Economy, they account for 30%. We have net free cash flow, EUR 1.2 billion, after having maintained thorough management of the networking capital. Here you see taxes, the extraordinary contribution due to solidarity EUR 122 million. As a matter of fact, we have self-financed our CapEx. We have completely done it, and this is something we will discuss also later. Here you see the change in net financial position, EUR 425 million. It's well controlled, well managed, and it gives us a very positive contribution to financial sustainability, also considering the growth of the EBITDA. That's all on my side for the first part. Questions will be asked at the end of the presentation. Now, a short break after which we will -
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Please feel comfortable because since I have a strategic plan 2024-2035 to tell you about, it's going to be a lot, but it's going to be interesting also to see through our eyes how we see the future of energy transformation, energy transition, and the circular economy of our country, of an important part of Europe and of our world. Let's start just giving you the closing of the first plan, January 2021, when we presented the first 10-year plan, 2021-2030. We were in the pandemic period. It was not possible to make a presentation like today with the attendance of the audience. Then, of course, we had some perplexities. For the credibility of our plan 2024-2035, I will start saying about the old plan as finished in 2028 with EUR 700 million CapEx.
We now have EUR 1.6 billion in the period 2021-2023. We have a comparison with actual, what we have actually done and what we had planned. We said EUR 5 million CapEx, and we did EUR 5 million CapEx. We had said that with the plan, we had reached EUR 1.6 billion of EBITDA 2023. We reached EUR 1.9 billion, and actually, we had this data net of the scenario fact. Of course, we were also lucky regarding the scenario fact. We had our plan now with the figures of the scenario numbers, we did in the plan 2021. EUR 1.7 billion is the result. We have indeed overcome the plan also in the EBITDA, and we had closed 2023 with EUR 400 million net income, and we have reached EUR 500 million net income, and we have reached over EUR 600 million.
But again, net of the scenario fact, we have overcome the old plan, and we have increased 40% and 90% plus with the scenario fact. So we're very proud of this figure, 24% of the total shareholder return. This is a really very good value in the period 2021-2023. And as Luca was mentioning before, we did that with various sector financial discipline. The ratio is 2.4 net debt EBITDA, and we thought 3.3, but that was another word. That was the year 2020, and so there was a different cost of our money at the time, and we know that we have become all more stricter, indeed. And also in this case, without the scenario fact, we would have obtained 2.7. And we have seized several opportunities to refinance the debt at very good conditions in the good years.
Now we have a debt that by 70% is ESG linked. ESG debt linked, meaning a sustainable debt with a good duration and a good cost. Under an industrial point of view, we have said that we would have reached 3.3 million customers, and we have reached 3.5. We said that we would have sold green energy 6.7. We have sold 6.7 with an installation of wind and solar of 0.4, and we have reached 0.6 without the hydro electricity. We have said that the RAB in electricity net growth would have reached EUR 900 million, and we have reached EUR 1 billion. Just this year in our electricity RAB, we have reached three times the investment we did in 2020. From EUR 70 to EUR 200 million.
Regarding waste, we add 0.9 tonnes of treated industrial waste, and we have grown a little bit less than forecast. This is more related to industrial decline we have experienced in 2023 and not so much to our performance. Continuous improvement in the water cycle leakage in our network. We have indeed improved very much, increased indeed in our investment and also in the RAB for water. Other important investments for certain aspects related to ESG, we had rated 20%, 21% of women in managerial positions. This is not easy in a technical company such as ours. We have the objective of 23%, and we are at 26.4%. Now we have 30% of ESG criteria in our vendor rating.
We are really doing very good work also in our supply chain so that the supply chain can follow us in the decarbonization process. We're talking about about 2,000 suppliers for EUR 2 billion purchases. Our plan 2021-2030 can be archived, and we're very proud. Now it's in the records. We did very good things, and we have this transformation of the growth into a life company we had announced in January 2021. In talking about our plan 2024-2035, we start from this. This is the agenda. We'll talk about the vision. It's quite mandatory if you look at 2035, but 2035 is really the day after tomorrow. We need some vision for that, and then we will explain to you the strategy we will implement and the financials as well. As I said in 2021, this is a real plan.
This is not a vision plan. This is a plan in which we have included all the things we did, the economics, investments, CapEx, EBITDA, and then IRR. So all the investments, from now to 2035. Why 2035? Because there are very important points at a European level. Just as you mentioned, some, for instance, the phase-out of electric vehicles. That is the symbol of electrification of consumption, the greenhouse, and then the waste. The target 65% for Europe of, indeed, differentiated collection with a fixed percentage to landfill, only 10%. And so as we did for 2030, the objective was to have a year with certain fixed points with respect to our targets and European strategies that we implement and we follow.
Let's start from the vision and from the fact that the concept of a life company, I'm sure you remember that we are interested in the purpose of what we do and not in the means. It's not that we tell you that we bring electricity, water, and gas, that we deliver all that, but we deal with infrastructures for the environmental transition that we'll never implement environmental transition, and we will want to solve, indeed, the decarbonization plan if we don't plan investments and we don't carry out the investments for the year 2050. We all agree on that. Without being too depressing, indeed, this is a starting point. We are in a situation where we had a 2.4 Celsius degrees increase in Italy versus 1880.
We had to stay below 1.2, 1.5, and in 2022, it has been raining, and we are happy for hydrolysity, but we lost 36 billion cubic meters of water in our indeed falls. It's not that we have recovered them, so we lost all that in the underground resources. We cannot afford wasting water. We have a pollution level that, before raining 20 days ago, there was an environmental alarm and a prescription to reduce traffic and pollution. We are in a situation where in the oceans, there is an estimate of about one ton of plastic per three tons of fish. Then the waste cycle, we are indeed delivering to landfill 11 billion cubic meters into landfill. That is the same as the Dome of Milan.
The overshoot day, if you use the overshoot calculator for us, it was the 15th of May 2023. We have exhausted, indeed, the planet resources. This is to say that we should tackle the problem, and we should think about our vision and our way forward. If you want to be a life company, you need to tackle these problems and try and solve some of these problems. On the other hand, we are helped by the fact, for instance, from these, indeed, firm situation turn-on scenarios, we see we have +30% expected peak power. This is the Italian average, and in our region and the good part of Lombardy, we have +50% estimate. These are the peak gigabyte distributed 55 in 2020, 71 in 2040. Also, PNIEC, that has been approved by the new government.
We will have 131 renewable in 2030 and in 2040, 177, to triple the power of our ES. As I have recently said to investors, the concern of an overcapacity, that is one-third of the rhythm that we should have it to reach the PNIEC goal. I do not understand that concern. Regarding the Circular Economy, these are the goals for 2035, 65% of recycle, 75% of differentiated collection. If you don't do that, it's not possible to have a 65% recycling rate. Just to try and solve those problems, we've a scenario that, luckily enough, the plan at the high level we have in our country includes plans to tackle these problems. A2A provides this contribution with this plan 2024-2035. Let's have a look at some macro data. What do we expect we will be in 2035 implementing this plan?
Here we have some macro figures. We will see some of them in detail, but we won't have enough time. It would take probably a couple of hours, but we would do that in the following roadshows. We believe that we will reach EUR 3.4 billion electricity network RAB. We are starting from EUR 0.7 billion in 2020. We have started seriously investing consistently with the turn-up plan. The acquisition we have done that we have announced of Enel network gives us a big boost, doubling our network, and we expect to reach EUR 3.4 billion electricity network RAB in 2035, 5.7 gigawatt in installed renewables. From 5.1 to go to 7.3 million tons of waste treated, so to increase also in our waste compartment. We have planned EUR 22 billion CapEx from now to 2035, which is quite significant.
This is indeed the maximum speed at which we can actually move in a safe way with our net cash flows, maintaining indeed our commitments, our financial rigor, and so on. This will lead us to a constant growth of EBITDA, so over EUR 3.2 billion and to overcome EUR 1 billion net income. There are three elements that I would like to underline. On the one side, when I presented the plan in 2021, I stressed very much on the smart infrastructures fact because indeed A2A is a life company investing for ecological transitions, where we do wind turbine, an electricity network, or a biomass plant. We are doing all these to have the ecological transition. The big part of our EBITDA comes from remuneration of our CapEx. That is why our plan is very much CapEx-driven.
I should not forget customers, because before there was the idea that A2A was a service company, and that's why I underlined that aspect. We should not forget that the goal of these infrastructures are customers, people, and companies on the territory where we work. Of course, decarbonization remains the polar star. This is somehow one of the elements of our plans. The other element on which we have very much thought over is the future-proof development. We are in a historical age where it is quite evident that there is some resilient EBITDA for the future and less future resilient EBITDA. We have to be sure to invest in something that is really future-proof. In 2035, 2050, A2A is even stronger than it is today. Hence, we need to pay attention to where we are investing.
Do you remember the pillars? On the left-hand side, we have Energy Transition. On the opposite side, Circular Economy. And in between, we have people and business. I was telling you that we have decarbonization drivers. In 2017, with the Science Based Target initiative, we have certified our emission factor. If I remember correctly, we were at 417 g of CO2 per kW/h produced. The target was to reduce that by 2030 to 223. This has been confirmed. We have decreased by 30%, and we have an estimated decrease based on the planned CapEx of 65% emission factor-wise. In these terms, what have we done? What are the targets we have achieved? What are the planned targets? We have closed and stopped the coal production except for 2022 when the Italian government had decided to maximize coal production.
Our Monfalcone plant has been producing for a short period. Then we have closed it down. In Monfalcone, we have the conversion to capacity market, the new CCGT production with high efficiency. We are working very much in district heating to develop it with decarbonized heat. In 2023, 85% of the distributed heat in Brescia, so 85% of the city's heated, and this was done with decarbonized heat coming from the WTE plant, from the CapEx made in the WTE plant. So we recover the heat. We have invested EUR 100 million. We have been using these exhaust gases. Then the collection to the two to Alfa Acciaia and Ori Martin , the two steelwork working plants in the city of Brescia. We are developing district heating also in Milan, using also reconversion of heat. We are no longer using gas.
We develop the network and use heat only where we find decarbonized heat. We are closing agreements with the data centers in Milan with incredible energy consumptions, huge consumptions. There will be a threefold increase in the terms of capacity absorbed by data centers. They produce heat, and this heat can be used for decarbonized district heating purposes. And then almost 2 TWh of solar and wind production starting from scratch. In our plan, the target is set at near zero scope two in 2026 to reduce by 60% scope three upstream fuel where, as you know, this is connected to electrification of the fleet. We have a fleet of about 5,000 vehicles, including AMSA and Aprica vehicles, Unar eti, and other company fleet vehicles. This is an important target. We have planned carbon capture plant.
Of course, carbon capture will be a central topic in the next few years. We cannot get completely rid of methane. Carbon capture remains an important element. Assisted by the capacity market, we want to reduce the production from CCGT. This is a very important target by 2035. When I say future fit strategy, this is what I mean. You see the macro trends and the investments we are performing. Decarbonization is a macro trend. On the opposite side, you see development of renewable energy sources and CCUS plant, which has a very important budget value. Energy security is an overarching topic because development of renewable energy sources has an impact on stability of the system. So we have capacity market storage. Monfalcone and many other investments are supporting that. Then we have electrification, so development of electricity grid, development of e-mobility, circular economy.
We have here energy recovery. We are doing that in waste to energy plants and biomethane plants and also material recovery. We are growing very much in this important area. Then water safeguards. Without wasting time, of course, we are the only player today who is strong both in hydroelectric and in water cycle, and we deem that water is really a great value. We here you see an estimate of the CapEx of the EUR 22 billion future feet, how much we are investing in assets that we will still have in the next 30 years. So we have a rate of 90%. EBITDA relating to future fit part of our company is now 77%. In 2035, it's going to account for 90%. In our opinion, this is extremely important. EBITDA is not all the same. Let's now look at the strategy here.
Here there are some elements of how we are implementing our plan. We have the breakdown into Circular Economy and Energy Transition. As it's always the case, we have EUR 6 billion in Circular Economy. Here you see energy recovery, waste to energy, biomethane, material recovery, water cycle, and district heating. That is on the left-hand side because we develop it with decarbonized heat. So, Circular Economy. Energy transition, EUR 16 billion. We have development of electricity grids, renewable energies, customer base, and energy flexibility. Let's break down these CapEx according to another KPI, so high or low volatility that I know is very important to you. So market CapEx versus low volatility CapEx. Low volatility includes, of course, the regulated business, so under ARERA, and what we call contractualized business.
We have received this order from AMSA, 10 years of contract with them, with a set of CapEx, and very low volatility. District heating, which is regulated from this year onward. It's almost regulated, we might say. If we add low volatility, Energy Transition, and the Circular Economy, we reach 44%, 44% of CapEx with low volatility, 56% with market volatility. We have renewable energy sources and CapEx of A2A energy in the customer base. Let's now look at the growth over the strategic plan time frame. Circular Economy. We have proposed a plan, and we have some anchoring points. We have 2023, then the turning point in 2026, and then 2030 and 2035. In between, of course, we have development year on year to attain the target, and there are some anchoring points, some milestones.
Circular Economy is growing, with a linear gradient to reach EUR 1 billion EBITDA. Here you see the Energy Transition starting, with EUR 1.4 billion in 2023, EUR 2 billion, so EUR 600 million Circular Economy, and EUR 1.4 billion in Energy Transition to reach more than EUR 2.2 billion. In the first slide, we had EBITDA to 35, so greater than 3.2, which actually refers to this part where we have more than EUR 2.2 billion. Business model for Circular Economy. Some snapshots of it. Waste. In the waste part, the strategic target until 2035 is to exceed 4 million inhabitants served, with over 2 million tons of waste being collected.
As Luca said earlier, we have acquired in this period two actually. We have received four orders, two in Liguria and one in Aosta Valley region, which is quite significant because they are out of the territory, which means we have a pretty dynamic business. We want to maintain the right hedging between collected waste and processed waste. We are very strong in waste treatment. We still need to grow to some way in waste collection so as to be on the safer side, that we have enough feedstock for our plants. 3 TWh of energy equivalent produced. We are talking about electricity and thermal energy from our plants. Thermal energy, of course, most of all in Milan and in the city of Brescia through district heating water.
It's quite interesting to observe that in the old plan, we had assumed a phase-out of some concessions that were supposed to be transferred to the public company, which had been set up in the province of Brescia, to acquire our concessions at the expiry date. Some concessions were actually implemented. They are in the business plan. They had ruled out this option for new concessions. This has changed the scenario. In 2035, we are talking about this network of EUR 1 billion. So we will have to make some considerations about the options that we have in taking over from large utilities. We consider to maintain 600,000 inhabitants served, to absorb the leakages. We will reach 13 cubic meters of water leakage per kilometer per day. Here you see the smart meter objective, 86%.
We are talking about these smart meters which allow to detect water leakages in our networks. Total processed waste. In light blue, you see industrial waste and urban waste in green. So for sure, as of today, we are still a player that is mainly focused on urban waste, but we are also growing in industrial waste. Why? Because this is the part where we see more industrial concentration in the next few years, not because of the quantity of produced waste in Italy will grow in that segment, on the contrary. Urban waste. Consider the packaging European Packaging Directive. If the world goes in the right direction, there should be a decrease in the volume of waste we all produce. For this reason, we are shifting towards industrial waste. We have acquired a plant from Tecno A in Crotone, Calabria region.
We are developing a WTE plant like the Filago-Bergamo province for industrial waste because we want to be leaders in industrial waste treatment. The target is EUR 3.9 billion cumulative CapEx in 2035, EUR 0.75 billion EBITDA until then. The target is to reach zero waste to landfill. Now we are sending to landfills only the ashes from the WTE plant, and we are working also on that, so as to reduce as much as possible through end-of-waste products. There is a specific project with Mapei Company to use for construction applications. Here you see a business innovation project at mind where there are robots helping us disassemble the exhausted electricity devices, so as to optimize production. As far as people and business are concerned, we are working for them. We have reorganized the value chain for industrial waste.
We had a situation where we were large players, but checking on the web and searching for the list of players to specialize in disposal of industrial waste, we were ranking 20th. So we hadn't a clear vocation for that. So we have a subholding now. We have redone the commercial and visibility part. We have got organized so as to provide consultancy management services end-to-end to our commercial customers. There is much room for growth also because we have plants, while the subjects, the entities doing that were actually intermediaries between industrial waste producers and A2A with waste processing plants. We have optimized the value chain, and there is much value to extract from it. Here you see the growth. We have assumed EUR 1.4 billion cumulative CapEx with EUR 0.3 billion EBITDA in industrial waste treatment until 2035. We will be more visible as per plan.
The waste, there is a topic we have to manage. So the overshoot should. Today, there's something we need to do. We are already working. For instance, composting, glass processing, ashes are the ashes from the WTE plant. We are working in wood, in plastic waste, partly also in paper waste, to see whether we can still optimize the value chain with a target of increasing the share of waste to material produced directly by our group. Here you see the target we have set for our sets, EUR 700 million CapEx for that and EUR 100 million EBITDA until 2035. As far as water is concerned, we have EUR 1 billion RAB until 2035. Today, we are investing. You see 2022, '23, we are investing EUR 130 per inhabitant. Average in Italy is about EUR 60 per inhabitant, and in Europe, about EUR 100 per inhabitant.
We are above the European average to try and close up the gap. Remember, 47% water leakages we have in Italy on average. There are not many ways to solve that. You just need to replace six-year-old water pipes. The authority greatly appreciates this investment, which doesn't have a huge impact on pricing, on our tariffs. It's very interesting for us, because we will reorganize remuneration and water, and this is for sure a very attractive, very important business for us. We are also working with advanced technology. Very good. Now let's talk about the Energy Transition part. The objective is to reach 10 TWh renewable production. We start from about 4 T Wh of hydroelectricity. We have a growth of our renewable energy, as the objective, to overcome 10 T Wh in green energy with a customer base over 5 million customers.
We will talk about that. Another objective we have set for the grids in the energy transition for our infrastructures concerning the EUR 4 billion RAB. We will have, indeed, 34,000 e-mobility charging points. We have reached the level of, indeed, city plants that allows us to develop e-mobility in Milan. 2,000 points in Milan of the 4,000 we have announced for the first two years, with, indeed, saturation rates of the first installations are done that are double compared to the normal charging points, although we don't have the dedicated position and place, and we should think about that. And 2.1 million electricity POD. That is the sum of what we had before and what we have bought from Enel. So this is the operation we have announced, indeed, in the last few days, just not to get you bored.
This is a very important operation for us. Probably, you know that both AEM, and SM are developing electricity network. They started about 100 years ago. When at the beginning of the year 2000, with a Bersani decree, AEM had the Milan networks, whereas ASM, Brescia. Then, there is an acquisition of networks in the Valle Sabbia area. The light blue area is the A2A historical part. It's about EUR 1 billion RAB and 1 million PODs. Considering that development of electricity networks, regarding regulated assets, was the nicest we could long for, I decided to go to Enel and check whether they were interested to actually sell us widening of our area. Of course, around us, to generate, indeed, operational efficiency because if you widen the network around us, of course, there's a generates a lot of benefits, you may imagine.
Luckily, we are in Lombardy, we are in Milan and Brescia, as a province. There's a rational coincide with the fact that there is a network that is particularly important with significant developments because in there's two territories that there is a growth of 50% power peaks, versus 30% growth in power peaks in Italy, throughout the country. We bought 17,000 kms of cables and network, and six primary substations, 9,500 secondary substations. We are talking about a value of above EUR 5 billion reconstruction. A huge network. This allows us to then be by far the second Italian operator in electricity networks. In terms of distributed power, we are in the class of the top 20 in Europe. Probably we are 17th in the ranking of distributors in Europe.
We believe we will close the 31st December 2024. We will close it. I will explain you why because the closing requires some time because you have to actually move the physical station because the energy passes from one network to the other. The toll, so to say, measuring energy flows between A2A and Enel was in the boundary of the city of Milan. We need to move the toll outside, and you do that installing meters, moving the networks. We have done the easiest part so far, and now the electrotechnical part is involved. We will have the electrotechnicians doing the hard work to establish the new boundary between A2A and Enel. We have estimated that the closing date for the operation will be the 31st of December 2024.
The 10% that remains with Enel as a version of a stewardship, meaning that there must be a collaboration to improve and maximize the performance of the systems. We have already done twice in 2023 in Milan and Brescia. They have been already absorbed by us, and there's a very good collaboration with Enel. We will also look at how we will fund and finance. There's an acquisition, of course. We start, you see, with 0.4 basis. That is very good. One part of it will be funded with our cash flows. We have also realized certain assets where we have the ability to allocate main array capital and the part of equity that allows us to close this operation quite safely. Very good. I am very happy about that.
I think this is a historical operation, and for many reasons, it is a very unique, quite unique operation. Concerning future of EBITDA, for sure this is what will come from these networks. So the strategic rationale was future-fit EBITDA and operational synergies, about 5% operational synergies between our networks. All CapEx are indeed eligible for European taxonomy. That was another very important element for us also in terms of financial costs and the quality of service because we have acquired a very interesting network that has a very good performance. Indeed, even last year, it was rewarded by ARERA last year. But of course, the seniority of that allows us to make substitutions. We have planned important investments so that there will be a CapEx absorption operation because, of course, there are certain assets that need to be replaced, but they still guarantee a very good performance.
The network was very well built at the time. The Italian network was built from the '50s until late '80s, and then for 30, 40 years, no investments were done anymore. But now, of course, the DSO has a different rationale because if you think about 1,200,000 solar panels around the company, of course, makes a difference for the DSO. So we have power peaks, increasing consumption. So another big flow of investments starts where you can do it for 20, 30 years. We have estimated a very important CapEx absorption. As you have read in my interview, it is like buying a kind of field where we can actually seed for the next few years and, indeed, actually collect a lot, gather a lot from that field. So we have EUR 1.4 billion cumulative CapEx only in Enel network.
On ours, there will be two more, a little bit less than EUR 2 billion. So very important CapEx. The interesting thing is that on this network, we have a cargo of RAB of 10%. So considering ours, we reach 11%, with an EBITDA 2035 of EUR 200 million. If we go to 2050, we reach over EUR 350 million. Here you see, when I launched the plan in 2021, this was one of the slides. I'm also an electrical technician, so I have a great passion for that. So we had a cargo a RAB from EUR 0.4 million to EUR 1.9 million. Now with this operation, we have reached very important growth. You have seen 2 T Wh . Milan has a density of distributed electricity that is five times the distribution in Rome.
This tells us that A2A, even before this acquisition, was higher than Acea, although Acea had 1.2 billion PODs because the intensity of energy distributed in Milan is huge. Of course, even on this, there is innovation. For instance, that suburbs station, that substation. You see when Vicenza was under the water two weeks ago. If you have heavy rain, those cables that were planned, indeed, years ago that have not the idea of absorption. You have flooding all the way to the substation, the secondary substation. Are under of the street, and it's right there under our walkway. We have this problem. We have, indeed, invented this underground secondary substation that can stay under the water for hours, like in the U-boats. This is just taken out and replaced.
The resilience of the network for this future-fit idea, this innovation, is something that has been requested to us also from other parts of the world. In RES, we have a growth of solar energy and wind energy, EUR 4.6 billion CapEx, in 2035. I like to underline the fact that we have speculated that we have a pipeline of 1.8 gigawatts, quite balanced between wind and solar energy. Substantially, we move on the greenfield, so the biggest part with a greenfield, not to leave any value behind. We have a very important part of middle stage. You know that this is a classical way of classifying the pipeline, so we have 350 megawatts per year to be authorized. We are just actually moving according to this plan.
What is important is that we are doing this in a very balanced way among the regions throughout Italy. Also concerning the commitments in the various regions and burden share is very important because this allows us to have a development of photovoltaic plants also in the northern region because the commitment in a PUN and of the single price is very important. We are building a plant in Friuli, Venezia, Giulia, Santo Stefano. The entire energy produced is immediately assumed, so it is then quite easy to reach very interesting prices, PUN. What we still have is that we have a generation portfolio that is very integrated and balanced. In 2035, we have a production of CCGT in Terawatt hours that goes up according to PNIEC policies.
The hydroelectric that goes up as a result of the plant investments, about EUR 1 billion investments in hydroelectric. Of course, to maintain the concessions. We also have a growth in the wind power, also with repowering of the plants that we have acquired in the portfolio and the solar plant and the waste energy with 2 tW/h with a fixed cost. Let me just show you something interesting that we considering our energy scenario. Let's see whether I can be effective in explaining it. Our waste-to-energy plants produce 8,000 hours of energy per year. The base load is concentrated in areas where there is a premium on the PUN, on the single domestic price. There are days, you know, in Italy, we have six bidding areas, so three northern and central Italy and then three in southern Italy and in the islands.
This is unique because the energy transmission grid cannot completely transfer energy from one end to the opposite. So it's just like having six separate countries. We have different zonal prices. You see, the PUN in Puglia can be EUR 0 while in northern Italy you can have EUR 180. This is what is happening right now. Therefore, it's very important to keep in mind that in a country like Italy, it's no longer possible to think in a logic where you take the average PUN and multiply it by produced values. You need to be more granular. 2 T Wh of energy produced through WTE plants mainly in northern Italy where we host the production here. You see the base load, referring position, so energy premium, solar. We have a balanced situation between northern and southern and Italian islands.
Not programmable, so it should be discounted from the PUN because it's not programmable. Wind energy is mainly concentrated in southern Italy and in the islands. There is no wind blowing in northern Italy. It's not programmable, but the production profile is very different from the solar one. So, you never have a discount on the PUN in this case. Hydro and CCGT, they are both programmable. 80% is in northern Italy. Here we have a premium on the PUN, on the single domestic price. Those doing dispatching, dispatch energy will never have the right prices. Result of all that, what are our main levers? Technological diversification. We have all generation sources, so we can leverage on that. We have hedging and PPAs with our customer base. You know that we have launched mass market PPAs. They are doing very well.
We have a strategic dispatching capacity, and we have a capacity market. This is the reason why we don't need to turn to production to plants from under capacity market. This allows us to produce at the right time price-wise. The result is the average of the last five years. We have a 10% premium on the national power price, on the PUN. Our achieved national power price that we get in our financial statements considering the national PUN is plus 10% thanks to this effect. In this plan, we have therefore assumed a change in the scenario between EUR 85 and EUR 100 of a PUN, a national power price. We know that we are systematically getting there thanks to our energy dispatching and thanks to our per-generation fleet with a 10% premium on the national price. Customer base evolution.
There was some astonishment also on our side concerning closing of the bids of the tendering processes for other usages. We had been awarded many orders at good prices, and we were growing as a consequence of that significantly and most of all, sustainably. In the last tenders, we have maintained our corporate style. So in areas that were interesting for us, we have submitted our bids. Most of all were. There was less awareness. We have submitted bids at positive values. Frankly speaking, clearly we are talking about customers who have profited from the safeguarded market. It's not easy to assume that there will be very become very dynamic. That's unlikely. So investing a lot of money in individuals, in consumers.
The only logic for this investment is that after three years when they get out of the safe-hearted market, you can start telling if they are not a specific commercial prevention. So there was no doing that. We have submitted bids at positive values. We were probably the only ones in Italy. We have been awarded the Palermo, Napoli, Naples, and Cagliari orders. Three important orders in three important Italian cities where we had low awareness. At this point, we continue to develop a customer base with the tools that we have proved we can use effectively. We need to be sensible, to some extent, when it comes to products. This is probably what is missing in the industry. The PPA in mass market that have been sold starting from February 6th end of February. We had already received 7,000 new contracts last year.
We had launched onto the market 10,000. Consider that the scheme is PPIs, A 2A generation to energy. A 2A Energy has green energy then that it can put onto the market. After that, since there was excess demand, we have opened for another 5,000. We have stopped the sales until February. There was no more green energy available. This year, we have restarted with a target of having 50,000 new contracts. We had assumed 5,000 per month. We are talking about 10-year contracts. But as a matter of fact, we are proceeding very quickly despite the very different price. Last year, the pricing was different. We had a PUN at EUR 200. Now we are at EUR 90. The mass market price is still EUR 119. Has not changed per megawatt hour.
Despite that, we are selling them very, very successfully and very surprisingly also. We have or we are also working with all of our channels. Let me just show you very quickly the main channels. In 2023, we have acquired on the market 700,000 new customers. Of course, there is also a churn-out rate. So here you see the net figures. Look at what's describing, 400,000 customers. The digital channel is growing a lot. Another innovation, introduced two years ago by A 2A . This is growing very successfully. We assume between 2024 and 2035 to have acquisitions in digital channels. You see the bar chart through our call center, which is an internal proprietary asset with our effective and trained employees and through also the stores. The stores are needed to promote awareness all over Italy.
Track record in acquisitions is very sound. We have doubled the digital acquisitions over the last few years, and we continue to grow here in digital. Brand awareness, we have tripled it since 2020. Now we have a brand awareness of 58%. It used to be 36% in 2020. In previous years, it was even lower. As of today, we have a very important lever linked to brand awareness and a low market share as it is quite obvious. We have a market share of 6.9% and awareness of 58%. These two figures, therefore, give us very good assumption to grow. 14 per customer service stores in 2030 because we are still in a world where phygital seems to be working well. There are customers who want to be fully digital.
Other customers who want to have brick-and-mortar stores for these services, most of all in certain regions where we are less well known. We are implementing this double strategy. We feel we are on the safe side when it comes to attaining the target in terms of customer base as you have seen earlier. CPO charging points, I have already made an announcement earlier. I don't want to dwell upon it. For sure, this is another innovation implemented by our company. It will be difficult to think we can develop CPOs today with CAPEX per single plug that is very high. We have selected the opposite model. When giving the brief for this charging station, I have said I need a plug which costs EUR 0.01 of a super fast CapEx, 1/100th, amortization. This is 1/5th. So it's nevertheless quite a good result.
This was necessary to have a capillary development without dedicated installations. If you have a CapEx of EUR 100,000 per station, you need to have a dedicated approach. While if you have a CapEx of EUR 1,000 per station recharging station, you can allow yourself to wait for electrification of the fleet to grow. Preliminary results are very promising. Let's now talk about financials with Luca. Luca will be presenting the financial part.
[Foreign language]
Thank you very much. Some figures. We have already taken a quick look at figures with Renato before me. Let's look at these figures. Let's start with CAPEX. As you know, our business model allows us to maintain a limited risk and to have active management of our business in a sustainable perspective.
In this plan, in the three-year between '24 and '26, we have EUR 1.5 billion CapEx, like for like, which is fully in line with what we had told with the promise we had made when presenting the plan. This has been maintained in November 2022. I'm referring to the previous plan. EUR 1.7 billion euro, there's a difference of about EUR 200 million per year. Due to the negative factor of the cash outflow of EUR 1.2 billion euro for the acquisition, offset and mitigated by opportunities we have already identified in corporate assets so as to open up to minority shareholders in to attract capital for the residual part as we will see later. Thanks to sustainable financial sustainability we have attained, we have enough time to consider all opportunities to collect financing on the market.
Also, the opportunities that will enable us to maintain a strong commitment and impact our rating, with the attendance rating metrics, of course. In terms of EBITDA, we grow with a CAGR of 6% until 2035, and the CAGR is 9% until 2026. So we will achieve, we will overcome EUR 3.2 billion in 2035, and we will reach EUR 2.2 billion in 2026, which is another milestone inherited from the previous plan. In 2026, we had a target of EUR 2.1 billion. Here, the delta between EUR 2.1 billion and EUR 2.2 billion is the EBITDA expressed by the networks we have acquired from Enel. Profitability will exceed EUR 1 billion, the net income, until 2035. In this bar chart, it will reach EUR 0.6 billion if we deduct the scenario effect as we have done for the EBITDA.
Starting from 0.5 in 2023, we will therefore have a CAGR between '23 and '26 of 10% and until 2035 of 7%. Let's go back for a while to the CapEx breakdown. This is a very central topic to us. Renato before me has mentioned that he was telling about the breakdown for this EUR 22 billion CapEx we have in the pipeline. This is a slide you have already seen in the old plan with the only difference that compared to the old plan, the part that we considered as low volatility, so regulated or contractualized, increases 40% to 44%. The justification of that is a different mix of CapEx between regulated business, contractualized business, and merchant business. Most of all, CAPEX in the electricity grid.
The merchant share, 56%, is a merchant business, a merchant part with very limited risk because, as we have seen also earlier, it consists of activities with an intrinsic natural hedging, generation, different technologies. We have seen how there has been an effective offset also under special circumstances as the drought, for instance, in 2022 where this offsetting mechanism with thermal energy has proved to be very effective, the same in 2023. Also in waste, we have feedstock collection and waste treatment plans. Also offset between generation and customers. Offsetting. It's merchant, but the risk profile is very, very controlled. These CapEx generate an EBITDA, which is well balanced between EBITDA with low volatility accounting for 50% in 2026, and it anyway remains in a very sustainable range throughout the arch of the strategic plan. How do we allocate capital?
We have three main pillars: a strategic pillar, which has been extensively described by the CEO. We look at the macro trends, Energy Transition and Circular Economy with a target of maintaining a limited risk profile. We have a financial pillar, of course, we want to have predictable cash flows, predictable and stable cash flows with a target spread between average cost of capital and IRR for our projects of at least 200 basis points. It should be sustainable, last but not least, enabling us to attain our ESG targets: decarbonization, fighting climate change, attaining recovery of material of waste.
With the objective we have set of a target return on investment above 9%. All these by maintaining rigor regarding our debt profile. Here it is. On our debt profile, the NFP to EBITDA starts from important flexibility situation 2.4. Then there's also a period of growth as an effect of the investments we have planned and then goes back again to 2.4. Again, regaining significant flexibility. A quite solid, sustainable financial profile that will never go above 2.8, thanks to the various mitigation actions that we will implement again with the clear objective to stay in the range indicated by the rating agency for the credit rating. 25% as an average.
This does not consider the fact that we have increased in some percentage points of the regulated EBITDA, but remains within this range. In terms of cash flows, we will be able to dedicate as many as EUR 15 billion to growth.
Of the EUR 22 billion cash flow generated, taking away the part dedicated to CAPEX maintenance, EUR 15 billion remains for growth. EUR 15 billion is a quite important amount that guarantees quite good flexibility in case of need. This gives us great comfort in terms of cash conversion rate after the maintenance CAPEX around 50%. As I said, the objective is to have an investment with an average ROI of 9%. Let's talk about debt. We have a debt mix, this is a very prudent approach. We managed the due dates quite in advance.
You see here that we have speculated to come from a fixed rate of 87% of our indebtedness to 70%, exploiting the opportunity of the decrease of interest rates that should take place in the next few months so that we can work with this debt mix in a prudent way to actually have an appropriate debt cost. The cost of debt should be at 3% by 2026 as in the previous plan. We are committed to keep below 3% in 2035, where in the last plan it was 3.5% in 2030 with an average duration of our debt above 5 years. In terms of funding needs, EUR 7.5 billion of which EUR 6 billion are for the refinancing of our due dates and only EUR 1.5 billion financial funding to fund the growth. Funding that will be more and more made of sustainable instruments.
So financial that is sustainable financial ESG bonds that will rate 100% at the end of the plan by 2030 with a very reasonable growth since we are to from 70%. The dividend per share policy to close the DPS policy will be in the plan now with the growth of at least 3% as a flow level. We see this immediately. Indeed, with the proposal we will put forward to the shareholders' meeting with a growth of 6% of the dividend, year over year, 23 over 22. Thanks to the very positive results we have reached with the objective to actually share our good results with our shareholders.
The final slides before Renato's conclusions. First guidance for 2024. We will rate EUR 2 billion EBITDA and net income of about EUR 0.57, EUR 0.59 billion. I think this is a quite clear message. You won't see the one in front of the EBITDA of A2A, I can guarantee you.
[Foreign language]
Regarding the closing remarks, I would like to make just a couple of take-home messages which are quite important. Regarding the waste or environment part, is a quite important commitment. Regarding the social part, within this plan, we have EUR 120 million on what we have called an Natality project. We believe that the first problem for our country is the birth rate and then the climate change because we have a demographic situation which is quite bad and considering the statistics we have, 37 million people, compared to the 60 million in 2060. Looking out the year 2060, we have tried to see whether the big companies can provide a contribution.
We have done a benchmark among all the big corporations in Italy to which are the family policies and we have actually included in our plan everything that can be the sum of all the other companies and it will be an increase of the cost of EUR 10 million per year, but we hope this will give us a result and I'm sure and hope that all the big companies will follow our examples. Of course, also the site has to provide a contribution, but also the companies, also the growth, 40% of women in managerial positions is still one of our objectives. Regarding the governance for our ESG targets, I'd like to highlight these. Nowadays, and indeed, this explains to you why our plan goes to 2035. This is the environmental word. From now to 2030, we are working in our plan to 2030.
76% of our CapEx is either ongoing or authorized. Either in progress or authorized. We actually look forward. Regarding Energy Transition, CapEx 2430, EUR 8.3 billion. And by 68% is either authorized or in progress. And this explains to you why we are actually dealing with a plan to 2035. Otherwise, we get bored because most of the part is being already authorized and planned and of course this is quite obvious. If you think about a Monfalcone plant that we are building, that was planned three years ago. Now we have the onsite works and of course in two years, it's going to be operating. Of course it is quite important to have this long-term vision when you have to build such important plans.
To give you this data to tell you that the plan is very solid and robust and of course we have projects that also go beyond 2030, but just to give you an idea of what we have done in our plan 2030, the deployment of this three years that we have already planned and authorized projects for the coming years. For instance, 13 primary substations, the CCGT in Monfalcone, and then 30 MW plant is a wind plant authorized, solar plants authorized for over 100 MW, and so on for the renewables part. The very strong take-home message is that we have very much with our feet on the ground, our head is of course in the sky feature, but we're still thinking about what we have to do now and we need to take authorization for the energy environment situation.
You need seven times bigger pipelines to be able to do what you need to do. Because our country is like that and once you know that, you actually take the required steps. Talking about the previous plan that leads us to this objective, the new plan consolidates the growth. This is a CapEx-driven plan as already done with that. You see, EUR 2.2 billion and EUR 2.02 billion, that was a negotiation because I didn't want to go below EUR 2 billion. The rationale is that already in 2024 to reach EUR 2 billion means to be indeed in advance compared to the plan. In 2026, we should reach EUR 2.1 billion and now we are EUR 2.2 billion, so we are exceeding the objective two years in advance.
With very important hedging levels for 2024, and you might have questions on these, and also for 2025. This is quite interesting and this allows us to keep on track with this very robust profile, and this is very important. 90% future fit CapEx, and this is not easy. We're very proud of that. Imagine to be a company as ours, managing EUR 1.5 billion cash flow and having to manage EUR 1.5 billion per year of future fit assets.
When you have big cash flows, you also need projects in which to invest, and they should be very significant future fit projects. Great attention, as Luca was saying, great attention to WACC and IRR. There's 0% TPS, CAGR, and 6% dividend yield. Our shareholders should be quite happy. Thank you very much, and then we are now ready to answer your questions. I'll be happy if someone can take me a chair.
[Foreign language]
[Foreign language]
Good morning, Francesco Sala Banca. Grosser thanks for your contribution. Congrats for the results. Three questions. Can you share the hirings in infrastructure, the acquisitions in WACC and infrastructures until 2026? Second question about retail. Do you see a margin squeeze in the last few months? If margins are declining, there is more aggressive competition, more aggressive bids. Third question about energy generation. Can you please share with us your assumptions in terms of capacity market and MSD so as to help us model also this component? Let's collect more questions and then we will answer.
[Foreign language]
Good morning. I was interested in your comment. You have said that your assumption is a PUN between 85 and 100 and you consider to attain 10% on top of that. Can you confirm that this is your statement and what is your assumption for 2025 and 2026? Very interesting, slide 35. If I have understood correctly, the capex you are assuming in 2024, 2026, you are assuming an asset protection to fund the purchase of Enel assets. If this is the case, can you please help me understand whether this dilution linked to the disbursal is included in your EBITDA and net income estimates?
Third question refers to the estimates you are making until 2026 concerning net income and EBITDA and until 2030. They look quite similar. In 2026, EUR 100 million more EBITDA, net income, and EBITDA look the same in 2030 compared to the previous plan. So, what are the different composition, a different breakdown of these figures? So less contribution from generation, more contribution from supply, from the networks. I would like to understand what is the underlying distribution and mix for the EBITDA and net income. They look quite similar in 2026 and 2030.
[Foreign language]
Good morning, Paolo Citi Int ermonte. Two questions on generation. First question about renewables. I think, compared to the old plan, there is probably an acceleration in growth shifting towards the second part of the plan as opposed to the first years. So, 2.8 until 2026 with a limited growth starting from 2.6. Can you please comment on the draft circulated, the FER X decree, so about EYR 80 per megawatt hour for the tendering process? Is it a low level? Is it adequate also considering the bidding processes we have in Europe? Talking about generation and energy systems, how do you see the potential development of new generation nuclear energy in Italy?
[Foreign Language]
Good morning, Stefano Gamberini, Equita SIM. A question from Paolo. Echoing Paolo's question, I would like to understand about the WACCs. When this is approved, do you consider that there will be a strong acceleration of CapEx in renewable energy sources? We haven't seen that so far. Many say that there is an issue with authorizations and also visibility for a plant is by far higher after you have a 20-year at EUR 85, rather than in the merchant segment. So, in your opinion, is there a risk to see these plants installed? So we are talking about plants which will be operating in 2030, 2035 through WACCs, or do you still think there can be a shift so that these targets are not attained?
The scenario assumption, in 2026 and 2030, what's the assumed single energy price, for gas, for electricity, and, third question, the CapEx in network, EUR 1.35 billion, that you will have to pay between 2024 and 2025? You tell us that the CapEx difference is only EUR 600 million net of the impact of dismissals. If we also include a higher capex in the new grids, most of it is funded through stewardship and transfers. What's wrong in my calculation? How do you maintain the level under 2.8? A question about the market. We have seen the breakdown of generation and market. Can you help me understand in 2026 where you see the market in terms of EBITDA vis-à-vis the EUR 360 million that have been included in the previous strategic plan? Thank you.
[Foreign language]
Maybe we can now answer.
[Foreign language]
Good morning, Emanuele Zerni, [Telepace] Brescia. I have some questions for you. First question about the retail market. I have seen doing a quick calculation on the number of expected customers in 2026 and 2030 related to the target EBITDA in your plan. There is an increase in profitability per customer as opposed to 2023. I would like to understand what are the underlying assumptions and what is the visibility when it comes to increase the profitability on the retail market, on the free market? Concerning the vertical integration concept, the growth that you expect from the retail and, say, to end customers in terawatt hours of electricity is assumed to grow in a more sustained manner than internal production of electricity.
It looks as if I know it's not easy to add new renewable capacity, but it looks as if it cannot keep pace, not because of internal problems, but because of a general Italian problem. The coverage, with electricity sold to end customers that is produced internally gradually reduces over the time arch of the strategic plan. Can you please expand on that? I have a question about 2025, the first milestone where you have full contribution to the EBITDA of the acquisition you have made in Enel networks. Can you give us additional information about the EBITDA and evolution of the EBITDA in the first years of the plan? Thank you.
[Foreign language]
Maybe you can start answering. Let's cluster these questions you have submitted.
[Foreign Language]
Let's start with the WACC. For WACC, we have moved in the wake of continuity with the values ARERA have expressed at the beginning of this year. For the deflator, we have considered a rate of about 3.5% in the first year and then a decreasing rate progressively up to 5%. To reach 1.4%, 1.5%. For the MSD, we have closed 2023 with about EUR 140-144 million. So the forecast as per previous plan is a decrease to a level of about EUR 90-100 million. So a gradual decrease year on year. 2024, about EUR 120 million, then EUR 100 million, and then the value will stabilize between EUR 90 and EUR 100 million. Should we follow the sequence of the questions? We have a question about the PUN, the asset rotation. Let's talk about retail.
You should consider that 2023 has been a strange year because there was a very good recovery in margins, but 2023 has also seen relevant capex in customer retention to realign customers. So we have launched a campaign. We have invested EUR 60 million to allow our customers who had the wrong positioning due to linked to the ratio between fixed price renewal of contracts where we could not get in touch with customers because of anti-trust restrictions. We couldn't reposition them at variable price and they have been renewed at a high fixed price. Once I have realized that they had the wrong market positioning, we have launched a campaign to reposition them and this has costed significantly and it was a one-off cost we are not going to incur in 2024. This is the reason for the growing marginality.
As a matter of fact, there will no longer be this significant item of cost which has had a strong impact on 2023. It will impact only partly in 2024 and then there will no longer be such impact. Our customers are all moving to variable price agreements. So we will have this cost for returning the customers. As of today, we continue to have a low churn rate and a very robust, very solid customer base. We foresee continuous growth of the VAS. They are the only reason for shifting, for changing to free market. The real difference is you have a customer with whom you can discuss and negotiate beyond the commodity and it's a win-win approach associated with the free market. This is our target and if we see that the performance in the first months of 2024, this is very reassuring.
The same applies to the PUN, to the single domestic price power. We see a scenario ranging around EUR 90. As I said earlier, ranging between EUR 85 and EUR 100. We will see where it's going to end up. It's not always easy to predict. There are many factors influencing that, one of them being industrial production and there are positive signals coming from the Italian Statistical Institute, but for sure we are in a situation where in 2024 we have coverage, 70% with a value of EUR 160, EUR 165. So we are already looking at 2025. For 2025, we have 25% at EUR 35 generating EUR 10 per terawatt hour at fixed price above the PUN, the domestic price, and then 10% overall throughout the plan, which is the empirical figure that we have systematically.
We have taken the last five-year time horizon to have statistically robust values based on our dispatching capacity and on the places where we have located our energy production and of course also with the contribution of technologies. So all in all, this is a robust scenario. We have run this scenario or EUR 110. Even if the Italian base PUN is lower, even if it stands at EUR 85, there will be no problem to reach, to attain this target, this value. Talking about the assets and asset rotation, considering that operation. As a matter of fact, what do we expect? We, as you know, we have very valuable assets. We could talk about the grids. We could talk about waste or renewable energy sources. In a company like A2A, we have high diversification and very valuable assets. So it's easy to find minorities contributing with significant equity.
But it's not that we need in terms of stewardship to do capex in new grids with this minority transfer. This supports the acquisition, but the EUR 1.4 billion CapEx that we have assumed in this grid is contained, is envisaged, and included in our ordinary cash flows. So we are assuming that the amount that we need to maintain a solid rating, a solid equity, is between EUR 600 and EUR 700 million. All the rest, so the rest of the value, the difference between EUR 1.35 billion and the CapEx in these 10 years are all included in our capex plan, which is fully funded through our cash flows. Let me just anticipate part of the answer to Xavier asking about the evolution of the EBITDA. If you remember the previous plan, the CapEx mix between Energy Transition and Circular Economy was more balanced.
We had 60/40. Now we have 76% and 16% respectively. Why that? We have shifted more investments towards electricity grid. CapEx in electricity grid being the driver for this imbalance. It's true that there is a change in nature, in breakdown, and composition of the EBITDA in the next years of the strategic plan. We reduce production through CCGT. There is a change in MSD. We have growth of renewable energy source and we have significant growth of electricity and water RABs. We will have a different mix. What can I tell you then? The company, I say in a quantum leap, from EUR 1.2 billion to EUR 2 billion between 2020 and today, we have reached a plateau of EUR 2 billion.
We will reach 2.2 in 2026 with a downturn scenario that is partly offset by hedging and also by the fact that our CapEx generates about EUR 100 million growth in the EBITDA, EUR 100 million EBITDA growth every single year. Consider also the EUR 100 million contribution from Monfalcone starting from 2026. This mix generates continuous growth. We have also renewable energy sources. There was a question about that. It is absolutely true that in our plan this has shifted forward because we want to do greenfields. We have done octopus acquisitions that were needed to become a recognized player and now the big value comes from the fact that if I don't pay EUR 500,000 for installed megawatt hour of capacity, I need to do projects with my pipeline and this requires some time delay. The FER X for sure is useful.
Better to have it than not to have it. Is it sufficient for the wind power? Probably not. They have underestimated the indexation we had for the wind power. The photovoltaic price is going down whereas there is a hard time with the wind plan. I think that FER X Decree is not going to push so much on RES. There won't be development enough. They will indeed revise the FER X Decree. When we have a decree to have a good push to the development of RES, it's going to be important. I hope that what the various category associations are doing, hopefully they are producing results about the EUR 110 per megawatt hour in the electric payrolls. This is quite important. There is great attention towards hydroelectricity.
The development we have given to RES, which is not a monster development because it is a well-balanced development compared to other CapEx . I believe this is absolutely sure because we have assumed a development that is consistent with the rest of the groups of CapEx , EUR 22 billion CapEx of which is for RES. We will do that for sure. This is quite sure. We are not concerned about that, but I don't expect that FEREX decree generates acceleration on RES. [Joni] was also asking about the contribution of Enel Networks starting from 2025.
There, the growth of EBITDA has been done in a weighted way compared to investments and considering the new ROSS regulation, not to create indeed faster money EBITDA, but to create slow money EBITDA derived from growth in RAB as an effect of investments and therefore consequent growth of remuneration return from EBITDA. From 2025, EBITDA starts with a level of about EUR 100 million and then there is a growth of 10% per year as we have already seen in our presentation. As I said before, as investments are developed, we will then reach values that as an average would be about EUR 120 million in the plan period and after the plan above EUR 220 million as an average.
Just to make calculations that indeed have been circulated lately regarding the EBITDA, I think it is more correct to look at the period of development, the average development period of this network and the EBITDA that can be expressed as an average because this is indeed a project with very important development opportunities and value extraction as a consequence of the fact that this is a regulated asset. You should consider that the comparison between 2013 and 2016 between old and new plan, there is a decrease of about EUR 100 million generation, EUR 100 million decrease in the market and indeed we have an income much higher from the market and also a growth of about EUR 100 million on networks, on the infrastructures as a consequence of the purchase of Enel Network.
Of course, the composition needs to be reviewed and they will have a different profile for sure. Indeed, the concern in the nuclear power, my position on nuclear power is the following. As I've already said in various public situations, nuclear power of this type, so we are talking about a reactor of about 100 or 300 mega. So it is an oligopoly setting because the operators that can deal with such an asset are very few and we are among those very few because you need to have mega investments with very sophisticated technology. I could say that if the decision is for nuclear power investment rather than have so many competitors for solar panels, we will be just three companies doing generation. But I don't think this will happen in Italy for two reasons.
The first reason is because investments are very high because at most a reactor of 200 megawatts costs about a couple of billions and no one would build it without indeed the support of the state, so public support. So I have a hard time to think that nuclear power is financed because no company would invest EUR 2 billion in a plant that is directly competing against RES because to actually recover that cost of EUR 2 billion, you need a baseload, but the baseload would have hours of the day with a very low price. It is also quite evident for that same reason that would compete with the RES market and this would stop the development of RES. In general, I am in favor of indeed these because in Europe it's going to be difficult without nuclear power.
I would focus that to where there is no RES potential and there are many countries without RES, without mountains, wind, and sun. We are a country where we are a third country with hydroelectricity and then also with Spain and Greece, we have a lot of sun and also a lot of wind in the islands. We also have a lot of waste and rather than exporting waste or indeed actually disposing them to landfill, we could recover very much with WTE plants. We should think about European planning for sure. Nuclear power is useful but not in Italy. My answer is no for development of nuclear power in Italy. Have we missed any answer to your questions? Joni probably was also asking or maybe a part of this question.
The topic was terawatt hour of production and since then we have more green power sold than produced. That was the question. The growth of terawatt hour sold to the final market energy supply business is much higher than the additional capacity that you can have from solar and wind plants. The vertical integration between a generation business and the retail market would go down. You should consider that we have the objective of reaching 10, 11 TWh of our production of green energy. Then we have our CCGT production that will work by modulation rather than baseload production. When we think about our edge in between production and customer base, we always think about RES production at fixed prices.
That's why we have thought about PPAs and in the mass market where there is big industrial production and for many industrial companies to close the PPAs for the part of RES production. This part of edging, green energy and customer base, if we look at how we have the green energy, we are 6.7 terawatt hours with growth of sale of green energy and our generation that is quite aligned, quite balanced. We should also say that the mass market part is very important because it is very stable with higher margins compared to B2B because our PPAs with mass market provide greater margins compared to B2B PPAs.
Historically, we also have a very significant B2B part with big customers and also in the energy crisis period, that was an important lever because many important operators abandoned, as you know, or actually did not satisfy their customers. We had a greater customer base, but these customer bases that A2A Energy also manages through trading because these are variable price contracts. Therefore, nowadays, there is not the situation of hedging that we had some time ago because big customers also actually operate at variable costs, variable prices. A2A Energy sells more energy than we produce, but the hedging part we are interested in is green generation and customer base, especially mass market capable to close the PPAs. We have 2 million customers with mass market PPAs absorbing 2 TWh alone. That is a big part with indeed mass market PPAs.
We are thinking about mass market PPAs and normal PPAs to reach 50% of green generation that is covered by PPAs with the best margins possible. We also have two-way PPAs. You have seen the announcement of an agreement with Enfinity and also other agreements. We acquire PPAs from generators and through the new platform, the new Enfinity platform, we put them on the market. Some years ago, anyone who had a wind plant or a solar plant that was on the market was sold. But now that there is a higher volatility also in prices, if you don't have an energy management, you cannot do that.
More and more frequently, entities owning assets come to us and are available to actually sell the asset in terms of production to create a platform that can be done only by a company with a structured energy management. That is for sure part of the development. I wanted to go back with the figures. Is it right to say that your solution for 2026 for prices, sales price of your production before it was EUR 130, 2026, EUR 110 for 2030 with a decrease of EUR 20 per terawatt hour? Yes, it is like that. The second question was, strategically, this is a company doing development on renewables that are not so flexible, especially with regards to solar energy. That 10% of a premium, historical premium, could it be a fair assumption that this premium should go down over the time?
Meaning that you have so much production that is not flexible, especially solar energy. Why this 10% should be sustainable over the time? For two reasons. Because the solar power development is balanced between north and south. If you take a solar plant like the one we are developing, 60 megawatt in Friuli Venezia Giulia, that has a price that is higher than PUN. And also in that case, it is fundamental not to develop the entire wind plants in the south or in the islands. We are working a lot to find development opportunities in northern Italy where the area prices, the district price is much higher.
The solar might have an average PUN because historically, since we have not developed so much the solar power plant because that was mainly developed in the south of Italy, we don't have so many megawatt hours in southern Italy and the new developments are being done in the north as well. This is a balanced mechanism. The solar power that will have an impact of about 20% or even less, 20% of our generation that should maintain an average PUN level. Neither a discount nor a premium. If you think about this territorial aspect and the solar percentage in our technological mix. Because if you are in a situation where the solar power actually has a lower PUN, since the PUN remains as an average, it means that someone else has a higher PUN and this is hydroelectricity.
If indeed the gap between those having a discount and those having a premium, it is important to also have the higher part of the curve. Indeed, if we have a worsened discount for the solar power, we will have an improvement as a premium in hydroelectricity or in thermo-hydroelectricity. How do you justify and what is the reason why you are positioned at a different price level than the former curve? When you do this, you don't look at the forward curve because you don't think that is a stronger price signal for what could happen in 2026, 2035. Can you work on that? I was also interested in the strategic issue. Why a company selling assets and not reducing CapEx intensity?
If you say you accelerate on CapEx , but you also sell assets, why don't you just delay or why don't you just reduce CapEx rather than selling assets? And then the last question was on the multiple you paid on the annual assets. When you think about the multiple that is generous, how do you are thinking about IRR in your investments? When you do your figures, what assumption do you do to have an IRR that is interesting for you in terms of cost of capital? Regarding the assumption of the curve, we also work on forward curves, but we work on the curves on our pool achieved. What we need to do to actually have a correct representation of the figures we see. Concerning the PUN achieved, it is different from the basic PUN rather than regarding the national flat price.
I don't think we are the only company doing it, but every time we actually represent the data of PUN to the board of directors, we have the basic PUN and the achieved PUN because it depends on the number of plants you have. This PUN may change. So we build our curve and we have indeed people doing this as their job and we start from a general scenario and on this, we then consider our PUN achieved with respect to our plants. For instance, we take each plant, the Gissi plant, and we may think about the PUN for that plant. Whereas you may not have the tools to be so granular. We do this granular work. So the curve we consider is a curve based on our plants.
Regarding the IRR of annual project, for sure, we have built a model where we have paid a smaller premium to annual compared to the return ratio. We have identified opportunities to recover an important part of this premium with synergies we will implement. In the end, the IRR won't be very different compared to the regulatory IRR. I wouldn't talk about asset rotation. We have just talked about partnerships. We're not selling pieces of our business, units of our business, with respect to your question concerning the capital intensity of investments. We have evaluated that selling a minority share on certain identified assets allows us to gain or to keep that financial flexibility, also to protect our rating and at the same time to develop the growth we have expressed through the employment of cash flows coming from the management.
This is quite balanced and consistent with a very high flexibility in development CapEx that gives us flexibility to actually calibrate over the time indeed if things need to be correctly calibrated. But our reference point remains to maintain financial sustainability and metrics and credit parameters protecting our rating.
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Let me just add something. You cannot evaluate Enel network with a simple multiple because doing when the whole plan is CapEx -driven, gas absorption, and growing EBITDA as a function of our AB, the only metric you can use for these assets is the DCF. Negotiation with annual for the sake of simplicity was on discount rate. We have a regulatory one post-tax of 5.9%. If they had sold at 5.9%, they would have transferred the asset at zero value for annual. It wouldn't have made any difference for them.
Negotiation has been on some points on the fee that the annual being owner of the asset has decided to retain. Negotiation was only on that. We have never used a multiple logic. It wouldn't have made sense over the time window. The multiple is 6.22. Does it make sense? You can take the average EBITDA of the plan, so 24, 54. We have taken CapEx , 54. EBITDA is EUR 380 million. You start from 100. Average multiple is 6.2. But these are methods that are not really applicable in that case. This was the real negotiating topic. Where do we recover the 0.4, 0.5% WACC that we have lost? We recover it through synergies, 5% to 10% through synergies that we can deploy and thus recover. And we can also recover thanks to our future ability with the new tiers to find and become even more effective.
The target we set for ourselves is to make sure that this CapEx has a return, that the return on investment is aligned to the regulatory one. I can tell you that the question to which we would like to get an answer is considering we are talking about unique assets here, there is no specific market. It's a unicum. What's the attractive rate to be taken to be considered? These assets can express profitability over the next 10,000 years for future generations. This has been the starting assumption. Considering the fairness opinion, the rate is significantly lower than the one we have paid. Considering this logic, we are happy of how we have been negotiating. Of course, annual has retained a fee, but we have managed to get a positive result and a reasonable rate for us.
Why don't we reduce the CapEx ? The answer is in the first 10 slides in the vision we were sharing earlier. There's no time to slow down. We cannot reach decarbonization goals until 2050. I would rather open up to minority capital and find an Australian pension fund which could be an Australian or any other pension fund. We don't have any negotiations yet, but this is just to tell you that they might allow us to maintain the speed of the pace because my impression is in Italy, in Europe, we are progressing too slowly considering the target we have. We shouldn't slow down. It's better to find travel mates allowing you to keep the pace and to continue the growth path. Stefano, and then there's one more question, a follow-up question on my side. From outside, it's difficult to understand how generation margins can be attained.
The EBITDA in 2023 was EUR 1.1 billion, so integrated margin. 2026 is EUR 1.12 billion. What are the movements underlying that? You have sold at EUR 170 in 2023, megawatt per hour. In 2026, there is a decrease. Are there any other elements to be considered to maintain the same value? Can you help us understand the data you were sharing about market and energy generation? Second question, if the scenario were different EUR 10 less per megawatt hour, what would be the sensitivity of the EBITDA? And then about waste. If I am right in the previous plan, the word WT is to be acquired also through international operations.
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Do we have any visibility of what is going to happen between 2027 and 2030? So authorized CapEx or CapEx in progress. Can you help us understand how you are going to accelerate in waste? Can you expand on that?
Can you share information about the new projects? I don't know Sicily or Rome, is it an attractive WTE project? Last question about hydroelectric concession. I remember last time you had announced there would be an extension of hydroelectric concessions. Now the bidding process has started and we don't know yet what could be the future evolution. Can you help us understand that? What's your assumption until year-end?
Waste. Let's talk about waste first. Let me just mention a couple of projects. We have received an award in the bidding process to revamp or implement the Trezzo sull'Adda WTE plant which was managed by Falck. We have been awarded the order, a new WTE plant connected to district heating for Trezzo d'Adda. We are now in the planning stage and these are projects to be implemented until 2030.
We have revamping of Tecno A waste to energy. We have bought a plant with authorization of 150,000 tons, great profitability. It's another building site which will start operating next year. It will take 36 months to be completed. We have Cortoleona, Pavia, another WTE plant after a long process for changes and amendments. We are now completing the process without mentioning Rome or Sicily because these are delicate projects. We have anyway authorized projects in our pipeline. We have significant projects that have already been authorized so far. There was also another question about the bridge. There is a decrease in PUN and domestic power price, a descending curve in 26. We have Monfalcone with EUR 100 million EBITDA generated through capacity market. It's a plant with 870 megawatt.
We have won the capacity market for the full capacity with EUR 50,000, EUR 48,100 probably per megawatt, per installed megawatt. So it's quick math. We assume that it will start operating with about 5,000 hours of operation. There will be a decalage in the next few years. Monfalcone for sure in energy generation will offset. You have the descending effect of the PUN which is offset by hedging a 24 price in 25 and then rebound in 26 through the start of operation of the Monfalcone plant. There was also another question, Stefano, about hydroelectric energy. You know that here in Lombardy, we have more than 1,000 megawatt of installed capacity. There was a bidding process for players. It's a hydroelectric plant which is very, very small in size. There is a rationale in that.
The rationale depends on the fact that, as you know, Lombardy region has a guidance and annually is interacting with the Italian government and is bringing forward this hypothesis of the fourth way, so reassigning concessions as a return on investments on CapEx. This is the way which will be used also for the future. Why wasn't this part of the law decree on energy? It's a section in the law decree about competition, one of the milestones of the resilience and recovery plan in Italy. So in the context of negotiations about the flexibility of the resilience and recovery plan in Europe, hydroelectric could be one of the topics to be debated. This political willingness that has not changed vis-à-vis that choice and the fact that instead of bidding concessions, a ratio for megawatts to some extent already gives an answer.
There is a signal which has been conveyed about the fact that it is necessary to find an answer. This has triggered necessarily both here and in Abruzzo region where bids were withdrawn. There have been discussions on IRR and other topics and pending issues preventing short-term bidding processes. As of today, in our plan, we have envisaged EUR 1 billion investment CapEx in hydroelectric energy in the wake of continuity, also considering the bidding processes. I could give the same answer I was giving a couple of days ago during an interview to Il Sole 24 Ore about electricity. When you are the second player in a situation where you are very robust, very well organized, I don't see bidding processes as negative in themselves. When it comes to hydroelectric energy, that's more negative because of the timing for the concessions is 2029.
That's wrong timing. We are in a situation where we need to invest today to strengthen the hydroelectric capacity. We now have a flow of waters to the lakes which has been modified for topographical reasons. These structures are dating back to 80 years ago. They are no longer up-to-date considering glaciers melting and what has happened in the last few years in terms of climate change.
To attain PNIEC targets, hydroelectric is a central item. We need to start investing right now. We cannot wait until 2029 and the bidding process and reassignment in 2035. Otherwise, CapEx will only start after 2035. It's going to be too late for Italy as a country. This is the reason why we have assumed consistently with interaction with institutional representatives some growth in production. As you have seen, from 3.6 to 4.1, that's the assumed increase. Instead of a decrease, we assume growth linked to the CapEx we have.
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We would like to thank you very much indeed for attending. If you have any other questions, don't hesitate to contact the investor relation office of A2A. Have a nice day.