Good afternoon. Welcome to A2A conference, nine-month 2023 results. I'm Jack. I will be your technical operator for the event today. During the call, all of your lines will be muted. You will then have the opportunity to ask questions at the end of the call or also during the call. You can record your contribution at any time, selecting star key on the keyboard of your device. If you need assistance during the call, please select star on the keyboard of your device, and you will be contacted by technical operator. Let me introduce Marco Porro, who is going to start the financial call today.
Good afternoon. Welcome to the presentation of the first nine months. As usual, we will provide insights. Renato Mazzoncini, our CEO, and Luca Moroni will then manage the comments and the Q&A session.
Good afternoon. Thank you for participating in our conference call. You have already received the results, so no need for me to tell you that I'm very happy with these results, and we are most notably happy because once more, in this quarter, which is drawing to an end, enabling us to have good visibility on how the year is going to end, also in terms of guidance, is confirming the sound business plan we have launched in 2021. The 10 year 2021 plan, envisaging sustainable growth, and there has been a positive effect, driven by the scenario with good management, and this has enabled us to reach the results we are presenting today. Let me just highlight both of these elements. Structural growth.
That, we had envisaged in the business plan, the 8% annual growth rate that we have included in the plan, which of course, was closely monitored by investors and financial analysts. We have gone through very complex phases and nevertheless, this strategy has proved to be very, very sound, and it will also be the case in the next few years. Talking about this quarter, there have been positive effects arising from higher hydroelectricity levels versus last year. As you all know, it was a tragic year, most of all Q3, concerning hydroelectricity. So we still have a good hydroelectricity level, and there are also effective hedging strategies and portfolio optimization strategies with all the tools and the resources we have, and this has enabled us to record a very good result.
The retail base has grown significantly, 455k customers plus. So we now have 3.5 million customers, and this is important in two perspectives. The first, because it's one of our core businesses, and it's also important that we have a parallel growth of customer base and energy generation, which allows us to work in an optimized hedging strategy, most of all with reference to customer base and renewable energy sources. We have very innovative initiatives that we have launched in the last 10 months. These positive effects have been offset by lower CCGT production, stemming from the contraction of contestable demand, and as a consequence of that, also MSD and ancillary services are now normalized, as 2022 was not a reference year for standard planning. We didn't have a stable electricity market.
Slide number three shows the main results obtained in these first nine months by our group. Also, with reference to ESG indicators, they are very important to us. As you see, if we look at emissions, we are stable. We have 362 grams per kWh of energy produced. In normal times, this might not be good news. We know we have gone through a year where we have still. We had still coal-fired plants in function. We had to replenish our gas stocks, so as to tackle quite a stable winter price-wise. And of course, this has also penalized the decarbonization path. That is a strong commitment for our group. Our renewable energy production has increased, also supported by higher hydroelectricity levels, and not only. We have a strong increase, as you can see, of our electricity grid capacity.
We are investing constantly. We have a 4,418 MW Amp of growth versus previous year, which means, 89% growth of installed capacity, which enables electrification of consumption, e-mobility, heat pumps, and all that is needed for the decarbonization path. We have fewer water leakages in the network. First of all, if we consider mean average value, we are very low, but we still want to improve. We have a 1% growth in the share of female managers in our group, so we are still, we still have a gender gap, but, it's very important to see that there is a positive change in that. And we have more orders placed with the suppliers that have been evaluated with ESG indicators. We are continuing to work on sustainable finance, EUR 500 million green bonds issued in 2023.
We have a set of projects that you see on the right-hand side of the slide. We have a Matarocco plant built by A2A. It's a wind farm located in Sicily, where we have a strong wind blowing. 8 blades, 30 MW capacity in total, highly performing blades. We are growing in the region of Veneto, where we have acquired two plants for 17.5 MW each. We are continuing to grow in district heating, which is a key element for decarbonization of our cities. We have entered into an agreement with 3L to increase the utilization of renewable heat in our plan. Every year, we want to grow by about 100 MW, thermal megawatts, which means that we have to find alternative energy resources, renewable sources.
This is part of an agreement, and there are more with data center, enabling us to have more energy efficiency in, the district heating network, thus contributing to decarbonization of Italian cities, most of all, of Milan. And we also have a growth in electric, charging stations. Slide 4, you see the numbers. Revenues, no need to confirm. Here you see the change. Good news for us and for citizens. We, we become more competitive, thanks to lower energy prices. At the same time, the EBITDA, ordinary EBITDA, has increased by 20%. And this result, stems from the business plan. Already in 2022, the scenario, in fact, was quite sensitive year-on-year. Therefore, we are really deploying the resolved business plan with a positive, scenario effect.
We have significant growth of the group net income, plus 26%, ordinary group net income. As you see here, we have extremely thorough financial management, leading us to a more positive relationship, ratio of 2.6 of the net financial position on the EBITDA. Very positive attainment. We are proud of these figures. Let me just hand over to Luca Moroni, who will provide more details about the individual business units.
Thank you, Renato, and good afternoon to everybody also from my side. We are now page 5, where you can see the summary of the EBITDA trends. You see actually the ninth month, and you have EUR 1,354 for ordinary, and you have seen a growth, especially from the two BU generation market, both with the great contribution on the part of smart infrastructures. As well as slowing down that I commented in June regarding the waste BU as a result of certain stoppages, especially for waste treatment plants. But we expect that we will have a full recovery and actually achieve what we expected also as the target of EBITDA at the end of the year. So the recovery in the last quarter, because we have solved the problem of the stoppages.
And then let's go to page 6, where we see indeed the trend of generation BU that has been partly already underlined. We have a growth by 20%, EUR 190 million increase in EBITDA. And then we have especially the industrial portfolio, that is the leading this increase, and indeed the production from renewable sources as indeed compensated the lower volumes in thermoelectric plants. Also as a result of less contestable demand, but we have indeed a positive acting strategies and the management of the financial portfolio with regard to energy management. And of course the rainfall of this year has given an important contribution to hydroelectric production. And we also had some opportunities, because last year, in this quarter, we had an overranging due to the drought.
And now we see that, indeed, the trend and the possibility of the exploiting of the various technologies are being part of our portfolio of plants in the generation BU has allowed us to actually take the entire value we have always narrated as a competitive sector in the group. And we see on the right the graph, we see a normalization of, indeed, the MSD margin, and renewable production and PUN baseload, and indeed, also for ancillary services, the MSD margin, regarding then what are indeed physiological values of 2019 and 2019, regarding indeed ancillary services MSD. And then we have actually achieved an average result in line with the previous years before crisis.
Then on page 7, we see indeed the Market BU, which is one, indeed, the one of the two big performances of this nine-month period. We also see in this factor that it is a growth opportunity. And here we see how the, indeed, the electric load and the volume and also gas sales but indeed performed very well. And considering that, if we consider this phenomenon as a customer base phenomenon, we see a confirmation of the big good margins in the recovery margin and also an improvement compared to previous year. So not only margin being recovered, but improved, and also with customer base mass market.
In addition to that, we have the volume factor of the customer base that has increased by 400 new customers, coming from, indeed, the various bids, one in the Safeguard Market, in the Protected Market. That was the first, last part of the free market, of the liberalization market. And then we see that we have always inherited this as a factor of the bids for the Safeguard Market. And this allowed us to perform those retention actions for the customer base as a result of the quite special situation, and especially for certain contracts that had a fixed price, and indeed, we have seen quite high prices, for which we have actually indeed put our CapEx available to protect this. And page 8, regarding environment and the waste BU.
So this has a different performance compared to last year. Last year, we had suffered a lot regarding collection due to the increase in prices, especially in energy and oil, that had indeed, you know, the operating costs regarding our fleet for collection. This year, on the contrary, we are able to achieve good margins, and just a small reduction that can be partially offset, and we will be able to express the entire value of the new treatment plants, that had some delays at the beginning, especially in the WTE in Verona, and due to its debt, and we had to stop another plant. So we had this accumulation of delays for this reason, but as a whole, we don't have the full operation of this two plants of Lacchiarella, and the other one actually allowed us to recover this.
So for the, indeed, the organic waste treatment, and so we will have a good closure of the year. The smart infrastructures are performing very well on all regulated business, on all RAB, and indeed, we have benefited from the investments made, especially for the electric distribution, where RAB increases by 15%, in line with the targets of development, to the indeed, a quite significant investment plans are made in the group. RAB gas increases by 6%, and again here, indeed, the CapEx has a good performance, a good status of our network, and also CapEx for indeed, the hydraulic cycle are in line with our targets. Where we likely suffer is in the heat volumes, because we have lower volumes due to indeed, the temperature, especially in last winter.
So now we see page 10, how indeed our income statement performed regarding EBITDA, and we have seen after EUR 1,354 million, we have the EBIT for EUR 579 million. We have a slight increase for greater CapEx. And indeed we have indeed there's actually the area where there's specificity that needs to be underlined, and actually there's the release of other provisions indeed for actually the waste management, and due to the increase of actually tax rates. And now we have the effect indeed of the provisions. And regarding the bad debt provisions, we had the effect of lesser expenses of energy, but then we have the effect of quantity on new customers for competitive markets.
Financial management has been positive. Financial charges, EUR 193 million, with a proactive management also of the cash we have available. We have done pre-funding, as already mentioned by Renato at the beginning, we have issued a green bond at year start. We have our investing this liquidity will good results, enabling us to limit average cost of debt, which is 2.5%. CapEx, as you see here, we have close to the nine months is with about EUR 800 million, so that's the 2022 value. I would like to remind you, since you have all been following these calls over time, that the last quarter is a quarter, where you close some projects, so CapEx result is not linear. We are going to close with a very high value also this year.
I would like to highlight anyway, that EUR 477 million, 60%, are linked to development. We are still investing in infrastructures, because these CapEx are the main driver, growth of the group, EBITDA, in all the years. The main elements where we have investment are electricity grid, with a significant level of CapEx, three times the CapEx, if we take the 2010 to 2020 time window, also for gas. Most of all, the agreement with the municipality of Milan and Brescia and investment plan, which has been negotiated and finalized, we are following it. We have a growth in wind plants, Matarocco is now in operation, and then we have solar plants also. And we have the Monfalcone CCGT, assisted by capacity markets.
Then talking about the way, so we talk about energy recovery and material recovery. We are investing in Crotone, Calabria, in the new WTE TecnoA plant. And then we have also finalized an investment in Verona. We have more CapEx. 75% of the CapEx is consistent with SDGs, and 65% of the CapEx is in line with the EU taxonomy. Let's now look at the positive cash flow trend. You see, the management of the working capital has been able to attain these results. As I said earlier, financial expenses and assets, taxes are performing well. In taxes, we have optimization of the same, with a tax rate which is decreasing from 32%-29%. And we also have an extraordinary outflow, the extra profit, EUR 120 million relating to last year.
If we consider that, as it should be done, this is an extraordinary item, of course, so the cash flow, the positive cash flow, would have been even higher than EUR 856 million that you see here as FFO. Here you see EUR 856 million have allowed us to deploy the investment plan until September the thirtieth, also leaving some dozens of millions of EUR for sales financing in terms of dividend payout with this additional EUR 120 million euro, the effect would have been even more positive. With these results, as you have seen, we have revised and improved our guidance for year, and the EBITDA will be EUR 1,880 million-EUR 1,920 million.
That's the range which allows us to have some flexibility in year-end results, with net ordinary income ranging between EUR 550 and EUR 570 AF. So an important result, and the key takeaways are pretty simple. There is a very good business performance, of course, positive expectations also for 2024 in market and generation, the two BUs that have allowed us to correct the guidance upward. We are still investing significantly in energy and environmental transition. That's our map, our direction for the future. It has not changed. So we are navigating in challenging waters, like all other players. So we adjust the route, depending, of course, on external events. And I would also like to underline that we are paying great attention to the net financial position and to other financial ratios, which allow us to maintain a safe route. Now, we open the floor for your questions.
Thanks a lot. I would like to remind you that if you want to ask a question, you should press one on the keyboard of your device. First question, Javier Suarez.
Good afternoon, everybody. I have some questions about the new guidance of the company. You have revised the guidance upward for 2023. Looking at the figures, I think that this is a combination of better results than expected in generation and also in energy supply. So with a focus on guidance increase, can you help us quantify where the positive deviation in supply has taken place, and in generation, what has been the deviation, so as to improve the rationale underpinning the guidance review? First question. Second question related to 2024.
The CEO has commented that this allows you to have enough visibility also in 2024. In concrete, in business terms, can you give us your latest indication about hydro production that you expect to have in 2023 and 2024, and the forward selling level also in scalable production, and also the level of cap pricing that you are closing at for internal generation? So can you give us an indication of the volume feature in generation for 2024, so as to see whether this figure, this 1.9, that you have announced, should be still corrected upward in 2024, should stabilize or should decrease? Third and last question relates to the supply business. I would like to have your indication about the direction for 2024. 2023 has been a year of strong recovery.
What are the underlying dynamics that you expect for 2024 as opposed to 2023? Do you expect a growth in 2024? Thank you very much indeed.
Let's first answer to the guidance review. So we can give a breakdown about market and generation. There is quite a good balance between the two. As you have seen, it has rained a lot, so our reservoirs are now more full than they were. In June, we had already commented on that. Between June and September, the level of reservoirs has further increased, so better than in 2021, with a heavy rain that we have had towards the end of the summer. We have been able to have larger volumes so that we could make better use of the available water in reservoirs, which in turn has enabled us to produce larger volumes of hydro energy.
To leverage on this opportunity, which has generated a value and a contribution of EUR 57 million. Talking about the market, we have about EUR 40 million resulting from the very good performance, that the market is having in terms of margins, additional volumes due to the customer base enlargement. We therefore expect a positive trend also for the future, not only, for 2023 closing. As you know, sales campaigns for gas that typically start in summer. The electricity campaign spreads all through the year. So this has allowed us to consolidate the margins, and also to have a very good outlook for 2024. As I said earlier, EUR 60 million-EUR 70 million from innovation and about EUR 40 million come from markets.
And then we have smart infrastructures, which have also contributed with EUR 10 million-EUR 15 million, EUR 100 million new guidance, mainly stem from these two main drivers. Talking about 2024 hydro, we had started with a year that we expected to be normal. And after all the problems we had had in 2022, where we had no water stock. This is the reason why we had in our budget, we had assumed for 2023, an ordinary rain level, so before less than 4 tera, we had assumed a 3.8 tera. You know, our expectations were then adjusted. We have revised the forecast to 3.2 tera. Do you remember the first quarter of the year, where we assumed we could not outperform 3.2 versus 2.7 in 2022?
Rainfalls after May have prompted us to correct it upward to 3.5 TWh, 3.6 TWh maximum, which should be the end of the movie, so to say, at year closing. With a major difference versus 2022, we have a full water reservoir. So this was not the case in 2022, where we had 2.7 TWh and empty reservoirs. Therefore, considering the fact that we have full water reservoirs and using the empirical method as usual, so we calculate the mean value, considering the 10-year timeline, 2022 has recorded 2.7, the previous year, 2.5 TWh. So the forecast is now between 3.8 and 3.9 TWh, is slightly less than 4 TWh. We have an important potential with our turbines and daily production, 30 MW per hour, which is significant.
So we have a great potential in our plants. And of course, the variability linked to rainfalls is very significant. It has, it might prompt an upward adjustment. We assume 2024 with a production, which that is about 10% higher than in 2023. Looking at the supply, sorry, considering pricing in 2024, Luca might give you additional details. We have good coverage also in this case. We have good prices, and we expect a generation performance in 2024, which is still very significant. Also, for supply, we have recorded very good figures in 2023, despite the fact that we have invested significantly, which means several dozen million EUR, in customer retention initiatives, mainly through the application by the Antitrust enforcement of the provisions of unilateral contract amendment.
What has happened in a nutshell, some customers, not few customers, have renewed at a fixed price, at very high prices, their agreement, we have covered that. So we have a purchase level that we could not correct, and these customers are more exposed to the churn rate, and they might interact with the neighbors and realize that they are not aligned price-wise. The Antitrust authorities has obliged us to do that. So no unilateral contract amendments, no variable prices, no contract renegotiations were possible, and we expect them to call us. So we have allocated a budget so as to retain these customers. Why am I telling that, Javier?
The very good results in 2023 would have been even better if we had not decided to invest a part of the margins so as to maintain a good reputation among the, among customers, so customer retention. And as you probably all know.
Calls for bids on a Safeguarded Market are play a central role. They will start on the eleventh. The customer shift might take place on April the first, as expected, or more likely during the summer of next year. So the assumption of losing some marginality is more than offset by the growth in customer base and set of these calls or bids. We assume for 2024, a growth in the, on the supply side in general, an exercise that we continue to conduct, in the company, is to normalize these results, comparing them, to the time scenario in January 2021, when we have first approved the business plan, where the price scenario was the, year-end 2020 scenario. Very different from the current one, therefore, comply with the industrial plan. Business plan target is very important.
We monitor the effect of the growth, 2024. We cannot give you more details as of today, but the scenario effect with implementing our system is quite flat versus 2023, and we have the growth in the business plan as expected. You can take a look at, the business plans which have been submitted, and we had assumed a certain growth rate in 2024 versus 2023. Let me just close by saying, that we have also, hedged for 2024. This is very similar to 2023 and therefore higher than EUR 150, and with an hedging level, 36%. So this is a confirmation of what Renato was saying, that we have indeed, a similar scenario to the one we have had this year.
So we expect, in any case, to exploit at best all opportunities, also in the generation and regarding market. We said that we will have the possibility of having the best value from new plants that have come into operation in the waste BU, giving their own contribution to the growth. And regarding networks, we then have the adjusting of regulation with WACC that we're expecting with an increased positive effect for the factors and some other items that will provide their contribution. Indeed, that's going to be interesting also for next years.
So, just to make follow-up, what I have understood is that from always, the 2024, may be similar to 2023. Is this indeed the takeaway message? Is this what you are saying, or I have misinterpreted?
Well, regarding the growth, the scenario effect and the industrial effect, the scenario effect will remain the same, won't give you an additional contribution to the growth. Whereas the industrial part, to which Renato was referring, we will then recover the average growth we have stated when we presented the industrial plan, and that should be confirmed. As a matter of fact, if you look at the industrial plan and the update we had in January 2022, the last big update, we indeed had expected before the scenario effect, we were expecting, indeed, an EBITDA of EUR 1.6 billion. So if you look at the scenario effect, we are in a situation where the scenario effect, compared to that period, amounts to about EUR 250 million or EUR 300 million.
So it means that we are following the industrial plan. We are performing a little bit better about the scenario effect that started in 2024, that will be stable, whereas the industrial plan is continuing increasing because of a series of things. So we are following our industrial plan. That is indeed regarding your first questions and observations, but that was considered partly ambitious, but we are respecting it, and we were lucky enough to actually have a scenario effect that is allowing us to achieve certain targets earlier.
Quite interesting. Thank you.
Thank you very much. Next question comes from Stefano Gamberini from Equita.
Yes, good evening, everybody. I also have some questions.
The topic in power generation now and the return, the normalization of ancillary services, or there might be a reduction considering the measures that by turn on this aspect. So what can we expect in 2025? The other question concerns indeed the reduction of CCGT. What can we expect for next year? Was it a trade-off due to some other elements? Could be a stabilization or a growth in volume for next year and a spike stretch, because that was quite high in the first part of the world, so you may even add in for next year and at which level? The second question in this sector is my usual question regarding the hydroelectricity concessions. So there might be a decree that should be issued by the government regarding the longer period concessions.
So we would like to understand the debate that is taking place in Europe and on the other side, whether we are talking about a RAB system or there has been a longer period in concessions. So regarding CapEx as a trade-off. And the other thing I want you to understand, regarding this part of the energy side, there was EUR 50 million available as an offset that were not used or partly used, if I have understood well. So there's a EUR 14 million more you have told us about, so 2,040 becomes 2,080, and so this may become something that can be projectable also to next years, because that make greater unit margin that can be expected also in the future.
The other thing, the last thing is to understand whether there's a better guidance, also the debt level at the end of the year will be improved. Also, regarding CapEx, that you have given us guidance that for 2023 and 2024, CapEx was about EUR 1.3 billion-EUR 1.4 billion, more or less. Can you confirm this? Thank you, and sorry, I apologize for the many questions I've made.
Well, I'll start with the hydroelectricity concessions. Regarding this, there can't be any RAB system, because if there is a fixed point in Europe, is that the electric generation market is a free market. So in no scenario there might be a RAB mechanism, so a regulatory mechanism or a RAB mechanism.
You should consider that right now, we're not talking about this regulation, so coming into details, there is no longer extension of concessions, so it is not an extension of concessions that can be hardly accepted by Europe. But we are talking about reassignment of concessions to current operators motivated by important CapEx being made in the next 10 years, so that we can maintain the optimal performance to achieve the objectives. So under this point of view, what might have leading due to misunderstandings of the new, indeed, investment that want to be correctly remunerated. So there is a valuation of the new investments that somehow is within this assignment of concessions.
So the debate with Europe, considering, you know, a low tax, a low draft, that has the alignment of regions and government for the operators. I don't see any problem with Europe, apart from timing. There is no regulations in Europe, with a mandatory bid for hydroelectricity, and indeed, in most member states, there is this idea that this is a sector that is stable, without significant growth and does not require any bidder operations to be managed. And, with respect to the commitment Italy has taken in the Recovery and Resilience Plan, is that, Italy should issue regulations and laws in order to accelerate investments in many sectors, including this one.
So as of today, there's indeed, a draft law is more consistent with the, indeed, Recovery and Resilience Plan objectives, because, almost most concessions, some are from us and some from Edison expires in 2029. So the current disruption will be capped in between to 2029, and then, for the next four or five years, we will see. whether there'll be a reassignment of concessions. So Europe has no interest about investment in hydroelectricity, so up to 2029. So that is the reason why, and, indeed, the minister would explain to Europe, there's a situation. So we, believe that an agreement can be found on this point, so that investment, should be started immediately.
Also, concession expiring in 2029, because almost all hydroelectricity plants have lost some capacity of generation over the last few decades compared to when they were built. So under this sense, we are working for that. Regarding CapEx, I have said that we can confirm, on previous guidance, 1.3-1.4, that is the idea. We close it, and the gap is under control. It might be also go down compared to 2.6, but we are already at a quite good level, so we are satisfied of this. Whereas, with regard to the issue of, indeed, what we have left for the market and for compensation, for that buffer we had, and we have spent some of it, about EUR 13 million, and, rather than EUR 50 million.
And we think that was a good investment because we had the churn of these customers that was much lower compared to the case if we had not treated them well enough. So the margins we can bring, we can take home also from big customers. So margins that we expect can be confirmed also for the year 2024. And with regards to MSD, regarding normalization, so every year we see, we start with MSD that is very low, and then, you know, without mentioning, because in 2022, because have always been higher. So when we have MSD and we calculate an MSD in an ideal world, in a world where there is some variability, because that is normal, nothing can be, I mean, so precisely forecast.
But it is a value that is normalized compared not to current scenario, but compared to an ideal world. So if you ask me what we expect from MSD in the next few years, we will have a standard, normalized MSD and I expect that we might do something more rather than something less. I don't know if Luca would like to add something?
Yes. As we commented previously, this market spread have decreased. We are hedging what we can hedge. Market liquidity is not expensive, and therefore, we can only do what the market allows us to do. We are at physiological levels for this time period. We have about 10%-12% hedged with the levels of 8%. In terms of production, we don't expect a disruptive situation, where plants are producing by far less than in a normal situation. Contestable demand in Italy is an important driver, and we consider how much percentage-wise it can change. What we can do very well, if we are strong in a technology, because we have the opportunity to do so, we should leverage on the use of the other, as we have repeatedly said.
Well, the flexibility, we need to reap the benefit of a specific time window with higher margins, which also means higher spreads than you can typically find on the market. Very much with me.
Thank you. Next question, Emanuele Oggioni.
Good afternoon. Thanks for your presentation. Congrats for the performance. I have a couple of residual questions. The first is about the revised guidance for outlook for 2024, most notably for the waste business. You have mentioned earlier that we have a scenario price impact in generation and on the MSD market, which is positive, about EUR 300 million in 2023, to be confirmed in 2024. And for the gas core part, you proceed as per business plan. I would like to understand whether this also applies to the waste business unit. You have outlined some delays in Crotone and in other plants. Has this been offset by other projects that are proceeding faster? Could you also remind us about the guidance? It's probably less than EUR 400 million-EUR 450 million for EBITDA, for the waste business.
Is this value confirmed? Is the business plan confirmed for waste? And what are the updates of this specific business unit? First question. Second question, second focus is about retail and the energy supply. You have the, there is still a significant part, the customers who have agreement that fix the prices, and some of them still have very high prices. Can you provide us some indication on that? During the last call, you have said 50/50, so 50% at fixed price, 50% at variable prices. And what should we expect? Is there going to be a progressive reduction in operating margins for customer, considering that as of this contract, that fixed price reach maturity, they are more beneficial to you, they will be replaced through contracts with lower margins.
Then, of course, the results of market liberalization, which leads to an increase in volumes and numbers of customers on the one hand, but in the short term or at the beginning, it should also lead to more competitive pressure and to greater dilution of the margin per customer of the unit margin.
Talking about waste, I confirm, Emanuele, that the business unit continues to grow, thanks to CapEx and new operation of plants. 2 important projects, one is already operating, it is WTE, the TecnoA in Crotone, Calabria. We have acquired the plant in 2022. The authorization for a new plant with a double capacity was already in the pipeline. There have been some delays. This is one of the CapEx-specific delays linked to a positive fact.
The business plan was to shut down the older WTE plant, to start building the new one with a different layout, with local approvals. We have managed to keep the old one in operation while we are building the new one. This is a WTE plant which will greatly contribute to the performance of the business unit and prices. You know, we have at Trescore, we have been awarded the order for a WTE plant in Trescore, Lombardy. We will start building quite soon. Then we have Verona, Corteolona, where a land reclamation has been completed, so they are ready to start now. The environment waste is the business unit with the greatest number of plants, which will be constructed within the next few months, is 2024, and with less than EUR 400 million. That's our guidance.
But the growing business plan can only be confirmed for 2024. Commenting upon retail, we have a very specific dynamic. We have the last call for me from the free started market of the competitive scenario has now weakened. So after the sacrifices linked to the energy crisis in 2022, considering the companies that have gone bankrupt, they are no longer on the market, considering the reduced competitive scenario. We are taking stock of the market evolution, and we don't expect it to go back to the competitive dynamics, which was so tight as before the energy crisis, when there were 800 large and small energy players competing on the market, putting pressure on margins and eroding them. Nowadays, to stay on the market, you need to have well-conceived hedging policies.
You need to have financial capabilities to finance the net working capital. Think of the agreements that fix the prices. The reason why fixed prices for ordinary customers are twice as high as the prices for variable agreements, in the past, they were 5% higher, which means that the cost of hedging has completely changed. You can reach 800 EUR pool, which was inconceivable in the past. This is what is happening now. One of the reasons for the driver of Noi2 offering is that 70% of the price is fixed, and it's very competitive. With 119 EUR per MWh, you can compete with prices on the market that are twice as high. And it brings a significant marginality to us, much better than other agreements we can make. Retail leads to higher margins than B2B.
Therefore, working in this segment, it's really possible to have a very positive situation, and you can read a good margin. It's a win-win situation. Also, customers who have undersigned the Noi2 offering are more than happy because they have realized that they have managed to stabilize their energy prices, also in some cases, under variable prices. So I think that, the margins we see today in retail, as I said earlier, responding to Stefano, will probably reduce to some extent with the expansion of the customer base. The market to be, is expected to go on a continuous growth path.
Thank you.
Thank you very much indeed. Next question, Davide Candella, Intesa Sanpaolo.
Good afternoon. Thank you very much indeed for presenting the results. I have a couple of questions.
With reference to your financing policy, commenting Slide 24, you have a well-balanced situation when it comes to debt maturities. Considering the liquidity, you have more than EUR 2 billion liquidity, also thanks to the strategy. So how are you going to invest this liquidity? How are you going to refinance your assets, also considering the cost of debt in light of the evolution in interest rates? How are you going to invest the cash to do more CapEx than you had originally assumed in the plan? The second question linked to this topic, looking at the leverage and the lending value at year-end, considering it could be reached at 2.6, considering the level of debt as of 2023. If I'm right, to reach a 3 ratio, you have EUR 800 million-EUR 900 million of allowance.
The flexibility you have in the balance sheet could therefore be used for specific M&A transactions to support more growth, or are you going to push in development CapEx because you have many projects in the pipeline? Also considering a possible evolution of the hydro tenders and the concessions, so you might consider investing there because there are many investments to be performed there. Last question, about waste. In nine months, these CapEx have slightly decreased. I, I'm wondering whether this is just a timing issue. Can you give more details on the timing for waste-specific projects in 2024 and 2025?
Funding the policies. As you have seen in this slide, we don't have a large need to go to the market.
We, we can play ahead of time, as we have done so far, also using other funding channels, as we are doing through bilateral agreements or through buy lines, which will allow us to control the cost of debt, compared to public debt market values. And then we will see next year whether we will have the opportunity to see an interest rate trend that is changing, and so that values are become more accessible, more affordable. We take an opportunistic stand on that. We consider the different opportunities we have, and we closely monitor the average cost of debt. Considering the financial leverage, as Renato said earlier, we have a very comforting level, and we consider to maintain it. We are now at a 2.6, in line with the metrics of rating agencies.
Considering the size of the portfolio, a 3 level, you know, this is a theoretical room we have, the range we have, but it would be good to maintain the current level. If, of course, we see a great opportunity to generate more value, we have some additional flexibility, but we prefer to maintain the level we have today, which is also underpinning the forecast. I hand over to my colleague for the answer about the waste business unit. The slowdown, as I said earlier, is only linked to the delay in Crotone CapEx. We have negotiated the possibility to change a plant layout so that the old plant was still in operation while building the new one. This has caused some months of delay, but we will close the time delay until year-end, and we will do it completely next year. Same goes for Trezzo.
The Trezzo plant, the awarding station has replaced the RUP. A person has retired. This might happen in the public administration, no major problems, but there have been some process-specific delays, and some CapEx that we had assumed in the, in these months have been slightly postponed. Nevertheless, that's ordinary administration of things. I don't remember who had asked the question on that. Probably it was Stefano. We reckon to close at EUR 1.3 billion CapEx, which means about EUR 500 million in Q4.
Thank you.
There are no more questions. I hand over to Marco Porro to conclude the call.
Thank you very much indeed. If you need further clarifications, don't hesitate to contact us to contact the IR team. I hand over to Renato for the closing remarks. Nothing else to add on my side.
We look at 2024 with the best of the best closing, you have already some way close to 2023.
Okay.
Thank you very much indeed, and have a nice afternoon.
Thank you.