Good morning, ladies and gentlemen, and welcome to our 2020 Capital Market Day. COVID keeps us far, but in this virtual reality, distances are shorter. We will, in a few minutes, kick off with the event, but before that, let me introduce a brief video. You will see represented our business and how this creates concrete benefits for people. It talks about restarting and people empowerment to create a more sustainable tomorrow. Open power for a brighter future. We empower sustainable progress. Enjoy the video.
Where will your power take you? To the same old world? Maybe not. To a world we can change for the better? Yes. Because today, we have the power to create a different tomorrow. A more sustainable one. A power that opens us up to a brighter future. Today, you can drive faster than ever without the planet noticing it. Today, you can use the wind just to text your friends or to make your home a warmer place. Today, you can take the job of your dad and make it better. You can make the night better. You can take a span. Yeah, just doing the laundry. You can take a city and take it forward. You can go forward even when the whole world seems to stop.
Today, you can be the one who saves pirates in Brazil, the last two, or the one who brings light to his community. Let's open our power for a brighter future.
Great. We are now good to start. Agenda on the screen, please. Okay. Our CEO, Francesco Starace, will illustrate our 2030 vision. Our CFO, Alberto De Paoli, will walk you through the 2021, 2023 plan. Before moving to questions, Francesco will share some closing remarks. During the Q&A session, I will call analysts connected either via Webex or call. Please raise your hands in Webex or send to us an email to investor.relations@nl.com to book yourself. Now it's time to go. I hand over to you, Francesco.
Thank you very much, Monica. Good morning to everyone. Welcome to our 2020 Capital Market Day. The evolution of technology has transformed the energy since its inception. This is a trend that is today in evident acceleration. This is bringing about a rapid transition to a more decarbonized and sustainable planet. In this transition, electricity is a winner. Renewables are displacing thermal generation in the world energy-electricity generation mix. In 20 years, global renewables capacity is projected to grow more than 4x . You can see this in the chart here. Vis-à-vis today, creating a huge market for global leaders. The increased share of renewable energy at lower economical and social cost is allowing consumers to opt for a higher share of electricity consumption. This increasing share of renewable energy supports this trend of growing electricity consumption.
This, in turn, supports growth in demand volumes and requires new services, creating new market opportunities for utilities. Infrastructure power grids will connect growing renewable capacity and will have to become more resilient against extreme events and run at a higher quality of service and reliability levels. Digital networks will be at the heart of the new energy world. Indeed, digital will be at the heart of the utilities of the future. This drastic and accelerated change of landscape will require utilities to become the center of a very complex system, as summarized in this chart. Energy transition dynamics allow an expansion of traditional utilities business models, adding circular models to asset-intensive and linear ones that are the ones that we have seen so far. Utilities will not just act as owners and operators of assets, but might become enablers and orchestrators of more complex systems.
These systems will be composed of a multitude of distributed generation assets, such as renewable power plants, storage solutions, charging stations, and also electric vehicles. Digital platforms will be key to manage this increasing complexity, driving a sustainable energy transition within the evolution of regulatory frameworks. Scale and efficiencies are gained through reuse and plug-and-play models, which in turn will reduce marginal costs. Utility clients are consumers and prosumers at the same time. They buy innovative and sustainable solutions and services, and they will get access to shared value pools. Innovation is boosted thanks to an open, fast, and inclusive approach, allowing multiple stakeholders to participate in the innovation process. This will happen while driving data flows across company structures. How does that take place? In the new energy world, digital platforms are replacing the traditional siloed approach and the organizations that we have used so far.
This means shaping a multi-layer digital architecture connecting data, data lakes, and the cloud and solutions. The new platform-based architectures enable the adoption of a platform operating model, flexible and modular by definition, which is based on reuse and will reduce marginal costs. The implementation of a platform business model built as a service, such as demand response for large customers for the electrification of public transport systems, and a strict compliance with an increasing amount of regulation around these very themes. We believe regulation will play a key role in the evolution of this model across the utility industry. Let's see how we are preparing for this transition and where are we today. Enel future is leveraging on a strong leadership position that we have. We have created the world's largest private renewables operator with 49,000 of renewable capacity, and we are the fastest growing player in this space.
We have the biggest network system with more than 74 million end users, and we are the most advanced in digital transformation and management of the networks. We manage the largest number of customer base, serving 70 million customers around the world. The results that we have just achieved in 2020 are proving the resiliency of our integrated business model. We have a 163% total shareholder return achieved over the last five years, which is a recognition of the industrial value we have created over time. We are not just leading in terms of dimensions. We are also leading in terms of evolution in the transformation that we have started in 2016. We are now on slide number eight. Four years ago, we have kicked off a massive digital transformation journey. We have set the foundations to evolve towards a digital company.
We have completed successfully our cloud transformation in April 2019, being the first major utility that is now 100% over the cloud. This transformation has a significant impact on the performances of our business in terms of scalability, automation, efficiency, and accessibility. For example, global renewable business maintains its own position thanks to an operating and maintenance platform and leverages on a worldwide platform-based development and engineering and construction model, which I shall illustrate later on. NLX designs its offering to all customers according to a unified digital platform. Networks are converging their different operating models into a single platform driving operations worldwide. Being a platform-based utility is enabling Enel to capture new opportunities to create value. We see two complementary business models emerging in our way of doing business. The traditional business model, which we call ownership.
Here, platforms play a role in making and enhancing this traditional business model to be more profitable. They drive efficiency into the system. There is a second business model, which we named stewardship. Here, the business model enabled by platform sees Enel as a catalyzer of investments of third parties, providing services, products, know-how, or also co-investing. It is a way of enhancing our capabilities, multiplying the way of projecting value around ourselves, helping others also co-invest with us. With this business model set up, Enel is positioned to fully benefit from the emerging opportunities. Where are these opportunities? Over the next 20 years, a total of $26 trillion will be required for adequate renewables development. We are talking about $24 trillion. Average annual rate of investment will be 4x higher than what has been the average investment rates of the last 10 years.
This is on renewables. On networks, yearly investment will grow more than 2x compared to the last 10 years, the period 2010, 2019. This will reach an accumulated amount of about $12 trillion. Investment into improving end-use energy efficiency, electric mobility included, will increase on average more than 5x compared to the last 10 years, reaching a total of $14 trillion. This whole figure adds up to a total of $50 trillion that will be invested into the power sector in the next 20 years. These are figures 2020, 2040. Thanks to the leadership that we have, the dimensions that we have, and the business models that we have put in place, we are perfectly positioned to capture the value that will be available to accelerate in this transition. We plan to mobilize investment for about EUR 190 billion over the next 10 years.
We plan to invest around ERU 160 billion of these EUR 190 billion up to 2030 through our ownership and stewardship models. We will also catalyze EUR 30 billion of third-party investment in the process. In 10 years, the group will add 95,000 MW of renewable capacities, which will more than triple the 2020 installed base. We expect 75,000 MW of these to be fully consolidated in our books and the rest to be managed by third parties. As we grow our renewable business and in line with the transformation of the energy systems, we will invest in our regulated asset base that will reach EUR 70 billion of RAB, around 70% higher than today. NLX will grow its solutions to business, to B2B, B2C, and B2G customers, growing accordingly, as you see in chart number 12.
Now, if we look at how these two models evolve over this period of 10 years, we first look at the classic ownership business model, which is shown here in chart number 13. The investment is an accumulated amount of EUR 150 billion. They will result in a large increase in renewable consolidated capacity. It will reach 120,000 MW in our books at the end of 2030. Despite a projected decline in power prices, which we believe will happen, growth will not be at the detriment of returns, mainly thanks to efficiency and scale. An increase of 35% in RAB over end users, so this is a ratio that we put in here. This will happen as new CapEx will be triggered by new and distributed renewable capacity to be connected, coupled with the need of increasing levels of quality, reliability, and resiliency to networks.
A growth of value per customer of 2x will happen when the completion of a global operating platform to manage customer operation worldwide will lead to a substantial decrease in costs. The ownership business model will couple with a growing importance of the stewardship business model, which is depicted in chart number 14. Within this model, operating platforms, business platforms, joint venture, and partnership businesses will generate a cumulative EBITDA of around $17 billion in the next 10 years' period, vis-à-vis an investment by Enel of around $10 billion in the same period. Do not forget, this $10 billion will also attract another $30 billion of investment by third party. 50% of the overall investment of $40 billion will be allocated to renewables. The rest will be evenly split in fiber, electricity transport, and flexibility.
Operating platforms will generate around $4 billion of those $17 billion in the period, and business platforms around $10 billion of those $17 billion. Platform enabling joint venture and partnership activities will account for about $2.8 billion of EBITDA. The value associated with this last business will not be capitalized entirely during the period. We calculate that our joint venture and partnerships will have an implied fair value at the end of the period, so in 2030, of around EUR 10 billion. These two models, ownership and stewardship, create long-term sustainable value. EBITDA and net income compound annual growth rate by 2030 are set to increase by mid to high single digit, with a good improvement of profitability over the period. Growth in the group financials are supported by business ambitions that I will detail later.
Before that, let me show you what we think will happen in our decarbonization, electrification, and massive use of platforms in this period. As far as decarbonization is concerned, we have put some key figures and some performance indicators in front of you, first of which being that renewables will save more than 200 million bbl of oil equivalent by 2030, or around $11 billion of costs, and will reduce greenhouse gas emissions by 80% vis-à-vis 2017. Thanks to the push in electrification, we see households saving around 25% of the energy bills and a 40% reduction in their emissions if they switch to electricity. Enel's actions on decarbonization and electrification will create more than $240 billion of GDP over the period between now and 2030.
Investments into digital platforms will improve significantly the quality performance of our networks, will reduce emissions, and will allow our CNI customers to save more than EUR 800 million cumulatively in the period. All of the business lines are contributing to value creation, setting sustainable long-term ambitions. Let's start now with a little bit of a snapshot of these ambitions. Here you see renewables. We plan to become and retain the role of renewable super major with the world as a geographic footprint. Our ambition is to further strengthen this super major position that we enjoy today. We will triple our total renewable capacity to 145 GW versus the 49 GW that we have today. This will grow our global market share from 2.5%. Today, we have a 2.5% of the global yearly installed base to above 4%.
Although this seems a very big growth, please bear in mind we're still a tiny portion of the very large renewable energy universe. There is a lot of space there. We will be able to maintain profitability thanks to our global operating platforms and the integrated position that we have along the value chain. The $85 billion cumulative investment that will be needed to achieve our goal will be supported and made possible by the fact that we have the world's largest and most diversified development pipeline in the industry. The ownership model, now let's take a closer look at how we work. First, we start with the renewables ownership model. We will add in the period 75,000 MW of renewable capacity, reaching around 120,000 MW owned at the end of 2030, which is 2.7x the current installed base.
I want to stress here one point. We consider renewables to be the generation capacity of the future. There will be no more difference between renewables and thermal generation. There will be generation, and it will be by far renewables. We will value this renewable business as a component of the integrated value chain, not on a standalone basis. The technological split of new addition will be fairly balanced between solar and wind. It will be deployed in all markets where we today already have or might build in the future an integrated presence along the value chain. We are really looking at the integrated value chain approach.
To back these growth ambitions over the next 10 years, we will be investing around $60 billion in the development of renewable capacity at blended EBITDA CapEx return of around 11%, as you see on the right-hand side here of the chart. This will be in line with the overall return we have on our asset base today. The stewardship model is interesting too. The effort on this business model from our side will catalyze about $20 billion of investment, of which 90% from third parties, resulting in more than 20,000 MW of capacity built and subsequently managed by us, mainly through joint venture and partnerships. In this part of the business, we will invest around $2 billion. Third parties' development fees, operation and maintenance contract fees, capital gains for the sale of developed projects will generate EUR 4.3 billion of Adjusted EBITDA by year 2030.
At the end of the period, we estimate the value of the existing joint venture and partnerships, which will be in place at that time, to be about $3 billion. Now, how can we do this based on what kind of tools? The first and most important one is the existing of this pipeline. Today, we manage the largest renewables pipeline in the world. This is a pipeline that exceeds 140,000 MW today. This is an increase of about 50,000 MW. If you remember the pipeline we presented to all of you last year, it's about 50% compared to that pipeline, 50% higher. This provides a very, very large reservoir of capacity from where the group will pick up the investment opportunities in the coming years.
Growth ambitions are on generation, but for the first time here, we show also a part of the pipeline, which is about storage. Here we have today 70,000 MW of storage investment opportunities, of which 3,000 MW are in mature state. Finally, of all this pipeline, 9,000 MW are today in various degrees of execution state. The technological split of the mature pipeline is well balanced between wind, mostly wind is onshore, and solar, covering a geographic footprint that is unmatched at this point by any other player. I stress the point we see our footprint as being the world. The development of such a large pipeline benefits how can we manage this? This is based on the fact that we have built a platform that manages this pipeline in an integrated manner. Here you see on the left-hand side the presence of our business development efforts.
In more than 30 countries, we are employing around 450 people in our employees, and they themselves interface with a little bit more than 1,000 external people working on this development effort. They all enjoy and share their business platform. This is a digital platform that provides project developers and planners with a common interface for pipeline management following every stage from the individual scouting until handover to engineering and construction. This setup offers extreme flexibility, extreme adaptability, and enables a very wide geographical spread seamlessly. Our development platform is very efficient. We invest about EUR 1 billion to support this expansion over the next three years. At the same time, we project to reduce the unitary cost of development by 10% in a ratio of cost of development per megawatt. Now, this is a platform that we have developed and used for business development.
Similarly, we have a digitized platform approach for our engineering and construction processes, and this is shown on this part of the chart. As always, on the left, you see the geographical footprint. On the right-hand side, some key figures. Engineering and construction is a global community. This is run today by 1,600 employees and more than 12,300 external workers that are on our sites every day. This global platform manages today a little less than 100 projects under construction, a number that grew remarkably since 2010, thanks also to automation solutions that are used in around 30% of our sites today. These solutions, together with expanding know-how, are resulting in a 25% reduction by 2030 of the project lead time and an improvement in efficiency of our workforce, as you see in the reduction of headcount per megawatt in execution by 9%.
We move to operation and maintenance, and this is another platform-based operations. Today, we have about 4,500 workers. They are assisted by another 5,000 external colleagues. They manage 1,200 plants around the world that comprise 16,000 generation units in 23 countries. 100% of the fleet is managed remotely. Around 86% of our workers are provided with different degrees of digital equipment. This globally spread platform will support a decline in OpEx per megawatt for renewables of around 10% by 2030, while reducing production losses by an average across solar and wind by 7%. In the next two charts, we are going to show some opportunities that are unfolding in the front of renewables hybridization. The first one is the mix between battery storage and renewable capacity. We believe batteries will develop quickly as a key enabler of system flexibility and reliability in this energy transition.
In this next decade, the group is going to increase its battery energy storage by 20 TWh capacity with the aim to have an integrated competitive decarbonization offer. This will be value-accretive. We have evidence of that nowadays because it will reduce the exposure of renewables to unbalancing costs, system costs, as well as curtailments and network congestions. It will generate additional margin through capacity payments and auxiliary services. It will open to renewable actions that will target integration between renewables and storage. We see these kinds of auctions taking place more and more often as networks understand the need for flexibility in their own daily operations. Through 2030, Enel will invest $5 billion in the hybridization of the existing renewable generation plants and adding battery storage to them. In terms of returns, we estimate on storage an EBITDA CapEx ratio of more than 15%.
Let's talk a little bit about Green Hydrogen. Our vision is based on the possible break-even economics of Green Hydrogen vis-à-vis other CO2-intensive ways of production of hydrogen today. This business model will be mainly based on three types of revenue streams. We, first of all, have proceeds from Green Hydrogen sales to industrial customers that are operating in sectors in which emissions are hard to abate. A second is proceeds from ancillary services sold to the grid by the renewables hybridized with Green Hydrogen plants and, of course, proceeds from the sale of electricity, which is not directly diverted to the electrolyzers. At present, we have projects under development in Chile, in the U.S., in Spain, and Italy, as you see in this chart. Any of the markets in which we are present today could, in principle, be considered for wind or solar plus electrolyzers.
We expect to grow our Green Hydrogen bid capacity to more than 2,000 MW by 2030, following the reduction of cost of electrolyzers, which could materialize in the next five years. You can imagine the concentration of these 2,000 MW that we project concentrated in the second half of this period between 2020 and 2030. Now, let's take a look at how the capacity and production of this global power generation will look at the end of the period. What kind of picture comes out after all this is said and done? You see that this slide summarizes the evolution of capacity and production through the next decade. At the end of this decade, Enel will double its total capacity from 88,000 MW to 170,000 MW, with the share of renewables representing more than 80% from 55% that we have today of its total.
Total production will be 85% of today, with more than three-quarters, 80%, as you see here, represented by renewables, and the remainder being basically gas and essentially modulating services as coal generation will be completely shut down. As far as coal is concerned, you see here the downward trend of this way of producing energy. We have further reassessed our coal phase-out strategy. We will exit coal by 2027, no more 2030. That is three years later than what we had communicated last year. This chart also shows that this acceleration of coal production reduction started in 2017, with the share of production coming from coal decreasing to a mere 7% in 2020 compared to 28% that we had in 2017. It is already sharply decreasing. The phasing out of coal protects generation margins, increases over time the profitability of our asset base.
This also allows us to boost the reduction on greenhouse gas emission in line with the 1.5% scenario. We want to underline here that we expect to reach around 218 g per kWh scope one emission in 2020. Let's remember that in 2015, we had set a target that was certified by the Science Based Targets initiative for this 2020 year of 350 grams per kilowatt-hour. We are 40% lower than what we had already projected in 2015. Second point, in September 2019, we announced a new target for 2030 consisting of a 70% reduction of CO2 emission per kilowatt-hour versus 2017, reaching a level of 125 g per kWh. This has been certified by the Science Based Targets initiative under the two degrees pathway.
Lastly, on October 30, we announced a further step up of our ambition, setting a new emission target for 2030 from 125 g per kWh to 82 g per kWh. This has also been certified by SBTi and as compliant, no more with the two degrees, but the 1.5 degrees scenario pathway, which is today the maximum ambitious possible. In addition to that, and you see in the lower part of this chart, we are set to reduce by 16% our scope three indirect emission by 2030 in consideration of the ongoing electrification of energy consumption. This is a reduction of the gas we are selling to our gas and retail customers. It is a 16% reduction of scope three. Now, that is for generation. Let's look at Networks. Enel Networks' ambition is to reinforce its position as a global leading player in scale, quality, and resiliency.
The efficient management of network will be enabled by adoption of a platform operating model, which will run on an increased level of digitalization of the infrastructure, as we have explained. We see a growth in the RAB, so the Regulatory Asset Base is growing with investments aiming at ensuring the highest level of quality at the lowest cost possible across grids. Our proprietary assets, management, and products know-how, such as more Smart Meters, will be monetized. Infrastructure will enable a more proactive role of customers, facilitating electricity choice as the individual contribution to sustainability. We see networks as a large and most important enabler of this growing trend of electrification worldwide. Investment in networks will increase steeply. The group will deploy around EUR 60 billion of cumulative investment over a decade, with an average yearly CapEx, which is going to be 1.6x higher than the 2020 levels.
Around 60% of this is projected to be spent in Europe. Around 70% of this will be devoted to further improve quality, where resiliency will be the main key driver to better withstand the increase of load associated with electrification and also the extraordinary external events that are associated with the consequences of climate change, unfortunately. About 20% will be invested in connection with benefit from the growing demand driven by urbanization and electrification of retail consumption, and 10% to further digitize the infrastructure. Now you might question, "This is fine. What happened with the tariffs? This is a lot of money. So what about the users?" We think that the fully digital transformation of infrastructures, the size and the scale of operation, will lead to an optimization in operation and maintenance costs and in the capital spending, and that will result in superior efficiency levels.
We expect the group system average interruption duration index or average to drop to 100 by 2030, and the number of interruptions that a customer would experience to decline by one-third. We will increase, therefore, significantly the level of quality granted to customers and also maintain flat tariffs thanks to efficiencies that are the ones resulting from this big digital transformation effort. Better quality, more resiliency, same tariffs. Now, how do we do this and how do we go about maintaining this digital platform worldwide? This is a single platform operating model enabled by the completion of the digital process we started. This will lead to improving quality, resiliency, efficiency, and flexibility. We are creating a system where resource allocation planning is optimized worldwide. Engineering and construction standards enhance quality and capital productivity worldwide.
Management of the asset is integrated, including planning, dispatching, and execution in the same concept, in the same methodology worldwide. Routine activities are lean and data-driven. You can understand the advantages of a worldwide network system that manages such a large operating array of networks. The unparalleled scale of the network operation is depicted here. Today, the networks that we manage engage 90,000 people, out of which 35,000 are our employees. These 35,000 are about half of the total group headcount. You can say half of Enel is networks. It is in many ways in terms of EBITDA, in terms of employees. It is a large operation. Thanks to our employees, we run today 11 networks worldwide. We manage 74 million customers worldwide. We have 2.2 million km of lines. Most of our customers are already served by Digital Meters.
The platformization and digital transformation of our networks will support a reduction in OpEx per end users, as you can see here, of about 17% by 2023 when compared to 2020. Over time, we have built a strong knowledge about what a digital asset means, as you see in slide 34. Enel has been an early mover in asset digitalization. We are crystallizing proprietary expertise and know-how on Smart Meters and Integrated Systems. We have been the first operator worldwide rolling out massively Smart Meters since the beginning of this century, thereafter proceeding with the full digital transformation of network management and operation, while most of the DSOs have started this process a decade later. The pace of smart meter deployment progressively accelerated. Today, we have full coverage of our end users in the key geographies of Spain and Italy already in 2020.
Thanks to the second generation of Smart Meters and sensors spread over the distribution network, Enel is able to collect more than 7,000 billion data every year in Italy, information that we use to optimize network operation via predictive maintenance, load balancing, revenue protection, both in terms of quality and efficiency. This knowledge that we have built in time opens us new business opportunities. This is the first time that we show this concept to you. We were surprised to understand and become conscious of the fact that we have become the third largest vendor of Smart Meters worldwide. We have evolved this concept into a full-fledged ecosystem of Digital Network Systems, Digital Network Devices, and applications that run our digitized networks.
Enel Smart Meter Technologies are among the most advanced ones in the sector because they rely on more than 20 years of experience in the refinement of the product. The equipment is designed by Enel, implemented with leading-edge technologies that enable future-proof abilities and functionalities. Smart grid technologies are necessary to enable distributed energy resource and demand-side flexibility. We think this is a business of the future in ways that so far we have not explored completely. Now, if we move to customers, we have three categories. The first one is B2C, so this is retail customer. In the business-to-customer segment, we will enable electrification aiming at accelerating the adoption of highly to fully electric behavior in our customers. We have the largest power customer base worldwide in markets that are at different stages of liberalization and that are subject to different degrees of unbundling regulations.
The opportunities stemming from digitalization will be fully captured across these differences to provide a personalized experience to all our customers while unlocking very high and very strong operating efficiencies. The progressive elimination of regulated tariffs on some markets will unlock new sources of value. However, we believe regulators will continue to play an important role in energy retail markets. We don't think these markets will be as widely deregulated as other commodities have been in the past. In face of this regulatory attention, we see good opportunities for value creation on a per-customer value basis. We have a positive view of regulation, if you want. On B2B, we want to be the leading energy partner of global and local businesses, supporting and accelerating the path to sustainability and energy efficiency.
Within the small-medium enterprise segments, we see customers increasing the electricity uptake, increasing their shift to electricity. We see further value generated through beyond commodity services, such as flexibility and customer insights. Even small companies have to be extremely careful about these parts of the value chain. Large and multinational customers will continue to increase their commitment to sustainability targets. They're really into it big time. This will open additional opportunities for Enel by offering integrated offerings and portfolio solutions to cover the needs. Traditional offerings, such as PPAs, which was the first, if you want, tool we used in this space, will couple with new services that are becoming very, very important: demand response, energy insight, and e-mobility solution coupled with pure supply of energy.
On the B2C, so on government and institutional level, we are going to support administration in reaching the goal on decarbonization and long-term sustainability, mainly in large metropolitan areas. Cities currently account for 70% of the world energy demand. 70% of the world energy demand has to do with what happens in cities. They also account for 70% of CO2 emissions worldwide. Cities are really very important going forward. By the way, by 2050, 70% of the world population will live in cities compared to 55% of today. Not only are cities important, they will become more important going forward. Electrification of transportation and other areas is key to ensure a proper carbon footprint, and a massive digitalization can be a driver in this for all municipalities in order to reduce their emissions and make life in cities more human.
Enel will support cities toward this path of transformation through electrification of public transportation, integrating this offer with mobility digital services, as for example, we have done in Italy on city analytics. To reach 100% decarbonization targets, cities will need PPAs and distributed energy storage as well as production, which are part of current offering of our group. Platformization will open to new business opportunities, pushing on data valorization and operational efficiency. Now, how do we manage all this? This is another footprint that is shown on the left-hand side of the chart here. Where are our customers today? You see that we have about 42 million customers in Europe and 28 million customers in Latin America. It is a big customer base, about 70 million customers, 60% of them in developed areas. In Latin America, these 28 million customers, 95% sit in very large metropolitan areas.
Basically, most of the large metropolitan areas of Latin America are our customer base. In this current position, we think we are unique. Enel can take advantage from energy transition trends both in Europe and elsewhere in the world where electrification is undergoing, dealing with decarbonization that is becoming a key driver in the development of this part of the equation. Market dimensions and ongoing elimination of regulated tariffs create new value pools coming from the scalability of operating and business platforms. On this journey, Enel can leverage on its digital platform expertise. We see here on page 40 that retail operation can take huge advantage by digital operating platform. You can imagine this is a huge digital universe, lots of data and repetitive operations of basically transactional nature.
A globally unified customer operation and salesforce management platform enables fertilization of best practices, a quick rollout of new services and products, cross-selling, and also the diffusion of subscription business models. The automation of predictable and replicable processes and AI applied to complex processes unlock cost efficiencies and operating efficiencies. Digitalization enables also new services that are customized and integrated with the offering of NLX. They are defined globally and then rolled out locally. NLX is running this on a digital platform from the beginning. This is a digital native business. For B2C customers, NLX works through its interface JuicePass, and it groups its offering an open charging contract at fixed price for recharges of electrical vehicles. Through NLX Pay, which is a proprietary app and system, we promote bill payments at a discount while engaging with customers that will have access to a wider range of digital financial services.
We sell home equipment together with operation and maintenance contracts and insurance coverage to B2C customers. For B2B customers, NLX manages one of the world's largest demand response portfolios, which is rapidly growing as regulation recognizes value for customers. This will enable this business model to be widely spread in more and more areas of the world. For B2G customers, we complement our electrified public transport offering with commodity contract, which also certifies the green content of the offering. Now, where is this creating value? It is creating value for everybody. If we achieve these ambitions that we have just underlined in front of your eyes, let's start with what this means for the operations of Enel. 80% of our electricity will come from renewable energies, as we have said.
We will add 95,000 MW and more than 2,000 MW of Green Hydrogen over 10 years, supporting these decarbonization targets. Electrification will progress across customer segments, and the 100% smart meter coverage of all the networks will enable new services and will support efficiencies. This will create value for customers, for society, and also for the environment. The customers will enjoy a sharp improvement in quality of service, while at the same time, will enjoy savings on energy bills and participate in the economic benefits from beyond commodity services. Society and the environment will benefit from a sharp contraction of greenhouse gas emissions and more than EUR 250 billion of GDP created by our local investment. We will work substantially to improve the rate of circularity, reducing material and fuel consumption on the group power fleet.
As far as we are concerned, decarbonization of our generation fleet means improving margins, reducing costs, accruing savings, and reducing risks by eliminating fossil fuels dependence. Electrification and integrated offering will significantly push up the value per customers in the B2B and B2C segments. The group platforms will open new businesses that will contribute to margins and will build up future value and reduce operating costs along the value chain. What about our shareholders? We have set a very simple policy. This has three characteristics. It is simple, it is predictable, and it is, in our eyes, quite attractive. Shareholders will receive a guaranteed fixed dividend per share over the next three years, which results in a 7% compound annual growth rate to 2023.
The implied average three-year dividend yield, together with an 8%-9% compound annual growth rate in earnings, will result in a total return to shareholders of around 13%. Beyond 2023, we see ample space to grow dividends, and every year, we will add one more year of visibility as we roll this plan forward. Given the significant opportunities associated with investment into the energy transition, you have seen the space that is opening in front of us and the capabilities that we put in place to profit from that space. We see total return as the appropriate metrics to measure shareholder remuneration going forward. No more complex formulas, three simple numbers guaranteed for the next three years. I now hand over to Alberto to deep dive into the 2021, 2023 business plan targets. Alberto.
Thank you Francesco a nd welcome, everybody, to our 2019 Capital Market Day. My task is to drive you to the three-year plan and also to show you how the three-year plan will be the first three steps towards the 10 years, Francesco, as outlined. The next three years will be the stepping stones towards our continued leadership in 2030 through an acceleration of the effort for both the ownership and the stewardship model. Our group will activate around EUR 50 billion of direct and third-party investments in the three-year period. The outcome of these massive investments is clearly visible in the key operating figures for 2033, showing across all businesses double-digit growth versus 2020. Renewable capacity is set to reach around 68,000 MW, out of which 60 GW consolidated and 7.6 GW under the stewardship model. Regulated asset base will grow around 14%.
Finally, main KPIs for new services show significant progress, position us further to lead the energy transition. Now, moving on the other chart, so we can look closely on the ownership model. Here, we will invest around EUR 38 billion with a growth rate in investments versus last plan of around 40%, which compares with a 10% plan-on-plan increase over the past three years. Almost 90% of the CapEx is allocated to networks and renewables, totaling around EUR 33 billion in three years. Value creation remains strong across businesses. Global power generation sees return on new investments remaining sound despite increasing competition, thanks to the key role that global platforms will play. RAB end users growth on new investments that support quality and resiliences, with 70% of them deployed in Europe. Retail customers' value will increase, driven by electrification, new services, and continued market liberalization.
As you know, by now, the ownership business model is complemented by the other one, the stewardship business model, which we see now on page 52. Investment mobilized for around EUR 10 billion, out of which EUR 2 billion directly invested by Enel will be concentrated on renewables, development, fiber network, e-transport, and flexibility systems. This model will generate in the next three years more than EUR 3 billion of EBITDA, out of which around 50% from operating and business platforms and the remaining from partnership and joint ventures. This model is constantly expanding. The fair value of contracts will reach EUR 8.6 billion in 2023, a value that is more than 2x the value of 2020.
The fair value of stakes in joint ventures and partnerships will be EUR 4 billion, a value that is more than 20% higher than 2020 without considering the EUR 1.6 billion that will be realized during the plan period. The compounded effort of the ownership and stewardship business model will impact the value creation visibly in the short and the long term. EBITDA will grow at mid-single-digit CAGR to 2023, broadly stable throughout 2030. Net income for the 2021, 2023 period will increase at a high single-digit CAGR due to continued optimization of our financial management and the ongoing simplification of our structure. This will push our group net income EBITDA up by 300 basis points. These economic results will be delivered on sound financial strengths, as we see on page 54. You see that despite the step up in CapEx, our leverage ratios will remain very solid.
Enel's net debt/EBITDA ratio will stand at the level well below the average of our closest peers. FFO on net debt reaches 26% in 2023, 400 basis points higher than 2020, driven by improving cash conversion. Let's now deep dive on the business lines, starting with power generation. The next three years will consolidate our position as renewable super major in a market that will expand significantly. New build capacity is set to reach around 20 GW, up by almost 40% versus previous plan, bringing us to a total installed capacity in 2023 of around 68 GW. Combined deployment of ownership and stewardship will result in a deployment of EUR 21 billion of CapEx cumulated. The growth rate in investment versus last plan is set to be around 35%.
Leveraging on our ENC platform, annually built capacity will increase to 6.5 GW, up by almost 1.4x versus current, gearing up towards 9.6 GW per annum targeted for the decade. On the next slide, we take a close look at renewable development under the ownership business model, where you can see that we will add in the period more than 15 GW, leading to 60 GW of own installed capacity in 2023. More than two-thirds of new build capacity will be in countries where the group has an integrated presence. Wind and solar will remain balanced as we continue to use profitability as the main investment criteria. Gross CapEx for 2021, 2023 will total EUR 16.8 billion, out of which EUR 15.7 billion for development of new capacity and remainder for maintenance.
Profitability will remain stable, both on EBITDA, CapEx, and IRR spread over WACC, supported by the unparalleled level of our pipeline, our scale, flexible capital allocation, as well as the integrated position along the value chain. Now we move to the stewardship business model on page 58. We will build more than 4 GW of capacity under the stewardship business model, mainly in the Asia-Pacific region and in Africa. Enel will mobilize EUR 3.9 billion total CapEx, of which EUR 500 million are direct investments of Enel and EUR 3.3 billion undertaken by third parties. Development fees and operation and maintenance contracts will generate cumulated EBITDA of around EUR 300 million.
Through the next three years, we will grow the future value of contracts by 30% to EUR 1.1 billion on the basis of the margin of contracts in place as of 2023 that will be deployed on a residual life of almost 20 years. The value of our participations in joint venture and partnerships is estimated to reach around EUR 1 billion, doubling the value in 2020. Now we focus on the visibility on the delivery of our targets, starting with our pipeline, and I'm on page 59. As said, today, Enel has the largest renewable pipeline in the world with more than 140,000 MW and the best global development platform. Breaking down our matching pipeline of 57 GW, we have 33 GW with potential commercial operation date in the 2021, 2023 period and 22 GW for the 2024, 2025 period.
80% of our pipeline is currently in countries where we are already present, mainly with an integrated presence. Let's now see in detail how this unmatched pipeline safeguards and drives our growth targets. With respect to the almost 20 GW targeted additions, we have now 8.7 GW in execution and have a residual target of 10.8 GW. Comparing this to the 33 GW major pipeline for 2021, 2023, we end up with a healthy ratio of 3x coverage on the remaining gigawatts to be addressed. If we split the overall ratio by geographic clusters, we obtain a similar result, providing extreme confidence on the two areas that will grow the most in the ownership business model. We have also a 3.2x multiple of other countries, highlighting our increased pipeline development effort worldwide.
Taking into account the 2.24 GW matching pipeline for the period beyond 2023 and the results shown over time in terms of pipeline growth and conversion, we sit comfortably on the three-year guidance and with our medium-term objectives. Before we move to financial results for the business, let's take a look at the overall industrial KPI for 2023. As you can see from the chart, we will significantly decarbonize our generation over the next three years and beyond. Overall capacity will increase by more than 10 GW, with renewables' addition more than offsetting the shutdown of coal. The share of renewables goes up by 15 percentage points on a larger perimeter. Production follows the same path, with an overall growth of around 50 TWh driven by renewables, which will account in 2023 for around 70% of total production.
The sustainability of our generation portfolio increases drastically, with CO2 emissions down over 30% and well on track towards our 2030 target. Now, on page 62, on the financials. These changes will lead to a significant improvement in profitability. Global power generation EBITDA will reach around EUR 7.7 billion in 2023, up by 13% versus 2020. Growth in renewables is the main driver of the period, with incremental asset base contributing for EUR 1.5 billion, further complemented by EUR 300 million associated with the existing asset base. Conventional generation EBITDA is set to decline by EUR 900 million on lower coal margins, market dynamics affecting our gas portfolio, lower contribution of new assets, partially offset by efficiencies. Production mix, more SKU toward renewables, will push EBITDA per megawatt up by 20%, despite a 2% decline in power prices over the period.
Ongoing efficiencies programs will result in a 7% decline in OpEx per megawatt ratio. We will now move to Global Infrastructure and Network. I'm on page 63. To extend our global leadership in Networks and advance toward the 2030 ambition, the growth rate in cumulated investments versus last plan is set to be above 35%. This compares with an average increase on the last three plans of around 5%. Our RAB growth will grow by around 14% to 2023, reaching EUR 48 billion, fueled by investments on increased quality and digitization of the grid. Quality of services will improve significantly, recording a 20% reduction in the average duration of interruption. In our countries of presence, returns are clear and visible for 2021, 2023, as regulatory frameworks are stable and with limited regulatory events happening in the period.
Ongoing discussion with regulators sounds really constructive, both in overcoming the COVID crisis and on addressing future evolution of regulations. Moving now to the CapEx plan. The group will deploy EUR 16.2 billion CapEx over the next three years, pushing up the annual average investment to around EUR 5.4 billion, up 37% versus the 2020, 2022 plan. 70% of CapEx will be spent in Europe, with an increase of 46% versus last year. 65% of CapEx will be dedicated to improving quality across the Board, around 23% to new connections driven by urbanization trends and the remaining to the ongoing digitalization of our grids. CapEx acceleration will drive up RAB up double digit. The RAB in RAB out ratio for 2021, 2023 at 1.4% clearly highlights growth accrued in the period. Investments will enable significant progress on digitization and quality.
I am on page 65, where you can see that the ongoing effort on digitization will bring the share of digitalized end users to 64%, up 4 percentage points. The Smart Meters coverage rate could be higher should Latin American regulators approve the deployment of Smart Meters in their respective countries. We expect to reach 100% as said of digitalized end users at the end of the decade. In terms of quality and resiliency, we expect an improvement in both the main quality index, which are set to decline by 90% on average. As a result, our networks will become more efficient, with OpEx end users ratio reaching around EUR 34 in 2023, 17% less compared to 2020. Let's now have a look on how managerial action translates into financials. Networks EBITDA will increase by 19%, reaching EUR 9.5 billion at the end of 2023.
Main drivers of this growth are associated with the EUR 300 million increase in RAB volume and revenues on the back of higher investments, about EUR 400 million for efficiency programs linked with a major operating platform implementation that will result in a decline, as said, in OpEx end users for around 17%, EUR 500 million for increasing tariffs due to inflation dynamics partially offset by declining regulatory returns, and EUR 300 million for higher volumes, mainly in Brazil, where the impact of COVID-19 has been particularly strong. We will now take a look at the main drivers on the retail business, starting with business to consumer. I am on page 67. The value of our business to consumers will increase by around 30% throughout the plan, thanks to three distinct dynamics. Ten million customers will be added to the three markets, mainly transitioning out of the regulated segment.
Increased electrification of consumption trends and new onboarded clients will support a 55% increase in volumes sold to the free market, and customers will trigger an increasing demand of beyond commodity services in their electrification path. The increase in customer value will not be limited to B2C, as we see also in the next slide, where now we look at the B2B business, where we want to be the leading energy partner of global and local businesses by supporting and accelerating the path to sustainability and efficiency. With regard to small and medium enterprises, the number of clients is forecasted to grow by around 70% to around 3.2 million in Europe. The end of regulatory tariff in Italy will take the major role in this increase.
Customer value for the B2B segment is set to grow by more than 40%, and the main driver is associated with beyond commodity services on flexibility and customer insight. Additionally, customer decarbonization targets and need of energy efficiency will support an increase in volume sold. On large and multinational clients, Enel is going to leverage on the integration of its global presence and scale in traditionally offerings such as PPAs with new services like demand response, energy insight, e-mobility solution, with the aim to increase significantly the number of multinational companies into our portfolio. Last, moving to the B2G business to government, to our business towards cities. Am I on page 69? The effort of the group in the next three years will be directed towards supporting B2C with particular focus on cities.
In their effort to reduce spending, municipalities look for more efficient and environmental-friendly solutions for street lighting, where we plan to increase our offer to 3.4 million units. There is a 17% increase versus today. In e-mobility, we will add more than 200,000 public charging points in the three-year period and more than 5,000 electric buses via direct and indirect investment. Now, on page 70, you see how clients and volumes evolution are in Europe and Latin America. Our global footprint positions the group for evolving phases of market liberalization. In Europe, regulated tariffs are progressively being eliminated, and customers will migrate to the free market. We plan a stable market share in the free markets with an increase of around 10 million customers in the next three years. Our current plan, as you can see, does not anticipate the liberalization of Latin American countries by 2030.
Should this kick off, it will represent an additional value pool. Now, on page 71, we see a summary of the EBITDA for customers. As you can see, EBITDA will increase by 36%, reaching EUR 4.5 billion at the end of 2023. B2C gross margin will contribute for around EUR 500 million, thanks to the increase in volume sold to the free market, electrification of consumption, which leads to unitary consumption increase of around 4% and incremental needs for additional services. B2B gross margin will contribute for EUR 400 million, benefiting from recovery of volumes versus a COVID-19-affected 2020 and increasing marginality per client associated with flexibility and customer insight services. B2G gross margin contributes for around EUR 100 million, mainly thanks to services offered to cities.
The efficiency program in real terms will add EUR 300 million to the 2023 EBITDA on the lie-down of an operating platform that will unify and digitalize customer operation. To moving on customer investment in EBITDA that can be divided into ownership and stewardship model, you see that Retail EBITDA will increase 25%, reaching EUR 4 billion. EBITDA per customer will grow 30% to EUR 58 per customer, driven by migration of customers, increasing volume, and declining OpEx. As said, our stewardship business model will play a pivotal role in the services offered to our customer through our division, Enel X, where we will invest EUR 1.1 billion in the next three years' period with EBITDA that will have a fivefold increase to EUR 500 million. Third- party will invest around 74% of the total EUR 4.3 billion we expect to activate in the next three years.
Now, we can move now on the sustainable growth and value session. I'm on page 74. As you can see, more than 90% of our consolidated investments is going to be aligned to SDG. As I liked it last year, the group activities directly target SDG 7, 9, 11, all contributing to SDG 13, aimed at taking urgent action against climate change, which is a core priority for Enel. In addition, Enel contributes to all other SDGs by promoting a sustainable business model, pursuing sustainable behaviors, and leveraging through its stewardship model on SDG 17 to foster global partnerships in order to tackle the world's multiple challenges. According on the other side to the EU taxonomy, our initial calculation is between 80% and 90% of our consolidated CapEx. This will be aligned to EU taxonomy criteria due to its substantial contribution to climate change mitigation.
Utilities activities are at the moment not fully defined by taxonomy scheme, such as our retail business, even if of a paramount importance to foster decarbonization and contributing to climate change. We therefore hope for a significant improvement into this scheme as we reckon it will be a reference for financial markets. All our global business lines EBITDA are set to grow, except for conventional generation, mainly due to the phase-out of coal and the other dynamics we discussed before. We will now deep dive on how the value generated by Enel reverberates to all its stakeholders. As you can see from the chart, Enel midterm action will push decarbonization while creating value. The shift of generation technologies will result in higher profitability despite an expected reduction in power prices. Electrification and integrating offerings will expand customer value by an average of 30%.
Digital platforms will create new business models, generating more than EUR 3 billion EBITDA in the period while supporting ongoing efficiencies across global business lines. Now, let's take a look at how operations are supported by sustainable finance and our financial management. I'm now on page 77. Total sources of funds will reach around EUR 46 billion on a cash conversion of around 70% during the time period, up by 10 percentage points versus 2020. The acceleration of capital expenditures will not affect our metrics and will allow us to maintain a stable 2.7x net debt EBITDA over the period. Furthermore, cash generation will have a stable profile, resulting in our FFO net debt ratio to remain stable at 26% over the plan and increasing 4 percentage points from the 22% expected in 2020.
Going in details on the solidity of our credit metrics and liquidity profile, Enel has a strong credit profile, as shown on the left-hand side of this chart, with a net debt to EBITDA ratio of around 2.7% expected in 2020 and in 2023, well below the average of our closest European peers. The level of yearly refinancing on average gross debt during the planned period is a mere 12%, 3% less than in the last three years. In addition, our liquidity amounts to over EUR 25 billion, covering 1.6x the long-term debt maturities in the plan, reducing refinancing risk. The strength of our balance sheet, together with ample liquidity, creates stability and allows us to deploy investment needed to support the path to transformation, as the group still retains headroom to capture future opportunities.
On our financing need, we will continue to tap sustainability-linked instruments to support our growth. As you can see, sustainable finance sources now represent around one-third of total gross debt. This includes sustainability-linked bonds, green bonds, sustainable loans, and other forms of subsidized financing. Our aim is to progressively refinance our upcoming maturities and raise new funding via general purpose instruments linked with sustainable targets. As a consequence, the share of sustainable finance sources on total gross debt will increase to around 50% in 2023 and more than 70% in 2030. The cost of debt of our sustainability-linked bonds is, on average, approximately 15, 20 basis points lower compared to a planned vanilla bond, a level that we believe is associated with market recognition of the value of sustainability and that will drive our cost of debt reduction.
The benefits of our sustainable finance are not limited to public bonds. As you remember, one year ago, Enel was the first and only company in the world to have launched sustainability-linked bonds. In the last 12 months, we have tapped the U.S. dollar, euro, and pound markets for a total amount issued of EUR 4.4 billion. Through the sustainability-linked bonds, we have been able to create a link between sustainability targets and yield. The innovative nature of our sustainability-linked bonds has been recognized internationally with the International Capital Market Association publishing a document on sustainability-linked bond principles, and the ECB recognizing this new asset class to become eligible as central bank collateral. We have marked the way for companies aiming at financing their sustainable strategy with international companies following suit and also starting issuing sustainability-linked bonds. Besides bonds, the group has also included sustainability metrics into other financial instruments.
We have signed around EUR 8 billion in loans at evolving credit facility with a price adjustment linked to SDG 7, while in the first half of 2020, the Euro Commercial Paper Programs of the group were updated as SDG 7 Guaranteed Euro Commercial Paper Program. In addition, we benefit from around EUR 800 million of subsidized loans, and we expect to increase both public loans and grants in the planned period related to the European Recovery Funds. In fact, as you see in page now, page 81, EU will make available about EUR 1.8 trillion to support long-term economic growth. 40% of the grants will be made available to countries where the group is present, supporting an acceleration of investments in Europe. In particular, Italy and Spain will benefit from around EUR 150 billion, out of which more than 30% have to be allocated on climate initiatives.
More than 60% of the EU Recovery Plan is aligned with NL business model, and we have already identified a wide range of eligible projects in the European countries in which we are present. Out of the total increase of investments of the plan, more than 70% is allocated to Europe. The sharp acceleration of our CapEx in Europe is connected with the grants and policy programs made available by the European Union. In the next slide, I will go into detail on our financial strategy. As you can see, thanks to our new funding strategy, strongly to sustainable, our cost of gross debt is set to reach 3.7% at the end of the year, 30 basis points lower than expected.
We are planning to refinance about EUR 16 billion of outstanding debt and EUR 6.5 billion new funding, out of a total of EUR 1.8 billion at an overall expected cost of 0.9% versus current 3.7%. This is the result of the ongoing tightening of our credit spreads, also thanks to the progressive substitution of traditional instruments with sustainable finance and the continued low interest rate environment. A positive effect will also come from the ongoing centralization of finance, with the share of new centralized funding on total new funding reaching 80% in 2023. On the right-hand side of this chart, you can see a remarkable decline in cost of debt compared to the previous plan, translating in unchanged financial expenses despite an increased level of debt. Now, a couple of points on the risking of our targets.
As you can see from this chart, our group has progressively de-risked its operational and financial profile, leveraging on its integrated and sustainable business. This is evident when looking at the beta of our company, now at 0.85%, well below the level of 1.14% recorded at the beginning of 2015. From an operational standpoint, the model continues to prove resilient, and it is stabilized into the 2021, 2023 period by the following drivers. Overall, the new plan foresees an 80% share of EBITDA from contracted and regulated activities, leaving only 20% exposed to merchant risk. Development of renewables is ideally positioned, with almost half of the target addressed in our extensive pipeline covering by 3x the residual portion. Almost 70% of renewable production is already sold forward, mainly through PPAs, with our retail customer base naturally hedging the remaining share.
Now, moving on to slide 85, you can see here how we secure production. You can see from the chart that a whopping 96% of the generation margin in Italy and Spain is associated with the production of renewables and nuclear. Entirely sold to the segment of our commercial portfolio that has shown a high degree of loyalty and stability over time. We have covered 2021 for over 90%, 2022 for almost 40% on a stable integrated margin, notwithstanding declining prices versus 2019. The management of margin in an integrated way with our retail portfolio provides us high visibility, limiting the downside risk. Now, moving on to page 86, our PPA sales portfolio amounts to 237 TW up 24% versus last year, and covers more than half of the accumulated 2021, 2023 expected production. Quality across the portfolio is high, with investment-grade buyers representing altogether more than 80%.
Utilities, it is, and discos still represent 80% of the total sold, but the growing share of C&I customers, driven by electrification of consumption and the pursuit of sustainability and efficiency of operation, has gained further ground and sits now at 20% of the total. Duration of the portfolio is queued towards the long term. More than 50% of the contracts hold the tenor longer than 10 years and an overall average duration in excess of 12 years. Quality and duration of portfolio supports our targets of profitability and delivery, coupled with the constantly growing appetite of C&I customers. PPA sales will remain the staple of our renewable development and a key differentiating factor versus peer. Now, let's have a look on targets. I'm on page 88. Given the high current scenario volatility due to the pandemic, we have decided to move to range-based targets going forward.
EBITDA is set to grow at an annual compound rate between 5% and 6% and net income between 8% and 10%. To underpin our confidence in the plan and to grant a total return to our shareholders in excess of 13%, we will pay a fixed dividend to 2023, growing at 7% CAGR, implying an average dividend yield for the period of around 5%. As Francesco mentioned, we expect our dividends to grow to 2030, and as we roll forward to our plan every year, we will also provide a new fixed dividend for the last year of that plan. Thank you very much. Now, hand over to Francesco for the closing remarks.
Thank you, Alberto. First of all, I want to say that last year we presented this strategy in Milan in person, and we had no clue of what was going to happen during the year after. I have to thank the dedication and the efforts that all our colleagues worldwide have put in their work during 2020, because it is thanks to them that the company has achieved its targets during a year that was absolutely unique in many ways. I think that we can say that the sense of purpose that is part of our business comes stronger after this pandemia, and during this pandemic, which is still raging, and helps us to shape this strategy. We know that we work for society. We know that we work to make progress more sustainable, and that we have become conscious of this in a deeper way during this year.
We have also become conscious of how digital this company is during this year. We have been able to basically flawlessly work in a very different environment, thanks to the fact that we have become much more digital than we even thought we would be. When we look at these things together, and that is something that helped us also shape the strategy which today we are presenting to you, we start with a very strong physical position, our dimension, the efficiency of operation, the global dimension in the global footprint we have, and the consciousness of how digital this company has become. These two things put together shape the strategy and give us the, if you want, the vision that we have been able to present to you for the next decade. Dimensionally.
This is an ambition which we have been able to pursue, thanks to the consciousness of our strengths and the fact that our people are totally focused and very motivated in pursuing a sustainable progress path. With more than 140,000 MW of renewable capacity, we will remain the energy leader in the global dimension of generation and will retain the role of renewable super major, which today we have. Adding RAB to RAB, we will reach a EUR 70 billion dimension in terms of RAB, which is also a very ambitious target, but that is associated with quality levels, resiliency level, and flexibility level that are fundamental in the networks that we operate for the future and the development of electricity in the societies where we operate.
Thanks to the digital transformation that we have put in place, our customers will be able to increase their share of electricity demand, enjoying a reduction in the overall energy bill. That is something we are committed to and towards which we will keep working, creating value over the long term. Because we have been deeply rooting innovability and so innovation and sustainability in our operations during these years from the bottom up, we know that this is something that will remain in the chromosomes, in the genome of the company. It's thanks to this convention and this strength that we were able to offer also a very simple, extremely clear, and attractive dividend policy going forward. We think shareholders should benefit from this approach as society, as all of us, and will enjoy the ride for the next 10 years with Enel. Thank you very much. Now, back to Monica for questions. Monica.
Okay, great. Thank you, CEO. Thank you, CFO. Now we can open to the Q&A session. We estimate to have approximately a little bit more than one hour and a half, so plenty of time today. I'll start with a question from Webex, and then I'll move to the questions that you have sent to our email address. The first question comes from Alberto Gandolfi, Goldman Sachs. Please open Alberto's line.
Hi, thank you. Hopefully, you can hear me. I don't like to start events by congratulating the thank you. This is making our job much more interesting, and you give us quite a lot to think about. I have three questions, although there's be a lot to talk about, but I'm going to start from these three, please. The first one is trying to understand renewable super major status. What is the market share that you might be able to achieve globally? Maybe can you elaborate a little bit more what you have assumed in your plan in terms of the United States moving to net zero? New regions, you talk about Asia-Pacific and Africa. I'm trying to figure out how do I know that 10 GW per year is reasonable? How do I know it's not 7 GW or 15 GW ? Your balance sheet remains very strong.
Am I right to assume that the stewardship model could turn eventually into an ownership model? You can enter into a region as stewardship, and then it becomes ownership. Second question is about returns. I was trying to understand. You typically used to say that EBITDA over CapEx used to be 10%, and now you're talking about 12%. Can I ask you where is this coming from? Is it more in emerging markets? Is it more merchant? You have higher risk? Is it just the competitive tension that is likely coming down because the addressable market is booming? The last question is, can you give us some tangible examples by division on the stewardship business model? What is the typical renewable project? Where would you report it in the P&L?
If you can elaborate and help us maybe understand a bit more tangibly. I spoke very slowly because I have a bit of return. You noticed I did not ask any question on the balance sheet and M&A releveraging this year, but I noticed that your balance sheet still does not relever. Thank you so much.
Okay, Alberto, thank you for the question. I will take question number one and partially number three, and then Alberto will manage question number two. On renewable super major, you know that the view we have is that we have an expanding renewable energy space going forward, and this expansion in our eyes is not going to stop in the next 10 years, which is a little bit odd, but there are businesses that are contracting and others that are expanding. This is one that is expanding, and in our views, the expansion will have no stoppage in the next 10 years. Where do we start? We start at a rate of a ratio of a percentage of being kind of a large player, but still relatively small in this space. We have 2.8, 2.7 year-on-year percentage of that market.
Even with this incredible growth that we are projecting, with the multiples we have shown in the chart, we do not think we will get to 5%. We will probably be a little bit below 5%. It is an exaggeration to call us super major with a 5%, perhaps, but we will still be by far the largest company in the space, given the fact that this is a very large expanding space, which is today literally sucking in players from all kinds of from all angles of different businesses. Everyone is giving it a try. Ten years is a long time. There might be a moment where consolidation might happen, but even in that case, we will be pretty well positioned in order to benefit from that. On market share, where is the growth going to be?
I think it's probably going to be in different times of the next decade. We see the U.S. remaining a very big theme. Moving from one administration to the other at federal level doesn't really make such a big difference. We have not suffered from a slowdown during the four years of the Trump administration, and we think it will be benefiting the theme in general in the U.S. with the Biden administration. We see the U.S. still remaining very large in terms of potential of growth. We see potential of growth in Europe, given the substitution effect from thermal generation into renewables. Europe will still be a very big renewable energy theme for the next few years, for sure, the next decade at least. Asia, particularly India and Southeast Asia, will be a big part of this growth. Where is the stewardship model fitting in this?
In renewables, basically, we see the stewardship model fitting in those parts of the world where we do not see any chance for regulatory or legal systems to have the possibility to build an integrated value chain position. There are countries where, by law or by regulatory frameworks, you are not entitled to put these things together. In those places, value creation is possible on generation, but over the medium-long term, we think that is a place where we will develop projects, build them, develop a joint venture, sell the majority to a third-party investor, which might enjoy a relatively stable cash flow with PPAs attached, and remain as an operator. Some parts of the world today, for example, Southeast Asia is a little bit like that. Distribution companies are not really privatized at the moment. India is opening up, so India will be probably an integrated position opportunity.
Mexico is not for constitutional reasons, so there are different situations. The rule of thumb is, can I have in the next few years a position on the value chain? Yes or no. That discriminates the two models. I just take an example for the number three question is on renewables. I just gave you an example, but another example could be, why not on networks? We could partner up with investors and become a passion investor, not a consolidator investor in networks, but build in value due to our incredible experience in managing networks and the plug-in digital platform we have assembled into which you can plug in existing assets, make them efficient, run them as a whole of a system, and create value. That is something that we have not done so far, but it is something we could do in the next future.
It's a very important and quite obvious value creation tool that we have in the future. You've seen another example with fiber. I mean, fiber is something we didn't have four years ago. Today, the value is pretty obvious to everyone, and it's something we will keep doing in several opportunities whenever they will occur. It's everything that has to do with potentially sharing value with others of the incredible capabilities that we have assembled in the company and the digital platform we have put together. On the number two question, which is the returns, I think Alberto can give you some figures.
Yes. Alberto, for your question, yes. On returns, I think you got from the presentation that we see a little reduction in returns looking at the 30 years plan, not in the next three years, in which we see a sort of stable level of returns of our investments. Remember that we have already, say, 50% of the development under management. We have already closed everything, so we know exactly what the final numbers is. When it comes to how it is possible to manage this level, I would say a balanced development plan. You asked if it is more Latin America, more Europe, more North America. It is quite balanced. I say that is 30%, 30%, and 30%. We have roughly 30% development in Europe, U.S., and also Latin America.
Secondly, yes, we are betting more on long-term PPAs with CNI customers, as I said in the presentation. We see here more room, an ample room to keep margins stable with this kind of development. For Europe, we back, we still back our development on our customer base because we are going down of the traditional production like coal, and we are substituting renewables to the same customer that has said has a very high level of stability. All this stuff together is bringing the level of returns of EBITDA CapEx stable for the next three years. I said we think that a little reduction in returns after 2023 will be possible looking at the market dynamics.
To next, just as a reminder, if you want to be more with us, just turn on your camera and you will be broadcasted. Next question from the line of Harry Wyburd from Bank of America Merrill Lynch. Please open Harry's line, please.
Hello. I hope you can hear me. Coming from Southwest London here, and thank you very much for taking our questions live. I think this is a really great format. I have three questions. The first one is on the chronology of the returns in the plan. I think if I have read correctly, you are assuming a slightly higher net income CAGR initially in the first three years and then slowing down a bit later on. I think if you look at the EBITDA over CapEx figures that you guided to, they get slightly diluted in the 2030 plan relative to the next three years. The same for the IRR WACC spread. I just wanted to understand why the targets seem a little bit softer in the latter years. Is it because you expect more competition?
Is it because a lot of the low-hanging fruit in your pipeline is already picked, or are you just being conservative? Just useful to understand the chronology there. The second one's on risk management. Now, you had a useful chart on, I think it was slide 84, saying that I think about 30% of your renewables capacity is going to be sold to your existing supply customers and a little bit more on forward sales. My question here is, how do you manage the risk that I guess ultimately your supply customer sales are floating, whereas obviously a PPA is fixed? Do you think that ultimately makes your sort of earnings variability higher than perhaps some of your competitors who are selling only on PPAs? Do you assume a slightly higher WACC, for example, on that new capacity that's being sold?
I guess you could call it sort of soft merchant to your end floating price retail customers. Finally, an obligatory one and sort of picking up a little bit where Alberto left off just on balance sheet and M&A. I think one thing that's been interesting is a lot of your peers have been doing some moderate-sized transactions. I think perhaps it's fair to say that the market has been willing to back, I think, some of those deals, even to raise equity to fund them with some of your Southern European peers. Has your view on M&A changed?
We know you get asked this on every single conference call every year or every quarter, but has your view changed in the last, say, three to six months after you've seen a lot of your peers do deals and perhaps after you've seen the market be maybe a bit more friendly towards funding M&A acquisitions? Thank you.
Thank you, Harry. It's always nice to see you. This time we managed in a virtual manner. Yeah, let me take this last question and also the one on the PPAs vis-à-vis retail customers, and Alberto will answer on returns. Yeah, we keep this M&A approach open, and we've been active on M&A and sometimes successful, sometimes less. We like distribution assets more than generating assets. We think this trend will materialize and continue in the future. You will see us pursuing both on M&A acquisition, on mainly mostly distribution networks. Of course, this is always a function of what opportunities arise, and it's not something that you can decide on your own. It is something we have to continue to pursue as we see this coming.
We think it makes perfectly sense, and it is the right time, by the way, to try and keep consolidating assets. This is, if you want, implied in the growth of customers connected to our networks that this plan has. I mean, you see that this number grows quite a lot, and it is partially due to the expansion, organic expansion of our networks, and partially on the fact that there will be some networks added to the system going forward. On the risk management side, let's say there is an experience which we all have on managing large customer retail portfolios. These customer retail portfolios have a churn percentage. What number of customers are leaving our portfolio every year? This number is roughly in the range of 10%, 14%, 20% and 12%. This is between 10% and 14%, depending on the market.
If you assume that you stop your sales activities, which is not the case, we keep this sale process going on. The churn is just a number of customers that keep changing, but the number of customers remain even, or sometimes in certain geographies keep growing, as it is the case of Italy and, for example, Romania. You can rest on the fact that you will always have that consumption of energy, that demand in your hands. We make a point that this is an implicit PPA in many ways of a slightly changing year-on-year average price, but roughly stable. We consider that a very, very solid ballast in the risk management concept. It is indeed the reason why we pursue an integrated value position across the value chain, because we think that is a value that materially feeds into the overall value chain.
One of the reasons, for example, why we think it makes sense to acquire distribution assets is that acquiring distribution assets in many countries implicitly and explicitly brings you customers. In others, only implicitly brings you customers because then you have to go about and sell energy to them in a different way. It is a very, very strong advantage, and it is a very, very strong position to have. I do not know if that answers the question, but we have a very strong anchor in the retail market position we have in certain markets that we consider in a way a PPA with the benefits and the negatives of PPA. For example, this year, we have seen the negatives.
We have sold, we have bought energy to sell to this demand, and the demand dropped, and we had to replace energy on the market, and we took a hit. It is another example that it is indeed in many ways a PPA.
Yes. Hi, Harry. Nice to see you on video. On your question on the difference of speed of growth between the first part of this plan and the second part, and on the returns. Yes, our returns are clear. When we see a 10-year plan, we think that in returns of renewables, also in possible market shares, we will have a compression. We think the competition will go up. We think the prices will go down because of the take of renewables. We think on the other side that the LCOE will go down, not at the same speed. All this stuff together is going to compress a little bit the returns that we see in the long run. As I said, this is not something that will affect the next years also because 50% is already under construction, is already fixed.
When it comes to different compound annual growth rate of EBITDA and net income in the different periods, EBITDA, you see in my page, in page is shown that is roughly stable. It's a linear growth of between 5% and 6%. Net income has a steep increase in the first three years because you have some things that are added to a normal growth that are. The COVID recovery, remember that the vast majority of the COVID impact is on bad debt, is on losses. All this stuff, it is going to be recovered in the first year of the plan. The second is that we are getting the most of the financial cost reduction because of the new issuing of sustainable finance and the interest rates that we are taking the advantage that we foresee in the next three years.
We have a scenario that will start to have an increase in the cost of debt. Finally, because we are massively concentrating our simplification effort in the first years of the plan through increasing our economic interest in different areas of the world, like the deal that we are now doing in integrating renewables in Latin America and increasing our share of income, our share in the Americas, and other deals that we can do to further increase and simplify our structure. These three things are adding to the normal level of rate that this push in the first three years.
We move to next. Now I have to pay my due. Last year, there was an analyst that could not ask a question because we were restricted on time. I call Lueder now. Please open the line of Lueder Schumacher from SocGen.
Hi, good morning. A number of questions from my side. The first one is on your renewable execution ability. You have been an early mover, but if I look at the incremental growth rate of your three-year execution capacity, 3.9%, 4.7%, 5.1%, it doesn't seem that easy to speed this up. Can you maybe elaborate a bit on the main factors driving the increase in this execution capacity and perhaps also more importantly, the bottlenecks that you are facing there? Because obviously there's all kinds of targets of renewable growth being branded about by all kinds of players at the moment, but it doesn't seem to be quite as simple to actually increase that. That's my first question. The second one is you target, you mentioned it on slide 19, I believe it was, an overall spread over WACC of 150 basis points.
You did say that most of the growth under the stewardship model will be in the Asia-Pacific, Africa region. What kind of spread over WACC do you target in that region? My last question is on Latin America. I do believe that the volatility in exchange rates that you mentioned as a reason for providing ranges is also the reason why this much loved detailed ordinary EBITDA table over the planned period has disappeared. Maybe you can give us an idea of what EBITDA for 2021 you expect for Latin America.
Thanks. Thanks. Let me take the first question, and then Alberto will fill the other two. On the challenging ramp-up of renewable, there are basically several bottlenecks, and you are absolutely right. It's not easy at all. It's something that we have taken very seriously from the very beginning. Maybe some of you that follow us from the very beginning remember the first year we installed 200 MW, okay? That for us was kind of a big thing. It is true that to go from 3.9% to 4.7% to 5.1%, they are pretty sizable improvements and increases. You have to see that we have done that so far, and we have gone up gradually year- on- year. Every year we have beaten our preceding year record safely. That means without making mistakes and without making large disasters, actually creating value. What are the key challenges?
There are three, basically. The first one is to have optionality in the selection of processes and of projects where to invest. The pipeline is the key here. You need to have a lot of pipeline in order to have, sorry, let me just, somebody has to click the video here. [Foreign language]? Okay. Okay. Sorry, this is a little bit of a bug that tells me that if someone does not click something in 29 seconds, something bad will happen, but no matter. Hopefully something will happen in 22 seconds. The pipeline is the key point in the presentation, in the development of renewables. If we have a pipeline that is about 3x-4x larger than our projected investment in the period, then you can safely assume that that pipeline will feed enough good projects in the overall curve.
If you don't have that pipeline, that is the first bottleneck you're going to hit. We think that this is going to be a very important part of the development. For us, the pipeline is more than 3x the projected growth. We are confident that this pipeline feeds the next three years. You will see probably next year a larger pipeline and so forth. Is there a limit here? So far, no. We think the fact that we have a global position in the world ensures that the pipeline will keep growing at an adequate pace to feed this ambition. The second bottleneck is the capability to engineer and construct.
This is perhaps the most complicated part because it entails a very large organization that must be able to contain the risks to spread the good practices and to, let's say, make sure that the whole environment where we work remains uniform across different geographies. Here we have built a very solid team, a very large group of investors, of people that are able to take care of this matter. Like we have said, we have about 100 projects in different parts of the world under construction. We had around 90 last year, 85 the year before, and so forth. This multiplicity of small-size, medium-sized projects is what we want. We want to have granularity of investments, short-term cycle of investment so that we can manage stably our economics.
This comes at a price, the price of having a lot of good people working seamlessly, and that is enhanced by the digital transformation and the platforms we put in place over the years. These people work together into a single digital environment, and they communicate and work together in a very, very smooth way. The third one is how to run this whole thing. I mean, you need management that has clear accountability over these phases. The organization we have set up from the very beginning, this is something we started in 2014, is one and one business line only, the responsibility of developing and building pipelines, and that is the global business line. There is no interference, but just help from the geographic dimension of our matrix organization.
There is one single line and one accountability, which is very clear from now six years, so it's pretty ingrained in the organization. That helps a lot to make sure that people are aligned and perform.
Lueder . For your two questions on effects and for the spread in Asia-Pacific. Taking account that we have, we are not changing spread over WACC for different areas because we have different WACC for a specific country. Our investment policies are set to have always 150-200 basis points over that specific WACC to have the investment approved. It does not change. Because you asked me on the stewardship model, remember that exactly, this kind of business allows us to try to find some third- party that is keen to get a lower return because it is intrinsic nature as a fund or other kind of partners. Exactly to have around the contracts we can make, the joint venture and the co-development that we can make with them, to have a lower level of returns than the joint venture.
This is useful to win tenders, but on the other side, to make us to have exactly the level of returns that we are seeking for. That is why this stewardship model works and particularly works for areas like India, South Asia, South Africa, and all the sub-Saharan areas. That is the way in which we work. On the effects, Latin America next year will have an EBITDA in euro of EUR 5.5 billion. That is, say, 25% of the total target. Remember when it comes to the impact you see on EBITDA, this is different from the net income impact. Remember that 10% variation in the assumption of effects in our business plan leads to a 2% variation in net income. That is more or less the rule of thumb that we have.
Okay. I think we can go to next question. Let's move to JP Morgan. Javier Garrido, please open the line of Javier. Javier. Okay. Let's move to another analyst. Here we go. Javier.
Thank you. Sorry, Monica. My first question was on the stewardship model. You can evaluate more also in combination with the countries with potential integrated model. What are you looking for here? Are you looking for full integration with networks, or is it enough to have the opportunity to bring customers into your portfolio in those countries to consider really integrated and therefore make that transition from the stewardship model into the full ownership model? It will be very interesting to know your perspectives because you mentioned India as a potential candidate in the future, but given that you are a global player, it would be interesting to know where else you see the potential for that transition to happen. The second question is on your dividend policy. I understand that you are targeting, let's say, a more simplified approach to dividends with just a guaranteed dividend.
What is the rationale? What's the problem of keeping a payout ratio as an additional, let's say, growth opportunity? Basically, in the past, you had the minimum guaranteed dividend. Why couldn't shareholders get an upside on potential performance if you keep a payout ratio as a potential source of upside? The third question is very specific, but taking the opportunity that you are talking of Outlook to 2030, I would be very interested in hearing your latest thoughts on Italian hydro concessions, which, yeah, in 2030 should have reached the end of their lives. Our Italian concessions, not yours, have already reached that period. What is your, where are you in your discussions with the government? What is your thinking about what will happen in 2030 with your Italian hydro concessions? Thank you.
Look, I think the question on the concessions is, I would say, perhaps a bit premature at this stage. I think the government that is today in charge will not be quite clearly in charge in 2030. The view is a view that maybe has to do more with what is the European evolution of concession regulation over the next few years. Here, I think the debate is pretty open because there is a wide range of different concession regimes across the member states of Europe, which is something we have underlined in front of the Commission, the previous Juncker Commission, and the present Commission, whereby you have member states with concessions that never expire. There are perpetual concessions in some European states, others with longer terms, other than shorter terms, and so forth. Disparity is pretty large.
Why we bring this up is because this disparity creates a disparity in competition when it comes to concession regimes. Some players sit on concessions that never expire, but cannot bet and cannot bid on different concessions that may expire. We think this is unfair and goes against the level playing field that Europe should have. I think the debate is more at the European level than at country level today. We see some member states already exploring prolonging concessions, waiting for this European debate to settle and to find a common way. We think for us, we have our expiration in 2029. I think for Italy, the moment will be to participate actively in this debate now and then decide on the concession tenders if any of this sort will happen perhaps five years down the road. That is as far as concessions are concerned.
On the previous, on the number one question, which is the stewardship model and its evolution, there are two answers. One is the short-term answer, so what about the next three years and then the longer term, 10 years? On the short-term answer, I think in the next three years, we have evidence that India will become a place where a player can acquire and manage a distribution network because there is an explicit plan of the government to divest in this sector. And we think this is an opportunity. There will be distribution assets put on sale in Europe. We have a process now going on. The U.S. has several players that have distribution assets in their hands, regulated distribution assets. Some distribution assets are in tender today in this very moment in parts of Latin America, namely Brazil.
This is something that in the next three years will touch these geographies roughly. We do not see in three years anything drastic happening in places where concessions are still not in place or where distribution assets are not possible. In a longer time, you might think that maybe other countries or other geographies will open up to privatizing distribution assets. We are looking at, for example, Mexico or other parts of Asia. Short-term, I think the geographies I have told you will become are already more or less potential opportunities. Longer-term, I think Asia and other parts of Latin America will become additional opportunities. On dividend policy, I think basically we wanted to keep life of people less complicated, and we think the formulas do not really serve the purpose. I think the dividend is pretty strong. It is very simple.
The most important thing is guaranteed for three years. We have seen that investors roughly prefer clarity and simplicity than complexity and, I would say, conditionality and exposure to risk in this field. That was basically the reason. Honestly, I think that has been a request that came from the largest part of the market. We do not see formulas, even complicated formulas, as we have seen in some instances, helpful to the equity story, but rather complications.
Okay. We go to next question. I'll call now the line of Sam Arie from UBS.
Hi. Good morning, everybody. Thank you for an excellent presentation. I have one question on numbers and one on bigger picture. On numbers, I think last year you had a slide that was very helpful, which compared your estimated group cost of capital with your expected return on invested capital. I think one was a bit under 6%. The other was a bit over 10%. You had a spread around 400 bps. I am not sure I saw that in today's presentation, but I would be really interested to know if those numbers have changed since last year or how you see group WACC and ROI going forward. My bigger picture question, if I may, I mean, I am just looking ahead to next year, and there is a lot on the cards in this energy transition debate. There is new leadership in the U.S. There is the UN Sixth Assessment.
We've got vaccines now, so maybe we're moving on past COVID. There's the Glasgow Conference, which was canceled this year, coming back next year. I'm just wondering, from your point of view, if you had a wish list, three things you might want to ask the global public sector for to help you in your energy transition activities, what would you want to see? Thank you.
I like very much your second question, and I will take that one. Alberto will take the other. I think the first wish list, I only have one wish list, honestly, because I think the story is very clear. I mean, the development of electricity is the winning part of the energy transformation, and we are on the electricity side, so that's okay. Just keep it like that. Do not change anything. The issue which we would like every government to focus on is reflect on the fact that in order to speed up this investment flow, in order to accelerate the transformation, which is obviously a benefit from your own country, you have tools that are not fit for the purpose. I am referring to the complex of authorization processes that govern the investment part of this transformation.
We are dealing with an incredible opportunity in a given amount of time, but the ways which we all have inherited from the past, how do you authorize an investment? How do you control this investment going forward? How do you plan the network accordingly? They are all too slow. They are all too complicated, and they are all bottlenecks of different sizes in different countries, but they're all bottlenecks. There is not a country that is perfect, and there are countries that are widely imperfect. I think that is the key point I would like to see solved because that is the limiting factor to the deployment of investment in a unit of time. I would say that the U.S. today, even in the Trump administration, is still the most efficient authorization part of the process.
It's still the most efficient worldwide, and Europe is lagging behind in this field. It's a very complex, cumbersome, and sometimes frustrating exercise, even for large companies. I think that's the only wish. I would like this wish fixed. The other ones, we'll take care of ourselves.
Yes. Some changes are because we see in 2020 a further decrease in our overall WACC. Now we have roughly 20 basis points lower WACC as an overall WACC of the company, while our ROI is still stable, and we see also it is stable next year. We think that we will be a little bit compressed going forward. For the planned period, not major changes, it is ranging around 9.5%. We are working on almost 350-400 basis points over WACC as ROI returns. No major changes.
Okay. We go to next. We stay still in London. The next is Rob Pulleyn from Morgan Stanley. Rob, you should have your line open.
Hi. Good morning. Thank you for the thorough presentation and the growth ambition to 2030. Three questions, if I may. You mentioned on the EU Recovery Fund that the EU grants are part of the support for higher CapEx going forward. When do you expect to hear confirmation of those grants, and are there any risks that Enel does not actually get those funds? The second one, and a little bit nitty-gritty, may I ask on the macro assumptions, particularly on the FX in the back of the pack, and what informs these expectations and where they differ to the market at the moment, most notably on FX, and to what extent that is hedged? Thirdly, if I may just revisit an early question on the minorities, particularly in LATAM, and what degree of ownership is envisaged in this plan for 2023 and 2030? Thanks very much.
Okay. I think I will answer question number one and number three, and Alberto will handle number two and partially also number three. On the next generation EU funds, the timing is during 2021, obviously. Most countries will have to present, they will all present their project list and their investment plans to the EU and then wait for the feedback. The EU has set up task forces country by country in order to be able to manage this interface. It is going to be pretty detailed and pretty complex. We do not see a risk in us not getting those projects that we present because we have been very careful in providing projects that are totally in line with the criteria that the Commission has been very clear about. The investment theme has to be in the direction of the green transformation of the economy.
It has to have some digital content in its own strategy development. It has to create jobs. We cannot present projects that are part of the business-as-usual strategy. This is something, it's a mistake that we shouldn't make, and obviously, we're not going to make. Things can always go wrong, but we don't see that a big risk. Let's say our strategy is fully in line with the strategy of the EU under this Commission. Frankly, we don't see this as a big issue. What might happen is, again, due to the syndrome I just finished discussing with the previous question, that things might develop slower than we all wish due to, let's say, the intrinsic viscousness of the authorization processes that still govern, notwithstanding the good intentions, still govern the development stages in most countries of Europe. I think that's the only risk we see.
Not getting the investment money or loans or grants, whatever they are, but the fact that this gets deployed with a slower rate because of, let's say, difficulties in the implementation of permitting and things like that, that are the experience of every day in this continent. I think on minorities, we look at simplifying further the minority position we have in Latin America during this year. You will probably see this change getting into 2021, that this is something we have initiated in Latin America a few months ago. I think this is something that will get us above the 65% threshold if our shareholders, together with us, agree on this combination of renewable energy assets in America. On 2030, we think we will keep listed companies that will sit in this kind of environment.
If you have liquid and functioning stock exchange, and if you are the incumbent in that country, then it's much better to have a listed vehicle and this listed vehicle be listed. The perfect example is Endesa. It's a listed company, very successful in a very efficient and working stock exchange. We will not change this listing percentage. I think 30% is a good liquidity for this kind of vehicles. Other companies that are not functional to this will probably be delisted or consolidated. Every time we have this situation, Chile is another example like that. It will remain a listed company.
Yes. For the FX impact, I would say we are keeping a constructive eye on the emerging market currencies. A more optimistic view that is based on our deep knowledge from the inside of the economies of the countries in which we work, and for a lot of also discussion and interaction with institutions and for plans and programs. We think that this cyclical impact will be sort of recovered in the next years, giving space for also further possible increase in the effects. It is clear that consensus is different, but everyone can take its final conclusion on what might be the final impact. In the presentation, you have in the annexes, we have assumptions and also sensitivities on our numbers. I remember that this impact might be limited when it comes to the net income impact on our business.
When it comes to euro dollar, also here, we are looking more on the U.S. side. We think that the U.S. has ample room higher than Europe to act on financial measures and also act to monitor intervention. On the other side, we think that Europe will more stay on a weaker euro to support export and to boost economic growth in the next years. This is the overall outcome. When it comes to hedge, remember that the vast majority of our production in Latin America is sort of hedged because it is dollarized for the vast majority. On the other side, it is not on distribution, but because distribution is linked to inflation, it is indirectly so hedged towards FX via the inflation that every year will impact in the revenues of our distribution networks.
Okay. We go to next. Next is Meike Becker from Bernstein. Meike, the line is open now.
Hello, everyone. Thank you very much for taking my questions. Let me start with one on the renewable returns. For the different technologies between solar and onshore wind, do you have different expectations? If you break down the 50 basis point reduction in your returns, if possible, is there a mix shift, maybe shifting to solar? Is there also perhaps a view included? We have seen the risk for the sector coming down as the market has matured. If possible, it would be great for the sector to understand how that breaks down. The second question is, if I may ask you to take the crystal ball, beyond 2030, how do we move from very low carbon emissions by 2030 to zero by 2050? I'm assuming that will have a lot to do with the gas generation.
I was just wondering what technology do you see in the lead for that to make it happen, or is there also a volume aspect that there'd just be less output? Thank you.
Okay. This is getting more and more interesting as time goes by because beyond 2030 is already almost science fiction. What I can tell you today is that we think, I know this seems a little bit contradictory, but I believe by 2030, we will have so little gas left in the mix that this will not be a problem anymore for anyone. I mean, this is something that will stay for some time, just filling the gaps and sometimes just providing, how can I say, psychological comfort to a system that will probably accept the fact that it can live without even the backup of gas forever. It will take another decade before we just get rid of it completely. I think gas will remain, but very marginal, extremely marginal for a longer time than people think.
From an emissions standpoint, from a polluting standpoint, it will be completely negligible. The impact will be perhaps lower than today is associated with our chimneys in homes. It is going to be very small. Now, from a technology standpoint, I think 10 years is a very, very, very long time. I mean, probably in the next 10 years, we will see changes in the generation capabilities that will be surprising us all, including me, that I am a veteran in the changes of this industry, but I'm still surprised all the times. We probably will have cars that will have more than 10,000 mi of autonomy charging from electrical chargers that today are not existing, and we will see electricity getting in industries that today do not even think of it as an energy source.
I think the debate on gas is going to be probably much more down to earth and less ideological once we all understand that this is a fuel that will remain in the mix, but it will not contribute anymore to the emissions in a sensible manner. It will just be a reliable backup, basically. Okay? There is a big debate on hydrogen. Here, I think we just said what we think about it. Only Green Hydrogens that interest us. We think Green Hydrogen can become a competitive source of storage in the next five years, provided that electrolyzer's costs go down a factor of six. Seems a lot, but we've seen industries change that overnight. We do not think this is going to be difficult for this industry. It can happen. Again, that's not a source of energy. It's a storage media.
It's a completely different question.
On technologies, solar and wind. In the short term, in the next few years, we still see no main differences between returns of the technology. We are working around 12% both. It is clear that it changes in every country in which we work. There are countries in which solar is supported by, I do not know, in the United States, ITC, or because of a very, very high level of radiation. It is clear that we do not look at technologies at the time in which we are in the investment committee. We are looking at profitability and risk. Technology is only the best fit with a specific country, with a specific regulation, with a specific resource availability, and also the better way to sell the energy in that country.
Right now, it's a situation if a technological breakthrough will happen, it's clear that the profitability and risk will go towards a specific technology, and we will follow increasing the rate of that technology. If you see, our development plan is balanced. It's 50/50 because more or less, it's not because we want to split it in two, but because the developments in the countries in which we are with the solar and other things is bringing this picture. You know that our plan is not already undertaking and defined 100%. We have ample room to change, and we will follow at the end the rate of the two technologies in line with the best profitability we can get in the next few years.
Okay. Great. We move to next. I bet we are moving to Milan now. Can you please open the line of Antonella Bianchessi of the Citig roup? I see the line still closed.
Try again, Monica. I think they haven't heard you.
Okay.
Try again.
The line of Antonella, can you open?
You have to tell the name of those that you want to.
Okay. Let's move to the yeah. Yeah. Antonella Bianchessi, can you try to open Antonella's line? Okay. Antonella, you have to confirm on the screen. Okay. Now you're open.
Hello. Thank you for that. A few questions on my side. The first one, if I look at your 2023 target, 80% of the growth is coming from LATAM because Italy, Spain, the U.S. is growing, but 80% of the growth is coming from LATAM. Can you explain what would be the number if we were to use today's exchange rate and how this would change the entire outlook in terms of earnings, in terms of EBITDA? Secondly, if you can elaborate on why you are so confident about the growth, particularly network in the LATAM division. The second question is on your renewable capacity installed. If I compare the target of last year with the one of this year, and I look for instance at 2022, the gigawatt installed are not massively different, I guess, from 54 GW to 55 GW, but the CapEx are materially higher.
Can you elaborate on what has happened in terms of the projects? Are they more complex or what is behind that? The third question is on IRR. You are targeting 200 basis points spread on IRR. Actually, I am unable to calculate the IRR of a renewable project considering that the asset life of the asset is longer than the PPAs. Can you explicitly state your assumption on what you think is going to happen when the PPA or the contract expires, which type of power crisis you are assuming in order to get to your 200 basis points? Last, my usual question on the supply. You are targeting 9 million customers, an additional 9 million customers in the liberalized market in Italy. This year, you managed to acquire 500,000 . What is going to change in your view and how different outlook?
I mean, we have been constantly disappointed on the liberalization of the market. How the different outlook could impact your outlook?
Okay, Antonella, thank you. Let me just answer this last question. I love this part of the equation. No, actually, we are not disappointed to the fact that every year we add about 500- 600 depending on which year. I mean, clearly, this is a COVID year, so it is a little less. Everything was lower on the sales side. The big change is just the end of the tariff. As you know, this is a saga that has been drawing on for now two or three different delays. Again, we still have this end of the tariff falling in the next three years' plan. What are we doing?
We are simulating the logic that we had already simulated last year and the year before and the year before, which is that as the tariff ends, in which way it remains to be seen, but as the tariff ends, we are only transferring to our free market position half of the customers that today we serve under the tariff. It is a very conservative assumption. That is the best guess we can have on the end of the tariff the way it is today. We all know that every new government in Italy, as soon as they swear, they get a free ticket that is you are able to postpone the end of the tariff another time. I think this is something that is going on now several years. I would not be surprised if a year from now, we might still have another postponement.
As these go by, I mean, every year we gain 500,000, 600,000, 700,000 customers in our market share. It is not such a disappointment for us at all. It is pretty good. On renewable growth, I think, Alberto, if you want to.
Yes. A lot of questions. First of all.
Maybe Latin America. Yeah.
Latin America. If you take mark-to-market today on impact on TINCOM on 2023, it is in the range of EUR 350 million. It is higher than the range, but it is clearly a mark-to-market. In my lifetime, never has mark-to-market been the real outcome. With the sensitivities and also the rule of thumbs, everyone can make what might be the final outcome of results. It is clear that it is also related to the composition of results that we have today. It is clear that it might also be different because of all the activities that we will run along these three years also in balancing and rebalancing our currencies. Confident in the growth of distribution in Latin America. Yes, we are confident in distribution because we are very depressed this year because of also all the price cap mechanisms they have there.
It is clear that steep recovery in demand will drive, together with investments and together with all the cost reduction that we will drive in this grid. It is making us confident that it is a task that we can achieve. When it comes to IRR, yes. It is clear that we take an easy way to approve our investments because it is really a point how it is going to happen after the PPAs. That is why I am saying that the optimism is one of the components of IRR and one of the components of the spread in all the investment committees that are in all the companies that will decide which kind of investments. That is why we have decided that no view of price increase might stay in our assumption.
We have a clear view on each country in which we are that the marginal cost or the marginal price at the time in which the plant will enter in the market will be sooner or later the market price of that country. That is because the marginal price is the renewable price and this is lower than the average price of each country. We take at the end of the PPAs prices that will stay in the level that will make the equilibrium of that specific market. This is the assumption. It is clear that we think that at that time we will be able either to stay with a merchant exposition or to have a PPA market at that price at the time in which the first PPA will expire. You asked me for the CapEx and the development.
No, I don't see any major change in, so the CapEx per megawatt is exactly the same as the previous plan, a little bit lower because there is a curve of decreasing in CapEx per megawatt. There are no big differences in the unitary CapEx of the development. The overall amount of megawatts is in line with the increase that we have in CapEx on the state. It's clear that you have some sort of differences because we have also to include the investments that we do in the last year and the megawatt that will come in the year after.
Because we are increasing a lot the investments, so we are growing the investment, it's clear that the part of investments that we do in the last year of the plan that not relates to any megawatt is higher than the previous plan because of this growth rate. Only this. No other major differences in CapEx and deployment.
Okay. We move now to next. We stay still in Milan. Nice background, virtual background as mine. Roberto Letizia from EQUITA. Your line is open, Roberto.
Yes, thank you. I hope you can hear me well. The first question relates to the business model of [audio distortion].
Okay. My first question relates to the business model of the renewable. You are showing a very significant growth in renewable in the coming years, which I think, but maybe you can correct me, an increase also in the size of each project you are following in. Also because this is required, for example, by the hydrogen development, and it is also part of the idea of Europe, which is calling for bigger projects to be developed first. I am wondering if this is going to change the concept of distributed energy model back into the centralized business model for renewable, which will maybe call for aggressive M&A in the future, a more difficult condition for the smaller player going forward. The second question is on debt. Would it be able for you to provide the level of leverage you are assuming in 2024, 2030?
Tell us how much have you assumed in terms of contribution for the EU financing, the Green Deal and the recovery fund measure. Did you assume already something to the benefit of your numbers into the strategy plan? Can you share with us this picture? A third question is on the stewardship. You show a higher portion of the stewardship contribution in distribution in the short-term period of the plan. Is it going to be the same in the longer part of your strategy plan? Is distribution the main play for the stewardship? Can you tell us what is the net income contribution of the stewardship? You showed us the EBITDA one. Would you be able to provide the net income? The final one on the power prices, would you be able to tell us what is the 2030 Italian power price? Thanks.
Assumed in your plan, of course.
Okay. Let me get the question number one, and then I will try also to answer on question number five. I say try because power prices in Italy in 2030 is really a guess, okay? On the Renewable Business Model, I think it is not exactly as it looks. The size of projects is a function of the geography in which they sit. Because of the last three years, we have been developing mostly projects in America, North, Central, and South America, you see the sizes of projects go up because this is a part of the world where large 500, 600, 700 solar plants or 400 wind farms are possible. There are other parts of the world where this is not normal and it is not possible, not even thinkable, and that is basically Europe.
I don't think Europe, apart from the offshore, you can plan to have this kind of projects. In fact, Europe will go the distributed way, in my opinion, in quite a large manner. This trend you will see probably rebalancing as Europe will get a bigger share of the efforts in the next few years. We don't think this is necessarily a global trend. This is more just a transient given the development that took place in some parts of the world. It's true anyway that smaller players will struggle for some time during the competitive tsunami that will hit the renewable energy European industry, which is not used to competition by and large. It's been a protected industry since the onset. You know that we've been developing a competitive behavior going outside of Europe, not playing into Europe.
Renewables in Europe still think or have a perception that they have to be protected and incentivized. I think that is going to go, that will be wiped away quite soon. I think smaller players will probably suffer a little bit in this, not for the size of projects, but because of the competitive play that will develop in a fierce way in Europe in the next few years. I think on debt.
Yes. [Foreign language] Roberto. First of all, on debt. On debt, we do not see any major changes in the next year. We will stay at the level I set for 2023. We will stay in the range of $2.7 billion and in the range of 26% FFO net debt also in the next years. No major changes. On the EU financing, I presented in a chart that we have increased around, in our assumption, around EUR 10 billion of investments in Europe, taking into account that we are working in four countries in which grants will be granted. Italy, Spain, but also Romania and Greece. We have presented a huge amount of projects. We have this increase of EUR 10 billion in investment.
We foresee for this addition, because the overall amount of the investment we will do in Europe is roughly EUR 25 billion, but for the addition versus the previous plan, we foresee a range of 25%, 30% of grants to support these investments. It is clear that if it does not occur, we will reduce the investments, the level of the grants. The net investment will remain the same. You asked me the impact on net income. Net income might be different, but the share of income for the next three years is not so huge. We have some financial contracts also with our joint ventures. All in all, we are ranging around EUR 2.8 billion cumulated impact on net income.
As said, power prices 2030, we see a progressive decrease in prices with a delay that is approximately four to five years. What you see in experience as a marginal price in a country in a year, we see that it will be the market price in four to five years. In this case, if you take Italy and if you look at today, the levelized cost of energy of renewables is in the range of EUR 48-EUR 49, and it will go down accordingly with the increase in renewable. You will see that more or less we have this point in three to four years going down towards, say, around EUR 40 at the end of the decade. I guess I have answered everything.
No, I think there is an issue on the price of energy in Italy in 2020, you said it. Okay.
I think actually we have answered all of them. I think we can move to the next. Again, nice background screen, but not virtual, I think. Javier Suárez from Mediobanca, can you open the line of Javier?
Many thanks, many thanks, and thank you for taking my questions as well. I have three remaining. The first one is on the LATAM exposure, and it's on a previous question, Antonella's question on exposure to LATAM. The question is on volatility on the underlying business. The company has presented a plan that has a bias towards Latin America that is significant. How does the company intend to manage volatility going forward? Looking into 2025 or 2030, how might that volatility impact your business development? I'm particularly interested in the debt management.
When the company is talking about net debt to EBITDA being structurally lower than other comparables, do you think that that is something structural, or do you think that that is something that would be progressively closed down because the business of Enel is similar, and therefore the giving potential of Enel is similar to other competitors or peers? That is the first question. The second question is, I think that you partially answered on that. My question was on simplification, effort on simplification, and asset rotation. I think that you have mentioned that the effort on simplification is not completed yet in Latin America. I was wondering if that also implies that the company will continue with some targeted asset rotation to complete that simplification.
The third question is on the, and I think that you have been discussing on that, but I wanted to have a clarification. Is on a, there is obviously plenty of discussion on lower electricity prices down the road and impact for profitability of utilities. It is a correct and a fair statement to make that Enel wants to expand, obviously, renewables, energies, but also completing that strategy with targeted M&A on the distribution network to ensure that you have that natural edge that the distribution networks are providing with. Many thanks.
Look, Javier, yes. The answer to your last question is absolutely yes. We theorized and practiced the horizontal integration across the value chain as the best way to create value in the next decade. That might end maybe in 2040, but for sure, not until 2030, I tell you. Yes, the answer is we will pursue actively an integrated position across the value chain in all those parts of the world where this is feasible and possible. We will, let's say, implement a stewardship model, so a model in which we develop, we build, and then we sell to third parties in all those cases where this is not possible. This would be very clear, and it is something we have always said from the beginning.
In fact, to that end, I think you will see us pursuing M&A and trying to complement the value chain positions that are in our eyes not balanced properly. This is not precise science, so we will never be 100% satisfied, but we will strive to keep that balance over the years. On simplification, you're also absolutely right. In Latin America, we are not finished in the asset rotation progress. You will see the simplification, hopefully more or less finished during the next few months, but then a season of additional asset rotation restarting in order to further streamline and rationalize our presence in that part of the world. On the first question, which is the volatility, I think Alberto can address that.
Yes. I add color to what Francesco was saying. We are, in the last years, we had a huge amount of asset rotation not impacting balance sheet because we sold both assets to create value. We will still continue. This plan foresees a balanced asset rotation that is in the range of EUR 5 billion of asset because more or less is the level of rotation that we foresee every three years is in the range of 5%, 7% of our actual assets. To take this for the first question, this is one. This is one of the first answers. It is clear that we are now paving the way to, along the 10 years plan, to rebalance and to put other areas of development that can balance the implicit volatility risk coming from FX.
Remember that is the only risk from Latin America that we, out of the COVID impact this year, we are experiencing. If you take out the FX impact in LATAM, you have a still growing, reliable operational activities that every year grows at the steady state. LATAM is set to grow more than last year, no, but the last plan, absolutely no, is set to grow the same. Seems to grow a lot because it has to recover a lot from the COVID impact. It might be a question mark, but looking at the fundamentals, looking at how all the countries are behaving today and yesterday, there are steep changes versus what we saw three or four months ago.
It is clear that the consensus and mark-to-market is going with a delayed set of data, but day-by-day activities, KPIs that we have are setting a steep recovery in the next month. Having not a big amount, now we are talking about 25% EBITDA next year coming from Latin America, it is high or not. We think that it is better to be more balanced. You are showing this plan that we have rebalanced investment in Europe, adding EUR 10 billion of investment in Europe. We are creating new areas of development now through stewardship models. In India, South Asia, all these parties that are balancing also in the future the FX impact. These are the managerial actions we are taking to balance this kind of volatility. On the debt management, the answer is it is structural.
We have ever managed this company with a strict financial discipline. We have ever said that we were taking the net debt ratio low and so deleveraging the company, waiting for the time in which the level of investment required for the transition will rise. The moment is now, and you see that we have steep increased investment, and we see a huge amount of investment in the next 10 years, not taking any risk on the debt level, staying well below three times net debt EBITDA while supporting this big transformation, this big increase in investments.
Okay, we move to next. We stay in Milan. Line open for Enrico Bartoli. Main first, Enrico. Line is open.
Yes. Hi, hi. Good afternoon. Three questions also on my side. First of all, on the outlook for 2030, I would like to share a bit the outlook regarding the client because I was impressed by the two slides, 37 and 38, on the increase in the value from customers that you expect over the next 10 years. I take that for the B2C is mainly related to volumes, but I see that for B2B, there is also a very huge increase on this, what you call the beyond commodity. If you can provide some details and your view on this point. The second question is related to Italy and the opportunity to increase investments in renewables. As you mentioned, you increased by EUR 10 billion the CapEx in Europe.
I saw that you're planning significant investments in capacity in TV, which is something that, if I'm right, you haven't done for a few years. I was wondering what kind of environment in terms of returns you expect from this kind of investments, and also on the possible evolution on the authorization side because it's very clear that in Italy, there are some delays due to the bureaucracy if you are talking with the government about real simplification and the possible introduction of some incentives. The third one is on the evolution of power prices. If you can provide some details on power prices in Italy and in Spain from now to 2023, particularly in Spain, we see that the forwards are quite low if you have this kind of assumptions of a different.
Since you provided a comment on power price in Italy for 2030, if you can add also on that on the Spanish market. Thank you.
Okay, let me go and answer the first question, and then I will also answer the number two on the slide number 38, which is the one that you were mentioning on the B2B beyond commodity market that you see there. I think here what you need to see is that we have evidence that the customers today in the B2B segment have an appetite for not only competitive energy supply, which has been the case so far, and this will continue, but also in services that have to do with flexibility, demand response, and in general with everything that has to do with the fact that their energy consumption is instrumental to the stability of the network. You know that with Enel X, we have today one of the largest, probably the largest demand response operator worldwide. We manage about 6,000 MW of demand response around the world.
We see this trend exploding nowadays in many parts of the world. Japan and Korea have been very successful for us. Europe is just starting now. This purple part is the Enel X activities related to B2B customers in terms of energy flexibility, demand response, battery storage, and everything that goes with it, with the services that have to do with generating and managing energy for them. We have small cogeneration plants run in the premises of the customer for their purposes, and that is now picking up also very largely. It has to do with everything but the commodity. Commodity is mostly the blue part, which we see as relevant but pretty small. This is a worldwide trend. Of course, Italy is just a part of it, but it is mostly everywhere in the world.
As far as Italy PV is concerned, we think PV is going to be the big story of renewables in Italy, apart from wind, because of the, let's say, natural characteristics of the country. It is not really such a windy place as Spain is, for example. We think PV is competitive PV, not incentivated PV, is the way to go. We are not looking for incentivation in this field. We are looking for a competitive battlefield. You are absolutely right. There is a slow permitting syndrome in Italy that slows down, has slowed so far, has slowed down development. We have represented this every time we can, and we had the opportunity to the government and also to the regions, which I recall you they are the responsible part in terms of energy in the country today. We think there is a need for some improvement there.
The returns in Italy on solar are around 7%, 7.5%. It is a relatively mild return environment for a very low-risk situation. On power prices of Italy and Spain.
Yes. Italy, as I said, Italy and Spain, it is Italy, we have already said. For Spain, we are in the range of 46%, 48% between 2021 and 2023. Also for Spain, we see this decrease going forward. It is the same rate as Italy, going down in the range of, say, 1%, 2% every year versus the last of the decade.
Okay. We move to next. Okay. Still a few to go. The next is Emanuele Oggioni from Banca Akros. Can you please open the line of Emanuele, please?
Can you hear me? Hello? Can you hear me?
We can hear you. We cannot hear you really well, Emanuele.
Sorry.
Can you try to speak closer to the mic?
I try to. Okay.
Yes. Now it's better. Thank you.
Thank you. Thank you for the presentation, and thank you for taking my question as well. The first one is on the European simplification reforms. In the last few weeks, you said that there is a need for the governance of the infrastructure authorization process in Europe, not only for Italy, also for all European countries, in order to realize the European green target set for by 2030, which are at risk. To what extent are you including the potential positive impact of the simplification reforms in Europe's plan in order to speed up CapEx, the renewable CapEx in Europe? This is my first question. The second is on the back to retail business in Italy. I think have you changed your assumption? The profitability, have you increased the profitability of the free market customers to the unitary margin?
I calculated a higher number for the retail EBITDA in Italy, if I'm correct in computation. On the recovery fund, European recovery fund, I have a question if you could put out more color on the projects you are planning, you are included in the recovery fund, and what could be the additional EBITDA by the end of 2023? The last question, are you planning to list renewable assets in North America in order to extract more value? Thank you.
Okay. I will take question number one and four. And Alberto, maybe you can take number two and three. On the simplification reforms, the question is, to what extent are you assuming there is a simplification in the plan? The answer is in two ways. In the short term, so the plan that we have 2023, basically no impact. We do not think there will, even if there is an improvement in the simplification processes, this will be already too late to have material impact in the 2023 strategic plan outline that we have presented to you. This is based on business as usual processes as we stand, okay? Obviously, if there is a simplification, there must be a simplification if we go to 2010, the way Europe provides, I mean, the way the ambition of Europe goes. I just give you a figure.
If you want to get to the 55% renewable energy percentages that the commission today is targeting in 2030, we would need to add to the overall EU-27 perimeter 28,000 MW of renewables every year. This is Europe, okay? The speed at which we are proceeding so far, if we take the last five years, the average is 18,000 MW. There is a big jump in the speed at which we need to put projects down. It has nothing to do with money. It is just process, the amount of projects in a given amount of time. Do we think this is going to change materially in the next three years? No. It must change now in order for year four, five, six to really see this acceleration.
To answer your question, in the three-year strategy, we do not imagine any real acceleration in permitting that has an impact on the three years, but later, yes. On listing renewables in the U.S., yeah, this is still possible. It is something that can happen. Frankly, I think a listed renewable-only company would be a little bit of déjà vu. I mean, we have done it already several times. I mean, we have been doing this already. It might be maybe a little late for the U.S. market. Perhaps there are other ways of creating value of that portfolio of assets, which starts to become significant, and I think you have a point there. Strategically, there is something that needs to be addressed. I think Italy, I mean.
Yes. On Italy, I would say the answer is yes. We see better results in the next three years versus the previous plan. It is mainly related to a couple of important points. One is that we are experiencing better margins on the overall business in Italy. The second is because the electrification of consumption is kicking in, and it mainly will affect because you have some sort of trend on one side. On the other, it will be reinforced by the action of all the beyond commodities analysts will support. We will target the consumers that will take this path. Looking at this, these two things together are bringing up our results a little bit higher than what was assumed in the previous plan.
Okay. We now go to Madrid, I think. Correct me if I'm wrong. Line of Manuel Palomo from Exane, please open. Thank you. Manuel.
Yes. Thank you, Monica. Just from Madrid, keeping here in Madrid. Thank you very much for the presentation. Very, very interesting. I'd like to ask, however, three questions. The question number one is on the CapEx, particularly on the CapEx of renewables. In the presentation, we could see that you plan to have around EUR 17 billion CapEx in the period 2021, 2023 in order to add around 15 GW of new capacity in the period. However, I could also see that most of these new installations will be solar, solar PV, which we have a much lower installation cost. I mean, when I look at the rough calculation, it looks to me that it's above EUR 1 million per megawatt. I don't know. What am I missing? Is this including any acquisition, or am I doing the wrong numbers?
My second question would be on the returns and on the targets. You have announced a major increase in CapEx today. Also, you've given the impression that the returns will be higher, particularly in the first three years. However, when I compare these year targets with the previous year plan, I find that the targets are pretty similar, largely unchanged. Could you help me to build the bridge to better understand the evolution of your targets? Was that going wrong? Or maybe, I mean, a big chunk of this CapEx is due to increases in maintenance CapEx, or I don't know. If you can help me, that would be great. Finally, just an update on Open Fiber, if you can. Thank you.
Okay. It's funny that the Open Fiber question comes from Spain. I was expecting something from Italy, but it's interesting anyway. Open Fiber is a good example of the stewardship model. It's a perfect stewardship model paradigm. In a way, it has helped us theorize and articulate this concept. We started Open Fiber, which was called at the beginning Enel Open Fiber, noticing a complete absence of the incumbent in the space of cabling the country with fiber optic. We developed an original model, which is a wholesale-only operator providing access on fiber at competitive cabling costs for everyone. In four years, we have more than doubled the incumbent capability and connections. Today, we see the opportunity to monetize the value created in a big way.
We will replicate this model in other parts of the world where we see similar or parallel situations, establishing a way of generating value based on the competitive structure that we can put in place and the capabilities that we have acquired in the process. We are not going to become a telecom operator, as we always said, but we will remain an infrastructure operator as always. We will monetize accordingly as soon as we see the opportunity fitting our appetite. On renewables, I think Alberto can explain that to you, but I think you have the wrong impression. We are not particularly PV-driven. We have basically a 50/50 PV onshore wind development pattern. I do not see how you can extrapolate that we have a lot of PV, this particular vintage of three years coming in front of us. Maybe Alberto can explain that.
The explanation is what I already said. If you look at the overall investments, we foresee for 2023 roughly, say, EUR 6 billion of investments. You have to take into account that roughly EUR 2 billion- EUR 2.5 billion are related to megawatts that will come online in 2024. If you deduct these EUR 2 billion from the overall amount, or you add the corresponding megawatts, you will take the final CapEx per megawatt number that is the right number that we use for doing the plan.
Okay. I think we have a follow-up question from Alberto Gandolfi. Please, can you open Alberto's line?
Hi, Monica. Thanks for having the lack of privilege to be first in the queue. I ask a couple of quick ones. The first one is, I do not think you have been saying anything about market design. I can see you are reducing the power prices going to 2030. My question is, if we move into a world where 65%, 75% of production is from renewables, and later on, we move into a world where 90% is from renewables, and we start to have batteries, maybe even hydrogen turbines, the marginal price setting probably no longer makes sense in the longer term. What would you be recommending? A world moving towards layered corporate PPAs, return on invested capital. Can you maybe tell us what should be the price setting technology in the longer run? The second, very, very brief one.
I mean, you only mentioned briefly Green Hydrogen. Considering we have a European strategy, considering your strong presence in Italy and Spain, I was wondering if you can elaborate a little bit more towards the end of the decade and maybe moving beyond. What opportunity do you see? The EU is assuming 500 GW of electrolyzers across Europe by 2050. I mean, this is huge numbers. I was thinking, how can you capitalize, particularly with your solar exposure in Italy and Spain, from this opportunity? Thank you.
I think thank you, Alberto. As always, this market design issue is indeed starting to become less theoretical and more concrete as time goes by. This is a discussion that has been going on for a while. We will all be saying, when there would be such and such percentage of renewables, then there would be the time it is going to be the time to discuss market design changes. When this percentage is getting close, I think this discussion is about to really kickstart in the regulatory frameworks that matter. All in all, I think that the system marginal price that we have so far managed in this part of the world, at least in Europe and in other parts of the market, is certainly still making some sense, but increasingly questionable and politically difficult to sustain going forward.
My view is that it will be evolving quickly into two markets, one short-term based on system marginal price and another mid-long-term based on PPA or long-term contracts, be they capacity or mixed hybrid energy and capacity for some time. At an asymptotical theoretical end in which you could even speculate that generation could become a regulated business as networks are, because basically it will, at the end of the day, be a question of having a technology or two or three based on mostly renewables and some balancing smallish thermal generation at the end that might require some quasi-regulated approach, remunerating the capital needed for the investment and the maintenance in good shape of the assets. Nothing really fancy and nothing really dangerous. Actually, we would love to be in that space already because regulation is a space we know and which we are completely confident.
I would say that there are parts of the U.S. where this model is already practically in place, and some utilities there are able to put in the RAB also the investment in wind turbines, which is, if you want, a little bit of a dream if you look at Europe. I would say this is something that can happen, but it will take some time. In the meantime, I think we would see the system marginal price being eroded by the emergence of a parallel medium to long-term market going forward. On the Green Hydrogen, let me tell you, I think Green Hydrogen is going to be possible, probably from a competitive standpoint in the next five years. We do not know what kind of industry this is going to be. I would say that there are today, in my mind, two possible outcomes.
Will it be a big electrolyzer, super large, that will make hydrogen, and then this hydrogen will have to be transported somehow to the places where hydrogen is used? That is one possibility with, I would say, a not trivial hydrogen logistic corollary that needs to be adjusted. How do you transport hydrogen on long distance at economic and safety concern? The second is, is it going to be hydrogen produced where it is consumed, so produced in modular, smallish, distributed electrolyzers close to where hydrogen needs to be consumed and only electrons wired with water and piped to the electrolyzer? That is a complete different scenario in terms of development of the industry. We actually do not have a clear indication on which of the two scenarios this is going to evolve.
It's going to be quite difficult for players to speculate now because we don't know where the technology is going. Is it going to be modular, or is it going to be the old way, so the large scale becomes more economic because of typically engineering large-scale economies? The impact on us is different because the distributed electrolyzer model gives value to the networks in a bigger way than the other one, which entails value for pipes. Not the same as we have today, but different pipes, but still a different business. Obviously, we prefer the distributed model, but we don't know where the technology is evolving that way. Sometimes you win, sometimes you lose. We don't know.
In general, this will entail, as you are rightly saying, a big demand in electricity, in renewable electricity, and solar and wind and all kinds of energy from renewable energy sources will be in play. I think that you would probably see, and it's not a secret that France is very active on the hydrogen because nuclear can also play a role in Green Hydrogen. It's a decarbonized form of energy, and they claim that this could provide support to demand going forward also to nuclear power plants.
Okay. Alberto's question was actually ending the session from Webex. We also received some questions from email, particularly from Barclays, José Ruiz, Andrew Molder, Credit Suisse, Oscar Najar, Santander, and Elkin Mamadou from Bloomberg. Most of them have been answered. We have just a couple of strategic questions that were not tackled during the presentation. One was on offshore wind. The question is if we are seeing sufficient opportunities in onshore so that we do not want to expand into offshore. The other one is on the integrated model, if we still see value within the integrated model at a time when competitors are shifting towards a more focused model.
On this integrated model, I think we reiterate that we like the integrated model a lot. In fact, I object to the fact that competitors are shifting. I mean, there are just two competitors that are in that separated mode, and they are basically struggling, I think, going forward to put together growth, dividends, and debt management in the right way. I would strongly advocate for the integrated model going forward, at least for the next decade, because the turbulence in technology is too large to manage betting on one part of the value chain only. We will not change that. Actually, we will pursue actively the integrated position across the value chain every time we can. I think the performance during the pandemic just showed that this is a very strong hedging tool to have every time that you can.
On offshore wind, we maintain that at least for the next three years, we do not see us having any interest in offshore wind, given that it is still more expensive in terms of euro per megawatt compared to onshore wind. It freezes more money for a longer time when compared to onshore wind. It also has an operation and maintenance risk profile that is not at par with onshore wind. Given the fact that we have such a large opportunity of investment on onshore wind and on our pipeline, we do not see a logic in us getting in the offshore. As this technology will become more and more market-friendly and less risky, of course, we will get interested. It is just not the moment at the not right now.
CEO, CFO, we are at the end of the event. I want to thank all of the analysts that made us traveling around Europe while I was in Milan and Francesco and Alberto were in Rome. From tomorrow, from our places, we will travel the world. I want to thank my colleagues that put together this virtual event that I think was great. As always, the Investor Relations Department is at your disposal in case you need any follow-up. Just email us at investor.therelations@enel.com. Thank you so much.