Good afternoon. This is the conference call operator. Welcome, and thank you for joining the ERG third quarter 2022 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on their telephone. At this time, I would like to turn the conference over to Mr. Paolo Merli, CEO of ERG. Please go ahead, sir.
Good afternoon, everybody, and welcome to our webcast for the third quarter results. Here with me is Michele, our CFO, who will take you through the results in more detail after my opening remarks. Let me start summarizing the key figures over the period. I'm on page number four. Numbers here, I remind you, are based on continuing operations, excluding ISAB and CCGT from the scope. In a nutshell, I'd say, again, a solid set of results in the third quarter, mainly driven by the larger installed capacity. Now let me focus on the nine months. Later, Michele will dive deeper into the third quarter.
We posted an EBITDA of EUR 411 million, up 62% year-on-year, mainly as a result of the larger contribution from recently acquired assets in Italy, consolidated during the course of the third quarter, in particular, the 34 MW in solar as of the beginning of the quarter and the 172 wind assets as of August 1. All the other assets outside Italy that progressively entered into operation over the last 12 months. In the end, let me say like this, the results benefited from all the significant investments made in 2021 and 2022. Let me also underline that the stronger EBITDA year-on-year in Italy was almost entirely attributable to the new assets.
Although there is a lot of talk about extra profits, here in Italy, the price scenario for us was likely negative, paradoxically, as the reduction in the value of incentives was only partly offset by the higher merchant prices that, I remind you, are limited by the hedging policies. Internationally, the EBITDA growth, almost 3 x year-on-year, was significant and coming from the strong execution of our strategy to expand the asset portfolio beyond the border. As a matter of fact, we continued to invest heavily with CapEx in excess of EUR 800 million in the first nine months of the year, more than double compared to the same period in 2021, which was already strong. We continued to do so through a mix of organic and M&A, relying on the financial firepower of the group.
In the end, in 2022, so in the first nine months, we invested roughly EUR 800 million, out of which 600 from M&A and in excess of EUR 200 million in our organic developments, and I'm referring substantially to all the assets we are having under construction. Some of them are already in full operation, some others will come shortly in U.K., Poland, France, Sweden, and Italy, both repowering and greenfield. Let me now comment bottom line. Net profit from continuing operation was EUR 174 million, more than double year-on-year. Let me say almost triple year-on-year, reflecting the stronger operating results, but also lower financial charges. Let me be clear.
Net profit here does not include the impact of windfall taxes and clawback measures effective in Italy and Romania, for the time being, just those two countries, those kind of measure that amounted to a total of EUR 58 million in the nine months. That figure, in reality includes also EUR 4 million for the CCGT, out of which, say, EUR 45 million in Italy and EUR 13 million in Romania. Given that those are temporary and extraordinary measures, we decided, according to the principle and together with our statutory auditors, to report them as non-recurring items while providing full and detailed disclosure. On our financial statements.
Although it's not represented here, let me tell you that the CCGT generated an EBITDA of EUR 52 million in the nine months of 2022, +80% year-on-year, so it compares to the EUR 29 million in the first nine months of 2021. Let me say that this increase, a significant portion is due also to the fact that the plant became eligible once again for white certificates as of the beginning of the year. Net financial position at the end of September was EUR 1,542 million, significantly down compared to the EUR 2,051 million at the end of 2021. There have been many big items, say, on the positive side, definitely the cash in from the disposal of the hydro asset, EUR 1.2 billion, almost EUR 1.3 billion.
The strong cash flow generated by the company over the first nine months. On the cash out side, we have the huge investments I already mentioned, and the dividends paid, I would say, though, are the two main figures. The last that is underlined in the graph is the fact that the net financial position at the end of the period was inflated by roughly EUR 310 million. That's basically the negative mark-to-market related to the derivatives on energy prices, given the huge swings in merchant prices registered in August and September. Let me say, this item is just a temporary debt, and is expected to completely reverse in 2023, because all our futures are going to be delivered next year.
Let me now move the next page number five to give you a quick update on our recent achievements, which I believe have been quite significant. We are moving forward with the expansion of our portfolio of renewable assets in Europe. The third quarter was a good one as well. Let's say we completed during the quarter the construction of the first 50 MW wind farm in Scotland, the first slot of Sandy Knowe project that allow us to reach an installed capacity in U.K. of 120 MW. This amount is expected to double in the next 5-6 months because the other two projects are completing the construction and are expected to enter soon.
In U.K., we also acquired a fully permitted and very high quality wind project in Northern Ireland, very close to all our other installation, with a capacity of 47 MW. Say, this will enter into our new business plan. In Poland, we commissioned our newly built wind farm at Laszki, 36 MW. We are very proud of this because despite the tough surrounding, consider that this wind farm is very close to the Ukrainian border, we managed to complete it as expected. Now in Poland, we have 142 MW installed. That's quite a significant capacity. Let me also say a quick comment on the CCGT disposal. As you know, the antitrust authority didn't authorize the disposal to Enel.
Undeniable, we were a little bit surprised by this decision, as our plant is mainly supplying the Priolo site, so a captive market, not a merchant market. We have a different view on this. Nevertheless, we look forward and we reiterate our objective to sell the plant as soon as possible. Let's say our objective is to rearrange the process, but we need to close 2022 to have a set of reference data, and we will work to relaunch very early next year the process and definitely to complete it, fingers crossed, during 2023 or the first part of 2023. As far as ESG, we are continuing to receive important external recognition, Moody's included, ERG in the top 2% of the world ranking.
We also strengthened our ESG governance model, having published the policy against violence, harassment, and bullying with a zero-tolerance approach, in order to once again confirm our commitment towards an even more inclusive approach. We also updated our sustainability policy, which is now incorporating a biodiversity policy in line with international principles. Last but not least, we strengthened our financial power while confirming our commitment to green financing. As a matter of fact, in the last weeks in October, we signed an ESG revolving credit facility for EUR 600 million, which provides ERG with more flexibility to manage this very volatile business environment. I would say even more will allow us to keep looking for growth opportunities in a cost-efficient way. We didn't require any public guarantees unlike others. It was an opportunity and not a necessity. Let's move on.
This is the chart I like the most because it provides you and ourself with a clear evidence on the execution of the group. Please look at the chart. I think it's quite self-explanatory. Thanks to the significant investments made in the second part of 2021 and in the first nine months of 2022, we could count on a larger asset base in service during the nine months, which in the end was the real reason behind the trend of our economic results.
In the fourth quarter, or let's say the very beginning of 2023, because some projects are clearly near the end of the year, we expect to add a further 150 MW from wind farms currently under completion in the U.K. and Italy, which will start likely contributing to our results this year, but say, they will be contributing at full speed in 2023. I now hand you over to Michele for his review on results.
Thanks, Paolo. Now let's have a look at our third quarter 2022 results. I'm at page eight. Let's start with an overview of unitary revenues trend. The all-in revenues per MWh for wind were higher year-on-year in all countries where we operate. With the exception of Poland, where they slightly declined as the rise in electricity prices have been more than offset by the hedging made in line with our exposure. In Italy, unitary revenues rose in third quarter, thanks to the acquisition of new assets, while the assets already in the group got a price in line with previous year. As the rise in electricity price has been offset by the hedging and by the 2022 value of the incentive, which declined from 109 EUR/MWh to 43 EUR/MWh.
In France, the large majority of our assets operate under a fixed scheme without exposure to market price. Unitary revenues have a limited increase year-on-year. In Germany, the one-way tariff structure, coupled with some short-term hedging, allow us to capture part of the peak merchant prices. As regards the solar all-in unitary revenues, we see value increase in Italy, thanks to the acquisition of new assets. In Spain, where our assets have a tariff mechanism that operate as a floor to our revenues, the all-in price is aligned with the overall merchant scenario and has been influenced in the last quarter by the regulatory framework update. Overall, a positive scenario, in particular for our foreign countries.
As a side note, we expect a negative impact recorded on our non-recurring result of the Italian clawback measure on the recent acquired solar asset, Progetto Siena, 34-MW, that captures merchant prices. Finally, we note that also the effect of the Romanian clawback measures that caps to roughly 90 EUR per MWh, the unit revenues of our 70-MW Corni wind farm, are recorded as non-recurring items. Now a focus on production. As regards Q3, we are in Italy 493 GWh, +80% year-on-year, 8% year-on-year, thanks to the consolidation of new wind and solar assets in Q3, +68 GWh, coupled with better sun irradiation, partly offset by lower wind conditions.
In France, 187 GWh, thanks to 46 GWh coming from new perimeter that more than compensated the weaker average production of the period in comparison to Q3 2021. In Germany, we have 82 GWh benefiting from the perimeter effect for 17 GWh due to the acquisition made in 2021, 55 MW, partly offset by slightly lower wind volumes. In Eastern Europe, wind volumes higher than Q3 2021, +28%, which reflect better conditions in Bulgaria and Romania. Higher volumes in Romania and in Poland reflect the new capacity in operation by the end of June, +11 GWh.
On top of that, were the contribution to the portfolio of the assets built in Northern Ireland in 2021 and acquired in Spain in January this year, for a total of 88 GWh. In the first nine months, production reached 3.6 TWh, +700 GWh, mainly due to the new assets acquired or internally developed in Italy and abroad, and higher wind productions in East Europe. In the third quarter of the year, we had an overall EBITDA equal to EUR 133 million, higher than Q3 2021 by EUR 58 million, of which EUR 44 million from perimeter effect. In Italy, the EBITDA was EUR 90 million, +42%, mainly due to the 2022 acquisition, EUR 22 million for wind and EUR 9 million from solar assets, partly offset by lower wind volumes on our asset base.
In France, the EBITDA was EUR 7 million, benefiting the consolidation of the assets acquired in Q4 2021. The new asset contributed with EUR 3 million. In Germany, the EBITDA grew consistently in the quarter due to a better scenario which accounted for EUR 5 million and the perimeter effect of EUR 2 million. In Eastern Europe, the EBITDA benefited mainly from better scenario, which resulted in EUR 11 million contribution, higher volume, + EUR 6 million, and a perimeter effect in Poland, + EUR 2 million. The figures do not include the windfall tax in Romania, accounted as a non-recurring item. It's worth mentioning that in Q3 2022, U.K. and Spain have contributed to our results for EUR 6 million.
In the first nine months, EBITDA reached EUR 411 million, EUR 157 million higher than previous year, of which about EUR 91 million comes from perimeter effect in Italy and abroad. Notwithstanding the last acquisition in Italy, the group EBITDA showed a significant increase of geographical diversification in 2022. More than 40% EBITDA comes from a diversified panel of European countries, while in 2021, the foreign EBITDA was only 25%. Now, a brief overview of investment in the period. In nine months 2022, we invested more than EUR 800 million, an amount which is higher than the one invested in nine months 2021, EUR 350 million, which was strongly influenced by the M&A operations in France and Sweden.
CapEx for the period are composed as follows: About EUR 610 million of M&A related to wind and solar acquisition in Italy, of which 172 MW wind and 34 MW solar, whose closing took place in Q3 2022. A solar acquisition in Spain, 92 MW, acquired in January this year. About EUR 194 million are related to organic CapEx in wind, referred to construction activities, mainly in U.K., EUR 70 million, Poland, France, and Sweden. It also includes EUR 60 million of CapEx in Italy for the repowering projects of Camporeale, Partinico-Monreale, Mineo-Militello-Vizzini, and the greenfield project of Roccapalumba in Sicily.
It's worth mentioning that recently, we made an important step forward in our construction works with the commissioning of last wind farm in Poland, 36 MW, and the first part of Sandy Knowe wind farm in U.K., 50 MW. About EUR 12 million related to revamping of solar plants in Italy, and finally, about EUR 7 million related to maintenance CapEx spread across all other countries. Let's now move on to financials, commenting on profit and loss on a recurring basis. We have higher depreciation, EUR 8 million, which reflects the contribution of the new assets, so a perimeter effect. Net financial charges at EUR 6 million versus EUR 7 million in Q3 2021, thanks to a lower cost of debt, mainly following the issuance of our third green bond in September 2021.
Tax rate in the quarter was 26% against 24% in Q3 last year, mainly due to the lower impacts from tax benefit, as overall, on the higher EBIT, driven by a higher EBITDA. Taxation in the quarter does not include the effects of windfall taxes in Italy, as they are accounted as non-recurring item for EUR 40 million. As of January 2022, our CCGT is consolidated in discontinued items. In Q3 this year, it recorded an EBITDA of EUR 32 million versus EUR 9 million in Q3 2021, and a net profit of EUR 17 million against EUR 2 million last year. The improved results of 2022 are also due to the contribution of the new ten-year period of white certificates following the 2021 refurbishment investment on the asset.
As a result of all of this, the adjusted net profit of the quarter amounts to EUR 64 million, versus EUR 30 million in Q3 last year. If we look at the first nine months of 2022, the adjusted net profit is equal to EUR 190 million, EUR 60 million higher than nine months 2021. Finally, let's take a look at the cash flow statement and the net financial position for the first nine months of 2022. The net financial debt closed at EUR 1.5 billion, EUR 500 million lower than the end of 2021. Starting from the left, we have the cash in from Hydro disposal and the consolidation of term on Hydro. Then the dividend paid in the period, EUR 136 million. Our EBITDA, EUR 411 million.
Investment made in the period, EUR 822 million. The change in working capital, financial charges and tax and others for EUR 174 million. In this amount, we have different effects. We have a contribution of EUR 191 million of commodity derivatives, a positive contribution of EUR 79 million in term of interest rate swap fair value change, and EUR 49 million of tax cash out. Finally, EUR 70 million of distribution of reserve coming from ERG Power. The net financial position includes EUR 310 million due to a mark-to-market of derivatives on commodities. This is a short term effect that will have a positive reversal during the last quarter of the year and in 2022.
A final word on the closing in October of our first ESG-linked EUR 600 million revolving credit facility. The line will add flexibility to our financial structure, and it will be able to support potential acceleration of our growth strategy. The RCF was signed with a pool of international and Italian banks without need of any public support or guarantee. I think that I have touched all the relevant items. Thank you for your attention. I will now hand over to Paolo for his final remarks.
Thanks, Michele. Now guidance for the full year 2022. I am on page 16. We have revised the EBITDA range upward by EUR 35 million. Therefore, the new range is EUR 520 million-EUR 550 million, say midpoint at EUR 535 million. The upward revision, which is the fourth in a row, basically reflects the quicker than expected deployment of a larger installed capacity from both organic and M&A. Please consider that this guidance is based, this is very important, on our best understanding of the regulatory frameworks in each country where we operate. Particularly, I'm referring to the clawback and price cap measures that should be effective as of December 1, 2022, following the EU regulation which was published last October 8, on top of those measures already effective.
Please consider that all member states have the option to introduce more conservative measures, so we should gain more visibility on that in the weeks leading up to December first. I hope that point is clear, but if not, I think in the Q&A, we can address a little bit better this point. We are confirming the CapEx guidance in the range of EUR 901 billion, as per the last webcast. As far as net financial position, we are lowering our guidance range by EUR 50 million, and this basically reflects the higher EBITDA, and let me say, also a little bit lower contingency in our estimates, given the limited time left until the end of the year.
Please note that the debt guidance at year-end still includes about EUR 260 million, which is our best estimate, related to the negative mark-to-market of derivatives, which as you know, and I repeat it, is a temporary debt that will reverse in 2023, with the rollout of hedging at the delivery time. I think I've touched everything. Thank you very much for listening, and we are now ready to take your questions.
Excuse me. This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and one at this time. The first question is from Enrico Bartoli with Mediobanca. Please go ahead.
Hi, good afternoon, and thanks for taking my questions. Actually three on my side. First of all, I'm interested in your view on recent developments in the industry, particularly in the current interest rate scenario. I was wondering if the additional cost of capital that the industry is facing, do you think will be able to be transferred in the final prices in the PPAs that we expect to sign over the coming quarters? If eventually the new scenario will be also translated into higher prices in the auctions organized by the government, and particularly I refer to the Italian auctions where there is a cap which is fixed.
On top of this, if you can also update us on the situation of the cost in the industry, particularly on the CapEx and inflation that you are facing. Second question is related to the guidance. You highlighted in the press release that you expect the contribution from Italy to EBITDA at full year to be lower than 2021. This would imply a very significant reduction in the fourth quarter compared to last year. If you can provide some details on the reason for this and what you are expecting as the evolution in Italy in the fourth quarter. The last one is related to, in some way also related to the interest rate scenario, to the cost of debt.
In your business plan, you have an assumption of 1.3% fixed in terms of cost of debt. How can, from what you can revisit now, this assumption can be moved, considering the current interest rate scenario? Thank you very much.
Okay, I'll try to go through your question, Enrico. I hope, first of all, I find you well. The first one was the outlook in terms of returns for the industry vis-à-vis the rising cost of capital and the evolution of pricing in the markets, in particular in the PPA and CFD auctions. It's the question, I think. A very complex one, but I think this is for all the industry over the last 15 months, more or less. We have seen an increase in interest rates.
These are the risk-free, say by 200 basis points, 2%, which is quite a significant amount in particular for businesses that are valued on a discounted cash flow model. We are at the same time experiencing very high merchant prices. If you look at the screen for forward prices, they are well above 100% even in four, five, six years' time. I can tell you that what we are experiencing in the field when negotiating PPA is the major players, off-takers we are talking with are assuming a medium long-term view with a very high price.
If the question is also how can you translate how much of the current merchant prices can be translated in the PPA? I would say today, for a 10-year duration PPA, we are definitely looking at number above EUR 100 per MWh, and sometimes significantly above EUR 100 per MWh. That's a clear view. The market is reflecting the fundamentals, because it's not just speculation, guys. There is a shortage of gas all around Europe. It's quite evident. There is an impossibility to switch overnight from the canceled Nord Stream 1 and 2 into new capacity.
The only very quick capacity to be deployed is the renewable one, because there are a lot of talking about nuclear of fourth and fifth generation, but that would take 15, 20 years to be on the field. The other part of your question was about the CFD, if I got it well, and this is the problem. The government and the member states are acting not as fast as they should, in order to create the right conditions for investors to deploy capital as quick as it would be needed by this very tough environment. We have seen over the last few days important signs from Europe.
The European Commission is now circulating a draft document that should be transformed into a regulation soon in the next few weeks. The aim of this document is to accelerate significantly the deployment of renewables, through a quite important simplification in the permitting. In particular, they are talking about reducing and squeezing the timing for authorization within one year for greenfield and within six months for repowering. Let's see if they will be able to do it, because in the end, all these good intentions, you know, have to face with the reality, the regional, the local, the country's realities. Say, on paper, all the signs from this point of view are positive. If you want my view, my view is very clear.
I don't see any other alternative solutions to this energy crisis than the liquefied natural gas coming to Italy in order to offset coming to Europe, sorry, to offset the lower flows from Russia, and I would say above all, the deployment of renewable. Because all other solutions are just, you know, for political reasons. There is no time to deploy new nuclear or kind of nuclear capacity. That, I suppose was. Ana, you also asked about the evolution of CapEx. It is another issue for the industry.
I would say theme for the industry, because in the end, if the market works as it should work, sorry, we should expect everything to be reflected in the PPA prices or in the CFD auction prices, providing the right and fair return for this kind of investment. Right now, the CapEx per megawatt for a wind installation is moving up. That's at least according to our understanding of the industry. You know, the first player of wind in Italy and one among the first ten in Europe is going up to in the region of EUR 1.5 million per megawatt, which is quite a significant increase compared to what we got used till 24 months ago, in the area of 1.2, something like that.
For the photovoltaic, so for the solar, even worse, because the cost of panels, the silicon, all the equipment. Please also consider that the incidence of BoP and all the ancillary activity in the photovoltaic segment are bigger than in the wind, where 80% or 75% is the turbine. In the solar, we are seeing even more this trend. We have an idea, just to say, a rounded number in the region of EUR 1 million per megawatt. We were used to see half that number till 24 months ago or 18 months ago. I think I have addressed your question. The second one, yeah, you are right.
The implicit value in our midpoint EBITDA guidance is a little bit below what we posted in the full quarter of 2021, with a larger installed capacity in 2022. The question is absolutely legitimate. Please, Enrico, consider, first of all, that over the fourth quarter in 2021, we had exceptional, really exceptional wind conditions. In the nine months were bad in 2021, but in November and December last year were amazing. That's a point you should take into consideration in your analysis.
In the fourth quarter of 2021, the prices, the energy prices were already very high, in particular in December 2021, while in our forecast for 2022, we assumed the all these caps they are talking about around Europe with member states that are issuing a draft decree not fully consistent with the 180 adopted and indicated by the European Commission. We are applying, as I said, our best understanding for France, for Germany, and for the other countries. It's a little bit, we are assuming caps in some states much more conservative than the 180, and we will see in a month. For the time being, it's like this.
Let's say if the production will be in line with our budget, probably the midpoint guidance is a little bit conservative. We are happy with it for the time being. The third quarter, that I will leave our CFO to answer.
Just a final addition, a comment on the last quarter. Remember that in comparison with last year, the Italian incentive last year was EUR 109 per megawatt hour. This year is EUR 43 MWh . There are also these elements that explain the difference, 2021 against 2022. Cost of debt in the business plan was 1.3%. For sure, when we decided our terms for business plan, we were in a different rate environment, so we should expect that the new business plan, the projections will be based on higher cost of debt.
Consider at the same time that at least for 2023 and 2025, we have pre-hedging in place that for EUR 500 million of notional to protect us against the increase in interest rate. Effectively, we fixed the roughly 0.3% cost of debt on a 5-year swaps. This currently has a positive mark-to-market that we recorded in our nine-month financial statements and balance sheet for an amount of EUR 16 million. It's a protection against the rate increase.
Thanks a lot. Very, very clear. Now I understand. Thanks a lot.
You're welcome.
The next question is from Roberto Letizia with Equita. Please go ahead.
Yes, good evening. Thanks for taking my question. I would like to move the ball on 2023 for whatever is possible to comment on next year, which is very interesting for the moving parts. I would like you to possibly sum up the moving parts for next year as far as your understanding, of course, of both regulation and market prices as we have today. Starting, for example, on a comment on the hedged prices, sorry. If you can comment, for example, how much do you expect in terms of increase in average hedged price in EUR per megawatt hours for next year?
When actually do you expect all the hedges to terminate, to let us understand when exactly, for example, the hedging you have in the balance sheet will fully disappear and when the full market price will start benefit your hedging policy in 2023. Then if you can comment on the total addition expected next year beyond the 150 MW you commented at page six, which we probably enter already this year. Instead, I would like you to sum up what is the total capacity addition expected next year.
Coming back just quickly, I would like to understand if you believe that the net effect for what regards Italy, the net effect from the additional reduction in green certificates and the higher hedges price for 2023 will be a net flat effect or eventually positive or negative. I would assume it should be roughly flat, so letting us, for example, the M&A to fully contribute in Italy next year. Can you briefly comment on the refinery ownership for your CCGT electricity sales? I know this is non-core, but it will affect probably the sale of the assets. What do you expect for the control of that asset, which is crucial for the sale of the electricity prices next year?
When do you expect to give us a new strategy guidelines and new strategy plan? Thank you.
Okay, Roberto, I try to touch the points you raised. First of all, 2023 is very difficult. As I said, we did a quite complex exercise to elaborate the forecast for the full year because the uncertainty right now is massive, let me say. Everything will depend on the rules and the guidelines we are still expecting from the European Commission to implement the infra-marginal electricity price cap. This is quite material because if the ceiling, the cap is at 180, okay, is a thing and we can elaborate the decision. If any state in France, they are talking about 180 ± 80 EUR per MWh, then could be even EUR 100 per MWh.
In Germany, they are talking about. There is nothing certain in this moment. There are just draft documents that are circulating or even rumors, just rumors. I don't want to give a number for 2023 because it's too early and I don't want to create expectations. For sure, the industrial platform of the company is growing up quite significantly. You know that there are megawatts that have entered into you know, into operations just as of August, and they will be fully up and running for 2023. This is a first upside. The second upside, we have a concentration of new entries from organic growth concentrated in the last part of the year and in the early part of 2023.
For instance, we have the 92 MW in Scotland, Creag Riabhach, where we have installed more or less 60, 65, 70%, I don't know, I can't remember well the right numbers, of wind turbines. The field should be fully up and running, say, by the end of the year or later, in January, at the end of January 2023, or something like that. We have roughly another 36 MW in Scotland again, that should enter into operation in the first quarter of 2023. We are finalizing the construction of a 60 MW, or more than 60 MW in Sweden that should enter in operation in the first quarter. Some repowering projects that should be entering in operation, some by the end of this year and the biggest part in 2023.
Let me say, all in all, we have roughly at the moment 350 MW under construction that should be part of it enter by the end of the year. We gave an indication in the region of 150 MW, while the remaining 200 MW, more or less, this is fully organic, will enter into operation during the course of 2023. From an industrial point of view, let me say, the portfolio is going to be stronger than in 2022. There are also other effects. The first one I already mentioned is the price cap and the mechanisms through which they will implement this price cap across the different countries. The second element, don't forget the incentive in Italy in 2023 will go down to zero.
Because, you know, there is this regulation where the green incentive, the value of green incentive is calculated based on a formula that says 180 EUR per megawatt hour, less the price of the merchant. The merchant price registered in the year before. In 2022, the price should be much higher than 180, then that will bring the value of the incentive for 2023 at zero compared to the 43 EUR. There are many elements that have to be put together. Let me say, my feeling is positive, but I stop here, okay? I see still upside, but I stop here because I prefer to do the exercise in full and then come back to you probably March, when we hope to present an updated business plan.
You had a third question, probably flat-
Yes. I have asked about the CCGT plant and the issue of the refinery, the control of it, the energy you're going to provide, and some thoughts on that.
There are lots of articles, lots of rumors about the ISAB refinery, because the point here is the oil embargo is going to be effective as of December the fifth. The question is if ISAB can keep running the business without any supply from Russia and supply from other sources. From a technical point of view, we were the ex-owner of the refinery. I can assure you that refinery can work on a different set of crude coming from everywhere. When we used to manage the refinery, just less than 20% came from Russia. The other crude came from other areas. It's more a financial issue because ISAB is asking for credit lines in order to maintain a certain autonomy, legitimately, in operating the refinery.
I think the issue is on the table of the Ministry of Economic Development, and they are trying to fix it. I'm a bit optimistic that they will find a solution because the country, Italy, can't afford the plant, the Priolo site to stop, because they are supplying 25% of all fuels, gas oil, gasoline to the country, and there are 10,000 people working in this industrial super site of Priolo. Everything is connected. If the refinery is gonna stop, it will stop the chemical plants, our plant. I can't even imagine a situation like that. From this point of view, we are absolutely confident that they will find a solution.
In terms of business environment, again, it's difficult to predict, in particular the merchant part, because the spot spreads are very much sensitive right now, very strongly volatile, with big swings we are seeing in gas prices, but also in demand. Difficult to predict. In our scenario, even in the forecast for the full year, we are quite conservative, but please consider that more or less 80% of the contribution margin of the plant is coming from the capacity market and the white certificates. That's why the results in the first nine months were so high compared to last year, because, you know, 2021 was the only year when, where the plant was completely out of any efficiency scheme regime.
In the meantime, we made this refurbishment, important investments to substitute the gas turbine, the steam turbine. As of the beginning of the year, the plant is still eligible for white certificate. Again, I'm quite positive and confident that the plant can keep performing well and generating cash flow to the group as it did, say, over the first nine months of the year.
Sorry, Paolo, if I can very briefly bring a piece of the first question regarding the hedging. Can you just tell us what I imagine actually forward sales for this year have been in the region of 65 or very close to a cap. What is the hedging for the energy component?
Yeah.
The energy component of the-
No, the question is clear, and I just forgot to answer. I say nothing has changed compared to what we said in August, because in the meantime, we decided to stop any hedging, short-term hedging based on futures because the volatility is so high, and I think covering the utility sector, you have an idea of what I'm talking about. It's so high that we preferred not to do and take any further actions, because you see our net financial position was inflated by EUR 310 million at the end of September because of those hedging. Simply the negative mark-to-market related to those hedging. This is the first important point.
Being all our hedging based on futures, fully related to 2023, because we stopped any hedging beyond, say, a twelve-month horizon in order to limit the volatility. The first positive message is, the EUR 310 million will reverse as a cash flow in the 2023 fiscal year. We should expect a very strong cash generation in 2023 because at delivery of those futures, we will recover some of the anticipated cash in the clearing house to face the mark-to-market. This is a positive, the first message I want to give you from a financial point of view. From an economic point of view, I can just confirm what we have said.
More or less, the average price is in the region of 120-130 EUR per MWh, and but the real revenues will depend on those price cap. The important, surely the positive news, it seems that according to the European regulation, any negative impact deriving from hedging could be included in the computation for the application of the price cap, as it is, as it was for Italy. As a matter of fact, for us, the impact of Article 15-bis of the Decreto Aiuti, so the one that set out the clawback measure of 65 EUR, basically hasn't had any effect because we had this hedging, and those hedging were included in the computation. I hope to have answered your question.
The next question is from Nassib Boueri with Barclays. Please go ahead.
Hey, good afternoon, everyone. Congratulations for the great results. Only two questions from me, if that's okay. The first one, sorry to go back to the commodities derivatives again, the EUR 310 million derivatives. Are we expecting the unwinding to be linear next year? It means you have equal amount every quarter, or do we expect a large amount to be unhedged, to be unwind in the first part of next year? That's my first question. My second question, sort of related to this. You are going to deleverage quite a lot next year because of this. Does that have any impact on your CapEx? Do you have any guidance, or can you provide a bit of color on your CapEx for next year? Thank you.
Hello?
Can you hear me, gentlemen?
Hello? Yeah, I can't hear anything after I asked the question.
Please go ahead.
Hello? Hello?
Hey, Paolo, we can hear you now.
Okay. Sorry. It was my mistake. Don't worry. I don't know what it is. Nassib, the first question, because I love the plan, was about the hedging. See, the deployment of hedging should be more or less linear throughout the year. Maybe a little bit more in the first quarter, in the last quarter because they are the one where we have expectation for higher production. More or less, let me say, it should be linear throughout the year. Now, in terms of CapEx for 2023, No, now he's back to the line. Sorry, I was asking.
About the CapEx, let me say that, still early to give an indication, so I prefer to wait for the business plan. Please consider that in 2022, we are gonna invest roughly EUR 1 billion, which is well ahead of what was envisaged in the business plan. My feeling, that's just a feeling and not a precise indication, the company is really strong. Not just from an economic point of view, but also from a financial point of view. I see the right firepower to keep accelerating on our external growth, just if the conditions and the opportunities are the right ones, because we have our own financial discipline, and we don't want to, you know, deviate from it.
Let's say on top of the organic growth, that's the one I commented before, because we have a lot of capacity that should enter anyway because we are completing the construction. On top of that, we will keep looking for external opportunities in solar, in particular, because we need to strengthen our solar portfolio, but also in wind, maybe not in Italy, but outside Italy, and particularly in the north. Let us work for a couple of months to three months, and then we will come back to you and providing with the right set of targets for 2023 and for coming years.
Perfect. Thank you very much, Paolo. Very clear.
Good. You're welcome.
Gentlemen, this concludes our Q&A session for today. The floor is back to you for any closing remarks.
Thank you very much for the attention, and we will see you soon at the next occasion. Thank you very much.
Thank you.
Have a nice weekend.
Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones.