Good afternoon. This is the Chorus Call conference operator. Welcome, and thank you for joining the ERG Third Quarter 2024 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, Chief Executive Officer of ERG. Please go ahead, sir.
Good afternoon, everyone, and welcome to our Third Quarter and Nine Months results presentation. Here with me, as usual, is our CFO, Michele Pedemonte, who will run you through our business performance over the period in more detail later on. So let's get started with the overview of results over the period. I am on page number four, and I'll focus my comments on the nine months, then Michele will elaborate a little bit more on the third quarter. EBITDA closed at EUR 390 million, slightly up, 4% up year on year, mainly driven by the larger in-service capacity, which included the full consolidation of the U.S. portfolio as of April 1st.
In particular, in the first nine months of the year, we benefited from the contribution of new assets to the tune of almost EUR 50 million, but this was partly offset by much weaker wind conditions, in particular in the third quarter, which resulted in lower production on a like-for-like basis in a context of generalized lower merchant prices, even exacerbated by a higher greater profile effect. This price effect was partly mitigated by the positive value of the incentive in Italy, you know, EUR 42 per MWh , compared to zero value last year because of the price mechanism, which, as you know, is inversely correlated to the merchant price registered in the previous year. All in all, the weak wind conditions and lower merchant prices and that of a stronger profile effect resulted in a lower margin of more than EUR 30 million, so over the first nine.
If you match the plus 50 minus the EUR 30 million negative effects, you come more or less to the EBITDA of the nine months. We still invested significantly over the period, EUR 500 million, significantly up year on year. More or less two-thirds of CapEx were related to some acquisition in France, but in particular the U.S. portfolio, and roughly one-third of CapEx were related to organic investments, mainly, say, associated to assets under construction, both repowering and greenfield projects. Adjusted net profit was EUR 130 million, down 13% year on year, notwithstanding this slightly better EBITDA we already commented, and this is a result of higher depreciation and financial charges because of the consolidation of new assets and a slightly higher tax rate, particularly following the cancellation of some fiscal benefits in Italy known as ACE.
The net financial position at the end of September was EUR 1.9 billion, higher versus the end of 2023, but in line, say, with our budget, mainly reflecting investments, buyback executed at the beginning of the year, dividends, and other cash-in/cash-out , so let's move to page number five. Here, there is a list of recent achievements. Let me say that in the period, we continued our journey forward in line with our business plan. As far as repowering, which remains a key pillar of our strategy, we completed the construction of Salemi-Castello, a wind farm in Sicily, 76 MW of capacity, which has entered the commissioning phase just over the last few days. In France, we completed the construction of two wind plants for a total capacity of 41 MW that are now up and running.
In Germany, we made several advancements in our permitting, with about 60 MW that reached the ready-to-build status. As far as financing, we managed to extend our evolving credit facility for EUR 600 million to 2027. At better terms compared to the previous ones, strengthening even more our balance sheet. In ESG, we see for the first time the GRESB rating, with a ranking of 98 out of 100, which puts us, say, in the very top tier of this rating. In addition, MSCI confirmed the AAA rating on the company, and Standard & Poor's improved our ESG rating by eight points. So still good achievements. Let me make a reflection. So we did all this in a very, very challenging environment, let's face it, with a growing negative sentiment towards the energy transition, which, bottom line, resulted in a stronger underperformance of the all-equity asset class in the equity markets.
ERG was not immune from this de-rating trend, even though at a lesser extent than some other peers. Notwithstanding this, we continue to see the energy transition as an unavoidable long-term global trend. We expect power demand to pick up tremendously over the next decades, driven by data centers, artificial intelligence, bitcoins, whatever, all sorts of new technologies that are all energy intense. Our view remains that these corporate offtakers, I mean, the owners of these developments in technology, will keep relying on renewable sources to supply their developments, and we already proved to be able to negotiate long-term PPA with tier-one corporates. We have right now several discussions going on from this point of view. With this strong view in mind, this morning, the board of directors approved the launch of another buyback program for about EUR 23 million or EUR 0.15 per share, so EUR 0.15 per share.
So the midpoint of the potential upside envisaged in our business plan of EUR 0.30 per share on top of the EUR 1 per share dividend. So this EUR 0.50 must be seen as an advance of the business plan already announced remuneration policy. Let's move on. Now, a quick look at the delivery on our strategy over the period. I'm on page number six. We are well on track to reach the target for the year at almost 3.9 GW of installed capacity by year-end. As a matter of fact, as of today, we have added roughly 530 MW to our asset base, made up of a good mix of wind and solar, M&A, and organic. As we said previously, we've just completed the construction of Salemi-Castello wind farm project, which is now entering its commissioning phase.
We are also finalizing the construction of six MW of repowering project in Germany and the repowering of some solar plants. So in a year, we will be adding about 600 MW of new capacity, so plus 18% versus the end of 2023, well spread over different geographies, both technologies. So we are quite satisfied of these achievements. Those assets are going to fully contribute to our results as of 2025. I would say, so this is a quite significant growth. Now, over to Michele for his review on quarterly results.
Thank you, Paulo. In Q3 2024, power market prices followed two different trends. Italy, Romania, and Bulgaria recorded higher prices than previous year, while in other countries such as France, Germany, and Spain, they have been significantly lower than Q3 2023. These trends have only partially influenced our all-in unitary revenues, which are in any case mainly dependent on incentive-feeding schemes, long-term PPAs, and short-term matching. In Italy, the wind all-in unitary revenues increased from EUR 97 MWh to EUR 132 MWh, mainly influenced by the value of the green incentive, which is EUR 42 MWh in 2024, and it was null in 2023, and only partially, but a higher market price captured in Q3 2024. In France, the unitary revenues decreased because the significantly lower market scenario impacts on some merchant assets, which do not benefit anymore of the two-way tariff mechanism or long-term PPAs.
In Germany, capture price in Q3 are strongly lower than last year because the previous year was influenced by very high short-term matching, while in 2024, they are aligned to the CFD floor. In Poland, unitary revenues increased in Q3, mainly driven by higher short-term matching compared to Q3 2023, a quarter that was also even impacted by lower certificate price and the relative write-off of certificates of origin not sold. Romania quoted a lower price than previous year because the government set the clawback cap price at EUR 400 MWh, while during Q4 2023, the cap was at EUR 450 MWh. In the U.K., capture price is around EUR 56 MWh and does not include balancing service revenues that, in any case, are lower than Q3 2023, which, in addition, still benefited from one plant in Scotland at higher merchant price.
The plant now is covered by a PPA. As regards the solar all-in unitary revenues, there is an increase of value in Q3 in Italy thanks to higher hedging price year on year, while in Spain, the capture price suffers the current market scenario, which significantly profile effect during daily hours, and compared with Q4 2023, which benefited of higher hedging prices. In France, the all-in unitary revenues are influenced by the newly acquired asset, whose energy is temporarily sold at merchant prices. ERG plants in the United States have a unitary revenue that reflects the PPA prices and the production tax credit for our wind assets. Now, a focus on production on page nine. As regards the Q4 2024, we have in Italy 495 GWh, minus 15. New greenfield plants entering operation between the second half of 2023 and the beginning of 2024.
In France, 235 GWh, plus 3%, thanks to new asset acquired in January this year, partially offset by lower wind conditions compared to a particularly windy Q4 2023. In Germany, 100 GWh, minus 8% due to lower wind conditions. Eastern Europe, 144 GWh, plus 10%, thanks to better wind conditions, mainly driven by Poland and Romania. U.K. and Nordics, 118 GWh, plus 8% compared to last year, when our assets were still in commissioning or ramp-up phase. Production in the U.K. is also influenced by remunerated balancing services market in Scotland and not remunerated grid containment in Northern Ireland. In Spain, 169 GWh, more than double year on year, thanks to the production of the newly acquired plants that enter in operation between July and December 2023.
The contribution related to the newly acquired plants in the U.S. is 180 GWh, out of which 134 GWh from wind and the complement from solar. As regards the nine months, the production reached 4.1 terawatt hour, plus 21% year on year, mainly driven by the perimeter effect due to the new assets, offset by the lower wind production, mainly in Italy and France compared to 2023. In the third quarter of the year, we have an overall EBITDA of EUR 109 million, EUR 5 million higher than Q4 2023, thanks to the new asset contribution, partially offset by lower productions. In Italy, the EBITDA is EUR 71 million, higher than last year by EUR 5 million, thanks to the new asset contribution, coupled with a better price effect and by the green incentive, as already commented, partially offset by lower wind conditions and lower solar irradiations.
In France, EBITDA is EUR5 million, lower than previous year due to lower market scenario coupled with worse wind conditions. In Germany, EBITDA is EUR4 million, lower than previous year, which was influenced by short-term matching at higher prices, while actual results reflect the CFD floor. In Eastern Europe, EBITDA is EUR13 million, higher than previous year, which benefited from better wind conditions in Romania and Poland, and the higher capture price in Poland. In U.K. and Nordics, EBITDA is just EUR6 million. Q4 is influenced by lower remunerated balancing service market in Scotland compared to Q4 2023 and very high containment in Northern Ireland. In Spain, EBITDA is EUR7 million, slightly lower than last year, driven by lower capture price, partially offset by perimeter effect coming from the capacity entering to operation in the second half of 2023. The contribution coming from the U.S. is EUR8 million.
As regards the nine months of 2024, the EBITDA is EUR390 million, EUR15 million higher than last year, mainly thanks to perimeter effect, partially offset by lower production in Italy and France and lower market share. Let's comment now on the investment in the period. In nine months, we invested EUR500 million, an amount which is higher than one invested in the first nine months of 2023, mainly due to the acquisition of wind and solar plants in the U.S. and France, while the first nine months of 2023 included M&A in Spain.
In addition, we made about EUR 181 million of organic CapEx, out of which EUR 87 million in Italy for a repowering and greenfield wind asset, EUR 8 million related to our first storage plant in Sicily, EUR 8 million related to solar plants and pumping projects, and the remaining amount mainly in the construction of new wind parks in France and Italy. Let's now move on to the financials, commenting on other items for the profit and loss. The third quarter amortisation and depreciation is EUR 66 million, higher than Q4 2023, mainly due to new assets acquired and entering into operation. Net financial charges are at EUR 9 million versus EUR 3 million in Q4 2023. The increase is mainly influenced by the accounting mechanism of the tax equity partnership of the U.S. portfolio, so note the cash item we're speaking about, EUR 3 million.
In addition, please note that in Q4, EUR 2.9 million are financing interest expenses, according to IFRS 16. So the sum of these two accounting items is EUR 5.6 million, out of an overall EUR9 million of net financial charges. So the increase of the cash financial charges is quite moderate. Tax rate in the quarter is 25%, lower than 27% of Q4 2023. The adjusted net profit of the quarter amounts to EUR 25 million, lower than last year, EUR 34 million. The adjusted net profit for the nine months is EUR 130 million versus EUR 149 million in the first nine months of 2023. Finally, let's take a look at the cash flow statement and the net financial position.
The net financial debt closed at EUR 1.9 billion, EUR 0.4 billion higher than the end of 2023, mainly driven by a solid cash generation from EBITDA, net by the already commented investment in the period, a dividend distribution of EUR 150 million, the last part of the buyback of EUR 37 million, and EUR 58 million of tax cash out. A significant part of this tax cash out, EUR 35 million, is related to one-off taxes on goodwill release to attribute tax relevance to the goodwill arising from the mergers of the Siena and Donatello projects. These payments allow future tax benefit through the amortization of the value of the goodwill starting from fiscal year 2025. Now, hand over to Paolo. He will comment on our 2024 guidance.
Thanks, Michele. Now, let's see our 2024 guidance.
As time passes and to take into account the nine months' results on top of a very, say, a little bit disappointing, let me say, beginning of the fourth quarter in terms of wind presence across Europe, we are narrowing the range of our EBITDA guidance within a range of EUR 520-EUR 560 million. So we confirm the lower end of the range while reducing the cap from EUR 580 to EUR 560 million. There is nothing company-specific. I'd like to say that. Just less wind in our geographies. We can't control the weather and can't do anything about that. We tend to see it as a one-off item that can happen. Looking forward and based on long-term cyclicity of wind resources over time, it may happen exactly the opposite in another year or time. So let's see what's going on next year.
As far as CapEx, we are confirming our guidance in the range of EUR 550- EUR 600 million, including the cash out for the acquisition in the U.S. and France as well, the organic CapEx. The net financial position at year-end is expected, confirming the previous guidance, in the range of EUR 1.75- EUR 1.85 billion. Let me say, likely the final number, of course, with the volatility depending on working capital and so on, but likely we now see the net financial position in the upper end of the range, considering the buyback program we approved today, and that is going to be executed probably during the next two months, so by year-end.
And also including, I've already said that in the previous webcast, the EUR 35 million invested to release the goodwill of some assets for future fiscal benefits that was not included in the initial guidance, as this range has been always the same since the beginning of the year, so thank you for listening, and now we are ready to take your questions.
Excuse me. This is the Chorus Call conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. To remove yourself from the question queue, please press star and two. We kindly ask you to use handsets when asking questions. The first question comes from Paul Chabran of Kempen.
Yes. Good afternoon, everyone. Thank you for taking my question. First, on corporate PPAs.
It seems to me that PPA prices have been under pressure recently, with some off-takers becoming more demanding in terms of price, but also in terms of risk. It seems to me that some industries are asking for baseload contracts now. Can you maybe comment on the changes that you see at the moment in your market in terms of corporate PPAs, and notably the differences that you might see between the tech industry, other energy-intensive industries, and other industries that might not be as energy-intensive? That would be the first question. And another one, a bit shorter. In the U.S., how do you and your partner Apex look at future developments in light of the potential risk on renewable tax credits under Trump? Thank you.
Okay.
I must say, prices have been under pressure, particularly say in the first part of the year, while now they are recovering even quite quickly because the gas price now is over EUR 40 per standard cubic meter in the TTF market, which at the end of the day is turning into a price near or above EUR 100 per MWh because you have to multiply by two to consider the efficiency of the gas technology while bidding in the day-ahead market, plus the cost of CO2, so prices now are recovering. We are getting used to living in a very volatile business environment, and coming to, I think, the core of your questions about PPA, PPA are in good shape. As you know, we closed four very large PPA last years with first-year off-taker.
Now, even in these days, we are under discussion with other PPA for other assets that are about to enter into operations. And of course, I can't give you specific details on the counterparts and so on, but let me say there are very big corporates and the names you can easily imagine that are seeking for important, significant volumes across Europe, and they are recognizing, I think, the fair value of the price, maybe even bigger, let's say, than what is embedded in the spot market or in the wholesale market because in the end, they are trying to secure for a long-term horizon energy prices and decarbonizing their equity story, let me say, like this simultaneously. So we remain positive about PPA, and we see PPA as one of the major route-to-market going forward, coupled with the CFD award in the public auction, sorry.
Please consider that trend we are noticing in the market is that the CFD value awarded in the auctions are becoming even more a reference for off-takers to set the long-term price in the PPA, which is quite positive because usually the value of the tariff awarded in auctions are more coherent and consistent with the LCOE of the technologies. I would say I would see this trend as a positive one. Of course, now I know that there is all this negative sentiment, but I tend to see it in a positive way. I don't know if I answered totally your questions. If not, I'm here to follow up.
No, that's very clear. Just about the U.S.?
About the U.S., of course, the equity markets reacted quite significantly after the outcome of the election.
But let me say the same worries were there eight years, six, seven years ago when Trump got the first mandate. We didn't see major changes at that time. Now, there are more doubts that Trump will implement more drastic rules. But from our perspective, we don't see any risk related to existing assets and existing PTC because they are already issued. They've already been issued. So never had we seen, at least based on our analysis, retroactive measure in the U.S. economy. This is a more European attitude, let me say. So we are not worried about what we already have in our portfolio. Looking forward, for sure, we are looking at very carefully the opportunity. But let me also remind you and the other in the audience that our model in the U.S. was very clearly stated since the beginning.
We are looking for a kind of the risk-growing model in the sense that we are trying to buy assets based on, for instance, a cooperation agreement with Apex, but it's not under an exclusivity. So we can move other ways to find assets that are already up and running where the PPA is already there, the production tax equity is already there, and so on. So from this point of view, we are not taking any major risk. Also, please consider the existing federal support through the Inflation Reduction Act, IRA, as substantial bipartisan backing in many Republican-led states that benefit from these investments. So I would be surprised if this kind of support is going to be canceled straight away, straight after. So we are still confident that the U.S. is a quite interesting market for renewable.
Thank you. Thank you very much.
You're welcome.
The next question, sorry, is from Enrico Bartoli of Mediobanca.
Hi. Good afternoon, and thanks for taking my question. First one is, please, on some comments on the outlook for 2025, in particular, if you can update us, first of all, on the hedging prices and volumes. Also on the expected capacity that you expect to be added in 2025. In the past presentation, you indicated 0.1 GW if that is still the projection. And also a comment on, let's say, the prices, the achieved prices that you expect next year in Italy and the European markets compared to the level achieved in 2024. Second question is related to the outlook and regulatory environment in Italy. There are several moving parts.
The FER X, if you can update on the process there and whether the prices that have been proposed you think are appropriate to make investment decisions in the current environment, and what is happening in terms of political discussions at regional level for the approval of the suitable areas laws. So if you think that the authorization situation is going to be easier or you see some local government to be actually strengthening their willingness to improve renewables, and overall, under which conditions you think that you can take the final investment decisions for the 300 MW of projects that you have already authorized in Italy. The last one, general one, that there are at European level many discussions on the potential from data centers.
If you can give us, let's say, your experience on what is happening in Italy and the potential from development of this project in Italy and the possible impact on electricity demand. Thank you.
Okay. Thank you, Enrico. So let me start with the outlook for 2025. Maybe you know that we are giving comprehensive guidance in occasion of the profit and loss, the announcement of the profit and loss, so usually in March. And given the volatility, I would tend to wait for this moment to give a precise number, a precise indication. But let me just comment. So the fundamentals, the main drivers that must be taken in consideration when looking at 2025. First of all, and this should be the most material element, all the portfolio assets that has entered, say, into operation during the course of 2024 will be fully contributing to our EBITDA next year.
I'm particularly referring to the U.S. portfolio. I'm referring to the asset that entered into our scope in France and all the repowering projects here in Italy, just to mention the major one. Then we are also expecting a better price environment, honestly. Just looking at the forward prices, they are on the upside right now over the last few months, and we see this trend. Please consider that 2024, at least across some geographies where we have a strong exposure like in Italy, like in France, like in Spain, the abundance of water, take Italy, for instance, the abundance of water made the hydroelectric production increase very substantially, also affecting the prices. Let's see what's going on.
But honestly, after two years of dry, it's been two years of very abundant water. I don't think it should be the norm. So then we expect prices going up. Please also consider that the green, the incentive in Italy, which still is benefited from some assets, our assets, is expected to be higher than the 42 EUR per MWh that we have in 2024. This is because of the price mechanism, because the PUN24 should be lower than the PUN23. So as a reversal of the calculation, we should expect a green incentive in the region of EUR 60 , something like that. So EUR 20 more than in 2024. So the conclusion is, yes. And you ask also for the hedging.
Yeah, I confirmed that we had a big portion, more than 70%-75% of our production in 2025, and the average price is above EUR 90 per MWh. So it's quite a good one. So for all these elements, I would expect, or it's reasonable to expect a change in the earning directions because we suffered in 2023 and in 2024 in a price environment that has declined quite significantly compared to the peak reached in 2022. So I would expect this trend to change finally in 2025, and we expect quite significant growth for our EBITDA. Of course, let me say, because there is nothing for granted that is based on the P50 assumption for wind. So in an environment where wind blows, let's say, in line more or less with our expectation, wind is unpredictable.
This is the reason why we narrowed the 2024 guidance, not just because of the third quarter, but because October was an incredibly low wind month. I think there are public data showing this. If you take the internal report, they show clearly that in the third quarter, the wind volume, especially in Italy, were down 21%. October was, let's say, the same tune. That's the only reason. We are in the business. We are not getting too excited when wind blows. We are not getting to the press when wind is not there. Let me say, it's statistics that are telling that maybe you may have a period like this, and then suddenly and abruptly, the wind is coming. The forecast is that wind should come as of next week.
So let's hope that these should restore, at least partly, what we have lost in terms of windiness over the last few months. FER X, oh, this is a little bit of a pain in our neck in the sense that we have been waiting, not just ERG, but all the sector has been waiting for the issuance of this decree for more than two years. It seems, but it always seems that we are really near for the decree to be published, and then, which is even more important, the first auction to be held. According to the latest news we have, we should expect the first auction to be held in March 2025.
The price, the range price, particularly for wind, is between EUR 70 and EUR 95 per MWh, and the tariff is going to be linked over the 20 years to inflation, at least for the OpEx, and to inflation in terms of CapEx from the time of the auction to the COD, to the commercial operation date. I think the structure is good, but we need to have it published in order to bid in those auctions. The final investment decision you were mentioning about the project that is already authorized will be taken just when we will have the security of the route to market.
It means that we prefer to wait until to launch the order of the wind turbine and blah, blah, because in the logic of value over volume, we want to approve investment just when we are sure the return is there and is coherent with our targets and internal other rates. About the, yeah, the regional decree, in particular, the Aree idonee, the Go/No-Gos' area decree is the most important because basically allows the region to accept, to permit, say, the assets and the construction. In Sardinia, where we have one very important project, I have to come clean on this. The regional law that has been proposed so far has not been yet converted into law, but it's not very encouraging in the sense that basically they are blocking any kind of developments in the island.
The other regions, the Puglia, the Puglia region came out with a completely different framework and set of documents, well supporting the development of renewable. Let's wait for the other regions. But let me say, there is no discussion about the other project we have already authorized. The only one in Sardinia, because according to this law, even the project already fully authorized should be stopped if they are not in what they consider a GO area. But in reality, according to the regional law, there is no GO area in the island. So of course, we expect the MASE, the Energy Transition Ministry, because I like to call it as it used to be, should claim against the regional law. We are the same. But let's see. We have to wait, unfortunately, to the situation. We have to wait the situation is going to clear up.
Say, data center, I already said in my speech, yes, of course, we are expecting a pickup in demand quite significant over the next 30 years, let's say, because our estimates are going to 2050, till up to 2050. Both in Europe and worldwide, we expect demand to more than doubled, almost between two and three times in the next 30 years, which is a quite, say, stunning amount, incredible amount. We discussed this trend just a few weeks ago in CEO retreat in Paris with all other CEO of utilities company. This is driven by the electrification of the system. We are now seeing that this process is not as easy as it has been publicly announced by the European Commission, but we tend to believe this trend is going to be unavoidable.
So to be more practical, let me say, all the PPA we have already announced and the PPA we are now negotiating are with operators that are investing and looking for data centers, artificial intelligence, all these kinds of things. And finally, just to close this point, given the volatility in the markets, we had a confrontation with the major providers, price scenario providers, and are all very confident that this trend should materialize very soon.
Thank you very much, Paulo.
Thank you. Thank you to you.
The next question is from Roberto Letizia of Equita.
Thanks a lot for the presentation and for taking my questions. Just want to recover one of the questions done before with the capacity expected, at least.
I know you will discuss the strategic plan next year, but maybe you can just remind us what kind of how much capacity you're expecting to add next year, given your pipeline so far and the ongoing asset construction. Then you commented on the U.S., but maybe can you be more precise, for example, in how much of the pipeline of your partner in the U.S., which I guess remains, at least the most visible. Then you have other options, of course, but it is probably the most visible source of additional growth in the U.S. Then you can, of course, look at the market if conditions are not there.
But at the moment, how much of the pipeline that will be developed by your partner in the U.S. is looking to get the funds from the IRA recognition or the incentives from the U.S. market, just to have an idea of how much of that is dependent and independent from any crazy decision that Mr. Trump can take going forward? Then I'm just wondering if there is now any country that you consider as no longer core in your strategy, which you may decide to divest or to look for asset rotation programs? And then one last question on Germany and in general, the EU regulatory environment. But Germany has recently talked about potential change in the incentives to renewable group. One of these is related to incentive recognition and, for example, the decision of not getting the incentive during the hours in which the price is negative.
This is in order to sustain investment in batteries, and the aim is to stabilize the grid and to avoid too much volatility, but that's potentially negative. I was wondering if there is any consideration we have to make on Germany, which is an important country for you. Thanks a lot.
Okay. Roberto, I'll try to tackle the queue, the long list of questions. About the capacity for 2025, this is a number that we never give in anticipation, let's say, of the release of the guidance in March. We prefer to stick with our habits. Let me say, I already said that we are slowing down some repowering projects in Italy because we are waiting for the FER X.
This is, unfortunately, an external force we can manage, but we are not changing our way of proceeding on this project in the sense that we don't want to launch. The projects are fully authorized, so we could order the wind turbine and start tomorrow morning the construction. But given that they are repowering and they are valued on a differential basis, I want to be sure we want to be sure the return on a differential basis is there before activating the investments. The range of the FER X, at least in the draft decree, is between 70 and 95. We expect the upper end of the range to be needed in order to justify the investments and the return. We have to see the outcome of these auctions.
So until we do not have the opportunity to participate to this auction, we prefer to wait and see what's going on. Of course, we have a queue of previous investments that are already under construction, and this is in the region of 100 MW, let me say. For the rest, in order to advance, and 100 MW is just in Europe. Because in the U.S., and then I come to your question in the U.S., yes, of course, we have a co-development agreement with Apex based on a shared pipeline. But the pipeline, and we have been always clear about this, is owned by Apex. And we need, in order to go on with this project, we need to find an agreement on the value of those projects.
For the time being, we are, let me say, like this, we are discussing about the fair value of these assets because the market is not easy for anyone, let me say. But again, we are very strict on our financial discipline and the returns we announce to the market. If they are not there, we prefer to wait and to maybe spend some money as we are doing now in buyback or dividends. So we are not throwing money out of the window from this point of view. But let me say, Roberto, we remain very confident that in the end, the right compromise between supply and demand will be found. We are exploring very different ways in the U.S. The main one, for sure, is with Apex, but not just that.
So I think we will be in a more precise position in March when we'll update the financial community about the delivery on our strategy and the delivery on our plan. Of course, in this strategy, one of the main points is the one you mentioned. So the asset rotation is the likely tool to reach the optimized asset portfolio. But the point is, which is the perfect asset allocation? Which is the most efficient portfolio of assets? We are posing ourselves this question. Even in these days, we are working internally to assess the best portfolio possible. And we will be working on this point, for sure, over the next few months. And I hope in March to give a more precise picture and objectives about this point, which we believe could be a good value creation lever. Germany.
Say for sure, the phenomenon of negative hours is a phenomenon that we are experiencing in the market, in particular in Germany, because Germany, if you look at the supply side, Germany, the mix of generation there is made of a large portion of renewables. And then when the wind is not there, the price tends to go up quite significantly, as it's happening now and over the last couple of months. But when there is a lot of wind, a lot of sun, etc., the price tends to, in some hours, tend to go negative.
And then the regulation is evolving, as you said, in the sense that even in the current auctions, it's already envisaged that after a few hours of negative price, the tariff is not awarded in those particular hours, even though during the life of the CFD, you can recover all the negative hours at the end of the CFD period. This is for sure to incentivize the installation of battery storage and flexibility mechanisms, but also to stimulate the operators to be more live on the market. And from this point of view, we are already trying to set our portfolio, equip our portfolio in a way that we can stop the plants whenever the hours go negative in order to avoid a negative impact on our P&L.
From this point of view, we are quite satisfied because we didn't report nothing negative in the first nine months of the year because of this phenomenon, because we were able to manage the plants in a way that there was no impact from this point of view. But for sure, I confirm that both auctions, but also PPA, are going that direction.
Thanks a lot.
You're welcome.
The next question, sorry, is from Nash Gui of Barclays.
Hey, good afternoon, everyone. Thanks for taking my questions. Only two. So the first one is on buybacks. I thought ERG shares are cheap, and buyback makes a lot of sense. And I wonder, could you potentially cut your CapEx for the next year and do more buybacks, just like one of your European peers have done this week? So that's my first question.
My second question is on 2025 consensus number, which is just around EUR 600 million for EBITDA. Paolo, I just wonder, do you agree with that? Because if I look at an EBITDA bridge, so your 2024 midpoint guidance is around EUR 540 million, then you will probably get EUR 20 million from the Brent tariff, then another EUR 20 million from new projects, then another EUR 20 million, say, from normalized one condition. It feels like EUR 600 million is achievable. Do you agree? Thank you.
So, about the buyback, for the time being, the board of directors this morning approved EUR 22.6 million to be allocated to buyback, which basically equals to EUR 0.15 per share, which must be seen in two ways. The first is the board and myself, the company.
We are all confident that the value of the company is much more than the one expressed by the equity markets. The equity markets are discounting and overshooting in the downside for the oldest class. In our opinion, the value is much more than that, at least with the reference to ourselves. I know my view is a little bit partisan, but I'm telling our view, internal view. We decided to launch this buyback because we see an opportunity. Let me say in another way, if the stock had been at EUR 30 or EUR 27 or EUR 28, probably this buyback wouldn't be launched today.
The other way to see it is from a remuneration of our shareholders' point of view, in the sense that we announced publicly remuneration policies that envisage EUR 1 per share dividend as granted dividend to our shareholder, plus a potential upside from EUR 0 to EUR 0.30, also to be done through buyback, and that was the case, so 22.6 could also be seen as the midpoint of the potential range, potential upside range, announced as an advance of the remuneration policy of 2024. Coming even more in depth to your questions, I don't know. Never say never. We will be discussing this in March and also depending on the closure of the closing of the profit and loss for 2024, also based on the prospects for investments for 2025 and so on.
So actually, I would say for the time being, EUR 23 million is what we are going to invest in buyback. For the future, we can't exclude that we can relaunch another stream of buyback, but I would prefer, honestly, to find good business opportunities.
As a reminder, please press.
Sorry. That was just the first question. Sorry, the second, I forgot.
Yep. Paolo, the second question is just on 2025 consensus, which right now is at EUR 600 million for EBITDA. And I wonder if you think that it's achievable because if I do an EBITDA bridge, I thought that's pretty achievable, but just want to hear your view about that. Thank you.
So let me make a joke. In a way or another, you want to know the guidance for 2025.
I limit my comment on saying that is a reasonable number, let me say, at least based on the current business environment or forecast whatsoever. Yes, it's a reasonable number.
Brilliant. Thank you, Paolo.
For any further questions, please press star and one on your telephone. Mr. Merli, there are no more questions registered. Excuse me, there is actually a question from Nathan Dubois of Sycomore.
Yes, hi, can you hear me? Yes, sir, we hear you. Hello. Can you hear me?
Yeah, yeah, absolutely.
Sorry, I joined the call a bit late. So maybe you touched already the subject, but could you give us any updates about the DDA investigation and the potential impact that it could have for you? And I'd like to know if you have taken any actions regarding this investigation. Thank you.
Okay.
I must say we have already published a very summarized press release, but the story in the end is very simple, and as clarified in our recent press release, ERG received in 2023 a very detailed whistleblowing notice, which indicated potentially serious events for the company. I want to show you now, there was no impact on ERG, but only for this reason, as we received this detailed report, the company carried out and completed an internal investigation in the following months, and this was made totally in accordance with our whistleblowing internal policy, approved by the board of directors and aligned, I mean, the policy with the very best market standards. In carrying out this activity, ERG believed, the board believed that the company has always acted in full compliance with the law and its corporate policies.
So let me make it even clearer that ERG, as a company, is not under investigation. Is not under investigation. I want to repeat it because in relation to our previous press release, take your question also as a chance to clarify that the reference in the Italian press was essentially in relation to ERG being a client of a third-party company hired to support the internal investigation as it is included in our policy. So I mean, the policy says that if we need support in doing an activity that is not our core activity, we can hire a specific company. So we remain very fully confident about the correctness of the behaviors of our people. But I'll stop here because being the investigation still ongoing, we cannot disclose further information at this time. We remain at full disposal of the competent authorities.
And so far, absolutely no impact, economic or financial, whatever.
Okay, thank you.
You're welcome. You're welcome.
Mr. Merli, there are no further questions, sir.
Thank you very much for listening and attending this meeting, your patience, and see you next time, probably in March, for the full year results. Thank you very much. Thank you.
Ladies and gentlemen, thank you for joining. The conference is now over, and you may disconnect your telephones.