Good morning and welcome to our full year 2019 results presentation, which will be presented by our CEO, José Bogas, and by our CFO, Luca Passa. In the following slide, we will elaborate on the progress of our strategic plan according to its key strategic pillars, and after, we will go through the full year operational and financial performance. Following the presentation, we will have the usual Q&A session open to those connected on the call and on the web. Thank you for your attention, and now let me hand over to José Bogas.
Thank you, Mar, and good morning, ladies and gentlemen. Let me start with the main highlight of the period. Today, we present outstanding results, which have, once again, exceeded our announced guidance, highlighting the ongoing delivery on our strategic pillars. EBITDA increased by 6% compared to last year, mainly driven by the positive performance of the liberalized business. Regulated businesses' EBITDA kept a steady pace during the period, adjusted fixed costs remained flat as our continuous focus on efficiency absorbed the increase in investment effort. At the bottom line, Net Ordinary, sorry. At the bottom line, I said Net Ordinary Income increased by 3% year-on-year once, adjusted mainly by the improvement that we will explain later on. It's worth mentioning that dividends will not be impacted.
Lastly, I would like to stress the step-up of our decarbonization path by promoting the discontinuity of production at our main and coal thermal power plants while accelerating renewable capacity additions. Moving now to the delivery of the strategic plan and starting from the achieved financial target on slide number four, EBITDA amounted to EUR 3.8 billion ahead of the 3.7 billion target. Net ordinary income came in at EUR 1,562 million, an increase of 3% year-on-year and ahead of the EUR 1.5 billion targeted. This magnitude does not include the EUR 1,409 million in permits booked during the year in relation to the mainland coal fleet cluster and to the non-mainland generation business. This positive result has allowed us to consider a dividend per share proposal of up to EUR 1.475 gross per share, consistent with our policy of 100% net ordinary income payout ratio.
Net CapEx has risen by 48% when compared to 2018, clearly showing the acceleration of the company's transformation leading into the energy transition in Spain. To sum up, we have an outstanding performance this year, exceeding set target across the board. Moving to slide number five, our achievement renders significant value creation for our shareholders. Total shareholder return attained a sound 25.3% in 2019, the highest in the last five years, considering both the effect of share appreciation and dividend return. The board of directors proposes, subject to general shareholders' meeting approval, a total gross dividend per share payment of 1.475 EUR per share against 2019 results. This dividend is 5% above our DPS guidance and represents a 3.3% increase over last year's DPS. We move now to slide number six on our CapEx deployment.
Exceeding our business plan commitment, net CapEx has amounted to EUR 1.9 billion, roughly a 50% increase year-on-year, out of which 53% has been devoted to asset development, especially in renewables. Enel Green Power España absorbs the lion's share with 40% of the total CapEx channeled mainly towards the development of the 879 megawatt of 2017 Auction, successfully entering commercial operation by year-end 2019. Distribution business followed with 28%, mainly devoted to grid digitalization, a key cornerstone of our business plan. In this sense, it should be noted that digitalization net CapEx amounted to EUR 0.4 billion, a figure that is already 30% of the EUR 1.3 billion committed to for the 2019 to 2022 period.
Following up on the SDGs commitments and in line with our business plan guidance, it is interesting to note that roughly 85% of our 2019 CapEx contributes to SDGs 7, 9, and 11, and overall to SDG 13. Before diving into the financial performance of the year, I would like to review the progress and comment on the main achievements we have made so far on our key strategic pillars. Acceleration in the transformation of our generation mix is clearly visible in slide number seven. We have taken the first but decisive step to phase out our coal fleet as structural changes in market conditions have heavily affected its competitiveness.
During 2019, groups one and two of As Pontes Power Plant have ceased operation while we have submitted the formal application to close down Litoral and As Pontes imported coal power plants, in addition to the Compostilla and Teruel requests already filed last year. Therefore, we expect mainland coal facilities to be phased out by 2021, one year ahead of schedule. All in all, these decisions have allowed us to reduce CO2 specific emission to 282 grams per kilowatt hour, achieving the target we set in our business plan for 2020, that is, one year in advance. Together with the formal close-down application, we have submitted regulatory gas transition plan based on a third value creation policy applied to the specific generation site. These plans include significant investment in new renewable energy facilities in the areas surrounding the plants with the necessary conditions for their installation.
These investments will lead to the creation of direct jobs for the dismantling of the coal-fired plants and for the construction of new ones. All this, together with the development of professional training actions and the opening of competitions for ideas for the future use of certain sites where renewables installations are not feasible, will allow activity and employment thus mitigating the impact of the affected areas. A relevant consequence of this process has been the low percentage of income from coal reaching a level of 12% from total and progressively decreasing towards 0% in the upcoming years. Moving now to slide number eight, in order to compensate for the discontinuity of coal production and being fully aligned to our strategic target, we have incorporated 926 megawatts of new renewable capacity, mainly stemming from 2017 Auction, reaching a total of 7.4 gigawatts, including hydro.
Our solid track record has been proven as we have been one of the few companies to strictly fulfill the deadlines for the commissioning of the plants. Additionally, on non-mainland system, Enel Green Power Spain was awarded around 72 megawatts of photovoltaic capacity in the option held in the Balearic Islands and around 60 megawatts in the Canary Islands. We estimate that the project will come into operation before the end of 2022. To ensure not only current business plan target but also a long-term solid capacity addition phase, we are increasing our pipeline of renewable projects, also reinforced by the recent transaction signed with Prodiel, which brought an additional one gigawatt solar photovoltaic pipeline, all with connection rights. Our total pipeline now stands at more than 19 gigawatts up to 2025, with a significant weight of solar around 76%.
Out of this pipeline, around 30% has TSO awarded connection points. Now, looking at slide number nine, the new project in operation at the end of 2019 brought sound growth in total mainland capacity, with increase by 5% up to 19 gigawatts. Renewable capacity represents around 40% of total mainland capacity, as well and well on track to reach the target of 60% once coal plants have been phased out by 2022. Regarding power generation, and this has total mainland output decreased 19% as a consequence of the drop in coal output out of merit orders since April and the lower hydro production due to the drier weather conditions. This was partially offset by hydro nuclear output reaching normalized levels, as well as higher load factor in our combined cycles.
Our CO2 emitting technologies accounted for around 73% of total mainland output versus approximately 60% last year, well on track to meet our decarbonization targets. Moving to slide number ten, despite the drop in Spanish demand and increasing competition in the sector, total gross sales remain almost flat. Consumption by segment remains steady in residential volumes, while industrial sales increased by 1%. In the regulated market, the sales decrease is around 8%, mainly explained by the reduction in the demand and the loss of regulated customers. The total customer loss has been very limited, with a healthy 2% improvement in the liberalized market, where we have managed to retain about half of the regulated customer loss. The customer acquisition strategy and the retention plan put in place since last year has contributed to a sound reduction in the churn rate by 1.3 percentage points.
The unitary integrated margin in the electricity business increased by 7% to EUR 27.6 per megawatt hour, ahead of our EUR 26 guidance. This remarkable margin improvement was mainly supported by the higher OTC price references, a higher nuclear output, the increase in supply margin mainly from lower ancillary services, partially compensated by lower thermal spread and lower hydro availability. Our liberalized supply margin is close to EUR 10 per megawatt hour, up from about EUR 8 per megawatt hour in 2018, mainly due to better portfolio management and lower cost of ancillary service this year. We have already hedged around 100% of our 2020 estimated price-driven output at an average all-in price of EUR 73 per megawatt hour, with an estimated all-in for integrated sales, including index energy, of EUR 65 per megawatt hour.
For 2021, we have hedged around 63% of our estimated price-driven output at an average all-in price of around 75 EUR per megawatt hour. Once we consider our total sale mix, the all-in revenue will convert to the level similar to 2020 reference. A few words on the gas business on slide number 11. Total sales have decreased by 3%, mainly due to the 10% drop in retail sales as a consequence of the milder temperatures during the year, while sales to combined cycles increased by 26%. Total customers increased by 50,000, mainly in the liberalized segment due to active client attraction campaigns. The strategy followed in the retail business had positive effects in the churn rate, with a remarkable improvement of 3.7 points.
Our ordinary unitary gas margin climbed to EUR 3.4 per megawatt hour, thanks to a steady performance of the retail margin, which was protected by the hydro selling price references used last year, and the excellent results of the wholesale segment and supply to combined cycles, driven by better sourcing and the active management of our flexible contract portfolio. Excluding the combined cycle sales and focusing on retail and wholesale activities, the adjusted unitary margin would have been EUR 2.7 per megawatt hour. Moving to slide number 12. In networks and the distribution remained stable despite the drop in energy demand over the whole country. Operational performance indicators showed a steady result with a containment in losses at 10.7% and improving by 6% when it comes to minutes of interruption in a context of extreme weather events throughout the year.
To this end, I would like to thank our technical team for their timely effort in the repair works of facilities affected by the Gloria storm. Being focused on maintaining quality of service, more than EUR 156 million have been invested, around 50% more than the previous year. All the above is aimed at enabling the progressive increase of electrification of final energy consumption. Electric mobility contributed as well, with an outstanding effort in electric vehicle charging points deployment, increasing by 67% versus 2018, up to around 5,000 charging points installed. Such an endeavor has allowed Endesa to reach the Spanish leadership position as charging points installer. Moving to slide number 14, I would like to comment on the market context for the period of this financial release.
Spanish electricity demand showed a decline both in growth, minus 1.7%, and adjusted terms, minus 2.7%, affected negatively by milder temperatures during the period, as well as some signs of an economic slowdown reflected in the decrease of industrial consumption. In Endesa's concession area, gross demand decreased by 0.6% and had a slightly positive behavior in adjusted terms. This development is mainly driven by the drop in the residential segment for set temperature reasons, not fully neutralized by the increase of the service sector activity. Electricity pool prices decreased to 47.7 EUR per megawatt hour on average during the period, 17% below last year. This price scenario is the result of sharp changes in commodity prices during the year.
While CO2 references have remained high, around EUR 25 per ton on average, the Spanish gas market benchmark, PVB, plummeted 58% to the historically low of 10 to 11 EUR per megawatt hour. Gas markets have been affected by a deepening of the oversupply situation in global LNG market, a consequence of new U.S. LNG supply, and a pullback in Asia demand affected as well by the drop in Chinese industrial activity. Coal price references show similar trends, but to a lesser extent. In particular, coal was quoted in December 2019 at a 37% discount to the $84 per ton recorded at the beginning of the year. Demand decreased, declining commodity prices, and lower pool prices shaped the context in which Endesa operated during 2019 and operating successfully. On slide 15, just a recap on the regulatory context evolution.
2019 proved to be a very intensive year in terms of regulation. As far as the European Union framework is concerned, the approval of the Green Deal transforming zero carbon emission in 2050 is a binding target while setting a very challenging target to 2030. Related to the Green Deal, the endorsement of the Just Transition Mechanism allows a fund deployment to finance the energy transition between 2021 and 2027. In Spain, last January, the 22nd, the climate emergency declaration was approved, committing to 30 priority measures to fight climate change. Let me remind you that the Spanish government, in order to comply with the European directive, issued a royal decree law handing back regulatory power to the CNMC.
To date, 11 out of the 14 CNMC circulares that will regulate the electricity market from 2020 and the gas market from 2021 have been approved and published in the state bulletin, providing a high degree of transparency to our regulated businesses. After having approved the new rate of return for renewables and non-mainland in November, last 9th January, the Spanish Ministry for Ecology started the period of public consultation on its proposal to review the renewables remuneration parameters for 2020 to 2025. Finally, a new ministerial order was issued last December the 26th on non-mainland parameters confirming the reduction in the remuneration of O&M costs for 2020 to 2025 regulatory period parameters in line with our expectations. Indeed, defined fuel references, which are expected to be retroactive for 1st January 2020, are still undetermined.
This backdrop of the new remuneration framework is the reason for the negative impairment test result conducted in this business. And now I will hand over to Luca Passa, who will present the details of our financial figures.
Thank you, Pepe, and good morning, ladies and gentlemen. Further deepening in the analysis of the main financial figures of the period, EBITDA increased by 6% compared to 2018, and now was slide 16. The net ordinary income increased 3%, affected by higher financial cost and D&A in the period, while reported net income decreased to 171 million EUR, mainly driven by impairment effects. A remarkable increase in free cash flow, around 40% higher than last year figure.
Net debt increased by 11% over 2018 to EUR 6.4 billion, mainly driven by higher CapEx, IFRS 16 impact, and the total dividend on 2018 results paid this year, amounting to EUR 1.511 billion. Finally, net CapEx increased by around 48%. Moving to slide 17 to illustrate impairments registered in the period. The structural change in 2019 has made the continuity of our all-mainland thermal power plants unfeasible. Low gas prices, then increasing carbon prices and policy changes have resulted in a structural call to gas full switching, which deepened in the last quarter. To this end, 2019 figures include an impairment in the value of mainland coal assets, which, as of year-end closing, amounts to a gross of EUR 1.469 billion, out of which about EUR 500 million correspond to this monthly provision.
This figure includes an effect of EUR 1 billion 366 million in D&A and EUR 103 million in EBITDA. In non-mainland generation, the new ministerial order issued last December, which defines an updated remuneration for the 2020-2025 regulatory period, has triggered a negative result of the impairment test carried out at the end of this year, resulting in a gross impairment loss of about EUR 400 million. Both impairments totaling a gross of EUR 1.9 billion are not considered in the calculation of the ordinary net income in accordance with the current dividend policy, so that they have no impact on the determination of the shareholder remuneration. Moving to the detailed analysis of the EBITDA on slide 18, let me now summarize the main drivers. Endesa reported an EBITDA of EUR 3 billion 841 million, plus 6% versus 2018.
Generation and supply EBITDA rose by 22% to EUR 1,475 million, supported by the sound increase in the integrated electricity and gas margins. Distribution EBITDA increased by 2% at EUR 2,099 million. Finally, non-mainland generation EBITDA reached 267 million euros, a 25% decrease. I will comment each business performance in the following slides. Regulatory business contributed to total EBITDA with approximately 60%, and I'm now on slide number 19. EBITDA decreased by 2% to EUR 2,366 million, with an almost flat gross margin, while fixed cost increased by 5%. Distribution margin increased by 2% thanks to higher regulated revenues and regularization from previous years, and incorporating now the full year consolidation of Empresa de Alumbrado Eléctrico de Ceuta.
The non-mainland generation gross margin reduced by EUR 73 million, mainly due to lower production by 7%, the reduction of the revenues related to fuel as a result of the settlement mechanism in non-mainland, which does not entail the full pass-through of actual fuel cost. Additionally, a lower financial remuneration income due to lower RAB was also booked in the period. Fixed cost increased by 5% year on year, mainly affected by non-recurring impacts. On the liberalized business on slide 20, EBITDA reached EUR 1 billion 475 million, or a sound 22% increase, driven by a EUR 288 million improvement in gross margin and a slight increase in fixed cost.
The increase in the electricity integrated margin was driven by higher OTC reference prices, the higher supply margin, higher nuclear production, and the positive impact of the temporary suspension of the generation tax in the first quarter, partially compensated by lower thermal spreads and lower hydro availability. Within integrated margin, Enel Green Power had a higher contribution of EUR five million. In gas, the combined effect of last year's hedging strategy for retail customers and the extra margin brought by the flexibility of our procurement portfolio drove a 95% increase in the gross margin to EUR 269 million. Endesa's gross margin remained almost flat. Fixed cost remained stable compared to last year once reduced the impairment effect. In a context of a strong acceleration of growth investments, mainly devoted to renewables development for an amount of more than EUR 700 million.
Moving now to slide 21, our efficiency program is consistently improving to be effective across all our businesses, containing costs despite growth and investment effort. Total reported fixed cost reached EUR 2 billion 65 million, or a 3% increase over last year's figure. Once reduced non-recurrent effects, fixed cost would have decreased by 0.5%. Adjusted figures exclude mainly the accounting effect of the application of IFRS 16 on leases, the stock impairment related to the discontinuation of coal plants, as well as other O&M non-recurrent costs booked in both years. Our OpEx evolution remains stable versus previous years, with efficiencies more than offsetting inflation, perimeter, and growth, with higher CapEx in a new investment cycle. The integration of the thermal and renewable capacity management is starting to allow synergies, which will deepen fixed cost control, reaching up to EUR 44,000 per megawatt in 2019, higher than the 2022 target.
In distribution, the digitalization initiatives of our processes and assets will bring further reductions in our operational costs. Lastly, in supply, we have trimmed the cost to serve to EUR 10.6 per customer by minus 3% versus 2018. This is a consequence of leveraging on the digitalization initiatives such as the following. The number of contracts with the billing rose by 36% versus 2018, up to 3.8 million contracts. Digital sales climbed from 5.7% in 2018 to 10% in 2019, while the number of digital contracts has grown 4.8 million. Finally, just to mention, at the beginning of 2020, a satisfactory collective agreement has been signed with the union representatives, which is expected to bring stability and increasing efficiencies in the upcoming years. On the P&L evolution from EBITDA to net ordinary income on page 22 now.
Starting from the EUR 3 billion 841 million reported EBITDA, D&A increased by 102% to EUR 3 billion 453 million as a result of the impairments for a total of EUR 1 billion 770 million. These impairments compared to EUR 158 million recorded in fourth quarter 2018, corresponding to Alcudia Power Plants Group 1 and 2. Excluding this, D&A would have increased by EUR 133 million, mainly explained by the application of IFRS 16 for about EUR 34 million, the amortization of digitalization investment for about EUR 30 million, embedded provision increased for about EUR 50 million, and the adjustment of assets' useful life since April 2019. Net financial results increased to EUR 184 million, mainly driven by the impact of IFRS 9 and IFRS 16 and the update of the financial workforce provision.
Associated and other items positive for an amount of EUR 26 million include EUR 24 million capital gain from the surplus of the optical fiber network transfer agreement with Lyntia. Income tax expenses amount to EUR 50 million, 87% lower than in 2018, basically explained by the positive fiscal impact of the impairments. Deducting said effect, the effective tax rate would have been 24.4% higher than the 21.6% recorded in 2018, coming from the lack of some fiscal deduction in 2019. As a result, net ordinary income increased by 3% over the period. Moving now to slide 23 on the cash flow evolution from EBITDA to free cash flow. Funds from operations increased by more than 30% versus 2018, reaching EUR 3 billion 181 million, which has exceeded the financing needs required to carry out the important investment effort.
This increase, which represents a historical record cash flow generation since 2014, is due to the following effects: higher EBITDA after provisions paid of around EUR 180 million, working capital and others uplifted by EUR 688 million, mainly due to the improvement of the net balance of receivables and payables accounts, lower inventories payment, and by the increase in regulatory collections in non-mainland by about EUR 400 million. Income tax increased EUR 114 million, mainly due to lower funds than in 2018. Net financial expenses paid decreased by minus 4%. The increase on cash-based CapEx by 24% was entirely financed by the FFO increase and led to free cash flow of EUR 1 billion 267 million. Moving now to slide 24 on the evolution of the net financial debt.
Net debt amounts to EUR 6.377 billion, EUR 607 million higher than the previous year, once considering the IFRS 16 impact of EUR 274 million, but below the EUR 7.1 billion guidance, mainly due to better results and the good evolution of the regulatory working capital. This item has decreased thanks to the increase in non-mainland collections from tariff settlements and from the general state budget at the end of the year. On the opposite side, the dividend payments, corresponding mainly to the total gross dividend against 2018 results, added another EUR 1.520 billion to the net debt final figure. The leverage ratio was 1.7 times. Gross debt has an average cost of 1.8% at its historical lows, which implies a further reduction versus the 1.9% reported at the end of 2018. Moving now to slide 25, let me hand over to Pepe for his conclusions.
Thank you, Luca. At home throughout this presentation, once again, in 2019, we succeeded in surpassing the target announced to the market. This notable set of results led us to believe that we have established the basis for our business plan execution. And finally, moving to slide number 26, I would like to conclude with some remarks on our performance. The continuous and timely delivery, once again, as has been the case every year since 2014, of our financial target committed to in the strategic plan. The acceleration in decarbonization of our generation mix, in accordance with our commitment with the National Energy and Climate Plan and in the COP25, this drives a strong investment effort, mainly in renewables capacity development in order to decarbonize while leading the energy transition.
As a consequence, these results in an outstanding total shareholder remuneration of 25.3% in 2019, providing sound value to our shareholders. And lastly, we are highly confident that these results will allow us to work towards our 2020 announced guidance. And ladies and gentlemen, this concludes our full year 2019 results presentation. Thank you very much for your attention, and we are ready to take some questions.
Thank you, Pepe. We will answer now all the questions you may have.
Thank you. Ladies and gentlemen, if you'd like to ask a question, please press star followed by one on your telephone keypad now. If you change your mind and wish to remove your question, please press star followed by two.
The first question comes from Harry Wyburd from Bank of America Merrill Lynch. Please, Harry, go ahead.
Hi. Morning, everyone. Three questions from me, please.
The first one's on net debt. So it looks like you've beaten your guidance by a lot about EUR 0.7 billion. And if I've done my math right, only about half of that is explained by the move in regulatory working capital since the nine months and the EBITDA beat. So you mentioned sort of receivables and inventories. What exactly has happened here that's generated such a big improvement in net debt? And is that sustainable, or is it going to reverse out in the first quarter? Second one's on power prices. You talked about the CO2 market situation when you went through the slides, but I guess you still notionally have above EUR 53 Spanish power prices in your business plan, and we're currently at EUR 44.
But irrespective of whether you agree with the forward market, maybe you could just comment, if power prices are 44, and if you just assume that they are at that level in a few years' time, to what extent have there been positive offsets to that that could still allow you to meet your guidance? And then finally, just on gas, and I'm talking about gas retail here, so ignoring the power price impacts, how's the best way to think about gas? Because I guess the first thought is, "Oh, gas prices have fallen, so it's going to hit your margins." But obviously, you have a much higher exposure to retail gas customers than many of your peers, and obviously, retail prices are quite sticky. So should we assume that given how quickly gas prices have fallen, is there an opportunity to actually increase margins in the short term?
So could you give any sort of guidance as of right now as to what you think gas margins will do for 2020? Thank you.
Okay. Harry, I want to ask to give you some call or answers to the second and third question about the power price and the gas retail. Power price, you are absolutely right. First of all, I should say that we have something around EUR 53 per megawatt hour in our strategic plan, in our business plan. These 53, as we explained in the presentation of the strategic plan, is based on some assumption. Mainly, these assumptions are the price of the CO2, that is EUR 24 per ton, and the price of gas, EUR 20 per megawatt hour.
What we have seen in the last quarter of the past year and also during this first month of this year is a huge drop in the price of gas. This huge drop is a consequence of with demand, mainly from Asia. It's a consequence of the warm winter, and also it's a consequence of the significant increase of the offer in the market. In that case, and also with the coronavirus now, what we have seen is that there are a lot of gas in the market looking for some home, and one of them is the European one and the Spanish one. So prices are around EUR 10 per megawatt hour. So if you compare EUR 10 per megawatt hour with the 20 that we had or we used in our assumption, that explains to you many things.
The first one is the drop in the prices, power prices from 53 in our assumption to roughly 40 that we have now in this year, 2020, but this kind of situation, first of all, let me try to be very simple. If we are long in customers, these low prices will give us an opportunity more than risks, and that is the case that we have today. We have an opportunity. Second, what about the evolution of this process? Well, what we think is, first of all, the forward gas prices for the year 2021 are around 15-16. That means a recovery of the gas prices. Let me remind you that in the year 2018, the price of gas was 24.4 EUR per megawatt hour.
And we are sure, let me say sure, that in the year 2021, we will start to see the recovery of prices going at least up to EUR 20 per megawatt hour that we have in our strategic plan. So we are now trying to optimize and optimizing, for sure, our margins with the drop in the prices, in the power prices this year. In terms of the gas retail for the next year, well, let me say, perhaps we will be absolutely honest. I'm thinking that just to reach the margin of EUR 3 per megawatt hour is going to be today, is going to be difficult. But we are expecting something around EUR 2.5-EUR 3 that is slightly decreasing in the margin, but nothing more.
And on the first question, Harry, yes, you're right. I mean, we had a very good evolution of our working capital.
We had basically a net balance between receivables and payable accounts, which has been net positive. Obviously, on trade receivables, there was an impact of lower prices in the 4Q, and as well as for inventories, we had a positive impact from obviously the impairment that we did for our stock of coal. To give you specific numbers, the net balance of receivables and payable accounts, payable were plus EUR 613 million, receivable EUR 455 million, and inventories for EUR 65 million. The regulatory collections in non-mainland was positive for EUR 413 million. Now, part of the question is whether this is sustainable, say, going forward. We still expect, let's say, a working capital to be positive in 2020, obviously not of the same magnitude, at least for now.
And we expect the regulatory working capital to increase from what we closed this year by about EUR 300 million. So to have an expectation of regulatory working capital of EUR 1.2 billion for 2020, which should drive our net debt guidance at about EUR 7 billion in 2020.
Thank you, Harry. We have now Alberto Gandolfi from Goldman Sachs.
Good morning. Thanks for taking my questions. I'd like to go back to power price with a little bit more specific question, please. I was wondering if you can give us a very brief summary of the percentage hedges and the achieved power price for the year that just closed, 2019 and 2021, 2022?
And if you agree that by the end of the plan, let's say 2022, the terawatt hour exposed to power prices, if we add hydro nuclear and we also take renewables within cap and floor and the merchant year bidding, are we going to see about 45 terawatt hour exposed to merchant prices by 2022? So I'm trying to understand if a 9-10 EUR per megawatt hour move can have up to EUR 450 million unhedged normalized risk for the portfolio. The second question is about capital allocation and capital structure. So your CapEx is now going to accelerate, and power prices are beginning to come down. So in your investor day, you talked about a decline in payout to 80% and then 70%. Are you going to stick to that, or maybe something has got to give because you want to keep more firepower?
I guess what I'm trying to ask is, where do you rank growth versus cash distribution? Would you want to chase more opportunities domestically in renewables at the detriment of dividends, perhaps, or is dividend maybe the priority? And the last question is on supply margins. Can you maybe help us out to see in maybe for 2020, you seem to say that margins will remain. Can we see any expansion, perhaps, given the reduction in power prices we have seen, which was not in your plan, and so supply can maybe mitigate some of the impacts from the power price decline or how you're seeing, for instance, the first two months of the year developing? Thank you so much.
Okay, Alberto. Many questions are very detailed questions, so I will leave Luca just to answer some of them.
But the easy one, let me say, is the supply margin for the year 2020. And I would say that you are right. There is some room just to improve just because of these low prices. But more than the supply margin, it would be the integrated margin. The integrated margin, it would be the one that we are sure that we are going to increase because of our hedging policy and also because, as I have said before, being long in customers, this situation with low prices is a very good situation for our interest. And now, Luca.
Thank you, Pepe.
On your first question, as far as hedges, as Pepe commented during the presentation, we have 100% hedged our production or our price-driven output for 2020 at an average all-in price of EUR 73 megawatt hour with an estimated all-in integrated sales, which includes also the index energy at EUR 65 megawatt hour, so very similar to where we closed 2019. For 2021, we have hedged around 63% of our estimated price-driven output at an average all-in price of around EUR 75 megawatt hour. Once you consider basically total sales, including the index portion, we are basically going to convert to the same integrated sales of EUR 65 per megawatt hour. Now, just to comment on this, that 63% means we have an open position of about 13 terawatt hours for 2021.
One euro megawatt hour difference between our assumption and, let's say, the forwards, if you want to do the mark-to-market to the forwards, weighs about EUR 30-40 million to our, let's say, gross margin. So that's the gap vis-à-vis the mark-to-market that we have, let's say, to face. And as far as capital allocation, first, the dividend policy that we have announced is the dividend policy that we stick to. So 80% payout in 2021, 70% payout in 2022. Now, what is the balance between, I would say, growth and, let's say, cash dividend or cash returns to shareholder? The plan, as you say, foresees an increase in CapEx basically over the next three years with a CapEx deployment in 2022 of about EUR 2.2 billion in this year, which is the maximum that we have in the plan.
Now, to your questions, I mean, here the plan is to accelerate as much as we can. So if we have the opportunity to spend more CapEx even in 2020, we will do so. And the acquisition of the Prodiel pipeline is exactly to the tender where we have in that pipeline about more than 100 megawatt of projects with the COD in 2020. So there will be an acceleration vis-à-vis what is the CapEx deployment forecasted in the plan. And the current, I would say, capital structure of the company allows for that acceleration with the dividend policy we have announced.
Thank you. We have now Javier Suárez from Mediobanca.
Hi. Good morning to everyone. Three questions also on my side. The first one is on the regulatory context and the regulatory draft on the remunerations for the renewable energies in the period 2020 to 2025.
You can give us your contribution to that regulatory draft document and what do you believe has to be said in that document to promote the expansion and fair remuneration of renewable energies. So the question is, what is your contribution into that regulatory paper to improve things? Then the second question is on the slide number 10 on the expansion in the electricity margins on the liberalized market. I think that you mentioned during the presentation an expansion in 2019 from EUR 8 to EUR 10 per megawatt hours. If you can, please remind and explain us again the reason for that expansion in the margin and where do you see that margin into 2020. And also on clarification in the decrease in the regulated customers that are down by -4% in 2019, if you can explain us the dynamic there.
The third and final question is on the renewable energy expansion. Obviously, there is plenty of debate in Europe, whether or not, the best way to expand renewable energies is instead of auctions through corporate PPAs. If you can update on your latest views on what is likely to be the expansion strategy of Endesa on renewables on the Spanish market. Many thanks.
Let me try to explain the margin. The margin, the expansion from EUR 8, about EUR 8 per megawatt hour to the EUR 10 per megawatt hour in the year 2019, it is explained by the way which we have been managing our customer base. Mainly, what we have done is just to take care about these customers with loyalty programs and retention programs. And then, as we have said many times, let me say, we are looking for increased value of our customer base.
Being the leader in this market, in the supply market, it is very difficult just to compete with others and take care about the prices. So in that sense, what we are looking for is higher quality in all the sense, in attention, etc., the loyalty programs and the retention programs. With all these, and also being efficient in the sense all the digitalization, the digital channels, the reduced cost just because of that has given us this margin of 10. And how we see the margin in the year 2020, let me say, very similar, very similar. That is what we are thinking now. What about the auction? As we have said many times, at least, I'm not in favor of auctions. That doesn't mean that auctions are not going to be launched. The government has said that they are going to launch these auctions.
I said that I am not in favor of auctions because there are many agents that are incumbents that will go ahead with these renewables projects without the auctions, and the auctions, in my opinion, have created the bubble that we have today in Spain with the connections of the renewables to the grid. Having said that, the only thing that I ask for is just to take care in the design of these auctions just to avoid some kind of negative effect that could be seen with the auctions, but in any case, I think that auction would be something good for the system, and of course, we will take care and we will go ahead with the auction also and not only with the merchant plans that we are thinking about today.
And then regarding your first question, Javier, our contribution to the regulatory, let's say, context for renewables for the 2020-25, obviously, we are participating as well as other companies. Bear in mind that for us, it's not going to change much in the sense that pre-2013 assets in terms of, let's say, contribution from that regulation is less than EUR 100 million to our accounts. So the picture will not change dramatically for us, whatever is going to be decided in that respect.
The next question comes from Fernando Garcia from RBC Capital Markets. Please, Fernando, the line is yours.
Hi. Good morning. I have three questions. First one is in gas. Could you provide details of the gas cargoes canceled for April delivery according to Bloomberg? And an additional question there is, did you cancel any cargo before?
My second question is, if you could provide impacts in the provision of the 2020 impairments if we've seen breakdown of coal and non-mainland impairments there. And the third question, could you provide details of the solar PV portfolio acquired from Prodiel? And there, how much would you pay to Prodiel if all the megawatts are developed? Many thanks.
Fernando, let me say that we have canceled one cargo, two cargos, excuse me, from Cheniere. And the reason is what we have been doing during the last year. Well, it's the first time that we canceled. But our contract has this flexibility that allows us to optimize our portfolio. And sometimes this is just because of the reopeners. Other times, it was just because we have delays on cargos or we have advanced orders. And in this case, it's just because we have canceled these two cargos.
But this is the usual management of our portfolio. When we think that canceling or changing some cargos and buying in the spot wholesale market, it would give us a better result than with our portfolio. We do that. We have been doing that during the last year, and we have gained a lot of optimization or benefit from that. But trying to summarize, you're right, we have canceled two cargos because we think it's better for a way to optimize our portfolio and our sourcing.
Then on your second question, the D&A impact from the impairments in 2020 from the coal, we will have a benefit of less D&A for EUR 120 million and for the non-mainland benefit of about EUR 40 million. Bear in mind that stripping out the impairment in 2019, D&A is EUR 1 billion 683 million.
For 2020, we expect D&A to be just below EUR 1.6 billion. And on your third question, the portfolio acquired from Prodiel, we paid EUR 90,000 per megawatt of pipeline to Prodiel, which includes also the development of this pipeline. Bear in mind that we can develop, let's say, our own pipeline in the region of EUR 60,000 to EUR 65,000. So we pay up a little bit, but clearly, here, some of these projects have COD 2020, as I mentioned before, and the majority of them between 2021 and 2022.
We have now Enrico Bartoli from MainFirst.
Hi, good morning. And thanks for taking my question. I have two left. One is on the non-mainland business. You mentioned that the drop in the EBITDA this year was due to the only partial recognition of part of the fuel cost.
If you can elaborate on the outlook for 2020 and also on the impact that on the profitability of this business would arise from the ministerial order that you mentioned in one of your slides? The second one is I would like to go back to the auction system that actually the government is planning to implement. If you can elaborate a bit on what your expectations are for this process in terms of timing, maybe the level of competition, and the amount of capacity that could be auctioned this year. Thank you.
Okay. In the non-mainland area, we're built for the year 2021. You're right in the sense that we have, just because of the mechanism or the methodology of the remuneration, fuel remuneration, regarding the non-mainland generation, we have had some difficulties.
That means that we have recovered slightly 14 million EUR less than the ones that we have paid, let's say that. While we're waiting for the new renewable excuse me, not renewable. We're waiting. I don't know what happened with the microphones. Well, as we continue with I don't know if you heard me better. Someone has changed the microphones. But in any case, I don't know where I was. Now. Okay. So as I have said, we are waiting for a ministerial order that will fix the new methodology, parameters for the remuneration of the fuels. We think that this problem that we have had in the year 2019 will be resolved with this. As far as guidance, I mean, we were already accounting for this basically O&M remuneration in our business plan, which sorry, we're not going to open the microphone now.
We're not going to open the microphone.
I was saying that we were already accounting in the business plan for the O&M remuneration that came at the end of December, which basically means that the plan is already forecasting the evolution of non-mainland with an EBITDA very similar in 2020 to the one that we recorded in 2019, which was about EUR 170 million, going down to about EUR 250 million in 2022. That is driven by several things, including RAB declining. As we said in the plan, RAB at the end of 2019 was about EUR 1.3 billion. It will go down to about EUR 1 billion in 2022. As far as the auction system that the government is thinking of, what we know, because obviously there are no official proposals there, is that the quantity should be about the capacity, about 3 gigawatts.
It should be for different types of technologies, and it should be a feed-in tariff. So basically for the price of production. And we understand that they will include 80% of the capacity only, and 20% will be merchant. That's our understanding as of now. But again, there are no official drafts regarding the auction mechanism for renewables. Sorry, because I think we have some difficulties with the line.
Next question comes from Javier Garrido from J.P. Morgan. Please, Javier, go ahead.
Yeah, good morning. First question is a follow-up on Luca's comment on 13 terawatt hour open position in 2021. Can you let us know how much of that is outright hydro, nuclear, renewables, how much is spread? And the second question is looking into 2022.
I think your comments basically suggest that you are still looking for an integrated margin of around EUR 30 per megawatt-hour in 2022 because you see the opportunity from being long clients of setting the decline of wholesale power prices. Is that what you are saying, or are you still looking for the EUR 30 per megawatt-hour target? And the third question is on your gas operations. If you could elaborate a little bit on how you operate, particularly out of the 100 terawatt-hour that you more or less sell every year, how much is long-term contracted, and how much is bought normally in the spot market?
Secondly, you disclose the margins you make in the retail and wholesale markets, but in the CCGTs, in your sales to CCGTs, should I assume that that's embedded into the power generation business, or that's part of your margins in power generation with CCGTs? Thank you.
Okay. Thank you, Javier. This is Luca. On the 13 terawatt-hour open position in 2021, it's all basically what we call the price-driven. So it's a part of a new hydro and renewables which is open. If you do the mark-to-market today with Calendar Forwards, it's about basically EUR 120 million less in terms of margins. Obviously, as Pepe commented before, we will have means, obviously not to get this hit because first, we think that obviously the forwards will recover given also where gas is forecasted in 2021. I mean, the Calendar Forwards for the PVB is around EUR 16.
And if you use this forward, the variable cost of producing through combined cycles is well above the EUR 50 megawatt-hour. And as you know, combined cycles will set the marginal technology that will set the price. So we see basically support in that respect. Plus, obviously, we have other means of mitigating any, let's say, negative impact, especially in supply, where obviously we had a very good performance this year. We are forecasting a similar performance in 2020. And obviously, it depends on how we manage, let's say, our client base or mix of clients. When it comes to the 2022 basically integrated margin, yes, you are correct. We're still assuming the EUR 30 integrated margin.
When it comes to the third questions on gas, let me just comment that basically all our sourcing is basically long-term contracted between, I would say, Algeria, as you know, LNG, and Algeria long-term take-or-pay index to Brent. Now, we basically don't have a policy on how much we use of the contracted part regarding how do we source our retail client base. It depends year on year whether we see opportunities. And that's why we cancel some cargos on LNG because there was an opportunity to source our retail client base through acquisition on the spot market, which is much cheaper. So it really depends on a yearly basis. And then when it comes to how do we calculate the gas margin in the EUR 3.7 unitary gas margin that we reported in 2019, obviously, there were also sales to CCGTs in that marginality.
Excluding sales to CCGTs, that margin would have been 2.7 EUR/MWh. Thank you. Next question comes from Jorge Guimarães from JB Capital Markets. Good morning, everyone. Just two follow-up questions. Firstly, regarding the write-off in the non-mainland systems, will it have any impact on the regulated asset price and therefore on remuneration? And secondly, and I don't know if it's possible for you to share this information or not, what is, on average, the cancellation fee of a cargo of LNG? And how the economics of cancelling versus going to the spot markets work out? Thank you very much. Regarding the first questions, the impact on regulated asset base is basically none. We just adjust our book value, which is now in the region for non-mainland of 1.5 billion EUR. And as I said, RAB evolution goes from 1.3 billion EUR in 2019 to about 1 billion EUR in 2022.
As far as the average calculation of a cargo is something that we cannot disclose because it's something which is bound by confidentiality with our sources of gas.
We have now Antonella Bianchessi from Citi. Please, Antonella, go ahead.
Yes. Just a quick follow-up on your debt and on the regulatory receivable. So you are assuming that the debt will remain pretty stable in 2020, and which are your assumptions over the dynamic of the regulatory receivable over the next, let's say, few years? The other question is on the financial cost. Do you expect the financial cost to normalize in 2020? And can you elaborate on, if on the 2019 numbers, there are costs related to the evaluation of the pension and if you can explicitate the number on that? Thanks a lot.
Regarding evolution of regulated working capital from 2019 to 2020, as I said, I mean, we have about EUR 900 million in 2019, and we expect an increase of regulated working capital of about EUR 300 million because we know that there is something that is coming for about EUR 300 million in that respect. So our assumption of regulated working capital in 2020 is about EUR 1.2 billion, which is the majority of it is actually for non-mainland. And this basically drives our net debt guidance in 2020 to EUR 7 billion approximately. Regarding financial cost normalization, I mean, we closed 2019 at an average cost of debt of 1.8, which has been a record low for the company. Obviously, we will monitor evolution of interest rates, and we will see whether there are opportunities to do some managing or better managing of interest rates.
But you should not expect a slight or a decrease in terms of the cost of debt because we are already at, let's say, a record low, which is not only a record low for the company, but it's a record low for the sector. So it's actually the lowest cost of debt or utility in Europe.
Thank you. The last question from the call comes from Jorge Alonso from Société Générale.
Hi, good morning. Can you elaborate a little bit on the tax rate that you expect for the coming years on the back of the potential and current fiscal measures taken by the government? The next one is the non-mainland should benefit from lower fuel cost environment, right? So is that offset by the new remuneration framework, and that is why you expect, let's say, the EBITDA that you mentioned before?
But is there a possibility that this environment can have a positive impact on the non-mainland and the daily in 2020? And the last one is, do you see the possibility of signing PPAs acquiring energy from other renewable producers in order to accelerate the expansion of the integrated margin, or do you feel comfortable with the path of your own renewables development, which, if I'm not wrong, do you expect now 3.5 gigawatts between 2020 and 2022, right? Thank you very much.
Thank you, Jorge. Regarding the first question, so what are our expectations? I mean, there are, as far as potential tax proposals, two proposals, one at the central government level and one at the local government level.
The one at central government level is on the potential budget law where they are planning to introduce a minimum tax rate for companies of 15% on the accounting result. It means that you cannot take into account any tax credit. For us, we'll have a minimal impact, about EUR 30 million, so we will see if that comes through or not. The other measure that supposedly should be in the budget proposal of this government is taxation of dividends from international subsidiaries to the holding companies in Spain, and for us, that should not have any effect, and then at the local level, as you know, there's been a proposal from the Catalan government on the ecotasa of Catalonia, which foresee basically the proposal of taxation of EUR 5 megawatt-hour on basically the generation fleet.
For us, that would have an impact of about EUR 120 million if it's passed through. Bear in mind that obviously this is overlapping with the existing 7% generation tax at central government level. So if they go through with this tax, we will definitely appeal, and there are, I would say, grounds for our appeal. Regarding the third question, whether we are, let's say, seeing a possibility of acquiring PPAs in order to accelerate expansion of margins, the answer is yes. It's something that we actually are doing, obviously in very small percentages vis-à-vis our short position. But there are, I would say, opportunities in the market where developers are willing to give out energy at very, very attractive prices. Bear in mind that we retain always the options at the end of these PPA contracts to buy out the assets.
So that's basically a key requirement for us to consider some kind of PPA energy acquisition. And then the second question was, sorry, non-mainland. I mean, the assumption that we have in the plan regarding fuel cost as far as non-mainland is basically a full pass-through. The proposal that has been issued by the ministry at the moment is not exactly a full pass-through. There are still, on the gas portion, some basic costs to us. So I wouldn't say that there is a positive or potential positive effect from this going through vis-à-vis our business plan targets. So you shouldn't expect, let's say, a potential upside from this regulation going through in the next few weeks.
Thank you, Luca. Thank you, Luca. We have just two pending questions, let's see, from the web.
The first one comes from Victor Peiro from GVC Gaesco that is asking if we can give some color on the economics behind the electric vehicle charging points, the CapEx deployment during this year and the main figures. And the other one is coming from Isidoro Del Álamo from BBVA that is wondering if we can give the network value of the non-mainland generation assets after the impairment.
Thank you, Mar. On this last one, as I said, network value is about EUR 1.5 billion after the impairment for non-mainland assets. Regarding the EV charging points, CapEx plan, I mean, for the whole CapEx deployment of these charging points up until 2023, we have about EUR 65 million of CapEx, the majority of it actually to the outer years of the plan in which we are going to install also the ultra-fast charging stations, which are the most expensive one.
Thank you very much. We have taken all the questions received from the call and from the web. And so thank you very much for your participation, and see you in the next Q1. Bye.