A competitive transition

Our commitment remains unchanged and grows stronger, adopting a growth strategy based on a competitive ecological transition which combines decarbonisation of operations and the competitiveness of businesses

The uncertain market and geopolitical context can accelerate or slow down the ecological transition, driven by favourable or unfavourable exogenous factors. Our commitment remains unchanged and grows stronger, adopting a growth strategy based on a competitive ecological transition which combines decarbonisation of operations and the competitiveness of businesses and Italy. 

The sector has settled into a “new normal” characterized by higher energy commodity prices, with the average PUN in 2024 double that of 2019, and with greater volatility. While the energy & utilities sector enjoys a stable regulatory framework that fosters investments in the networks, thanks to RAB-based remuneration, and in capacity flexibility, thanks to the Capacity Market and upcoming incentive mechanisms for RES and storage. Nevertheless, several challenges remain: restrictions on the implementation of renewables and uncertain and short-term incentive schemes. 

  • Crisis of competitiveness
  • Areas for action
  • Our strategic path
  • Il ruolo delle città

Crisis of competitiveness

At the centre of the political framework, the crisis of European competitiveness calls into question the ecological transition trajectory undertaken in recent years at EU level.

EU competitiveness crisis​

GDP evolution at constant prices

2015 reference levels | ‘000 $B

~2x

UE-USA gap in GDP ​
between 2002-2023​

800€B/y

​Additional investments​
to increase European competitiveness

>90%

A2A investments over the Plan 24-35
in line with Draghi’s fundamentals

Source: The future of European competitiveness, European Commission, 2024

Three areas for action

"The future of European competitiveness" Report drafted by Mario Draghi upon mandate of the European Commission President Ursula von der Leyen identifies three areas for action to relaunch growth in the EU and bridge the gap with more competitive areas of the world:

  1. Innovation: supporting innovative companies and filling the skills gaps
  2. Decarbonisation: promoting decarbonisation by transferring its benefits to energy prices
  3. Autonomy: ensuring access and supply of key raw materials and technologies

Our strategic path

The strategic path undertaken by A2A in the recent years is fully aligned with the objectives of the Draghi’s report, with over 90% of the investments planned in the Plan in line with the three pillars.

Innovation

In area of innovation, the Group is engaged in the Corporate Venture Capital fund "360 LIFE I" and as anchor investor in the new "360 LIFE II" fund, with an expected average multiple of 3x on the investments made.

Decarbonisation​

A2A is at the forefront of decarbonisation, developing new renewable plants and relying on PPAs to purchase and sell energy thus promoting energy prices and gas volatility decoupling. Moreover, investments in electricity networks foster electrification of consumption. 

Autonomy​​

To promote greater European autonomy in the supply of critical raw materials, the A2A Group has planned a new project of a lithium-ion battery recovery plant leveraging its leadership in the Circular Economy. This project fits within the Group’s strategy to increase material recovery for new secondary raw materials to be reused in production processes.

Transition starts from the cities

The competitive ecological transition starts from the cities: cities are intrinsically efficient ecosystems that make investments more effective both from an environmental and economic point of view.

This becomes even more relevant considering that the main cities served by A2A are expected to undergo strong urbanization: the number of residents is expected to grow 18% by 2040 compared to 2010, versus an average 5% decrease expected in Italy. For this reason, the Group plans to concentrate over 50% of the CAPEX planned in urban areas.

Energy efficiency index​

Toe/€M GDP​

Fonte: The European House Ambrosetti-A2A
Note - (1) Refers to 112 Italian capital citiesl

Resident population​

(2010=100), 2040 vs 2010​

Source: national data analysed by The European House Ambrosetti-A2A; European data by Eurostat​
Notes
(2) Representative sample of 10 EU cities with >1.5 M residents and maximum 2 cities for each country
(3) Capital cities in which A2A operates with distribution infrastructures