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Enel Group accelerates closure of its last coal-fired plant in Chile

28 May 2020

Enel announces that its Chilean subsidiaries have informed the market that their Boards of Directors have decided to accelerate the closure of Bocamina coal-fired power plant, located in Coronel. Specifically, Enel Generación Chile will request Chile’s National Energy Commission (CNE) to authorize the cessation of operations of the above plant’s Units Bocamina I (128 MW) and Bocamina II (350 MW) to take place by December 31st, 2020 and by May 31st, 2022, respectively. The closure, which is subject to the above authorization, has been accelerated compared to what was projected by Enel Generación Chile in the country’s National Decarbonization Plan signed with the Chilean Ministry of Energy on June 4th, 2019, which provided for the closure of Bocamina I by the end of 2023 and the closure of Bocamina II in 2040 at the latest.

“We will be the first power company in Chile to fully exit the coal sector, while continuing to safely build renewable capacity, with concrete benefits from an environmental, economic and social standpoint. This is fully in line with our Group’s decarbonization strategy. Our approach addresses our people, and specifically those colleagues working in coal facilities and coal technology, who are given opportunities to retrain on other technologies within the Group,” said Antonio Cammisecra, Head of Global Power Generation at Enel.

The net book value of the two Bocamina Units amounts to approximately 790 million euro at the Enel Group level, including the related dismantling costs. The decisions of Enel Chile and Enel Generación Chile’s Boards of Directors could entail the recognition of an impairment on the assets involved in an amount of up to the net book value reported above. The associated financial impact will be reported in the half-year financial report of Enel Group at June 30th, 2020.

Any impairment stemming from the expected interruption of generation by the two Bocamina Units would not in any case affect Enel’s dividend policy, which is based on a pay-out proportionate to the Group’s net ordinary income that would not be impacted by such impairment.

The above initiative is in line with the Enel Group’s goal to fully decarbonize its generation mix by 2050. Towards this aim, the Group is working towards complete coal phase-out by 2030; in addition, the Enel Group is increasing its managed renewable capacity to 60 GW by 2022, from the current 46 GW.

As part of its decarbonization commitment in Chile, the Enel Group is also planning to complete, through Enel Green Power Chile, around 2 GW of renewable capacity in the country by 2022, half of which is already under construction, including, among others: (i) Azabache (60.9 MW), a solar plant hybridized with Valle de los Vientos wind farm (90 MW), making the first hybrid industrial power generation plant in the country; (ii) the solar project Campos del Sol (382 MW); and (iii) the 33 MW expansion of 48 MW Cerro Pabellón, the only geothermal plant in operation in South America. In Chile, the Enel Group has already closed the 158 MW coal-fired unit at Tarapacá power plant in December 2019. Similarly to Tarapacá, the Enel Group will implement the redeployment, within the Group, of Bocamina’s workers, alongside assessing the reconversion of its facilities.

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