After ten years in Romania, Enel is already contemplating the next decade: a decisive interval for a business in its way towards radical changes. Toni Volpe, Country Manager Enel Romania, gave us a glimpse of where the Italian owned distribution companies are heading.
What are Enel Romania`s goals for the next period, in each of its areas of activity?
When Enel entered the local market ten years ago, our main focus was to improve the quality of the services we provided to customers. We achieved this by implementing a massive investment program which started top down – from high voltage to medium and low voltage. This sequence makes sense because high voltage impacts the largest number of customers. Now, we are gradually shifting both in terms of works volume and CAPEX towards medium and low voltage, which will be the focus in the next five to ten years. In terms of numbers, this strategy translated into 81% of the high voltage primary stations already refurbished and modernized, while in the case of secondary stations, servicing medium and low voltage networks, 26% have completed this process of bringing new equipment and technology on board. Telecontrol, the technology that allows our technicians to remotely perform operations and control network components, has been another key pillar of our development strategy. The roll-out of this system is almost fully fledged in the high voltage part with 85% of stations already covered. The results are visible: Enel distribution companies have the best performance in terms of service continuity, the average duration of interruptions being around half the national average.
Our future focus in Romania will be efficiency, smarter grids and customer needs. In particular, Enel’s strategic plan presented in March, sets the focus on digital technologies: from networks – where this activity is already on the right track with the implementation of Telecontrol and then, further, with the roll-out of the smart meter – to the supply activity where digital channels play a more and more important role both in the life of our company and in that of our customers.
Enel is undergoing a consolidation process in Romania. What are this process’s objectives and what does it mean in terms of specific actions and decisions?
We are continuously searching for solutions that foster efficiency and a better use of resources, therefore this is the only way forward. Being part of a multinational group helps us in burning some stages by adopting solutions that have already proven their success in more mature markets. To give you an example – the Telecontrol system and the smart metering systems have been implemented by our colleagues in Italy for over a decade now, with extraordinary results in terms of increasing the overall customer experience. The full roll-out of the smart meter in Romania is very small compared to what we have done already in Italy 15 years ago, rolling out this solution for the first time in the world to 32 million users. Today, in many countries, our field workers go on site and use their tablets for many of the operations they previously had to perform either on paper, or when coming back to their office. This ensures that the same team can now help more customers, rather than losing time in traffic to get back in the office and fill their reports. They are in constant contact with their dispatcher who permanently knows where they are – and, when a network fault is signaled we can send the closest available team.
In supply area we have streamlined customer care in order to be closer to the customers, while more and more emphasis is given to digital channels – from web care to mobile apps, even to being the only utility service that has in Romania a dedicated customer care team to take over requests via social media (Facebook, Twitter).
Which are your main tasks to be accomplished as the executive management leader in the near future in Romania? What are your target numbers for this year?
Taking into account that our core business is distribution, which is a regulated business, relatively stable and predictable, we can talk about results that are pretty much in line with previous years, and, in the same time, witness a continuous trend of improvement.
The Enel Romania group of companies posted in 2014 consolidated total revenues of 1.008 billion euros. The EBITDA stood at 298 million euros. (Note: EBITDA in 2013 was 289 million euros)
In terms of investments, our program continues to be substantial for the next 5 years. We plan to invest about 700 million euros (connection fees included) / about 500 million euros (net of connection fees) up to 2019.
However, I personally like to see the bigger picture, outside the simple financial targets. The industry is going through a dramatic change and not all players are prepared for the new paradigm. We want to be at the forefront of this change. The prospect of a truly different configuration in electricity generation and distribution is perhaps closer than we think. Decentralized production is a reality in many countries, effective storage solutions will probably emerge sooner or later and electric mobility could also become widespread in a decade or so. What we need to do is to make sense of all the developments happening around us and take advantage of our current position to redefine our role adapted to the emerging realities. It’s becoming more and more obvious that the safe environment of the utility is a matter of the past.
What are the main challenges you are faced with as Country Manager of Enel Romania?
There are everyday challenges, inevitable to any business in any country, but they should not prevent us from seeing the bigger picture. The real opportunity instead is building a future for our company that takes advantage of the technological developments in a way that best answers to the demands of the customers. Ten years from now our business will be radically different from what we are used to now. We’ll see more active consumers, their role will change from passive receivers of electricity to, why not, as I pointed before – producers. In order to get there, many processes and procedures need to be implemented, new regulations to be harmonized – the work is complex and challenging. If Romania wants to take a part in this energy revolution, then the challenge is to have all the industry actors aligned and pushing in the same direction. Romania does have a lot of catching up to do and this gap filling needs to grow even faster and smarter than it did up to now. Countries compete with each other just like companies do, and competition will not get any softer in the future.
Enel Romania recently started some activities somehow unusual for this sector (Enel My Card, Enel Assistence). Were they well received by the customers?
They may seem unusual in Romania, however, taking the example of other markets where Enel is present, this type of diversified portfolio of services are a day to day business case. All these actions are part of our strategy to be one step ahead of customer needs.
Today, for example, if we think about our home, we still do not have enough information about how, when, why and what uses electricity. Imagine a very near future where this information becomes available. The possibilities to build new services for our customers become endless. It’s similar to the mobile communication world before the advent of smartphones… and that wasn’t that long ago, the first iPhone was launched on June 29, 2007! It could be the same for electricity. Our desire is to be an active part of this forthcoming future.
In your opinion, what is Enel Romania’s role in the general landscape of energy efficiency efforts to be made, both in the business and household markets?
I believe that the role of the electricity provider should be first and foremost that of an educator and a steward of customer needs. We have developed various campaigns to inform our customers, be they residential or business, about the benefits of efficient energy consumption – not only in terms of savings, as well as environmental benefits. One of our five years running sustainability and community involvement projects, through which we exchange incandescent light bulbs with energy efficient ones in underprivileged villages, has touched as many as 5,500 households.
The smart meter is also a very useful tool, both for customers and for distribution operators, because it provides a continuous flow of information. When you have the information you need and you use it to make consumption patterns or even to see what generates the largest portion of your electricity bill, you, as a consumer, can take action to reduce your energy footprint. The same is valid for the distribution operator – better data collection can help you to make a thoroughly analysis and see where your largest network losses are and what you can do to lower them.
————————————-
The full version of this article can be read in printed edition of energynomics.ro Magazine, issued on September 2015.
In order to receive the next issue (December 2015) of energynomics.ro Magazine for free, we encourage you to write us at [email protected] to include you in our distribution list.