SUSTAINABILITY REPORT
2006
THE FUTURE
IS OUR COMMITMENT
For the Edison Group, 2006 was an especially important year, not only because the Company reported outstanding operating and financial results, but also because it laid the foundations for its future growth with a capital investment plan that has been extremely appreciated our shareholders and the financial markets.
Net profit rose to 650 million euros, or 30% more than the 504 million euros earned last year, which was itself a record for Edison. In addition, the Group reinstated its dividend payment in 2006 after a four-year hiatus, underscoring its belief that compensating shareholders, who have invested and believed in the Company, is a primary obligation for any business. Equally important is the need to provide a growing contribution to the development of the communities that host the Group.
In 2006, we all but completed one of the most ambitious capital investment programs carried out in Europe in the last decade. In 2007, as the power plants in Simeri Crichi and Turbigo (Edipower) will go on stream, the Group’s installed generating capacity will rise to almost 12,500 MW, most of which consists of gas-fired power plants that use combined-cycle technology, the most efficient and environmentally compatible system available today.
The production of clean energy is in Edison’s DNA: we were the first company in Italy to develop hydroelectric power generation and we are leading the way in wind-power generation. Moreover, Edison was the first company in Italy to adopt the ISO 14001 and EMAS management systems. At the end of 2006, 98% of the Group’s electric power facilities used certified environmental and safety management systems. As a result, emissions from Edison’s power plants have been declining steadily and by significant amounts.
In order to make sustainable growth possible, we are working to lower as much as possible the amount of CO2 emitted per unit of energy generated.
We are already in the forefront of this effort, as we have gradually replaced the oil-fired systems of the former Enel (now Edipower) facilities with ecocompatible, combined-cycle systems fueled with natural gas. But we are committed to doing even better, as demonstrated by our increasing investments in the area of renewable sources. In 2006, the Company approved a plan that calls for investments in renewable resources totaling 480 million euros.
However, irrespective of the strength of our commitment, we must reflect in concrete terms on how the goals of sustainable development can be made compatible with today’s technology, if we are to face realistically the challenges posed by climate change and the Kyoto protocol.
At the end of 2006, the relevant Italian Ministries published a draft of the National Emissions Allocation Plan for the “transitional period” (2008-2012). This draft is currently being revised to address issues raised by the European Union. In our opinion, the Plan’s allocation method does not reflect, as we recommended, the principle of making more costly the sources that account for
most of the CO2emissions.
We hope that this key principle will be included in the changes that are now being discussed and will become the reference paradigm for the period after 2012.
In any case, if we are to protect the environment, it is essential that technological progress and carefully framed regulations go hand in hand with educational campaigns conducted at the national and local level to increase public awareness of the importance of energy conservation and change the daily habits of consumers. An example of such projects is the campaign that Edison helps Legambiente conduct each year in the Italian school system to encourage a culture of energy conservation.
Italy has chosen natural gas as its primary fuel for producing electric power. Our responsibility is to make sure that our country has access to the gas it needs for continued growth and progress. Accordingly, we are committed to designing and building new importation infrastructures that will make it possible to diversify supply sources and make the entire system more reliable.
Working in partnership with ExxonMobil and Qatar Petroleum, Edison is currently the only company engaged in constructing a regasification terminal. This facility, which is being built in the Northern Adriatic, will have a capacity of 8 billion cubic meters of natural gas per year. It is expected to go on stream in 2008,