Enel’s DER Dominance: How Grid Modernization and VPPs are Shaping the 2025 Energy Market

Industry Adoption: Enel’s Shift from Strategic Pivot to Aggressive Market Execution in Distributed Energy

Between 2021 and 2024, Enel executed a decisive strategic pivot, transforming itself from a traditional utility into a foundational enabler of a decentralized energy system. This period was characterized by internal restructuring and massive capital reallocation. The company earmarked a staggering €18.6 billion for distribution grids in its 2024-2026 plan, representing 53% of total investments, and further committed €26 billion for grids through 2027. This financial commitment was aimed at modernizing its networks to handle bidirectional energy flows from a growing fleet of Distributed Energy Resources (DERs). Technologically, the focus was on developing proprietary tools like its Distributed Energy Resource Optimization Software (DER.OS) to manage and monetize assets. To fund this ambitious pivot, Enel undertook a disciplined capital rotation strategy, divesting non-core assets, most notably selling its North American distributed energy solutions (DES) business to Calibrant Energy in October 2024 and its Peruvian generation assets for approximately $1.86 billion. This phase was about building the financial and technological foundation for a DER-dominated future.

Starting in 2025, Enel’s strategy shifted from foundational planning to aggressive commercial execution and technological leadership. The groundwork laid in the previous years began to pay off in the form of major market wins and pioneering initiatives. In September 2025, Enel North America signed its largest-ever corporate Power Purchase Agreement (PPA) with Mars for 851 MWac of solar capacity in Texas, demonstrating its bankability and commercial prowess in a competitive market it had previously been divesting from. Expansion became a key theme, with its joint venture acquiring over 1 GW of renewable assets in Australia and Enel Colombia increasing grid investment by 42.8% year-over-year. Technologically, Enel moved beyond foundational platforms to deploying cutting-edge solutions. It launched the VPP Connect API to scale its Virtual Power Plant operations and, in a groundbreaking move, initiated the EBITTS project with Conio to tokenize renewable assets on the Algorand blockchain. This shift from internal capital planning to external market-shaping activities—spanning large-scale PPAs, international acquisitions, and frontier technologies like blockchain—signals that Enel is no longer just preparing for the energy transition; it is actively leading and defining it.

Table: Enel’s Key Investments in Grid Modernization and Distributed Energy

Table: Enel’s Strategic Partnerships for DER Expansion and Innovation

Geography: Enel’s Expansion from Core Markets to Global DER Leadership

Between 2021 and 2024, Enel’s geographical focus was on consolidation and fortification of its core European and Latin American markets. The majority of its significant grid innovation funding (78%) was directed toward Italy and Spain, where supportive regulatory frameworks allowed for rapid modernization. This was complemented by a planned $2 billion investment to upgrade distribution grids in Colombia. Simultaneously, Enel streamlined its global footprint by divesting assets in regions where it lacked a dominant grid presence, such as the sale of its North American DES business and generation assets in Peru. This strategy was designed to concentrate capital and operational resources in markets where Enel could leverage its established position as a major grid operator to build a robust foundation for DER integration.

From 2025 onwards, Enel leveraged this strong foundation for aggressive and geographically diverse expansion. The company demonstrated a renewed and powerful commercial presence in North America, securing an 851 MWac PPA in Texas with Mars—a landmark deal that reasserted its strength in the highly competitive US market. Its global ambitions were further underscored by the acquisition of a 1 GW+ renewable portfolio in Australia via its Potentia Energy joint venture, marking a significant entry into the Asia-Pacific utility-scale and distributed energy market. Activity also intensified in Latin America with a 42.8% YoY increase in grid investment in Colombia and a new feeder project in Chile. In Europe, targeted investments continued with a €6 million automated cabin in Italy, while Enel X secured 520 MW of demand response capacity in Great Britain and expanded its VPP operations to Taiwan. This rapid expansion from a consolidated core to a multi-continent push demonstrates that Enel is now executing a truly global strategy, planting flags in key growth markets for both centralized renewables and distributed grid services.

Technology Maturity: Enel’s Journey from DER Deployment to Blockchain-Enabled Orchestration

During the 2021-2024 period, Enel’s technology strategy focused on deploying and proving the commercial viability of established DER technologies. This phase was about building operational capabilities. The company moved hybrid projects like the Azure Sky Wind + Storage facility in Texas from construction to operation, demonstrating the integration of large-scale renewables with storage. It also scaled commercial microgrid solutions, such as the one launched at an Alltown Fresh station in Massachusetts. Central to this effort was the development of its proprietary DER.OS software, a platform designed to optimize behind-the-meter assets. The launch of a retail energy business for C&I customers in the US in 2022 was a key commercial milestone, packaging DERs and renewable energy into a scalable product. The technology focus was on application and integration, proving that DERs could be reliably deployed and managed within its portfolio.

In 2025, Enel’s technological ambition took a significant leap forward, moving from deployment to large-scale orchestration and pioneering new market models. The focus shifted to scalable software and cutting-edge innovation. The launch of the VPP Connect API platform was a pivotal moment, transforming its Virtual Power Plant capabilities from a managed service into a scalable, open ecosystem for third-party DER integration. Artificial Intelligence was explicitly elevated as a core enabler for everything from grid optimization to plant design, as highlighted during its Innothon 2025 event. The most forward-looking move was the EBITTS project—the tokenization of renewable assets on the Algorand blockchain. This initiative represents a jump from commercially proven technology (VPPs, AI) to frontier technology (blockchain), moving from optimizing existing energy markets to creating entirely new digital layers for asset ownership and financing. This evolution shows a company confident in its core DER capabilities and now focused on building the next generation of technology-driven business models to dominate the future energy landscape.

Table: SWOT Analysis of Enel’s Distributed Energy Strategy Evolution

Forward-Looking Insights: Enel’s Path to Becoming the Central Nervous System of a Decentralized Grid

The data from 2025 signals a clear and powerful trajectory for Enel: it is solidifying a synergistic business model that combines owning the physical grid with mastering the digital orchestration layer above it. This dual-pronged strategy creates a formidable competitive moat that few rivals can replicate. Looking ahead, we should expect Enel to aggressively leverage this position. The VPP Connect API is a critical signal; its adoption rate by third-party DER owners will be a key indicator of Enel’s success in becoming the de facto platform for grid services in its key markets. Watch for more large-scale acquisitions and joint ventures, particularly in high-growth markets like Australia and North America, as Enel uses its strong capital position to rapidly scale its global renewables and DER footprint.

The most important signal to monitor is the progress of the EBITTS asset tokenization project. While still in its infancy, its success could fundamentally reshape how renewable energy projects are financed, creating a new paradigm of fractional ownership and unlocking vast new pools of capital. This is where Enel is moving from an operator to a market-maker. The primary challenge remains navigating fragmented and evolving regulations across its expanding empire. However, its proactive investments in grid hardware, like the automated cabin in Italy, combined with its sophisticated digital platforms, position Enel not just to participate in the DER transition, but to architect and monetize it at every level. The year ahead will likely see Enel doubling down on this integrated strategy, cementing its role as the indispensable central nervous system for a decentralized energy future.

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Frequently Asked Questions

What was the main change in Enel’s strategy around 2025?
Starting in 2025, Enel shifted its strategy from an internal, foundational phase (2021-2024) focused on restructuring and capital planning to a phase of aggressive commercial execution and technological leadership. While the earlier period was about divesting non-core assets to fund grid modernization, 2025 saw Enel leveraging that foundation to win major market deals (like the 851 MW Mars PPA), expand globally (Australia, Colombia), and deploy cutting-edge platforms like the VPP Connect API and a blockchain-based asset tokenization project.

Why did Enel sell its North American distributed energy business if it’s now expanding in the US?
The sale of its North American distributed energy storage (DES) business in October 2024 was a strategic move to raise capital and focus on its core strengths: grid modernization and large-scale renewable generation. The subsequent 851 MWac PPA with Mars in Texas in 2025 demonstrates this new focus. Instead of competing in the behind-the-meter storage market, Enel is leveraging its strength as a developer of large, bankable renewable energy projects to reassert its dominance in the competitive US market.

What are Virtual Power Plants (VPPs) and what is Enel’s approach to them?
Virtual Power Plants are systems that digitally aggregate diverse Distributed Energy Resources (DERs)—like solar panels, batteries, and flexible industrial loads—to operate as a single, coordinated power plant. Enel’s approach has evolved from developing its own proprietary management software (DER.OS) to launching the VPP Connect API in 2025. This API allows third-party asset owners to easily integrate into Enel’s VPP, signaling a strategic shift to becoming an open platform and a central orchestrator for grid services.

What is the significance of Enel’s EBITTS project involving blockchain?
The EBITTS project, a partnership to tokenize renewable energy assets on the Algorand blockchain, represents a significant leap from operating within existing energy markets to creating new ones. By creating digital tokens that represent ownership in a physical asset (like a solar farm), Enel aims to create a new, more liquid, and accessible way to finance green infrastructure. This move into ‘frontier technology’ shows Enel’s ambition to shape the future financial architecture of the energy industry, not just its physical infrastructure.

Where is Enel focusing its major investments?
Enel’s primary investment focus is on modernizing its distribution grids to handle the rise of Distributed Energy Resources (DERs). The company earmarked €18.6 billion for grids in its 2024-2026 plan (53% of total investment) and a further €26 billion through 2027. Geographically, while initial investments were concentrated in its core markets of Italy and Spain, the strategy has expanded to support aggressive growth and grid integration in key international markets, including Colombia, the United States, and Australia.