Enel’s Geothermal Pivot: 2025 Strategy Revealed
Enel’s Geothermal Pivot: Why the Italian Giant Is Doubling Down in 2025
Industry Adoption: Enel’s Strategic Geothermal Consolidation
Between 2021 and 2024, Enel executed a strategic realignment of its geothermal business, shifting from a model of global expansion to one of focused consolidation and technological depth. The period was defined by a calculated retrenchment, highlighted by the October 2023 decision to sell its entire 150 MW U.S. geothermal portfolio to Ormat Technologies for $271 million. This move was not a retreat from the technology but a deliberate pivot to reallocate capital and expertise. While divesting geographically, Enel simultaneously explored technology-adjacent opportunities, notably through a July 2022 partnership with Vulcan Energy to research geothermal lithium extraction in Italy. This, combined with modernizing legacy assets like the 60 MW Farinello plant with ABB technology, signaled a clear shift from pursuing geographic breadth to mastering technological depth in its core market.
The period from 2025 to today marks the full execution of this strategy. The inflection point came in February 2025, when Enel secured a 20-year extension of its geothermal concessions in Tuscany to 2046. This was not merely a renewal but a landmark public-private partnership backed by a committed investment of nearly €3 billion. With the U.S. divestment complete, Enel is now laser-focused on optimizing its 34 Tuscan plants, which account for 70% of the region’s renewable energy. Adoption is now about maximizing the value of these long-held assets. This is evident in the company’s turn toward Artificial Intelligence (AI) to lower the Levelized Cost of Energy (LCOE) and a reaffirmed 30-year supply chain partnership with Tenaris to guarantee operational stability. The pattern is clear: Enel has traded its role as a global geothermal operator for that of a dominant, tech-focused regional leader, creating new opportunities in efficiency and resource valorization while mitigating the risks of a scattered global footprint.
Table: Enel’s Geothermal Investment Trajectory
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Tuscan Geothermal Concession Extension | February 2025 | Enel committed to invest nearly €3 billion ($3.15 billion) to modernize its Tuscan geothermal operations in exchange for a 20-year license extension to 2046. This secures long-term operational stability and funds growth at its core assets. | Italy’s Tuscany to extend Enel’s geothermal licences to 2046 |
| Sale of U.S. Geothermal Portfolio | February 2025 (Completed) | Enel completed the sale of its 150 MW U.S. geothermal and solar portfolio to Ormat Technologies for $271 million. This strategic divestment provided capital and focus for reinvestment in core markets like Italy. | Geothermal Player Ormat Adds Capacity as Power … |
| Colombian Renewables & Grids | October 2024 | Enel Colombia secured a USD 300 million facility from EIB Global, backed by SACE, for renewable energy and grid improvements. This supports potential geothermal exploration in Colombia, where Enel invested in a site in 2022. | Enel agrees with EIB and SACE on a synthetic facility in … |
| Geothermal Sector Investment Plan | September 2023 | Enel Green Power announced plans to invest €3 billion in the Italian geothermal sector, including the construction of two new power plants. This plan was formalized with the 2025 concession extension agreement. | Enel plans EUR 3 billion investment for geothermal in Italy |
| Renewable Crowdfunding | May 2022 | Enel launched a crowdfunding initiative in Italy to help finance the construction of new renewable facilities, diversifying its funding sources by engaging local communities and retail investors. | Renewable Choice |
Table: Enel’s Strategic Geothermal and Renewable Alliances
| Partner / Project | Time Frame | Details and Strategic Purpose | Source |
|---|---|---|---|
| Mars Inc. | September 2025 | Signed its largest-ever corporate PPA for 851 MWac of solar power. This demonstrates a commercial model of securing long-term offtake agreements with corporations, which is applicable to its baseload geothermal power. | Enel Signs Company’s Largest-Ever PPA; Full Output from … |
| EIFO and Citi | July 2025 | Secured a €756 million financing facility to support Enel’s global renewable portfolio. This provides the necessary capital to fund its ambitious investment plans, including the Tuscan geothermal expansion. | Enel agrees on a 756 million euro multiborrower and … |
| Groupe Renault | June 2025 | Partnered to promote electric mobility and develop green power solutions for EVs. This positions Enel’s stable geothermal power as a key enabler for decarbonizing the transportation sector. | Groupe Renault strikes new energy-sector agreements … |
| Masdar | March 2025 | Sold a 49.99% stake in a 446 MW solar portfolio in Spain to Masdar. This exemplifies Enel’s capital recycling strategy: monetizing mature assets to fund new growth, including its geothermal pipeline. | Endesa and Masdar Enter Into Agreement for 446 MW of PV … |
| Potentia Energy | February 2025 | Through its joint venture, Enel acquired a 1 GW renewable portfolio in Australia. This expands its global renewable footprint, supported by its diverse generation mix that includes geothermal expertise. | Enel’s joint venture Potentia Energy acquires renewable … |
| Tenaris | February 2025 | Highlighted a 30-year supply chain partnership for tubulars and services at the Larderello geothermal site. This collaboration is critical for maintaining and expanding Italy’s largest geothermal complex. | Tenaris highlights 30 years of supporting the Larderello … |
| Vulcan Energy | July 2022 | Partnered on geothermal lithium research in Italy. The collaboration aims to combine Enel’s subsurface knowledge with Vulcan’s extraction expertise to potentially produce lithium from geothermal brines. | Enel Green Power and Vulcan Energy join forces on … |
| ABB | February 2022 | Collaborated to upgrade the 60 MW Farinello geothermal plant in Tuscany with advanced switchgear, enhancing grid stability and reducing outages at the world’s oldest geothermal complex. | Enel gives world’s oldest geothermal energy plant a new … |
Geography: Enel’s Retreat to its Italian Fortress
Between 2021 and 2024, Enel’s geothermal geography underwent a significant contraction. The defining move was the strategic decision to exit the United States, culminating in the sale of its geothermal assets in Nevada and Utah, including the Cove Fort and innovative Stillwater plants. While this marked a full retreat from the American market, the company maintained a flicker of international interest with exploratory investments in a geothermal site in Caldas, Colombia. However, the overwhelming operational center of gravity remained Tuscany, Italy. This period was one of pruning its global map to concentrate resources, setting the stage for a much more focused future.
From 2025 onwards, Enel’s geothermal map has become almost singularly focused on Italy. The €3 billion investment and 20-year concession extension have transformed Tuscany from merely a legacy asset into a fortress of long-term strategic importance. The Larderello Geothermal Complex, responsible for 10% of global geothermal production, is now the clear crown jewel. While the company’s past success in building South America’s first geothermal plant in Chile demonstrates its international capability, all current commercial activity points inward. This geographic consolidation transforms Enel’s risk profile: it has swapped the complexities of managing disparate international assets for a concentrated execution risk on a single, massive regional investment. The world is no longer Enel’s geothermal oyster; Tuscany is its entire ocean.
Technology Maturity: From Hybrid Plants to AI Optimization in Enel’s Geothermal Strategy
In the 2021-2024 period, Enel’s technology strategy was characterized by innovation at the margins of its commercial operations. The company operated the Stillwater triple-hybrid plant in Nevada, a unique commercial facility combining geothermal, solar PV, and solar thermal technologies, demonstrating a push for site-level efficiency. Concurrently, it explored next-generation concepts through pilot projects and research. Key examples include the integration of a 24 MWh thermal energy storage system from Brenmiller Energy at its Santa Barbara plant and the forward-looking geothermal lithium research partnership with Vulcan Energy. These initiatives were largely in the pilot or research phase, aimed at creating future value streams, while modernization of core assets continued with commercial-scale upgrades like the ABB switchgear at the Farinello plant.
Since the start of 2025, the technological focus has decisively shifted from exploratory pilots to the optimization and scaling of its mature, commercial asset base in Italy. The headline initiative is the application of Artificial Intelligence (AI) to optimize plant design and operations, with the explicit goal of lowering the LCOE from its current ~$70/MWh. This represents a move to enhance the profitability of its existing 34 commercial plants, rather than developing novel plant types. Securing a long-term supply chain with Tenaris for drilling components is another signal of a mature, scaled technology that requires a robust maintenance and expansion pipeline. While the industry discusses next-generation geothermal, Enel’s current strategy is grounded in maximizing the efficiency of its commercially proven technology at an unprecedented scale, validating its decision to concentrate its efforts on a single, well-understood resource.
Table: SWOT Analysis: Enel’s Geothermal Evolution
| SWOT Category | 2021 – 2023 | 2024 – 2025 | What Changed / Resolved / Validated |
|---|---|---|---|
| Strengths | Deep operational experience in Tuscany with 34 plants (915.8 MWe capacity); proven ability to integrate new technologies via partnerships (ABB, Vulcan Energy). | Solidified legal and operational dominance in Tuscany with a 20-year concession extension until 2046; robust financials (Q1 2025 revenue up 13.6%); secure supply chain via Tenaris partnership. | Enel’s strength evolved from operational know-how to a legally-enshrined, long-term monopoly in its core market, validated by a massive government-backed investment deal. |
| Weaknesses | Geographically dispersed portfolio with non-core U.S. assets diluting capital and management focus; uncertainty surrounding the renewal of its core Italian concessions. | Geothermal remains a small portion of Enel’s total revenue (Enel Green Power at 12%); geothermal LCOE is relatively high (~$70/MWh) compared to future industry targets. | The weakness of a diluted portfolio was resolved through the $271M U.S. divestment. The weakness of concession uncertainty was eliminated, replaced by a focus on improving cost-competitiveness. |
| Opportunities | Exploring value-add technologies like geothermal lithium (Vulcan partnership); modernizing legacy plants to improve efficiency (Farinello plant upgrade with ABB). | Deploying a massive €3 billion investment to modernize and expand Italian assets; leveraging AI to significantly lower LCOE; potential for selective expansion in proven regions like South America. | The opportunity shifted from exploratory R&D to a funded, large-scale execution plan to upgrade the entire core business, validating the strategic decision to concentrate capital. |
| Threats | Risk of spreading capital too thinly across global markets; regulatory uncertainty regarding the long-term future of its primary Italian assets. | High execution risk associated with deploying the €3 billion Tuscan investment effectively; increased market concentration risk by becoming heavily dependent on a single region (Italy). | Enel resolved the threat of concession non-renewal but, in doing so, swapped diversified market risk for a concentrated execution risk on its massive Italian revitalization project. |
Forward-Looking Insights: Enel’s Geothermal Future is Italian and Tech-Driven
The data from 2025 signals that Enel’s geothermal strategy is now firmly in execution mode. The year ahead will be defined by the tangible deployment of its €3 billion investment in Tuscany. Market actors should watch for specific announcements on new well drilling, modernization timelines for the Larderello complex, and progress on the two planned new power plants. These actions will be the first true test of this highly focused strategy.
The signal gaining the most traction is the push for operational efficiency through technology. The focus on using AI to drive down the LCOE from its current ~$70/MWh is critical. Success here would not only boost the profitability of Enel’s core assets but also serve as a blueprint for the global industry. Conversely, ambitious international expansion appears to be losing steam. Having exited the U.S. and established a precedent in Chile, any new projects in South America or elsewhere will likely be highly selective and secondary to the Italian revitalization. The signal to monitor for long-term upside remains the geothermal lithium research with Vulcan Energy. While still in an early phase, any positive pilot results could radically transform the value proposition of Enel’s geothermal brine resources. For now, Enel has made its bet: the future of its geothermal business will be forged not by global reach, but by technological and operational dominance in its Italian heartland.
Frequently Asked Questions
Why is Enel investing so heavily in Italian geothermal now?
Enel is investing nearly €3 billion in its Tuscan geothermal operations because it secured a 20-year extension of its concessions in the region, lasting until 2046. This long-term security makes it strategic to invest heavily in modernizing and optimizing its 34 core plants, which already account for 70% of Tuscany’s renewable energy.
Did Enel exit the geothermal business by selling its U.S. plants?
No, the sale of its 150 MW U.S. portfolio was not a retreat from geothermal energy but a strategic pivot. Enel sold these assets for $271 million to reallocate capital and focus its expertise on its much larger and more strategic Italian operations, shifting from geographic breadth to technological depth.
How is Enel using technology to improve its geothermal plants?
Enel has shifted its technology focus from pilot projects to large-scale optimization. The company is now applying Artificial Intelligence (AI) with the specific goal of lowering the Levelized Cost of Energy (LCOE) from its current ~$70/MWh. This involves using AI to optimize plant design and operations across its 34 Tuscan facilities.
What is the significance of Enel’s partnership with Vulcan Energy?
The partnership with Vulcan Energy is an exploratory, forward-looking initiative to research geothermal lithium extraction from Enel’s geothermal brines in Italy. While still in an early phase, a successful outcome could create a significant new value stream by producing lithium, a critical material for batteries, alongside clean energy.
What is the biggest risk in Enel’s new geothermal strategy?
According to the SWOT analysis, the primary risk is the shift from a diversified global portfolio to a highly concentrated one. By focusing almost exclusively on Tuscany, Enel has swapped diversified market risk for a ‘concentrated execution risk,’ meaning the success of its geothermal business now heavily depends on the effective deployment of its €3 billion investment in this single region.
Experience In-Depth, Real-Time Analysis
For just $200/year (not $200/hour). Stop wasting time with alternatives:
- Consultancies take weeks and cost thousands.
- ChatGPT and Perplexity lack depth.
- Googling wastes hours with scattered results.
Enki delivers fresh, evidence-based insights covering your market, your customers, and your competitors.
Trusted by Fortune 500 teams. Market-specific intelligence.
Explore Your Market →One-week free trial. Cancel anytime.
