target and growth strategy

A  moderate economic recovery began to take hold during the first half of  2010, but the second half of 2010 was characterized by a less dynamic economic activity, both in the advanced and in the emerging countries. In 2010, gross total demand for electric power from the Italian grid totaled 326.2 TWh (or 1.8% more than the previous year, while Italian demand for natural gas grew by 6.6% compared with the previous year to a total of about 82.8 billion cubic meters.

In the first months of 2011 the start of the recovery of the global economy was , driven mainly by the renewed vigour of international trade, which increased by 13.7% in 2010 and is expected to expand by 8% in 2011.

In Italy, the economic recovery is still unable to gain momentum and continues to be driven by foreigndemand, while consumer spending and investments remain anaemic. The growth rate projected for 2011 is still quite low, in line with the 1% rate of 2010.

Edison intends to respond to the challenge posed by this scenario, leveraging on its proven ability to grow by anticipating market changes.

The Company’s specific goals are to:

• consolidate its competitive position in the Italian electric power generation market and strengthen its role as the second-largest operator in the natural gas procurement sector;
• focus its commercial strategy on increasing its penetration in the small business-SOHO and residential segments, leveraging on its ability to supply both power and natural gas;
• increase and fully exploit the Abu Qir reserves, with the objective of covering 15% of its hydrocarbons portfolio through own production;
• compensate for the gradual reduction of the regulated margins generated by CIP6 electric power production with the planned tripling of its storage capacity;
• participate, over the long term and consistently with the macroeconomic evolution, in the development of two natural gas import pipelines from Africa and the Middle East.
  

The growth pace of the Group will be modulated to ensure that the level of investments reflects the changing trends in energy demand and to comply with the financial flexibility parameters required by the current credit rating.