Risk profile of the business model under the plan

The investments foreseen in the business plan do not change the Group's risk profile, confirming a clear prevalence of regulated or quasi-regulated activities, equal to about 70% of Ebitda.


Analysing each business unit:

  • Networks: the management activities of the water and energy (electricity and gas) networks are fully regulated by the Authority and therefore have a low exposure to risk, that is limited to changes in the regulation of operating costs recognised in the tariff and in the wacc with  the related calculation method.
  • Waste: the reduction in the percentage of regulated or quasi-regulated activities is mainly due to the development of plants in the waste selection and treatment area and to the recent M&A transactions. The plan provides for the construction of 9 new urban waste treatment plants in the paper, plastic, organic fraction, wood and sludge sectors, the repowering of a durable goods treatment plant and the expansion of a landfill. The development of the plant allows for the internalisation of the margins related to these activities with a limited exposure to the risk of price and volume fluctuations. These investments have a low risk profile, as they are consistent with the macro trends in the sector supported by the European Union, and are aimed at making up for the lack of infrastructure in the Country. The development of the plants therefore makes it possible to intercept volumes of waste that benefit from the stability of urban waste collection flows and that are currently destined for foreign countries. The choice between plant types was made through an analysis aimed at identifying the best value chains, optimising the trade-off between the extraction of significant value and the limited risk of raw materials.
  • Energy: the expansion of the district heating network, through the saturation of cogeneration and waste-to-energy plants, increases the percentage of quasi-regulated activities of the Energy Business Unit, despite the expiry of energy certificates during the plan. The objective set by the Group for 2025 is to reach 110 mcm of district heating volume (+16% vs. 2019). The generation risk profile is mainly related to the energy scenario fluctuations. The award of capacity market auctions for 2022 and 2023 mitigates, through regulation, the exposure to the scenario risk, ensuring a stable marginality compared to that of the day-ahead market (MGP) or the dispatching system market (MSD), characterised by greater exposure to commodity trends. In addition, the integrated management of the energy chain reduces the exposure to scenario risk through a policy of natural hedging between energy production and sales to end customers.
  • Market: Market Business Unit is exposed to fluctuations in volumes purchased from customers and commodity prices, as well as competition from competitors. In addition to the mitigation deriving from the natural hedging highlighted above, the group mitigates the main risks through:

- a commercial policy that provides for fixed-rate sales and simultaneous hedging to cover approximately 90% of expected sales
- a solid customer base, mainly retail, which in 2020 proved to be stable in terms of consumption
- the development of a customer-oriented commercial strategy, full of high added-value products and services, which will make it possible to attract new customers and further increase the loyalty of the customer base.


The investments included in the business plan at 2025 have a lower risk profile than the previous plan, as:

  • the new combined-cycle line of Turbigo power plant obtained the authorisations, the construction has already been started and will be able to benefit from the contribution of the capacity market;
  • with regard to the water, energy and district heating networks, we expect that there are no authorisation risks or possible delays in implementation;
  • 9 out of 11 plants of the environment sector have already completed all design and authorisation procedures and we expect them to be operational by the end of 2022. On the other hand, the authorised procedures are still in progress for the remaining two plants (Pallet in Vercelli and Forsu in La Spezia), which are expected to be completed shortly;
  • the tenders for environmental services in Parma and Piacenza were successfully concluded for the Group, which was awarded the activities until 2036, while the tenders for gas distribution were excluded from the business plan, as they are difficult to place in time.


Iren Group developed and adopted a new Risk Management Model aimed at supporting the management in the decision-making process. This Model is also focused on strengthen awarness about the importance of a deep risks assessment and management, aimed at pursuing objectives achievement and creating value for the business. Risk management Department performs a specific risk assessment on the Business Plan, through which it supports strategic choices.

This evaluation allowed to analyzed specific risks related to the four strategic trends and related guidelines. The investments planned over the Business Plan horizon have been considered as mitigation actions for specific operational or business risks, as well as sources of risks in case of insufficient deployment.

The methodology used for the risk assessment process is presented below:

The relevant risk classes identified through the risk assessment of the Business Plan are shown below: