Annual Report 2010 - Enel.com

Main risks and uncertainties
Market liberalization and regulatory
developments
The energy markets in which the Group operates are currently
undergoing gradual liberalization, which is being
implemented using different approaches and timetables
from country to country.
As a result of these processes, the Group is exposed to increasing
competition from new entrants and the development
of organized markets.
The business risks generated by the natural participation
of the Group in such markets have been addressed by integrating
along the value chain, with a greater drive for
technological innovation, diversification and geographical
expansion. More specifically, the initiatives taken have
increased the customer base in the free market, with the
aim of integrating downstream into final markets, optimizing
the generation mix, improving the competitiveness
of plants through cost leadership, seeking out new
high-potential markets and developing renewable energy
resources with appropriate investment plans in a
variety of countries.
The Group often operates in regulated markets, and
changes in the rules governing operations in such mar-
CO 2 emissions
In addition to being one of the factors with the largest
potential impact on Group operations, emissions of carbon
dioxide (CO ) are also one of the greatest challenges
2
facing the Group in safeguarding the environment.
EU legislation governing the emissions trading scheme
imposes costs for the electricity industry, costs that could
rise substantially in the future. In this context, the instability
of the emissions allowance market accentuates the
difficulties of managing and monitoring the situation.
In order to mitigate the risk factors associated with CO2 regulations, the Group monitors the development and
implementation of EU and Italian legislation, diversifies
112 Enel Annual Report 2010 Report on operations
kets, and the associated instructions and requirements
with which the Group must comply, can impact our operations
and performance.
In order to mitigate the risks that such factors can engender,
Enel has forged closer relationships with local government
and regulatory bodies, adopting a transparent,
collaborative and proactive approach in tackling and eliminating
sources of instability in regulatory arrangements.