overview of the year
performance of the group's businesses
Electric Power Operations
Quantitative Data
GWh (*) 2005 2004 % change
Net production Edison Group: 33,369 34,705 (3.8%)
- Thermoelectric power plants 30,205 30,890 (2.2%)
- Hydroelectric power plants 2,757 3,411 (19.2%)
- Wind farms 407 404 0.8%
Edipower 11,320 12,443 (9.0%)
Imports 1,580 1,111 42.2%
Other domestic purchases and swaps (1) 6,424 2,265 183.6%
Total sources 52,693 50,524 4.3%
GWh (*) 2005 2004 % change
CIP-6 dedicated 20,375 21,914 (7.0%)
Captive and other industrial customers 5,082 5,283 (3.8%)
Deregulated market 27,086 23,327 16.1%
Exports 150 0 n.a.
Total uses 52,693 50,524 4.3%
(*) One GWh is equal to one million kWh.      
(1) Net of line losses and tolls.      
Financial Highlights
(in millions of euros) 2005 2004 % change
Sales revenues 4.993 4.304 16.0%
EBITDA 1.006 1.205 (16.5%)
as a % of sales revenues 20.1% 28.0%  
Capital expenditures 511 535 (4.5%)
Number of employees (1) 1,992 1.996 (0.2%)
(1) End of period amount.      
Sales revenues grew to 4,993 million euros in 2005, for a gain of 16% over the previous year.
Higher unit sales (+4.3%) and a significant increase in average sales prices, made possible by a rise in the cost of benchmark fuels and a successful pricing strategy implemented in the target markets, account for this improvement.
At December 31, 2005, EBITDA totaled 1,006 million euros, or 199 million euros less (-16.5%) than in 2004. This decrease is mainly the result of the expiration of CIP-6 incentives for several power plants (about 160 million euros). However, the shortfall in production caused by scheduled or extraordinary maintenance at some CIP-6 and Merchant power plants, the shutdown of the Brindisi power plant for environmental reasons, a decline in hydroelectric output caused by a reduction in available water resources and a sizable increase in fuel costs that could not entirely be reflected on market prices were offset in part by an effective management of the Group's portfolio of energy assets, especially in the ancillary services market; the contribution provided by the newly commissioned Candela power plant; and a successful hedging strategy in the commodities market.
Sales and Marketing
In 2005, sales of electric power totaled 52,693 million kWh, or 4.3% more than the volume sold in the previous year. Sales in the deregulated market continued to grow (+16.1%), rising from 23,327 GWh in 2004 to 27,086 GWh in 2005. Direct deliveries to eligible customers were up about 31.6%, accounting for most of the increase. Sales on the Electric Power Exchange, which amounted to 3,612 GWh, correspond both to sales made on the so-called STOVE market in the first quarter of 2004 and to those made on the Electric Power Exchange during the rest of 2004, which together totaled 5,491 GWh.
Sales under CIP 6 contracts decreased by 7.0% due to the plant downtime mentioned above.
Deliveries to industrial customers and captive customers totaled 5,082 GWh, down slightly (-3.8%) compared with 2004.
Production and Procurement
Net production totaled 33,369 million kWh in 2005. The decrease of 3.8% compared with the previous year reflects a decline in production from the thermoelectric power plants (-2.2%). Hydroelectric output was also down (19.2%), as the availability of water resources decreased to a level that had not been recorded in years, when compared with the average for the last 30 years.
The share of energy generated by Edipower's plants that was available to the Group was 9.0% less than in 2004 due to the temporary shutdown of some facilities for maintenance and the stoppage of production at the Brindisi power plant in connection with environmental issues related to the use of the plant's coal storage facility, which was restarted in October. This negative development was offset in part by the startup of the Candela power plant (380 MW) during the second half of the year. In 2005, Edison's internal production was supplemented by electric power purchased from external sources. Including imports, these purchases increased to 8,004 GWh, or 4,628 GWh more than in 2004.
Hydrocarbons Operations
Quantitative Data
millions of m3 of natural gas 2005 2004 % change
Total net production: 1,248 1,309 (4.7%)
- Production in Italy 902 1,027 (12.2%)
- Production outside Italy 346 282 22.7%
Pipeline imports 6,601 6,710 (1.6%)
LNG imports 80 18 344.4%
Domestic and other purchases (1) 5,714 3,421 67.0%
Total sources 13,643 11,458 19.1%
(1) Includes inventory changes and pipeline leaks.