Italy's biggest utility, Enel, is set to broaden its business plan next February to include services for data centers, a move that could turn its grid investments into a steadier source of revenue. The announcement came on a post-results call with analysts on Thursday, where CFO Stefano De Angelis said the plan will address the growing number of data center proposals in Italy, following earlier buildouts that clustered around London and other major European hubs.
Data centers are among the most power-hungry facilities being built today, and they require more than just electricity. They need fast, reliable connections, which typically means new substations, stronger local lines, and ongoing grid services. For a utility like Enel, these projects can translate into grid upgrades or contracted services—earnings that are often more predictable than selling electricity at volatile market prices.
Nine-month results show mixed picture
Enel's decision comes as it reported earnings for the first nine months of the year. Earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 4% to €17.9 billion, while ordinary net income reached €6 billion. The growth was driven by strength in Spain and the Americas, where its Endesa unit and other operations performed well.
However, Italy was a drag. Earnings in the home market fell 5.5%, as hydro output dropped and prices for retail and small-business customers eased. That mixed performance gives Enel some breathing room but also highlights the challenges it faces at home, where policy and market conditions are shifting.
The company reiterated that it expects net debt to remain around 2.8 times EBITDA, even if interest rates rise. That leverage target is a key constraint as it plans to spend heavily on grids and renewables.
Data centers: a new growth engine?
For investors, the February plan could turn Enel's grid spending into a data center cash flow engine. Data centers create a pipeline of large, localized connection projects that utilities often earn on through regulated returns or service contracts. That's appealing because it can make growth look more "infrastructure-like" and less tied to volatile power prices.
But there are caveats. Enel's capital spending is already up nearly 20% in the first nine months to €8 billion, mainly for grids and renewables. Management is trying to keep leverage steady, and the February plan will also reflect Italy's new measures aimed at cutting power bills. If those policies squeeze network tariffs or retail margins, funding extra grid work could become harder without raising leverage.
The key swing factor will be whether Enel can link the data center push to predictable, grid-led earnings in Italy while power-bill rules are being set, without seeing allowed revenues squeezed. The company's ability to navigate that balance will be closely watched by investors.
What it means for investors
For everyday investors, Enel's move is a sign of how utilities are adapting to the rise of artificial intelligence and cloud computing, which are driving demand for data centers. As the AI data center boom shifts risk into private credit's shadows, utilities like Enel are positioning themselves to benefit from the infrastructure buildout.
But the path isn't without risks. Delays in data center projects are not uncommon, as seen with Nebius cutting its 2026 revenue outlook due to data-center delays. Enel will need to execute on its plans to turn these opportunities into reliable earnings.
For those watching the sector, the February plan will be a key event. It will show whether Enel can deliver on its data center ambitions while maintaining financial discipline. The company's ability to generate steady, infrastructure-like returns from these projects could make its stock more attractive to investors seeking stability in a volatile energy market.
In the meantime, Enel's results show that its international operations, particularly in Spain and the Americas, are providing a buffer against weakness at home. That diversification is a reminder of the importance of geographic spread for large utilities.
As Poste Italiane launches a €600M fund to build data centers in Italy, the country is clearly becoming a hotspot for such investments. Enel's move to add data center services to its plan positions it to be a key player in that growth.
For now, investors will be watching how Enel balances its growth ambitions with its leverage targets and the regulatory environment in Italy. The February plan will be a critical test of whether the company can turn its grid investments into a new, reliable revenue stream.
