16. Property, plant and equipment - €79,809 million

The breakdown of and changes in property, plant and equipment for 2019 is shown below:

Plant and machinery includes assets to be relinquished free of charge with a net carrying amount of €8,976 million (€8,747 million at December 31, 2018), largely regarding power plants in Iberia and Latin America amounting to €4,267 million (€4,390 million at December 31, 2018), and the electricity distribution network in Latin America totaling €3,911 million (€3,806 million at December 31, 2018).

For more information on leased assets, see note 18 below.

The types of capital expenditure made during 2019 are summarized below. These expenditures, totaling €8,924 million, increased by €2,394 million from 2018, an increase that was particularly concentrated in solar power plants.

(1) Thefigure for 2019 includes €692 million in infrastructure investments within the scope of IFRIC 12 (€271 million in 2018). 

Capital expenditure on power plants amounted to €4,954 million, an increase of €1,610 million on the previous year, essentially reflecting increased investment in alternative energy plants. Capital expenditure on power plants is mainly attributable to wind farms in North America, Spain, Brazil, South Africa and Greece, and on solar plants in the United States, Brazil and Spain.
Capital expenditure on the electricity distribution network amounted to €3,874 million, an increase of €784 million compared with the previous year, and mainly concerned service-quality improvements in Italy and Brazil and the production of smart meters in the amount of €730 million.

The change in the scope of consolidation in 2019 mainly concerns the acquisition of controlling interests in a number of companies of EGPNA REP, a joint venture held equally by EGPNA (now Enel North America) and General Electric Capital’s Energy Financial Services, companies that were previously measured using the equity method (€1,033 million), and the acquisition of Tradewind Energy, a company developing renewable energy projects in the United States, and Yousave SpA.

Impairment mainly concerns adjustments to the carrying amount of a number of coal-fired plants in Italy, Spain, Chile and Russia.
In Chile, specifically, the value of two plants has been adjusted due in part to the agreement reached with the Chilean government concerning their early decommissioning, and the value of the Reftinskaya coal-fired plant in Russia has been adjusted due to its sale.

In Spain, the deterioration in the market in relation to developments in commodity prices and the functioning of the CO₂ emissions market in the 3rd Quarter of 2019 compromised the competitiveness of coal-fired plants. In Italy, in addition to a deterioration in market conditions, implementation of new capacity market regulations for the remuneration mechanism for available capacity restricted the scope of future application for plants with higher CO₂ emission, excluding coal technology from the electricity market. For these reasons, the carrying amount of a number of coal-fired plants in Italy and Spain, including the associated dismantling costs, has been written down by a total of €3,527 million.
These effects were partially offset by reversals of impairment for gas plants in Italy in the amount of €265 million following impairment testing.

Reclassifications from/to assets held for sale mainly concern the Reftinskaya GRES plant, which was sold by Enel Russia to JSC Kuzbassenergo in the 4th Quarter of 2019.

Other changes include the provisioning of decommissioning costs and plant restoration charges in Italy and Spain in the amount of €825 million, mainly in respect of coal-fired plants, the effects of IAS 29 on property, plant and equipment for a total of €462 million and the effect of capitalizing interest on loans specifically dedicated to capital expenditures in the amount of €159 million (€77 million in 2018), as detailed below:

At December 31, 2019, contractual commitments to purchase property, plant and equipment amounted to €763 million.