9.a Revenue from sales and services - €62,623 million

Millions of euro      
  2020 2019 Change
Sale of electricity (1) 34,745 39,584 (4,839) -12.2%
Transport of electricity (1) 10,710 10,931 (221) -2.0%
Fees from network operators 932 866 66 7.6%
Transfers from institutional market operators 1,395 1,625 (230) -14.2%
Sale of gas 2,718 3,294 (576) -17.5%
Transport of gas 611 617 (6) -1.0%
Sale of fuel 602 914 (312) -34.1%
Fees for connection to electricity and gas networks 759 785 (26) -3.3%
Construction contracts 732 749 (17) -2.3%
Sale of environmental certificates 35 36 (1) -2.8%
Sale of value-added services 862 918 (56) -6.1%
Other sales and services 764 720 44 6.1%
Total IFRS 15 revenue 54,865 61,039 (6,174) -10.1%
Sale of energy commodities under contracts with physical settlement (IFRS 9) 7,513 10,775 (3,262) -30.3%
Fair value gain/(loss) on derivatives on sale of commodities with physical settlement (IFRS 9) 224 5,519 (5,295) -95.9%
Other revenue 21 33 (12) -36.4%
Total revenue from sales and services 62,623 77,366 (14,743) -19.1%

(1) In the Distribution segment in Colombia, a number of items previously classified under “Sale of electricity” were reclassified to “Transport of electricity” to improve the presentation of the data. In order to ensure the uniformity and comparability of the figures, the amounts for 2019 have also been reclassified in the total amount of €461 million.

Revenue from the “sale of electricity” amounted to €34,745 million, a decrease of €4,839 million compared with the previous year (-12.2%). The reduction is mainly due to:

  • a decrease in revenue from the sale of electricity to end users on both the regulated and the free markets in Spain (€1,390 million) and Italy (€808 million), reflecting in particular the effects of the COVID-19 pandemic, which on the free market caused a decline in sales volumes involved in business-to-business transactions;
  • a significant reduction in revenue in Latin America (€2,248 million), due in particular to the depreciation of local currencies against the euro and the contraction in volumes and the average prices applied to sales;
  • a reduction in revenue registered by Enel Global Trading (€82 million) as a result of lower sales on the spot market in Italy, mainly due to the fall in electricity prices;
  • a decline in revenue in Russia (€362 million) following the sale of the Reftinskaya coal plant in October 2019.

Revenue from “transport of electricity” amounted to €10,710 million in 2020, a decrease of €221 million that was mainly attributable to the reduction in electricity transported on the grid due to the effects of the COVID-19 pandemic.

“Transfers from institutional market operators” decreased by €230 million compared with the previous year, reflecting the entry into force of the new 2020-2025 remuneration parameters for extra-peninsular generation in Spain following a decrease in demand and an increase in commodity prices.

Revenue from the “sale of gas” in 2020 amounted to €2,718 million (€3,294 million in 2019), a decrease of €576 million compared with the previous year. This reduction, concentrated mainly in Spain and Italy, also reflected the decline in quantities sold connected with the COVID-19 health emergency.

Revenue from the “sale of fuel” fell by €312 million due to a reduction in volumes handled by Enel Global Trading, reflecting in part the energy transition initiated by the Group and the consequent decline in conventional generation.

Revenue from the sale of energy commodities under contracts with physical settlement (IFRS 9) and the gain from the fair value measurement of those contracts decreased by a total of €8,557 million, reflecting the contraction in volumes traded and a decline in spot prices.

The following table shows the net charges in respect of contracts for the purchase and sale of commodities with physical settlement measured at fair value through profit or loss within the scope of IFRS 9.

Millions of euro      
  2020 2019 Change
Contracts for sale of energy commodities with physical settlement (within the scope of IFRS 9)        
Electricity        
Sale of electricity 2,478 4,278 (1,800) -72.6%
Fair value gain on contracts for sale of electricity 156 988 (832) -
Total electricity 2,634 5,266 (2,632) -
         
Gas        
Sale of gas 4,723 6,235 (1,512) -32.0%
Fair value gain on contracts for sale of gas 123 4,296 (4,173) -
Total gas 4,846 10,531 (5,685) -
         
Environmental certificates        
Sale of environmental certificates 312 262 50 16.0%
Fair value gain/(loss) on contracts for sale of environmental certificates (55) 235 (290) -
Total environmental certificates 257 497 (240) -93.4%
TOTAL REVENUE 7,737 16,294 (8,557) -

 
       
Contracts for purchase of energy commodities with physical settlement (within the scope of IFRS 9)        
Electricity        
Purchase of electricity 4,011 7,064 (3,053) -76.1%
Fair value gain/(loss) on contracts for purchase of electricity (155) 233 (388) -
Total electricity 3,856 7,297 (3,441) -89.2%
         
Gas        
Purchase of gas 4,664 6,575 (1,911) -41.0%
Fair value gain/(loss) on contracts for purchase of gas (185) 4,094 (4,279) -
Total gas 4,479 10,669 (6,190) -
         
Environmental certificates        
Purchase of environmental certificates 301 1,060 (759) -
Fair value gain on contracts for purchase of environmental certificates 71 256 (185) -
Total environmental certificates 372 1,316 (944) -
TOTAL CHARGES 8,707 19,282 (10,575) -
NET CHARGES (970) (2,988) 2,018 -


Revenue from contracts with customers (IFRS 15) for 2020 amounted to €54,865 million, and break down into “point in time” and “over time” revenue as indicated in the following table.

Millions of euro 2020
  Italy Iberia Latin America Europe North America Africa, Asia and Oceania Other, eliminations and adjustments Total
  Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time
Total IFRS 15 revenue 21,107 441 16,355 460 13,433 200 1,418 580 586 51 67 79 16 72 52,982 1,883
                                 
Millions of euro 2019
  Italy Iberia Latin America Europe North America Africa, Asia and Oceania Other, eliminations and adjustments Total
  Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time Over time Point in time
Total IFRS 15 revenue 22,635 522 17,860 785 15,573 503 1,383 934 646 27 76 81 7 7 58,180 2,859


The table below gives a breakdown of revenue from sales and services by geographical segment.

Millions of euro    
  2020 2019
Italy  23,968 26,420
Europe    
Iberia  16,173 18,265
France 503 1,259
Switzerland 99 217
Germany 1,860 3,746
Austria 66 173
Slovenia 2 40
Romania 1,322 1,311
Greece 110 73
Bulgaria 9 8
Belgium 18 26
Czech Republic 33 152
Hungary 165 418
Russia 533 897
Netherlands 2,743 6,553
United Kingdom 399 726
Other European countries 78 (22)
Americas    
United States 502 501
Canada 25 18
Mexico  218 233
Brazil 6,666 7,752
Chile 2,811 3,263
Peru 1,118 1,261
Colombia 2,022 2,243
Argentina 816 1,323
Panama 136 169
Other    
Africa 79 92
Asia 149 249
Total 62,623 77,366

Performance obligations

The following table provides information about the Group’s performance obligations arising from contracts with customers with reference to the main revenue streams only, with a summary of the specific judgments made and the related revenue recognition policies.

For information on the use of estimates with revenue from contracts with customers, please see note 2.1 “Use of estimates and management judgment”.

Type of product/service Nature and timing of satisfaction of performance obligation Accounting policies
Sale/transport of electricity/gas to end users An electricity/gas supply agreement signed with an end user includes a single performance obligation (sale and transport of the commodity) because the Group has determined that the contract does not provide distinct goods/services and the promise is satisfied by transferring control over the commodity to the customer when it is delivered at the point of delivery. In order to determine the nature of the promise included in such contracts, the Group carefully analyzes the facts and circumstances applicable to each contract and commodity. However, the Group considers that the performance obligation provided for in a repetitive service contract, such as a supply or transport contract for the provision of electricity/gas to end users, is typically satisfied over time (because the customer simultaneously receives and consumes the benefits of the commodity as it is delivered) as part of a series of distinct goods/services (i.e., each unit of commodity) that are substantially the same and have the same pattern of transfer to the customer. In these cases, the Group applies an output method to recognize revenue in the amount to which it has a right to invoice the customer if that amount corresponds directly with the value to the customer of the performance completed to date. Revenue from the sale and transport of electricity/gas to end users is recognized when these commodities are delivered to the customer and is based on the quantities provided during the period, even if these have not yet been invoiced. It is determined using estimates as well as periodic meter readings. Where applicable, this revenue is based on the rates and related restrictions established by law or by the Regulatory Authority for Energy, Networks and the Environment (ARERA) and analogous foreign authorities during the applicable period.
Network connection services

The network connection fees received from customers for connecting them to the electricity/gas distribution networks require a specific Group assessment to take into consideration all terms and conditions of the connection arrangements. This assessment is intended to determine whether the contract includes other distinct goods or services, such as for example the right to obtain ongoing access to the infrastructure in order to receive the commodity or, when the connection fee is a “non-refundable up-front fee” paid at or near contract inception, a material right that gives rise to a performance obligation.

In particular, in some countries in which the Group operates, it has determined that the nature of the consideration received represents a “non-refundable up-front fee” whose payment provides a material right to the customer. In order to determine if the period over which this material right should be recognized extends beyond the initial contractual period, the Group takes into consideration the applicable local legal and regulatory framework applicable to the contract and affecting the parties. In such cases, if there is an implied assignment of the material right and an obligation from the initial customer to the new customer, the Group recognizes the connection fee over a period beyond the relationship with the initial customer, considering the concession terms as the period during which the initial customer and any future customer can benefit from the ongoing access without paying an additional connection fee. As a consequence, the fee is recognized over the period for which the payment creates an obligation for the Group to make the lower prices available to future customers (i.e., the period during which the customer is expected to benefit from the ongoing access service without having to pay an “up-front fee” upon renewal).

Revenue from monetary and in-kind fees for connection to the electricity and gas distribution network is recognized on the basis of the satisfaction of the performance obligations included in the contract. The identification of distinct goods or services requires a careful analysis of the terms and conditions of the connection arrangements, which could vary from country to country based on the local context, regulations and law. In order to finalize this assessment, the Group considers not only the characteristics of the goods/services themselves (i.e., the good or service is capable of being distinct) but also the implied promises for which the customer has a valid expectation as it views those promises as part of the negotiated exchange, that is goods/services that the customer expects to receive and has paid for (i.e., the promise to transfer the good or service to the customer is separately identifiable from other promises in the contract).
Furthermore, the Group acts as an agent in some contracts for electricity/gas network connection services and other related activities, depending on local legal and regulatory framework. In such cases, it recognizes revenue on a net basis, corresponding to any fee or commission to which it expects to be entitled.
Construction contracts The construction contracts typically include a performance obligation satisfied over time. For these contracts, the Group generally considers it appropriate to use an input method for measuring progress, except when a specific contract analysis suggests the use of an alternative method that better depicts the Group’s performance obligation fulfilled at the reporting date. For construction contracts that include a performance obligation satisfied over time, the Group recognizes revenue over time by measuring progress toward the complete satisfaction of that performance obligation. The cost-to-cost method is generally considered the best method to depict the Group’s performance obligation fulfilled at the reporting date. The amount due from customers under a construction contract is presented as a contract asset; the amount due to customers under a construction contract is presented as a contract liability.