Erg (company)

Erg S.p.A., acronym for Edoardo Raffinerie Garrone, is an Italian energy company, founded in 1938, and based in Genoa, Italy.

It produces wind and solar energy and has operations in Italy, France, Germany, the United Kingdom, Sweden, Poland, Bulgaria, Romania, and the United States. As of June 2024, the installed capacity of the group's plants amounted to 3,754 MW.

Erg is 62.53% controlled by “SQ Renewables S.p.A.,” a company that is in turn 51% controlled by San Quirico S.p.A. - the holding company of the Garrone-Mondini family - and the remaining 49% by IFM Investors.

The company has been listed on the Italian stock exchange since 1997.

History

Origins

Erg was founded by Edoardo Guida Garrone in 1938, founding a company for the refining of petroleum and tar. The company, which became a refinery after World War II, chose as its trademark a die (from “Dado,” an affectionate diminutive of Edoardo) on whose faces is reproduced a three-letter acronym, the initials of Edoardo Raffinerie Garrone, or Erg.

Postwar period

In 1947, production began at the Genoa San Quirico Refinery. Immediately after World War II, in a country in need of reconstruction, energy needs made oil a key energy source. Thanks to the favorable economic situation and the optimal geographical location of the plants, Erg's business experienced rapid development.

In 1956, Erg signed an agreement to refine the oil on behalf of BP which, thereafter and for a number of years, will hold a minority interest in Erg's share capital.

In 1963, 6.5 million tons of processed material was reached. During the 1960s and 1970s the company started to build some oil refineries and pipelines in Italy. Specifically, in 1967 Erg built a major pipeline in Arquata Scrivia; in 1971, it entered with other private groups into the shareholding structure of ISAB (Industria Siciliana Asfalti e Bitumi), a company created to build a large refinery in Sicily that began production in 1975 in Priolo Gargallo.

Erg network development

After developing business mainly in the refining sector, the Genoa-based company also began to grow nationally in the fuel distribution sector through its subsidiary Erg Petroli. In 1984, it acquired the 780 petrol stations network of Elf's Italian subsidiary and in 1986 1.700 stations owned by Chevron. Thus grows the Erg Network, which adopts the brand characterized by the three rampant panthers.

In 1987 the company also finalized an agreement with BP to distribute the British company's lubricants.

Collaboration with Elf and BP to sell lubricants (produced by Erg's own plants in Savona) continued until 1996, when its own product was launched.
In 1985, in anticipation of the closure of the San Quirico Refinery in Genoa, it took control of ISAB with a stake that grew over the years until it reached 100 percent in 1997. In 1994, ISAB Energy was established to build a plant to produce electricity derived from the gasification of heavy oils. By the mid-1990s, Erg accounted for 6 percent of the Italian market in the field of service stations.

Since 1997 the company is listed on the Italian Stock Exchange. In 1999 it opened gas, (petrol), stations network in Spain through Erg Petroleos, sold in 2008 to Saras S.p.A.

From oil to multi-energy company

In 2000, Erg began producing electricity through ISAB Energy (a joint venture with Edison Mission Energy), with a capacity of 528 MW and an estimated production of about 4 billion kWh per year; the goal was to build Italy's first heavy oil regasification plant for electricity production. With this operation, Erg, from an oil company, becomes a “multi-energy” company.

A few years later, in October 2002, Erg Raffinerie Mediterranee was founded, a company entrusted with the management of one of the refining hubs in Europe, achieved through the union and integration of Erg's ISAB Refinery with the former Agip refinery, both in Priolo. The integration of the two refineries took place through the construction of an oil pipeline system and other upgrades and improvements to production efficiency and environmental compatibility.

In 2005, Erg's stock joined the Blue-Chip segment of the Italian Stock Exchange, following the stock's significant increase in market capitalization.

In 2006, Erg acquired EnerTAD, a company listed on the Milan Stock Exchange that built and operated wind farms. The transaction marks Erg's entry into the renewables sector, again as part of the “multi-energy” strategy. Later, EnerTAD changed its corporate name to Erg Renew.
Subsequently to the EnerTAD acquisition, from 2007 Erg started to operate in the French and German wind markets, acquiring wind farms also in Bulgaria, Romania, Polonia and United Kingdom.

In 2008 it signed an agreement with Lukoil, sharing the 49% of oil refinery in Priolo Gargallo.

Growth of renewables and divestment of oil business

From 2008, Erg started a profound transformation process that led it to divest from the oil sector in order to focus investments on renewables. In 2010, Total Italia and Erg Petroli merged to create TotalErg, a joint venture between Total (49%) and Erg (51%).

Then, in early 2011 Erg reduced its share in ISAB from 51% to 40%. Two years later Erg completed the exit from the refining sector.

In the meantime (since 2010) Erg grew in the Italian wind power sector becoming the leading wind operator in Italy in 2013. In seven years, between 2008 and 2014, the company divested assets worth €3.3 billion and reinvested €3.9 billion on renewables related activities.

Meanwhile, in 2009 it launched its own Mobile Virtual Network Operator: Erg Mobile, becoming the first Italian oil company with its own telecommunications company.

In 2015 Erg entered the hydroelectric sector, via acquisition of E.ON's Italian assets, with 527 MW of capacity.

In February 2016 Erg entered the UK wind market acquiring a wind farm project in Northern Ireland (45 MW) and completed the acquisition of eleven wind farms in France and six in Germany (206 MW).

In January 2018, Total and Erg completed the closing with Gruppo API regarding the sale of TotalErg, and Erg completed its industrial transformation process towards renewables. In the same year, Erg entered the solar power business through the acquisition of 89 MW (30 photovoltaic plants) in Italy.

Transition to a pure renewable model and entry into the US market

Starting in 2021, Erg completed its transformation into an exclusively renewable operator, focusing on wind and solar power generation, with the divestment of its hydro and thermoelectric assets.

Specifically, in August 2021 the company signed an agreement with Enel Produzione to sell the entire capital of Erg Hydro S.r.L., while in June 2023 it signed an agreement with Achernar Assets to sell Erg Power S.r.l., owner of the Priolo Gargallo natural gas-fired power plant.

In June 2022, San Quirico, the holding company that has control over Erg, and IFM Investors signed a long-term strategic partnership. Under the agreement, the new holding company SQ Renewables Spa was established. IFM and its affiliates acquired an initial 35 percent stake in the new holding company, which in turn holds about 62.5 percent of Erg. This was the first direct investment in Italy for IFM. In April 2024, as per the agreement, IFM increased its stake in SQ Renewables to 49%.

Since 2023, as part of its wind asset portfolio renewal project, the group completed the repowering of four wind farms in Sicily, doubling installed capacity and about tripling power generation.

In the same year, in December, Erg entered the renewables market in the United States through an agreement with Apex Clean Energy Holdings. This includes the acquisition of a wind plant and a solar plant for 317 MW of installed capacity and an estimated production of about 1 TWh. There is also a cooperation agreement related to about 1 GW of new onshore solar and wind projects under development in the United States.

Erg Mobile

Erg Mobile was an Italian Mobile Virtual Network Operator owned by the oil company Erg, later TotalErg.

Operational since 15 April 2009, it was the result of a commercial agreement between Erg and Vodafone (the service, launched as ESP MVNO, in fact uses the GSM/GPRS/UMTS network of the British company).

The Erg Mobile service was available for subscription, from April 2010, throughout the entire Erg, then TotalErg, distribution network.

The area code used was 377-5.

The main feature of Erg Mobile was the ambivalent one of giving advantages on fuel to those who use Erg Mobile and on top-ups to those who get fuel at service stations.

On 10 January 2018, the sale of the TotalErg business unit relating to fuels to Gruppo API was completed and on 30 November 2018, after months of uncertainties and disservices in the provision of new SIMs, the operator, via an SMS, notified its customers of the cessation of all activities starting from March 30, 2019.

Profile

Following a period of profound transformation (sale of the ISAB refinery and of the ISAB Energy power station, creation and sale of the TotalErg joint venture and the sale of the Erg Oil Sicilia network), Erg group is now the leading operator in wind energy in Italy and is currently among the top ten in Europe (onshore). It is also active in Italy and abroad in the generation of electricity from solar sources.

In Italy, the company operates with a total installed capacity of more than 1,550 MW, including more than 1,400 MW in wind and 150 MW in solar.

Internationally, it has a total installed capacity of more than 2,100 MW. Specifically, in wind power, it is present in France, Germany, the United States, the United Kingdom, Poland, Romania, Sweden, and Bulgaria. As for solar power generation, the group operates in France, Spain, and the United States.

With regard to sustainability issues, in October 2022, Standard Ethics Aei upgraded Erg's sustainability rating to "E+" with a positive outlook on a scale of F to EEE within the SE European Utilities Index.

Sponsorship

Erg was the main sponsor of U.C. Sampdoria (until 2011), a football club that was owned by the Garrone family ( Riccardo Garrone was the chairman, with Edoardo as the vice-chairman, and Vittorio as director), for more than 9 years.

References

External links

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Companies based in Genoa
Italian brands
Oil and gas companies of Italy
Energy companies established in 1938
Automotive fuel retailers
Filling stations
Non-renewable resource companies established in 1938