MILAN Nov 30 Amazon is in talks with
utility Enel over the conversion of old power stations
in north and central Italy into data centres as it seeks to
expand its lucrative cloud services business in the country.
An Enel spokeswoman said on Wednesday there had been
contacts with the U.S. online retailer while a source close to
the matter said a deal could be closed in coming months.
Amazon is market leader in the global cloud infrastructure
services sector. In the third quarter of 2016, its cloud
business grew sales by 55 percent from a year earlier.
Amazon Web Services (AWS), the cloud services unit, recently
announced it would open data centres in the Paris region, after
investing in Ireland, Germany and the United Kingdom.
It will spend up to 1 billion euros ($1.06 billion) to
convert plants in Italy, the source said, adding the investment
was in line with other data hub deals it had done in Europe.
AWS's interest in Italy comes as Enel, Europe's biggest
utility in terms of capacity is shutting down old plants as part
of a strategy to shift its focus to grids, renewable energy and
retail business, especially in emerging markets.
Enel invited parties interested in taking on the sites to
present projects on how to use them. Two sale processes were now
in an advanced stage, it said last week, giving no details.
Amazon has invested over 450 million euros in Italy since
setting up shop in 2010 and employs 1,700 people. In July it
announced it would build a major storage and logistics centre
Prime Minister Matteo Renzi has been striving since coming
to office in 2014 to attract foreign investors to help kick
start Italy's sluggish economy. He has staked his political
future on a constitutional reform referendum in December, aimed
at creating stable government and streamlining law-making.
State-controlled Enel said last year it was scrapping 23
thermal power stations in Italy with a total capacity of 13
gigawatts to meet falling power demand and changing business
patterns as green energy replaces fossil fuel generation.
The source said talks between Amazon and Enel focus on three
to five sites, all in the north of Italy, including the plants
of Trino, in the north-western region of Piedmont, and La
Casella, close to the northern town of Piacenza.
A second source familiar with the matter said negotiations
involved three sites, including La Casella. "The plant is not
among the 23 plants being decommissioned but Amazon has asked
for a piece of land there."
Amazon has its main Italian distribution centre employing
1,000 workers on the outskirts of Piacenza.
Industry Ministry undersecretary Paola De Micheli told
parliament last Thursday Amazon was looking into converting
three Enel sites, adding the utility could help make the
technology company's power consumption more efficient.
($1 = 0.9405 euros)
(Editing by Alexandra Hudson)