The strong and unexpected growth in renewable energy lowered power generation margins in the top two markets for Italian utility Enel SpA (ENEL.MI), said Chairman Paolo Andrea Colombo Monday.

The growth of renewables, together with a stagnant demand, in Italy and Spain , has led to excess installed capacity, "causing a reduction in the generation margin," said the chairman at the company's shareholders' meeting in Rome to approve 2011 results.

The chairman also said the group's carbon dioxide emissions have been cut by 34% since 1990 and Enel plans to lower them further.

Enel's dividend payout ratio of 40% of ordinary net profit is a "floor" and the utility may review it upwards if the market conditions improve, said Chief Executive Fulvio Conti at the same shareholders' meeting.

The CEO also said the drop in electricity demand is "structural" and isn't expected to return to pre-crisis level before 2014.

The company confirms the 2012 targets, Conti said.

Enel doesn't exclude cutting its investment plan if needed, especially in Spain if the regulatory climate worsens, he also said.

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