Energy transition: from conventional energy to renewable sources

China is now closer, thanks also to the energy transition. Converting from fossil fuels to carbon-free energy is a common need shared by all countries that want to meet growing energy demand without depleting natural resources.

China, the world's largest energy consumer, started later than Europe in this effort, but it is now set on filling the gap in this field by increasing renewable energy sources by up to one fifth of the total within an overall context of strong growth in energy demand. All this is planned to happen by 2030 when Beijing is expected to start reducing also the volume of CO₂ emissions. 

The way energy is consumed and produced is changing

The report, titled The Energy Transition: Ongoing in the European Union & Emerging in China, is a comparative analysis of the European and Chinese experience. It was drawn up by Giuseppe Montesano and Alain Wormser of Enel Foundation, Daniele Agostini, Head of Low Carbon and European Energy Policies at Enel, and HTERI, the socio-economic research institute of the Huaneng Group, one of China’s top five utility companies, as part of a joint research effort on the energy transition in China and Europe. It focusses in particular on the cases of Italy and Spain as well as on the impact on all the utilities involved. 

Enel Foundation presented the report on November 15^th in Marrakesh at the UN Conference on Climate Change. The meeting was attended by representatives of the European Parliament, Chinese and Italian public institutions, world-class universities and representatives of international NGOs engaged in the electricity sector.

The attendees included Simone Mori, Enel Group's Head of European Affairs, and Carlo Papa, Enel Foundation Director, as well as Francesco La Camera, Director General at the Italian Environment Ministry, Duan Maosheng, professor at Tsinghua University, Li Junfeng, Director General at NCSC in Beijing, and Robert Stavins, Director of the Harvard Environmental Economics Program.

"The Stone Age did not end for lack of stone, and the Oil Age will end long before the world runs out of oil". These are the famous words of the former Saudi Oil Minister, Ahmed Zaki Yamani. They were quoted at the beginning of the report to clear up any misunderstandings: the energy transition is not due to the progressive depletion of oil wells, but rather the result of technological innovation and of the quality of policy decisions.

An overview of the facts and phenomena of the last twenty years makes this concept even clearer. The Kyoto Protocol, the new needs of consumers, the fragmentation of markets, and the interconnection of economic and energy systems are driving the energy transition which in China and Italy alike is and will be all about striking a balance between environmental sustainability, the competitiveness of businesses, access to energy and security of supplies, as underscored by the Enel Foundation’s report.

In presenting the study, Enel Foundation chose three Enel case histories to help us understand how the world will change as a result of the energy transition.

One is from Spain where wind power is used to cover the energy needs of auxiliary grid services. As explained by Santiago Dominguez, Operations & Maintenance Manager at Enel Green Power, the project will be extended to almost all of the over 70 Enel wind farms in Spain by the end of 2016, totalling 1600 MW. Futur-e, presented by its manager, Marco Fragale, is an Italian project involving the transformation of 22 fossil fuel power stations into an opportunity to be seized for local development.

“Enel’s Futur-e project, which aims at transforming power plants that are no longer competitive on the energy market, is yet another step along the transition path. It is an opportunity to be seized by local communities”

Last but not least, there is the project presented by Alessio Montone, head of Smart Meter Solutions. It is dedicated to grids and smart meters and shows that technological innovation can boost the efficiency of the energy and economic system through these instruments.

The role of public policy makers

The report The Energy Transition also describes scenarios for public policy makers and companies operating in the electricity industry. Policy makers are called to favour cross-border cooperation and flexible energy demand and supply, to eliminate harmful emissions and to force market players to be accountable and meet their obligations.  

Electric utilities, in turn, are called to face a growing number of competitors, to rapidly adapt quickly to new technologies and to respond to increasingly stringent environmental regulations, while ensuring the necessary flexibility needed to cope with changes.

The mission of Enel Foundation

Enel Foundation which co-authored the report is a non-profit institution that is engaged in research and in strategic studies on energy. The Foundation’s activities are geared to anticipate and interpret new needs in society and markets in the current global scenario.

Its goal is to contribute to the international debate on energy and energy-related issues, as was the case in Marrakesh with the report The Energy Transition which suggests how the energy transition can project the world into a future of widespread prosperity, greater efficiency and better protection of nature’s resources.