In 2040, 60% of world electricity production will be generated from renewable sources and more than half from wind and solar power. Green power is poised to go mainstream, becoming a key asset of the energy market. However, this is not enough to reach the goals set by the Paris Agreement on climate change.
The World Energy Outlook 2016 (WEO) forecasts published in November by the International Energy Agency (IEA) outline the transformation of the sector in the coming years. According to the report, there will be a decline of fossil fuels, in particular coal, and the energy system which accounts for at least two thirds of greenhouse gas emissions will shift toward a more sustainable production model.
This is a core issue for Enel. Among the world's major utilities, it has focused its growth strategy on the decarbonisation of power generation processes, anticipating the trend illustrated by the IEA report. On December 12th, 2016, at its headquarters in Rome, Enel Group hosted an event to analyse in detail the scenario described in the document and to broaden the debate on the transformation underway in the energy sector.
“Over the years, we have developed projects that have allowed us to be recognised as leaders around the world”
Maria Patrizia Grieco, Enel Chairman
The transition underway
“Today we have an installed capacity of 36 GW and a diversified presence in 24 countries. With more than 1,000 plants around the world we have developed a diversified power generation mix that includes all the main renewable technologies, from wind power to solar energy, from hydroelectric power to geothermal and biomass energy”, stressed Maria Patrizia Grieco, Enel Chairman, in her opening remarks.
According to the WEO data, the growth of renewables has been sensational. In 2015, the installed capacity of green energy exceeded all new installed capacity of coal, fuel oil, nuclear power and gas. And this trend is bound to continue, as explained the Executive Director of the IEA, Fatih Birol. He underscored the main aspects of the transition underway and the great potential of renewable energy sources, the success of which bolsters the credibility of the actions and commitments undertaken by governments against climate change. But these do not seem to be enough.
“Climate change is mainly an energy problem. It is essential that governments set out clear rules to consolidate the role of utilities and encourage the development of a sustainable and profitable energy system”
Fatih Birol, IEA Executive Director
Boosting green energy and efficiency
The IEA director stressed the urgent need to change gear and adopt a new cultural approach. The strategies outlined by countries for the implementation of the Paris Agreement will not be enough to keep the increase in global warming within 2°C. To stop the planet's fever, it is necessary to expand the development of renewables and reduce fossil fuel dependency in sectors such as transportation and residential and industrial heating. Mr. Birol concluded, “In this revolution, companies like Enel have a fundamental role to play”.
“Technological development and the uncertainty of the times we live in call for decisions that must be implemented swiftly. It is not a matter of making a revolution, but of common sense choices”
Francesco Starace, Enel CEO
Toward a decarbonised model
The urgency for the global economy to shift to a decarbonised and efficient energy model was reaffirmed by Enel's CEO, Francesco Starace, who closed the meeting by recalling the scientific evidence of the effects of global warming, such as the increasingly rapid shrinking of large glaciers in Alaska, Patagonia and on the highest mountain chains in the world. Francesco Starace added, “Our strategy in mature markets is to close thermal power plants at their end of life and to replace them gradually with renewable technologies. This is a process that can be completed within 10-15 years”.
The real challenge of the renewable energy revolution, therefore, is not to beat fossil fuels, but to win the race against time to stop climate change. Maria Patrizia Grieco concluded saying, “The question now is how quickly can we shift our energy systems, our economies and our societies toward development models that are more inclusive and sustainable”.