Renewables, Italy takes the lead

Renewables, Italy takes the lead

Enel is the driving force that has enabled Italy to play a leading role in the new global energy scene. This was the dominant theme of the Enel Auditorium event, launched by our CEO Francesco Starace and Italian prime minister Paolo Gentiloni

Renewables can no longer be described as an alternative form of energy. Originally niche products, they have now entered the mainstream, benefiting the environment, consumers, investors and companies. It's a path that Enel set out on many years ago, and this strategy now enables the company to view the future with the clarity of a prime mover, displaying the confidence inspired by being the first to discover what others only came to realise afterwards.

Can Italy play a leading role in the new global energy scenario? Can an international group such as ours be a driving force in its home country, the site of its head office and where it intends to once again invest in renewables?

The event promoted by Enel on the theme of “Italy and renewable energy sources,” held on 5 December in our Auditorium, aimed to provide answers to these important questions.

 

The present, not the future

This high-level event, opened by Enel's CEO and General Manager Francesco Starace and Italian Prime Minister Paolo Gentiloni, saw the participation of experts, think tanks and companies involved in the sector from Italy and abroad.

“Renewables are no longer revolutionary, they are an evolutionary fact. They have become highly competitive, with rapidly declining generating costs,”said Francesco Starace in his opening statement.

This worldwide trend is accompanied by an exponential rise in investment - it is calculated that by 2040, 40% of electricity will be generated from non-conventional sources.

Riding this boom has made Enel Green Power, the company of our Group producing renewable energy, “the most important company in the world in this sector. Last year it broke through the 2 GW of new capacity installed, and this year it’s set to exceed 2.5 GW.”

Our Group has also made it possible for this Italian technological and industrial leadership to achieve another 100% Italian first - the digitalisation of the electricity network, a crucial step if we are to exploit the competitive advantage that renewables offer. Over the next three years the Enel Strategic Plan 2018-2020 envisages investments totalling €5.3 billion to digitalise Enel Group’s asset base, operations and processes, and to enhance connectivity.

In short, in the words of our CEO, “Italy has many strong cards to play.” Renewables are an opportunity to be grasped right here and now.

“A choice for the future and today,” said Gentiloni, because “investment in clean energy isn’t a form of charity, or a good cause: on the contrary, it’s an exceptional way of generating competitiveness in our economy. That’s why Italy’s significant contribution to the international transition will have such a powerful impact.”

The Italian premier also quoted the latest report on global trends by UNEP (the United Nations Environment Programme), which states that installed renewable capacity has risen by 8% over the last year and that during the same period the cost per megawatt fell by more than 10%. Figures like this “break down many prejudices,” especially the idea that the “transition is an operation based on public incentives.” Nowadays “the assumption of economic impracticability has been completely overtaken by the facts. We’re talking about highly competitive sources.” So that’s where Italy must concentrate its efforts.

Of course, mention had to be made of the SEN 2017, the National Energy Strategy, which was given the green light by the government only a few weeks ago. According to the Italian premier, the “challenging and ambitious” targets set by the SEN can help Italy become “a European Benchmark.” This “significant wager” involves €175 billion of investment in a sector where “Italy is already performing better than other major European players like France and Germany.” The aim is to make the Italian system even more competitive. In conclusion, Gentiloni said that “travelling from South America to Africa, I saw just how much demand there is around the world for renewables from Italy.”

 

Italian know-how around the world

The investment by EGP is already providing a response to the demand for Italian expertise. “We export Italian know-how and now we want to bring some of this innovation back home,” said Antonio Cammisecra, CEO of Enel Green Power (which is described as “an open, diversified ecosystem”). Because “we have to be nimble and technologically advanced in order to win a competitive bid in Mexico, the USA and soon in Italy, too.” Technology is the basic driver.

The new frontier is storing clean energy, especially wind and solar power. “When we can again achieve a paradigm shift,” in the opinion of Lucia Bormida, vice-president of Elettricità Futura, Italy’s most important association for the world of electricity. The US and China are investing in this new frontier. What about Europe? Would it be possible to initiate a Europe-wide project along the lines of Airbus? “Yes, Italy could be a candidate for hosting a European gigafactory,” added Cammisecra.

A series of slides gave Paolo Frankl, Head of Renewable Energy Division IEA (International Energy Agency) and Thomas Rowlands-Rees, Senior Analyst at Bloomberg New Energy Finance, the task of tracking the advance of renewables throughout the world. Frankl spoke of “progress that would have been unthinkable only five years ago,” and an ongoing fall in auction prices with China and India driving global demand. Generating capacity for energy from renewable sources will have risen by 43% by 2022, moving forward at an impressive rate – in five years’ time we’ll be producing half as much coal-derived energy as we do now, despite its 80-year history. Record growth in renewable energy was registered in 2016, covering two-thirds of new generating capacity around the world. For the first time, solar energy has overtaken coal to become the world’s most rapidly developing energy source. He went on to say, “The focus now should be on policies, to promote the use of renewables in heating and cooling systems, as well as in transport.”

These figures have been confirmed by Rowlands-Rees (in 2040 solar and wind energy will account for two-thirds of the world’s installed capacity), who also said that “Italy’s leadership in solar energy has set a trend.” Italian companies involved in renewables produce innovation, and Enel is also responsible for the growth taking place in linked industries. “Companies are ahead of the politicians,” explained Gianni Silvestrini, scientific Director of the Kyoto Club.

Some propose modernising existing plant to increase production by 50%, reducing baseline consumption, others hope for investment in land-based solar generation - repurposing abandoned military installations, for example. Everyone wants a stable, transparent and sustainable regulatory framework to enable renewables to operate in a competitive environment.

Carlo Tamburi, Head of Country Italy, concluded by saying, “the SEN 2017 is a springboard and a reference point, and now Enel must make sure these things happen. Our Group claims leadership in the national system, a role it’s already carrying out.” The shift towards an energy system based on green sources “is inevitable from a technological and industrial point of view.” Given that the objective is to achieve total decarbonisation by 2050, producing renewable energy “is good for the environment, is good for consumers because bills will be lower, encouraging electrification of consumption in a number of sectors, and, of course, it is good for the company.”

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