For the future of the climate, the solution is electricity

Energy is a key enabler for progress and growth. In fact, a sustainable future of widespread wellbeing depends on clean and accessible energy for all. And the most powerful solution to help us achieve such a future is electricity.

“Enabling a clean future: the power of electricity”. This was the theme of the edition of #EnelFocusOn that took place in New York City on 24 September, during the very same week that saw the world’s political leaders come together at the United Nations to discuss the actions to combat climate change and build a fairer society. The 17^th edition of the global cycle of open discussions, created in Rome three years ago and so far followed via live streams by a total of over 14 million people, involved experts and influencers from ten countries, our CEO Francesco Starace and a truly exceptional keynote speaker, Rachel Kyte, CEO and Special Representative of the UN Secretary-General for Sustainable Energy for All.

Technology, the planet’s ally

Electricity is a product that is “different from others, difficult to describe, also because it can neither be seen nor touched". This is how Starace described this form of energy in his opening address. In spite of these characteristics, electricity possesses an almost unlimited potential that is powerful enough to help us emerge victorious in the epochal challenges of global warming and inequality.

“Demand for energy around the world is growing constantly and demand for electricity is growing at double the pace,” explained our Group’s CEO. “The reasons are manifold, first of all technology is making electricity increasingly cheap, stable and reliable, liberating it from the price fluctuations of fossil fuels.”

In fact, the energy transition is being driven by the exponential development of new technologies, in particular in the field of renewables, where progress in materials science has made it possible to achieve reductions in generation costs that would have been unimaginable a few years ago. To name just two examples, since 2010 the Levelized Cost of Energy (LCOE) produced from solar photovoltaic has fallen by 85%, and from “onshore” wind power by 49% (source: BNEF New Energy Outlook 2019). In other words, we are moving closer to the scenario that Thomas Edison dreamt of, in which one day electricity would be “so cheap that only the wealthy can afford the luxury of burning candles.”

But it is not only a question of falling costs, added Starace. “Thanks to the advance of digitalisation, electricity is increasingly versatile and precise in its end uses, in difference to energy from fossil fuels: and this considerably increases its reliability. Furthermore, the vector of electricity enables us to use available resources more efficiently. In fact, from an energy perspective electric technology is typically more efficient than traditional solutions, for example, in the case of electric mobility compared with conventional vehicles. In short, the benefits are enormous and with renewables we can decarbonise electricity and consequently numerous other sectors of the economy. This is a perfect example of technology being the climate’s ally.”

Electricity for all: a question of fairness

The very concept of electricity is changing radically. It is no longer something indescribable, but an immensely powerful and versatile force with a precise purpose: to enable us to redesign our future. And this also concerns social fairness, because as Francesco La Camera, Director General of IRENA (International Renewable Energy Agency), pointed out during the debate, the energy transition “is above all a matter of fairness”.

Also for Rachel Kyte the real challenge that awaits us is to “manage to have clean energy to preserve the environment, but also at a cost that everyone can afford.” The UN Special Envoy outlined her conviction that “electricity represents a large part of the solution".

“Renewables,” emphasised Kyte during her speech, “can be produced and distributed in a decentralised way; this enables us to bring energy to the one billion people who still do not have access to it. The old conception of the electricity system, which relied on large generation plants, never managed to reach these people. The only way to do so is to produce energy directly in the place where it is needed, and renewables make this possible at a contained cost.”

In such cases Kyte claimed, the combined power of electricity and technology, with only a limited investment, can make a huge difference to people’s lives. “If we can develop an X-ray machine that consumes much less electricity than current models, we will be able to install it in any hospital no matter how remote, and run it from even a relatively limited renewable energy source. If we manage to design more efficient air conditioning systems at a low cost, more people will be able to afford them and, in a world that is getting hotter and hotter, people will be able to store foods, medicines and vaccines more easily, as well as enjoying a better general quality of life.”

“In short,” continued Kyte, “if we manage to create a decentralised, decarbonised and digitalised energy system, we will have a truly democratic energy scenario, with universal access, the possibility to produce it autonomously and to take it anywhere it is required. No one would be left behind. This dream is achievable, and it can be done only through electricity.”

The courage and vision to imagine the future

“In theory nothing can stop us,” echoed Starace. “The classic question is: is there enough money to finance the energy transition? The answer is clearly yes: the financial community not only wants to but needs to invest in this sector. The consequent benefits for industry, the community and the job market, in addition to advantages for the environment, will be significant and must be shared fairly throughout society. This is the message that we need to send today in order to overcome the only remaining obstacle.”

The issue of the necessity for a fair transition was also at the heart of the “Just E-volution 2030” report presented at The European House–Ambrosetti Forum in Cernobbio, which outlined how the energy transition, in the best case scenarios, can bring huge benefits to Europe over the next decade or so. The report predicted a net effect on the value of production of +145 billion euros in 2030 as well as 1.4 million new jobs.

For Starace, “clearly there are some sectors that will expect some negative effects as a result of the energy transition: our task is to work together to identify the ways in which everyone – with no one excluded – can benefit from the transition.”

For Rachel Kyte, “in order to achieve this, technology is not enough, what is essential is the political will to discard the old rules. It is necessary to fight the inertia of the traditional system, which sees its own interests and jobs at risk and is therefore resistant to change, and we must face down the tendency to ignore the most urgent problems linked to global warming. It would be much easier to change things if governments committed to pursuing the brilliant future of electricity, if leaders had more courage and more vision. And if there were more organisations like Enel that has clearly demonstrated its vision and courage and that is one of the few companies that really manages to let us imagine how the future could be.”

Sometimes in order to imagine the future, it’s necessary to take a look at the past, as Starace suggested at the end of his speech. “Many electricity companies were created many years ago, and all of them with the same mission: to encourage the development of society. After all these years, our mission has not changed: we are still here to serve the people. This gives us an enormous sense of purpose, and this is also our greatest strength.”