In order to decarbonize the Planet, it is necessary to transform the energy system: ceasing to produce energy from fossil fuels and turning instead to renewable sources, electrifying all consumption, developing smart grids, and adopting other types of technology, such as energy storage systems.
This evolution will necessitate an important technological change but it will also entail new and different raw materials requirements, in terms of both quantity and quality. According to the latest estimates by the International Energy Agency (IEA), in order to achieve a scenario of net zero global emissions by 2050, and thereby contain temperature increases to within 1.5°C by the end of the century, it will be necessary to extract a quantity of minerals that is six times higher than today’s levels.
This increase in consumption of raw materials should be viewed in relation to the elimination of fossil fuel consumption, which today, in terms of tonnes of resources used each year, is more than 1,500 times higher. Furthermore, it should be remembered that raw materials, unlike fossil fuels, are not burnt but used and therefore, in a circular economy scenario, can be regenerated or reused at their end of life and redeployed for other purposes.
The new technologies will require raw materials and traditional materials such as steel, copper, cement and aluminum but also volumes – albeit small in absolute terms but still higher than today’s levels– of materials like silicon, lithium or cobalt, which are currently not used very much.
These latter resources are considered “critical” from a geopolitical perspective due to the fact that they are found only in some areas of the world and could therefore be subject to interruptions in their supply. Furthermore, they are subject to substantial price variations, with sudden or unforeseen price increases that could make the new technologies less competitive. Their social impact is also important: for example, the health and safety of workers, which must be guaranteed at all stages. Another key issue concerns their environmental impact, which should be monitored and minimized in all phases, for instance in terms of emissions along the supply chain, or of water consumption, especially in areas where it is scarce, or the production of waste.
For some time now Enel has been committed to the transition to a sustainable business model, both by decarbonizing its energy mix and by reducing as much as possible its dependence on raw materials. It has also adopted a circular economy model which has rapidly gathered momentum in recent years, with an integrated strategy along the entire value chain that leverages measuring, innovation and cooperation.
This means rethinking all of the phases of the value chain, beginning with materials, identifying renewable or recycled materials, and designing plants in a way that makes it possible to extend their life. It also means identifying use models that ensure the most effective deployment of materials, regenerating those that reach the end of their life and, where this is not possible, recycling or reusing the raw materials.
We cannot do this alone, however, and it is essential to collaborate extensively with our own ecosystem of suppliers, partners, startups and institutions, universities, private and public research centers.
In July 2021 Enel joined the European Raw Material Alliance (ERMA) and was the first utility to do so. The Alliance is an initiative that was launched at the end of 2020 by the European Union to ensure access to all of the raw materials necessary for putting the European Green New Deal into practice. ERMA identified obstacles, opportunities and investment cases to build the capacity in all phases of the value chain, from mineral extraction to waste recovery.
Enel’s commitment to the issue of raw materials extends to all of its activities and embraces all phases, even those not managed directly by the company.
It is therefore essential to redesign the value chain from a circular perspective, taking action, for example on the following levers:
- reducing the need for new resources and in particular those that are considered critical, recovering materials at the end of products’ useful lives and redeploying them in the productive cycle (remanufacture and recycling)
- maximizing the use factor of resources, extending the life of products in use (through modular design, predictive maintenance and regeneration) and through sharing solutions or the “product as a service” model.
The next steps
Since Capital Markets Day 2020 Enel has included a resource circularity target (applying to raw materials and fuels) currently in relation to the company’s own production plants. This indicator measures the consumption of resources (excluding those from renewable or circular sources or those being reused) for their entire life per MWh produced by the generation side compared with the year of reference, 2015.
The goal for 2030 is to increase circularity and reduce the consumption of resources in proportion to the amount of energy produced by 92%, with respect to 2015.