Enel, 60 years of challenges and solutions for the future

Enel, 60 years of challenges and solutions for the future

So our journey through the Group’s history comes to an end. It’s a journey which started with it bringing about the complete electrification of Italy, and then saw it accepting the sustainable energy challenge to become a global renewables supermajor and lead the energy transition toward decarbonization.

During the first two decades of the 21st century, the world was profoundly different from how it had been in 1962, the year in which Enel began its journey. These 60 years have seen a major shift in the global political balance of power and the rise of new technologies, from mass digitalization to the world wide web through to artificial intelligence, globalization, economic growth and recessions, and changes in consumption and habits, including greater awareness of environmental issues. Enel has negotiated these changes thanks to its ability to adapt and, above all, to anticipate, transforming itself whenever necessary, growing internationally and diversifying, demonstrating its ability to meet future challenges by building upon those it has overcome in the past.


The electricity access challenge and the energy crisis

In the 1960s, the first challenge to overcome was universal access to electricity. In a country that was experiencing an economic boom but still lagging behind in terms of electrification, the newly formed Ente Nazionale per l’Energia Elettrica invested today’s equivalent of nearly €56 billion in new power plants in order to increase production. It upgraded the high-voltage grid, finally connecting the grid in the north to the one in the south, and installed submarine cables to create links to the islands. The result was that, within a decade, access to electricity in Italy had doubled, with the number of users rising from 13 million to 26 million in 1970.

Not long after that, the 1973 oil crisis struck, with the price of crude oil quadrupling in just a matter of weeks, plunging Italy into a period of austerity and leading to it becoming overly dependent on foreign countries for energy. The crisis was short-lived, but the message was loud and clear: Italy had to diversify its energy mix, a need which was reflected in the country's 1975 national energy plan. It was in this decade that Enel began its journey into the world of “alternative energies. At the time that meant mainly investing in nuclear power, but also reviving hydropower (with the construction of the Taloro plant in Sardinia and the Entracque plant in Piedmont) and commencing initial experimental work on the “new” renewables, solar and wind power. This led to the development of state-of-the-art facilities such as the Adrano solar power plant near Catania.


The birth of sustainable development and globalization

Then came the 1980s which, after a second oil crisis, saw a new period of economic growth. In Italy, the growth in manufacturing, and particularly the explosion of new small and medium-sized enterprises, led to an increase in the demand for electricity for industrial purposes, thus reversing a trend that for many years had seen demand being predominantly for domestic use. However, this was accompanied by a new environmental consciousness. Thanks to the UN’s Brundtland Report, the concept of sustainable development was beginning to impose itself on the global agenda. And Enel decided to do just that by continuing to expand into the renewables sector - the solar power plant on the island of Vulcano and the Alta Nurra wind power facility in Sardinia were pioneering projects - and by incorporating social and environmental sustainability into its business plans. This was also the decade in which Italy turned its back on nuclear power, which was abandoned after the 1987 referendum that had been prompted by the Chernobyl disaster, bringing about a new strategic rethink regarding energy sources and a renewed push towards renewables.

The fall of Berlin Wall in 1989, and the 1990s gave rise to a world that had been unimaginable only a few years earlier, resulting in an immediate impact on the energy market. Indeed, these were the years of globalization and the liberalization of sectors which were once exclusively state-owned and controlled. Enel responded by starting out on a path of internationalization, diversification, and expansion into new markets, laying the foundations for the creation of what the Enel Group is today. Firstly, becoming a limited company in 1992, then being privatized and listed on the stock exchange in 1999: it was the largest public offering of shares the Italian market had ever seen, involving more than 3.8 million investors in Italy and abroad. This was also accompanied by the creation of three new companies (Enel Produzione, Enel Distribuzione and Terna) to manage the different areas of activity in an increasingly complex and competitive electricity sector.


The digital revolution and the birth of Enel Green Power

Meanwhile, the digital revolution was rapidly advancing, opening up new opportunities for the energy sector in the 2000s. Enel was among the first operators that sought to exploit these possibilities so as to provide better services to customers and make energy management more efficient. As early as 2001, it began installing smart meters to enable the two-way exchange of information between the energy supplier and its customers. This also made it possible for certain activities to be conducted remotely, replacing the in-situ interventions that were previously necessary. It was the first building block for the development of Smart Grids. At the same time, the company started to turn its attention toward the international markets: Enel acquired control of energy producers and distributors in the United States, Canada, Brazil and Spain.

And so we come to the last decade, one in which Enel Green Power, a company that was established in 2008 and which is entirely dedicated to renewable energy, became the world's largest private renewable energy operator in just a few years, with more than 54 GW of installed capacity. In addition to installing industrial wind and solar facilities in just about every corner of the globe, there have been energy storage projects, such as battery systems integrated with wind power in Pietragalla, in Basilicata, and solar power in Sicily; the production of photovoltaic panels through the 3Sun joint venture in Catania; and experiments on green hydrogen in Sardinia, Apulia and Sicily.


The new era of electrification and future challenges

We are now on the eve of a new era, the era of electrification, an essential prerequisite for the energy transition process. If we are to limit the global temperature rise to less than 1.5 °C, as required by the Paris Agreement, 50% of the energy consumed must be via the power grid by 2050, and 90% of it must be generated by renewable sources. According to the International Renewable Energy Agency (IRENA), by 2030 new solar power installations will have to produce energy at a rate of 630 GW per year, and wind power facilities will have to hit 390 GW per year, four times their current rates. Entire sectors that had previously seen almost no electrification, such as transportation and the heating of buildings, will have to convert to it. Electric vehicles will have to account for 60% of new car sales by 2030: today the figure is just 5%. Electricity distribution networks will have to become even more digitalized and smart in order to integrate renewables and meet a demand for electricity that will rise by at least 50% by 2050.

It’s a global challenge in which the Enel Group is engaged on all fronts: production, with Enel Green Power, sales, with Enel Energia, and distribution, with Enel Grids and the newly established Gridspertise, which supports energy distributors worldwide in digitalizing their grids. Enel X was created to flank companies and institutions on their path toward electrification, providing all the necessary services, while Enel X Way focuses on electric mobility.

Thanks to the work and successes of these 60 years, the Enel Group is poised to play a leading role in the greatest transformation the energy system has experienced since the Industrial Revolution.