Enel’s view on the circular economy

Enel’s view on the circular economy

Enel has long considered the circular economy a cornerstone of its strategy and has now summarized its vision and experiences in a new paper on the subject. 

Enel is used to taking the lead, as has also been the case with the circular economy: our Group had already established the circular economy as a cornerstone of its strategy by 2015, when the concept was just starting to spread among companies. Today, seven years later, we have gathered together our experiences and evaluations in a paper entitled A Journey into Enel Group Circular Economy.


The only way forward

Today the circular economy is a necessity rather than a choice: it is the only way forward toward a sustainable future, the only one that enables us to tackle the great global challenges such as climate change, pollution, waste management, the loss of biodiversity and even energy independence, in a practical and decisive way. It is the best way to achieve the United Nations Sustainable Development Goals – SDGs.

More specifically, regarding the climate, the circular economy is the main tool for reducing greenhouse gas emissions. From the promotion of renewable energy sources, to recycling materials and reducing the need to extract raw materials, it also helps to reduce not only the impact of the mining industry on land, but also greenhouse gas emissions.

As well as environmental sustainability, social sustainability also benefits from circularity: for example, less polluted environments see an improvement in quality of life and, above all, in overall health.

From an employment perspective, jobs in the repair and recycling services for manufactured goods require skills which are less easily replaced by automated systems than in goods production. Furthermore, circular principles, which envisage the potential recycling of products right from the design phase, pave the way for the creation of an innovative technological supply chain, and therefore for skilled jobs.

From a company point of view – and this is a key issue – the circular approach doesn’t only mean the adoption of a social responsibility standard, but it is, first and foremost, a factor in competitiveness: it leads to savings and increased efficiency relating to the use of raw materials, costs, disposal times and purchasing (thanks to the extended lifespan of products).


The many faces of circularity

Our Group, which considers the issues of innovation and sustainability to be central to our strategy, sees the circular economy as the perfect model for presenting our vision. By this we mean an open and inclusive approach, the creation of shared values in social, economic and environmental terms, resulting from the use of technologically advanced infrastructure, renewable energy generation and the electrification of consumption.

In addition to presenting our position on the issue, the new paper also contains a selection of the most successful initiatives carried out in recent years.


The importance of innovation

One of the best examples of circularity innovation is the 3Sun solar panel factory in Catania. Through the development of its TANGO project (iTaliAN pv Giga factOry), it will produce 3GW of panels per year, resulting in a 15-fold increase of its current production capacity, thus making it the biggest factory in Europe producing high performance double-sided photovoltaic modules. In order to recover the precious metals used in production processes – in particular silver and indium – and also waste glass and resins, new specialized techniques have been introduced for the first time anywhere in the world.

Smart meters are an example of circular planning, and are a field in which Enel has always been a forerunner. We are currently in the process of installing the new generation of meters, using materials recovered from those already decommissioned. Some 80,000 “circular” smart meters were produced in Italy in 2021, and the goal is to reach a target of 8.2 million by 2026. At the same time, 48% of the weight of every new meter is made from regenerated materials and we calculate that over the course of its useful life (15 years), this will result in a saving of more than 1kg of virgin material and 7kg of CO2.

Regarding the extension of the useful life of goods, one of our techniques involves using 3D printing to repair damaged components instead of replacing them.

Digitalization, which is another pillar of Enel’s strategy, can also significantly contribute to reducing the consumption of resources and therefore the environmental footprint. For example, by introducing electronic billing in 2021 we prevented the consumption of 2,423 tons of paper. This was a case of innovation for the sake of efficiency and the environment, and it was accompanied by a promotional campaign in Italy inviting customers to choose the electronic billing format.


Collaborative projects

Since 2015 – the year of the Paris Climate Agreement – we have been promoting the circular economy all along our supply chain and establishing collaborative relationships with other companies interested in the issue.

The Alliance for the circular economy, which we founded in Italy in 2017 along with the Intesa Sanpaolo bank, was one of the first and most important achievements of this strategy. It is an association which today includes numerous businesses and shares knowledge on the circular economy through dialogue with companies, political decision-makers, associations in the sector and ordinary citizens, in order to carry forward circularity in all its forms.

Since then the Enel Group has taken part in numerous other initiatives in partnership with companies and research bodies. Enel X, the Group company specializing in innovative technological solutions, collaborates, for example, in the “Monitor for Circular Fashion” project. This was launched by the SDA Bocconi School of Management in order to collect data and promote the adoption of circular models in the fashion sector in Italy.


Measure to improve

The first step to improving our performances is to measure them. And this is also true for circularity. That is why Enel X developed its own innovative tool to measure the circularity of a company. This is the CirculAbility Model®, which evaluates materials and energy in an integrated manner and takes into consideration all the life cycle phases of a product. It starts from the use of raw materials and continues up to the sourcing of products and materials, via the phase of use and the extension of the useful life of a product.

On the basis of this model, we created a series of more specific indexes. Specifically, regarding the generation of electricity, we developed an index that measures consumption of raw materials in relation to the energy they generate. According to this index, in 2021 our Group recorded an improvement of 62% compared to 2015, and the goal is to increase this figure to 92% by 2030.


Circular Cities

Cities are responsible for around 70% of global Co2 emissions, consuming 60% of resources and producing 50% of global waste. And these figures are set to rise with the continual increase in the urban population percentage of the total population.

Therefore, every comprehensive study on the circular economy, and in particular our new paper, devotes particular attention to circular cities. Our Group has many initiatives specifically aimed at cities, including the first phase of circularity evaluation.

Enel X, in collaboration with the department of Economics and Statistics at the University of Siena, developed a specific indicator, the Circular City Index, to measure the urban circularity level of a municipality examining four areas: digitalization, environment and energy, mobility, and waste. On the basis of the results we then suggest a consultation to identify the areas in which action needs to be taken in order to increase the level of circularity.


The next challenges

Finally, the paper examines the future challenges which need to be faced in order to complete the transition toward circularity. Our objective is extremely ambitious: to separate our business activities from the consumption of resources, with a view to exclusively using renewable or recycled resources.

While the goal is clear, certain aspects of the journey still need to be defined. It is therefore necessary to establish a series of intermediate targets with related deadlines, which will enable us to maintain our focus while at the same time evaluating along the way the progress achieved and the steps that still need to be taken.

It is a road that should be travelled with other companies, including those from other sectors, with the suppliers and institutions continuing to have the fruitful relationships seen to date. That’s because even if it isn’t possible to adopt ready-made models created by others, discussion is necessary to achieve results. It is both a stimulating and exciting way forward and, apart from anything else, the circular way is the only one available to us, if we are to bring about a sustainable future.

Download the document here.