Electricity is the future of energy in Europe and the world, from renewables to new services for customers, while e-mobility is in pole position. The energy transition in the Old Continent is focusing on electrification, redrawing the structure of the market and the role of utilities.
This was the picture to emerge during the first day of discussions at the 2017 edition of the The Future of Energy Summit, the international forum that examines the main challenges in the energy sector, held in London on 18 and 19 September by Bloomberg New Energy Finance (BNEF), the American press agency’s research organization specialized in the energy market.
The session dedicated to the role of utilities (“Utility transformation”) was chaired by Paul Benjamin, Director of Bloomberg New Energy Finance, and included a speech by the CEO and General Manager of our Group Francesco Starace who, together with Leonhard Birnbaum, Chief Operating Officer - Networks & Renewables of E.ON, and Peter Terium, CEO of innogy SE, provided an in-depth look at the issue of the rapid and ongoing transformation of the electric energy sector, beginning with the increasingly relevant role of renewable energy in the energy mix.
“Enel,” explained Starace, “ is adding around 2GW per year of renewable production to its own production mix on a global level.” Concerning the scenario today, the three managers were in agreement, “now almost everywhere in the world renewables are competitive without the need for subsidies”.
In order to remain in the market, added our CEO, the large electricity companies must keep pace with the technological evolution. “The technology is changing very quickly and it is necessary to have a highly diversified portfolio. The key to success can be found, in fact, in the capacity to invest in many projects at the same time and not just one, because the success rate of a projects is on average one in every four.”
Starace claims that this scenario of transformation is global. “The transition of the energy market is not only taking place in Europe and in the United States, it is happening all over the world, Latin America and Africa included. This is the frontier of our Group.”
The issue of electrification and the increasingly central role of electricity as an enabler of services for the customer, represented another key theme of the debate, in which there was a notable focus on e-mobility. Starace pointed out that this sector is one that Enel is specifically targeting. “At the moment,” he explained, “we do not know in what direction exactly this market will progress, how the value chain will evolve, but one thing is certain: we can no longer talk of e-mobility unless there is a widespread network of recharging columns.” So, the first step is to create an extensive infrastructure for electric cars: only with millions of users will it be possible to evaluate a return on investments in this sector: a challenge that Enel has seized upon and towards which the group is actively working.
From electric cars to batteries the step is a short one: during the debate Francesco Starace also mentioned the innovative Vehicle 2 Grid system, developed by Enel in partnership with Nissan V2G and already launched in Denmark. This technology enables electric car batteries to be transformed into a support tool to balance the distribution network and was developed thanks also to the increasingly competitive costs of storage systems and batteries for e-cars. This technology can enable owners of electric cars to obtain also an economic advantage from connecting their vehicles to the grid.
The debate at Bloomberg’s The Future of Energy Summit concluded by focusing on the new relationship between utilities and customers. This relationship is experiencing a genuine revolution due to the many innovations and forms of technology, which are within reach of everybody, requiring electricity to function. “People pass from one supplier to another often use the price factor as a pretext,” observed Francesco Starace, “In reality nobody rationally changes supplier for price reasons if they are satisfied with the service. They change if the service is lousy. Conversely, a good service can change people’s lives. For this reason the competition can no longer be limited to price but will shift increasingly towards the quality of the service.”
With this in mind, our Group is working in order to offer our customers innovative services in step with the latest technology. An objective that has led our company to create a new business line (E-Solutions), thus separating the commodity from the range of solutions that can be offered to our customers in both business and retail, creating added value. In substance, Francesco Starace explained, “today Enel’s is a business model based on the demand for energy services.”
This approach is valid in Europe as it is in the other contexts in which our company operates. “Innovation and new customers can arrive from every part of the world. For example in Latin America,” concluded Enel’s CEO, “where a vast number of people do not have access to energy: for us they represent potential customers and a further reason to innovate. The company is changing rapidly and we are open to receive any type of input that arrives from new markets. Our vision of OpenPower is what provides the energy to our company.
Click to see Enel's CEO Francesco Starace speech at the Utility Transformation panel during the Future of Energy Summit.