The Circular Economy is a strategic lever for making a company’s business model even more sustainable. Since 2015 Enel has been developing tangible projects along the entire length of the value chain in order to take full advantage of the immense potential of circularity. Many choices made at the beginning of our journey have not only guided our progress but, at the same time, have become issues that have seen a convergence of opinion at global level. One in particular is the integration of the Circular Economy and Decarbonization, two themes that had been developed separately, for historic and implementation reasons, but that our company has always considered to be closely interconnected.
The experience gained in these years has resulted in an approach to circularity integrated along the length of the value chain that we wanted to outline in the document “A journey into Enel’s Circular Economy.”
Realizing that the Circular Economy played a role in all the sectors in which we operate and along the value chain led to a radical rethink of our business. Indeed, it is precisely by beginning with product design that circular business models can replace linear ones, building on five fundamental keystones: I) Sustainable Inputs (renewables, reuse and recycling); II) Product Life Extension (through modular design, predictive maintenance, etc.); III) Product as a service (i.e., providing clients with a service rather than a product); IV) Sharing platforms (shared use) and V) New Life Cycles (recovering value through upcycling, reuse and recycling).
A genuine rethink of activities from a circular perspective cannot focus exclusively on reuse and recycling, important as they are. We believe, rather, that an integrated vision is required, one that originates in innovation and design, offering sustainable, measurable and economically competitive solutions, also through synergies between different industrial sectors.
To this end, since the beginning of the journey toward circularity, our Group has been placing a substantial focus on measuring circularity, developing various models over time. This journey has led to the creation of market-recognized certification schemes, such as Enel X’s recent Circular Certification, which is accredited by Accredia.
The Circular Economy, moreover, is a strategic lever for economic competitiveness: the very name “Circular Economy” encapsulates how the transition must take place within a model that generates value. Today all of this is possible.
Enhancing previously neglected resources
Enhancing resources along the length of the entire cycle can in fact offer notable economic benefits for the company doing so. Design, planning and collaboration with suppliers, together with reuse and recycling, make it possible to reduce reliance on imported raw materials, an issue that is particularly relevant today. Enel’s transition toward a new energy paradigm involves the procurement of technologies that employ a different composition of raw materials. Furthermore, with a view to achieving a fully sustainable transition, materials are analyzed in their entirety, taking into account environmental, social and commodity aspects, as well as the necessary geopolitical considerations.
The adoption of circular policies, therefore, makes it possible to recover raw materials at the end of their life, reduce volumes of waste and foster the development of local value chains. Moreover, models based on the concept of “product as a service” enables services that are more competitive, in addition to reducing the consumption of resources.
The Circular economy can also have a particularly important impact on urban transition: it is no coincidence that we increasingly hear the term “Circular Cities.”
Large urban areas are places that have an important role to play in decarbonization, not to mention their environmental, social and economic and quality of life challenges. Consequently, it is in this setting that the principles of the Circular Economy can have a greater impact. The urban transition can be guided through Circular Economy plans and strategies that embrace all sectors of urban life and aim at sustainable development and improving inhabitants’ quality of life. Enel has contributed to the development of this both in terms of vision and definition, as well as business solutions. Since 2018, every year our Group has published a global paper on the topic, endeavoring to foster debate and raise awareness, by engaging stakeholders and companies from other sectors.
More generally, circularity has enabled – and will enable to an even greater extent in future – the creation of new business models.
One example of this is by extending the life of products, i.e., solutions that make it possible to extend the operational life of goods without modifying performance or mode of use. On this front, the Group has already completed some projects, such as additive manufacturing, which involves the use of 3D printing to repair damaged components for Italian geothermal plants. Enel X has presented a project to extend the useful life of batteries and increase their reliability through predictive tools based on Artificial Intelligence: as part of this project, the European Commission has financed part of the work to create the Storage X-Lab in Catania and the purchase of laboratory equipment.
In the field of reuse, we have devised the New Life project in Italy, Spain, Chile and Argentina, which aims to give new life to warehoused components and equipment at coal-fired power stations that are being decommissioned. Furthermore, we have activated various initiatives to promote the reuse of IT hardware no longer required by the company, selling it to staff or third parties. Thanks to this project, in 2021, we sold 14,600 devices (desktop computers, laptops and smartphones) to our employees in Italy and Spain. A further 10,000 were purchased by third parties, extending their useful lives and creating positive social and environmental impacts.
The journey toward circularity necessarily involves an openness to new ways of collaborating. For example, collaboration with stakeholders and the development and sharing of knowledge and experience through as broad a network as possible. That is why Enel is part of a series of networks involving national and international partners, to which we actively contribute.
Finally, when we talk about the Circular Economy, we have to look to the future, to the pathway that awaits us and that leads to places yet to be fully discovered. The final objective of a transition toward circularity is ideally to separate all activities from the consumption of resources, thus enabling the use of exclusively renewable or recycled resources. Our company is already adopting a circular approach in all of its areas of activity. The challenge now is to increasingly scale up the implementation of new business models and new circular projects, also by leveraging enabling sectors such as sustainable finance and digitalization.
These are just some examples of a vast transformation that does not only concern the development of technologies, but also a new way of doing business and creating value, for everyone.