COP23, the strategy to fight climate change

Further forward, faster and together. The course of action plotted at COP23, the United Nations Climate Change Conference held in Bonn in Germany, urged a change of pace. Enel has responded with three clear goals: to lead from the front in the global response, to pursue a sustainable strategy and to eliminate harmful emissions in order to reduce the carbon footprint to zero.

Our Group is playing its part. Leading the way at numerous meetings and events in Bonn we have offered contributions on innovation, the new opportunities in digitalization and on how harmonise policies for the reduction of fossil fuel emissions, making speeches together with representatives of governments, scientists, environmentalists and delegations from 195 countries.

The Earth’s thermometer is sending out contrasting signals. Today there are certainly the resources and technologies available to adopt a model of sustainable development that is capable of containing global warming below 1.5 degrees, as outlined in the Paris Agreement, but the current mentality still struggles to let go of past models. So what can be done then?

Innovation is a point of view

At the Renewable Energy Day, promoted in Bonn by IRENA (The International Renewable Energy Agency), the participants agreed on the necessity to move beyond the current paradigms. The approach introduced by Ernesto Ciorra, Chief Innovability Officer of Enel, highlighted the importance of not giving into the habit of reasoning according to established stereotypes and prejudices because this leads to a mentality that perceives as impossible what we should rather consider as a challenge towards innovation. For this reason today it will become essential to include in our planning, expertise from diverse specialised sectors alongside contributors from other fields who can, therefore, ask new questions to old answers. An example of this can be found in our activities in the United States, where we have managed to combine geothermal energy with solar photovoltaic and solar thermodynamic at the Stillwater plant in Nevada. Another demonstration is the first geothermal plant in South America, built in Cerro Pabellón in Chile, 4500 metres above sea level in an area previously considered as too extreme because of its geographical features.

“Orthodox knowledge can create models that limit our capacity to see things from different points of view, this curtails our potential for innovation. In order to face the challenge of climate change we must, therefore, learn to abandon our established paradigms”

Ernesto Ciorra, Chief Innovability Officer at Enel

At COP 23, 15 organisations won awards for their creative and innovative ideas to tackle the issue of energy poverty and promote sustainability in Europe. The initiative “Social Innovation to Tackle Fuel Poverty”, launched in June by Ashoka and the Schneider Electric Foundation in partnership with Enel, received over 40 requests to participate. This significant response was obtained also thanks to Open Innovability, our platform for crowdsourcing ideas dedicated to innovation and sustainability. The winners were social innovators from Germany, Greece, Portugal, Spain and Italy. The Italian winners were Giulia Detomati of InVentoLab, Fabio Gerosa of Fratello Sole, Alberto Gastaldo of Energia Positiva and Marina Varvesi of Assist-Aisfor.   

Digitalization as a game changer

Innovation does not only have effects on our way of thinking or on the rapid development of new technological solutions, but it also reconfigures our business models. Automation, the Internet of Things (IoT), Artificial Intelligence (AI) and Augmented Reality (AR) are the foundations of a new industrial revolution, the effects of which were discussed at the meeting “Industry 4.0 Future - Creating jobs, accelerating clean energy and enabling policies”. On behalf of our Group Andrea Valcalda, Head of Sustainability at Enel, focussed on the impact of smart grids and the digitalization of the electricity sector. These factors are potentially game changers because they are capable of driving the shift towards business models based on services rather than ownership. The combination of intelligent technologies and renewable energy, then makes it easier to enter into developing markets: the recent launch of a project in Ethiopia to construct a photovoltaic plant in Metehara is one example of this. The plant will enter into activity in 2019 and will be capable of generating approximately 280 GW per year, avoiding emissions into the atmosphere of around 296,000 tonnes of CO₂.

“Smart grids are one example of the gradual process of fusion between human intelligence and machine intelligence and the potential for the application of this technology is limitless. Thanks to renewable energy, they can be used in both highly evolved urban environments and in developing countries”

Andrea Valcalda, Head of Sustainability at Enel

A single strategy for Carbon Pricing Policies

Although the market appears to be increasingly interconnected from a technological point of view and concerning the circulation of products, the regulatory instruments adopted by individual countries continue to be excessively fragmented. The greatest challenge on this front involves Carbon Pricing Policies, an issue that was the subject of two debates held by the Enel Foundation and Harvard University at which two figures from our Group, Simone Mori, Head of European Affairs, and Daniele Agostini, Head of Low Carbon Policies and Carbon Regulation, played leading roles. The shared objective is to work towards a joined-up approach between regional and national policies to redistribute the results in the reductions of emissions across all levels of a cap-and-trade system capable of imposing limits on the quantity of pollution that one company or organisation can produce.

Today six different forms of regulation are applied in the European Union, in New Zealand, in the United States, in California, in Korea and in China but also 12 different types of international tax. Applying article 6 of the Paris Agreements would make it possible to harmonise the current scenario through negotiations that refer to shared principles. It is necessary to find the right balance between regulatory flexibility and the finalisation of the rules in order to avoid an uneven distribution of energy plants.

Mitigating against the effects of climate change

The efforts to reduce emissions and the relevant regulations must not neglect the impact on the workforce during the transitional phase. A business briefing dedicated to this issue, called “Just Transition”, was organised by the International Trade Union Confederation and involved the participation of Cristina Cofacci, Industrial Relations and Labour Law manager at Enel. Our Group, in fact, considers meaningful dialogue with the local stakeholders to be fundamental. Also deemed necessary is the inclusion in a circular economy model of resources that the technological developments have made unproductive: the reconversion of the 23 former power plants in Italy, through the Futur-e project, can represent a reference point on an international level for the generation capacity of new social and employment opportunities. For example, investments to encourage projects to counter climate change can nowadays be financed via the issuing of green bonds by the European Investment Bank (EIB), or with financial instruments such as the Warsaw International Mechanism for Loss and Damage for the countries affected by climate change. Established at COP19 and finally brought into operation at Bonn it will be the centre of a preliminary work in Katowice in Poland, the venue for COP24 in 2018. 

In spite of the efforts to reach a compromise at the last Conference, many developing countries are still aiming to obtain a greater commitment from the industrialised nations. All eyes are on the Global Stocktake in 2020, the year in which voluntary national contributions to fight climate change will be updated and upgraded in order to achieve the goals established in the Paris Agreements. A positive development could arrive sooner however, from Katowice, where the control of the state of the implementation of the Agreement will involve all of the signatory Countries. The speed with which many have responded to its adoption in 2015, with over 80 ratifications just one year after the launch, offers a very encouraging sign.