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There is a sharp increase in investment in your plan. With what objectives?
The increase is there, but not as strong as it seems, replies Enel CEO Francesco Starace, who since 2008 has transformed Enel Green Power into one of the world leaders in the renewable energy sector. Who before and who after, all in the last ten years have understood that renewables are competitive, convenient and are the backbone of the generation of electricity in the coming years. now a shared fact. For the International Energy Agency (Iea) they will grow fivefold in the next few years. It is not a phenomenon confined to the world of electricity, because when it is produced with renewables it subverts some fees. It begins to cost very little, permanently. Then it becomes available for different uses. Now transport is being electrified, then consumption for heat, for cooking and many others. This is the word of the decade: electrification.
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You said: If we had the 2030 renewables target of the National Energy Plan today, gas volatility would have a 40% lower impact. Enel expects a decrease of up to 40% in customers’ energy costs. Can you explain?
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Energy prices are the direct consequence of natural gas prices, whose soaring is the trigger. Gas affects the bill because the marginal cost of electricity depends on the price of gas, which is prevalent in Italy.
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The price for everyone is decided by the plants that place the latest offers among the cheapest and in fact the price of energy is made by gas. Does your prediction imply a change in the system?
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No, because the marginal cost of energy as a function of the technology that dominates the mix. If we had the mix expected for 2030, with a prevalence of renewables, the dependence on gas would be very low. The marginal price would be gas, but for a very few hours a day a year. So the average energy price would be much lower. The average price of energy close to zero. The more renewables we have in the mix, the less gas weighs on Italians’ spending.
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Given that electricity consumption is expected to double by 2040, how can the system be guaranteed in the hours when there is no sun or wind? Very high capacity batteries are needed, with enormous costs and technical difficulties …
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Ten years ago it was said that a solar panel would never generate the energy it takes to produce it. It was fake. We are used to smartphones, whose weight is given for about 90% by the battery. For this, a lithium-ion technology has been developed, which is a good compromise between performance, weight and cost of the battery. Applies to electric cars. Not the only technology available but it is being used today. We too will use lithium-ion batteries, which meet the needs for grid stabilization in one to four to five hours. But if you need a battery that covers night and day, that’s not the right battery. There are others.
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Will a technological acceleration solve the problem?
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There are already other technologies: sodium batteries or others that already cover longer time intervals. When we needed them, we would put them on the ground. Not a problem.
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But does the electricity storage capacity from renewables required in Milan almost exceed the world production of batteries today?
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Perhaps, when it comes to lithium-ion batteries. But they are not what you need in this case. The technology is there. As soon as we and other power companies need it, production will adjust.
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How do you plan to achieve net zero emissions by 2040? Times are tight.
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We have already begun. We have to progressively replace thermal capacity with renewable ones and we think that in Italy and Spain it is possible. But what carbon footprint do our customers and suppliers have? That’s what electrification is for. Since we have 4 million customers who burn gas, we tell them that it is not convenient and that electricity is cheaper. We can stop giving them gas by supplying electricity. By 2040 we will do it. Not a problem and pays off for customers. The same goes for our suppliers. The first they electrify and abandon gas, the first they attract ESG investments (with sustainability criteria, ed).
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What explains the rise in energy costs? Some say that the constraints of ESG investors prevent oil & gas groups from expanding production capacity and demand is structurally growing more than supply.
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a weak argument. When was the gas price stable? Anyone know? These commodities thrive on instability. Which is always explained ex post, never ex ante. The price instability inherent in the nature of this business has nothing to do with ESG investments. Otherwise not all the volatility of the past is explained. Was the gas price stable when there was no ESG investment? Stick with why prices are how laughable they are. The price has always gone up and down: it is enough to say things that are not true …
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You also said: it is madness to depend on gas. The sooner we go out better. What is the logic?
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We are used to living attached to a variable on which a large part of our energy depends, which has a totally inscrutable trend. But right? healthy? useful for our well-being? And above all, why does it have to be so? When there is no alternative, I understand. But now that it is, why do we have to depend on this strange madness?
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Mario Draghi said that renewables can have limits in the long run, so we need to invest in technologies capable of capturing carbon. Should we focus entirely on renewables or also open up to CO2 capture and sequestration (CCS)?
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How many times do we have to retry something that didn’t work? The electrical industry has spent $ 15 billion over 15 years trying to find the way to CCS.
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For you, the CCS, on which the oil & gas majors are betting, does it not work?
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economically out of the market. In addition to not working from a technological point of view. It only works where CO2 is used to push oil out of wells. I don’t want to stop others from trying. But as far as we’re concerned, it doesn’t work.
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When Draghi mentions the possible limits of renewables, what is he talking about?
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Everything has its limits. it is normal that there are limits and renewables also have them. But they are very far from being achieved. Therefore it is good to question oneself, without limiting its current use.
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Is it wrong to talk about technological neutrality?
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There is a semantic trap. The word neutral is positive, because it is the opposite of hostile. MSRa in the field of technology this reasoning wrong. You don’t side with one or the other, a technology affirms itself. just a matter of how much one wants to lose by not understanding. The world is moving towards electrification with renewables for their convenience.
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Are renewables a threat to the landscape?
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There are strategies to mitigate. For wind turbines, I don’t see many other places in Italy where they can be put. Italy is stronger on the sun, because it lends itself to small sizes, to be sewn on the territory in a less invasive way, with less impact. On the roofs of houses, warehouses, greenhouses. There are millions and millions of hectares on the roofs. Even if we limit ourselves to that, we would still make it.
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