RIO DE JANEIRO, BRAZIL – With even more ambitious goals, from Italy, the largest electric utility company in Chile, Enel group, presented its 2022-2024 strategic plan on Wednesday, with an emphasis on boosting investments towards decarbonization.
In the framework of Enel’s Capital Markets, the CEO of the Italian group, Francesco Starace, announced that they will bring forward their “Net Zero” (i.e., 100% renewable) commitment by ten years, from 2050 to 2040, for both direct and indirect emissions.
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Projecting an image of a road entering a forest, Enel’s top executive said he did not believe that zero emissions would be reached “by planting new trees”, but he did show his conviction that the company will get “full decarbonization by 2040, not 2050”.
As Starace explained, this decarbonization will be achieved by substituting thermal generation to reach emission-free production by 2040. “This substitution phase will be in line with the logic of a just transition. We don’t want to lay people off or do anything traumatic,” he clarified.
And while in last year’s press release, they reported that they plan to abandon coal generation in 2027, this time they went further, adding the exit from gas generation by 2040, replacing their thermal fleet with new renewable capacity in addition to leveraging the combination of the latter with storage solutions.
“We will have to adhere to the already announced strategy of exiting coal generation by 2027, coal plants will be replaced by renewable generation, or when it is necessary to ensure stability and system adequacy by small gas plants. In the long term, gas generation will also have to be eliminated from our mix”, the executive acknowledged.
Thus, it is expected that all the group’s electricity sold by 2040 will come from renewables and, in the same year, it will exit its gas retail business. “In terms of indirect emissions, all the electricity sold is going to come from renewable energy. So we are going to get out of the 2040 gas supply business,” Starace stressed.
He added that “we will no longer be in the gas retail business, and we will encourage our gas customers to convert to electricity with incentives, increasing the speed of electrification of our customer base.”
Also, amid this energy transition, Starace pointed out that by 2030 renewables will reduce the cost of energy by 50%. “Today, it will seem strange to you, but we are in the gas crisis, with very high prices, and this could increase if we don’t have an increase in the percentage of renewables,” he said.
However, he added, if this trend continues, “we will have a 50% drop, and this reflects the substitution effect of thermoelectric assets.”
INVESTMENTS
At the meeting, the group said it expects to mobilize total global investments of €210 billion between 2021 and 2030, of which €170 billion will be invested directly, which is 6% more than the previous plan, and €40 billion catalyzed through third parties.
According to Starace, this year’s plan, with €170 billion of direct investments by 2030, “is fundamental.” “Its implementation allows us to move from the previous decade of renewable energy discovery to the current decade of electrification,” he said.
He added: “We are accelerating growth across the business, bringing value to our customers, who are at the core of the group’s strategy, the value that translates into a projected reduction in their energy expenditure as we increase their electricity demand by 2030.”
With information from Diario Financiero