Renewable Energy, the Green Engine of Competitiveness

Published on Thursday, 14 December 2017

“ The transition from coal to renewable energy is both a choice for the future and for today, a choice that strengthens our national economic system”

– Paolo Gentiloni, Prime Minister of Italy

“The idea of the economic impracticability of renewable energy has been rendered completely null by facts”, stressed Gentiloni, pointing out that the competitiveness of green energy sources has by now become an established fact. “We are dealing with a transition of extraordinary scope that has long been discussed, but has now taken off and aims to achieve two fundamental values: to create cleaner energy for the country and the environment, and to enhance the competitiveness of our and other industrial systems.”

“We are not talking about a good cause, but about one of the most extraordinary drivers of the competitive edge of economic systems”

– Paolo Gentiloni, Prime Minister of Italy

Defined in recent weeks by the Ministries of Economic Development and of the Environment, the SEN aims to reach a renewable energy quota equal to 28% of consumption by 2030 and 55% of electricity production. This is a major challenge for Italy’s economy that attracts investments and, as analysts indicate, will make it possible to create new jobs. For this reason, the Prime Minister concluded, “We need to work on human capital, professionalism and the capacity for innovation” to give even more value to green energy.

Source of Competitiveness, Renewable Energy in Numbers

For some time now, international data and trends have shown that when renewable energy is supported by innovation and technological development, it is no longer a dream but can drive the energy transition and generate sustainable value from industry to end users. The Managing Director and CEO of Enel, Francesco Starace, highlighted this aspect during his introduction to the conference.  

Renewable energy sources have become very competitive - Starace explained - with generation costs falling fast and with the progressive erosion of conventional sources’ competitiveness.” In the photovoltaic sector, the price of electricity in megawatt per hour (MWh) has decreased in ten years from 490 euro/MWh to less than 40 dollars/MWh in the most recent competitive auctions in many parts of the world. The same thing has happened with wind power, which has dropped from 180 euros/MWh to less than 30 dollars/MWh.

It is green energy’s competitiveness that makes it advantageous, rendering it an essential tool for guiding the country towards the decarbonisation of the economy, industry and cities.

“The point of this great revolution of renewable energy is to understand its impact on the changes in our energy systems and how much good it can do to the Italian and global economy”

– Francesco Starace, CEO Enel

Our CEO continued by explaining that to seize this opportunity, the transition to renewable energy must go hand in hand with the digitalisation of infrastructures: a crucial step for increasing the amount of renewable energy available. Enel’s 2018-2020 Strategic Plan is moving in this direction by envisaging investments amounting to 5.3 billion euros in digitalisation over the next three years, most of which will be devoted to technological assets and the rest to processes, systems and corporate culture.

In fact, according to the latest report of the International Energy Agency (IEA), the data of which were illustrated during the event by Paolo Frankl, Head of the Renewable Energy Division, by 2022 the global generation of energy from renewable sources will increase by 43%, and at an impressive rate: in just five years, half the energy currently produced with coal – which however has 80 years of history behind it – will come from renewable sources. As Frankl pointed out, 2016 was a record year for the growth of energy from renewable sources, which globally covered two thirds of the new generation capacity. And for the first time, photovoltaic energy surpassed the growth of coal to become the fastest developing energy source in the world. These figures are also reflected in the forecast of Bloomberg's New Energy Outlook presented in Rome by one of the agency’s senior analysts, Tom Rowlands-Rees, who believes that photovoltaic and wind power will constitute two thirds of installed capacity in the world by 2040.

Green Energy for the Italian Economy

Italy can therefore become attractive to international investors along the entire supply chain: “Together with decarbonisation, the cost of electricity is dropping and stabilising”, noted Francesco Starace, who explained how this causes, “Transport, heating and a series of industrial processes to also become more predictable, less polluting and cheaper.”

To cement all the benefits of the energy transition to renewable sources and the opportunities these can open up as a driving factor towards a circular and decarbonised economy, the conference continued with a focus on the supply chain analysis and the needs of large and medium-sized enterprises operating in the sector.

Among the protagonists of the event was Antonio Cammisecra, CEO of Enel Green Power and Head of Enel’s Renewable Energy Division, who stressed that to facilitate the transition to green energy, a clear and stable regulatory framework is needed: “We are not asking for incentives - the manager stressed - but we need a stable regulatory framework to allow renewable energy to navigate with in a competitive context.”

“The renewable energy market is based on pure competitiveness. To win auctions in Mexico, the USA and in future also in Italy, we must focus on technological innovation”

– Antonio Cammisecra, Head of Enel’s Renewable Energy Division and CEO of Enel Green Power

Cammisecra said that Enel Green Power is ready to take up the challenge and that “Italian industry is also ready to bring the experience accumulated at a global level in recent years back to Italy, but with an important caveat: we must be innovative and know how to question our business model day after day in order to constantly be sustainable and in step with the times.” The market also needs stimuli for innovation and rules that encourage healthy competition, which can come with the introduction of a competitive auction system with medium/long-term contracts: this combination would give companies more courage and certainty in investments.

This opinion was widely shared by the guests of the various panels: from the representatives of major European utility companies such as Edison, Erg, E.On and EDP, but also large and medium-sized companies that make up the renewable energy supply chain (from Siemens to Samsung to the Italian companies FIMER, Ansaldo Energia, Tozzi Sud, Enertronica and Convert Italia), right up to organisations such as Elettricità Futura, the sector division of Confindustria, Kyoto Club and Althesys.

Italy is a candidate for international leadership in the renewables sector. It is guided by the technological expertise and experience of Enel Green Power, which exceeded 2 GW of newly installed renewable energy capacity in 2016 and is preparing to outdo this result by adding an additional 2.6 GW in 2017.

As for storage systems, during the discussion Cammisecra stressed that “The European gigafactory could be setup in Italy; we have the technology, skills, capital, passion and a long-term vision.” He underscored the need for Italy to strengthen its leadership in renewable technologies starting from the European context. One way to do this is to invest in digital infrastructures to increase the mixture of green source production in our country, but also to take the lead in more far-reaching projects for the development of the technologies needed to facilitate the energy transition towards a decarbonised economy, such as storage systems.

Enel is ready to take on a leading role, as Head of Country Italy at Enel Carlo Tamburi confirmed at the close of the event. Dr Tamburi explained that our company has the role of directing the national economy towards the digitalisation of energy assets, the development of new innovative services and renewable energy sources. The transition to an energy system based on green sources, he stressed, “Is inexorable from a technological and industrial point of view. In order to achieve the challenging objectives of the SEN, it is also necessary to promote cohesion between institutions, authorities and operators.” Tamburi concluded: “Besides being good for the world and the country, producing renewable energy is good for consumers because the costs will lower, thus also favouring the electrification of consumption in different sectors, from public and private transport to heating.”

“Ensuring that the customer’s industrial needs can be transferred to an advantageous general services network is one of our goals. The big challenge is to ensure that this is beneficial for everyone”

– Carlo Tamburi, Head of Country Italy at Enel

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