Sunday, October 16, 2016

Interview Francesco Starace, CEO Enel: “We Have Stopped Investing in Projects That Take More Than 2 or 3 Years”

Francesco Starace, CEO Enel (Credit: Enel).
“Our aim is to grow the use of electricity as energy vector.”  This is how Francesco Starace, CEO of Enel, one of the world’s largest utilities and perhaps the biggest producer of renewable energy in the world, describes the strategic goal of his company. According to Starace, the utility of the future owns and manages a digitized grid that connects up decentralized green energy sources and is at the center of a whole new system of energy products and services.  But he is concerned that many utilities are still engaged in a futile effort to deny the future.  “There are still a lot of us who think they should own large centralized fossil fuel plants.”  Enel gives priority to flexibility:  “we have decided to stop investing in projects that take more than two or three years to complete.”  This interview was first published in World Energy Focus 2016, a magazine produced by Energy Post for the World Energy Congress in Istanbul.

If there is one major utility company in the world that has fully embraced the low-carbon energy transition, it has to be Enel.  The Italian company was probably the first in the world to replace all its conventional meters in its home country with smart meters.  Through its subsidiary Enel Green Power, which owns over 10 GW of renewable energy capacity in 17 countries, Enel is also one of the world’s largest (if not the largest) renewable energy producers.  About half of the company’s generation capacity is now carbon-free, and this number will only go up, says Francesco Starace, who became head of Enel in May 2014 after six years as CEO of Enel Green Power:  “We have stopped investing in large-scale centralized power generation.”

In the period 2016-2019, Enel will invest for growth some €17 billion of which almost 90% will go to renewables and grids.  This is where the utility of the future is headed, says Starace: “The key for us is to own and manage a digitized grid, which will connect as many decentralized units as possible.  Who owns the generating capacity is less important.”

“There are still a lot of us who think they should own large centralized fossil fuel plants with some transmission and distribution and without much technology”

In a country like Italy, there are already some 670,000 small renewable energy plants, he notes, and this trend will continue.  “As network operator you don’t only need to move electricity from high-voltage to low-voltage lines, but also increasingly across low-voltage and medium-voltage lines, and sometimes even in counterflow.”  This kind of very fragmented and intermittent generation can be handled by the grid, says Starace.  But only if that grid is digitized.  Digitization will, moreover, enable the development of new products and services that will make the energy system much more flexible and efficient.

“Over the next ten years grids are going to be extremely important,” says Starace.  This is all the more so because of the worldwide trend towards urbanization and “megacities”.  Enel owns or operates grids in many cities in the world, also outside of its large domestic markets of Italy and Spain, e.g. in Bucharest (Romania), Santiago (Chili), Bogota (Colombia), Rio de Janeiro (Brazil), Buenos Aires (Argentina), Lima (Peru).  “People are increasingly migrating from the countryside to these cities.  We are committed to make them as livable as we can.  As efficient and as modern as possible.”

Starace emphasizes that the energy system cannot be modernized and adapted to the low-carbon energy transition if the grids are not digitized.  “Digitized grids will enable a lot of features that are not there today.  They will make electricity use much more efficient and will lead to many more new applications.  Consumers will interact much more with their energy providers and become more conscious of their energy use.”

Read more at Interview Francesco Starace, CEO Enel:  “We Have Stopped Investing in Projects that Take More Than 2 or 3 Years”

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