Electrification can stop the climate crisis

That rapid scaling up is vital because time is of the essence. The frequency and degree of disruption caused by events linked to global warming, such as wildfires in Australia and California, and hurricanes and flooding in Europe, are all evidence of the need to speed up the transition to a carbon-neutral future. The coming decade will see both renewable energy and digital networks assume an ever-increasing importance as more and more consumption is electrified and the use of digital platforms increases. Those two considerations underlie Enel X’s business strategy. Electrification of end-use services initially in sectors such as transportation, buildings, and industry, combined with the decarbonization of electricity generation is key to limiting the increase in global temperatures.

That points to two requirements. First, there is the need to generate electricity from renewable sources; second, the necessity of using it to replace fossil fuel in end-use sectors.

 

Given that the cost of generating renewable energy has plunged by over 70% since 2010, the price of making the transition is falling – some less developed nations may even be able to avoid investing in giant power stations entirely, moving directly to a model based on renewables.

While replacing fossil fuels in powering such things as bulldozers, trucks and air conditioning systems, implies an increase in electricity use – some analysts suggest it might even double by 2050 – a modest increase in energy efficiency of devices using it can make quite a difference to overall demand. Flexibility in the times at which power is consumed is also important in managing increased demand. Consider solar and wind power: by their nature, these are variable resources. By aggregating groups of smaller producers – even down to the level of individual households – and integrating them with privately owned power storage facilities, up to and including the batteries of electric vehicles, and managing it all with sophisticated software, Enel X can ensure that supply is smoothed out and peaks in demand are offset by reductions elsewhere.

As the Group announced during the last Capital Markets Day, it plans to double down on its commitment to renewables in the coming three years, with about 17 billion euro earmarked for investment in the field, to raise capacity to 68 GW in 2023. Added to that, we are planning to mobilize investments worth 190 billion euro in the coming decade. Of that, 160 billion euro will be our own investment, with the rest coming from money we spend to stimulate third-party investment using our platforms to offer services, products and expertise.

The energy transition is accelerating, and this spells opportunity for Enel X. It underlines our focus on platforms that boost traditional business models and create space for new ones, generating sustainable growth that creates value for our customers, our stakeholders and society at large. As the climate crisis looms, sustainable growth is more important than ever.