Enel brings net zero target forward to 2040

Italian utility expects to have 154GW of renewables and battery storage capacity by 2030, including 32GW of new wind

Enel expects to bring around 5GW of new renewables capacity online this year, but expects this to triple towards 2030
Enel expects to bring around 5GW of new renewables capacity online this year, but expects this to triple towards 2030

Italy-based utility Enel has brought its target for net zero forward to 2040, as it aims to generate and supply its customers with power solely generated from renewable sources such as wind and solar a decade earlier than previously planned. 

As it eyes net zero, Enel management said in a presentation to investors on 24 November that it now projects total capacity from renewable energy and battery storage to rise to 154GW in 2030, up from a previous target of 145GW. 

The 2030 target includes 129GW in renewable capacity Enel will own and a further 25GW that it will manage but not own with a controlling stake.   

When it comes to owned capacity, Enel intends to bring online 9GW in battery storage by 2030 to foster the penetration of renewable energy. This comes on top of some 32GW in wind and 43GW in solar it envisions it will add from 2021 to 2030. 

By 2030, the utility expects to trace more than 80% of its capacity to renewables, against an estimated 58% in 2021. At the end of this decade, the company also envisages it will be bringing online new clean energy capacity at the rate of about 15GW a year. 

That is triple the estimated 5GW Enel expects to come online in 2021, which will bring Enel’s green energy capacity to about 54GW and towers over the previous annual capacity record of 3.1GW set last year. 

Enel says it will exit all gas-powered generation by 2040 and get to net zero with no contribution from either nature-based solutions or carbon removal. It confirmed plans announced previously to exit coal by 2027. 

Strong growth in renewables in 2021 has comes despite supply chain challenges from which Enel has not been immune. However, the company said it has withstood difficulties such as port congestion and component shortages better than smaller players due, in part, to the fact that components of its renewable energy projects are secured ahead of time through forward agreements. 

Supply chain

Enel CEO Francesco Starace estimated supply chain problems will add up to a “slight delay” for about 500MW of renewable capacity that could have come online in 2021, but now will be completed in the first quarter of 2022. 

According to Enel’s 2022-2024 strategic plan, the company intends to add about 21GW of owned and managed renewable capacity in the next three years, about one third of this from wind and the remainder mainly from solar, as well as 2GW in battery storage.  

That plan shows that about 2.5GW of new owned wind capacity should be added in Latin America in 2022-2024, some 1.4GW in North America, roughly 400MW in Iberia and approximately 150MW in Italy. It also sees more than 650MW in new wind from other European countries like Romania and Russia.  

Starace stressed that indications for investments were not set in stone and could be subject to adjustments. “We only invest if we have adequate returns,” he said. 

The Enel CEO said much of its battery capacity is expected to initially be located in the US, where regulators in some parts of the country are interested in tapping into batteries “to cope with the instabilities of networks." 

Battery storage is also likely to be on the agenda in a few years time in places like Spain, Italy and Peru, he added. “It’s a question of the evolution of the regulator and how they see the value-added from batteries,” said Starace.

Offshore and hydrogen

The company still has no plans to invest in offshore wind, whether that be fixed-bottom or floating, in Italy or abroad. “We don’t need it,” said Starace. “We have a 400GW pipeline with no offshore wind. It takes roughly two years more to build an offshore plant and twice the money for the same amount of production.” 

For green hydrogen, Enel is now in the “discovery phase”, which entails a “big investment, but not one that is material to us,” added Starace. He expects Enel could deploy more capital for green hydrogen in the next three to five years, when it will be easier to “see if this technology maintains its promise” and to better understand how green hydrogen will develop, whether primarily through large-scale plants or smaller facilities. 

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