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Energy, Italy can make it: Francesco Starace takes stock of the situation

How to deal with the energy crisis caused by events in Ukraine: Enel’s CEO and General Manager Francesco Starace addresses the issue

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Reducing the role of gas in energy production, replacing gas for civil uses with more efficient and safer technologies that are already available, accelerating in the area of regasification. According to Francesco Starace, these are three crucial but necessary choices that need to be made in order to be able to face the energy crisis caused by events in Ukraine. Italy can make it: Enel’s CEO wrote this in an editorial published in a leading Italian newspaper “Corriere della Sera,” indicating the steps that the country should take “in order to be less ‘fragile’ and to help strengthen European energy policy.” According to the CEO, there are three options to implement which must be taken into account immediately. First of all, “reducing dependence on gas by drastically cutting down on the amount of gas burned to generate electricity.” Secondly, “reducing the amount of gas for civil uses with technologies which are available today that make energy use more efficient and safer.” Finally, “diversifying gas supply sources for other industrial and civil uses by building at least two LNG regasification terminals. This would make it possible to manage more effectively and preventively any crises that might arise in countries supplying gas through pipelines.

For each solution, Francesco Starace analyzed the implications in terms of “time, investment (and not costs, which are those paid today to buy gas at a high price) and consequences.” As for drastically reducing dependence on gas in producing electricity, “the choice to be made is to accelerate the conversion of the power generation fleet into renewable energy production.” Starace recalled the proposal made by the organization Elettricità Futura which had shown that “achieving about 60 GW of renewable capacity in the next three years is a possibility within Italy’s reach.” Indeed, in this sector the country can count on “world leadership and a widespread entrepreneurship which, in the past, already proved its ability to take such leaps in this area.” In this way, Italy’s gas consumption “would be reduced in three years by about 18 billion cubic meters and by a further 5 billion in the following two years, almost eliminating the need for gas in energy production by 2030.

““The crisis caused by events in Ukraine concludes a year of tensions in gas markets. Italy can make it but, in order to be less ‘fragile’ and to help strengthen the European energy policy, three choices need to be made immediately”

Francesco Starace, Enel CEO

As for the second point – namely the reduction of gas consumption for civil uses – Starace believes that “an existing and completely competitive solution is the gradual replacement of gas boilers with heat pump systems.” The time needed to do this would be longer “but in about ten years the consumption of gas for civil uses would be reduced by approximately 10 billion cubic meters.” The construction of two regasification terminals would take “three years for the first one, which already has all the permits, and probably five years for the second one, for which there should be a simplified authorization procedure.” The construction of these plants would mean that “about 16 billion of cubic meters would no longer be linked to pipeline supplies, thereby providing great flexibility in the supply of LNG from other countries (USA, Qatar, Australia and Canada).

Starace also stressed that “the strengthening and the second-generation digitalization of electricity grids” are functional choices that Italy has already made, also on the basis of the programs provided for by the PNRR (Italy’s National Recovery and Resilience Plan). In fact, unlike other countries, Italy can count on “an infrastructure that’s capable of keeping up with the rapid evolution of its generation fleet in the direction indicated here, and this is a strong point that must be kept in mind.” In short, as Enel’s CEO finally reiterated, Italy has an ample opportunity to “do it quickly and well.” In doing so, “it would attract investments, improve the balance of payments, drastically cutting the costs of purchasing gas from abroad, significantly reducing and stabilizing energy costs.” Furthermore, it “would create jobs and strengthen industrial chains that already exist, establishing and consolidating its leadership in relevant sectors in the world.” In “doing so,” it would become “a point of strength and no longer one of weakness in the European energy system, contributing to building a freer, more competitive and sustainable future for its economic development in the context of a more secure Europe.

 

Enel editorial staff