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Finance & Innovation

5 ways this energy giant is trying to fix the planet

Source- Wikimedia Commons- Rosser1954

The Italian energy giant Enel has found itself in an unusual relationship: friends with Greenpeace, the combative environmental advocacy organization.

They were in a bitter court dispute just last year, but Greenpeace’s relentless environmental logic finally convinced Enel to change sides.

Now, instead of fighting attempts to go green and cruising on fossil fuel profits, the company is embracing Greenpeace’s vision.

It’s a shift that could influence energy production around the world.

Enel has 61 million customers, the most by an energy utility in the world. It generates roughly 29% of its electricity from coal and another sizable chunk from natural gas and oil.

Becoming environmentally friendly will be an enormous undertaking, but the company is prepared to start making major investments.

As the Enel’s CEO Francesco Starace told the Guardian, “There is a huge tide flowing and you can decide in which direction you want to swim. The tide is not in our control — it is the evolution of technology. I think it is crazy if there is someone thinking that he can actually influence this.”

Here are 5 ways that Enel is changing the game.

No more coal plants

Enel will no longer build coal plants and will begin to phase out existing plants. Coal is the world’s second biggest source of energy after oil and, arguably, the most environmentally disastrous. Extracting and transporting coal destroys and pollutes ecosystems and emits greenhouse gases. Burning coal releases a range of harmful chemicals that accelerate climate change. Coal plants also consume huge quantities of water.  

Coal miningImage: Flickr: Emilian Robert Vicol

Ultimately, a green future is a future without coal and Enel gets this.

Going carbon neutral

Some estimates claim that humanity has already emitted two-thirds of the trillion tons of carbon that can reasonably be absorbed by the Earth before dangerous climate change occurs. Since the rate of carbon emissions is still rising, drastic measures will have to be taken to avoid hitting the trillion ton mark in the years ahead.  

While, ideally, carbon neutrality needs to be achieved before 2050, at least Enel is establishing a concrete date rather than some vague distant period.

Investing in renewables

Over the next five years, Enel will invest $9 billion in renewable energy technologies in a bid to make wind and solar the centerpieces of its portfolio. Since the price of wind and solar investments have substantially fallen over the past several years, these funds will go a long way.

Many energy utilities are aligned with state governments because the services they provide have become such essential parts of modern life. When an energy utility shows an interest in a certain area of investment, governments will generally follow with additional investments or make the investing easier through incentives such as subsidies.

Further, Enel’s shift toward renewables could spur governments to set stronger regulations that all but mandate green investments.

Being transparent

The energy industry has been roundly criticized for failing to reckon with climate change and for funding deceptive research that obscures basic scientific facts.

Enel’s plain admission that climate change is a real problem and that something has to be done about it is refreshing and could give other industry players a nudge in the right direction.

Influencing the industry

The energy industry — like most industries — tends to act in unison. Trade groups lobby together and rarely break rank. Enel’s decision to split from the general consensus of ignoring climate change could embolden other energy players to change their positions, potentially ushering in a flood of renewable investments.

If the biggest energy utility in the world is able to prove that renewables are not only feasible, but also profitable, then resistance will fall away.