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Disclosure on Management Approach - Climate Strategy

Climate change is a global challenge to which governments, companies, and citizens are called to respond within the scope of their respective duties.
Aware of its responsibilities, Enel is engaged in the fight against climate change.
Indeed, Enel believes that, by improving its environmental performance, it can both safeguard the Earth’s equilibria and create corporate value.
In March 2009, Enel’s CEO was among the 60 heads of European power companies who, upon the initiative of Eurelectric, committed to achieving a carbon-neutral European power sector by 2050. This ambitious commitment will translate not only into a sharp increase of zero-emission power generation (from renewable and nuclear sources), but also into a radical change in consumption patterns (e.g. energy efficiency and more electricity in transport).
Among the crucial factors in moving towards the new scenario without sudden shocks in the economic system: fast development of carbon capture and storage (CCS) technologies and emission credits from international offset mechanisms (e.g. the Kyoto Protocol Clean Development Mechanism - CDM).

Enel’s strategy rests upon five pillars covering cover all the main elements of carbon neutrality:

  • use of the best available technologies: Enel’s thermal generating mix is progressively evolving towards 100% high-efficiency and thus low-emission power plants;
  • development of zero-emission sources, e.g. renewable and nuclear energy: Enel is consolidating its long-standing leadership in renewable through a dedicated company – Enel Green Power – and plans to significantly increase the nuclear share of its generating mix;
  • energy efficiency:Enel plans to improve the efficiency of its grids and take end-use efficiency initiatives through, among other things, its energy service companies;
  • research & innovation: Enel allocated about e 1 billion in the 2010-2014 period to CCS demonstration projects, development of innovative solar technologies and of smart grids, and dissemination of power-driven mobility;
  • global commitment to curbing CO2 emissions: dissemination of projects and best practices in East-European and developing countries using, among other things, the Kyoto Protocol flexible mechanisms (Clean Development Mechanism and Joint Implementation).

Enel is pursuing a dialogue with decision-makers to promote the adoption of immediate and clear public policies and a long-term stable regulatory framework,to foster consistent choices by the industrial sector. It is preferable to move away from command-and-control measures, based on emission standards for each installation, in favor of market mechanisms, which convey a CO2 price signal, encouraging emission reductions and optimizing resources to the benefit of companies and consumers. The Kyoto Protocol and the European Emission Trading Scheme (EU-ETS) took the first steps in this direction. However, the current reference framework presents considerable uncertainties in the long term that the December 2009 Copenhagen Conference did not resolve.

Enel thinks that sustainable companies’ climate strategies would benefit from an international agreement based on the following principles:

  1. Global approach: Mechanisms should be put in place to prompt all countries to make a commitment within the scope of their capabilities and legitimate development prospects.
  2. Reasonable and achievable long-term targets: Investors in energy and other sectors should have a clear and realistic view of actions to be undertaken.
  3. Extension of the CO2 market under clear and firm rules: This would generate the liquidity and long-term price signals that energy-sector operators need to make massive investments on the transition towards a low-emission economy
  4. Support to development of technologies: The public sector should provide financial resources to foster fast development of advanced technological solutions jointly with the private sector, avoiding the risk that companies might be impeded by their fear of the first-mover disadvantage.
  5. Direct involvement of the private sector: Administrative procedures should be streamlined to increase the involvement of the private sector, which has proved to be the main player of emission reduction projects in developing countries. For instance, private-sector Clean Development Mechanism initiatives account for 85% of the CO2 emission reductions in Asia and Latin America.

Public climate-change policies should also take into account the distinctive features of the various sectors of action. For instance, in the sector of renewable energy, authorization procedures should be simplified, while construction of power plants and their effective and secure integration into the power grid should be encouraged through straight forward and predictable procedures, which would provide security to investors.

For information and further details, contact:
Enel SpA - Regolamentazione, Ambiente e Carbon Strategy / Politiche Ambientali
Viale Regina Margherita 137 00198 Rome - Italy