Enel

In 2020, ENEL had 45 GW of renewable capacity and plans to triple its renewable capacity by 2030 to reach 145 GW. Enel also plans to increase its green hydrogen capacity to more than 2 GW by 2030 and will invest an additional EUR 5 billion (USD 5.7 billion) in the hybridization of renewable sources and storage systems, the potential of which is expected to reach around 20 terawatt hours (TWh) by 2030. Enel X, the company’s flexibility optimiser business, is also developing at scale. Enel will increase the number of electric buses supplied and managed by more than 6 times to around 5,500 units and reach around 780,000 public and private charging points worldwide by 2023.

Enel is one of the only companies assessed that has published results of its climate scenario analysis in financial terms, translated as EBITDA gains or losses for short- and medium-term horizons (i.e. until 2030). It publishes financial results reflecting risks and opportunities of electricity demand variations and renewable generation variations due to resource availability or regulatory measures affecting CO2 prices. The company relies on Representative Concentration Pathway (RCP) scenarios – RCP 2.6, RCP 4.5 and RCP 8.5 – and a benchmark of external scenarios. Enel could improve its performance by embedding the 1.5°C scenario within the analysis performed.

Enel plans to reduce its scope 1 emissions intensity by 80% by 2030 with an intermediary target of 64% by 2023, both compared to 2017. The company also plans to reduce its scope 3 emissions from the use of sold products by 16% by 2030 compared to 2017. Finally, Enel aims to reach net-zero emissions by 2050 for its scope 1 emissions and will define scope 2 and 3 targets in line with the SBTi Net-Zero Standard in the near future.
While Enel is on track to achieve its targets, the company’s targeted scope 1 and 2 emissions reductions are not fully aligned with its 1.5°C pathway. Furthermore, it should aim to be carbon neutral by 2040 as this is aligned with the 1.5°C pathway for electric utility companies with assets in emerging economies.

Enel has reduced its dependence on fossil fuel assets from 51% in 2018 to 36% in 2020. This has resulted in a significant reduction in scope 1 and 2 emissions intensity from 421 gCO2/kWh in 2015 to 214 gCO2/kWh in 2020. However, Enel’s future emissions intensity is projected to only decrease by around 8% per annum between 2021 and 2025, while 10% is required to align with its 1.5°C pathway. Enel could close this decarbonization gap and remain within its carbon budget to 2035 by accelerating the closure of coal plants to a date before 2027 and limiting the share of gas in its generation portfolio.

Enel invested around EUR 93 million (USD 106 million) in low-carbon research and development (R&D) in 2020, equivalent to 1% of its total capital expenditure (CapEx), which remains below the expectation that electric utility companies should be investing 5% of CapEx in low-carbon R&D. Enel is collaborating with several innovation hubs and labs to support research projects. Notably, in 2020, Enel worked on systems managing sediments that accumulate in basins of hydropower plants to fight coastal erosion, on optical fibres that can detect the presence of ice on turbines and on digital tools replicating power supply infrastructure to help operations and data management.

Enel plans to reduce its scope 1 emissions intensity by 80% by 2030 and by 64% by 2023, both compared to 2017. It also plans to reduce its scope 3 emissions from the use of sold products by 16% by 2030 compared to 2017. Enel has committed to achieve net-zero scope 1 emissions by 2050.

Enel is investing EUR 16.8 billion (USD 19.2 billion) over the 2021-2023 period to install 15.4 GW of new renewable capacity to reach 60 GW by 2023, and it will invest EUR 65 billion (USD 74 billion) over the 2021-2030 period to install 75 GW of renewable capacity to reach 120 GW by 2030.

Enel has disclosed planned capital expenditures from 2021 to 2030. The company plans to allocate 46% of the EUR 150 billion (USD 171 billion) planned to renewable generation, while only 3% will be allocated to conventional generation (i.e. gas, oil and coal) over the period.

Between 2015 and 2020, Enel’s emissions intensity from electricity generation decreased by 48%, due to a simultaneous reduction in thermal capacity and increase in renewable capacity. Enel has reduced its emissions intensity at a rate faster than that required by its 1.5°C pathway.

Enel has improved its GHG targets ambition, is planning to significantly invest in renewables until 2030 and has accelerated the closure of its coal plants to 2027. The company’s climate strategy is consistent but could be further improved by working on finding alternative renewable gases to natural gas.