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Thought Leadership
EEI International Insights:
Enabling the Clean Energy Future

In November, political leaders from around the world will be gathering for COP26 to reaffirm their commitments to reducing carbon emissions and addressing global climate change. The energy industry will be a key partner in meeting this challenge, and electric companies around the world already have announced their own clean energy targets and goals for carbon emission reductions.

Earlier this year, we spoke with top leaders from AES, Enel, Iberdrol​a, and Ørsted about how their companies are reducing emissions, and about the key technologies that will enable the clean energy future. This session took place during EEI’s 5th Annual Global Electrification Forum, and featured Andrés Gluski, president and CEO, The AES Corporation; Francesco Starace, CEO and general manager, Enel Group (Italy); Ignacio Galán, Chairman and CEO, Iberdrola (Spain); and Mads Nipper, group president and CEO, Ørsted (Denmark). The discussion was moderated by Lawrence Jones, vice president of International Programs, EEI.

The following is an overview of the conversation, featuring highlights from the session. Responses have been edited for clarity and conciseness. 

  Andrés Gluski, president and CEO, The AES Corporation; Francesco Starace, CEO and general manager, Enel Group (Italy); Ignacio Galán, Chairman and CEO, Iberdrola (Spain); and Mads Nipper, group president and CEO, Ørsted (Denmark) in a session moderated by Lawrence Jones, vice president of International Programs, EEI, during EEI's 5th Annual Global Electrification Forum.
Above: ​During EEI’s 5th Annual Global Electrification Forum in April, Galán, Nipper, Gluski, and Starace shared how their companies are enabling a clean energy future.

 

Q: Today, your companies are all world leaders in clean energy. Tell us about your company's journey, what were some of the major inflection points along the way? And what are your goals for 2030?


Andrés Gluski (AES):
“We had some investments in renewables as long as more than 20 years ago, but we really started taking the transition seriously about five years ago. ... We set out an ambitious goal, that we want to be net zero in electricity by 2040. We want to have zero coal generation by 2030, and less than 10 percent of all generation (in MWh) coming from coal by 2025. So, we set short-term goals and long-term goals. ... What's made this journey possible is one, it's just the economics made sense over the last five years. Second, we believe that the climate transition was necessary, and we set out some ambitious goals. So, I'm happy to say that it's all come together very well. We’ve retired 10 GW of coal and, at the same time, we've built 10 GW of renewables. And, again, we're very excited about this transition and we see that many different things have to come together to make it possible.”

Ignacio Galán (Iberdrola): “I joined the company 20 years ago. I was coming from telecoms, so I was absolutely new in the sector and my board asked me to make a plan for the future of the company. ... For me, the environment is very, very important in my life. I saw this as an opportunity to show something different, and I presented the plan to the board for how to close all our oil and coal power plants, and how we were going to invest in renewables. … The result is that now, we have something like 35,000 MW of renewables, almost 90 million kWh of storage. The company ambition now is to continue this trend, to double our capacity in the next few years and to triple in the next 10 years, as well.”

Mads Nipper (Ørsted): “Imagine just 10 years ago, we were one of the most sort-of carbon intensive utilities. At that time, partly stimulated by ambition, but also by some of the EU 2020 transition goals for clean energy, we made a vision to say ‘we want to make that transformation, and we want to make it fast.’ And that led us to essentially make a massive shift. We divested from fossil fuel generation and invested very heavily and early into, specifically and most notably, into offshore wind. … In less than 10 years now we've already reduced 86 percent of our total emissions. And, now we are the largest offshore developer in the world. ... Our ambitions for the future are that by 2025 we plan to be completely carbon neutral in our generation, which I believe is one of the fastest plans, and the next big milestone we have is to be net zero, including our supply chain, by 2040. … So, we’re very happy with the journey, but as I mentioned, we’re only just getting started.”

Francesco Starace (Enel): “I joined Enel in 2000, but I have always worked in the power sector. We started to change the company in 2009-2010, when Enel Green Power was created and I was put in charge of that. Remember, that was a time when renewables were very expensive…but we started developing a pipeline of projects, betting on the fact that this was going to become a competitive industry. ... When I became the CEO of Enel in 2014, I changed Enel through Enel Green Power and today it is the largest renewable energy player outside of China. The goal today is to grow our present capacity, which exceeds 50,000 MW, tripling it to 145,000 MW by 2030. … The plan is to fully decarbonize by 2050. We have decommissioned so far 13,000 MW and are closing another 8,000 MW of coal in the next few years. We will exit coal by 2027... The strategy we followed was to remain a utility. We are an integrated player with a very large generation fleet, the largest private network worldwide, and a lot of customers. So we want to keep this front united, where networks are an instrument to decarbonize society deeply: the issue is not just about providing renewables but also how to make them available in a reliable way to society... so, it's a huge effort."

 

Q: We see a lot of investments coming from Wall Street and elsewhere, but your companies have also made bullish announcements about investments. Can you talk about your investment plans and investment strategy for the next decade?


Starace (Enel):
“The plan we have is to invest around 200 billion euros in the next 10 years. Roughly half will go into the generation and half into the network line of business, so it's balanced between networks and generation. … We also issued the first bond linked to sustainable development goals (SDGs) in 2019 – it is a 1.5 billion USD bond linked to SDG7, and we issued a second one a few months later for 2.5 billion euros, and there was a huge success. These were the first-ever SDG-linked bonds in the market. Now we issued a framework that all our financing goes through some SDG flavor. ... So, money is not a problem. Technology is not a problem. The issue is governance, namely what processes are there around the world to rule on permitting and allow investments to materialize. And this is not on par with the speed at which the world needs to change its infrastructure.”

 

Q: AES was the first publicly traded company to issue a report on compliance for the task force on climate related disclosure. Can you talk about why you chose to do that?


Gluski (AES): “We joined the taskforce on climate disclosure because we felt that it was very important. One key factor was, if you believe in climate change, then is your business robust to a change in the climate? And we thought it was very important for investors and clients to see that yes, we were robust and (to see) what steps we were taking. Now, I actually think that the real challenge is, can we grow fast enough? Can we supply the needs of society?... We do have to do more research to get that last 10 or 20 percent by 2050, but we also have to run as fast as we can with the technology of today. And I don't believe it's like a one trick pony. Lithium-ion batteries aren't going to solve all the problems, hydrogen is not going to solve all the problems. So, I think it's all of the above.”

 

Q: I want to talk about the human aspect of this transition. Can you talk about that in terms of how you are upskilling the workforce?


Nipper (Ørsted):
“I think it's incredibly important to underline that this transition to the new energy system is a huge opportunity to create jobs and industrial development in all parts of the world. I think in many cases the rhetoric has been about what the risks are and that people may lose their jobs. But the fact is that it's a wonderful opportunity to reskill and to work with unions, like Ørsted does consistently in the U.S. We’re also supporting minority businesses and working with universities to upskill labor…and I think this will be important in a post-pandemic period, if we can come out and prove that we are making serious investments, creating great jobs, working with the unions, and investing in sustainability. I think the more we all do to prove that we are a company that takes a holistic responsibility for everything from biodiversity to job creation to accelerate the green transformation, I think we will have a lot of tailwinds.”

Gluski (AES): “I think that to attract really talented young people, you have to have a very strong sustainability program and be seen as helping to make the world a better place. This is very important for millennials and the younger generations. They really want to make a difference in the world, so if you really want to attract top talent, quite frankly, you have to do that. And this also extends to customers. I think they want companies that are doing good for the world, not just supplying a service.”

Starace (Enel): “This is the utility world – and the word (utility) itself is a very big motivator. We are useful. So, our purpose is very clear...we are an incredible enabler of things. People deep down in this industry have a spirit of service that is unique. I don’t think you'll find an industry with this same unifying spirit of service. This is a big thing. We just need to be useful for society. We were born like that – this is deep in the chromosomes of the industry. I think this is a great thing that needs to be communicated to people and it’s a super lucky moment for the industry.”

Galán (Iberdrola): “When you mention the human aspect, I think that if we would like to achieve the target of net zero, we all need to row in the same direction, politicians, regulators, unions, civil society, companies, universities. We need to educate people if we would like to deliver the benefits that this transition can provide, which are jobs, wealth, and economic growth. … I think that the point for me is that everybody needs to move in the same direction. We need politicians, regulators, unions, civil society, companies, universities, etc. to achieve the results that society is expecting from us.”

 

Q: Why are you so optimistic about the clean energy future, and where do you see your company by the year 2050?


Gluski (AES):
“Where do I see the company in 2050? I see us as a leader in innovations, really. But I think that the modern world is much more about partnerships of all kinds…because, as we’ve said, the opportunity is so huge that there's space for everybody. And many times, by teaming up, somebody may have a better technology in one space and I may have it in the other, and if we get together, we can make things happen.”

Nipper (Ørsted): “I think we have every reason to be bullish. We’ve talked about mature technologies, we talked about a continued acceleration of technological opportunities, we talked about a population of the world that is becoming more and more prone and politicians that are getting it. And if I look at what I would not have thought possible, that a very carbon intensive utility like Ørsted has made a complete transformation to now being almost carbon neutral in our generation in less than a decade. ... My dream is that we will have been a catalyst for change, meaning playing a role like we've done in offshore wind. … If we can look back and say that didn't end in 2021, that continued for the next 30 years where we played a role and showed to everybody else that this is a viable way forward. That's my dream.”

Galán (Iberdrola): “From how I see it, we have a moral obligation. Our generation probably has the last opportunity of changing the trends of emissions and pollution...and I think we have this moral obligation to leave a better world, in all senses. A better world in the sense of a cleaner, more competitive, more efficient, everything, because we cannot only leave liabilities for future generations. We have to leave them some assets, as well. ... We’re trying to give future generations a system that is much more reliable, much cleaner, and with more jobs and a better education for the people. That is our ambition. Not only to be bigger, to be more efficient, to be better for shareholders, but also to be better for the society we serve.”

Starace (Enel): “I think that the conclusion on which we all agree is that the world will be decarbonized by and large, or substantially, by 2050.”​