Italy-based power utility Enel is accelerating its plans to decarbonise its global power production, exit coal and make way for more wind, solar and a hydrogen venture, which could come to life in 2021 at the latest.

Speaking with journalists at a press briefing, Antonio Cammisecra, Enel’s head of global power generation and CEO of Enel Green Power, highlighted the company’s future strategy regarding its energy mix. Underscoring that there is only one kind of recovery from the coronavirus pandemic, and it is the green kind, Cammisecra discussed Enel’s plans for hydrogen and renewables, the company’s troubles with the coal phase-out, its position on offshore wind and marine energy and what offshore and onshore turbine makers can learn from one another.

In Italy, the law requires all coal-fired plants to be shut by 2025 and the company is confident of achieving it by then. “It must be done. And the quicker we do it, the better for everybody”, Cammisecra said. Enel had recently announced that it has received green signal from its board for the early closure of a thermal plant’s unit in southern Italy starting from January 2021.

The company is betting big on hydrogen. Green hydrogen represents a “fantastic complement” to electrification, allowing to accelerate decarbonisation in sectors where electrification is difficult, said Cammisecra during the press briefing. The utility is looking for projects – both in its 40 GW renewable energy development pipeline and its vast fleet of operational wind and solar plants. While the company sees potential opportunities in all markets where it has a presence, Cammisecra believes its first green hydrogen production sites are likely to be in the United States, Chile and Spain.  Amid continuing research and development investments, he expects the cost of using electrolysers to produce hydrogen from renewable electricity will become “very competitive” in the next few years. He stressed that hydrogen must be produced from renewable energy to contribute to decarbonisation, adding: “Any other form of hydrogen is just a trick.”  “An electrolyser can be easily turned on and shut down, so when coupled with a [variable] source such as solar or wind we can dispatch power in a much more fruitful way that is useful to the grid,”  Cammisecra explained.

According to Cammisecra, the company’s first hydrogen energy venture will combine a renewable energy project, wind or solar, of 300 MW to 400 MW and an electrolyser of 100 MW. This hydrogen energy project will be the newest addition to its renewable portfolio which otherwise largely comprises solar and onshore wind projects.

Regarding offshore wind segment, Enel has not changed its long-held position to not enter that market as of now. Cammisecra said that he is curious about the technological exchange between onshore and offshore wind technologies and insists on visiting offshore wind turbine factories. He believes the two technologies could benefit from one another. The offshore segment should learn about cost-reduction, while its land-based equivalent should learn how to improve reliability.

REGlobal’s views: Enel’s plan to exit coal sooner than later points towards the growing consensus global energy community that as the world moves towards a low carbon economy, coal power assets are going to be stranded, and will hence constitute a growing financial and reputational risk. As far as renewables are concerned, Enel wants to play it safe with its choice of technology to bring about the decarbonisation, sticking only to mature technologies such as onshore wind and solar. Hydrogen is a natural ally for these technologies and countries like United States, Chile and Spain share characteristics such as strong renewable resources that are competitive with other generation sources, ample space and a market for hydrogen. These countries also have regulatory frameworks that allow renewable energy producers significant opportunities to provide grid services, boosting the green hydrogen business case.