“For us this is not a solution”: Enel CEO skeptical of use of carbon capture

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The CEO of Italian multinational energy company Enel has expressed doubts about the usefulness of carbon capture and storage, suggesting that the technology is not a climate solution.

“We’ve tried and tried – and when I say ‘we’ I mean the electrical industry,” Francesco Starace told TUSEN’s Karen Tso on Wednesday.

“You can imagine, we have made a big effort over the last 10 years – maybe more, 15 years – because if we had a reliable and economically attractive solution, why would we go and shut down all these coal-fired plants? [when] could we decarbonize the system? “

The European Commission, the EU’s executive body, has described carbon capture and storage as a suite of technologies focused on “capturing, transporting and storing the CO2 emitted by power plants and industrial plants” .

The idea is to prevent CO2 “from reaching the atmosphere, by storing it in suitable underground geological formations”.

The Commission said the use of carbon capture and storage is “important” when it comes to helping reduce greenhouse gas emissions. This view is based on the claim that a substantial proportion of industry and power generation will still depend on fossil fuels in the years to come.

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Enel’s Starace, however, seemed skeptical of the potential for carbon capture.

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“The point is, it doesn’t work, it hasn’t worked for us so far,” he said. “And there’s a rule of thumb here: if a technology doesn’t really improve in five years – and here we’re talking more than five years, we’re talking at least 15 – you’d better drop it.”

There are other climate solutions, Starace said. “Basically stop emitting carbon,” he said.

“I’m not saying it’s not worth trying again, but we’re not going to do it. Maybe other industries can try harder and be successful. For us, it doesn’t. is not a solution. “

Carbon capture technology is often seen as a source of hope in reducing global greenhouse gas emissions, and features prominently in countries’ climate plans as well as in the net zero strategies of some of the world’s largest. major oil and gas companies of the world.

Proponents of these technologies believe they can play an important and diverse role in achieving global energy and climate goals.

However, climate researchers, activists and environmental groups have long argued that carbon capture and storage technologies prolong the global dependence on fossil fuels and divert attention from a much-needed hub to renewable alternatives.

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Plans to increase shareholder dividends

Starace was speaking after Enel released a strategic plan for 2022-24 and outlined his goals for the years to come. Among other things, Enel will make direct investments of 170 billion euros ($ 190.7 billion) by 2030.

Direct investments in renewable energy assets that Enel will hold are expected to reach 70 billion euros. Consolidated installed renewable capacity, or capacity owned directly by Enel, is expected to reach 129 gigawatts by 2030.

Additionally, Rome-based Enel said it advanced its net zero commitment – a target that covers both direct and indirect emissions – to 2040, whereas it was previously 2050.

On the fossil fuel front, the group wants to exit coal production by 2027, with its exit from gas production by 2040.

Enel also said that between 2021 and 2024, shareholders “are expected to receive a fixed dividend per share … which is expected to increase by 13%, up to 0.43 euro / share”.

During his interview with TUSEN, Starace was asked about Enel’s forecast for higher dividends and the wider debate over how one might be invested in so-called “sin stocks” – in this case, the big polluters in the energy space – and still get good returns, especially on the dividend side.

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“It’s all about the risk rewards,” he said. “And in the end, I see nothing wrong with an increasingly risky business [being] … Forced to increase dividends if you want to attract investors. “

“What we are trying to say is that there is a tipping point, there is a point where the risk becomes unbearable whatever dividends you want to distribute, and it is approaching,” he said. he declares.

“So in our case what you need to do is get out of that risk, get out of the carbon footprint and also make sure that when you put the word ‘net’ in front of zero that ‘net’ doesn’t become sort of a trick around which you don’t really decarbonize your operations. “

“We’re saying we’re going to be zero carbon, which means we’re not going to emit carbon and so we’re going to [not] … Need to plant trees to offset this carbon. “

Starace recognized, however, that trees would be needed over the next several centuries to remove carbon left in the atmosphere due to historic emissions.

—TUSEN’s Sam Meredith contributed to this article.

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