We chose to put sustainability at the heart of our business model in order to create economic, social and environmental value for all
Published on Tuesday, 17 December 2019
It was 2014 when, at the World Economic Forum in Davos, the circular economy made its international debut. For the first time, in the context of combatting climate change the debate addressed the need to abandon the traditional, linear economic model of “produce, consume, dispose”. Such a shift would involve a move to a circular model based on sustainability, no longer intended as an ideal goal but as a crucial factor for economic growth. The Enel Group was one of the first to embrace this paradigm shift, adopting a sustainable and integrated business model that since 2015 has been creating, and continues to create, growing value. As much was explained on November 26 in Milan, during the presentation of the 2020-2022 Strategic Plan, a vision based on the three mainstays of our development – decarbonisation, electrification and digitalisation. This can be summarised in the formula sustainability = value.
Following this insight, Enel X was founded in 2017. This is the division of the Group that anticipates the needs of its customers by developing innovative products and digital solutions in areas in which energy shows the greatest potential for transformation: city, home, industry, electric mobility and fintech. Right from the outset, sustainability has been at the heart of our business model, with the aim of building an ecosystem capable of taking full advantage of the opportunities offered by digitalisation to create new economic, social and environmental value for all: shareholders, consumers, businesses and public administrations. This is a mission that we drive forward each day through a platform-based model, which allows customers to actively participate in energy markets and reduce costs, maximising the impact of innovation and capitalising on economies of scale.
All these aspects place Enel X firmly at the heart of the strategy that will see our Group maximising the creation of value for shareholders over the next three years, with considerable potential for growth even beyond 2022. Today, Enel X is the world leader in Demand Response (DR), as well as one of the leading players in the sectors of e-mobility and energy storage systems. Over the next three years we will invest 1.1 billion euros to meet the growing demand for value-added services brought about by the decarbonisation of facilities worldwide and widespread electrification, while also further empowering customers, who already play an increasingly central role in the energy system. In particular, decarbonisation will be boosted by an increase in DR capacity from the current 6.3 GW to 10.1 GW by 2022 and an increase in storage capacity from the current 119 MW to 439 MW over the same period. Enel X will also confirm its role as the driving force of electric mobility, bringing the number of public and private charging stations to 736,000 by 2022, compared to the current 82,000.
For us at Enel X, sustainability = value means offering increasingly cost-effective solutions. To better perform our role as “value booster” and “transition accelerator” of the circular economy, we have organised our business into several Global Product Lines, corresponding to the sectors that can be greatly transformed by the use of energy, but also to the many innovative services designed around the needs of our customers. To each line we apply the five business models on which the circular economy is based: the sustainability of resources, seeing the product as a service (i.e. the possibility of using products without purchasing them, so customers only pay for what they need), the sharing economy, extending the life cycle of goods and the end-of-life management of products (encouraging reuse and recycling).
We have also developed a series of innovative tools for measuring and accelerating circularity, applying these to our own solutions to certify their circularity and also making them available to other companies and public administrations. The Circular Economy Score, in fact, measures the degree of circularity of individual products with a score from 1 to 5. The Circular Economy Report analyses and measures the energy circularity of the company and all of its corporate premises, and the Circular Economy Boosting Program pinpoints all the actions necessary to increase the circularity of the business, the site and individual product.
Demand Response is a good example of how sustainability can transform into value on many different levels. The DR programme rewards our commercial and industrial customers for temporarily reducing their energy consumption on demand, for example in the event that peaks in demand exceed the amount of energy available. So, while demand is met without the need to increase energy production, the company benefits from both financial gains and lower costs. This prevents possible blackouts and keeps the energy bill low, eliminating peaks in demand and price. The environmental benefits are also obvious: DR, combined with storage systems, can promote better integration of renewables in the energy system. Once again, economic benefits go hand in hand with social (no blackouts, lower energy prices) and environmental ones (greater use of renewable sources).
Another example comes from e-mobility. Longer battery life on one hand and the expanding network of charging points on the other, are helping boost demand for electric vehicles. According to BloombergNEF's Electric Vehicle Outlook 2019, this process will lead to a progressive fall in prices and the mass take up of this type of vehicle in the coming years, with significant benefits for both the environment (less pollution) and people (fewer cases of respiratory diseases).
If we then focus on energy efficiency in our homes, we can see that similar trends have led in recent years to lower prices for LED lights, smart meters and technologies for the smart home in general.
Sustainability is value with Enel X’s smart home solutions
For us at Enel X sustainability means value, providing savings for our clients. Our goal is to offer sustainable services that are increasingly affordable and within reach of everyone.
Similarly, in urban areas, the technological shift enabled by digitalisation is offering cities smart solutions that are tailored to the needs of citizens and capable of providing more efficient services at a lower cost. These include energy efficiency systems for public administrations, digital service management platforms such as City Analytics and YoUrban, or solutions such as the latest generation of JuiceLamp, which integrates adaptive public lighting, charging stations for electric vehicles and traffic management systems.
These are only some practical examples of our company's daily commitment to finding solutions that can improve quality of life for everyone, every day. Our pole star is always one simple equation: sustainability = value.
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