Circular economy: Enel X’s five business models
The circular economy is founded on five keystones that Enel has placed at the core of its global strategy in order to offers its customers cutting-edge, sustainable solutions: from Demand Response to integrated public lighting and e-vehicle charging systems
Population growth and a scarcity of resources mean that the linear economic model based on the “produce, consume, dispose” mindset is no longer a sustainable option. The new frontier is the circular economy, a paradigm that aims to replicate nature’s cycles of regeneration within the economic system by focusing on five keystones, which in turn translate into five business models. Enel X has ensured that these five keystones are at the very heart of its strategy and, through a range of solutions offered on a global level, is establishing itself as a booster or accelerator of the circular culture and sustainable innovation within the ecosystem of its suppliers, partners, installers and clients.
Sustainability of resources
The first business model centres around a supply chain comprising circular suppliers, ensuring the use of renewable energy and raw materials of biological origin that are completely recyclable or biodegradable. So how are we contributing to this paradigm here at Enel X? Through our innovative solutions for generating renewable energy, for instance, and with services such as Enel X’s Demand Response which remunerates commercial and industrial consumers for agreeing to modulate their own consumption at the request of the electricity operator. This makes it possible to respond to demand/supply peaks and guarantee greater grid flexibility and stability.
Demand Response also enables the more effective exploitation of renewable energy sources such as wind and solar by encouraging consumption at times when energy production is higher or discouraging use at times when less energy is being generated. This reduces excess and wastage because the electricity generated is now either consumed immediately or stored rather than simply going to waste. According to the International Energy Agency (IEA), by 2040 more widespread storage systems and digitalised Demand-Response could reduce renewable energy waste from 7% to just 1.6%, cutting carbon monoxide emissions by 30 million tonnes in the process.
Pay as you go
The second business model sees products as a service. Clients have access to products owned by a company that also manages and maintains them. This incentivises producers and service providers to offer longer-term solutions, thus reducing the resources used. Charging points for e-vehicles such as the Pole Station 3G and the new generation solutions in the Juice range are just a couple of examples of how Enel X is putting this paradigm into practice. With these solutions the customer only pays for what he or she needs (the charging service), without having to buy the product (i.e. the charging infrastructure). This is a sustainable model designed to mirror the new consumption habits of Millennials (people born between the late 1980s and early 1990s) and Generation Z (born after 1997) who seem to prefer access to possession and experience to ownership.
The advantages of sharing
The sharing platform business model, based on several customers sharing the use of a good or service, is another response to this new consumption trend. Sharing reduces the number of products in circulation as well as the resources required to produce them and the energy consumed to make them function, guaranteeing customers significant savings and, in certain cases, even profits. This is the model applied by the Vehicle-to-Grid (V2G) bidirectional charging system that Enel uses for electric cars and which turns each user into a potential energy provider. The system allows users to use their electric cars – when they are parked and charging in a garage or connected to the grid – as energy suppliers to the grid through Enel X’s Demand Response service. A virtuous circle is thus created that reduces the cost to customers of using e-vehicles as they are paid for through their contribution to the grid. It also encourages the spread of a zero impact mobility model.
The sharing business model is also being applied to solutions that combine several different customer services in a single asset. This is exactly the case regarding the Enel X Juice Lamp, a smart LED lamp that combines public lighting with an e-vehicle charging system. Aside from being able to charge two cars at the same time, the system can also be pre-set for video surveillance, air quality monitoring and fibre or Wi-Fi connectivity. Therefore, a whole range of different services can be provided to the community by one single sustainable solution.
The fourth keystone concerns extending the life cycle of goods. Products and their components are repaired, refurbished or repurposed and reused, maximising the economic benefits and reducing the resources consumed and the amount of waste to be disposed of.
Enel X applies this paradigm by offering its customers maintenance, repair and assistance services and remote management on the one hand, and solutions such as the Juice range on the other; these have a modular design so that they can be easily dismantled and reconfigured in order to last longer.
Maximising reuse and recycling
The fifth and final keystone involves the end-of-life management of products and leverages the salvaging and recycling of resources so that they can be used in further production processes. When it came to designing its solutions, Enel X took inspiration from this model to expand the number of product end-of-life reuse and recycling options as much as possible. Through this model, in fact, Enel X is incentivising the reuse and regeneration of electronic components used in its solutions and the discovery of new uses for assets and resources nearing the end of their life cycle. This is just one of the many examples of how Enel X innovation is helping to speed up the adoption of forms of circular production and consumption within the vast ecosystem of its own suppliers, partners, installers and clients, as well as spreading the culture of sustainability further afield, of course.
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One of the initiatives covered by the significant tax credits included in the EcoSismabonus is the installation of a heat pump to replace a condominium boiler. What’s more, transferring the tax credit for 65% of the value of the intervention to Enel X means only having to cover the remaining 35% of the total cost.
The future of the economy is circular. Enel X has placed this model at the centre of its strategy with the aim of accelerating and multiplying the benefits for clients and suppliers. The advantages do not only concern the environment, but also economic growth and new business opportunities
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