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Energy CEO calls for Europe’s ‘stupid’ dependence on natural gas


Enel’s Francesco Starace poses for a photo during the World Economic Forum in Switzerland on May 24, 2022. In an interview with CNBC on Friday, Starace said that dependence on gas is “stupid.”

Jason Alden | Bloomberg | beautiful pictures

CEO of Italian energy company Enel told CNBC on Friday that Europe’s reliance on natural gas was “dumb” and suggested that reducing its dependence on fossil fuels was a better option in the long run.

“I think we finally understand how stuck we are on gas, how stupid this dependence is, and how we can do it,” said Francesco Starace, who is speaking to CNBC’s Steve Sedgwick. can fix this.”

In an interview at the Ambrosetti Forum in Italy, Starace said that, in some people’s view, oil and gas will be the key to energy for the next 25 years, a position he opposes.

“I completely disagree, because this is a view that came from 15 years ago,” he said. “Was it wrong then? No, it wasn’t. Wrong now.”

He went on to add: “The economy could work much better, relying less on fossil fuels than people think. “It will probably be another two years before people understand that – but there we are.”

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Despite this optimism about the future, today’s reality on the ground is extremely challenging.

The current situation in Europe, where many countries are trying to cut off Russian energy following the Kremlin’s invasion of Ukraine, illustrates the important role fossil fuels play in society.

With the colder months coming to an end, European nations are looking for ways gas storage in an effort to ensure the security of supplies.

Looking ahead, Enel’s Starace expressed confidence Europe is prepared for next winter.

“As far as storage is concerned, Europe … got it right,” he said, noting that most countries are “quite full”.

“Now the question is what would happen if the gas was completely cut off from Russia,” Starace continued. “Well, we’re almost there, the real cut is almost done.”

“We have a view, and there’s a lot of research that shows that with some sacrifice, [such as] temperature drops two orders of magnitude, and a little attention to gas consumption… Europe could make it through the winter. “

“The question is when do we come to spring [of] By 2023, indeed, the reserves have been completely exhausted, and the gas is still not flowing,” he said.

“Can Europe re-establish storage, with all the backup sources of buoyant and energy returners coming from other parts of the world? I think that will be a big challenge. “

The Enel Group – whose main shareholder is the Italian Ministry of Economy and Finance – has said it will abandon gas production by 2040. It also plans to leave the retail gas market by 2040.

European concerns

Starace’s comments came the same day as the EU’s Chief Climate Officer, Frans Timmermans, underlined the urgency of the situation facing European economies amid rising energy prices and supply concerns.

“We need to do everything we can to face this energy crisis and make sure we do everything we can to keep prices down so our citizens can still afford to heat their homes during the winter.” this winter,” said Timmermans, who spoke with CNBC’s Silvia Amaro at an event in Bali, Indonesia.

He also stressed the importance of member states “being able to address the issue of profits, if necessary”.

“So we’re going to try everything to make sure that our energy markets are working and are working in a way that solves the problems we need to solve.”

Timmermans was asked if “doing everything” meant the EU agreed, in the short term, to impose limits on gas and electricity prices.

“Well, nothing to discuss right now,” he replied. “We’re preparing for all of that, but we have to make sure that what we do doesn’t create more damage than it helps us solve the problem.”

“So we have to be extremely careful. It took us 30 years to build the energy market, so we need to make sure that we solve today’s problems without creating lasting problems. long.”



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