Energy CEO calls Europe ‘foolish’ reliance on natural gas

Enel’s Francesco Staras is photographed during the World Economic Forum in Switzerland on May 24, 2022. During an interview with CNBC on Friday, Staras said relying on gas was a “fool”.

Jason Eldin | Bloomberg | Getty Images

CEO of the Italian Energy Company Enel He told CNBC Friday that Europe’s reliance on natural gas was “foolish” and argued that reducing reliance on fossil fuels is a better long-term option.

“I think we finally understand how related we are to gas, how foolish that dependence is, and how we can fix that,” said Francesco Staras, speaking to CNBC’s Steve Sedgwick.

During an interview at the Ambrosetti Forum in Italy, Starace was told that, in some people’s view, oil and gas would be key to energy for the next 25 years, a disagreement he opposed.

“I totally disagree, because this is a view that comes up, say, 15 years ago,” he said. “Was that wrong then? No, it wasn’t. Now it’s wrong.”

“The economy can do much better, relying less on fossil fuels, than people think,” he added. “It may take another two years before everyone understands that – but we are there.”

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Despite this optimism about the future, today’s reality on Earth presents a major challenge.

The current situation in Europe, where many countries are trying to distance themselves from Russian energy after the Kremlin’s invasion of Ukraine, illustrates the critical role that fossil fuels still play in society.

With the approaching cold months, European countries have been looking forward to gas storage support Trying to ensure the security of supply.

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Looking ahead, Enel’s Starace is confident that Europe is preparing for the upcoming winter.

“In terms of storage, Europe … did the right thing,” he said, noting that most countries were “pretty much full.”

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

We have a point of view and there are many studies that show that with some sacrifices. [such as] A two-degree drop in temperature, a little bit of attention to gas consumption…Europe can make it through the winter.”

“The question is when will we reach spring [of] In 2023 with reserves already fully depleted, and the gas is still not flowing. ”

“Is Europe able to re-establish storage, with all the backups from the floating regasifiers and energy coming in from other parts of the world? I think that’s going to be the big challenge.”

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

European concerns

Starace’s comments came on the same day that EU climate chief Frans Timmermans emphasized the urgency of the situation facing European economies in the face of rising energy prices and supply concerns.

“We need to do everything we can to tackle this energy crisis and to make sure that we are doing everything we can to bring prices down so that our citizens can still afford to heat their homes this winter,” Timmermans, speaking to Silvia on CNBC, Amaro said in a statement. Happened in Bali, Indonesia.

He also stressed the importance of member states being “in a position to address the issue of windfall profits, if necessary”.

“So we will try everything to make sure that our energy markets are working, and operating in a way that addresses the issues that we need to address.”

Timmermans was asked if “doing it all” meant that the EU would agree, in the short term, to caps on gas and electricity prices.

Well, he replied, “nothing is on the table now.” “We’re preparing for all of that, but we have to make sure that what we’re doing doesn’t cause more harm than it helps us address the problem.”

“So we have to be very careful. It took us 30 years to build energy markets, so we need to make sure that we address today’s issue without creating long-term problems.”

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