Ansaldo boss: 'There's a clear imbalance over who pays for the energy transition'
Enlit Editorial Team
Posted on: 16 March 2022
Daniela Gentile, CEO of Ansaldo Green Tech., shared her thoughts on the outcomes of the COP26 conference and what this implies going forward.
While Daniela Gentile believes the outcomes of COP26 are "going in the right direction", she has one over-riding concern: the price tag put on hitting net zero by 2050.
According to Gentile, who is chief executive of Ansaldo Green Tech, it is "gigantic and it’s clear that industry cannot bear this heavy cost alone".
She highlights what it is that needs to be paid for: “By 2030, 75% of the CO2 emission reduction falls within the power generation sector and in the faster deployment of wind and solar renewables.
“According to figures from the International Energy Agency's World Energy Outlook 2021, by 2030 the electricity needs will reach 5 million GWh. Some 100GWh of coal by that day should be retired and 64% of electricity shall be generated by renewables, which is almost 23% more than in 2020."
In a nutshell, we need five times more wind, three times more solar, and 20 times more storage compared to the level today.
Gentile emphasized how this level of energy generation and storage turnaround would require an almost unreasonable amount of capital investment. “There’s a clear imbalance and this is where we have a concern.”
Finance gap
These ambitious targets for wind, solar and storage, accompanied by how the power industry has to shoulder the majority of the burden for decarbonisation, highlight this finance gap. This includes the development of technology at scale to drive decarbonisation.
Gentile further states how the investment scenario, in relation to the outcomes of and follow-ups to COP26, is continuously fluctuating. She points to green hydrogen and carbon tax as examples.
“To produce green hydrogen it costs almost more than five times than grey hydrogen. This is an unclear balance between the investment and the profitability of the investment.
"Let’s talk about carbon tax, which is another very important element to judge the scenario. When it was set up in 2017, CO2 costed €5 per tonnes. In 2019 it cost €15 per tonnes. Today it is steadily above €60 per tonnes and it is projected to go to €100 per tonnes.”
On the other side, Gentile points out how “raising the threshold of green hydrogen would make it more competitive towards natural gas. And so it’s a kind of acceleration of the hydrogen economy.” This in turn provides the potential to generate growth and create jobs.
Watch the full interview to hear about the power sector's grid challenges for integrating renewables and how hydrogen can play a key dual role as power buffer and a new carbon fuel.
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