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Energy CEO calls out Europe’s ‘ridiculous’ dependence on natural gas

Francesco Starace of Enel pictured at the World Economic Forum in Switzerland on May 24, 2022. In his interview with CNBC on Friday, Starace said his dependence on gas was “ridiculous.”

Jason Alden | Bloomberg | Bloomberg | Getty Images

The CEO of Italian energy company Enel told CNBC on Friday that Europe’s reliance on natural gas is “ridiculous”, arguing that reducing reliance on fossil fuels is the better option in the long run. .

Speaking to CNBC’s Steve Sedgwick, Francesco Starace said, “We finally understand how addicted we were to gas, how stupid this addiction is, and how we can fix this.” think.

In an interview at Italy’s Ambrosetti Forum, Starace’s opinion was expressed by some that oil and gas would be the key energy source for the next 25 years, but he disagreed with this claim. I objected.

“I completely disagree, because this is the view from, say, 15 years ago,” he said. “Was it wrong then? No, it wasn’t. It’s wrong now.”

“The economy could become much less dependent on fossil fuels and work much better than people think,” he added. “It’s probably going to take another two years for everyone to figure it out, but we’re there.”

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While optimistic about the future, the reality on the ground today is very difficult.

The current situation in Europe, where many countries are moving away from Russian energy following the Kremlin’s invasion of Ukraine, shows that fossil fuels still play an important role in society.

With the cold months approaching, European countries are looking to ramp up gas storage to ensure supply security.

Looking ahead, Enel’s Starace expressed confidence that Europe was well prepared for the coming winter.

“As far as storage is concerned, Europe… did the right thing,” he said, noting that most countries were “pretty full.”

“The question is what happens when the gas is completely cut off from Russia,” Stares continued. “Well, it’s almost there. The cut is actually pretty close.”

“We have a point of view and a lot of research showing it at some cost. [such as] A temperature drop of two notches and a little attention to gas consumption could get Europe through the winter. ”

“The question is when spring arrives [of] By 2023 the reserves will be completely depleted and the gas is still not flowing,” he said.

“Can Europe re-establish storage with all the backup of floating regasifiers and energy 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 cease gas production by 2040. It also plans to exit the retail gas market in 2040.

european concern

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

“We need to do everything we can to tackle this energy crisis, and we need to do everything we can to bring prices down so that citizens can afford to heat their homes this winter. Timmermans told CNBC’s Silvia, Amaro said at an event in Bali, Indonesia.

He also stressed the importance of Member States being “in a position to address the issue of windfall interests if necessary”.

“So we will do everything we can to ensure that our energy markets work and work to address the issues that need to be addressed.”

Timmermans was asked whether “doing everything” meant that the EU would agree in the short term to cap gas and electricity prices.

“Well, nothing for now,” he replied. “We are prepared for all of that, but we need to make sure that nothing we do creates more damage than it helps address the problem.”

“So we have to be very careful. It took us 30 years to build the energy market, so we have to make sure that today’s problems are addressed without creating long-term problems. .”

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