ENEL gives mixed climate messages at AGM

Energy giant ENEL’s conflicting climate policies have come under fire at its AGM but the group is still refusing to give investors any certainty about the future, despite the rapid decline of coal in Europe.

Quizzed by NGOs IIDMA and Re:Common, ENEL (the major shareholder in coal company Endesa) confirmed Spanish plants Teruel and Compostilla are set to close mid-2020. But it refused to give any firm closure dates for Endesa’s other Spanish plants, many of which need cost-intensive retrofits to meet new regulations.

This includes units of Alcúdia, which is located incongruously in Spain’s paradisiac Balearic Islands – despite the Islands’ plan to switch entirely to renewables. The Islands’ own government has included the shutdown of some units in its climate plan.

Pressed on its plans to future-proof its coal business model, ENEL confirmed decarbonisation was a ‘key component’ of its strategy but maintained that it would only act when national and regional laws were set in stone.

Meanwhile, huge subsidies paid by the Spanish government to Endesa’s coal plants are being investigated by the European Commission, which is likely to declare that they are illegal – and may order them to be paid back. But Endesa is still hopeful for more state support to extend its plants’ lives.

ClientEarth energy lawyer Sam Bright said: “Investors should be deeply concerned about Enel’s dangerous game of wishful thinking and its failure to set out a strategic plan for a coal-free future.

“Endesa is swimming against the tide here. All signs point towards coal being phased out in Europe in the coming years and Endesa will need to make some big investments if it wants to keep its plants open into the mid-2020s and beyond.

"This means its plants are in real danger of becoming very expensive stranded assets if the company doesn’t have a plan for a coal-free future.

“Coal plants in Spain are already being paid huge sums to stay open – in many cases illegally. Upgrading these plants to comply with new pollution laws will not be feasible without further state support. The government must stop supporting power production that jeopardises the climate and instead plan for a managed coal phase-out that supports job creation and boosts communities.”

IIDMA director Ana Barreira said: “ENEL’s evasive responses regarding the closure of Endesa’s Spanish plants show a clear lack of commitment in the fight to slow climate change and protect people’s health – despite its 2050 decarbonisation goals. Without concrete plans and milestones in the route towards that goal, it’s just empty words and no action.”

While ENEL has been forced to face facts in its native Italy, where a firm coal phase-out date has been announced, it is banking on Spain’s lack of a sunset date to speculate on a rosier future for fossil fuels.

Re:Common’s Antonio Tricarico said: “You cannot have a different climate policy for every country. This planet has one climate. It is a complete double-standard.”