Enel CEO Says Cheap Oil May Accelerate Green Energy Shift

(Bloomberg) --

The double blow of the coronavirus and falling oil prices won’t derail the green economic transformation on which Enel SpA is building its future, according to Chief Executive Officer Francesco Starace.

Investment in renewable energy will continue and the disruption may even weaken efforts to slow the change, he said in an interview. The Italian electricity giant generates 43% of its power from renewable sources that it owns and plans to increase its renewable capacity to 60% over its strategic plan through 2022.

“The development of renewables has not slowed down,” Starace said. “If, in a few months, we have got the health situation under control, many investments will have to be accelerated.”

Weak demand had already sent energy costs down before a price war between Russia and Saudi Arabia pushed oil prices even lower. That makes the economic case for renewables even more convincing, the CEO said.

“The drop in electricity prices takes away space from lobbyist forces that were ideologically opposed and remain opposed to renewable sources,” he said. “We have demand from large customers who have decided to go on renewables for economic reasons.”

Enel on Thursday reported a 17.4% increase in net ordinary income to 4.8 billion euros ($5.1 billion). The company doesn’t expect the virus outbreak to disrupt its operations in 2020 and said its Chinese solar-panel suppliers have already resumed production.

“Our supply chains and our workers are safe, hence there are no medium-term operational difficulties,” Starace said. “If we see that the pessimists are right, we can safely modulate the investments and still respect our commitments.”

Enel gained as much as 5.1% in Milan trading and was up 4.8% at 6.11 euros as of 10:01 a.m. That gives the company a market value of about 62 billion euros.

©2020 Bloomberg L.P.