MATHIAS STECK     Hello and welcome to the tenth series of the DNV Talks Energy podcast. I'm your host, Mathias Steck. In this series we take a fresh look at the role businesses play in lowering the world's carbon emissions and how they can work with governments, policymakers and other key decision makers to transition faster to a clean energy future. In this episode, we look at the role of infrastructure in accelerating the energy transition. 

I speak to Antonio Cammisecra, Head of Global Infrastructure and Networks at Enel. He tells me about his role as a renewable energy pioneer when he started out at Enel over 20 years ago and how this experience informs his approach to his new focus on grid digitization. He argues that for every dollar spent on energy generation, the same or more must be spent on infrastructure in order to meet the demand created by widespread electrification. We hope you enjoy the episode.

ANTONIO CAMMISECRA     Yes, with pleasure. I have more than 20 years of experience in the electricity business, all of them within Enel, which was not my only job, but so many times it's basically a big part of my life. You said right, I am a generation guy, so far. Most of my career was spent in generation and almost all of it in renewables. So, I can be considered sort of a pioneer. I was very young when I moved into renewables, that at that time were a very marginal part of our generation business and was almost not visible a part of the energy matrix of any country.

So, I was an explorer within Enel. I worked in many countries. I went to South America in particular to develop our presence there. So, I saw the journey of renewables from being just exiting the lab in certain technologies in particular, to becoming significant and predominant like they are today, and the hope for the decarbonization effort that we have in front of us. So, I'm, let's say, approaching this all new part of my career with this spirit, maintaining the vision of the continuously and fast decarbonizing world with the help of technology, that luckily today is available at the right cost, and with the help of the digitalization that will foster and accelerate the speed of implementation of this switch from old technologies to new technologies.

And, of course, the main part will be, it’s driven by the implementation of renewable projects where we avoid emissions of CO2 in the atmosphere. But without the equivalent effort in the expansion of the grids in the modern economies and the creation of grids in developing economies, there will be no switch possible. There will be no renewable penetration possible at the levels where we must maintain or limit global warming within the 1.5 degrees or 2 degrees, which is an extraordinary effort that will drive resources in terms of technology or capital. So, the brains and/or patience, likewise in renewables, also in the grid infrastructure business. So, from this point of view, I will not switch too much my mood. I'm still working to save the world, if I may say.

ANTONIO CAMMISECRA     Well, I think who is going to work in renewables today will face the next ten, fifteen years of extraordinary expansion, so full of opportunities to enlarge the business in all possible aspects and in all possible geographies.

There will be no countries in this world that will stay away from a massive implementation of renewable projects, including the heaviest polluters of today's economy, like India and China in particular. Actually, China already announced a significant shift towards renewables in the very recent five years’ planning. So, I think who is starting today or who is keeping working renewables today actually has to have it clear in mind that the next ten years will be very tough, because the speed of development must change with a factor of two or three if you want to achieve the targets that we have commonly set for the globe.

Let's remember that any gram of CO2 that is avoided into the atmosphere is not done for Italy or Germany or US. It's done for the globe, because it's a cumulative problem. So, from wherever point of the world and from wherever kind of technology, you will be working with renewables. You will be contributing probably to the most fascinating, difficult, but lifesaving challenge that is today on the political agenda. There are also attached to this incredible economic opportunities, both for mature countries who will export their competencies, their technologies, their capital sometimes, but also for developing economies where there is an opportunity finally to close the historical gap in the access to electricity that is still reducing, slowing down dramatically the speed of growth of those countries. Lack of electricity is considered the hurdle number one in many countries, particularly in Africa.

So, all this together represents a fantastic opportunity, but also an incredible challenge. There will be consequences of this incredible growth of renewables. Certain aspects, if you think about the geopolitics of energy, will completely change in ten years. Energetic flows were steeply, in the last 50 years, flowing from a few areas of the world towards a few other areas of the world where those resources were consumed mostly. All this will change completely. So, the scarce resources will become others, probably the rare earth or certain specific materials or minerals. So, many implications of this big evolution will emerge in the next years, but overall, the overarching message from my side is that it's an incredible opportunity, especially valuable as a booster of the economy after a dramatic pandemic we're still living. So, that's a need to preserve the stability of the global ecosystem, but at the same time, one of the biggest sectors in which we can try to inject capital and create jobs to exit from the pandemic, maybe even better compared to how we entered into it.

ANTONIO CAMMISECRA     It could be potentially a limiting factor if we don't understand that the two things must go hand in hand, as they have been going in Europe, at least in the past decade. So, for any dollar or euro invested in renewable generation, there must be another euro or more invested in grids. Why more than one euro is easy to be understood, because we need to implement a massive quantity of renewable generation, but we also need to electrify the consumption. Because if decarbonizing electricity is the main solution to not pollute anymore, then we need to consume that electricity in many more sectors than today. So, what that means, we have to drive electric cars, we have to heat our houses with electricity, and to the extent it's possible and economically viable, we have to introduce electricity in industrial processes much more than before.

So, we need to work with the grid from the input and the output. We are in between the two phases of decarbonization and electrification. That's why I think that we have to invest maybe even more than just in generation, because we need to create connection opportunities, connection points for all these additional consumptions that will emerge. Because electricity will be the simplest and easiest way for the consumers to become cleaner.

ANTONIO CAMMISECRA      To be honest, I don't know, and I will explain why I don't know. Because in the developing countries there are two phenomena that are visibly happening today. One is the population growth, which is basically not happening so much in modern economies, in modern countries, and the second aspect is the access to electricity. So, in many countries there is still a too fragile access to electricity or no access whatsoever to electricity which implies an infrastructure effort that is completely different from the one that is forecasted for the advanced economies.

In addition to that, there is also another phenomenon that we lived with already many centuries ago and lately after the Second World War, which is urbanization. So, in many areas of Africa and of South America, still there is a visible phenomenon of urbanization, which will reach almost 70% of the European population by 2050. This phenomenon is very important to be understood if we want to understand what will be the challenges of serving people with electricity in the places where they live.

So, I think the two dynamics will be completely different. In many parts of the world still electricity will be, the access to it, will represent the first access to it, the possibility to study, to get education, to cook cleaner than they are doing today, or many other frugal initial uses. We are talking almost a billion people, not a few of them. Almost a billion people are living in the next ten years with this kind of problem. And there is another billion people, luckily in a better situation, which will experience an initial form of electrification, which means probably will use electricity for more uses, but still quite far away from the use of an electric car.

And then there will be a large part of the global population which will transition quickly, I think, into a full electrified kind of consumer. So, they will use electricity for their own direct consumption, but also, they will represent the force to use big brands, to use electricity more, because it's a renewable electricity, a decarbonized electricity, into the processes with which they will manufacture the goods and services that those clients are going to buy. So, they will be the activators of electrification. So, the dynamic, I think, will be dual. We will see certain phenomena happening in the developing world and certain other phenomena happening in the advanced world.

ANTONIO CAMMISECRA     Frankly speaking, no, and I hope it will not happen. Because if we think that the switch, the move of the centre of gravity towards the South is meant in the old-fashioned way of exploding resources being in a certain area of the world to serve the modern economy that will need more and more and more electricity, that's a vision that we don't share. That's a new form of electro-colonialism that absolutely we don't share.

When I think of geopolitical reshuffling, I mean that many countries, poor or not abundant in resources, for the simple fact they're moving to renewables, will have their own local domestic resources to be consumed for the local domestic needs, which is a form of liberty unexploited before.

ANTONIO CAMMISECRA     In this regard, the role of the policymakers and the regulator, in particular, is extraordinarily important because the effective regulation, and also visionary or courageous regulation, can represent an important value for the final consumer. Because it can attract modernization projects or the implementation of advanced technology that creates more resilient grids, more resilient infrastructure, or more efficient infrastructure that ultimately converts themselves into value for consumers, for the final client.

So, the role of the regulator probably will change also from this point of view in the future. They will have to be, rather than watching and observing the innovation and then accepting them into the rules, actually stimulating the innovation to accelerate the speed of implementation because this will serve the purpose of having better grids and more efficient grids. Typically the regulators, and this is generally valid wherever we are, in Europe, like in South America, but I think it's valid also in the US and in other countries, they have been a little bit passive with it. So, waiting for the companies, the distributors, to propose, then observe, understand, certify and then apply. And I think this must change.

The cooperation with the regulators must create a more dynamic understanding of the possibility of the technologies and implement them, maybe on a pilot scale before, but then with courage, let's roll it out as fast as possible in order to create the benefits for the consumers. And especially when we will be facing the scarcity of capital, or let's say the need for huge investments in the grids, understanding what is the right solution, either to implement a new line, or enforce a line, or just manage the demand with software that can control the flows will be crucial to have the right burden on consumers coming from the investments of the grids. So, the efficiency in the capital allocation can pass also through the right interaction with the regulator.

ANTONIO CAMMISECRA     Yes, we are very proud of being one of the most advanced, probably the first fully digitalized grid in the world. This basically comprises of three things. The first and the most iconic thing is the digital meter. Everything starts with having our customers served through a digital meter that now is reaching the third generation. The second is a digital system that can let the information flow from the meter all the way back to our servers in order to collect data in real time, in order to understand the level of consumption, the level of service and possible information about the consumers. But, also, about any other piece of equipment in the chain from our centres to the point of delivery.

So, we have digital tools, not only the digital meter, we have digital tools in the primary and secondary substations so that we can in real time monitor the flows, monitor the conditions and act on them. So, the second piece, in order to be able to act, is a very high level of automation. So, you have digital tools, but also an initial level of robotization.  So, we need to actuate, we operate on our piece of equipment from a distance, and so, we need to have a tele-controlled, tele-commanded switchboard, switch gears, and any other piece of equipment must be remotely operated to the maximum extent as possible.

The third is a digital brain that can do all this work in a very fast way. We call it self-healing. So, if we have a problem in a point of the grid, the old-fashioned way was through trial and error, so go and try to check where the problem is and then go and send some people to act. Now, with all this digital equipment spread across the entire network, automatically the grid tells us where there is problem. So, we have not to ask the grid. The grid is telling us, guys, we have a problem here. And actually, while the grid is telling us, the grid is also self-performing the reconfiguration of the grid in order to solve the problem. Then of course, very quickly, we need to send people to fix the problem if it's a physical problem, or just do a reset if it's a digital problem.

So, it started with the digital meter, then going up in the chain we have a digitized, and we are still digitizing, the substations, primary, secondary, medium voltage substations. And now we are introducing more advanced technology in all our terminals, in all our areas of the grid, locating in the peripheral areas of our grids an immense computing power. Because this will serve for the grids of the future where the grids will not only deliver power, but will also feel what's happening in the environment, collecting so many other data that will create really a difference with the way the grid was managed in the past.

So, it's not an easy journey because, of course, if you have only the digital world completely separated by the physical reality, you don't know what to do with it. So, the interaction between the two things is probably the most challenging part in our view and, of course, it becomes even more complex when you move into emerging countries where the fragility of the network is even more evident. But we have accumulated almost 20 years of experience. We started at the beginning of the first decade of the third millennium, now we are at the third generation with the digital meter, and actually we are starting to think about the fourth. And the fourth generation of the digital meter will be capable of doing extraordinary things that we don't even know today. So, that's the way we are approaching the new way. It must be like the introduction of the iPhone or the iPad, just to make an example, so something completely different that it's so new that we didn’t even desire it before, because we could not think of it before seeing it for the first time.

ANTONIO CAMMISECRA     That's a very difficult question. I think when it's about technology, when it's about resilience of the grids, it's quite straightforward. But the challenge, as you said, the keyword is together. It means that we have to understand that the grids, it’s a lifeline for the modern economy. So, we need to be ready to habilitate the vision of an electrified, decarbonized economy, which means we will have many actors playing on our grids, like prosumers, consumers, distributors, energy generators, electrolysers, and many other technologies using the grids to deliver the product in a decarbonized way.

So, I think that our role will change. The current setup of the electricity sector is still based on the view of the past century where you had few places where the power stations, where electricity was generated, or a few places where electricity was consumed, the cities, the industrial areas, transportation network, and then the distribution network. So, it was from top to bottom. The future will be completely different, and the distributor will be much much closer to this new ecosystem. We will be much closer to the distribution and generation. We will be much closer to our more electrified consumers. We will be much closer to sensing what is happening on the grid.

So, the role of the distributor is going to change. We will become system operators with resources that will be more available with batteries, with demand response, so our role must change. Technology is not enough. We have to understand this role, propose the role to the policymakers, and convince them that it's more efficient and more robust if this role is undertaken by the distribution system operator. That's easy to say, or not even easy to say, so imagine how difficult it is to do. But I think this is the key of creating an efficient and safe electric world that is what we want to create in the next ten years.