Enel chief talks leaving Russia’s market if sale of assets successful

The Italian energy company Enel is going to leave the Russian market due to the escalation of the situation around Ukraine, Report informs referring to the Financial Times.

CEO Francesco Starace said he had not been expecting “this kind of escalation” at the time and that Enel was now looking at leaving the country. “If we can sell [to a Russian party], then we will exit,” he said.

“Otherwise I think it will be very difficult for us to continue anyway, to guarantee the functioning of these units in the proper way.”

Starace, who has been at the helm of state-controlled Enel since 2014, said European nations should have started worrying about their energy dependency from third countries years ago.

“This is Russia’s turn but let’s not forget what happened in Libya 10 years ago,” said the 67-year-old chief executive. “Where gas is coming into Europe from is a problem.”

He said the EU should have managed its “dependence on fossil fuels, namely gas, in a better and more aggressive way”.

Starace urged European nations to free themselves from “physical links” to other countries by building regasification plants and leasing floating ones to process seaborne liquefied natural gas, which would allow them to diversify supplies and cut ties to fixed pipelines.

He also called on them the accelerate the transition to other energy sources including renewables, while acknowledging this could not be done overnight.

“Burning gas to generate electricity is totally stupid… both from economic standpoint and from an environmental [one], gas is precious and it should be used where it is irreplaceable,” Starace said.

“Of course, these things require some time, so you need to do things in the order of importance,” he added. “And clearly you have first to survive and then try to reduce your dependence.”

Enel, which has a market capitalization of 62 billion euros and is one of the world’s largest renewable energy producers, plans to stop using fossil fuels to generate electricity by 2040.

Enel has 300 million euros exposure to Russia, where it employs 1,500 people at its three large combined-cycle thermoelectric power plants using gas to produce electricity for the domestic network and provide heating to three large cities.