Former Enel chief says governments cannot ignore energy transition

The former chief of Italy’s largest state-backed utility has said all governments will have to tackle green transition regardless of their beliefs about climate change.

Francesco Starace, who is joining private equity firm EQT in June after being pushed out of Enel by Giorgia Meloni’s government, said in an interview that even the more reluctant policymakers would “converge” in aiming to decarbonise the economy.

“Not everybody understands it properly and some politicians don’t understand where the transition is going, but we shouldn’t be troubled,” Starace said. “Eventually they will all converge.”

He added: “During my nine-year tenure as chief executive of Enel I met six [Italian] governments, the transition happens anyway.”

While Starace minimised his departure from Enel saying “it was time to use my experience elsewhere”, international investors in the energy group saw Rome’s decision to replace him as a sign that his transition-focused strategy could be reversed. Starace said: “I don’t see that happening because investors want the transition and it’s the obvious direction [in which] to go for companies like [Enel].”

The Roman executive transformed the €60bn utility into one of the world’s largest renewable energy producers after taking over in 2014. However, the group’s debt also grew to more than €60bn, another sticking point with the government. Starace launched a €21bn asset disposal plan last year in an attempt to reduce net debt.

Enel declined to comment on the new management’s strategy. The group’s chair Paolo Scaroni said in March, before his appointment, that the “energy transition is a necessary target but I am convinced nuclear [as opposed to renewable] energy is the only technology that can help us leave behind fossil fuels”.

Nuclear power for electricity generation was completely phased out in Italy after a referendum in the country in 2011.

Meloni’s rightwing coalition has opposed plans to ban the sale of combustion engine cars from 2035. Earlier this year she said the government was not composed of “dangerous climate change deniers” but that a “more pragmatic and gradual approach [to energy transition] was needed”.

Starace said transition would affect all industries: “[It] starts with the energy sector, but it will go through the economies of the world.”

As a partner at EQT, Starace said he would lead global investments into renewable energy. “The need for private capital going forward to make the energy transition happen is huge,” he added.

EQT announced in February its newest fund is seeking to raise €21bn to invest in key infrastructure and energy assets. Earlier this month the Swedish firm’s infrastructure fund took a majority stake in Italian mobile provider Wind Tre’s network company.

Starace had previously hinted at wanting to potentially retire after stepping down from the top job at Enel. “Its time to give back [what] I learned and help others avoid mistakes, EQT is a great vehicle [for this],” he said. “What I did promise myself is not to be CEO ever again.”