Q&A with Gianfilippo Mancini: Prosumers propel Europe’s energy transition
About 20 years ago, Sorgenia entered the newly liberalised Italian energy market. Today, under the leadership of Gianfilippo Mancini, CEO of Sorgenia, it provides 2.7% of national capacity, supplying more than 400,000 businesses and households with gas and renewable energy. But it is its innovative digital technologies and distributed energy management activities that put this private operator at the heart of Italy’s energy transition.
What are the big trends in the European energy market?
The centralised business model built around big investments in conventional generation has clearly come to an end. The market is now moving towards a distributed business model that is made up of small renewable assets, connected by smart grids and smart data management. However, distributed energy generation and the increased share of renewables add a lot of stress to the system. The answer to that will be enhancing flexibility in the grid through storage, flexible generation technologies, and their IT systems and data management.
In terms of customers, we are seeing a dramatic and accelerated shift towards digital channels and a more direct relationship with their suppliers. This is true in any industry, of course. But it is a particularly interesting development in energy, which has not traditionally been a leader in digital innovation.
These developments lower the value of the commodity and increase the value of new services around that commodity. This is a challenge which requires new competencies in addition to flexibility, cooperation and innovation. The incumbents that do not adapt their culture and organisation fast enough will be disrupted, while new market entrants and players from different industries — especially those with a strong data-centric and customer-centric culture — now have an opportunity to participate in this growing market.
What does all this mean for Sorgenia?
Over the past few years, we have repositioned the company around innovation and sustainability, which translates into three specific actions. First, our modern gas-generation fleet has enabled a dramatic drop of coal usage in Italy, thanks to its flexibility and the lower cost of generation. Second, we have invested in a growing fleet of renewable generation, including from wind and biomass.
And finally, we are engaging with a new and rapidly growing community of environmentally active customers. We call them the Greeners, and they now represent 20% of our customer base. They are empowered by our services, such as renewable micro-generation and digital solutions built around sustainability.
What does that mean? It means that on our web site there is a full digital path to arrange the supply of green energy and fibre to the home. But also for the provisioning and supply of rooftop photovoltaic panels, heat pumps and other smart appliances. Through our app we enable our customers to control their household consumption and bills, including a measurement of their carbon footprint. This popular tool helps customers to understand the environmental impact of their habits.
Taking this a step further are RECs, renewable energy communities. Here, consumers participate in a sharing economy whereby they generate and distribute energy locally through an interconnected digital platform. It is enabled by new regulatory conditions outlined in the EU’s 2019 Clean Energy for All Europeans package. We are enabling these communities in a number of areas in Italy, and we expect to see this model grow dramatically throughout Europe.
Engaging with these ‘prosumers’ [people who both produce and consume] is essential to the shift from a centralised model to a distributed model made up of consumers, information and data.
Do you think there is anything that would make Italy’s energy transition easier?
It is a good thing that in Italy, as in other countries in Europe, a large part of the next generation of EU funding will be dedicated to infrastructure and integration of the new energy model, which is based on the shift towards carbon neutrality and resilience. These investments should be developed with a market-based approach that builds on cost efficiency.
But if I had to name one single point of action for the Italian government, I would say that there is a dramatic need to speed up and simplify the authorisation processes for investments in renewables. In fact, the high level of bureaucracy involved in obtaining authorisations makes the process difficult, expensive and time consuming.
I believe this should be one of the main tasks for the new Italian government, led by Prime Minister Mario Draghi.