The chief executive of Enel sees gas-fired power as having a bright future, believing it to be a complementary technology for renewables.

Francesco Starace, who previously ran the company’s renewables division, told the FT that while the shale gas revolution in the US may have threatened the economics of renewable power, renewables that have no exposure to fuel price risk and are valuable as hedges against possible future increases in the cost of gas.

US gas prices have fallen sharply because of shale, but no one can be certain that they will stay low, Mr Starace argues. “If you ask for the price of shale gas five years down the road, no one can give it to you,” he said.
He sees opportunities for Enel on that basis in the US and in emerging markets. In Chile, for example, Enel Green Power, which is 68.3 per cent owned by its parent, is building the country’s largest solar plant. It is also developing wind and solar projects in South Africa, and has pre-qualified for a large wind development programme in Morocco.

Referring to renewables efficiency, Mr Starace said, “The machines are getting cheaper and they are doing a better job year after year.”

In parts of the US, he said, wind turbines could generate power for about $30 per megawatt hour, which was “very very competitive”, helped by the tax credit for generation.

Even without that credit, which is no longer available for new projects, wind power could be produced for $40-$45, he added.

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