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4 min.

K Factor: Our partner selection criteria is based on sustainability

Renewable energy use, sustainable supply chain certification and application of circular economy principles are the new criteria to assess and select our suppliers.

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The energy transition is the largest challenge Enel Green Power is facing. There’s a story that deserves to be told, a kind of challenge within a challenge. It shows how we are the forerunner in realizing a more sustainable economic and industrial model, beginning with how we choose our suppliers.

Our objective to incentivize current and potential suppliers to become more sustainable has become the competitive K Factor, which will be applied to the entire value chain.

To that end, we’ve introduced global sustainability criteria for evaluating our suppliers, which focus mainly on 3 points: use of renewable energy to execute business, sustainability certification throughout the entire production supply chain, application of circular economy principles, especially, the use of recycled materials in current production processes.

This is a major paradigm shift in our partner relationships, which will no longer be based on contracts or exclusives alone, but on shared values, challenges and objectives.

 

 

Green storage supply chain

One of the first applications of this new mechanism took place in the United States last December. We launched a tender to identify the best partners with whom to develop an important pipeline of the nearly 1 GW of energy storage projects that we intend to realize by 2022.

In a market like the US, where our green energy is spreading more and more thanks to Power Purchase Agreements, the stability of renewable resources reduces risk for both producers and customers.

Sun, wind and water are not constant energy sources. That’s why every one of our US plants will be integrated with energy storage systems wherever possible, so intermittent, non-programmable renewable energy can be stored during times of low consumption and then used during times of peak demand.

The storage plants will increase grid stability thanks to their extremely quick response time to frequency oscillations and will enable our solar and wind farms to function at their best. Thus, the overall electrical system will become more flexible, intelligent and sustainable.

We’re also studying how to reutilize electric vehicle batteries and integrate them into stationary storage plants to provide services to the electric grid, thereby creating a virtuous circular economy process.

Enel Green Power is one of the world’s leading companies in the use of energy storage systems, and today, it’s full of innovations!

By applying sustainability criteria as requisites during the company evaluation phase and as deciding factors during the adjudication phase, we’re sharing our values and our culture with every player in the supply chain.

 

“All of our partners share in the spirit of how we do business and have shown interest in set targets and committed to achieving those targets as quickly as possible. Now and in the coming months, we’re going to keep on aligning the largest possible number of entities with our sustainability guidelines.”

- Nicholas Magliocco - Head of Battery Energy Storage Procurement

 

Creating a sustainable value chain that applies the principles of the circular economy is a crucial tool for Enel Green Power to use in order to achieve its own strategic objective: to lead the transition into a greener world. To do so, sustainability must become a common goal shared by our suppliers as we innovate, grow and create value together. This is one of our most worthwhile challenges. We want to transmit our commitment to sustainability to all our partners and their entire supply chains. Soon, we’re going to expand the application of this model to how we select our suppliers in the solar and wind sectors in all of the countries where we operate.

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