U.S. subsidies better than EU ones on manufacturing, Enel says


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NEW YORK — The U.S. Inflation Reduction Act is more efficient than European Union aid to support domestic production of energy sector components, the CEO of Europe’s biggest utility Enel said in an interview during the Reuters Next conference.

“There are better ways to doing things than the system in Europe, and the U.S. have a great package not only to change the infrastructure and the energy generation mix but also to help re-shore some critical components,” Enel’s Francesco Starace said on Thursday.

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Starace added, however, that the U.S and European packages were roughly equivalent for the energy sector, apart from where component manufacturing was concerned.

The United States approved a $430-billion new green energy subsidy package in the summer labeled the Inflation Reduction Act (IRA), offering tax breaks for components used in renewable energy technologies on condition they are made in North America.

The U.S. package has raised criticism in Europe, especially in Germany, where the Economy Minister Robert Habeck signaled that manufacturing jobs may be lost as investments are lured by North America.

Starace said a global dependence on Chinese solar materials was “problematic,” and confirmed Enel would ramp up its solar panel manufacturing capacity in Europe and in the United States with two plants.

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Europeans will eventually find an agreement on how to reduce the volatility of gas prices, he said, adding that one solution could be to link the European gas price index to the Asian index for liquefied natural gas (LNG).

“We are not advocating a price cap on gas. We are advocating a cap to the volatility of the index,” Starace said.

Speaking about financial markets, Starace said the current environment was too volatile to press on with the listing of the group’s electric mobility venture Enel X Way.

“Maybe an initial public offering (IPO) in 2023 is a little ambitious; we are not in a hurry, we might look at 2024.” To view the Reuters NEXT conference live on Nov. 30 and Dec. 1, please click [https://www.reuters.com/world/reuters-next/] (Reporting by David Gaffen; writing by Francesca Landini; Editing by Nick Zieminski and Bernadette Baum)


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