Why are cables important for the green transition and what role does Prysmian Group play in this?
S.S.: Cables serve as the arteries of our electrical infrastructure, facilitating the transfer of large amounts of electrons essential for our daily lives. This makes them crucial in the global shift towards renewable energy.
Prysmian Group specializes in providing power and optical cable solutions across various voltages, thus powering every facet of human life. We are a 150-year-old conglomerate, formed from Pirelli Cables of Italy, Draka Cables from the Netherlands, and General Cable from the US.
Cables are now taking more and more center stage in the wake of decarbonization efforts and digital equality drives initiated by various governments. About a decade ago cables were considered just a hidden commodity. However, following the Paris Agreement and the global emphasis on decarbonization, the narrative has changed. Cables are now acknowledged to be key in many diverse environments ranging from renewable power generation to power transmission and distribution. To meet the ever more challenging needs coming from the market, over the past five years, we have innovated a lot and our mission for the next two decades is focused on product innovation that will assist in decarbonizing the grid and providing digital equity. Prysmian believes that innovation and sustainability must go hand-in-hand. That is why we are involved in initiatives that combine sustainability and high performance like Formula E.
How are Prysmian Group’s innovations going to improve efficiency, affordability, and safety in renewable energy systems? Can they also address energy discrepancies between regions?
S.S.: As an example, our 525 kV HVDC technology can transfer up to 2 Gigawatts of power. This means one set of cables can potentially power millions of homes, thus serving entire cities. And those higher voltages and increased power capacity align perfectly with the world's growing energy needs. Our focus is also on creating cables that are more sustainable. Unlike the cross-linked polyethylene used universally for High Voltage systems, we have developed a 100% recyclable product called P-Laser. This polypropylene-based HVDC cable system has a 40% lower carbon footprint, giving customers a greener alternative.
Further, we are deeply involved in major interconnector projects like the German Corridors, which connect different energy hubs. The aim is to address the intermittency issues associated with renewable energy sources like wind and solar. Our advanced cables, such as P-Laser, facilitate bidirectional power transmission, offering a solution to the varying energy production patterns in different parts of a country or even between continents. This kind of technology not only allows for more efficient transmission of power but also provides redundancy to cope with fluctuating renewable energy production, thus playing a vital role in global energy sustainability. It also addresses the issue of energy discrepancies between different regions, such as the north and south of Germany, allowing for a more stable and reliable power supply.
What innovations is Prysmian working on for offshore renewable energy projects, considering sea depth challenges?
S.S.: We have invested significantly in R&D to develop submarine cables capable of being installed at depths up to three kilometers. Traditional cable designs are not suited for such depths, which limits the reach of offshore wind farms, particularly in regions like the Mediterranean and the California coast. By innovating in this area, we aim to ensure that cable infrastructure will not be an obstacle for renewable energy projects. Our larger, deeper, and greener approach ensures that we are ready to meet the challenges of expanding renewable energy worldwide.
Cristina, tell us more about Prysmian's sustainability ambitions and goals as a company.
C.B.: Sustainability is integral to everything we do.
We are the first cable manufacturer to align with Science-Based Targets Initiative (SBTI), committing to a 1.5-degree trajectory for our Scope 1 and Scope 2 emissions. By 2030, we aim to halve our emissions from our 2019 baseline.
In addition to our focus on climate change, we are also committed to advancing a circular economy and social inclusivity. For example, we have targets for promoting STEM competencies among women, aiming to hire, promote, and develop 500 STEM women by 2030.
Our sustainability goals are not only long-term ambitions but are also tracked through shorter-term KPIs that are part of our incentive system. Starting in 2018, we integrated ESG KPIs into our remuneration system, linking both short-term and long-term incentives to sustainability targets. This operational integration ensures that we are committed to achieving these goals and leading the industry in sustainability efforts. About 50% of our investors today are ESG-focused, which further underscores our commitment to being a sustainable market leader.
Srini, how did your partnership with Formula E and Andretti Autosport come about, and what innovations have emerged from it?
S.S.: Our partnership with Formula E and Andretti Autosport was considered over about three years. We chose Andretti Autosport due to their strong connection with Prysmian's two main home countries. Mario Andretti is a significant motorsports figure in Italy, and Michael Andretti is equally prominent in Indianapolis, where our North American R&D center is located. Beyond that, the partnership focuses on three core areas: innovation, performance, and sustainability. In just the first three months of our formal partnership, we have developed a sensor and monitoring solution that optimizes EV charging for Formula E, based on our PRY-CAM technology. Originally intended for transmission system operators, we adapted our PRY-CAM solution to create more efficient and safer EV charging infrastructures.
Moreover, we are expanding our technological reach in the Formula E ecosystem with advancements aimed at creating innovative sensing and monitoring systems that improve charging, safety, and energy efficiency. It is an excellent platform for us to innovate and adapt our technologies for different applications, contributing to the broader goals of Formula E.
What sets Prysmian apart in your industry, and how are you managing the challenges of rapid growth?
S.S.:
Prysmian is unique in that we integrate energy and telecom, a combination uncommon in our industry. This synergy allows us to push for transitions in both digitalization and sustainability.
For instance, we are leveraging fiber optic elements in our energy cables not just for data transfer but also as sensors. This innovation allows us to monitor various factors like temperature and mechanical responses, a skill set that we have invested in for the last two decades. Our capabilities have thus evolved beyond traditional cable applications, serving diverse industries from telecom to automotive.
Regarding challenges of rapid growth, operational excellence is our primary focus. Previously, our industry was accustomed to steady growth, which made us very cautious in capital expenditure. However, the growing demand for green, fast, and efficient infrastructure has prompted us to double our annual CapEx expenditure to around $400-$500 million. The second challenge is ensuring that other parts of the value chain, such as permitting processes, keep pace with our rate of growth. Execution is key to meeting these challenges, and it is crucial for not just us but also our competitors, as the entire industry shifts towards a future that demands innovation and rapid development.
