By Leonardo Senni, Head of Energy Department, Ministry of Economic Development
Spring 2013
educing energy costs, surpassing all the "20-20-20" environmental targets, greater security of supply and industrial development in the energy sector. These are the objectives set out in the new National Energy Strategy document just approved by the Italian Government.
The reform of the energy sector is a key element in the government's Sustainable Growth Agenda. More than 20 years on since the adoption of the last National Energy Plan, the industry had been eagerly awaiting this policy document.
It is the result of a wide-ranging public debate on a consultation document that was presented last October. The debate involved more than 100 stakeholders (institutions, sector associations, trade unions), as well as the general public, through an on-line feedback mechanism.
The document defines objectives, key policies and priority measures in the energy sector. The measures defined in the new energy strategy, which has a double time horizon (2020 and 2050) aim at significantly improving cost competitiveness of the key energy sources (electricity, gas and fuels), which today tend to be more expensive than in other European countries. At the same time, the strategy make it possible to move decidedly towards the de-carbonization of the economy, while improving security of supply.
The results expected by 2020 are as follows:
- Wholesale prices of all energy sources will be aligned with average European average price levels, thanks to the liberalization measures foreseen and already undertaken, resulting in savings of about €9 billion/year in the overall power and gas bill (from current 70 billion - assuming same commodity prices). This is already happening, thanks to the measure already implemented: gas wholesale prices have aligned in the past few months (from an historical gap of about 20%), and electricity prices are coming closer to those of central Europe.
- Expenditure on energy imports will be reduced by about €14 billion/year (from the present €62 billion), and dependency on foreign supplies from 84% to 67%, thanks to energy efficiency, increased production from renewables, lower electricity imports and increased production from national resources.
- €180 billion will be invested between now and 2020 in the green and the white economies (renewables and energy efficiency) and in traditional sectors (electricity and gas networks, re-gasification plants, storage, hydrocarbon development). These will be private investments, partly supported by incentives, and are expected to generate positive economic returns for the Country.
- Greenhouse gas emissions will fall by about 21% vs. The 2005 level, exceeding the European 20-20-20 targets for Italy.
- Renewable energy sources will account for 19-20% of gross final consumption (compared with about 10% in 2010). This is equivalent to 22-23% of primary energy consumption, while fossil fuel use will fall from 86% to 76%. Furthermore, it is expected that renewables will become the primary source in the electricity sector together with gas, accounting for 34-38% of consumption (compared with 23% in 2010).
- Primary consumption will fall by about 24% by 2020 compared with the reference scenario (an estimated 4% below 2010 levels); this exceeds the European 20-20-20 targets of -20%, thanks mainly to energy efficiency measures.
To attain these results, the strategy has been articulated into seven priorities, each with specific supporting measures that have already been set in motion or are currently being defined:
- Fostering Energy Efficiency, which is expected to exceed the European targets, as the most appropriate means of pursuing all the aforementioned objectives.
- Promoting a competitive gas market, integrated with the other European markets and with aligned prices. Italy has the opportunity to also become the main Southern European Hub.
- Developing renewable in a sustainable way, in order to exceed the European targets ("20-20-20"), while at the same time keeping energy bills competitive.
- Developing an electricity market fully integrated with the European market; the market should be efficient (with prices competitive with the rest of Europe) and see the gradual integration of renewable power production.
- Restructuring the refining industry and the fuel distribution network, to achieve a more sustainable system, with European levels of competitiveness and service quality.
- Sustainably raising national hydrocarbons production, which will bring major economic and employment benefits, while observing the highest international standards in terms of security and environmental protection.
- Modernising the system of governance of the energy sector, with the aim of making decision-making processes more effective and more efficient.
In addition, research and development will play a key role in developing technologies that allow for a more competitive and sustainable energy system.
The Italian Energy Strategy document is now publicly available on the website of the Ministry of Economic Development.