ITALIAN WHITE PAPERfor the valorisation of

RENEWABLE ENERGY SOURCES

Rome - August 1999

The Italian White Paper for the valorisation of renewable energy sourceshas been prepared on the base of the Italian Green Paper drawn up, in the framework of organisation

process of the National Conference Energy and Environment, by the Working Group Renewable Energy Sources, composed by:

L. Barra (Co-ordinator)R. Avella, G. Braccio, G. Caserta, M. Chiadò Rana, C. Ciciolla, G. Conte, A. De Lillo, V. Gerardi, G.

Giuliani, V. Pignatelli, L. Pirazzi, A. Ricci, A. Sarno, A. Sonnino, D. Viggiano (ENEA)

V. Pazzi(Ministry of Industry, Trade and Handicraft)

G. Silvestrini (Ministry of Environment)

F. Morselli (Ministry of University, Scientific and Technological Research)

G. Gomboli(Inter-regional Energy Co-ordination)

with contribution of Ministry of Agricultural Policies

English TranslationEuroCenter Studio – Naples - under ENEA contract managed by A. Ricci

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TABLE OF CONTENTS

1. INTRODUCTORY REMARKS AND SUMMARY...............................................................................................5

1.1 INTRODUCTION............................................................................................................................................................6

1.2 FROM THE GREEN PAPER TO THE WHITE PAPER: MAIN CHANGES TO THE STANDARD FRAMEWORK........................7

1.3 SUMMARY OF OBJECTIVES AND STRATEGIES........................................................................................................9

2. REASONS FOR DEVELOPING RENEWABLE ENERGY SOURCES...............................................................12

2.1 GENERAL REASONS...................................................................................................................................................13

2.2 REDUCTION OF ENVIRONMENTAL COSTS IN ENERGY PRODUCTION..........................................................................14

2.3 SECURITY OF THE ENERGY SYSTEM AND PROTECTION OF THE TERRITORY..............................................................15

2.4 A FEW EVIDENCES ON POSSIBLE FOLLOW-UP IN THE EMPLOYMENT SECTOR...........................................................15

3. DISSEMINATION GOALS FOR 2008-2012 AND RELATIVE REDUCTION OF CO2 EMISSIONS...........19

3.1 RENEWABLE SOURCES CONSIDERED.........................................................................................................................20

3.2 GENERAL FRAMEWORK.............................................................................................................................................20

3.3 HYDROELECTRIC ENERGY.........................................................................................................................................23

3.4 GEOTHERMAL ENERGY.............................................................................................................................................23

3.5 WIND ENERGY...........................................................................................................................................................24

3.6 SOLAR ENERGY.........................................................................................................................................................25

3.6.1 Photovoltaic solar energy..................................................................................................................................25

3.6.2 Solar thermal energy.........................................................................................................................................26

3.7 BIOMASS, BIOGAS AND BIOFUELS.............................................................................................................................26

3.8 WASTES.....................................................................................................................................................................30

3.9 ESTIMATE ON INVESTMENT COSTS............................................................................................................................31

3.10 ESTIMATE OF AVOIDED GREENHOUSE GAS EMISSIONS...........................................................................................32

4. INTERVENTION STRATEGIES..............................................................................................................................35

4.1 CONSISTENCY OF POLICIES.......................................................................................................................................36

4.1.1. Integrating interventions and approaches........................................................................................................36

4.1.2 Contributing to the definition of a European policy on bioenergy...................................................................37

4.2 THE ROLE AND NEEDS OF REGIONS AND LOCAL AUTHORITIES...............................................................................38

4.3 INFORMATION AND TRAINING...................................................................................................................................39

4.4 RATIONALISE AND ENHANCE RESEARCH..................................................................................................................40

4.5 STRATEGIES FOR MARKET INTEGRATION..................................................................................................................41

4.5.1 Framework assurance and clearness of rules...................................................................................................41

4.5.2 Guidelines for promotion criteria.....................................................................................................................42

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4.5.3 The electricity sector.........................................................................................................................................43

4.5.4 The biofuel sector..............................................................................................................................................44

4.5.5 The heat sector..................................................................................................................................................46

4.5.6 Integration into the building sector...................................................................................................................48

4.5.7 Giving full attention to the environmental impact of renewables.....................................................................49

4.5.8 Facilitate project financing...............................................................................................................................49

4.6 ORGANISATIONAL NEEDS..........................................................................................................................................50

4.6.1 Setting up a sector monitoring system...............................................................................................................50

4.6.2 Organising the biomass exploitation cycle........................................................................................................50

4.6.3 A system of non-discriminatory rules and technical standards: a guarantee for the users..............................51

5. FRAMEWORK PROJECTS......................................................................................................................................52

5.1 PROMOTING VOLUNTARY AGREEMENTS...................................................................................................................53

5.2 RENEWABLES FOR THE DEVELOPMENT OF SOUTHERN ITALY...................................................................................54

5.3 RENEWABLES FOR CO-OPERATION IN THE MEDITERRANEAN AREA.........................................................................56

5.4 NATIONAL PLAN FOR THE ENERGETIC VALORISATION OF AGRICULTURAL AND FORESTRY BIOMASS......................57

5.5 INTEGRATED PLAN FOR USING RENEWABLES IN THE PUBLIC BUILDING SECTOR......................................................58

5.6 STRATEGIC RESEARCH..............................................................................................................................................59

5.6.1 Increase of agricultural biomass production through genetic interventions....................................................59

5.6.2 Photovoltaic energy : a strategic resource.......................................................................................................61

5.6.3 Solar energy storage..........................................................................................................................................63

5.7 A PROJECT FOR SPREADING THE CULTURE OF RENEWABLE ENERGY........................................................................63

ENCLOSURE 1 - ACTORS THAT HAVE CONTRIBUTED IN PREPARING THE WHITE PAPER................65

ENCLOSURE 2 – SUMMARY OF COMMENTS TO THE GREEN PAPER..........................................................66

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1. INTRODUCTORY REMARKS AND SUMMARY

The Italian Government firmly believes in the strategic importance that renewable energy sources have for our country. For this reason, within the scope of a coherent and penetrating policy of support by the European Union, the Government intends to sustain the progressive integration of these sources into the energy market and develop co-operation with other countries in the Mediterranean.

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1.1 Introduction

This paper fulfils a specific provision of the Inter-ministerial Committee for Economic Planning (Comitato Interministeriale per la Programmazione Economica – CIPE) resolution dated 19 th

November 1998, approving the “Guidelines of the national policies and measures for reducing greenhouse gas emissions” (resolution n. 137/98). Item 2.4 of this resolution, in fact, provides for the Minister of Industry, Trade and Handicraft, in understanding with the Minister of Environment, Minister of Agricultural and Forestry Policies, Minister of Public Works, Minister of Finance, Minister of University and Scientific and Technological Research, hearing the Unified Conference, to submit the White Paper for promoting renewable resources for approval from the CIPE. This is prepared on the basis of the Green Paper drafted by ENEA (Italian National Agency for New Technology, Energy and the Environment), within the scope of the organisational process of the National Energy and Environment Conference (Conferenza Nazionale Energia e Ambiente).

The White Paper identifies, for each renewable source, the goals to reach in order to obtain reduction of greenhouse gas emissions which the CIPE decision attributes to renewable sources identifying, in addition, the strategies and tools required for this purpose.The drafting of said paper, moreover, launches and implements, at a national scale, the Community White Paper on renewables1 in which it is stated that “the role of member States in implementing the action plan (of the Community White Paper, ndr) is considered crucial. They must decide upon their specific goals within the area of a more general framework and develop proper national strategies for achieving them”. Experts of ENEA and various Ministries have contributed in preparing this paper. The developing process has been characterised by comparison with all institutional, social and entrepreneurial actors, as well as the European Union, which has been the guiding criteria used by ENEA within the scope of the National Energy and Environment Conference organisation.Therefore, a series of activities has been initially developed, defined and then discussed with the operators in an appropriate programmatic conference held in Rome on 8 April 1998. In that session, open scientific work groups were established – which included about a hundred experts representing all participants involved – which, afterwards, have examined certain important issues linked to the topics to be discussed.At the same time it was appropriately concluded to publicly debate the issue of renewable sources in a dedicated national conference so as to cast light upon the opportunities offered by these sources, not to mention the obstacles found in their path of spreading, and the type of strategies to adopt in order to overcome any existing barriers. The conference was held in Naples on 4-5 June 1998, and in that session policymakers from the government, Regions2 and local authorities illustrated their basic intentions. Trade associations and social forces expressed their opinions in regards to the issues on the carpet; and lastly, the European Commission expressed its findings on the initiative’s compliance with the policy of the European Union.In the meantime, the working groups examined specific issues.The pool of all the contributions led, in July of 1998, to achieving the national Green Paper on renewable energy sources, a discussion paper containing the basic informational elements and

1 Com(97) 599 def. dtd. 26-11-1997: «Energy for the future: renewable energy sources – White Paper for a Community strategy and action plan»

2 The word - Regions – appearing anywhere in this paper is used to mean: Regions and Autonomous Provinces.

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assumptions of goals and intervention strategies. The Green Paper was sent to those who had participated in the Conference of Naples, to the Chamber of Deputies and the Senate House, and made available on the Internet and sent to anyone requesting it. On 1 October 1998, the Minister of the Environment presented the Green Paper to the Press. The same paper was also subject to a hearing on 7 October 1998 at the Senate Commission on Environment and Territory. During the same time, the issues found in the Green Paper were matter of discussion with other groups who, for different reasons, were also assessing the potential of renewable energy sources. Along side this, it was considered useful to perform additional specialised studies regarding certain types of issues. We are referring here to a study on employment impact hinged to the implementation of the dissemination programme indicated in the Green Paper, which was performed. This was conducted to determine any beneficial employment results that were obtained, consequently upholding these policies in favour of renewables.Other matters examined were the condition and needs for modifying and integrating technical regulations resulting from promotional mechanisms applied in Italy (with a pertinent overview on other mechanisms adopted by other European countries) were carried out, as well as the state and prospects of district heating through biomass.The process leading to the White Paper also included integrating the comments to the Green Paper coming from the operators involved (Enclosure 1 lists both the operators that have contributed to drafting the Green Paper, as well as those that have supplied comments to the same paper). The comments, critiques, suggestions to the Green Paper were numerous, authoritative and valuable. A final summary of said contributions are reported in Enclosure 2. A preliminary version of the White Paper, presented by ENEA at the National Energy and Environment Conference (Nov. 1998) was reached.Approval, in November 1998, of the CIPE decision 137/98 supplied the definitive guideline to complete the paper whose preliminary version was being submitted by ENEA to the interdepartmental workgroup according to the same decision. Within this scope, and by active and constant participation of ENEA, the final paper was developed in conformance with the instructions of the CIPE 137/98 decision.We would like to emphasise that the cognitive elements contained in the Green paper are not reported with the same degree in this paper, unless, in the meantime, new elements have not emerged. This is the case, for example, of the employment impact associated with reaching the different objectives established in the same Green Paper, in which, the following makes specific considerations as well as changes in the standard framework which will be matter of discussion in the next paragraph.

1.2 From the Green Paper to the White Paper: main changes to the standard framework

In addition to the debate on the Green Paper numerous institutionally relevant facts have emerged in the meantime regarding the energy supply sector and renewable sources, elements which, in general, underline the coherent determination of the Government in promoting renewable sources.The outstanding elements have been the following:a- Introduction, with Law n. 488/98 “Public Finance Measures for Stabilisation and Development”

of taxation on carbon dioxide (carbon tax), so as to continue the gradual process of internalising the social costs of energy production. This had already commenced with the putting into effect of

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taxation on sulphur oxide and nitrogen oxide emissions. The same law provides for granting a tax break with tax credits of 20 L/kWh (in this text Italian liras are indicates as L) of heat supplied in the municipalities of E and F climatic zones through grids of district heating supplied with biomass;

b- approval of the CIPE n. 137/98 decision “Guidelines for national policies and measures for reducing greenhouse gas emissions”. In particular, this decision specifies the actions through which it is possible to obtain reduction of greenhouse gas emissions for values equivalent to 95/112 Mt CO2 by 2008/2012, as better detailed in Table I. The corresponding value ascribed to the sole production of energy from renewable sources amounts, in the forecasts, to 18/20 Mt in reference to 2008/2012.

Table I. – Nationally aimed actions for reducing greenhouse gas emissions (CIPE 137/98 decision)

Actions Mt CO2

2002Mt CO2

2002Mt CO2

2008-2012Greater efficiency in the electric sector 4/5 10/12 20/23Reduction of energy consumption in the transport sector 4/6 9/11 18/21Energy production from renewable sources 4/5 7/9 18/20Reduction of energetic consumption in the industrial/housing/tertiary sectors 6/7 12/14 24/29Reduction of emissions in non-energy sectors 2 7/9 15/19Absorption of CO2 emissions from forests - - (0.7)TOTAL 20/25 45/55 95/112

The executing organ of this decision is identified in the Commission for sustainable development, technically supported by the interdepartmental workgroup. This was already established by decree of the President of the Council of Ministers on 20 March 98 to ensure an adequate level of co-ordination of programmes in the sectors identified by the CIPE decision of 3 December ’97, in co-operation with ENEA. The following bodies are present in the workgroup: Ministry of Agricultural Policies, Ministry of Environment, Ministry of University and Scientific and Technological Research, Ministry of Industry, Trade and Handicraft, Ministry of Treasury, Budget and Economic Programming, Ministry of Foreign Affairs, Ministry of Transport, Ministry of Public Works, Ministry of Finance, Ministry of Public Health, Ministry of Foreign Trade, Unified Conference.The same Commission will later have to promote a monitoring system for the execution of the programme and measures provided for by the decision, in collaboration with ENEA, ANPA, State Administrations and Regions;

c- finalisation, through Legislative Decree n° 36/99, of the reorganisation process of ENEA which attributes to this Body the responsibility of operating in the fields of research and innovation for sustainable development and perform agency functions for public administrations by offering advanced services in the fields of energy, environment and technological innovation. These tasks show obvious connections with the present document;

d- introduction of specific measures on renewables in Legislative Decree n° 79/99 «Implementation of the European Directive 96/92/EC bearing common standards for the internal electrical energy market». With this decree the scope is that of promoting a wider contribution of renewable

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sources for fully meeting the needs of electricity, through the issuing of the following principal measures:1. Ensure the priority of dispatch of electricity produced by plants powered by renewable energy

sources; 2. starting from the year 2001, compel companies that produce or import electricity from non-

renewable energy sources to input into the network a quota produced from new or enhanced plants powered by renewable energy sources which were placed into operation after 1 April 1999. This quota is initially set at 2% of energy exceeding 100 GWh, at net of co-generation output, power plant internal consumption and exported electricity;

3. give priority to the use of renewable energy sources in small isolated networks; 4. subordinate renewal of hydro-electric concessions to programmes increasing energy output or

installed power; 5. set the time schedule for the starting of incentives provided for by the CIPE 6/92 provision.

It is noteworthy here to indicate the work of the Authority for Electrical Energy and Gas, which has adopted numerous measures regarding renewables too. Particularly, it started off the procedure for revising the feed-in tariff system for transferring to the grid electricity generated by the renewable power plants included in the lists of the CIP 6/92 measure.

1.3 Summary of objectives and strategies

The government attributes strategic importance to renewable sources in relation to the contribution they can give for guaranteeing greater security of the energy supply system, the reduction of relative environmental impact and the opportunities represented by protecting the territory and fostering social development. Therefore it is the Government’s intent to uphold the dissemination of aforesaid sources, pursuing, within the context of a coherent European support policy, a substantial increase of their share in the energy supply budget for the years 2008-2012. At the national level, the goal pursued for 2008-2012 is to increase the use of energy from renewable sources up to approx. 20.3 Mtoe, compared to 11.7 Mtoe recorded in 1997. In the meantime, it is our intention to foster the creation of suitable conditions for a yet greater recourse to renewable sources for the upcoming decades.The materialisation of such prospects requires State intervention, together with other public institutions, that will be structured along various lines and actions:

1. Adopt coherent policies

A permanent advisory board will be established at the Ministry of Industry which will ensure the necessary technical support for co-ordinating sector-based policies and integration among the action of the various levels of competence, as well as eliciting an adequate and coherent support policy from the European Union. Along with the representatives of public bodies assigned to the development and spreading of renewables, Regions and Local authorities, as well as competent Ministries, will participate in the work of the advisory board. The Ministry of Industry, assisted by ENEA, will assess the feasibility of proceeding with setting up an appropriate agency, possibly within the scope of the options offered by the Legislative n° 36/99 for co-ordinating all framework projects and strategies included in this paper.

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2. Decentralisation and subsidiarity: functions and structures for Regions and local authorities

A wide and growing involvement of Regions and Local Authorities in managing dissemination programmes will be favoured, guaranteeing, during the initial phase, the availability of adequate financial resources necessary for direct promotion in producing renewable energy. Furthermore, the necessary technical support structures will be made available also supplying assistance for creating and enhancing energy agencies.

3. Disseminate awareness in energy related environmental issues

Initiatives for creating a widespread culture of renewables and, in general, a more balanced energy related environmental awareness, at the local-administrative and citizen levels, will be promoted with the technical support of sector-based public organisms pertinent to the sector. Moreover, initiatives aimed towards specialist and professional training will be promoted, at both a national and Mediterranean level.

4. Acknowledge the strategic role demonstrated by research

Special strategic projects will be developed for photovoltaic, biomass and solar energy storage, in any case in full compliance with the trends outlined in this paper - to be included in the National Research Programme.Furthermore, integration among the financial resources of the various institutional levels and competencies of the various actors operating on a national level will be fostered. In general, co-operation with national industry in research on advanced technologies will be favoured, as well as endeavours in integrating with European projects for long term strategic research. Special attention will be given to co-operation agreements with developing countries - and, of course, the Mediterranean area - that may be conducive to industrial type co-operation.

5. Encourage integration with energy markets

a. A simple, lasting and convincing reference framework will be created within the sphere of receiving and implementing Community Directives regarding energy - and generally all rules involving the energy sector - adopting coherent standards with the objectives and policies of the European Union suited to foster private enterprise.

b. The first specific rules for electricity produced from renewables, already introduced with Legislative Decree n° 79/99, are: priority in dispatching, obligation - assumed by large producers and importers - to produce or purchase pre-set quotas of energy from renewables. Subordinate, where possible, renewal of hydroelectric concessions of produced energy or installed power. Foresee the priority use of renewables in small isolated networks.

c. As the conditions arise for laying down the groundwork of technical feasibility, and provided that voluntary agreements are not drawn up with an equivalent efficacy, the opportunity to embed the valorisation of renewable sources into the heat market will be taken into consideration. In particular, creation of technical structures and financial mechanisms that will

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facilitate the spreading of thermal-energy use produced by low enthalpy solar panels, biomass and geothermal will be sustained by means of a tariff system burdening the end-user, as is presently the case with traditional systems.

d. As far as biofuels are concerned3, in compliance with the provisions of the CIPE decision 137/98, our aim is that of promoting the use of biodiesel for heating purposes and motor propulsion designed for public transport. This will start with the large cities first, and - mixed in with diesel oil - in distribution networks and pleasure crafts. For this precise purpose, steps towards demonstrative actions on a significant scale will be taken - with which identifying even the conditions for possibly applying them to the sector of flexible mechanisms foreseen by the Kyoto protocol. In addition to defining the necessary technical conditions in the use of biodiesel and ETBE mixed with diesel oil and lead free petrol, respectively.

e. In all cases, special importance is given to “voluntary agreements” which form a remarkable tool for searching the goals or carrying out functional initiatives on them, with preventive involvement of the actors engaged. A first initiative in this direction is a programme-based agreement for executing initiatives on wind energy benefiting from the tariffs set by the CIP 6/92 measure. It is our intent to enhance this tool, foreseeing to extend its use in the same electrical energy sector, as well as in specific initiatives regarding other sectors.

f. In order to find additional financial resources meant for direct promotion a specific line will be included dedicated to renewable resources in the European Union Structural Fund Programming for the years 2000-2006. Furthermore, initiatives to encourage operators accessing other European and international funds will be sustained, such as those made available by the MEDA programmes as well as by financial organisms for sustaining development.

6. Meeting organisational requirementsa. A monitoring system on renewable energy sources will be set up whose duties will be those of

performing a wide and qualified monitoring of the sector, verify the efficacy of sustaining diffusion mechanisms and provide useful elements for the development of technologies.

b. Along with the Regions, adequate attention will be given to the juridical and technical regulations regarding renewables supporting the separation of the juridical rules from the technical ones. That according to the European “new approach”, and promoting the building of a non-discriminatory regulatory system, which, in the meantime, will ensure the protection of users.

7. Start off framework projects and support initiatives.a. Projects and initiatives will be promoted - focused, among other things - on activating wide-scale

co-operation with countries from the Mediterranean area, and the gradual exploitation of the renewable sources in southern Italy.

b. For the starting off and sustaining of such projects, as well as resorting to Community financial opportunities, specific actions will be defined on development, demonstration, dissemination, technical support, training and information coherent with the intervention lines illustrated in this

3 In this text, the word biofuels indicates both liquid fuels for heating as well as biofuels used in the pure or mixed state for powering internal combustion engines.

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paper. 2. REASONS FOR DEVELOPING RENEWABLE ENERGY SOURCES

Renewable energy sources can contribute considerably in developing a more sustainable energy supply system, enhance the level of awareness and participation of the citizens, assist in protecting the land as well as the environment, and provide valid opportunities for economic development.

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2.1 General reasons

The energy demand-supply system affects the economic and social progress of a nation, but the way by which energy is made available can have its negative repercussions on eco-systems and consequently on the quality of life itself.Since decades, industrial countries withdraw and use up fossil fuel sources at the rate of consumption of about hundreds of thousands of times greater than what it took to make them. If the present rate will continue or increase (because of developing countries will follow suit), the greatest damage, in the short and medium term, will not be so much that of depleting these sources (which, of course, will have implications in the long term), as that of causing irreversible damage to the environment.Quite appropriately, therefore, individual nations, as well as supranational organisms, have striven in recent years to find the most adequate tools for joining progress and environmental protection, aware of the worldwide implications of this problem.One of the tools available for accomplishing these goals is a greater use of renewable energy sources that are capable of guaranteeing a more limited environmental impact than that created by fossil fuel sources.In the short and medium term, the importance of renewable sources does not lie so much in their ability to replace considerable amounts of fossil fuels, as their contribution in limiting the environmental damage produced by the aforementioned fossil fuels which, although significant, is not so critical.On the contrary, in the long term, the contribution of renewable energy sources can be meaningful, both for supply-side security as well as for the drastic increase in environmental alarm. Therefore, it is of extreme importance to start their gradual introduction into the energy market without any further delay. Projections for the year 2020 show that renewable sources could well cover (by that date) up to 20-30% of world energy needs.The widespread nature of renewable sources allows joining energy production with control and management of the territory, contributing in fighting depopulation and degradation. For this same reason, renewable sources offer the chance to directly involve entire populations and local administrations with implementing the concept of “think global, act local”.The European Union in its paper, “An energy policy for the European Union”4 identifies three goals: greater competitiveness, security in energy supply, and environmental protection for advancing the promotion of renewable energy sources as an important tool for attaining these goals. In the subsequent community paper, “Energy for the future: renewable energy sources – White Paper for a Community-wide strategy and action plan” sets as its minimum target for the year 2010 the doubling of the percentage contribution of renewables for matching energy needs. Further, the paper invites Nation members to identify specific goals within the same general framework scope and develop national strategies to reach them. With this paper, we set our own practical trend while at the same time acknowledge the European Union’s invitation.

4 COM(95) 682 def. dtd 13-2-1995: “An energy policy for the European Union”

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2.2 Reduction of environmental costs in energy production

There is no doubt of the value of renewables in terms of reducing environmental costs in energy production.In regards, a few useful quantitative indications can be inferred from the “ExternE project” financed by the European Union, which has assessed the environmental costs linked to electric production of various countries, with different sources and various technologies. IEFE and ENI have participated in this study. While inviting you to read the study for the methodology5 used, it is interesting to note here that in Italy6, the environmental cost (including greenhouse effect) of electricity production from fossil fuels is estimated equal to 65-106 L97/kWh, from natural gas 28-51 L97/kWh, and from hydraulic 6.46 L97/kWh. Another case examined is that of wastes: deducting from total external cost the external cost of alternative disposal in landfill a value of 65-70 L97/KWh is obtained. In the last case, however, the social function should be considered for the waste disposal service as well as the complexity of different waste disposal systems and relative comparison. Even renewable energy sources have an environmental cost, of a limited extent in the case of hydroelectric, and still more limited in the case of wind energy and solar technologies. Different is the matter regarding sources that require air combustion, as is the case of wastes and biomass. From the data of the aforementioned ExternE project, for example, we can assume that the damage due to nitrogen oxides emissions into the atmosphere alone, in any case resulting from biomass combustion, may be greater than 30 L97/KWh. To this data, however, the advantage obtained should be deducted through the production of energy, in terms of a more correct disposal of biomass itself, since we are dealing here with industrial and organic wastewater.For this reason it is unfitting to convert, tout-court, the environmental damage of energy production from conventional sources into a renewable energy value. Nevertheless, the above stated figures make up interesting reference data for comparing various sources in a more complete manner.Of course, even the lower power credit of certain renewable sources should be taken into account, but this is considered inappropriate at this point, but most certainly it will be necessary in the cases of greater levels of market penetration were to be obtained.Another recent study7 provides us with estimates on external costs regarding the transport sector, in which biofuels should be, essentially, introduced: as a mere reference, the external cost data associated only to atmospheric pollution and automobile carbon dioxide is estimated by the study in approximately 70 L95/pkm (cost per unit of passenger traffic).With the introduction of taxation on sulphur and nitrogen oxide emissions and CO2 emissions (Carbon Tax), the Government has meant to direct the fiscal system on energy products towards a first integrating of external costs. This policy must continue in a scope of compatibility with the policy of other European countries while taking into account the needs of the productive system. In this context it must find the right, dynamic balance between taxation on conventional sources and promotion – regulatory and/or financial – in favour of renewables.

5 Eur Doc 16520-16525, 19956 Blue Energy, n.2, May 19987 Friends of the earth, State railroads: the environmental and social costs of mobility in Italy, June 1998

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2.3 Security of the energy system and protection of the territory

The national potential of renewables not yet exploited is considerable, even if exact and exhaustive estimates are not available for each source. However, according historical data and few past investigations on the territory, it is reasonable to make some hypothesis. The exploitable wind potential could be in the range of some Mtoe (in terms of fossil fuels substituted by electricity produced). That of biomass of some dozen Mtoe (in terms of energetic content of raw material). For solar energy instead, especially for conversion into electricity, the potential could be estimated more noticeably but meets with its limits for exploitation in production plant costs. Interesting are also the further exploitation margins for hydroelectric, geothermal energy, in thermal and electric applications, and utilisation of the energy content of wastes. The exploitation of this “renewable resources”, some of them plentifully located in the South, will increase the security of the Italian and European energy system.In addition to environmental benefits linked to reducing harmful emissions, great importance takes on for our country a better utilisation, protection and safeguarding of the territory, for the most part pursuable through a careful exploitation of biomass. Italy’s landmass extends for approximately 30.1 million hectares, with a population density of about 191 inhabitants/km². The surface is made up of 9 million hectares of arable lands, 3.2 of permanent farming, 6.5 of forestland, 4.2 by grass and pasturelands, and 7.2 by barren lands and other.The Useful Agricultural Area, quantity that measures the actual consistency of the productive agricultural land is shrinking more rapidly than in the rest of Europe.In the interval of time between 1989 and 1993 this contraction has been 1.4% in Italy against a European average of 0.6%. Presently, untilled lands, for the most part hilly, amount in Italy to 3 million hectares, of which 2 in the South.A further source of biomass is made up by available wood from the approx. 3 700 000 ha of coppice forests which represent about 42% of the Italian forestry resource. Among the various hypothesis for intervention which are formulated by experts of the sector regarding coppice forest, one is that of intervening, where specific conditions allow it, by operating a conversion to standard trees. A study, carried out for the National Energy and Environment Conference, has concluded that if such an operation were conducted on a surface of 2 million hectares, a greater capacity of the regenerated system to absorb CO2 equal to 8-9 Mt/year would be obtained. Further the study has focused also the reaching of a greater control on forest fires – whose cost can be estimated at a few hundred billion a year – and an increased capacity to stabilise the soil from a hydro-geologic standpoint.Wood, resulting from the operation would have an energy content corresponding to 0.8 Mtoe/year.In short, the development and dissemination of renewable source, thanks to its low density and widespread nature, fostering a better protection of the territory, concurrent contrasting of escalating pollution, and productive use of land otherwise barely made use of.These aspects are extremely fitting for Southern Italy, since the process of reducing and limiting hydro-geologic hazards can easily match with renewable energy production.

2.4 A few evidences on possible follow-up in the employment sector

Given the importance to day of topic correlated to new job creation, further sound reasons have to

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underpin for implementing development policies of renewable technologies. A few excerpts from the study8 - specially carried out - are reported, relative to the employment impact contingent upon reaching the goals for spreading renewables, as outlined in this paper.

“Since employment effects of the investment plan are the consequence of not only the personnel directly employed in the execution of the plants, but also by the indirect effects that are induced in other economic sectors. In order to assess the overall effect we have consulted the Input-Output Table of the Italian Economy, while data regarding direct employment in the operation and maintenance of plants have been inferred from information basically relative to plants already operational in Italy or built by Italian manufacturers.”So that by means of a field survey, almost all the percentage contributions of the various items that make up the investment have been acquired, in order to be inserted into the Input-Output Table.

Taking into consideration negative employment impact due to traditional plants, that would not have been produced and made operational because replaced by renewable plants, calculations, performed by the Input-Output Table, have led to forecast, for the year 2010 (intermediate date between 2008 and 2012) a net employment impact comprised between 70100 and 79800 units, according to the inferred assumptions.

The assessments generated by the Input-Output Table account for, in fact, two effects:- share of goods imported for the individual plant solutions coincide with that expressed by the

Input-output Table of the Italian Economy;- firms involved limit to producing for the national market.

Both hypothesis are reasonable for mature technological solutions, i.e hydroelectric and geothermal, and can be essentially considered worthwhile even in the case of energetic use of refuse. The same, vice-versa, cannot be said for wind, photovoltaic, thermal solar, biomass and biogas, biofuels energy.While we can consider that for the first group, the implementation of the White Paper have no effect on imports as well as exports, for the second group instead, possible induced effects have been assessed both by a greater innovative capacity as well as a national competitive ability to the entire system, as consequence of the programme execution foreseen by the White Paper.In the same manner, the effects of a lack of innovative impulse and competitiveness have been assessed, which would translate into resorting to imports significantly greater than those foreseen by the Input-Output Table.We have consequently estimated that in the event of a strong dependence on imports we would have to fall back to the minimum employment levels indicated above, while with a good (30%), still not exceptional export capacity, the higher level would be reached (approx. 80000 units by 2010).

The reference estimate to 2010 provided by the Input-Output Table, equal to about 74000 units, is about less than a quarter owed to direct and induced employment for the operation and maintenance of the plants built, while for the rest it relies on the stability of a meaningful investment plan.As far as employment contribution of the different sources is concerned, considering together all the contributions to energy production, both electric and thermal, by 2010 biomass will have the lion’s share, with a total amount equal to 40%. Solar energy and hydro-electricity will follow with a 8 ENEA-ERG assignment n. 1267 dated 31 July 1998

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percentage slightly less than 20% each, while wastes contribute for little more than 10% and wind energy for less than 8%. Modest contributions are those of geothermal and biofuels.

Apart from the numerical data, there is no doubt whatsoever that the penetration of renewable sources should above all change the geographic distribution of employment since, for at least some primary sources, its availability is greater in the Southern areas of the country.This holds true especially for solar energy and consequently for electric and thermal applications also, but wind speed conditions favour Southern areas of the country too. Furthermore, development of biomass production has once again favoured Southern areas, where there are more soils available for their cultivation.As a first approximation, this study provides some orientation data that quantify the basic principles just expressed. In fact, depending on whether we consider new productive installations in the South or not, we assume, as it is reasonable, a significant localisation of new firms in the sector. The share of employment, which in 2010 would go to the south, will probably be comprised between 35100 to 43100 units. That corresponds in terms of percentage to 47% and 58% of total induced employment at a national level, to compare with a population in our Southern regions consisting of 35% of the national total. This is not a negligible contribution in areas where unemployment is a very serious matter.Employment is forecasted to change also in regards to its distribution among different industrial and service sectors. Let us stop and think for a second about the features of the blades of a wind-power generator, which for designing criteria, material selection, work process make them similar to aircraft components. Or yet, to the features of silicon cells of a photovoltaic system. The allocation of a significant part of investments in geothermics towards drilling activities, typical of the mining sector. In addition to the role a service such as transportation plays in the case of biomass and urban solid waste. Overall, we can safely state that job demand shifts towards higher professional levels.Apart from the general contribution of the plant types, which are topic of this study, to a different qualitative, as well as quantitative distribution of work opportunities, the development of biomass energy exploitation can especially give a positive contribution to sustaining agricultural economy; especially in those areas where it seems to be in worrisome decline since it facilitates setting up arming in otherwise marginal areas (at least under an economic profile).Similar considerations can be made for mini-hydraulics and for wind generators, even though in this case we are dealing with a modest contribution, and if you think about the operating and maintenance of plants, we are dealing here with professional profiles completely different from those traditionally present on farming lands.Returning to biomass, in this case workforce is required for production and collection, both for transporting, and since it is convenient to have generation plants the closest possible to the fuel production areas, as well as operation and maintenance activities, being it clearly understood that only production and collection can deploy the typical competencies of agricultural and forest activities (without the risk of importing foreign specialised workforce).In addition to strictly occupational effects, development in agricultural areas of activities connected to energy generation from renewable sources increase on-site income and puts into motion a virtuous cycle which local communities can only benefit from: not only greater circulation of money, but increase in collection of local taxes which in turn generates greater investments (for infrastructures, training, etc.).On the basis of foreign experience, which this study takes into consideration, the contribution to the local economy coming from tourism inspired and motivated by the presence of energy plants

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powered by renewable sources, should not be neglected.

“…with additional occupational levels by 2010 included between 70000 and approx. 80000 units compared to overall investments which, deducting those relative to replaced traditional plants, amount to approximately 32000 billion lire we are in the presence of investments in the range of 400 and 460 million per worker, higher than the national average but not too greatly out of range.Moreover, if we take into consideration the environmental costs avoided, and the greater dues that society would have to bear if those 70,000-80,000 individuals were to remain unemployed, the economic benefits of this programme appear even more obvious”.

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3. DISSEMINATION GOALS FOR 2008-2012 AND RELATIVE REDUCTION OF CO2 EMISSIONS

Within the new reference framework, characterised by the process of creating the single European energy market ranging from liberalisation to decentralisation of competencies, the role of government must essentially rely in defining the objectives, dictate coherent rules and foster the conditions for attaining those same goals through market dynamics.

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3.1 Renewable sources considered

Renewable energy sources were defined in the Green Paper, but the discussion on them was limited to those sources for which there are, in our country, interesting potentials, and the state of the art of technology and relative prospects appear to be very appealing in the short-medium and long term. Hydraulic energy, geothermal energy for electric and heating uses, solar thermal and photovoltaic, wind, biomass and biogas, as well as waste have all been taken into consideration.

Legislative Decree n° 79/99, executing the European Directive n° 96/92/CE on common standards for the internal electric energy market, also bears a definition of renewable energy sources coherent with the above considerations. For these reasons, in the White Paper reference will be made to the same sources considered and analysed in the Green Paper.

3.2 General framework

Italy is still lacking an accurate study on the “reserves” of renewable energy which allows defining, in relation to state of the art technologies, the “resources” actually exploitable. However, some of the data provides us with useful elements for a general estimate on the potential exploitable within the next 10-12 years.Presently, a significant number of initiatives for the building of electricity production plants from renewable sources are in progress, or in the planning, activated thanks to the first six rankings of the CIP 6/92 measure9. At present the overall amount of requested power capacity submitted are approximately 5800 MW (lists 1-9).Other useful data, concerning potentials’ evaluation, come from the consideration that energetic cultivation of the three million hectares of land, abandoned by conventional agriculture, can supply about 12 Mtoe/year, in terms of net calorific value than biomass (assuming an annual production of dry biomass of 10 t/hectare and net calorific value than dry biomass by 4000 kcal/kg).As far as regards solar thermal and photovoltaic, we can take as reference development rates similar to those recorded in other European countries and/or at international scale.

These few raw data allow making an rough estimate on possible realisations in the next future.The following tables II and III provide a summary of the situation as of 1997 and relate the 9 With the CIP 6/92 measure, about 3800 MW of renewable sources have been activated within the scope of the first six rankings, of which 1200 to ENEL and 2600 MW to independent producers.The situation stands as follows:

TYPE OF RENEWABLE SOURCES ACCEPTED CAPACITY INSTALLED CAPACITY ON 31/12/97

Wind 740 MW 80 MWHydroelectric 1354 MW 644 MW of which with power < 10 MW 367 MW 59 MWGeothermal 548 MW 300 MWWaste 674 MW 43 MWbiomass and biogas 561 MW 75 MW

TOTAL 3877 MW 1161 MW

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forecasts for the years 2002, 2006 and 2008-2012, coherent with the goals of greenhouse gas reductions planned by the CIPE decision n. 137/98.Overall, an additional contribution of renewables is possible, in respects to 1997, of approx. 8.6 Mtoe running from 11.7 Mtoe to 20.3 Mtoe for 2008-2012 in terms of substituted conventional fuel. Of the latter, approx. 16.7 Mtoe will derive from electric energy production and 3.5 Mtoe from production and use of heat and bio-fuels.

The electric power fed by renewable sources would run, for 1997 to 2008-2012, from 17100 MW to 24700 MW, with an increase of over 7600 MW. These increases, in relation to 1997, are expected for the next 3-4 years. A part of is due especially to the implementation of the initiatives included in the six lists of the CIP 6/92 measure. Another part will come from the obligation imposed, by Legislative Decree n° 79/99, upon large-scale producers and importers to produce and acquire, starting from 2001, a minimum 2% quota from new renewable energy plants. In order to meet the goals set for the years 2006 and 2008-2012, it is imperative to immediately start on researching and setting up the technical, regulatory, cultural, political and administrative conditions that foster the penetration of renewable technologies.Further more significant increases will derive from biomass – both for electrical/heat production and biomass fuels – not to mention hydroelectric and wind energy. The contributions of geothermal and waste energy are also considerable. Although contributions from solar thermal and photovoltaic are quite modest, it would be sensible not to neglect these technologies for their industrial and strategic significance.

The goals, set for 2008-2012, are in any case quite ambitious, introducing a whole array of problems. Firstly, we must reaffirm that in order to meet these targets a great effort must be made right away if we are to lay down the necessary conditions for such a high level of market penetration. Secondly, the high increase in the contribution of renewables takes up a large share of the exploitable potential using present day technologies.

In order to meet more ambitious targets – obviously necessary if renewables are to come into play regarding energy security and a more stringent need for environmental protection – a significant and simultaneous heightening of R&D on more efficient technologies, keeping a constant competitive edge, must take off right away.

The technologies that offer more appeal and better margins for improvement are photovoltaic and biomass. Within this perspective, furthermore, appropriate research actions conducted even on systems, engineering and management of network systems, can considerably alleviate the negative effects of certain renewable sources, such as low density and, in some cases, discontinuous generation.

The following paragraphs will provide the attainable targets for 2008-2012 regarding each technology; as far as the state of art at a national scale for each technology, and the relative Italian market is concerned, refer to the Green Paper on Renewable Energy Sources, Enclosures 2 and 3.

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Tab. II – Status of electricity generation from renewables as of 1997 and development forecasts for 2008-201210

Technology 1997 MWe11 Mtoe

2002 MWe Mtoe ΔMtoe

2006 MWe Mtoe ΔMtoe

2008-2012 MWe Mtoe ΔMtoe

Hydro 10 MWHydro <=10 MWGeothermal energyWind energyPhotovoltaic12

Biomass & Biogas13

WasteTotal

13942 7.365 2187 1.787

559 0.859119 0.026

16 0.003

192 0.125 89 0.055

17104 10.221

14300 7.550 0.1862400 1.954 0.166

650 1.051 0.192700 0.308 0.282

25 0.006 0.003380 0.502 0.377350 0.385 0.330

18805 11.756 1.535

14500 7.656 0.2922600 2.116 0.329

700 1.132 0.273 1400 0.616 0.590 100 0.024 0.021

800 1.056 0.931 500 0.550 0.495

20600 13.151 2.930

15000 7.920 0.556 3000 2.442 0.655 800 1.294 0.435 2500 1.100 1.074 300 0.073 0.069 2300 3.036 2.911 800 0.880 0.825 24700 16.744 6.524

Tab. III – Status of thermal energy production from renewables as of 1997 and development forecasts for 2008-201214

Technology 1997Mtoe15

2002 Mtoe Δ Mtoe

2006 Mtoe Δ Mtoe

2008-2012 Mtoe Δ Mtoe

Biomass fuels16

Solar thermal17

Geothermal energy18

Biomass & Biogas19

WasteTotal

0.0600.0080.2131.0700.0961.447

0.280 0.2200.56 0.048

0.250 0.0371.400 0.3300.120 0.024 2.106 0.659

0.544 0.4840.111 0.1030.300 0.0871.600 0.5300.160 0.0642.715 1.268

0.940 0.8800.222 0.2140.400 0.1871.750 0.6800.200 0.1043.512 2.065

10 Electric energy is converted to Mtoe using the principle of substitution, with the equivalency of 2200 Mcal/MWh (Italian rule) and keeping in mind that 1Mtoe=10 Mcal. This criterion has also been used for secondary electricity from biomass, biogas and waste, since more suitable (compared to the transformation in Mtoe of net calorific value of raw material) for the purpose of calculation of substituted fossil fuel and of avoided greenhouse gas emissions.Except for 1997, for which we have real data, the following average annual production data have been assumed: Hydroelectric > 10 MW: 2100 kWh/kW; hydroelectric < = 10MW: 3700 kWh/kW; geothermal : 7350 kWh/kW; wind: 2000 kWh/kW; photovoltaic: 1100 kWh/kW; biomass and biogas: 6000 kWh/kW; waste: 5000 kWh/kW. These data are referred to a typical ENEL year (hydroelectric, geothermal), or inferred from literature (biomass and waste, wind and photovoltaic). For these latter sources, the values of energy production relative to 1997 are lower than those listed above, since the values refer, for the most part, to new power plants in start-up phase.

11 Gross efficient power capacity, even for values relative to following years. For 1997, the data shown are ENEL source, except for photovoltaic (EUROSTAT source).

12 The 2006 value takes into account the start-up programmes; the value for 2008-2012 is calculated on the basis of an average growth of the market during the entire term, similar to that recorded in the latter years (about 25%). In the event of wide success of the technological development programmes, a greater emphasised diffusion is expected.

13 Includes electric production plants and co-generation using wood and wood residues, electric production plants from landfill biogas, sludge and animal dungs.

14 The data in Mtoe refer to the corresponding avoided average consumption of fossil fuel (principle of substitution) with the clarifications indicated in the following notes.

15 Elaborated on EUROSTAT data16 We have used the weighted average net calorific value of biodiesel and ETBE on the basis of expected production

values.17 The Mtoe values are obtained considering the overall values of installed area indicated in the text, with an average

insulation of 1500 kWh/m² and an average system efficiency of 50%. The substitution capacity is calculated onsidering an energy efficiency of the fossil fuel devices substituted by 90%.

18 Also includes heat for balneology and balneo-therapy. The contribution is given by the difference between bank fluid enthalpy and exhaust fluid enthalpy.

19 Includes burning wood found in commercial outlets, wood and residues for district heating plants, the fraction of wood and wood residue useful for producing heat in co-generation plants. Given the substantial difference in efficiency of the various utilisation devices (10-15% for fireplaces, up to 80-85% of industrial plants) this data is obtained considering an average substituting capacity compared to plants fed by fossil fuels equal to 50%.

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3.3 Hydroelectric energy

Production of electricity from hydraulic source has reached, at an international and national scale as well, good diffusion levels and low costs with competitive internal costs of produced energy for large hydroelectric and quite competitive for small hydraulic.By the end of 1997, the installed power capacity related to renewable plants totalled 14000 MW e .by power plants greater than 10 MWe and approx. 2200 MWe by plants with power less than or equal to 10 MWe (of the latter, approx. 400 MWe have a power less than 1 MWe, falling into the class of micro-hydro). Present programmes in progress, basically included in the first six lists of the CIP 6/92 measure, foresee a development, within 3-4 years, to approx. 14300 MWe for the first class of plants and about 2400 MWe for the second. There are also requests for more than 500 MWe of hydro plants submitted after the first six rankings of the CIP 6/92. In some regions, projects have been identified for over 300 MW. Further contributions can derive from suitable enhancing interventions of existing plants encouraged by the provisions of Legislative Decree n° 79/99, as long as the economic feasibility and all environmental and social compatibility requirements are met. In addition, a census of all abandoned plants must be carried out, verifying the existence of technical, economic and environmental conditions for recovery and restoring actions.Interesting, at last, may be acknowledging the potential of micro-hydraulics, which according to some researchers, would amount to various hundreds of MW and can involve even operators who manage water basins: such a potential could justify technological innovations for exploiting this potential at lower costs, however. The sum of these elements lead us to believe that by 2008-2012, it will be possible to reach an overall installed capacity of approx. 18000 MWe, of which 3000 MWe

from plants having power lesser than 10 MWe. This perspective will remain realistic even taking in consideration the framework of gradual depletion of potentials not yet exploited of existing hydro resources.This value could actually stand for the final limit of this source, since almost all experts agree in stating that the Italian territory has an annual hydroelectric potential of 65 TWh, in correspondence to a gross energetic production in 1997 of approximately 42 TWh. In regards to this, authorisation and environmental constraints must be taken into consideration, which are at times insurmountable, making full exploitation of the potential very difficult. Unit investment costs for reaching the power goals reported above are estimated to increase in connection with the gradual marginality of the initiatives and by the fact that we are already dealing here with a matured technology. The average value in the period referenced is estimated equal to 5.0 Billion L 97/MW for larger size 10 MW plants, and to 4.5 Billion L 97/MW for those plants smaller than or equal to 10 MW.

3.4 Geothermal energy

Italy is on the cutting edge, at an international level, for electricity production from geothermal sources. Internal energy costs stand to be quite competitive. At the close of 1997, a geo-thermoelectric power slightly over 550 MWe was reported in our country, with the prospect of reaching the figure of 650 MWe within 3-4 years. The residual power potential for electric energy production is estimated in a further 200 MWe, there standing the chance, therefore, of reaching by 2008-12 an overall power capacity of about 800 MWe; this

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estimate, in any case, can be reviewed in the light of the results of deep exploration programmes. In defining next geothermal programmes, it will be necessary to take into consideration problems connected to: - gradual exhaustion of deposits still to be exploited, - related increase – not always justifiable – of costs for investigation, exploration and production

of any new potential discovered, - growing needs for prevention against the emission of pollutants, in addition to resulting

authorisation-based difficulties. Under this point of view the chances of exceeding 1000 MWe are in any case modest. Unit investment costs for geo-thermoelectric plants are estimated to increase in connection with the gradual marginality of initiatives, and indicated on an average equal to 5 Billion L97/MW.In addition to electric production, a greater use of low enthalpy geothermal resources for use in heating should be given a closer look at, especially for urban district heating, greenhouse farming and other industrial applications. With regard to this, expansion programmes are in progress for the utilisation of the direct uses of geothermal energy, essentially concentrated in Tuscany and Upper Latium. It is estimated that the direct use of geothermal energy may reach, by the year 2010, approximately 0.4 Mtoe. In regards to this, local conditions must be identified in which, in correspondence to the availability of the resource, use of heat can be carried out.The costs of district heating plants are estimated at about 5 Million L97/unit served. Here unit served is a volume equal to approx. 300 m³, which corresponds to a residential type dwelling with heating needs equivalent to 1 toe/year. More in general that corresponds to three “equivalent connected inhabitants”, each one corresponding to 100 m³ of residential and tertiary public volume.

3.5 Wind energy

At an international scale, wind energy technology has attained excellent levels of diffusion, efficiency and economic convenience with internal energy costs almost at a competitive level in good windy conditions.In Italy, after a standpoint, the diffusion process has started thanks above all to the CIP 6/92 measure.In addition to the approximately 740 MWe of the first six rankings, the CIP 6/92 measure sees unaccepted requests, relative to lists 7-9, for additional 1500 MWe of plants. The proposed plants are, for the most part, foreseen to be installed in areas situated on the central-southern Apennine ridge and, in lesser extent, in proximity to the coastline.We believe, however, that there are the conditions for a total 2500 MWe by the years 2008-2012.This value has been defined taking into consideration the study conducted on penetration levels of this technology in more advanced countries of the sector: at the close of 1998, 1500 MW were found in Denmark, almost 3000 MWe in Germany, this latter value was attained in about ten years. Even Spain has recorded rapid progress, with installed output of about 800 MW by the end of 1998.As just stated above, wind installations will mainly involve the Apennine ridge and the islands. Taking into account the fact that many nations of Northern Europe, farther ahead than Italy in the exploitation of this source, give great importance to offshore installations, this could mean that part of the future wind installations will be of this kind. The potential contribution of offshore wind energy, however, would be circumscribed, considering the density of human settlements in addition to the environmental importance of Italian shores. In the event suitable sites were identified – from

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a wind speed as well as environmental compatibility viewpoint – in sufficient number, installation of wind power could reach even 3000 MWe. Unit investment costs are estimated to decrease in connection with the development of the market and technological innovation. Average specific cost is estimated in 1.5 Billion L97/ MWe.

3.6 Solar energy

3.6.1 Photovoltaic solar energy

Italy has so far sustained a considerable public effort in the promotion of the market for photovoltaic plants. This effort has affected, for the most part, medium-large size plants (in the range of hundred kW and up to a few MW) connected to the electric network. The advances of this technology, however, has not been such to reveal new opportunities for this type of application, whose feasibility affects the long-term period and is subordinated to research results, in terms of large increase in component efficiency and cost reduction. At this time in fact, the cost of electric energy from photovoltaic plants connected to the network is comprised between 500 and 1000 L/kWh, and the margins for further reductions seem limited if we take into account only scale economies. Therefore, for the time being, it is not appropriate to build other large plants with public intervention.In the short term, however, public commitment must continue: on one hand targeting research, while on the other, focusing on promotion of those market sectors. In defining the interventions it occurs to profit positive synergies that are possible between the technical characteristics and the modularity of photovoltaic and the needs of other sectors characterised by wide potential receptiveness. This is the case of integrating photovoltaic energy into the construction sector, believed to be a very interesting combination by various countries – among which Japan, United States and Germany – for the possibility of building “photovoltaic” facades, tops, projecting roofs. These goals, rather than of an energetic nature, appear more like development and promotion, at least until costs have not taken a sharp cut.With these introductory remarks, we find it to be that market promotion can be performed, at least in the short term, within the scope of photovoltaic “roofs and facades” programme, jointly developed by the Ministry of Industry and Ministry of Environment, with the technical support of ENEA. This programme must be considered, however, as functional to the development goals of technologies that can find integration into the construction sector, for which it seems fitting to activate and sustain an adequately sized market may be reached. Assuming that, between public initiative and free market demand the market were to grow after the year 2000, at an average rate of 25% (similar to that of the latter years of the international markets), by 2010 we may reach a installed power of approx. 300 MW.The unit investment cost over the entire referenced period is prudentially assumed equal to 11 Billion L 97/MW.In the event of success of the photovoltaic “roofs and facade” programme – or, in any case, thanks to technological advances - in the upcoming years the goal for reducing unit costs of the system should reach at least 5-6 Billion L 97/MW, the possibility for a wider diffusion of photovoltaic can be considered, even with the take-off of a new programme allowing to reach at least 500 MW by 2010. This conjecture is not, at the time, taken into consideration for the purpose of market forecast for 2010.

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3.6.2 Solar thermal energy

Solar thermal for sanitary hot water supply is to the point of being competitive in various applications, above all wherever it is capable of replacing not only fuels but conventional plants as well. It is therefore possible to attain an even slight energetic contribution by promoting the growth of the industry sector; training and organising of a widespread network of installers – maintenance workers, as well as soliciting appropriate incentives. The time is ripe for promoting the diffusion of solar thermal, since this technology, adequately mature at an international level, finds particularly suitable conditions in Italy, such as:- climatic conditions, - suitability of most residential buildings (characterised by one-two dwelling units),- large diffusion of electricity use for water-sanitary heating (about 1 0000 000 electric water-

heaters).

We believe it to be possible by the year 2010 to install about 3 million m² of panels, starting with applications in which we can find a good matching between demand and availabiltiy profiles of heat as well as by diffusion initiatives performed on public sector buildings.The indication, given to us regarding this development of the national market, is based upon the assumption of growth similar to that of Austria. The assumption would bring to a total of installed panels of around 500 000 m² within a year, 1-1.5 million m² by 2006 and 3 million m² by 2008-2012. Around 2010, then, a market for replacements should start which would bring an increase in production capacity, gradually growing to about 250 000 m² a year.In order to reach these targets, a first phase of public intervention is required, even financially, for promoting the market by public demand, for example by financially sustaining local public administrations determined on installing plants on public premises and starting off programmes regarding State real estate. Furthermore, additional tools will be taken into consideration, such as a fund for contribution on interest rates will be created.

Unit cost investments are considered decreasing in connection with the growth of the market, with an average value of approx. 700 000 L 97/m² referred to the system.Thermodynamic solar systems for electricity generation also deserve mentioning here, not discussed in the Green Paper because considered unpractical in Italy mainly due to unsuccessful testing experiences. But it is worthwhile at least to closely follow the development of this technology at an international level, to verify if, following adequate technical-economic improvements, it will be possible to apply them in our country.

3.7 Biomass, biogas and biofuels

A proposal concerning the action to be taken by the State to comply with the Kyoto Protocol is the scheme presented by the Ministry of Agricultural Policies: the " National plan for the valorisation of agricultural and forestry biomass ". This is the result of a broad consultation and involvement of public and private institutions, presently awaiting approval by the CIPE.

The plan opens up the potential for pursuing aims of social nature, such as:- re-conversion, diversification and integration of income sources in the agricultural field;

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- reforestation of marginal lands contributing in curbing erosion and the hydro-geologic imbalance of hilly or mountainous areas;

- the opportunity to create new jobs in areas where the unemployment rate is high;- economic exploitation of by-products and organic wastes which are at present, in most

cases, incorrectly disposed;- reduction of costs for purifying and correctly disposing of the waste resulting from agro-

industrial and industrial processing.

In order to pursue achievable goals in the biomass field, account is given to the above plan and to all further elements useful for this purpose.As regards the contribution of biomass to heat generation, there are a wide range of household users employing various and structured heating systems such as fireplaces, heaters and kitchen-ranges. Generally, these systems are characterised by modest values of power capacity (20-30 kW) and low efficiency (around 15% for fireplaces and 40-45% for other systems). However, in recent years progress has been made in the field, both for the technological quality of heating systems and for their marketing. The wood industry and the agro-alimentary enterprises constitute another important category of users. Most of them dispose of their own residual products to generate heat for processing and for building heating. They usually use heating systems with power capacity in the order of 0.5 to 20 MWt, with an efficiency rate of approximately 75-80%. This category of users totals an installed power capacity estimated at approximately 2500 MWt which corresponds to an avoided utilisation of biomass equal to approx. 0.6-0.8 Mtoe.In recent years, heat utilisation has increased through the installation of district heating plants fed by biomass. Today, there are fifteen systems located in the North (Alto Adige - Piemonte) for approx. 40 MWt which allow a reduction in fossil fuels equal to more than 7000 toe/year. Although their number is not so significant, and its total heating capacity not so relevant, in recent years the district heating plants in general and those of biomass in particular have developed a tendency to spreading which is foreseen to continue its trend even in the future with good prospects.The same is occurring in other European countries - particularly our neighbouring Austria - where the use of district heating has been practised for years. Furthermore, the prospect of district heating offering not only heating during the winter season, but also generating cooling during the summer by using pumps for absorption of heat, is very interesting. Actions aimed at creating a prospect for renewing the inferior technological sector by using devices of a higher output - presently available on the market -, for spreading remote heating systems and maximise the exploitation of co-generation. This would allow having a final contribution by biomass to heat generation, estimated at approximately 1.7 Mtoe for the years 2008-2012.As regards to the generation of electric power, a significant contribution actually comes from biogas collecting and utilisation systems (50% methane, 50% CO2) produced by the anaerobic digestion of the organic fraction of refuse present in disposals.A push towards utilising these systems has been devised by the CIP 6/92 measure that has permitted the installation of authorised systems for approx. 100 MW. The Legislative Decree n° 22/97 on refuse is based on sorting of waste and allows producing fuel from refuse, while resorting to disposal sites is provided only for inert or inactive substances. Nevertheless, exploitation of biogas presently produced in actual disposal sites represents a significant energetic and environmental opportunity. At the present state, taking into consideration that biogas production is theoretically in the order of 200 m3/t of waste, and that the process takes 20 years to complete, (quickly at first, rather slowly

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afterwards), we can assume that the potential total gross power produced by all Italian landfills grouped together can reach approx. 1000 MW. In reality, due to the inevitable loss of biogas and to the high costs required for extracting biogas in the final phase, only one fraction of the total amount produced, estimated at about 30%, can be used for energetic purposes. As most of this production is concentrated in medium and large disposal sites, it seems possible to increase the production to 200-300 MW in the years 2008-2012.Thanks to the initiatives included among the first six priorities of the CIP 6/92 measure, the generation of power using biomass and biogas should allow, by year 2002, to achieve the target of a total amount of power obtained equal to approx. 400 MW.Nonetheless, biomass has a greater potential than prospected: it has been estimated that the energy content of agricultural and forestry residues, agro-industrial rejects, organic waste and animal refuse annually produced in Italy, amount to 20-25 Mtoe.Actually, considering that the energetic use of waste and refuse contribute to lessening the problems associated with waste disposal, the potential effectively exploited is very low. Biomass, in fact, is mostly made up by materials of low energy density, scattered all over the territory and coming from the Italian agricultural context characterised by small farms. These can extend over areas of a few hectares of land and the landowners are not sufficiently motivated to join others in starting up new innovative forms of enterprise, such as the Energy Farm, or use the waste resulting from their cultivation as a product to sell on the market as fuel. These farmers still get rid of their refuse through combustion in open fields. The abolishing of this practice, that is still performed in Italy, has allowed in other European countries, like Denmark and Austria, to systematically use the residues for co-generation systems and remote heating, showing great environmental benefits and advantages for all the promoters of these initiatives.The problems arising when using agricultural waste as biomass, instead, are smaller in the case of biomass originating from the agro-industrial transformation process (cores, exhausted husk, sawdust, etc.). These elements are already concentrated by nature in industrial sites and represent an almost expensive waste to be disposed or a high-cost fuel to be exploited. This class of biomass, thanks to its accessibility and consistency can very probably be used for power generation.Taking into account:- the different grade of accessibility of the various kinds of biomass already present on the

territory;- the possibility of using excess areas and marginal lands (3 million hectares) for energetic

and industrial cultivation;- the potential represented by coppices, which are by nature, principally assigned for energetic

use, or to residues of their conversion into standard trees. - the contribution given by gathering and using methane produced by disposals;it will be possible, during the years 2008-2012, to install systems for power generation for a total amount of 2300 MW, carrying them out through the progression timetable reported in Table II.The assumption of progression accounts not only for the initial input deriving from putting into practice the projects mentioned above, which are included among the first six on the list of the CIP 6/92 measure, but also study the level of interest showed by the operators. This can be found by examining the other initiatives included in the lists, going back to the previous drafting of the same CIP 6/92 measure and finally the expected impact of the national and community support policies provided.Effective approaches to achieve this goal must take into consideration both the energetic exploitation of waste and refuse, complying with the rules regulating environmental protection, and

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the start of a rational programme under environmental control for the energetic cultivation of fields not assigned to alimentary use.However, an action aimed towards the energetic use of cultivation and of the reclassification of agricultural waste, still needs to be presented by the Government to the European Community.The government must define its position to support biofuels and be bearer of this position at the European Community. In fact in the case of an adequate development of European policy, there stands the chance of technically achieving most significant targets for the production and utilisation of biofuels also in the order of 1 Mtoe for the years 2008-2012.Particular interest for biofuels like bioethanol and biodiesel and for the subsequent action taken by the European Community is due to the need of specifying practicable solutions for controlling, especially in large cities, pollution caused by fossil fuels used for transportation. Road traffic is in fact the cause of 93% of the emission of CO, 60% of NOx and HC, and 12% of CO2. Biofuels on the contrary:- have vegetable origins, therefore they do not contribute to the emission of CO2 in the

atmosphere;- do not contain sulphur;- have molecules containing oxygen which allow a reduction of the emission of CO and

biofuel compounds;- avoid the emission of other hazardous substances associated with the combustion of fossil

fuels;- are totally biodegradable.Biodiesel originates from the trans-esterification of vegetable oil performed through the use of methyl alcohol and ethyl alcohol. The result is a fuel similar to petrol, applicable at the pure state, or mixed with the same gas oil. Today, in Italy, 11 farms operate in this sector: in 1997 the national product was 70000 tonnes, thanks also to certain measures dedicated to reducing taxation. This will be explained later on. Vegetable oils produced in Italy originate from cultivation of colza and sunflower in set-aside fields. Taking into account that it is possible to benefit, not only from agricultural raw material but also from the large amount of oil used, a prediction can be made regarding possible production for the years 2002-2012 of approx. 500 000 tonnes, equal to approx. substituted 0.45 Mtoe (with a net calorific value of biodiesel of approx. 9000 kcal/kg).Bioethanol is produced through the digesting processes and the distillation of sugary or starch materials. The most common destination is its use in the synthesis of ETBE (ethil-therbuthil-ether), used in a mixture with gas oil as an oxygenated additive and antiknock substance in substitution of lead tetraethyl or of aromatic hydrocarbon. In Italy there is an annual use of 16 million tonnes of petrol. Considering a mixture of 10% petrol, the ETBE could reach a potential market of 1.6 Mt/year equal to approx. 0.8 Mt/year of ethylic alcohol, corresponding to approx. 0.50 Mtoe substituted (net calorific value of the ethyl alcohol of 6500 kcal/kg). Today in Italy there is only one system producing ETBE, located in Ravenna (AGIP group), with a capacity of 90000 t/year.Aside from technical feasibility, reaching the goals set for biofuels will also depend on the nature of the problems that will most certainly arise and which should be taken into account beforehand. On one hand, the fields set aside for every type of cultivation must be of a good quality; consequently these will not be easy to find among marginal lands. Furthermore, the cost of biofuels in Italy is three times higher than that of traditional fuels and 80-90% of this cost is contingent upon the cost of raw materials and it is difficult, on a national level, to work on significantly reducing these costs.In regards to the national production of raw material it is useful to verify the possibilities of also utilising fields belonging to the State; these extend over an area of hundreds of hectares. These

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areas, which are only at times flooded by water, are today often occupied by poplars with consequent management and environmental problems. Even keeping the primary functions of these areas the same, it seems appropriate to study the details in order to specify which areas, considering their dimensions and conditions, are more suitable for this use. Furthermore, which species can be cultivated, what problems of compatibility may arise, what are the minimum requirements for energy and funds needed to activate various demonstrative initiatives. We must also take into account the possibility that certain problems involving management and planning may find solution once a navigable stream becomes available using fluvial transport to carry raw materials. In addition to what has been stated so far, biofuels also represent important opportunities in applying the flexible mechanisms provided for in the Kyoto protocol. Co-operation for production of at least raw materials in a third country offers the opportunity to employ lands not yet exploited, promote “on site” job creation and, due to the low costs of farms and manpower, contribute to reducing processing costs. The biofuel produced can then either be used in the countries producing the raw materials, or imported instead.The objectives planned for the years 2008-2012 are important: reaching these objectives requires not only the enforcement of national policies and incorporation of European ones, but also the deployment of capabilities and resources for the production of cycles. These could reduce harvesting costs and attenuate the obstacles of technical, financial and institutional nature. For these reasons, both the objectives to be attained by the year 2006 and those for the years 2008-2012 are to be considered as recommendations. They may be better defined once the results of the initiatives included in the national Plan for energy exploitation of biomass are obtained, depending on how the entirety of national and European policies will be defined in this sector, and what answer will be given by the producers of raw materials.On the other hand, it is useful to underline that the role of biomass is essential in order to double the efficacy of the contribution of renewables by the years 2008-2012. This should bring us to pay special attention to all the various aspects influencing the growth of this sector.The average unit investment costs relative to the realisation of the processing systems for electric energy originating from biomass and biogas are estimated at approx. 3.5 Mdl 97/MW. These take into account that the effects of the reduction of costs for a greater spreading of these systems will be compensated, on the other side, by the increasing costs required to meet the most stringent environmental commitments. The mean value takes into account the fact that biogas systems have a cost of 2.0-2.5 Billion L97/MW, while the costs for biomass systems vary between 3.0 and 4.5 Billion L97/MW according to the size and the type of technology used. The costs of remote heating systems are estimated equal to those reported for remote heating by geothermal energy with a low enthalpy.

3.8 Wastes

The waste sector is involved in dynamics of a social and environmental relevance, for which the energy use represents only a functional aspect in relation to the first two.Legislative Decree n° 22/97 focuses towards an increasing re-deployment and recycling of wastes and, starting from year 2000 onwards, it prohibits direct disposal in landfills of all urban wastes with the exception of residual and refuse products coming from process and treatment of wastes themselves. Furthermore, article 4 of the above decree also provides for the "primary use of waste as a fuel or as another means for power generation".

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Actually, there are processing systems for power generation fed by refuse with a power of approx. 90 MW, with a prospect to grow to approx. 300-400 MW in a few years thanks to the initiatives put into practice according to the ranking of the CIP 6/92 measure. Furthermore, following the sixth ranking of the same measure, there are other requests for a further 600 MW. Based on this "expression of interest" from the operators, and also taking into consideration the proposals ofn. 22/97, it is estimated that the total potential power to be installed during the period 2008-2012 could reach approx. 800 MW.It is essential however to make certain substantial clarifications which lead us to be careful about the effective realisation of these prospects.Most of the combustible fraction of waste is in theory meant to be re-used for energetic and/or non-energetic purposes (production of fuels derived from wastes). The realisation of combustion systems and power generation plants for about 800 MW, requires the incineration of fuel amount resulting from wastes with an energy content equal to that contained in approx. 6.5-8 Mt/year of waste called “tal quale”. Meaning such waste as it results from direct collecting (primary wastes) whose energetic content is equal to 2000 kcal/kg, power conversion efficiency of 25% and annual production of 5000 kWh/kW). This data has to be compared to the annual availability of solid urban wastes of type “tal quale”, equal to 26 Mt/year.In addition to this, some of the aspects concerning the territory and the sites have to be taken into account. The realisation of the power plants requires in fact the appropriate territorial density to produce the right amount of waste and the existence of this condition is to be checked beforehand. Environmental related issues could furthermore reduce the potential energy use of wastes.For these reasons, most of the above estimates are very approximate actually not foreseeable as they depend on a series of variables and on the evaluation of the results attained with the lines of approach already adopted.The average investment costs are considered to be decreasing in connection with the expansion of the market and with the technological innovations. However, usually they are considered equal to 8 Billion L97/MW, as they account also the phases previous to the power plants, which are necessary for the production of fuel derived from waste.Lower costs - and lower dedicated power - could occur in the desirable (where it is possible) case of co-combustion, that is the use of fuel derived from wastes in existing plants, like for example coal plants or cement-factories.Finally with regards to the hypothesis delineated in the Green Paper, it has been considered essential to add a contribution to heat generation up to 0.2 Mtoe in the years 2008-2012, in order to take the opportunity of promoting co-generation.

3.9 Estimate on investment costs

Table IV below illustrates a general assessment on investments associated to realising the necessary initiatives to reach the goals for the years 2008-2012.The following elements must be emphasised:- the specific investment data result to be, in some cases, altered compared to those indicated in

the Green Paper following comments received on this latest paper;- except for photovoltaic and wind energy, specific investment costs are indicated as constant.

This assumption comes from the fact that many of the technologies taken into consideration here are at a good level of maturity and therefore we expect slight cost variations. For

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photovoltaic energy, instead, we have believed it to be quite realistic to indicate an average specific cost of 16 Billion L 97/MW, for the first years (up to 2002). Later the value should drop till it reaches, at least, a value referred to the entire period, of 11 Billion L 97/MW. Further reductions can be had in relation to the outcome of research activities. Reduction of average investment cost for wind energy, instead, is believed to be reliable, running from 2002;

- for wastes, we have taken into consideration the investment cost for recovery and energetic valorisation in dedicated plants; in the case co-combustion of fuel derived from waste were also considered, for example in cement factories or in coal burning plants, the above mentioned cost may considerably decrease, as well as dedicated electric power plants to be installed;

- the costs shown include only the building of plants and not operational costs as well: therefore, in the case of cycles as those for biomass, biomass fuels and waste, these do not include costs related to production, supply and possible transformation of raw materials.

Tab. IV – Estimate of investments necessary for the executions by 2008-2012Technology Specific Investment Total initiatives

1997-2012Total Costs

Electric Billion L 97/MW MW (Billion L 97 )Hydro 10 MWHydro <= 10 MWGeothermal energyWind energyPhoto-voltaicBiomass/BiogasWaste

5.04.5

51.8-1.516-11

3.58

1000800300

2400280

2100700

5000360015003800310074005600

Total electric 7580 30 000Thermal Million L 97 /su20

Geothermal energy 5 190 000 su 1000Biomass 5 680 000 3400Waste 5 100 000 su 500

Million L 97 /m2

Solar energy 0.7 3 x 10 6 m² 2100Total thermal 7000Biomass fuels21 Million L 97 /t 1 500General totals 37 500

3.10 Estimate of avoided greenhouse gas emissions

Tables V and VI below relate, for each renewable source used for the production of electric and thermal energy as previously described, the amount of carbon dioxide which would have been emitted into the atmosphere if the same energy had been produced by fossil fuel source. These quantities are consequently defined as avoided greenhouse gas emissions or generically equivalent avoided emissions (CO2 equivalent), thus assimilating all the various components that make up greenhouse effects to the CO2 componentThis calculation is based upon the consideration that production of electric and thermal energy from

20 s.u. stands for served unit (unità servita), it is a volume equal to approximately 300 m³, which corresponds to a dwelling for residential use with a heating need equivalent to 1 toe/year, that’s to say, in general, to three “equivalent connected inhabitants”, each corresponding to 100 m³ of residential, tertiary or public sector.

21 Investment cost of biomass fuel production plant having a productive capacity of 1 Mtoe/year.

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certain renewable sources is characterised by net null emissions, and on the hypothesis that the exploitation of biomass occurs in such a way as to comply with the same condition. On the other hand, geothermal source, by its own nature, emits CO2 in equivalent quantities of 0.4 kg of CO2 per kWh produced. It is furthermore known, from test measurements, that the average value of CO2 produced from the ENEL thermoelectric parks is equal to approx. 0.7 kg of CO2 per kWh produced, thus equivalent to 3.18 Mt of C CO2 per Mtoe produced: in this paper we use this data as a reference point, since, if on one hand we expect a gradual reduction of the overall average value, it is also reasonable to believe that renewable sources will replace less modern plants, and therefore at a higher specific CO2

emission value. In the case of geothermal energy, as previously stated, the amount of avoided CO2emissions is equal to 0.3 kg per kWh produced, that is 1.36 Mtoe of per produced Mtoe. For waste, we have assumed that the fuel fraction deriving from renewable primary source is be equal to 50% of the total, with a corresponding reduction of the capacity to avoid CO2 emissions compared to null CO2 emission renewable sources.As far as thermal energy production from renewable sources goes, instead, taking into consideration the fact that fossil fuels used for heat production are “light”, the factor for calculating avoided greenhouse gas emissions is equal to 2.8 Mt of CO2 for each Mtoe produced.Only for waste the value considered is respectively equal to 1.4 for what has already been explained concerning the electric sector, while for geothermal energy the value is 2.3 since this source brings about CO2 emissions recorded equal to approx. 0.5 t/toe.In relation to reported avoided emission values we highlight that the amount determined by electric production from renewable sources can be entirely ascribed to the action, “Production of energy from renewable sources” of the CIPE provision 137/98. On the other hand, the 2.5 Mt of CO2 coming from biomass fuels must be ascribed to the action, “Reduction of energy consumption in the transport sector” of the same decision, keeping in mind that vegetable raw material, according community regulations, can be produced even out of national boundaries. At last, the remaining part of emissions from thermal energy can be partially attributed to the action, “Reduction of energy consumption in the industrial/dwelling/tertiary sectors”, since we are dealing here with, in part, not of additional energy production from renewables, but rather of a more efficient use of the source: this is the case, for example, of co-generation from biomass and waste.

Tab. V – Production of electric energy from renewable sources: CO2 avoided emissions

2002 2006 2008-2012Δ Mtoe Mt CO2 Δ Mtoe Mt CO2 Δ Mtoe Mt CO2

Hydro > 10 MW 0.186 0.592 0.292 0.928 0.556 1.768Hydro < 10 MW 0.166 0.529 0.329 1.047 0.655 2.083Geothermal 0.192 0.262 0.273 0.372 0.435 0.593Wind 0.282 0.897 0.590 1.877 1.074 3.417Photovoltaic 0.003 0.009 0.021 0.067 0.069 0.221Biomass & Biogas 0.377 1.198 0.931 2.962 2.911 9.262Waste 0.330 0.524 0.495 0.787 0.825 1.312Total 1.535 4.011 2.930 8.040 6.524 18.655

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Tab. VI – Production of thermal energy from renewable sources: CO2 avoided emissions

2002 2006 2008-2012Δ Mtoe Mt CO2 Δ Mtoe Mt CO2 Δ Mtoe Mt CO2

Biomass fuels 0.220 0.616 0.484 1.355 0.880 2.464Solar thermal 0.048 0.134 0.103 0.289 0.214 0.600Geothermal 0.037 0.087 0.087 0.204 0.187 0.439Biomass & Biogas 0.330 0.924 0.530 1.484 0.680 1.904Waste 0.024 0.034 0.064 0.090 0.104 0.146Total 0.659 1.794 1.268 3.423 2.065 5.553

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4. INTERVENTION STRATEGIES

Once begun, the strategies illustrated in this chapter will constitute, de facto – in addition to energy and environmental policy factors – an industrial policy of the sector too, foreseeing an opportunity framework for businesses. The growing role that renewables are assuming at an international scale will definitely contribute in this sense. The government, therefore, is determined to act, even at a European level, so that programmes such as Structural funds, the Energy Multiregional Programme, the V Outline Programme on research and technological development, and the MEDA programme can supply financial opportunities. In this way financing, going hand in hand with market opportunities, will lead to the building of a competitive sector system. At a national level, Government attaches special importance to the tools made up by voluntary agreements and territorial pacts, which it intends promoting through Local Administrations, social and entrepreneurial parties.

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4.1 Consistency of policies

4.1.1 Integrating interventions and approaches

The European Parliament, in a resolution dated 18 June 1998, commits the Commission to enhance the measures and interventions required in order to reach doubling of the contribution that renewables can give by the year 2010. It was also underlining how the reinforcing of renewable sources should be integrated into other policies. At the scope the European Parliament inviting the Commission to “take into account for achieving community strategy, in addition to European energy policy, for such sectors as the environment, agriculture, regional development, and transportation - fiscal, economic and foreign trade policy as well”.

Just as an example, the European Parliament has stressed how the “..tripling of the present level of biomass use for energetic purposes provided for by the White Paper (Community, ndr) can be implemented only through special measures of agricultural policy”, and that, on the contrary, “...the proposals advanced for reforming agricultural policies contained in Agenda 2000... are not compatible with the goals set by the White Paper (Community, ndr)”.

Taking into account the various sectors that regard the development and spreading of renewables, the problem arises on the horizontal integration among the various sector-based policies. This problem does not only regard the policies for increasing the contribution expected by renewables, but also maintaining the necessary conditions in guaranteeing that the present contribution of production remains. Typical aspects that regard present production are that of acknowledging prices adequate for the maintaining and remuneration of plants and the co-ordination of legislative interventions that can also indirectly involve the sector (for example, in matters of taxation for concessions regarding hydroelectric and expenses for biomass combustion in existing plants).On the other hand, interest for renewables has been gradually increasing, involving more and more varying levels of public institutions and, consequently, public research and development bodies.The distributing of tasks and functions among the various institutional actors has found greater clarification during time, up to the definition operated by Law 59/97 and through Legislative Decree n° 112/98.There is, however, the need to vertically co-ordinate all institutional actors (European Commission, State, Regions and Local Authorities), for the purpose of optimising energy policies and administrative matters, and implement the subsidiarity principle.In the public sector, then, various actors operate that are involved with research and development, however, there is no clear and unitary framework on objectives and respective contributions for reaching them.Furthermore, liberalisation of the electric energy market and the transforming of ENEL into a Limited company can cause a gradual disengagement of the Electric agency from the qualifying activities of renewable source plants, causing a gap that has yet to be bridged.For the sum of all these reasons, a permanent advisory board should be established, upon Government initiative, guaranteeing technical support in order to reach the co-ordination of sector-based policies and integration among the actions of various levels of competence. In addition to competent Ministries, Regions and Local Authorities, representatives of public agencies assigned to research and development will participate in this advisory board.In this setting we will have to proceed with verifying the suitability and consistency of the policies

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and public interventions compared to the dissemination goals identified in this paper.Along side this, we can emphasise the need for tools suitable to give equal coherence and unitarity to the strategies implemented and to framework projects described as follows as well as specific programmes and public interventions. For this reason, the Ministry of Industry will carry out an assessment concerning the opportunity to proceed with setting up an appropriate agency possibly within the scope of the possibilities offered by Legislative Decree n° 36/99. In the meantime, it is fitting that the check for consistency with this paper of initiatives and public programmes is carried out by the same Ministry of Industry, together with the Ministry of Environment.

4.1.2 Contributing to the definition of a European policy on bioenergy

The problems associated with integrating sector-based policies is especially up-to-date when looking upon biomass and biofuels, deserving, however, further clear-cut considerations. Competencies are shared among the European Union, the State, Regions and Local Authorities, and the energetic development of biomass is influenced by various aspects.Since everyone widely acknowledges the bond between agriculture and environment, the dominating theme, at a European level, is that of overproduction of foodstuffs caused by the improvement of farming operations as well as the discovery of higher yielding species, derived from sector research activities. Europe produces, for the most part in a subsidised market, excesses in respect to internal consumption and this surplus represents a burden that continuously repeats itself year after year.The European community tool for containing excess production, aimed also at recovering soil fertility, is carried out by the rule better known as, voluntary “set aside” (1988). This was later made mandatory; in essence an premium is recognised to the landowner that gives up cultivating part of their plots for a number of years, binding the farming areas to “productive rest” or allowing non alimentary cultivation, sowing the seed of promotion policy for “no-food” products.In Italy, approximately 200,000 hectares have been set-aside, during the period 96/97, 37,000 of which have been cultivated with oleaginous plants for bi-oil (oil for non alimentary purposes) production. But in reality the attempt to promote an industrial agricultural market with this instrument does not elicit much success for various reasons, among which, a lack of co-ordination between the productive phase and that of users downstream of production.The recent European Council of Berlin (24-25 March 1999) has decided to set at 10%, for the entire period 2000-2006, the mandatory resting time for farmlands. The forecasts, for the near future, are of a further extension of excess soil for 200,000-300,000 ha.There is no shadow of a doubt that energetic production from industrial and/or agricultural biomass is one of the possible way for increasing the contribution of renewable sources. At the same time it can contribute to resolving the problems of agricultural overproduction even in the light of recent on site agreements reached in international negotiation on the liberalisation of world trade of agricultural products.Italy is particularly interested in these aspects. In reference to the programming of structural funds for 2000-2006, the South, characterised by many areas in a status of degradation due to land abandonment, is almost entirely embedded in objective 1. Many other areas, ex-objective 5b, fall into objective 2: these areas of the country may draw environmental, economic and social benefit from a coherent European policy on developing energetic agriculture.This policy must aim, furthermore, to make the exploitation of residues and organic wastes easier,

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which for now the sector is greatly influenced as much by the classification of waste (within the European catalogue of waste defined by Directive 75/442/CE) of those same residues resulting from agricultural food production by implementation modes of the entire community organisation in matters of waste.The Government, hence, must be proactive in order to contribute in defining a position, at a community level, that facilitates the energetic use of biomass, even for economic development, control and conservation of the environment. The reference lines in question are:

- the defining of an increasing share of farm-lands to allocate for cultivation and energetic uses, even through use of land placed for mandatory set-aside;

- the simultaneous development of proposals for defining financial support mechanisms in the production of energetic biomass, even for the recovery of abandoned lands and forestry maintenance, to be included, for example, in the Community Regulation for rural development support proposed by the Guarantee and Development Fund for European agriculture, which, moreover, provides for agro-environmental measures;

- the use of structural funds for the financial incentives of promotions connected to biomass that present energetic, environmental and employment significance: the first steps in this direction are found, for that matter, in the provisional document drafted by the agricultural sector board within the reach of the structural funds programming 2000-2006 process.

4.2 The role and needs of Regions and Local Authorities

In order to reach significant goals in the spreading of renewables, the role of Regions and local Authorities is essential. The same Inter-regional Energy Co-ordination, in a deep analysis of the Green Paper, has emphasised how the assurance of a substantial increase of energetic contribution of renewable sources “... is strongly influenced by the relations with land, environmental and social conditions with which it clashes every time the policies and strategies are converted into concrete actions which are localisation and achievement of interventions.”22

Moreover, the Government has favoured an evolution of the juridical framework in line with these needs, first through Law n° 59/97 and Legislative Decree n° 112/98, subsequently with Legislative Decree n° 79/99 on the reorganisation of the electric energy sector. In fact, it foresees that resources allocated to direct promoting are managed by the Regions, committed to fostering the involvement of local communities. On the same line, also, the Government is obliged to find resources, even Community ones, to impress actual implementation to this latest provision as will be illustrated later. At the present state of the situation the functions of planning, promoting and managing for the most part lie upon Regions and Local Authorities.The situation now lies on creating optimal conditions to go from what is prospected from standards to concrete implementation, and therefore create support technical structures with complementary functions to those of regional energy and local agencies. These latter can operate to the best as interface between local institutions and the local social and productive fabric. In this way it can be assured social consent to the initiatives matching the supply and demand of energy from

2 2 Energy Inter-regional Co-ordination Committee: Note on renewable energy sources, “National Energy and Environmental pre-Conference”, September 1998

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renewables. Demand aggregation can be particularly efficient for modular technologies and more sensitive to scale economies as solar thermal and photovoltaic. Relative industries can benefit -and follow more rapidly the learning curve for costs, with benefits to users - from organising a demand of sufficient size in order to provide a solid framework for investments. This would even trigger the setting up of a system of installers and qualified maintenance workers, which is an important factor for gaining the trust of users.On the other hand, the support technical structures will be involved at any step of the initiatives. Primarily in helping to draft regional energy plans - even by taking on “census” activities of exploitable resources - in such a way that energetic production can become a topic of territorial planning. And therefore, the objectives indicated in the present document are lowered directly onto the territory, through the elaboration of the “Regional White Paper”.Important is also the supporting function for implementing other tasks conferred, and in particular for implementing regional energy plans and any other programmes on renewables. This function can cover the phases of definition and carrying out of tender procedures, the definition and application of methods for assessing environmental impact of energy plants, citizen information, promotion of agreements and territorial pacts capable of simultaneously fostering the spreading of renewables and local development.The organisation of these structures is entrusted to ENEA, both for the specific competencies in question, as well as for Legislative Decree n° 36/99, reforming that body, upon request and in competent sectors. In particularly ENEA could provide “...specialist and organisational technical support ... to the Regions and Local Authorities for the development of functions and tasks for which art. 5 of law 9 January 1991, n. 10, and even of those conferred to them according to Legislative Decree 31 March 1998, n° 112...”

4.3 Information and training

Spreading of renewables, especially if sustained by the will to build a system capable of competing on the international market and develop all the employment opportunities, must be accompanied by a cultural growth at an institutional, administrative, social and scientific level.On the other hand, the strong lack of reliable and convincing information on induced benefits, the actual limits - and even environmental impact - connected to energy production from renewable sources surely stands for a not easy job. The coldness and wariness with which the citizen assesses the topic leads to an attitude of the type, “not in my yard”. Consequently, Public Administrations, especially at a local level, are not stimulated to assume favourable positions.Even the European parliament, in its resolution of 18 June 1998, has underlined that popular support is essential, …. and that all the measures adopted must take into consideration... also a wide popular consensus”, keeping to, “...a proposal for a community wide information campaign...”.In Italy, there is an institutional working group for the spreading of technical-scientific culture, instituted through decree by the University and Scientific and Technological Research University dated January 1997. In its own report on the spreading of technical-scientific culture, the working group has underlined how a “widespread knowledge and extended exposure of citizens to technical-scientific know-how are imposed also by the need to guarantee free effective democratic expression, where choices are made and shared by a greater number of citizens”, indicating a few axis along which the technical-scientific culture gap can be bridged.The Government, therefore, must strive to activate information services, especially at a territorial

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level, correctly informing public opinion and stimulating citizens to the use and conscious acceptance of all renewable sources. Special emphasis will be given to world of school, so that, in time, a widespread base culture is formed.An important role in question will be recognised by socially focused non profit organisations operating in the sector, which, for the exact reason of the lack of direct economic interests, may turn out to be suitable in providing correct and unbiased information.Even trade categories must usefully apply their services in this sector, voluntarily equipping themselves with guidelines and “best practices” for project development, covering all phases, from the feasibility studies up to the dismantling of plants at the end of their life span. For each of them, provide consulting tools for citizens: this will contribute greatly in providing well-informed elements and assurances to citizens and administrators.Another problem of cultural nature invests training, at a scientific and technical level. Renewable sources are not, at this present time, included in any type of school course, whatever the level taken into consideration, or professional training course for that matter.There are cases in which the same entrepreneurs undertake the burden of training technicians capable of designing, realising and managing components and plants.This must be remedied by creating competencies at university and post graduate level, aimed not only to Italian students, but even to those of countries of the Mediterranean area, so as to foster desired, deeper relations with these countries in the renewable sectors.A complimentary role should be played by the same Regions regarding professional training, considering their competence in the matter. They, along with the appropriate public authorities’ support, can without doubt increase the employment outlooks of renewables accompanying the programmes and support policies for renewables through concomitant training of technicians and plant experts in energy renewable plants.An additional field of training is that relative to the estimate of renewable resources, which constitutes an important element so that State and Regions can better carry out the respective tasks of government and administration.

4.4 Rationalise and enhance research

The Green Paper has brought to the forefront a number of technical limits on renewables: internal cost of energy produced, at times greater then conventional source energy costs; the low credit of power due to the inconstancy of renewable sources; low density of energy produced per employed surface unit.Approaches to resolve the above limits mainly involve research, which, for the almost competitive sources, must be of the increment type and involve industrial operators. For other sources, and that is photovoltaic and biomass, research needs are even more pressing, and assume strategic relevance if we are also to take into consideration the very high theoretical potential of these two sources and consequent cost reductions.Even the problem of inconstancy requires a strong effort on the part of research, in a prospect of far-reaching implications, regarding energy storage systems.In regards to this, Government aims to enhance and rationalise research programmes, even beyond those performed by public organisms within the reach of respective institutional mandates.The reference document here is Legislative Decree n° 204/98 bearing provisions for co-ordination, programming and assessment of national policy relative to scientific and technological research.

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For that matter, competent Administrations, taking into consideration all programmes, contributions and facts of regional research and understanding with public research bodies, will promote plans and programmes to be introduced into the national programme for research.Programmes on photovoltaic, biomass and storage, of special strategic relevance, can also take advantage of the special integrative fund for research to which the same Legislative Decree n° 204/98 refers.Established, therefore, that ENEA is the main public organism operating on the topic even in matters of research, the relative research strategies and technological developments will be enhanced and rationalised, together with those aimed at estimating resources and renewable reserves.

4.5 Strategies for market integration

4.5.1 Framework assurance and clearness of rules

A positive and lasting reference framework is the basic condition so that, within the scope of market logic and relative rules, businesses can benefit. This problem has been addressed through a new structure of the legislation on matters of renewable sources, as well as further directives outlined in this paper.Particularly delicate is the issue of administrative problems concerning authorisation processes. A study, carried out on the implementation of proposals for the building of plants powered by biomass and waste, presented in the scope of CIP 6/92, has shown that 3.5 to 4 years are required only to obtain the prescribed consents and legal authorisations. In some case opposition by local groups can extend the expectations of the proponents indefinitely.Often, even the relatively simplest of installations, such as solar water heaters, encounter obstacles at times insurmountable. Confirming the usefulness of the services conference, a new procedure capable of establishing the necessary connection among all the involved competent authorities, is the single bureau, foreseen by Legislative Decree n° 112/98, which is applied to the localisation, and expansion of productive plants, including energy ones.The relative regulation, recently issued by the Government, foresees that the request for all authorisations necessary for localisation, realisation, renovation or re-conversion of plants is to be performed by one single application to the competent Commune on the territory. If the Mayor does not acquire in time all the consents and authorisations necessary from the competent authorities, a meeting of the service conference will be convened. All the procedures must in any case be completed within 11 months, if the proposed plant requires environmental impact assessment, and a maximum time less than (6 months) in the case assessment on environmental impact is not required.Aside from the still opened issues, referring to the implemented regional laws, to the complexity of the organisational structure, to the difficulty in building relations among the various institutional actors, the size of local authorities, the single bureau can become a useful tool to solve the age-old problem of the complexity of authorisation procedures.In the meantime, in forwarding suggestions to Regions and local Authorities on defining guidelines for assessing the projects, the Government aims to provide its support so that this tool is made rapidly operational for renewable energy plants, even through the setting up of a pilot bureau in the areas most interested for high density settlements by transferring experiences to other Local

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Authorities.Even firms have a useful role in the matter, since, equipping themselves, for each type of renewable source, with guidelines for actuating the programmes conforming to national and European standards, can facilitate the definition of standard criteria in assessing the projects.

4.5.2 Guidelines for promotion criteria

The promoting mechanisms, adopted up to now in Italy for spreading renewables, have been of the direct type: they acknowledge a contribution to realisation of the projects, which could be in capital account or energy account.Through technological evolution, and following experiences matured with the managing of previous mechanisms, a type of indirect promoting mechanism was thought and found its first main application in the Legislative Decree n° 79/99. This decree, in fact, compels large producers and importers of fossil fuel electricity to produce or acquire a preset quota of electric energy from new or re-powered renewable plants, bearing, in addition other provisions that foster spreading of renewables, such as priority in dispatching.Indirect incentives implemented mainly for compelling producers to acquire minimum quotas of energy from renewable sources constitute a principle that can be applied in a general way, foreseeing its gradual introduction even in the heat and biofuels sector23, in relation to building technical and economic feasibility conditions. Application of this principle is perfectly in line with the needs of liberalisation of the energy market: it, in fact, allows to create a market of renewable energy sources necessarily protected for the reasons previously discussed in chapter 2. In any case, within this protected market, a process of free competition can be started which cannot but foster the evolution of technology and reduction of costs.It is, however, appropriate that the initial application phase of this indirect promoting mechanism is accompanied by the simultaneous presence of the more conventional mechanisms (direct incentives), allowing a gradual and effective shifting from the old to the new system. This concern has already been applied for the electricity sector. In fact, the Legislative Decree n° 79/99 foresees, accompanying with the introduction of a minimum quota, that the CIPE decide on the multi-annual goals for each renewable source and perform the distribution of financial resources among the Regions, which, with their own budget, decide on promoting through tender procedures.For this purpose, the opportunities offered by the structural funds 2000-2006 must be used to the best. In that direction, the Ministry of Industry, through the intermediate report of the energy board, has already proposed a specific measure for financially supporting, in the regions located in objective 1, programmes for 2000 electric MW and 2000 thermal MW. Perfectly in line with what has already been said, the proposal provides for the axis to the regional management too. The same Ministry for Agricultural Policies, in its provisional report related to the agriculture board, has advanced a few proposals compatible with development of the biomass sector. It is, however, essential that opportunities offered by the structural funds are exploited into the full breadth of their range. That’s considering also the sector tables established by the CIPE decision of 22 December 1998, cover numerous sectors, some of which suitable for promoting actions to foster accompanying measures (for example, in the training sector), in any case indispensable for building a real sector system. Furthermore, taking into account roles and modalities, foreseen by the same

2 3 As far as biofuels are concerned, moreover, the same item 5.1 of the CIPE 137/98 decision introduces provisions that go back to the minimum share and indirect promotion criteria.

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CIPE decision of 22 December 1998, it is indispensable that a coherent approach and interest by the regions in developing their own proposals is achieved. Apart from the originating of the resources, it is useful to underline the fact that during the transitory phase, promotion by direct incentives resorts preferably to mechanisms suitable to stimulate the conscious involvement of the beneficiary. Therefore, tools such as contributions in energy account or interest account are to be preferred to capital account incentives which must be limited to demonstrative/pilot worth initiatives, that are in any case directed to creating the conditions for a gradual transition to the indirect promotion system.

4.5.3 The electricity sector

Sufficiently mature renewable sources for a significant market penetration in producing electric energy are hydraulic, geothermal, biomass, biogas, waste (fuel deriving from waste), and wind. Photovoltaic solar energy instead shows energy costs still too far from being competitive, thus the policies and instruments for sustaining must be addressed to the promotion of technological advancement.In order to foster the sources listed above, the Government, within the scope of the sector reorganisation process linked to implementation of the 96/92/CE Directive through Legislative Decree n° 79/99 has introduced specific measures aimed mainly at:a. fostering the rapid and effective actualisation of the programmes included in the first six rankings

of the CIP 6/92 measure, both by giving a regulatory answer to a few of the needs that have come up (especially the need of changing the sites of the plants), as well as setting fixed data for concluding the programmes24.

b. ensuring precedence in dispatching to electricity produced by means of renewable energy sources;

c. introducing, starting from 2001, the obligation to produce a quota of “green electricity” those actors that produce or import electricity from non-renewable sources exceeding 100 Gwh on a yearly basis (at net of co-generation output, power plant internal consumption and exporting electricity). The imposed quota of green electricity, that must sent to the network, can be produced or even partially acquired from operational or repowered renewable energy plants, restricted to the additional energy capability, in a later date than that in force by the decree (1 April 1999). This quota is initially established at 2%, and will be increased for the subsequent years to 2002 by decree of the Ministry of Industry;

d. foreseeing that the request for renewal of hydroelectric concessions is subordinated to, where applicable, the presentation of programmes of produced energy or installed power;

e. foreseeing priority use of renewable sources in the development of small isolated networks;f. foreseeing that, upon proposal from the Ministry of Industry, the CIPE defines on the multi-

annual objectives for each renewable source and provides for distributing financial resources to allocate for promotion between Regions and Autonomous Provinces which will in turn provide, even with their resources, to carry out promotion actions through call for tender25 procedures.

Furthermore, a provision has been recently approved introducing appropriate procedural 2 4 As support action, the Government has also promoted a voluntary agreement among the involved parties having

competence in this goal, already marked for wind energy liable to be extended to other technologies, which will be explained later

2 5 In this case, referring to the experiences obtained mainly with the CIP 6/92 measure, it is fitting that biomass and biogas are treated separately for the various relative problems associated and, above all, for the different level of development and costs.

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simplifications for operation of renewable energy plants connected to power networks less than 20 kW.These above measures represent the first important instruments, even by implementing the will of a greater involvement of Regions and Local Authorities.The Government, however, in line with the needs of reaching the goals outlined in this paper, can activate additional programmes.A first signal in that direction is given to us by the fact that, within the breadth of the mentioned structural fund programming, the energy board report attributes to electric energy production the greatest importance, with a proposal that provides for sustaining programmes for approximately 2000 MW electric energy. From the moment that covering of the public expenditure part is only partially entrusted to funds coming from the community, it is evident that we must acquire national resources too, for example allocating part of incomes coming from the carbon tax to the development. These resources must be utilised very carefully, preferably directing them towards those programmes that demonstrate reaching a more efficient use of renewable raw material (for example, in the biomass sector co-generation must have much more attention than the only electricity generation), high employment levels per investment unit or a better conservation of the interested territory.Moreover, in line with what is foreseen in the aforementioned Legislative Decree n° 79/99, the implementing regulation of art. 7 will bear provisions aimed at ensuring, even through the contribution of community funds, that priority use of renewable funds in small isolated networks is actually pursued.As far as distributing the burdens concerning grid connection of renewable power plants to the grid, the present order will be maintained. But specific purpose plan is meant to be promoted similar to those already in place for gas and electric grids, and to be financed by community funds. This is necessary in order to avoid penalising the programmes in those regions where very high production levels of energy from fossil fuels are obtained.We invite the Regions to proceed in this direction, especially there where Regional energy plans have been defined. They can in fact allocate part of the resources for sustaining the sector in building grids rather than distributing incentives on investments for building of plants.

4.5.4 The biofuel sector

The first steps to take in the direction of spreading the use of biofuels is linked to the adoption of an appropriate policy by the European Community, and our country should take active part in the drafting of this policy. All this in accordance with the goals set for the development of renewables, even with proposals to appropriately support agricultural energy cultures. This is a very delicate issue as the production of vegetable raw materials necessary for the biofuel production are not allowed under those mechanism supporting these types of production intended for alimentary use. On the contrary, the present allocated system of tax exemption provided for biodiesel is applied without considering the obligations related to the origins of vegetable oils (see following note).Having voiced this concern, the starting point is constituted by item n. 5.1 of the CIPE 137/98 decision. Therefore, it is necessary to attempt setting up a voluntary agreement between operators and public administrations, according to the achieved objectives. In the cases such agreements were not successful, the above item of the CIPE 137/98 decision would impose the use of biodiesel by all means of public transport in towns with more than 100 000 inhabitants, and the utilisation of biodiesel mixed with gasoline, diesel in distributing networks and pleasure crafts.

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The strategies to apply for putting into practice the option of voluntary agreement, as well as technically realise the respect of alternate obligations, essentially regards defining the conditions of use, the standardisation of products, the adoption of supporting tools, and starting appropriate demonstration actions on a significant scale. As regards the first matter, biofuels (ethanol, ETBE and biodiesel) can be used at a pure state or mixed with fossil fuels. In the case of ethanol, aside from various pilot experiences utilising the pure product in deliberately modified engines, the use in a mixture with petrol, after its transformation in ETBE, is the only feasible way that can be realistically analysed in a European and national context.In the case of biodiesel, whose use in a mixture with diesel , compared to the use of the pure product which is presently possible and has been widely exploited, offers numerous environmental, technical and organisational benefits. Therefore, aside from use in pleasure crafts inside domestic waters or from use in closed spaces, the use of mixtures is to be considered favoured.As regards standardisation, various European countries have set national quality standards for biofuels and have determined the conditions and procedures for executing all relevant controls (in Italy this sector is regulated by the appropriate CUNA regulation). It is essential, however, to establish a quick definition of norms and quality standards to be adopted at a European level, for a clear regulation for the use of biodiesel and relative mixtures, and defining the mechanisms and appropriate procedures for controlling and monitoring the effects on the environment. Italy will have an active part in treating this issue. Furthermore, item 3.3 of the CIPE 137/98 decision establishes that the Ministry of Transport should outline and submit to the approval of CIPE a measure concerning the regulation in the use of biofuels. As regards incentives, we have to consider that the costs of biofuels is much more higher than the cost of traditional fuels and that there are European regulations binding direct incentives required for agricultural cultures necessary for biofuel production. In these conditions, the cost of production is higher than correspondent combustibles of a fossil origin. For example, the cost of producing biodiesel in Italy is three times higher than that of gas oil: to allow exploitation on a pilot scale, (see decree by the Ministry of Finance dated 22 May 1998, n. 219) the regulation concerning tax exemption in the case of biodiesel use has been recently renewed.26. The tax exemption is applied to bio-diesel production with a maximum limit fixed at an annual contingency of 125 000 tonnes (established by legal ordinance n. 504/95), in accordance with European Directive n. 92/81/CEE. In this case, biodiesel is not subject to the same excise tax of gas oil allowing the final price to be equal or lower than gas oil prices. This consideration confirms once again that for widely spreading the range of objectives, it is essential to have a clear European policy established through active contribution.The first evaluations bring to the conclusion that the production of raw material and of biofuels is going to be included in initiatives for putting into practice the flexible mechanisms foreseen by the Kyoto protocol. This possibility will eventually be examined thoroughly along with other Community bodies, considering the contents of the measures included in item 6.1 of the CIPE 137/98 decision.As concerns demonstration actions, it would be useful to promote, preferably as the first step of implementing voluntary agreement, integrated demonstrative projects in the "sector" for the use of biofuels in urban areas, in pleasure crafts inside domestic waters..

2 6 This tax exemption is applied “without taking into consideration the bonds relative to the source of vegetable oils, so as to avoid, according to the statements of the European Union, revoking or prejudicing the system of common market organisations” (5th section of the introduction of ministerial decree 219/98)

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The action should be elaborated according to the identification of specific user basins, involving public administrations, agricultural operators, conversion industries, and distribution infrastructures. During this phase there will probably be the opportunity of an appropriate use of waste products (waste and agro-alimentary processing refuse and wastes, such as oils used for frying, refuses coming from the slaughtering and processing of meat, acids coming from oil in olive processing, etc.), but it will be necessary to reconsider all binding regulations. Furthermore, the projects have to be considered as an opportunity to resize wider initiatives, including any international co-operations for implementing the previously mentioned mechanism. In the field of demonstration actions, in addition to verifying the necessary conditions for technological sector and reducing costs, it is crucial to exploit the following applications:- the distribution of reformulated lead-free petrol, added with 10-15% of ETBE and with a

substantially reduced content of aromatics and olefins, therefore in accordance with the need to reduce benzene emissions;

- the use of biofuel as fuel replacing diesel in heating systems for building and dwellings in substitution of gas oil, in places where it is not possible to use methane;

- the use of biodiesel and gas oil mixtures for fuelling public means of transports and service for motorboats.

4.5.5 The heat sector

The contribution of renewables to this sectorial segment of the energy market comes from thermal solar, low enthalpy geothermal and biomass, even through co-generation and district heating. The obstacles encountered are essentially of an economic-financial, administrative and organisational nature.More recently, certain favourable provisions have been introduced for the removal of certain barriers. In particular, we record:- inclusion of renewable source plant installation expenses among those allowed to benefit from the deduction of 41% on IRPEF, which obviously favours solar thermal especially;- explanation given by the Finance Ministry in October 1998, which establishes that VAT for systems that employ solar sources for production and distribution of heat for dwelling use is set at 10%;- concession, through financial law for 1999, of a tax break of 20 L/kWh for heat supplied in buildings located in severe the climatic areas (E and F) through means of district heating fuelled by biomass;- the launching or setting up of certain programmes, such as the Solarised Commune (Comune Solarizzato) for works of social use.

These programmes must be considered only as the first steps in reaching the goals previously indicated. Tools for greater far-reaching goals can be voluntary agreements, which involve operators and public administrations at central and periphery level. An example in this direction is made up by the “Self-regulation Code of Public administrations for the energetic-environmental quality of buildings and open spaces”. This is an instrument promoted by ENEA through which Administrations adhering engage themselves to promote, on a voluntary basis, energy saving, encourage the use of eco-compatible materials, and foster use of renewable energy sources.On the other hand, introducing regulatory instruments aimed at compelling – at the expense, for

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example, of distributors of fossil fuel for heating and heat production – minimum quotas on heat production from renewable sources counts against, at this time, various obstacles of technical and organisational type. In line with the criterion of indirect incentives, we may in any case verify the feasibility of such a trend.In general, considering the more stressed interaction between the territory and necessary interventions for a greater use of heat from renewables (production and use must occur in the same territory), we believe that a more decisive role, in this sector, lies upon Regions and local Authorities. This holds true even for the Energy and Environmental agencies, that can facilitate creating the technical and economic conditions, stimulate citizen awareness, operate as link between public and private sector, foster the setting up of productive structures (agriculture, fish farming, process heating, etc.) in proximity to the heat source. In general, operating in order to aggregate the demand side in sufficient measure so as to trigger supply side programmes. Municipal Administrations, furthermore, in understanding with regional ones, can introduce appropriate standards in the respective building regulations, both for removing obstacles of technical-urban type, as well as promoting the use of technologies for supplying renewable heat, thus contributing even to the shaping of a greater awareness in designers.As far as thermal solar goes, further State intervention will mainly go in the direction of initiatives - compatible with the availability of resources and agreed with Regions and local Authorities - aimed at promoting spreading in public buildings making recourse to programmes such as the mentioned “Solarised Commune Project”, developed under the national programme for “works of social use” and others at present in the study phase or awaiting to be defined. These programmes must focus towards - through a limited phase and decreasing of incentive on investments – evolving in the direction of public intervention characterised by a more stressed indirect incentive rate consisting, for example, in supporting the creation of technical professional figures, of structures for qualifying components of appropriate entrepreneurial capacities, in favouring the critical demand aggregation and the building of financial tools that alleviate the burden of the initial investment on the end user.There are various problems linked to the spreading of heat from low enthalpy geothermal and biomass renewable sources for district heating and cooling. This application counts against, in fact, the difficulties of meeting demand with heat supply which is transported with greater difficulty compared to electric energy. A first State intervention is constituted by the already mentioned introduction of a tax break in the order of 20 L/kWh, in the climatic areas E and F (5347 municipalities over 8115) for heating from biomass district heating.Possible financial programmes by the Government, in addition to those already described, may consist in introducing mechanisms similar – in the presence of a motivated request by Local Administrations - to the 41% mentioned above for the partial covering of expenses realisating civil works for grids, or in alternative, by activating incentives in thermal energy production account, possibly in addition to the already mentioned tax break for heat through district heating by biomass.Furthermore, the Government is engaged in introducing and consolidating Third Party Financing, an instrument largely used in other countries and which can be especially effective, both for solar thermal as well as district heating. Third Party Financing foresees supplying, from external companies - the ESCO (Energy Service Companies) - diagnose, installation, management, maintenance and financing services, necessary for realising technological interventions, from which a sufficient economic saving is obtained to allow the depreciation of the investment cost and payment of provided financial services.

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Government must sustain the setting up of such structures especially through resorting to voluntary agreements with municipal companies and gas distributors - which would configure even as distributors of renewable heat - in co-operation with other actors already active in the sector. The final aim must be that of reaching a heat spreading from renewable sources through tariff systems on the end user similar to conventional ones, and in addition, with necessary technical guarantees. Within the reach of this agreement, a public fund can be constituted for covering all risks associated with research and exploitation of heat.

4.5.6 Integration into the building sector

Certain renewable sources, especially thermal solar, photovoltaic solar, and for domestic applications, even biomass, prove to be excellent for integrating into building structures, be they residential, commercial or industrial.The creation of favourable conditions for spreading of renewable source plants to integrate into infrastructures and building structures make up an excellent opportunity, whether for increasing cultural awareness on renewables or for enlarging the market base, constituting a strong stimulus for operators and developers of components ever so building oriented.Presently, the use of renewable source plants in the building sector constitutes not integration but adding on of the plants themselves to existing building structures.Integration must be pursued through development, for example, of glass panels and “photovoltaic” building components, of thermal panels and water storage tanks incorporated in the roofs.We can also develop domestic appliances such as washing machines and dishwashers, already designed to use solar heated water. The same construction of fireplaces and domestic stoves should foresee a more efficient use of heat.Considering the importance of this topic, we are presently evaluating to establish far reaching projects which, in an early phase, must aim towards developing technologies and only subsequently sustaining the initial phase of market penetration.In regards to this, the Government’s intention is to promote agreements among the competent structures in the sector of renewable energy sources and the world of designing and realisation of technologies for the building sector, with the common goal of pursuing a gradual and growing penetration.

A first project in this direction is that of photovoltaic, which is finalised towards PV plants to install on buildings and connected to the low voltage electric distribution grid, which should be pursued by integrating into the building structures. This programme - already developed by the Ministries of Industry and Environment, with the technical support of ENEA -is already operational in the experimental phase, and sees the involvement of various public and private actors.This project must however go hand in hand with a wide programme of technological nature, aimed at developing “photovoltaic components for the building sector”, which pursues the actual integration of technologies for the production of electricity in buildings. In this regard, there is a considerable effort in act, on behalf of the operators in the sector and of the world of photovoltaic for achieving a joint initiative aimed at developing an Italian industry of photovoltaic panels specifically to install on facades and roofs, an initiative that the Government has every intention of pursuing and adequately sustaining.

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4.5.7 Giving full attention to the environmental impact of renewables

The problem regarding the environmental impact of renewable sources must not be underestimated. Even thought there is no doubt, at a world-wide scale, that renewable sources have a much lesser impact than that of fossil fuels, at a local level quite often opposition is encountered in the realisation of projects, motivated by fears of local environmental impact. It is the case, for example, of the visual and noise impact given by wind turbines and the potential territorial impact of hydroelectric. Other renewable sources - such as waste, biomass and geothermal energy - may show a greater impact - not only at a local level. The most recent regulatory reference is made up by the European Directive 97/11/CE, amendment of the European Directive 85/337/CEE, regarding the evaluation of the environmental impact of certain public and private projects, and whose term for being implemented at a national level is set for 14 March 1999.Aside from waste, renewable sources plants fall, reasonably so, in enclosure II of Directive 97/11/CE which lists a series of plants that is sent to the various member States to determine - case by case, on the basis of fixed criteria - if we must proceed or not to the environmental impact assessment. In regards, a first addressing is that of item 3.b of decision CIPE 137/98, which foresees that the Minister of Environment adopt a measure relative to regulating combustion of biomass for energetic purposes.For the other cases, instead, except for what is regulated by other provisions, it is appropriate that the Government, in line with the basis lines of Legislative Decree n° 112/98, attributes greater autonomy to the Regions recommending, however, to give careful attention to the environmental impact of renewables so as to acquire the widest possible consensus from the citizens involved in the settlements.

4.5.8 Facilitate project financing

Renewable source plants constitute typical energy projects whose financing requires developing innovative tools. For small plants, the solutions are those outlined when discussing about the heat market (promoting ESCOs and Third Party Financing, setting up an assurance fund).Different is the matter for plants that require considerable investments.In this sense, we must start from the fact that banking institutions usually perform financing to firms and project financing. Often, instead, the projects for implementing renewable energy plants are carried out by small firms not able of meeting the requirements required from this type of financing to the firms. On the other hand, the projects are usually smaller than the minimum size considered worthwhile by the banks. Moreover, the type of business does not provide secure guarantees; due also to the uncertainties of energy production as well as non-existence of technical assurances on the plants themselves.Lastly, at times there is no correspondence between the technical conditions which the operators must subject to, and the conditions that the banking world requires for financing the plants.These pitfalls can be remedied using to the best all the experience matured within the reach of the programme agreement for implementing the projects of CIP 6/92, which has already allowed to settle, in some sectors, the financing difficulties on the basis of project financing. This experience can be used for defining a sure reference framework concerning the problem of financing, shared by the involved actors.A second necessity is associated with the need to create specific competencies capable of assessing innovative projects and based upon sources at times uncertain, such as with certain renewables, so

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as to allow the banking system to correctly assess the economic budget of the programmes. A leading role can be taken on by the banking system itself, once the general picture will have guaranteed a sufficient market.

4.6 Organisational needs

4.6.1 Setting up a sector monitoring system

The integration of renewable energy sources into the electricity market, heat and fuel pays for the “diversity” of renewables themselves in respects to the structure, in evolution for that matter, of the above mentioned markets.We must start on paying careful attention to this “diversity”, working so that the systems overall evolve in the direction of integrating renewables.The process of market liberalisation constitutes the obliged reference framework in which the conditions are found so that renewables can compete with other energy sources, according to the guide lines expressed by public institutions. In order to better carry out this guide function, it is in any rate necessary to comprehend what the actual effectiveness of the adopted sector policies is, taking in consideration the possible market distortion factors, the outcome of possible promotional mechanisms, the effects on technological evolution and the increase of the sector wide competitiveness rate.Programmes in this direction have been successfully adopted in other European countries, while in Italy such a gap has entailed certain difficulties in rapidly understanding the effects of the measures adopted and the problems of the sector.This observation has induced the Government to foresee, in Legislative Decree n° 36/99 for reforming ENEA, which, among the tools offered for carrying out its own functions, the Agency can create a monitoring system of the energetic and environmental programmes in a local scope. This last clarification is extremely important in the case of renewables, taking into consideration the particular nature of these sources and more than often referred to role of Regions and Local Authorities. For all of these reasons, in expectation of the will and public effort for supporting the penetration of renewables, we will proceed with setting up, within ENEA scopes, a monitoring system of the sector possibly integrated into a wider structure. This will help in monitoring programmes, assess the effects of incentive policies, suggest improvements, analyse the performances of various technologies and, last but not least, foster the evolution of the system towards a better costs/benefits ratio. The monitoring system will be at the complete service of public institutions, but also of companies and private citizens.It will be the Government’s responsibility, in understanding with the Regions, to define, upon proposal from ENEA, the tools, even compelling, apt to ensure the continuous and rapid flow of necessary data and the effective organisation of the monitoring system.

4.6.2 Organising the biomass exploitation cycle

Certain renewable technologies show obvious difficulties in organising cycles. For example, the biomass plants - whether they are for production of electricity, heat or biofuel - require that they simultaneously meet diverse conditions: production of raw material, collection, transport, possible treatment, stocking, suitable combustion plants, possibility of connecting to the electric and/or

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heating network. In Italy it is not always easy to achieve all of these conditions simultaneously, especially those referring to production and collection of raw material. We would like to recall that in Italy farmland property is extremely fragmented, in the order of a few hectares per landowner, compared to the need to have a few hundred hectares available for every MW of electrical power fed by biomass. The competencies, once again, are distributed among a lot of actors. We need to act so as to aggregate production and the supply of raw material. In the same way, in order to promote co-generation from biomass (but this argument applies to low enthalpy geothermal energy as well), certainly more efficient in energetic terms and in reduction of the emissions balance, in the organisation of the system we must try to insert the demand as well as the end use of heat.For these purposes the Government is moving to constitute a technical task force, at the service of public and private operators, which will allow lying the conditions for vertical integration of the management of the biomass system.An additional useful tool is made up by the local understandings and land pacts, for which we recommend full commitment by the Regions and Local Authorities.

4.6.3 A system of non-discriminatory rules and technical standards: a guarantee for the users

As for any other product, activities centred on renewable technologies are developed vertically along the line of research, development, demonstration, qualification, certification, and market. Not always do we encounter a connection among the various phases in our country.Public organisms - but, obviously not only then - will be mainly engaged on research, development, demonstration and qualification.Especially important is the organisation of a system of guarantees for the final users and the consumers of the products for the exploitation of renewables. The lack of this system has been of course among the causes of the failed launching of certain technologies, such as solar thermal. A suitable system of guarantees includes, at the lowest level, the capacity of defining or implementing technical standards in accordance with state of the art, the certification of firms and products, an adequate support structure.The Government will therefore have to:- take into account, in the possible issuing of standards regarding the sector, of the “New Approach” trend of the European Union dated 1985, and thus, limiting to define goals and essential technical rules, falling back on the voluntary technical standards for the other specific aspects;- develop and introduce a juridical standard that mandates setting, stating from the year 2002, certified products of institutes, certified or recognised by Sincert, according to technical standards of the assigned organisms;- foster the creation of a network of laboratories and centres starting from existing ones, even of non public organisms that are connected to the industries and bodies of standardisation and certification (UNI, CEI, CTI, Sincert, Sinal), ensuring an effective participation in international and European contexts in which the technical standards are defined.- entrust to ENEA, being the competent public organisation, the task of developing qualification activities and technical support capacities for the certification of products.In the end, Government will pay more attention so that the technical rules of its competence are in line with the needs for environmental protection as well as with those of promoting the development of renewables. An example of this concern is the need of balance given by the provision of the reported item 3.b of the CIPE 137/98 decision which foresees a regulation of biomass combustion for energetic purposes to be issued by the Ministry of Environment.

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5. FRAMEWORK PROJECTS

Framework projects focus on providing a complete and intrinsic frame of reference for the various intervention programmes by achieving a critical dimension apt to elicit the interest and involvement of the many institutional actors who contribute to it, in addition to creating suitable scenarios for soliciting and fostering the commitment of market operators. The government is committed, for each one of them, to promote and implement coherent programmes of which a few are mentioned in this chapter.

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5.1 Promoting voluntary agreements

An important fact occurred during the National Energy and Environment Conference was the signing of the energy and environment pact. This Pact, whose partners are central and local administrations, social parties, operators and users, identifies the rules and general goals in a constructive and innovative relationship among all the parties involved. This is the necessary prelude for the undersigning of voluntary agreements (sector-based or territorial) constituting the main new tool for energy policies. Voluntary agreements, in fact, in correspondence to clear and shared goals, (provided with appropriate implementing tools) can lay the conditions so that the rules themselves are better respected while providing for what the rules can not anticipate.For that matter, the same CIPE 137/98 decision at times provides for reaching significant goals by making use of voluntary agreements. This is the case of biomass fuels, the criteria for increasing the efficiency of the thermoelectric sector, and the reduction of energy consumption in the industrial and tertiary sectors.Voluntary agreements are cited in this paper as important implementing tools for various strategic policies especially in regards to integration into the electric, heat, biomass fuel sectors as well as the building sector.In the electricity production sector, a first experience experimentation of voluntary agreements has just been carried out relative to the wind energy projects included in the first six rankings of the CIP 6/92 measure. For a few of these projects, public and entrepreneurial involved operators have all been identified and tariff conditions established: nonetheless, the implementing plans have run into different obstacles that have hindered or slowed down the realisation of wind power plants connected with projects.In order to overcome these barriers through a concerted action, a voluntary plan agreement has been reached involving Government, Regions, Local Authorities, Trade Unions, ENEL, ENEA, bank and business operators of the sector too. A management board has been set up which, among other things, is trying to derive from the general agreement a specific agreement to be implemented through involvement of the local actors and citizens actually interested in achieving the installation of renewable power plants. This, moreover, is in line with the provisions of Legislative n° 79/99 (art. 11 comma 6) and allows to support the operators in fulfilling the provisions of the aforementioned decree, that is, in reference to full adherence to the 2% quota and the schedule for completion of the projects allowed to benefit from the tariffs of the CIP 6/92 measure. For the same scopes, the Committee is trying to extend the agreement to other renewable technologies also contemplated within the same measure: the overall electric power in play here is greater than 2,000 MW.An important beneficial side effect deriving from this programme lies in the fact that the effective actualisation of the agreement can foster the building of a national sector system of the sector, capable of adequately facing the further challenges deriving from setting the ambitious goals set for 2008-2012.

A second voluntary agreement whose activities are already in progress, as previously mentioned, is the introduction of a Self-regulating code of public administration for the energetic-environmental quality of buildings and open surreandings, to which the administrations adhering commit themselves on a voluntary basis to promote, among other things, the use of renewable energy sources. This tool can be particularly useful for the spreading of thermal solar energy, as well as district heating and, in specific situations, can constitute a useful support for enhancing the level of

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awareness of citizens and administrators on energy and environmental issues.In the heat sector, however, an agreement that can turn out to be particularly important and effective is that of promoting through municipal companies and gas distributors, actors already active in the sector. This agreement must focus on spreading the supply of heat from renewables with a relation between producer and end user similar to that negotiated for the supply of fossil fuel meant for heat production. Within this scope, the public party adhering to the agreement can contribute, among other things, even by setting up a public fund aimed at reducing the interest charges on the necessary investments for achieving the realisation of renewable energy plants.

In regards to the biomass fuel sector, a correct and realistic approach is that previously described: having, as reference, the provisions of item 5.1 of the CIPE decision 137/98, in addition to the regulation that the CIPE will approve in compliance with item 3.c of the same decision. We are dealing here with trying to establish a voluntary agreement aimed, in the initial phase, at setting up iniziatives for defining use, product standardisation, adopting of support tools, the starting of demonstrative actions on a significant scale. For this purpose, we can immediately start off an action in a pilot city for the use of biodiesel in diesel vehicles of public transport (city buses), taxis and public mass transportation (garbage trucks, vehicles for road maintenance, etc.). In addition to the use of biodiesel in complete substitution of gasoil for the heating of all public buildings equipped with systems not easily convertible into biomass or methane feed.Such an action would be of extreme help for technically and economically proportioning the necessary actions for reaching the long awaited spreading of biomass fuels, besides building a connection with the raw material production system. For this purpose, in co-operation with the farming associations, the right conditions are still examined through voluntary agreements in order to integrate the production phase of agricultural matter with that of biomass fuel production: on this point, however, there is, as previously stated, the need to link national programmes to Community agricultural policy.

5.2 Renewables for the development of Southern Italy

From a study carried out within the scope of the Energy Aimed Project (“Progetto Finalizzato Energetica”), it is estimated that, in central-southern Italy and the islands, there are approx. 2 million hectares of land abandoned by conventional agriculture for non-existence of farm income. This corresponds to an overall unused area equivalent to 6.7% of the national territory. The localisation of this land is situated on areas such as foothills, hills and plains, all quite easily accessible since cultivated in the past. The climatic and soil conditions are suitable to cultivating wood essence such as Locust tree, Broom and Eucalyptus.In the case of cultivation of energy biomass in these 2 million hectares, at least 8 Mtoe of primary energy can be obtained (in terms of net calorific value of biomass).Even the wind potential of the South is especially significant: wind energy is available especially along the Apennine ridge, and even today wind projects from independent producers are in course for achieving almost 500 MW in the Apennine ridge of Apulia and Campania. Further programmes for achieving over 1000 MW in southern regions have been presented by ENEL. Even in this case, the most part of the projects regards low density inhabited sites affected by gradual abandonment in recent years.Solar energy is particularly plentiful in the South, there being a ground radiation on horizontal

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surface of at least 1500-1700 kW/m² a year. This constitutes an important resource for the production of heat and electricity.In correspondence to this potential, Southern Italy is extremely deficit under the energy profile: the consumption of electric energy exceeds on an average approximately 17% the production, bringing this production deficit in some cases, with respect to demand, to values of approx. 70% (Basilicata) and over 80% (Campania).

For the future, we can consider the process of gradually integrated exploitation of these three sources through the “cultivation” of the mixed wind-photovoltaic-biomass reserve.Many areas of Southern Italy, then, are affected by degradation and disorder, to which the process of abandonment and deserting of the land mentioned above have contributed. The productive recovery for energy purposes may also be an occasion for improving the control, maintenance and conservation of the land, fighting the degradation, and providing productive tools for employment.Some preliminary estimates on employment effects from land protection and conservation policy accompanied by an energetic and industrial use of biomass, regarding a territory of approx. 1 million hectares, supply values in the order of tens of thousands of employed.Furthermore, there are numerous structures in the south operating in the renewables sector. Various ENEA centres: Portici, which takes care of, among other things, photovoltaic technologies; Trisaia, where competencies and structures are prevailing on biomass and thermal solar activities, Manfredonia, dedicated to photovoltaic systems. The ENEL centres of Serre and Vulcano for photovoltaic energy, of Frosolone and Alta Nurra for wind energy. The Conphoebus site in Catania, along with numerous CNR and University centres with useful competencies for the scope.What has been said above makes the launching of the strategic project for the exploitation of the renewable potential in the south very interesting, capable as it is to, at the same time, stimulate a better protection of the territory and provide solid and productive employment opportunities.The project could also see the involvement of agencies and actors such as Sviluppo Italia, Regions, of competent organisation in matters of agriculture, forest and land conservation, with technical support, for more energy focused aspects, of the above mentioned technical structures rationally joined up among themselves.An opportunity to take advantage of right away for the materialisation of said prospects is the planning of the structural funds 2000-2006 for the areas of objective 1. We have already mentioned the fact that the energy sector-based board, presided by the Ministry of Industry, has developed a proposal for supporting the achieving of 2000 MWe and 2000 MWth. The spin off opportunities offered by other sectors must also be gathered, such as agriculture, training and research. We hope that Regions, in a consistent and synergetic way, see in renewables a new and effective tool for pursuing development, environmental protection and employment. A fundamental support to the coherent implementation of the projects might be, in this case, the agency discussed in paragraph 4.1.A second example of actuating initiatives consists in linking the labs and scientific centres located in Southern Italy, previously listed, so as to constitute a network for qualification and certification, in addition to supporting professional training programmes at the service of Regions and entrepreneurial operators.

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5.3 Renewables for co-operation in the Mediterranean area

It is a commonplace statement that Italy is at the centre of the Mediterranean. A geographic area which, for that matter, is characterised by a common history and by quite similar climatic conditions. There are many co-operation attempts on numerous issues on both sides of the Mediterranean. These attempts regard various sectors, including energy: the Euro-Mediterranean conference of November 1995 has stressed the will of countries that overlook the Mediterranean to arrive to a more intense and friendly co-operation and, more specifically, the intent to co-operate in the field of energy. The following declaration of Barcelona has sanctioned the guide lines to reach such a co-operation, acknowledging that the collaboration in the energy field can increase the safety for European countries and constitute the fundamental factor for the socio-economic development of all the countries on the South Mediterranean coast.The dialogue in process underlines the common availability of the countries on the two shores to arrive to a greater and friendlier collaboration on renewables, laying emphasis on such tools as the Mediterranean Solar Council and a Task Force - to be formed - for preparing a Mediterranean Action Plan for Renewable Energies.A strong impulse in this direction may come from the yearly Ministerial Meeting for the Mediterranean Energy Co-operation: the last meeting was held in Rome in October 1998.In that setting, the Ministries have acknowledged to give impulse to the works of the conference itself, proceeding, among other things, to analyse projects for the development of renewable sources especially for isolated villages, rural areas, and the islands. They all agreed upon the need to promote a greater recourse to the funds made available for the financing of programmes in the energy sector by the European Commission, by BEI, by the Arab Economic Development and Social fund, by the World Bank and other international organisms.In this last respect, the European Commission, General Directorate Energy XVII, in its own comment to the Green Paper, advised “to give greater importance in the next White Paper to the great financial possibilities offered ... by the MEDA programme foreseeing funding for 3.4 billion Euro for a period of five years. In the political leanings that go hand in hand with the creation of this new fund we uphold that energy, renewable energies and rational energy use will have to carry out a restructuring role within the common programmes to the countries of the European Union and the Mediterranean”.We must mention here that the European Parliament has recommended that in the periphery regions and islands, numerous in the Mediterranean, the production of electric energy from renewable sources be upheld through the support of Structural Funds.There are, therefore, the premises and potential resources for a wide and reciprocally profitable collaboration with the countries of the Mediterranean.Government, hence, aims at promoting a wide co-operation project with the countries of the Mediterranean for the development and spreading of renewables, immediately putting to stake numerous and significant resources especially present in Southern Italy which will be connected to an organic and functional “network” for reaching various specific goals. For instance, high level training (which will be the grounds on which to activate the first specific programme, as described further on), organisation of an integrated system of technological development, setting up of service centres (certification, qualification, and metrology), carrying out of a wide programme of demonstration and spreading of technologies and systems suitable to the various needs of the countries in the area.In this manner, moreover, certain collaborations already in place can be brought back to a unitary

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logic.In this project, in addition to the structures specifically operating on the topic, others will be involved, no doubt the Development for co-operation, the Regions, the Institute for Foreign Trade and industries. This project, in fact, must certainly be of a cultural nature, but the prospects for industrial collaboration that may also come out of it, deserve consideration. A first example of initiative is the founding of a Specialisation Course in Engineering of renewable energies to be localised preferably at one of the ENEA centres of the South, and organised as a Master to prepare engineers coming from countries overlooking the Mediterranean in technologies on the following renewables: Biomass, Solar thermal, Wind, Photovoltaic, Geothermal. A pre-feasibility study has already been conducted on which the Basilicata Region, Basilicata University and the Community of Mediterranean Universities, member of the non-Governmental Organisation of UNESCO which brings together 165 Universities of 21 countries of the Mediterranean carrying out promotion activities for scientific co-operation and creation of permanent links among the associated Universities, have already expressed initial consent.Depending on the results of a more involved feasibility study and of a suitable project, this programme will be achieved even for the intent of creating permanent connections between the Italian situation and that of Mediterranean countries.

5.4 National plan for the energetic valorisation of agricultural and forestry biomass

The Ministry of Agricultural Policies demonstrating great sensitivity not only towards the problems arising in this pertinent sector, but also towards environmental and energy issues, has set up a "National Plan for the Energetic Valorisation of Agricultural and Forestry Biomass". The CIPE 137/98 decision establishes that a similar plan must be approved by CIPE itself. With reference to the contents of plan ready for submission to CIPE, we refer to the presently drafted document in order to give completeness of information and underline cohesion, while leading the trend, with the lines laid out in the present document.The plan outlines the agricultural sector involved, the modality and reference lines of intervention, and the relative lists.Reported below are some of the extracts concerning the results achieved:On a European scale:- line-up of a specific policy for the non-alimentary sector;- development of dedicated cultivation or prevalently energetic oriented cultivation released

from the mandatory set-aside;- standardisation of the final product (with particular reference to biofuels);On a national scale:- identification of species and varieties of vegetables capable of maximising efficient

productivity in terms of the amount of biomass that can be used;- diversification of the processing activities by agricultural and forestry farms;- line-up of an incentive system (through means of administrative, financial and fiscal nature)- redefinition of the binding norms connected to the thermal use of agricultural and forestry

biomass resulting from non-coherent classification within different type of wastes;- promotion of an action for the recovery of oils and vegetable fats used and other secondary

material;- identification and/or checking of: criteria and technical rules characterising biomass types

for energetic use;

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- industrial conversion technologies;necessary investments;

- appropriate conditions for the removal of financial and administrative obstacles;- promotion for the integration of cycles;- activation of demand;- promotion of significant projects with strong demonstrative characteristics;On a general level, with effects in the medium and long run:- improvement of land quality;- contribution to bio-diversity safeguard;- integration of research, development and demonstration activities;- information and communication;- reinforcement of international co-operationThe objectives in the short run are specified in the definition of demonstrative initiatives concerning both biofuels and bio-electricity using traditional cultivation and/or other available biomass and consolidated technologies which can treat other raw materials with a low or null environmental impact.Further initiatives, with a more innovative character, viewed from a technological prospect as well as from the type of biomass used, will simultaneously be examined.

5.5 Integrated plan for using renewables in the public building sector

Public building property is extremely large: the volume of public buildings themselves falling under the Ministry of Public Works amounts to approximately 10 million m³: if we assume that energy consumption for only heating requirements are similar to those of the residential sector, it follows, for these buildings alone, a yearly consumption of over 3 Mtoe. In addition, public property includes structures also managed by other national organisms, Regions (among which, for example, hospitals), Local Authorities – such as municipal and school system buildings – as well as buildings for dwelling use belonging to numerous public agencies. Overall, we are dealing with an extremely immense property upon which interventions are quite frequent, even in conformance with legal provisions regarding the content of energy consumption or plant safety.It is a feasible thing to implement a plan that integrates, among interventions on public buildings aimed at reaching the respect of the laws in force, further interventions focused at optimising energy use, and within this last context, pursue integration of renewable sources compatible with the needs of technical and economic feasibility as well as safeguarding the architectural specificity of the buildings themselves.Such a plan must go hand in hand with the definition of reference technical standards even through the involvement of safety managers and energy managers for the purpose of ensuring quality and organic unit of the interventions, as well as creation of technical support structures for the concerned Administrations. In relation to the type of building, the needs to meet, the geographic localisation and the availability of the primary renewable source, the technologies that can be introduced are thermal solar, district heating from biomass and geothermal – especially where the availability of the source exists along with a particular concentration of public buildings or of potentially applicable public service (for example in those areas classified as services).Along with defining the program it is appropriate to uphold, as stated previously, the creation of structures of the Energy Service Company type, while proceeding in setting up a suitable guarantee

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fund: the goal must lie in allowing the Administrations using part of their resources today already assigned to covering energy expenses, to manage covering expenses deriving from the activation of the energy saving service and supply of renewable energy. In this sense, standard simplifications must be introduced which can possibly become necessary in order to make the program administratively feasible. Lastly, the program must be organised so as to come from the public actors managing a considerable portion of public property in order to ensure the urgency of the intervention in comparison with the needs for structuring of the productive system. Special attention then must be directed to school buildings, both for their importance, as well as for the fact that interventions on schools in this case may also go hand in hand with useful initiatives of demonstrable and educational importance.

5.6 Strategic Research

We have mentioned earlier that some of the difficulties encountered in the penetration of renewables into the energy markets are linked to their “diversity” when compared to conventional sources, not just in positive terms which have been illustrated, but also for certain negative aspects: at times low efficiency, low energy density produced per unit of occupied area, discontinuous generation and high costs (for some technologies).Moreover, the goal set for doubling the contribution of renewables by 2010 absorbs most of the potential exploitable through modern status of technologies.These problems, where not appropriately and opportunely faced, may limit in the long term the contribution of renewables, relegating them into a secondary role and therefore of very little importance even for environmental protection, a need, the latter, which makes up one of the main reasons in favour of developing renewables.The tool for solving these problems lies in strategic research, which looks toward the long term period and foresees an energy system in which renewables have an important role in producing electricity, heat and fuel. The co-ordination committee of which we have proposed to establish can operate to define and plan the implementation projects whose execution requires integration between competencies and existing resources at a European, national and regional level.A useful tool in this direction is the National Research Plan (“Piano Nazionale per la Ricerca”) within which space can be found to embed certain strategically important projects to be defined through a wide involvement of public and private research organisms. Financial resources can be obtained within the scope of the Special Research fund. As follows, two examples of strategic research are reported regarding the sources that show the greatest spectrum of development and contribution to match the energy needs of: biomass and photovoltaic solar energy.

5.6.1 Increase of agricultural biomass production through genetic interventions

The energy use of agricultural and forestry biomass, in a modern sense, finds its main limitation today in the course of producing the raw material.This, in fact, cuts into the final energy cost in a large measure compared to the industrial transformation costs. The transformation processes, in any case, have seen an incredible technological innovation that have already reduced costs to a level very hard to exceed. In order to reduce agricultural and forestry biomass unitary production costs it seems necessary to act on the maximisation of production units per surface unit and time

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considering the reduction of production costs per surface and time unit appears somewhat of a problem, and not very promising.Considering that at 40° N latitude each hectare yearly receives approx. 1.47x10¹³calories (equal to approx. 1700 kWh/m²) of total radiation (TER = Total Energy Radiation), 43% of which photo-synthetically active (PAR = Photo-synthetically Active Radiation), and that the heat value of dry biomass is approx. 4000 kcal/kg, the theoretical production of biomass should amount to approx. 250 tonnes of dry substance per hectare. Actually, this level of production has never been reached with any species not even during experimental trials. In fact, we must take into consideration that cultivation does not use incident radiation at the same way during the entire year, that the biomass collected is net of that used up through respiration, that leaves tend to stick together, that water in the soil, humidity and atmospheric temperature are not always optimal. The maximum limits of production can therefore be estimated at 30% of theoretical production. We consider in fact that the max. production obtainable in Italy is around 60 t/ha.

This maximum production has been reached in plots experimentation of a few m². The production obtainable today in full field cultivation is usually quantifiable, at the most, in 15-20 t/ha.It is therefore presumable that unitary production can be easily multiplied by a two or three factor through genetic interventions without proportionally increasing production costs.The IV Outline Framework of the European Union has dedicated considerable resources to research aimed at exactly maximising biomass unitary production. Efforts have been concentrated on identifying those vegetable species showing greater potential and on their assessment, in addition to the optimisation of agri-techniques and on rationalisation of the entire cycle. On behalf of Italian, research this activity has been concentrated on exploring vegetable species potentially promising for the production of energetically or industrially geared biomass. We can underline here the role carried out by the PRISCA project, promoted and financed by the Ministry of Agricultural Policies, as well as by certain research institutions among which ENEA (Trisaia Research Centre).Community and national research has clearly identified which are the agricultural or forestall species by large climatic zones that are suitable to be cultivated for producing biomass for energetic purposes.The species identified belong to the following groups:- plants cultivated for other purposes and that can be reconverted to biomass for energy use

(example: sorghum, thistle, locust tree):- plants cultivated in other countries to be introduced and adapted to our environment

(example: Panicum virgatum);- wild or semi-wild plants, both exotic as well as domestic, to be trained (examples: reed,

Miscanthus).The following step seems that of starting specific genetic improvement programmes. In fact, tests conducted so far have dealt with plants that have never undergone a selection process aimed at obtaining goals, at times even conflicting, but in any case diverging from that of energy utilisation of biomass production (species cultivated for alimentary purposes).The long process of genetic improvement of plants performed by man, at first unconsciously, afterwards through scientific basis has, in fact, allowed to multiply the production yields of the edible parts of the plants themselves. For the most part, this improvement has been performed modifying the so called harvest index, maximising that is the edible part of the plant to the detriment of the remaining parts. As a pure example, the modern varieties of wheat produce 10 or

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20 times more than the varieties cultivated in the past, thanks to a better ratio broken kernels and produced straw, while the production of total biomass has not been modified in any significant manner. In reality, a genetic improvement aimed at increasing total production of biomass has been applied only to a limited number of plants and in a few cases only. Once the phase of identifying more suitable plant species for biomass production for energetic purposes is depleted, we propose to give life to a far-reaching project aimed at the genetic improvement of the identified species so as to select high yielding types per surface and time unit. Special attention must be given to chlorophyl photosynthesis and to transportation and storage processes of related products. Another aspect to consider is the ability of plants to produce in marginal land and in presence of adverse environmental conditions. The use of modern biotechnologies will certainly be able to offer intervention tools of great effectiveness.Considering the success already obtained for other goals, we believe that a project of this type is capable of obtaining considerable increases of productivity for agricultural and forestry biomass and consequently considerably reduce production costs.

5.6.2 Photovoltaic energy : a strategic resource

Photovoltaic is, in principle, the most attractive renewable energy: very low environmental impact during the operational phase, greater efficiency in primary solar energy conversion in electricity compared to other renewable energies, consequent improved use of the territory, capable of being integrated into building structures.This technology, also, has a peculiarity of being modular, and employable then, for applications ranging from milliwatts to megawatts. All this while in the presence of considerably high costs, opened up market niches, gradually increasing as the learning curve costs-power produced was annually covered.This peculiar aspect has led to consider photovoltaic technology as a factor for creating industries aiming towards conquering greater shares of the market although still not as significant from an energy viewpoint.This approach, exemplary from an entrepreneurial viewpoint, risks however to overshadow the research needs connected to the energetic potential of this technology.In any case, the still unfulfilled promises of photovoltaic in terms of reduction of costs and times for reaching full competitive levels (perhaps even due to the approach mentioned above) have privileged PV technologies suitable to marginal applications.In Italy, as in many other countries, a significant effort has been made for identifying more promising technologies, investigating mono silicon and polycrystalline (at the present time the only industrialised technology in our country), amorphous silicon, gallium arsenide, polycrystalline film, without significant results. Presently, however, there are still quite a few doubts regarding the types of research lines to pursue for achieving high conversion rate and expected cost reductions.In any case, research on photovoltaic is still “young”, since the activities for the development of materials, devices and earth application systems have only started 20-30 years ago. Considering its own characteristics and the great potential, even in the absence of sure prospects on cost reduction, we believe that photovoltaic must be developed to the highest levels possible, if anything so as to pre-establish a “reserve” option, in order to face undesirable environmental and energetic emergencies, always possible for the decades to come. On the same wavelength as other countries, even in Italy, a considerable effort is being made for developing applications suitable for photovoltaic integration into building structures: this market

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seems to be the most promising for the upcoming years.This choice seems commonly shared, since it prospects a highly relevant application for a number of reasons: first of all, favours the desirable integration into the building sector, this being a circumstance which in itself helps to reduce costs; secondly, offers market opportunities unthinkable until a few years ago, to industrial operators, but in any case significant from an energy viewpoint; lastly, helps prepare a more cognisant energy-environmental culture.In regards to this, research lines are necessary to reach a true integration for obtaining a photovoltaic system which is a multifunctional element to be embedded into the architecture of buildings (but even in structural elements and prefabs for industrial use), which is also a basic product for technological plants at the service of building structures, useful not only for producing electricity but also for recovering of thermal energy. Technological research will have to go in the direction of developing materials and thin film devices and relative techniques for deposition on large areas, as well as development of adequate components of the non active part of the plant.Established, therefore, that one of the strategic lines to pursue is the developing of systems for integrating photovoltaic into the construction sector, it remains to be seen if this choice depletes or absorbs part of the efforts and resources.Actually, a wide spreading of photovoltaic into the construction sector would allow obtaining a significant energy contribution, obviously not in a determining manner, and since the relative technologies, moreover, would be unlikely suitable for different applications.In fact, in order to increase the spreading of photovoltaic in the short term it would be sensible to stimulate the widest potential market for photovoltaic sizing the support policies in reason of the competitiveness in economic and/or energetic terms of the various applications.For example, among the market sectors closer to being competitive are street lighting, lighted signs, telephone booths, service platform roofs, powering of isolated users. For this market niche, small support interventions will be able to obtain great results in terms of development and spreading of the technology, with good prospects even for the countries in the Mediterranean area as well as developing countries. A support can be provided for those applications, even through hybrid systems, focused on isolated networks or users, perhaps closest to being competitive on a large scale. A further method of promoting this type of system can be that of activating projects and processes connected to the flexible mechanisms contemplated by the Kyoto protocol. In any case, there being the will to consider photovoltaic, together with biomass, strategic resource for the years following 2010, an research effort, independent from the possible short term application, should be made however, aimed at studying new materials and developing devices and systems that can become competitive in the long term for the internal and international market, especially of the Mediterranean basin, with potential benefits for Italian industry.A few possible lines are research and development on new active photovoltaic materials, the development of new structures and engineering conversion devices, the innovation of components so called “conventional” for improvement in yield and reliability, as well as cost reduction. Research commitment must also be directed towards manufacturing processes, optimisation of productive cycles and development and experimentation of methodologies, components and standard systems.A far-reaching strategic programme will be promoted on these topics to be started within the scope of the community strategies on energy and the environment.Moreover, the mentioned modular nature of technologies in play allows executing some of the research activities on a small scale, for which the necessary financial resources can be relatively contained.

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5.6.3 Solar energy storage

One of the obstacles towards a greater wide spreading of certain renewable sources is made by discontinuous generation. This aspect constitutes a particularly stringent constraint for wind energy and thermal solar for meeting energy needs. Discontinuous generation, in fact, limits the likelihood of substituting conventional sources, and the credit of renewable sources is limited to the operational and environmental value. In a medium term prospect and, for the electric sector only, this problem is resolved according to precedence in dispatching.In the long term, however, in wishing to attain higher levels of penetration, the problem is placed on configuring renewable source generation plants having the same features of generation availability as conventional ones. This brings storage technologies up again, which are today already technically feasible, butsubstantially increasing generation costs.Even in this sector, therefore, need for a research effort is necessary which can be conducted on a small scale level, thus containing costs.Some of the research lines to pursue are the following:- for solar thermal, the realisation of seasonal storage in large underground storage systems,

thus arriving to solar district heating. Various European countries are very active along this line.

- for photovoltaic solar – but generally, for the production of discontinuous electricity, the problem is more complex, due to the difficulty of storing electricity at lower costs and with the known difficulties of stored energy (per weight unit and volume of electric storage device). A first approach – not of true storage, but in attenuation of discontinuous problems – consists in integrating among different renewable source plants (wind, photovoltaic and biomass), in such a way that the overall generation curve follows as best as possible the load curve.

In order to identify other research lines it is indispensable that a preliminary study of the possible technological options to investigate is performed, starting off from what has been done at an international level. For example, efforts accomplished in other countries are reported for the production of solar hydrogen, energetic vector which, along with many other problems, also offers the advantages of being easily reconverted into electricity (for example, in fuel cells) or employed in different applications, such as motor propulsion.

5.7 A project for spreading the culture of renewable energy

Without an adequate evolution of the energy-environmental culture and of the behaviours of citizens and administrators, the spreading of renewable sources will probably run into obstacles very difficult to overcome. Today, sensitivity towards energy problems is more than anything governed by economic convenience, discovering in the free market the tool for attaining the best cost/service ratio. In the latter, environmental quality finds its place, although in regards to this, a more declamatory than substantial attention is observed that takes the need of environmental protection to the background, compared to the economic aspects. The same worries over energetic safety, the need to work for a greater diversification on the supply side and a greater recourse to national sources counts against the present abundance of conventional raw material (fossil fuels) – for that matter also available at relatively low costs – the relative market calm and, above all, the

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gradual integration of the national energetic system into the European system with the creation of an internal single market.Even in this transitory context, we must work to create a widespread culture that creates greater awareness on the connection between availability and energy quality, economic and social development, environmental protection and, within this scope, the important role of renewable sources.Therefore, a cultural project must be developed which faces in an organised manner the aspects connected to training and information.In relation to information we have had the chance to mention the difficulties which the process of renewable spreading meets, both at the public opinion level as well as administrative level.A correct approach to the topic must start from the introduction that the development and spreading of initiatives for renewables must be accepted by the citizens, not endured by them.We believe that all this can be obtained by initiating an information campaign that works in two directions, from the top to the bottom and vice-versa, therefore aiming at two types of citizen-users: students and relative teaching bodies on one side, local administrators and citizens on the other.The information to spread must regard both the strategic importance of renewables, as well as the specific features of the various technologies.The information campaign on wind energy in the territories most interested in the settlements, presently in course of execution by ENEA, is demonstrating the usefulness of this tool for overcoming prejudice and obstacles deriving from information gaps, inducing more positive behaviours by the local population.A greater initiative can be enjoyed by the conclusions of the already mentioned working group for the spreading of the technical-scientific culture which has suggested to spread the scientific culture within the scope of the training system reform. In regards to this, the group has suggested to consider a few axis, among which teaching of science in the schools, interdisciplinary training and university training, within these axis culture of renewables must be progressively integrated.There is, however, a more urgent need for professional training for which it is our intention to activate as soon as possible, a university specialisation course directed to students in engineering in Italian and Mediterranean University as well, described as follows.The Regions are invited to insert the theme of renewable sources among those of professional training schemes, of Regional competence themselves, coherent with the development goals indicated in this paper and with the developing and execution of the respective regional energy plans.

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Enclosure 1 - Actors that have contributed in preparing the White Paper

The Green Paper has been developed within the scope of the preparatory process of the National Energy and Environment Conference. The preparation of the book has been co-ordinated by ENEA, Renewable sources working group, with the participation of experts from the Ministry of Industry, Ministry of Environment and Ministry of University and Scientific and Technological Research, and with a special collaboration effort with the Ministry of Agricultural Policies and with the Energy Interregional Co-ordination Committee.

The following listed below have contributed to the preparation of the Green Paper:

ABI Acea/Ecomed AEM/Torino AIEE Airu Aiso ANCI ANDIL ANEA ANIT Ansaldo Apei/Aper Associazione Rete Punti Energia Assocalor Assolterm Basentec Cavazza S. r. 1. CEI Cia

Comunid Univ. de1 Mediter.CNELCNR-IEREN Coldiretti-Inipa Confagricoltura Conphoebus CTIDea S. r. 1. ENEL ENI Eniricerche EUBIA Eurosolar Italy EurosolareFederelettrica Fiat Avio Fox Petroli Gechelin ICE

IEFE INARCH Interenergy ISES ISMA ISMES ItabiaKoba S. r. 1.Metapontum Agrobios Novao1 IVPCOmniatecno S. r. RENAGRI Riva Calzoni Sinal Sincert Sindacato CGIL Sindacato CISL Sindacato UIL

Sistemi Energia Staes Tecnagro Tecnoparco Valbasento Tecnosolar Termomax UE-DG XVII Unapace Universita' de L'Aquila Universita' della Basilicata Universita' di Bari Universita' di Bologna Universita' di Genova Universita' di Napoli Universita' di Roma 3 Universita' di Roma La Sapienza Universita' Genova UPI West

Specific comments or contributions on the matters dealt with in the Green Paper, at times in the form of debates, interventions in the conference, have come from the following:

The European Commission General Directorate Energy DG XVII, the Energy Inter-regional co-ordination committee, the Ansaldo renewable energy consortium, Italian Geothermal Union, Cesen, Eurosolare, Edison, Itabia, ENEL, Ecogeo, Unapace, Polytecnyka, University of Ancona, Renagri, Italian Thermotecnic Committee, IEFE, Assolterm, Idis, CNEL, Petrol Union, CEI, Isma, Feederpern, Finidreg, Novaol, Aper, Federelettrica, Euroenergy, Acea, Club Minihydro, Parmenide, Riva Calzoni, Prisma 2000, Sondel, Florys, UPI, ANCI, UNCEM, Federambiente, Adiconsum, Confederate Trade Unions, ABI, various environmental associations, numerous private citizens.

We would like to express our gratitude to all those who have contributed with proven interest, passion and competence.Taking into due account all the contributions, ENEA has arranged a preliminary version of the White Paper, submitted to the Interdepartmental Work Group, within which the paper has been discussed and perfected.Finally, CIPE approved the final document “White Paper for the valorisation of Renewable Energy Sources” with decision taken on 6th August 1999.

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Enclosure 2 – Summary of comments to the Green Paper

The European Commission, General Directorate for Energy DG XVII has expressed high consensus emphasising the importance of Mediterranean countries and the related university master project.The Inter-regional Energy Co-ordination, in a deep analysis, further highlights the great importance of the Regions connected to the fact that assuring a doubling of results “is strongly influenced by the relations with land, environmental and social conditions with which it clashes every time the policies and strategies are converted into concrete actions which are localisation and achievement of interventions.”Ansaldo, renewable energy consortium, has emphasised the problem of connection expenses to the electric network and on the need to create a regulating mechanism allowing new localisation of the plant site, where occurred such necessity. Furthermore, it has expressed favourable comments regarding photovoltaic. Ansaldo has also raised the issue of Italian standards on biomass, inadequate when compared to European ones. Lastly, it has brought to light the needs for strategic and precompetitive research. The Italian Geothermal Union has supported the opportunity of extending the incentives foreseen for electricity to heat produced from renewable sources soliciting a simplification of the procedures. Cesen has sent a monographic contribution on geothermal energy.Eurosolare has supported the building of an effective and integrated national sector system, solicited the definition of specific projects as part of a national research programme also suggesting promotion of synergies for realising integration of photovoltaic into the construction sector.Edison has expressed its opinions regarding the costs of wind technology.Itabia has suggested to highlight the role of biomass for the production of heat and district heating as well.ENEL has provided useful elements for economic evaluation emphasising, furthermore, on the opportunities offered by the re-powering of hydroelectric plants, proposing an increase of relative attainable objectives. ENEL has moreover expressed a few considerations on the costs of photovoltaic and biomass: in this latter aspect it has also believed optimistic the development forecasts of biomass plants for production of electricity. Further a particular ENEL contribution has come on geothermal energy in whose regards the development forecasts for the year 2010 have been confirmed, highlighting the possibilities and conditions for a greater use of low enthalpy geothermal energy and recalling the prospects for cost reduction as well as already low environmental impact. Lastly, ENEL has shown its own availability in integrating its own test structures and CONPHOEBUS in a network of laboratories for qualification and certification.ECOGEO has mentioned the potential of biogas.UNAPACE has provided useful clarifications on a few contents of the Green Paper.POLYTECNYCA has confirmed the environmental benefits deriving from waste fuel combustion, believing, moreover, overestimated the productive capacity associated with the CIP 6/92 mechanism.The Energy Department of the University of Ancona has emphasised the fact that agricultural and forestry biomass production for energetic purposes provides the opportunity for an environmental reorganisation: it is important to formulate execution plans.RENAGRI has stated the need of a more precise description of the territorial data and of national and community policies.The Italian Thermo-technical Committee has maintained that the introduction of renewables on the

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land will foster the environmental balance. It has also provided comments on the need to utilise biomass in a compatible manner with the general needs of balance of the agri-forestal system, making clear the data on biomass plant costs. The Committee has also underlined the importance of technical rules and product certification in support of administrative choices. Lastly, it has also emphasised the importance of strategic projects.The IEFE has stressed the need for co-ordinating national policies with European ones, underlining the role of private operators and the necessity to create a solid standard frame of reference, with the elimination of present inefficiencies and slowness of the authorisation process.ASSOLTHERM has provided useful comments on the technical standards, on fiscal aspects and the needs of the thermal solar sector.IDIS has provided useful cognitive elements proposal about the problem of simplifying authorisation procedures for the realisation of projects. Various other operators have given authoritative opinions in the course of specific conventions or through direct comparison.

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