italy profile final feb 2016

8/19/2019 Italy Profile Final Feb 2016

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Energy Profile for Italy

Marco Crespi, José Daniel FasolinoFebruary 2016


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Content

Introduction

Energy Policy

Governance

SupplyDemand

Prices

Summary: energy balance & indicators, specifics & issues

| Country Profile Italy2


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Introduction

Country snapshot in numbers

Indicator Unit Year of Estimate Value

Land area Thousand sq.km 2014 301.4

Forest area % of land area 2012 31.6

Population Millions 2014 60.8Population density People per sq.km 2014 201.0

GDP per capita PPP 2011 $ 2014 34,700

Industry value-added % of GDP 2014 23.5

Inflation CPI % 2014 0.9

Rents (mineral, oil, coal, gas) % of GDP 2012 0.2

| Country Profile Italy3 Source: World Bank – World Development Indicators

- 8th country in GPD ranking- a lot of SMEs- strong manufacturing industry


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Introduction

Resources


About 75% of Italy’s energy needs are covered by imports, with small

domestic product ion from gas (9%) and oil (10%).

Source: MISE, Situazione Energetica Nazionale 2014

The consumption of

energy constantly

grew until 2005;

since then a

decrease


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Introduction

Resources


From under-capacity to over-capacity

• Electricity companies mostly reliant on CCGT suffer from high over-capacity inelectricity generation; (all the Italian power plants can provide with 130GW, but thereal need is about 45/50 GW)

Source: MISE, Situazione Energetica Nazionale 2014Article on Affari & Finanza, Jan. 11th, 2016


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Introduction

Resources


The current energy mix, in particular for electricity, is fairly costly

Italy has high environmental standards, being one of the world’s most

energy-effic ient countr ies, wi th primary energy intensity 14% lower than the

European average in 2010

• However, the energy efficiency of the building park in Italy is very low: it is generallyold

Source: World Energy Resources – 2013 Survey


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Introduction

Wind and Solar resources



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Energy Policy

National energy plan: targets

The National Energy Strategy (“ Strategia Energetica Nazionale” ) has set the

choices of energy pol icies for Italy and established four main targets in

medium term (2020), even taking into account the very long term (2050):

• Competitiveness: to significantly reduce energy cost gaps, bringing energy costs

and prices in line with European levels by 2020• Environment: to meet and surpass the European environmental and

decarbonisation targets, exceeding the targets set by the Climate-Energy Package(’20-20-20’).

• Security: to improve security and independence of energy supply, in both electricityand gas sectors

• Growth: to foster a sustainable economic growth.



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Energy Policy

National energy plan - Priorities

To achieve the 2020 objectives, the strategy has been structured according

to 7 prior ities:

1. Energy efficiency, which contributes to the achievement of all energy policytargets, absorbing a substantial portion of expected increases in energy demand

2. Competitive gas market and Gas Hub for Southern Europe, which would help Italy

become a country of exchange and transit to northern Europe

- This could allow the CCGT fleet to become competitive again

3. Sustainable development of renewable energy to go beyond the 2020 productionobjectives.

4. Development of electricity infrastructure and the electricity market

5. Restructuring the refining industry and the fuel distribution sector

6. Sustainable production of domestic hydrocarbons (with no impact on environment;no shale oil/gas )

7. Modernization of the systems governance (shorter time and more efficiency intaking decision)



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Energy Policy

National energy plan - Highlights

The results expected by 2020 are as follows:

• Save 15.5 Mtoe of final energy per annum (20 Mtoe of primary energy)

• 19-20% share of renewable energy in gross final consumption,

• Reduction from 86% to 76% of fossil fuels on primary energy consumption• Renewables exceed the levels of gas as energy source in electricity generation, 35-

38%

• Significant reduction of energy costs and a gradual alignment of Europeanwholesale prices

• Reduction of greenhouse gas emissions by 21%

• Reduction from 84% to 67% of energy dependence from abroad

• Positive impact on economic growth thanks to major investments expected in thesector (170-180 Bn€ invested by 2020)



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Energy Policy

Renewable Energy

Following European 2020 objectives, Italy must accomplish a quota of 17%

of energy f rom renewables, 20% increase in energy efficiency and 18%

reduction of greenhouse gas emissions.

Renewable energy, quota reached in 2014: 17,1%

| Country Profile Italy11 Source: GSE- Rapporto statistico Energia da fonti rinnovabili 2014


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Energy Policy

Renewable Energy


Source TWh

Hydro 58.5

Wind 15.2

Solar 22.3

Geothermic 5.9

Bioenergy 18.7

Total 120.7(= 10,376 Mtoe)

Source Mtoe

Solar 0.180

Biogas 0,283

Solid biomass+waste

6,731

Other 0.163

Heat pumps(heating, notconditioning)

2.579

Total 9.934

Heating f rom REElectricity f rom RE

Source: GSE- Rapporto statistico Energia da fonti rinnovabili 2014


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Energy Policy

Renewable Energy

There were two instruments that promoted renewable energies in electricity

generation (these two mechanisms are no longer available for new

installations)

• Feed-in-Tariff (FiT): as in many other countries, this policy mechanism is designed

to accelerate investment in renewable energies by providing a fee which is aboveretail electricity prices

- 20 years of FiT for PV- Decree in 2014 : the amount of those FiT will be payable in longer period.

• Green certificates (GCs): all producers and importers of non-renewable have toinject a minimum quota of renewable electricity into the power system every year.

- Each GC is conventionally worth 1 MWh of renewable electricity and is valid forthree years

In Italy, support schemes for RES are managed by ‘Gestore dei Servizi Energetici’ or

GSE (Manager of Electr ici ty services), a state owned company



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Energy Policy

Renewable Energy

Grid operators are obliged to give priori ty access to renewable plants.

Favorable tax conditions are currently in place for the promotion of RES for

heating

• For example, detractions for installation of solar collectors

District heating and cool ing networks are managed at local level

• According to Law 102/2014 about energy efficiency, GSE must assess thefeasibility of district heating.

Biofuels should reach the 10% share of fuel consumption by 2020



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In order to improve the energy effic iency, it is important to keep and

strengthen the existing ini tiative to foster E.E., like the tax detractions,

white certif icates and incentives (“Conto Termico” ).

• Better energy performances for new buildings• Tax detractions

• Incentives (like “Conto termico”, for private and public properties)

• White certificates (for distributors of electricity and gas having 50,000+clients):

1.7 Mtoe saved in 2015


Energy Policy

Energy Efficiency in N.E.S.


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Energy Policy

Electricity

The electricity market in Italy was liberalised following objectives ofDirective 96/92/EC after almost 40 years of state nationalisation

Distribut ion and supply activit ies must be unbundled

Generation:

• 2014: The main companies involved in electricity generation are Enel (27.2%), Eni(8.3%) and Edison (6.0%). Top10 generate about 60%.

• AssoElettrica is the association: 120 companies (90% of the market)

Transmission + dispatching:

• Terna – Rete Elettrica Nazionale SpA, is the transmission system operator (TSO). It isthe owner of the majority of the transmission grid operation line and holds theconcession agreement to operate the system.



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Energy Policy

Nuclear

The civil nuclear program was abandoned in 1987, after a referendum. Itfollowed the growing anti-nuclear sentiment of people in the 70s and theChernobyl accident in 1986.

In the 2000s, the government tried to restart the nuclear program, but itrenounced after a second referendum in 2011.

Italy imports electricity produced to nuclear power in France, Switzerland andSlovenia



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Energy Policy

Climate

The domestic GHG emissions has

been declining since the second

half of the 2000s. Several factors

contributed to this fact, such as:

• A switch from oil to natural gas• Increased use of renewable

energy sources

• Improvement of energy efficiency

• The economic crisis

| Country Profile Italy18 Source: Eurostat

year MT Co2 equiv.

1990 525.3

1995 538.4

2000 561.8

2005 587.4

2010 516.0

2013 446.6


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Governance

Institutions

• The ‘Ministero dello Sviluppo Economico / Settore Energia’ (MiSE) is theMinistry of Economic Development, which manages the security of supply andenergy infrastructure, mineral resources, RES, EE, among others

• The ‘Autorità per l ’energia elettrica e il gas e sistema idr ico’ (AEEGSI) is

the electricity and gas authority, which sets tariffs, establishes guidelines forproduction and distribution services, among others

• The ‘Gestore dei Mercati Energetici’ (GME) is the Electricity MarketOperator, being responsible for the economic management of the electricitymarket, environmental markets, day ahead markets, among others

•The ‘Gestore dei Serivizi Energetici ’ (GSE)

is the Electricity ServiceOperator, which is responsible for support of renewable electricity, purchase ofelectricity from producers and resale in the market, promotion of renewables,among others



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Supply

Overview

| Country Profile Italy20 Source: IEA Energy Balances of OECD Countries

0%

5%

10%

15%

20%

25%

30%

35%

40%

0

20.000

40.000

60.000

80.000

100.000

120.000

140.000

160.000

180.000

200.000

1960 1970 1980 1990 2000 2010 2011 2012 2013

Total primary energy supply (TPES) and energy independence

Production TPES Energy independence


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Supply

Energy balance sheet

| Country Profile Italy21 Source: Autorità per Energia Elettrica Gas e Sistema idrico

Comparison:

• 2014: Oil+Gas+ Solids represent 73.1%

• 2004: Oil+Gas+ Solids represent 87.3%

Source MToe % Trend

Gas 50.70 30.5

Petroleum 57.30 34.5 ↓

Renewable energies 35.34 21.2 ↑

Solid fuels 13.47 8.1

Electricity (import- export) 9.61 5.8

Nuclear 0 0

Total (gross domestic consumpion) 166.43 ↓


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Supply

Electricity

| Country Profile Italy22 Source: ENERDATA – Global Energy & CO2 Data

0

50

100

150

200

250300

350

400

1970 1990 2010 2012 2014

Electricity consumption inTWh

19%

6%

38%

17%

5%

5%

8%2%

Electricity production by source

Hydro

Coal

Oil

Gas

Biomass andwaste

Wind

Solar

Geothermal

Production of electric ity from RES: 2013: 38.6% - 2014: 43.1%


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Supply

Electricity

| Country Profile Italy23 Source: ENERDATA – Global Energy & CO2 Data

18%

6%

7%

45%

2%

7%

14%1%

Power capacity by source

Hydro

Coal

Oil

Gas

Biomass andwaste

Wind

Solar

Geothermal

19%

6%

38%

17%

5%

5%

8%2%

Electric ity production by source

Hydro

Coal

Oil

Gas

Biomass andwaste

Wind

Solar

Geothermal

Production of electric ity from RES: 2013: 38.6% - 2014: 43.1%


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Supply

Interconnectors (electrici ty)

Italy has interconnection capacity w ith 6 countries: Switzerland, France,

Greece, Slovenia, Austria and Malta

Italian electrici ty imports represented more about 15% of total consumption

in 2014 (46 TWh ; 100%=309TWh)

Terna is developing projects for new submarine interconnections in the

Balkan area

• A new connection with Montenegro will represent the first 1,000 MW

electricity bridge with the Balkan area

• Several studies are being developed for new submarine interconnectionswith Tunisia, Croatia and Albania



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Supply

Gas

Gas: import covers about 90% of i talian gas need.

Algeria (12%), Russia (46%), Libya (11%) and Netherlands (7%) are the mainsources of gas import from ducts (2014).

LNG is shipped from Qatar (7%); Italy has 3 regassification units.

The trend is a slow decline in the use of the gas: the peak was reached in

2005 (71 Mtoe, whi le in 2014 it was 50,7 Mtoe)

The main italian producer is ENI (85%).

Italy has nearly 14 BCM of gas storage capacity


Source: MISE: Situazione energetica nazionale 2014


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Supply

Interconnectors (gas)

May Italy become the gas hub for the southern Europe?

“South stream” and “Galsi” (Algeria-Sardinia) projects have been delayed(canceled ?).

Trans Adr iatic Pipeline (TAP): Greece- Albania- Italy (from Caspian Sea) isexpected to start in 2016 and should be completed in 2020


Snam Rete is investing in the Po Valley gas infrastructures and developing

a reverse flow project towards north-east.• This would make possible to export gas to France and Switzerland

Snam Rete is also developing a South-North project to increase flexibil ity


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Supply

Oil

The consumption of oil is decreasing and wil l keep decreasing: in 2000 it

covered 49.5% of need (92.03 MToe ), now i t is 35% (57.27 MToe)

| Country Profile Italy27 Source: Ministero Sviluppo Economico(graph. : Ministero Sviluppo Economico, elaborazione fabiodiscolzi.com)

Crude oil: exporter countries:

• Azerbaijan (17.1%)• Russia (15.9%)

• Iraq (11.8%)

• Saudi Arabia (10.9%)

• Kazakhstan (8,3%)• Libya (7.8%)

Others: 29.2%


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Demand

Overview


25%

32%

27%

14%

2%

Energy consumption by sector

Industry

Transport

Residential

Services

Agriculture

0

20

40

60

80

100

120

140

1960 1970 1980 1990 2000 2010 2011 2012

Energy consumption, Mtoe


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Demand

Industry


Electricity and natural gas are the main consumption sources

9%

11%

32%

37%

9%2%

Industry energy consumption by source

Coal

Oil

Gas

Electricity

Heat

Biofuels & waste


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Oil is the most important source of consumption in the transport

sector

Demand

Transport


91%

2%3% 4%

Energy consumption characterization in transport

Oil

Gas

Electricity

Biofuel and waste


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Demand

Services


Electricity and gas are the main consumptions in the service

sector

4%

46%49%

0% 1%

Service sector energy characterization

Oil

Gas

Electricity

Biofuel and waste

Heat


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Demand

Residential


Electricity and gas are the main consumption sources

0% 9%

58%

19%

12%2%

Energy consumption characterization in residential

Solids

Oil

Gas

Electricity

Biofuel and wasteHeat


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Prices

National Energy Bill (B€)

33

Fuel Industry Transport Households &

Services

Total

Coal 0 - - 0

Oil 2 60 7 69

Gas 4 - 19 23

Electricity 28 - 35 63

Heat 2 - 1 3

Total 35 60 63 158

| Country Profile Italy


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Prices

Electricity prices w.r.t. neighbours

34

Constant price in US$cents05 of electricity in industry (taxes incl.)

Unit 1980 2013 2014 Unit 1980 2013 2014

Belgium

USc05/kWh

11.1

10.1

9.9

Z-score

0.1

0.3

0.1

France USc05/kWh 11.5 10.0 9.9 Z-score 0.2 0.3 0.1

Germany USc05/kWh 11.5 13.9 14.8 Z-score 0.2 1.2 1.2

Italy USc05/kWh 14.6 25.6 25.9 Z-score 0.8 4.0 3.8

Spain USc05/kWh 9,92 13,09 14,26 Z-score -0,12 1,05 1,09

Switzerland USc05/kWh 13.4 9.5 9.5 Z-score 0.6 0.2 0.0

Source: ENERDATA – Global Energy & CO2 Data| Country Profile Italy


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Prices

Gas prices w.r.t. neighbours

35 Source: ENERDATA – Global Energy & CO2 Data

Constant price in US$05 of natural gas in industry (taxes incl.) GCV

Unit 1980 2013 2014 Unit 1980 2013 2014

Belgium USc05/kWh 2.5 3.9 3.3 Z-score -0.4 0.1 -0.2

France USc05/kWh 2.9 4.3 4.1 Z-score -0.3 0.4 0.3

Germany USc05/kWh 2.7 4.1 3.8 Z-score -0.3 0.2 0.2

Italy USc05/kWh 3.3 4.2 4.0 Z-score -0.1 0.3 0.3

Spain USc05/kWh 4,26 3,56 3,55 Z-score 0,15 -0,03 -0,01

Switzerland USc05/kWh 5.0 5.2 5.2 Z-score 0.4 0.8 1.0

| Country Profile Italy


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Prices

Taxes

36

Oil: 55% taxes in end-consumer prices

• 57% of taxes for the transport sector (56% on diesel and 60% on gasoline)

• 15% for industry

• 44% for household and services

Electric ity: 38%

• 40% of taxes for the industry


Gas: 27% tax

• 21% of taxes for the industry


Renewable electric ity fees: A3 component

• Up to 6.51 c€/kWh

| Country Profile Italy Source: ENERDATA – Energy and tax bill


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Summary

Simplified Energy Balance


Mtoe 1997 2000 2005 2009 2010 2011 2012 2013 2014

Primary Product ion 33.37 31.04 29.43 30.31 33.89 35.47 37.54 43,82 45,04

Imports 161.11 181.56 197.39 175.44 185.26 175.73 168.63 154,11 143.79

Exports 21.15 21.60 29.67 27.08 30.11 27.57 30.48 24,96 21.26

Stock changes -1.08 5.10 -0.63 -1.67 1,26 -0.58 -0.62 -0.02 1.15

Gross inland consumption

174.41 185.90 197.77 180.34 187.79 184.20 176.31 172.99 166.43

Avai lab le for f inal consumption 127.66 134.84 146.59 132.71 138.58 134.90 127.86 126.59 120.80

• Industry 37.21 40.18 41.06 29.26 32,15 32.66 30.19 28.18 27.71

• Transport 38.87 41.51 43.96 42.50 42.42 42.47 38.56 37.82 39.09

• Residential + service 37.53 39.70 47.06 46.37 49.13 46.45 46.89 49.51 44.23

• Agriculture 3.20 3.23 3.40 3.29 3.04 3.01 2.78 2.74 2.69

• Non-energy uses

8.445 7.50 7.68 7.22 8,39 6.90 6.49 5.91 4.78

• Bunkers 2.40 2.70 3.42 3.37 3.47 3.41 2.96 2.43 2.30

Efficiency of transformation 73,2% 72,5% 74.1% 73.5% 73.7% 73.2% 72.5% 73.1% 72.5%

Energy independence 19.1% 16.7% 14.9% 16.8% 18,0% 19.2% 21.3% 25.3% 27.0%

Source: Ministero dello Sviluppo Economico – DGSAIE – Statistiche e analisi energetiche e minerarie


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Country Comparison on Energy use from

1960 to 2012 (ktoe)



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Summary

Extended Energy Balance

ktoe Solids Oil Gas RES Biomass Nuclear Electricity Total

Primary Production 51 5,629 7,046 11,487 7,641 0 0 31,885

Imports 15,978 85,421 55,451 0 2,807 0 3,905 163,562

Exports -213 -30,379 -114 0 -56 0 -198 -30,959

Bunkers

0 -5,568 0 0 0 0 0 -5,568

Stock changes 483 443 -1,045 0 30 0 0 -89

Gross inland consumption 16,299 55,547 61,338 11,487 10,421 0 3,707 158,800

Available for consumption 2,608 49,502 35,811 273 5,499 0 25,520 122,645

Industry 2,464 3,268 9,040 10 465 0 10,348 28,178

Transport

0 33,170 886 0 1,368 0 925 36,349Services 0 633 7,274 98 46 0 7,764 31,325

Residential 3 2,809 18,111 117 3,619 0 5,973 15,930

Agriculture 0 1,961 129 18 2 0 501 2,625

Non-energy uses 141 7,369 371 0 0 0 0 7,880



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Summary

Specifics

Some controversial matters about big infrastructures:

• Electric interconnector from Montenegro

• Gas duct from Algeria (GALSI project)

The “ Unlock Italy” make the drill ing for oil and gas easier. A referendum will

be held in April, in order to limit the the duration of dr illing concessions.



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Sources

Macroeconomic indicators: http://databank.worldbank.org

Energy Balances: Eurostat, IEA, Enerdata

Energy Prices: Eurostat, Enerdata

Country Report, Global Energy Research (Enerdata)

Country Report, www.reegle.info European Commission: Progress towards completing the IEM

World Energy Counci l: World Energy Resources 2013 Survey

American Council for an Energy Efficiency Economy: “ 2014

International Energy Efficiency Scorecard”


http://databank.worldbank.org/http://www.reegle.info/http://aceee.org/research-report/e1402http://aceee.org/research-report/e1402http://aceee.org/research-report/e1402http://aceee.org/research-report/e1402http://aceee.org/research-report/e1402http://www.reegle.info/http://databank.worldbank.org/


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Sources (in Italian)

Ministero dello Sviluppo economico: “ Bilancio Energetico

Nazionale”

GSE: “ Rapporto statistico - Energia da fonti rinnovabili 2014” (Dec.

2015).

Ministero dello Sviluppo Economico: “ Situazione energetica

nazionale nel 2014” , (July 2015)

Ministero dello Sviluppo Economico: “ Strategia energetica

Nazionale” (Mar.2013)


http://dgsaie.mise.gov.it/dgerm/ben/ben_2014.pdfhttp://dgsaie.mise.gov.it/dgerm/ben/ben_2014.pdfhttp://www.gse.it/_layouts/GSE_Portal2011.Structures/GSEPortal2011_FileDownload.aspx?FileUrl=http://www.gse.it//it/Dati%20e%20Bilanci//GSE_Documenti/osservatorio+statistico/Rapporto+statistico+GSE+-+2014.pdf&SiteUrl=http://www.gse.it//it/Dati%20e%20Bilhttp://dgsaie.mise.gov.it/dgerm/downloads/situazione_energetica_nazionale_2014_v4_con_allegati.pdfhttp://dgsaie.mise.gov.it/dgerm/downloads/situazione_energetica_nazionale_2014_v4_con_allegati.pdfhttp://www.sviluppoeconomico.gov.it/images/stories/normativa/20130314_Strategia_Energetica_Nazionale.pdfhttp://www.sviluppoeconomico.gov.it/images/stories/normativa/20130314_Strategia_Energetica_Nazionale.pdfhttp://www.sviluppoeconomico.gov.it/images/stories/normativa/20130314_Strategia_Energetica_Nazionale.pdfhttp://www.sviluppoeconomico.gov.it/images/stories/normativa/20130314_Strategia_Energetica_Nazionale.pdfhttp://dgsaie.mise.gov.it/dgerm/downloads/situazione_energetica_nazionale_2014_v4_con_allegati.pdfhttp://dgsaie.mise.gov.it/dgerm/downloads/situazione_energetica_nazionale_2014_v4_con_allegati.pdfhttp://www.gse.it/_layouts/GSE_Portal2011.Structures/GSEPortal2011_FileDownload.aspx?FileUrl=http://www.gse.it//it/Dati%20e%20Bilanci//GSE_Documenti/osservatorio+statistico/Rapporto+statistico+GSE+-+2014.pdf&SiteUrl=http://www.gse.it//it/Dati%20e%20Bilhttp://dgsaie.mise.gov.it/dgerm/ben/ben_2014.pdfhttp://dgsaie.mise.gov.it/dgerm/ben/ben_2014.pdf


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Thank you

For more information please contact:[email protected]

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italy profile final feb 2016

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