Italy

  • With limited domestic energy sources, and no nuclear plants, Italy is highly dependent on energy imports, and about 10% of the countries electricity consumption (316 TWh in 2005) has to be satisfied by imports, mainly from Switzerland and France. As a consequence, the main lines connecting the national grid to the international network are running at close to full capacity.

     

    Electricity generation in Italy is mainly based on thermoelectric sources (about 75% from conventional thermal gas, oil and solid combustibles). In the past decade, the declining production from Italy's natural gas fields and the increase in domestic consumption have increased the country's reliance on gas imports. Natural gas, renewable sources and solid fuels are gradually replacing oil in electricity generation. Renewable energy sources (water, wind and solar) contributed about 25% of the gross electricity generation. There was no contribution from the four nuclear power stations, which were closed following a referendum in 1987. Many of the country's power stations are old and inefficient. Growing electricity demand, increasing energy prices and environmental requirements have led to high degrees of investments (about € 10-15 billion between 2006 and 2008 and further investments up to € 10 billion are expected between 2009 and 2011) in new power plants and the renewal of existing plants, mainly gas.  Italian priorities in the energy field are strictly confined to the main issues of securing energy supplies, reducing greenhouse gases and pollutant emissions and assuring competitiveness in the energy sector.

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    Despite strong growth in sectors such as onshore wind, biogas and biodiesel, Italy is far from reaching the renewable targets set at both the national (17%) and European (20%) level. Several factors contribute to this. Firstly, there is a large element of uncertainty due to recent political changes and ambiguities in current policy design. Secondly, there are administrative constraints such as complex authorisation procedures at the local level. Thirdly, there are financial barriers such as high grid-connection costs. In order to promote renewable energy electricity generation, Italy has adopted a number of policy schemes such as one of the highest feed-in tariffs for PV globally. The main tool to support renewables will remain the “green certificate” market-based mechanism. Parallel with this, the feed-in tariff scheme for photovoltaic technology and legislation on energy efficiency in the building sector will contribute to accelerate the increase of renewable energy in the energy mix in Italy.

  • Despite strong growth in sectors such as onshore wind, biogas and biodiesel, Italy is far from the renewable targets set at both the national (17%) and European (20%) level. Several factors contribute to this situation.

    Firstly, there is a large element of uncertainty due to recent political changes and ambiguities in current policy design. Secondly, there are administrative constraints such as complex authorization procedures at local level. Thirdly, there are financial barriers such as high grid connection costs. In order to promote RES-E, Italy has adopted the following schemes:

    • Priority access to the grid system is granted to electricity from RES and CHP plants.
    • An obligation for electricity generators to feed a given proportion of RES-E into the power system. In 2006, the target percentage was 3.05%.
    • Tradable Green Certificates
    • One of the highest feed-in tariff’s for PV globally.

    The main tool to support renewables will remain the “Green certificate” market-based mechanism. In parallel, the feed-in tariff scheme for photovoltaic and the recent legislation on energy efficiency in the building sector will contribute to accelerate the increase of renewable energy in the energy mix.

  • Italy has one of the longest sunlight hours of any Mediterranean country and one of the most favourable feed-in-tariffs globally%u2013 and after a slow start to harness the possibilities %u2013 in 2008, Italy was the third largest producer of solar PV energy with ca. 260 MW installed capacity, GSE, the state-run Italian power management agency, expects that total installed PV power will reach 900 MW by the end of 2009. This represents 100% growth compared to 2008, with approximately 70,000 new-build PV installations in 2009. GSE expects the market to grow further to 1500 MW in 2010, resulting in a compound annual growth rate of 135% for the PV market in the period 2006-2010. The market cap of 1200 MW cumulative installed PV power is expected to be reached by late 2009 or early 2010. This will leave 14 months for projects to be completed. What will happen after this remains an unknown. Plans have been presented to extend market stimulation with lower feed-in tariffs. Some experts, however, believe that new incentives in southern Italy will no longer be necessary in 2011, as grid-parity could be reached due to high grid electricity prices. The biggest stimulus to the introduction of solar panel technology to Italy occurred in 2005 when the Italian Government introduced %u2018Conto Energia (Energy Account), an incentive program that allowed the sale (if part of the electricity network) of energy produced by solar panels with subsidized tariffs. This decree was strengthened in 2007 and the official government targets are set within the framework of that legislation at 3.000 MW by 2016. However, during the discussions for the 20 20 20 EU Directive, the government presented a position paper of its own in which the PV market was addressed with regard to a potential of 8,500 MW: 7,500 MW roof-mounted and 1,000 MW ground-mounted. Italy´s feed-in tariff %u2013 the main element of the incentive scheme approved in 2007, which guarantees operators up to 0.49 euros per kilowatt hour of produced power for 20 years %u2013 has made the PV sector something of a safe haven investment.