In November 2017, the Italian government made public a new National Energy Strategy (NES): a ten-year plan to manage the change of the national energy system trying to make it more sustainable, secure and competitive. The Minister of Economic Development, Carlo Calenda, and the Minister of Environment, Gian Luca Galletti, co-signed the document and presented it during a press conference with Prime Minister Paolo Gentiloni at the end of a one-year procedure.
The NES is the result of a joint and shared process that involved, from the preliminary stage, public institutions, operators of electricity and gas transportation networks and qualified experts. In the preliminary phase two parliamentary hearings were held, meetings with parliamentary groups and the Regions, which co-own part of the legislative competence in energy matters. A first draft of the energy strategy was put up for a three months public consultation; associations, companies, public bodies, citizens and universities had the chance to make comments and proposals, partially incorporated into the final document; as a result, emerged the need to accelerate on the path previously followed in coherence with both the EU Energy Roadmap 2050[1] and the goals set at the COP21[2].
As outlined in the very first part of the document, this new energy strategy marks a switch in the approach followed, because it is based not on the sole definition of sectoral targets, but on the identification of measures and areas of coordination, so that environmental objectives are pursued in a manner that ensures at the same time the security of the system and the accessibility of prices. Environment, prices, security of supplies and new technologies keep representing the areas to focus on in the promotion the long-term energy transition.
General attention is paid to environmental and socioeconomic impacts of the energy transition. The government put on the table its intention to deploy disused industrial areas, warehouses or roofs in order to better protect landscape from renewable energy sources’ facilities, but because these measures will not be enough to match the established targets, Calenda and Galletti proposed to Regions and local authorities the identification of areas ‘not otherwise exploitable’ to be allocated to renewable energy production. The document also laid down its confidence on the fact that the replacement of fossil fuels with renewable sources will also generate a positive net balance in terms of employment, a reason for this phenomenon to be monitored and governed.
What Italy has already achieved
Italy has been deeply committed to the COP21 goals and to the target set within the European Energy Union, in fact RES already covers 17.5% of gross final energy consumption. It is also true that energy efficiency continued to grow and that the GDP energy intensity dropped by 4.3% as compared to 2012; at the same time, Italy’s dependence on foreign supply sources continued to fall: energy imports were down by 7 percentage points versus 2010; therefore, an energy cost gap between Italy and the EU remains and puts Italy at a disadvantage[3].
Renewable energy sources’ deployment in Italy can decrease not only emissions, but also energy dependence and, in the future, the gap between Italian electricity prices and European average ones. So, they clearly represent the future and the government planned to double investments in clean-energy research and development from € 222 million in 2013 to € 444 million in 2021[4]. The Minister of Economic Development Calenda also repeatedly said that during the transition Italy will have to rely on natural gas[5], which is why the strategy deems it vital to diversify supply sources[6] and improve the flexibility of the existent ones, by optimizing the use of the present infrastructures, and develop new connection. Strengthening gas pipelines and the peak-demand security margin, coordinating national contingency plans, including mutual support between EU countries[7] will also be relevant parts of Italian strategy.
Conclusions
The document has no legal binding value, and the projections and measures it contains will need to be further discussed and agreed within the legislative national process in order to become actually implemented[8]. The general election, set on 4 March 2018[9], may give Italy a new and different coalition government, but it will unlikely reverse the energy policies set by the ruling one, and the NES discussed above represents a medium-term legacy, if we take into account its 2030 deadline. The document actually contains a certain overview on how the Italian energy market should move by 2030, and therefore puts down some recommendations and conditions necessary to succeed.
First of all, both Calenda and Galletti highlight the importance of infrastructure, systems of electric power accumulation, for instance, are needed in order to switch from coal to clean energy[10]. At the same time, security and diversification of gas supplies cannot be guaranteed, if all necessary infrastructures are blocked by local interests, innovation turns into a meaningless word, if you take several years to start new initiatives. Participation procedures, at the same time, are welcomed, but need to be simple, smart and effective. That is coherent to the view of a parliamentary majority, who tried to reform the Constitution by giving back, among other things, legislative powers in the field of energy policies to the State.
These recommendations should not be taken for granted: the realization of the planned TAP pipeline, which should carry Azeri gas through Greece, Albania, and Adriatic Sea to Italy, is facing a strong and fierce opposition by both the local population and the President of the Apulia Region, Michele Emiliano. The same situation occurs to the pipeline that should carry gas from Melendugno (where TAP will be brought ashore) to northern Italy. The project, led by Italian gas company SNAM, in fact envisages the pipeline would pass through the most seismically-prone area of the country. The conflict involving citizens and local institutions on one hand and national government on the other one is mounting rather than fading and a solutions seems yet far to come.
Italy should increase the share of LNG in the supply mix and could develop a new floating storage and regasification unit, Calenda said[11]. The Minister of Economic Development, considered as the real master of the energy strategy, advocated a bright future for gas by his statements, letting his censors define the NES as a match won by gas companies over electricity ones. Both TAP and EastMed corridors, in fact, provide Italy, via gas companies[12], with attractive geopolitical solutions. Furthermore, less than two-and-a-half years since its discovery (by Eni) and with potential gas reserves of 850 billion m³, the super-giant Egyptian gas field Zohr has started production[13]. So, the strategy seems to indulge Italy’s necessity to improve its energy security via diversification of supplies within an EU framework on one hand and its ambition to become a sort of energy hub connecting South-Eastern Mediterranean to Central Europe on the other. But a NES is not only about gas; that’s why the next governments in office, starting from the very next one, will have to put in place all the measures needed in order to make the NES feasible.
Francesco Angelone
Master’s degree in International Relations (LUISS “Guido Carli”)
Notes and references
[1] European Commission (2011). Energy roadmap 2050. Retrieved from https://ec.europa.eu/energy/sites/ener/files/documents/2012_energy_roadmap_2050_en_0.pdf
[2] Italy has already overcome the European targets in terms of penetration of renewable energies on total consumption in 2015 (17.5%) compared to the 2020 target (17%).
[3] Ministero dello Sviluppo Economico (2017). Italy’s National Energy Strategy 2017. Retrieved from http://www.sviluppoeconomico.gov.it/images/stories/documenti/BROCHURE_ENG_SEN.PDF
[4] Total investments envisaged by the 2017 National Energy Strategy amount to €175 billion by 2030. The investments will be divided as follows: €30 billion for networks and gas and electricity, €35 billion for renewable sources, and €110 billion for energy efficiency.
[5] Jewkes, S., & Di Giorgio, M. (2017, November 10). Italy keeps foot on gas as it calls for early end to coal. Reuters. Retrieved from https://www.reuters.com/article/us-italy-energy-strategy/italy-keeps-foot-on-gas-as-it-calls-for-early-end-to-coal-idUSKBN1DA1GQ
[6] Dependence on one supplier (Russia) increased, and the renewals of the Algerian gas contracts have not been defined yet.
[7] Thanks to storage facilities or bidirectional gas flows.
[8] Ardito, G. (2017, July 3). 2017 Italy’s National Energy Strategy: Not a Straightforward Pathway. Global Energy Facts. Retrieved from https://globalenergyfacts.com/2017/07/03/2017-italys-national-energy-strategy
[9] Anon. (2017, December 29). Italy heads for fresh elections. The Economist. Retrieved from https://www.economist.com/news/europe/21733238-vote-will-be-held-march-introducing-new-uncertainty-europe-italy-heads-fresh
[10] Italy plans to phase out coal power plants by 2025 at an estimated cost of around €3 billion, Calenda said in Parliament on 11 May 2017. See: Pagni, L. (2017, May 10). Energia, Calenda prevede uscita dal carbone entro il 2025-2030. La Repubblica. Retrieved from http://www.repubblica.it/ambiente/2017/05/10/news/energia_calenda_prevede_uscita_dal_carbone_entro_il_2025-2030-165107968/
[11] Argus Media Group (2017). Italian Energy Strategy 2017: outlook for power and gas. Retrieved from https://www.argusmedia.com/~/media/files/pdfs/white-paper/italian-energy-strategy-white-paper.pdf?la=en
[12] SNAM is member of TAP consortium, and Edison is member of the IGI Poseidon consortium in charge of the EastMed pipeline.
[13] Eni (2017). The history of Zohr. Retrieved from: https://www.eni.com/en_IT/operations/upstream/exploration-model/zohr-egypt.page