Executive Summary
2018 is the last whole year for which renewables capacity and production data in Italy were available. That year, overall installed power from renewables exceeded 54 GW, i.e. about 45% of the 118 GW-strong Italian generation park. During 2018 1,162 MW of renewables capacity were installed, broken down as follows: wind: 511 MW; photovoltaics: 437 MW; hydroelectric: 140 MW; biomass: 74 MW. Total installed capacity in 2018 was over 250 MW higher than that installed in 2017 (+ 28%). In 2018 Italy was the only major EU country which had been surpassing ahead of time its 2020 renewable quota targets, set at 17%. In 2018 Italy also ranked third in Europe for renewable energy consumption, after Germany and France.
2019 whole year data on renewables still needs to be confirmed. However, during a June 2020 seminar GSE, the Italian government-owned company responsible for the development of sustainability and the granting of incentives for renewables and energy efficiency, presented a few key provisional 2019 data: total production from renewables: 116 TWh; additional renewable power installed: 1.2 GW, mainly photovoltaic (+750 MW) and wind (+400 MW), compensating for a decrease in hydro. GSE also noted that in 2019 overall installed power from renewables in Italy amounted to 55.5 GW. Moreover, in 2019 18% of energy consumption (electrical, thermal and transportation) was satisfied by renewables.
Because of the Covid-19 pandemic, which impacted energy production and consumption, it is estimated that any forecasts for renewable power generation in 2020 and 2021 will have to be revised down by about 10%, despite renewable energies being more resilient than fossil fuels. Even with continued cost reductions, renewables are not sheltered from future market uncertainty caused by Covid-19 in terms of demand and availability of financing. However, Ernst & Young’s May 2020 Renewable Energy Country Attractiveness Index observed that “Italy will keep playing a central role in this sector”. This is confirmed by the strategic plans to bolster renewables prepared by the Government during the last few years.
Current Market Needs
The renewable technology showing the strongest growth rate (past and future) for Italy is photovoltaic (PV) solar production, with over 22 TWh produced in 2018 by photovoltaic systems and installations. According to the International Energy Agency’s Snapshot of Global PV Markets, Italy is among the countries that now have enough PV capacity to theoretically produce more than 5% of their annual electricity demand with PV. In 2019, Italy installed around 0.6 GW new PV power and ranks sixth among world countries and second in Europe for total PV installed capacity (20.8GW). Italy’s €5.4 billion ($6 billion) renewable incentives program is expected to spur new growth in large scale PV while also providing incentives for rooftop systems. In order to receive the incentives, plants whose power is below 1MW will need to be enrolled in specific registers. Same for plants whose power is above 1MW, but in order to do so they will need to participate in auctions.
Recent Market Trends
Italy’s National Hydrogen Strategy
In mid-November 2020 Italy launched a national hydrogen strategy to help decarbonize the economy in order to meet European climate targets. In a draft document, which was open for public consultation by all relevant stakeholders from November 24 to December 21, 2020, the Ministry of Economic Development said it was targeting investments in the sector of around 10 billion euros ($12 billion) to 2030, with half of the amount coming from European funds and private investments. The Government’s plan to help boost production of green hydrogen, as stated in the draft document, is to introduce about 5 gigawatts of electrolyzing capacity to extract the gas from water over the 2021- 2030 period. The document also stated that by 2030, hydrogen could make up 2% of Italy’s final energy demand and could help eliminate up to 8 million tons of CO2, with a 20% energy demand coverage possible by 2050. The document also stated that the plans could create more than 200,000 jobs and generate up to €27 billion for Italy’s gross domestic product, with hydrogen to be used in transportation, heavy industry and natural gas pipelines. It should also be noted that a recent study highlighted the potential for Italy to become a clean energy hub for Europe by importing hydrogen produced in North Africa from solar power at a cost 10-15% lower than the one produced in Europe.
Regulatory Environment
The Integrated National Plan for Energy and Climate (PNIEC) is the document that determines Italy’s strategies from 2021 to 2030 with regards to decarbonization, energy efficiency, self-consumption and distributed generation, energy security and consumption electrification. The Plan aims to bring the share of renewables of the final gross energy consumption to 30% by 2030. The Plan’s installed power objectives for the various renewable sources in 2025 and 2030 are ambitious and challenging. With regards to electricity generation, the Plan expects power generated by renewables by 2030 to increase by 65% compared to its current total, with renewables scheduled to cover more than 55% of national electricity consumption (estimated at 337 TWh) in 2030. Specifically, the Plan places a strong emphasis on wind energy (set to reach in 2030 almost twice the amount of installed power in 2017) and photovoltaics (2.5 times the 2019 installed power). This means a total increase of installed power from renewable sources by 75%.
Best Prospects for U.S. Exporters
Leading global energy company ENEL, headquartered in Italy and with a growing presence in North America, has committed to a “complete decarbonization” by 2050, which includes an increase in the weight of renewable energy to 60GW by 2022. Already, renewables represent 64% of Enel’s total power generation capacity. ENEL welcomes the opportunity to partner with innovative U.S. technology providers through its Innovation Hubs network (with hubs located in the USA as well).
Lombardy Energy Cleantech Cluster: it’s the cluster in the Region of Lombardy (where Milan is located) that promotes growth, innovation and competitiveness in the sectors of energy, environment, water and more. Among their members they include companies and research centers and industrial associations. They promote the internationalization of Lombardy cleantech SMEs and foster innovation in cleantech and welcome chances to cooperate with U.S. firms in that respect.
Technologies that would be welcome from the USA would be building integrated photovoltaics and energy storage. Another area of opportunity, currently just in the initial stage, is that of sustainable (electric) mobility, for which several companies are developing electric recharge networks and signing partnerships with other European actors.
U.S. Commercial Service Information
Federico Bevini, Commercial Specialist
U.S. Commercial Service, U.S. Consulate Milan
Tel: +39 026268 8520
E-mail: federico.bevini@trade.gov
