Italy Energy National Recovery and Resilience Plan Funds for Energy Transition
The “Italia Domani” National Recovery and Resilience Plan (NRRP) is part of Next Generation EU, the European Union’s plan to boost member states’ economies after the COVID pandemic, in the 2021-2026 timeframe.
The NRRP consists of six Missions, or Policy Areas, which correspond to the six pillars of the EU Next Generation Plan, plus a recently added one. They are:
• Digitalization, Innovation, Competitiveness, Culture and Tourism
• Green Revolution and Ecological Transition
• Infrastructure for Sustainable Mobility
• Education and Research
• Inclusion and Cohesion
• Health
• RePowerEU (recently added)
Under the Green Revolution and Ecological Transition Mission €55.52 bn. (approx. $60 bn.) are destined to the circular economy, renewable energy sources and sustainable agriculture. Renewable Energy Sources, projects include renovation of bus fleets and green trains; promotion of renewables for energy communities and self-consumption; biomethane development; hydrogen; and more (please click on above link to see details on all projects).
Originally under the NRRP, Italy was due to receive €191.5 bn (approx. $207 bn) in EU loans and grants through 2026, but in the second half of 2023 it fell behind schedule in terms of spending the cash it had already received and in meeting policy targets, and that would have affected future payment releases. To overcome these difficulties, the Government of Italy revised the NRRP, scrapping some projects and adding new ones that were deemed more viable and actually focused more on the energy sector.
Thanks to the Government’s revision in early December 2023, the NRRP grew both in size (from €191.5 to 194.4 bn) and scope (encompassing 614 objectives instead of the original 527). The increase in size was due mostly to additional resources devoted to a new Mission of the Plan called RePowerEU, in line with the European Union’s plan to end dependence on Russia’s fossil fuels and tackle the climate crisis. RePowerEU is worth €11.2 billion and it includes projects to strengthen energy distribution networks, increase the production of renewables, increase energy efficiency and create competencies on green themes.
RePowerEU projects include €840 million destined to high voltage electricity grid manager Terna, which will devote €500 million to create the eastern branch of the Tyrrhenian Link, a submarine power line that will connect Campania, Sicily and Sardinia. It also includes €570 million worth of projects for Enel, the Italy-based global energy group, for investments in smart grids with the aim of increasing efficiency in electricity distribution to enable an increasingly decentralized electricity production model (there are now 1.4 million “prosumers” in the country, or citizens who are producers and consumers of energy at the same time).
Snam, the company managing Italy’s gas infrastructure, will also benefit from funding worth €420 million that will be devoted to phase 1 of the Adriatic Line, a pipeline paralleling an existing one that will improve the transportation of gas from entry points located in southern Italy to the north of the country. The overall value of the investment is €2.5 bn and the pipeline will be entirely “hydrogen ready”, i.e. capable of transporting hydrogen as well as natural gas. Other Snam projects include the construction of a new 15-megawatt electric compression unit for a gas compression plant and works in a Northern Italian plant that will allow for the reverse flow of gas from Italy to Austria.
The NRRP and its revisions include considerable projects and funds for Italy’s energy transition and security. The energy sector in Italy offers opportunities for U.S. firms in the areas of LNG technologies, energy storage, hydrogen-related technologies and carbon capture and storage. U.S. entrepreneurs interested in the Italian energy sector and seeking representation and information on how the U.S. Commercial Service can assist U.S. companies should reach out to: federico.bevini@trade.gov