Italy Power Report Q1 2012
Includes 3 FREE quarterly updates
BMI View: As the public says no to nuclear, Italy resigns itself to a future of greater import dependency, a continued high-level use of imported natural gas for generation and a desperate need to boost solar and wind power. Nuclear was always a controversial and generally unpopular option but, as in the UK, the government saw it as the easiest route to a low-carbon generating portfolio. Italy now faces a major challenge in securing adequate supply and avoiding a massive power import requirement.
Italy banned nuclear power generation in a 1987 referendum. Plans were then reintroduced for the establishment of nuclear generating capacity that could help the country meet its emissions targets. Then, in the wake of Japan’s Fukushima accident, former Prime Minister Silvio Berlusconi was forced by a popular referendum to accept the rejection of his nuclear power plans. The new political leadership is unlikely to rock the boat and can therefore expect a challenging time in securing Italy’s energy future. Key trends and recent developments in the Italian electricity market include:
Italy’s energy regulator has announced proposals to raise the return on investments in power transmission, distribution and measurement included in the electricity tariffs in 2012-2015, expected to boost the revenues of the power grid operator Terna and other utilities. The regulator’s website laid out plans to increase returns from 6.9% to 7.2% in the next regulatory period. It also proposed to raise investment reimbursement in power distribution from 7.0% to 7.4% and from 7.2% to 7.4% for investments in power meters.
During the 2011-2016 period, Italy’s overall power generation is expected to increase by an annual average of 1.11%, to reach 291TWh. Driving this growth is an annual 2.37% gain in gas-fired and a 4.90% rise in renewables-based electricity supply. Coal-fired generation is expected to fall by 2.03% per annum, with the use of oil-fuelled generation dropping by an average 5.00%.
Following an increase in 2011 real GDP of an estimated 0.8%, BMI forecasts average annual growth of 1.2% between 2011 and 2021. The population is expected to remain around the 61mn level throughout the forecast period, and net power consumption looks set to increase from 297TWh to 315TWh by 2016, rising further to 330TWh by 2021. During the 2011-2016 period, the average annual growth rate for electricity demand is forecast at 1.16%, but slowing somewhat later in the decade to an average 0.98% in 2016-2021.
Thanks partly to the forecast modest rise in net generation, growth of which barely matches that of the underlying demand trend, Italy’s power supply shortfall is likely to remain significant. A broadly stable percentage of transmission and distribution losses at around 7% will do little to help balance the market. The theoretical net import requirement by 2016 is put at 44.7TWh, which could remain close to this level to 2021 if investment is not increased dramatically.
BMI View: As the public says no to nuclear, Italy resigns itself to a future of greater import dependency, a continued high-level use of imported natural gas for generation and a desperate need to boost solar and wind power. Nuclear was always a controversial and generally unpopular option but, as in the UK, the government saw it as the easiest route to a low-carbon generating portfolio. Italy now faces a major challenge in securing adequate supply and avoiding a massive power import requirement.
Italy banned nuclear power generation in a 1987 referendum. Plans were then reintroduced for the establishment of nuclear generating capacity that could help the country meet its emissions targets. Then, in the wake of Japan’s Fukushima accident, former Prime Minister Silvio Berlusconi was forced by a popular referendum to accept the rejection of his nuclear power plans. The new political leadership is unlikely to rock the boat and can therefore expect a challenging time in securing Italy’s energy future. Key trends and recent developments in the Italian electricity market include:
Italy’s energy regulator has announced proposals to raise the return on investments in power transmission, distribution and measurement included in the electricity tariffs in 2012-2015, expected to boost the revenues of the power grid operator Terna and other utilities. The regulator’s website laid out plans to increase returns from 6.9% to 7.2% in the next regulatory period. It also proposed to raise investment reimbursement in power distribution from 7.0% to 7.4% and from 7.2% to 7.4% for investments in power meters.
During the 2011-2016 period, Italy’s overall power generation is expected to increase by an annual average of 1.11%, to reach 291TWh. Driving this growth is an annual 2.37% gain in gas-fired and a 4.90% rise in renewables-based electricity supply. Coal-fired generation is expected to fall by 2.03% per annum, with the use of oil-fuelled generation dropping by an average 5.00%.
Following an increase in 2011 real GDP of an estimated 0.8%, BMI forecasts average annual growth of 1.2% between 2011 and 2021. The population is expected to remain around the 61mn level throughout the forecast period, and net power consumption looks set to increase from 297TWh to 315TWh by 2016, rising further to 330TWh by 2021. During the 2011-2016 period, the average annual growth rate for electricity demand is forecast at 1.16%, but slowing somewhat later in the decade to an average 0.98% in 2016-2021.
Thanks partly to the forecast modest rise in net generation, growth of which barely matches that of the underlying demand trend, Italy’s power supply shortfall is likely to remain significant. A broadly stable percentage of transmission and distribution losses at around 7% will do little to help balance the market. The theoretical net import requirement by 2016 is put at 44.7TWh, which could remain close to this level to 2021 if investment is not increased dramatically.
Contents
Executive SummarySWOT Analysis
Italy Power SWOT
Global Industry Overview
Regional Industry Overview
Industry Forecast Scenario
Italy Snapshot (Macro)
Country Snapshot: Economic and Demographic Data
Country Snapshot: Power Sector
Italy Forecast Scenario
Electricity Generation and Power Generating Capacity
Table: Italy Total Generation Data
Table: Italy Total Generation Data
Table: Italy Electricity Generating Capacity Data
Table: Italy Electricity Generating Capacity Data
Thermal
Nuclear
Hydro
Renewables
Electricity Consumption
Table: Italy Total Consumption Data
Table: Italy Total Consumption Data
Transmission & Distribution, Imports & Exports
Table: Italy Electric Power Transmission And Distribution Losses Data
Table: Italy Electric Power Transmission And Distribution Losses Data
Table: Italy Trade Data
Table: Italy Trade Data
Key Policies/Market Structure
Regulation and Competition
Pricing
Table: Electricity Prices In the EU Member States, As Of June 2011
Business Environment
Regional Risk/Reward Ratings
Developed States Power Risk/Reward Ratings
Power Risk/Reward Ratings
Italy Power Rating
Rewards
Risks
Competitive Landscape
Enel
Edison
Terna
Endesa
Electrabel
Company Monitor
Enel
Market Position
Glossary of Terms
Table: Glossary of Terms
Methodology And Sources
Industry Forecasts
Power Industry - Data Methodology
Generation and Consumption Data
Electricity Generation Capacity Data
Power Risk/Reward Ratings Methodology
Table: Power Risk/Reward Indicators
Sources Skip to top