Energy transition,
what is it and why is it so important?

When it comes to reducing emissions and safeguarding the environment, as the operator of the Italian energy transmission grid Terna has an important responsibility towards society and its future.

Currently, fossil fuels still account for over 80% of global energy consumption; a change of course is essential to reduce our dependency on this type of energy and limit the global temperature increase.

The transition under way will radically change the appearance of the electricity system. By focusing on projects and investments in network infrastructures, Terna is laying the foundations to optimise and support the current transformation process for an appropriate, safe and efficient system with an increasing focus on renewable energy sources.

For a leading transmission and dispatching operator, this commitment is formalised through investments in skills, technology and innovation to optimise the management of grid development and maintenance activities (Transmission Operator) and to ensure the safe and quality planning and management of the electricity service (System Operator).

Thanks to the unique expertise of its employees and its constant dialogue with the territories, Terna is able to contribute to the growth and development of sustainable projects in Italy.

The scientific community is united in its opinion that climate change is closely linked to human activity. The average temperature of the Earth has risen by approximately 1°C since the end of the nineteenth century, predominantly as a result of emissions of carbon dioxide and other greenhouse gases.

However, the most consistent rise in temperature has taken place in the last fifty years, with a trend of around +0.2°C every decade.

The leading cause of global warming has been identified by the scientific community as the greenhouse effect, which occurs when certain types of gases, such as carbon dioxide (CO₂), nitrous oxide (N₂O) and methane (CH₄), prevent heat from leaving the atmosphere. These elements are joined by so-called “chlorofluorocarbons”, or CFC gases, artificial substances used in various industrial processes and responsible for the now infamous “hole in the ozone layer”.

In the last century, the use of fossil fuels such as coal and petrol, has drastically increased the concentration of CO₂ in the atmosphere.

The consequences of this phenomenon are already being felt: between 1993 and 2016 Greenland lost approximately 281 billion tonnes of ice per year, while Antarctica lost around 119 billion.

Sea levels have also risen, increasing by approximately 20 centimetres in the last century. Similarly, the acidity of the oceans has increased by 30 percent since the onset of the industrial revolution, resulting in serious consequences for marine and plant life.

Above all, climate change is causing substantial changes in precipitation, with significantly higher rainfall in certain parts of the world and dangerous reductions in others. Droughts and heatwaves will increase both in frequency and intensity, with particularly serious repercussions for agriculture.

In light of global warming and the risks it poses for the immediate future, to prevent temperatures from rising excessively (over the 2°C defined by the Paris Agreement) the global economy must aim to cut its carbon intensity¹ by 6.4% each year until 2100.

Reaching this target would require a scientifically impossible reduction in emissions (and therefore in performance) of current fossil fuel plants. In layman's terms, this would be the equivalent of a car in 2050 using one litre of fuel per 200 kilometres, compared to the 20 kilometres managed by today's vehicles. This means that, in order to meet these targets, we need to develop technology that burns fossil fuels in a way that increases its energy efficiency tenfold, which would break every law of thermodynamics. How can we solve this problem?

The only viable solution is to focus on radical energy transition, which enables us to achieve the ambitious goal of combating climate change: only by decommissioning non-renewable and highly polluting energy sources can we feasibly stabilise the already seriously high concentration of CO₂ in the atmosphere.

Energy transition is the transition from current sources of energy production, based mainly on the use of non-renewable sources, such as oil, gas and coal, to a more efficient, less polluting mix of renewable energy.

Over the course of history, we have already seen significant energy transitions. Think of the move from wood to coal consumption that took place during the Industrial Revolution or the introduction of nuclear energy. But due to the increase in demand for energy, today's renewable sources are not capable of replacing the 'old' energy production systems, but rather complement them.

Between 1990 and 2015, the percentage of renewable energies used on a global level remained almost unchanged, with an insignificant increase from 13% to 14%. The reason for this lies in the fact that several countries had only recently entered the industrial world, drastically increasing their energy demand, which was primarily met by the traditional, already widely available and more affordable, pollutant sources.

Until only a few decades ago, due to the lack of technologies capable of replacing non-renewable sources, it was hard to imagine a solution to this problem. However, it is now possible to produce energy from renewable sources and transport it to where it will be consumed, at increasingly competitive prices, thanks to the transport and distribution networks.

In order to address the issue of emissions, numerous initiatives have been launched by international organisations: only joint action between different countries can lead to concrete results on a global level in terms of climate change. In Italy’s case, there are three main sources to consider.

The long-term aim is outlined in the “2050 - A Clean Planet for All” strategy presented by the European Commission in November 2018. This strategy demonstrates how Europe can guide the process of reducing emissions through a series of policies and initiatives that involve industrial policies, academic research and active citizenship

In terms of renewables, the plan aims to cover 30% of final consumption with renewable sources. The contribution of renewables to final consumption is shared across 55.4% of the electricity sector, with 33% in the thermal sector and 21.6% in incorporation in transport - for example, through the massive spread of electric cars which is expected to reach six million vehicles in 2030.

With the total phase-out of coal-fired power plants set for 2025, renewables are expected to increase—from their current share of 34.1%—thanks to technological developments and the upgrading of currently active plants, in particular photovoltaic and wind power plants. Energy efficiency solutions will therefore become fundamental to encouraging lower consumption.

In this context, electricity grids play an even more central and strategic role than ever before, with a progressive transformation of the constant energy flows from large production plants to consumption centres and infrastructures capable of dynamically managing and sorting energy flows, which vary over time and space due to the strong uncertainty of renewable sources.

As the International Energy Agency states, every Euro invested in renewable energy sources must be matched by more than one Euro invested in the development of infrastructure to transport the energy produced. It is no use installing wind turbines where the wind is strongest—in the open sea for example—if you do not have an electricity grid capable of transporting the energy produced to the most populated areas where it is needed most.

This last point has become fundamental for Terna in its role as 'enabler' of the energy transition towards production based on renewable energy. The Group's activities and mission almost completely correspond with some of the United Nations’ Sustainable Development Goals.

Terna's main tools for achieving these objectives are:

In particular, Terna's commitment to promoting decarbonisation revolves around the investment of significant resources to facilitate the systemic development of renewables.

This means that the transmission grid operator is constantly adapting the infrastructures so that they can transport the energy produced by renewable sources, as well as grid planning and real-time management of the electricity system.

Electricity is in fact very hard to store and must therefore be consumed as it is produced, ensuring that consumption and production are instantaneously balanced to avoid issues in service continuity.

For example, in the evenings, the energy produced from solar panels decreases rapidly, yet it is specifically during the afternoon that the peak consumption for the entire day is concentrated. On the contrary, peak production of photovoltaic energy is concentrated during the central daytime hours and, in future energy scenarios, the need to accumulate this energy in excess of consumption will increase progressively. Moreover, the northern Italian regions require a greater amount of energy, while the majority of renewable energy plants are concentrated in the south due to the natural availability of sun and wind.

To lead Italy through the energy transition, while continuing to guarantee the quality and safety of the electricity supply, the following five factors must be considered at all times.

Alongside the development of the national electricity grid, Terna is working to increase the interconnection capacity with neighbouring countries to increase the integration of the Italian and European grids, therefore guaranteeing energy exchange and services (for example, allowing the use of pumping plants in the north of Italy to supply foreign services). This is the case with the Italy - France interconnection: 190 kilometres of underground power lines, crossing 25 municipalities in the province of Turin: a unique project in terms of engineering and technological solutions, thanks to the design and construction of the longest underground power line in the world, with a total capacity of 1,200 MW and a very low impact on the environment and the territory.

In general, Terna's investments in the energy transition focus on making the Italian electricity system more sustainable and efficient, as well as significantly reducing CO₂ emissions: a substantial contribution to the battle against climate change.