"More renewables to limit energy costs"

«In 15-20 years, paying electricity and gas bills will be the same as paying a tax for waste disposal». These words spoken by Stefano Donnarumma, Terna’s Chief Executive Officer, are set against the backdrop of the energy transition and it is no surprise that they formed the crux of his speech at #Italia 2030. La Rivoluzione Obbligata., the webinar hosted on 2 December 2021 by MoltoEconomia and the newspapers of the Caltagirone publishing group (Messaggero, Mattino, Gazzettino, Corriere Adriatico, Quotidiano di Puglia).

The event focused on the major changes that the energy industry - and Italy in general - will have to make in order to confront global climate change and the need to adapt development models to more sustainable parameters. In fact, the National Recovery and Resilience Plan (NRRP) provides for a major increase in renewable energy production, in line with the Next Generation EU targets.

At the moment, utility bills in Italy are soaring due to the sharp rise in the price of international gas imported from overseas, which meets 70% of the country’s energy needs. Moreover, further increases (up to 50% for gas) are expected in January 2022 on top of those seen in October 2021. But there is light at the end of the tunnel: «If, instead of 35%, the amount of energy produced by renewables was 65%, the European target we're aiming to meet in the next 10 years, the impact on utility bills would have been less than half what it was. I have no doubt that in 15-20 years energy costs for Italian citizens will be the same as paying a tax for waste disposal; basically, we won't pay for the commodity itself but rather for the infrastructure that manages and transports the electricity through the grid. In this respect, Terna’s role as a major operator of the Italian transmission grid is absolutely fundamental», explained Stefano Donnarumma. In this scenario, we would mainly pay for infrastructure management costs, while the cost of self-produced energy would be close to zero.

The Government has done the only thing possible to manage the energy price crisis and is covering system costs using taxpayers’ money, continued Terna’s CEO. «Yet the real solution would be to produce more energy autonomously, and the only way to do this in the short and medium term, so in the next 5-7 years, is to increase the installed capacity of renewables: solar and wind. And Terna’s role is to continue to operate the grid. Our ten-year development plan includes over 18 billion euro of investments to strengthen the green energy transmission system from the south of the country, where most of our energy is produced, to the north, where our consumption is greatest».

The Government is also keenly aware of the need to increase domestic green energy production, to the point that the NRRP includes major investments in renewable sources and provides for simplified authorisation procedures in the sector. According to the most recent estimates by the Minister of Ecological Transition, Roberto Cingolani, to achieve European and national targets Italy will have to install somewhere between 7 to 8 GigaWatt of additional capacity every year for the next ten years.

Meanwhile, the pandemic has involuntarily but effectively provided an important test bed for the energy sector: «It has helped us to understand that the central topic must be to increase investments in the grid to use all of the green energy we produce. Every euro invested in the energy industry generates 3 euro of positive returns on Italy's GNP». This «varies depending on energy consumption, which this year is increasing by 6-7%, just like GNP», adds Stefano Donnarumma.

The CEO concluded his speech by responding to a specific question about nuclear energy, a topic that has been widely discussed in recent weeks. His approach was cautious but unbiased: «The debate we’re having is a fair one, but the point is that the energy transition needs clean energy in the short and medium term, so in the next 5-6 years, and I doubt there is enough time to discuss and design a new-generation nuclear plant in that period of time, partly because we don't yet have all of the technology to do so».