Energy infrastructures key for recovery

The energy supply chain could become the driving force behind recovery post COVID-19, and Terna is ready to play a leading role. But in order to take up the challenge to the full, companies are launching a new appeal to government to start a plan involving simplification and cutting red tape as soon as possible to help businesses make investments to contribute to Italy’s recovery, promote employment and drive the implementation of the European Green New Deal aims. The energy transition is unavoidable, but it won't happen all on its own.

The pandemic that has affected Italy and the world has already started to have a serious impact on the economies of the most affected countries, but has also left them with an urgent need for change, which could yet become an opportunity for development. The acceleration of digitisation and increased awareness of the need to rebuild by focusing on more sustainable growth models are the foundations on which to base an economic recovery that will necessarily need to make the energy transition its central focus.

“It’s a unique, possibly once-in-a-lifetime, opportunity to create a new future for Italy, with a focus on investments for a green recovery based on maximum efficiency and effectiveness for all work”, commented Giuseppe Ricci, President of Confindustria Energia during the “Energy infrastructure for Italy’s recovery and the development of the Mediterranean area” webinar. An event which involved representatives from both institutions and businesses to discuss the challenges that the sector will have to face in order to enable Italy to recover and cater for the demands of an industry that knows it could play a key role but needs planning and a system-based approach to be able to do so.

“Today, Italy needs to accelerate investment in infrastructure to enable us to make a swift exit from the post-pandemic economic crisis. Our development projects for a secure, efficient and decarbonised electricity system are an immediate force for the Italian economy”, confirmed Terna’s CEO Stefano Donnarumma in his address.

The stakes are high. According to the study “Energy Infrastructure for Italy and the Mediterranean”, drafted by Confindustria Energia, in the 2018-2030 period the Italian energy chain is capable of mobilising € 110 billion in investments on primary infrastructure, with +0.8% impact on GDP on average over the next decade and an added value of € 350 billion. With these resources, there is potential for 135,000 people to be employed per year until the end of the plants’ useful life, providing an annual reduction of 75 mt CO₂ produced, but also to meet the decarbonisation goals, transforming Italy into the fulcrum of the Euro-Mediterranean Green Deal.

Terna’s intends to do its part. The company that manages the Italian electricity grid is planning, by 2030, € 14.5 billion in investments to encourage the dispatching of electricity produced using non-programmable renewable sources and promote energy efficiency, plus an additional € 4.9 billion to be allocated to the implementation of complementary infrastructures such as storage systems and balancing services for the grid. In order for these plans to become reality, however, simplification, clearer and faster authorisation procedures and explicit rules will be essential, as will the integration and collaboration between markets.

“Today, an important Terna initiative reaches completion in about 10 years, 7 of them for authorisation and 3 of them for completion”, said Donnarumma, to identify in a few words the obstacles that need to be overcome in order to enable recovery. “Shortening authorisation deadlines and making them more fixed is in everyone's interest if we want to lift Italy back onto its feet. Every billion in investments made by Terna, actually means about 3 billion in terms of GDP and creates several hundred jobs besides”, said the CEO of the measures of the Simplification Decree, considered useful but not yet sufficient.

In order to develop a successful dialogue with institutions, “we are preparing some requests and suggestions that will be submitted to the relevant offices over the next few hours”, said Donnarumma, highlighting that, “on the timing, I believe that decisiveness is fundamental. We need clear, precise rules that are absolutely respected. This will provide companies with the chance to plan in the correct manner”.

The CEO then focused on recent assessments made by Cassa Depositi e Prestiti, Terna and Snam on the implementation of a possible investment plan for the South: “A potential intervention of € 5 billion could generate up to 10,000 jobs, between direct employees and allied industries, in the southern Italian regions that need it most”. But focusing on energy transition is not only essential for the domestic economy, “Terna will also play a key role in the energy transition through the development of its cross-border interconnections, which will allow Italy to strengthen its role as the energy hub of the Mediterranean area,” said the CEO.

Italy’s geographic location and its climate characteristics present a unique opportunity to create new collaborations in the Euro-Mediterranean area, exporting our energy model to countries with unparalleled demographic prospects and potential for energy development. The OME (Mediterranean Energy Observatory) estimates € 1,900 billion investments in the area, € 900 billion of which dedicated to sustainable energy development on the South and East coast. Strengthening synergies and fostering the integration across the electricity and energy market therefore becomes fundamental. Terna, for its part, included electricity connection between Italy and Tunisia by 2027 in its 10-year Development Plan and advocated for the creation of Med-Tso (Mediterranean Transmission System Operators) and Med-Reg, for which the EU Commission asked that criteria be developed for the definition of Mediterranean Projects of Common Interest, confirming Italy’s central role in the Euro-Mediterranean Green Deal between Europe, North Africa and the Middle East.