Installed capacity (2011) 118 GW Average electricity use (2013) 317 TWh Competitive supply to large users Yes | Share of renewable energy 38.5% (2013) Share of private sector in generation 100% | |
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GHG emissions from electricity generation (2007) 7.4 tons CO2 per capita | ||
The electricity sector in Italy describes the production, sale, and use of electrical power in Italy. The country's total electricity consumption was 297.3 TWh in 2013, of which 278.8 TWh (93.7%) was produced domestically (the remaining 6.3% was imported).
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According to its national energy plan, Italy plans to increase renewable power generation from all renewable sources to 26% of all electricity produced by 2020, covering 17% of its total energy consumption. In 2014, 38.2% of the national electric energy consumption came from renewable sources (in 2005 this value was 15.4%), covering 16.2% of the total energy consumption of the country (5.3% in 2005). Solar energy production alone accounted for almost 9% of the total electric consumption in the country in 2014, making Italy the country with the highest contribution from solar energy in the world.
Italy has abandoned nuclear power following a referendum in the wake of the 1987 Chernobyl disaster, and nuclear power in Italy has never been greater than a few percent of total power generation.
Italy has a high share of electricity in the total final energy consumption. The share of primary energy dedicated to electricity production is above 35%, and grew steadily since the 1970s.
Emissions of carbon dioxide per capita in 2007 were 7.4 tons, below the EU27 average of 7.9 tons CO2. Emission change 1990/2007 was 10% increase.
Cost of electricity
Italy has one of Europe's highest final electricity prices. In particular, unlike all other countries, price per kWh tends to be lower for lower consumption levels. This policy aims at encouraging energy saving. Higher final prices are also a consequence of the extensive use of natural gas, which is more expensive than other fossil fuels, and the expenses from renewable energy incentives, which is expected to reach a total cost of more than €10 billion in 2012.
Early years
The first electric power plants in Italy were carbon-fueled and were built during the end of 19th century near city centers. Plants had to be close to the place of consumption due to the use of direct current and low voltage electricity, which limits greatly the possible transmission distance. The first power plant was built in 1883 in Milan, near Scala Theater, to power the illumination of the building.
Following the development of high-voltage transmission on long distances, Italy began to utilize hydroelectric power. Several hydroelectric plants have been built on the Alps and the Apennines since the beginning of the 20th century. The first geothermal power station in the world was built in Larderello in 1904. Renewable sources met almost all of the country's electricity demand until the 1960s, when population growth caused an increase in electricity demand.
Nationalization
The electricity sector in Italy, private until then, was nationalized in 1962 with the creation of a state-controlled entity named ENEL, with a monopoly on production, transmission and local distribution of electric energy in the country. The new entity incorporated all the previous private companies operating in Italy since the end of the 19th century. The nationalization followed a general tendency in Europe after the Second World War: France and Great Britain nationalized their sectors in 1946 and 1957 respectively. This was seen as the only solution for an efficient and reliable electricity supply given the natural monopoly nature of this sector. The new entity, which absorbed more than 1000 previously private companies, had to face a rapid growth of electricity demand during subsequent decade, with consumption rising of about 8% every year. This demand was largely met with fossil-fuel powered plants. This trend changed partly after the 1970s oil crisis, which induced Enel to rethink its energy strategy. More investments were devoted to nuclear energy and electricity started to be imported from France to differentiate the supply. However, nuclear energy was abandoned in 1987 following a popular referendum, while imported energy still covers an important share of electricity consumption.
Privatization
The belief of a more efficient sector with a public monopolistic company progressively reversed since the 1980s. Enel was made into a joint-stock company in 1992, however still fully owned by the Ministry of Economy. The liberation of the electricity sector from government control started in late 1990s following European Union directives. Directive 96/92/CE of 1996 followed the tendency towards privatization. It was based on the adoption of different regulations for production and transmission: production and trading should be free and managed by private companies, while transmission and distribution, being natural monopolies, should be regulated by the state. This first directive suggested a progressive liberalization of the electricity market and the "unbundling", namely the clear separation of monopolistic activities from free-market activities in the companies involved in the electricity sector. This separation was effected by clearly separating budgets for different businesses.
The European directive was followed by the Italian legislative decree 79/1999 ("Decreto Bersani") of 1999. The decree created a path towards a complete liberalization of the market through gradual steps. Not only the European directive was followed, but the transition to the free market was planned to be faster, with more than 40% of electricity planned to be traded on the free market by 2002 and with a corporate separation of activities. Some of Enel's core activities were passed on other companies. The network was transferred to a new company, Terna, rensponsible for the management of the system. Moreover, the limit on Enel property share of Terna was set at 20%. Enel eventually sold its remaining share of the company in January 2012. In order to improve competition and to develop a free market for production, Enel was also forced to sell 15,000 MW of capacity to competitors before 2003. Following this, three new production companies were created: Endesa Italia, Edipower and Tirreno Power.
A new European directive, 2003/54/CE of 2003, and a subsequent Italian decree, requested a free electricity trading for all commercial clients from July 2004 and, eventually, a complete opening of the market for private customers from July 2007.