Italian National Energy Strategy 2017 - Ministry of Economic Development - E3s workshop "CHALLENGES OF THE ENERGY TRANSITION AND IDEA CREATION" ...

 
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Italian National Energy Strategy 2017 - Ministry of Economic Development - E3s workshop "CHALLENGES OF THE ENERGY TRANSITION AND IDEA CREATION" ...
Ministry of Economic Development
            Directorate General for Security of Supply and Energy Infrastructure

 Italian National Energy Strategy 2017

E3s workshop “CHALLENGES OF THE ENERGY TRANSITION AND IDEA CREATION”

                                 March 6, 2018
                            ENEA headquarters in Rome
Italian National Energy Strategy 2017 - Ministry of Economic Development - E3s workshop "CHALLENGES OF THE ENERGY TRANSITION AND IDEA CREATION" ...
From hearings in Parliament to adoption:
 timeline of the drafting process of NES 2017
        2016                                                                        2017

 Nov.          Dec.         Jan.         Feb.        March           Apr.     May          June        July         Sept.       Oct.         Nov.

                Preliminary Analysis: vertical working groups
               (Renewables, Energy efficiency, Electricity market,
                Gas market, Oil market and Logistics, Scenarios)

 Stakeholders involved: ENEA,
                                            Trade Unions
RSE, ISPRA, GSE, GME, SNAM,
                                              involved
            Terna

                                                    Workshop         Regions
                                                  with experts       (13/04)
                                                     (14/03)
                                                           Autohorities
                                                              (5/04)
                                                                G7 EMM
                                                                (9-10/04)
                                          Parliament's 1st             Parliament's 2nd
                                           hearing (1/03)               hearing (10/05)

                                                    Parliamentary consultations                                          Results presented in
                                                                                                                          Parliament (24/10)
                                                                                            Extensive public
                                                                                              consultation                       Interministerial Decree
                                                                                            June 12 – Sept. 12                        signed (10/11)

                                                                                                                 Finalisation

                                                                                                                                                1
Italian National Energy Strategy 2017 - Ministry of Economic Development - E3s workshop "CHALLENGES OF THE ENERGY TRANSITION AND IDEA CREATION" ...
NES 2017 is based on evidence, input and contributions emerged in
   national and international meetings and a broad public consultation
       Preliminary                                                     G7 Energy Minister’s
      Consultations                       Workshop                          Meeting                     Public consultation

Engagement of associations       5 workshops with leading            International debate about      Over 250 contributions from
and social partners (almost      international experts in order      improvement of our security     companies, public
40) to collect suggestions       to get contributions                of supply. Commitment to        administration, citizens,
and contributions                concerning:                         achieve and exceed              academia. Detailed results
concerning:                                                          environmental and               presented in Parliament. Main
                                                                     decarbonisation targets:        concerns and requests:

 • critical issues                • environmental and                 • energy system security        • speed up environmental
 • policy and expected results      decarbonisation targets,            through diversification of      sustainability of the energy
                                    evolution of electricity , gas      supply sources                  system
 • interaction between
                                    and oil retail market             • growth of LNG                 • effects on prices
   stakeholders
                                  • scenarios (e.g. oversupply        • RES integration               • security of supply
                                    in the LNG market)                • energy efficiency             • environmental impact of
                                                                      • low carbon transport            new technologies and of
                                                                                                        the energy transition

                                                                      Paris COP21 Agreement           2050 energy policy
                                                                      commitment confirmed            projections

                                                                                                                                2
Italian National Energy Strategy 2017 - Ministry of Economic Development - E3s workshop "CHALLENGES OF THE ENERGY TRANSITION AND IDEA CREATION" ...
The scenario has been elaborated considering the trend of
the EU and national energy context by 2030 and 2050
                        Constraints and variables defining the scenario

• EU constraints concerning Energy Efficiency and
  non-ETS Emissions
• Macroeconomic variables: GDP, population,
  components per family
• Commodities and CO2 prices defined in the EU
  scenario
• Net electricity import/export balance which is                 NES SCENARIO 2017
  influenced by the evolution of Member States' policies
  (e.g. nuclear reduction in France and coal in Germany)
• National policies in terms of transport infrastructures
  and logistics
• Use of alternative forms of mobility
• Long term COP21 goals

        Because of the several and changeable variables of the energy scenario, the
                NES must be FLEXIBLE with respect to scenario evolution
                                                                                      3
NES 2017 & the five dimensions of the Energy Union

                                                          • Extension of security, suitability and quality of gas and electricity networks
1. Security, solidarity and trust                           through
 Diversifying Europe's sources of energy and                  – more RES and new European scenarios;
ensuring energy security through solidarity and
                                                              – GAS flow management and growing demand;
    cooperation between Member States.
                                                              – GAS sources branching out for geopolitical reasons

  2. A fully-integrated internal
          energy market                                  • Structural solutions to regain price gap:
 Enabling a free flow of energy throughout the EU             –   Reset/reverse gas spread between PSV and TTF
  through adequate infrastructure and without any             –   Progressive convergence of EU generation mix and reducing cost of renewable sources
technical or regulatory barriers – an efficient way to        –   Measures to protect energy intensive industries
secure supply and give consumers the best energy              –   Reducing energy expenditure through efficiency and technology
                        deal.

          3.Energy efficiency                            • Increased investment in energy efficiency
Energy efficiency first - improved energy efficiency
 will reduce our dependence on energy imports,
                                                              – New focus on residential and transport
  reduce emissions and drive jobs and growth.                 – continuing best practice in manufacturing and services

      4. Climate action -                                 • Italian Climate&Energy Plan considering:
  decarbonising the economy                                   – Further impulse to the RES
EU ETS, a roadmap towards low-emission mobility               – AFID & advanced biofuels and biomethane
 and an energy policy which makes the EU world
     leader in renewables. Paris Agreement,                   – phase out of coal-fired power generation by 2025

                                                          • Consolidation of efforts to advance clean energy R&D
  5. Research, innovation and
                                                             – double public funds for R&D for clean energy R&D (MI)
        competitiveness                                      – increase funds for private R&D and innovation (Industry 4.0)

                                                                                                                                                        4
NES 2017 & national priorities: the Energy Trilemma

                          NES 2017 goals consistent with the EU Energy Plan

                                • Structural solutions to regain price gap:
     Competitiveness                 – Reset/reverse gas spread between PSV and TTF
Energy price gap reduction,
                                     – Progressive convergence of EU generation mix and reducing cost of
aligning with EU prices, in a
                                       renewable sources
context of internationally
                                     – Measures to protect energy intensive industries
rising prices
                                     – Reducing energy expenditure through efficiency and technology

       Environment               • New 2030 targets in the EU context and trend until 2050
Achieve environmental goals      • Italian Climate&Energy Plan considering:
and Climate&Energy targets           – Increased investment in energy efficiency
     in line with COP21              – Further impulse to the RES

                                 • Extension of security, suitability and quality of gas and electricity
          Security                 networks through
  Improve security of supply        – more RES and new European scenarios;
    and system flexibility          – GAS flow management and growing demand;
                                    – GAS sources branching out for geopolitical reasons

    Considering the reciprocal interactions and the limited availability of resources, the goals are
       pursued by optimizing costs and benefits and by a technologically neutral approach
                                                                                                           5
The National Energy Strategy has to consider proposals for
 environmental goals shared in Europe
                                                                                                                                                              Proposed binding targets at
                                             Italian goals                                       Italian Current situation                                   national and/or European level

                                                    2020                                                         2015                                                              2030
                                                                                                                                                              EU Commission proposal to
                                                                                              ~1,4%1 of annual savings
 ENERGY                        1,5% annual savings from                                           through policies in the
                                                                                                                                                             keep compulsory 1,5% annual
EFFICIENCY                                  active policies                                                                                                  savings through active policies
                                                                                                    2014-2015 period
                                                                                                                                                                 for each Member State

                                                                                                                                                               EU Commission proposal of
                              non-ETS emissions reduction                                    ~17% non-ETS emissions                                           non-ETS emissions reduction
EMISSIONS                        of 13% with respect                                            reduction with respect to
                                                                                                                                                              of 33% for Italy with respect
                                     to 2005 levels                                                   2005 levels
                                                                                                                                                                    to 2005 levels

                                  renewable penetration                                            17,5% of renewable                                             EU Commission proposal
                               - power, H&C and transport -                                      penetration in total final
RENEWABLES
                                                                                                                                                                   for a EU goal of 27%
                                                                                                     consumption
                                   at 17% of total final                                                                                                          of total final consumption
                                                                                               (33,5% power, 19,2% H&C
                                       consumption
                                                                                                  and 6,4% transport)

 1 1,4% is the result of savings from active policies compared to total saving and factoring in the flexibility foreseen in the Directive that Italy has taken advantage of; 2015 data: estimate

 Source: Eurostat; Clean Energy Package; PAEE 2014; MiSE

                                                                                                                                                                                                   6
EU 2020 target for RES already achieved. By 2030, Italy sets a 28%
share of RES in total final energy consumption

  Renewable energy sources share in total final
             energy consumption                                         RES sub targets

                                                            Power generation
                                                                                          55%
                                                                33,5%          26%
                                                28,0%

                                                            Heating&Cooling
               17,5%                     17%
                                                                                          30%
                                                                19,2%          17%

                                                            Transport

                                                                               10%        21%
                                                                 6,4%
                2015                 2020
                                     target      2030
                                                                2015            ta
                                                                               2020       2030
                                               NES Target
                                                                                      NES Targets

Fonte: PAN, SEN 2013, ENEA, ISPRA, RSE
                                                                                                    7
Energy efficiency targets: 10,2 Mtoe from consumption reduction
(residential and transport)

   Evolution of savings through energy efficiency                               Remarks
                                                                 • The change in policy mix is required to
                                    10,2 Mtoe
                                                                   achieve CO2 reduction targets in the
                                                                   non-ETS sectors
                                       3,7                          – Focus on residential and transport
                                   (34% - 38%)
                                                   Residential
                                                                 • Such mix allows to reach the CO2 non-
                                                                   ETS emissions reduction within a
       5,0 Mtoe                        2,6                         scenario of constant GDP growth
                  1,2              (21% - 25%)
                                                   Transport
                                                                    – over 1% y-o-y GDP growth between
      0,1       (24%)
     (1%)               0,7
                                       2,3                            2021 and 2030
                        (15%)
                                   (13% - 17%)
                                                   Services
                                                                • Technological progress and research
              3,0                                                 will facilitate innovation in the
                                       1,6
            (60%)
                                   (24% - 28%)
                                                   Manufacturing residential and transport fields
                                                                     – e.g., heat pumps, smart homes,
     2016 – 2020                   2021 – 2030                          construction equipment for deep
                                                                        renovation, batteries, etc.
       In 5 years                    In 10 years
  (~ 1 Mtoe per year)           (~ 1,0 Mtoe per year)

                            Keeping the pace of consumption reduction,
                           focusing on residential and transport sectors
Italy has decided for the complete phase-out of coal-fired power
      generation by 2025
                                             Scenario ~55% RES &                                Scenario ~55% RES &
                                              BAU coal phase-out                               complete phase-out coal

     coal plant operating
     coal plant decommissioned                              -2GW coal                                                  -8GW coal
                                                            capacity                                                   capacity                                      !
                                                             At least 2–4                                              At least 15-18               Long authorization
                                                             Mton of CO2                                               Mton of CO2                  processes building
                                                             emission avoided                                          emissions avoided            new infrastructure

                                                    Torrevaldaliga Nord (1.980MW)
                                          Fiumesanto (640MW)
                                                          Brindisi Sud
                                                           (2.640MW)
                                           Sulcis (590MW)
                                                                              BAU                                                                   NES 2030
                                                                            scenario                                                                scenario

Investment in security and
system adequacy (€Bn):                           BAU phase-out                                      vs. BAU phase-out

                                                            6,7                                              + 2 – 2,4
 Network                                          essential interventions in           (additional interconnection to Sardinia and improvement of
                                            Terna development % defense plans                            infrastructure in Sardinia)

 Flexibility resources*                                4 – 4,5                                                    -
 Additional generation                                      0,9                                                 + 1,3
                                                                                                     (+1,9GW new OCGT/ CCGT
 capacity**                                     (1,5GW new OCGT/CCGT)
                                                                                                     of which 0,4GW in Sardinia)

 Additional gas infrastructure                               -                                                  + 0,5
                                                                                               (infrastructure to supply LNG to Sardinia)

 Total Investment                                  11,6 – 12,1                                            + 3,8 – 4,2
 * storage, pumped storage and other flexibility resources
                                                                                                                                             !
                                                                                                     Stranded assets
 ** of which at least 50% OCGT; in Sardinia possible replacement w/storage
                                                                                                   need to be addressed
 Source: Terna, MiSE                                                                                                                                            9
Continuing need to improve system resiliency & taking advantage
of new market opportunities

  1• gas has the role of back up of renewable energy sources, with growing importance linked to the
     growth of RES in the electricity mix
  2• The Italian gas system fulfils with a limited margin the EU’s so called “N-1 rule", but the security of the
          system, in case of negative events, shows some risks considering current flows
             – Russian gas is 46%1 of gas imports to Italy in a year and 2/3 of daily peak demand in the winter season

             – diversification of routes and sources of supply is essential to increase the market power of consumers
               when negotiating with external suppliers and to limit abuse of dominant position and pivotal role of
               suppliers in determining gas prices in the final market
  3• The increase of flexibility of supplies will allow Italy to play an increasing role in the EU market, by
     means of possible reverse flow (trough the current exit points in Passo Gries (CH) and Tarvisio (A))
     and for possible solidarity measures foreseen at EU level by new SoS Regulation
  4• The increase of LNG import capacity will allow to take advantage of a LNG market in oversupply
     condition until 2024-2025

1. 2015   and 2016 average
                                                                                                                        10
Reconversion and re-use of refineries to support
      the refining sector
Oil product demand (Mtoe)
100

 50

  0
              2005                     2010               2015                         2020              2025              2030
                       Five refineries reconverted                             Possible measures to keep operating refining
                      (~20% total refining capacity)                              plants and areas in the medium term

                                              • Marghera and Gela are now
                                                bio-refineries               1 Possibility to convert other refineries into bio-
                                                  – Italy has a leadership     refineries, linked to the decrease of oil product
                                                     role in this sector       demand and to the increase of advanced biofuel
                                              • Mantova, Roma and              demand
                                                Cremona are now fuel
                                                deposits
                                                                             2 Consolidate position of Italian refineries by
                                                                               integrating them in one or more refining systems ,
                                                                               more competitive and sustainable, promoting refining
                                                                               consortia

        refinery operating
        refinery reconverted

      Source: MiSE; ENEA, RSE, ISPRA                                                                                               11
Italy is part of the EU SET-Plan and is a promoter of Mission Innovation
launched at COP21 to boost frontier projects for clean energy technologies

                           • International programme joined by 22 nations plus EU Union with the
                             aim to promote technology innovation to support energy transition by
                             means of doubling of public funds for cleantech research
                               – Italy committed to double public funds for R&D for clean energy
                                 (from 222 Million Euro in 2013 to 444 Million Euro in 2021)
                           • Italy has a co-leadership role for development of Smart Grids
                             technologies

                           • Reference Program for investment at national, regional and UE level, and
                             for private investment to support R&D and innovation in the energy sector
                           • The main implementation program of the SET Plan is Horizon 2020 with
                             a budget of 6 billion Euros in 2014-2020

                                                                                                    12
Governance: NES 2017 & Climate and Energy Plan

                                2017                                2018                                20191                         2020 – 2023     2023 - 20241

                                                                                                                                   NES 2020          NES 2023
 NES                  NES 2017
                                                                                                                                   (update           (update
                                                                                                                                   NES 2017)         NES 2020)

Climate                                                                                                                            Enforcement of
                                       Discussion with EU
                                                                                               Final Plan to be                    the Plan (2020)
  and                                  Commission, consultation                                                                                      Revision of the
                                                                                               notified to EU
Energy                                 with other Member States                                                                                      Plan (2024)
                                                                                               Commission                          Monitoring of
 Plan                                  Presentation of Draft Plan
                                                                                                                                   implementation

 1. The notification date of the Climate and Energy Plan and the update schedule could change based on the revision of the Governance Directive
                                                                                                                                                                  13
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