Positive results recorded by Enea, but Italy is still behind on the ‘Fit for 55’ objectives
During the third quarter of this year, energy consumption remained essentially stable (-0.3%), but there was a significant reduction in CO2 emissions (-8%) thanks to the reduction in the use of fossil fuels and the significant increase in renewable energy. Preliminary estimates for the whole of 2023 indicate a drop in consumption of 3% and emissions of 8%. These are the results of the latest quarterly update of the Enea analysis on the Italian energy system.
Francesco Gracceva, coordinator of the Enea quarterly analysis, underlined that in the third quarter consumption aligned itself again with GDP, industrial production and the climate, canceling the decoupling recorded in the last year and a half. Emissions recorded a significant decrease, mainly in the ETS sectors, i.e. the energy-intensive industry and electricity generation. In the first nine months of the year, electricity production saw a reduction in emissions equal to 15% compared to the previous year.
In the third quarter of 2023, the slight decrease in consumption was influenced by 40% drop in fossil fuels, which corresponded to a notable increase in renewable energy (+20%), above all thanks to the recovery of rainfall and hydroelectric energy. Overall, in the first nine months, gas was the main driver of the decline in consumptionfollowed by coal and oil, while renewable energy and the net import of electricity have recorded significant increases.
Another positive result is described by the Ispred index which evaluates the three crucial dimensions for the energy transition: decarbonisation, security of supply and energy price. In the third quarter, the energy transition summary index marked a 48% increase mainly thanks to decarbonisation but also, to a lesser extent, to energy prices. However, Gracceva underlined that the increase in renewable energy is not yet sufficient to reach the 40% target for 2030 set by the EU’s ‘Fit for 55’ plan.
From the point of view of energy security, despite the record levels of storage filling, Gracceva warned that in the event of prolonged cold peaks for Italy, critical issues could emerge. The collapse in Russian gas imports was offset by significant increases from other sources, but the decline in demand remains a key and entirely relative factor because it depends on the temperatures which are expected to drop in the coming weeks.
Once again, however, for Italy the problem arises on the technological front. In fact, among the aspects highlighted by the Enea Analysis there is a strong deficit in the trade balance of key technologies for decarbonisation. In practice, we need to import technological elements and tools capable of innovating energy production from other countries. In the first half of 2023, the deficit even exceeded i 3 billion eurosmainly due to imports of lithium-ion batteries, photovoltaic panels and plug-in hybrid vehicles.
Broadening the analysis to innovative capacity, Italy has consolidated strengths in construction, but shows signs of decline in the industrial sector. “Considering the industrial vocation of the Italian economy, this trend is particularly critical especially in comparison with Germany, which records an increase in specialization indices, reporting values above 1.5 in more recent years”, commented Gracceva.
The government is working on Integrated National Plan for Energy and Climate (Pniec) which must be approved by June 2024. Here the levers on which to act to reduce CO2 emissions are identified: renewable energy, biomethane, hydrogen, Ccus (Carbon Capture Use and Storage) technologies and energy efficiency. There will also be room for the Hard To Abate sectors for which the costs of renewal are very high and the technologies are not always mature enough to be implemented in production processes. Despite this, according to the Bcg report, the Pniec measures would allow emissions to be reduced by 2030, 38% compared to 1990. A result very far from the -55% objective set by the European ‘Fit for 55’ plan.
Savings as leverage
We therefore need a faster energy transition for Italian companies (and beyond). In this sense, an important lever can be the economic savings generated by renewable energy which in 2022 alone amounts to 521 billion dollars globally, as certified by the International Renewable Energy Agency (Irena) in the report Renewable Power Generation Costs in 2022 .
When considering the full life cycle savings of renewable energy capacity added in 2022 in non-OECD countries, Cost reductions will reach $580 billion globally.
These data certify the growth of green supply sources, accelerated exponentially by the fossil fuel price crisis, but can improve over time. In fact, in 2010 the global weighted average cost of onshore wind energy (systems installed in flat areas far from the sea) was 95% higher than the lowest cost of fossil fuels; in 2022, however, the global weighted average cost of onshore wind energy was 52% lower than the cheapest fossil fuel-based solutions.
The result was even improved by that of photovoltaic which, compared to the cheapest solution based on fossil fuels, cost 710% more in 2010 and cost 29% less in 2022.
All numbers that indicate how technological innovation is the path to follow both for the well-being of the environment and for the good of the treasury.