Making Italy an electricity hub in the Mediterranean; this certainly strategic and important issue for the Italian and European energy market has been debated for some years now. What opportunities and what limits of this strategy? But, above all, what are the goals to pursue?
existing interconnections. First of all, it is worth remembering that Italy is already an electricity hub in the Mediterranean in a certain sense. Of course, there is room for improvement in terms of grid congestion, but thanks to the numerous investments made by the operator of the NTG (national transmission grid, i.e. Terna) Italy is currently one of the countries with one of the most robust electricity frontiers in the world. Europe, with 22 interconnection lines already active: 12 with Switzerland, 4 with France, 2 with Slovenia, 2 with Corsica, 1 with Austria and 1 with Greece. What were the drivers of these investments? Essentially two:
1. Get cheap electricity;
2. Increase the security of the electricity system in Italy (and neighboring countries) in the event of a blackout.
The new interconnection projects. About five years ago discussions began on new interconnection projects, in particular with the Balkans and North Africa. What prompted you to hypothesize these new lines? While we are aware of the excessive simplification of the proposition that follows, the answer is one: importing electricity from renewable sources to achieve the European objectives for 2020. It seems incredible today but certainly not then: it is worth remembering that the official government documents estimated at 8 GW the maximum theoretical potential that can be installed with photovoltaics in Italy (while today we are already over 17 GW). And, as we will see, the opposite could paradoxically hold true, namely exporting electricity to countries that have a strong need for it.
Old and new priorities for the Italian electricity market. Since 2008, as is evident, many things have changed. The 2020 electricity targets set by the EU were achieved eight years in advance; the installed capacity of the Italian electricity park is more than double the peak demand; consumption has stopped growing and has begun to decline; plants powered by fossil fuels, especially gas, work less than 3.000 heq per year. All in a context in which the price of electricity for end users does not seem to fall or is falling very little. The priorities for the Italian electricity market have therefore profoundly changed compared to five years ago:
1. Decrease the cost of electricity for end users;
2. Finding new markets/sectors for fossil fuel plants that run on narrow gauges and in many cases are close to bankruptcy (some have already been demolished).
The construction of new electricity infrastructures, whatever they are, will have to affect at least one of these two points. In a period of scarce financial resources and economic crisis, we cannot afford to "digress".
Opportunities and risks of new interconnections. Having said all this, how does the project to make Italy an electricity hub in the Mediterranean fit into all of this? The answer is not unique. Let's talk about North Africa: in a context of production overcapacity and declining demand, spending on infrastructure intended to import green electricity loses most of its reasons. Some sensational outputs from the Desertec project (Siemens, Bosch) prove it. North Africa has a great need for energy and, perhaps, an interconnection could find justification in the export of energy from Italy to North Africa. But here, unfortunately, a significant problem arises: that of prices. As is known, tariffs in North Africa, mostly prices administered by the government, are considerably lower than in Italy and in Europe. It should be added that the sword of Damocles of the Sorgente-Rizziconi power line hangs over the connection projects with North Africa: on this see the article by Stefano Clerici in this masthead.
At a time like the present, however, it would seem preferable for new plants to be built on site to meet local needs: this is a significant opportunity for Italian industry. This applies both to renewables but also to fossils; on this last point, it is worth mentioning that RWE is transferring some of its CCGTs to Turkey. It could also be a viable road from Italy. A very similar discourse also applies to the countries of the Balkan area.
The situation is different for the interconnections with Europe and, in particular, with France. As is known, France has a lower electricity price than Italy. Increasing imports from this country would certainly help reduce the cost of electricity in Italy. On the other hand, in a situation of over-capacity, expanding imports could lead to the bankruptcy of numerous plants with all the necessary employment, industrial and, why not, fiscal consequences. It should also be specified that in our opinion an increase in energy dependence is not desirable.
However, increased interconnection with France and other European countries could also have positive spillovers. While it is true that France has lower electricity prices than Italy, it should also be noted that its power plants are among the least flexible in Europe. The increase in production from non-programmable renewables is posing serious problems for the French electricity system. In this context, Italy could play an important role as a "stabilizer" of the French market (and in the future also of other countries). New demand (moreover at peak prices) for the Italian CCGT and pumping plants which in 2011, according to GSE data, worked on average for 2.633 and 249 (!!!) hours respectively.
Conclusions: Italy as a European hub. In conclusion, Italy has all the characteristics to play the role of electricity hub in the Mediterranean. However, given the current conditions of the market, the role of hub would probably be much more useful to Europe and, in particular, to countries such as France and Germany which, as mentioned, lack flexible production. In this context, our country could truly play a very significant "stabilizing" role, with positive effects on the Italian electricity system as well as on the European one more generally.
