An overview of the Italian Energy transition: the ... · In 2017, about 800.000 plants managed,...
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MEETING WITH TURKISH DELEGATION An overview of the Italian Energy transition: the electricity sector ENERGY IN MOTION TOWARD 2030 GSE GUARANTEES THE SUSTAINABLE DEVELOPMENT OF OUR COUNTRY PROMOTES RENEWABLE SOURCES AND ENERGY EFFICIENCY 28/11/2018
Transcript of An overview of the Italian Energy transition: the ... · In 2017, about 800.000 plants managed,...
MEETING WITH TURKISH DELEGATION
An overview of the Italian Energy transition: the electricity sector
ENERGY IN MOTION TOWARD 2030
GSE GUARANTEES THE SUSTAINABLE DEVELOPMENT OF OUR COUNTRY PROMOTES RENEWABLE SOURCES AND ENERGY EFFICIENCY
28/11/2018
• THE ITALIAN ELECTRICITY SECTOR
• GSE ROLE AND ACTIVITIES
• RENEWABLE TARGETS AND RESULTS
• LOOKING AT THE FUTURE: THE ROAD TO 2030
An overview of the Italian Energy transition
AGENDA
THE ITALIAN POWER SYSTEM
PRODUCTION
Liberalized since 1999 (some independent producers since 1992)
TRANSMISSION
Natural monopoly: TERNA Italian TSO since 2005
DISTRIBUTION
Natural monopoly: Concessions to local owners of the grid (more than 80% to Enel)
RETAIL
Liberalized: - Large consumers: since 2007 - Small and domestic consumers:
• Voluntary since 2013 • Compulsory since 2020
ELECTRICITY SECTOR DATA
Italian generation mix 2003-2017 Italian electricity balance 2017 TWh
Gross generation 295,8 Net generation 285,3 Pumping consumption 2,5 Net import 37,8 (12%) Grid losses 18,7 (6%) Electricity consumption 301,9
2%
42%
35%
22%
Agricolture IndustryServices Households
Electricity consumption by sector
Relevant growth of renewable generation, accompanied by the decrease of oil products first, then of natural gas
47 54 48 51 48 58 69 77 83 92 112 121 109 108 104
39 46 44 44 44
43 40
40 45
49 45
43 43 36 33
117
130 149 158 173 173 147
153 145 129 109 94 111 126 140
66 47 36
34 23 19
16 10 8 7 5
5 6 4 4 25 27 27
27 27 26
20 23 22 22
18 17 14 16 15
294 303 304 314 314 319 293 302 303 299
290 280 283 290 296
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
RES Coal Natural gas Oil products Other
TWh
• THE ITALIAN ELECTRICITY SECTOR
• GSE ROLE AND ACTIVITIES
• RENEWABLE TARGET AND RESULTS
• ENERGY EFFICIENCY TARGET AND RESULTS
An overview of the Italian Energy transition
AGENDA
GSE ROLE
Ministry of Economic Development Ministry of Economy and Finance Regulatory Authority for energy, grid and Environment
Regulation Strategic guidelines
Promote sustainability supporting renewables and energy efficiency
Supply electricity for customers without a supplier in
liberalized retail market
Management of power, gas and environmental market
platforms
Research and projects for energy sector
development
100% ownership
100% ownership
In 2017, about 800.000 plants managed, 1.200.000 public-private partnerships and 14,7 € billion incentives
GSE ACTIVITIES – A VIEW ON ITALIAN INCENTIVES
Incentives
12,5
1,6
0,6
FER elettriche
Efficienza, FER termiche
FER trasporti
14,7 € bln
Scope
Measures
Activities
Energy
RES-E MD 23/6/2016 MD 6/7/2012 Conto Energia FV Incentivo ex CV, TO CIP 6 Net billing Simplified purchase
1.200.000 Contracts
800.000 RES Plants
65 TWh
RES electricity incentivized
RES-H Energy Efficiency Conto termico
White Certificates High efficiency CHP
50.000 Requests
2 Mtep
Primary energy saving
RES-T
CIC Biomethane
5.000 Biofuel
certifications
10,6 mln Gcal
biofuel
RES-E
RES-H, Energy Efficiency
RES-T
MONITORING RES EVOLUTION AND IMPACTS
Along with core operations, GSE monitors renewable energy and energy efficiency development, also supporting policy makers
Environmental impacts
Technology cost
Incentives burdens and
electricity & gas bills
Social economic impacts
Policy making support
RES & Energy efficiency statistic
5 bln € RES investments
110.000 FTE direct and indirect, temporary and permanent jobs
PV:
900-1500 €/kW Wind:
1300-5000 €/kW
17,7% 2017 RES Target
RES-E burden scenario:
2020: 11,7 bn 2030: 7,1 bn
Typical italian family energy expense
amounts to 2.689 € of which 113 €/y for sustainability - 63 MtCO2eq GHG emissions saving
National Energy Strategy
Energy & Climate Plan Regional regulation monitoring
• THE ITALIAN ELECTRICITY SECTOR
• GSE ROLE AND ACTIVITIES
• RENEWABLE TARGETS AND RESULTS
• LOOKING AT THE FUTURE: THE ROAD TO 2030
An overview of the Italian Energy transition
AGENDA
EUROPEAN TARGETS FOR CLIMATE AND ENERGY
EU Climate & Energy Package: 2020 targets
20% cut in GHG emissions (from 1990 levels)
20% share for renewable energy (17% for Italy)
20% improvement in energy efficiency (24% for Italy)
European Energy Union: 2030 targets
40% cut in GHG emissions (from 1990 levels)
32% share for renewable energy
32,5 % in energy efficiency (from 2007 energy consumption scenario)
2040 target:
60% cut in GHG emissions
2050 target:
80% cut in GHG emissions
A EUROPEAN VIEW OF RES TARGET MONITORING
Considering the European context in 2016, Italy is among the countries that have already reached 2020 targets
Italy is one of the countries with the higher increase with respect to 2005 share
RES share 2016 RES share 2005 2020 target
RES share 2016
RES TARGET MONITORING: WHERE WE ARE
13,0% 12,9%
15,4%
16,7% 17,1% 17,5% 17,4% 17,6%
8,1% 8,6%
9,2% 9,9%
10,5% 11,2%
12,0% 12,9%
13,8%
15,1%
17,0%
2010 2011 2012 2013 2014 2015 2016 2017* 2018 2019 2020
Total and RES Gross Final Consumption [Mtoe] Observed RES share and 2020 target [%]
In 2016 the share of renewables in gross final energy consumption was 17,4%, higher than 2020 Italian mandatory target set up by Directive 2009/28/EC (17%). Preliminary estimation on 2017 indicates that RES share could amount to about 17,7%
Observed trend: growth of RES consumptions, slower in recent years; decrease then weak recovery of total consumption
Observed Renewable share
Renewable National Plan (2010)
17,7%
17,4 16,5 19,6 20,7 20,2 21,3 21,1 21,7
133,3 128,2 127,1 123,9 118,5 121,5 121,1 123,0
2010 2011 2012 2013 2014 2015 2016 2017*
RES Transport RES Heating
RES Electricity Total gross final consumptions
*preliminary
16,1%
34,0%
55,0%
5,7%
18,9%
30,0%
1,2%
7,2% 10%
20,5%
6,3%
17,4% 17%
28,0%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
RES-E share on electricity consumption
RES-H share on heating consumption
RES-T on transport consumption
RES tot on gross final consumption
THE FUTURE OF RENEWABLES: A LOOK AT 2030
RES share on renewable consumptions: past trend, mandatory 2020 targets and 2030 targets
In 2017, the National Energy Strategy (NES) set challenging targets for 2030. The Energy and Climate Plan (NECP), currently under elaboration, will update 2030 targets, and will probably be more ambitious
NES
NES NES
NES
51 54 48 47 54 48 51 48
58 69
77 83 92
112 121
109 108 104
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EVOLUTION OF RES-E: STATISTICS
RES cumulative installed capacity (GW) RES gross electricity production (TWh)
Capacity: large stock of hydro, progressive increase of wind and bioenergy, and explosive PV in 2010-2013, now first RES Energy: hydro the largest RES, with large fluctuations; PV second source. In 2017 RES-E at 34% of electricity consumption
18 19 19 20 20 21 21 22 24 27 30
41 47 50 51 51 52 53
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Solar Bioenergy
Wind Geothermal
Hydro
0
5
10
15
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25
30
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GW
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60TWh
RES DISTRIBUTION: PV
Total number: 774.014
Total capacity: 19,7 GW
2017
RES DISTRIBUTION: WIND
2016
RES DISTRIBUTION: HYDROELECTRIC
2016
RES DISTRIBUTION: BIOENERGIES
2016
RES DISTRIBUTION: GEOTHERMAL
2016
HOW DID WE GET HERE? SUPPORT SCHEMES TIMELINE
CIP 6/92 (Feed in tariff)
Certificati Verdi (Green Certificates)
Conto Energia FTV (Feed in premium)
Tariffe Onnicomprensive (Feed in tariff)
Conto Energia CSP (Feed in premium)
Decreto 6 luglio 2012 (Feed in premium/Feed in tariff)
Decreto 23 giugno 2016 (Feed in premium/Feed in tariff)
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92
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94
19
95
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03
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13
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20
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Approximate periods of eligibility for support schemes in electricity sector
HOW DID WE GET HERE? SUPPORT SCHEMES TIMELINE
Overview of support schemes implemented in electricity sector
SUPPORT SCHEME ACCESS PERIOD
(since-to)
INCENTIVE DURATION
(years)
SOURCE & TECHNOLOGY
SUPPORTED ENERGY
CAPACITY INCENTIVE
TYPE TARIFF VALUE DEFINITION
RENUMERATION OF INJECTED
ENERGY
MD 23/6/2016 RES-E 2016-… 15-30 RES-E excluded PV include CSP
Injected <=500kW FIT Constant Tariff Included in Tariff >500kW SFIP Tariff – Energy Price Power Market
MD 6/7/2012 FER-E 2013-2016 15-30 RES-E
Excluded PV Injected
<=1MW FIT Constant Tariff Included in Tariff >1MW SFIP Tariff – Energy Price Power Market
V Energy Account 2012-2013 20 PV Produced <=1MW FIT + AP Constant Tariff Included in Tariff >1MW SFIP + AP Tariff – Energy Price Power Market
Energy Account CSP 2008-2016 25 CSP Produced Any FIP Constant Tariff Power Market /SP&RA/NM
Feed in Tariff 2008-2012 15 RES-E
excluded PV Injected <=1MW FIT Constant Tariff Included in Tariff
I-IV Energy Account 2006-2012 20 PV Produced Any FIP Constant Tariff Power Market /SP&RA/NM
GREEN CERTIFICATE/ EX GC TARIFF
2002-2012 8-15 RES-E Produced Any OQ-GC (until
2016)
SFIP (since 2016)
GC Market (until 2016) Indexed Tariff (since
2016)
Power Market /SP&RA/NM
CIP 6/92 1992-2001 8-15
RES-E and fossil (industrial
waste) Injected Any FIT
3 tariff component, 1 indexed commodity Included in Tariff
ACRONYMS: FIT: Feed in Tariff, FIP: Feed in Premium, SFIP: Sliding Feed in Premium, OQ-GC: Obligation Quota – Green Certificate, SP&RA: Simplified Purchase and Resale Arrangements, NM: Net metering
- 10 87 483 781
2.328
9.539
3.654
1.400 409 306 368 414 -
1.408 7.647
34.805 41.788
84.370
174.395
150.048
110.949
51.841 39.563 42.319 43.936
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Capacity (MW) Number
THE CASE OF SOLAR PV: “CONTO ENERGIA” "
Annual PV installations
45.000 plants 400 MW/year
97% < 20 kW (tax credit and Net billing)
Trend after Conto Energia
5 successive measures (I, II, III, IV, and V Conto Energia) with decreasing tariffs, ended in July 2013
The decrease of tariff was not as fast as technology cost, thus resulting in generous incentives, which promoted an explosive growth of PV installations, with a high system cost, that reached the cap of 6,7 € bn
I Conto Energia (2005) Capacity:151 MW Avg tariff: 434 €/MWh
II Conto Energia (2007) Capacity:6,8 GW Avg tariff: 360 €/MWh
III Conto Energia (2010) Capacity:1,5 GW Avg tariff: 304 €/MWh
IV Conto Energia (2011) Capacity:7,7 GW Avg tariff: 247 €/MWh
V Conto Energia (2012) Capacity:1,4 GW Avg tariff: 134 €/MWh
After Conto Energia, reduced constant trend of 400 MW/y, due to small plants (45.000/y) with tax credit and net billing
549.000 plants 17,5 GW 22 TWh 6,4 bn €
Total Conto Energia plants
MORE COMPETITIVE MECHANISMS: MD 23 June 2016
ALL RES PLANTS EXEPT PV
Plant Capacity
0,5 MW
5 MW
60 kW Wind 250 kW Hydro
200 kW Biomass 100 kW Biogas
Type of incentive Energy belongs to: Refurbished Plants New and completely
rebuilt Plants
Sliding Feed-in Premium
Feed-in value MINUS
hourly zonal electricity market price
Plant Owner Registries with technology-based
allotment (Selection based on priority criteria)
Auctions With technology-based
Allotments
Registries with technology-based
allotment (Selection based on priority criteria) Feed-in tariff
technology and size banding incentive
GSE
Direct Access Direct Access
Plant Capacity
How to access to incentives Incentive and energy
MD 23 June 2016: REGISTRIES AND AUCTIONS
AUCTIONS
REGISTRIES
Requirements: Building permission or, for hydro, geothermal, relevant public concession
Hierarchy criteria:
For bioenergies: priority for specific bioenergies (by-products)
Ranking in previous registries (MD July 6, 2012)
Reduction of incentive tariff (90%)
For geothermal: specific technologies (fluid re-injection)
For hydroelectric: specific technologies (on artificial channels, waste waters, etc.)
For CSP: Minor fraction of integration
Date of project
Minor capacity
Requirements:
Building permission or, for hydro, geothermal and offshore wind, relevant public concession (no exceptions for plants up to 20 MW or off-shore wind)
Capitalization as proof of financial and economic stability decreasing with the size of the projects (10% of the estimated investment costs up to 100 M€, 5% from 100 to 200 M€, 2% over 200 M€)
Surety bond deposit by bank only (5% temporary, 10% definitive)
Other rules:
Extended offer range (reductions up to 40%)
Possibility to renounce granted capacity with limited deposit loss (30% by 3 months – 50% by 6 months)
FOCUS ON AUCTIONS: COMPETITIVENESS
Admitted: 442 MW
60
70
80
90
100
110
120
130
35
16
5
29
0
42
8
56
4
66
0
79
3
90
3
1.0
23
1.2
01
1.3
17
1.4
28
1.5
74
1.6
75
1.8
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1.8
76
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3
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71
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78
7
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1.0
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1.1
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7
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30
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40
0
52
7
65
3
76
5
83
2
91
9
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2 14
66
17
7
29
0
40
8
2016 session 2014 session 2013 session 2012 session
Admitted: 800 MW Not admitted: 1.144 MW
Admitted : 356 MW Not admitted : 867 MW
Admitted : 400 MW Not admitted : 582 MW
124 €/MWh
115€/MWh
93€/MWh
66€/MWh
Initial time needed for operators to get accustomed to the scheme (2012 session not completely assigned)
Increase in percentage reductions offered over the four bidding sessions (40% in 2016 session)
Promotion of competitiveness and reduction of system cost
Offers range and granted capacity in sessions
€/MWh
Incentive defined by 2016 session I = Tb – Pz = 66 – (53)= 13 €/MWh
COST AND BURDEN OF INCENTIVES IN 2017
• In 2017 the cost for support and purchase of electricity was 14,2 billion euros
• In 2017 the burden on electricity bill of consumers was 12,5 billion euros. The largest contribution is related to PV plants (6,5 bn €), followed by biomass, wind, hydroelectric, biogas
6,5
1,8
1,7
1,5
1,0
bn€
Electricity incentive by source & mechanism Electricity incentive net cost (RES burden in electricity bill)
RES burden by source
bn€
COST AND BURDEN OF INCENTIVES IN 2017
Scenario of RES burden evolution (billion euros) by supported mechanism 2030 analysis
By 2030 the incentives of 22
GW plants are going to expire
By 2030 the incentives burden
could decrease of about 5,6 bn
€ with respect to 2015
• A scenario of the RES burden evolution was drawn up, considering: • expiry of incentive period for RES plants • gradual entry of new RES plants with current incentive schemes without considering new policies & measures
RES burden is collected from electricity bills o consumers. In the case of households, total RES burden is about 113 €/year (85 €/year in the electricity sector)
EVOLUTION OF RES: IMPACTS ON HOUSEHOLDS EXPENDITURE
58
0
78
2
30
9
12
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1.9
06
81
5
28
8
90
4
52
4
67
3
67
9
54
3.9
37
-
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
4.500
Mln
€
Investments
O&M costs
EVOLUTION OF RES-E: IMPACTS ON JOBS
Mixed pumping, waste, sewage and landfill plants not included
3.9
79
6.1
41
2.9
84
1.1
58
1.1
24
15
.39
5
9.6
77
3.7
19
11
.50
2
6.4
54
3.6
21
1.9
90
68
9
37
.65
2
-
5.000
10.000
15.000
20.000
25.000
30.000
35.000
40.000
JOB
S
Temporary jobs
Permanent jobs
Investments and O&M costs in 2017* [mln €] Temporary and permanent jobs in 2017*
(*) preliminary data
RES impacts is calculated within the framework of a standard demand driven I-O model, suitably integrated and matched with the statistical and technical-economic data collected and analyzed by GSE
In 2017, wind and PV attracted higher investments (and “temporary” jobs, direct and indirect), hydro showed higher O&M costs (and “permanent” jobs, direct and indirect)
• THE ITALIAN ELECTRICITY SECTOR
• GSE ROLE AND ACTIVITIES
• RENEWABLE TARGETS AND RESULTS
• LOOKING AT THE FUTURE: THE ROAD TO 2030
EVOLUTION OF RES-E: THE ROAD TOWARDS 2030
National Energy Strategy (NES 2017) defined a high target share of RES-E in 2030 (55%), with a +80% increase with respect to 2017 (from 103 TWh to 184 TWh). The higher contributions are expected from PV and wind: PV energy should triple (in the past 4 years about 400 MW/year installed; the rate should raise up to 3 GW/year); Wind energy should double
The National Energy and Climate Plan (NECP), under discussion, will probably be even more ambitious. NECP not only will define new targets, but also policies and measures to reach the targets.
NES 2017 capacity targets and road towards 2030 NES 2017 energy targets and road towards 2030
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SEN
TWh Hydro Wind
Solar Geothermal
Bioenergy
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Hydro Wind
Solar Geothermal
Bioenergy
The represented trajectories are only conjunctions between 2017 and 2030, real development will obviously be not linear
EVOLUTION OF RES-E: THE NEW M.D. “FER1” DRAFT
The new M.D. draft aims at supporting, in the period 2019-2021, energy from new, refurbished and upgraded plants from “mature” RES: PV, onshore wind, hydro and sewage gas for a total capacity of about 8 GW (of which 7,4 GW new)
8 rounds of competitive AUCTIONS for groups of technologies (with reserves for each technology if some conditions occur) and REGISTRIES for smaller plants, with some competitive elements
Plant owners offer a % reduction of the base tariff: between 2% and 70% for auctions, and up to 30% for registries (also other criteria)
The support is mainly a Sliding FiP (“two-ways”: owner pays GSE back in case Pelectricity>Incentive tariff) and a FiT (≤100kW); premium for PV plants removing asbestos in addition to the incentive
Registries: plants < 1 MW (PV >20kW) Auctions (plants ≥ 1 MW)
A (Wind, PV)
A-2 (PV substitution
of asbesto)
B (hydro,
sewage gas)
C (refurbished wind,hydro, sewage gas)
770 800 80 80
A (Wind, PV)
B (hydro,
sewage gas)
C (refurbished wind,hydro, sewage gas)
5.600 110 500
Group
Capacity (MW)
Main priority criteria:
group A: plants installed on exhausted landfills or other specific areas;
group A-2: plants on schools, hospitals, public buildings etc;
combined with recharge columns for e-mobility
offered reduction of the base tariff (max 30%)
Specific financial requirements:
capitalization as proof of financial and economic stability
surety bond deposit (5% temporary, 10% definitive)
FOCUS ON PAST AND FUTURE WIND AUCTIONS Onshore wind auctions base tariffs and offers range
Increase in percentage reductions offered over the four past wind bidding sessions (all plants offered the maximum allowed reduction in 2016 session, 40% of the base tariff)
Promotion of competitiveness and reduction of system cost
The tariff resulting from the latest auction is comparable and can be even lower than the current and future energy price
89 89 89
66
21
127 127 127
110
70
124 115
93
66
96 103
89
75
63 52
43
72
124 124 124
108
69
2012 session 2013 session 2014 session 2016 session 2019 session
€/M
Wh
Possible range Base tariff Min admitted reduction Max admitted reduction Energy price
Applied capacity (MW) 442 982 1.223 1.944
Admitted capacity (MW) 442 465 368 800
in operation capacity (MW) 346 452 306 118
% in operation/admitted 78% 97% 83% 15%
Uncertainty for the next auctions: the base tariffs established in the latest Decree draft is lower than the forward energy price
?
ITALIAN EXPERIENCE: LESSON LEARNED
Tips for efficient RES development:
• Stable framework, guarantee continuity and “certainty” of RES policies, in a long-term perspective
- Set long term RES targets
- Promote a progressive development, consistent with the national context
- Define efficient authorization procedures
- Promote a consistent development of the electricity grid
- Minimize country/investment risk, encouraging foreign investors
• “Tune” incentives finely
- Incentive may distort the market: too generous tariffs can determine speculative behaviors rather than development
- Set fair tariffs, if necessary and plan progressive reduction
- Promote competitive schemes, like auctions
• Monitor results:
- RES deployment and track towards targets
- Provide feedback to policy makers and eventually adjust support schemes
