This is a best prospect industry sector for this country. Includes a market overview and trade data.
Italy ranks third in Europe for both renewable power consumption and electrical and thermal power production from renewable resources. Italy is one of 14 EU countries that reached its 2020 target of renewables as a percentage of total energy consumption (18.2% versus a 17% target).
Italy’s Integrated National Plan for Energy and Climate (PNIEC) outlines the country strategy from 2021 to 2030 in relation to decarbonization, energy efficiency, self-consumption vs. distributed generation, and energy security. The Plan aims to bring renewables’ share of final gross energy consumption to 30% by 2030 and sets ambitious goals in terms of power generation from renewable sources. In the National Recovery and Resilience Program (NRRP), Italy is earmarking €59 billion (approximately $66 billion) to incentivize renewables in between 2021 and 2026.
In 2020, total installed power from renewables amounted to 56GW. This included 21.5 GW of solar power, 19 GW of hydroelectric, 10.8 GW of wind, 4.1 GW of bioenergy, and 0.8 GW of geothermal. In 2020, power generated from renewables in Italy amounted to 119.4 TWh, with an increase in power generated from photovoltaics (+8.2%) and hydroelectrical plants (+5%), and a decrease from wind (-4.43%). Italy added 785 MW of renewable capacity in 2020 including 625 MW of solar photovoltaics, 85 MW of wind, 66 MW of hydroelectrical, and 8 MW of bioenergy.
COVID-19 disrupted plant construction and operations activities and added difficulty in communicating with government agencies. However, the decrease in renewables plant installations in Italy was more drastic than in other countries, due to a few structural weaknesses, namely long waiting times for obtaining new plant authorizations, conflicts over land use, and the lack of agreement on a nationwide installation planning and monitoring system.
Regarding photovoltaic (PV) plants, the predominant type of new installations, in commercial and residential settings, consists of those under 20kW. During the fourth quarter of 2020, there was a decrease in installations in anticipation of new energy efficiency incentives in 2021. For both new and revamped plants, there is a steady and continuing decrease in the cost of PV plants. A similar trend is taking place in onshore wind farms, due mainly to higher towers and more powerful turbines that are constructed with better materials. However, as noted, installations of new wind farms decreased considerably in 2020, due to the unavailability of incentives for small scale wind plants. An incentive tariff, already in the works by the Ministry of Economic Development, is in the works. Regarding hydroelectric plants, larger installations (over 5MW) grew considerably in 2020 vs. 2019, but there is a growing interest in mini-hydro and a request for specific incentives. Bioenergy plant installations have been decreasing since 2014. Most of the 44 Italian bioenergy plants are small scale, and to boost growth, a planned incentive tariff is expected to be available soon.
Opportunities for U.S. Exporters
In mid-November 2020, Italy launched a national hydrogen strategy to help decarbonize the economy and meet European climate targets. The NRRP confirms the strategy and earmarks €3.19 billion (approx. $3.57 billion) for hydrogen, transforming abandoned industrial areas into “hydrogen valleys,” piloting projects for hard-to-abate sectors, advancing transportation, and technology R&D. The objective is to install 6GW of electrolysis capacity by 2050 to produce and transport 1 million tons of renewable “green” hydrogen. The government’s objective also includes producing 700,000 tons of “blue” hydrogen (in association with carbon capture) in the next 10 years. U.S. technologies that relate to the development of hydrogen as a resource are welcome in the Italian market.
At the end of October 2020, Italy had almost 37,000 storage systems linked to renewable energy power plants. These storage systems have a combined capacity of 170.1 MW and a maximum storage capacity of 267.5 MWh. Around 95% of the installed storage capacity is based on lithium-ion technology. Around 90% of the devices have a storage capacity of less than 20 kWh. Most of the storage systems are deployed in the regions of Lombardy, Veneto, Emilia Romagna, and Piedmont. Until recently, Italy had done little to incentivize energy storage. However, in 2021, the government introduced new incentives for energy efficiency in the residential market. Nationwide incentives are still needed to boost the market for industrial, commercial, and utility scale energy storage applications. In 2020, Terna, a company that manages Italy’s high voltage network, launched a tender to help the transmission system better cope with the variability of energy production from renewable sources, replacing fossil fuel energy sources with batteries. U.S. energy storage technologies are in demand in Italy.
Working with major Italian energy companies and associations.
A few Italy-based global energy companies like ENEL, ENI, and SNAM have launched ambitious decarbonization and sustainability strategies. ENEL in particular wants to partner with innovative U.S. technology providers through its Innovation Hubs network (with hubs located in the United States as well). The Lombardy Energy Cleantech Cluster promotes the internationalization of Region of Lombardy cleantech SMEs, fosters innovation in cleantech, and would like to cooperate with U.S. firms.
U.S. Commercial Service Contact:
Federico Bevini, Commercial Specialist
U.S. Commercial Service, U.S. Consulate Milan
Tel: +39 026268 8520