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Electricity sector in Italy

The electricity sector in Italy describes the production, sale, and use of electrical power in Italy. The country's total electricity consumption was 297.3 TWh in 2013, of which 278.8 TWh (93.7%) was produced domestically (the remaining 6.3% was imported).

According to its national energy plan, Italy plans to increase renewable power generation from all renewable sources to 26% of all electricity produced by 2020. However, Italy has abandoned nuclear power following a referendum in the wake of the 1987 Chernobyl disaster, and nuclear power in Italy has never been greater than a few percent of total power generation. Today, most of the electricity is produced through fossil-fuel powered plants.

Of all energy consumption in Italy, a large share of it is consumed in the form of electricity. The share of primary energy dedicated to electricity production is above 35%, and has grown steadily since the 1970s.

Emissions of carbon dioxide per capita in 2007 were 7.4 tons, below the EU27 average of 7.9 tons CO2. There was a increase in emissions of 10% between 1990 and 2007.

Power sources
For a detailed picture of the sources of electric power in Italy (including decommissioned nuclear plants and renewable energy projects), see the List of power stations.

Summary
In 2008 Italy consumed electricity in 6,054 kWh per capita, while the EU15 average was slightly higher 7,409 kWh per capita. In 2009 consumption was divided by power source as follows: 13.5% import, 65.8% fossil electricity and 20.7% renewable electricity.

Fossil fuels


Fossil fuels are the most common common source of electrical energy in Italy, accounting for 72.7% of the total production in 2012. Of these, natural gas is the predominant source; it accounts for 59.5% of the total power produced using fossil fuels. the total electricity produced by natural gas was 173 TWh in 2008. Coal (21.6%), petroleum, (4.3%), other gases (2%), and other solid combustibles (biomass, waste, bitumen, and others, 12.2%), contribute smaller percentages to the total production.

Hydroelectricity
Italy is the world's 14th largest producer of hydroelectric power, with a total of 41,456 GWh produced in 2012. Energy from hydro accounted for about 18% of the national production in 2010, with hydroelectric plants located mainly in the Alps and the Appenines. From the beginning of the 20th century to the 1950s, hydroelectric power accounted for the majority of generated power, but as energy needs increased approaching the 21st century that percentage dropped significantly.

Other renewables
Italy's share of energy produced with renewable sources was 32.67% in 2012 (including hydroelectric).

According to the National Renewable Energy Action Plan of 2011, Italy will not meet its 17% RES (Renewable Electricity share) target in 2020. Italy’s target for the total renewable electricity is 100 TWh in 2020, including 20 TWh from wind, 42 TWh from hydro, 19 TWh from biomass, 12 TWh from solar, and 7 TWh from geothermal power. The share of renewable electricity is subject to annual changes of hydro power generation capacity and total future electricity use.

The wind energy target, 5.3% of the total electricity use, is the 6th lowest in the European Union, whose average target in wind is 14% in 2020. EWEA’s analysis of the Italy’s plans reflect disappointment since the action plan suggests an annual slow-down of the wind power generation capacity rate and the rates of authorization for new plants. However, Italy's 8119 MW of installed wind power capacity in 2012 placed it fourth in Europe and seventh in the world.

Italy ranks among the largest producers of electricity from solar power with an installed capacity of 12,750 MW at the end of 2011. The installed photovoltaic capacity, compared to the previous year, has tripled in 2010 and almost quadrupled in 2011. This was a result of strong economic incentives towards renewable energy development. In addition, since 2001, all the producers and importers of electricity in Italy are forced to produce a quota of electricity from renewable sources or to buy green certificates from a different company with a surplus in renewable energy production. In 2013, Italy had the second largest photovoltaic installed capacity (17.3 GW) in the European Union, behind Germany.

In recent years, the share of electricity generated by thermal power plants (using biomass and industrial waste as fuel) has increased dramatically; almost no power was produced this way in 1992, compared with the 3.8% of the energy demand reached using thermal plants.

Imported electricity
Italian international grid connections comprise several lines connecting the national grid with Europe: 4 with France, 12 with Switzerland, 1 with Austria, 2 with Slovenia, 1 with Greece, 1 with Corsica. In addition, a new subsea HCDC power line was installed in 2015 between Sicily and Malta. Electricity imports amounted to about 40 TWh in 2008. This was the second highest import in the world, after Brazil. Most electricity imports into Italy come from Switzerland and France. Import accounts for over 10% of total consumption.

Early years
The first electric power plants in Italy were carbon-fueled and were built during the end of 19th century near city centers. Plants had to be close to the place of consumption due to the use of direct current and low voltage electricity, which limits greatly the possible transmission distance. The first power plant was built in 1883 in Milan, near Scala Theater, to power the illumination of the building.

Following the development of high-voltage transmission on long distances, Italy began to utilize hydroelectric power. Several hydroelectric plants have been built on the Alps and the Appenines since the beginning of the 20th century. The first geothermal power station in the world was built in Larderello in 1904. Renewable sources met almost all of the country's electricity demand until the 1960s, when population growth caused an increase in electricity demand.

Nationalization
The electricity sector in Italy, private until then, was nationalized in 1962 with the creation of a state-controlled entity named ENEL, with a monopoly on production, transmission and local distribution of electric energy in the country. The new entity incorporated all the previous private companies operating in Italy since the end of the 19th century. The nationalization followed a general tendency in Europe after the Second World War: France and Great Britain nationalized their sectors in 1946 and 1957 respectively. This was seen as the only solution for an efficient and reliable electricity supply given the natural monopoly nature of this sector. The new entity, which absorbed more than 1000 previously private companies, had to face a rapid growth of electricity demand during subsequent decade, with consumption rising of about 8% every year. This demand was largely met with fossil-fuel powered plants. This trend changed partly after the 1970s oil crisis, which induced Enel to rethink its energy strategy. More investments were devoted to nuclear energy and electricity started to be imported from France to differentiate the supply. However, nuclear energy was abandoned in 1987 following a popular referendum, while imported energy still covers an important share of electricity consumption.

Privatization
The belief of a more efficient sector with a public monopolistic company progressively reversed since the 1980s. Enel was made into a joint-stock company in 1992, however still fully owned by the Ministry of Economy. The liberation of the electricity sector from government control started in late 1990s following European Union directives. Directive 96/92/CE of 1996 followed the tendency towards privatization. It was based on the adoption of different regulations for production and transmission: production and trading should be free and managed by private companies, while transmission and distribution, being natural monopolies, should be regulated by the state. This first directive suggested a progressive liberalization of the electricity market and the "unbundling", namely the clear separation of monopolistic activities from free-market activities in the companies involved in the electricity sector. This separation was effected by clearly separating budgets for different businesses.

The European directive was followed by the Italian legislative decree 79/1999 ("Decreto Bersani") of 1999. The decree created a path towards a complete liberalization of the market through gradual steps. Not only the European directive was followed, but the transition to the free market was planned to be faster, with more than 40% of electricity planned to be traded on the free market by 2002 and with a corporate separation of activities. Some of Enel's core activities were passed on other companies. The network was transferred to a new company, Terna, rensponsible for the management of the system. Moreover, the limit on Enel property share of Terna was set at 20%. Enel eventually sold its remaining share of the company in January 2012. In order to improve competition and to develop a free market for production, Enel was also forced to sell 15,000 MW of capacity to competitors before 2003. Following this, three new production companies were created: Endesa Italia, Edipower and Tirreno Power.

A new European directive, 2003/54/CE of 2003, and a subsequent Italian decree, requested a free electricity trading for all commercial clients from July 2004 and, eventually, a complete opening of the market for private customers from July 2007.

Nuclear power
Italy no longer produces power using nuclear plants due a public referendum banning it in the wake of the 1986 Chernobyl disaster. Much concern arose because Italy is in a seismically active area, placing it at greater risk for a nuclear accident.

Former Prime Minister of Italy Silvio Berlusconi and President of France Nicolas Sarkozy made an agreement to construct four nuclear power plants in Italy in February 2009. In April 2009, the 2009 L'Aquila earthquake struck, which caused further concern. Based on the Seveso II Directive, neighboring countries may end nuclear-energy prospects in Italy. The actual construction of nuclear power is unlikely due to the lack of public support and environmental and construction concerns. The 2011 Tōhoku earthquake and tsunami and the Fukushima nuclear power disaster in Japan in March 2011 caused international investors and politicians to review energy policy with regard to nuclear power. In a subsequent referendum to cancel plans for new reactors, over 94% of the electorate voted in favor of the construction ban, with 55% of the eligible voters participating, making the vote binding.